<div class="phx-topic abstract-wrapper">U.S. House legislators advocating the scanning all containers that come into the U.S. used a Tuesday congressional hearing on the threat of dirty bombs, or explosives using radioactive materials and conventional explosives, to reiterate their calls for the long-delayed federal mandate.</div>

U.S. House legislators advocating the scanning all containers that come into the U.S. used a Tuesday congressional hearing on the threat of dirty bombs, or explosives using radioactive materials and conventional explosives, to reiterate their calls for the long-delayed federal mandate.

<div>WASHINGTON — U.S. House legislators advocating the scanning all containers that come into the U.S. used a Tuesday congressional hearing on the threat of dirty bombs, or explosives using radioactive materials and conventional explosives, to reiterate their calls for the long-delayed federal mandate.Legislators’ determination has only been bolstered after multiple sting operations in Moldova uncovered smuggling operations attempting to sell what they thought was radioactive material to representatives of the Islamic State terrorist group. U.S. Customs and Border Protection officials countered that 100 percent scanning is not only impractical, both for trade and financially, but could prove more dangerous than...

WASHINGTON — U.S. House legislators advocating the scanning all containers that come into the U.S. used a Tuesday congressional hearing on the threat of dirty bombs, or explosives using radioactive materials and conventional explosives, to reiterate their calls for the long-delayed federal mandate. Legislators’ determination has only been bolstered after multiple sting operations in Moldova uncovered smuggling operations attempting to sell what they thought was radioactive material to representatives of the Islamic State terrorist group. U.S. Customs and Border Protection officials countered that 100 percent scanning is not only impractical, both for trade and financially, but could prove more dangerous than the current practice of only scanning high-risk shipments. The Department of Homeland Security was granted a two-year extension last year to implement the 100 percent screening policy, after missing both its initial 2012 deadline and another in 2014 . At a congressional hearing Tuesday before the House Subcommittee on Coast Guard and Maritime Transportation, Rep. Janice Hahn, D-Calif., reiterated her call for 100 percent scanning of all cargo at U.S. ports. “I have said it once and I will say it again, we need 100 percent scanning at our ports. The risks are too high not to,” the congresswoman said. Federal officials, however, argued that even with the utilization of existing technologies 100 percent screening of incoming containers would be nearly impossible: It would disrupt trade, slow the flow of commerce through maritime gateways and could even prove more dangerous than the screening conducted at current levels. Customs officials acknowledged that port X-ray and gamma-ray machines only scan 4.1 percent of the millions of containers that arrive in U.S. ports each year. According to Stephen Flynn, a former Obama White House policy adviser, only 19 percent of containers arriving in the U.S. in 2013 deemed by Customs to be at high risk for containing a weapon of mass destruction were inspected at a foreign port. One of the reasons, according to Flynn, is that such inspections can disrupt port terminal operations. “If CBP routinely asked that as little as 1 to 2 percent of U.S.-bound containers in a major overseas port to be subject to examination before loading, it would likely completely overwhelm the inspection facility,” Flynn said. Not only would 100 percent screening cost ports and Customs man-hours, it would cost them hard cash. Flynn suggested that the $3 billion to $5 billion it would cost to deploy non-intrusive container inspection equipment at ports around the world could perhaps be paid for through a $10 to $15 per container security fee, much like the security fees charged by airlines. “Such a fee-based cost recovery approach would allow for equipment to be upgraded with new technologies as frequently as every two years,” Flynn asserted. Others appearing during the hearing Tuesday warned the congressional subcommittee that enforcing a 100 percent screening mandate would add further complexities to a port security system that is still not fully developed. The current screening process still has a slew of shortcomings that should be assessed and resolved before Congress mandates more stringent measures, said Joseph Lawless, director of maritime security at the Massachusetts Port Authority. He spoke on behalf of the American Association of Port Authorities, the top U.S. port lobby. It’s been roughly 10 years since CBP and ports were required to use radiation portal monitors, or RPMs, to detect dirty bombs in containerized cargo shipped into the U.S., Lawless told the subcommittee. Even under the current screening guidelines implemented roughly 10 years ago, he said, questions continue to be raised “regarding who pays for the maintenance of the RPMs, who is responsible for paying for new portals during a port expansion and what is the long term obligation for the next generation of RPMs.” The AAPA said in a statement that it continues to encourage DHS to carefully evaluate the viability of implementing the 100 percent scanning mandate but hopes the agency avoids instituting a system that will slow cargo movements or significantly increase the cost of shipping. Hahn, however, remained unconvinced that the U.S. would not be better served with more stringent security measures at the nation’s ports. “When people ask me what keeps me up at night? A dirty bomb at the Port of Los Angeles,” said Hahn. “Since 9/11, our nation has strengthened aviation security but our ports have not received the same scrutiny and remain incredibly vulnerable to what could be a devastating attack.” Turning to Huban Gowadia, director of the domestic nuclear detection office at DHS, Hahn asked: “Are you 100 percent positive that a dirty bomb could not slip through and get to one of our ports under this security model?” “I don’t think anybody could give you a 100 percent guarantee on that,” Gowadia responded. “We are bringing every last resource we have to bear. We are far better off today than we were 10 years ago.” Gowadia said the U.S. would actually not be better off if Congress were to enforce its 100 percent screening mandate. However, she declined to provide the evidence, which she said was confidential, to support her claim during Tuesday’s public hearing. Contact Reynolds Hutchins at reynolds.hutchins@ihs.com and follow him on Twitter: @Hutchins_JOC .

Transport, Trade and Regulation News

US legislators highlight dirty bomb threat in appeal for 100% container scanning

<div class="phx-topic abstract-wrapper">One additional risk to a threatened strike at US East and Gulf Coast ports, which the container shipping industry did not have in October, is that the potential disruption would come just as new alliance networks are to be phased in, writes analyst Lars Jensen. </div>

One additional risk to a threatened strike at US East and Gulf Coast ports, which the container shipping industry did not have in October, is that the potential disruption would come just as new alliance networks are to be phased in, writes analyst Lars Jensen.

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<div class="phx-topic">With the negotiations between International Longshoremen’s Association and the US Maritime Alliance being stalled for the past month, and with President-elect Trump having <a href="https://www.joc.com/article/ila-plays-new-trump-card-in-automation-standoff-with-usmx-5905242">voiced clear support</a> for the ILA’s position, it is time to revisit the domino-effects pertaining to a potential strike from January 15th. There are domino-effects to be contemplated not only during a strike but also before and after. The risk of a strike itself – irrespective of whether it happens or not – has already led to <a href="https://www.joc.com/article/us-retailers-prepare-for-new-ila-strike-threat-tariffs-on-china-imports-5822904">some US importers moving products</a> earlier than they otherwise would have done. But this effect is now tapering off as we are approaching a point of no return. For cargo from Asia to US East Coast the transit time is typically four to five weeks depending on routing with some slightly faster and some slightly slower. With the strike only four weeks away this means there is no longer the option here to avoid the potential strike. Re-routing the cargo via the US West Coast is still feasible but with transit times of two-three weeks this window is also rapidly closing. The same applies to cargo coming from South America and Europe where the window for moving cargo in before January 15th is coming to an end unless bookings are placed within a week. A ripple effect on this is of course a larger pressure on warehousing than what would otherwise have been the case for cargo being frontloaded. These were the dominoes which had already been toppling prior to the potential strike. If the strike goes into effect the immediate impact – as we also saw during the three-day strike in October – is that we will see vessels anchor up outside major US East and Gulf coast ports. We will also see some cargo discharged in alternate locations. In October some cargo was discharged earlier than planned in US East Coast ports to get the cargo off the vessel before a strike, and some were discharged into regional hubs such as for example Freeport and Kingston. We are likely to see the same pattern unfold this time. Then comes the dominoes following the initial port closures. When vessels anchor up, this means they do not return to their origins either. This will lead to capacity declining in Europe with a lag time of two to three weeks and Asia with a lag time of four to five weeks. This effect was also seen following the October strike, but given that the strike only lasted three days, the effect was relatively manageable. Should the strike last longer, this gives rise to significant drops in export vessel capacity on the headhaul Atlantic trade in the first half of February and in Asia this will impact export capacity towards the end of February. If the strike is relatively short – say a week or so – the impact especially in Asia should be manageable as well. This will be at the tail-end of the seasonal downturn after Lunar New Year, but a more protracted strike will lead to capacity shortages well into March when demand tends to pick up again. A more protracted strike would furthermore impact the equipment availability in Asia as during the strike there will be no repatriation of empty containers from the US East Coast back to Asia. This would then become a problem during March as well, but only if the strike is relatively protracted. <h3>New networks, new risks</h3>Another domino impact, which we did not have in October, is that this disruption hits right as the new alliance networks are to be phased in. This will result in significant operational disruptions to the networks, also beyond what can already be expected. Phasing in the new networks involves shuffling hundreds of vessels out of their current service rotations and into new ones – and those can also involve vessels being shuffled to or from US East Coast services. As such, there can be additional ripple effects on trades, not directly calling strike-impacted ports at all. A quick look at the volumes handled on the US East Coast shows that every day of strike will take roughly six days to clean up in terms of the congestion impact in the ports. In broad strokes that is also what we saw back in October. All in all, a strike – especially a protracted one - will create substantial issues for US importers and exporters. As the window is now closing in terms of moving cargo prior to such a strike, the best approach at this point is for those importers and exporters to explore what they can do to nurture an environment wherein a deal is made between the union and the terminals and hence prevent the strike from happening. Contact Lars Jensen at <a href="lars.jensen@vespucci-maritime.com">lars.jensen@vespucci-maritime.com</a>.  </div>

With the negotiations between International Longshoremen’s Association and the US Maritime Alliance being stalled for the past month, and with President-elect Trump having voiced clear support for the ILA’s position, it is time to revisit the domino-effects pertaining to a potential strike from January 15th. There are domino-effects to be contemplated not only during a strike but also before and after. The risk of a strike itself – irrespective of whether it happens or not – has already led to some US importers moving products earlier than they otherwise would have done. But this effect is now tapering off as we are approaching a point of no return. For cargo from Asia to US East Coast the transit time is typically four to five weeks depending on routing with some slightly faster and some slightly slower. With the strike only four weeks away this means there is no longer the option here to avoid the potential strike. Re-routing the cargo via the US West Coast is still feasible but with transit times of two-three weeks this window is also rapidly closing. The same applies to cargo coming from South America and Europe where the window for moving cargo in before January 15th is coming to an end unless bookings are placed within a week. A ripple effect on this is of course a larger pressure on warehousing than what would otherwise have been the case for cargo being frontloaded. These were the dominoes which had already been toppling prior to the potential strike. If the strike goes into effect the immediate impact – as we also saw during the three-day strike in October – is that we will see vessels anchor up outside major US East and Gulf coast ports. We will also see some cargo discharged in alternate locations. In October some cargo was discharged earlier than planned in US East Coast ports to get the cargo off the vessel before a strike, and some were discharged into regional hubs such as for example Freeport and Kingston. We are likely to see the same pattern unfold this time. Then comes the dominoes following the initial port closures. When vessels anchor up, this means they do not return to their origins either. This will lead to capacity declining in Europe with a lag time of two to three weeks and Asia with a lag time of four to five weeks. This effect was also seen following the October strike, but given that the strike only lasted three days, the effect was relatively manageable. Should the strike last longer, this gives rise to significant drops in export vessel capacity on the headhaul Atlantic trade in the first half of February and in Asia this will impact export capacity towards the end of February. If the strike is relatively short – say a week or so – the impact especially in Asia should be manageable as well. This will be at the tail-end of the seasonal downturn after Lunar New Year, but a more protracted strike will lead to capacity shortages well into March when demand tends to pick up again. A more protracted strike would furthermore impact the equipment availability in Asia as during the strike there will be no repatriation of empty containers from the US East Coast back to Asia. This would then become a problem during March as well, but only if the strike is relatively protracted. New networks, new risks Another domino impact, which we did not have in October, is that this disruption hits right as the new alliance networks are to be phased in. This will result in significant operational disruptions to the networks, also beyond what can already be expected. Phasing in the new networks involves shuffling hundreds of vessels out of their current service rotations and into new ones – and those can also involve vessels being shuffled to or from US East Coast services. As such, there can be additional ripple effects on trades, not directly calling strike-impacted ports at all. A quick look at the volumes handled on the US East Coast shows that every day of strike will take roughly six days to clean up in terms of the congestion impact in the ports. In broad strokes that is also what we saw back in October. All in all, a strike – especially a protracted one - will create substantial issues for US importers and exporters. As the window is now closing in terms of moving cargo prior to such a strike, the best approach at this point is for those importers and exporters to explore what they can do to nurture an environment wherein a deal is made between the union and the terminals and hence prevent the strike from happening. Contact Lars Jensen at  lars.jensen@vespucci-maritime.com . 

Maritime

Container Shipping News

Port News

North American ports

Marine terminals

Longshore labor

Domino-effects await if ILA strikes again: analyst

<div class="phx-topic abstract-wrapper">Both CMA CGM and MSC will add a surcharge to trans-Pacific cargo transiting the canal beginning Jan. 1, pointing to higher operating costs thanks to a new system of reserving transits through the waterway. </div>

Both CMA CGM and MSC will add a surcharge to trans-Pacific cargo transiting the canal beginning Jan. 1, pointing to higher operating costs thanks to a new system of reserving transits through the waterway.

<div class="phx-topic">CMA CGM and Mediterranean Shipping Co. are seeking an extra $40 per TEU for shipments traversing the Panama Canal from Asia to North America to recoup higher operating costs tied to the waterway’s new reservation system. Both carriers will implement their charges on Jan. 1 when the changes to Panama Canal Authority’s (ACP) Transit Modification System officially will go into effect, introducing a new program called Long-Term Slot Allocation (LoTSA). The changes, ACP said, were designed to create flexibility in swapping and substituting canal transit slots, discourage last-minute cancellations, and increase overall passage efficiency. The new LoTSA program, announced in August, applies to all market segments except liquefied natural gas and liquefied petroleum gas vessels, said ACP.The modifications will also offer a “Last Minute Transit Reservation” for any vessel which were not able to secure a booking through the normal reservation system. Several other specialty ad-hoc tariffs and charges will also be implemented on Jan. 1, and forwarder sources point to these charges as the driving factor behind the new carrier fees.“For Neo Panamax vessels, rebooking will rise from $80,000 to $100,000 so the carriers have done the math and come up with $40 per container,” said a freight forwarding source.The charges from carriers come amid <a href="https://www.joc.com/article/us-import-surge-to-persist-into-spring-amid-continued-frontloading-retailers-5878711">a strong trans-Pacific import season</a> and, while the Suez Canal remains impassable, <a href="https://www.joc.com/article/panama-canal-chief-offers-land-bridge-option-to-transship-containers-across-isthmus-5810460">options for cargo on the lane are limited.</a>ACP Administrator Ricaurte Vásquez Morales <a href="https://www.joc.com/article/panama-canal-chief-offers-land-bridge-option-to-transship-containers-across-isthmus-5810460">told the Journal of Commerce in October</a> that the PCA is eyeing 2027 as the next potential dry season impacting canal passages and draft restrictions – subject to change amid increased weather volatility. </div>

CMA CGM and Mediterranean Shipping Co. are seeking an extra $40 per TEU for shipments traversing the Panama Canal from Asia to North America to recoup higher operating costs tied to the waterway’s new reservation system. Both carriers will implement their charges on Jan. 1 when the changes to Panama Canal Authority’s (ACP) Transit Modification System officially will go into effect, introducing a new program called Long-Term Slot Allocation (LoTSA). The changes, ACP said, were designed to create flexibility in swapping and substituting canal transit slots, discourage last-minute cancellations, and increase overall passage efficiency. The new LoTSA program, announced in August, applies to all market segments except liquefied natural gas and liquefied petroleum gas vessels, said ACP. The modifications will also offer a “Last Minute Transit Reservation” for any vessel which were not able to secure a booking through the normal reservation system. Several other specialty ad-hoc tariffs and charges will also be implemented on Jan. 1, and forwarder sources point to these charges as the driving factor behind the new carrier fees. “For Neo Panamax vessels, rebooking will rise from $80,000 to $100,000 so the carriers have done the math and come up with $40 per container,” said a freight forwarding source. The charges from carriers come amid a strong trans-Pacific import season and, while the Suez Canal remains impassable, options for cargo on the lane are limited. ACP Administrator Ricaurte Vásquez Morales told the Journal of Commerce in October that the PCA is eyeing 2027 as the next potential dry season impacting canal passages and draft restrictions – subject to change amid increased weather volatility.

Trans-Pacific

Carriers implement Panama Canal surcharges amid reservation system changes

<div class="phx-topic abstract-wrapper">While US customers are importing more than usual, C.H. Robinson Worldwide’s CEO Dave Bozeman doesn’t see a ‘major material’ pull-forward of goods in the last weeks before a potential US longshore strike.</div>

While US customers are importing more than usual, C.H. Robinson Worldwide’s CEO Dave Bozeman doesn’t see a ‘major material’ pull-forward of goods in the last weeks before a potential US longshore strike.

<div class="phx-topic">A year-long wave of front-loading of ocean cargo is already tapering toward its end, according to C.H. Robinson Worldwide CEO Dave Bozeman. “I don’t see a major material movement of goods pulled forward,” Bozeman told the Journal of Commerce Monday. “What we’re seeing is that shippers have been preparing for this for months, in a continuum going back to at least June,” and the first strike threat, he said. “They’ve been building more resiliency into their supply chains and inventory levels.” C.H. Robinson, the <a href="https://www.joc.com/article/journal-of-commerce-rankings-kerry-consolidates-top-nvo-position-5703126">third-largest non-vessel-operating common carrier</a> in the eastbound trans-Pacific trade by volume according to Journal of Commerce rankings, saw ocean and air cargo volumes rise throughout 2024. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="84dc625e-2a2c-4db3-949e-798502bbef70"></dynamic-object></div>In the third quarter, C.H. Robinson reported a 7% increase in ocean shipments. By December, Bozeman said, many US importers have struck a new balance in their stock levels after months of elevated shipment volumes. By mid-December, “if you haven’t made a decision already, you’re going to air,” he said. “We’re constantly counselling customers on their decisions about ports” during 2024, he said. “Some shippers have rebalanced (inventories) already.” The seasonally adjusted US retail inventory-to-sales ratio in September was up 4.7% year over year at 1.33, flat with August but its highest level since the 2020 recession, according to US Census Bureau data. In an earnings call last week, apparel retailer J. Jill said it pulled freight forward this year to offset delays related to the rerouting of ships away from the Red Sea, and to get some holiday goods to the West Coast ahead of an East Coast port strike this fall. “This resulted in goods associated with our late fall and holiday floor sets carrying elevated freight costs from the summer that will be realized as we sell these goods,” said Mark Webb, CFO and COO. Some shippers are looking to pull additional goods forward tactically on an as-needed basis. “We'll look where we can to pull forward inventory buying, which actually we've done already because of some of the less predictability around shipping and how much time product spends on the water and also because of the risk of strikes,” Gary Millerchip, CFO of wholesale retailer Costco told analysts during an earnings call last week. In their monthly Global Port Tracker, the National Retail Federation (NRF) and Hackett Associates project December containerized imports will be up 14.3% year over year. Global Port Tracker forecasts the surge to continue through at least April. US containerized imports rose 15.3% year over year in November, but at 2.31 million TEUs were down from a 2.52 million peak in September, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>Journal of Commerce Research Analyst Cathy Morrow Roberson contributed to this report. </div>

A year-long wave of front-loading of ocean cargo is already tapering toward its end, according to C.H. Robinson Worldwide CEO Dave Bozeman. “I don’t see a major material movement of goods pulled forward,” Bozeman told the Journal of Commerce Monday. “What we’re seeing is that shippers have been preparing for this for months, in a continuum going back to at least June,” and the first strike threat, he said. “They’ve been building more resiliency into their supply chains and inventory levels.” C.H. Robinson, the third-largest non-vessel-operating common carrier in the eastbound trans-Pacific trade by volume according to Journal of Commerce rankings, saw ocean and air cargo volumes rise throughout 2024. In the third quarter, C.H. Robinson reported a 7% increase in ocean shipments. By December, Bozeman said, many US importers have struck a new balance in their stock levels after months of elevated shipment volumes. By mid-December, “if you haven’t made a decision already, you’re going to air,” he said. “We’re constantly counselling customers on their decisions about ports” during 2024, he said. “Some shippers have rebalanced (inventories) already.” The seasonally adjusted US retail inventory-to-sales ratio in September was up 4.7% year over year at 1.33, flat with August but its highest level since the 2020 recession, according to US Census Bureau data. In an earnings call last week, apparel retailer J. Jill said it pulled freight forward this year to offset delays related to the rerouting of ships away from the Red Sea, and to get some holiday goods to the West Coast ahead of an East Coast port strike this fall. “This resulted in goods associated with our late fall and holiday floor sets carrying elevated freight costs from the summer that will be realized as we sell these goods,” said Mark Webb, CFO and COO. Some shippers are looking to pull additional goods forward tactically on an as-needed basis. “We'll look where we can to pull forward inventory buying, which actually we've done already because of some of the less predictability around shipping and how much time product spends on the water and also because of the risk of strikes,” Gary Millerchip, CFO of wholesale retailer Costco told analysts during an earnings call last week. In their monthly Global Port Tracker, the National Retail Federation (NRF) and Hackett Associates project December containerized imports will be up 14.3% year over year. Global Port Tracker forecasts the surge to continue through at least April. US containerized imports rose 15.3% year over year in November, but at 2.31 million TEUs were down from a 2.52 million peak in September, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Contact William B. Cassidy at bill.cassidy@spglobal.com Journal of Commerce Research Analyst Cathy Morrow Roberson contributed to this report.

Supply chain

Trucking News

Truck brokers

Surface

Front-loading of ocean cargo diminishing, C.H. Robinson CEO says

<div class="phx-topic abstract-wrapper">Holes in the Atlantic port network are being plugged as ONE, the Ocean Alliance and HMM prepare for February's launch of the new container shipping groupings. </div>

Holes in the Atlantic port network are being plugged as ONE, the Ocean Alliance and HMM prepare for February's launch of the new container shipping groupings.

<div class="phx-topic">Ocean Network Express (ONE) is launching three cross-alliance trans-Atlantic services with an outside carrier grouping while partnering on a weekly North Europe-US West Coast service with Premier Alliance partner HMM that is returning to the trade after six years. It is the latest example of how the alliances that will be restructured from Feb. 1 and standalone carrier Mediterranean Shipping Co. (MSC) are <a href="https://www.joc.com/article/carrier-order-books-alliance-changes-signal-continued-reliance-on-scale-5740942">striking partnerships beyond their own networks</a> to plug gaps in coverage. The new <a href="https://www.one-line.com/en/news/2025-one-transatlantic-service">three-service trans-Atlantic partnership</a> will be a vessel sharing agreement between Singapore-based ONE and the Ocean Alliance. “As ONE we look forward to our new collaboration with CMA CGM, Cosco, OOCL and Evergreen in the trans-Atlantic trade starting in February 2025,” Jeremy Nixon, CEO of ONE, said in a statement Tuesday, adding that the services offered would cover all the key trans-Atlantic market sectors. HMM announced the launch of the North Europe-US West Coast TA1 service to be jointly operated with Premier Alliance partner ONE (AL5 service), marking a return to the trans-Atlantic by the South Korean carrier that withdrew from the route in 2018. “The launch of the new Europe-US West Coast service is part of our Premier Alliance network coverage,” a spokesperson for HMM told the Journal of Commerce Tuesday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean Network Express (ONE) is launching three cross-alliance trans-Atlantic services with an outside carrier grouping while partnering on a weekly North Europe-US West Coast service with Premier Alliance partner HMM that is returning to the trade after six years. It is the latest example of how the alliances that will be restructured from Feb. 1 and standalone carrier Mediterranean Shipping Co. (MSC) are striking partnerships beyond their own networks to plug gaps in coverage. The new three-service trans-Atlantic partnership will be a vessel sharing agreement between Singapore-based ONE and the Ocean Alliance. “As ONE we look forward to our new collaboration with CMA CGM, Cosco, OOCL and Evergreen in the trans-Atlantic trade starting in February 2025,” Jeremy Nixon, CEO of ONE, said in a statement Tuesday, adding that the services offered would cover all the key trans-Atlantic market sectors. HMM announced the launch of the North Europe-US West Coast TA1 service to be jointly operated with Premier Alliance partner ONE (AL5 service), marking a return to the trans-Atlantic by the South Korean carrier that withdrew from the route in 2018. “The launch of the new Europe-US West Coast service is part of our Premier Alliance network coverage,” a spokesperson for HMM told the Journal of Commerce Tuesday. Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Trans-Atlantic

Ocean carriers outline new trans-Atlantic services from Feb. 1

<div class="phx-topic abstract-wrapper">Slow vehicle sales, easing charter rates and surplus fleet growth are set to ease the intensity of the ro/ro sector. </div>

Slow vehicle sales, easing charter rates and surplus fleet growth are set to ease the intensity of the ro/ro sector.

<div class="phx-topic">After record volumes in 2024, car carrier operators face a slacker year in 2025 amid sluggish vehicle sales, falling vessel charter rates and fleet growth outpacing cargo demand.Wallenius Wilhelmsen, the world’s largest roll-on/roll-off (ro/ro) operator, said in a Dec. 16 outlook statement that several automobile and high-and-heavy equipment manufacturers were struggling with sales.Global light vehicle sales growth is expected to be a sluggish 1.8% this year, rising to 91.4 million units from 89.8 million vehicles last year, consultant Kroll said in a November commentary. “Sales have slowed globally due to weaker customer demand, mixed economic conditions and higher interest rates,” the firm said.British shipbroking house Clarksons said global seaborne automobile shipments had cooled this year, climbing by 3% between January and October compared with an 18% increase for the whole of last year.“This reflects a number of factors: pent-up demand post-COVID has mostly been worked through in key markets; car sales in Europe are facing headwinds from high prices, elevated finance costs and uncertainty around the pace of the EV transition; while exports from Japan and Korea have been curbed by competition from Chinese brands in key markets and some logistical challenges,” the broker said in a car carrier commentary on Dec. 6.<h3>Lowering expectations</h3>During its third quarter results briefings in October, Oslo, Norway-listed Wilhelmsen and its Oslo-listed rival Höegh Autoliners had forecast a recovery in high-and-heavy volumes next year.But Wilhelmsen’s optimism about the high-and-heavy sector, which includes construction, mining and agricultural equipment, has largely evaporated. It said volumes “are assumed to remain muted for much of 2025, with a possible uptick towards the end of the year,” in its Dec. 16 outlook statement. Höegh Autoliners also saw its prorated share of high-and-heavy and breakbulk volumes slip to 23% of total cargo volumes in November, compared with 24% for the September-November period, the carrier said in a Dec. 6 trading statement.Wilhelmsen highlighted growing global vessel supply as an issue next year, “which may push utilization down if cargo volumes do not grow.”“Other risk factors include supply chain challenges, labor conflicts, and cost escalation,” the carrier added. “Overall, we see growing uncertainties for 2025, but we expect our solid contract base, including 2024 renewals, to support our business and counterbalance possible market softening,” its update added.Wallenius said it also saw the potential for vehicle volumes to recover next year after car manufacturers cut production over the past few months to balance inventories. “The introduction of new models in 2025 may contribute positively to volumes,” it said.<h3>Freight fixed at record rates</h3>Ro/ro operators, including Wilhelmsen and Höegh Autoliners, have fixed freight contracts, including multi-year deals, at record highs this year on the back of strong demand and tight capacity. Wilhelmsen said its net freight rate in the third quarter was a record $61 per cubic meter. As a result, its earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to be 4% to 6% higher compared with last year at about $1.9 billion.Höegh Autoliners has also reported higher freight rates after signing further long-term and spot transportation contracts in the last few months.These included its most significant deal this year in terms of value and volumes, a five-year contract starting from Jan. 1, 2025, to transport vehicles from Asia and the Atlantic basin for an existing international car maker customer, the carrier said.Ro/ro operators are currently in a buoyant position with healthy earnings and strong balance sheets after renewing freight contracts at firm levels and exceptional freight rates despite the recent declined, Clarksons said. “Additionally, significant car trade volumes are still being moved in containers or on other vessels, providing a buffer of unmet demand that the car carrier fleet can look to ‘win back’ as capacity grows,” the broker said on its commentary.But it warned of a further easing in fundamentals, with 12% fleet growth in 2025 and a further 8% increase in 2026 set to outpace cargo demand of between 1% and 2% in both years.There are 211 car carriers on order totaling 4.6 million deadweight metric tons, equivalent to 35% of the existing fleet in tonnage terms, according to Clarksons data.These include deals last month from Wallenius and Sallaum Lines with Wallenius ordering an additional two 11,700-car-equivalent-unit (CEU) Shaper-class vessels at China Merchants Jingling Shipyard Company and Sallaum Lines ordering six 7,400 CEU to 7,500 CEU car carriers from two shipyards in China in November.Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

After record volumes in 2024, car carrier operators face a slacker year in 2025 amid sluggish vehicle sales, falling vessel charter rates and fleet growth outpacing cargo demand. Wallenius Wilhelmsen, the world’s largest roll-on/roll-off (ro/ro) operator, said in a Dec. 16 outlook statement that several automobile and high-and-heavy equipment manufacturers were struggling with sales. Global light vehicle sales growth is expected to be a sluggish 1.8% this year, rising to 91.4 million units from 89.8 million vehicles last year, consultant Kroll said in a November commentary. “Sales have slowed globally due to weaker customer demand, mixed economic conditions and higher interest rates,” the firm said. British shipbroking house Clarksons said global seaborne automobile shipments had cooled this year, climbing by 3% between January and October compared with an 18% increase for the whole of last year. “This reflects a number of factors: pent-up demand post-COVID has mostly been worked through in key markets; car sales in Europe are facing headwinds from high prices, elevated finance costs and uncertainty around the pace of the EV transition; while exports from Japan and Korea have been curbed by competition from Chinese brands in key markets and some logistical challenges,” the broker said in a car carrier commentary on Dec. 6. Lowering expectations During its third quarter results briefings in October, Oslo, Norway-listed Wilhelmsen and its Oslo-listed rival Höegh Autoliners had forecast a recovery in high-and-heavy volumes next year. But Wilhelmsen’s optimism about the high-and-heavy sector, which includes construction, mining and agricultural equipment, has largely evaporated. It said volumes “are assumed to remain muted for much of 2025, with a possible uptick towards the end of the year,” in its Dec. 16 outlook statement. Höegh Autoliners also saw its prorated share of high-and-heavy and breakbulk volumes slip to 23% of total cargo volumes in November, compared with 24% for the September-November period, the carrier said in a Dec. 6 trading statement. Wilhelmsen highlighted growing global vessel supply as an issue next year, “which may push utilization down if cargo volumes do not grow.” “Other risk factors include supply chain challenges, labor conflicts, and cost escalation,” the carrier added. “Overall, we see growing uncertainties for 2025, but we expect our solid contract base, including 2024 renewals, to support our business and counterbalance possible market softening,” its update added. Wallenius said it also saw the potential for vehicle volumes to recover next year after car manufacturers cut production over the past few months to balance inventories. “The introduction of new models in 2025 may contribute positively to volumes,” it said. Freight fixed at record rates Ro/ro operators, including Wilhelmsen and Höegh Autoliners, have fixed freight contracts, including multi-year deals, at record highs this year on the back of strong demand and tight capacity. Wilhelmsen said its net freight rate in the third quarter was a record $61 per cubic meter. As a result, its earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to be 4% to 6% higher compared with last year at about $1.9 billion. Höegh Autoliners has also reported higher freight rates after signing further long-term and spot transportation contracts in the last few months. These included its most significant deal this year in terms of value and volumes, a five-year contract starting from Jan. 1, 2025, to transport vehicles from Asia and the Atlantic basin for an existing international car maker customer, the carrier said. Ro/ro operators are currently in a buoyant position with healthy earnings and strong balance sheets after renewing freight contracts at firm levels and exceptional freight rates despite the recent declined, Clarksons said. “Additionally, significant car trade volumes are still being moved in containers or on other vessels, providing a buffer of unmet demand that the car carrier fleet can look to ‘win back’ as capacity grows,” the broker said on its commentary. But it warned of a further easing in fundamentals, with 12% fleet growth in 2025 and a further 8% increase in 2026 set to outpace cargo demand of between 1% and 2% in both years. There are 211 car carriers on order totaling 4.6 million deadweight metric tons, equivalent to 35% of the existing fleet in tonnage terms, according to Clarksons data. These include deals last month from Wallenius and Sallaum Lines with Wallenius ordering an additional two 11,700-car-equivalent-unit (CEU) Shaper-class vessels at China Merchants Jingling Shipyard Company and Sallaum Lines ordering six 7,400 CEU to 7,500 CEU car carriers from two shipyards in China in November. Contact Keith Wallis at keithwallis@hotmail.com .

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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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