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<div class="phx-topic abstract-wrapper">Less-than-truckload volumes may be down as much as 15% from 2021, but carriers are pushing for rate hikes in single-digit percentages as they plan expansion. </div>

Less-than-truckload volumes may be down as much as 15% from 2021, but carriers are pushing for rate hikes in single-digit percentages as they plan expansion.

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<div class="phx-topic">US freight demand may be soft, but less-than-truckload (LTL) carriers are defying a two-year freight slump and increasing contractual pricing heading into 2025. Several large publicly-owned LTL providers have reported third-quarter contract renewal rates rising by anywhere from low single-digit to high single-digit percentages. That’s surprising in a market where LTL shipments overall are down and excess capacity at large carriers is heading toward 30%. LTL carriers also continue to invest in terminals, opening facilities bought from Yellow <a href="https://www.joc.com/article/yellow-puts-remaining-112-ltl-terminals-on-the-block-5737425">as they plan for long-term expansion</a>. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="458dda45-1e1c-4de2-9960-9b02e4cb2804"></dynamic-object></div>LTL’s pricing surge still stems from the July 2023 collapse of Yellow, at the time the third-largest US LTL provider, which cut into overall capacity in the sector. LTL carriers also have kept pricing discipline, eschewing discounts. Those carriers that have tried lower pricing face tough margin pressure from rising operating costs. An LTL shipper that did not want to be identified said carriers are still very selective when it comes to the freight they haul, despite overall soft demand. LTL providers are more strictly monitoring shipment dimensions and refusing lower margin freight, the source said. <h3>Single-digit rate hikes </h3>Long-haul LTL carriers Saia and XPO both reported contract rates rising in the high single-digit range year over year in the third quarter, with Saia fixing its average gain at 7.9%. That’s also the amount of the 2025 general rate increase Saia announced this week. Old Dominion Freight Line (ODFL), the second-largest US LTL provider, said it expects LTL yield excluding surcharges, a measure that often substitutes for rates, to rise by approximately 4% in the fourth quarter.Excluding fuel, ODFL’s yield, or revenue per hundredweight, rose 4.6% in the third quarter from a year ago. “We expect to continue to get increases,” CFO Adam Satterfield told Wall Street analysts last week. Overall, LTL tonnage is down about 15% from a peak in the second quarter of 2021, according to ODFL. However, the US LTL producer price index (PPI), a measure of all-inclusive LTL selling prices, is up 6.6% from its latest trough in April 2023 and 5.2% from Yellow’s collapse. The ongoing LTL pricing gains also suggest that US shippers are concerned about securing adequate capacity ahead of stronger freight demand. “When freight starts coming back, we’ll have the cycle for all cycles in LTL in terms of volume and yield and not having enough capacity,” XPO CEO Mario Harik told the Journal of Commerce Wednesday. <h3>Waiting for a new tide </h3>ODFL, XPO and Saia expect a gradual increase in LTL freight demand as lower interest rates generate more freight across manufacturing and retail sectors. “The tide is finally coming back in,” Satterfield told Wall Street analysts. He referred to LTL freight that had shifted to the truckload market in the past two years, where rates are considerably lower. After Yellow collapsed, “I think people were just trying to find a home for freight,” Satterfield said. ”So now we’re seeing an influx of business coming back, and once we renormalize, we’d expect that we’ll be able to pick up quite a bit of freight,” he said. ODFL’s daily shipment count dropped 3.4% year over year in the third quarter to 47,967 shipments a day on average, the company said. For the first nine months of 2024, the average daily shipment count was flat year over year at 47,781 shipments. Average daily volume at XPO fell 3.2% in the quarter to 51,921 shipments, while the volume count rose 1.9% year over year in the past nine months, to 52,281 shipments. Saia increased its daily volume by 8.5% from the year-ago quarter to 37,200 shipments. The carrier raised its revenue 8.6% to $841 million, a new third-quarter record for the company. Saia, now the seventh-largest LTL carrier ranked by revenue, has grown at a rapid rate over the past year, picking up business from Yellow and purchasing 28 terminals from the bankrupt company. Its volume growth began to slow after the anniversary of Yellow’s exit, but growth continues. Shipments per day at Saia are up about 4% in October to date after rising 8.6% year over year in September, Saia CFO Matthew Batteh said during an earnings call last week. ”Freight moves around a little bit when you take the rate increase at times,” Batteh said. “With the macro backdrop where it is, there are customers that may go find other options. And we’re willing to let that walk. We’re not going to go chase that.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US freight demand may be soft, but less-than-truckload (LTL) carriers are defying a two-year freight slump and increasing contractual pricing heading into 2025. Several large publicly-owned LTL providers have reported third-quarter contract renewal rates rising by anywhere from low single-digit to high single-digit percentages. That’s surprising in a market where LTL shipments overall are down and excess capacity at large carriers is heading toward 30%. LTL carriers also continue to invest in terminals, opening facilities bought from Yellow as they plan for long-term expansion . LTL’s pricing surge still stems from the July 2023 collapse of Yellow, at the time the third-largest US LTL provider, which cut into overall capacity in the sector. LTL carriers also have kept pricing discipline, eschewing discounts. Those carriers that have tried lower pricing face tough margin pressure from rising operating costs. An LTL shipper that did not want to be identified said carriers are still very selective when it comes to the freight they haul, despite overall soft demand. LTL providers are more strictly monitoring shipment dimensions and refusing lower margin freight, the source said. Single-digit rate hikes Long-haul LTL carriers Saia and XPO both reported contract rates rising in the high single-digit range year over year in the third quarter, with Saia fixing its average gain at 7.9%. That’s also the amount of the 2025 general rate increase Saia announced this week. Old Dominion Freight Line (ODFL), the second-largest US LTL provider, said it expects LTL yield excluding surcharges, a measure that often substitutes for rates, to rise by approximately 4% in the fourth quarter. Excluding fuel, ODFL’s yield, or revenue per hundredweight, rose 4.6% in the third quarter from a year ago. “We expect to continue to get increases,” CFO Adam Satterfield told Wall Street analysts last week. Overall, LTL tonnage is down about 15% from a peak in the second quarter of 2021, according to ODFL. However, the US LTL producer price index (PPI), a measure of all-inclusive LTL selling prices, is up 6.6% from its latest trough in April 2023 and 5.2% from Yellow’s collapse. The ongoing LTL pricing gains also suggest that US shippers are concerned about securing adequate capacity ahead of stronger freight demand. “When freight starts coming back, we’ll have the cycle for all cycles in LTL in terms of volume and yield and not having enough capacity,” XPO CEO Mario Harik told the Journal of Commerce Wednesday. Waiting for a new tide ODFL, XPO and Saia expect a gradual increase in LTL freight demand as lower interest rates generate more freight across manufacturing and retail sectors. “The tide is finally coming back in,” Satterfield told Wall Street analysts. He referred to LTL freight that had shifted to the truckload market in the past two years, where rates are considerably lower. After Yellow collapsed, “I think people were just trying to find a home for freight,” Satterfield said. ”So now we’re seeing an influx of business coming back, and once we renormalize, we’d expect that we’ll be able to pick up quite a bit of freight,” he said. ODFL’s daily shipment count dropped 3.4% year over year in the third quarter to 47,967 shipments a day on average, the company said. For the first nine months of 2024, the average daily shipment count was flat year over year at 47,781 shipments. Average daily volume at XPO fell 3.2% in the quarter to 51,921 shipments, while the volume count rose 1.9% year over year in the past nine months, to 52,281 shipments. Saia increased its daily volume by 8.5% from the year-ago quarter to 37,200 shipments. The carrier raised its revenue 8.6% to $841 million, a new third-quarter record for the company. Saia, now the seventh-largest LTL carrier ranked by revenue, has grown at a rapid rate over the past year, picking up business from Yellow and purchasing 28 terminals from the bankrupt company. Its volume growth began to slow after the anniversary of Yellow’s exit, but growth continues. Shipments per day at Saia are up about 4% in October to date after rising 8.6% year over year in September, Saia CFO Matthew Batteh said during an earnings call last week. ”Freight moves around a little bit when you take the rate increase at times,” Batteh said. “With the macro backdrop where it is, there are customers that may go find other options. And we’re willing to let that walk. We’re not going to go chase that.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

US LTL carriers raising rates as shippers keep wary eye on 2025

<div class="phx-topic abstract-wrapper">The Environmental Protection Agency will disburse nearly $3 billion in federal funds meant to offset the costs of upgrading thousands of pieces of yard equipment from diesel to electric power.</div>

The Environmental Protection Agency will disburse nearly $3 billion in federal funds meant to offset the costs of upgrading thousands of pieces of yard equipment from diesel to electric power.

<div class="phx-topic">US ports are poised for one of the largest ever upgrade cycles for container handling equipment after the federal government announced $2.8 billion in grants to replace diesel-powered yard equipment with electric equipment. With the grants, ports that abut residential areas can keep growing cargo volumes while diminishing the adverse effects of pollution and carbon emissions. The Environmental Protection Agency (EPA) said Tuesday its Clean Ports Program will fund 21 projects across US ports for replacing diesel-powered cargo handling equipment with electric equipment, making it the largest port segment for replacement grants after other areas including vessel shore power, solar installations and trucks and rail. The funds are available under the Biden administration’s Inflation Reduction Act. The Port of New York and New Jersey received $344 million, the third-largest grant behind the ports of Los Angeles and Virginia. Beth Rooney, port director for the Port Authority of New York and New Jersey, told the Journal of Commerce Wednesday that a large grant was needed to tackle a port-wide equipment upgrade. Rooney said there are some 2,700 pieces of equipment at local marine terminals that could be replaced under the program. Replacing that equipment will be the equivalent of removing 14,000 gasoline-powered cars from the road annually, she added, and remove a source of 67,000 tons of carbon dioxide emissions. New York-New Jersey also received another $3 million toward air monitoring and community engagement efforts. Since implementing a clean air action program in 2009, Rooney said the port pollution has decreased by half or more depending on the specific pollutant. Marine terminal operators in New Jersey have undertaken their own initiatives to reduce diesel pollution over the years. Port Newark Container Terminal deployed propane-powered yard tractors through a private grant, and Maher Terminals used a state program funded through the Volkswagen diesel mitigation trust to deploy hybrid and electric straddle carriers. However, the smaller, one-off grants will pale in their impact compared with the Clean Ports funding, Rooney said. “There’s been small grants over the years that have allowed us to do things like the truck replacement program and pilot programs associated with testing emissions reduction technology,” she said. “With $344 million, we’ll be able to really move the needle in terms of implementing stuff.” Other ports, too, will undertake system-wide equipment upgrades. The Port of Los Angeles will earmark part of its $411 million grant for replacing 425 pieces of diesel equipment. The Port of Virginia, which received $380 million, will do the same for some 150 pieces of equipment. <h3>Working with marine terminals </h3>Rooney said her agency is now working with marine terminals to identify specific equipment for upgrades. The grant funding will also be used toward building the necessary charging infrastructure and reinforcing the port’s local grid. As for the biggest source of port pollution and carbon emissions — drayage trucks — the grant will also be used to fund incentives for motor carriers to replace diesel trucks and study optimal sites for locating electric vehicle chargers. The Clean Ports grants are particularly welcomed by communities near US Northeast ports, which are typically surrounded by some of the highest population densities in the country. New Jersey’s Hudson County, home of CMA CGM’s Port Liberty Bayonne terminal and across Newark Bay from other major marine terminals, has the sixth-highest US population density, according to the US Census Bureau, after New York and San Francisco counties. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

US ports are poised for one of the largest ever upgrade cycles for container handling equipment after the federal government announced $2.8 billion in grants to replace diesel-powered yard equipment with electric equipment. With the grants, ports that abut residential areas can keep growing cargo volumes while diminishing the adverse effects of pollution and carbon emissions. The Environmental Protection Agency (EPA) said Tuesday its Clean Ports Program will fund 21 projects across US ports for replacing diesel-powered cargo handling equipment with electric equipment, making it the largest port segment for replacement grants after other areas including vessel shore power, solar installations and trucks and rail. The funds are available under the Biden administration’s Inflation Reduction Act. The Port of New York and New Jersey received $344 million, the third-largest grant behind the ports of Los Angeles and Virginia. Beth Rooney, port director for the Port Authority of New York and New Jersey, told the Journal of Commerce Wednesday that a large grant was needed to tackle a port-wide equipment upgrade. Rooney said there are some 2,700 pieces of equipment at local marine terminals that could be replaced under the program. Replacing that equipment will be the equivalent of removing 14,000 gasoline-powered cars from the road annually, she added, and remove a source of 67,000 tons of carbon dioxide emissions. New York-New Jersey also received another $3 million toward air monitoring and community engagement efforts. Since implementing a clean air action program in 2009, Rooney said the port pollution has decreased by half or more depending on the specific pollutant. Marine terminal operators in New Jersey have undertaken their own initiatives to reduce diesel pollution over the years. Port Newark Container Terminal deployed propane-powered yard tractors through a private grant, and Maher Terminals used a state program funded through the Volkswagen diesel mitigation trust to deploy hybrid and electric straddle carriers. However, the smaller, one-off grants will pale in their impact compared with the Clean Ports funding, Rooney said. “There’s been small grants over the years that have allowed us to do things like the truck replacement program and pilot programs associated with testing emissions reduction technology,” she said. “With $344 million, we’ll be able to really move the needle in terms of implementing stuff.” Other ports, too, will undertake system-wide equipment upgrades. The Port of Los Angeles will earmark part of its $411 million grant for replacing 425 pieces of diesel equipment. The Port of Virginia, which received $380 million, will do the same for some 150 pieces of equipment. Working with marine terminals Rooney said her agency is now working with marine terminals to identify specific equipment for upgrades. The grant funding will also be used toward building the necessary charging infrastructure and reinforcing the port’s local grid. As for the biggest source of port pollution and carbon emissions — drayage trucks — the grant will also be used to fund incentives for motor carriers to replace diesel trucks and study optimal sites for locating electric vehicle chargers. The Clean Ports grants are particularly welcomed by communities near US Northeast ports, which are typically surrounded by some of the highest population densities in the country. New Jersey’s Hudson County, home of CMA CGM’s Port Liberty Bayonne terminal and across Newark Bay from other major marine terminals, has the sixth-highest US population density, according to the US Census Bureau, after New York and San Francisco counties. Contact Michael Angell at michael.angell@spglobal.com .

US ports plan upgrades to electric yard equipment after securing EPA grants

<div class="phx-topic abstract-wrapper">Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative ILA labor agreement.</div>

Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative ILA labor agreement.

<div class="phx-topic">An extended peak season on the eastbound trans-Pacific is manifesting in unusual strength for imports from Asia, coming as carriers signal atypically low blank sailings for November and seek higher rates. Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative labor agreement at US East and Gulf coast ports. About 5.4% of the total capacity into the West Coast is forecast as of now to be blanked in November, according to data from maritime intelligence firm eeSea. The figure is about 8.1% on the East Coast. That’s down from the 11.5% blanked capacity observed in November of 2023 for ex-Asia imports into both regions. Next month’s blanks are down sharply from 16% to the West Coast and 21% to the East Coast in October, according to the eeSea data. “What we are seeing is a fairly robust November,” a carrier executive who did not want to be identified told the Journal of Commerce Wednesday. “For four weeks out, bookings look strong.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1c1d9578-c129-4d4e-a136-e220473bd136"></dynamic-object></div>And that is keeping rates afloat and far higher than where they were a year ago. The spot/freight-all-kinds (FAK) rate from Asia to the West Coast as of Oct. 28 was $4,200 per FEU, up 133% year over year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. The East Coast rate of $4,300 per FEU is up 87% from October 2023. Despite the elevated rates, carriers are notifying forwarders of general rate increases (GRIs) of about $500 to $600 per FEU they will attempt to pass on from Nov. 1. Normally, spot and FAK rates drop in the final two months of the year after holiday merchandise has been shipped from Asia. Peak season demand and vessel load factors have been strong this summer and fall. US imports from Asia in September totaled 1.72 million TEUs, up 16.7% year over year and hovering near a two-year high, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Forwarders and carriers say import volumes have remained robust in October. “I think carriers are surprised at how full they were in October,” said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. The National Retail Federation’s Global Port Tracker has <a href="https://www.joc.com/article/us-retailers-expect-modest-import-bump-in-october-to-close-out-peak-season-5745363">forecast a year-over-year increase of 3.1% in US imports in October</a>. “Ships are full, especially to the West Coast,” said a second US-based carrier executive. <h3>Several factors driving trans-Pac demand </h3>Forwarders attribute the strong volumes to the frontloading of shipments to East and Gulf coast ports ahead of a possible second strike by the International Longshoremen’s Association (ILA) <a href="https://www.joc.com/article/ila-usmx-say-to-resume-talks-on-new-master-contract-in-november-5778794">when its extended contract expires on Jan. 15</a>. Retailers are also concerned about a possible <a href="https://www.joc.com/article/potential-trump-tariffs-would-reset-business-strategy-for-us-importers-analyst-5765307">spike in tariffs on imports from China</a>, depending on the outcome of Tuesday’s US presidential election. The frontloading of spring merchandise before an early Lunar New Year in Asia on Jan. 29 is also keeping imports strong. “There’s a triple convergence of events,” said James Caradonna, executive vice president at the forwarder M&amp;R Spedag Group. Caradonna said some retailers are content to bring merchandise into their warehouses early and pay the storage fees rather than risk having their freight caught up in supply chain bottlenecks. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>The combination of strong demand and the modest blank sailings from Asian load ports is keeping vessel space tight. “There’s definitely some tightening,” said Kurt McElroy, executive vice president of the forwarder Kerry Apex. “[Customers] are booking two to three weeks in advance, especially from South China.” <h3>‘Erosion’ in peak season surcharges </h3>Forwarders and carriers told the Journal of Commerce that because vessel space is likely to remain tight through November and into December, peak season surcharges (PSSs), which are applied to fixed-rate contracts known as named-account (NAC) rates, are likely to remain in play even though the eastbound trans-Pacific is technically not in the traditional peak season. However, the $2,000 PSS that many forwarders have been paying since May 1 is softening. The first carrier executive said PSSs effective Nov. 1 are in the market at about $1,800 per FEU, with other carriers charging $1,000 to $1,200 per FEU. “We’ve seen erosion,” the source said. “[Customers] are putting a lot of pressure on us.” On the other hand, while some carriers are opening up more vessel space for named-account bookings, not all forwarders are getting as much of the lower-priced space as they would like, said Christian Sur, executive vice president for ocean freight contract logistics at the forwarder Unique Logistics International. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com ">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

An extended peak season on the eastbound trans-Pacific is manifesting in unusual strength for imports from Asia, coming as carriers signal atypically low blank sailings for November and seek higher rates. Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative labor agreement at US East and Gulf coast ports. About 5.4% of the total capacity into the West Coast is forecast as of now to be blanked in November, according to data from maritime intelligence firm eeSea. The figure is about 8.1% on the East Coast. That’s down from the 11.5% blanked capacity observed in November of 2023 for ex-Asia imports into both regions. Next month’s blanks are down sharply from 16% to the West Coast and 21% to the East Coast in October, according to the eeSea data. “What we are seeing is a fairly robust November,” a carrier executive who did not want to be identified told the Journal of Commerce Wednesday. “For four weeks out, bookings look strong.” And that is keeping rates afloat and far higher than where they were a year ago. The spot/freight-all-kinds (FAK) rate from Asia to the West Coast as of Oct. 28 was $4,200 per FEU, up 133% year over year, according to Platts, a sister company of the Journal of Commerce within S&P Global. The East Coast rate of $4,300 per FEU is up 87% from October 2023. Despite the elevated rates, carriers are notifying forwarders of general rate increases (GRIs) of about $500 to $600 per FEU they will attempt to pass on from Nov. 1. Normally, spot and FAK rates drop in the final two months of the year after holiday merchandise has been shipped from Asia. Peak season demand and vessel load factors have been strong this summer and fall. US imports from Asia in September totaled 1.72 million TEUs, up 16.7% year over year and hovering near a two-year high, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Forwarders and carriers say import volumes have remained robust in October. “I think carriers are surprised at how full they were in October,” said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. The National Retail Federation’s Global Port Tracker has forecast a year-over-year increase of 3.1% in US imports in October . “Ships are full, especially to the West Coast,” said a second US-based carrier executive. Several factors driving trans-Pac demand Forwarders attribute the strong volumes to the frontloading of shipments to East and Gulf coast ports ahead of a possible second strike by the International Longshoremen’s Association (ILA) when its extended contract expires on Jan. 15 . Retailers are also concerned about a possible spike in tariffs on imports from China , depending on the outcome of Tuesday’s US presidential election. The frontloading of spring merchandise before an early Lunar New Year in Asia on Jan. 29 is also keeping imports strong. “There’s a triple convergence of events,” said James Caradonna, executive vice president at the forwarder M&R Spedag Group. Caradonna said some retailers are content to bring merchandise into their warehouses early and pay the storage fees rather than risk having their freight caught up in supply chain bottlenecks. The combination of strong demand and the modest blank sailings from Asian load ports is keeping vessel space tight. “There’s definitely some tightening,” said Kurt McElroy, executive vice president of the forwarder Kerry Apex. “[Customers] are booking two to three weeks in advance, especially from South China.” ‘Erosion’ in peak season surcharges Forwarders and carriers told the Journal of Commerce that because vessel space is likely to remain tight through November and into December, peak season surcharges (PSSs), which are applied to fixed-rate contracts known as named-account (NAC) rates, are likely to remain in play even though the eastbound trans-Pacific is technically not in the traditional peak season. However, the $2,000 PSS that many forwarders have been paying since May 1 is softening. The first carrier executive said PSSs effective Nov. 1 are in the market at about $1,800 per FEU, with other carriers charging $1,000 to $1,200 per FEU. “We’ve seen erosion,” the source said. “[Customers] are putting a lot of pressure on us.” On the other hand, while some carriers are opening up more vessel space for named-account bookings, not all forwarders are getting as much of the lower-priced space as they would like, said Christian Sur, executive vice president for ocean freight contract logistics at the forwarder Unique Logistics International. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Strong imports, low blanks extend peak season on eastbound trans-Pacific

<div class="phx-topic abstract-wrapper">With this latest deal, the combined methanol offtake agreements Maersk now has in place will meet half the demand from its fast-growing dual-fuel fleet in 2027.</div>

With this latest deal, the combined methanol offtake agreements Maersk now has in place will meet half the demand from its fast-growing dual-fuel fleet in 2027.

<div class="phx-topic">Maersk has signed a long-term bio-methanol supply agreement with China’s LONGi Green Energy Technology Co. as the carrier works toward securing enough green fuel to power its fast-growing dual-fuel fleet. The carrier has taken delivery of seven dual-fuel, methanol-capable 16,592-TEU ships from an 18-vessel order. With this latest supply deal, the combined methanol offtake agreements Maersk has in place so far will meet half the demand from its fleet in 2027. “While we believe that the future of global logistics will see several pathways to net-zero, this agreement underscores the continued momentum for methanol projects that are pursued by ambitious developers across markets,” Emma Mazhari, head of energy markets at A.P. Moller-Maersk, said in a statement Wednesday. The need for ocean carriers to secure supply agreements for green fuels — particularly methanol and LNG — is becoming more urgent, with almost 80% of the total 1.7 million TEUs of ship orders made so far this year being for vessels capable of sailing on methanol or LNG, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. The ordered vessels are steadily coming online, and although they can sail on conventional bunker fuel in the meantime, meeting both internal and regulatory emissions targets will largely depend on operating on green fuels. <h3>Deep dive into methanol </h3>The agreement with Henan-based LONGi continues Maersk’s deep dive into methanol. But growing uncertainty over the future supply of low- or zero-carbon fuels has seen the carrier expanding its alternative fuels portfolio into areas once regarded as out of bounds, such as liquefied natural gas (LNG). The need to keep fuel options open and avoid being locked into one pathway was illustrated in a <a href="https://www.joc.com/article/maersks-lng-order-hedges-bet-on-green-fuel-technology-ceo-5703200">recent Maersk order for dual-fuel vessels totaling 800,000 TEUs</a> capable of sailing on methanol as well as LNG. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1a054077-7728-4ffd-abb8-b7aff17c3235"></dynamic-object></div>In an interview with the Journal of Commerce earlier this month, Morten Bo Christiansen, Maersk’s head of decarbonization, said including LNG-capability in the carrier’s dual-fuel fleet is designed to bring in a wider mix of fuels. “When we look at our road map to decarbonize and meet our science-based targets, it is methanol that plays the big role,” Christiansen said. “We expect to get some biomethane [a cleaner version of LNG], but we are still relying mostly on methanol because we have a reasonable certainty that we can get those green fuels at a reasonable cost. “We already have <a href="https://www.joc.com/article/maersk-inks-new-methanol-sourcing-deal-with-chinese-supplier-5234419">one deal of half a million [metric tons] secured</a>, and we have a rather promising pipeline of green methanol,” he added. Ammonia is increasingly being included in container shipping decarbonization conversations, with classification society DNV on Wednesday approving in principle a 15,000-TEU ammonia-fueled vessel design by Hyundai Heavy Industries. <h3>China in a ‘pioneering role’ </h3>Maersk did not disclose the volume that will be produced by LONGi’s central China plant, but the supply will begin in 2026 with full production by the end of the decade. The bio-methanol will be produced from agricultural residues such as straw and fruit tree cuttings. “China continues to play a pioneering role, and it is encouraging to also see strong market developments in other geographies as well,” Mazhari noted, adding that the carrier was involved in “several promising projects.” While Maersk moves to lock in supply of methanol, the fuel remains three to four times more expensive per ton than low sulfur fuel oil, a price differential that must be lowered, Rabab Raafat Boulos, COO at A.P. Moller-Maersk, said in Wednesday’s statement. “Global shipping’s main net-zero challenge is the price gap between fossil fuels and the alternatives with lower greenhouse gas emissions,” he noted. Even with current regulatory tools in place such as the European Union’s <a href="https://www.joc.com/article/european-parliament-approves-shipping-ets-but-stakeholders-wary-5202492">Emissions Trading System (ETS)</a> and <a href="https://www.joc.com/article/container-carriers-to-shoulder-bulk-of-europe-fuel-intensity-rule-5192246">FuelEU Maritime fuel intensity rules</a> that will be applied from Jan. 1, Maersk noted that only by the mid-2030s would it be more expensive to use fossil fuels on ships rather than green fuels. “We continue to strongly urge the International Maritime Organization’s (IMO’s) member states to level the playing field by adopting a global green fuel standard and an ambitious pricing mechanism which the industry urgently needs,” Boulos said. Member states of the IMO are working on reaching an agreement on the <a href="https://www.joc.com/article/midterm-emissions-plan-to-take-center-stage-at-upcoming-imo-meeting-5731399">proposed midterm measures</a> before they are approved at the MEPC 83 meeting in April 2025, with adoption of the measures in October next year. If the IMO is not able to roll out the midterm measures in autumn next year, there are fears the maritime industry will not be able to meet its interim targets. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Maersk has signed a long-term bio-methanol supply agreement with China’s LONGi Green Energy Technology Co. as the carrier works toward securing enough green fuel to power its fast-growing dual-fuel fleet. The carrier has taken delivery of seven dual-fuel, methanol-capable 16,592-TEU ships from an 18-vessel order. With this latest supply deal, the combined methanol offtake agreements Maersk has in place so far will meet half the demand from its fleet in 2027. “While we believe that the future of global logistics will see several pathways to net-zero, this agreement underscores the continued momentum for methanol projects that are pursued by ambitious developers across markets,” Emma Mazhari, head of energy markets at A.P. Moller-Maersk, said in a statement Wednesday. The need for ocean carriers to secure supply agreements for green fuels — particularly methanol and LNG — is becoming more urgent, with almost 80% of the total 1.7 million TEUs of ship orders made so far this year being for vessels capable of sailing on methanol or LNG, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. The ordered vessels are steadily coming online, and although they can sail on conventional bunker fuel in the meantime, meeting both internal and regulatory emissions targets will largely depend on operating on green fuels. Deep dive into methanol The agreement with Henan-based LONGi continues Maersk’s deep dive into methanol. But growing uncertainty over the future supply of low- or zero-carbon fuels has seen the carrier expanding its alternative fuels portfolio into areas once regarded as out of bounds, such as liquefied natural gas (LNG). The need to keep fuel options open and avoid being locked into one pathway was illustrated in a recent Maersk order for dual-fuel vessels totaling 800,000 TEUs capable of sailing on methanol as well as LNG. In an interview with the Journal of Commerce earlier this month, Morten Bo Christiansen, Maersk’s head of decarbonization, said including LNG-capability in the carrier’s dual-fuel fleet is designed to bring in a wider mix of fuels. “When we look at our road map to decarbonize and meet our science-based targets, it is methanol that plays the big role,” Christiansen said. “We expect to get some biomethane [a cleaner version of LNG], but we are still relying mostly on methanol because we have a reasonable certainty that we can get those green fuels at a reasonable cost. “We already have one deal of half a million [metric tons] secured , and we have a rather promising pipeline of green methanol,” he added. Ammonia is increasingly being included in container shipping decarbonization conversations, with classification society DNV on Wednesday approving in principle a 15,000-TEU ammonia-fueled vessel design by Hyundai Heavy Industries. China in a ‘pioneering role’ Maersk did not disclose the volume that will be produced by LONGi’s central China plant, but the supply will begin in 2026 with full production by the end of the decade. The bio-methanol will be produced from agricultural residues such as straw and fruit tree cuttings. “China continues to play a pioneering role, and it is encouraging to also see strong market developments in other geographies as well,” Mazhari noted, adding that the carrier was involved in “several promising projects.” While Maersk moves to lock in supply of methanol, the fuel remains three to four times more expensive per ton than low sulfur fuel oil, a price differential that must be lowered, Rabab Raafat Boulos, COO at A.P. Moller-Maersk, said in Wednesday’s statement. “Global shipping’s main net-zero challenge is the price gap between fossil fuels and the alternatives with lower greenhouse gas emissions,” he noted. Even with current regulatory tools in place such as the European Union’s Emissions Trading System (ETS) and FuelEU Maritime fuel intensity rules that will be applied from Jan. 1, Maersk noted that only by the mid-2030s would it be more expensive to use fossil fuels on ships rather than green fuels. “We continue to strongly urge the International Maritime Organization’s (IMO’s) member states to level the playing field by adopting a global green fuel standard and an ambitious pricing mechanism which the industry urgently needs,” Boulos said. Member states of the IMO are working on reaching an agreement on the proposed midterm measures before they are approved at the MEPC 83 meeting in April 2025, with adoption of the measures in October next year. If the IMO is not able to roll out the midterm measures in autumn next year, there are fears the maritime industry will not be able to meet its interim targets. Contact Greg Knowler at greg.knowler@spglobal.com .

Maersk secures long-term methanol supply in China production deal

<div class="phx-topic abstract-wrapper">The port will see almost half of its container capacity go offline beginning Thursday as the local longshore union declares an unlimited strike against two of Montreal’s largest marine terminals.</div>

The port will see almost half of its container capacity go offline beginning Thursday as the local longshore union declares an unlimited strike against two of Montreal’s largest marine terminals.

<div class="phx-topic">Two marine terminals handling Mediterranean Shipping Co.’s Montreal container services face a work stoppage starting this week after longshore workers there voted to authorize an indefinite strike targeting nearly half of the port’s container capacity. Termont International said Monday that Local 375 of the Canadian Union of Public Employees (CUPE) notified it that an “unlimited strike” will occur at Montreal’s Maisonneuve and Viau terminals starting Thursday at 11 AM local time. The terminal operator urged shippers with cargo at both terminals to schedule pickups by Wednesday evening. The strike at the two terminals will idle more than 1 million TEUs of Montreal’s total 2.3 million TEUs in terminal capacity. The port’s two other international container terminals, Racine and Cast, won’t be affected by the work stoppage. Termont, a joint venture between MSC’s Terminal Investment Limited, SSA Marine and Canadian stevedore Logistec, primarily handles MSC’s trans-Atlantic and north-south services into Montreal. The services include the Montreal Express 1 from Italy, the Med Canadian service and the Canada Gulf Bridge service that spans Mexico and US Gulf ports. MSC’s current schedule shows at least four of its ships — Anya, Celine, Nahara and England — scheduled to arrive at the Termont terminals by the end of the week. Another two ships in MSC services — Levina III and OOCL St. Lawrence — are scheduled to arrive at Montreal’s other terminals. Local 375’s latest labor action represents a further escalation of pressure tactics against the Maritime Employers Association (MEA), which has yet to agree on a new contract covering the port’s 1,200 longshore workers. Local 375 also started <a href="https://www.joc.com/article/montreal-says-congestion-risk-grows-as-dockworkers-refuse-overtime-5751118">an ongoing boycott of overtime work</a> at the port and held <a href="https://www.joc.com/article/port-of-montreal-to-face-three-day-strike-against-two-terminals-next-week-5737483">a three-day work stoppage at the Viau and Maisonneuve terminals</a> at the start of October. This past Sunday, Local 375 conducted <a href="https://www.joc.com/article/montreal-dockworkers-plan-one-day-port-strike-on-sunday-5773614">a one-day, port-wide strike at Montreal</a>. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>. </div>

Two marine terminals handling Mediterranean Shipping Co.’s Montreal container services face a work stoppage starting this week after longshore workers there voted to authorize an indefinite strike targeting nearly half of the port’s container capacity. Termont International said Monday that Local 375 of the Canadian Union of Public Employees (CUPE) notified it that an “unlimited strike” will occur at Montreal’s Maisonneuve and Viau terminals starting Thursday at 11 AM local time. The terminal operator urged shippers with cargo at both terminals to schedule pickups by Wednesday evening. The strike at the two terminals will idle more than 1 million TEUs of Montreal’s total 2.3 million TEUs in terminal capacity. The port’s two other international container terminals, Racine and Cast, won’t be affected by the work stoppage. Termont, a joint venture between MSC’s Terminal Investment Limited, SSA Marine and Canadian stevedore Logistec, primarily handles MSC’s trans-Atlantic and north-south services into Montreal. The services include the Montreal Express 1 from Italy, the Med Canadian service and the Canada Gulf Bridge service that spans Mexico and US Gulf ports. MSC’s current schedule shows at least four of its ships — Anya, Celine, Nahara and England — scheduled to arrive at the Termont terminals by the end of the week. Another two ships in MSC services — Levina III and OOCL St. Lawrence — are scheduled to arrive at Montreal’s other terminals. Local 375’s latest labor action represents a further escalation of pressure tactics against the Maritime Employers Association (MEA), which has yet to agree on a new contract covering the port’s 1,200 longshore workers. Local 375 also started an ongoing boycott of overtime work at the port and held a three-day work stoppage at the Viau and Maisonneuve terminals at the start of October. This past Sunday, Local 375 conducted a one-day, port-wide strike at Montreal . Contact Michael Angell at michael.angell@spglobal.com .

Montreal dockworkers target MSC’s terminals for strike this week

<div class="phx-topic abstract-wrapper">It is the second major port investment the Marseilles-based carrier has made recently after paying $1.2 billion last month for a majority stake in Brazil’s largest terminal operator.</div>

It is the second major port investment the Marseilles-based carrier has made recently after paying $1.2 billion last month for a majority stake in Brazil’s largest terminal operator.

<div class="phx-topic">CMA CGM said Tuesday it has signed a joint venture deal with Moroccan port operator Marsa Maroc to equip and operate half the Nador West Med container terminal near the Gibraltar mouth of the Mediterranean. It is the second major port investment the Marseilles-based carrier has made recently after <a href="https://www.joc.com/article/cma-cgm-moves-to-take-over-top-brazilian-terminal-operator-5732689">paying $1.2 billion last month for a majority stake</a> in Brazil’s largest terminal operator Santos Brasil. Rodolphe Saadé, chairman and CEO of the CMA CGM Group, said in a statement Morocco was positioning itself as “a strategic logistics and port hub with strong growth potential.” “The partnership we are entering into with Marsa Maroc marks a key step for the CMA CGM Group, strengthening our presence through the Nador West Med container terminal,” Saadé said. ”Our ambition is to support the country’s development, particularly in the forward-looking sectors of logistics and alternative energies,” he added. The joint venture covers one-half of the Nador West Med container terminal, giving CMA CGM control of 750 meters of quay with a maximum draught of 18 meters, in addition to 35 hectares of an adjacent container yard. Within the framework of a 25-year sub-concession, CMA CGM and Marsa Maroc will jointly invest $280 million into the terminal with the aim of achieving annual output of 1.2 million TEUs. CMA CGM did not provide a timeframe for when that volume target would be reached. CMA CGM has had a long-standing presence in Morocco. Through its subsidiary Terminal Link, the carrier owns 100% of a Casablanca terminal and a 40% stake in the Eurogate Tangiers terminal. “This is a clear strategic path for many of the carriers that need to ensure they have access to terminals they own to avoid supply chain disruption,” Peter Sand, chief analyst at rate benchmarking platform Xeneta, told the Journal of Commerce Tuesday when commenting on the deal. “Interesting to see CMA CGM being more aggressive in this area, but it fits well with a strategy to build up transshipment capacity in Morocco,” Sand added. West Mediterranean terminals have become important transshipment hubs for cargo destined for southern Europe. With the Red Sea mostly unavailable to commercial shipping amid ongoing militant attacks, southern Europe and East Mediterranean cargo is offloaded in terminals at ports such as Tanger Med, Algeciras and Barcelona for onward shipment. Surging volume earlier in the year placed those <a href="https://www.joc.com/article/bottlenecks-flare-in-barcelona-as-port-battles-rise-in-transshipment-volumes-5244343">ports under extreme pressure, especially Barcelona</a>, which is a destination port not suited to large transshipment volume. Nador West Med is also earmarked as a maritime bunkering hub for new synthetic energies in the Mediterranean, including e-methane and e-methanol that will fuel CMA CGM’s growing fleet of dual-fuel LNG and methanol vessels. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

CMA CGM said Tuesday it has signed a joint venture deal with Moroccan port operator Marsa Maroc to equip and operate half the Nador West Med container terminal near the Gibraltar mouth of the Mediterranean. It is the second major port investment the Marseilles-based carrier has made recently after paying $1.2 billion last month for a majority stake in Brazil’s largest terminal operator Santos Brasil. Rodolphe Saadé, chairman and CEO of the CMA CGM Group, said in a statement Morocco was positioning itself as “a strategic logistics and port hub with strong growth potential.” “The partnership we are entering into with Marsa Maroc marks a key step for the CMA CGM Group, strengthening our presence through the Nador West Med container terminal,” Saadé said. ”Our ambition is to support the country’s development, particularly in the forward-looking sectors of logistics and alternative energies,” he added. The joint venture covers one-half of the Nador West Med container terminal, giving CMA CGM control of 750 meters of quay with a maximum draught of 18 meters, in addition to 35 hectares of an adjacent container yard. Within the framework of a 25-year sub-concession, CMA CGM and Marsa Maroc will jointly invest $280 million into the terminal with the aim of achieving annual output of 1.2 million TEUs. CMA CGM did not provide a timeframe for when that volume target would be reached. CMA CGM has had a long-standing presence in Morocco. Through its subsidiary Terminal Link, the carrier owns 100% of a Casablanca terminal and a 40% stake in the Eurogate Tangiers terminal. “This is a clear strategic path for many of the carriers that need to ensure they have access to terminals they own to avoid supply chain disruption,” Peter Sand, chief analyst at rate benchmarking platform Xeneta, told the Journal of Commerce Tuesday when commenting on the deal. “Interesting to see CMA CGM being more aggressive in this area, but it fits well with a strategy to build up transshipment capacity in Morocco,” Sand added. West Mediterranean terminals have become important transshipment hubs for cargo destined for southern Europe. With the Red Sea mostly unavailable to commercial shipping amid ongoing militant attacks, southern Europe and East Mediterranean cargo is offloaded in terminals at ports such as Tanger Med, Algeciras and Barcelona for onward shipment. Surging volume earlier in the year placed those ports under extreme pressure, especially Barcelona , which is a destination port not suited to large transshipment volume. Nador West Med is also earmarked as a maritime bunkering hub for new synthetic energies in the Mediterranean, including e-methane and e-methanol that will fuel CMA CGM’s growing fleet of dual-fuel LNG and methanol vessels. Contact Greg Knowler at greg.knowler@spglobal.com .

CMA CGM shores up West Med transshipment capacity with Moroccan JV

<div class="phx-topic abstract-wrapper">The container shipping industry has been slow to innovate its core commercial and customer service product, according to Jeremy Masters.</div>

The container shipping industry has been slow to innovate its core commercial and customer service product, according to Jeremy Masters.

<div class="phx-topic">Many companies aspire to innovate. Leading the pack, however, has some risks and costs attached and the edge gained by the first adopter is often short-lived. Strictly within the liner shipping space, there is a good case to say that Maersk has been the most innovative carrier since the start of containerization. Fast ships, bigger ships, frequent service, terminal ownership and alternative fuels are just some of the areas in which they have been early instigators. The initiatives Maersk took in the physical realm have proved to be easily copyable, but not necessarily valuable enough to their clients to command the kind of premium that would make them economic. Being first out of the blocks with each iteration of bigger ships certainly gave Maersk scale advantage for a long time, but that period has passed. Owning an intrinsic part of their gate-to-gate product — terminals (through APM) — makes natural sense and has enabled Maersk to control cost and service in key gateways. It has looked even more valuable in recent years in giving them some control in a turbulent world (with ships arriving off-window), and is high-profile in the upcoming Gemini deployments and a key sell within their integrated logistics business. Many carriers, however, now have significant terminal interests, so whatever edge it has historically given has reduced over time. It is, of course, early days in alternative fuels, but the bet Maersk <a href="https://www.joc.com/article/maersk-secures-long-term-methanol-supply-in-china-production-deal-5781961">has taken on methanol is certainly innovative</a>. And given the cost of ships, the lack of operating track record with this fuel type and question marks over supply, it could even be described as courageous. Whether their leadership on this alternative fuel type at least proves to be a winner, only time will tell. In the meantime, the other carriers will spread their risk and learn from Maersk’s experience. Maersk’s venture with integrated logistics is business transformation rather than innovation, but it again reflects their sustained commitment to putting their money where their mouth is. This is certainly commendable and has had a positive impact on the industry. Whether innovation has benefited them over the long haul seems to be a mixed story, and the latest dramatic throws of the dice could end up with some violently different outcomes. <h3>Slow to innovate </h3>Other carriers have also adapted their physical products significantly, and some have horizontally integrated and diversified. The industry has been slow, however, to innovate its core commercial and customer service product. Indeed, what you get today in some key areas is not hugely different from 20 years ago. Carriers have certainly invested heavily in e-commerce, and this has created a better channel to offer some of their services and has provided some process efficiencies. For some routine processes, it might even have improved service. But many carrier clients would argue that the corresponding reduction in skilled human beings at customer service desks has worsened customer service where it counts — dealing with a problem — and has moved work to them.Carriers will undoubtedly explore AI in areas such as network design and scheduling. AI should also help make pricing more objectively reflect all the quantifiable factors available. This will inevitably mean pushing clients — particularly spot ones — to online answers even if the exceptions have to be dealt with differently. This may be more efficient, more accurate and a good adoption of new technology, but it is not particularly innovative. <h3>Mixed results </h3>By contrast, in the airline industry, e-commerce was used to innovate the core pricing and reservation product (i.e. if you pay today and book up to a year ahead, you get a beneficial price and committed space). Low-cost airlines have been able to differentiate themselves by creating a very lean version of this model. Even though this kind of product, at whatever service level it’s pitched, could be very useful to the liner industry as a more definitive space protection facility and as a price hedging tool, there is nothing comparable. The answer to whether innovation pays in liner shipping is mixed. Investments in evolution of the physical product (including terminals) have given some sustained rewards, but limited edge over competitors rapidly copying each development. Innovations in the deployment of ships have arguably yielded minimal return because they tended to cost more, and clients didn’t ultimately want to pay the required premium. In the areas of innovation where there are the biggest risks and the biggest rewards — the commercial product and, in particular, the management of forward pricing and space protection — there has been minimal innovation from carriers. This is an area ripe for an outside disruptor, so carriers should think more radically. Contact Jeremy Masters at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

Many companies aspire to innovate. Leading the pack, however, has some risks and costs attached and the edge gained by the first adopter is often short-lived. Strictly within the liner shipping space, there is a good case to say that Maersk has been the most innovative carrier since the start of containerization. Fast ships, bigger ships, frequent service, terminal ownership and alternative fuels are just some of the areas in which they have been early instigators. The initiatives Maersk took in the physical realm have proved to be easily copyable, but not necessarily valuable enough to their clients to command the kind of premium that would make them economic. Being first out of the blocks with each iteration of bigger ships certainly gave Maersk scale advantage for a long time, but that period has passed. Owning an intrinsic part of their gate-to-gate product — terminals (through APM) — makes natural sense and has enabled Maersk to control cost and service in key gateways. It has looked even more valuable in recent years in giving them some control in a turbulent world (with ships arriving off-window), and is high-profile in the upcoming Gemini deployments and a key sell within their integrated logistics business. Many carriers, however, now have significant terminal interests, so whatever edge it has historically given has reduced over time. It is, of course, early days in alternative fuels, but the bet Maersk has taken on methanol is certainly innovative . And given the cost of ships, the lack of operating track record with this fuel type and question marks over supply, it could even be described as courageous. Whether their leadership on this alternative fuel type at least proves to be a winner, only time will tell. In the meantime, the other carriers will spread their risk and learn from Maersk’s experience. Maersk’s venture with integrated logistics is business transformation rather than innovation, but it again reflects their sustained commitment to putting their money where their mouth is. This is certainly commendable and has had a positive impact on the industry. Whether innovation has benefited them over the long haul seems to be a mixed story, and the latest dramatic throws of the dice could end up with some violently different outcomes. Slow to innovate Other carriers have also adapted their physical products significantly, and some have horizontally integrated and diversified. The industry has been slow, however, to innovate its core commercial and customer service product. Indeed, what you get today in some key areas is not hugely different from 20 years ago. Carriers have certainly invested heavily in e-commerce, and this has created a better channel to offer some of their services and has provided some process efficiencies. For some routine processes, it might even have improved service. But many carrier clients would argue that the corresponding reduction in skilled human beings at customer service desks has worsened customer service where it counts — dealing with a problem — and has moved work to them. Carriers will undoubtedly explore AI in areas such as network design and scheduling. AI should also help make pricing more objectively reflect all the quantifiable factors available. This will inevitably mean pushing clients — particularly spot ones — to online answers even if the exceptions have to be dealt with differently. This may be more efficient, more accurate and a good adoption of new technology, but it is not particularly innovative. Mixed results By contrast, in the airline industry, e-commerce was used to innovate the core pricing and reservation product (i.e. if you pay today and book up to a year ahead, you get a beneficial price and committed space). Low-cost airlines have been able to differentiate themselves by creating a very lean version of this model. Even though this kind of product, at whatever service level it’s pitched, could be very useful to the liner industry as a more definitive space protection facility and as a price hedging tool, there is nothing comparable. The answer to whether innovation pays in liner shipping is mixed. Investments in evolution of the physical product (including terminals) have given some sustained rewards, but limited edge over competitors rapidly copying each development. Innovations in the deployment of ships have arguably yielded minimal return because they tended to cost more, and clients didn’t ultimately want to pay the required premium. In the areas of innovation where there are the biggest risks and the biggest rewards — the commercial product and, in particular, the management of forward pricing and space protection — there has been minimal innovation from carriers. This is an area ripe for an outside disruptor, so carriers should think more radically. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Carriers need more radical thinking when it comes to innovation

<div class="phx-topic abstract-wrapper">Despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for shippers to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market, writes Kristian Ording, consultant and former logistics director </div>

Despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for shippers to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market, writes Kristian Ording, consultant and former logistics director

<div class="phx-topic">Over the past few years, the lack of true partnership in international container shipping has been laid bare. Carriers are quick to point fingers at shippers bailing from contracted rates to dip into spot market bookings during slack season or when the supply/demand balance is out of whack. Shippers turn that around, pointing to times when carriers have refused bookings during peak seasons or when geopolitical or weather-related disruptions disproportionately impact supply. And so, back and forth it goes with no real end in sight. Is there a solution? Can true partnerships be built, trusted and maintained? The answer is not always, and attempts can lead to frustration, but they are decidedly worth it for shippers trying to get the most value out of their ocean container supply chains. An anecdote helps explain. In 2014, I had the opportunity to speak on a procurement panel at TPM. At that time, we had a decentralized operating environment but a centralized procurement team responsible for gathering, leveraging and contracting all requirements for 10 individual business units across direct and indirect categories. Our approach was to bring historically decentralized negotiation processes together, resulting in master contracts at the corporate level featuring consistent key terms for each of the businesses — for ocean freight matters such as floating bunker, payment terms, free time, etc. While our process was certainly more analytical and pragmatic in nature, we did spend quite a lot of time building relationships and eventually what felt like partnerships across several carriers. This included developing a virtual quarterly business review (QBR) process and in-person annual reviews at the carrier headquarters in Europe and Asia to track contract progress and maintain open dialogue at senior levels. In August 2017, following our company’s merger with another large consumer package goods company, our team coordinated meetings with our top carriers and non-vessel operating common carriers to present our integrated company but also, in the spirit of partnership, to directly request feedback regarding best practices and what we could be doing better as we combined our approaches. We solicited feedback regarding our legacy request for proposals (RFPs), but also about contracting, key terms and post RFQ items such as allocation management, QBR cadence, etc. I’m not one to ever shy away from a good pun, and we had special labels printed on Yankee Candles featuring our new company logo and the phrase “Shoring Up the PartnerShip.” Our team took the time over the course of a week to host the carriers in our corporate headquarters with the intention of gathering feedback to ultimately build stronger partnerships. Some insight from the carriers were that longer term contracts would add value. Also, forecasting shipments further out and more accurately would help pre-confirm our space. Later in the year, we followed up those meetings with in-person meetings at the carrier headquarters in Europe and then also in Asia and further incorporated elements from these meetings into our process. Our 2018 RFP incorporated much of what the carriers had suggested to build stronger partnerships. One key item was building a biweekly, eight-week, forward-looking forecasting system starting with our trans-Pacific volumes that would be communicated directly to the carriers’ origin offices. As our businesses operated in separate ERPs, all the information had to be normalized and converted to a meaningful container forecast. Consolidating business unit container forecasts on a week, container size, lane, carrier basis process took a lot of effort, but the hope was that there would be real mutual value on the other side. Some carriers were quick to engage with our forecasting process, every two weeks confirming or denying each updated allocation using our requested format and approach. Our forwarders and booking entities were instructed to document any booking rejection including a reason code. We also built an internal mechanism to analyze successive forecasts against previous ones but more importantly to monitor actual bookings against forecasts. This information was then included in our carrier QBRs to elevate transparency and foster trust. Did taking these steps help build partnerships, and, at the end of the day, help confirm space on the ships? Sometimes. We built and refined the forecasting process and continued allocations during both slack and peak, lower market and higher market. However, as capacity tightened, unfortunately many of the carriers resorted to not confirming forecasts until the last minute, and in some cases either not confirming at all or accepting less bookings than forecast (and at times even than allocated). In other words, we tried but didn’t quite get there with all our partners. Should we continue trying? Absolutely. At the end of the day, the keys to partnership are communication and trust. One is relatively easy to do and maintain. The other takes many, many years to build and can unfortunately evaporate very quickly. That said, despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for beneficial cargo owners to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market. I hope shippers keep this in mind as we all gear up for the 2025 contracting cycle. Kristian Ording, a consultant who led global logistics and procurement at Newell Brands and most recently at Element Solutions, can be reached at <a href="ordingassociates@gmail.com">ordingassociates@gmail.com</a>.</div>

Over the past few years, the lack of true partnership in international container shipping has been laid bare. Carriers are quick to point fingers at shippers bailing from contracted rates to dip into spot market bookings during slack season or when the supply/demand balance is out of whack. Shippers turn that around, pointing to times when carriers have refused bookings during peak seasons or when geopolitical or weather-related disruptions disproportionately impact supply. And so, back and forth it goes with no real end in sight. Is there a solution? Can true partnerships be built, trusted and maintained? The answer is not always, and attempts can lead to frustration, but they are decidedly worth it for shippers trying to get the most value out of their ocean container supply chains. An anecdote helps explain. In 2014, I had the opportunity to speak on a procurement panel at TPM. At that time, we had a decentralized operating environment but a centralized procurement team responsible for gathering, leveraging and contracting all requirements for 10 individual business units across direct and indirect categories. Our approach was to bring historically decentralized negotiation processes together, resulting in master contracts at the corporate level featuring consistent key terms for each of the businesses — for ocean freight matters such as floating bunker, payment terms, free time, etc. While our process was certainly more analytical and pragmatic in nature, we did spend quite a lot of time building relationships and eventually what felt like partnerships across several carriers. This included developing a virtual quarterly business review (QBR) process and in-person annual reviews at the carrier headquarters in Europe and Asia to track contract progress and maintain open dialogue at senior levels. In August 2017, following our company’s merger with another large consumer package goods company, our team coordinated meetings with our top carriers and non-vessel operating common carriers to present our integrated company but also, in the spirit of partnership, to directly request feedback regarding best practices and what we could be doing better as we combined our approaches. We solicited feedback regarding our legacy request for proposals (RFPs), but also about contracting, key terms and post RFQ items such as allocation management, QBR cadence, etc. I’m not one to ever shy away from a good pun, and we had special labels printed on Yankee Candles featuring our new company logo and the phrase “Shoring Up the PartnerShip.” Our team took the time over the course of a week to host the carriers in our corporate headquarters with the intention of gathering feedback to ultimately build stronger partnerships. Some insight from the carriers were that longer term contracts would add value. Also, forecasting shipments further out and more accurately would help pre-confirm our space. Later in the year, we followed up those meetings with in-person meetings at the carrier headquarters in Europe and then also in Asia and further incorporated elements from these meetings into our process. Our 2018 RFP incorporated much of what the carriers had suggested to build stronger partnerships. One key item was building a biweekly, eight-week, forward-looking forecasting system starting with our trans-Pacific volumes that would be communicated directly to the carriers’ origin offices. As our businesses operated in separate ERPs, all the information had to be normalized and converted to a meaningful container forecast. Consolidating business unit container forecasts on a week, container size, lane, carrier basis process took a lot of effort, but the hope was that there would be real mutual value on the other side. Some carriers were quick to engage with our forecasting process, every two weeks confirming or denying each updated allocation using our requested format and approach. Our forwarders and booking entities were instructed to document any booking rejection including a reason code. We also built an internal mechanism to analyze successive forecasts against previous ones but more importantly to monitor actual bookings against forecasts. This information was then included in our carrier QBRs to elevate transparency and foster trust. Did taking these steps help build partnerships, and, at the end of the day, help confirm space on the ships? Sometimes. We built and refined the forecasting process and continued allocations during both slack and peak, lower market and higher market. However, as capacity tightened, unfortunately many of the carriers resorted to not confirming forecasts until the last minute, and in some cases either not confirming at all or accepting less bookings than forecast (and at times even than allocated). In other words, we tried but didn’t quite get there with all our partners. Should we continue trying? Absolutely. At the end of the day, the keys to partnership are communication and trust. One is relatively easy to do and maintain. The other takes many, many years to build and can unfortunately evaporate very quickly. That said, despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for beneficial cargo owners to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market. I hope shippers keep this in mind as we all gear up for the 2025 contracting cycle. Kristian Ording, a consultant who led global logistics and procurement at Newell Brands and most recently at Element Solutions, can be reached at ordingassociates@gmail.com .

BCO partnerships with carriers often fail but are still critical

Shanghai to N. Europe

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Y-o-Y: {N_Europe_YoY.formatNumber("##.#'%'")}

 Shanghai to Mediterranean

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{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {Med_YoY.formatNumber("##.#'%'")}

The Shanghai Shipping Exchange’s (SSE) Shanghai Containerized Freight Index (SCFI) reflects spot rates and associated seaborne charges for containerized exports from Shanghai. The SCFI includes indices of freight rates in 13 individual shipping routes and a composite index, using Oct. 16, 2009, as the base period (Oct. 16, 2009 = 1000). [SSE](https://en.sse.net.cn/indices/scfinew.jsp)

Shanghai to North Europe and Mediterranean container spot rates (SSE)

Shanghai to Europe container spot rates (SCFI-Weekly) Gateway

<div class="phx-topic abstract-wrapper">Maritime employers and the longshore union representing dockworkers along the US East and Gulf coasts will restart negotiations in New Jersey next month, with automation the main issue at hand. </div>

Maritime employers and the longshore union representing dockworkers along the US East and Gulf coasts will restart negotiations in New Jersey next month, with automation the main issue at hand.

<div class="phx-topic">The International Longshoremen’s Association (ILA) and maritime employers along the US East and Gulf coasts said Friday they will resume negotiations in November on the remaining terms of a new master contract following a tentative wage deal that ended a three-day dockworkers strike earlier this month. The ILA and the United States Maritime Alliance (USMX) said in a joint statement talks will take place in New Jersey next month on a six-year master contract. After settling on <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">a wage offer on Oct. 3 that would increase longshore pay 62%</a>, the two sides agreed to a contract extension until Jan. 15 to negotiate other outstanding issues. “The ILA and USMX welcome the opportunity to return to the bargaining table and get a new agreement in place as soon as possible,” the two sides said in the statement, adding that no further details about the negotiations will be available prior to those meetings. The biggest remaining issue has to do with contractual language around <a href="https://www.joc.com/article/us-port-automation-holds-promise-but-hardly-a-sure-shot-5772709">the use of marine terminal automation and new technology</a>. Under the previous master contract that expired at the end of September, the ILA and USMX allowed marine terminals to implement semi-automated equipment provided that both the union and terminal agreed on staffing. But it completely barred the development of fully automated terminals. The ILA has struck a more hardline tone during this bargaining cycle, calling for <a href="https://www.joc.com/article/ilas-daggett-promises-dockworkers-great-contract-as-strike-begins-5739618">a ban on the use of any type of automation</a>. “The ILA is steadfastly against any form of automation — full or semi — that replaces jobs or historical work functions,” the union said in an Oct. 1 statement, <a href="https://www.joc.com/article/ilas-daggett-promises-dockworkers-great-contract-as-strike-begins-5739618">the day its members walked off the job</a>. “We will not accept the loss of work and livelihood for our members due to automation.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The International Longshoremen’s Association (ILA) and maritime employers along the US East and Gulf coasts said Friday they will resume negotiations in November on the remaining terms of a new master contract following a tentative wage deal that ended a three-day dockworkers strike earlier this month. The ILA and the United States Maritime Alliance (USMX) said in a joint statement talks will take place in New Jersey next month on a six-year master contract. After settling on a wage offer on Oct. 3 that would increase longshore pay 62% , the two sides agreed to a contract extension until Jan. 15 to negotiate other outstanding issues. “The ILA and USMX welcome the opportunity to return to the bargaining table and get a new agreement in place as soon as possible,” the two sides said in the statement, adding that no further details about the negotiations will be available prior to those meetings. The biggest remaining issue has to do with contractual language around the use of marine terminal automation and new technology . Under the previous master contract that expired at the end of September, the ILA and USMX allowed marine terminals to implement semi-automated equipment provided that both the union and terminal agreed on staffing. But it completely barred the development of fully automated terminals. The ILA has struck a more hardline tone during this bargaining cycle, calling for a ban on the use of any type of automation . “The ILA is steadfastly against any form of automation — full or semi — that replaces jobs or historical work functions,” the union said in an Oct. 1 statement, the day its members walked off the job . “We will not accept the loss of work and livelihood for our members due to automation.” Contact Michael Angell at michael.angell@spglobal.com .

ILA, USMX say to resume talks on new master contract in November

<div class="phx-topic abstract-wrapper">The recent rise in volume to Europe contrasts sharply with China-to-US tonnage that in the second half has fallen far below year-over-year levels following greater scrutiny by US authorities on e-commerce imports.</div>

The recent rise in volume to Europe contrasts sharply with China-to-US tonnage that in the second half has fallen far below year-over-year levels following greater scrutiny by US authorities on e-commerce imports.

<div class="phx-topic">Air cargo rates and tonnage from Asia to Europe picked up sharply in October as rising demand for e-commerce shook off the slow buildup to peak season that typically follows China’s Golden Week holidays. But the recent rise in volume to Europe contrasts sharply with China-to-US tonnage that in the second half of 2024 has fallen far below year-over-year levels following greater scrutiny by US authorities on imports using the so-called “de minimis” exemption from duties. “That decline appears to have been triggered by tighter Customs rules and checks since July on inbound US air cargo traffic from China, especially at Los Angeles airport,” Netherlands-based air freight analyst WorldACD said in a market update Friday. Data shows China-Los Angeles tonnage for the week ended Oct. 20 (week 42) was down 37% year over year. A significant proportion of e-commerce shipments are routed through Hong Kong, and with global online shopping promotions such as China’s Singles Day, Black Friday and Cyber Monday just around the corner in November, as well as several new smart phone launches, rates and demand have begun to rise, significantly so on the China-Europe trade lane. “The consistent strengthening of the Hong Kong-to-Europe market in the last six weeks, despite the normally dampening effects of China’s Golden Week holiday period at the start of October, is one of the earliest and only indicators of a potential significant fourth quarter air cargo peak season emerging this year,” WorldACD said. Average spot rates from Hong Kong to Europe in the last seven weeks rose above the $5 per kilogram level, to $5.15/kg for the week ended Oct. 20, with China-to-Europe spot rates at $4.29/kg. Both trade lanes are 13% above last year’s levels. Tonnage from Hong Kong to Europe in week 42 was up 25% on the already strong levels in the same week last year, with tonnage through the first three weeks of October up 12% sequentially compared to the average weekly volume moved in September. The Baltic Air Index (BAI) assessed average spot rates from Shanghai to North Europe this week at $4.52/kg, the highest rate level on the trade lane this year and up 19% on the same week in 2023. Bogen Chi, director of air freight at C.H. Robinson, said elevated air freight demand has continued for three quarters and shows no signs of slowing as the end of year approaches. “Booming demand for e-commerce from Asia, air diversions from disruptions in the Red Sea and shippers using air to mitigate the effects of the US East and Gulf coast port strike have all contributed to the usual peak season,” Chi said in a customer advisory this week. Decline in China-US tonnage Although Asia-to-US air cargo demand has risen steadily since the Golden Week holidays, China-US tonnage alone was down 18% year over year last week, part of a wider pattern of a decline in tonnage on the trans-Pacific in the second half that WorldACD believes was triggered by growing US scrutiny on e-commerce imports. The White House in July proposed a rule that would <a href="https://www.joc.com/article/white-house-takes-aim-at-growing-threat-of-de-minimis-imports-5727350">apply section 301 tariffs to de minimis shipments</a>, a part of US trade law that allows single shipments valued at less than $800 to move duty-free and with fewer data submission requirements. Currently, section 301 tariffs cover approximately 40% of US imports from China, including 70% of Chinese textile and apparel imports. Although the $800 threshold has not yet been lowered, Chi warned air freight importers this week to keep regulatory and compliance issues on their radar. “With the upcoming US election and new security measures anticipated across Europe, more regulatory shifts are likely on the horizon in 2025 and could have an impact on capacity,” he said. “For example, should the de minimis threshold be lowered, air capacity would likely open as most of the e-commerce freight using air now would be at risk of being held at the border,” Chi added. Should capacity be released into the market, it would ease the limited space and lower rates from currently elevated levels, leaving shippers with fixed-rate agreements or chartered-in capacity stuck on prices above the prevailing market. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Air cargo rates and tonnage from Asia to Europe picked up sharply in October as rising demand for e-commerce shook off the slow buildup to peak season that typically follows China’s Golden Week holidays. But the recent rise in volume to Europe contrasts sharply with China-to-US tonnage that in the second half of 2024 has fallen far below year-over-year levels following greater scrutiny by US authorities on imports using the so-called “de minimis” exemption from duties. “That decline appears to have been triggered by tighter Customs rules and checks since July on inbound US air cargo traffic from China, especially at Los Angeles airport,” Netherlands-based air freight analyst WorldACD said in a market update Friday. Data shows China-Los Angeles tonnage for the week ended Oct. 20 (week 42) was down 37% year over year. A significant proportion of e-commerce shipments are routed through Hong Kong, and with global online shopping promotions such as China’s Singles Day, Black Friday and Cyber Monday just around the corner in November, as well as several new smart phone launches, rates and demand have begun to rise, significantly so on the China-Europe trade lane. “The consistent strengthening of the Hong Kong-to-Europe market in the last six weeks, despite the normally dampening effects of China’s Golden Week holiday period at the start of October, is one of the earliest and only indicators of a potential significant fourth quarter air cargo peak season emerging this year,” WorldACD said. Average spot rates from Hong Kong to Europe in the last seven weeks rose above the $5 per kilogram level, to $5.15/kg for the week ended Oct. 20, with China-to-Europe spot rates at $4.29/kg. Both trade lanes are 13% above last year’s levels. Tonnage from Hong Kong to Europe in week 42 was up 25% on the already strong levels in the same week last year, with tonnage through the first three weeks of October up 12% sequentially compared to the average weekly volume moved in September. The Baltic Air Index (BAI) assessed average spot rates from Shanghai to North Europe this week at $4.52/kg, the highest rate level on the trade lane this year and up 19% on the same week in 2023. Bogen Chi, director of air freight at C.H. Robinson, said elevated air freight demand has continued for three quarters and shows no signs of slowing as the end of year approaches. “Booming demand for e-commerce from Asia, air diversions from disruptions in the Red Sea and shippers using air to mitigate the effects of the US East and Gulf coast port strike have all contributed to the usual peak season,” Chi said in a customer advisory this week. Decline in China-US tonnage Although Asia-to-US air cargo demand has risen steadily since the Golden Week holidays, China-US tonnage alone was down 18% year over year last week, part of a wider pattern of a decline in tonnage on the trans-Pacific in the second half that WorldACD believes was triggered by growing US scrutiny on e-commerce imports. The White House in July proposed a rule that would apply section 301 tariffs to de minimis shipments , a part of US trade law that allows single shipments valued at less than $800 to move duty-free and with fewer data submission requirements. Currently, section 301 tariffs cover approximately 40% of US imports from China, including 70% of Chinese textile and apparel imports. Although the $800 threshold has not yet been lowered, Chi warned air freight importers this week to keep regulatory and compliance issues on their radar. “With the upcoming US election and new security measures anticipated across Europe, more regulatory shifts are likely on the horizon in 2025 and could have an impact on capacity,” he said. “For example, should the de minimis threshold be lowered, air capacity would likely open as most of the e-commerce freight using air now would be at risk of being held at the border,” Chi added. Should capacity be released into the market, it would ease the limited space and lower rates from currently elevated levels, leaving shippers with fixed-rate agreements or chartered-in capacity stuck on prices above the prevailing market. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe air cargo demand jumps while ‘de minimis’ scrutiny hampers trans-Pac

<div class="phx-topic abstract-wrapper">Shippers and forwarders are reporting slowdowns at several inland gateways that are linked to seasonality, equipment placement, labor disruption and carrier behavior.</div>

Shippers and forwarders are reporting slowdowns at several inland gateways that are linked to seasonality, equipment placement, labor disruption and carrier behavior.

<div class="phx-topic">The US export market is facing some operational hurdles amid peak season for some agricultural commodities, with shippers saying delays at ports and inland hubs are making it hard to secure equipment and hit berthing windows.Described by sources as an ongoing problem growing worse, shippers and forwarders are reporting slowdowns at several inland gateways, including Minneapolis and Omaha, that are linked to seasonality, equipment placement, <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">labor disruption</a> and carrier behavior.“There isn’t a fundamental difference in [export] volumes this year,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC). “What is more difficult, however, is that in some markets we have carriers engaged in blank sailings, slower sailings and less service.”Still, agriculture export volumes have seen growth of late, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. In August, the most recent data available, US containerized agricultural exports were up 12.5% year over year. According to Sea-Intelligence Maritime Analysis, trans-Pacific westbound reliability had been mostly improving since February, reaching 64.8% in August. In September, however, it dropped to 63.6%, marking the first reduction since April. In addition to inland bottlenecks, exporters point to hurdles faced on a terminal-by-terminal basis, especially at the ports of Los Angeles and Long Beach. “We are seeing a lot of instability in the sailing schedules and heavy congestion on West Coast routings due to all the diverted cargo,” said a non-vessel-operating common carrier (NVO) close to the export trade. “The main challenge right now <a href="https://www.joc.com/article/up-pins-performance-slip-on-communication-gap-over-uswc-cargo-surge-5773561">is poor rail service</a> — especially to the US West Coast, and problems with vessel schedules and space. It’s temporary but very disruptive.”The West Coast delays, made worse by <a href="https://www.joc.com/article/us-west-coast-cargo-surge-boosts-q3-intermodal-numbers-5751694">a third-quarter cargo surge</a>, are risking time-sensitive agriculture exports, a source said. The Pacific Merchant Shipping Association (PMSA) reported that dwell times for rail-bound containers at <a href="https://www.joc.com/article/la-lb-rail-dwells-spike-to-two-year-high-amid-record-imports-in-september-5750222">the ports of Los Angeles and Long Beach rose to 9.25 days on average in September</a>, the highest since October 2022. East Coast export rates softeningExport rates have softened for the trans-Pacific Asia-bound trade out of the East Coast, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Spot rates for cargo bound for North Asia were assessed at $400 per FEU as of Oct. 24, down 11% on the week and down from $550 per FEU one year ago. West Coast export rates were unchanged at $400 per FEU. Despite the decline from the East Coast, sources do not expect further degradation as long as import rates remain around current levels, which impacts carrier margins on exports. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="8438aaef-650a-4928-9f63-315217f3a76e"></dynamic-object></div>Still, the NVO source said shipping schedules that were briefly disrupted by the short-lived strike at East and Gulf coast ports will soon return to a more normal cadence — but that return to normalcy will rely in part on East Coast exports returning to pre-strike levels, especially as West Coast ports continue to work to clear out backlogs. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">Laura.Robb@spglobal.com</a>. </div>

The US export market is facing some operational hurdles amid peak season for some agricultural commodities, with shippers saying delays at ports and inland hubs are making it hard to secure equipment and hit berthing windows. Described by sources as an ongoing problem growing worse, shippers and forwarders are reporting slowdowns at several inland gateways, including Minneapolis and Omaha, that are linked to seasonality, equipment placement, labor disruption and carrier behavior. “There isn’t a fundamental difference in [export] volumes this year,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC). “What is more difficult, however, is that in some markets we have carriers engaged in blank sailings, slower sailings and less service.” Still, agriculture export volumes have seen growth of late, according to PIERS, a sister product of the Journal of Commerce within S&P Global. In August, the most recent data available, US containerized agricultural exports were up 12.5% year over year. According to Sea-Intelligence Maritime Analysis, trans-Pacific westbound reliability had been mostly improving since February, reaching 64.8% in August. In September, however, it dropped to 63.6%, marking the first reduction since April. In addition to inland bottlenecks, exporters point to hurdles faced on a terminal-by-terminal basis, especially at the ports of Los Angeles and Long Beach. “We are seeing a lot of instability in the sailing schedules and heavy congestion on West Coast routings due to all the diverted cargo,” said a non-vessel-operating common carrier (NVO) close to the export trade. “The main challenge right now is poor rail service — especially to the US West Coast, and problems with vessel schedules and space. It’s temporary but very disruptive.” The West Coast delays, made worse by a third-quarter cargo surge , are risking time-sensitive agriculture exports, a source said. The Pacific Merchant Shipping Association (PMSA) reported that dwell times for rail-bound containers at the ports of Los Angeles and Long Beach rose to 9.25 days on average in September , the highest since October 2022. East Coast export rates softening Export rates have softened for the trans-Pacific Asia-bound trade out of the East Coast, according to Platts, a sister company of the Journal of Commerce within S&P Global. Spot rates for cargo bound for North Asia were assessed at $400 per FEU as of Oct. 24, down 11% on the week and down from $550 per FEU one year ago. West Coast export rates were unchanged at $400 per FEU. Despite the decline from the East Coast, sources do not expect further degradation as long as import rates remain around current levels, which impacts carrier margins on exports. Still, the NVO source said shipping schedules that were briefly disrupted by the short-lived strike at East and Gulf coast ports will soon return to a more normal cadence — but that return to normalcy will rely in part on East Coast exports returning to pre-strike levels, especially as West Coast ports continue to work to clear out backlogs. Contact Laura Robb at Laura.Robb@spglobal.com .

US export market navigating ‘disruptive’ peak season amid ag shipment growth

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">The ruling from the Canada Industrial Relations Board said union longshore foremen moved too late in raising the issue of automation’s impact on jobs at the Port of Vancouver.</div>

The ruling from the Canada Industrial Relations Board said union longshore foremen moved too late in raising the issue of automation’s impact on jobs at the Port of Vancouver.

<div class="phx-topic">Longshore foremen knew that new automation was being installed at DP World’s Port of Vancouver marine terminal but failed to negotiate early with maritime employers about the project’s impact on staffing, Canada’s labor tribunal has ruled, determining the foremen’s union bargained in bad faith with maritime employers. The Canada Industrial Relations Board (CIRB) ruled Wednesday in favor of the British Columbia Maritime Employer’s Association (BCMEA), which <a href="https://www.joc.com/article/dp-worlds-centerm-project-at-heart-of-employer-union-dispute-in-vancouver-5225162">filed a bad-faith bargaining complaint against Local 514 of the International Longshore and Warehouse Union in May</a>. Local 514, which represents about 730 longshore foremen throughout British Columbia, was “generally aware that automation of operations at (DP World’s) Centerm terminal was being developed and would be implemented” as early as 2022, the CIRB said. As part of a plan <a href="https://www.joc.com/article/centerm-terminal-expansion-gives-vancouver-critical-boost-in-capacity-5227056">to increase its capacity by 60% to 1.5 million TEUs</a>, Centerm completed the installation of remotely operated rail mounted gantry cranes (RMGs) early in 2023. When Local 514 started to bargain with British Columbia maritime employers for a new collective bargaining agreement that year, it became clear by August that “remote and semi-automated operations of RMGs would result in some changes to the manning model” at Centerm, the CIRB said. However, “the union did not make every reasonable effort to reach a collective agreement by waiting until April 2024” to put forward a proposal on Centerm’s manning, the CIRB said. After the BCMEA filed its complaint with the CIRB, <a href="https://www.joc.com/article/ilwu-canada-illegal-strike-ruling-averts-vancouver-shutdown-5192250">Local 514 held a vote for a strike against the Centerm facility</a>. The CIRB also blocked that move as illegal. The BCMEA said in a statement Wednesday that the decision is the third such ruling against the union, as the CIRB struck down another last-minute proposal about DP World’s Nanaimo terminal in Vancouver. “For almost two years, the BCMEA has proposed comprehensive offers that would have resulted in a competitive and balanced deal to Local 514 members, and if accepted, would have provided all forepersons with significant gains in wages and benefits, without any concession requests from employers,” the BCMEA said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Longshore foremen knew that new automation was being installed at DP World’s Port of Vancouver marine terminal but failed to negotiate early with maritime employers about the project’s impact on staffing, Canada’s labor tribunal has ruled, determining the foremen’s union bargained in bad faith with maritime employers. The Canada Industrial Relations Board (CIRB) ruled Wednesday in favor of the British Columbia Maritime Employer’s Association (BCMEA), which filed a bad-faith bargaining complaint against Local 514 of the International Longshore and Warehouse Union in May . Local 514, which represents about 730 longshore foremen throughout British Columbia, was “generally aware that automation of operations at (DP World’s) Centerm terminal was being developed and would be implemented” as early as 2022, the CIRB said. As part of a plan to increase its capacity by 60% to 1.5 million TEUs , Centerm completed the installation of remotely operated rail mounted gantry cranes (RMGs) early in 2023. When Local 514 started to bargain with British Columbia maritime employers for a new collective bargaining agreement that year, it became clear by August that “remote and semi-automated operations of RMGs would result in some changes to the manning model” at Centerm, the CIRB said. However, “the union did not make every reasonable effort to reach a collective agreement by waiting until April 2024” to put forward a proposal on Centerm’s manning, the CIRB said. After the BCMEA filed its complaint with the CIRB, Local 514 held a vote for a strike against the Centerm facility . The CIRB also blocked that move as illegal. The BCMEA said in a statement Wednesday that the decision is the third such ruling against the union, as the CIRB struck down another last-minute proposal about DP World’s Nanaimo terminal in Vancouver. “For almost two years, the BCMEA has proposed comprehensive offers that would have resulted in a competitive and balanced deal to Local 514 members, and if accepted, would have provided all forepersons with significant gains in wages and benefits, without any concession requests from employers,” the BCMEA said. Contact Michael Angell at michael.angell@spglobal.com .

BC longshore foremen bargained in bad faith: Canada labor board

<div class="phx-topic abstract-wrapper">A report from the US Governmental Accountability Office shows the possible, but narrow, path for adoption of automation at US ports as maritime employers and longshore labor along the East and Gulf coasts attempt to hammer out a new master contract. </div>

A report from the US Governmental Accountability Office shows the possible, but narrow, path for adoption of automation at US ports as maritime employers and longshore labor along the East and Gulf coasts attempt to hammer out a new master contract.

<div class="phx-topic"><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5772658_0.1.jpg"></img></div>A report released this year by the US Congressional watchdog about port automation provides a sobering read, showing the possible, but narrow, path for adoption amid overexuberance over technology’s potential and doomsaying on its impact on labor. That the reality of automation potential at US ports is somewhere in between, as described <a href="https://www.gao.gov/assets/d24106498.pdf">by the US Government Accountability Office (GAO)</a>, is worth remembering in the context of whatever employers and longshore workers <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">agree to or reject come the Jan. 15 deadline</a> for a labor contract along the East and Gulf coasts. The International Longshoremen’s Association (ILA) wants to strike language allowing any degree of automation, while the United States Maritime Alliance (USMX) wants to not only retain the automation allowed in past contracts, but also create a mechanism to consider more in consultation with the union.The GAO report, released in March, details the possibilities of automation, but also the numerous hurdles, including the high costs and opposition from longshore labor, and cases when it’s just not economically feasible. In the report, the feedback from port directors and marine terminal operators highlights the nuances of when automation works, in what form and where. But in some cases, automation can hurt productivity or fail to match that of human labor, the GAO’s survey of stakeholders at the top US ports revealed. Some unidentified US port directors and terminal operators told the GAO it could take a decade or two to recover the investment costs of automation — with the technology potentially becoming outdated during that long wait. Half of the stakeholders interviewed by GAO deemed larger supply chain issues, including cargo visibility and operating hours of nearby warehouses, more pressing than the adoption of automation. Or, as the GAO report noted, based on feedback from a port representative and a terminal operator: "Unless other parts of the supply chain — such as ground transportation and warehousing — can increase the speed and the efficiency of their operations, any gains in capacity or efficiency that terminals make by adopting automated equipment or other approaches will be lost further down the chain.” Yet the release of the GAO report, as required by Congress through the Ocean Shipping Reform Act of 2022 (OSRA-22), also shows how automation can help space-constrained ports and marine terminals squeeze out more functional capacity. Automated gate technologies at the Port of Virginia helped it reduce truck dwells, cutting harmful emissions, according to the report. Separately, the port has also credited its semi-automated stacking cranes at Norfolk International Terminals for helping it better handle import surges. The hard physical separation of the stacking cranes from the drayage trucks also improves safety by reducing the chances of multi-ton equipment hitting drivers and longshore workers. <h3>Process over equipment</h3>Ultimately, it’s automating processes rather than automating equipment that holds the most promise, US port stakeholders told the GAO. So-called port community systems that share key information with terminals, truckers, chassis providers and other stakeholders have reduced trucking dwells and are in place at eight of the top 10 US ports, according to the report. But when it comes to the next level of automation processing, such as adopting AI and machine learning, US ports lag their top foreign counterparts, the GAO report concluded. US ports lag even further when it comes to digital twin technologies. The creation of a “digital twin” to its physical container counterpart allows for not just monitoring, but predicting snags and autonomously adjusting for them. In terms of adoption of automated port handling equipment, the US also trails its foreign counterparts, the GAO concluded. That includes automated guided vehicles, remotely operated ship-to-shore cranes and automated gantry cranes. US ports lag the automation adoption of foreign ports, including being absent from the top 50 most productive ports as measured by the S&amp;P Global Port Performance database, but one can argue that it doesn’t make much competitive difference. That’s not because other ports aren’t more productive. But like premier soccer leagues or professional baseball leagues in the United States and Japan, US ports can be compared with foreign ports, but they rarely compete with them. One exception is how the Northwest Seaport Alliance of Seattle and Tacoma competes with Vancouver, British Columbia, for US exports and US-bound imports. More often though, US ports compete with each other. While East and Gulf coast ports fight among themselves for a greater share of cargo, they arguably compete even more with West Coast ports for discretionary cargo. Still, even with greater, but limited, automation on the West Coast, it would be hard to find a shipper that routes discretionary cargo through, say, Los Angeles’ TraPac terminal — the most automated facility in North America — for that reason alone. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

A report released this year by the US Congressional watchdog about port automation provides a sobering read, showing the possible, but narrow, path for adoption amid overexuberance over technology’s potential and doomsaying on its impact on labor. That the reality of automation potential at US ports is somewhere in between, as described by the US Government Accountability Office (GAO) , is worth remembering in the context of whatever employers and longshore workers agree to or reject come the Jan. 15 deadline for a labor contract along the East and Gulf coasts. The International Longshoremen’s Association (ILA) wants to strike language allowing any degree of automation, while the United States Maritime Alliance (USMX) wants to not only retain the automation allowed in past contracts, but also create a mechanism to consider more in consultation with the union. The GAO report, released in March, details the possibilities of automation, but also the numerous hurdles, including the high costs and opposition from longshore labor, and cases when it’s just not economically feasible. In the report, the feedback from port directors and marine terminal operators highlights the nuances of when automation works, in what form and where. But in some cases, automation can hurt productivity or fail to match that of human labor, the GAO’s survey of stakeholders at the top US ports revealed. Some unidentified US port directors and terminal operators told the GAO it could take a decade or two to recover the investment costs of automation — with the technology potentially becoming outdated during that long wait. Half of the stakeholders interviewed by GAO deemed larger supply chain issues, including cargo visibility and operating hours of nearby warehouses, more pressing than the adoption of automation. Or, as the GAO report noted, based on feedback from a port representative and a terminal operator: "Unless other parts of the supply chain — such as ground transportation and warehousing — can increase the speed and the efficiency of their operations, any gains in capacity or efficiency that terminals make by adopting automated equipment or other approaches will be lost further down the chain.” Yet the release of the GAO report, as required by Congress through the Ocean Shipping Reform Act of 2022 (OSRA-22), also shows how automation can help space-constrained ports and marine terminals squeeze out more functional capacity. Automated gate technologies at the Port of Virginia helped it reduce truck dwells, cutting harmful emissions, according to the report. Separately, the port has also credited its semi-automated stacking cranes at Norfolk International Terminals for helping it better handle import surges. The hard physical separation of the stacking cranes from the drayage trucks also improves safety by reducing the chances of multi-ton equipment hitting drivers and longshore workers. Process over equipment Ultimately, it’s automating processes rather than automating equipment that holds the most promise, US port stakeholders told the GAO. So-called port community systems that share key information with terminals, truckers, chassis providers and other stakeholders have reduced trucking dwells and are in place at eight of the top 10 US ports, according to the report. But when it comes to the next level of automation processing, such as adopting AI and machine learning, US ports lag their top foreign counterparts, the GAO report concluded. US ports lag even further when it comes to digital twin technologies. The creation of a “digital twin” to its physical container counterpart allows for not just monitoring, but predicting snags and autonomously adjusting for them. In terms of adoption of automated port handling equipment, the US also trails its foreign counterparts, the GAO concluded. That includes automated guided vehicles, remotely operated ship-to-shore cranes and automated gantry cranes. US ports lag the automation adoption of foreign ports, including being absent from the top 50 most productive ports as measured by the S&P Global Port Performance database, but one can argue that it doesn’t make much competitive difference. That’s not because other ports aren’t more productive. But like premier soccer leagues or professional baseball leagues in the United States and Japan, US ports can be compared with foreign ports, but they rarely compete with them. One exception is how the Northwest Seaport Alliance of Seattle and Tacoma competes with Vancouver, British Columbia, for US exports and US-bound imports. More often though, US ports compete with each other. While East and Gulf coast ports fight among themselves for a greater share of cargo, they arguably compete even more with West Coast ports for discretionary cargo. Still, even with greater, but limited, automation on the West Coast, it would be hard to find a shipper that routes discretionary cargo through, say, Los Angeles’ TraPac terminal — the most automated facility in North America — for that reason alone. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

US port automation holds promise, but hardly a sure shot

<div class="phx-topic abstract-wrapper">The completion of initial clearance improvements allows CSX to operate double-stack rail service on a temporary route from Baltimore along its network in Pennsylvania, New Jersey, New York and into the Midwest. </div>

The completion of initial clearance improvements allows CSX to operate double-stack rail service on a temporary route from Baltimore along its network in Pennsylvania, New Jersey, New York and into the Midwest.

<div class="phx-topic">CSX Transportation has begun double-stacked intermodal service out of the Port of Baltimore after completing the first round of tunnel and track improvements from the port that will ultimately boost Baltimore’s current container handling capacity by one-third. Maryland Gov. Wes Moore said in a statement Monday the start of double-stacked rail operations from Baltimore comes after the completion of vertical clearance improvements at rail bridges north of the port as part of the Howard Street Tunnel Project. The $466 million Howard Street project, which began in 2022, <a href="https://www.joc.com/article/federal-grant-boost-baltimores-dock-rail-capacity_20220601.html">consists of raising tunnels and bridge clearances and lowering tracks along 22 locations on CSX tracks between Baltimore and Philadelphia</a>. The most complex part of the project involves raising the height of the 1.7-mile Howard Street tunnel. Moore’s office said the completion of the first clearance improvements allows CSX to operate double-stack rail service on a temporary route from Baltimore along its network in Pennsylvania, New Jersey, New York and into the Midwest until the work is complete in 2026. Baltimore has the shortest rail track mileage into Chicago from major East Coast ports. “This is a significant milestone for intermodal rail service between Baltimore and Midwest markets and wouldn’t be possible without the ongoing collaboration between our federal, state, and local project partners,”CSX CEO Joe Hinrichs said in the statement. Once the Howard Street project is fully complete, the double-stacking capability is expected to increase business at the port by approximately 160,000 containers annually. During the 12-month period ending in September, Baltimore handled 457,566 containers, according to data from the Maryland Port Administration. The Seagirt Marine Terminal, which has nominal capacity of 800,000 TEUs annually, is <a href="https://www.joc.com/article/new-msc-backed-baltimore-container-terminal-on-track-for-2028-debut-5220430">undergoing a densification project that will allow it to handle 1.2 million TEUs annually</a>. The Howard Street project will also allow double stacking of containers on intermodal service from Baltimore’s proposed Sparrows Point Container Terminal. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

CSX Transportation has begun double-stacked intermodal service out of the Port of Baltimore after completing the first round of tunnel and track improvements from the port that will ultimately boost Baltimore’s current container handling capacity by one-third. Maryland Gov. Wes Moore said in a statement Monday the start of double-stacked rail operations from Baltimore comes after the completion of vertical clearance improvements at rail bridges north of the port as part of the Howard Street Tunnel Project. The $466 million Howard Street project, which began in 2022, consists of raising tunnels and bridge clearances and lowering tracks along 22 locations on CSX tracks between Baltimore and Philadelphia . The most complex part of the project involves raising the height of the 1.7-mile Howard Street tunnel. Moore’s office said the completion of the first clearance improvements allows CSX to operate double-stack rail service on a temporary route from Baltimore along its network in Pennsylvania, New Jersey, New York and into the Midwest until the work is complete in 2026. Baltimore has the shortest rail track mileage into Chicago from major East Coast ports. “This is a significant milestone for intermodal rail service between Baltimore and Midwest markets and wouldn’t be possible without the ongoing collaboration between our federal, state, and local project partners,”CSX CEO Joe Hinrichs said in the statement. Once the Howard Street project is fully complete, the double-stacking capability is expected to increase business at the port by approximately 160,000 containers annually. During the 12-month period ending in September, Baltimore handled 457,566 containers, according to data from the Maryland Port Administration. The Seagirt Marine Terminal, which has nominal capacity of 800,000 TEUs annually, is undergoing a densification project that will allow it to handle 1.2 million TEUs annually . The Howard Street project will also allow double stacking of containers on intermodal service from Baltimore’s proposed Sparrows Point Container Terminal. Contact Michael Angell at michael.angell@spglobal.com .

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