March 27, 2023
Supply Chain Snapshots - News of the Week (Mar. 27, 2023)
Monday, March 27, 2023
1. Crunch Time for Trans-Pacific Container Shipping Contract Talks
(Read more on FreightWaves)
A great write-up of both the current state of ocean freight and the ongoing Request For Proposal (RFP) negotiating season. According to Nerijus Poskus, Flexport’s Vice President of Ocean Strategy and Carrier Development, the next two weeks are critical. And while the final outcome of rate negotiations won’t be known until April, Poskus expects contract rates will be around $300 to $500 per forty-foot equivalent unit above current spot rates. Check out this story for more quotes from a recent webinar in our Logistics Rewired series, Navigating the 2023 Ocean RFP Season. We also recently published a blog summarizing RFP ‘23 recommendations from our ocean freight experts.
2. Opinion: Carriers Are in the Midst of a Downturn – And Their Different Reactions Provide a Strong Indication of the Future
(Read more on Shipping Watch)
A clear-eyed look at the recently reported end-of-year 2022 numbers from the major carriers, courtesy of leading industry thinker, Lars Jensen. He explores the numbers, then looks at how the carrier's responses vary, with some thoughts on what these differences mean for how each company is likely to address the coming year.
3. Knight-Swift Agrees To Acquire U.S. Xpress
(Read more on Transport Topics)
Knight-Swift Transportation Holdings has agreed to acquire U.S. Xpress for a reported $808 million. The deal will mean a consolidated fleet of 7,200 tractors and 14,400 trailers, representing the merging of two of the largest and best-known brands in the U.S. trucking industry.
4. Europe Agrees To “Ground-Breaking” Shipping Decarbonization Deal
(Read more on Journal of Commerce)
Legislators in Europe are looking at an ambitious plan that would see maritime emissions cut by as much as 80% by 2050. The bill has a long journey ahead of it as it winds through the European Parliament, but is still a big step toward curbing greenhouse gas emissions.
5. Retailers Reaping Big Savings on Ocean Transport Costs
(Read more on The Wall Street Journal)
A succinct look at the state of ocean freight contract negotiations this year. Fixed rates have tumbled from last year’s historic highs to near or below 2019’s pre-pandemic rates, leaving many importers to reassess their balance between the reliability of fixed contracts and the potential cost savings of playing the spot market this year. And with many of these importers still swimming in inventory that may have cost them 10x current rates to bring in last year, Kaitlyn Glancy, Flexport’s Head of North America says: “What we’re hearing more and more is the customer is saying, ‘Look, cost is still king for us.’”
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