The Friday Report Blog: January 19th, 2024

Shippers Looking to West Coast to Steer Supply Chains Away from Red Sea Attacks

The Port of Los Angeles is experiencing a noticeable increase in cargo volumes, partly due to shippers rerouting their supply chains to avoid risks associated with the Red Sea and the Panama Canal. Gene Seroka, the Executive Director, highlighted in a media briefing that many shippers, seeking safer and more reliable routes, are turning to the West Coast.

This shift, along with factors like the Lunar New Year and a rise in demand, contributed to an 18% increase in cargo volumes in January compared to the previous year, making it one of the port’s busiest Januarys. The port, operating at about 75% to 80% capacity, is well-prepared to accommodate any additional rerouted cargo, leveraging its advanced port community information system for enhanced visibility and efficiency.

This strategic redirection by shippers not only secures their supply chains but also promises continued robust activity for the Port of Los Angeles.

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Walmart Negotiates Additional FedEx Rate Discounts for Third-Party Sellers for Ship Users

Walmart has successfully secured further shipping discounts with FedEx for its third-party sellers on the Ship with Walmart program, as revealed in their recent “Seller Digest.” This program enhances Walmart Marketplace by offering cost-effective shipping solutions, including reduced rates for FedEx Ground and FedEx Ground Economy services, ideal for scheduled deliveries.

While specific discount details weren’t disclosed, the initiative reflects Walmart’s negotiation prowess in a market where carriers are increasingly open to offering better rates due to soft demand. This move follows Walmart’s addition of UPS as a supported carrier, underscoring its commitment to providing sellers with competitive shipping options.

Moreover, Walmart is extending additional benefits and expanding services to attract more third-party sellers and increase its footprint in the e-commerce arena against giants like Amazon, offering significant savings on storage and fulfillment fees for new marketplace sellers.

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ONE and Wan Hai Lines Plan to Launch Revamped Service from Asia to U.S. West Coast

Ocean Network Express (ONE) and Wan Hai Lines are set to enhance their Asia-U.S. West Coast shipping services with the introduction of the AP1 service, targeting a late spring launch to accommodate the growing import volumes on this crucial trade route.

This collaborative effort represents a strategic enhancement of the existing AA3 service, with the two carriers planning to deploy a combined fleet of seven vessels, boasting a total nominal capacity of 13,000 TEUs. With direct routes from Taipei, Taiwan, and Shekou, China, to the U.S. West Coast, the service promises efficient returns to Vietnam, featuring rapid transit times.

Set to commence operations subject to regulatory approvals, this initiative addresses the increasing demand for reliable shipping options, partly driven by global logistics shifts including rerouted cargo to avoid disruptions and constraints elsewhere.

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