<div class="phx-topic abstract-wrapper">1450 (Dec. 10, 1990) Previous day - 1451 The Baltic International Freight Futures Market in </div>

1450 (Dec. 10, 1990) Previous day - 1451 The Baltic International Freight Futures Market in

<div>1450 (Dec. 10, 1990) Previous day - 1451The Baltic International Freight Futures Market in London offers owners and charterers in thebulk shipping community a forum for futures trading of a freight rate index. The contracts are based on the Baltic Freight Index, announced daily, of 12 routes listed below.DollarCom- MetricRoutes modity WeightTon IndexU.S. Gulf-North Continent L. Grain 10% 15.600 1718Trans-Atlantic Round Time Charter 10% 9241 1410U.S. Gulf-Japan H. Grain 20% 25.650 1795U.S. North Pacific-Japan H. Grain 7.5% 14.417 1563Trans-Pacific Round Time Charter 7.5% 10200 1517U.S. Gulf-Venezuela H. Grain 5% 13.167 1128Skaw Passero-Far East Time Charter 5% 10258 1269Hampton Roads-Richards Bay-Japan...

1450 (Dec. 10, 1990) Previous day - 1451 The Baltic International Freight Futures Market in London offers owners and charterers in thebulk shipping community a forum for futures trading of a freight rate index. The contracts are based on the Baltic Freight Index, announced daily, of 12 routes listed below.Dollar Com- Metric Routes modity WeightTon Index U.S. Gulf-North Continent L. Grain 10% 15.600 1718 Trans-Atlantic Round Time Charter 10% 9241 1410 U.S. Gulf-Japan H. Grain 20% 25.650 1795 U.S. North Pacific-Japan H. Grain 7.5% 14.417 1563 Trans-Pacific Round Time Charter 7.5% 10200 1517 U.S. Gulf-Venezuela H. Grain 5% 13.167 1128 Skaw Passero-Far East Time Charter 5% 10258 1269 Hampton Roads-Richards Bay-Japan Coal 7.5% 14.442 1400 Hampton Roads-North Continent Coal 5% 7.125 1233 Queensland-Rotterdam Coal 5% 11.108 981 Vancouver-San Diego-Rotterdam Petcoke 5% 13.708 1043 Monrovia-Rotterdam Iron Ore 5% 5.667 1259 Casablanca-West Coast India Phosrock 2.5% 32.975 924 Aqaba-West Coast India Phosrock 5% 19.883 1468

Maritime

BALTIC FREIGHT INDEX

<div class="phx-topic abstract-wrapper">The new service that will start in April will enhance Vietnam’s connectivity with Brazil, which is already Vietnam’s largest trading partner in Latin America. </div>

The new service that will start in April will enhance Vietnam’s connectivity with Brazil, which is already Vietnam’s largest trading partner in Latin America.

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<div class="phx-topic">CMA CGM and Maersk will become the latest carriers to launch a joint Asia-East Coast South America (ECSA) service with a semi-express loop that is specifically targeting the significant trade growth between Brazil and Vietnam. The move follows a tie-up between HMM and Ocean Network Express (ONE) that will see the two carriers begin an express service linking Busan and South China with Brazil. Both the CMA CGM/Maersk and HMM/ONE connections will begin in April, just as container freight rates are anticipated to rise, according to one Brazilian-based freight forwarder. “Demand is stable and freight rates on Asia–ECSA are around $2,100 per FEU, at least until the middle of March,” Fabrizio De Paulis, managing director of forwarder De Paulis Logistics &amp; SCM, told the Journal of Commerce. “Rates will likely increase in April on improved demand,” he added. De Paulis pointed out rates have seen a steep decline since hitting around $8,000/FEU last July. CMA CGM said its Asia-South America East Coast 3 (SEAS3) service – known as the ASAS2 for Maersk – will provide a "unique service from Vietnam" while also streamlining shipments between Asia and Brazil with the limited number of port calls improving transit times. This is the first time CMA CGM and Maersk have teamed up on an Asia-ECSA service. Their separate existing services involve multiple ports calls in Asia and South America, including Argentina and Uruguay. Maersk said there will be a 37-day transit from Shanghai to Santos, 33 days from Shekou (Shenzhen) to Santos, and 29 days from Vung Tau to Santos, Latin America’s largest port. CMA CGM is providing seven vessels with a nominal capacity of 6,500 TEU, while Maersk is deploying four ships on the service. The full rotation is Shanghai-Shekou-Vung Tau-Singapore-Santos-Singapore-Shanghai. <h3>Boost for Vietnam-Brazil connectivity </h3>Both CMA CGM and Maersk said the Vung Tau call will enhance Vietnam’s connectivity with Brazil, which is already Vietnam’s largest trading partner in Latin America. That comes as bilateral trade between the two countries is set to top $10 billion this year and $15 billion by 2030, up from around $8 billion last year, according to comments made last November by Vietnam Prime Minister Pham Minh Chinh. Vietnam’s exports to Brazil include seafood, rubber, textiles and footwear, while Brazil’s exports to Vietnam comprise soybeans, animal feed and cotton. CMA CGM said the calls at Vung Tau and Singapore will provide opportunities for transshipment cargo from other countries in Southeast Asia, including Thailand. The loop will be the first new service to call at the Santos Brasil Tecon Terminal since CMA CGM last September said it would acquire a 48% stake in Santos Brasil, the country’s leading terminal operator. The new service will provide shippers in Latin America and the Caribbean with additional options for Asia-bound cargo, with Santos acting as CMA CGM’s regional hub connecting other countries in the region. ONE and HMM will start their joint Asia-ECSA service in April from Busan, also with limited port calls to enhance transit times. The rotation is Busan–South China–Singapore–Rio Grande–Santos–Santa Catarina–Singapore–Hong Kong–Busan. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

CMA CGM and Maersk will become the latest carriers to launch a joint Asia-East Coast South America (ECSA) service with a semi-express loop that is specifically targeting the significant trade growth between Brazil and Vietnam. The move follows a tie-up between HMM and Ocean Network Express (ONE) that will see the two carriers begin an express service linking Busan and South China with Brazil. Both the CMA CGM/Maersk and HMM/ONE connections will begin in April, just as container freight rates are anticipated to rise, according to one Brazilian-based freight forwarder. “Demand is stable and freight rates on Asia–ECSA are around $2,100 per FEU, at least until the middle of March,” Fabrizio De Paulis, managing director of forwarder De Paulis Logistics & SCM, told the Journal of Commerce. “Rates will likely increase in April on improved demand,” he added. De Paulis pointed out rates have seen a steep decline since hitting around $8,000/FEU last July. CMA CGM said its Asia-South America East Coast 3 (SEAS3) service – known as the ASAS2 for Maersk – will provide a "unique service from Vietnam" while also streamlining shipments between Asia and Brazil with the limited number of port calls improving transit times. This is the first time CMA CGM and Maersk have teamed up on an Asia-ECSA service. Their separate existing services involve multiple ports calls in Asia and South America, including Argentina and Uruguay. Maersk said there will be a 37-day transit from Shanghai to Santos, 33 days from Shekou (Shenzhen) to Santos, and 29 days from Vung Tau to Santos, Latin America’s largest port. CMA CGM is providing seven vessels with a nominal capacity of 6,500 TEU, while Maersk is deploying four ships on the service. The full rotation is Shanghai-Shekou-Vung Tau-Singapore-Santos-Singapore-Shanghai. Boost for Vietnam-Brazil connectivity Both CMA CGM and Maersk said the Vung Tau call will enhance Vietnam’s connectivity with Brazil, which is already Vietnam’s largest trading partner in Latin America. That comes as bilateral trade between the two countries is set to top $10 billion this year and $15 billion by 2030, up from around $8 billion last year, according to comments made last November by Vietnam Prime Minister Pham Minh Chinh. Vietnam’s exports to Brazil include seafood, rubber, textiles and footwear, while Brazil’s exports to Vietnam comprise soybeans, animal feed and cotton. CMA CGM said the calls at Vung Tau and Singapore will provide opportunities for transshipment cargo from other countries in Southeast Asia, including Thailand. The loop will be the first new service to call at the Santos Brasil Tecon Terminal since CMA CGM last September said it would acquire a 48% stake in Santos Brasil, the country’s leading terminal operator. The new service will provide shippers in Latin America and the Caribbean with additional options for Asia-bound cargo, with Santos acting as CMA CGM’s regional hub connecting other countries in the region. ONE and HMM will start their joint Asia-ECSA service in April from Busan, also with limited port calls to enhance transit times. The rotation is Busan–South China–Singapore–Rio Grande–Santos–Santa Catarina–Singapore–Hong Kong–Busan. Contact Keith Wallis at keithwallis@hotmail.com.

Container Shipping News

Container lines

CMA CGM, Maersk become latest to launch joint express Asia-ECSA service

<div class="phx-topic abstract-wrapper">The bleak timeline from Europe’s busiest port is based on the chaos that resulted when the Ever Given was freed after six days of blocking the Suez Canal in 2021.</div>

The bleak timeline from Europe’s busiest port is based on the chaos that resulted when the Ever Given was freed after six days of blocking the Suez Canal in 2021.

<div class="phx-topic">Long Beach, California -- The backlog of containers that would result from ocean carriers resuming Red Sea transits would take months to clear from Europe’s port hubs, the director of containers for the Port of Rotterdam told the Journal of Commerce’s TPM25 conference this week. Once the Red Sea is deemed safe enough for commercial shipping, vessels taking the shorter route would overtake those diverting around southern Africa, with severe congestion expected as a result. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>Hanna Stelzel said the timeline for clearing the backlog of boxes at Rotterdam was based on the disruption caused when the Ever Given was freed after six days of blocking the Suez Canal in 2021. “It will be very challenging, but what we learned from the Suez blockage was that by widening our anchorage area it gave us an advantage and we have put that into practice,” Stelzel said. It’s estimated that more than 1.9 million TEUs of capacity was delayed during the six-day Ever Given blockage in 2021. Carrier schedules were heavily disrupted for months at ports in North Europe and along the US East Coast. But the diversions around Africa over the past 15 months as carriers avoid potential attacks in the Red Sea by Houthi militants operating in Yemen have absorbed around 10% of global container shipping capacity, and the impact of resuming Suez transits will be far greater. In addition to expanding its anchorage area, Rotterdam has improved its sharing of data and collaboration across its customer supply chain to manage the expected congestion, Stelzel said. <h3>‘Severe risk’ to vessels remains </h3>But given the fragility of the ceasefire between Israel and Hamas and the potential for the Hamas-backing Houthis to resume attacks on shipping in the Red Sea, the port congestion that will emerge from a return to Suez is unlikely to be this year’s problem. Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global, parent of the Journal of Commerce, said in his one-year outlook there remains a “severe risk” to vessels transiting the Red Sea. “We expect the ceasefire process is likely to break down in the next 12 months and military operations will resume in Gaza,” was Kennedy’s bleak assessment given during a TPM25 session on the Red Sea situation. Kennedy said the Houthis will use that as a justification for resuming their own rocket attacks on Israel, which he predicts will result in airstrikes from the US, thus triggering a resumption of attacks on commercial shipping in the Red Sea. A more optimistic view of the resumption of Suez Canal transits was presented by Tom Behrens Sorensen, chairman of ECCO Global Shoe Production, who said Chinese- and Russian-flagged carriers were already transiting the Red Sea. “Once the carriers in the first alliance return to Suez, all the rest will have to follow, and in my view, that will happen in the second half,” he told an Asia-Europe panel discussion at TPM25. “Obviously, there are lot of caveats in this in terms of how the political situation evolves, but I'm cautiously optimistic that it will happen in the third or fourth quarter because the temptation [to resume Suez transits] is too big,” Behrens Sorensen added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Long Beach, California -- The backlog of containers that would result from ocean carriers resuming Red Sea transits would take months to clear from Europe’s port hubs, the director of containers for the Port of Rotterdam told the Journal of Commerce’s TPM25 conference this week. Once the Red Sea is deemed safe enough for commercial shipping, vessels taking the shorter route would overtake those diverting around southern Africa, with severe congestion expected as a result. Hanna Stelzel said the timeline for clearing the backlog of boxes at Rotterdam was based on the disruption caused when the Ever Given was freed after six days of blocking the Suez Canal in 2021. “It will be very challenging, but what we learned from the Suez blockage was that by widening our anchorage area it gave us an advantage and we have put that into practice,” Stelzel said. It’s estimated that more than 1.9 million TEUs of capacity was delayed during the six-day Ever Given blockage in 2021. Carrier schedules were heavily disrupted for months at ports in North Europe and along the US East Coast. But the diversions around Africa over the past 15 months as carriers avoid potential attacks in the Red Sea by Houthi militants operating in Yemen have absorbed around 10% of global container shipping capacity, and the impact of resuming Suez transits will be far greater. In addition to expanding its anchorage area, Rotterdam has improved its sharing of data and collaboration across its customer supply chain to manage the expected congestion, Stelzel said. ‘Severe risk’ to vessels remains But given the fragility of the ceasefire between Israel and Hamas and the potential for the Hamas-backing Houthis to resume attacks on shipping in the Red Sea, the port congestion that will emerge from a return to Suez is unlikely to be this year’s problem. Jack Kennedy, head of Middle East and North Africa country risk at S&P Global, parent of the Journal of Commerce, said in his one-year outlook there remains a “severe risk” to vessels transiting the Red Sea. “We expect the ceasefire process is likely to break down in the next 12 months and military operations will resume in Gaza,” was Kennedy’s bleak assessment given during a TPM25 session on the Red Sea situation. Kennedy said the Houthis will use that as a justification for resuming their own rocket attacks on Israel, which he predicts will result in airstrikes from the US, thus triggering a resumption of attacks on commercial shipping in the Red Sea. A more optimistic view of the resumption of Suez Canal transits was presented by Tom Behrens Sorensen, chairman of ECCO Global Shoe Production, who said Chinese- and Russian-flagged carriers were already transiting the Red Sea. “Once the carriers in the first alliance return to Suez, all the rest will have to follow, and in my view, that will happen in the second half,” he told an Asia-Europe panel discussion at TPM25. “Obviously, there are lot of caveats in this in terms of how the political situation evolves, but I'm cautiously optimistic that it will happen in the third or fourth quarter because the temptation [to resume Suez transits] is too big,” Behrens Sorensen added. Contact Greg Knowler at greg.knowler@spglobal.com .

Port News

Asia-Europe

International ports

TPM25: Months of port congestion face carriers’ Red Sea return: Rotterdam

<div class="phx-topic abstract-wrapper">The largest cold chain storage company in the world is looking to maintain momentum through targeted acquisitions and diverse portfolio development, its co-founder told TPM25.</div>

The largest cold chain storage company in the world is looking to maintain momentum through targeted acquisitions and diverse portfolio development, its co-founder told TPM25.

<div class="phx-topic">Long Beach, California — Cold storage leader Lineage Logistics is looking to build on the biggest initial public offering (IPO) of 2024 through new acquisitions and potential joint ventures in growth markets such as South America, its co-founder said Tuesday. Adam Forste told the Journal of Commerce’s TPM25 conference that the company has long leaned on acquisitions as a key approach to growth, citing more than 120 companies acquired since Lineage was conceived as a single warehouse in 2008. Forste said Lineage, which aims to offer end-to-end cold chain solutions, has even developed an acquisition playbook to streamline integration, including a dedicated integration team led by Lineage CEO Greg Lehmkuhl. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>As the largest cold chain storage company in the world, Lineage has more than 3 billion square feet of capacity across North America, Europe and Asia. Now Lineage — which raised more than $4.4 billion in its IPO last year — is looking at agile partnership models and structures to tackle growth opportunities in growing markets such as the Middle East, South America, India, Africa and Southeast Asia without distracting from Lineage’s core business. “What works in central South America may not be the right format in a place like India,” Forste said. Partnerships with local players have allowed Michigan-based Lineage to explore emerging markets, while continuing to bolster its existing business in established markets, said Forste. Lineage has managed to crack into the South American market using their partnership approach, which has been “incredibly successful,” he said. “We raised third-party capital for that business,” Forste said, referring to Lineage’s existing South American partnership. “We support them with technology and advice. But in three short years, they’ve grown that business to 75 warehouses in other countries in that market.” Additionally, Forste said Lineage aims to balance its acquisitions with development of new facilities — stressing the importance of acquiring companies that are in alignment with Lineage and offer the right growth opportunities, with high value put on both portfolio diversification and operational efficiency. “If you could aggregate and get diversity of commodity, customer and geography — we could insulate it and effectively reduce the risk [for] our own company and lower our cost of capital,” said Forste. “And that proved out to be true over a lot of different cycles.” Still, there are cold chain challenges on the horizon, Forste said. Inflation, tariffs and supply chain disruptions could impact the market, but he believes Lineage’s targeted expansions offer an advantage to customers. “We really think of ourselves as trying [to prioritize] the most important projects for our customers’ growth with the very best [returns] for our shareholders,” Forste said. “In any given market, that could be more acquisitions, it could be more developments. Right now, we’re seeing a blend of both.” Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Long Beach, California — Cold storage leader Lineage Logistics is looking to build on the biggest initial public offering (IPO) of 2024 through new acquisitions and potential joint ventures in growth markets such as South America, its co-founder said Tuesday. Adam Forste told the Journal of Commerce’s TPM25 conference that the company has long leaned on acquisitions as a key approach to growth, citing more than 120 companies acquired since Lineage was conceived as a single warehouse in 2008. Forste said Lineage, which aims to offer end-to-end cold chain solutions, has even developed an acquisition playbook to streamline integration, including a dedicated integration team led by Lineage CEO Greg Lehmkuhl. As the largest cold chain storage company in the world, Lineage has more than 3 billion square feet of capacity across North America, Europe and Asia. Now Lineage — which raised more than $4.4 billion in its IPO last year — is looking at agile partnership models and structures to tackle growth opportunities in growing markets such as the Middle East, South America, India, Africa and Southeast Asia without distracting from Lineage’s core business. “What works in central South America may not be the right format in a place like India,” Forste said. Partnerships with local players have allowed Michigan-based Lineage to explore emerging markets, while continuing to bolster its existing business in established markets, said Forste. Lineage has managed to crack into the South American market using their partnership approach, which has been “incredibly successful,” he said. “We raised third-party capital for that business,” Forste said, referring to Lineage’s existing South American partnership. “We support them with technology and advice. But in three short years, they’ve grown that business to 75 warehouses in other countries in that market.” Additionally, Forste said Lineage aims to balance its acquisitions with development of new facilities — stressing the importance of acquiring companies that are in alignment with Lineage and offer the right growth opportunities, with high value put on both portfolio diversification and operational efficiency. “If you could aggregate and get diversity of commodity, customer and geography — we could insulate it and effectively reduce the risk [for] our own company and lower our cost of capital,” said Forste. “And that proved out to be true over a lot of different cycles.” Still, there are cold chain challenges on the horizon, Forste said. Inflation, tariffs and supply chain disruptions could impact the market, but he believes Lineage’s targeted expansions offer an advantage to customers. “We really think of ourselves as trying [to prioritize] the most important projects for our customers’ growth with the very best [returns] for our shareholders,” Forste said. “In any given market, that could be more acquisitions, it could be more developments. Right now, we’re seeing a blend of both.” Contact Laura Robb at laura.robb@spglobal.com . 

Cool Cargo News

Supply chain

TPM25: Lineage using big 2024 IPO to launch company’s next moves

<div class="phx-topic abstract-wrapper">ONE’s chief executive took the opportunity of TPM’s silver anniversary to look back at how the industry has changed for the better over the years and call out some of the existing hurdles.</div>

ONE’s chief executive took the opportunity of TPM’s silver anniversary to look back at how the industry has changed for the better over the years and call out some of the existing hurdles.

<div class="phx-topic">Long Beach, California — Container shipping had to overcome many growing pains as it has risen to serve global trade, Ocean Network Express (ONE) Chief Executive Jeremy Nixon said, demonstrating the industry’s resiliency. While it has met those challenges, Nixon urged against complacency as new challenges continue to arise. Speaking Tuesday at the Journal of Commerce’s TPM25 conference, Nixon reflected on the event’s silver anniversary and about container shipping’s inflection points over the previous two decades as trade volumes, as well as ships and ports, grew larger. He said the industry has reached a new level of maturity, but it will continue to evolve and face further evolutions that remain unpredictable. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>The first TPM coincided with the 2001 terror attacks on the World Trade Center, which housed the US offices of many container carriers, Nixon said. Due to concerns about further terrorist attacks, container shipping had to adopt to the automated manifest system for pre-declaring inbound US cargo, along with using X-ray inspections, practices that have been adopted around the world. “Homeland Security needed to know what’s actually in these containers,” Nixon said. “Quickly after this, we had to come up with a process for declaring this online before the vessel arrived. That got replicated around the world.” As ships and volumes grew larger, ocean carriers began contending with series of accidents, including the 2013 sinking of the MOL Comfort, belonging to a parent of ONE. The loss of 4,000 containers was the largest industry accident to date. However, the industry responded through stricter guidelines on safe cargo handling, Nixon said. He pointed to the verified gross mass requirement put forth by the International Maritime Organization (IMO) that helped reduce container losses at sea as cargo weights had to be verified to ensure safer loading on ships. While container losses at sea have declined, Nixon pointed to further challenges in adequate cargo declaration. He said ONE recently flagged a consolidated shipment from Shanghai to the Middle East for further inspection due to irregularities around the weight and cargo declaration. While the bill of lading said it was cookware, the inspection revealed the shipper packed fireworks into the box. “We are working very closely as an industry to tighten up this type of misdeclaration,” Nixon said, adding that new digital tools such as artificial intelligence (AI) can be used in this regard. The industry has also had to better navigate its boom-bust cycles and the chaos that ensued from those. As carriers dealt with low freight rates, they were unable to meet the demands of US West Coast longshore labor, which struck the ports for 10 days in 2002 and prompted then-President George W. Bush to use the Taft Hartley Act to order dockworkers back on the job. <h3>Hanjin ‘wakeup call’ </h3>Nixon worked at P&amp;O Nedlloyd when it was acquired by Maersk in 2005. While it was an amicable deal, Nixon said there were problems with integrating the back-office systems of both carriers. NYK Line, Nixon’s later employer and another ONE parent, was also involved in a slot-sharing agreement with South Korea’s Hanjin Shipping, which faced bankruptcy in 2016. NYK boxes were stranded on Hanjin ships, and vice versa. The Hanjin bankruptcy was part of the impetus for MOL, NYK and K-Line consolidating their container ships into ONE, Nixon said, noting that bringing together three corporate cultures itself was a challenge. “Everybody’s balance sheet was so stretched and I think this is also one of the factors behind ONE coming together,” Nixon said. “Hanjin was a good wakeup call about what could happen.” The widening of the Panama Canal in 2016 was a major boost to the industry as it finally allowed ships larger than 4,800 TEUs to reach the US East Coast. The longer and wider ships were somewhat safer than the first Panamax ships, which were narrow and required more ballast to steady. However, since then, ports have been in a race to build longer berths and install taller cranes. Nixon said port capacity is still a major hurdle for the industry as the inability of marine terminals to efficiently handle large ships contributes to port congestion. “Carriers actually do want to run their networks on time,” he said. “The challenge is the port infrastructure has not really been able to keep up.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Long Beach, California — Container shipping had to overcome many growing pains as it has risen to serve global trade, Ocean Network Express (ONE) Chief Executive Jeremy Nixon said, demonstrating the industry’s resiliency. While it has met those challenges, Nixon urged against complacency as new challenges continue to arise. Speaking Tuesday at the Journal of Commerce’s TPM25 conference, Nixon reflected on the event’s silver anniversary and about container shipping’s inflection points over the previous two decades as trade volumes, as well as ships and ports, grew larger. He said the industry has reached a new level of maturity, but it will continue to evolve and face further evolutions that remain unpredictable. The first TPM coincided with the 2001 terror attacks on the World Trade Center, which housed the US offices of many container carriers, Nixon said. Due to concerns about further terrorist attacks, container shipping had to adopt to the automated manifest system for pre-declaring inbound US cargo, along with using X-ray inspections, practices that have been adopted around the world. “Homeland Security needed to know what’s actually in these containers,” Nixon said. “Quickly after this, we had to come up with a process for declaring this online before the vessel arrived. That got replicated around the world.” As ships and volumes grew larger, ocean carriers began contending with series of accidents, including the 2013 sinking of the MOL Comfort, belonging to a parent of ONE. The loss of 4,000 containers was the largest industry accident to date. However, the industry responded through stricter guidelines on safe cargo handling, Nixon said. He pointed to the verified gross mass requirement put forth by the International Maritime Organization (IMO) that helped reduce container losses at sea as cargo weights had to be verified to ensure safer loading on ships. While container losses at sea have declined, Nixon pointed to further challenges in adequate cargo declaration. He said ONE recently flagged a consolidated shipment from Shanghai to the Middle East for further inspection due to irregularities around the weight and cargo declaration. While the bill of lading said it was cookware, the inspection revealed the shipper packed fireworks into the box. “We are working very closely as an industry to tighten up this type of misdeclaration,” Nixon said, adding that new digital tools such as artificial intelligence (AI) can be used in this regard. The industry has also had to better navigate its boom-bust cycles and the chaos that ensued from those. As carriers dealt with low freight rates, they were unable to meet the demands of US West Coast longshore labor, which struck the ports for 10 days in 2002 and prompted then-President George W. Bush to use the Taft Hartley Act to order dockworkers back on the job. Hanjin ‘wakeup call’ Nixon worked at P&O Nedlloyd when it was acquired by Maersk in 2005. While it was an amicable deal, Nixon said there were problems with integrating the back-office systems of both carriers. NYK Line, Nixon’s later employer and another ONE parent, was also involved in a slot-sharing agreement with South Korea’s Hanjin Shipping, which faced bankruptcy in 2016. NYK boxes were stranded on Hanjin ships, and vice versa. The Hanjin bankruptcy was part of the impetus for MOL, NYK and K-Line consolidating their container ships into ONE, Nixon said, noting that bringing together three corporate cultures itself was a challenge. “Everybody’s balance sheet was so stretched and I think this is also one of the factors behind ONE coming together,” Nixon said. “Hanjin was a good wakeup call about what could happen.” The widening of the Panama Canal in 2016 was a major boost to the industry as it finally allowed ships larger than 4,800 TEUs to reach the US East Coast. The longer and wider ships were somewhat safer than the first Panamax ships, which were narrow and required more ballast to steady. However, since then, ports have been in a race to build longer berths and install taller cranes. Nixon said port capacity is still a major hurdle for the industry as the inability of marine terminals to efficiently handle large ships contributes to port congestion. “Carriers actually do want to run their networks on time,” he said. “The challenge is the port infrastructure has not really been able to keep up.” Contact Michael Angell at michael.angell@spglobal.com .

TPM25: Container shipping still evolving as new challenges arise: Nixon

<div class="phx-topic abstract-wrapper">Kate Farmer told TPM25 that people would be “shocked” at how much money the oft-targeted railroad spends on combating the increasingly sophisticated methods of cargo theft.</div>

Kate Farmer told TPM25 that people would be “shocked” at how much money the oft-targeted railroad spends on combating the increasingly sophisticated methods of cargo theft.

<div class="phx-topic">Long Beach, California — Combating cargo theft is a critically important issue for BNSF Railway, but it will require local, state and federal law enforcement to fully eradicate the increasingly organized and brazen criminal acts, the company’s CEO said. There has been a recent spike in US cargo thefts, including a Jan. 13 incident in Arizona during which thieves stole 1,985 pairs of unreleased Nike shoes worth more than $440,000 from a BNSF train, according to the <a href="https://www.latimes.com/california/story/2025-02-23/freight-train-heists-targeting-nike-merchandise-are-probed-as-related">Los Angeles Times</a>. Last November, criminals sabotaged another BNSF train in Arizona, forcing it to an emergency stop and stealing 180 unreleased Nike shoes worth $41,400. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>BNSF CEO Kate Farmer said fighting cargo theft is one of her top priorities. “If I told you how much money we were spending on prevention, people would be shocked,” Farmer told the Journal of Commerce’s TPM25 conference. “We are putting up electric fencing and building cement barriers in our intermodal facilities. Last year, our rail police spent 10,000 more hours in surveillance than the year before. We’re using drone technology between Barstow [California] and Belen [New Mexico]. We have heat technology, thermal technology and BNSF Police officers riding trains.” Cargo theft has affected <a href="https://www.joc.com/article/rail-industry-split-on-how-to-best-combat-cargo-theft-5742577">all major US railroads</a>, often targeting freight moving through urban rail hubs. In 2022, looters <a href="https://www.cbsnews.com/losangeles/news/thieves-raiding-cargo-containers-stealing-packages-on-downtown-section-of-union-pacific-train-tracks/">ransacked containers</a> outside Union Pacific Railroad’s (UP’s) Los Angeles Terminal Center, leaving the tracks strewn with discarded goods. Last October, thieves struck a UP train in Chicago that was <a href="https://www.nbcchicago.com/news/local/trains-halted-on-metra-line-due-to-groups-stealing-from-freight-traihttps:/www.nbcchicago.com/news/local/trains-halted-on-metra-line-due-to-groups-stealing-from-freight-trains-agency-says/3571665/?os=v&amp;ref=appns-agency-says/3571665/?os=v&amp;ref=app">being interchanged</a> with Norfolk Southern Railway. CSX Transportation has also reported <a href="https://www.joc.com/article/us-rail-cargo-crime-on-the-rise-as-thieves-methods-gain-sophistication-5219201">rising thefts in Memphis</a>. <h3>Growing sophistication among cargo thieves </h3>The scale and sophistication of recent thefts have raised concerns among law enforcement agencies. A federal investigator told the Los Angeles Times that some cargo theft operations rival the drug cartels of Sinaloa, Mexico, in their organization and sophistication. In a string of at least 10 cargo train burglaries since last March, thieves have targeted BNSF trains in California and Arizona. Criminals board slow-moving eastbound trains, wait until they reach remote stretches of the desert, and then sabotage the train or signals, forcing an emergency stop. Criminals will cut air brake hoses, disable signal boxes or sever control wires, disrupting train movements in ways similar to tampering with traffic lights. Some groups use follow vehicles to track shipments and deploy surveillance crews to monitor law enforcement activity. Despite the extensive security measures, Farmer said railroads must also receive stronger action from law enforcement at all levels. “We’ll have six folks that we will arrest on Monday, and then we will see them again on Friday, so this is not going to be something that the railroad is going to be able to solve on its own,” she said. “We cannot solve this alone as a rail industry. We absolutely must have federal involvement. I believe that it is starting to get the kind of attention in Washington that it needs, but we’ve got a long way to go.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Long Beach, California — Combating cargo theft is a critically important issue for BNSF Railway, but it will require local, state and federal law enforcement to fully eradicate the increasingly organized and brazen criminal acts, the company’s CEO said. There has been a recent spike in US cargo thefts, including a Jan. 13 incident in Arizona during which thieves stole 1,985 pairs of unreleased Nike shoes worth more than $440,000 from a BNSF train, according to the Los Angeles Times . Last November, criminals sabotaged another BNSF train in Arizona, forcing it to an emergency stop and stealing 180 unreleased Nike shoes worth $41,400. BNSF CEO Kate Farmer said fighting cargo theft is one of her top priorities. “If I told you how much money we were spending on prevention, people would be shocked,” Farmer told the Journal of Commerce’s TPM25 conference. “We are putting up electric fencing and building cement barriers in our intermodal facilities. Last year, our rail police spent 10,000 more hours in surveillance than the year before. We’re using drone technology between Barstow [California] and Belen [New Mexico]. We have heat technology, thermal technology and BNSF Police officers riding trains.” Cargo theft has affected all major US railroads , often targeting freight moving through urban rail hubs. In 2022, looters ransacked containers outside Union Pacific Railroad’s (UP’s) Los Angeles Terminal Center, leaving the tracks strewn with discarded goods. Last October, thieves struck a UP train in Chicago that was being interchanged with Norfolk Southern Railway. CSX Transportation has also reported rising thefts in Memphis . Growing sophistication among cargo thieves The scale and sophistication of recent thefts have raised concerns among law enforcement agencies. A federal investigator told the Los Angeles Times that some cargo theft operations rival the drug cartels of Sinaloa, Mexico, in their organization and sophistication. In a string of at least 10 cargo train burglaries since last March, thieves have targeted BNSF trains in California and Arizona. Criminals board slow-moving eastbound trains, wait until they reach remote stretches of the desert, and then sabotage the train or signals, forcing an emergency stop. Criminals will cut air brake hoses, disable signal boxes or sever control wires, disrupting train movements in ways similar to tampering with traffic lights. Some groups use follow vehicles to track shipments and deploy surveillance crews to monitor law enforcement activity. Despite the extensive security measures, Farmer said railroads must also receive stronger action from law enforcement at all levels. “We’ll have six folks that we will arrest on Monday, and then we will see them again on Friday, so this is not going to be something that the railroad is going to be able to solve on its own,” she said. “We cannot solve this alone as a rail industry. We absolutely must have federal involvement. I believe that it is starting to get the kind of attention in Washington that it needs, but we’ve got a long way to go.” Contact Ari Ashe at ari.ashe@spglobal.com .

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

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Shippers save money, time with automated transportation bidding tools

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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