<div class="phx-topic abstract-wrapper">Truckers and shippers complain that it’s taken weeks to get containerized imports.</div>

Truckers and shippers complain that it’s taken weeks to get containerized imports.

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<div><a>APM Terminals</a> says congestion at its <a>Port of New York and New Jersey</a> facility will ease soon, following complaints from truckers and shippers that it’s taken weeks to get containerized imports.APM Terminals, after more than three months of persistent problems, says conditions will get better thanks to added labor and equipment and as components of a $200 million terminal upgrade — including a new appointment system — come online. To hasten improvement, the terminal also has asked one ocean carrier to divert vessels to another terminal “for a few weeks to allow us to catch up,” APM Terminals said.The terminal...

APM Terminals says congestion at its Port of New York and New Jersey facility will ease soon, following complaints from truckers and shippers that it’s taken weeks to get containerized imports. APM Terminals, after more than three months of persistent problems, says conditions will get better thanks to added labor and equipment and as components of a $200 million terminal upgrade — including a new appointment system — come online. To hasten improvement, the terminal also has asked one ocean carrier to divert vessels to another terminal “for a few weeks to allow us to catch up,” APM Terminals said. The terminal says it is suffering from the combined effects of rising cargo, equipment problems, vessel bunching, and the ongoing terminal upgrade, as well as the more recent pressure of two three-day weeks due to the holiday. The terminal, which extended gate hours since November to help with the problem, also reduced gate hours after the holiday period, apparently because it reached a cap on the number of hours the Customs and Border Protection (CBP) agency could cover. Yet frustration is rising among beneficial cargo owners (BCOs) and truckers, who say progress is slow and turn times are far longer than at other terminals, with sporadic cases of truckers waiting for 10 hours or more to get a container. The Association of Bi-State Motor Carriers, the largest drayage group in the port, which represents about 75 percent of drivers, said that although it has seen “some improvement” in APM Terminal's situation, the extended periods spent by drivers at the terminal is limiting drayage capacity and exacerbating the existing driver shortage in the port. Some drivers now refuse to go there, the association said. David Gledhill, managing director of APM Terminals Elizabeth, LLC, said that “certainly since the uptick in volume we have experienced in the last quarter we have seen a deterioration on our truck turn times.” Loaded cargo through the port increased by 6.5 percent, to 3.77 million loaded TEU, in the first nine months of 2018 compared with the same period in 2017, according to figures from PIERS, a sister product of JOC. “We understand the frustration of our landside customers,” he said. “Over the holiday period we have continued to handle vessels but were closed for roadside collections. This has obviously increased the number of imports in our yard.” Staffing status APM Terminals says that after suffering a shortage of labor last year, it has had enough workers since the start of 2019. Four rubber-tire gantry (RTG) cranes, out of eight ordered, are now in service at the terminal, and it expects another two to be available by the end of the week. The terminal said it also expects to receive two top loaders this week. “We are therefore confident that we will continue to see improved service levels in the short term and over the course of the coming months,” Gledhill said. Yet the persistent problems at APM Terminals roiled drivers at the monthly meeting of the Association of Bi-State Motor Carriers on Tuesday. The association, which tracks turn times at the port’s five main terminals but does not release them publicly, said members report that “the number of extended turn times at APM Terminals — those in excess of two hours — are close to double what we see at other terminals, so that's an area where we're lobbying for improvement." Three BCOs told JOC.com they have had containers stuck in the terminal for unacceptably long times. One BCO said that of two groups of its import containers that arrived at the terminal recently, the first, which was unloaded on Dec. 1 for transportation to Columbus by rail, left the terminal between 26 and 35 days later. Another group of containers, which arrived at the terminal on Dec. 8, has yet to be released, the shipper said. “We’re not seeing any indications of overall improvement and would guess we’re still several weeks away from it,” the shipper said, adding that it’s taken 14 days to get other containers out. “It sounds like they’ve well over exceeded capacity and are completely buried. We’ve experienced containers getting put in closed areas because there’s no other available real estate.” The terminal at present periodically closes areas of its yard so that it can focus on clearing other parts. The terminals’ problems come as the port is facing the effects of a rise in cargo volume and a surge in the frequency of mega-vessel arrivals in the wake of the raising of the Bayonne Bridge, which for the first time enabled ships of greater than 9,500 TEU to reach three of the port’s main terminals — among them APM Terminals. That has sparked more than double the amount of mega-vessels calling at the port each month, although the average amount of cargo loaded and unloaded from each is not much larger than from smaller vessels in the past. APM Terminals has continued to operate as it undergoes a major upgrade that includes new cranes, a revamped berth, and a new 24-lane gate system. APM Terminals in June began a nine-month, $10 million upgrade of its RTG crane fleet, and the new appointment system is expected to go online in March. Truck driver frustration Several drivers at the association’s monthly meeting expressed frustration at APM Terminal’s inability to improve conditions. One 35-year veteran of providing drayage to the port, noting that one chassis provider had run out of chassis at one of its depots in the last week, said the combined effect of such incidents would hurt the port’s reputation. “I don’t see how we can continue growth with the performance that’s going on right now,” the trucker said. “I think we are going to lose market share as a community unless we fix some of these problems that are currently happening. The customer doesn’t want to hear why they didn’t get their freight [or] the fact that they are closing areas at APM Terminals right now. Customers have deadlines. Once the vessel arrives, they are expecting to pick up that container on the first free date, not be told ‘It’s in a closed area and you can’t have it.’” Another trucker at the meeting said he had drivers that waited 10 hours at APM and still did not get their boxes. He questioned why the terminal only opened until 10 a.m. Saturday after the recent holiday period. APM Terminals has since November extended terminal gate hours in an effort to reduce the congestion, opening until 7 p.m. on weekdays, instead of closing at 5:30 p.m., and also opening the gates on Saturday. But the terminal reduced those hours over the holiday period, closing its gates at 5 p.m. during the week and opening on Saturday only until 10 a.m. The hour cutbacks occurred as Port Newark Container Terminals and Maher Terminals extended their gate hours to cope with increased demand from truckers after the Christmas and New Year holidays created two three-day weeks. Some port stakeholders said they believed that APM Terminals had exceeded its extra hours allotted for extended gate situations by the CBP. The agency, which is stretched as part of the federal government shutdown, operates a gate that contains a passive radiation detection device that scrutinizes all containers for potential bombs as they leave. Another terminal said it has not had any problem getting CBP to cover extended gates but believes the future is uncertain if the shutdown continues. “Although we have had to make some reductions in our operating hours, we are grateful for the continued support we have from CBP during the evenings and on Saturdays,” Gledhill said. A statement by CBP said it “has accommodated all additional requests by marine terminals in the Port of New York/Newark without a reduction in service.” Some shippers are still waiting to get their boxes. One shipper said this week that an import box unloaded on Dec. 20, ready to be transported by rail, remains in the APM Terminals yard, and the only explanation that it has received from the ocean carrier is “congestion” and “terminal error.” Another BCO said it has not yet been able to pick up five containers that arrived on Dec. 28. But others that arrived on Jan. 2 were available the next day, the BCO said. Still, with trucker turn times above two hours, “We are going to switch ocean carriers temporarily in that lane to avoid APM,” the shipper said. Contact Hugh R. Morley at hugh.morley@ihsmarkit.com and follow him on Twitter: @HughRMorley1 .

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Drayage

North American ports

Marine terminals

APM Terminals promises NY-NJ relief

<div class="phx-topic abstract-wrapper">Some US-based shippers are racing to beat the April 9 imposition of new tariffs on most goods, while others are holding back product in Asia on the chance the levies will be reduced by President Donald Trump, whose tariff implementation strategy in recent weeks has been marked by a large dose of impulsiveness.</div>

Some US-based shippers are racing to beat the April 9 imposition of new tariffs on most goods, while others are holding back product in Asia on the chance the levies will be reduced by President Donald Trump, whose tariff implementation strategy in recent weeks has been marked by a large dose of impulsiveness.

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<div class="phx-topic">The broad and varied tariffs <a href="https://www.joc.com/article/trump-announces-10-across-the-board-tariffs-on-all-us-imports-5975639">announced this week by the Trump administration</a> that affect US imports from virtually every country on the globe have sent shippers scrambling, forcing a rethink of supply chain strategy within a market so cloaked in uncertainty that one stakeholder likened it to the early days of the COVID-19 pandemic. Some US-based shippers are, incredibly enough, racing to beat the April 9 imposition of new tariffs on most goods, while others are holding back product in Asia on the chance the levies will be reduced by US President Donald Trump, whose tariff implementation strategy in recent weeks has been marked by a large dose of impulsiveness. April 9 is the date country-specific tariffs take effect. Baseline 10% tariffs on countries that avoided the specific, so-called “reciprocal” rates are due to go into effect April 5. “It looks to me like we are witnessing a sudden global slowdown akin to COVID,” a forwarder who did not want to be identified told the Journal of Commerce. “It’s starting to look like the collective response will be to stop, kind of like what we saw we when COVID started. The question is, for how long?” The source said some major customers are “deciding to store product in Asia and essentially cutting off the flow.” “They are looking at using air or other modes but in more of a ‘batch’ sequencing versus the normal flow models,” the forwarder said. Another forwarder who also did not want to be identified said shippers are using a range of tools ahead of the tariff increases. “Customers are shifting volume from [full containerload] to [less-than-containerload] to get goods here before April 9,” the source said. “Some are booking air to get ahead of the tariffs. Some are pulling back orders. Some vendors are pulling back on DDP shipments to renegotiate on price. Some want to change the Incoterms to change the responsible party for duties.” DDP, or delivery duty paid, occurs when the seller is responsible for paying duties. The forwarder added that some customers that were eyeing an exit from China to other sourcing locations in Asia are now rethinking those plans. That’s because those alternative sourcing locations have been nailed with new tariffs, too, most notably Vietnam at 46%. Robert Khachatryan, CEO of Los Angeles-based forwarder FreightRight, said he isn’t seeing a rush to expedite bookings that would not have ordinarily moved this week. “Clients that have bookings in place are pushing to make sure they depart as planned,” Khachatryan said. “However, there are no new orders rushing in.” <h3>’Structural change’ to supply chains </h3>The Trump tariff plan, which was far more extensive that observers expected, is forcing a wholesale reconsideration of individual supply chains. “With the new tariffs and the <a href="https://www.joc.com/article/air-cargo-braces-for-impact-as-us-restores-duties-on-chinese-e-commerce-5976399">end of the de minimis exemption</a>, many importers are being forced to rethink how they manage cost, visibility, and compliance across their supply chains,” said Jim McCullen, chief technology officer at Century Supply Chain Solutions. “What we’re seeing is that this moment isn’t just about logistics, it’s about risk management, planning, and structural change.” In some ways, the race for vessel capacity has been on since before Trump took office for the second time. Aggregate import volumes into the ports of Los Angeles and Long Beach in January and February exceeded even the peak COVID years of 2021 and 2022, and were even 24% higher than pre-pandemic January-February volumes in 2019 when frontloading occurred to beat Trump’s initial tranche of 25% tariffs on Chinese imports. The new tariffs are designed to reinvigorate the US manufacturing sector, Trump said during a White House event Wednesday. But they come amid a slowing manufacturing sector in North America that showed weakness in part because of the long-threatened tariffs. US factory output fell in March, according to PMI survey data compiled by S&amp;P Global, parent company of the Journal of Commerce. Respondents attributed the slowdown to falling demand and the waning impact from the cargo frontloading that occurred earlier in the year as importers moved to beat the imposition of tariffs “Manufacturing output fell across North America in March at one of the steepest rates seen over the past two years...with broad-based production loses in the US, Canada and Mexico,” Chris Williamson, chief business economist at S&amp;P Global Market Intelligence, wrote in a research note Thursday. “Prices paid for inputs also rose sharply. US factory input cost inflation, in fact, exceeded that seen in all 33 economies surveyed by S&amp;P Global for the first time since 2008.” <h3>Consumer goods in crosshairs </h3>Early research into which commodity categories might be most impacted by the tariffs highlights the effect on finished consumer goods from high-tariff nations. “Notable examples include toys and video games (average duty rate increase of 30.4%), computer parts (29.6 %), clothing (28.3%, with some as high as 36.9%) and smartphones (27%),” Chris Rogers, head of supply chain research at S&amp;P Global Market Intelligence, wrote in an analysis Thursday. “Many of the products that are excluded from these new duties will face their own tariff reviews and may end up with duties of around 25%, including copper, lumber, pharmaceuticals and semiconductors, after the reviews are completed in a few months.” The hit would be $458 billion to US importers’ costs in a full year, based on 2024 import levels, Rogers added. “The full impact on supply chains will also be a function of how other governments react — for example, the EU and mainland China have been more hawkish — and how firms choose to incorporate the new tariffs into their pricing and sourcing strategies,” he wrote. “Given the wide-ranging nature of the duties and focus on consumer goods, price increases may be a main strategy followed.” UBS, meanwhile, said it expects the tariffs announced Wednesday, in addition to previously announced 25% tariffs on all imported automobiles, to drive pressure on international trade volumes and weaken domestic freight activity. In a research note Thursday, the bank said it estimates that 33% of rail and 25% of truck ton miles in the US are directly tied to international trade. Whether US Customs and Border Protection (CBP) has the capacity and sufficient technology infrastructure in place to enforce the new tariffs is another open question. Some forwarders said the agency can handle the changes, while others were doubtful given disruptions caused by previous tariff implementations. “Customs is almost guaranteed not to be ready,” Khachatryan said. “Even with the previous, less sweeping tariffs, CBP was woefully unprepared. Aluminum tariffs alone took over a week to work properly in different [automated brokerage interface] systems, with many shipments stuck in storage at airline terminals. Guidance for customs brokers is even slower to come. Something of this magnitude will almost certainly be a lot more disruptive, not least because of all the overlapping tariffs and confusing exclusions.” More broadly, the tariffs could well lead to choppier decision making for logistics operations personnel, with decisions on whether to import goods or hold them back determined by Trump’s seemingly day-to-day policy changes. “This will be a good example of honing skills to strategically manage based on daily information versus quarterly cycles, and I doubt many will be able to do this,” a forwarder said. Contact Eric Johnson at eric.johnson@spglobal.com. </div>

The broad and varied tariffs announced this week by the Trump administration that affect US imports from virtually every country on the globe have sent shippers scrambling, forcing a rethink of supply chain strategy within a market so cloaked in uncertainty that one stakeholder likened it to the early days of the COVID-19 pandemic. Some US-based shippers are, incredibly enough, racing to beat the April 9 imposition of new tariffs on most goods, while others are holding back product in Asia on the chance the levies will be reduced by US President Donald Trump, whose tariff implementation strategy in recent weeks has been marked by a large dose of impulsiveness. April 9 is the date country-specific tariffs take effect. Baseline 10% tariffs on countries that avoided the specific, so-called “reciprocal” rates are due to go into effect April 5. “It looks to me like we are witnessing a sudden global slowdown akin to COVID,” a forwarder who did not want to be identified told the Journal of Commerce. “It’s starting to look like the collective response will be to stop, kind of like what we saw we when COVID started. The question is, for how long?” The source said some major customers are “deciding to store product in Asia and essentially cutting off the flow.” “They are looking at using air or other modes but in more of a ‘batch’ sequencing versus the normal flow models,” the forwarder said. Another forwarder who also did not want to be identified said shippers are using a range of tools ahead of the tariff increases. “Customers are shifting volume from [full containerload] to [less-than-containerload] to get goods here before April 9,” the source said. “Some are booking air to get ahead of the tariffs. Some are pulling back orders. Some vendors are pulling back on DDP shipments to renegotiate on price. Some want to change the Incoterms to change the responsible party for duties.” DDP, or delivery duty paid, occurs when the seller is responsible for paying duties. The forwarder added that some customers that were eyeing an exit from China to other sourcing locations in Asia are now rethinking those plans. That’s because those alternative sourcing locations have been nailed with new tariffs, too, most notably Vietnam at 46%. Robert Khachatryan, CEO of Los Angeles-based forwarder FreightRight, said he isn’t seeing a rush to expedite bookings that would not have ordinarily moved this week. “Clients that have bookings in place are pushing to make sure they depart as planned,” Khachatryan said. “However, there are no new orders rushing in.” ’Structural change’ to supply chains The Trump tariff plan, which was far more extensive that observers expected, is forcing a wholesale reconsideration of individual supply chains. “With the new tariffs and the end of the de minimis exemption , many importers are being forced to rethink how they manage cost, visibility, and compliance across their supply chains,” said Jim McCullen, chief technology officer at Century Supply Chain Solutions. “What we’re seeing is that this moment isn’t just about logistics, it’s about risk management, planning, and structural change.” In some ways, the race for vessel capacity has been on since before Trump took office for the second time. Aggregate import volumes into the ports of Los Angeles and Long Beach in January and February exceeded even the peak COVID years of 2021 and 2022, and were even 24% higher than pre-pandemic January-February volumes in 2019 when frontloading occurred to beat Trump’s initial tranche of 25% tariffs on Chinese imports. The new tariffs are designed to reinvigorate the US manufacturing sector, Trump said during a White House event Wednesday. But they come amid a slowing manufacturing sector in North America that showed weakness in part because of the long-threatened tariffs. US factory output fell in March, according to PMI survey data compiled by S&P Global, parent company of the Journal of Commerce. Respondents attributed the slowdown to falling demand and the waning impact from the cargo frontloading that occurred earlier in the year as importers moved to beat the imposition of tariffs “Manufacturing output fell across North America in March at one of the steepest rates seen over the past two years...with broad-based production loses in the US, Canada and Mexico,” Chris Williamson, chief business economist at S&P Global Market Intelligence, wrote in a research note Thursday. “Prices paid for inputs also rose sharply. US factory input cost inflation, in fact, exceeded that seen in all 33 economies surveyed by S&P Global for the first time since 2008.” Consumer goods in crosshairs Early research into which commodity categories might be most impacted by the tariffs highlights the effect on finished consumer goods from high-tariff nations. “Notable examples include toys and video games (average duty rate increase of 30.4%), computer parts (29.6 %), clothing (28.3%, with some as high as 36.9%) and smartphones (27%),” Chris Rogers, head of supply chain research at S&P Global Market Intelligence, wrote in an analysis Thursday. “Many of the products that are excluded from these new duties will face their own tariff reviews and may end up with duties of around 25%, including copper, lumber, pharmaceuticals and semiconductors, after the reviews are completed in a few months.” The hit would be $458 billion to US importers’ costs in a full year, based on 2024 import levels, Rogers added. “The full impact on supply chains will also be a function of how other governments react — for example, the EU and mainland China have been more hawkish — and how firms choose to incorporate the new tariffs into their pricing and sourcing strategies,” he wrote. “Given the wide-ranging nature of the duties and focus on consumer goods, price increases may be a main strategy followed.” UBS, meanwhile, said it expects the tariffs announced Wednesday, in addition to previously announced 25% tariffs on all imported automobiles, to drive pressure on international trade volumes and weaken domestic freight activity. In a research note Thursday, the bank said it estimates that 33% of rail and 25% of truck ton miles in the US are directly tied to international trade. Whether US Customs and Border Protection (CBP) has the capacity and sufficient technology infrastructure in place to enforce the new tariffs is another open question. Some forwarders said the agency can handle the changes, while others were doubtful given disruptions caused by previous tariff implementations. “Customs is almost guaranteed not to be ready,” Khachatryan said. “Even with the previous, less sweeping tariffs, CBP was woefully unprepared. Aluminum tariffs alone took over a week to work properly in different [automated brokerage interface] systems, with many shipments stuck in storage at airline terminals. Guidance for customs brokers is even slower to come. Something of this magnitude will almost certainly be a lot more disruptive, not least because of all the overlapping tariffs and confusing exclusions.” More broadly, the tariffs could well lead to choppier decision making for logistics operations personnel, with decisions on whether to import goods or hold them back determined by Trump’s seemingly day-to-day policy changes. “This will be a good example of honing skills to strategically manage based on daily information versus quarterly cycles, and I doubt many will be able to do this,” a forwarder said. Contact Eric Johnson at eric.johnson@spglobal.com.

Forwarding

Transport, Trade and Regulation News

New US tariffs forcing shippers to recalculate supply chains on the fly

<div class="phx-topic abstract-wrapper">But any shipper celebrations over potentially lower rates in a cooling market will be tempered by concerns about border congestion as US customs will now be tasked with processing millions of de minimis imports every day.</div>

But any shipper celebrations over potentially lower rates in a cooling market will be tempered by concerns about border congestion as US customs will now be tasked with processing millions of de minimis imports every day.

<div class="phx-topic">The Trump administration will eliminate duty-free treatment for low-value US imports from China and Hong Kong starting May 2 in a move that will be welcomed by shippers of general air cargo that have been punished by tight capacity and high rates for the past 18 months. But any shipper celebrations over potentially lower rates will be tempered by concerns over border congestion at US airports due to the dramatic increase in shipments needing to be processed by US Customs and Border Protection (CBP). The executive order signed by Donald Trump Wednesday is aimed at “deceptive shipping practices by Chinese-based shippers, many of whom hide illicit substances, including synthetic opioids, in low-value packages to exploit the de minimis exemption.” All postal items valued at or under $800 previously qualifying for the US’ so-called “de minimis” exemption will become subject to a duty rate of either 30% of their value or $25 per item, increasing to $50 per item after June 1. Almost one billion US de minimis shipments last year were from China. “The executive order mentioned the Secretary of Commerce announcement that ‘adequate systems are in place to collect tariff revenue,’ [but] it is hard to imagine that such capacity was built so quickly,” Ram Ben Tzion, CEO of risk management firm Publican, said in a statement Thursday. When the Trump administration removed low-value products from de minimis exemptions in February, the two million daily air cargo shipments from China caused the system to immediately back up. The exemption was quickly restored until CBP devised an appropriate inspection and duty collection system, which the US Department of Commerce says is now in place. <h3>End in sight for never-ending peak season </h3>A never-ending peak season driven by booming e-commerce demand on the Asia-North America trade lane — much of that cargo enjoying the de minimis exemption — increased volume by double-digit percentages last year, with the packages filling dozens of daily freighter flights out of China. But the massive demand also pushed rates to levels not seen since the pandemic, hurting general air cargo shippers and those forced into the air when ocean carriers began diverting around southern Africa following the Red Sea attacks on commercial shipping that began in late 2023. Spot rates on the China-North America route have averaged $5.40 per kilogram for the past 18 months, almost double the average for pre-pandemic 2019. Should the duties charged on low-value imports from China drag down demand for e-commerce in the US, a significant amount of freighter capacity will be released back into the market and bring down spot rates. But those duties will also impact the air cargo transport models adopted by the Chinese online marketplaces. “This will disrupt and possibly eliminate many of the e-commerce giants’ ability to do business, as well as many logistics operators who provide services and capacity,” Tzion said. The main Chinese e-commerce platforms — Temu, Shein and Tik Tok — contract space directly with airlines, bypassing the global forwarders that mostly handle relatively small e-commerce volume. But they also have already established huge distribution centers in the US and Europe as they shift from an air cargo-focused approach to a more traditional fulfilment model using mostly ocean shipping. Cross-border e-commerce has evolved as the major driver for global air cargo demand growth in recent years. China-US e-commerce shipments alone account for nearly half of the cargo capacity on the eastbound corridor and about 6% of global air freight demand, rate benchmarking platform Xeneta noted in a statement Thursday on the US de minimis announcement. <h3>Difficult to plan in ‘crazy environment’ </h3>Holger Ketz, global head of network and carrier management at Swiss logistics giant Kuehne + Nagel, told the Journal of Commerce in a recent interview that although the forwarder has low single-digit e-commerce business, “we are still operating in the same market.” “If suddenly there is no demand from e-commerce customers anymore, it will have an impact on our own operated fleet because with falling demand our yield will go down,” Ketz said. That was a point made by Niall van de Wouw, Xeneta’s chief air freight officer, in the company’s statement. “It’s a crazy environment, left and right,” he said, adding that the market anxiety and uncertainty was not good for any players in the air cargo supply chain — producers, consumers, airlines or forwarders. “No one is benefiting from this situation because it’s impossible to plan effectively against a moving target,” van de Wouw noted. “Clearly, everyone will be waiting to see how the removal of the de minimis threshold and all the global tariffs already announced and those still to come will impact trade, as well as how quickly there will be less demand and, consequently, less air freight.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com.">greg.knowler@spglobal.com</a>.</div>

The Trump administration will eliminate duty-free treatment for low-value US imports from China and Hong Kong starting May 2 in a move that will be welcomed by shippers of general air cargo that have been punished by tight capacity and high rates for the past 18 months. But any shipper celebrations over potentially lower rates will be tempered by concerns over border congestion at US airports due to the dramatic increase in shipments needing to be processed by US Customs and Border Protection (CBP). The executive order signed by Donald Trump Wednesday is aimed at “deceptive shipping practices by Chinese-based shippers, many of whom hide illicit substances, including synthetic opioids, in low-value packages to exploit the de minimis exemption.” All postal items valued at or under $800 previously qualifying for the US’ so-called “de minimis” exemption will become subject to a duty rate of either 30% of their value or $25 per item, increasing to $50 per item after June 1. Almost one billion US de minimis shipments last year were from China. “The executive order mentioned the Secretary of Commerce announcement that ‘adequate systems are in place to collect tariff revenue,’ [but] it is hard to imagine that such capacity was built so quickly,” Ram Ben Tzion, CEO of risk management firm Publican, said in a statement Thursday. When the Trump administration removed low-value products from de minimis exemptions in February, the two million daily air cargo shipments from China caused the system to immediately back up. The exemption was quickly restored until CBP devised an appropriate inspection and duty collection system, which the US Department of Commerce says is now in place. End in sight for never-ending peak season A never-ending peak season driven by booming e-commerce demand on the Asia-North America trade lane — much of that cargo enjoying the de minimis exemption — increased volume by double-digit percentages last year, with the packages filling dozens of daily freighter flights out of China. But the massive demand also pushed rates to levels not seen since the pandemic, hurting general air cargo shippers and those forced into the air when ocean carriers began diverting around southern Africa following the Red Sea attacks on commercial shipping that began in late 2023. Spot rates on the China-North America route have averaged $5.40 per kilogram for the past 18 months, almost double the average for pre-pandemic 2019. Should the duties charged on low-value imports from China drag down demand for e-commerce in the US, a significant amount of freighter capacity will be released back into the market and bring down spot rates. But those duties will also impact the air cargo transport models adopted by the Chinese online marketplaces. “This will disrupt and possibly eliminate many of the e-commerce giants’ ability to do business, as well as many logistics operators who provide services and capacity,” Tzion said. The main Chinese e-commerce platforms — Temu, Shein and Tik Tok — contract space directly with airlines, bypassing the global forwarders that mostly handle relatively small e-commerce volume. But they also have already established huge distribution centers in the US and Europe as they shift from an air cargo-focused approach to a more traditional fulfilment model using mostly ocean shipping. Cross-border e-commerce has evolved as the major driver for global air cargo demand growth in recent years. China-US e-commerce shipments alone account for nearly half of the cargo capacity on the eastbound corridor and about 6% of global air freight demand, rate benchmarking platform Xeneta noted in a statement Thursday on the US de minimis announcement. Difficult to plan in ‘crazy environment’ Holger Ketz, global head of network and carrier management at Swiss logistics giant Kuehne + Nagel, told the Journal of Commerce in a recent interview that although the forwarder has low single-digit e-commerce business, “we are still operating in the same market.” “If suddenly there is no demand from e-commerce customers anymore, it will have an impact on our own operated fleet because with falling demand our yield will go down,” Ketz said. That was a point made by Niall van de Wouw, Xeneta’s chief air freight officer, in the company’s statement. “It’s a crazy environment, left and right,” he said, adding that the market anxiety and uncertainty was not good for any players in the air cargo supply chain — producers, consumers, airlines or forwarders. “No one is benefiting from this situation because it’s impossible to plan effectively against a moving target,” van de Wouw noted. “Clearly, everyone will be waiting to see how the removal of the de minimis threshold and all the global tariffs already announced and those still to come will impact trade, as well as how quickly there will be less demand and, consequently, less air freight.” Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Forwarder News

Air Cargo Carriers News

Air Cargo

Air cargo braces for impact as US restores duties on Chinese e-commerce

<div class="phx-topic abstract-wrapper">There is a seasonal element to the second quarter increase in capacity deployed on the trade, but the reluctance by ocean carriers to withdraw capacity comes amid increasing signs of a price war.</div>

There is a seasonal element to the second quarter increase in capacity deployed on the trade, but the reluctance by ocean carriers to withdraw capacity comes amid increasing signs of a price war.

<div class="phx-topic">Ocean carriers on the Asia-North Europe trade lane are reducing the number of blank sailings in April and May while significantly adding capacity despite a spot market that continues to slide. Data from visibility provider eeSea shows carriers will blank sailings totaling 79,664 TEUs in capacity during April, almost half of the 151,549 TEUs that were withdrawn in March. At the same time, the deployed capacity is expected to surge 26% to 1.08 million TEUs. In May, the blanked capacity will be reduced still further to just 34,680 TEUs, while deployed capacity will rise to 1.12 million TEUs, the eeSea data shows. Although there is a seasonal element to the second-quarter increase in capacity deployed on the trade, as well as the reshuffling of carrier alliances employing more vessels, the reluctance by ocean carriers to withdraw capacity comes amid increasing signs of a price war. Average spot rates on Asia-North Europe have fallen 55% since the beginning of the year to $2,127 per FEU, according to rate benchmarking platform Xeneta. Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said the decline in spot rates was “significantly more negative than what can be explained by just seasonality.” “This could be the result of an aggressive commercial price war between shipping lines, potentially due to the switchover to the new alliances, a weakening of the supply-demand balance, or a combination of both,” Murphy noted in this week’s Sunday Spotlight newsletter. Sea-Intelligence data showed the year-over-year capacity growth on Asia-Europe in the eight weeks prior to Lunar New Year was 9%, while in the following eight weeks capacity grew 27%. “It is clear that ... highly significant capacity growth is a key parameter in explaining the current spot rate weakness,” Murphy said. <h3>Carriers fighting for market share </h3>Stefan Verberckmoes, senior shipping analyst at Alphaliner, said the alliance reshuffle was seeing ocean carriers moving ships to new assignments as old services were phased out and new networks established. “The alliance reshuffle also explains the rate decline, as some carriers are fighting for market share to fill their ships by lowering spot freight rates,” Verberckmoes told the Journal of Commerce Thursday. Niels Rasmussen, chief shipping analyst at BIMCO, described Chinese exports as having “the worst first-quarter development of the past 20 years.” He noted in a container shipping brief Wednesday that the China Container Freight Index (CCFI), which measures both contract and spot prices out of China, was down 28% since the beginning of January due to a record decline in the spot market. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b695a38f-ee99-4040-88ed-961c1bf85058"></dynamic-object></div>Spot rates measured by the Shanghai Containerized Freight Index (SCFI) have fallen 46% since the beginning of the year, the largest first-quarter drop since the SCFI began in late 2009. “Since 2006, the CCFI has on average only fallen 2% during the first quarter and has only declined more than 10% four times,” Rasmussen said. “The second-worst year was 2023 when average rates fell 24% between the start and end of the first quarter.” However, Xeneta’s Chief Analyst Peter Sand said the falling rates should be seen in context, with the 55% drop in Xeneta’s average Asia-North Europe spot rate coming off a significantly elevated $5,200/FEU rate in late December. “The current spot rates are 75% above the mid-November 2023 level and carriers are very profitable right now,” Sand told the Journal of Commerce Thursday. “Spot rates are heading for a little jump in a few days ... carriers are gaining confidence as they seem to have successfully arrested the three months of decline.” <h3>Strong underlying demand — for now </h3>The head of ocean freight at a global forwarder based in Europe agreed that rates were likely to rise in April with what appears to be strong underlying demand. “It seems like demand is there because some carriers are even not accepting further bookings from China to Europe, but it is hard to see if it is temporary or will be sustained,” the source said, warning that if demand fell away, “carriers will react quickly and implement ad-hoc blank sailings.” In a market update released Thursday, Maersk CCO Karsten Kildahl said Europe was facing ongoing challenges, including trade policy uncertainty, high energy prices and competitive pressures. “However, the region has very quickly made a paradigm shift, with Germany’s substantial investment plan in infrastructure and defense capabilities,” Kildahl noted. “This will provide a much-needed stimulus to the Euro area.” More worrying for carriers is that rates have fallen even as the rerouting of ships around the Cape of Good Hope continues to absorb 10% to 12% of the available global fleet capacity, a clear indication of the excess tonnage looming over the industry. “As container shipping fleet capacity is expected to grow 5.4% during 2025, freight rates can be expected to remain lower than in 2024,” Rasmussen noted. But he added that should volume growth slow and ships return to normal routings via the Red Sea and Suez Canal, “2019 [rate] levels may soon be within sight.” Data from Xeneta shows that on April 2, 2019, the average spot rate from China to North Europe was $1,185/FEU. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers on the Asia-North Europe trade lane are reducing the number of blank sailings in April and May while significantly adding capacity despite a spot market that continues to slide. Data from visibility provider eeSea shows carriers will blank sailings totaling 79,664 TEUs in capacity during April, almost half of the 151,549 TEUs that were withdrawn in March. At the same time, the deployed capacity is expected to surge 26% to 1.08 million TEUs. In May, the blanked capacity will be reduced still further to just 34,680 TEUs, while deployed capacity will rise to 1.12 million TEUs, the eeSea data shows. Although there is a seasonal element to the second-quarter increase in capacity deployed on the trade, as well as the reshuffling of carrier alliances employing more vessels, the reluctance by ocean carriers to withdraw capacity comes amid increasing signs of a price war. Average spot rates on Asia-North Europe have fallen 55% since the beginning of the year to $2,127 per FEU, according to rate benchmarking platform Xeneta. Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said the decline in spot rates was “significantly more negative than what can be explained by just seasonality.” “This could be the result of an aggressive commercial price war between shipping lines, potentially due to the switchover to the new alliances, a weakening of the supply-demand balance, or a combination of both,” Murphy noted in this week’s Sunday Spotlight newsletter. Sea-Intelligence data showed the year-over-year capacity growth on Asia-Europe in the eight weeks prior to Lunar New Year was 9%, while in the following eight weeks capacity grew 27%. “It is clear that ... highly significant capacity growth is a key parameter in explaining the current spot rate weakness,” Murphy said. Carriers fighting for market share Stefan Verberckmoes, senior shipping analyst at Alphaliner, said the alliance reshuffle was seeing ocean carriers moving ships to new assignments as old services were phased out and new networks established. “The alliance reshuffle also explains the rate decline, as some carriers are fighting for market share to fill their ships by lowering spot freight rates,” Verberckmoes told the Journal of Commerce Thursday. Niels Rasmussen, chief shipping analyst at BIMCO, described Chinese exports as having “the worst first-quarter development of the past 20 years.” He noted in a container shipping brief Wednesday that the China Container Freight Index (CCFI), which measures both contract and spot prices out of China, was down 28% since the beginning of January due to a record decline in the spot market. Spot rates measured by the Shanghai Containerized Freight Index (SCFI) have fallen 46% since the beginning of the year, the largest first-quarter drop since the SCFI began in late 2009. “Since 2006, the CCFI has on average only fallen 2% during the first quarter and has only declined more than 10% four times,” Rasmussen said. “The second-worst year was 2023 when average rates fell 24% between the start and end of the first quarter.” However, Xeneta’s Chief Analyst Peter Sand said the falling rates should be seen in context, with the 55% drop in Xeneta’s average Asia-North Europe spot rate coming off a significantly elevated $5,200/FEU rate in late December. “The current spot rates are 75% above the mid-November 2023 level and carriers are very profitable right now,” Sand told the Journal of Commerce Thursday. “Spot rates are heading for a little jump in a few days ... carriers are gaining confidence as they seem to have successfully arrested the three months of decline.” Strong underlying demand — for now The head of ocean freight at a global forwarder based in Europe agreed that rates were likely to rise in April with what appears to be strong underlying demand. “It seems like demand is there because some carriers are even not accepting further bookings from China to Europe, but it is hard to see if it is temporary or will be sustained,” the source said, warning that if demand fell away, “carriers will react quickly and implement ad-hoc blank sailings.” In a market update released Thursday, Maersk CCO Karsten Kildahl said Europe was facing ongoing challenges, including trade policy uncertainty, high energy prices and competitive pressures. “However, the region has very quickly made a paradigm shift, with Germany’s substantial investment plan in infrastructure and defense capabilities,” Kildahl noted. “This will provide a much-needed stimulus to the Euro area.” More worrying for carriers is that rates have fallen even as the rerouting of ships around the Cape of Good Hope continues to absorb 10% to 12% of the available global fleet capacity, a clear indication of the excess tonnage looming over the industry. “As container shipping fleet capacity is expected to grow 5.4% during 2025, freight rates can be expected to remain lower than in 2024,” Rasmussen noted. But he added that should volume growth slow and ships return to normal routings via the Red Sea and Suez Canal, “2019 [rate] levels may soon be within sight.” Data from Xeneta shows that on April 2, 2019, the average spot rate from China to North Europe was $1,185/FEU. Contact Greg Knowler at greg.knowler@spglobal.com .

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Asia-Europe carriers hold back on blanks despite rate weakness

<div class="phx-topic abstract-wrapper">But countries believed by the White House as having an unfair advantage over the US on trade will be hit with higher levies, including China, South Korea and European Union nations. </div>

But countries believed by the White House as having an unfair advantage over the US on trade will be hit with higher levies, including China, South Korea and European Union nations.

<div class="phx-topic">President Donald Trump on Wednesday said the US will assess a minimum 10% tariff on all imports into the US, although countries the Trump administration views as having an unfair trade imbalance with the US will be hit with much higher levies. The so-called “reciprocal” tariffs that Trump unveiled Wednesday will be equivalent to half of what the US calculates each individual country imposes, through tariffs and non-tariff barriers, on US exports. The tariffs vary by country and will go into effect in two stages between April 5 and April 9. Products from countries hit with the baseline 10% tariff will be impacted from April 5, while products from individual countries with specific reciprocal tariffs will be affected from April 9. Imports from China, for example, will be set at 34%, the European Union at 20% and Vietnam at 46%. Other tariff levels announced Wednesday are 26% on goods from India, 25% on South Korea and 36% on Thailand. Most South American nations will see a 10% tariff on their exports to the US. Canada and Mexico have <a href="https://www.joc.com/article/disrupted-cross-border-freight-shipping-braces-for-us-tariffs-5974787">already been hit with 25% tariffs that went into effect Wednesday.</a>“We will be charging them approximately half of what they are and have been charging us,” Trump said during an event at the White House. The president also confirmed that all automobile imports will be subject to 25% tariffs. Trump’s announcement ends weeks of speculation about the administration’s actions to support its stated goal of reinvigorating the US manufacturing sector by imposing barriers on international trade. But the endless speculation has caused chaos in the global marketplace, hit the stock market hard and caused banks and economists to lower their expectations for US growth this year. Because tariffs are taxes that will ultimately be passed on to US shoppers, consumer confidence readings have taken a hit. Trump said he expects to receive calls from heads of state about how to reduce their tariffs and other market barriers — such as state subsidies or currency manipulation — in the coming days as countries seek to reduce the impact of the reciprocal tariffs. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

President Donald Trump on Wednesday said the US will assess a minimum 10% tariff on all imports into the US, although countries the Trump administration views as having an unfair trade imbalance with the US will be hit with much higher levies. The so-called “reciprocal” tariffs that Trump unveiled Wednesday will be equivalent to half of what the US calculates each individual country imposes, through tariffs and non-tariff barriers, on US exports. The tariffs vary by country and will go into effect in two stages between April 5 and April 9. Products from countries hit with the baseline 10% tariff will be impacted from April 5, while products from individual countries with specific reciprocal tariffs will be affected from April 9. Imports from China, for example, will be set at 34%, the European Union at 20% and Vietnam at 46%. Other tariff levels announced Wednesday are 26% on goods from India, 25% on South Korea and 36% on Thailand. Most South American nations will see a 10% tariff on their exports to the US. Canada and Mexico have already been hit with 25% tariffs that went into effect Wednesday. “We will be charging them approximately half of what they are and have been charging us,” Trump said during an event at the White House. The president also confirmed that all automobile imports will be subject to 25% tariffs. Trump’s announcement ends weeks of speculation about the administration’s actions to support its stated goal of reinvigorating the US manufacturing sector by imposing barriers on international trade. But the endless speculation has caused chaos in the global marketplace, hit the stock market hard and caused banks and economists to lower their expectations for US growth this year. Because tariffs are taxes that will ultimately be passed on to US shoppers, consumer confidence readings have taken a hit. Trump said he expects to receive calls from heads of state about how to reduce their tariffs and other market barriers — such as state subsidies or currency manipulation — in the coming days as countries seek to reduce the impact of the reciprocal tariffs. Contact Eric Johnson at eric.johnson@spglobal.com .

Trump announces 10% across-the-board tariffs on all US imports

<div class="phx-topic abstract-wrapper">The change to a more freight-all-kinds strategy comes as ongoing contracts for the 2024–25 service year bundled with penalty clauses have proved to be problematic for keeping customer relationships intact.</div>

The change to a more freight-all-kinds strategy comes as ongoing contracts for the 2024–25 service year bundled with penalty clauses have proved to be problematic for keeping customer relationships intact.

<div class="phx-topic">Ocean carriers active on the India-US East Coast trade lane seem to be “reformatting” their traditional service contract arrangements for the 2025–26 season as the market environment remains increasingly cloudy, industry sources say. Multiple sources, especially non-vessel-operating common carriers (NVOs), who spoke with the Journal of Commerce noted that some liners are not keen to negotiate fixed-rate long-term deals as they anticipate cases of shipper underperformance or failure to honor commitments in the current volatile market. The strategy change comes as ongoing contracts for the 2024–25 service year bundled with penalty clauses have proved to be problematic for keeping customer relationships intact. “The indications as of now are that [carriers] want to avoid a recurrence of too many customer complaints about penalty notices and potential legal risks,” an NVO executive who didn’t want to be identified told the Journal of Commerce. “Customers usually push for penalty waivers regardless of the terms and conditions they have agreed to.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56199e2b-5df4-468f-a149-b18ae7c32e51"></dynamic-object></div>One carrier holding off on negotiating or signing long-term contracts is Hapag-Lloyd, sources say. The German liner was previously offering a fixed-price type of contract with validity ranging from six to 18 months. “Hapag-Lloyd instead is now seeking to work on a freight-all-kinds [FAK] pricing basis with all customers,” an NVO source said. Hapag-Lloyd is the top India-US East Coast carrier, offering the fastest transit from West India to North America. The carrier accounts for almost 25% of the market, anecdotal industry data indicates. There are some tentative signals that a few other competing carriers will selectively consider an FAK pricing strategy to ward off likely bad blood with customers as long-term relationships remain more critical than ever amid the dual headwinds of significant overcapacity and muted demand growth. But other forwarder sources hold a view that carriers can’t afford to lose contract customers, which they say could impact their space allocation math. “Liners need some base cargo through contracts to plan their commercial strategies,” a forwarder executive said. “It’s true that contracts with penalty clauses or floating charges have been a complex matter, with defaults reported, mostly with small and mid-size volume shippers.” Sources also noted that contract clients, both beneficial cargo owners and NVOs, typically contribute approximately 50% of carrier volumes on the trade lane. <h3>‘Rate war’</h3>Riding on enhanced India-USEC weekly capacity, Maersk is said to be advancing contract negotiations and has already concluded deals with several leading forwarders and/or BCOs, sources say. Meanwhile, most carriers on the trade lane have canceled early-April rate increase plans and extended recent spot rates through the first half of the month, a lack of bargaining position they in large part blame on Asian carriers working on slot rights, particularly Cosco Shipping and its subsidiary OOCL. “What we are witnessing now can best be described as a rate war between European and Asian carriers,” Joy Varghese, managing director of Mumbai-based forwarder Cargocare Group, told the Journal of Commerce. “As a result, mega carriers are increasingly weaponizing blank sailings or port skips to tighten the market.” Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged India-USEC spot rates at $1,700 per FEU as of April 1, down 8% from last week. Contact Bency Mathew at <a href="https://www.joc.com/article/bencymathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Ocean carriers active on the India-US East Coast trade lane seem to be “reformatting” their traditional service contract arrangements for the 2025–26 season as the market environment remains increasingly cloudy, industry sources say. Multiple sources, especially non-vessel-operating common carriers (NVOs), who spoke with the Journal of Commerce noted that some liners are not keen to negotiate fixed-rate long-term deals as they anticipate cases of shipper underperformance or failure to honor commitments in the current volatile market. The strategy change comes as ongoing contracts for the 2024–25 service year bundled with penalty clauses have proved to be problematic for keeping customer relationships intact. “The indications as of now are that [carriers] want to avoid a recurrence of too many customer complaints about penalty notices and potential legal risks,” an NVO executive who didn’t want to be identified told the Journal of Commerce. “Customers usually push for penalty waivers regardless of the terms and conditions they have agreed to.” One carrier holding off on negotiating or signing long-term contracts is Hapag-Lloyd, sources say. The German liner was previously offering a fixed-price type of contract with validity ranging from six to 18 months. “Hapag-Lloyd instead is now seeking to work on a freight-all-kinds [FAK] pricing basis with all customers,” an NVO source said. Hapag-Lloyd is the top India-US East Coast carrier, offering the fastest transit from West India to North America. The carrier accounts for almost 25% of the market, anecdotal industry data indicates. There are some tentative signals that a few other competing carriers will selectively consider an FAK pricing strategy to ward off likely bad blood with customers as long-term relationships remain more critical than ever amid the dual headwinds of significant overcapacity and muted demand growth. But other forwarder sources hold a view that carriers can’t afford to lose contract customers, which they say could impact their space allocation math. “Liners need some base cargo through contracts to plan their commercial strategies,” a forwarder executive said. “It’s true that contracts with penalty clauses or floating charges have been a complex matter, with defaults reported, mostly with small and mid-size volume shippers.” Sources also noted that contract clients, both beneficial cargo owners and NVOs, typically contribute approximately 50% of carrier volumes on the trade lane. ‘Rate war’ Riding on enhanced India-USEC weekly capacity, Maersk is said to be advancing contract negotiations and has already concluded deals with several leading forwarders and/or BCOs, sources say. Meanwhile, most carriers on the trade lane have canceled early-April rate increase plans and extended recent spot rates through the first half of the month, a lack of bargaining position they in large part blame on Asian carriers working on slot rights, particularly Cosco Shipping and its subsidiary OOCL. “What we are witnessing now can best be described as a rate war between European and Asian carriers,” Joy Varghese, managing director of Mumbai-based forwarder Cargocare Group, told the Journal of Commerce. “As a result, mega carriers are increasingly weaponizing blank sailings or port skips to tighten the market.” Platts, a sister company of the Journal of Commerce within S&P Global, pegged India-USEC spot rates at $1,700 per FEU as of April 1, down 8% from last week. Contact Bency Mathew at bencyvmathew@gmail.com .

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India-US liners tweak 2025–26 contract plans amid shipper performance fears: NVOs

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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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