Trendwatch: FMC halts Gemini alliance and demands more info from Maersk and Hapag; ILA says threat of East Coast and Gulf Ports strike growing more likely; Dutch Supreme Court says Schiphol slots ruling wrong

FMC halts Gemini alliance and demands more info from Maersk and Hapag

Maersk and Hapag-Lloyd’s Gemini Cooperation, a capacity-sharing alliance between the second and fifth top global container lines, was put on hold on Friday by the US Federal Maritime Commission (FMC), which is demanding “more information” to determine “potential competitive impacts”.

Gemini will offer a combined capacity of 6m teu, just above MSC’s standalone 5.6m teu.

The FMC said: “The commission has determined that the Gemini Cooperation agreement as submitted lacks sufficient detail to allow for a complete analysis of its potential competitive impacts

The FMC stressed that whatever information it obtains in its investigation cannot be made public, explaining: “Information sought as part of a ‘request for additional information’ is commercially sensitive and is not publicly published.

ILA says threat of East Coast and Gulf Ports strike growing more likely

The leader of the International Longshoremen’s Association (ILA) said July 12 that the threat of a strike at all Atlantic and Gulf Coast Ports is becoming more likely, as time is growing short before the current contract expires on September 30, 2024. Harold J. Daggett, ILA president and the union’s chief negotiator, said that the employers represented by United States Maritime Alliance (USMX) are running out of time to negotiate a new Master Contract agreement and avoid and coast-wide strike on October 1, 2024.

“Only 80 days remain before the end of our current contract and we are waiting on USMX,” said Daggett. “The actions of violating our current Master Contract by some of their members caused us to cancel scheduled negotiations with USMX in early June.”

Dutch Supreme Court says Schiphol slots ruling wrong

The Supreme Court in the Netherlands has upheld a ruling that a plan to cut slots at cargo hub Amsterdam Schiphol Airport was unlawful.

This decision follows something of a battle between the government, the International Air Transport Association (IATA) and airlines since the Dutch government’s “experimental regulation” to cut flight numbers at the airport from 500,000 per year to 452,500 was proposed in 2022 to address noise and environmental pollution.

In March last year, the International Air Transport Association (IATA) and airlines began a legal challenge over the Dutch government’s decision to reduce capacity at Schiphol, owned and operated by Royal Schiphol Group and itself majority owned by the government.

Hong Kong retains top slot among top 20 cargo airports

Hong Kong retained its first position with a three percent increase in cargo handled at over 4.3 million tonnes in 2023.

Memphis and Shanghai Pudong followed with 3.9 million tonnes (down four percent) and 3.4 million tonnes (up 10 percent), respectively, according to the latest data from Airports Council International (ACI).

Airbus sees lower demand for freighters

Airbus anticipates that 2,470 freighters will enter the industry over the next twenty years, comprising 940 new-builds and 1,530 conversions, down from its earlier projection of 2,510 freighters.

The European manufacturer has also revised its forecast for cargo demand growth from 2024 to 2044 to 3.1% annually, down from its previous projection of 3.2%, says the latest update of the Global Market Forecast.

Airbus foresees the global freighter fleet expanding from 2,220 to 3,360 aircraft by 2043, supported by a higher retention of current aircraft around 890, up from the previous estimate of 720.

Port of Long Beach awarded nearly $8M to improve visibility platform

The Port of Long Beach’s Supply Chain Information Highway received nearly $8 million in funding from a California program for port interoperability, according to a July 11 press release.

The port will use the funds to pursue several projects that will enhance the digital platform, allowing it to provide better cargo planning resources for more than 200,000 shippers who use the Port of Long Beach. These new enhancements are set to increase cargo velocity and tighten coordination across modes of transportation, Port of Long Beach Executive Director Mario Cordero said in the release.

Carriers getting choosy on what they carry – opting for lighter loads

Container lines are becoming increasingly selective about the commodities they want to carry, targeting “more for less, in size” during the peak season rush.

Heavy and overweight shipments have taken a hard knockback from carriers working to push vessel loads on available space from India to Europe, amid strong booking demand, according to market sources.

They noted that major liners were pushing for lightweight freight bookings and tightened their cargo weight policies to realise their stowage plans.

German Port Workers to Vote on Contract Proposals After Multiple Strikes

Germany’s Ver.di union has decided to present two possible alternatives for a new dockworkers’ contact to the membership for comments after four rounds of contentious negotiations. Ver.di says it will determine its response after the membership survey to what the Central Association of German Seaport Operators (ZDS) called its final offer.

The contract for 11,000 port workers expired at the end of May with the union staging a series of warning strikes during June and July bringing cargo shipments and containers to a halt at major ports ranging from Hamburg to Bremerhaven and Edem. The stoppages ranged from one to two days at a time with carriers such as Maersk warning that they could be forced to divert ships or experience delays.

Lufthansa’s troubles are only getting worse, says Stifel Analyst

Deutsche Lufthansa AG is facing long-running “profound” problems ahead, according to Stifel Nicolaus & Co. analysts, who cut their price target to a new low and urged clients to sell the stock.

The German carrier is growing capacity too quickly and will continue to face pressure on pricing and costs, according to Johannes Braun. He cut his price target to €4.50, a new low among analysts tracked by Bloomberg and one that implies about a 20% drop from current levels. Lufthansa shares fell as much as 3.1% on Monday.

“There is too much inefficient capacity growth despite yield weakness, combined with perceived product shortcomings and uncompetitive cost structures,” Braun wrote in a note, cutting his rating to sell from hold.