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DHL cargo plane forced to make emergency landing at LAX

At around 11pm local time last night, a DHL cargo plane made an emergency landing at LA Airport. Flames could be seen on the tyres of the aircraft as it touched down after leaving Phoenix, Arizona. Emergency crews rushed to the aircraft, forcing one of the runways to temporarily close. The cause of the fire on the aircraft is not yet known, and it is believed that no one has been injured.

Maersk switches pricing strategy - now quicker to pass on rate hikes

Maersk has changed the way it prices container freight, tracking market movements more closely than it did during the pandemic, according to Sea-Intelligence. Its analysis compares Maersk's average quarterly freight rates with the Container Trade Statistics (CTS) global average, using Q4 23 as a baseline. During the pandemic-era freight rate surge, Maersk was the clear outlier among carriers, Sea-Intelligence found, noting that the Danish shipping line was more cautious about passing rising market rates on to customers, apparently in the hope that doing so would result in a more gradual decline when the market turned. However, rates subsequently fell just as quickly for Maersk as they did for the wider market, said Sea-Intelligence, adding: "In other words, the data showed Maersk gave away some revenue upside when rates went up, but got nothing in return when rates went down." Sea-Intelligence estimated that, compared with a hypothetical scenario in which its pricing followed the market the strategy cost Maersk about $15.8bn in revenue. But the consultancy says Maersk's behaviour changed during what it called the "Red Sea cycle". With Q4 23 again the index baseline, Maersk's rates have closely tracked the CTS average as the market responded to the Red Sea disruption. "Figure A4 (below) shows the deviation in Maersk's rate from the CTS average. As can be seen, the deviation is so tiny, as to more likely constitute minor fluctuations with no discernible trend." Sea-Intelligence concluded: "What the data shows very clearly is that Maersk has changed its approach to pricing, compared to what it was doing during the pandemic." "They now very closely follow average market developments and hence avoid the loss in revenue opportunity when the rates suddenly surge."

Tariff spat sees Canadian shippers eye alternatives to US market

Commercial relations between Canada and its southern neighbour have hit a new low, and logistics providers are seeing more clients trying to diversify from the US market. Trade negotiations broke down on Friday when the Canadians walked away, citing new US demands tabled at the last minute, as well as a litany of justifications Washington invoked to force Ottawa to make concessions. These range from fentanyl smuggling and Canadian dairy rules to failure to weed out slave labour upstream. The end of talks opened the door to new US tariffs on Canadian goods that day, and Ottawa has pledged to impose retaliatory tariffs on US goods, starting 8 September. Prime minister Mark Carney said the decision had been taken "reluctantly", but Washington's offer was not good enough and that conciliatory moves, like the suspension of earlier retaliatory tariffs, had been to no avail. Polls indicate his stance is supported by the majority of Canadians and the business community. "We are, in general, opposed to tariffs because businesses and households ultimately pay the price. But if Canada responds, it should do so with a strong hand -- surgically, strategically, and in close consultation with business," said Candace Laing, president and CEO of the Canadian Chamber of Commerce. She described Washington's Section 338 tariffs as "a body blow to North American competitiveness in this self-defeating trade saga". "A whopping, non-absorbable tariff is not sustainable or viable for business," she added. The Canadian government has yet to publish a full list of US goods that will be hit by the new tariffs. Early indications suggest steel, dairy products, appliances, agricultural equipment, and electronics will be on the list According to Mr Carney, Canada will match the new US tariffs dollar for dollar. Washington's 50% tariff targets goods including electronics, industrial equipment, liquor, dairy, building materials, and hockey sticks and other sporting goods - an estimated $20bn worth of Canadian exports, a relatively minor sliver in a trade that amounted to nearly $900bn both ways last year. However, the US measure will have a knock-on effect on employment. According to one estimate, this could eliminate more than 87,000 jobs in Canada, with the biggest impact on the transport and warehousing. Indeed, Canadian logistics firms are bracing for more headwinds. Business suffered from Washington's previous tariffs. Montreal-based AGO Transportation has seen volumes decline since the White House started its tariff offensive, said VP Sandra Faraj. And Mo Datoo, COO of Toronto-based eShipper, reported that many of the firm's customers had been affected, causing some to move to the US while others shut down. Many of eShipper's clients source products from China, so the new US levies will hit them on top of tariffs on China-made products. Ms Faraj heard from clients that their US customers have been reluctant to sign contracts, "because they don't know what will happen tomorrow". She added that Canadian firms had also been hesitant, wondering if they would be able to recoup duties if customers declined to accept the higher charges. On past experience, there are also worries that Washington might suddenly announce new tariffs at any point. "The uncertainty is what's killing everyone," Mr Datoo said. "People want to plan now, they want to order, but they can't do it because they don't know what will happen next month." In a LinkedIn post, Pete Mento, MD of global trade advisory services at Baker Tilly, commented that he still expected Ottawa and Washington to come to an agreement, given the dire repercussions of a prolonged escalation on their highly integrated economies. "But the real question isn't whether these particular tariffs survive. It is whether the eventual settlement restores confidence in the rules governing North American trade," he warned. More and more Canadian managers appear to have concluded that waiting for a settlement probably is not the answer. "A lot of our clients are looking for new markets," reported Ms Faraj, adding that Ottawa had been actively supporting this trend, aiming to double exports to non-US markets by 2035 to halve the share of exports going to the southern neighbour. This wou;d bring an estimated $220bn in new orders for Canadian goods and services. Both Mr Datoo and Ms Faraj see Europe at the top of many clients' diversification agenda. Transportation costs to Europe are lower than to Asia or Latin America, and Europe offers the additional benefit of a free-trade agreement. And for AGO, this would not require a significant tweak of its set-up, Europe has been the traditional focus for the company, and its agency network there is well established. "It's more of a challenge shipping to the Middle East now," Ms Faraj said. eShipper opened a branch in Dubai last year. After a good start business stalled because of the outbreak of war in the region, Mr Datoo reported. At the moment he is more bullish on India, where his company has also established an office. "India is starting to become a big market," he said, adding that Australia was also on the rise, albeit to a smaller extent, given the smaller population.