Episode Transcript
[00:00:00] Speaker A: Hello and welcome to the Lodestar Podcast News in Brief, where we are going to be rounding up all the major points of last week's supply chain news and giving you some insight on what you might see coming up in the news. On this episode, we are going to be taking a look at tariff refunds, the dynamics shaping the air and ocean freight markets, plus a look at rates. We're going to be having a look at the wise tech earnings, plus much, much more.
And before we get into the news from the week, I just want to quickly shout out this week's sponsor, which is Port Everglades. With direct shipping routes to Central and South America, the Caribbean and Europe, South Florida's Port Everglades is your leading container port. Bulk break, bulk perishable and containerized cargo can go from ship to store quickly and efficiently by road or rail. To learn how Port Everglades is perfectly positioned to move your goods through, visit port everglades.net and of course, as always, I am joined this week by Gavin Van Mael. Hello Gav.
[00:01:01] Speaker B: Hello Charlotte.
[00:01:03] Speaker A: And Alex Linane. Hello Alex.
[00:01:05] Speaker C: Hi Charlotte.
[00:01:06] Speaker A: Now, at the end of last week, very conveniently, on the Friday afternoon, just as we were wrapping up for the week, we got the news that the Supreme Court had made its ruling on Donald Trump's IEEPA tariffs and ruled them unlawful. So Alex, what has the fallout been this week?
[00:01:23] Speaker C: Well, as we anticipated, it's messy, I think is the right word to use here. So there's potentially between 100 billion and $300 billion worth of tariff refunds available.
But the court didn't spell out how the refunds were going to be handled.
The process has been Left to the U.S. court of International Trade.
So experts are saying that it's going to be a multi year litigation heavy kind of exercise, particularly for already liquidated entities.
So interestingly, it's kind of created a secondary market.
So some SMEs reportedly have been selling their claims to refunds for as little as 10 cents on the dollar.
And some companies, in fact, some connected to the White House administration have been buying those refunds. So it could well be a money spinner for some companies, but probably not ones who actually paid out.
And as SECO Logistics told us last week, even those companies that sell their rights may still have to do the paperwork and pursue the refunds.
So there's a question about who ultimately will be benefiting from all that.
The big news probably has been that FedEx immediately went in and filed a court case seeking a full refund of its duties paid. So that's potentially worth hundreds of millions of dollars in the case of FedEx.
And that's the first corporate major player to sort of look to secure a payment via the courts. But I expect that this story will go on and on and on, to be honest.
[00:03:00] Speaker A: Yeah. A lot of people I've spoken to have just said that it's going to be years, years before anyone gets refunds. But it is going to be interesting to see it play out. I had a few different conflicting opinions from people. Some forwarders seem to think that there'd be a massive rush of cargo non now that shippers don't have to contend with these IEPA tariffs. So they're going to be restocking in the us. But then other forwarders seem to say that there's going to be not much of a demand surge. Obviously this would have an impact on rates, but Gav, how are rates looking at the moment in ocean freight?
[00:03:33] Speaker B: Well, as far as the spot rates go, it's been another week of very muted trading as we're still sort of in the Chinese New Year holiday period.
Some offices have been reopening in China over the last week and some factories, but it's sort of more of a movement back to work than a sort of full reopening. And it normally takes another week or so for everyone to get back in place and for supply chains, for truckers particularly to be back and hauling the containers into the ports.
[00:04:06] Speaker C: So,
[00:04:09] Speaker B: so there's, you know, so lower volumes traded normally leads to less sort of price movements. And that's what we saw again last week.
WCI has very gentle drop of 1%.
So I think it's going to be next week or rather this coming week when we'll see whether or not the tariff situation has led to a demand spike that you're alluding to there. And of course that will coincide with the 1st of March. That's Sunday, that'd be yesterday with the 1st of March general rate increase of between $2,000 and $3,000 depending on the carrier for Trans Pacific volumes.
So that's where we are with rates. It's not really a very clear picture either, frankly.
[00:04:55] Speaker A: Right. And do you have any idea of what this might do to the upcoming Trans Pacific contracting season? I know you're headed to TPM this week.
[00:05:02] Speaker B: Yeah. So obviously it's very crucial period both for Trans Pacific and Asia, Europe actually. But we've talked before about how these, these, these calendars have sort of started to slip in recent years.
We ran a story Late last week on Wanhui and their general manager Thomas Hie and the feedback from here, he claimed that Shippers. The feedback that he has had from shippers is the 2026 annual transpacific contracts that they'll be signing will be in the range of $1,600 to $1,700 per 45th. So it's quite interesting. We've got first sort of indication of where we think annual rates might, might sort of fall into this year. That would be for Wanhai. Those sort of rates would represent around a 14% increase on last year for that carrier. But.
[00:05:57] Speaker C: But
[00:05:59] Speaker B: as with what you've discovered Charlotte, we don't really know how widespread that view is amongst other carriers.
Probably worth noting that the current WCI spot rate on the Shanghai Los Angeles leg is $2,190. So yeah, I mean what's that? That's a sort of 5 to 600 spot rate premium compared to annual rates.
Probably be about right. But then we also know from west coast forwarders that you can get discounted spot rates in around 1450-1600 dollar band. So you know, you normally expect the spot rate to be a few hundred dollars higher than the annual contract rate. So yeah, it'd be interesting to see whether WAN High is an outlier or it's. Or it's more in the middle of the pack.
[00:06:49] Speaker A: Yeah, it does just throw in another element of confusion before contracting. I was speaking to Zenita's Peter sand earlier and he said that he thinks that it's just going to mean that people wait a bit before they sign contracts. He said it might be pushed further for long term anyway until people know what is actually happening.
But you'll be going to tpm so I'm sure you'll get lots more insight here and it's a good job it's over on the US west coast because the east coast was severely impacted by blizzard conditions last week. This also impacted air cargo operations at New York's JFK, Newark, LaGuardia, Boston, Logan, Philadelphia International and Washington's Reagan International. I believe this is cleared now but like with any disruptions, it's always going to cause a bit of a backlog and take a few days before things return to normality.
This episode is sponsored by Port Everglades. With direct shipping routes to Central and South America, the Caribbean and Europe.
South Florida's Port Everglades is your leading container port. Bulk break, bulk, perishable and containerized cargo can go from ship to shore quickly and efficiently by road or rail to Learn how Port Everglades is perfectly positioned to move your goods. Visit port everglades.net Alex now that we have covered ocean rates, it seems only fair to check in on the air side of things. So how are the dynamics looking over in the air freight market?
[00:08:12] Speaker C: Kind of. Overall the market's quite dull.
It's not collapsing though, it's just moving slightly. I had a really good chat with Marco Blumen from AVN again, this time on the demand side of air cargo, and he showed me that US air imports would actually be negative if it wasn't for data center traffic, you know, servers and all that sort of thing, which is now one point. Well, last year was 1.4 million tons annually, or about 5% of total air cargo volumes. So fairly significant.
That and E Commerce, which is not ending, just moving is going to keep air cargo going this year it looks like.
So in E Commerce, China, US volumes have taken a bit of a hit, but China, Europe volumes have gone up and also to Latin America and the Gulf in pricing terms. Tacindex noted last week that the Baltic air freight index fell 6% week on week, but it's still Chinese New Year essentially that that data. So it's not terribly interesting. It's only marginally down year on year.
Shanghai and Hong Kong rates eased a bit on the on the week, but stayed ahead of last year. Actually Taiwan to the US which is very much server traffic that's still continuing to go very strong.
So yeah, weak still in Chinese New Year lull. Not much to say about it really.
[00:09:40] Speaker A: Thanks Alex. And I just want to have a quick look at Lodestar Premium while I've got you here. They did a rather good analysis on WiseTech earnings which I noticed you did not report on last week. You stayed well away from that. But could you give us the details of some Wise Tech earnings please?
[00:09:56] Speaker C: So yeah, I mean low Star Premium has been covering it fully, so it really doesn't need me to add my, my top of the thin but on the soul.
Wisetech said very little about dsv. Actually it did note that no customers account for more than 10% of its income.
And it said it had factored in DSV's integration with Schenker in its four year guidance. It didn't really specify more than that though.
Mostly it talked about its very popular value packs which now cover 95% of its customers.
They're explicitly designed to protect revenues and at the same time they're using AI to cut costs. So the sort of big headline news was that they're cutting 2,000 jobs by the end of next year.
Overall, the results were solid. They weren't spectacular, but they were solid. They were steady. A bit of margin dilution, acquisition of E2 Open, and there's quite a lot riding on the execution of the new model of these value packs.
So, yeah, there's still quite a lot to watch there. But for analysis of it all, I'd read loud. Premium.
[00:11:05] Speaker A: Yeah, those job cuts were quite surprising. I think that was the bit that caught most people's attention from their earnings report. Was there anything else on Premium that you saw our readers might be interested in?
[00:11:16] Speaker C: Yeah, there's a really good article on C.H. robinson and its use of agentic AI and how that's faring for the company. And I'll give you a spoiler alert. It's. It's faring pretty well, to be honest. In fact, on Premium this week, there is quite a lot on AI and its impact on logistics. So I would definitely recommend that for anyone interested in AI and logistics, which we all should be yav.
[00:11:38] Speaker A: A story that's been going on for a while that we've been monitoring is the ongoing saga of the control of the Panamanian ports Cristobal and Balboa. This took a bit of a dramatic turn recently. So what are the details?
[00:11:50] Speaker B: Yeah, this. I. I think a few weeks ago I said that this could suddenly.
Things could suddenly move quite quickly on this. So very quick background. The Panamanian government declared, or rather the Panamanian Comptroller General declared, that the found that the Panama Ports Company operating concession for those two ports, Balboa and Crispell, was unconstitutional.
In January, it merged that APM terminals had been tapped for running them on a temporary basis.
Hutcheson issued legal warning to apmt, basically saying, don't you dare touch it. We'll see you in court.
And then on Monday, it really got quite dramatic. So Monday morning saw representatives from the Panama Maritime Authority, accompanied by the country's labor minister, Jacqueline Munoz, went to the gates of Panama Ports Co. Balboa Terminal, which is a couple of miles outside Panama City, and basically physically present PPC executives from going to work. In fact, there's a. There's quite a nice photo from Associated Press of the gates of the terminal locked to the chain and padlock.
[00:13:08] Speaker A: Sounds like something out of a tv, you know.
[00:13:12] Speaker B: This is, this is, this is not far from.
This is not far off. The Wire, the second series of the Wire, which took place in Baltimore's Container Dundalk. Container term, I think so anyway. Yes, you're right, it is. It's a real target. Anyway, Hutch has confirmed it all. They said they're going to launch legal proceedings against the country of Panama and so on and so forth and I'm not entirely sure how effective that's going to be. But anyway, on the same days that they were being locked out of their facilities, Panama's president Jose Molino was signing temporary concession contracts for APM terminals to take over Balboa.
And also, and this is the one that we didn't see coming also for MSC's port operating on TIL Terminal Investment Limited to assume temporary control of Cristobal, which is actually the smaller of the two facilities. Now APM terminals are sort of in there now. Right. They told us that the first priority was stabilization of operations. So what that actually means, in effect the real issue here, it's not quite so easy as just coming in and you know, basically employing the same crane drivers but just with a different management team because.
Because of the IT systems. So my understanding is, is that Panama Ports Company used Hutchison's in house engine system and given that APMT probably has absolutely no access to that, IT said that it's going to be installing the Navis N4 system which is used by like 80% of the terminals worldwide instead. So that's quite interesting. So the first thing they're going to have to do here is actually completely redo the IT because they don't have access to the previous IT system.
[00:15:07] Speaker A: God, that sounds like a whole. That sounds like a whole drama. I'm sure we'll have more details on the load star coming up.
I'm sure you'll probably hear a lot about this at TPM is.
[00:15:18] Speaker B: Well, I hope so. You could say that they've opened Panama's box.
[00:15:24] Speaker A: Brilliant. That's your next headline.
[00:15:26] Speaker C: Thank you.
[00:15:26] Speaker A: Another, another interesting story in the ocean freight world from last week was that CMA CGM appears to be on the verge of launching a standalone Asia to Europe service. So what are the stops on this rumored service and what do you think prompted this?
[00:15:40] Speaker B: Yes, so nature abhors a vacuum and so too does shipping it seems. So basically Premier Alliance, I think we first covered this in December. The Premier Alliance's 2026 network for their Asia Europe services doesn't include or drops to plan entirely off it. So it's almost like a Gemini type network structure where Japanese exports for Europe will be all transshipped through shuttle services from Japan into Busan.
I mean Japan is the world's fourth largest economy and for it to Sort of have no direct links whatsoever to Europe. We all know we're all familiar with Japanese consumer electronics or car brands or in many cases clothing and stuff. It seems quite a call. So anyway, at the same time that Premier alliance is leaving Japan, it CMA CGM is set to launch what it terms its Ocean Rye service, which is a standalone service. It has three calls in Japan, Kobe, Nagoya and Yokohama.
A couple of calls in China, Xiamen and Yantian, and then it's straight to three North European ports, Rotterdam, Bremer, Harden and Southampton.
Interestingly, no transshipment call in Southeast Asia, which makes it almost unique amongst sort of Asia Europe strings, because that really underlies that. It is very much a direct service for Japanese exporters.
And of the.
I mean, I've been investigating the various line of databases, principally Easy, and I think at the moment when I last looked, they had seven of the possible 14 ships nominated. They're all CMA CGM ships. So we're assuming that the likelihood is that it's going to be a standalone CMA CGM Japan North Europe service operated outside of its membership of the Ocean Alliance.
[00:17:52] Speaker A: Looking to the upcoming week. Now I've already mentioned, Gav, that you are going to be at tpm. Is there anything you're particularly looking forward to when you get there? Any sessions that you've got bookmarked or any interviews you've got?
[00:18:03] Speaker B: Oh, loads. I mean, it's a roll call of all the issues facing supply chains right now. You know, tariffs, rates, reliability, visibility. No escape from reality.
I don't know why that came in.
Jeremy Nixon is making his last TPM appearance.
Janet Yellen's giving the keynote. They do have some very good speakers at the tpm. So I was really interested by John Bolton last year. So to be honest, it's such a big show that I try, I try myself, I try and leave a sort of gap in my schedule so that I can like react to stuff as it's going on rather than just, you know what I mean? Because otherwise you sort of go into something and you're in a straitjacket of your own making. So just opening some really high quality content as, as we normally get there.
[00:18:53] Speaker A: Yeah, I remember last year we had just finished for the day and we were about to head to the bar and then all of a sudden the news dropped. I think at that time it was, it was a really big story. I think it was the MSC Blackrock,
[00:19:05] Speaker C: I think that was.
[00:19:06] Speaker A: Yeah. And you were just like, I need to get this out. And then I felt really bad for you. I did go to the bar, you'll all be pleased to know.
And Gav stayed behind and filed that story.
Anyway, Alex, looking to the week ahead, do you have anything on your radar while Gav is off in Los Angeles?
[00:19:21] Speaker C: Well, I'm looking forward to sort of secondhand hearing Ryan Peterson's session at 2pm I'll be getting back into tech with more on what's new in tms.
Our news editor Alex also called. Alex is off to Singapore for the WCA conference, so we'll have something for small forwarders to think about probably next week.
I also wanted to give a very little shout out to an interview I did actually last year with Amar Moray from Carlay Logistics Solution on cyber threats at ports. I personally think it was one of the most interesting interviews I did all year and we've published it now in the lodge. So do go and have a look at that if you're worried about port cybersecurity. Sorry, that was slightly out of place, but yeah, I just wanted to mention it.
[00:20:09] Speaker A: No, rightly so. That was a very interesting story. Thank you both so much for joining me for another round of supply chain news.
[00:20:16] Speaker B: Thank you, Charlotte.
[00:20:17] Speaker C: Thanks, Charlotte.
[00:20:18] Speaker A: And of course, thank you all for listening or watching. And thank you to Port Everglades for sponsoring this episode. And before we wrap up, I just want to do a quick call to action to anyone who might want to feature on the podcast. Be nice to give Alex and Gav a week off from from joining me every week. So if anyone would like to come and comment on the week's supply chain news, ideally we don't want people coming on to promote their product.
So if you have anything to say about the week's supply chain news, then do get in contact and we would love to have you on the episode. Thank you very much and we will see you next time.
