This week:
- Ocean carriers on the trans-Pacific trade routes blank October sailings in bid to stop rate plummet
- After CUPW workers go on strike, Canada Post suspends all mail and parcel services nationwide
- Federal appeals court strikes down FMC rule limiting who carriers could bill for container late fees
- Despite low rates in the for-hire trucking sector, US shippers increasingly utilize private truck fleets
Ocean Carriers Blanking More Sailings as Trans-Pacific Spot Rates Plummet
Ocean container lines are aggressively canceling voyages on trans-Pacific routes for the next four weeks in an attempt to slow down a rapid decline in spot rates. According to Journal of Commerce (JoC) editors Bill Mongelluzzo and Laura Robb, the increase in blank sailings for October is partially a response to unexpectedly weak demand ahead of Asia’s Golden Week holiday.
Capacity from Asia to the North American West Coast in October has been cut by 13.6%, while capacity to the East Coast has been reduced by 14.4%. These cuts follow a 30% drop in US West Coast spot rates and a nearly 20% fall in US East Coast rates over the last three weeks.
According to Platts data from supply chain analytics firm S&P Global Commodity Insights, rates from Asia to the West Coast have fallen from $2,025 to $1,400 per container since early September, with some carriers now reportedly offering rates as low as $1,350.
Industry observers say the blank sailings are not intended to increase prices but rather to reverse the decline in spot rates. Sanjay Tejwani, of 365 Logistics, CEO of consulting firm 365 Logistics, told the JoC, “The blanks won’t increase the [spot] rates, they will just prevent a further freefall, and with all of the announced blank sailings, there will probably be some ad hoc blank sailings that haven’t been announced yet. We could still see more action.”
The market is expected to remain weak through the end of the year, partly due to a late Lunar New Year in 2026, which will delay shipments of spring merchandise until January. Mongelluzzo and Robb, respectively the JoC senior editor and associate editor, said that with current rates hovering near or below carriers’ operational costs, ocean liners are facing an especially challenging Q4.
Canada Post Halts All Parcel Services as Union Launches Nationwide Strike
The long-running labor dispute between Canada Post and the Canadian Union of Postal Workers (CUPW) reached a breaking point last Thursday, as the union launched a nationwide strike and the national carrier halted all mail and parcel services.
Although negotiations between Canada Post and the CUPW have been deadlocked for over a year, the union had managed to avoid a full work stoppage until now. As the two sides battled over issues like wage increases and weekend deliveries, CUPW workers instituted an overtime ban earlier this year and recently announced they would stop delivering unaddressed direct mail.
However, the work stoppage is in response to the Canadian government’s plan to overhaul the financially troubled postal carrier.
The proposed reforms, which the government claims are necessary to address Canada Post’s “insolvency,” include reducing door-to-door delivery in favor of community mailboxes and utilizing ground transportation for non-urgent mail. The CUPW has condemned the plan as an “attack on good jobs and public services.”
In response to the work stoppage, Canada Post has stopped accepting new items and announced that all processing and delivery are on hold indefinitely. The shutdown forces shippers to find alternative carriers, which many had already done following a short CUPW holiday season strike last year.
Canada Post’s parcel volume declined 36.5% in Q2, as businesses shifted to more reliable delivery options. The carrier has warned that even after this latest labor disruption has been resolved, it will take a significant amount of time for operations to return to normal.
Subscribe to JMR’s Weekly Supply Chain Roundup!
Stay informed with the latest supply chain news, trends, and insights. Get it delivered directly to your inbox every week.
Court Strikes Down FMC Rule on Who Pays Demurrage and Detention Fees
A federal appeals court has struck down a controversial Federal Maritime Commission (FMC) rule that limited who ocean carriers could bill for late container fees.
On Tuesday of last week, the DC Court of Appeals ruled in favor of the World Shipping Council (WSC), finding the FMC regulation “arbitrary and capricious” for preventing carriers from charging detention and demurrage to their own in-house truckers.
The vacated rule had restricted carriers to billing only the party that contracted for the ocean transport. The FMC said the rule was intended to protect truckers from unfair charges.
However, a three-judge panel for the appeals court found the rule was contradictory because it blocked billing between parties in contractual relationships who are well aware of the fee structures.
The WSC argued that the rule unfairly prevented ocean carriers from holding their trucking partners accountable for delays. The court agreed, adding that he rule’s logic was flawed because it allowed for billing of consignees, who may not have a contract with the carrier.
Following the ruling, the FMC issued a statement contending that while the section on who can be billed has been overturned, the majority of the rule remains in full effect. According to the FMC, it can still enforce a 30-day deadline for issuing and contesting invoices, as well as a requirement that carriers provide detailed information on how they calculate late fees.
Despite Low Truck Rates, US Shippers Increasingly Utilizing Private Fleets
According to a recent report by William B. Cassidy, senior editor for the JoC, US shippers are increasingly using their own private truck fleets to haul goods — despite favorable rates in the for-hire trucking market. The expansion in in-house capacity continues as shippers seek greater control over their supply chains.
According to data from the National Private Truck Council (NPTC), shipments handled by private fleets grew 11.7% year-over-year in 2024. Schneider National CEO Mark Rourke told the JoC that he estimates the overall truckload market to be 55% private fleet and 45% for-hire, after years of being evenly split.
Cassidy said one notable development is the increased use of private fleets specifically for inbound freight. He points to an NPTC survey released last week that shows shippers used their own trucks for 43% of inbound loads in 2024, up from 35% the previous year.
Trucking industry experts say that high operating costs may eventually push some freight back to for-hire carriers.
