<div class="phx-topic abstract-wrapper">Pacific Maritime Association CEO James McKenna on Wednesday released details of the employers’ contract offer to U.S. West Coast longshoremen, a comprehensive offer the waterfront employer group hopes will head off the need for a lockout or strike by the International Longshore and Warehouse Union during negotiations that appear to be at an impasse.</div>

Pacific Maritime Association CEO James McKenna on Wednesday released details of the employers’ contract offer to U.S. West Coast longshoremen, a comprehensive offer the waterfront employer group hopes will head off the need for a lockout or strike by the International Longshore and Warehouse Union during negotiations that appear to be at an impasse.

<div>Pacific Maritime Association CEO James McKenna on Wednesday released details of the employers’ contract offer to U.S. West Coast longshoremen, a comprehensive offer the PMA hopes will head off the need for a lockout or strike by the International Longshore and Warehouse Union during negotiations that appear to be at an impasse.The surprising PMA offer includes an agreement by employers to continue paying 100 percent of dockworkers’ medical costs, including the Cadillac tax under ObamaCare. The employers’ proposal would increase annual pension payments to $88,800 a year, in a contract employers propose will run for five years.“There are no take-aways,”...

Pacific Maritime Association CEO James McKenna on Wednesday released details of the employers’ contract offer to U.S. West Coast longshoremen, a comprehensive offer the PMA hopes will head off the need for a lockout or strike by the International Longshore and Warehouse Union during negotiations that appear to be at an impasse. The surprising PMA offer includes an agreement by employers to continue paying 100 percent of dockworkers’ medical costs, including the Cadillac tax under ObamaCare. The employers’ proposal would increase annual pension payments to $88,800 a year, in a contract employers propose will run for five years. “There are no take-aways,” McKenna told a press conference Wednesday, attempting to head off any concerns among the rank and file of the ILWU that hard-fought provisions from previous contracts would be compromised. ILWU President Robert McEllrath responded that there should be no need for an employer lockout or a dockworker strike because an agreement is “extremely close.” “We’re this close,” he said, holding up two fingers in a gesture to indicate how close the two parties are to a contract resolution. McKenna said no one wants a lockout, but with ports at the point of gridlock and most vessels in the trans-Pacific trades stuck on the West Coast, the system will soon shut itself down. No one can predict when that will happen — five days, seven days, two weeks — but the ports will soon grind to a halt, he said. There are six “open” contract issues that must be resolved, including details of the employers’ offers on wages and pensions that the ILWU must sign off on. One of the issues that employers find especially troubling is a new demand by the ILWU that arbitrators can be unilaterally fired by either the ILWU or the PMA. The 50-year-old arbitration system on the West Coast prevents both parties from being able to hold ports hostage through a claim, such as for health or safety reasons. This grievance process is currently null and void because the ILWU refused to extend the previous contract when it expired on July 1, 2014. If it had been in place, employers could have immediately asked the agreed-upon arbitrators to rule on safety claims by the union that have slashed crane productivity in Oakland, Seattle and Tacoma and reduced the dispatching of yard crane operators in Southern California to a trickle. At present, the PMA and ILWU must both agree to remove a local arbitrator at the various ports. This provides continuity and a balanced, fair approach to arbitrating waterfront claims, McKenna said. An arbitrator who could be dismissed at the whim of one side or the other would not be able to act with impartiality, he said. McKenna has undoubtedly surprised a number of industry observers by revealing that employers have agreed to pay 100 percent of the Cadillac tax in the Affordable Health Care Act. He told the JOC Group’s Trans-Pacific Maritime Conference in March 2014 that the provision will come at a cost of $150 million a year, and that the ILWU didn’t want to pay it and employers couldn’t afford to pay it. The tax is scheduled to take effect on Jan. 1, 2018. McKenna dropped another surprise at the press conference by saying the employers propose that the agreement will run for five years not three years as many had surmised, so employers’ exposure to the Cadillac tax will be “minimal.” Employers have also made another significant concession in their proposed agreement, which is to give the ILWU jurisdiction over chassis maintenance and repair, including the ability to inspect every chassis before the equipment leaves the marine terminal. This provision would preserve hundreds of ILWU mechanic jobs, but it also grants huge leverage to mechanics to arbitrarily place equipment out of service for the flimsiest of reasons. It is a highly-controversial concession given the fact that most chassis are now owned by equipment leasing companies and truckers. The Harbor Trucking Association of Southern California is on record as saying it will consider all legal options as soon as longshoremen attempt to detain trucker-owned chassis. Employers believed as recently as last week that a contract agreement was imminent because they agreed to the concession on chassis inspections. McKenna said those hopes faded when ILWU negotiators returned to the bargaining table with a new list of demands, some of which could be devastating for employers. McKenna was careful in handling all questions concerning an employer lockout, such as the 10-day lockout that occurred in the 2002 negotiations. He said employers can no longer afford to pay longshoremen for productivity that is down about 50 percent, but he said the reality of the waterfront is that the ports are so congested and vessels are now stuck at the ports for weeks, so the system will sooner rather than later grind to a halt. If employers do call a lockout, it would set in motion a process that could lead to President Obama invoking an 80-day cooling off period under Taft-Hartley. President Bush invoked Taft-Hartley when the PMA lockout in 2002 reached 10 days. Taft-Hartley is not a cure-all for poor productivity and gridlock, however. It would not guarantee, for example, that crane operators in the Pacific Northwest would overnight increase their productivity back to 28 moves per hour from about 18 at present. Nor would it force the ILWU dispatch hall in Southern California to resume sending out 110 skilled yard crane operators each day as it had done for years. On some days last month, PMA records show that as few as two yard crane operators were dispatched. McEllrath said the union “dropped almost all of our remaining issues to help get this settled -- and the few issues that remain can be easily resolved.” He said the ILWU pledged to keep the ports open and to keep cargo flowing. Contact Bill Mongelluzzo at bmongelluzzo@joc.com and follow him on Twitter: @billmongelluzzo .

Longshore labor

PMA details ILWU contract offer in attempt to avert lockout

<div class="phx-topic abstract-wrapper">Speakers at the conference in New Orleans agreed that recent volatility has yet to significantly slow projects or investments in the project cargo sector.</div>

Speakers at the conference in New Orleans agreed that recent volatility has yet to significantly slow projects or investments in the project cargo sector.

Feature image

<div class="phx-topic">New Orleans — Adapting to the unexpected while resisting knee-jerk reactions will be key to navigating a series of market uncertainties that include constant changes to US tariff policy, geopolitical tensions and labor strikes, a panel of project cargo logistics managers told attendees at the Journal of Commerce’s Breakbulk and Project Cargo Conference. “Don’t get comfortable. It’s always changing,” John MacDonough, construction logistics manager for the Woodfibre LNG project in British Columbia, told the conference Thursday. Logistics managers on the panel agreed that volatility hasn’t significantly slowed projects or investments. ”There’s only a slight halt in that that we’re being asked to look at the risks a little more closely, because it’s changing almost daily,” said Geanean Ordonez, project logistics manager/procurement for EPC Technip Energies. John Hark, a director at Bertling Logistics and adjunct professor at Texas A&amp;M at Galveston, said the long-term return on investment on large projects will help ensure that investments will continue amid uncertainty. But managing costs and supply chain risks will remain important for logistics managers. ”We can’t just say, ‘well, let’s not worry about this $10 million because the project is worth this much money over the next 20 years,’” he said. Itoro Ibanga, project logistics specialist and category manager for industrial supplier Air Liquide, said logistics managers should trust their own expertise and maintain compliance as they respond to tariffs and other unknowns. “Plan for the worst. Anything could happen,” he said. “Be ready and try to see how much you can mitigate that risk.” Ordonez said logistics managers will need to expect surprises as they work with their customers. “Just keep swimming,” she said. “It’s what we do.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

New Orleans — Adapting to the unexpected while resisting knee-jerk reactions will be key to navigating a series of market uncertainties that include constant changes to US tariff policy, geopolitical tensions and labor strikes, a panel of project cargo logistics managers told attendees at the Journal of Commerce’s Breakbulk and Project Cargo Conference. “Don’t get comfortable. It’s always changing,” John MacDonough, construction logistics manager for the Woodfibre LNG project in British Columbia, told the conference Thursday. Logistics managers on the panel agreed that volatility hasn’t significantly slowed projects or investments. ”There’s only a slight halt in that that we’re being asked to look at the risks a little more closely, because it’s changing almost daily,” said Geanean Ordonez, project logistics manager/procurement for EPC Technip Energies. John Hark, a director at Bertling Logistics and adjunct professor at Texas A&M at Galveston, said the long-term return on investment on large projects will help ensure that investments will continue amid uncertainty. But managing costs and supply chain risks will remain important for logistics managers. ”We can’t just say, ‘well, let’s not worry about this $10 million because the project is worth this much money over the next 20 years,’” he said. Itoro Ibanga, project logistics specialist and category manager for industrial supplier Air Liquide, said logistics managers should trust their own expertise and maintain compliance as they respond to tariffs and other unknowns. “Plan for the worst. Anything could happen,” he said. “Be ready and try to see how much you can mitigate that risk.” Ordonez said logistics managers will need to expect surprises as they work with their customers. “Just keep swimming,” she said. “It’s what we do.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Supply chain

Breakbulk News

Breakbulk carriers

Project cargo

Breakbulk25: Logistics managers push adaptability amid market turmoil

<div class="phx-topic abstract-wrapper">The closure of freighter slots at the airport beginning in August is expected to last several months because of an estimated $1 billion investment plan launched by port operator Adani Airport Holding.</div>

The closure of freighter slots at the airport beginning in August is expected to last several months because of an estimated $1 billion investment plan launched by port operator Adani Airport Holding.

<div class="phx-topic">Freighter slots at the Mumbai International Airport (MIAL) will be suspended beginning mid-August for extensive infrastructure upgrades, posing a threat to India's booming air freight supply chains amid the recent cargo expansion fueled by trade diversification in Asia. The impending closure is expected to last several months because of an estimated $1 billion investment plan launched by port operator Adani Airport Holding (AAHL), a subsidiary of the private behemoth Adani Group. “MIAL needs to carry out multiple air-side works, including building new taxiways, to enhance its capacity and bring efficiency in operations,” the authority told cargo stakeholders. A significant portion of Indian air cargo volumes moves via Mumbai, making it one of the busiest hubs for freighter networks. Turkish Airlines, Emirates, Challenge Group and Qatar Airways lead the pack there, with about 60 to 75 freighter services a month. The infrastructure work at MIAL seemingly ties in with AAHL's long-term strategy to consolidate all Mumbai air freight operations at a new airport in Navi Mumbai on the outskirts of Mumbai City, which is expected to go live in June. AAHL already has eight Indian airports under its management, accounting for 25% of the country's passenger footfalls and 35% of air cargo volumes. Industry sources believe airlines and trade stakeholders could encounter serious challenges, including infrastructure and regulatory issues, relocating to the new airport due to the complex nature of the air cargo sector, especially for perishables verticals. “MIAL stands as a vital nerve center for India’s international trade, particularly in the pharmaceutical and perishable goods sectors,” Satish Lakkaraju, board member at the Air Cargo Forum India (ACFI), told the Journal of Commerce. “Any operational bottlenecks could lead to cargo backlogs, longer lead times and a spike in logistics costs.” Global air cargo carriers have markedly cemented connections out of Mumbai to support India's strong e-commerce demand, another segment that could take a toll if supply chains are disrupted. India's e-commerce market swelled 24% year over year in 2024 to $148 billion by value, according to industry data. “In the short term, businesses in Mumbai can anticipate multiple hurdles due to the disruption," said a freight forwarder who didn't want to be identified. "Looking ahead, they might have to adapt by diversifying supply chains and/or exploring alternative routes.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Freighter slots at the Mumbai International Airport (MIAL) will be suspended beginning mid-August for extensive infrastructure upgrades, posing a threat to India's booming air freight supply chains amid the recent cargo expansion fueled by trade diversification in Asia. The impending closure is expected to last several months because of an estimated $1 billion investment plan launched by port operator Adani Airport Holding (AAHL), a subsidiary of the private behemoth Adani Group. “MIAL needs to carry out multiple air-side works, including building new taxiways, to enhance its capacity and bring efficiency in operations,” the authority told cargo stakeholders. A significant portion of Indian air cargo volumes moves via Mumbai, making it one of the busiest hubs for freighter networks. Turkish Airlines, Emirates, Challenge Group and Qatar Airways lead the pack there, with about 60 to 75 freighter services a month. The infrastructure work at MIAL seemingly ties in with AAHL's long-term strategy to consolidate all Mumbai air freight operations at a new airport in Navi Mumbai on the outskirts of Mumbai City, which is expected to go live in June. AAHL already has eight Indian airports under its management, accounting for 25% of the country's passenger footfalls and 35% of air cargo volumes. Industry sources believe airlines and trade stakeholders could encounter serious challenges, including infrastructure and regulatory issues, relocating to the new airport due to the complex nature of the air cargo sector, especially for perishables verticals. “MIAL stands as a vital nerve center for India’s international trade, particularly in the pharmaceutical and perishable goods sectors,” Satish Lakkaraju, board member at the Air Cargo Forum India (ACFI), told the Journal of Commerce. “Any operational bottlenecks could lead to cargo backlogs, longer lead times and a spike in logistics costs.” Global air cargo carriers have markedly cemented connections out of Mumbai to support India's strong e-commerce demand, another segment that could take a toll if supply chains are disrupted. India's e-commerce market swelled 24% year over year in 2024 to $148 billion by value, according to industry data. “In the short term, businesses in Mumbai can anticipate multiple hurdles due to the disruption," said a freight forwarder who didn't want to be identified. "Looking ahead, they might have to adapt by diversifying supply chains and/or exploring alternative routes.” Contact Bency Mathew at bencyvmathew@gmail.com .

Air Cargo Forwarder News

Air Cargo Carriers News

Air Cargo

Indian air cargo braces for disruptions amid looming upgrade project at Mumbai

<div class="phx-topic abstract-wrapper">The latest deals will increase the total number of methanol-enabled ships Wan Hai has on order to 32, worth a total of almost $5 billion.</div>

The latest deals will increase the total number of methanol-enabled ships Wan Hai has on order to 32, worth a total of almost $5 billion.

<div class="phx-topic">Wan Hai Lines has ordered four additional 16,000-TEU methanol-ready, dual-fuel container ships from two South Korean shipyards at a cost of up to $816 million, the Taiwan-headquartered carrier said. The latest deals will increase the total number of methanol-enabled ships Wan Hai has on order to 32, worth a total of almost $5 billion. Wan Hai, ranked 11th in the world by Alphaliner in terms of capacity, said two of the vessels will be built by HD Hyundai Samho, while the other pair will be constructed by Samsung Heavy Industries. Each of the four ships will cost between $187 million and $204 million, the carrier said Thursday. All of Wan Hai’s ships on order are scheduled for delivery in 2026 and 2027 and will increase the carrier’s owned fleet to almost 150 ships totaling around 950,000 TEUs in capacity. The orders also mark further expansion of Wan Hai’s long-haul network to North and South America, India and the Middle East, while increasing the number of owned vessels and reducing the need for chartered tonnage. The latest contracts were confirmed by Wan Hai after it announced that its operating revenue surged 34% year on year in the first quarter to $1.1 billion amid high rates and solid freight volumes. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Wan Hai Lines has ordered four additional 16,000-TEU methanol-ready, dual-fuel container ships from two South Korean shipyards at a cost of up to $816 million, the Taiwan-headquartered carrier said. The latest deals will increase the total number of methanol-enabled ships Wan Hai has on order to 32, worth a total of almost $5 billion. Wan Hai, ranked 11th in the world by Alphaliner in terms of capacity, said two of the vessels will be built by HD Hyundai Samho, while the other pair will be constructed by Samsung Heavy Industries. Each of the four ships will cost between $187 million and $204 million, the carrier said Thursday. All of Wan Hai’s ships on order are scheduled for delivery in 2026 and 2027 and will increase the carrier’s owned fleet to almost 150 ships totaling around 950,000 TEUs in capacity. The orders also mark further expansion of Wan Hai’s long-haul network to North and South America, India and the Middle East, while increasing the number of owned vessels and reducing the need for chartered tonnage. The latest contracts were confirmed by Wan Hai after it announced that its operating revenue surged 34% year on year in the first quarter to $1.1 billion amid high rates and solid freight volumes. Contact Keith Wallis at keithwallis@hotmail.com .

Maritime

Trans-Pacific

Container lines

Wan Hai orders four 16,000-TEU ships amid expansion of long-haul network

<div class="phx-topic abstract-wrapper">F. Paul De Maria will become the new CEO of the group representing ocean carriers and marine terminal operators at East and Gulf coast ports. </div>

F. Paul De Maria will become the new CEO of the group representing ocean carriers and marine terminal operators at East and Gulf coast ports.

<div class="phx-topic">The United States Maritime Alliance (USMX) has picked F. Paul De Maria as its new chief executive officer after he successfully led negotiations for a new contract between maritime employers and the International Longshoremen’s Association (ILA), which itself praised De Maria as a “tough negotiator.” De Maria joined the USMX in 2012 as its vice president of labor relations after he oversaw stevedoring operations for Ports America along the East and Gulf coasts. He was promoted to executive vice president and chief operating officer at the USMX in 2021. De Maria will replace Dave Adam as CEO of the USMX, which represents ocean carriers and marine terminal operators at East and Gulf coast ports. “It’s an honor to lead this organization as we work together with the ILA to ensure we have the strong and efficient supply chains necessary to ensure American companies can access the global marketplace,” De Maria said Thursday in a statement from the USMX. The USMX in 2022 <a href="https://www.joc.com/article/ila-open-to-starting-contract-talks-soon-with-usmx-5218348">started preliminary negotiations</a> with the ILA over a new six-year master contract with the hope of concluding a deal well before the previous contract’s 2024 expiration. But the talks dragged out over issues involving <a href="https://www.joc.com/article/ila-unmoved-by-latest-industry-leading-wage-offer-from-usmx-5703227">pay</a> and <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">marine terminal automation</a>, eventually leading to <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">a brief strike last October</a>. An active presence at <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">the final contract talks in January 2025</a>, De Maria was credited with “helping secure a landmark new agreement that protects current ILA jobs and establishes a framework for implementing technologies that will create additional jobs while modernizing East and Gulf Coast ports,” the USMX said in the statement announcing the leadership change. The ILA’s leadership also praised De Maria for his role in negotiating a new contract, which <a href="https://www.joc.com/article/ila-ratifies-new-six-year-deal-with-higher-entry-pay-automation-protection-5951338">the union’s rank and file approved in February</a>. “If it weren’t for Paul’s leadership, we would have been on the picket line again,” ILA President Harold Daggett said in a Facebook message last February. “We all knew that Paul was a tough negotiator, but he showed a lot of skill in how he worked with our bargaining committee.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The United States Maritime Alliance (USMX) has picked F. Paul De Maria as its new chief executive officer after he successfully led negotiations for a new contract between maritime employers and the International Longshoremen’s Association (ILA), which itself praised De Maria as a “tough negotiator.” De Maria joined the USMX in 2012 as its vice president of labor relations after he oversaw stevedoring operations for Ports America along the East and Gulf coasts. He was promoted to executive vice president and chief operating officer at the USMX in 2021. De Maria will replace Dave Adam as CEO of the USMX, which represents ocean carriers and marine terminal operators at East and Gulf coast ports. “It’s an honor to lead this organization as we work together with the ILA to ensure we have the strong and efficient supply chains necessary to ensure American companies can access the global marketplace,” De Maria said Thursday in a statement from the USMX. The USMX in 2022 started preliminary negotiations with the ILA over a new six-year master contract with the hope of concluding a deal well before the previous contract’s 2024 expiration. But the talks dragged out over issues involving pay and marine terminal automation , eventually leading to a brief strike last October . An active presence at the final contract talks in January 2025 , De Maria was credited with “helping secure a landmark new agreement that protects current ILA jobs and establishes a framework for implementing technologies that will create additional jobs while modernizing East and Gulf Coast ports,” the USMX said in the statement announcing the leadership change. The ILA’s leadership also praised De Maria for his role in negotiating a new contract, which the union’s rank and file approved in February . “If it weren’t for Paul’s leadership, we would have been on the picket line again,” ILA President Harold Daggett said in a Facebook message last February. “We all knew that Paul was a tough negotiator, but he showed a lot of skill in how he worked with our bargaining committee.” Contact Michael Angell at michael.angell@spglobal.com .

North American ports

Marine terminals

De Maria elevated to lead USMX after his work on new ILA contract

<div class="phx-topic abstract-wrapper">The award is less than the electronics giant sought in its complaint against Zim over detention and demurrage billing, a case that saw the judge chide Zim’s billing practices. </div>

The award is less than the electronics giant sought in its complaint against Zim over detention and demurrage billing, a case that saw the judge chide Zim’s billing practices.

<div class="phx-topic">Zim Integrated Shipping Services must pay Samsung Electronics $3.7 million in damages because the ocean carrier unreasonably held the release of Samsung containers during various billing disputes between the parties over detention and demurrage (D&amp;D) charges in 2021 and 2022, a judge for the Federal Maritime Commission (FMC) has ruled. In a decision published Wednesday, the FMC judge also rebuked Zim for its billing practices, saying they could run afoul of US shipping laws. When it brought the complaint in October 2022, the South Korean electronics giant originally wanted over $12 million in damages from the D&amp;D charges and additional trucking costs. Samsung said the D&amp;D charges spanned almost 10,000 separate charges on nearly 3,000 containers. Most of those containers moved under carrier haulage or so-called “store door” agreements where Zim was responsible for hiring the trucker. Samsung argued that since it did not hire the drayage driver, it shouldn’t pay any fees when a trucker is delayed in retrieving a container. However, the judge determined that many of those charges related to Samsung’s inability to receive cargo at the time. Samsung asked Zim about pre-pulling containers out of ports to avoid demurrage charges, the judge’s ruling said, a finding that shows Samsung was aware it could face those charges. Moreover, the judge did not buy Samsung’s argument that it was not the shipper, just the consignee, and should not be responsible for Zim’s charges. The judge determined the shippers were direct affiliates of Samsung, and thus can also be a responsible party in Zim’s service contracts. “It cannot be categorically found that all D&amp;D charges on door/carrier haulage shipments should have been paid by Zim,” the decision read. That was also the case when Samsung itself recommended a trucker to Zim, but the trucker failed to perform, the judge ruled. Zim started to refuse releasing some of Samsung’s containers due to the mounting D&amp;D bills, a practice that Samsung alleged also violated shipping law and incurred further demurrage. The FMC judge ruled that an ocean carrier can hold cargo for unpaid charges. However, many of the unpaid charges ended up being for containers that weren’t Samsung’s or were not otherwise justified or itemized on Zim’s invoices, the judge determined, making the holds unreasonable. While Zim eventually corrected the invoice errors, it “struggled to manage customer-specific invoice requirements and procedures during a very busy period,” the judge said. “The evidence shows significant problems with Zim’s invoicing practices because of billing the wrong party, delays in sending invoices, and inaccuracies or missing information,” the decision read. While there was no evidence these were regular practices, “Zim risks violating the Ocean Shipping Reform Act [of 2022] if this level of inaccurate billing continues,” it added. Zim was not immediately available for comment late Thursday.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Zim Integrated Shipping Services must pay Samsung Electronics $3.7 million in damages because the ocean carrier unreasonably held the release of Samsung containers during various billing disputes between the parties over detention and demurrage (D&D) charges in 2021 and 2022, a judge for the Federal Maritime Commission (FMC) has ruled. In a decision published Wednesday, the FMC judge also rebuked Zim for its billing practices, saying they could run afoul of US shipping laws. When it brought the complaint in October 2022, the South Korean electronics giant originally wanted over $12 million in damages from the D&D charges and additional trucking costs. Samsung said the D&D charges spanned almost 10,000 separate charges on nearly 3,000 containers. Most of those containers moved under carrier haulage or so-called “store door” agreements where Zim was responsible for hiring the trucker. Samsung argued that since it did not hire the drayage driver, it shouldn’t pay any fees when a trucker is delayed in retrieving a container. However, the judge determined that many of those charges related to Samsung’s inability to receive cargo at the time. Samsung asked Zim about pre-pulling containers out of ports to avoid demurrage charges, the judge’s ruling said, a finding that shows Samsung was aware it could face those charges. Moreover, the judge did not buy Samsung’s argument that it was not the shipper, just the consignee, and should not be responsible for Zim’s charges. The judge determined the shippers were direct affiliates of Samsung, and thus can also be a responsible party in Zim’s service contracts. “It cannot be categorically found that all D&D charges on door/carrier haulage shipments should have been paid by Zim,” the decision read. That was also the case when Samsung itself recommended a trucker to Zim, but the trucker failed to perform, the judge ruled. Zim started to refuse releasing some of Samsung’s containers due to the mounting D&D bills, a practice that Samsung alleged also violated shipping law and incurred further demurrage. The FMC judge ruled that an ocean carrier can hold cargo for unpaid charges. However, many of the unpaid charges ended up being for containers that weren’t Samsung’s or were not otherwise justified or itemized on Zim’s invoices, the judge determined, making the holds unreasonable. While Zim eventually corrected the invoice errors, it “struggled to manage customer-specific invoice requirements and procedures during a very busy period,” the judge said. “The evidence shows significant problems with Zim’s invoicing practices because of billing the wrong party, delays in sending invoices, and inaccuracies or missing information,” the decision read. While there was no evidence these were regular practices, “Zim risks violating the Ocean Shipping Reform Act [of 2022] if this level of inaccurate billing continues,” it added. Zim was not immediately available for comment late Thursday. Contact Michael Angell at michael.angell@spglobal.com .

Transport, Trade and Regulation News

FMC judge awards Samsung $3.7 million from Zim in billing dispute

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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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