<div class="phx-topic abstract-wrapper">In a move to better utilize its leased pool of trailers, Uber Freight has partnered with software vendor Optimal Dynamics to bundle loads for drivers across 10 trailer pool locations. </div>

In a move to better utilize its leased pool of trailers, Uber Freight has partnered with software vendor Optimal Dynamics to bundle loads for drivers across 10 trailer pool locations.

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<div class="phx-topic">Uber Freight has extended the reach of its drop-and-hook program to target truckload moves in the 500- to 1,000-mile range, so-called “tweener” shipments that have previously been elusive for the freight broker to serve with the program. The trailer pool that supports Uber Freight’s drop-and-hook program, called Powerloop, was launched in 2018 with the goal of reducing the turnaround time for a driver at a facility compared with a live load or unload. To that end, Uber Freight said this week it is now offering bundled drop-and-hook loads to carriers that enable it to serve large shippers with high volumes of freight with variable patterns. It does so by allowing drivers to tap into pools of leased Powerloop trailers at various points across the country, rather than being limited by a certain geographic distance to a specific trailer pool. Loads are available in the Midwest, Texas, Georgia, California and Pennsylvania, with more areas to be added. “We’re providing our customers dedicated long haul capacity,” Alyssa Correale, vice president of operations at Uber Freight, told the Journal of Commerce. “Powerloop previously offered short-haul capacity that needed to loop back. Now this opens up long-haul that will come back on a longer timeframe to service that ‘tweener’ freight of 500 to 1,000 miles.” A year ago, Uber Freight said it was focusing on better utilization of its Powerloop assets as demand grew. This week, Correale said that by giving drivers a sequence of longer-haul moves, it can provide capacity options to shippers, consistent volumes to carriers, and maintain high utilization rates of its leased trailers. To enable the best recommendations for those sequenced moves using drop-and-hook trailers, Correale said Uber Freight is partnering with technology provider Optimal Dynamics, which provides optimization software to carriers and private fleets. “If we string together all the loads in an optimization exercise, we can really drive up revenue on that asset,” Correale said. “We’re mostly solving for trailer revenue per week, but someone has to haul that trailer, and so it made sense to partner with the best carrier optimization platform.” <h3>Big volumes, irregular patterns </h3>The sequenced moves, which Uber Freight calls tours, are triggered by acceptance of an initial contract rate for a shipper. Optimal Dynamics then continuously analyzes whether the pre-determined next legs are still the best options or whether a spot rate that still taps into the trailer pool might provide better revenue on a second or third leg. The program is running with about 100 trucks in 10 locations with three core shipper customers, Correale said. The sweet spot for Powerloop tours are shippers with a minimum of 10 to 20 loads per week, with long lengths of haul and irregular patterns that can leverage the geographic footprint of Uber Freight’s network. “This is more flexibility than traditional dedicated,” she said. “It’s where you wish you could do dedicated but it doesn’t quite fit.” The Uber Freight program comes as large truckload carriers and diversified trucking services providers are shifting assets to serve higher demand from shippers for dedicated services. JB Hunt recently pegged the value of the overall dedicated trucking market at $90 billion, approximately 10% of the entire US truckload industry. The drop-and-hook model typically requires large numbers of trailers, but a surplus of trailers built during the pandemic and muted freight demand through 2023 and into 2024 have meant those trailers are largely available. Powerloop now has 1,000 leased trailers. Uber Freight is utilizing them at a 91% rate by marrying GPS tracking of the assets, loads from shippers in its network and a core group of power-only carriers. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Uber Freight has extended the reach of its drop-and-hook program to target truckload moves in the 500- to 1,000-mile range, so-called “tweener” shipments that have previously been elusive for the freight broker to serve with the program. The trailer pool that supports Uber Freight’s drop-and-hook program, called Powerloop, was launched in 2018 with the goal of reducing the turnaround time for a driver at a facility compared with a live load or unload. To that end, Uber Freight said this week it is now offering bundled drop-and-hook loads to carriers that enable it to serve large shippers with high volumes of freight with variable patterns. It does so by allowing drivers to tap into pools of leased Powerloop trailers at various points across the country, rather than being limited by a certain geographic distance to a specific trailer pool. Loads are available in the Midwest, Texas, Georgia, California and Pennsylvania, with more areas to be added. “We’re providing our customers dedicated long haul capacity,” Alyssa Correale, vice president of operations at Uber Freight, told the Journal of Commerce. “Powerloop previously offered short-haul capacity that needed to loop back. Now this opens up long-haul that will come back on a longer timeframe to service that ‘tweener’ freight of 500 to 1,000 miles.” A year ago, Uber Freight said it was focusing on better utilization of its Powerloop assets as demand grew. This week, Correale said that by giving drivers a sequence of longer-haul moves, it can provide capacity options to shippers, consistent volumes to carriers, and maintain high utilization rates of its leased trailers. To enable the best recommendations for those sequenced moves using drop-and-hook trailers, Correale said Uber Freight is partnering with technology provider Optimal Dynamics, which provides optimization software to carriers and private fleets. “If we string together all the loads in an optimization exercise, we can really drive up revenue on that asset,” Correale said. “We’re mostly solving for trailer revenue per week, but someone has to haul that trailer, and so it made sense to partner with the best carrier optimization platform.” Big volumes, irregular patterns The sequenced moves, which Uber Freight calls tours, are triggered by acceptance of an initial contract rate for a shipper. Optimal Dynamics then continuously analyzes whether the pre-determined next legs are still the best options or whether a spot rate that still taps into the trailer pool might provide better revenue on a second or third leg. The program is running with about 100 trucks in 10 locations with three core shipper customers, Correale said. The sweet spot for Powerloop tours are shippers with a minimum of 10 to 20 loads per week, with long lengths of haul and irregular patterns that can leverage the geographic footprint of Uber Freight’s network. “This is more flexibility than traditional dedicated,” she said. “It’s where you wish you could do dedicated but it doesn’t quite fit.” The Uber Freight program comes as large truckload carriers and diversified trucking services providers are shifting assets to serve higher demand from shippers for dedicated services. JB Hunt recently pegged the value of the overall dedicated trucking market at $90 billion, approximately 10% of the entire US truckload industry. The drop-and-hook model typically requires large numbers of trailers, but a surplus of trailers built during the pandemic and muted freight demand through 2023 and into 2024 have meant those trailers are largely available. Powerloop now has 1,000 leased trailers. Uber Freight is utilizing them at a 91% rate by marrying GPS tracking of the assets, loads from shippers in its network and a core group of power-only carriers. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Truck brokers

Truckload

Uber Freight offering drop-and-hook option as dedicated-like product for shippers

<div class="phx-topic abstract-wrapper">Brent Sadler served in the US Navy for 26 years and now works as a senior research fellow at the Heritage Foundation.</div>

Brent Sadler served in the US Navy for 26 years and now works as a senior research fellow at the Heritage Foundation.

<div class="phx-topic">Retired US Navy Capt. Brent Sadler has been nominated by President Donald Trump to serve as the next administrator of the US Maritime Administration (MARAD). Sadler’s nomination was sent this week to the Senate Committee on Commerce, Science and Transportation. A timeline for his confirmation wasn’t immediately available. If confirmed, he will fill the role left vacant when former administrator Ann Phillips resigned in January. MARAD is part of the Department of Transportation. Sadler would be positioned to lead MARAD as the Trump administration pushes for <a href="https://www.joc.com/article/ustrs-china-tonnage-tax-would-squeeze-smaller-trades-stakeholders-5967638">significant changes in the maritime industry</a> around US shipbuilding policies. Sadler has expressed interest in disrupting the shipbuilding space, having written an article for the US Naval Institute entitled, “The Nation Needs a Shipbuilding Revolution” just last month. “The world of shipping is on the cusp of a paradigm shift in part because of changing geostrategic realities and technological innovation,” Sadler wrote. “This does not mean ‘outperforming’ China’s heavily subsidized and government-directed shipbuilding and shipping industries. Rather, a smarter approach that changes modern logistics through a blue-ocean strategy is needed — a multifaceted approach that creates new market space rather than continuing to compete in a conventional way.” Sadler served 26 years in the navy, having served on numerous operational tours on nuclear-powered submarines since graduating from the US Naval Academy in 1994. He currently serves as a senior research fellow at the Heritage Foundation, the conservative think tank behind Project 2025. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Retired US Navy Capt. Brent Sadler has been nominated by President Donald Trump to serve as the next administrator of the US Maritime Administration (MARAD). Sadler’s nomination was sent this week to the Senate Committee on Commerce, Science and Transportation. A timeline for his confirmation wasn’t immediately available. If confirmed, he will fill the role left vacant when former administrator Ann Phillips resigned in January. MARAD is part of the Department of Transportation. Sadler would be positioned to lead MARAD as the Trump administration pushes for significant changes in the maritime industry around US shipbuilding policies. Sadler has expressed interest in disrupting the shipbuilding space, having written an article for the US Naval Institute entitled, “The Nation Needs a Shipbuilding Revolution” just last month. “The world of shipping is on the cusp of a paradigm shift in part because of changing geostrategic realities and technological innovation,” Sadler wrote. “This does not mean ‘outperforming’ China’s heavily subsidized and government-directed shipbuilding and shipping industries. Rather, a smarter approach that changes modern logistics through a blue-ocean strategy is needed — a multifaceted approach that creates new market space rather than continuing to compete in a conventional way.” Sadler served 26 years in the navy, having served on numerous operational tours on nuclear-powered submarines since graduating from the US Naval Academy in 1994. He currently serves as a senior research fellow at the Heritage Foundation, the conservative think tank behind Project 2025. Contact Laura Robb at laura.robb@spglobal.com . 

Breakbulk News

Container Shipping News

Transport, Trade and Regulation News

North American ports

Maritime

Trump taps retired navy captain to head US Maritime Administration

<div class="phx-topic abstract-wrapper">Consolidation in container shipping over the last two decades and better capacity management in recent years show that the old ways of looking at vessel capacity are outdated, writes Journal of Commerce Executive Editor Mark Szakonyi.</div>

Consolidation in container shipping over the last two decades and better capacity management in recent years show that the old ways of looking at vessel capacity are outdated, writes Journal of Commerce Executive Editor Mark Szakonyi.

<div class="phx-topic">The conventional thinking is that container lines are heading for another down cycle due to mounting overcapacity and weakening global demand. After record profits during the COVID-19 pandemic era and $60 billion more in 2024, JP Morgan in a March 17 research note said it thinks the industry is “entering a multi-year period of losses.” That may very well be how this year and 2026 shake out. But a scenario in which external factors keep restraining effective container shipping capacity and carriers muster enough pricing discipline isn’t outlandish, either. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5970290_0.1.jpg"></img></div>Internally, thanks to consolidation over the last two decades and better capacity management in recent years, whether through blank sailings or holding firm on contract allocations when space gets tight, the old ways of looking at capacity aren’t relevant. Even so, the size of the current order book is daunting, with new orders representing a quarter of the existing fleet, according to S&amp;P Global’s Sea-web, a sister company of the Journal of Commerce. Maersk CEO Vincent Clerc said approximately 2 million TEUs of capacity will be delivered this year, equating to 6% of the existing fleet, according to Sea-web. Another 1.5 million to 2 million TEUs could be released whenever the Red Sea reopens to commercial traffic, Clerc said during the company’s first-quarter earnings call Feb. 6. The industry’s return to Suez Canal transits is expected to cause three to six months of disruption, with ships repositioning and causing bunching at European and US East Coast ports, ultimately reducing effective capacity. “The overcapacity anticipated last year has been delayed to 2025, but the supply-demand equation is much more nuanced and benign than what we had in front of us just a year ago before the outbreak of the Red Sea disruption,” Clerc told investors. He added that Maersk expects stronger global demand in 2025 than last year, expanding at 4% — in line with the market — despite the US slapping tariffs on goods from China, Europe and other trading partners. <h3>Red Sea factor is ever-present </h3>So much depends on when the container shipping industry deems it safe to route through the Red Sea. US President Donald Trump’s decision to move a second aircraft carrier to the Middle East on March 23, a week after his order of strikes on Houthi-held areas in Yemen, may not open the waterway as he hopes. “The resumption of US airstrikes significantly increases the likelihood of further Houthi attacks on US and US-allied naval assets in the Red Sea and Gulf of Aden — representing a severe risk to all vessels in transit due to uncertainties around Houthi targeting selection,” said Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global Market Intelligece. Kennedy said it was unlikely that the US would be able to “restore unchecked freedom of navigation” in six months by pressuring Iran to stop helping its Houthi proxies. He doubts that the US can uproot the Houthi without help from the UAE and Saudi Arabia, a move that would most likely trigger retaliation from the Houthis. The Israel-Hamas ceasefire, announced Jan. 15, initially raised hopes of a return to Red Sea transits, Jeremy Nixon, CEO of Ocean Network Express (ONE), said Monday at Singapore Maritime Week. “That doesn’t look likely now based on the events, particularly in the last week, so probably routing around the Cape of Good Hope is a continued paradigm for likely the rest of this year is the way things stand, and that has a big impact on our operations, big impact on the supply and demand,” Nixon said. <h3>Unused levers </h3>Independent of the Red Sea, carriers still have unused levers to curb overcapacity, including idling and slow steaming, Jan Tiedemann, senior analyst at Alphaliner, said at TPM25 in Long Beach earlier this month. Less than 1% of tonnage is idling, reflecting the belief of carriers that it’s better to have extra tonnage in case of disruption than send older vessels to the scrapping yards, he said. Scrapping last year was well below 1%, but there is limited yard capacity to break ships if carriers retire older tonnage. While container lines have sailed ships faster due to Red Sea diversions, there is plenty of functional capacity that can be reabsorbed by slowing down by just a few knots. “That doesn’t seem a lot, but if [a] ship only sails at 18 knots, and it goes down to 15, that’s quite a reduction in terms of the percentage” of capacity needed, Tiedemann said. Global port congestion and other events that pull down ocean reliability are curbing the effective capacity of the fleet, according to Simon Sundboell, founder and CEO of maritime intelligence firm eeSea. For example, the deployment of capacity out of Asia to Europe, North America and the Caribbean and Central America rose 7.9% year over year in 2024, according to eeSea. But the functional capacity was just 3.4%. The question for 2025 and beyond is not whether there will be tonnage overcapacity, as there surely will be, but to what degree there will an overhang of functional capacity. Contact Mark Szakonyi at <a href="https://www.joc.com/article/mark.szakonyi@spglobal.com.">mark.szakonyi@spglobal.com</a>.</div>

The conventional thinking is that container lines are heading for another down cycle due to mounting overcapacity and weakening global demand. After record profits during the COVID-19 pandemic era and $60 billion more in 2024, JP Morgan in a March 17 research note said it thinks the industry is “entering a multi-year period of losses.” That may very well be how this year and 2026 shake out. But a scenario in which external factors keep restraining effective container shipping capacity and carriers muster enough pricing discipline isn’t outlandish, either. Internally, thanks to consolidation over the last two decades and better capacity management in recent years, whether through blank sailings or holding firm on contract allocations when space gets tight, the old ways of looking at capacity aren’t relevant. Even so, the size of the current order book is daunting, with new orders representing a quarter of the existing fleet, according to S&P Global’s Sea-web, a sister company of the Journal of Commerce. Maersk CEO Vincent Clerc said approximately 2 million TEUs of capacity will be delivered this year, equating to 6% of the existing fleet, according to Sea-web. Another 1.5 million to 2 million TEUs could be released whenever the Red Sea reopens to commercial traffic, Clerc said during the company’s first-quarter earnings call Feb. 6. The industry’s return to Suez Canal transits is expected to cause three to six months of disruption, with ships repositioning and causing bunching at European and US East Coast ports, ultimately reducing effective capacity. “The overcapacity anticipated last year has been delayed to 2025, but the supply-demand equation is much more nuanced and benign than what we had in front of us just a year ago before the outbreak of the Red Sea disruption,” Clerc told investors. He added that Maersk expects stronger global demand in 2025 than last year, expanding at 4% — in line with the market — despite the US slapping tariffs on goods from China, Europe and other trading partners. Red Sea factor is ever-present So much depends on when the container shipping industry deems it safe to route through the Red Sea. US President Donald Trump’s decision to move a second aircraft carrier to the Middle East on March 23, a week after his order of strikes on Houthi-held areas in Yemen, may not open the waterway as he hopes. “The resumption of US airstrikes significantly increases the likelihood of further Houthi attacks on US and US-allied naval assets in the Red Sea and Gulf of Aden — representing a severe risk to all vessels in transit due to uncertainties around Houthi targeting selection,” said Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligece. Kennedy said it was unlikely that the US would be able to “restore unchecked freedom of navigation” in six months by pressuring Iran to stop helping its Houthi proxies. He doubts that the US can uproot the Houthi without help from the UAE and Saudi Arabia, a move that would most likely trigger retaliation from the Houthis. The Israel-Hamas ceasefire, announced Jan. 15, initially raised hopes of a return to Red Sea transits, Jeremy Nixon, CEO of Ocean Network Express (ONE), said Monday at Singapore Maritime Week. “That doesn’t look likely now based on the events, particularly in the last week, so probably routing around the Cape of Good Hope is a continued paradigm for likely the rest of this year is the way things stand, and that has a big impact on our operations, big impact on the supply and demand,” Nixon said. Unused levers Independent of the Red Sea, carriers still have unused levers to curb overcapacity, including idling and slow steaming, Jan Tiedemann, senior analyst at Alphaliner, said at TPM25 in Long Beach earlier this month. Less than 1% of tonnage is idling, reflecting the belief of carriers that it’s better to have extra tonnage in case of disruption than send older vessels to the scrapping yards, he said. Scrapping last year was well below 1%, but there is limited yard capacity to break ships if carriers retire older tonnage. While container lines have sailed ships faster due to Red Sea diversions, there is plenty of functional capacity that can be reabsorbed by slowing down by just a few knots. “That doesn’t seem a lot, but if [a] ship only sails at 18 knots, and it goes down to 15, that’s quite a reduction in terms of the percentage” of capacity needed, Tiedemann said. Global port congestion and other events that pull down ocean reliability are curbing the effective capacity of the fleet, according to Simon Sundboell, founder and CEO of maritime intelligence firm eeSea. For example, the deployment of capacity out of Asia to Europe, North America and the Caribbean and Central America rose 7.9% year over year in 2024, according to eeSea. But the functional capacity was just 3.4%. The question for 2025 and beyond is not whether there will be tonnage overcapacity, as there surely will be, but to what degree there will an overhang of functional capacity. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container lines

Container ship overcapacity may be more ‘benign’ than order book suggests

<div class="phx-topic abstract-wrapper">Major carriers had lined up rate increases with the intention of strengthening their bargaining power during service contract negotiations, but overcapacity seems to have kept that tactic in check. </div>

Major carriers had lined up rate increases with the intention of strengthening their bargaining power during service contract negotiations, but overcapacity seems to have kept that tactic in check.

<div class="phx-topic">Ocean carriers on the India-US trade lane are realizing they are in no position to push through rate increases in a market saddled with excess capacity and faltering demand. Reflecting that skepticism, most carriers have recalled their April rate increase notices — mostly in the range of $500 per container — for bookings from West India to the US East Coast, local freight forwarder sources told the Journal of Commerce this week. “Hapag-Lloyd and CMA CGM have canceled their GRI [general rate increase] plans scheduled for the early part of April, while Maersk has revised its peak season surcharge date to April 20,” a forwarder who didn’t want to be identified said. “Right now, it’s a shippers’ market.” Local sources at Mediterranean Shipping Co. were unavailable to confirm the status of its GRI plans for April. Forwarders generally believe with no void vessel calls declared for next month on the premier India-USEC routings as of now, carriers could even struggle to hold end-March rates up into the coming weeks. Sources at the lead carriers who spoke with the Journal of Commerce noted that recent GRIs could have worked better if smaller lines working on slot rights had also made similar attempts. “A few Asian carriers are very aggressive in their pricing to fill the weekly space they have,” a European carrier source said. “Rate efforts will fail so long as some carriers are undercutting achievable spot rates.” Forwarder sources put spot rate quotes from Cosco Shipping/OOCL and HMM at between $1,400 and $1,700 per FEU for bookings from Nhava Sheva to New York. Ocean Network Express is another liner usually quoting 20% to 25% lower than its established peers, sources say. Major carriers had arguably lined up rate increases effective March 1 and March 15 with the intention of strengthening their bargaining power during service contract negotiations, but overcapacity seems to have kept that tactic in check. Contact Bency Mathew at <a href="https://www.joc.com/article/bencymathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Ocean carriers on the India-US trade lane are realizing they are in no position to push through rate increases in a market saddled with excess capacity and faltering demand. Reflecting that skepticism, most carriers have recalled their April rate increase notices — mostly in the range of $500 per container — for bookings from West India to the US East Coast, local freight forwarder sources told the Journal of Commerce this week. “Hapag-Lloyd and CMA CGM have canceled their GRI [general rate increase] plans scheduled for the early part of April, while Maersk has revised its peak season surcharge date to April 20,” a forwarder who didn’t want to be identified said. “Right now, it’s a shippers’ market.” Local sources at Mediterranean Shipping Co. were unavailable to confirm the status of its GRI plans for April. Forwarders generally believe with no void vessel calls declared for next month on the premier India-USEC routings as of now, carriers could even struggle to hold end-March rates up into the coming weeks. Sources at the lead carriers who spoke with the Journal of Commerce noted that recent GRIs could have worked better if smaller lines working on slot rights had also made similar attempts. “A few Asian carriers are very aggressive in their pricing to fill the weekly space they have,” a European carrier source said. “Rate efforts will fail so long as some carriers are undercutting achievable spot rates.” Forwarder sources put spot rate quotes from Cosco Shipping/OOCL and HMM at between $1,400 and $1,700 per FEU for bookings from Nhava Sheva to New York. Ocean Network Express is another liner usually quoting 20% to 25% lower than its established peers, sources say. Major carriers had arguably lined up rate increases effective March 1 and March 15 with the intention of strengthening their bargaining power during service contract negotiations, but overcapacity seems to have kept that tactic in check. Contact Bency Mathew at bencyvmathew@gmail.com .

Port News

International ports

Carriers jettison India-US April rate hike plans after shaky March recovery erodes

<div class="phx-topic abstract-wrapper">Acquisitions continue in the domestic freight market, with Descartes buying 3GTMS to continue a decade-long spree of purchases. </div>

Acquisitions continue in the domestic freight market, with Descartes buying 3GTMS to continue a decade-long spree of purchases.

<div class="phx-topic">Logistics software company Descartes has acquired 3GTMS, a widely used domestic transportation management system (TMS) provider, the companies said Tuesday. The $115 million all-cash deal strengthens Descartes’ TMS reach within the US shipper community, especially in managing truckload, less-than-truckload and parcel shipments. 3GTMS adds to an existing catalog of TMS products that Descartes offers, including ones specifically for shippers and brokers. Descartes Chief Commercial Officer Andrew Roszko, in a statement, called the two TMSs “highly complementary” for domestic modes. “The acquisition also expands our carrier reach in North America, including the addition of a network of [application programming interface]-integrated LTL carriers,” he said. Founded in 2013 by TMS pioneer Mitch Weseley, 3GTMS initially came to market to serve the needs of shippers with complicated transportation networks. The product eventually came to be used by third-party logistics providers as well. The deal is Descartes’ 32nd acquisition since 2016 across a range of different transportation and global trade functions. The acquisition continues a recent trend of consolidation in the domestic transportation software and data landscape, with Triumph Financial having acquired <a href="https://www.joc.com/article/triumph-acquires-broker-focused-pricing-technology-provider-greenscreensai-5951484">truckload pricing data provider Greenscreens.ai</a> in late February and brokerage pricing and visibility software vendor <a href="https://www.joc.com/article/dat-acquires-trucker-tools-in-move-to-reduce-load-board-driver-churn-5907848">Trucker Tools being acquired by DAT Freight &amp; Analytics</a> in December. The TMS market in which Descartes and 3GTMS operate is highly fragmented, with large players such as Oracle, SAP and Blue Yonder competing against small low-cost options targeted at brokers, carriers or shippers. Additionally, many brokers use homegrown TMSs. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Logistics software company Descartes has acquired 3GTMS, a widely used domestic transportation management system (TMS) provider, the companies said Tuesday. The $115 million all-cash deal strengthens Descartes’ TMS reach within the US shipper community, especially in managing truckload, less-than-truckload and parcel shipments. 3GTMS adds to an existing catalog of TMS products that Descartes offers, including ones specifically for shippers and brokers. Descartes Chief Commercial Officer Andrew Roszko, in a statement, called the two TMSs “highly complementary” for domestic modes. “The acquisition also expands our carrier reach in North America, including the addition of a network of [application programming interface]-integrated LTL carriers,” he said. Founded in 2013 by TMS pioneer Mitch Weseley, 3GTMS initially came to market to serve the needs of shippers with complicated transportation networks. The product eventually came to be used by third-party logistics providers as well. The deal is Descartes’ 32nd acquisition since 2016 across a range of different transportation and global trade functions. The acquisition continues a recent trend of consolidation in the domestic transportation software and data landscape, with Triumph Financial having acquired truckload pricing data provider Greenscreens.ai in late February and brokerage pricing and visibility software vendor Trucker Tools being acquired by DAT Freight & Analytics in December. The TMS market in which Descartes and 3GTMS operate is highly fragmented, with large players such as Oracle, SAP and Blue Yonder competing against small low-cost options targeted at brokers, carriers or shippers. Additionally, many brokers use homegrown TMSs. Contact Eric Johnson at eric.johnson@spglobal.com .

Descartes snaps up rival to double down on domestic TMS market

<div class="phx-topic abstract-wrapper">CEO Stefan Paul told the company’s annual capital markets event in London that while K+N will focus on organic growth, it will also make bolt-on acquisitions “if they make sense.” </div>

CEO Stefan Paul told the company’s annual capital markets event in London that while K+N will focus on organic growth, it will also make bolt-on acquisitions “if they make sense.”

<div class="phx-topic">Gains in market share, especially in both sea and air logistics, will help Kuehne + Nagel outperform growth in the wider freight forwarding sector, senior company executives said Tuesday. CEO Stefan Paul said the company is aiming for growth of one and a half times the market rate, equal to average GDP growth, between now and 2030. “For sea and air logistics, our reference metric is volume growth; for road and contract logistics, it is net turnover growth,” Paul said during the company’s capital markets day in London. But K+N is also forecasting a more subdued 2025, with earnings before interest and taxes (EBIT) of between $1.7 billion and $2 billion. That compares with EBIT of $1.9 billion last year. “The lower end of our guidance reflects an increased level of uncertainty at this relatively early stage of the year 2025,” CFO Markus Blanka-Graff said during Tuesday’s event. Company executives admitted they were over-optimistic how the market would develop after the end of the COVID-19 pandemic when they targeted EBIT growth of 17% to 19% between 2019 and 2024. Actual average growth was 11%, and while that was an improvement compared with pre-pandemic growth rates, “it means we are clearly tracking below our expectations,” Paul said. He said the new growth targets are based on three assumptions. Aside from global long-term economic growth, they comprise increasing supply chain complexity due to trade barriers and other disruptions in supply or demand, and further market consolidation “because scale matters.” Paul said while K+N will focus on organic growth, it will also make bolt-on acquisitions “if they make sense,” such as the prior takeovers of Apex Logistics, US drayage firm IMC and Canadian customs broker Farrow. Commenting on the growth targets, Paul indicated that Kuehne + Nagel had already taken on new air freight customers in the fourth quarter because of <a href="https://www.joc.com/article/approvals-from-europe-us-among-last-hurdles-in-dsvs-takeover-of-db-schenker-5937453">DSV’s agreement to acquire DB Schenker</a>. And he expects a major shift in customers will come after that deal is completed, saying a combined DSV-Schenker could lose between 20% and 25% of its business to other logistics providers, mostly in the second half of this year. That is largely due to shipper procurement policies and governance issues in terms of how much business they can allocate to one provider rather than quality or service issues, Paul added. <h3>Expanding in smaller markets </h3>Michael Aldwell, K+N’s executive vice president of sea logistics, said the company would intensify its focus on key trades such as the trans-Atlantic, intra-Asia and Asia to North America and Europe, especially in areas such as healthcare, consumer goods, high-tech and industrial. “We will expand our network in smaller markets where we find attractive growth potential,” Aldwell said. “So far, we are now serving 41 new markets since the beginning of 2023, out of the initial goal of 50 by 2026.” At least another 20 new markets will be added in the next few years, including in Japan, Central Europe and Central and Latin America, he said. The forwarder is also increasing its focus to attract more small and medium-sized firms, which currently account for about 49% of its customer base. Yngve Ruud, K+N’s executive vice president of air logistics, was confident about the air freight outlook, with global volumes expected to increase 3% between 2025 and 2028. “Demand will exceed capacity in specific regions and trade lanes,” Ruud said, without giving details. He expected the forwarder would also meet its earnings growth target by launching new services for shippers later this year and in 2026, including “an end-to-end cool corridor in health care.” Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Gains in market share, especially in both sea and air logistics, will help Kuehne + Nagel outperform growth in the wider freight forwarding sector, senior company executives said Tuesday. CEO Stefan Paul said the company is aiming for growth of one and a half times the market rate, equal to average GDP growth, between now and 2030. “For sea and air logistics, our reference metric is volume growth; for road and contract logistics, it is net turnover growth,” Paul said during the company’s capital markets day in London. But K+N is also forecasting a more subdued 2025, with earnings before interest and taxes (EBIT) of between $1.7 billion and $2 billion. That compares with EBIT of $1.9 billion last year. “The lower end of our guidance reflects an increased level of uncertainty at this relatively early stage of the year 2025,” CFO Markus Blanka-Graff said during Tuesday’s event. Company executives admitted they were over-optimistic how the market would develop after the end of the COVID-19 pandemic when they targeted EBIT growth of 17% to 19% between 2019 and 2024. Actual average growth was 11%, and while that was an improvement compared with pre-pandemic growth rates, “it means we are clearly tracking below our expectations,” Paul said. He said the new growth targets are based on three assumptions. Aside from global long-term economic growth, they comprise increasing supply chain complexity due to trade barriers and other disruptions in supply or demand, and further market consolidation “because scale matters.” Paul said while K+N will focus on organic growth, it will also make bolt-on acquisitions “if they make sense,” such as the prior takeovers of Apex Logistics, US drayage firm IMC and Canadian customs broker Farrow. Commenting on the growth targets, Paul indicated that Kuehne + Nagel had already taken on new air freight customers in the fourth quarter because of DSV’s agreement to acquire DB Schenker . And he expects a major shift in customers will come after that deal is completed, saying a combined DSV-Schenker could lose between 20% and 25% of its business to other logistics providers, mostly in the second half of this year. That is largely due to shipper procurement policies and governance issues in terms of how much business they can allocate to one provider rather than quality or service issues, Paul added. Expanding in smaller markets Michael Aldwell, K+N’s executive vice president of sea logistics, said the company would intensify its focus on key trades such as the trans-Atlantic, intra-Asia and Asia to North America and Europe, especially in areas such as healthcare, consumer goods, high-tech and industrial. “We will expand our network in smaller markets where we find attractive growth potential,” Aldwell said. “So far, we are now serving 41 new markets since the beginning of 2023, out of the initial goal of 50 by 2026.” At least another 20 new markets will be added in the next few years, including in Japan, Central Europe and Central and Latin America, he said. The forwarder is also increasing its focus to attract more small and medium-sized firms, which currently account for about 49% of its customer base. Yngve Ruud, K+N’s executive vice president of air logistics, was confident about the air freight outlook, with global volumes expected to increase 3% between 2025 and 2028. “Demand will exceed capacity in specific regions and trade lanes,” Ruud said, without giving details. He expected the forwarder would also meet its earnings growth target by launching new services for shippers later this year and in 2026, including “an end-to-end cool corridor in health care.” Contact Keith Wallis at keithwallis@hotmail.com .

Forwarding

Supply chain

Kuehne + Nagel says gaining market share key to driving earnings growth

<div class="phx-topic abstract-wrapper">There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession — rate deflation accompanied by cost inflation — and if carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. </div>

There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession — rate deflation accompanied by cost inflation — and if carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth.

<div class="phx-topic">The surface freight transportation industry is now pinning its hope on economic recovery — for the third straight year — on an expected recovery in the second half of the year. The industry consensus calls for incremental improvement in truckload rates driven by gradual improvement in sector fundamentals throughout the year. Nevertheless, the most recent results of many public truckload stocks have been sobering. Although some carriers observed some “green shoots” during peak season, post-election gains have been given back — and then some. Multiples are below historic norms, and fleet sizes continue to contract — despite several years of shrinkage. There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession caused by rate deflation accompanied by cost inflation. If carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. To analyze this dichotomy, I utilized “An Analysis of the Operational Cost of Trucking: 2024 Update.” Prepared by the American Transportation Research Institute (ATRI), this annual report casts a wide net in respondent type, size and operating model; provides historical context for almost the past 20 years and is remarkably transparent when compared with other self-anointed experts. The first chart explains this difference by looking at two distinct metrics: driver cost per hour and fuel cost per mile. Fuel costs have deviated wildly over this period, whereas driver cost has been steadily increasing. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b372d175-2a73-40b7-83a0-f350f63093d1"></dynamic-object></div>Nevertheless, in an environment where trucking costs are on an inexorable inflationary arc, how have rates remained so depressed? I believe that the issue is that the trucking market is less “free” since the COVID-19 pandemic. A free market exists when supply and demand (through “voluntary exchange”) determine economic outcomes. Buyers and sellers are free to trade goods and services free of governmental intervention or market dominance by one side: monopoly, oligopoly or monopsony. A free market also requires the freedom of firms to enter that market because there are no barriers of entry. Since deregulation, the truckload market has had this freedom. However, market freedom also permits firms to freely depart from the market without any barriers to exit. This has not necessarily been the case since the pandemic. At the smallest increment of production, an individual with a commercial driver’s license could acquire a tractor and trailer, obtain insurance, register with the government and be in business. If the business did not work out, the individual could hand the keys to the equipment lender and be on with their life. COVID changed these dynamics. Equipment was wildly expensive and lenders required more security than just the underlying asset. New entrants needed to pledge their homes or life savings. When the market turned, there was no exit possible because they were “upside down.” The asset was worth less than they paid for it. These owner-operators are now forced into an untenable situation. Having no exit, their only choice is to keep driving until the market changes. Because survival — not profitability — is the goal, their floor price is what I call “direct cash costs.” In the ATRI model, this is fuel, insurance, permits/licenses and tolls. Costs such as equipment payments, maintenance and repair and tires are deferred until the end. I call them “episodic cash.” Driver wages and benefits are notional. The second chart shows how these costs have tracked the past 10 years. I have also included traditional truckload and intermodal. The former has no episodic cash. Maintenance is maintained, and equipment cost is deferred by parking equipment. Non-asset intermodal is all “direct cash” because all components are purchased. Bimodal intermodal providers are not shown, but they would be between traditional truckload and non-asset intermodal. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7c8a9981-9386-4062-844d-cd07eb8ea529"></dynamic-object></div>The second chart also explains the freight recession. The traditional economies of scale enjoyed by large truckload carriers over owner-operators are meaningless when costs are not “apples to apples.” The same applies to intermodal’s competitive advantage. The intermodal line may be a little high; however, we have not seen a widespread willingness of railroads to cut their rates. This situation is not The Flying Dutchman, a phantom ship doomed to sail forever. Eventually, the equipment will be retired, and “normal” market conditions will return. Until then, this market situation is likely to maintain. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

The surface freight transportation industry is now pinning its hope on economic recovery — for the third straight year — on an expected recovery in the second half of the year. The industry consensus calls for incremental improvement in truckload rates driven by gradual improvement in sector fundamentals throughout the year. Nevertheless, the most recent results of many public truckload stocks have been sobering. Although some carriers observed some “green shoots” during peak season, post-election gains have been given back — and then some. Multiples are below historic norms, and fleet sizes continue to contract — despite several years of shrinkage. There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession caused by rate deflation accompanied by cost inflation. If carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. To analyze this dichotomy, I utilized “An Analysis of the Operational Cost of Trucking: 2024 Update.” Prepared by the American Transportation Research Institute (ATRI), this annual report casts a wide net in respondent type, size and operating model; provides historical context for almost the past 20 years and is remarkably transparent when compared with other self-anointed experts. The first chart explains this difference by looking at two distinct metrics: driver cost per hour and fuel cost per mile. Fuel costs have deviated wildly over this period, whereas driver cost has been steadily increasing. Nevertheless, in an environment where trucking costs are on an inexorable inflationary arc, how have rates remained so depressed? I believe that the issue is that the trucking market is less “free” since the COVID-19 pandemic. A free market exists when supply and demand (through “voluntary exchange”) determine economic outcomes. Buyers and sellers are free to trade goods and services free of governmental intervention or market dominance by one side: monopoly, oligopoly or monopsony. A free market also requires the freedom of firms to enter that market because there are no barriers of entry. Since deregulation, the truckload market has had this freedom. However, market freedom also permits firms to freely depart from the market without any barriers to exit. This has not necessarily been the case since the pandemic. At the smallest increment of production, an individual with a commercial driver’s license could acquire a tractor and trailer, obtain insurance, register with the government and be in business. If the business did not work out, the individual could hand the keys to the equipment lender and be on with their life. COVID changed these dynamics. Equipment was wildly expensive and lenders required more security than just the underlying asset. New entrants needed to pledge their homes or life savings. When the market turned, there was no exit possible because they were “upside down.” The asset was worth less than they paid for it. These owner-operators are now forced into an untenable situation. Having no exit, their only choice is to keep driving until the market changes. Because survival — not profitability — is the goal, their floor price is what I call “direct cash costs.” In the ATRI model, this is fuel, insurance, permits/licenses and tolls. Costs such as equipment payments, maintenance and repair and tires are deferred until the end. I call them “episodic cash.” Driver wages and benefits are notional. The second chart shows how these costs have tracked the past 10 years. I have also included traditional truckload and intermodal. The former has no episodic cash. Maintenance is maintained, and equipment cost is deferred by parking equipment. Non-asset intermodal is all “direct cash” because all components are purchased. Bimodal intermodal providers are not shown, but they would be between traditional truckload and non-asset intermodal. The second chart also explains the freight recession. The traditional economies of scale enjoyed by large truckload carriers over owner-operators are meaningless when costs are not “apples to apples.” The same applies to intermodal’s competitive advantage. The intermodal line may be a little high; however, we have not seen a widespread willingness of railroads to cut their rates. This situation is not The Flying Dutchman, a phantom ship doomed to sail forever. Eventually, the equipment will be retired, and “normal” market conditions will return. Until then, this market situation is likely to maintain. Contact Ted Prince at ted@tricitiesintermodal.com .

Surface

Surface industry faces obstacles on way to hoped-for H2 recovery

<div class="phx-topic abstract-wrapper">No matter what changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry, writes Satish Jindel.</div>

No matter what changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry, writes Satish Jindel.

<div class="phx-topic">On June 25, 2024, during an earnings call, FedEx leaders announced that the company’s board had authorized management to explore options for a sale or spinoff of FedEx Freight, and that a decision would be announced by the end of the year. On Dec. 19, <a href="https://www.joc.com/article/fedex-freight-spinoff-is-latest-move-to-reshape-us-ltl-market-5909683">the leadership announced that a spinoff</a> was the best option and would be completed over 18 months. Why tell the shareholders and the less-than-truckload (LTL) market of this move if it is not happening for many months? Now, competitors and shippers can prepare for the various changes that could result from the FedEx Freight spinoff. Competing carriers and shippers should benefit from FedEx’s Priority and Economy services getting merged for a number of reasons. While the parcel market supports express and ground services, the FedEx Express volume has been shrinking for many years, with FedEx Ground now representing over 80% of total parcel volume. So, if there is a rationale to merge the Express and Ground parcel networks, FedEx Freight’s Priority and Economy services should also be merged. The premium for the Priority service price is so small that it does not make up for the various costs related to offering two services. If the two services were so appealing and financially rewarding, other LTL carriers would have done the same. Yet after 12 years, no other LTL carrier has followed suit. Many LTL carriers with just one service are generating operating margins better than 14.5% of FedEx Freight. As the LTL industry speeds up the transit times on high-volume lanes, the gap between Priority and Economy services will shrink. <h3>Greater role for technology </h3>While the parent company wants to spin it off as FedEx Freight, expect the new board to rename it American Freightways. With relief from intercompany charges of $528 million during fiscal year 2024 paid to FedEx Corporation for marketing, sales, technology and billing support, the spinoff will save FedEx Freight a few hundred million dollars by handling those corporate support functions itself. If it uses that money to go for greater market share with pricing initiatives, it could be good news for shippers. Shippers should get ready for a greater role of technology. With the National Motor Freight Traffic Association finally adopting dimensional pricing, there will be a greater need by shippers and carriers to capture shipment dimensions. This change should ensure more accurate billing and reduce the cost for auditing all freight bills for proper classification. With shippers being required to pay greater attention to the dimensions of the pallets, they can expect FedEx Freight support to improve their palletizing just as FedEx helps parcel customers improve their packaging. Because there are practically no appointment deliveries in the parcel business, expect FedEx Freight to embrace opportunities with AI to reduce the number of appointment deliveries, which should help shippers avoid charges for such service. We can also expect FedEx Freight to take greater interest in participating in LTL industry conferences and contributing its shipment data to SMC3’s national LTL database. No matter which of these changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry. And for those wondering why FedEx needs 18 months to spin off Freight, just imagine the pressure on the board and leadership that may find that investors are valuing its LTL business at a higher market cap than its parcel business, which is generating just a 5.5% margin compared with 14.5% for LTL business. Contact Satish Jindel at <a href="mailto:info@shipmatrix.com">info@shipmatrix.com</a>. </div>

On June 25, 2024, during an earnings call, FedEx leaders announced that the company’s board had authorized management to explore options for a sale or spinoff of FedEx Freight, and that a decision would be announced by the end of the year. On Dec. 19, the leadership announced that a spinoff was the best option and would be completed over 18 months. Why tell the shareholders and the less-than-truckload (LTL) market of this move if it is not happening for many months? Now, competitors and shippers can prepare for the various changes that could result from the FedEx Freight spinoff. Competing carriers and shippers should benefit from FedEx’s Priority and Economy services getting merged for a number of reasons. While the parcel market supports express and ground services, the FedEx Express volume has been shrinking for many years, with FedEx Ground now representing over 80% of total parcel volume. So, if there is a rationale to merge the Express and Ground parcel networks, FedEx Freight’s Priority and Economy services should also be merged. The premium for the Priority service price is so small that it does not make up for the various costs related to offering two services. If the two services were so appealing and financially rewarding, other LTL carriers would have done the same. Yet after 12 years, no other LTL carrier has followed suit. Many LTL carriers with just one service are generating operating margins better than 14.5% of FedEx Freight. As the LTL industry speeds up the transit times on high-volume lanes, the gap between Priority and Economy services will shrink. Greater role for technology While the parent company wants to spin it off as FedEx Freight, expect the new board to rename it American Freightways. With relief from intercompany charges of $528 million during fiscal year 2024 paid to FedEx Corporation for marketing, sales, technology and billing support, the spinoff will save FedEx Freight a few hundred million dollars by handling those corporate support functions itself. If it uses that money to go for greater market share with pricing initiatives, it could be good news for shippers. Shippers should get ready for a greater role of technology. With the National Motor Freight Traffic Association finally adopting dimensional pricing, there will be a greater need by shippers and carriers to capture shipment dimensions. This change should ensure more accurate billing and reduce the cost for auditing all freight bills for proper classification. With shippers being required to pay greater attention to the dimensions of the pallets, they can expect FedEx Freight support to improve their palletizing just as FedEx helps parcel customers improve their packaging. Because there are practically no appointment deliveries in the parcel business, expect FedEx Freight to embrace opportunities with AI to reduce the number of appointment deliveries, which should help shippers avoid charges for such service. We can also expect FedEx Freight to take greater interest in participating in LTL industry conferences and contributing its shipment data to SMC3’s national LTL database. No matter which of these changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry. And for those wondering why FedEx needs 18 months to spin off Freight, just imagine the pressure on the board and leadership that may find that investors are valuing its LTL business at a higher market cap than its parcel business, which is generating just a 5.5% margin compared with 14.5% for LTL business. Contact Satish Jindel at info@shipmatrix.com .

How the LTL market could evolve as the FedEx Freight spinoff plays out

S&P Global Platts editors engaging with market participants to assess the current value of freight-all-kinds (FAK) rates on major container trades produce container spot rates. The rates include bunker adjustment factors, general rate increases and emergency rare restoration. They also include low-sulfur fuel, equipment imbalance and repositioning surcharges. The rates exclude terminal handling, port security, overweight container, delivery, and detention and demurrage charges. [Platts](https://www.spglobal.com/commodityinsights)

North Europe to US East Coast container spot rates (Platts)

Platts North Europe to US East Coast Weekly Gateway

<div class="phx-topic abstract-wrapper">The IMO is a specialized agency of the United Nations, which potentially puts the organization in the crosshairs of the new administration that is reassessing all its UN positions and policies. </div>

The IMO is a specialized agency of the United Nations, which potentially puts the organization in the crosshairs of the new administration that is reassessing all its UN positions and policies.

<div class="phx-topic">A crucial April meeting of the International Maritime Organization (IMO) will be the first during President Trump’s second term, with the US currently “in a holding pattern” regarding continued membership of the IMO, according to classification society DNV. The 176 member states of the IMO will gather at the 83rd Marine Environment Protection Committee (MEPC) meeting in London from April 7–11 to design a greenhouse gas (GHG) fuel intensity regulation and settle on an economic measure for taxing carbon emissions, with both measures aiming for implementation in 2027. Eirik Nyhus, director for environment and maritime at DNV, said in an MEPC update this week that <a href="https://www.joc.com/article/progress-on-carbon-pricing-on-track-despite-us-stance-on-green-initiatives-imo-5929236">the US position regarding the IMO</a> going forward remained unclear. At the last meeting of the IMO’s Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 18) in late February, Nyhus said the US did not take the floor until the very end, stating that the new administration was reassessing all its United Nations positions and policies. The IMO is a specialized agency of the UN. The Trump administration is also in the process of withdrawing from the Paris Agreement climate change accord, part of a broader initiative of “reviewing for rescission all regulations that impose undue burdens on energy production and use.” A spokesperson for the IMO told the Journal of Commerce this week that “any member state can withdraw from the organization, as outlined in Article 73 of the IMO Convention, though they would still be bound by the treaties to which they are party.” Still, Nyhus played down the significance of a potential US withdrawal with the IMO having far more important issues to focus on. “While the US has turned into a bit of a wild card, I cannot see this being a showstopper [at MEPC] in any way,” he noted. “Many issues, big and small, remain under negotiation, with the two most challenging ones being the design of the greenhouse gas fuel intensity regulation and the choice of economic measure. The discussions remain intensely political,” he added. The goal is to have a net zero framework ready for approval at MEPC 83 in London, and there is pressure on member states to finalize the legal framework around a fuel standard and economic measure with implementation planned for October. If the measures do not roll out in October, it will place the IMO’s interim emissions reduction targets at risk. Ocean carriers are watching the MEPC deliberations closely — many have had to invest huge sums in dual-fuel ships able to run on cleaner energy despite the lack of regulations to narrow the gap between fossil fuels and the alternatives. “We <a href="https://www.joc.com/article/lack-of-clarity-over-clean-energy-supply-driving-dual-fuel-ship-orders-5747200">have to take decisions on decarbonizing our fleet</a> over the next 20, 25 or 30 years, and we believe that the direction that we have chosen remains valid,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters at the carrier’s annual results presentation Thursday. “That means trying to reduce our emissions significantly until 2030 and also to stick to our target to be net carbon neutral by 2045.” <h3>No deal is not an option </h3>Andy Wibroe, lead regulatory specialist at classification society Lloyd’s Register, said in an MEPC update this week that one of the main issues to be resolved in April is how shipowners and operators will pay for GHG emissions from their ships on a well-to-wake basis. Funds coming from whatever carbon-charging measure is agreed upon are essential to support the development and scale up of a new generation of carbon-free marine fuels, which remain significantly more expensive than traditional fossil fuels. Another crucial point is the support for developing countries and remote island states through the energy transition in shipping. Wibroe highlighted the divisions between two camps — those who believe in a technical measure built around a fuel standard that generates revenue from under-compliant ships paying for credits to make up the compliance deficit, and the others who want a flat carbon emissions fee to guarantee revenue and reduce the cost gap between fuel types. Small island nations oppose both approaches because they believe the fuel standard measure will not generate enough funding to support “a just and equitable transition,” and because they rely on sea trade for everything, the carbon tax will cost them out of existence. Navigating a way through the divisions among member states will not be easy, but Lloyd’s Register said the IMO cannot be seen to close this milestone MEPC meeting on a “no deal” basis. “It is not expected to be a hostile meeting, but there are many heated discussions already taking place in back rooms and corridors that will continue in the lead up to the meeting,” Wibroe said. “It is anticipated, however, that the IMO is still likely to close MEPC 83 with a consensus.” Nyhus had the same view that by the time MEPC delegates emerge on April 11 from their London Embankment bunker at the IMO headquarters in London they will have reached a deal of some kind. “It looks pretty certain that this is going to come down to the wire at MEPC 83 with a very real possibility that the meeting at some point simply will be presented with a take it or leave it proposal,” was Nyhus’ assessment. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A crucial April meeting of the International Maritime Organization (IMO) will be the first during President Trump’s second term, with the US currently “in a holding pattern” regarding continued membership of the IMO, according to classification society DNV. The 176 member states of the IMO will gather at the 83rd Marine Environment Protection Committee (MEPC) meeting in London from April 7–11 to design a greenhouse gas (GHG) fuel intensity regulation and settle on an economic measure for taxing carbon emissions, with both measures aiming for implementation in 2027. Eirik Nyhus, director for environment and maritime at DNV, said in an MEPC update this week that the US position regarding the IMO going forward remained unclear. At the last meeting of the IMO’s Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 18) in late February, Nyhus said the US did not take the floor until the very end, stating that the new administration was reassessing all its United Nations positions and policies. The IMO is a specialized agency of the UN. The Trump administration is also in the process of withdrawing from the Paris Agreement climate change accord, part of a broader initiative of “reviewing for rescission all regulations that impose undue burdens on energy production and use.” A spokesperson for the IMO told the Journal of Commerce this week that “any member state can withdraw from the organization, as outlined in Article 73 of the IMO Convention, though they would still be bound by the treaties to which they are party.” Still, Nyhus played down the significance of a potential US withdrawal with the IMO having far more important issues to focus on. “While the US has turned into a bit of a wild card, I cannot see this being a showstopper [at MEPC] in any way,” he noted. “Many issues, big and small, remain under negotiation, with the two most challenging ones being the design of the greenhouse gas fuel intensity regulation and the choice of economic measure. The discussions remain intensely political,” he added. The goal is to have a net zero framework ready for approval at MEPC 83 in London, and there is pressure on member states to finalize the legal framework around a fuel standard and economic measure with implementation planned for October. If the measures do not roll out in October, it will place the IMO’s interim emissions reduction targets at risk. Ocean carriers are watching the MEPC deliberations closely — many have had to invest huge sums in dual-fuel ships able to run on cleaner energy despite the lack of regulations to narrow the gap between fossil fuels and the alternatives. “We have to take decisions on decarbonizing our fleet over the next 20, 25 or 30 years, and we believe that the direction that we have chosen remains valid,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters at the carrier’s annual results presentation Thursday. “That means trying to reduce our emissions significantly until 2030 and also to stick to our target to be net carbon neutral by 2045.” No deal is not an option Andy Wibroe, lead regulatory specialist at classification society Lloyd’s Register, said in an MEPC update this week that one of the main issues to be resolved in April is how shipowners and operators will pay for GHG emissions from their ships on a well-to-wake basis. Funds coming from whatever carbon-charging measure is agreed upon are essential to support the development and scale up of a new generation of carbon-free marine fuels, which remain significantly more expensive than traditional fossil fuels. Another crucial point is the support for developing countries and remote island states through the energy transition in shipping. Wibroe highlighted the divisions between two camps — those who believe in a technical measure built around a fuel standard that generates revenue from under-compliant ships paying for credits to make up the compliance deficit, and the others who want a flat carbon emissions fee to guarantee revenue and reduce the cost gap between fuel types. Small island nations oppose both approaches because they believe the fuel standard measure will not generate enough funding to support “a just and equitable transition,” and because they rely on sea trade for everything, the carbon tax will cost them out of existence. Navigating a way through the divisions among member states will not be easy, but Lloyd’s Register said the IMO cannot be seen to close this milestone MEPC meeting on a “no deal” basis. “It is not expected to be a hostile meeting, but there are many heated discussions already taking place in back rooms and corridors that will continue in the lead up to the meeting,” Wibroe said. “It is anticipated, however, that the IMO is still likely to close MEPC 83 with a consensus.” Nyhus had the same view that by the time MEPC delegates emerge on April 11 from their London Embankment bunker at the IMO headquarters in London they will have reached a deal of some kind. “It looks pretty certain that this is going to come down to the wire at MEPC 83 with a very real possibility that the meeting at some point simply will be presented with a take it or leave it proposal,” was Nyhus’ assessment. Contact Greg Knowler at greg.knowler@spglobal.com .

US in ‘holding pattern’ over IMO membership: DNV

<div class="phx-topic abstract-wrapper">The growing backlog of boxes awaiting a return to Asia has resulted in finger pointing among stakeholders over how best to address the problem.</div>

The growing backlog of boxes awaiting a return to Asia has resulted in finger pointing among stakeholders over how best to address the problem.

<div class="phx-topic">The surge in imports landing in Southern California during January amid a rush to beat new US tariffs and Lunar New Year factory closures has resulted in a significant buildup of empty containers awaiting a return trip to Asia in drayage yards and marine terminals. The growing backlog has also resulted in finger pointing among stakeholders over how to address the problem. The empties are creating a costly logistics problem for drayage operators in Southern California, according to Matt Schrap, CEO of the Harbor Trucking Association. Schrap said many of the empties are sitting on chassis at the yards of drayage operators, taking up space and inhibiting the return of the equipment before free storage time runs out at the marine terminals. One way to address the problem is for marine terminals to open more appointment slots for truckers so they can return the containers and chassis before detention and demurrage charges kick in, Schrap told the Journal of Commerce. “If you can’t get an appointment, you have to pay the late fees and demurrage fees,” he said. The threat of tariffs from the new Trump administration and an earlier-than-normal Lunar New Year that began Jan. 29 resulted in a cargo rush in Southern California at the start of the year. Imports from Asia were up 31.3% in Long Beach in January and 12.6% in Los Angeles year over year, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="23e67c9e-b9d6-4eb9-a4ca-6b3ac6e2cb07"></dynamic-object></div>At the same time, US exports through Southern California are down, so most of the containers must be returned to Asia empty. Gene Seroka, executive director of the Port of Los Angeles, told a press conference this week that exports in February from Los Angeles were down 18% year over year, while empty containers were up 16%. <h3>Trucker appointment slots a factor </h3>Because the empties cannot be returned to Asia quickly enough to prevent the containers from accumulating at the marine terminals, they have created a backlog at some terminals and at drayage operators’ facilities in Southern California. “Volumes are high. We get it,” Schrap said. But Schrap said the marine terminals continue to make it difficult for truckers to get sufficient appointment slots for empty container returns. Also, he noted, some terminals will only allow an empty to be returned if the trucker also picks up a loaded inbound container, a process known as a dual transaction. Terminal operators disagree with Schrap’s assessment. They note that Los Angeles-Long Beach is the only US port complex to consistently keep its gates open for 10 shifts each week. The terminals said they offer sufficient appointments to handle empty container returns, but a number of slots go unfilled each day because many truckers do not want to make appointments at inconvenient times, such as late at night or on weekends. SSA Marine, which operates three of the six container terminals in Long Beach, intentionally caps its truck traffic during the day gates in order to push more truck calls into the night shift. If SSA and other terminals didn’t do that, the freeways from the port would be overwhelmed during daytime hours, said Sal Ferrigno, SSA’s vice president in Southern California. Ferrigno said SSA attempts to maintain a mix of 55% of truck calls during the day shift and 45% at night. However, drayage companies are not using most of the nighttime slots that are available to them. “Those guys need to work at night,” Ferrigno said. Schrap said the empty container situation varies from ocean carrier to ocean carrier and terminal to terminal. Alan McCorkle, president of Yusen Terminals in Los Angeles, said containers have been flowing freely at his facility despite the January cargo surge and a February that was stronger than usual. Yusen, according to McCorkle, continues to experience unused trucker appointment slots during the terminal’s day and evening shifts. About 6% to 12% of its daytime appointment slots go unfilled or are no-shows, and about 16% to 20% of its nighttime appointments are not used, he said. Yet another factor at work this time of year is that terminals must catch up with the backlog of empty containers that occurs when ocean carriers blank sailings during the Lunar New Year lull, said Noel Hacegaba, COO at the Port of Long Beach. “Terminals, in an effort to manage blank sailings, are limiting the return of empties,” he said. “Because of the strong influx of imports in recent months, there are more empties across the system that need to be repositioned back to Asia.” <h3>Who should pay for container storage? </h3>Schrap said an even greater problem for truckers is “a complete unwillingness” by ocean carriers and intermodal equipment providers to pay drayage companies for storing their containers and chassis until the units can be returned to the terminals. “History has shown that it is cheaper for [equipment providers] to stage boxes at motor carrier yards [at no cost] as opposed to finding off/near-dock return locations or paying the MTO [marine terminal operator] to store them,” Schrap said. Seroka noted that according to the Pool of Pools, which is operated by the three largest chassis providers in Southern California, the average chassis street dwell time in the region is about six days. “We’d like to see it at four days,” Seroka said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The surge in imports landing in Southern California during January amid a rush to beat new US tariffs and Lunar New Year factory closures has resulted in a significant buildup of empty containers awaiting a return trip to Asia in drayage yards and marine terminals. The growing backlog has also resulted in finger pointing among stakeholders over how to address the problem. The empties are creating a costly logistics problem for drayage operators in Southern California, according to Matt Schrap, CEO of the Harbor Trucking Association. Schrap said many of the empties are sitting on chassis at the yards of drayage operators, taking up space and inhibiting the return of the equipment before free storage time runs out at the marine terminals. One way to address the problem is for marine terminals to open more appointment slots for truckers so they can return the containers and chassis before detention and demurrage charges kick in, Schrap told the Journal of Commerce. “If you can’t get an appointment, you have to pay the late fees and demurrage fees,” he said. The threat of tariffs from the new Trump administration and an earlier-than-normal Lunar New Year that began Jan. 29 resulted in a cargo rush in Southern California at the start of the year. Imports from Asia were up 31.3% in Long Beach in January and 12.6% in Los Angeles year over year, according to PIERS, a Journal of Commerce sister product within S&P Global. At the same time, US exports through Southern California are down, so most of the containers must be returned to Asia empty. Gene Seroka, executive director of the Port of Los Angeles, told a press conference this week that exports in February from Los Angeles were down 18% year over year, while empty containers were up 16%. Trucker appointment slots a factor Because the empties cannot be returned to Asia quickly enough to prevent the containers from accumulating at the marine terminals, they have created a backlog at some terminals and at drayage operators’ facilities in Southern California. “Volumes are high. We get it,” Schrap said. But Schrap said the marine terminals continue to make it difficult for truckers to get sufficient appointment slots for empty container returns. Also, he noted, some terminals will only allow an empty to be returned if the trucker also picks up a loaded inbound container, a process known as a dual transaction. Terminal operators disagree with Schrap’s assessment. They note that Los Angeles-Long Beach is the only US port complex to consistently keep its gates open for 10 shifts each week. The terminals said they offer sufficient appointments to handle empty container returns, but a number of slots go unfilled each day because many truckers do not want to make appointments at inconvenient times, such as late at night or on weekends. SSA Marine, which operates three of the six container terminals in Long Beach, intentionally caps its truck traffic during the day gates in order to push more truck calls into the night shift. If SSA and other terminals didn’t do that, the freeways from the port would be overwhelmed during daytime hours, said Sal Ferrigno, SSA’s vice president in Southern California. Ferrigno said SSA attempts to maintain a mix of 55% of truck calls during the day shift and 45% at night. However, drayage companies are not using most of the nighttime slots that are available to them. “Those guys need to work at night,” Ferrigno said. Schrap said the empty container situation varies from ocean carrier to ocean carrier and terminal to terminal. Alan McCorkle, president of Yusen Terminals in Los Angeles, said containers have been flowing freely at his facility despite the January cargo surge and a February that was stronger than usual. Yusen, according to McCorkle, continues to experience unused trucker appointment slots during the terminal’s day and evening shifts. About 6% to 12% of its daytime appointment slots go unfilled or are no-shows, and about 16% to 20% of its nighttime appointments are not used, he said. Yet another factor at work this time of year is that terminals must catch up with the backlog of empty containers that occurs when ocean carriers blank sailings during the Lunar New Year lull, said Noel Hacegaba, COO at the Port of Long Beach. “Terminals, in an effort to manage blank sailings, are limiting the return of empties,” he said. “Because of the strong influx of imports in recent months, there are more empties across the system that need to be repositioned back to Asia.” Who should pay for container storage? Schrap said an even greater problem for truckers is “a complete unwillingness” by ocean carriers and intermodal equipment providers to pay drayage companies for storing their containers and chassis until the units can be returned to the terminals. “History has shown that it is cheaper for [equipment providers] to stage boxes at motor carrier yards [at no cost] as opposed to finding off/near-dock return locations or paying the MTO [marine terminal operator] to store them,” Schrap said. Seroka noted that according to the Pool of Pools, which is operated by the three largest chassis providers in Southern California, the average chassis street dwell time in the region is about six days. “We’d like to see it at four days,” Seroka said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Trans-Pacific

Marine terminals

Empty containers piling up in Los Angeles-Long Beach after January import surge

<div class="phx-topic abstract-wrapper">The latest salvo in the US-induced global tariff war comes as the EU said Thursday that a 50% tax on imports of US-produced whiskey will take effect from mid-April.</div>

The latest salvo in the US-induced global tariff war comes as the EU said Thursday that a 50% tax on imports of US-produced whiskey will take effect from mid-April.

<div class="phx-topic">A coalition of US wine importers, retailers and restaurants has told members to suspend all shipments from the European Union until greater clarity emerges on the level of tariffs to be imposed on European wine and spirits by the Trump administration. That comes as the EU said Thursday that a 50% tax on imports of US-produced whiskey will take effect from mid-April, a reciprocal measure that was in response to tariffs placed on all steel and aluminium imports to the US. After the EU announced its tariff on US whiskey, Donald Trump threatened to raise tariffs to 200% on wine and spirits imports from the “hostile and abusive” EU. The threat was enough for the US Wine Trade Alliance (USWTA), a collection of hundreds of importers, to issue a notice on Wednesday urging importers to halt all shipments of wine, beer and spirits from the EU. USWTA fears the tariffs on the beverages could be imposed from April 2. Alison Leavitt, managing director of the US-based Wine and Spirits Shippers’ Association, said many other companies have also stopped their orders from the EU or have requested a stop on shipments. “The uncertainty is the biggest problem, and it is hugely disruptive,” Leavitt told the Journal of Commerce. “The tariffs will have a devastating impact on the [US] wine business.” Europe sends wine valued at more than €4.5 billion ($4.89 billion) a year to the US, according to European wine industry representative Comité Européen des Entreprises Vins. <h3>No guarantee of on-time arrival </h3>Leavitt said for US importers, anything that is not already on the water will not arrive before the beginning of April, and even then, there is no guarantee that the shipments will be on time. “Many containers booked to arrive pre-April 1 are not going to arrive in time based on the massive delays caused by the ocean carrier disruption with almost all vessels delayed by seven to 14 days over the last weeks,” she said, adding that some companies were arranging air freight for high-value goods. Ocean carriers are in the midst of a reshuffling of alliances, with new services being phased in and often running in parallel with old services. Carriers have warned previously that disruption was likely during the transition period that will only be completed by the summer. But if there are lengthy delays on the trans-Atlantic, they will not be coming from Gemini Cooperation members Hapag-Lloyd and Maersk, according to Rolf Habben Jansen, CEO of Hapag-Lloyd. “As far as the Gemini voyages are concerned, when we look at the schedule reliability data, we are looking at very high on-time arrival percentages in North America,” he said Thursday during the carrier’s 2024 annual results press conference. He added that across the Gemini network, schedule reliability is currently near 90%. Habben Jansen said there was also no sign of a slowdown in volume on the Europe to US routes, with this week having the strongest bookings since Gemini was launched on Feb. 1. “It is normal people would think a little bit harder about whether to ramp up volume when we see high tariffs coming, but so far we do not see declines in bookings [on the trans-Atlantic],” he said. <h3>Rate increases, surcharges coming in April </h3>Meanwhile, ocean carriers are lining up trans-Atlantic rate increases and “peak season surcharges” in April that, if accepted by the market, will significantly ramp up price levels that have been declining steadily since late December. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="fa309dd3-ee6c-427e-9173-66d782c66dbf"></dynamic-object></div>Mediterranean Shipping Co. set its freight-all-kinds (FAK) rate from Antwerp to New York at a hefty $7,000 per FEU, while CMA CGM’s Rotterdam to New York rate was set at $3,026/FEU. For context, the North Europe to US East Coast spot rate this week was at $2,000/FEU, down 13% since the beginning of the year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. On the Mediterranean-US trade lane, Gemini partners Maersk and Hapag-Lloyd announced separate peak season surcharges. From April 5, Hapag-Lloyd will add $750 to all types of containers and Maersk will charge $400 per box. Rate benchmarking platform Xeneta this week assessed average spot rates from the Mediterranean to the US East Coast at $3,355/FEU, down 8.4% since Jan. 1. The latest available trans-Atlantic volume data is for February, so any frontloading to get ahead of the tariffs to be imposed on the European Union on April 2 by the Trump administration is not yet reflected in the data. February volume fell 8.7% year over year to 154,090 TEUs, according to PIERS, also part of S&amp;P Global. On Mediterranean to US routes, volume edged up 1.7% year over year to 128,230 TEUs. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A coalition of US wine importers, retailers and restaurants has told members to suspend all shipments from the European Union until greater clarity emerges on the level of tariffs to be imposed on European wine and spirits by the Trump administration. That comes as the EU said Thursday that a 50% tax on imports of US-produced whiskey will take effect from mid-April, a reciprocal measure that was in response to tariffs placed on all steel and aluminium imports to the US. After the EU announced its tariff on US whiskey, Donald Trump threatened to raise tariffs to 200% on wine and spirits imports from the “hostile and abusive” EU. The threat was enough for the US Wine Trade Alliance (USWTA), a collection of hundreds of importers, to issue a notice on Wednesday urging importers to halt all shipments of wine, beer and spirits from the EU. USWTA fears the tariffs on the beverages could be imposed from April 2. Alison Leavitt, managing director of the US-based Wine and Spirits Shippers’ Association, said many other companies have also stopped their orders from the EU or have requested a stop on shipments. “The uncertainty is the biggest problem, and it is hugely disruptive,” Leavitt told the Journal of Commerce. “The tariffs will have a devastating impact on the [US] wine business.” Europe sends wine valued at more than €4.5 billion ($4.89 billion) a year to the US, according to European wine industry representative Comité Européen des Entreprises Vins. No guarantee of on-time arrival Leavitt said for US importers, anything that is not already on the water will not arrive before the beginning of April, and even then, there is no guarantee that the shipments will be on time. “Many containers booked to arrive pre-April 1 are not going to arrive in time based on the massive delays caused by the ocean carrier disruption with almost all vessels delayed by seven to 14 days over the last weeks,” she said, adding that some companies were arranging air freight for high-value goods. Ocean carriers are in the midst of a reshuffling of alliances, with new services being phased in and often running in parallel with old services. Carriers have warned previously that disruption was likely during the transition period that will only be completed by the summer. But if there are lengthy delays on the trans-Atlantic, they will not be coming from Gemini Cooperation members Hapag-Lloyd and Maersk, according to Rolf Habben Jansen, CEO of Hapag-Lloyd. “As far as the Gemini voyages are concerned, when we look at the schedule reliability data, we are looking at very high on-time arrival percentages in North America,” he said Thursday during the carrier’s 2024 annual results press conference. He added that across the Gemini network, schedule reliability is currently near 90%. Habben Jansen said there was also no sign of a slowdown in volume on the Europe to US routes, with this week having the strongest bookings since Gemini was launched on Feb. 1. “It is normal people would think a little bit harder about whether to ramp up volume when we see high tariffs coming, but so far we do not see declines in bookings [on the trans-Atlantic],” he said. Rate increases, surcharges coming in April Meanwhile, ocean carriers are lining up trans-Atlantic rate increases and “peak season surcharges” in April that, if accepted by the market, will significantly ramp up price levels that have been declining steadily since late December. Mediterranean Shipping Co. set its freight-all-kinds (FAK) rate from Antwerp to New York at a hefty $7,000 per FEU, while CMA CGM’s Rotterdam to New York rate was set at $3,026/FEU. For context, the North Europe to US East Coast spot rate this week was at $2,000/FEU, down 13% since the beginning of the year, according to Platts, a sister company of the Journal of Commerce within S&P Global. On the Mediterranean-US trade lane, Gemini partners Maersk and Hapag-Lloyd announced separate peak season surcharges. From April 5, Hapag-Lloyd will add $750 to all types of containers and Maersk will charge $400 per box. Rate benchmarking platform Xeneta this week assessed average spot rates from the Mediterranean to the US East Coast at $3,355/FEU, down 8.4% since Jan. 1. The latest available trans-Atlantic volume data is for February, so any frontloading to get ahead of the tariffs to be imposed on the European Union on April 2 by the Trump administration is not yet reflected in the data. February volume fell 8.7% year over year to 154,090 TEUs, according to PIERS, also part of S&P Global. On Mediterranean to US routes, volume edged up 1.7% year over year to 128,230 TEUs. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Jittery US wine coalition urges hold on EU imports over Trump tariff threat

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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<div class="phx-topic abstract-wrapper">Cosco said changes in the shipping alliances this year will trigger competition in digitization and decarbonization.</div>

Cosco said changes in the shipping alliances this year will trigger competition in digitization and decarbonization.

<div class="phx-topic">Cosco Shipping Holdings said Friday that the industry will experience “profound changes in global cargo flow patterns” due to tariff- and trade-related policies after reporting strong profits in 2024. Container shipping demand growth is set to moderate this year, the carrier said, thanks to the combined effects of an easing of “global inflationary pressures and accommodative monetary policies in Europe and the United States.” The carrier, the fourth-largest by tonnage, according to Alphaliner, said changes among the major container shipping alliances are expected to trigger increased competition this year, “particularly in two strategic arenas: digitalized supply chains and green and low-carbon development initiatives.” That came as Cosco reported a 106% increase in net profit, to $6.8 billion, last year, on revenues that rose 33% to $32 billion thanks to significantly higher freight rates and a 10% year-over-year increase in total container volumes. Average revenue per TEU on international routes climbed 30% to $1,055 per TEU. Industrywide operating profits reached nearly $60 billion in 2024, according to estimates from Sea-Intelligence Maritime Analysis, but analysts are <a href="https://www.joc.com/article/oversupplied-ocean-carriers-sailing-into-new-downcycle-analysts-5963852">warning of a downcycle beginning this year</a>. The state-owned carrier said it will accelerate the scaled development of its dual-brand fleet, consisting of Cosco Shipping Lines and Hong Kong-based subsidiary Orient Overseas Container Line (OOCL), after it ordered a dozen 14,000-TEU methanol dual-fuel container ships last year. Cosco Shipping Lines accounted for approximately two-thirds ($4.3 billion) of the $6.8 billion in reported profits last year, with the balance coming from OOCL and terminal arm Cosco Shipping Port, which saw its net profit slip 5% to $309 million. Revenue gains were led by the trans-Pacific trade, which spiked 63% to $9 billion on a 13% jump in volumes. Asia-Europe revenue rose 41% to $6.4 billion despite a 13% drop in liftings, a reflection of operational capacity cuts stemming from vessels diverting around the Cape of Good Hope to avoid Houthi militant attacks in the Red Sea area. Revenue from intra-Asia, including Australia, climbed 23% to $7.4 billion on volumes that increased 11%. Earnings from other trades, including the trans-Atlantic and Latin America, grew 27% year over year to $4.5 billion as liftings rose 10%.Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Cosco Shipping Holdings said Friday that the industry will experience “profound changes in global cargo flow patterns” due to tariff- and trade-related policies after reporting strong profits in 2024. Container shipping demand growth is set to moderate this year, the carrier said, thanks to the combined effects of an easing of “global inflationary pressures and accommodative monetary policies in Europe and the United States.” The carrier, the fourth-largest by tonnage, according to Alphaliner, said changes among the major container shipping alliances are expected to trigger increased competition this year, “particularly in two strategic arenas: digitalized supply chains and green and low-carbon development initiatives.” That came as Cosco reported a 106% increase in net profit, to $6.8 billion, last year, on revenues that rose 33% to $32 billion thanks to significantly higher freight rates and a 10% year-over-year increase in total container volumes. Average revenue per TEU on international routes climbed 30% to $1,055 per TEU. Industrywide operating profits reached nearly $60 billion in 2024, according to estimates from Sea-Intelligence Maritime Analysis, but analysts are warning of a downcycle beginning this year . The state-owned carrier said it will accelerate the scaled development of its dual-brand fleet, consisting of Cosco Shipping Lines and Hong Kong-based subsidiary Orient Overseas Container Line (OOCL), after it ordered a dozen 14,000-TEU methanol dual-fuel container ships last year. Cosco Shipping Lines accounted for approximately two-thirds ($4.3 billion) of the $6.8 billion in reported profits last year, with the balance coming from OOCL and terminal arm Cosco Shipping Port, which saw its net profit slip 5% to $309 million. Revenue gains were led by the trans-Pacific trade, which spiked 63% to $9 billion on a 13% jump in volumes. Asia-Europe revenue rose 41% to $6.4 billion despite a 13% drop in liftings, a reflection of operational capacity cuts stemming from vessels diverting around the Cape of Good Hope to avoid Houthi militant attacks in the Red Sea area. Revenue from intra-Asia, including Australia, climbed 23% to $7.4 billion on volumes that increased 11%. Earnings from other trades, including the trans-Atlantic and Latin America, grew 27% year over year to $4.5 billion as liftings rose 10%. Contact Keith Wallis at keithwallis@hotmail.com .

Asia-Europe

Escalating tariffs will cause ‘profound’ trade pattern changes: Cosco

<div class="phx-topic abstract-wrapper">US maritime interests said the proposed fees on Chinese ships would hit a variety of low-value, niche trades that can’t absorb the costs.</div>

US maritime interests said the proposed fees on Chinese ships would hit a variety of low-value, niche trades that can’t absorb the costs.

<div class="phx-topic">While major container lines and their major customers are not speaking out much about the Trump administration’s proposed fees of about $1 million per US port call on Chinese vessels, shippers involved in smaller maritime and container trades are lashing out directly against the proposal through a comment period ending Monday. In comments filed with US Trade Representative (USTR) prior to a Monday hearing on the proposed fees, maritime interests said it will hit swathes of the economy outside the container trade and will even hurt the US-based maritime industry, which relies on Chinese ships. The USTR hearing comes after a year-long investigation found that <a href="https://www.joc.com/article/us-port-fees-could-hit-chinese-ships-under-trump-trade-proposal-5949409">China heavily subsidized its shipbuilding industry to take a dominant market share</a>. Last month, the USTR outlined a broad array of possible remedies, including collecting fees on Chinese carriers calling US ports, collecting other fees on non-Chinese carriers with Chinese ships in their fleet or newbuild orders in China, and requiring that US-flag vessels carry more exports. After the public hearing, the USTR will make a final determination on which of the penalties to enforce. The USTR has received more than 200 submissions ahead of Monday’s hearing on the impact of those penalties. The majority of commenters argue against any type of penalties, citing the potential for much higher shipping costs on trades that can least afford them and the reduction of services as Chinese ships avoid US ports. Many of the submissions highlighted that US-based ocean carriers also have Chinese-built ships in their fleets, with some of these fleets serving small regional markets such as the Caribbean, or dry and liquid bulk trades that will also be swept up in the port fees. There are 448 ships currently in service that are built in China and owned and operated by US ocean carriers, according to Sea-Web, a sister company of the Journal of Commerce within S&amp;P Global. Dry bulk ships make up about one-third of that total. There are also about 90 Chinese-built container and general cargo ships in US-based fleets, Sea-web data show. Although the Jones Act bars these ships from transporting goods between US ports, carriers such as Tropical Shipping and Seaboard Marine can serve international ports in the Caribbean and Central America from US ports. <h3>Caribbean sees end to shipping services </h3>A number of Florida ports and Caribbean-based shippers said USTR’s proposed penalties would cripple trade throughout the region. While the port fees could easily be absorbed across multiple cargoes on large ships, smaller vessels and shippers would take a big hit if a fee is charged regardless of the size of the ship and the value of the cargo. Carriers that serve Caribbean markets with Chinese ships “would effectively be out of business and so would all the islands and countries they trade with,” West Indian Marine Group said in its comment. “Islands and countries in the Caribbean would not be able to survive and exist because all trade is supplied from the USA.” Other niche carriers said they would not be able to serve the US market if fees on Chinese ships are levied. Atlantic Container Line, which has five ships in the trans-Atlantic trade, said only Chinese shipyards were willing to build its ships, which can switch between handling containers, breakbulk and roll-on, roll-off cargoes. “ACL would be forced to terminate its US service, close its American offices, lay off its American staff and redeploy its ships to non-US trades,” the company said in its submission. Container lines that remain in the US trade will likely have to pass on those charges to customers, the International Chamber of Shipping (ICS) said in its submission. It said the port fees could add $600 to $800 to the cost of each shipping container moved through US ports as the USTR proposal would impact nearly all container vessel calls to the US. “While some reorganization and substitution may be possible to avoid exposure to fees, it would be impossible for container liners to avoid the disproportionately high fees proposed, and costs would be passed on to US charterers and consumers,” the ICS said. The proposed fees would also cause large ocean carriers to change their service networks, the American Association of Port Authorities (AAPA) said in its submission to the USTR. It said container lines could increase calls to Canadian and Mexican ports to avoid the fees while reducing US port calls. <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">That would strain big US ports and leave others with vastly reduced business, all while increasing costs to shippers</a>, the AAPA said. “This would cause significant congestion at large ports and the collapse of business lines at small and medium-sized ports. The results would be higher inflation, more unemployment, and higher trade deficits,” the AAPA said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

While major container lines and their major customers are not speaking out much about the Trump administration’s proposed fees of about $1 million per US port call on Chinese vessels, shippers involved in smaller maritime and container trades are lashing out directly against the proposal through a comment period ending Monday. In comments filed with US Trade Representative (USTR) prior to a Monday hearing on the proposed fees, maritime interests said it will hit swathes of the economy outside the container trade and will even hurt the US-based maritime industry, which relies on Chinese ships. The USTR hearing comes after a year-long investigation found that China heavily subsidized its shipbuilding industry to take a dominant market share . Last month, the USTR outlined a broad array of possible remedies, including collecting fees on Chinese carriers calling US ports, collecting other fees on non-Chinese carriers with Chinese ships in their fleet or newbuild orders in China, and requiring that US-flag vessels carry more exports. After the public hearing, the USTR will make a final determination on which of the penalties to enforce. The USTR has received more than 200 submissions ahead of Monday’s hearing on the impact of those penalties. The majority of commenters argue against any type of penalties, citing the potential for much higher shipping costs on trades that can least afford them and the reduction of services as Chinese ships avoid US ports. Many of the submissions highlighted that US-based ocean carriers also have Chinese-built ships in their fleets, with some of these fleets serving small regional markets such as the Caribbean, or dry and liquid bulk trades that will also be swept up in the port fees. There are 448 ships currently in service that are built in China and owned and operated by US ocean carriers, according to Sea-Web, a sister company of the Journal of Commerce within S&P Global. Dry bulk ships make up about one-third of that total. There are also about 90 Chinese-built container and general cargo ships in US-based fleets, Sea-web data show. Although the Jones Act bars these ships from transporting goods between US ports, carriers such as Tropical Shipping and Seaboard Marine can serve international ports in the Caribbean and Central America from US ports. Caribbean sees end to shipping services A number of Florida ports and Caribbean-based shippers said USTR’s proposed penalties would cripple trade throughout the region. While the port fees could easily be absorbed across multiple cargoes on large ships, smaller vessels and shippers would take a big hit if a fee is charged regardless of the size of the ship and the value of the cargo. Carriers that serve Caribbean markets with Chinese ships “would effectively be out of business and so would all the islands and countries they trade with,” West Indian Marine Group said in its comment. “Islands and countries in the Caribbean would not be able to survive and exist because all trade is supplied from the USA.” Other niche carriers said they would not be able to serve the US market if fees on Chinese ships are levied. Atlantic Container Line, which has five ships in the trans-Atlantic trade, said only Chinese shipyards were willing to build its ships, which can switch between handling containers, breakbulk and roll-on, roll-off cargoes. “ACL would be forced to terminate its US service, close its American offices, lay off its American staff and redeploy its ships to non-US trades,” the company said in its submission. Container lines that remain in the US trade will likely have to pass on those charges to customers, the International Chamber of Shipping (ICS) said in its submission. It said the port fees could add $600 to $800 to the cost of each shipping container moved through US ports as the USTR proposal would impact nearly all container vessel calls to the US. “While some reorganization and substitution may be possible to avoid exposure to fees, it would be impossible for container liners to avoid the disproportionately high fees proposed, and costs would be passed on to US charterers and consumers,” the ICS said. The proposed fees would also cause large ocean carriers to change their service networks, the American Association of Port Authorities (AAPA) said in its submission to the USTR. It said container lines could increase calls to Canadian and Mexican ports to avoid the fees while reducing US port calls. That would strain big US ports and leave others with vastly reduced business, all while increasing costs to shippers , the AAPA said. “This would cause significant congestion at large ports and the collapse of business lines at small and medium-sized ports. The results would be higher inflation, more unemployment, and higher trade deficits,” the AAPA said. Contact Michael Angell at michael.angell@spglobal.com .

USTR’s China tonnage tax would squeeze smaller trades: stakeholders

<div class="phx-topic abstract-wrapper">While there is no strong demand trigger for LTL freight on the horizon, providers continue to add terminals and lanes to growing networks. </div>

While there is no strong demand trigger for LTL freight on the horizon, providers continue to add terminals and lanes to growing networks.

<div class="phx-topic">US freight demand is declining, but less-than-truckload (LTL) carriers keep building, adding terminals and lanes at a time when they might be expected to rein in expansion plans. Instead of hedging against uncertainty, LTL trucking companies say they are positioning themselves for the upswing in freight demand they hope will come sometime this year. “For the first time in decades, nobody is seeing the traditional March peak for LTL,” Chris Jamroz, CEO of Roadrunner, told the Journal of Commerce. “It used to be that anybody who had a pulse could deliver a great result in LTL in March.” Not this year. Four of the top 10 publicly owned LTL companies reported declines in shipments and tonnage in January and February, with only one, Saia, reporting gains, including a 5.5% increase in shipments — almost certainly market share gains from competitors. Shipments at FedEx Freight, the largest US LTL provider, fell 4.7% year over year in the quarter that ended Feb. 28. Shipments were down 5.9% from a year ago at Old Dominion Freight Line (ODFL) in January and February and were 6.2% lower at XPO in February. Shipments per day were down 1% in January and February at ABF Freight System, but the ArcBest subsidiary’s tonnage slipped 6%, according to its mid-quarter report. ABF in February began hauling more heavy-weight truckload-rated shipments to bolster its volumes.The Cass Freight Shipments Index, a broad measure of freight volume that blends LTL, truckload and rail shipments, was down 5.5% year over year in February and 9.5% from two years ago. The annualized decline was 8.2% in January. Although data for early March isn’t available yet, LTL executives and shippers point to little change in freight demand. LTL executives who spoke with the Journal of Commerce but did not want to be identified say freight volumes were down by low single-digit percentages from a year ago. Those executives are still optimistic, though, partly because they are winning contractual rate hikes, as they have been since <a href="https://www.joc.com/article/us-ltl-sector-growth-efficiencies-still-fueled-by-loss-of-yellow-5715785">bankrupt LTL provider Yellow collapsed</a> in 2023. The US long-haul LTL producer price index (PPI) rose 6.3% from a year ago in January and 6.1% in February. The measure of all-inclusive LTL selling prices is now at its highest point ever, having recovered from a 12% slide between June 2022 and April 2023. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="eea5e7a8-7e1e-4d7c-9068-ac1fc2db0a5e"></dynamic-object></div>The LTL PPI is now 12.3% higher than it was when Yellow shut down in July 2023. That makes it easier for LTL carriers to begin building toward a demand recovery. “We still see a soft domestic economy, but it feels like it’s improving,” Adam Satterfield, CFO of Old Dominion Freight Line, told the Journal of Commerce. “Sequentially, we saw shipments and tonnage improve more than average from January to February.” <h3>Larger, denser LTL networks</h3>ODFL spent $664 million over the past two years on its service center network — without buying terminals from Yellow. “We continue to add capacity,” said Satterfield. “Capacity is an important part of the equation in the first year of an economic inflection.” After two slow years, ODFL has “more excess capacity than we’ve ever had,” at about 30%, Satterfield said. “But we still have a robust capex [capital expenditure] plan,” he added. “Investing in new service centers is a key part of our strategy, and we want to stay ahead of the curve.” ODFL opened four facilities in 2024 and has several service centers under construction that can be opened when the market heats up, he said. Other carriers, including regional LTL providers Dayton Freight Lines, A. Duie Pyle and Averitt <a href="https://www.joc.com/article/ltl-carriers-expanding-networks-to-prepare-for-long-term-growth-5915148">are opening or expanding service centers</a> to gain greater freight density and expand next-day and same-day service. Yellow continues to sell the last of its terminals. There is still less LTL capacity available than there was before Yellow’s exit, Satterfield said. That is helping to keep LTL pricing elevated. Roadrunner, which is leasing a former Yellow terminal in Atlanta, one of its network hubs, last week expanded by adding 278 lanes, its largest expansion since its current restructuring began in 2021. One-third of those 278 new lanes are more than 1,000 miles long, originating at the company’s hubs in Atlanta, Detroit, Nashville, Cleveland and Grand Rapids, Michigan. The new lanes aren’t a reaction to rising demand, however; they’re all about prepositioning for coming demand. LTL carriers are also prepping for the eventual spinoff of FedEx Freight as an independent carrier in 2026 and a possible LTL play by Amazon. “We’re at the bottom of the trough, but we will go up, and we want to be positioned to respond to shippers very fast,” Jamroz said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

US freight demand is declining, but less-than-truckload (LTL) carriers keep building, adding terminals and lanes at a time when they might be expected to rein in expansion plans. Instead of hedging against uncertainty, LTL trucking companies say they are positioning themselves for the upswing in freight demand they hope will come sometime this year. “For the first time in decades, nobody is seeing the traditional March peak for LTL,” Chris Jamroz, CEO of Roadrunner, told the Journal of Commerce. “It used to be that anybody who had a pulse could deliver a great result in LTL in March.” Not this year. Four of the top 10 publicly owned LTL companies reported declines in shipments and tonnage in January and February, with only one, Saia, reporting gains, including a 5.5% increase in shipments — almost certainly market share gains from competitors. Shipments at FedEx Freight, the largest US LTL provider, fell 4.7% year over year in the quarter that ended Feb. 28. Shipments were down 5.9% from a year ago at Old Dominion Freight Line (ODFL) in January and February and were 6.2% lower at XPO in February. Shipments per day were down 1% in January and February at ABF Freight System, but the ArcBest subsidiary’s tonnage slipped 6%, according to its mid-quarter report. ABF in February began hauling more heavy-weight truckload-rated shipments to bolster its volumes. The Cass Freight Shipments Index, a broad measure of freight volume that blends LTL, truckload and rail shipments, was down 5.5% year over year in February and 9.5% from two years ago. The annualized decline was 8.2% in January. Although data for early March isn’t available yet, LTL executives and shippers point to little change in freight demand. LTL executives who spoke with the Journal of Commerce but did not want to be identified say freight volumes were down by low single-digit percentages from a year ago. Those executives are still optimistic, though, partly because they are winning contractual rate hikes, as they have been since bankrupt LTL provider Yellow collapsed in 2023. The US long-haul LTL producer price index (PPI) rose 6.3% from a year ago in January and 6.1% in February. The measure of all-inclusive LTL selling prices is now at its highest point ever, having recovered from a 12% slide between June 2022 and April 2023. The LTL PPI is now 12.3% higher than it was when Yellow shut down in July 2023. That makes it easier for LTL carriers to begin building toward a demand recovery. “We still see a soft domestic economy, but it feels like it’s improving,” Adam Satterfield, CFO of Old Dominion Freight Line, told the Journal of Commerce. “Sequentially, we saw shipments and tonnage improve more than average from January to February.” Larger, denser LTL networks ODFL spent $664 million over the past two years on its service center network — without buying terminals from Yellow. “We continue to add capacity,” said Satterfield. “Capacity is an important part of the equation in the first year of an economic inflection.” After two slow years, ODFL has “more excess capacity than we’ve ever had,” at about 30%, Satterfield said. “But we still have a robust capex [capital expenditure] plan,” he added. “Investing in new service centers is a key part of our strategy, and we want to stay ahead of the curve.” ODFL opened four facilities in 2024 and has several service centers under construction that can be opened when the market heats up, he said. Other carriers, including regional LTL providers Dayton Freight Lines, A. Duie Pyle and Averitt are opening or expanding service centers to gain greater freight density and expand next-day and same-day service. Yellow continues to sell the last of its terminals. There is still less LTL capacity available than there was before Yellow’s exit, Satterfield said. That is helping to keep LTL pricing elevated. Roadrunner, which is leasing a former Yellow terminal in Atlanta, one of its network hubs, last week expanded by adding 278 lanes, its largest expansion since its current restructuring began in 2021. One-third of those 278 new lanes are more than 1,000 miles long, originating at the company’s hubs in Atlanta, Detroit, Nashville, Cleveland and Grand Rapids, Michigan. The new lanes aren’t a reaction to rising demand, however; they’re all about prepositioning for coming demand. LTL carriers are also prepping for the eventual spinoff of FedEx Freight as an independent carrier in 2026 and a possible LTL play by Amazon. “We’re at the bottom of the trough, but we will go up, and we want to be positioned to respond to shippers very fast,” Jamroz said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

US LTL getting in position for higher freight demand — when it comes

<div class="phx-topic abstract-wrapper">Capacity improvements at the New Jersey facility will include optimization of the terminal layout, rebuilding berths at a higher level to allow for anticipated increases in the sea level and replacing existing cargo-handling equipment with zero-emission, electric machines.</div>

Capacity improvements at the New Jersey facility will include optimization of the terminal layout, rebuilding berths at a higher level to allow for anticipated increases in the sea level and replacing existing cargo-handling equipment with zero-emission, electric machines.

<div class="phx-topic">APM Terminals will invest more than $500 million to improve cargo handling capacity at its 350-acre Elizabeth terminal after it agreed to a 33-year lease extension with the Port Authority of New York and New Jersey, the two parties announced Monday. The current lease, which was due to expire in December 2029, will be extended to December 2062, according to the new agreement. The deal will be voted on by the port authority’s board of commissioners on March 27. APM Terminals said the capacity improvements will include optimization of the terminal layout, rebuilding the berths at a higher level to allow for anticipated increases in sea level and replacing existing cargo-handling equipment with zero-emission, electric machines. Elizabeth has a current terminal capacity of 2.3 million TEUs over 6,000 feet of wharfage. Specifics of the planned capacity growth at the New Jersey facility were not disclosed. Work to optimize the terminal layout and invest in the electrification of equipment will begin in the coming weeks as soon as the new lease is signed, an APM Terminals spokesperson told the Journal of Commerce. “The optimization of the layout and electrification will take place over the next several years as the terminal is modernized,” the spokesperson said. “Optimization entails improving the densification of the terminal to be able to efficiently handle higher cargo volumes within the same footprint.” The construction work at the terminal will result in an increase in jobs at the facility. “The modernization improvements will result in a significant capacity increase and our experience shows that the biggest driver of longshore employment is increases in volume growth,” the APM spokesperson said. “As a result, we expect our workforce on the terminal to expand as our volumes increase due to these investments.” The Elizabeth terminal handles more than 25% of the annual container throughput at the port’s terminals, which saw combined volumes rise 11.5% last year to 8.7 million TEUs. The Port Authority said the investment supports its 2050 port master plan, which anticipates cargo volumes doubling or tripling by mid-century. “This lease extension secures transformative infrastructure and capacity enhancements at the second-largest container terminal in the East Coast’s busiest port,” Port Authority Executive Director Rick Cotton said in a statement. “These commitments will enable the Port of New York and New Jersey to move more goods, create more jobs and further cement its role as an essential driver of our region’s economy and our nation’s supply chain.” <h3>Fixed berthing windows </h3>The APM Terminals spokesperson said the new Gemini Cooperation network of Maersk and Hapag-Lloyd is expected to slightly increase cargo volumes at the Elizabeth terminal when fully implemented. APM is owned by A.P. Moller–Maersk. APM Terminals is also introducing fixed berthing windows at dedicated berths for Gemini vessels and those of other carriers. “Keeping all services at dedicated and separate berths consistently will isolate port delays,” the spokesperson said, adding that if a vessel arrives late due to bad weather it will only affect other vessels calling at that specific berth. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

APM Terminals will invest more than $500 million to improve cargo handling capacity at its 350-acre Elizabeth terminal after it agreed to a 33-year lease extension with the Port Authority of New York and New Jersey, the two parties announced Monday. The current lease, which was due to expire in December 2029, will be extended to December 2062, according to the new agreement. The deal will be voted on by the port authority’s board of commissioners on March 27. APM Terminals said the capacity improvements will include optimization of the terminal layout, rebuilding the berths at a higher level to allow for anticipated increases in sea level and replacing existing cargo-handling equipment with zero-emission, electric machines. Elizabeth has a current terminal capacity of 2.3 million TEUs over 6,000 feet of wharfage. Specifics of the planned capacity growth at the New Jersey facility were not disclosed. Work to optimize the terminal layout and invest in the electrification of equipment will begin in the coming weeks as soon as the new lease is signed, an APM Terminals spokesperson told the Journal of Commerce. “The optimization of the layout and electrification will take place over the next several years as the terminal is modernized,” the spokesperson said. “Optimization entails improving the densification of the terminal to be able to efficiently handle higher cargo volumes within the same footprint.” The construction work at the terminal will result in an increase in jobs at the facility. “The modernization improvements will result in a significant capacity increase and our experience shows that the biggest driver of longshore employment is increases in volume growth,” the APM spokesperson said. “As a result, we expect our workforce on the terminal to expand as our volumes increase due to these investments.” The Elizabeth terminal handles more than 25% of the annual container throughput at the port’s terminals, which saw combined volumes rise 11.5% last year to 8.7 million TEUs. The Port Authority said the investment supports its 2050 port master plan, which anticipates cargo volumes doubling or tripling by mid-century. “This lease extension secures transformative infrastructure and capacity enhancements at the second-largest container terminal in the East Coast’s busiest port,” Port Authority Executive Director Rick Cotton said in a statement. “These commitments will enable the Port of New York and New Jersey to move more goods, create more jobs and further cement its role as an essential driver of our region’s economy and our nation’s supply chain.” Fixed berthing windows The APM Terminals spokesperson said the new Gemini Cooperation network of Maersk and Hapag-Lloyd is expected to slightly increase cargo volumes at the Elizabeth terminal when fully implemented. APM is owned by A.P. Moller–Maersk. APM Terminals is also introducing fixed berthing windows at dedicated berths for Gemini vessels and those of other carriers. “Keeping all services at dedicated and separate berths consistently will isolate port delays,” the spokesperson said, adding that if a vessel arrives late due to bad weather it will only affect other vessels calling at that specific berth. Contact Keith Wallis at keithwallis@hotmail.com .