Tag: Supply Chain

Shipping Alliances Reshape Trade Routes: Delays, Blank Sailings, and Vessel Diversions Expected to Continue

March 2025

The global shipping industry is undergoing a significant transformation as major alliances restructure their operations, leading to widespread disruptions on key trade routes. This restructuring is causing delays, blank sailings, and vessel diversions, leaving both shippers and consumers grappling with uncertainty.

The most notable shift has been the dissolution of the long-standing 2M alliance between MSC Mediterranean Shipping Company (MSC) and A.P. Moller-Maersk, which is set to end in 2025. In its place, new alliances such as the Gemini Cooperation, formed between Maersk and Hapag-Lloyd, are taking center stage. While these changes are intended to streamline operations, they have resulted in a slew of scheduling adjustments, causing confusion and congestion.

Scheduling Chaos and Port Congestion

As shipping alliances realign their schedules, shippers have reported discrepancies in arrival times, leading to confusion across the industry. Some carriers, even within the same alliance, are listing different transit times for the same vessel, contributing to widespread scheduling confusion. Ports, especially in Asia, are experiencing severe congestion, with ships waiting up to three days for a berth, exacerbating the backlog of containers.

The result? Delayed shipments, longer waiting times at major ports like Shanghai, and disrupted schedules that have left many vessels stranded at terminals.

Blank Sailings and Diversions

Another side effect of the alliance shifts has been the rise in blank sailings and diversions. Blank sailings, where a scheduled voyage is canceled due to insufficient cargo or other operational reasons, have increased across the Asia-Europe route, further straining supply chains.

The geopolitical instability in the Red Sea has also prompted several shipping companies to divert vessels around the Cape of Good Hope instead of passing through the Suez Canal, resulting in longer transit times and increased freight rates. Attacks in the region, particularly by Iran-backed Houthi rebels, have heightened concerns over vessel safety, prompting carriers to adopt this detour as a precautionary measure.

Declining Service Reliability

As a result of these scheduling changes, the shipping industry has seen a significant decline in service reliability. On-time performance, which was once a benchmark for efficiency, has plummeted for many carriers. Some are reporting on-time rates as low as 55%, a far cry from the 90% reliability target that many had been able to achieve in the past.

To combat this, the Gemini Cooperation aims to improve on-time reliability by reducing port calls and utilizing larger vessels on key trade routes. The new alliance is targeting a return to 90% on-time performance by optimizing operations and adapting to current market conditions.

The Road Ahead

With these ongoing disruptions, stakeholders across the shipping industry are bracing for continued challenges. While the restructuring of alliances is seen as a necessary step to adapt to evolving market demands, businesses and consumers must prepare for fluctuating schedules and unpredictable freight rates.

As shipping companies continue to adapt to these changes, flexibility and vigilance will be key for those relying on global trade networks. With ongoing geopolitical uncertainties and shifting market strategies, the next few months will likely be marked by further disruptions, and companies must remain agile to navigate the changing landscape.

USTR Seeks Public Input on Trade Measures Against China’s Maritime Dominance

The Office of the United States Trade Representative (USTR) is requesting public comments on proposed trade actions in response to China’s growing control over the global maritime, logistics, and shipbuilding industries. Following a Section 301 investigation, USTR determined that China’s policies have disadvantaged U.S. businesses and workers, prompting potential countermeasures.

Background of the Investigation

The investigation began in April 2024 after several U.S. labor unions filed a petition citing China’s long-standing efforts to dominate the shipbuilding and logistics sectors. Over the past three decades, China has significantly expanded its control, increasing its global shipbuilding market share from under 5% in 1999 to over 50% in 2023. Additionally, China now produces 95% of the world’s shipping containers and 86% of intermodal chassis, strengthening its influence over global trade logistics.

According to the USTR’s findings, China’s industrial policies have created unfair competitive conditions by displacing foreign businesses, limiting commercial opportunities, and posing economic security risks. As a result, USTR has determined that action is necessary under Section 301 of the Trade Act of 1974.

Proposed Trade Actions

To address China’s competitive advantage, the USTR is considering several measures:

  • Service Fees on Chinese Shipping Operators – A fee of up to $1,000,000 per vessel entry into U.S. ports for operators with Chinese-built vessels.
  • Tariffs on Operators Using Chinese-Built Ships – Additional fees for companies that operate or have pending orders for Chinese-manufactured vessels.
  • Incentives for U.S.-Built Vessels – A system of fee reimbursements for operators using U.S.-manufactured ships.
  • Shipping Restrictions on U.S. Exports – A phased-in requirement that a portion of U.S. goods be transported on U.S.-flagged and U.S.-built vessels.
  • Security Measures Against Chinese Logistics Platforms – Possible restrictions on the use of LOGINK, a Chinese-developed logistics data platform, due to security concerns.

Public Comment Period and Hearing Details

The USTR is encouraging stakeholders to provide feedback on these proposed actions. The key deadlines are as follows:

  • February 21, 2025 – Public comment period opens.
  • March 10, 2025 – Deadline to request participation in the public hearing.
  • March 24, 2025 – Deadline to submit written comments.
  • March 24, 2025 – Public hearing at the U.S. International Trade Commission in Washington, D.C.
  • Seven days after the hearing – Deadline for post-hearing rebuttal comments.

Comments and requests to participate in the hearing can be submitted via USTR’s online portal at https://comments.ustr.gov/s/ using docket numbers USTR–2025–0002 (for written comments) and USTR–2025–0003(for hearing requests).

The Future of Fashion Logistics: A Trillion-Dollar Industry by 2027

The fashion industry is on the brink of an incredible transformation. According to recent data, it is poised to become a trillion-dollar industry by 2027, driven by emerging trends, technological advancements, and changing consumer preferences. This rapid growth presents unique opportunities and challenges for fashion logistics, making it essential for companies to stay ahead of the curve.

Technological Advancements Driving Growth

One of the key drivers behind this growth is the integration of advanced technologies. Innovations such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT) are revolutionizing the way fashion businesses operate. AI enhances design processes, predicts trends, and optimizes supply chains, while blockchain provides greater transparency and traceability. IoT devices are improving inventory management and enabling real-time tracking of shipments.

Sustainable and Ethical Fashion

Consumers are becoming increasingly conscious of the environmental and ethical implications of their purchases. The demand for sustainable and ethically produced fashion is rising, prompting brands to adopt eco-friendly practices. This shift is influencing logistics as well, with a growing emphasis on reducing carbon footprints and ensuring responsible sourcing and manufacturing processes.

E-Commerce and Omnichannel Strategies

The rise of e-commerce has reshaped the fashion industry, with online sales expected to account for a significant portion of total revenue by 2027. Brands are adopting omnichannel strategies to provide seamless shopping experiences across multiple platforms. This shift requires robust logistics solutions to handle online order fulfillment, returns, and last-mile delivery complexities.

Customization and Personalization

As consumers seek unique and personalized experiences, the fashion industry responds with customized products and services. This trend extends to logistics, where tailored solutions are necessary to meet the specific needs of individual customers. Efficient handling of small-batch productions and rapid delivery times are critical to maintaining customer satisfaction in this competitive market.

Globalization and Emerging Markets

The global reach of the fashion industry continues to expand, with emerging markets playing a crucial role in its growth. Countries in Asia, Africa, and Latin America are becoming significant players, both as consumers and producers of fashion goods. Navigating the complexities of international trade, customs regulations, and cultural preferences requires expertise and flexibility in logistics operations.

The Role of Data Analytics

Data analytics is becoming increasingly important in the fashion industry. By leveraging big data, companies can gain valuable insights into consumer behavior, market trends, and supply chain efficiency. Predictive analytics helps forecast demand, optimize inventory levels, and reduce waste, ultimately leading to more efficient and cost-effective logistics operations.

Conclusion: Partnering for Success in Fashion Logistics

As the fashion industry marches towards becoming a trillion-dollar powerhouse, the importance of reliable and innovative logistics solutions cannot be overstated. Future Forwarding understands the unique needs of the fashion sector, offering tailored services that cater to the demands of this dynamic industry. With a focus on technology, sustainability, and customer-centric solutions, Future Forwarding is your trusted partner in navigating the complexities of fashion logistics. Let us help you stay ahead in this fast-paced market and ensure your business thrives in the years to come.

Reach out to Future Forwarding today to learn how we can support your fashion logistics needs and drive your success in this evolving industry.



The Importance of Supply Chain Mapping

With an increasing emphasis being placed by CBP on importers to know the source of every component and raw material in their supply chain, the agency now recommends that importers map their supply chain down to the fifth supplier level of raw materials to ensure that the product is free of forced labor. Beginning with the Customs Modernization Act in the mid-1990’s and now with a final rule published by CBP governing broker responsibilities in 19 CFR Part 111 and as part of their wider mission to update their regulations for today’s trade, there is a reinforcement and reiteration to importers – know where your goods are coming from.

 

According to the Global Slavery Index, the United States imports approximately $144 billion dollars worth of goods made with forced labor. These goods are, in fact, prohibited by Section 307 of the US Tariff Act and any goods that are reasonably suspected of being produced in such a way could be subject to a Withhold Release Order (WRO). A Withhold Release Order means that the goods will not be released for entry into the United States, and the goods could be subject to seizure and the IoR subject to steep fines. 

 

It’s important to understand the definition of forced labor for these purposes. From the US Tariff Act: “All work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.” Menace could be anything from verbal threats, to withholding pay, deception, retention of identity documents, debt bondage, and even excessive overtime to more insidious acts like physical violence. 

 

If we all do our part, we can keep ethically produced goods moving while eliminating the demand for forced labor supply. 

 

Some suggested resources to help with supply chain mapping and compliance from the Department of Homeland Security (DHS) are as follows:

 

The U.S. Department of Labor’s Comply Chain

 

The U.S. Department of State’s Responsible Sourcing Tool

 

National Action Plan on Responsible Business Conduct

 

CBP’s forced labor website resources

 

CBP’s Withhold Release Orders and Findings

The appearance of forced labor for raw materials extends beyond Xingang and its cotton and photovoltaic cell industries. CBP has WRO actions in place for products from around the world. The requirement of importers to comply or risk denial of entry means that is extremely important that, working with our clients, Future Forwarding keeps the goods in your supply chain moving from raw material to final delivery to the customer, whether business or individual.

CBP SENDING LETTERS FOR UFLPA

CBP made news this week as the ramp-up to the enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) signed by the President late last year comes into force on June 21st.

 

CBP posted an announcement on April 12th of its intention to issue “Known Importer Letters” before June 21st, the effective date of the rebuttable presumption under the Act. As a reminder, goods that are mined, produced, manufactured wholly or in part in China’s Xinjiang Uyghur Autonomous Region (XUAR) will be considered by CBP to be in violation of the forced labor statute under the UFLPA and prohibited entry into the US by the Section 307 of the Tariff Act of 1930. 

 

There are certain circumstances where exceptions will apply. In these cases, the CBP commissioner will determine if:

  1. The importer has fully complied with guidance to be established under the UFLPA and has completely substantively responded to all associated CBP inquiries.
  2. By clear, convincing evidence, that the goods were not produced, wholly or in part, by forced labor.

CBP will also be issuing letters to parties identified as having previously imported merchandise that could be subject to the UFLPA. Those parties are encouraged to examine and address any forced labor issues in their supply chains with due diligence. 

 

Regardless if they received the letters, the announcement also states that all importers are expected to review their supply chains and institute reliable measures to ensure that imported goods fall under the UFLPA guidelines. So if any goods are wholly or partly made with convict labor, forced labor, and/or indentured labor, including forced or indentured child labor, these goods are to be examined and addressed accordingly. 

 

Intending to strenuously enforce the UFLPA, CBP’s issuance of “Known Importer Letters’’ serves as the latest reminder to importers that they are expected to put into practice supply chain programs that address raw material acquisitions, including the production process. 

 

The agency held a hearing and solicited testimony a week ago on April 8th, and June 21st is fast approaching. Importers who have not already done so should urgently communicate with their suppliers and ask whether or not the goods they are purchasing are manufactured, partly or in whole, with anything sourced from Xinjiang province and risk being detained or denied entry upon arrival.

 

 If you are uncertain as to where to start this process, please contact your Future Forwarding representative today and we can help you get to the source and clarify anything that may be prohibiting you from getting answers.

Feds respond to supply chain woes

Multiple federal agencies scrutinizing supply chain performance, costs.

 

As shippers ponder whether or not today’s freight rates will remain this way into next year and panic over Drewry’s analysis showing container port capacity may remain this constrained until 2025, shippers are making tough choices when it comes to their supply chain and what cargo to ship and what to leave behind – or cancel altogether. This, coupled with the checks they are writing for demurrage and detention penalties to marine terminal operators, carriers, and railroads have had consequences ranging from jeopardizing end-to-end domestic supply chains to denying service to exporters.

With July drawing to a close and the traditional peak season on the transpacific slated to begin in earnest, cargo owners who have felt taken advantage of for the past year or so are taking note of the federal government’s stepped-up interest and actions in ocean shipping and railroad practices. While they’ve not noticeably intervened yet, a few of the more notable actions they’ve taken, plus potential Congressional action, should be on the minds of our customers hoping that maybe this time the phrase, “I’m from the government, I’m here to help,” will mean something for their supply chains.

 

The Federal Maritime Commission has jurisdiction over ocean shipping. They regulate companies like ours who require a license to offer ocean transportation services as well as the carriers who operate the vessels. Last year, the FMC opened a Fact-Finding into the demurrage and detention practices of ports when containers were trapped on terminals unable to be recovered but cargo owners were nonetheless being charged. 

The situation escalated when American exporters were unable to secure equipment because carriers were sending empties back to Asia to load with more profitable cargo rather than repositioning boxes. 

These activities became the subject of a subcommittee hearing in the House of Representatives.

 

Earlier this month, the President signed an Executive Order focused on competitiveness and targeted industries that were exhibiting monopolistic and antitrust behavior. Called out specifically were ocean lines and Class 1 railroads, both of whom the Executive Order directed regulatory agencies to investigate. For carriers, the FMC, for railroads, the Surface Transportation Board.

 

That was on a Friday. The following Monday, the FMC announced the signing of their first-ever interagency MOU with the Justice Department to announce shared resources and initiatives to investigate antitrust behavior by shipping carriers. Then, they unveiled their plan to audit the demurrage and detention practices of the nine largest carriers by market share.

The Surface Transportation Board then announced their intention to force railroads to open their books to investigate their charging practices, especially given the fact that in some cities the time to recover a container was measured in weeks, not days, and they were collecting thousands of dollars in fees per box.

As if both sets of companies didn’t have enough to worry about with this sudden interest in their practices and record profitability, Congress is drafting legislation that would rewrite the US shipping laws and curb the ability to assess these record-level punitive charges.

 

Is the cloud over the horizon the thundering hooves of the cavalry, or just another dust storm of bluster and little else? At this point, it’s hard to tell. But for those who’ve been in the logistics business for a few decades, the early 00’s saw the Justice Department indict, prosecute, and send to prison air cargo executives from global airlines for price-fixing of surcharges. They’ve gone after other industries before, and given the precipitous decline in the number of carrier and rail choices because of mergers and consolidation, a handful of companies are all comporting themselves in identical fashion – a behavior that could cost them sometime in the future.

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