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March 18 2019

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March 18 2019 | The Journal of Commerce 15 International Maritime shippers rose 3 percent in 2018 from 2017. The NVO market share in the eastbound trans-Pacific trade increased to 45 percent after being flat at 43 percent in 2016 and 2017, according to PIERS, a sister product of The Journal of Commerce within IHS Markit. Although growth is expected to moderate this year both in total US imports and in the growth of NVO market share, NVOs feel comfortable they proved last year the range of services they offer — such as ship- ment tracking, visibility into delays at marine terminals, and securing truck capacity at seaports and inland hubs — will generate repeat business. Carriers such as APL and Maersk Line have responded to customer demands for visibility and predict- ability on both the ocean and land side of the supply chain by offering premium services or expanding their menu of technology offerings. However, most carriers have been saddled this past year with large vessel departures from Asia because of terminal congestion and weather, which immediately rippled through the supply chain. Alan Murphy, CEO and part- ner at SeaIntelligence Maritime Consulting, told a JOC webinar in February he doesn't expect carrier on-time performance, which was about 50 percent in the trans-Pacific last year, to improve much in 2019. NVOs anticipate booking more business from BCOs whose containers were shut out of some vessel departures leaving Asia during the 2018 peak season, even when customers had booked slots, because carriers overbooked the vessels. BCOs that had their cargo rolled sometimes had to pay surcharges of $1,000 or more to get carriers to open space on vessels for time-sensi- tive shipments. Consistent performance — and making good on contractual com- mitments — is a major selling point for NVOs. "Our goal is to provide a consistent service, delivering on the rates and space that were nego- tiated. We expect the same from our carriers," said Michael Klage, solutions director at TOC Logistics International. NVO market share is driven largely by BCOs that are booking more cargo with intermediaries that can often provide them with space on vessels leaving Asia when capaci- NON-VESSEL-OPERATING COMMON carriers (NVOs) plan to capitalize on shipper frustration over carriers' fail- ure to honor their space and pricing commitments during the 2018 peak season by increasing their eastbound trans-Pacific contractual commit- ments with customers this year. NVOs in 2019 expect to increase both their volume and market share of imports from Asia after demonstrat- ing to beneficial cargo owners (BCOs) their ability to nimbly navigate vol- atile trade conditions in the Asia-US trade during last year's peak season. They say the more cumbersome book- ing processes that have resulted from consolidation in the carrier industry have commoditized carrier services in the largest US trade lane. Cargo volume carried by NVOs in 2018 increased 14.3 percent over 2017, far greater than their approximately 5 percent annual average growth rate in recent years. Comparatively, Asian import volume contracted between carriers and Port of Oakland Playing to advantage NVOs to gain aer shippers are burned by carrier failure to honor contract commitments By Bill Mongelluzzo Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

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