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<div>Copyright 2008, Traffic World, Inc.The roller-coaster ride for air cargo companies zipped into high-G forces in the first quarter as many major industry players saw steep declines in profit despite higher revenue.Carriers, express companies and forwarders are looking for ways to brake against the headlong rush to disaster, bracing themselves for higher fuel costs and a slower domestic U.S. economy that threaten to ground the rest of 2008.Airlines count on mergers and capacity cuts to provide the financial cushion. Carriers and express companies are eying acquisitions, leaner operations and foreign trade bounces to keep them on track at a time...

Copyright 2008, Traffic World, Inc. The roller-coaster ride for air cargo companies zipped into high-G forces in the first quarter as many major industry players saw steep declines in profit despite higher revenue. Carriers, express companies and forwarders are looking for ways to brake against the headlong rush to disaster, bracing themselves for higher fuel costs and a slower domestic U.S. economy that threaten to ground the rest of 2008. Airlines count on mergers and capacity cuts to provide the financial cushion. Carriers and express companies are eying acquisitions, leaner operations and foreign trade bounces to keep them on track at a time when New York Harbor jet fuel prices reached $3.72 per gallon as of April 18. Consider some of the industry''s ugly first-quarter results: n UPS reported a 12 percent decline in quarterly profit to $906 million, cutting its 2008 earnings forecast. FedEx had cut its own forecast a month earlier after its own dismal showing. n On the heels of their announced merger plan, Delta Air Lines and Northwest Airlines posted losses totaling $10.5 billion for the first three months of the year due to fuel prices and write-downs of their companies'' value. Delta''s losses were about $6.39 billion; Northwest reported about $4.1 billion. n US Airways reported a quarterly loss, excluding special items, of $239 million. Fuel costs were about $260 million higher than the same period a year earlier. n Alaska Air reported a first-quarter net loss of $35.9 million compared with last year''s first-quarter loss of $10.3 million, thanks to 45 percent increase in fuel costs. n Net income for European mail and express operator TNT fell 58 percent in the first quarter after the company discontinued a joint venture with Postbank and wrote off restructuring charges in its mail division. Overall revenue for the quarter was $4.2 billion, up 1.8 percent compared with last year''s first quarter. Net income for the period was $280 million, compared with $667 million a year earlier. n Forward Air''s net income for the quarter fell to $10 million, compared with last year first quarter''s the $10.3 million. Company revenue climbed about 23 percent to $107.9 million from $87.4 million. Now the transportation companies are looking for some financial and operational safety belts. UPS gets a break this summer, CEO Scott Davis said, when the new Teamsters labor contract kicks in. The company is taking other measures, UPS Chief Financial Officer Kurt Kuehn said, including "adjusting our dispatch, the hours our people work and realigning the network." The company reduced the number of U.S. operating locations. "On a daily basis we do adjust the number of employees in our operations and the hours they work, so certainly we have some of the more junior employees that are perhaps just working a couple of days a week if demand is there," Kuehn said. "We are adjusting the hours on those people also." He added, "Additional vehicles we will scrutinize very carefully. We (will) revisit all projects. We are doing value engineering in our IT, looking at projects. We are restricting hiring except in sales. We are stopping all non-critical projects and limiting discretionary spending, including business travel, relocations and consulting services." But UPS is keeping key foreign investments. "In China we are proceeding with plans to initiate air service between Shanghai and Nagoya next month in conjunction with expanding our presence at Pudong International Airport at Shanghai," Kuehn said. For airlines the choices are starker and simpler. US Airways is cutting mainline capacity 2 percent to 4 percent in the second half of 2008. The airline is talking about a merger with United Air Lines, which is talking about uniting with Continental Airlines. Forward Air has its heart set on acquisitions to ride out the storm, even refraining from buying back shares to make the deals. "The primary reason is keeping our powder dry for acquisitions," said Rodney Bell, company chief financial officer, senior vice president and treasurer. "The best way that we can use our available cash and borrowings is buying companies." The company attributes its revenue growth to its three recent major acquisitions, including Black Hawk and Pinch Holdings. "If the right opportunity is put in front of us, we would probably jump at it," said Bruce Campbell, company CEO. "But I would put emphasis on that one word, right. We''ve made three acquisitions in the last month, we have probably looked at 100, so we are very, very picky."

Air Freight Fright

<div class="phx-topic abstract-wrapper">The $390 million deal for Cowan will boost Schneider’s dedicated trucking segment to 8,400 tractors, representing 70% of its total fleet.</div>

The $390 million deal for Cowan will boost Schneider’s dedicated trucking segment to 8,400 tractors, representing 70% of its total fleet.

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<div class="phx-topic">Schneider National said Monday it will acquire Cowan Systems for $390 million in cash, cementing its foothold among shippers with distribution centers along the Interstate 95 corridor on the US East Coast. It’s Schneider’s third deal since 2022 to bolster its dedicated truckload business. Wisconsin-based Schneider will now own 8,400 tractors in dedicated trucking, representing 70% of the company’s total fleet. “This acquisition aligns with Schneider’s long-term vision to have customer-centric dedicated solutions as the cornerstone of its truckload segment,” CEO Mark Rourke said in a statement. “By complementing our organic dedicated growth success with transactions like this, we are broadening our presence to provide greater value to our customers.” The deal catapults Schneider closer to the largest dedicated carriers in the US, consisting of J.B. Hunt Transport Systems, Knight-Swift Transportation Holdings, Landstar System, Ryder Supply Chain, Penske Logistics and Werner Enterprises. Schneider has made other transactions to bolster its dedicated division, acquiring <a href="https://www.joc.com/article/acquisition-expands-schneiders-dedicated-truck-capacity-5196056">Midwest Logistics in 2022</a> and <a href="https://www.joc.com/article/schneider-goes-deeper-into-dedicated-trucking-with-mm-acquisition-5234490">M&amp;M Transport in 2023</a>. <h3>Lure of dedicated trucking </h3>Many trucking companies believe <a href="https://www.joc.com/article/us-truckload-carriers-see-upside-in-sharpened-focus-on-dedicated-shippers-5214830">dedicated trucking is attractive</a> because it can grow quickly when shippers struggle to book for-hire trucking, providing a safety net to guarantee a truck and a driver. Dedicated truckload contracts also tend to be at least three-year deals, getting carriers and shippers out of the arduous process of launching, responding and administering annual bids. There is also lower turnover in dedicated trucking because a driver tends to cover the same route week after week while serving the same shipper over and over, bringing familiarity at the dock. Schneider said Cowan will retain its name and operate as a wholly owned subsidiary. Cowan’s dedicated trucking business will likely be integrated into the Schneider Dedicated unit, while Cowan Logistics will likely integrate with Schneider Logistics. Cowan also has a port drayage division consisting mainly of agents and owner-operators serving the Port of Baltimore and the Port of New York and New Jersey. That business will likely integrate with Schneider’s port drayage services division. Schneider said the deal is expected to close before the end of the year and immediately contribute to its quarterly profits. The Cowan name is familiar to many shippers on the East Coast. Located near Baltimore, the company was founded in 1924 by William T. Cowan, hauling less-than truckload (LTL) freight in the Mid-Atlantic region. His son, Joe Cowan, rebranded the company from W.T. Cowan to Cowan Systems in 1994. Since then, it has grown to be one of the largest freight transportation and logistics companies on the East Coast. Cowan’s dedicated division serves industrial and retail shippers in major Northeast distribution markets such as the Lehigh Valley in Pennsylvania and the I-95 corridor in New Jersey. Schneider was also family-owned, founded by the late Al and Don Schneider in 1935 before becoming a publicly traded company in 2017. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

Schneider National said Monday it will acquire Cowan Systems for $390 million in cash, cementing its foothold among shippers with distribution centers along the Interstate 95 corridor on the US East Coast. It’s Schneider’s third deal since 2022 to bolster its dedicated truckload business. Wisconsin-based Schneider will now own 8,400 tractors in dedicated trucking, representing 70% of the company’s total fleet. “This acquisition aligns with Schneider’s long-term vision to have customer-centric dedicated solutions as the cornerstone of its truckload segment,” CEO Mark Rourke said in a statement. “By complementing our organic dedicated growth success with transactions like this, we are broadening our presence to provide greater value to our customers.” The deal catapults Schneider closer to the largest dedicated carriers in the US, consisting of J.B. Hunt Transport Systems, Knight-Swift Transportation Holdings, Landstar System, Ryder Supply Chain, Penske Logistics and Werner Enterprises. Schneider has made other transactions to bolster its dedicated division, acquiring Midwest Logistics in 2022 and M&M Transport in 2023 . Lure of dedicated trucking Many trucking companies believe dedicated trucking is attractive because it can grow quickly when shippers struggle to book for-hire trucking, providing a safety net to guarantee a truck and a driver. Dedicated truckload contracts also tend to be at least three-year deals, getting carriers and shippers out of the arduous process of launching, responding and administering annual bids. There is also lower turnover in dedicated trucking because a driver tends to cover the same route week after week while serving the same shipper over and over, bringing familiarity at the dock. Schneider said Cowan will retain its name and operate as a wholly owned subsidiary. Cowan’s dedicated trucking business will likely be integrated into the Schneider Dedicated unit, while Cowan Logistics will likely integrate with Schneider Logistics. Cowan also has a port drayage division consisting mainly of agents and owner-operators serving the Port of Baltimore and the Port of New York and New Jersey. That business will likely integrate with Schneider’s port drayage services division. Schneider said the deal is expected to close before the end of the year and immediately contribute to its quarterly profits. The Cowan name is familiar to many shippers on the East Coast. Located near Baltimore, the company was founded in 1924 by William T. Cowan, hauling less-than truckload (LTL) freight in the Mid-Atlantic region. His son, Joe Cowan, rebranded the company from W.T. Cowan to Cowan Systems in 1994. Since then, it has grown to be one of the largest freight transportation and logistics companies on the East Coast. Cowan’s dedicated division serves industrial and retail shippers in major Northeast distribution markets such as the Lehigh Valley in Pennsylvania and the I-95 corridor in New Jersey. Schneider was also family-owned, founded by the late Al and Don Schneider in 1935 before becoming a publicly traded company in 2017. Contact Ari Ashe at ari.ashe@spglobal.com

Schneider bolsters US East Coast business by acquiring Cowan Systems

<div class="phx-topic abstract-wrapper">A decline in sales of high-and-heavy equipment for the bellwether roll-on/roll-off cargo providers will reduce demand for breakbulk carriers.</div>

A decline in sales of high-and-heavy equipment for the bellwether roll-on/roll-off cargo providers will reduce demand for breakbulk carriers.

<div class="phx-topic">Rough market conditions are grinding down the performance of heavy equipment manufacturers Deere and Caterpillar, with Deere announcing plans to pull back its production in North America for the first quarter of 2025. Considered bellwether roll-on/roll-off (ro/ro) cargo providers and breakbulk shippers, both of the high-and-heavy manufacturers posted lagging results in their latest quarterly earnings amid a convergence of challenging market conditions. Illinois-based Deere &amp; Company, which produces heavy machinery for farming and construction, reported a decline in sales for all its equipment types. “Lingering headwinds include depressed yields from unfavorable weather, reduced regional commodity prices, and persistently elevated input costs,” investor communications manager Josh Rohleder said during the company’s Nov. 21 earnings call. “The confluence of these issues, coupled with high interest rates, are expected to keep industry equipment demand at low levels throughout 2025.” Citing the softening demand for equipment, Deere investor relations director Josh Beal said the company will shut down earthmoving production lines at its North American factories for about half of total production days in the first quarter of 2025. The move comes after the company in the fourth quarter pulled back production and shipping at its factories worldwide. Year-over-year fiscal fourth-quarter net income for Deere fell 47% to $1.2 billion. For the full fiscal year, net income declined 30% to $7.1 billion. Deere is forecasting further declines for the coming year, projecting $5 billion to $5.5 billion in net income in 2025. <h3>Energy props up Caterpillar </h3>Equipment orders to support the energy sector helped offset lower demand for construction machinery for Texas-based Caterpillar, according to the company’s latest quarterly report. Caterpillar’s third-quarter order backlog increased 2% to $28.7 billion year over year, driven by what CEO Jim Umpleby described as a “quite robust” increase in the company’s energy and transportation sector, offsetting a decrease in the backlog for construction machinery. For the second consecutive quarter, Caterpillar adjusted its full-year outlook to be “slightly lower” than its 2023 sales and revenues of $67.1 billion. The adjustment came as Caterpillar reported a 4% decline in its overall Q3 sales, while revenues fell to $16.1 billion because of lower demand for construction and mining equipment, which accounts for over half of the company’s business. Energy and transportation equipment needs helped offset those declines, specifically because of orders for solar turbines for oil and gas reciprocating engines, as well as for power generation equipment for the burgeoning data center market. Caterpillar’s decline in construction equipment business comes three years after President Joe Biden’s 2021 Infrastructure Investment and Jobs Act (IIJA) took effect and helped fuel demand for construction equipment right as pandemic-stalled projects were resuming. Umpleby pointed out in the earnings call that about half of the IIJA funds remain uncommitted. “So, there’s a lot of infrastructure activity out there that our dealers are working with their customers to help support,” he said. Although the election of Donald Trump has introduced some uncertainty to federal infrastructure spending, Trump’s incoming administration is expected to lift Biden’s pause on permits for US liquefied natural gas (LNG) projects that rely on heavy equipment from companies such as Caterpillar. “If that permitting process starts again, I would think certainly medium, long-term that would be a positive for us,” Umpleby said. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

Rough market conditions are grinding down the performance of heavy equipment manufacturers Deere and Caterpillar, with Deere announcing plans to pull back its production in North America for the first quarter of 2025. Considered bellwether roll-on/roll-off (ro/ro) cargo providers and breakbulk shippers, both of the high-and-heavy manufacturers posted lagging results in their latest quarterly earnings amid a convergence of challenging market conditions. Illinois-based Deere & Company, which produces heavy machinery for farming and construction, reported a decline in sales for all its equipment types. “Lingering headwinds include depressed yields from unfavorable weather, reduced regional commodity prices, and persistently elevated input costs,” investor communications manager Josh Rohleder said during the company’s Nov. 21 earnings call. “The confluence of these issues, coupled with high interest rates, are expected to keep industry equipment demand at low levels throughout 2025.” Citing the softening demand for equipment, Deere investor relations director Josh Beal said the company will shut down earthmoving production lines at its North American factories for about half of total production days in the first quarter of 2025. The move comes after the company in the fourth quarter pulled back production and shipping at its factories worldwide. Year-over-year fiscal fourth-quarter net income for Deere fell 47% to $1.2 billion. For the full fiscal year, net income declined 30% to $7.1 billion. Deere is forecasting further declines for the coming year, projecting $5 billion to $5.5 billion in net income in 2025. Energy props up Caterpillar Equipment orders to support the energy sector helped offset lower demand for construction machinery for Texas-based Caterpillar, according to the company’s latest quarterly report. Caterpillar’s third-quarter order backlog increased 2% to $28.7 billion year over year, driven by what CEO Jim Umpleby described as a “quite robust” increase in the company’s energy and transportation sector, offsetting a decrease in the backlog for construction machinery. For the second consecutive quarter, Caterpillar adjusted its full-year outlook to be “slightly lower” than its 2023 sales and revenues of $67.1 billion. The adjustment came as Caterpillar reported a 4% decline in its overall Q3 sales, while revenues fell to $16.1 billion because of lower demand for construction and mining equipment, which accounts for over half of the company’s business. Energy and transportation equipment needs helped offset those declines, specifically because of orders for solar turbines for oil and gas reciprocating engines, as well as for power generation equipment for the burgeoning data center market. Caterpillar’s decline in construction equipment business comes three years after President Joe Biden’s 2021 Infrastructure Investment and Jobs Act (IIJA) took effect and helped fuel demand for construction equipment right as pandemic-stalled projects were resuming. Umpleby pointed out in the earnings call that about half of the IIJA funds remain uncommitted. “So, there’s a lot of infrastructure activity out there that our dealers are working with their customers to help support,” he said. Although the election of Donald Trump has introduced some uncertainty to federal infrastructure spending, Trump’s incoming administration is expected to lift Biden’s pause on permits for US liquefied natural gas (LNG) projects that rely on heavy equipment from companies such as Caterpillar. “If that permitting process starts again, I would think certainly medium, long-term that would be a positive for us,” Umpleby said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Heavy equipment production slowdown to hit ro/ro trade as demand softens

<div class="phx-topic abstract-wrapper">The acquisition of a majority stake in Roadrunner by an investment group sets the stage for further growth at the carrier as the LTL sector readies for expansion in 2025. </div>

The acquisition of a majority stake in Roadrunner by an investment group sets the stage for further growth at the carrier as the LTL sector readies for expansion in 2025.

<div class="phx-topic">An investor group led by CEO Chris Jamroz is acquiring a majority stake in less-than-truckload (LTL) carrier Roadrunner. The deal, announced Friday, sets the stage for further organic growth and acquisitions by the direct point-to-point LTL trucking company at a time when the US LTL sector is preparing for expansion, building out networks <a href="https://www.joc.com/article/us-ltl-carriers-laying-groundwork-for-higher-pricing-in-2025-5822094">and raising rates</a>. The deal between Prospero Staff Capital, owned by Jamroz and partner Ted Kellner, a long-time investor in Roadrunner, leaves Elliott Investment Management with a minority stake in the Illinois-based company. Terms of the transaction were not disclosed. “After comprehensively unwinding the prior management’s roll-up strategy to get to a pure-play LTL network, Roadrunner now stands as a premium long-haul carrier,” Jamroz said in a statement. “Today marks the beginning of our growth phase, driven by new capital, strategic investments and acquisitions.” Activist investor Elliott acquired a majority stake in Roadrunner through a <a href="https://www.joc.com/article/roadrunner-gets-540-million-infusion-new-leadership-5195821">$540 million investment</a> in 2017. Jamroz joined the company in 2019; Prospero is part of his investment company, LyonIX Holdings. Roadrunner is the 20th-largest LTL provider in the US and Canada, with about $410 million in revenue in 2023, according to SJ Consulting Group data. Merger activity is picking up speed <a href="https://www.joc.com/article/smaller-us-ltl-carriers-increasingly-merging-in-sink-or-swim-market-5783875">among smaller LTL carriers</a>, which could provide several targets for Roadrunner in markets where it wants to grow. The US LTL sector as a whole is in the midst of a growth phase kicked off by the exit of Yellow, then the third-largest LTL provider, from the market in July 2023. That sharply reduced LTL capacity, which enabled carriers to raise pricing despite tepid freight demand. Yellow’s collapse also launched an ongoing land rush as LTL carriers battle for terminals. Yellow is <a href="https://www.joc.com/article/yellow-puts-remaining-112-ltl-terminals-on-the-block-5737425">preparing to sell</a> its remaining 112 terminals, including some of its largest sites, in a move that will release pent-up LTL capacity. Roadrunner played a small part in that land rush, rebuilding a terminal formerly leased by Yellow in Atlanta as a new regional hub. Roadrunner has put more focus on reducing transit times in hundreds of lanes to meet shipper demand for faster service. In October, the company accelerated shipments in more than 200 lanes and opened more than 40 new lanes. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

An investor group led by CEO Chris Jamroz is acquiring a majority stake in less-than-truckload (LTL) carrier Roadrunner. The deal, announced Friday, sets the stage for further organic growth and acquisitions by the direct point-to-point LTL trucking company at a time when the US LTL sector is preparing for expansion, building out networks and raising rates . The deal between Prospero Staff Capital, owned by Jamroz and partner Ted Kellner, a long-time investor in Roadrunner, leaves Elliott Investment Management with a minority stake in the Illinois-based company. Terms of the transaction were not disclosed. “After comprehensively unwinding the prior management’s roll-up strategy to get to a pure-play LTL network, Roadrunner now stands as a premium long-haul carrier,” Jamroz said in a statement. “Today marks the beginning of our growth phase, driven by new capital, strategic investments and acquisitions.” Activist investor Elliott acquired a majority stake in Roadrunner through a $540 million investment in 2017. Jamroz joined the company in 2019; Prospero is part of his investment company, LyonIX Holdings. Roadrunner is the 20th-largest LTL provider in the US and Canada, with about $410 million in revenue in 2023, according to SJ Consulting Group data. Merger activity is picking up speed among smaller LTL carriers , which could provide several targets for Roadrunner in markets where it wants to grow. The US LTL sector as a whole is in the midst of a growth phase kicked off by the exit of Yellow, then the third-largest LTL provider, from the market in July 2023. That sharply reduced LTL capacity, which enabled carriers to raise pricing despite tepid freight demand. Yellow’s collapse also launched an ongoing land rush as LTL carriers battle for terminals. Yellow is preparing to sell its remaining 112 terminals, including some of its largest sites, in a move that will release pent-up LTL capacity. Roadrunner played a small part in that land rush, rebuilding a terminal formerly leased by Yellow in Atlanta as a new regional hub. Roadrunner has put more focus on reducing transit times in hundreds of lanes to meet shipper demand for faster service. In October, the company accelerated shipments in more than 200 lanes and opened more than 40 new lanes. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Investors plan to expand US LTL carrier Roadrunner after takeover

<div class="phx-topic abstract-wrapper">Major retailers such as Ralph Lauren and Target say they successfully mitigated disruptions from the early October port strike and are ready for the next labor threat and the fallout from likely higher tariffs on Chinese goods. </div>

Major retailers such as Ralph Lauren and Target say they successfully mitigated disruptions from the early October port strike and are ready for the next labor threat and the fallout from likely higher tariffs on Chinese goods.

<div class="phx-topic">US retailers are telling investors that after successfully managing the three-day port strike along the East and Gulf coasts in early October, they’re prepared to navigate whatever operational challenges arise from the higher tariffs on Chinese goods that President-elect Donald Trump has promised for his second term. Ralph Lauren, Williams Sonoma and Target, during their respective third-quarter earnings calls, highlighted how they diverted cargoes to West Coast ports ahead of the Oct. 1 expiration of the labor contract between the International Longshoremen’s Association (ILA) and maritime employers. Ralph Lauren said it tapped air cargo transport in the days before the strike to ensure it had key products on hand. Following the tentative deal that ended the brief strike, the three retailers said they are now monitoring developments ahead of the Jan. 15 expiration of that extended pact. ILA last week announced it <a href="https://www.joc.com/article/ila-breaks-off-contract-talks-accuses-usmx-of-semi-automation-push-5810392">pulled out of negotiations</a> over what it said was a desire by employers to introduce semi-automated equipment at marine terminals. The cargo diversions to the West Coast “came at a cost, but allowed us to be well-positioned for our guests through the strike and into the holiday season,” Target CFO Michael Fiddelke said during a Nov. 20 earnings call. ”Thankfully, the strike was short-lived,” he added. “We’ll continue to watch the situation closely in the lead up to continued negotiations in January.” US inventories in comparison to sales have risen this fall as shippers experience an extended peak season highlighted by frontloading linked to renewed ILA strike threats, the <a href="https://www.joc.com/article/us-importers-dabbling-in-frontloading-ahead-of-new-tariff-threat-5821448">anticipation of higher US tariffs</a> on Chinese retail imports and a shorter post-holiday period due to an earlier Lunar New Year. <h3>Retail inventories rising</h3>The ratio of US retail inventories to sales climbed to 1.42 in September from 1.27 in August, according to US Census Bureau data. The 1.42 level, also observed in February 2023 and February 2021, is the highest since 1.69 in April 2020 at the outset of the pandemic.Facing Trump’s threat of tariffs on Chinese goods of more than 60%, retailers took pains on earnings calls to stress the limits of their exposure to Chinese sourcing because of multiyear preparation to diversify away from the world’s largest factory. Williams Sonoma has mapped out its various product lines and will evaluate sourcing by tariffs levels and alternatives, CFO Jeff Howie told investors Wednesday. The high-end home furnishing retailer can also lean on domestic manufacturing plants in North Carolina, Mississippi and Oregon, and will considering front-loading some goods from China early next year to avoid tariffs, he said. ”I just want to remind everyone that it’s not our first time at this,” Howie said. “We’ve always been a leader and proactively responded to changes in the trade environment. ”There’s a lot of change since the last time this came up,” he added. “We’ve significantly reduced our China-sourced goods from 50% to 25% over the last few years.” Lowe’s has been working its suppliers in recent years to diversify away from China, giving it confidence that the company can handle “whatever it is that gets thrown as us,” said Bill Boltz, the company’s executive vice president of merchandising. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

US retailers are telling investors that after successfully managing the three-day port strike along the East and Gulf coasts in early October, they’re prepared to navigate whatever operational challenges arise from the higher tariffs on Chinese goods that President-elect Donald Trump has promised for his second term. Ralph Lauren, Williams Sonoma and Target, during their respective third-quarter earnings calls, highlighted how they diverted cargoes to West Coast ports ahead of the Oct. 1 expiration of the labor contract between the International Longshoremen’s Association (ILA) and maritime employers. Ralph Lauren said it tapped air cargo transport in the days before the strike to ensure it had key products on hand. Following the tentative deal that ended the brief strike, the three retailers said they are now monitoring developments ahead of the Jan. 15 expiration of that extended pact. ILA last week announced it pulled out of negotiations over what it said was a desire by employers to introduce semi-automated equipment at marine terminals. The cargo diversions to the West Coast “came at a cost, but allowed us to be well-positioned for our guests through the strike and into the holiday season,” Target CFO Michael Fiddelke said during a Nov. 20 earnings call. ”Thankfully, the strike was short-lived,” he added. “We’ll continue to watch the situation closely in the lead up to continued negotiations in January.” US inventories in comparison to sales have risen this fall as shippers experience an extended peak season highlighted by frontloading linked to renewed ILA strike threats, the anticipation of higher US tariffs on Chinese retail imports and a shorter post-holiday period due to an earlier Lunar New Year. Retail inventories rising The ratio of US retail inventories to sales climbed to 1.42 in September from 1.27 in August, according to US Census Bureau data. The 1.42 level, also observed in February 2023 and February 2021, is the highest since 1.69 in April 2020 at the outset of the pandemic. Facing Trump’s threat of tariffs on Chinese goods of more than 60%, retailers took pains on earnings calls to stress the limits of their exposure to Chinese sourcing because of multiyear preparation to diversify away from the world’s largest factory. Williams Sonoma has mapped out its various product lines and will evaluate sourcing by tariffs levels and alternatives, CFO Jeff Howie told investors Wednesday. The high-end home furnishing retailer can also lean on domestic manufacturing plants in North Carolina, Mississippi and Oregon, and will considering front-loading some goods from China early next year to avoid tariffs, he said. ”I just want to remind everyone that it’s not our first time at this,” Howie said. “We’ve always been a leader and proactively responded to changes in the trade environment. ”There’s a lot of change since the last time this came up,” he added. “We’ve significantly reduced our China-sourced goods from 50% to 25% over the last few years.” Lowe’s has been working its suppliers in recent years to diversify away from China, giving it confidence that the company can handle “whatever it is that gets thrown as us,” said Bill Boltz, the company’s executive vice president of merchandising. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

US retailers prepare for new ILA strike threat, tariffs on China imports

<div class="phx-topic abstract-wrapper">By connecting to forwarder-customers of software vendor e2open, Freightos is continuing its push to develop electronic booking capability in the air freight industry.</div>

By connecting to forwarder-customers of software vendor e2open, Freightos is continuing its push to develop electronic booking capability in the air freight industry.

<div class="phx-topic">Software vendors Freightos and e2open have integrated their systems to help forwarders access dynamic air freight rates within Freightos’ rate database and make associated electronic bookings on those rates. The integration embeds Freightos’ WebCargo booking tool into e2open’s transportation management system (TMS). “It will cut down on manual entry and give our team real-time access to rates and bookings within the TMS, helping us respond faster to client needs and eliminate the back-and-forth that used to slow us down,” Megan Kelley, vice president of enterprise applications at Crane Worldwide Logistics, one of the companies that’s been trialing the integration, said in a statement Thursday. WebCargo has become a dominant player in the airfreight technology space, predominantly by enabling forwarders and air cargo airlines to connect with one another digitally to transmit rates and bookings. e2open is a widely used supply chain software provider that has acquired a number of TMS solutions over the past five years serving different modes, including air. The company has an internal ocean freight booking capability through its 2018 acquisition of INTTRA. The software provider is very partner-friendly, adding integrations to visibility providers, freight brokers, freight procurement tools and payment systems to support its planning and execution tools. Freightos CEO Zvi Schreiber said in the statement that Freightos’ goal is to “deliver better cargo pricing and booking to our global forwarders wherever they work, whether it's through our [application programming interfaces] for their own systems, with integrations to third-party solutions, or on our platform.” Freightos’ customers include shippers Electrolux and ABB, forwarders FedEx, UPS and Scan Global Logistics, as well as carriers American Airlines Cargo, Qatar Airways Cargo and Emirates SkyCargo. e2open’s customers include shippers L’Oreal and Leggett &amp; Platt and forwarders such as Geodis and Leschaco. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Software vendors Freightos and e2open have integrated their systems to help forwarders access dynamic air freight rates within Freightos’ rate database and make associated electronic bookings on those rates. The integration embeds Freightos’ WebCargo booking tool into e2open’s transportation management system (TMS). “It will cut down on manual entry and give our team real-time access to rates and bookings within the TMS, helping us respond faster to client needs and eliminate the back-and-forth that used to slow us down,” Megan Kelley, vice president of enterprise applications at Crane Worldwide Logistics, one of the companies that’s been trialing the integration, said in a statement Thursday. WebCargo has become a dominant player in the airfreight technology space, predominantly by enabling forwarders and air cargo airlines to connect with one another digitally to transmit rates and bookings. e2open is a widely used supply chain software provider that has acquired a number of TMS solutions over the past five years serving different modes, including air. The company has an internal ocean freight booking capability through its 2018 acquisition of INTTRA. The software provider is very partner-friendly, adding integrations to visibility providers, freight brokers, freight procurement tools and payment systems to support its planning and execution tools. Freightos CEO Zvi Schreiber said in the statement that Freightos’ goal is to “deliver better cargo pricing and booking to our global forwarders wherever they work, whether it's through our [application programming interfaces] for their own systems, with integrations to third-party solutions, or on our platform.” Freightos’ customers include shippers Electrolux and ABB, forwarders FedEx, UPS and Scan Global Logistics, as well as carriers American Airlines Cargo, Qatar Airways Cargo and Emirates SkyCargo. e2open’s customers include shippers L’Oreal and Leggett & Platt and forwarders such as Geodis and Leschaco. Contact Eric Johnson at eric.johnson@spglobal.com .

Freightos, e2open link up on airfreight e-bookings for forwarders

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

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Shippers save money, time with automated transportation bidding tools

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

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SSA Marine Mexico Modernizes Facilities with $15 Million Investment 

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

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