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US Intermodal Gains Momentum Amid Trucking Challenges

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US Transport Company Challenges CMA CGM’s Detention and Demurrage Charges

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Global Logistics, Global Trade Daily, News, Ocean Ports

US Transport Company Challenges CMA CGM’s Detention and Demurrage Charges

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Access One Transport, a California-based haulier, has lodged complaints with the US Federal Maritime Commission (FMC) regarding container line detention and demurrage (D&D) charges. The company is seeking around $77,000 in damages from CMA CGM, alleging violations of the Shipping Act between April 2021 and June 2022.

Access One transports full imported ocean containers to and from CMA terminals across Long Beach and Los Angeles. However, it claims that during the pandemic, CMA would assign a terminal for empty container returns, but often failed to provide available appointments or imposed restrictions on the number of empties accepted. As a result, Access One had to store the containers itself, incurring charges after the free return time. The company alleges that CMA charged detention in an unreasonable manner, leading to additional stop-off, re-delivery charges, and storage fees.

Access One also filed a smaller claim against Zim for charges on five containers in May 2022. Additionally, another shipper filed a claim against CMA CGM, alleging errors on bill of ladings resulting in cargo return. These incidents underscore a broader challenge with container line practices, prompting calls for further investigation by the FMC.

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Uncategorized

Hapag-Lloyd Leads the Industry with Fleet-Wide Real-Time Container Tracking

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Hapag-Lloyd has taken a pioneering step in the container shipping industry by introducing real-time container tracking across the majority of its extensive fleet, encompassing nearly 3 million containers. With its innovative “Live Position” feature, customers can now monitor their shipments seamlessly from origin to destination. The company has made significant progress, equipping over two-thirds of its dry container fleet with tracking devices, with plans for complete coverage by summer.

Dr. Maximilian Rothkopf, Hapag-Lloyd’s COO, emphasized the transformative impact of real-time tracking, enabling swift decision-making and risk management for customers while enhancing fleet management efficiency. This milestone aligns with Hapag-Lloyd’s commitment declared in April 2022 to outfit all standard shipping containers with real-time monitoring, with installations commencing shortly thereafter.

Henrik Schilling, Head of Global Commercial Development, highlighted the company’s dedication to addressing customer concerns and enhancing operational capabilities. The Company aims to integrate tracking data seamlessly into customers’ systems via API and introduce Estimated Time of Arrival (ETA) Prediction as part of its ongoing product development.

This initiative builds upon Hapag-Lloyd’s previous success in real-time monitoring for its reefer container fleet and underscores its commitment to innovation and customer satisfaction. Collaborating with TradeTech company Nexxiot AG and leveraging devices from ORBCOMM, Hapag-Lloyd continues to lead the industry in providing cutting-edge solutions for enhanced supply chain visibility and efficiency.

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Explosion Near Yemen’s Mokha: Vessel Sustains Damage but Crew Safe Amid Rising Tensions

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An explosion reported near Yemen’s Mokha has caused damage to a vessel, yet fortunately, the crew remains safe as they continue towards their next port of call, according to the United Kingdom Maritime Trade Operations (UKMTO) agency. Concurrently, British maritime security firm Ambrey has revealed that a Malta-flagged container ship in the same vicinity was allegedly targeted with three missiles while en route from Djibouti to Jeddah, Saudi Arabia.

The incident occurs against the backdrop of ongoing hostilities in the region, with Iran-backed Houthi militants launching drones and missiles against international commercial shipping in the Red Sea since mid-November. Claiming solidarity with Palestinians against Israel’s military actions in Gaza, these attacks have disrupted global shipping routes, necessitating longer and costlier journeys around southern Africa.

Ambrey has further assessed that the targeted vessel may have been singled out due to its listed operator’s trade relations with Israel. In response to the escalating tensions, both the United States and Britain have conducted strikes against Houthi targets. As the situation unfolds, concerns mount over the safety and security of maritime traffic navigating through the volatile Red Sea region.

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Air cargo, Global Logistics, Global Trade Daily, News, United states news

Chinese E-Retailers Drive Surge in Air Cargo Prices to the U.S

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The escalating popularity of Chinese e-commerce giants like Shein and Temu among American consumers is driving a significant increase in air cargo prices from China to the U.S. This surge in demand, especially during what is typically considered an off-peak season for cargo, is straining limited capacity and bucking the global downward trend in air cargo rates.

Unlike U.S. e-commerce giants that primarily ship from domestic warehouses, Shein and Temu directly ship goods from Chinese factories to U.S. consumers using air cargo. This has led to a 14% increase in air cargo rates from China to the U.S. compared to the same period last year, while the global average has seen an 8% decrease.

The rise of Chinese e-commerce platforms offering competitive prices and fast delivery times has caused capacity shortages, prompting concerns about meeting demand during peak seasons like the Christmas holiday period. To address this, cargo airline Atlas Air has increased its flights between the U.S. and China, partnering with Chinese freight forwarder YunExpress.

However, challenges persist as air freight capacity between China and the U.S. has not fully recovered to pre-pandemic levels. Additionally, reduced cargo capacity on planes due to fuel-saving measures and geopolitical tensions have further constrained capacity.

Despite efforts to add capacity and mitigate rising demand, competition for air cargo space between logistics companies and Chinese e-commerce firms continues to intensify. This competition, coupled with delays in ocean shipping caused by conflicts like the Red Sea conflict, is pushing prices even higher.

As the air freight market continues to soar, driven by the relentless growth of e-commerce shipments, logistics companies are grappling with the challenge of meeting demand amidst limited capacity, with no clear indication of when the situation may stabilize.

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Global Trade Daily, Technology, United states news

AI Power Surge Fuels Demand for US Natural Gas

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The rapid expansion of data centers powered by Artificial Intelligence (AI) technology is driving a surge in electricity demand, boosting the need for natural gas in the United States. This growing demand presents significant opportunities for natural gas producers and shippers, with expectations of higher prices by the end of the decade.

The increasing demand for grid connections and electricity to power data centers is set to propel natural gas demand, challenging the Biden Administration’s plans for a greener grid. Despite preferences for solar and wind energy, the necessity for fast deployment of data centers is driving up the need for natural gas alongside renewable sources.

Projections suggest that electricity demand from data centers could quadruple by 2030, requiring an additional 8.5 billion cubic feet per day of natural gas to meet consumption. Consequently, U.S. benchmark natural gas prices could double to around $4 per million British thermal units (MMBtu) by the end of the decade.

Leading natural gas producers and pipeline companies are poised to benefit from this surge in demand. Companies like EQT Corporation, Chesapeake Energy, and pipeline giants such as Energy Transfer, Williams Companies, and Kinder Morgan are expected to capitalize on rising natural gas prices and consumption.

Despite the current market glut leading to output curtailments, producers anticipate boosting production later in the year to meet rising domestic power demand and liquefied natural gas (LNG) exports. Kinder Morgan, for instance, remains optimistic about the future of its natural gas transportation business, anticipating substantial growth driven by increased LNG exports and power demand from AI operations, cryptocurrency mining, and data centers.

Natural gas, already a significant contributor to U.S. electricity generation, is expected to play a crucial role in meeting the backup power needs of new renewable capacity installations. As data center electricity consumption continues to rise, utilities and regulators are revising their forecasts for peak power demand, further emphasizing the importance of natural gas in the energy landscape.

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Global Logistics, Global Trade Daily, News, Rail, Trucking

US Intermodal Gains Momentum Amid Trucking Challenges

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Following a period of sluggish performance, US intermodal traffic is on the rise, signaling potential for further growth. Union Pacific’s new route between Chicago and southern California, along with the addition of on-dock rail service at the port of Houston, highlights the railway’s focus on capturing intermodal traffic from trucking.

Intermodal traffic in the US is up by 9% compared to the same period last year, with promising expansion expected in Mexico as well. Nearshoring and disruptions in cross-border trucking are contributing factors, leading to increased demand for intermodal transport.

Domestic intermodal services in Mexico have experienced significant growth, with a surge of 36% last year. The trend of nearshoring is expected to drive cross-border volumes, presenting opportunities for rail carriers to compete with trucking.

US rail carriers, like Union Pacific, are prioritizing network efficiency improvements to attract shippers currently using trucking services. S&P Global’s outlook suggests that rail carriers are poised to make substantial gains in business currently dominated by trucks, especially with the expectation of rising trucking rates.

The trucking market, particularly the truckload sector, continues to face overcapacity, leading to challenges for players like Knight-Swift Transportation and JB Hunt. Rising diesel prices further exacerbate the situation for truckers, especially smaller operators.

Overall, the rise of intermodal transport presents a competitive alternative to trucking, with rail carriers expected to capitalize on improved efficiency and rising demand for freight transportation.

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Global Trade Daily, International Trade, News

Global Commodity Prices Plateau, Threatening Inflation Targets Amid Geopolitical Tensions

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Global commodity prices, which sharply declined last year contributing to a reduction in global inflation, have now stabilized, posing challenges for central banks aiming to lower interest rates swiftly. The World Bank’s latest Commodity Markets Outlook also warns that escalating conflict in the Middle East could disrupt this trend, potentially driving inflation upwards.

Between mid-2022 and mid-2023, commodity prices dropped nearly 40%, significantly impacting global inflation. However, since mid-2023, the World Bank’s commodity price index has remained relatively stagnant. Forecasting suggests a marginal decline of 3% in 2024 and 4% in 2025, insufficient to curb inflation still above central bank targets in many countries.

Indermit Gill, Chief Economist of the World Bank Group, highlights that falling commodity prices, a key factor in reducing inflation, have reached a plateau. This could lead to prolonged higher interest rates, especially if geopolitical tensions escalate, potentially triggering a major energy shock.

Geopolitical tensions have kept oil prices elevated despite sluggish global growth, with Brent crude reaching $91 per barrel, well above pre-pandemic averages. Further escalation in the Middle East conflict could disrupt oil supplies, raising global inflation significantly.

Ayhan Kose, Deputy Chief Economist of the World Bank Group, emphasizes the divergence between global growth and commodity prices, attributing it to heightened geopolitical tensions. Central banks are advised to monitor inflationary risks associated with commodity price spikes amidst geopolitical uncertainties.

The report predicts record-high gold prices in 2024 due to increased demand amid geopolitical and policy uncertainties. Additionally, a Middle East conflict could drive up prices of natural gas, fertilizers, and food, impacting global markets.

Investment in green technologies has also influenced metal prices essential for clean energy transition, with copper and aluminum prices expected to rise in the coming years.

Lastly, the report evaluates various approaches to commodity price forecasting, emphasizing the importance of incorporating diverse analytical methods for accurate predictions.

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Global Logistics, Global Trade Daily, News, United states news

Freight Train Derailment Sparks Fire Near US-Mexico Border

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A freight train transporting gasoline and propane derailed near the Arizona-New Mexico border, igniting a blaze that engulfed approximately six rail cars. New Mexico State Police (NMSP) reported the incident, which prompted the closure of a vital trucking route.

According to NMSP Lieutenant Phil Vargas, the derailment occurred close to Houck, Arizona, and resulted in a prolonged fire that required hours to extinguish. Fortunately, there were no injuries reported in connection with the incident.

As a safety precaution, both east and westbound lanes of interstate highway I-40 near milepost 8 were shut down following the derailment. The McKinley County Sheriff’s Office indicated uncertainty regarding the reopening of the affected roads.

Lena Kent, a spokesperson for BNSF Railway, confirmed the derailment and assured that the crew remained unharmed. The incident is currently under investigation and is being treated as a hazardous materials incident, as reported by local media outlets. Authorities are actively probing the cause of the derailment to prevent similar incidents in the future.

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Global Logistics, Global Trade Daily, News

Mounting Oil Price Threat Amplifies Supply Chain Concerns Amidst Middle East Tensions

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As warnings from the World Bank echo concerns of soaring oil prices amidst ongoing instability in the Middle East, supply chain chiefs face heightened risks and frustrations in navigating global logistics.

The recent alert from the international financial institution underscores the potential for oil prices to surge beyond $100 per barrel, particularly in the event of escalating Iran-Israel hostilities. This development compounds existing apprehensions among supply chain managers, exacerbated by Iran’s recent seizure of a container ship.

Philip Damas, Managing Director and Head of Supply Chain Advisors at Drewry, highlights the expanding risk landscape, particularly in the strategic Suez Canal Red Sea area and the Gulf of Hormuz region, critical gateways responsible for a significant portion of global container traffic.

The seizure of the MSC Aries and threats to close the Strait of Hormuz have intensified concerns among forwarders, shippers, and container lines. Potential impacts include diversions to UAE and Omani ports, necessitating short-term contingency measures to mitigate disruptions.

While ports outside the Strait of Hormuz offer latent capacity, Mr. Damas acknowledges that this alone may not fully address the challenges faced by shippers and forwarders, who anticipate service disruptions and new surcharges.

In addition to geopolitical tensions, the World Bank’s warning of rising oil prices further compounds the complexity of the situation. As tensions escalate, hopes of stabilizing oil prices at $84 per barrel seem increasingly optimistic, with potential inflationary implications globally.

Amidst these challenges, the prospect of additional surcharges, as suggested by Drewry, exacerbates frustrations among forwarders. The strained relationship between forwarders and carriers in recent years adds to the complexities of navigating an increasingly volatile global supply chain landscape.

In summary, the convergence of geopolitical uncertainties and economic warnings underscores the pressing need for resilience and adaptability within supply chain operations to mitigate risks and ensure continuity amidst evolving challenges.

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Global Trade Daily, News, United states news

Wallbox Secures $5.2 Million Tax Credit for Expansion of EV Manufacturing in Arlington

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(Global Trade Magazine)- Wallbox, a prominent provider of electric vehicle (EV) charging solutions, has proudly announced its allocation of a $5.2 million tax credit through the esteemed 48C Qualifying Advanced Energy Tax Credit Program by the U.S. Department of Energy (DOE). This tax credit is designated to bolster Wallbox’s expansion efforts at its flagship U.S. EV supply equipment (EVSE) manufacturing facility located in Arlington, Texas.

The 48C tax credit, extended as part of the Inflation Reduction Act, aims to bolster investment and address crucial needs within the clean energy economy. Eligible projects span across various sectors, including grid components, electric vehicle components and chargers, solar materials, and other essential clean energy resources. Wallbox’s commendable achievement encompasses 30% of qualified investments for the second phase of its Arlington factory buildout, facilitating enhanced manufacturing capacity.

Enric Asunción, CEO and co-founder of Wallbox, expressed gratitude for the prestigious recognition: “We are honored to be selected for the highly competitive 48C tax credit, which will enable us to further invest in our U.S. manufacturing capabilities and deliver Wallbox’s top-tier EV charging solutions, pivotal to the transition to electrified transportation.”

The tax credit encompasses various enhancements for Wallbox’s 150,000-square-foot factory in Arlington, including multiple new EVSE assembly lines and a cutting-edge validation lab. Upon completion, the project will empower Wallbox to produce a comprehensive range of charging solutions tailored for the North American market, including acclaimed offerings like the Quasar 2 bidirectional charger and Buy America-compliant DC fast chargers such as the recently launched Supernova 180 DC fast chargers.

Anticipated to achieve a maximum production capacity of over 1 million chargers per year by 2030, the Arlington factory is poised to significantly contribute to U.S. clean energy and transportation objectives.

The selection process for the 48C tax credit was fiercely competitive, with numerous applications vying for limited funding. Following meticulous review by the DOE, Wallbox’s project emerged as a standout recommendation to the IRS for this prestigious award.