<div class="phx-topic abstract-wrapper">General rate increases ranging from 4.9% to 7.9% are setting expectations for higher contract pricing as less-than-truckload carriers attempt to recoup the costs of network expansion. </div>

General rate increases ranging from 4.9% to 7.9% are setting expectations for higher contract pricing as less-than-truckload carriers attempt to recoup the costs of network expansion.

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<div class="phx-topic">US less-than-truckload (LTL) carriers are laying the groundwork for higher pricing in 2025, well before higher freight volumes hit their docks. Several of the largest LTL carriers in recent weeks have released average general rate increases (GRIs) for 2025 ranging from the mid- to upper single digits. The GRIs are for non-contract business, but they set expectations for contract pricing in 2025. Old Dominion Freight Line set the base with a 4.9% GRI announced Monday that will take effect Dec. 2. FedEx Freight earlier announced a 5.9% GRI effective Jan. 6, while TForce Freight, the former UPS Freight, raised its LTL rates 5.9% on average in October. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4a956aa9-0f8d-4079-ab21-88b58ab2775a"></dynamic-object></div>The biggest GRI came from Saia, which raised rates 7.9% on average in October. That GRI matched the average rate increase Saia claims it is getting in contract renewals. “We’ve got to really continue to focus on pricing,” Saia President and CEO Frederick J. Holzgrefe told Wall Street analysts during Saia’s third-quarter earnings call last month. “The rates have got to go up across the board in all elements of the business.” Higher rates and revenue are needed to support the <a href="https://www.joc.com/article/yellow-puts-remaining-112-ltl-terminals-on-the-block-5737425">ongoing expansion of terminal networks</a> and to keep pace with operating costs, carrier executives say. Saia, for example, will spend $1 billion this year on real estate, employees, equipment and technology. Shippers have told the Journal of Commerce they expect LTL costs to rise in 2025, but not as steeply as some carriers anticipate. But shippers may be surprised. <h3>Costing, pricing discipline </h3>Before the 2008-2009 Great Recession, GRIs often were whittled down in contract negotiations, especially in years when the market was soft. That’s less likely to happen today. “Now it’s all about measuring profitability, not just putting freight on trucks” to gain market share, said Dean Jones, chief commercial officer of AFS Logistics, a third-party logistics company that offers LTL cost management and other services.LTL carriers are not only disciplined when it comes to pricing, resisting rate discounting, but they’re also more disciplined in their approach to costing, Jones said in an interview. “The carrier pricing teams are way more sophisticated than they’ve ever been,” he said. “All their costing models for every contractual customer will be run with their GRIs. They know exactly what they need to make the margins they want lane by lane.” The GRIs, he pointed out, are averages, which means some shippers will pay less and others more. “They know who’s a good client and who’s a bad client, who delays shipments and who expedites them,” Jones said. In many ways, LTL carriers are taking pages from the playbook of Old Dominion, which pioneered a cost- and profitability-based <a href="https://www.joc.com/article/qa-david-congdon-old-dominion-freight-line-5196932">approach to LTL pricing</a>. Companies that didn’t adopt some version of that approach and relied on lower rates to draw shippers and freight have failed, from Yellow to <a href="https://www.joc.com/article/central-freight-shutdown-adds-to-ltl-pressure-5206107">Central Freight Lines</a>. <h3>Looking beyond rates </h3>But LTL trucking companies aren’t relying on higher rates alone to grow revenue. They’re expanding their use of accessorial charges, tinkering with fuel surcharges, adding premium-priced services and using technology to reach new customers. They’re also using dimensioning equipment on docks and forklifts to check and double-check shipment dimensions to ensure freight is correctly classified and priced. The LTL sector is cribbing pages from the playbook used by parcel companies, Jones said. “We never used to see remote delivery charges in LTL, and now LTL carriers are doing that,” he said. “Like the parcel carriers, if it costs them more to deliver, they’re going to charge more.” Accessorial charges are also being used to change shipper behavior. During the COVID-19 pandemic, LTL carriers with congested terminals introduced higher surcharges for shipments that exceeded length limits; those surcharges remain in place. FedEx Freight, for example, has an extreme length surcharge that runs from $672 to $1,430 per shipment depending on the length of the shipment. “At first people thought it was a fad, but today every LTL carrier doesn’t want anything over 8 feet in length,” Jones said. What they do want is palletized, stackable freight that will efficiently fill trailers. Shippers have told the Journal of Commerce that LTL carriers are increasingly willing to turn away freight that doesn’t match their requirements — or charge much higher rates to haul it. The cumulative result of all these strategies will be higher LTL costs to shippers, but also pricing that is more closely based on the actual cost to move freight. And while accessorial fees may be added or raised, “the place to move the needle the most is the base rates,” Jones said. “The carriers that are more focused on the larger picture are going to go after the line-haul rates.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

US less-than-truckload (LTL) carriers are laying the groundwork for higher pricing in 2025, well before higher freight volumes hit their docks. Several of the largest LTL carriers in recent weeks have released average general rate increases (GRIs) for 2025 ranging from the mid- to upper single digits. The GRIs are for non-contract business, but they set expectations for contract pricing in 2025. Old Dominion Freight Line set the base with a 4.9% GRI announced Monday that will take effect Dec. 2. FedEx Freight earlier announced a 5.9% GRI effective Jan. 6, while TForce Freight, the former UPS Freight, raised its LTL rates 5.9% on average in October. The biggest GRI came from Saia, which raised rates 7.9% on average in October. That GRI matched the average rate increase Saia claims it is getting in contract renewals. “We’ve got to really continue to focus on pricing,” Saia President and CEO Frederick J. Holzgrefe told Wall Street analysts during Saia’s third-quarter earnings call last month. “The rates have got to go up across the board in all elements of the business.” Higher rates and revenue are needed to support the ongoing expansion of terminal networks and to keep pace with operating costs, carrier executives say. Saia, for example, will spend $1 billion this year on real estate, employees, equipment and technology. Shippers have told the Journal of Commerce they expect LTL costs to rise in 2025, but not as steeply as some carriers anticipate. But shippers may be surprised. Costing, pricing discipline Before the 2008-2009 Great Recession, GRIs often were whittled down in contract negotiations, especially in years when the market was soft. That’s less likely to happen today. “Now it’s all about measuring profitability, not just putting freight on trucks” to gain market share, said Dean Jones, chief commercial officer of AFS Logistics, a third-party logistics company that offers LTL cost management and other services. LTL carriers are not only disciplined when it comes to pricing, resisting rate discounting, but they’re also more disciplined in their approach to costing, Jones said in an interview. “The carrier pricing teams are way more sophisticated than they’ve ever been,” he said. “All their costing models for every contractual customer will be run with their GRIs. They know exactly what they need to make the margins they want lane by lane.” The GRIs, he pointed out, are averages, which means some shippers will pay less and others more. “They know who’s a good client and who’s a bad client, who delays shipments and who expedites them,” Jones said. In many ways, LTL carriers are taking pages from the playbook of Old Dominion, which pioneered a cost- and profitability-based approach to LTL pricing . Companies that didn’t adopt some version of that approach and relied on lower rates to draw shippers and freight have failed, from Yellow to Central Freight Lines . Looking beyond rates But LTL trucking companies aren’t relying on higher rates alone to grow revenue. They’re expanding their use of accessorial charges, tinkering with fuel surcharges, adding premium-priced services and using technology to reach new customers. They’re also using dimensioning equipment on docks and forklifts to check and double-check shipment dimensions to ensure freight is correctly classified and priced. The LTL sector is cribbing pages from the playbook used by parcel companies, Jones said. “We never used to see remote delivery charges in LTL, and now LTL carriers are doing that,” he said. “Like the parcel carriers, if it costs them more to deliver, they’re going to charge more.” Accessorial charges are also being used to change shipper behavior. During the COVID-19 pandemic, LTL carriers with congested terminals introduced higher surcharges for shipments that exceeded length limits; those surcharges remain in place. FedEx Freight, for example, has an extreme length surcharge that runs from $672 to $1,430 per shipment depending on the length of the shipment. “At first people thought it was a fad, but today every LTL carrier doesn’t want anything over 8 feet in length,” Jones said. What they do want is palletized, stackable freight that will efficiently fill trailers. Shippers have told the Journal of Commerce that LTL carriers are increasingly willing to turn away freight that doesn’t match their requirements — or charge much higher rates to haul it. The cumulative result of all these strategies will be higher LTL costs to shippers, but also pricing that is more closely based on the actual cost to move freight. And while accessorial fees may be added or raised, “the place to move the needle the most is the base rates,” Jones said. “The carriers that are more focused on the larger picture are going to go after the line-haul rates.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

US LTL carriers laying groundwork for higher pricing in 2025

<div class="phx-topic abstract-wrapper">While some shippers say they are still facing a measure of disruption, CSX says it has recovered following a rough patch in keeping cargo flowing through central Florida after hurricanes Helene and Milton battered the state.</div>

While some shippers say they are still facing a measure of disruption, CSX says it has recovered following a rough patch in keeping cargo flowing through central Florida after hurricanes Helene and Milton battered the state.

<div class="phx-topic">Intermodal shippers are still facing disruption in service to central Florida on CSX Transportation in the aftermath of back-to-back hurricanes that wreaked havoc on the state in September and October. Hurricane Milton made landfall on Oct. 9, leaving damage in its wake across the Interstate-4 corridor, home to CSX terminals in Tampa and Winter Haven. One month later, CSX’s partners say there are still significant delays shipping 53-foot containers into Winter Haven, according to comments made in the latest Journal of Commerce Intermodal Service Scorecard survey. “Yes, there were hurricanes, but a month later and CSX Winter Haven is at a standstill,” one intermodal marketing company (IMC) wrote in the survey. “Empty containers are being left behind. Drivers are waiting hours for containers to be mounted on chassis due to the massive stacks of boxes in Winter Haven.” Another IMC said it was “struggling with chassis availability” as recently as this week. Still, other IMCs noted that conditions have improved significantly in the last two weeks. Norfolk Southern Railway (NS) does not have any terminals on the I-4 corridor. NS has a terminal in Jacksonville, while partner Florida East Coast Railway operates along the east coast of Florida from Jacksonville to Miami. CSX told the Journal of Commerce that hurricanes Helene and Milton caused power outages and damaged roadways and warehouses, disrupting the flow of the final-mile dray at its Winter Haven terminal. But the railroad said operations in Winter Haven have recently returned to normal. “Goods experienced delays leaving the terminal, increasing dwell time both in the terminal and on the street,” CSX said in a statement Wednesday. “This created significant congestion and delayed the turnaround of key assets, such as chassis. To address these challenges, CSX implemented several recovery measures, including establishing alternate service options in Tampa and Jacksonville and deploying additional equipment and personnel to manage the surge in volume.” Intermodal volumes in the Southeast US have been relatively muted compared with lanes such as Los Angeles to Chicago, which saw a 20% surge in October year over year, according to Journal of Commerce estimates. The Intermodal Association of North America reported railroads in October moved 47,000 containers into the Southeast from originations in the Midwest and Northeast, up 3.4% year over year. The data, however, doesn’t differentiate between specific origin and destination pairs, and trains to Atlanta have more cargo than Tampa or Winter Haven. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Intermodal shippers are still facing disruption in service to central Florida on CSX Transportation in the aftermath of back-to-back hurricanes that wreaked havoc on the state in September and October. Hurricane Milton made landfall on Oct. 9, leaving damage in its wake across the Interstate-4 corridor, home to CSX terminals in Tampa and Winter Haven. One month later, CSX’s partners say there are still significant delays shipping 53-foot containers into Winter Haven, according to comments made in the latest Journal of Commerce Intermodal Service Scorecard survey. “Yes, there were hurricanes, but a month later and CSX Winter Haven is at a standstill,” one intermodal marketing company (IMC) wrote in the survey. “Empty containers are being left behind. Drivers are waiting hours for containers to be mounted on chassis due to the massive stacks of boxes in Winter Haven.” Another IMC said it was “struggling with chassis availability” as recently as this week. Still, other IMCs noted that conditions have improved significantly in the last two weeks. Norfolk Southern Railway (NS) does not have any terminals on the I-4 corridor. NS has a terminal in Jacksonville, while partner Florida East Coast Railway operates along the east coast of Florida from Jacksonville to Miami. CSX told the Journal of Commerce that hurricanes Helene and Milton caused power outages and damaged roadways and warehouses, disrupting the flow of the final-mile dray at its Winter Haven terminal. But the railroad said operations in Winter Haven have recently returned to normal. “Goods experienced delays leaving the terminal, increasing dwell time both in the terminal and on the street,” CSX said in a statement Wednesday. “This created significant congestion and delayed the turnaround of key assets, such as chassis. To address these challenges, CSX implemented several recovery measures, including establishing alternate service options in Tampa and Jacksonville and deploying additional equipment and personnel to manage the surge in volume.” Intermodal volumes in the Southeast US have been relatively muted compared with lanes such as Los Angeles to Chicago, which saw a 20% surge in October year over year, according to Journal of Commerce estimates. The Intermodal Association of North America reported railroads in October moved 47,000 containers into the Southeast from originations in the Midwest and Northeast, up 3.4% year over year. The data, however, doesn’t differentiate between specific origin and destination pairs, and trains to Atlanta have more cargo than Tampa or Winter Haven. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Intermodal shippers still feeling ripple effects from Florida hurricanes

<div class="phx-topic abstract-wrapper">Frontloading and Red Sea diversions pushed volume and rates higher in the third quarter, and ongoing geopolitical disruption will allow carriers to extend their robust financial health into next year, according to the founder of the global equity firm.</div>

Frontloading and Red Sea diversions pushed volume and rates higher in the third quarter, and ongoing geopolitical disruption will allow carriers to extend their robust financial health into next year, according to the founder of the global equity firm.

<div class="phx-topic">The 47 million TEUs transported by ocean carriers in the third quarter comprised the highest quarterly volume on record, besting the previous high set in 2021 at the height of the pandemic by just over 2%, according to the founder of global equity firm Blue Alpha Capital. John McCown wrote in his quarterly market report this week that volume data from Container Trades Statistics (CTS) also showed that for the first nine months of 2024, the 136.7-million-TEU volume moved worldwide was up 6.3% year over year and 1.5% above the first nine months of 2021. The robust volume was accompanied by higher rate levels that saw the average revenue per load assessed by CTS up 52.5% in the third quarter year over year and 23.4% higher compared with the second quarter. “Driven by the capacity tightening resulting from the Red Sea situation and augmented by robust volume, the sector moved to a $5.4 billion Q1 profit that was doubled in the second quarter and more than doubled in the third quarter,” McCown said. Average global spot rate levels in the third quarter recorded by the Shanghai Containerized Freight Index (SCFI) of $3,074 per TEU were more than double the year-ago period and up 19% from the second quarter. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b1d23881-2ae2-4545-ac9b-03e4ae60579e"></dynamic-object></div>McCown said the carriers’ third-quarter net profit of $26.8 billion was up 164% sequentially over the second quarter and almost nine times higher year over year. It was also more than twice what the container shipping industry earned in any full pre-pandemic year, he noted. The three consecutive quarters of exponential net profit growth this year followed an industry loss of $700 million in the last three months of 2023. Maritime consultancy Drewry has estimated that container shipping will report a pre-tax profit of $50 billion this year, up from $28 billion in 2023. While it is a fraction of the $298 billion recorded in 2022, the carriers will enter an uncertain 2025 in solid financial health. “Stronger-than-expected volume has certainly buoyed rates, but much of the recent pricing strength remains tied to the Red Sea situation that is effectively absorbing 8% of worldwide capacity,” McCown wrote. <h3>Tariffs on China ‘now more of a reality’ </h3>Looking ahead to next year, McCown said in addition to continued diversions around southern Africa to avoid the Red Sea, US President-elect Donald Trump’s stated intention to impose tariffs of 60% and more on Chinese imports and 10% to 20% on all other imports iss now more of a reality. The tariffs would also follow <a href="https://www.joc.com/article/ila-breaks-off-contract-talks-accuses-usmx-of-semi-automation-push-5810392">a possible second strike</a> by the International Longshoremen’s Association (ILA) when its tentative contract extension expires on Jan. 15. “The combined impact of those two, happening at the same time, would indeed be a perfect storm for the sector,” McCown warned. “My hope is that reason prevails and that the supposed silver bullet of tariffs was more about campaigning and less about administering.” Global bank HSBC also highlighted tariffs and ILA industrial action as catalysts for strong volume development on the US import trades for the rest of the year and into 2025. “We expect the looming US East [and Gulf] coasts labor union strike and an earlier Lunar New Year [Jan. 29] <a href="https://www.joc.com/article/us-importers-dabbling-in-frontloading-ahead-of-new-tariff-threat-5821448">to drive cargo frontloading into the year-end</a>,” HSBC said in a market update. “Separately, following the election of Donald Trump, we expect further frontloading due to potential tariff concerns to keep near-term freight rates elevated.” US imports from Asia were up 10.5% year over year in October, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. <h3>‘Meaningful uplift to 2025 earnings’ </h3>Carriers will reap the benefits of elevated rate levels on the east-west trade lanes, which HSBC believes will see 2025 contract rates on Asia-Europe rising sharply compared with this year, providing “meaningful uplift to 2025 earnings.” Potentially standing in the way of continuing profitability is shipping supply, with the order book approaching 30% of the in-fleet capacity. Data from shipping association BIMCO has forecast cargo volume this year will grow between 4% and 5% against 16% growth in capacity. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b1577241-6a7f-498a-8c5d-7a1e12ab9b6b"></dynamic-object></div>However, assuming Red Sea diversions last through 2025, container shipping analyst Clarksons estimates that nominal fleet capacity growth will slow from over 10% to 5% against estimated 18% growth in TEU-mile demand in 2024 and 3% growth in 2025. “While supply growth still exceeds demand and we continue to assume freight rates to trend lower in 2025 as our base case, we think the pace of supply delivery and demand from frontloading indicates that near-term freight rates may not capitulate as the market feared,” HSBC noted in its report. Ocean carriers are also becoming more optimistic in their capacity outlooks for next year as the Red Sea diversions absorb capacity. Maersk CEO Vincent Clerc told analysts in a third-quarter earnings call that demand would remain solid into 2025 and <a href="https://www.joc.com/article/scrapping-slow-steaming-demand-will-limit-capacity-overhang-clerc-5785020">the supply-demand balance could be smoothed out</a> by carriers pulling on the capacity management levers of increased scrapping and slow steaming. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The 47 million TEUs transported by ocean carriers in the third quarter comprised the highest quarterly volume on record, besting the previous high set in 2021 at the height of the pandemic by just over 2%, according to the founder of global equity firm Blue Alpha Capital. John McCown wrote in his quarterly market report this week that volume data from Container Trades Statistics (CTS) also showed that for the first nine months of 2024, the 136.7-million-TEU volume moved worldwide was up 6.3% year over year and 1.5% above the first nine months of 2021. The robust volume was accompanied by higher rate levels that saw the average revenue per load assessed by CTS up 52.5% in the third quarter year over year and 23.4% higher compared with the second quarter. “Driven by the capacity tightening resulting from the Red Sea situation and augmented by robust volume, the sector moved to a $5.4 billion Q1 profit that was doubled in the second quarter and more than doubled in the third quarter,” McCown said. Average global spot rate levels in the third quarter recorded by the Shanghai Containerized Freight Index (SCFI) of $3,074 per TEU were more than double the year-ago period and up 19% from the second quarter. McCown said the carriers’ third-quarter net profit of $26.8 billion was up 164% sequentially over the second quarter and almost nine times higher year over year. It was also more than twice what the container shipping industry earned in any full pre-pandemic year, he noted. The three consecutive quarters of exponential net profit growth this year followed an industry loss of $700 million in the last three months of 2023. Maritime consultancy Drewry has estimated that container shipping will report a pre-tax profit of $50 billion this year, up from $28 billion in 2023. While it is a fraction of the $298 billion recorded in 2022, the carriers will enter an uncertain 2025 in solid financial health. “Stronger-than-expected volume has certainly buoyed rates, but much of the recent pricing strength remains tied to the Red Sea situation that is effectively absorbing 8% of worldwide capacity,” McCown wrote. Tariffs on China ‘now more of a reality’ Looking ahead to next year, McCown said in addition to continued diversions around southern Africa to avoid the Red Sea, US President-elect Donald Trump’s stated intention to impose tariffs of 60% and more on Chinese imports and 10% to 20% on all other imports iss now more of a reality. The tariffs would also follow a possible second strike by the International Longshoremen’s Association (ILA) when its tentative contract extension expires on Jan. 15. “The combined impact of those two, happening at the same time, would indeed be a perfect storm for the sector,” McCown warned. “My hope is that reason prevails and that the supposed silver bullet of tariffs was more about campaigning and less about administering.” Global bank HSBC also highlighted tariffs and ILA industrial action as catalysts for strong volume development on the US import trades for the rest of the year and into 2025. “We expect the looming US East [and Gulf] coasts labor union strike and an earlier Lunar New Year [Jan. 29] to drive cargo frontloading into the year-end ,” HSBC said in a market update. “Separately, following the election of Donald Trump, we expect further frontloading due to potential tariff concerns to keep near-term freight rates elevated.” US imports from Asia were up 10.5% year over year in October, according to PIERS, a Journal of Commerce sister product within S&P Global. ‘Meaningful uplift to 2025 earnings’ Carriers will reap the benefits of elevated rate levels on the east-west trade lanes, which HSBC believes will see 2025 contract rates on Asia-Europe rising sharply compared with this year, providing “meaningful uplift to 2025 earnings.” Potentially standing in the way of continuing profitability is shipping supply, with the order book approaching 30% of the in-fleet capacity. Data from shipping association BIMCO has forecast cargo volume this year will grow between 4% and 5% against 16% growth in capacity. However, assuming Red Sea diversions last through 2025, container shipping analyst Clarksons estimates that nominal fleet capacity growth will slow from over 10% to 5% against estimated 18% growth in TEU-mile demand in 2024 and 3% growth in 2025. “While supply growth still exceeds demand and we continue to assume freight rates to trend lower in 2025 as our base case, we think the pace of supply delivery and demand from frontloading indicates that near-term freight rates may not capitulate as the market feared,” HSBC noted in its report. Ocean carriers are also becoming more optimistic in their capacity outlooks for next year as the Red Sea diversions absorb capacity. Maersk CEO Vincent Clerc told analysts in a third-quarter earnings call that demand would remain solid into 2025 and the supply-demand balance could be smoothed out by carriers pulling on the capacity management levers of increased scrapping and slow steaming. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Container lines

Trans-Atlantic

Asia-Europe

Trans-Pacific

Maritime

Global ocean volume in Q3 beat pandemic record: Blue Alpha Capital

<div class="phx-topic abstract-wrapper">A dearth of consolidation means there are still plenty of visibility vendors for shippers to choose from, but it also means the market as a whole is on somewhat unsteady ground. </div>

A dearth of consolidation means there are still plenty of visibility vendors for shippers to choose from, but it also means the market as a whole is on somewhat unsteady ground.

<div class="phx-topic">It’s been more than three years since the last major consolidation within the real-time transportation visibility market, a period in which urgency from shippers around granular insights into global shipments has dampened but not disappeared. Not since project44 acquired ClearMetal, Ocean Insights and Convey and FourKites acquired Haven in 2021 has there been an appreciable shrinking of the vendor list in the visibility market. Instead, standalone vendors such as Shippeo, Overhaul, Vizion, Terminal49, OpenTrack, Wakeo and Portcast all coexist alongside project44 and FourKites. For shippers, this means there is still a catalog of vendors from which to choose depending on their needs, which split along modal, geographic and predictive capabilities. That’s especially significant given that one provider estimates fewer than 20% of shippers and third-party logistics providers (3PLs) are currently using supply chain visibility technology. But it also means the visibility market as a whole is on somewhat unsteady ground; it’s unclear whether acquisitions can or will occur, or whether some providers will go under, leaving customers to find alternative data sources. Nearly every vendor in the sector has undertaken layoffs, executive reshuffles or both in the last two years, but they’re all still standing. That begs the question: is the current market structure sustainable, or will the category be reshaped by mergers, acquisitions or closures. “The world does not need 100-plus visibility platforms, but it instead needs a few large, networked platforms per region and mode,” said Bart de Muynck, a strategic advisor to logistics technology companies, including project44, and a former analyst with Gartner who focused on the visibility market. “Just as we don’t need hundreds of telecommunications providers, but a handful of large vendors with global coverage.” <h3>A difficult M&amp;A market </h3>De Muynck, who spent 18 months as an executive with project44 until 2023, said he expects the market will consolidate, not due to acquisitions, “but smaller vendors running out of funds and leaving the market or changing their focus.” There are a few challenges facing the market in terms of consolidation. One major hurdle is the massive funding rounds that some of the largest providers took before and during the COVID-19 pandemic, investments that resulted in sky-high company valuations. As the pandemic-induced surge in freight demand — and resulting supply chain disruption — receded in the second half of 2022 and the first half of 2023, so did the market for real-time visibility. And although the market has recovered, some of those large valuations are proving difficult to justify, a dynamic made more difficult by the continued presence of multiple vendors in the market. The multitude of options for shippers also fosters competition among venders, forcing them to invest in product engineering and marketing to differentiate themselves and putting downward pressure on pricing and contract lengths. Companies with once-large valuations that are currently lower are naturally more difficult to sell because investors want a return based on the valuation in which they invested. But potential buyers are aware that other options exist in the market. Further, a potential buyer might decide that using a given visibility product makes more sense than purchasing the company that owns it, or that it could build a similar product in-house for less. All these factors are leading to market stasis. project44 is the largest provider and has the largest geographic footprint, with FourKites a close second. Paris-based Shippeo is attempting to expand into North America, building on its solid customer base in Europe. The others tend to be focused more narrowly on international transportation visibility. <h3>Best-in-breed vs. one-stop shop </h3>The market is further clouded by the existence of other types of visibility vendors. There are hardware-focused providers that deploy devices on containers, pallets or individual products, such as Tive, Roambee, Traxens, and Nexxiot, as well as logistics software providers including Infor Nexus, E2open, Transporeon and Gnosis Freight that offer visibility as part of a broader suite of technology products. Gnosis, for example, provides visibility data to a number of other software vendors, including some real-time visibility providers. One theory for the lack of consolidation is that there actually is enough demand for all the standalone visibility providers to prosper because the pandemic recalibrated shippers’ needs for such data. “Each mode of transportation has deep specificities, so today there is no ‘one size fits all,’” said Julien Cote, CEO of Wakeo. “And global organizations have different buying teams — one for intercontinental, one for local road transport in North America and one for European road transport — so the one-stop-shop approach has limitations both from a buyer and product perspective.” Cote said the reality that most shippers take a patchwork approach to visibility based on mode and geography is part of what’s keeping many vendors in the game. “Vendors tend to coexist,” he said. “Typically, many of our customers, like Michelin, use Wakeo for all their intercontinental flows, and then locally they can be using p44 for road in North America. In the end, several companies can prosper.” Cote compared the current landscape to that of a transportation management system (TMS) market, where “many people thought a large player like SAP would consolidate the end-to-end supply chain. In reality, we’re far from this, and the best-of-breed approach took over the one-stop-shop play.” Melding data from more than one visibility provider means shippers, or their 3PL partners, need to be adept at integrating and normalizing tracking data across modes, or use a platform that specializes in logistics data integrations. That’s not as difficult a task as it was in previous generations of logistics software. Most visibility providers already integrate with widely used TMSs, and some even plug directly into enterprise resource planning (ERP) systems so shippers can use visibility data in functional areas outside of logistics. “It’s really not a big issue for clients,” Cote said. “Via APIs, they can still connect everything back to the ERP, but this means you need good IT architects and integration teams.” <h3>A problem of profitability </h3>Beyond the technical lift of combining data from multiple visibility providers, there is a sense that more vendors are good for the market. Logistics has a natural predilection for fragmentation, evidenced by the tens of thousands of 3PLs, trucking companies and software providers that serve shippers. “Lack of consolidation means there’s more competition,” said Akshay Dodeja, CEO of Terminal49. “There’s more appetite to continue to innovate, to improve the quality of the data and the user experience. “It’s an old industry that we’re trying to evolve and change, and it’s going to take some time,” he added. “There’s a linear increase in technology improvement instead of an exponential increase.” But competition — at least in theory — creates winners and losers, leaving the question of whether all these vendors can survive in their current forms very much unanswered. FourKites told the Journal of Commerce it is currently profitable, but none of the other vendors have yet to reach that milestone. With all but project44 likely too small to consider a public offering, the only viable options are to trim costs and win more business until they become profitable or find an acquirer. De Muynck said the latter would be difficult. “A lot of the functionality is not differentiated, and so there is no upside for a larger vendor to acquire a smaller vendor,” he said. Brian Glick, CEO of logistics systems integrations specialist Chain.io, which is tasked with connecting many of the visibility providers to shippers’ and 3PLs’ execution systems, agreed. “I don’t know why a visibility company would buy another one at this point,” he said. “The original set of acquisitions were about getting coverage for different modes and geographies. Now, it would be more about buying customer lists. I don’t think the smaller ones have a big enough reach to make their customer lists interesting enough for the big ones. I think the big ones are too highly valued to sell to each other.” Glick said he also doesn’t think other software companies or 3PLs would be willing to meet current valuations to “buy a shortcut to what they’d see as a feature in their suite. If I’m [TMS provider] Blue Yonder, I’d argue that I could build any visibility provider’s functionality for a lot less than what I’d pay to buy them.” Another technical challenge to market consolidation is that previous platform combinations haven’t really helped the market concentrate. They’ve either extended the modal or geographical reach of a vendor, or added to their customer list, but the market fragmentation persisted. “The multiples on our revenue or some of our competitors’ would be high enough that a project44 or FourKites, which already has these capabilities, does not have the cash to acquire other companies,” Dodeja said. “And the founders would not settle for lower multiples in a sale as long as they have money in the bank and they continue to go win in the market.” Dodeja said visibility providers are in “capital preservation mode” and that companies on the top end of the market no longer have the growth rate to raise huge amounts of capital needed to fund acquisitions. “Raising growth equity rounds right now is effectively impossible, unless you are growing extremely fast,” he said. “And the struggle that logistics tech companies had in 2022–23, where if you look at their metrics, they might not look as appealing to a potential buyer.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

It’s been more than three years since the last major consolidation within the real-time transportation visibility market, a period in which urgency from shippers around granular insights into global shipments has dampened but not disappeared. Not since project44 acquired ClearMetal, Ocean Insights and Convey and FourKites acquired Haven in 2021 has there been an appreciable shrinking of the vendor list in the visibility market. Instead, standalone vendors such as Shippeo, Overhaul, Vizion, Terminal49, OpenTrack, Wakeo and Portcast all coexist alongside project44 and FourKites. For shippers, this means there is still a catalog of vendors from which to choose depending on their needs, which split along modal, geographic and predictive capabilities. That’s especially significant given that one provider estimates fewer than 20% of shippers and third-party logistics providers (3PLs) are currently using supply chain visibility technology. But it also means the visibility market as a whole is on somewhat unsteady ground; it’s unclear whether acquisitions can or will occur, or whether some providers will go under, leaving customers to find alternative data sources. Nearly every vendor in the sector has undertaken layoffs, executive reshuffles or both in the last two years, but they’re all still standing. That begs the question: is the current market structure sustainable, or will the category be reshaped by mergers, acquisitions or closures. “The world does not need 100-plus visibility platforms, but it instead needs a few large, networked platforms per region and mode,” said Bart de Muynck, a strategic advisor to logistics technology companies, including project44, and a former analyst with Gartner who focused on the visibility market. “Just as we don’t need hundreds of telecommunications providers, but a handful of large vendors with global coverage.” A difficult M&A market De Muynck, who spent 18 months as an executive with project44 until 2023, said he expects the market will consolidate, not due to acquisitions, “but smaller vendors running out of funds and leaving the market or changing their focus.” There are a few challenges facing the market in terms of consolidation. One major hurdle is the massive funding rounds that some of the largest providers took before and during the COVID-19 pandemic, investments that resulted in sky-high company valuations. As the pandemic-induced surge in freight demand — and resulting supply chain disruption — receded in the second half of 2022 and the first half of 2023, so did the market for real-time visibility. And although the market has recovered, some of those large valuations are proving difficult to justify, a dynamic made more difficult by the continued presence of multiple vendors in the market. The multitude of options for shippers also fosters competition among venders, forcing them to invest in product engineering and marketing to differentiate themselves and putting downward pressure on pricing and contract lengths. Companies with once-large valuations that are currently lower are naturally more difficult to sell because investors want a return based on the valuation in which they invested. But potential buyers are aware that other options exist in the market. Further, a potential buyer might decide that using a given visibility product makes more sense than purchasing the company that owns it, or that it could build a similar product in-house for less. All these factors are leading to market stasis. project44 is the largest provider and has the largest geographic footprint, with FourKites a close second. Paris-based Shippeo is attempting to expand into North America, building on its solid customer base in Europe. The others tend to be focused more narrowly on international transportation visibility. Best-in-breed vs. one-stop shop The market is further clouded by the existence of other types of visibility vendors. There are hardware-focused providers that deploy devices on containers, pallets or individual products, such as Tive, Roambee, Traxens, and Nexxiot, as well as logistics software providers including Infor Nexus, E2open, Transporeon and Gnosis Freight that offer visibility as part of a broader suite of technology products. Gnosis, for example, provides visibility data to a number of other software vendors, including some real-time visibility providers. One theory for the lack of consolidation is that there actually is enough demand for all the standalone visibility providers to prosper because the pandemic recalibrated shippers’ needs for such data. “Each mode of transportation has deep specificities, so today there is no ‘one size fits all,’” said Julien Cote, CEO of Wakeo. “And global organizations have different buying teams — one for intercontinental, one for local road transport in North America and one for European road transport — so the one-stop-shop approach has limitations both from a buyer and product perspective.” Cote said the reality that most shippers take a patchwork approach to visibility based on mode and geography is part of what’s keeping many vendors in the game. “Vendors tend to coexist,” he said. “Typically, many of our customers, like Michelin, use Wakeo for all their intercontinental flows, and then locally they can be using p44 for road in North America. In the end, several companies can prosper.” Cote compared the current landscape to that of a transportation management system (TMS) market, where “many people thought a large player like SAP would consolidate the end-to-end supply chain. In reality, we’re far from this, and the best-of-breed approach took over the one-stop-shop play.” Melding data from more than one visibility provider means shippers, or their 3PL partners, need to be adept at integrating and normalizing tracking data across modes, or use a platform that specializes in logistics data integrations. That’s not as difficult a task as it was in previous generations of logistics software. Most visibility providers already integrate with widely used TMSs, and some even plug directly into enterprise resource planning (ERP) systems so shippers can use visibility data in functional areas outside of logistics. “It’s really not a big issue for clients,” Cote said. “Via APIs, they can still connect everything back to the ERP, but this means you need good IT architects and integration teams.” A problem of profitability Beyond the technical lift of combining data from multiple visibility providers, there is a sense that more vendors are good for the market. Logistics has a natural predilection for fragmentation, evidenced by the tens of thousands of 3PLs, trucking companies and software providers that serve shippers. “Lack of consolidation means there’s more competition,” said Akshay Dodeja, CEO of Terminal49. “There’s more appetite to continue to innovate, to improve the quality of the data and the user experience. “It’s an old industry that we’re trying to evolve and change, and it’s going to take some time,” he added. “There’s a linear increase in technology improvement instead of an exponential increase.” But competition — at least in theory — creates winners and losers, leaving the question of whether all these vendors can survive in their current forms very much unanswered. FourKites told the Journal of Commerce it is currently profitable, but none of the other vendors have yet to reach that milestone. With all but project44 likely too small to consider a public offering, the only viable options are to trim costs and win more business until they become profitable or find an acquirer. De Muynck said the latter would be difficult. “A lot of the functionality is not differentiated, and so there is no upside for a larger vendor to acquire a smaller vendor,” he said. Brian Glick, CEO of logistics systems integrations specialist Chain.io, which is tasked with connecting many of the visibility providers to shippers’ and 3PLs’ execution systems, agreed. “I don’t know why a visibility company would buy another one at this point,” he said. “The original set of acquisitions were about getting coverage for different modes and geographies. Now, it would be more about buying customer lists. I don’t think the smaller ones have a big enough reach to make their customer lists interesting enough for the big ones. I think the big ones are too highly valued to sell to each other.” Glick said he also doesn’t think other software companies or 3PLs would be willing to meet current valuations to “buy a shortcut to what they’d see as a feature in their suite. If I’m [TMS provider] Blue Yonder, I’d argue that I could build any visibility provider’s functionality for a lot less than what I’d pay to buy them.” Another technical challenge to market consolidation is that previous platform combinations haven’t really helped the market concentrate. They’ve either extended the modal or geographical reach of a vendor, or added to their customer list, but the market fragmentation persisted. “The multiples on our revenue or some of our competitors’ would be high enough that a project44 or FourKites, which already has these capabilities, does not have the cash to acquire other companies,” Dodeja said. “And the founders would not settle for lower multiples in a sale as long as they have money in the bank and they continue to go win in the market.” Dodeja said visibility providers are in “capital preservation mode” and that companies on the top end of the market no longer have the growth rate to raise huge amounts of capital needed to fund acquisitions. “Raising growth equity rounds right now is effectively impossible, unless you are growing extremely fast,” he said. “And the struggle that logistics tech companies had in 2022–23, where if you look at their metrics, they might not look as appealing to a potential buyer.” Contact Eric Johnson at eric.johnson@spglobal.com .

Forwarding

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International ports

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Logistics Technology News

Lack of consolidation driving freight visibility differentiation, competition

<div class="phx-topic abstract-wrapper">While there is some frontloading of US imports from China to get ahead of expected tariffs in the coming Trump administration, most cargo owners appear to be holding their fire, writes Journal of Commerce Executive Editor Mark Szakonyi. </div>

While there is some frontloading of US imports from China to get ahead of expected tariffs in the coming Trump administration, most cargo owners appear to be holding their fire, writes Journal of Commerce Executive Editor Mark Szakonyi.

<div class="phx-topic">US importers are better prepared for the imminent tariffs that President-elect Donald Trump has promised to slap on goods from China, yet the majority don’t seem to be significantly rushing orders to get those goods across the docks ahead of his inauguration. Rather, tariff fears are just one of several factors pushing US importers to book more than usual during this extended peak season. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5821199_0.1.jpg"></img></div>In Trump’s first term, US importers were at first unsure how serious the president was about following through with his tariff threats; indeed, he was very serious. In his second term, it’s less a question of “if” and more “when” Trump will implement harsher tariffs on China, which he says will be higher than 60%. The extent to which US importers frontload ocean cargoes has implications for shipping price and service. Trump’s first term was marked by three waves of escalating US tariffs on Chinese goods and two postponements of implementations. That created five periods in which US importers moved goods earlier, artificially creating demand that fueled differing degrees of spot rate volatility and pulled down ocean reliability. And, to a lesser degree, slowed cargo flow through ports. This time, however, knowing that more tariffs will be a reality rather than a possibility gives shippers a firmer base to scope out potential responses and make plans, said Chris Rogers, head of supply chain research at S&amp;P Global Market Intelligence. S&amp;P Global is the parent company of the Journal of Commerce. There’s also some degree of knowing what types of goods are first in the firing line for higher US tariffs, given the first Trump administration in December 2019 suspended tariffs targeting imports of mobile phones and laptops from China. Such high-value items could easily be moved via faster air transport rather than ocean shipping to narrowly avoid any tariff deadline. <h3>Multiple factors drive booking bump </h3>Based on discussions with three cargo owners and various forwarders, a degree of frontloading to avoid imminent Chinese tariffs is occurring and will continue. The logistics directors at three midsize importers said they had an internal goal to get more goods from China into US ports by Jan. 1. “We are experiencing an overwhelming surge in booking demands, with available space becoming increasingly constrained for both the USWC and the USEC,” Marc Meier, global head of ocean freight at Toll Global Forwarding, told the Journal of Commerce. The stronger-than-normal booking demand, Meier said, was due to a litany of factors: Chinese tariff fears, strong blank sailings and the <a href="https://www.joc.com/article/ila-breaks-off-contract-talks-accuses-usmx-of-semi-automation-push-5810392">looming Jan. 15 deadline for longshore workers and employers</a> to reach a deal or risk another strike along the US East and Gulf coasts. Beyond knowing that tariffs are coming, US importers have higher carrying costs than they did during Trump’s first term, thanks to higher interest rates. The more elevated prices to store goods will prompt some importers to be more conservative with just how much they frontload. How much of that frontloading is fueled by importers moving goods to avoid the strike threat and earlier Lunar New Year celebrations is unclear. Chinese factories stall or slow production during the nearly two-week holiday period that next year begins on Jan. 29. US import bookings out of China haven’t jumped despite the tariff threat, according to logistics software provider e2open. “While November has seen a slight uptick compared to October, this is likely due to the lower order volume during China’s Golden Week holiday in October,” e2open said in a statement to the Journal of Commerce. US imports from Asia were up 10.5% year over year in October, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. Stephen Nothdurft, vice president of North America sales at forwarder MOL Consolidation Service, said tariffs were playing just “a bit of a role” in extending peak season volumes. He also expected importers dependent on the East and Gulf coasts to wait out the Jan. 15 deadline. “Nobody is looking to rush to get crazily ahead of this East Coast situation,” he said. “[And] nobody is charging forward on the tariff [risk].” That seems to be the sentiment of approximately 100 shippers polled by Ravi Shanker, Morgan Stanley's managing director and lead analyst for North American freight transportation. More than 70% of those polled said they didn’t plan to restock differently due to Trump winning a second term. Of those shippers, a little more than a third said they are considering “moderating or significantly” increasing inventories ahead of tariffs while an amazing 42% of shippers don’t expect to change behavior in the face of impending tariffs. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

US importers are better prepared for the imminent tariffs that President-elect Donald Trump has promised to slap on goods from China, yet the majority don’t seem to be significantly rushing orders to get those goods across the docks ahead of his inauguration. Rather, tariff fears are just one of several factors pushing US importers to book more than usual during this extended peak season. In Trump’s first term, US importers were at first unsure how serious the president was about following through with his tariff threats; indeed, he was very serious. In his second term, it’s less a question of “if” and more “when” Trump will implement harsher tariffs on China, which he says will be higher than 60%. The extent to which US importers frontload ocean cargoes has implications for shipping price and service. Trump’s first term was marked by three waves of escalating US tariffs on Chinese goods and two postponements of implementations. That created five periods in which US importers moved goods earlier, artificially creating demand that fueled differing degrees of spot rate volatility and pulled down ocean reliability. And, to a lesser degree, slowed cargo flow through ports. This time, however, knowing that more tariffs will be a reality rather than a possibility gives shippers a firmer base to scope out potential responses and make plans, said Chris Rogers, head of supply chain research at S&P Global Market Intelligence. S&P Global is the parent company of the Journal of Commerce. There’s also some degree of knowing what types of goods are first in the firing line for higher US tariffs, given the first Trump administration in December 2019 suspended tariffs targeting imports of mobile phones and laptops from China. Such high-value items could easily be moved via faster air transport rather than ocean shipping to narrowly avoid any tariff deadline. Multiple factors drive booking bump Based on discussions with three cargo owners and various forwarders, a degree of frontloading to avoid imminent Chinese tariffs is occurring and will continue. The logistics directors at three midsize importers said they had an internal goal to get more goods from China into US ports by Jan. 1. “We are experiencing an overwhelming surge in booking demands, with available space becoming increasingly constrained for both the USWC and the USEC,” Marc Meier, global head of ocean freight at Toll Global Forwarding, told the Journal of Commerce. The stronger-than-normal booking demand, Meier said, was due to a litany of factors: Chinese tariff fears, strong blank sailings and the looming Jan. 15 deadline for longshore workers and employers to reach a deal or risk another strike along the US East and Gulf coasts. Beyond knowing that tariffs are coming, US importers have higher carrying costs than they did during Trump’s first term, thanks to higher interest rates. The more elevated prices to store goods will prompt some importers to be more conservative with just how much they frontload. How much of that frontloading is fueled by importers moving goods to avoid the strike threat and earlier Lunar New Year celebrations is unclear. Chinese factories stall or slow production during the nearly two-week holiday period that next year begins on Jan. 29. US import bookings out of China haven’t jumped despite the tariff threat, according to logistics software provider e2open. “While November has seen a slight uptick compared to October, this is likely due to the lower order volume during China’s Golden Week holiday in October,” e2open said in a statement to the Journal of Commerce. US imports from Asia were up 10.5% year over year in October, according to PIERS, a Journal of Commerce sister product within S&P Global. Stephen Nothdurft, vice president of North America sales at forwarder MOL Consolidation Service, said tariffs were playing just “a bit of a role” in extending peak season volumes. He also expected importers dependent on the East and Gulf coasts to wait out the Jan. 15 deadline. “Nobody is looking to rush to get crazily ahead of this East Coast situation,” he said. “[And] nobody is charging forward on the tariff [risk].” That seems to be the sentiment of approximately 100 shippers polled by Ravi Shanker, Morgan Stanley's managing director and lead analyst for North American freight transportation. More than 70% of those polled said they didn’t plan to restock differently due to Trump winning a second term. Of those shippers, a little more than a third said they are considering “moderating or significantly” increasing inventories ahead of tariffs while an amazing 42% of shippers don’t expect to change behavior in the face of impending tariffs. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Port News

US importers dabbling in frontloading ahead of new tariff threat

<div class="phx-topic abstract-wrapper">The carrier’s CFO pointed to the rising ratio of US retail sales to inventories as a sign that retailers are still bringing in new inventory.</div>

The carrier’s CFO pointed to the rising ratio of US retail sales to inventories as a sign that retailers are still bringing in new inventory.

<div class="phx-topic">US import volumes are expected to remain elevated into 2025 amid cargo frontloading driven by labor and tariff concerns, officials at Zim Integrated Shipping Services said Wednesday. Zim CFO Xavier Destriau, during the carrier’s third-quarter conference call, pointed to the rising ratio of US retail sales to inventories, a barometer of available product, as a sign that retailers are still bringing in new inventory, meaning there likely won’t be a sharp drop in volumes early next year. “We see that inventory levels as of today are not abnormal compared to normal inventory levels to be expected at this time of year,” he said. “The demand has been strong and resilient in the US, so we don’t feel too alarmed that there might be inventory buildup going on right now in the US that might bite us back in subsequent quarters into 2025.” The ratio of US retail inventories to sales climbed to 1.42 in September from 1.27 in August, according to US Census Bureau data. The 1.42 level, also observed in February 2023 and February 2021, is the highest since 1.69 in April 2020, the outset of the pandemic. Destriau pointed to <a href="https://www.joc.com/article/ila-breaks-off-contract-talks-accuses-usmx-of-semi-automation-push-5810392">implications of a second possible strike</a> by the International Longshoremen’s Association (ILA), the <a href="https://www.joc.com/article/us-importers-dabbling-in-frontloading-ahead-of-new-tariff-threat-5821448">fear of new US tariffs</a> and general seasonality as possible accelerants for the growing inventories. Zim rode the market volatility to a strong performance in the third quarter, reporting its revenues jumped 117% year over year to $2.77 billion. Net income of $1.13 billion was up from a loss of $2.27 billion. Volumes moved by the carrier in the quarter increased 12% to 970,000 TEUs. Some of the profitability in the third quarter was a result of the carrier having more spot capacity on hand after taking a harder line on annual service contract pricing in early 2024 by shifting the typical 50% share of spot volumes up to about 65%, Destriau said. Maritime consultancy Drewry estimates container shipping will report a profit of $50 billion this year, up from $28 billion in 2023. And while it is a fraction of the $298 billion recorded in pandemic-fueled 2022, the carriers will enter an uncertain 2025 in robust financial health.Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US import volumes are expected to remain elevated into 2025 amid cargo frontloading driven by labor and tariff concerns, officials at Zim Integrated Shipping Services said Wednesday. Zim CFO Xavier Destriau, during the carrier’s third-quarter conference call, pointed to the rising ratio of US retail sales to inventories, a barometer of available product, as a sign that retailers are still bringing in new inventory, meaning there likely won’t be a sharp drop in volumes early next year. “We see that inventory levels as of today are not abnormal compared to normal inventory levels to be expected at this time of year,” he said. “The demand has been strong and resilient in the US, so we don’t feel too alarmed that there might be inventory buildup going on right now in the US that might bite us back in subsequent quarters into 2025.” The ratio of US retail inventories to sales climbed to 1.42 in September from 1.27 in August, according to US Census Bureau data. The 1.42 level, also observed in February 2023 and February 2021, is the highest since 1.69 in April 2020, the outset of the pandemic. Destriau pointed to implications of a second possible strike by the International Longshoremen’s Association (ILA), the fear of new US tariffs and general seasonality as possible accelerants for the growing inventories. Zim rode the market volatility to a strong performance in the third quarter, reporting its revenues jumped 117% year over year to $2.77 billion. Net income of $1.13 billion was up from a loss of $2.27 billion. Volumes moved by the carrier in the quarter increased 12% to 970,000 TEUs. Some of the profitability in the third quarter was a result of the carrier having more spot capacity on hand after taking a harder line on annual service contract pricing in early 2024 by shifting the typical 50% share of spot volumes up to about 65%, Destriau said. Maritime consultancy Drewry estimates container shipping will report a profit of $50 billion this year, up from $28 billion in 2023. And while it is a fraction of the $298 billion recorded in pandemic-fueled 2022, the carriers will enter an uncertain 2025 in robust financial health. Contact Laura Robb at laura.robb@spglobal.com . 

Cargo push to continue amid mounting market pressures: Zim

<div class="phx-topic abstract-wrapper">The large fuel tanks needed for low-density alternative fuels could make them a non-starter for multipurpose vessels.</div>

The large fuel tanks needed for low-density alternative fuels could make them a non-starter for multipurpose vessels.

<div class="phx-topic">The “future fuel” dilemma is a 21st century conundrum for shipowners of every type of ship, but perhaps more so for the multipurpose (MPV) and heavy-lift fleet. With their heavy and outsized cargoes, finding room for the larger fuel tanks needed for low-density fuels is a real challenge, which makes emerging fuels hydrogen and ammonia a much tougher option for MPV newbuilds today. Green methanol has potential, but there are caveats to that choice, too. The market is coming to terms with the time it will take to scale up the production and distribution of green methanol. While supplies can and are being secured for some pioneering ship operators, it is likely to be much harder to procure green methanol supplies for tramping MPVs with their variable routings and port calls. However, some carriers are choosing methanol from the newbuild stage, having implemented a “ready” approach with plans to convert. These include AAL with a series of eight 32,000-deadweight ton (dwt) liner-type MPVs, three of which have been delivered; Griegstar and Gearbulk with eight ammonia/methanol-ready 82,300-dwt open-hatch general cargo newbuilds; Skarv with four 7,000-dwt ammonia/methanol-ready project cargo carriers; and SAL’s methanol-ready heavy-lift MPV Orca class. Biofuels offer a more immediate solution for MPV operators, especially for those operating in European Union waters, where from next year FuelEU Maritime regulations will heavily penalize vessels that cannot comply with the requirements for using alternative fuels with lower fossil carbon content. Many owners and operators in the sector have already tested different kinds of biofuels with various “drop-in” ratios. A steep increase in demand for biofuels is expected in the coming years. At DNV, we see benefits in the pooling mechanism allowed in the EU’s FuelEU Maritime regulation to encourage future fuel procurement at scale. This could serve the MPV sector well as an emissions-reduction strategy. This novel approach gives MPV shipowners the option to pool well-to-wake greenhouse gas fuel intensity (GFI) compliance across several ships from the same or different companies. This means that a non-compliant vessel could rely on others in a pool to achieve a compliant combined GFI. This cooperative approach could provide a pathway for MPV operators to secure the benefits of using low- or zero-carbon fuels. <h3>‘New nuclear’ a long-term possibility </h3>Nuclear propulsion as an alternative fuel for MPVs falls in a much longer-term window, in my view. Small modular reactors (SMRs) are still in the testing stage on land for power generation, and it will be many years before they will be ready for commercial use in shipping. Expect to see SMR testing for ultra-large container carriers well before MPVs are ready for new nuclear. The industry is looking closely at the possibilities, however, so at DNV, we have recently joined with companies and stakeholders in the maritime and nuclear sector to explore the technology as part of the new Nuclear Energy Maritime Organization (NEMO). Batteries, as part of hybrid propulsion solutions, are on the rise. We estimate that some 900 ships are operating with batteries systems — from a few fully electric vessels, mainly in operation on short-sea point-to point ferry trades, to varying degrees of hybridization where batteries are combined with generators or fuel cells. Batteries as part of hybrid solutions are a relatively mature technology. Combine this with energy efficiency improvements, improved battery and charging technology, and a decrease in costs, and the economics of hybridization are likely to continue to improve. No matter the fuels, a greener choice will mean higher costs for MPVs. This puts an even greater premium on reducing losses through energy efficiency. Operational and technical energy-efficiency measures we can deploy today can reduce fuel consumption by up to 16%. The business case for these technologies, including wind-assisted propulsion, waste heat recovery, and hybrid systems is very strong compared with the cost of alternative fuels. Carbon capture and storage is a potential — but niche — option for emissions reduction for MPVs, but again the room required on board to store the CO2 is the sticking point. This takes us back to the key limitation of MPVs when switching to lower-density fuels: a lack of onboard space. For now, the most likely solution is that the MPV sector will need to rely on biofuels, dual-fuel and future fuel-ready notations, perhaps with demand aggregation and GFI pooling as we move ahead on the path to zero. Contact Jost Bergmann at <a href="mailto:jost.bergmann@dnv.com">jost.bergmann@dnv.com</a>. DNV is a Norway-based classification society. </div>

The “future fuel” dilemma is a 21st century conundrum for shipowners of every type of ship, but perhaps more so for the multipurpose (MPV) and heavy-lift fleet. With their heavy and outsized cargoes, finding room for the larger fuel tanks needed for low-density fuels is a real challenge, which makes emerging fuels hydrogen and ammonia a much tougher option for MPV newbuilds today. Green methanol has potential, but there are caveats to that choice, too. The market is coming to terms with the time it will take to scale up the production and distribution of green methanol. While supplies can and are being secured for some pioneering ship operators, it is likely to be much harder to procure green methanol supplies for tramping MPVs with their variable routings and port calls. However, some carriers are choosing methanol from the newbuild stage, having implemented a “ready” approach with plans to convert. These include AAL with a series of eight 32,000-deadweight ton (dwt) liner-type MPVs, three of which have been delivered; Griegstar and Gearbulk with eight ammonia/methanol-ready 82,300-dwt open-hatch general cargo newbuilds; Skarv with four 7,000-dwt ammonia/methanol-ready project cargo carriers; and SAL’s methanol-ready heavy-lift MPV Orca class. Biofuels offer a more immediate solution for MPV operators, especially for those operating in European Union waters, where from next year FuelEU Maritime regulations will heavily penalize vessels that cannot comply with the requirements for using alternative fuels with lower fossil carbon content. Many owners and operators in the sector have already tested different kinds of biofuels with various “drop-in” ratios. A steep increase in demand for biofuels is expected in the coming years. At DNV, we see benefits in the pooling mechanism allowed in the EU’s FuelEU Maritime regulation to encourage future fuel procurement at scale. This could serve the MPV sector well as an emissions-reduction strategy. This novel approach gives MPV shipowners the option to pool well-to-wake greenhouse gas fuel intensity (GFI) compliance across several ships from the same or different companies. This means that a non-compliant vessel could rely on others in a pool to achieve a compliant combined GFI. This cooperative approach could provide a pathway for MPV operators to secure the benefits of using low- or zero-carbon fuels. ‘New nuclear’ a long-term possibility Nuclear propulsion as an alternative fuel for MPVs falls in a much longer-term window, in my view. Small modular reactors (SMRs) are still in the testing stage on land for power generation, and it will be many years before they will be ready for commercial use in shipping. Expect to see SMR testing for ultra-large container carriers well before MPVs are ready for new nuclear. The industry is looking closely at the possibilities, however, so at DNV, we have recently joined with companies and stakeholders in the maritime and nuclear sector to explore the technology as part of the new Nuclear Energy Maritime Organization (NEMO). Batteries, as part of hybrid propulsion solutions, are on the rise. We estimate that some 900 ships are operating with batteries systems — from a few fully electric vessels, mainly in operation on short-sea point-to point ferry trades, to varying degrees of hybridization where batteries are combined with generators or fuel cells. Batteries as part of hybrid solutions are a relatively mature technology. Combine this with energy efficiency improvements, improved battery and charging technology, and a decrease in costs, and the economics of hybridization are likely to continue to improve. No matter the fuels, a greener choice will mean higher costs for MPVs. This puts an even greater premium on reducing losses through energy efficiency. Operational and technical energy-efficiency measures we can deploy today can reduce fuel consumption by up to 16%. The business case for these technologies, including wind-assisted propulsion, waste heat recovery, and hybrid systems is very strong compared with the cost of alternative fuels. Carbon capture and storage is a potential — but niche — option for emissions reduction for MPVs, but again the room required on board to store the CO2 is the sticking point. This takes us back to the key limitation of MPVs when switching to lower-density fuels: a lack of onboard space. For now, the most likely solution is that the MPV sector will need to rely on biofuels, dual-fuel and future fuel-ready notations, perhaps with demand aggregation and GFI pooling as we move ahead on the path to zero. Contact Jost Bergmann at jost.bergmann@dnv.com . DNV is a Norway-based classification society.

Breakbulk News

Breakbulk carriers

Heavy-haul transport

Project cargo

MPV fuel challenge complicated by heavy and outsized cargoes

<div class="phx-topic abstract-wrapper">Beneficial cargo owners have numerous market factors and risks to weigh when formulating a strategy for negotiating next year’s service contracts, writes John McCauley.</div>

Beneficial cargo owners have numerous market factors and risks to weigh when formulating a strategy for negotiating next year’s service contracts, writes John McCauley.

<div class="phx-topic">Beneficial cargo owners (BCOs) will need to consider multiple macro factors — both immediate and long term — as they approach negotiations on their annual service contracts with ocean carriers. First, is the possibility of the end of militant attacks in the Red Sea and Gulf of Aden. Any resumption of sailings through the Suez Canal will happen, at best, by mid-year. It is also necessary to factor in a three- to six-month delay in carrier schedule and shipper/consignee supply chain adjustments from any cessation of hostilities. My view is to plan for no resumption of Red Sea transits in 2025. The second factor is whether seasonality will continue at historical levels or we will see some smoothing of demand and volume similar to that which we saw in 2024 and partly in 2023. Those BCOs that can smooth demand, having fought the internal battle to minimize transportation risk, have largely done so to the degree possible allowing for increased warehousing and higher working capital from increased inventory. Therefore, I expect in 2025 that there will be some improvement in volume smoothing, but nothing game changing. Thirdly will be the supply situation. Much has been made of the new tonnage coming into service, and indeed without Suez transits there would be overcapacity on the Asia-Europe trade. However, the new capacity will be asynchronous with demand, particularly in the trans-Pacific. Another significant issue on the supply side is the sheer scale and size of Mediterranean Shipping Co., which now operates about 20% of global container capacity. Their impact will be at least twofold: for any BCO with reasonable volume, purely on berth capacity and schedule alone, you will likely need to use them. But more importantly, they were the traditional price makers when they were on par with others in capacity terms and part of vessel-sharing agreements/consortia and were often the earliest movers in the market. Will that continue given their market share and agile and adventurous commercial actions? Not so easy when you are a solo player. Finally, do not expect any improvement in service levels beyond (at my best estimate) 60% to 65% globally. While I am healthily skeptical and highly hopeful that Gemini Cooperation delivers on its service level target of 90%, this will not kick in until first shipments start arriving in at least the second quarter of 2025. <h3>Options for BCOs </h3>So, where does all this leave BCOs trying to make sense of who to contract with and at what levels in 2025? The likelihood is that we are in balance in a buyer’s market with two caveats: it all depends on your relation and value to the carriers and the current levels you are paying versus spot and forward freight agreement (FFA) projections for the third and fourth quarters of 2025. If you choose to commit for a full year, indeed in the current and near-term environment, the likelihood of carriers wanting to contract for less than one year without a significant risk premium is very low. This leaves several options, any of which may suit your business or not. You can go long this year, committing all your volume to a range of carriers, but being sure to include standalone liners and one from each of the main alliances. Pretty traditional, but at least this locks you in. The quid pro quo for this commitment must be next to zero surcharges through the life of the contract. This will mitigate short-term shocks during the contract duration. The more adventurous option will be some form of index linked for a portion of the volume, accepting the risk of fluctuation. This also means you must lock in your critical lanes and product lines. Again, keep an eye on surcharges. The most aggressive option would be a mix of contracts for key volumes/lanes with a proportion on the spot market. Your level of conviction of supply-side easing and a Suez reopening needs to be very high, and even in those scenarios coming together, carriers will still blank sailings and even lay up capacity, so the reward may be elusive. With no constraints, I would lock in my key lanes and buy FFAs to hedge up to 50% of the upside risk. In summary, not an easy year (are they ever?) with the potential for rates to increase, but more likely to fall, particularly for trades outside North America. For the trans-Atlantic and north/south lanes, expect little change while I remain convinced the surge in US imports will be unsustainable. The outcome and impact of the US presidential election is a further wild card not included in the factors above! John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>. </div>

Beneficial cargo owners (BCOs) will need to consider multiple macro factors — both immediate and long term — as they approach negotiations on their annual service contracts with ocean carriers. First, is the possibility of the end of militant attacks in the Red Sea and Gulf of Aden. Any resumption of sailings through the Suez Canal will happen, at best, by mid-year. It is also necessary to factor in a three- to six-month delay in carrier schedule and shipper/consignee supply chain adjustments from any cessation of hostilities. My view is to plan for no resumption of Red Sea transits in 2025. The second factor is whether seasonality will continue at historical levels or we will see some smoothing of demand and volume similar to that which we saw in 2024 and partly in 2023. Those BCOs that can smooth demand, having fought the internal battle to minimize transportation risk, have largely done so to the degree possible allowing for increased warehousing and higher working capital from increased inventory. Therefore, I expect in 2025 that there will be some improvement in volume smoothing, but nothing game changing. Thirdly will be the supply situation. Much has been made of the new tonnage coming into service, and indeed without Suez transits there would be overcapacity on the Asia-Europe trade. However, the new capacity will be asynchronous with demand, particularly in the trans-Pacific. Another significant issue on the supply side is the sheer scale and size of Mediterranean Shipping Co., which now operates about 20% of global container capacity. Their impact will be at least twofold: for any BCO with reasonable volume, purely on berth capacity and schedule alone, you will likely need to use them. But more importantly, they were the traditional price makers when they were on par with others in capacity terms and part of vessel-sharing agreements/consortia and were often the earliest movers in the market. Will that continue given their market share and agile and adventurous commercial actions? Not so easy when you are a solo player. Finally, do not expect any improvement in service levels beyond (at my best estimate) 60% to 65% globally. While I am healthily skeptical and highly hopeful that Gemini Cooperation delivers on its service level target of 90%, this will not kick in until first shipments start arriving in at least the second quarter of 2025. Options for BCOs So, where does all this leave BCOs trying to make sense of who to contract with and at what levels in 2025? The likelihood is that we are in balance in a buyer’s market with two caveats: it all depends on your relation and value to the carriers and the current levels you are paying versus spot and forward freight agreement (FFA) projections for the third and fourth quarters of 2025. If you choose to commit for a full year, indeed in the current and near-term environment, the likelihood of carriers wanting to contract for less than one year without a significant risk premium is very low. This leaves several options, any of which may suit your business or not. You can go long this year, committing all your volume to a range of carriers, but being sure to include standalone liners and one from each of the main alliances. Pretty traditional, but at least this locks you in. The quid pro quo for this commitment must be next to zero surcharges through the life of the contract. This will mitigate short-term shocks during the contract duration. The more adventurous option will be some form of index linked for a portion of the volume, accepting the risk of fluctuation. This also means you must lock in your critical lanes and product lines. Again, keep an eye on surcharges. The most aggressive option would be a mix of contracts for key volumes/lanes with a proportion on the spot market. Your level of conviction of supply-side easing and a Suez reopening needs to be very high, and even in those scenarios coming together, carriers will still blank sailings and even lay up capacity, so the reward may be elusive. With no constraints, I would lock in my key lanes and buy FFAs to hedge up to 50% of the upside risk. In summary, not an easy year (are they ever?) with the potential for rates to increase, but more likely to fall, particularly for trades outside North America. For the trans-Atlantic and north/south lanes, expect little change while I remain convinced the surge in US imports will be unsustainable. The outcome and impact of the US presidential election is a further wild card not included in the factors above! John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

BCOs should approach new service contracts with broad market view

Index

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 {name} {categoryY.formatNumber('#.0%')} 

The JOC Truckload Capacity Index (TCI) measures truck capacity at large, publicly traded trucking companies on a quarterly basis using end-of-quarter truck counts reported within their earnings statements. The index covers a group of full truckload carriers with combined annual revenue of more than $10 billion, using the group’s average truck count in the fourth quarter of 2006, prior to Great Recession of 2007–09, as its base (Q4 2006 = 100). Large truckload carriers represent a core sector of capacity for high-volume shippers.

Truckload capacity index (Journal of Commerce)

JOC Truckload Capacity Index Gateway

<div class="phx-topic abstract-wrapper">Forwarders and industry analysts forecast strong import volumes through the early Lunar New Year that begins Jan. 29 as importers of time-sensitive merchandise and manufacturing components route shipments through the country’s busiest gateway.</div>

Forwarders and industry analysts forecast strong import volumes through the early Lunar New Year that begins Jan. 29 as importers of time-sensitive merchandise and manufacturing components route shipments through the country’s busiest gateway.

<div class="phx-topic">Rail container dwell times at the ports of Los Angeles and Long Beach rose to their highest level in two years last month and will likely remain elevated through January amid higher-than-normal import volumes driven in part by cargo diversions from the US East and Gulf coasts. Rail-destined container dwell times in the largest US port complex increased to an average of 9.86 days in October, up from 9.25 days in September and 8.2 days in August, according to data from the Pacific Merchant Shipping Association (PMSA), which represents terminal operators and shipping lines on the West Coast. “I think dwell times will remain elongated until the rails get some relief on the volumes,” said Lawrence Gross, president and founder of Gross Transportation and a Journal of Commerce analyst. US imports from Asia moving through Los Angeles-Long Beach have been exceptionally strong since the earlier-than-usual peak season began in early summer. Asian imports in the gateway were up 30% in July through September compared with the same period last year, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. “The continued upward trajectory in dwell times through October underscores both the complexity and adaptability of our supply chain as we manage increased cargo volumes and try to balance intermodal equipment availability with demand,” said Natasha Villa, external affairs manager for the PMSA. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="155dedc1-99f2-4adf-a449-1c9ab2510f95"></dynamic-object></div>Forwarders and industry analysts forecast strong import volumes through the early Lunar New Year that begins Jan. 29 as importers of time-sensitive merchandise and manufacturing components route shipments through Los Angeles-Long Beach. Importers are <a href="https://www.joc.com/article/ila-breaks-off-contract-talks-accuses-usmx-of-semi-automation-push-5810392">concerned about the possibility of another strike by the International Longshoremen’s Association (ILA)</a> when its extended contract expires on Jan. 15. Importers are also front-loading shipments in anticipation <a href="https://www.joc.com/article/hapag-lloyd-sees-possible-pre-lny-cargo-rush-amid-very-healthy-demand-5817691">of a large increase in tariffs under the new Trump administration</a>.<h3>Terminals, railroads say rail dwells have peaked </h3>Railroad and terminal operator sources, meanwhile, told the Journal of Commerce that while import volumes will remain higher than normal through January, imports through Southern California peaked last month. Terminal operators are now focusing on relieving the backlog of rail containers that built up in recent months. “It definitely plateaued in October and we’re chipping away at the backlog,” said Alan McCorkle, president of Yusen Terminals in Los Angeles. Rail container dwell times at Long Beach Container Terminal (LBCT) last week were down to about three days, said Anthony Otto, LBCT’s president. “We’re all caught up and things are headed in the right direction,” Otto said. Union Pacific Railroad said the past month has seen significant improvement in Southern California. “So much has changed since October. Today (Nov. 14), Union Pacific’s total LA-LB inventory count is down to its lowest level since mid-July 2024,” a UP spokesperson told the Journal of Commerce. “We have also made significant progress in working with individual port terminals to significantly reduce aged containers.” UP this year has experienced a higher jump in loaded railcars idling. Between January and August, the railroad averaged 68 loaded intermodal railcars idling per week, according to the US Surface Transportation Board (STB). The average grew to 139 in September and 199 in October, although it peaked at 241 in the second week of October. BNSF Railway averaged 221 railcars idling in January through August, 170 in September, and 237 in October, with the peak in the third week of October, according to the STB data. <h3>Shippers still experiencing delays </h3>The upbeat analysis of the terminals and railroads is of little solace to shippers who say they still struggle with delays at the marine terminals. An importer in the automotive sector said he has no recourse but to build a buffer for rail container dwell times into his Southern California supply chain. “We have been doing this for months,” said the importer, who did not want to be identified. “Big guys move quicker, the rest of us slower.” Steve Hughes, president and CEO of the consultancy HCS International, said Southern California is an important gateway for automotive industry imports due to its extensive intermodal rail connections to the eastern half of the US. For many importers, rerouting shipments to other ports is not an option. “If you’re looking for good rail connections, there are not many viable alternatives,” Hughes said, noting that other West Coast gateways such as Seattle-Tacoma and Vancouver are also experiencing rail container dwell issues. Mario Cordero, executive director of the Port of Long Beach, said he feels “very comfortable” about the ability of terminal operators in the port complex to handle the continued high import volumes projected through the Lunar New Year. Cordero noted that Long Beach in October had its busiest month ever in terms of total cargo volume. With Los Angeles this week scheduled to report a strong October, Cordero said the port complex is handling the record volumes without the backlog of 109 container ships it experienced in January 2022. “We [Long Beach] are at 70% of capacity,” he said. “We’re already receiving cargo diverted from the East Coast. If there’s a bump in cargo, we’ll handle it.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Ari Ashe, Senior Editor, contributed to this story </div>

Rail container dwell times at the ports of Los Angeles and Long Beach rose to their highest level in two years last month and will likely remain elevated through January amid higher-than-normal import volumes driven in part by cargo diversions from the US East and Gulf coasts. Rail-destined container dwell times in the largest US port complex increased to an average of 9.86 days in October, up from 9.25 days in September and 8.2 days in August, according to data from the Pacific Merchant Shipping Association (PMSA), which represents terminal operators and shipping lines on the West Coast. “I think dwell times will remain elongated until the rails get some relief on the volumes,” said Lawrence Gross, president and founder of Gross Transportation and a Journal of Commerce analyst. US imports from Asia moving through Los Angeles-Long Beach have been exceptionally strong since the earlier-than-usual peak season began in early summer. Asian imports in the gateway were up 30% in July through September compared with the same period last year, according to PIERS, a Journal of Commerce sister product within S&P Global. “The continued upward trajectory in dwell times through October underscores both the complexity and adaptability of our supply chain as we manage increased cargo volumes and try to balance intermodal equipment availability with demand,” said Natasha Villa, external affairs manager for the PMSA. Forwarders and industry analysts forecast strong import volumes through the early Lunar New Year that begins Jan. 29 as importers of time-sensitive merchandise and manufacturing components route shipments through Los Angeles-Long Beach. Importers are concerned about the possibility of another strike by the International Longshoremen’s Association (ILA) when its extended contract expires on Jan. 15. Importers are also front-loading shipments in anticipation of a large increase in tariffs under the new Trump administration . Terminals, railroads say rail dwells have peaked Railroad and terminal operator sources, meanwhile, told the Journal of Commerce that while import volumes will remain higher than normal through January, imports through Southern California peaked last month. Terminal operators are now focusing on relieving the backlog of rail containers that built up in recent months. “It definitely plateaued in October and we’re chipping away at the backlog,” said Alan McCorkle, president of Yusen Terminals in Los Angeles. Rail container dwell times at Long Beach Container Terminal (LBCT) last week were down to about three days, said Anthony Otto, LBCT’s president. “We’re all caught up and things are headed in the right direction,” Otto said. Union Pacific Railroad said the past month has seen significant improvement in Southern California. “So much has changed since October. Today (Nov. 14), Union Pacific’s total LA-LB inventory count is down to its lowest level since mid-July 2024,” a UP spokesperson told the Journal of Commerce. “We have also made significant progress in working with individual port terminals to significantly reduce aged containers.” UP this year has experienced a higher jump in loaded railcars idling. Between January and August, the railroad averaged 68 loaded intermodal railcars idling per week, according to the US Surface Transportation Board (STB). The average grew to 139 in September and 199 in October, although it peaked at 241 in the second week of October. BNSF Railway averaged 221 railcars idling in January through August, 170 in September, and 237 in October, with the peak in the third week of October, according to the STB data. Shippers still experiencing delays The upbeat analysis of the terminals and railroads is of little solace to shippers who say they still struggle with delays at the marine terminals. An importer in the automotive sector said he has no recourse but to build a buffer for rail container dwell times into his Southern California supply chain. “We have been doing this for months,” said the importer, who did not want to be identified. “Big guys move quicker, the rest of us slower.” Steve Hughes, president and CEO of the consultancy HCS International, said Southern California is an important gateway for automotive industry imports due to its extensive intermodal rail connections to the eastern half of the US. For many importers, rerouting shipments to other ports is not an option. “If you’re looking for good rail connections, there are not many viable alternatives,” Hughes said, noting that other West Coast gateways such as Seattle-Tacoma and Vancouver are also experiencing rail container dwell issues. Mario Cordero, executive director of the Port of Long Beach, said he feels “very comfortable” about the ability of terminal operators in the port complex to handle the continued high import volumes projected through the Lunar New Year. Cordero noted that Long Beach in October had its busiest month ever in terms of total cargo volume. With Los Angeles this week scheduled to report a strong October, Cordero said the port complex is handling the record volumes without the backlog of 109 container ships it experienced in January 2022. “We [Long Beach] are at 70% of capacity,” he said. “We’re already receiving cargo diverted from the East Coast. If there’s a bump in cargo, we’ll handle it.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Ari Ashe, Senior Editor, contributed to this story

Marine terminals

Importers navigate two-year high rail container dwells in Los Angeles-Long Beach

<div class="phx-topic abstract-wrapper">The move comes as the DP World-operated hub is making large investments in berths and supporting infrastructure with a plan to grow its throughput and attract volumes from other UK ports, including top rival Felixstowe. </div>

The move comes as the DP World-operated hub is making large investments in berths and supporting infrastructure with a plan to grow its throughput and attract volumes from other UK ports, including top rival Felixstowe.

<div class="phx-topic">DP World’s London Gateway opened a £350 million ($442 million) all-electric fourth berth last week, the latest step in a six-berth plan to overtake Felixstowe as the UK’s largest container port in the next five years. But the title of largest UK port is not the only thing London Gateway plans to take from Felixstowe. In a review of the Gemini Cooperation’s port network published in a customer advisory Monday, members Maersk and Hapag-Lloyd said they have decided that vessels in the shared network will call at London Gateway instead of Felixstowe when the new alliance launches in February. “During this optimization process and our review of the Asia-Europe services, we have concluded that London Gateway is the most optimal port to serve our customers importing/exporting cargo to and from the UK,” Maersk noted in the advisory. Felixstowe, operated by Hong Kong’s Hutchison Port Holdings, handles more than 4 million TEUs a year, while 2.9 million TEUs crossed the London Gateway wharves last year. Felixstowe was originally meant to receive three of Gemini’s four Asia-North Europe loops, but Maersk said the new decision for the services to call at London Gateway was a strategic move to reduce network complexity with mostly single operator loops and fewer port calls per service, and was aimed at improving reliability, reach and speed for customers. “Due to this change, Felixstowe will not be a part of Maersk and Hapag-Lloyd’s shared Gemini network,” the carrier said. Maersk currently has four calls at Felixstowe outside its existing 2M Alliance with Mediterranean Shipping Co. that will not be affected by the launch of Gemini. The launch of the new 430-meter berth at London Gateway, which DP World said will increase handling capacity at the port by about 1 million TEUs annually, comes after $1.3 billion in fresh investment into its London Gateway operation was briefly threatened last month when the UK Transport Secretary criticized the March 2022 sacking of nearly 800 sea staff by DP World subsidiary P&amp;O Ferries. DP World group Chairman and CEO Sultan Ahmed bin Sulayem immediately canceled a scheduled announcement of the $1.3 billion investment and ordered a review of the London Gateway expansion plans. He later reversed his decision after a flurry of phone calls between DP World and senior British government officials. <h3>A pointed message </h3>In what appears to be a pointed message to the UK government, Ernst Schulze, DP World UK CEO for ports and terminals, placed a heavy emphasis on the scale of the investment being made into London Gateway. “We have already invested more than £2 billion ($2.5 billion) in the building of our modern and efficient facility at London Gateway in the last decade, connecting the UK with global supply chains and export markets,” he said. “This new berth, alongside our £1 billion [$1.3 billion] investment in the fifth and sixth berths, will further enable us to service the largest vessels in operation worldwide today, and the larger, future megaships currently under construction, while also advancing our goal to be net-zero by 2050,” Schulze noted, adding that the all-electric berth has also added 200 new permanent jobs to the port. London Gateway is located on the River Thames estuary about 30 miles east of London. The new berth will operate alongside the London Gateway Logistics Park, which has 9.25 million square feet of warehousing capacity, half of which is already developed, and multimodal connectivity to domestic and international road and rail networks. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

DP World’s London Gateway opened a £350 million ($442 million) all-electric fourth berth last week, the latest step in a six-berth plan to overtake Felixstowe as the UK’s largest container port in the next five years. But the title of largest UK port is not the only thing London Gateway plans to take from Felixstowe. In a review of the Gemini Cooperation’s port network published in a customer advisory Monday, members Maersk and Hapag-Lloyd said they have decided that vessels in the shared network will call at London Gateway instead of Felixstowe when the new alliance launches in February. “During this optimization process and our review of the Asia-Europe services, we have concluded that London Gateway is the most optimal port to serve our customers importing/exporting cargo to and from the UK,” Maersk noted in the advisory. Felixstowe, operated by Hong Kong’s Hutchison Port Holdings, handles more than 4 million TEUs a year, while 2.9 million TEUs crossed the London Gateway wharves last year. Felixstowe was originally meant to receive three of Gemini’s four Asia-North Europe loops, but Maersk said the new decision for the services to call at London Gateway was a strategic move to reduce network complexity with mostly single operator loops and fewer port calls per service, and was aimed at improving reliability, reach and speed for customers. “Due to this change, Felixstowe will not be a part of Maersk and Hapag-Lloyd’s shared Gemini network,” the carrier said. Maersk currently has four calls at Felixstowe outside its existing 2M Alliance with Mediterranean Shipping Co. that will not be affected by the launch of Gemini. The launch of the new 430-meter berth at London Gateway, which DP World said will increase handling capacity at the port by about 1 million TEUs annually, comes after $1.3 billion in fresh investment into its London Gateway operation was briefly threatened last month when the UK Transport Secretary criticized the March 2022 sacking of nearly 800 sea staff by DP World subsidiary P&O Ferries. DP World group Chairman and CEO Sultan Ahmed bin Sulayem immediately canceled a scheduled announcement of the $1.3 billion investment and ordered a review of the London Gateway expansion plans. He later reversed his decision after a flurry of phone calls between DP World and senior British government officials. A pointed message In what appears to be a pointed message to the UK government, Ernst Schulze, DP World UK CEO for ports and terminals, placed a heavy emphasis on the scale of the investment being made into London Gateway. “We have already invested more than £2 billion ($2.5 billion) in the building of our modern and efficient facility at London Gateway in the last decade, connecting the UK with global supply chains and export markets,” he said. “This new berth, alongside our £1 billion [$1.3 billion] investment in the fifth and sixth berths, will further enable us to service the largest vessels in operation worldwide today, and the larger, future megaships currently under construction, while also advancing our goal to be net-zero by 2050,” Schulze noted, adding that the all-electric berth has also added 200 new permanent jobs to the port. London Gateway is located on the River Thames estuary about 30 miles east of London. The new berth will operate alongside the London Gateway Logistics Park, which has 9.25 million square feet of warehousing capacity, half of which is already developed, and multimodal connectivity to domestic and international road and rail networks. Contact Greg Knowler at greg.knowler@spglobal.com .

Gemini says will use London Gateway for shared network vessel calls

<div class="phx-topic abstract-wrapper">The deal for privately-owned IMC Logistics gives NVO Kuehne+Nagel a significant advantage in selling door-to-door products to cargo owners.</div>

The deal for privately-owned IMC Logistics gives NVO Kuehne+Nagel a significant advantage in selling door-to-door products to cargo owners.

<div class="phx-topic">Kuehne+Nagel said Thursday it has acquired a majority stake in IMC Logistics, one of the largest ocean drayage providers in the US with terminals in almost every major port city and rail hub. Terms of the deal were not disclosed. The non-vessel-operating common carrier (NVO) will have a 51% stake in Tennessee-based IMC Logistics, formerly known as Intermodal Cos., giving K+N a significant advantage in selling door-to-door products to cargo owners. IMC handles about 2 million TEUs annually from US ports and rails and generated $800 million in revenue in 2023. “IMC’s range of capabilities significantly expands our service offering and allows us to develop even more attractive solutions for the value chains of our sea freight customers,” K+N CEO Stefan Paul said in a statement, adding the IMC brand will be retained. While ocean carriers own other US drayage providers, none are as large as IMC Cos., a family-owned company founded by current Chairman Mark George. Maersk acquired Performance Team in 2020 for $545 million. It has also owned Hudd Transportation-Damco Distribution for more than two decades. Mediterranean Shipping Co. acquired C&amp;K Holdings in 2022, including the C&amp;K Trucking drayage division. IMC is much larger than Hudd-Damco and C&amp;K Holdings. IMC owns 49 terminals in the US, covering nearly every major port city and rail hub, except in the Pacific Northwest and Florida, and owns five transloading facilities. For comparison, C&amp;K Holdings owns 20 terminals in the US, while Performance Team has eight locations. One of largest remaining privately-owned US drayage provider is RoadOne IntermodaLogistics, which is co-owned by the Kellaway family and two private equity firms. Other privately-owned providers with a large base of owner-operators include the Evans Network of Companies and STG Logistics.The K+N-IMC transaction is expected to close at the beginning of the first quarter of 2025. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com ">ari.ashe@spglobal.com</a></div>

Kuehne+Nagel said Thursday it has acquired a majority stake in IMC Logistics, one of the largest ocean drayage providers in the US with terminals in almost every major port city and rail hub. Terms of the deal were not disclosed. The non-vessel-operating common carrier (NVO) will have a 51% stake in Tennessee-based IMC Logistics, formerly known as Intermodal Cos., giving K+N a significant advantage in selling door-to-door products to cargo owners. IMC handles about 2 million TEUs annually from US ports and rails and generated $800 million in revenue in 2023. “IMC’s range of capabilities significantly expands our service offering and allows us to develop even more attractive solutions for the value chains of our sea freight customers,” K+N CEO Stefan Paul said in a statement, adding the IMC brand will be retained. While ocean carriers own other US drayage providers, none are as large as IMC Cos., a family-owned company founded by current Chairman Mark George. Maersk acquired Performance Team in 2020 for $545 million. It has also owned Hudd Transportation-Damco Distribution for more than two decades. Mediterranean Shipping Co. acquired C&K Holdings in 2022, including the C&K Trucking drayage division. IMC is much larger than Hudd-Damco and C&K Holdings. IMC owns 49 terminals in the US, covering nearly every major port city and rail hub, except in the Pacific Northwest and Florida, and owns five transloading facilities. For comparison, C&K Holdings owns 20 terminals in the US, while Performance Team has eight locations. One of largest remaining privately-owned US drayage provider is RoadOne IntermodaLogistics, which is co-owned by the Kellaway family and two private equity firms. Other privately-owned providers with a large base of owner-operators include the Evans Network of Companies and STG Logistics. The K+N-IMC transaction is expected to close at the beginning of the first quarter of 2025. Contact Ari Ashe at ari.ashe@spglobal.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

SSA Marine Mexico has made significant strides in modernizing its infrastructure at the Port of Manzanillo, investing $15 million to enhance operational efficiency and sustainability at its facilities. This move is part of the company's broader strategy to remain at the forefront of the shipping and logistics industry. •	Strengthening Sustainability with Advanced Technology <figure class="joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left"><img src="/content-assets/1730488295264_Cranes%20arrival%20to%20TEC%20I.png" alt="Cranes arrival to TEC I" class="joc_admin__inline-image-inherit"></figure> In July, SSA Marine Mexico added seven state-of-the-art E-RTG (Electric Rubber-Tired Gantry) cranes to its fleet, valued at $14 million. These advanced cranes were distributed across its two terminals: four cranes were assigned to the Multipurpose Terminal, and three to the Specialized Container Terminal I. What sets these cranes apart is their dual-operation capability, allowing them to function either on electric power or diesel fuel. This innovation plays a critical role in reducing the environmental impact of operations, contributing to a 7% increase in energy efficiency. This efficiency improvement is equivalent to eliminating nearly 4,000 tons of CO2 emissions annually, underscoring SSA Marine Mexico's commitment to sustainability. Through this acquisition, SSA Marine Mexico not only enhances its cargo-handling capabilities but also reinforces its leadership in integrating cutting-edge, eco-friendly technology in the maritime industry. The company continues to push the boundaries of efficiency and sustainability, ensuring long-term value for both its customers and the environment. •	Upgraded Facilities to Meet Growing Demand <figure class="joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left"><img src="/content-assets/1730488350634_Multipurpose%20terminal.png" alt="Multipurpose Terminal" class="joc_admin__inline-image-inherit"></figure> In addition to the new cranes, SSA Marine Mexico has completed crucial modernization and repair work across its Multipurpose Terminal and Specialized Facility at the Port of Manzanillo. This $1 million investment targeted critical infrastructure enhancements, focusing on both structural integrity and operational functionality. Key improvements included leveling approximately 12,000 square meters in the dock area, along with the removal of outdated concrete curbs and asphalt layers. The upgraded space now features high-resistance pavers designed to optimize water drainage and prevent pooling, ensuring safer and more efficient operations. Moreover, the Specialized Facility saw significant upgrades, including the leveling of key warehouse areas to facilitate smoother cargo handling processes. These infrastructure improvements directly enhance the handling of TEUS (Twenty-foot Equivalent Unit containers), further demonstrating SSA Marine Mexico's unwavering commitment to continuous modernization, operational safety, and efficiency. With these initiatives, SSA Marine Mexico is well-positioned to meet the growing demands of the global shipping industry while setting new standards in sustainable port operations. LINK:<a href="https://www.ssamarine.mx/ssa-ing/index" rel="noreferrer" class="joc_admin__link"> https://www.ssamarine.mx/ssa-ing/index</a>

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SSA Marine Mexico Modernizes Facilities with $15 Million Investment 

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

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<div class="phx-topic abstract-wrapper">Shippers, brokers and trucking executives at a Traffic Club of Chicago forum all said the long freight downturn isn’t finished — but are hopeful it’s nearing an end.</div>

Shippers, brokers and trucking executives at a Traffic Club of Chicago forum all said the long freight downturn isn’t finished — but are hopeful it’s nearing an end.

<div class="phx-topic">CHICAGO — The so-called freight recession may be close to its end, but it is still very much alive, shippers, brokers and trucking executives told the Traffic Club of Chicago this week. Logistics executives don’t expect the US freight market to flip and expand until 2025, perhaps closer to mid-year, driven by increased manufacturing output and home sales. “We are in a transitionary period in the market,” Ryan Hammett, director of market intelligence and insights at C.H. Robinson Worldwide, told the Traffic Club’s Transportation &amp; Logistics Customer Forum on Wednesday. “There are signs that things are changing, and we’re moving from a period of oversupply into a little bit more balance,” Hammett said, referring to <a href="https://www.joc.com/article/large-carrier-truckload-capacity-stabilizing-alongside-rates-5788958">truckload capacity</a>. But while supply in the form of trucks may be contracting, demand in the form of shipments hasn’t yet expanded significantly, Hammett and other speakers told the forum. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="dbbd4237-84d4-4708-a9bb-cde62ec92462"></dynamic-object></div>“There’s only a certain amount of freight out there,” said Mitch Morrin, North American outbound logistics lead for Owens Corning. “You can say the freight recession is over all you want, but if the freight doesn’t materialize in the marketplace, it’s not.” Morrin expressed concern that some trucking companies will push for rate increases based on premature claims the <a href="https://www.joc.com/article/mid-level-us-freight-recession-packs-larger-truck-rate-wallop-analyst-5225206">freight downcycle</a> that began in May 2022 is finished. “Are they going to talk expansion into existence? That’s going to be tough,” he said. <h3>Seasonality, regional growth </h3>There are “green shoots” that signal improvement in freight demand, other speakers said. Much of that improvement, however, has been seasonal and regional. “The experience right now between Southern California and the East Coast in terms of freight markets is drastically different,” Hammett said. “I think that we need to begin to expect regional tightness in certain places that you may not see across the rest of America. Regional tightness doesn’t mean a freight market shift.” In the Midwest, “We’re still very flat on our volumes, but what we have seen in the last three months is fewer companies are seeing drops in volume,” said Matt Hart, executive director of the Illinois Trucking Association. “We know volumes have stopped declining, but they’re still very flat,” he said. “They haven’t taken off.” Other economic indicators support claims that a freight recovery is not yet under way, although spot and contract truckload rates have begun rising. The Cass Freight Shipments Index dropped 1.7% in September from August before seasonal adjustment. The American Trucking Associations For-Hire Freight Tonnage Index was 6.4% below its non-seasonally adjusted August reading in September. Routing guide depth metrics from C.H. Robinson Worldwide have dropped in recent months after rising toward July, Hammett said, indicating that primary carriers in contract routing guides are still picking up their customers’ freight most of the time. “A change in a freight recession is not a flat line,” Hammett said. <h3>Manufacturing malaise </h3>Hammett also noted that US manufacturing capacity utilization has dropped from its most recent peak in May 2022, the start of the freight recession. The seasonally adjusted S&amp;P Global US Manufacturing Purchasing Managers’ Index (PMI) was 48.5 in October, up from 47.3 in September but below the 50 “no-change” mark for a fourth consecutive month. The Institute for Supply Management (ISM) PMI <a href="https://www.reuters.com/markets/us/us-manufacturing-drops-15-month-low-october-2024-11-01/">also remained in contraction</a>, at 46.5 in October. “Industrial production is not doing well,” said Hammett. “[But] an upside is the consumer is still healthy.” Hammett sees consumer spending on goods and services becoming more balanced. “To really say that the market is turned we’re going to have to see manufacturing come back, we have to see housing starts coming back,” said Vince Paperiello, senior vice president of intermodal at STG Logistics. For Paperiello, a key indicator that the freight recession is ending will be seeing intermodal containers “come down off the stacks” where they’ve piled up around the US over the past two years. “When you see that, we’ll be out of the freight recession,” he said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

CHICAGO — The so-called freight recession may be close to its end, but it is still very much alive, shippers, brokers and trucking executives told the Traffic Club of Chicago this week. Logistics executives don’t expect the US freight market to flip and expand until 2025, perhaps closer to mid-year, driven by increased manufacturing output and home sales. “We are in a transitionary period in the market,” Ryan Hammett, director of market intelligence and insights at C.H. Robinson Worldwide, told the Traffic Club’s Transportation & Logistics Customer Forum on Wednesday. “There are signs that things are changing, and we’re moving from a period of oversupply into a little bit more balance,” Hammett said, referring to truckload capacity . But while supply in the form of trucks may be contracting, demand in the form of shipments hasn’t yet expanded significantly, Hammett and other speakers told the forum. “There’s only a certain amount of freight out there,” said Mitch Morrin, North American outbound logistics lead for Owens Corning. “You can say the freight recession is over all you want, but if the freight doesn’t materialize in the marketplace, it’s not.” Morrin expressed concern that some trucking companies will push for rate increases based on premature claims the freight downcycle that began in May 2022 is finished. “Are they going to talk expansion into existence? That’s going to be tough,” he said. Seasonality, regional growth There are “green shoots” that signal improvement in freight demand, other speakers said. Much of that improvement, however, has been seasonal and regional. “The experience right now between Southern California and the East Coast in terms of freight markets is drastically different,” Hammett said. “I think that we need to begin to expect regional tightness in certain places that you may not see across the rest of America. Regional tightness doesn’t mean a freight market shift.” In the Midwest, “We’re still very flat on our volumes, but what we have seen in the last three months is fewer companies are seeing drops in volume,” said Matt Hart, executive director of the Illinois Trucking Association. “We know volumes have stopped declining, but they’re still very flat,” he said. “They haven’t taken off.” Other economic indicators support claims that a freight recovery is not yet under way, although spot and contract truckload rates have begun rising. The Cass Freight Shipments Index dropped 1.7% in September from August before seasonal adjustment. The American Trucking Associations For-Hire Freight Tonnage Index was 6.4% below its non-seasonally adjusted August reading in September. Routing guide depth metrics from C.H. Robinson Worldwide have dropped in recent months after rising toward July, Hammett said, indicating that primary carriers in contract routing guides are still picking up their customers’ freight most of the time. “A change in a freight recession is not a flat line,” Hammett said. Manufacturing malaise Hammett also noted that US manufacturing capacity utilization has dropped from its most recent peak in May 2022, the start of the freight recession. The seasonally adjusted S&P Global US Manufacturing Purchasing Managers’ Index (PMI) was 48.5 in October, up from 47.3 in September but below the 50 “no-change” mark for a fourth consecutive month. The Institute for Supply Management (ISM) PMI also remained in contraction , at 46.5 in October. “Industrial production is not doing well,” said Hammett. “[But] an upside is the consumer is still healthy.” Hammett sees consumer spending on goods and services becoming more balanced. “To really say that the market is turned we’re going to have to see manufacturing come back, we have to see housing starts coming back,” said Vince Paperiello, senior vice president of intermodal at STG Logistics. For Paperiello, a key indicator that the freight recession is ending will be seeing intermodal containers “come down off the stacks” where they’ve piled up around the US over the past two years. “When you see that, we’ll be out of the freight recession,” he said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

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Prolonged US freight ‘recession’ to drag into 2025: transportation executives

<div class="phx-topic abstract-wrapper">The carrier, which reported $1 billion in net profit for the third quarter, says the potential boost in volumes could come as US importers seek to beat the possible implementation of new tariffs on Chinese goods by the incoming Trump administration.</div>

The carrier, which reported $1 billion in net profit for the third quarter, says the potential boost in volumes could come as US importers seek to beat the possible implementation of new tariffs on Chinese goods by the incoming Trump administration.

<div class="phx-topic">Hapag-Lloyd could see a cargo rush ahead of the Lunar New Year holidays in January partly due to shippers seeking to beat the possible imposition of new and increased US tariffs on Chinese products by the incoming Trump administration, its CEO said Thursday. That comes as demand remains strong in the fourth quarter, although Q4 profitability is set to slide compared with the carrier’s highly profitable third quarter, it said. “That we’re going to see a little bit of a rush going into Chinese New Year, I would certainly not rule it out,” Hapag-Lloyd CEO Rolf Habben Jansen said in an online briefing after the carrier released its third-quarter earnings. He said it was too soon to tell how big the potential boost in volumes could be. Habben Jansen said cargo demand returned quickly after the October holidays in China and was currently “robust.” “But how much of that is pre-loading, is difficult to judge,” he said. “We see, at the moment, demand is very healthy.” The CEO indicated that increased demand ahead of the Lunar New Year holiday would most likely have a positive impact on short-term freight rates. The Lunar New Year holiday starts on Jan. 29, just over a week after Donald Trump is inaugurated as the US president. Habben Jansen thought the introduction of more tariffs by the US could cause a further shift in trade flows, as happened during the first Trump administration in 2017–21 when manufacturers moved some production away from China. “I would not be surprised if there was going to be something similar this time,” he said. “I’m cautiously optimistic that in the end trade flows may change, but we’ll hopefully still see fairly decent global trade. If we want to grow wealth around the world, it’s important we have free trade.” Hapag-Lloyd is currently forecasting cargo demand growth of 3% next year. Habben Jansen said Hapag-Lloyd is not yet preparing for the possibility of renewed industrial action by dockworkers at ports on the US East and Gulf coasts when the current extended contract between the United States Maritime Alliance (USMX) and the International Longshoremen’s Association expires on Jan. 15. “I would still hope an amicable agreement is ... reached between USMX and the ILA,” he said. The ILA <a href="https://www.joc.com/article/ila-breaks-off-contract-talks-accuses-usmx-of-semi-automation-push-5810392">on Wednesday broke off talks with the USMX</a> scheduled for this week after it said maritime employers continued to push for automation and semi-automation in its proposed master contract in a move the ILA claimed would eliminate longshore jobs. Habben Jansen, meanwhile, confirmed that Gemini Cooperation, its coming alliance with Maersk, would open for cargo bookings in two weeks as it prepares for a Feb. 1 launch. He said while Hapag-Lloyd has signed up “a bit more volume” for next year from Asia to Europe in the current ongoing contract negotiations with shippers, it was “way too early to draw any conclusions” whether Gemini was responsible. Gemini hopes to grow its market share partly on the basis of having improved schedule reliability by having fewer port pairings, Habben Jansen added. “I would expect because of higher schedule reliability and better predictability in the supply chain people might be willing to pay a bit more,” he said. “But of course, we first need to implement that and demonstrate that schedule reliability week in, week out.” <h3>Q3 net profit soars </h3>Habben Jansen’s comments came after Hapag-Lloyd said third-quarter net profit surged 256% to $1 billion, up from $293 million in the prior year period. The quarterly figure was also 32% higher than the total $792 million in net profit reported for the first half of the year. But indicating lower earnings in the fourth quarter despite robust demand, the carrier estimated earnings before interest and taxes (EBIT) of between $460 million and $861 million for the fourth quarter based on full-year forecasts. Jefferies Equity Research said the carrier’s third-quarter results were in line with expectations. ”Hapag-Lloyd is in solid shape financially and benefiting from a strong underlying freight market,” Jefferies said in a research note Thursday. Hapag-Lloyd said group revenue climbed to $5.8 billion in the third quarter, up 29% from $4.5 billion a year earlier. That was driven by a 23% increase in average revenue per TEU, to $1,612 per TEU, plus a 3.8% increase in liftings to 3.2 million TEUs, fueled by volume gains on the trans-Pacific, trans-Atlantic and Far East trades. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Hapag-Lloyd could see a cargo rush ahead of the Lunar New Year holidays in January partly due to shippers seeking to beat the possible imposition of new and increased US tariffs on Chinese products by the incoming Trump administration, its CEO said Thursday. That comes as demand remains strong in the fourth quarter, although Q4 profitability is set to slide compared with the carrier’s highly profitable third quarter, it said. “That we’re going to see a little bit of a rush going into Chinese New Year, I would certainly not rule it out,” Hapag-Lloyd CEO Rolf Habben Jansen said in an online briefing after the carrier released its third-quarter earnings. He said it was too soon to tell how big the potential boost in volumes could be. Habben Jansen said cargo demand returned quickly after the October holidays in China and was currently “robust.” “But how much of that is pre-loading, is difficult to judge,” he said. “We see, at the moment, demand is very healthy.” The CEO indicated that increased demand ahead of the Lunar New Year holiday would most likely have a positive impact on short-term freight rates. The Lunar New Year holiday starts on Jan. 29, just over a week after Donald Trump is inaugurated as the US president. Habben Jansen thought the introduction of more tariffs by the US could cause a further shift in trade flows, as happened during the first Trump administration in 2017–21 when manufacturers moved some production away from China. “I would not be surprised if there was going to be something similar this time,” he said. “I’m cautiously optimistic that in the end trade flows may change, but we’ll hopefully still see fairly decent global trade. If we want to grow wealth around the world, it’s important we have free trade.” Hapag-Lloyd is currently forecasting cargo demand growth of 3% next year. Habben Jansen said Hapag-Lloyd is not yet preparing for the possibility of renewed industrial action by dockworkers at ports on the US East and Gulf coasts when the current extended contract between the United States Maritime Alliance (USMX) and the International Longshoremen’s Association expires on Jan. 15. “I would still hope an amicable agreement is ... reached between USMX and the ILA,” he said. The ILA on Wednesday broke off talks with the USMX scheduled for this week after it said maritime employers continued to push for automation and semi-automation in its proposed master contract in a move the ILA claimed would eliminate longshore jobs. Habben Jansen, meanwhile, confirmed that Gemini Cooperation, its coming alliance with Maersk, would open for cargo bookings in two weeks as it prepares for a Feb. 1 launch. He said while Hapag-Lloyd has signed up “a bit more volume” for next year from Asia to Europe in the current ongoing contract negotiations with shippers, it was “way too early to draw any conclusions” whether Gemini was responsible. Gemini hopes to grow its market share partly on the basis of having improved schedule reliability by having fewer port pairings, Habben Jansen added. “I would expect because of higher schedule reliability and better predictability in the supply chain people might be willing to pay a bit more,” he said. “But of course, we first need to implement that and demonstrate that schedule reliability week in, week out.” Q3 net profit soars Habben Jansen’s comments came after Hapag-Lloyd said third-quarter net profit surged 256% to $1 billion, up from $293 million in the prior year period. The quarterly figure was also 32% higher than the total $792 million in net profit reported for the first half of the year. But indicating lower earnings in the fourth quarter despite robust demand, the carrier estimated earnings before interest and taxes (EBIT) of between $460 million and $861 million for the fourth quarter based on full-year forecasts. Jefferies Equity Research said the carrier’s third-quarter results were in line with expectations. ”Hapag-Lloyd is in solid shape financially and benefiting from a strong underlying freight market,” Jefferies said in a research note Thursday. Hapag-Lloyd said group revenue climbed to $5.8 billion in the third quarter, up 29% from $4.5 billion a year earlier. That was driven by a 23% increase in average revenue per TEU, to $1,612 per TEU, plus a 3.8% increase in liftings to 3.2 million TEUs, fueled by volume gains on the trans-Pacific, trans-Atlantic and Far East trades. Contact Keith Wallis at keithwallis@hotmail.com .

Hapag-Lloyd sees possible pre-LNY cargo rush amid ‘very healthy’ demand

<div class="phx-topic abstract-wrapper">The company sees its new Broker Access product as another channel for brokers to find capacity outside of contracts with truckload carriers and posting spot freight on a load board. </div>

The company sees its new Broker Access product as another channel for brokers to find capacity outside of contracts with truckload carriers and posting spot freight on a load board.

<div class="phx-topic">Uber Freight on Thursday opened its network of truckload carriers to fellow freight brokers under a new product called Broker Access. The product, which is operated independently of Uber’s own freight brokerage business, gives other brokers the ability to expand the pool of capacity available to move truckloads for those brokers’ shipper-customers. Broker Access, in some ways, mirrors the development of a similar product at the now-defunct freight broker Convoy, which in 2021 launched Convoy for Brokers to similarly give other brokers access to drivers within its network. Convoy’s technology was later acquired by forwarder Flexport, which earlier this year restarted Convoy for Brokers under a new name, the Convoy Platform. The commonality between the two products is leveraging a network of hundreds of thousands of truckload drivers who have downloaded the companies’ respective mobile apps. Those apps allow drivers to book loads, sequence multiple loads (something Uber Freight calls re-loads) and automate other workflow aspects in the shipment lifecycle. Uber Freight sees Broker Access as another channel for brokers to find capacity outside of contracts with truckload carriers and posting spot freight on a load board, Brooks McMahon, the company’s vice president of emerging products and business development, told the Journal of Commerce. Key to enabling this third path is that some carriers are embracing mobile apps as workflow enablement tools, not a technology nuisance. “We think it’ll continue to happen, where more and more carriers will want to work this way,” said McMahon, who spearheaded Convoy for Brokers before joining Uber Freight in late 2023. “But there will always be a place for relationships and there will always be a place for load boards. Keep doing what you’re doing and consider this another path to get access to this new carrier base.” As brokers look for vetted carriers outside their network, there is a cohort of drivers who are embracing apps such as Uber’s because they’re technologically savvy or English is a second language and they feel disadvantaged when business is conducted over the phone, McMahon said. “Programs like this sort of level the playing field for carriers,” he said. <h3>Data behind a firewall </h3>One key behind the Broker Access offering is that it utilizes the same back-end technology that Uber Freight uses for its own brokerage business, but data is kept behind a firewall, so the Uber Freight brokerage business isn’t advantaged. “We’ve got different tables for all of our data,” McMahon said, acknowledging that overcoming the perception that Broker Access isn’t independent is important. “We have access controls. We don’t share data with the [third-party logistics] teams. They don’t share with us. So, we truly have put up walls. We have to offer this the right way.” McMahon said Uber Freight has been trialing Broker Access with a group of brokers since May. The product can be accessed by brokers via application programming interface (API), electronic data interchange (EDI) or via a web-based interface. The API and EDI connections allow external brokers to enable automated workflows around tendering, booking, tracking and payment reconciliation, but the web interface is there for smaller brokers not yet ready for integrations but who still want access to drivers using the Uber Freight app. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

Uber Freight on Thursday opened its network of truckload carriers to fellow freight brokers under a new product called Broker Access. The product, which is operated independently of Uber’s own freight brokerage business, gives other brokers the ability to expand the pool of capacity available to move truckloads for those brokers’ shipper-customers. Broker Access, in some ways, mirrors the development of a similar product at the now-defunct freight broker Convoy, which in 2021 launched Convoy for Brokers to similarly give other brokers access to drivers within its network. Convoy’s technology was later acquired by forwarder Flexport, which earlier this year restarted Convoy for Brokers under a new name, the Convoy Platform. The commonality between the two products is leveraging a network of hundreds of thousands of truckload drivers who have downloaded the companies’ respective mobile apps. Those apps allow drivers to book loads, sequence multiple loads (something Uber Freight calls re-loads) and automate other workflow aspects in the shipment lifecycle. Uber Freight sees Broker Access as another channel for brokers to find capacity outside of contracts with truckload carriers and posting spot freight on a load board, Brooks McMahon, the company’s vice president of emerging products and business development, told the Journal of Commerce. Key to enabling this third path is that some carriers are embracing mobile apps as workflow enablement tools, not a technology nuisance. “We think it’ll continue to happen, where more and more carriers will want to work this way,” said McMahon, who spearheaded Convoy for Brokers before joining Uber Freight in late 2023. “But there will always be a place for relationships and there will always be a place for load boards. Keep doing what you’re doing and consider this another path to get access to this new carrier base.” As brokers look for vetted carriers outside their network, there is a cohort of drivers who are embracing apps such as Uber’s because they’re technologically savvy or English is a second language and they feel disadvantaged when business is conducted over the phone, McMahon said. “Programs like this sort of level the playing field for carriers,” he said. Data behind a firewall One key behind the Broker Access offering is that it utilizes the same back-end technology that Uber Freight uses for its own brokerage business, but data is kept behind a firewall, so the Uber Freight brokerage business isn’t advantaged. “We’ve got different tables for all of our data,” McMahon said, acknowledging that overcoming the perception that Broker Access isn’t independent is important. “We have access controls. We don’t share data with the [third-party logistics] teams. They don’t share with us. So, we truly have put up walls. We have to offer this the right way.” McMahon said Uber Freight has been trialing Broker Access with a group of brokers since May. The product can be accessed by brokers via application programming interface (API), electronic data interchange (EDI) or via a web-based interface. The API and EDI connections allow external brokers to enable automated workflows around tendering, booking, tracking and payment reconciliation, but the web interface is there for smaller brokers not yet ready for integrations but who still want access to drivers using the Uber Freight app. Contact Eric Johnson at eric.johnson@spglobal.com .

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