TradeLens global data-sharing platform shuttering

The blockchain-enabled global platform TradeLens will go offline by the end of the first quarter of 2023.

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A.P. Moller – Maersk and IBM announced Tuesday the dissolution of the blockchain-enabled TradeLens platform. 

“TradeLens was founded on the bold vision to make a leap in global supply chain digitization as an open and neutral industry platform. Unfortunately, while we successfully developed a viable platform, the need for full global industry collaboration has not been achieved. As a result, TradeLens has not reached the level of commercial viability necessary to continue work and meet the financial expectations of an independent business,” Rotem Hershko, head of business platforms for Maersk, said in the announcement. 

The platform will go offline by the end of the first quarter of 2023, according to the news release.

TradeLens was launched by IBM and GTD Solution, a division of Maersk, in August 2018 as an open and neutral platform underpinned by blockchain technology for the transparent and secure exchange of global trade information. 

Zim Integrated Shipping Services joined TradeLens in April 2019, followed by CMA CGM and MSC in May and Hapag-Lloyd and Ocean Network Express in July of that year. By December 2019, TradeLens was publishing 2 million events per day and its ecosystem included more than 175 organizations. 

Marc Bourdon, senior vice president of CMA CGM’s commercial agencies network, acknowledged in October 2020 that it was highly unusual for competitors to cooperate, particularly when it came to sharing information. 

“Digitization is a cornerstone of the CMA CGM Group’s strategy aimed at providing an end-to-end solution tailored to our customers’ needs. An industrywide collaboration like this is truly unprecedented. Only by working together and agreeing to a shared set of standards and goals are we able to enact the digital transformation that is now touching nearly every part of the global shipping industry,” Bourdon said. 

At the time of Bourdon’s statement, TradeLens was gathering daily data from more than 600 ports and terminals around the world.

Andre Simha, MSC’s global chief digital and information officer, called the TradeLens collaboration “an important initiative in the digitalization of global shipping and logistics with the potential to help carriers and their customers to increase transparency and reduce errors and delays, all at a crucial time when the industry is rethinking and improving the resiliency of supply chains.”

Tuesday’s announcement said Maersk is still committed to digitizing the supply chain “through other solutions to reduce trade friction and promote more global trade.” 

Hershko said TradeLens’ progress will be used as a steppingstone to advance Maersk’s digitization efforts and that the company looks forward to “harnessing the energy and ability of our technology talent in new ways.” 

The announcement did not say what roles, if any, TradeLens employees or its CEO will have at Maersk going forward. 

Kim Spalding, who was hired to lead TradeLens earlier this year, recently told FreightWaves her priorities for the platform.

“First, we want to help the industry scale digitization. One of those areas I’m focused on is partnerships. The second thing is just to focus on really great customer experiences, which means we want to continue to rapidly launch features that make our products better, and we want to expand the breadth, coverage and quality of the data that we have on the platform to help customers,” she said. 

Asked Tuesday what would become of Spalding and other TradeLens employees, a Maersk spokesman told FreightWaves, “At this point, we have no further comments.”

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Click here for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.

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Enhanced ship routing key to US-Singapore low-carbon corridor

Shippers and carriers are increasing the pressure on ports and other supply chain participants to roll out “green corridors” using digital technology.

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A trans-Pacific trade lane between Singapore and Southern California will use enhanced routing technology to help convert it into a corridor aimed at speeding deployment of low- and zero-carbon container ships.

The “green and digital shipping corridor,” a partnership between the Maritime and Port Authority of Singapore (MPA) and the ports of Los Angeles and Long Beach, is part of a wider Green Shipping Challenge initiative unveiled at the 27th United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt, earlier this month.

Included in the green corridor partnership is C40 Cities Climate Leadership Group, a network of international mayors committed to limiting rising average global temperatures.

“Reducing greenhouse gas emissions in the maritime supply chain is essential, and this trans-Pacific partnership will help us build a network of ports and key stakeholders to help decarbonize goods movement throughout the Pacific region,” commented Port of Los Angeles Executive Director Gene Seroka.

The green corridor connecting Los Angeles and Singapore builds on a similar low-carbon corridor partnership announced in January by the ports of Los Angeles and Shanghai, major hubs on one of the world’s busiest container shipping routes. Similarly, Singapore, Los Angeles and Long Beach are hub ports and considered “vital nodes on the trans-Pacific shipping lanes and key stakeholders in the maritime sector’s green transition,” according to the corridor partners.

“While we don’t have as much container volume moving between our port complex and Singapore, it’s probably the biggest fuel bunkering hub in the Pacific,” Chris Cannon, chief sustainability officer at the Port of Los Angeles, told FreightWaves. “So we really wanted to begin to work with them because of the critical importance they play in fuels and bunkering for the entire trans-Pacific trade.”

Cannon said that up until the green corridor partnerships with Shanghai and Singapore, cutting air pollution centered around cargo-handling equipment, drayage trucks serving the container terminals, zero-emission locomotives moving in and out of the port, and low-sulfur fuel emission control areas that extend 200 nautical miles from the coastline.

“That’s where our focus had ended,” Cannon said. “But with the green shipping corridors, our focus is starting to be on what we can do to reduce carbon emissions along a ship’s entire journey.”

Untangling supply chains

To make that happen, the partners in the initiative will use digital technology, Internet of Things (IoT), and cloud-based computing to improve how cargo is transferred, Cannon emphasized.

“The plan is to identify the most direct and efficient routing for the ships and the most efficient way to track and provide advance notice of where cargo’s going, so that when it’s picked up, it can be picked up quickly, with advanced staging in place so that you can plan for things like customs clearance, freight forwarding and [drayage] appointments,” he said. “If we can reduce the number of times a container is touched, that reduces the amount of overall activity associated with the movement of that container, which means less fuel used which generates less carbon emissions.”

While carriers presumably always seek the most efficient routing to reduce fuel costs, electronic data interchange within various sectors of the supply chain has been lacking, according to Peter Zimmerman, North American software sales manager for Vormittag Associates, Inc., an enterprise resource planning company.

“If we know when a ship is due in at port, the port can be more efficient — whether that’s storing cargo or notifying the trucking or rail company,” Zimmerman told FreightWaves. “So it’s not just the green aspect of it. There hopefully will be an opportunity for cost reduction in the supply chain as well.”

Initiative has shipper, carrier buy-in despite costs

The strongest backers of the initiative are the cargo owners, according to Cannon. He noted that Amazon, Ikea and other retailers last year committed to purchasing ocean freight services powered only by zero-carbon fuels by 2040 because consumers increasingly are asking that the goods they buy are transported in a way that reduces their carbon footprint.

“They’re telling the shipping lines, if you want my business, you better get yourself a low-carbon ship because, if you don’t, someone else will,” he said.

Container ship operators A.P. Moller – Maersk, CMA CGM, COSCO Shipping Lines and Ocean Network Express have signed on to the Shanghai corridor and are expected to commit to the Singapore corridor as well.

Cannon also acknowledged the low-carbon ships on order by some of the shipping lines are more expensive to operate.

“Cargo owners are willing to pay more if their cargo is moved in the manner they want,” he said. “And shipping lines are going to build the cost into their business plans because that’s what their customers want.”

No regulatory oversight — yet

The Federal Maritime Commission, which regulates international container shipping in the U.S., has been extracting information from carriers, shippers, ports and terminal operators to figure out how to improve data flow in an effort to speed cargo through the supply chain.

Cannon points out, however, that the green and digital initiatives are so far voluntary with no mandates planned from regulatory agencies.

“The best way to get progress in reducing emissions in shipping is to start voluntarily and use incentives to encourage the use of these types of fuels and participate in these corridors,” he said.

At the same time, he said, regulators are interested and supportive.

“The IMO [International Maritime Organization, the U.N. agency responsible for regulating maritime shipping] is excited and wants to help us, and would like to help us with tracking our progress,” Cannon said. “FMC is interested as well, along with the [Environmental Protection Agency] and the [California Air Resources Board].”

The World Shipping Council (WSC), which represents container line shipping and which Cannon said also supports the Singapore initiative, wants to ensure that any regulations involving the adoption of low-carbon fuels takes into consideration “the total climate footprint from production to combustion.”

In a Nov. 21 letter to the European Union, which has proposed using an emissions trading system as a way to lower emissions from global shipping, WSC and its coalition members emphasized that when a price is set for fuel emission, “it is important that a fuel is not considered green if it has left a significant climate footprint during extraction and production,” stated Jim Corbett, WSC’s environmental director for Europe.

“Liner carriers are already investing in alternative fuels and technologies, and urge the EU to ensure policies are geared to accelerate investments in the necessary renewably derived fuels by adopting a full life-cycle perspective.”  

Click for more FreightWaves articles by John Gallagher.

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CMA CGM Reduces Debt as Freight Rates Return to Normal

French shipping giant CMA CGM has reported yet another huge quarterly profit, but uncertain economic conditions, normalizing trade flows and a sharp decline in freight rates weigh on the company’s…

French shipping giant CMA CGM has reported yet another huge quarterly profit, but uncertain economic conditions, normalizing trade flows and a sharp decline in freight rates weigh on the company’s...

Shipping’s Attempt to Hire More Women Runs Into a Male-Dominated Culture

By Brendan Murray (Bloomberg) — People often want to take photos of Taalke Middents on the container vessels she helps helm through ports and passages like the Suez Canal. That’s because…

By Brendan Murray (Bloomberg) — People often want to take photos of Taalke Middents on the container vessels she helps helm through ports and passages like the Suez Canal. That’s because...

Banana Supply Headache Fuels Russia-Latin America Shipping Talks

MOSCOW, Nov 22 (Reuters) – Fesco FESH.MM, one of Russia’s largest transportation companies, said on Tuesday it was in negotiations to establish a shipping route between Russia and Latin America, in a move …

MOSCOW, Nov 22 (Reuters) – Fesco FESH.MM, one of Russia’s largest transportation companies, said on Tuesday it was in negotiations to establish a shipping route between Russia and Latin America, in a move driven by the need...

CMA CGM, Hapag-Lloyd announce leadership changes in North America

Ed Aldridge is retiring from CMA CGM America, and Uffe Ostergaard is leaving Hapag-Lloyd.

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Both the CMA CGM Group and Hapag-Lloyd announced North American leadership changes this week. 

CMA CGM said Ed Aldridge, president of CMA CGM America and American President Lines (APL), will retire Dec. 6 and be replaced by Peter Levesque, the former president of Ports America Group.

Port of Los Angeles Executive Director Gene Seroka accepts some of the 200,000 face masks donated by CMA CGM North America from its president, Ed Aldridge, in June 2020. (Photo: CMA CGM)

In Wednesday’s announcement, France-headquartered CMA CGM said it was grateful for Aldridge’s “leadership, dedication and the results he has achieved during the last 14 years, as the company has added differentiated ocean services, expanded its logistics capability in North America and significantly grown ocean volumes and market shares.”

American Shipper reported in September 1999 that Aldridge had resigned as senior vice president of North America for Sea-Land Service to become president of APL. He left APL in 2003 to launch and serve as CEO of U.S. Lines, which was acquired by CMA CGM in 2008. CMA CGM acquired APL in 2016. In June 2020, Aldridge became president of CMA CGM North America and APL.

Levesque became president of Ports America, touted as the largest marine terminal operator and stevedore in North America, in February 2020.

Levesque, who left Ports America last year, previously spent 25 years based in Hong Kong and held leadership positions in international transportation, logistics and supply chain companies, including CEO of Modern Terminals Limited, Ceva Logistics and DHL, CMA CGM said.

Sandlin replacing Ostergaard at Hapag-Lloyd

Hapag-Lloyd announced that Uffe Ostergaard, president of the shipping line’s North American region, is leaving the company. Stuart Sandlin, currently the senior vice president of sales for the United States, will assume the president’s position Jan. 1. 

Sandlin joined Hapag-Lloyd in 2001 in a sales position in Atlanta and went on to hold several management positions in the United States and Germany, the company said. He left Hapag-Lloyd in 2015 to serve as president of North America for the United Arab Shipping Co. (UASC). Sandlin again became part of Hapag-Lloyd when the German shipping company acquired UASC in 2017.

“With Stuart’s leadership experience and his vast commercial understanding, we will have a strong foundation for managing one of our most traditional key markets but also for further growth in North America,” Hapag-Lloyd Rolf Habben Jansen said in Monday’s announcement. 

Ostergaard worked at Maersk for 20 years, serving as group head for global marketing from 1992 to 2012. In 2013, he joined UASC, serving as chief commercial officer until 2017. Following the merger of Hapag-Lloyd and UASC, he became president of the North American region in April 2018. 

“Uffe has made an enormous contribution to Hapag-Lloyd,” Habben Jansen said. “We thank him for his passionate work for our company — not least for completing the consolidation of our USA-based operations in Atlanta. We wish him the very best and lots of success in his new role.”

The announcement did not name that new position, only saying that Ostergaard “will take over another management position outside of Hapag-Lloyd in the United States.”

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Click here for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.

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CMA CGM’s Billionaire Boss in Search of Media Acquisitions

By Tara Patel (Bloomberg) — French shipping billionaire Rodolphe Saade is seeking more media acquisitions after snapping up a regional newspaper and failing to get his hands on a broadcaster. “I…

By Tara Patel (Bloomberg) — French shipping billionaire Rodolphe Saade is seeking more media acquisitions after snapping up a regional newspaper and failing to get his hands on a broadcaster. “I...

CMA CGM Says Biogas-Powered Ships Will Reduce Emissions by 67%

French shipping giant CMA CGM recently announced a new series of seven containerships powered by biogas to serve the French West Indies. The ships include four 7,300 TEU vessels and…

French shipping giant CMA CGM recently announced a new series of seven containerships powered by biogas to serve the French West Indies. The ships include four 7,300 TEU vessels and...

South Florida Container Terminal orders 12 electric gantry cranes

South Florida Container Terminal has ordered 12 electric, emission-free, rubber-tired gantry cranes and welcomed the launch of CMA CGM’s Medgulf service at PortMiami.

South Florida Container Terminal (SFCT) at PortMiami has ordered 12 electric, emission-free, rubber-tired gantry (RTG) cranes to prepare for cargo growth and larger vessels — and to help meet decarbonization goals.

The RTG cranes are being purchased from Kalmar, which is part of Finland-headquartered Cargotec. SFCT did not provide the cost of the cranes but did say delivery is expected in the second quarter of 2023. 

SFCT said the order comes on the heels of a three-year modernization project that transformed the facility into a more sustainable operation with electric RTG cranes and added cargo storage space, using a densification model that allows 33% more usability in the container yard than before. This will increase capacity to approximately 300,000 lifts per year, according to a news release from APM Terminals. SFCT, founded in 2008, is a joint venture between APM Terminals and Terminal Link

SFCT is already seeing new business. CMA CGM’s Medgulf service began at the end of September. Six vessels operate the weekly service, which makes its first U.S. call at PortMiami. The port rotation is Tanger, Morocco; Genoa, Italy; Valencia, Spain; Miami; Veracruz and Altamira, Mexico; Houston; and Tanger.   

“Miami’s business center strength and Florida’s growing consumer market are creating excellent business opportunities for supply chain planners,” Hugh Healey, head of SFCT, said in the news release. “We’re excited to welcome the new CMA CGM Medgulf service and also announce the next phase of our terminal improvement plan.” 

SFCT said its modernization project aligns with the master plan of PortMiami, which is financing $38 million in port infrastructure improvements and applying for federal funds  to achieve port decarbonization goals by electrifying yard-handling equipment and yard trucks. 

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Click here for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.

Tidal wave of new container ships: 2023-24 deliveries to break record

The number of newly constructed container ships set to hit the water will exceed any previous capacity additions.

photo of a container ship newbuild under construction

Shipping adheres to a time-honored tradition: When shipowners make exceptionally high profits, they order a lot of new vessels. When those newbuilds are delivered by the yards, it kills shipowners’ profits.

Such boom-and-bust behavior has been de rigueur for over a century. As London shipbroker J.C. Gould, Angier & Co. wrote in 1894: “The philanthropy of the shipowners is evidently inexhaustible. The amount of tonnage on order guarantees a long continuance of low freight rates.”

The container industry has experienced the most profitable two years in shipping history in 2021-22. Right on cue, owners ordered more new container ships than ever before. Even now, as freight rates tumble, they’re still ordering more.

“A huge number of new large container ships are going to hit the water at a time of stagnating demand,” warned Alphaliner in a report on Tuesday. “The market could struggle to absorb all these new ships.”

The container-ship orderbook now stands at 7.1 million twenty-foot equivalent units, according to Alphaliner shipping analyst Stefan Verberckmoes. The previous peak was 6.6 million TEUs in 2008. At that point, tonnage on order totaled 60% of the capacity of the on-the-water fleet.

Since then, the global fleet has more than doubled, so the current orderbook — a record in absolute capacity terms — represents “only” 30% of existing tonnage, noted Alphaliner.

Record newbuild deliveries in 2023-24

The majority of tonnage on order will be delivered the next two years: 2.34 million TEUs in 2023 and 2.83 million TEUs in 2024, compared to around 1.1 million TEUs in both 2021 and 2022, said Verberckmoes.

Note: Currently orderbook stretches out only to early 2026 (*) Low value for 2026 is not a forecast (Chart: Alphaliner)

The scale of the upcoming deliveries is unprecedented. Historical delivery data from Clarksons shows that annual fleet growth averaged 970,000 TEUs in 2001-20. Deliveries in 2023-24 will be 2.6 times higher than that average.

The previous single-year record for annual growth was 1.7 million TEUs in 2014, according to Clarksons data, well below what’s to come.

Meanwhile, the current orderbook continues to grow. New orders favor dual-fuel tonnage that can burn both traditional marine bunker fuel as well as liquefied natural gas or methanol. Alphaliner data shows that 29% of capacity on order is dual-fuel.

Artist rendering of Maersk methanol-powered newbuild (Photo: Maersk)

Maersk announced orders Wednesday for six more 17,000-TEU newbuilds that can run on either traditional fuel or green methanol. All are for 2025 delivery. The new orders bring Maersk’s methanol-fueled orderbook to 19 17,000-TEU vessels.

Alphaliner said that MSC is reportedly near a deal for 12 16,000-TEU newbuilds that can burn LNG; Yang Ming is inviting bids for at least five 15,000-TEU vessels with LNG-fuel capability; Maersk is looking at an additional series of 2,500-TEU ships that can run on methanol; and Cosco is considering orders for six methanol-powered 23,000-TEU ships plus nine conventional 15,000-TEU ships.

Ships in existence vs. ships in service

“The jury is still out on whether the market can or cannot absorb this,” wrote Alphaliner.

Maersk CEO Soren Skou addressed this issue during his company’s Q2 2022 quarterly call. “What matters in our view in container shipping is not so much how many ships exist,” he explained. “What matters is how much capacity we deploy in our networks compared to the demand that we have.

“If you go back to 2020, demand was down sharply, by 15%, in the second quarter. But [freight] prices stayed flat because all of the networks adjusted capacity and idled tonnage that was not needed. Certainly, going forward, that will also be our philosophy. We will provide the capacity our customers need, but we will not sail all the capacity we have unless there’s demand for it.

“That’s what I see for this industry, assuming everybody continues to operate their networks the way they do today,” said Skou. “I see little reason to think people would do something different.”

“Something different” is exactly what happened in the last big downturn. Following heavy newbuild deliveries in 2014, the container industry descended into a price war in 2015-16, leading to the bankruptcy of Hanjin.

Scrapping and slow steaming

“What [carriers] do next will go a long way in determining how much of the gains of the supercycle they get to keep,” wrote Drewry in a report on Tuesday. “Failure here will mean that the industry will be doomed to return to the low-margin pre-pandemic trend.”

Carriers “face an enormous challenge taming the one thing they have control over: supply,” said Drewry. “The problem is there is a lot of it.”

If carriers idle tonnage to compensate for demand weakness in the years ahead, idled ships that are owned would still incur capital costs and idled chartered ships would still incur lease payments.

One way to offset this is for carriers to scrap older vessels. Virtually no container ships were scrapped in 2021-22 because freight rates were so high. Carriers “will look to offload as many older, more polluting ships from the market as quickly as they can,” predicted Drewry. “Our base forecast includes provision for a near-record level of demolitions in 2023.”

But Alphaliner said “it is unlikely that the quantity of ‘scrap-able’ ships will be enough to offset the supply and demand imbalance. Most certainly, younger vessels will likely need to be torched too, to alleviate the pain.”

Carriers could also throttle sailing speed, which would cut fuel costs, reduce emissions and remove effective supply. Skou estimated that environmental regulation-driven slow steaming could reduce global fleet capacity by 5%-15% in the medium term.

Expiring charters will make room for newbuilds

Another big lever for ocean carriers: They can let existing charters expire to offset newbuild deliveries. 

Alphaliner noted that 56% of capacity on order will either be owned or chartered by one of the top five carrier groups: MSC, Maersk, CMA CGM, Cosco and Hapag-Lloyd.

The company’s data also shows that the top 10 carriers have significantly more chartered tonnage in operation today than they have on order. This should allow carriers to make room for newly christened ships via charter expirations.

According to Alphaliner data, MSC currently has 2.5 million TEUs on charter, 68% more capacity than it has on order. CMA CGM is chartering 1.8 million TEUs of capacity, 2.5 times what it has on order. Cosco charters more than twice its orderbook. ONE has 72% more chartered tonnage in service now than it has under construction at the yards, Zim (NYSE: ZIM) 17% more.

(Chart: American Shipper based on data from Alphaliner)

In general, Drewry voiced optimism that the carriers could use various strategies to avoid a wipeout when the tidal wave of newbuilds arrives. 

Shipping lines are “entering a period of managed decline,” it said. “Following consolidation and alliance restructuring, carriers are better placed now to tackle the ‘danger’ years than ever before” and to “pull the right capacity levers to ensure a soft landing for the market.” 

Click for more articles by Greg Miller