<div class="phx-topic abstract-wrapper">BNSF has named Kathryn Farmer, who has been with the western railroad for 28 years, as its new CEO effective Jan. 1, 2021. She will become the first female CEO of a North American Class I railroad.</div>

BNSF has named Kathryn Farmer, who has been with the western railroad for 28 years, as its new CEO effective Jan. 1, 2021. She will become the first female CEO of a North American Class I railroad.

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<div>Kathryn Farmer, a 28-year veteran of BNSF Railway who came up through the intermodal ranks, will become CEO of the western railroad effective Jan. 1, 2021. She will replace Carl Ice, who has held the job since 2014, the company announced Monday.Farmer will become the first female CEO of a North American Class I railroad after spending the last two years as executive vice-president of operations.Matt Igoe, BNSF's vice-president of transportation, will take over Farmer's role as executive vice-president of operations.“One of the most important roles of a CEO is to ensure a strong succession plan is in place,” Ice...

Kathryn Farmer, a 28-year veteran of BNSF Railway who came up through the intermodal ranks, will become CEO of the western railroad effective Jan. 1, 2021. She will replace Carl Ice, who has held the job since 2014, the company announced Monday. Farmer will become the first female CEO of a North American Class I railroad after spending the last two years as executive vice-president of operations. Matt Igoe, BNSF's vice-president of transportation, will take over Farmer's role as executive vice-president of operations. “One of the most important roles of a CEO is to ensure a strong succession plan is in place,” Ice said in a statement. “Katie and I have been working toward this plan for a long time. Katie has held many different roles at BNSF with an ever-increasing impact with each new role as she has built trust and confidence throughout BNSF. I am pleased for Katie and the organization knowing BNSF’s future is in good hands.” Warren Buffett, CEO of BNSF’s parent company, Berkshire Hathaway, praised Ice for his successful leadership of the railroad and said Farmer “possesses all of the qualities that make us excited about the future”. Like other Class I railroads, BNSF has dealt with a decline in volume owing to the COVID-19 pandemic. Through the first week of September, BNSF’s intermodal volume, both international and domestic, had declined 7.5 percent compared with a year ago. Unlike its chief competitor, Union Pacific (UP) Railroad, BNSF’s intermodal volume has not risen as sharply in the third quarter. UP’s intermodal volume is up 6.5 percent year over year in the third quarter, including year-over-year gains in 9 out of the last 10 weeks, according to the Association of American Railroads (AAR). BNSF’s volume, meanwhile, has declined 2.5 percent so far in the third quarter versus a year ago, and weekly totals were lower than a year ago in every week of 2020 until the last two weeks, according to AAR. Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe .

International rail

North-American rail

BNSF veteran Farmer named new CEO

<div class="phx-topic abstract-wrapper">The Taiwanese carrier is joining an industrywide shift away from methanol that accelerated last year amid growing supply concerns.</div>

The Taiwanese carrier is joining an industrywide shift away from methanol that accelerated last year amid growing supply concerns.

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<div class="phx-topic">Taiwan’s Evergreen Marine has confirmed inking two deals worth up to $3.2 billion for the order of 11 24,000-TEU vessels capable of sailing on liquefied natural gas (LNG). Six of the megaships will be built at South Korean yard Hanhwa Ocean and five at Guangzhou Shipyard International Co. in China at a unit cost between $265 million and $295 million, Evergreen said in a statement Thursday. No delivery data was provided by the carrier, but with shipyards filled with orders from container shipping lines the vessels are not expected to start coming online until 2028. The Evergreen order is a switch in fuel direction following <a href="https://www.joc.com/article/evergreen-confirms-orders-for-24-methanol-ready-container-ships-5245271">an order for 24 methanol-capable dual-fuel ships the carrier made in 2023</a>. While Evergreen did not provide a reason for the decision to invest in LNG-capable vessels, it is part of a wholesale industry shift towards LNG amid growing methanol supply concerns. The need to keep fuel options open was illustrated in a recent Maersk order for dual-fuel vessels totaling 800,000 TEUs <a href="https://www.joc.com/article/maersks-lng-order-hedges-bet-on-green-fuel-technology-ceo-5703200">capable of sailing on methanol as well as LNG</a>, a deviation from the carrier’s deep dive into methanol. About 70% of the total 1.7 million TEUs of orders made last year were for ships capable of sailing on methanol or LNG, with LNG comprising 63% of the new orders, according to data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. In 2023, the methanol-LNG split was 66% in favor of methanol ships, Sea-web data shows. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1a054077-7728-4ffd-abb8-b7aff17c3235"></dynamic-object></div>Peter Keller, chairman of industry coalition SEA-LNG, said the existing LNG infrastructure, including storage, bunkering and distribution, provided a significant advantage over other alternative fuels that require building new infrastructure from scratch. "The combination of availability, infrastructure, energy density and potential for price advantages makes LNG an attractive and competitive option for ship owners and operators during this transition period before other alternatives become more viable,” Keller told the Journal of Commerce. Just how viable and at what scale was a huge challenge for the shipping industry, according to Tristan Smith of the climate change research group UCL Energy Institute. In a recent report, Smith said finding the fuel of the future was more a process of capital allocation than a development of technology. He pointed out that large amounts of existing infrastructure would become obsolete because it was aligned with the supply of fossil fuels to the shipping industry and would likely not have a role in 15 years. “So how does someone make a business case for something if it’s an applicable solution in the 2030s but doesn’t have any role in the 2040s?” Smith asked. “How does the fleet make the right decision at the right point in time so that it doesn’t become obsolete? “Those are all the difficult decisions that people across the energy supply system, national governments and the people who buy and finance ships are all having to factor in,” he added. “It’s quite tough.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Taiwan’s Evergreen Marine has confirmed inking two deals worth up to $3.2 billion for the order of 11 24,000-TEU vessels capable of sailing on liquefied natural gas (LNG). Six of the megaships will be built at South Korean yard Hanhwa Ocean and five at Guangzhou Shipyard International Co. in China at a unit cost between $265 million and $295 million, Evergreen said in a statement Thursday. No delivery data was provided by the carrier, but with shipyards filled with orders from container shipping lines the vessels are not expected to start coming online until 2028. The Evergreen order is a switch in fuel direction following an order for 24 methanol-capable dual-fuel ships the carrier made in 2023 . While Evergreen did not provide a reason for the decision to invest in LNG-capable vessels, it is part of a wholesale industry shift towards LNG amid growing methanol supply concerns. The need to keep fuel options open was illustrated in a recent Maersk order for dual-fuel vessels totaling 800,000 TEUs capable of sailing on methanol as well as LNG , a deviation from the carrier’s deep dive into methanol. About 70% of the total 1.7 million TEUs of orders made last year were for ships capable of sailing on methanol or LNG, with LNG comprising 63% of the new orders, according to data from Sea-web, a sister company of the Journal of Commerce within S&P Global. In 2023, the methanol-LNG split was 66% in favor of methanol ships, Sea-web data shows. Peter Keller, chairman of industry coalition SEA-LNG, said the existing LNG infrastructure, including storage, bunkering and distribution, provided a significant advantage over other alternative fuels that require building new infrastructure from scratch. "The combination of availability, infrastructure, energy density and potential for price advantages makes LNG an attractive and competitive option for ship owners and operators during this transition period before other alternatives become more viable,” Keller told the Journal of Commerce. Just how viable and at what scale was a huge challenge for the shipping industry, according to Tristan Smith of the climate change research group UCL Energy Institute. In a recent report, Smith said finding the fuel of the future was more a process of capital allocation than a development of technology. He pointed out that large amounts of existing infrastructure would become obsolete because it was aligned with the supply of fossil fuels to the shipping industry and would likely not have a role in 15 years. “So how does someone make a business case for something if it’s an applicable solution in the 2030s but doesn’t have any role in the 2040s?” Smith asked. “How does the fleet make the right decision at the right point in time so that it doesn’t become obsolete? “Those are all the difficult decisions that people across the energy supply system, national governments and the people who buy and finance ships are all having to factor in,” he added. “It’s quite tough.” Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Container lines

Maritime

Evergreen makes $3.2 billion order for LNG-capable megaships

<div class="phx-topic abstract-wrapper">The first in a series of “development flights” loaded with packages from Hong Kong landed at the Scottish west coast airport this week with a view to launching scheduled weekly services in March.</div>

The first in a series of “development flights” loaded with packages from Hong Kong landed at the Scottish west coast airport this week with a view to launching scheduled weekly services in March.

<div class="phx-topic">China’s top online marketplaces – Temu, Shein and Tik Tok – put Glasgow Prestwick Airport’s e-commerce hub aspirations to the test this week by sending a freighter loaded with packages ordered online to the airport on Scotland’s west coast. The 60 tonnes of e-commerce that arrived on a Hong Kong Air Cargo freighter mark the first in a series of “development flights” put together by the online platforms with a view to launch scheduled flights between Hong Kong and Prestwick in March. “We have made significant investments over the past year to improve our cargo handling capabilities and attract traffic from the Far East, but we have also designed an end-to-end solution for the e-commerce platforms,” Nico le Roux, business development manager at Glasgow Prestwick Airport, told the Journal of Commerce in an interview this week. “Temu, Shein and Tik Tok have all visited Prestwick to view the e-commerce operations we have built, and they have been very supportive,” he added. The market Prestwick is targeting is enormous. Le Roux estimates that China’s top four online marketplaces were responsible for sending 1,000 tonnes of e-commerce to UK airports from Hong Kong every day. “That is just Temu, Shein, Tik Tok and Alibaba and I'm not even talking about the hundreds of tiers two and three platforms,” he said. “We started interacting with one of the second-tier platforms and they are also supporting the Hong Kong Air Cargo flights.” But even as Prestwick pursues its e-commerce hub goals, there are two sizeable challenges facing the airport: How to fill the backhaul flights to make freighter services more commercially viable, and <a href="https://www.joc.com/article/europe-joins-us-in-call-for-end-to-e-commerce-de-minimis-exemption-5943108">the looming clampdown on the so-called de minimis exemption</a> on low-value packages that threatens to disrupt the e-commerce air cargo model. <h3>Chicken-egg situation </h3>Le Roux acknowledged the chicken-egg situation regarding filling outbound flights, with Scottish exporters of seafood requiring frequent, scheduled flights for their high-value cargo. “There are huge volumes of seafood and whisky leaving the UK for global markets and most of that traffic is transferred south to Heathrow by road or air for export, and for good reason,” he said. ”When we speak to these producers and exporters, frequencies [of flights] are of the utmost importance and they use Heathrow because if they miss a flight, there’s another two or three flights to the same destination on the same day,” le Roux added. Offsetting fewer services, however, is Prestwick’s selling point that revolves around one of the most important commodities in air freight – time. E-commerce cargo from arriving flights goes into a bonded warehouse where it is consolidated all the way down to package level and handed over to last-mile provider Royal Mail. "In doing that, we save between 12 and 18 hours in processing time and shippers save on the trucking time to Heathrow,” le Roux said. “Exporters can take that shelf life back for their products, and we are seeing a lot of interest from seafood shippers and forwarders. “Whisky doesn’t have the shelf-life issues of seafood, but the distillers we have spoken to are all looking for more frequent flights from Prestwick to Asia,” he added. <h3>Rising de minimis scrutiny </h3>Overshadowing Prestwick’s e-commerce hub aspirations is the growing scrutiny of imports from China that fall below the de minimis value threshold of £135 ($168) in the UK and €150 ($155) in the European Union. This means those imports enter the market duty free, which has led to growing concerns from the retail industry that online platforms are being given an unfair competitive advantage over local business. While the UK has yet to take action, the European Commission last week called for the removal of the de minimis exemption for low-value parcels. The de minimis issue is also under review in the US. Le Roux said Prestwick was keeping a close eye on these developments that are already prompting the Chinese retail platforms to build warehouses in the US that will lead to a shift of e-commerce from air to ocean. “It depends on what the UK and Europe will do, but we will likely follow in the same footsteps, and we need to be prepared for that,” he said. ”Before we make any investments in equipment and infrastructure, we take into consideration the sustainability and longevity of this e-commerce business,” le Roux added. “It is always in the back of our minds.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

China’s top online marketplaces – Temu, Shein and Tik Tok – put Glasgow Prestwick Airport’s e-commerce hub aspirations to the test this week by sending a freighter loaded with packages ordered online to the airport on Scotland’s west coast. The 60 tonnes of e-commerce that arrived on a Hong Kong Air Cargo freighter mark the first in a series of “development flights” put together by the online platforms with a view to launch scheduled flights between Hong Kong and Prestwick in March. “We have made significant investments over the past year to improve our cargo handling capabilities and attract traffic from the Far East, but we have also designed an end-to-end solution for the e-commerce platforms,” Nico le Roux, business development manager at Glasgow Prestwick Airport, told the Journal of Commerce in an interview this week. “Temu, Shein and Tik Tok have all visited Prestwick to view the e-commerce operations we have built, and they have been very supportive,” he added. The market Prestwick is targeting is enormous. Le Roux estimates that China’s top four online marketplaces were responsible for sending 1,000 tonnes of e-commerce to UK airports from Hong Kong every day. “That is just Temu, Shein, Tik Tok and Alibaba and I'm not even talking about the hundreds of tiers two and three platforms,” he said. “We started interacting with one of the second-tier platforms and they are also supporting the Hong Kong Air Cargo flights.” But even as Prestwick pursues its e-commerce hub goals, there are two sizeable challenges facing the airport: How to fill the backhaul flights to make freighter services more commercially viable, and the looming clampdown on the so-called de minimis exemption on low-value packages that threatens to disrupt the e-commerce air cargo model. Chicken-egg situation Le Roux acknowledged the chicken-egg situation regarding filling outbound flights, with Scottish exporters of seafood requiring frequent, scheduled flights for their high-value cargo. “There are huge volumes of seafood and whisky leaving the UK for global markets and most of that traffic is transferred south to Heathrow by road or air for export, and for good reason,” he said. ”When we speak to these producers and exporters, frequencies [of flights] are of the utmost importance and they use Heathrow because if they miss a flight, there’s another two or three flights to the same destination on the same day,” le Roux added. Offsetting fewer services, however, is Prestwick’s selling point that revolves around one of the most important commodities in air freight – time. E-commerce cargo from arriving flights goes into a bonded warehouse where it is consolidated all the way down to package level and handed over to last-mile provider Royal Mail. "In doing that, we save between 12 and 18 hours in processing time and shippers save on the trucking time to Heathrow,” le Roux said. “Exporters can take that shelf life back for their products, and we are seeing a lot of interest from seafood shippers and forwarders. “Whisky doesn’t have the shelf-life issues of seafood, but the distillers we have spoken to are all looking for more frequent flights from Prestwick to Asia,” he added. Rising de minimis scrutiny Overshadowing Prestwick’s e-commerce hub aspirations is the growing scrutiny of imports from China that fall below the de minimis value threshold of £135 ($168) in the UK and €150 ($155) in the European Union. This means those imports enter the market duty free, which has led to growing concerns from the retail industry that online platforms are being given an unfair competitive advantage over local business. While the UK has yet to take action, the European Commission last week called for the removal of the de minimis exemption for low-value parcels. The de minimis issue is also under review in the US. Le Roux said Prestwick was keeping a close eye on these developments that are already prompting the Chinese retail platforms to build warehouses in the US that will lead to a shift of e-commerce from air to ocean. “It depends on what the UK and Europe will do, but we will likely follow in the same footsteps, and we need to be prepared for that,” he said. ”Before we make any investments in equipment and infrastructure, we take into consideration the sustainability and longevity of this e-commerce business,” le Roux added. “It is always in the back of our minds.” Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo

Air Cargo Forwarder News

Air Cargo Carriers News

Scotland’s Prestwick airport tested by China’s e-commerce giants

<div class="phx-topic abstract-wrapper">The top 15 liners in the Journal of Commerce rankings collectively carried 18.8 million TEUs to the US from Asia last year, up 17.3% from 2023. </div>

The top 15 liners in the Journal of Commerce rankings collectively carried 18.8 million TEUs to the US from Asia last year, up 17.3% from 2023.

<div class="phx-topic">Cosco Shipping and its OOCL subsidiary held their position as the leading carrier for containerized US imports from Asia in 2024, increasing tonnage by more than 20% on the year while expanding market share slightly, according to the Journal of Commerce’s rankings of the top 15 ocean carriers as measured by US imports from Asia. Cosco/OOCL carried 3.06 million TEUs in imports last year, up from 2.5 million TEUs in 2023. Their combined market share nudged higher — to 16.1% from 15.8%. CMA CGM maintained the second spot in the trans-Pacific rankings, hauling 2.65 million TEUs, up almost 15%, while posting a 13.9% market share, down slightly from 2023. The rest of the top five shifted slightly. Ocean Network Express (ONE) grabbed the third spot with 2.23 million TEUs and an 11.7% market share, moving up from number four. Mediterranean Shipping Co., which did not break into the top five in 2023, moved to the fourth spot in 2024. The carrier imported 2.17 million TEUs to the US from Asia, up more than 24% from the year prior. Its share of the eastbound trans-Pacific market climbed slightly to 11.4%. MSC knocked former 2M Alliance partner Maersk out of the top five, with Maersk sliding to the sixth spot with 1.84 million TEUs, up just 3.8% from 2023. Its 9.7% share of the market was down from 10.9%. Evergreen Marine moved down two spots to number five in 2024, carrying 2.05 million TEUs, up 2.1%, while its market share fell to 10.8% from 12.5%. Overall, the top five carriers in the eastbound trans-Pacific hauled 12.2 million TEUs in imports to the US in 2024, good for a 64% market share. Rounding out the top 10 were Zim Integrated Shipping Services, HMM, Yang Ming and Hapag-Lloyd. The top 15 carriers collectively hauled 18.8 million TEUs to the US from Asia, up 17.3% from 2023. The <a href="https://www.joc.com/article/asia-us-container-spot-rates-spiking-to-year-end-highs-5908460">elevated 2024 volumes</a> can be largely attributed to increased demand compared with 2023 amid frontloading linked to new US tariffs and the threat of labor unrest on the East and Gulf coasts. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Cosco Shipping and its OOCL subsidiary held their position as the leading carrier for containerized US imports from Asia in 2024, increasing tonnage by more than 20% on the year while expanding market share slightly, according to the Journal of Commerce’s rankings of the top 15 ocean carriers as measured by US imports from Asia. Cosco/OOCL carried 3.06 million TEUs in imports last year, up from 2.5 million TEUs in 2023. Their combined market share nudged higher — to 16.1% from 15.8%. CMA CGM maintained the second spot in the trans-Pacific rankings, hauling 2.65 million TEUs, up almost 15%, while posting a 13.9% market share, down slightly from 2023. The rest of the top five shifted slightly. Ocean Network Express (ONE) grabbed the third spot with 2.23 million TEUs and an 11.7% market share, moving up from number four. Mediterranean Shipping Co., which did not break into the top five in 2023, moved to the fourth spot in 2024. The carrier imported 2.17 million TEUs to the US from Asia, up more than 24% from the year prior. Its share of the eastbound trans-Pacific market climbed slightly to 11.4%. MSC knocked former 2M Alliance partner Maersk out of the top five, with Maersk sliding to the sixth spot with 1.84 million TEUs, up just 3.8% from 2023. Its 9.7% share of the market was down from 10.9%. Evergreen Marine moved down two spots to number five in 2024, carrying 2.05 million TEUs, up 2.1%, while its market share fell to 10.8% from 12.5%. Overall, the top five carriers in the eastbound trans-Pacific hauled 12.2 million TEUs in imports to the US in 2024, good for a 64% market share. Rounding out the top 10 were Zim Integrated Shipping Services, HMM, Yang Ming and Hapag-Lloyd. The top 15 carriers collectively hauled 18.8 million TEUs to the US from Asia, up 17.3% from 2023. The elevated 2024 volumes can be largely attributed to increased demand compared with 2023 amid frontloading linked to new US tariffs and the threat of labor unrest on the East and Gulf coasts. Contact Laura Robb at laura.robb@spglobal.com . 

Trans-Pacific

Cosco/OOCL maintain top spot for carriers hauling US imports from Asia

<div class="phx-topic abstract-wrapper">The European Commission wants member states to exert greater control over low-value imports, while its consumer watchdog has launched an investigation into e-commerce giant Shein.</div>

The European Commission wants member states to exert greater control over low-value imports, while its consumer watchdog has launched an investigation into e-commerce giant Shein.

<div class="phx-topic">The European Commission (EC) has joined the US in calling for the removal of the so-called de minimis exemption for low-value parcels that is a key driver of the massive increase in air cargo imports from China over the past two years. The EC wants joint action from member states to address concerns from the surge of unsafe, counterfeit, non-compliant or illicit products entering the European market, with its consumer protection authority launching an unspecified “coordinated action” against Chinese e-commerce giant Shein. “As e-commerce is booming, we must step up efforts to prevent non-compliant products from entering the EU market and to ensure fair competition for both European and third-country operators,” Maroš Šefčovič, the EC commissioner for trade and economic security, said in a proposal called “A Comprehensive EU Toolbox for Safe and Sustainable E-commerce” that was issued last week. “Our customs authorities are the first set of eyes at the border so we must equip them with the appropriate instruments to strengthen our enforcement capacities, in close cooperation with other authorities instrumental to checking goods entering the EU market,” he noted. Last year, 4.6 billion consignments with a value below the European Union’s de minimis threshold of €150 ($155) entered the EU market duty free, mostly from China and double the number recorded in 2023, EC data shows. In the US, China accounted for two-thirds of the 1.36 billion de minimis imports last year. De minimis regulations in the US allow one shipment of less than $800 in value to move between a single shipper and single consignee per day duty free. Removing low-value products from de minimis exemptions will mean all those millions of daily parcels will need to go through customs checks, a process that would immediately overwhelm the system in both the EU and the US. It is for that reason that soon after the Trump administration removed Chinese low-value products from de minimis rules, the exemption was restored. <h3>‘Profound’ impact on capacity </h3>While customs officials in the US and Europe search for ways to process the millions of daily packages, air freight analysts are trying to estimate the impact removing de minimis protection would have on the air cargo industry. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said the impact on air freight capacity between China and the US would be “profound,” but he believes e-commerce demand is strong enough to withstand the clampdown. “E-commerce volumes out of China grew more than 30% last year following similar growth in 2023, so it’s going to take a sledgehammer to crack that level of consumer demand and I’m not sure blocking de minimis alone is enough,” van de Wouw said in a market update this week. “Products may be slightly more expensive if de minimis is removed, but they will still be cheaper than buying through retailers in the US,” he added. “But delays in receiving the goods due to operational disruptions could have a bigger impact than price because it takes away the attractiveness for consumers.” Judah Levine, head of research at Freightos Group, noted in a market update Tuesday that 60% of the air freight volume from China to the US comprised e-commerce shipments flown in dozens of daily freighters. “Total capacity out of China increased 25% year over year in 2024, so closing de minimis to China is expected to drive a sharp drop in volumes and a spike in available capacity,” Levine said. That would push down rates not just on the trans-Pacific, but on other trade lanes as significant capacity is released back into the market. But Levine added that with de minimis for China reinstated for now, “rates may not collapse immediately.” What is changing is the supply chain approach used by the Chinese online marketplaces as regulatory scrutiny grows. “The pause may serve as a wind-down period for [business-to-consumer] small imports from China during which Chinese e-commerce platforms shift away from their heavy reliance on de minimis and air cargo,” Levine said. “These platforms have already been increasing their use of ocean freight to build up inventories in Mexico and the US and there are reports that for American shoppers, Temu is already promoting items from sellers with US-based inventory,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The European Commission (EC) has joined the US in calling for the removal of the so-called de minimis exemption for low-value parcels that is a key driver of the massive increase in air cargo imports from China over the past two years. The EC wants joint action from member states to address concerns from the surge of unsafe, counterfeit, non-compliant or illicit products entering the European market, with its consumer protection authority launching an unspecified “coordinated action” against Chinese e-commerce giant Shein. “As e-commerce is booming, we must step up efforts to prevent non-compliant products from entering the EU market and to ensure fair competition for both European and third-country operators,” Maroš Šefčovič, the EC commissioner for trade and economic security, said in a proposal called “A Comprehensive EU Toolbox for Safe and Sustainable E-commerce” that was issued last week. “Our customs authorities are the first set of eyes at the border so we must equip them with the appropriate instruments to strengthen our enforcement capacities, in close cooperation with other authorities instrumental to checking goods entering the EU market,” he noted. Last year, 4.6 billion consignments with a value below the European Union’s de minimis threshold of €150 ($155) entered the EU market duty free, mostly from China and double the number recorded in 2023, EC data shows. In the US, China accounted for two-thirds of the 1.36 billion de minimis imports last year. De minimis regulations in the US allow one shipment of less than $800 in value to move between a single shipper and single consignee per day duty free. Removing low-value products from de minimis exemptions will mean all those millions of daily parcels will need to go through customs checks, a process that would immediately overwhelm the system in both the EU and the US. It is for that reason that soon after the Trump administration removed Chinese low-value products from de minimis rules, the exemption was restored. ‘Profound’ impact on capacity While customs officials in the US and Europe search for ways to process the millions of daily packages, air freight analysts are trying to estimate the impact removing de minimis protection would have on the air cargo industry. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said the impact on air freight capacity between China and the US would be “profound,” but he believes e-commerce demand is strong enough to withstand the clampdown. “E-commerce volumes out of China grew more than 30% last year following similar growth in 2023, so it’s going to take a sledgehammer to crack that level of consumer demand and I’m not sure blocking de minimis alone is enough,” van de Wouw said in a market update this week. “Products may be slightly more expensive if de minimis is removed, but they will still be cheaper than buying through retailers in the US,” he added. “But delays in receiving the goods due to operational disruptions could have a bigger impact than price because it takes away the attractiveness for consumers.” Judah Levine, head of research at Freightos Group, noted in a market update Tuesday that 60% of the air freight volume from China to the US comprised e-commerce shipments flown in dozens of daily freighters. “Total capacity out of China increased 25% year over year in 2024, so closing de minimis to China is expected to drive a sharp drop in volumes and a spike in available capacity,” Levine said. That would push down rates not just on the trans-Pacific, but on other trade lanes as significant capacity is released back into the market. But Levine added that with de minimis for China reinstated for now, “rates may not collapse immediately.” What is changing is the supply chain approach used by the Chinese online marketplaces as regulatory scrutiny grows. “The pause may serve as a wind-down period for [business-to-consumer] small imports from China during which Chinese e-commerce platforms shift away from their heavy reliance on de minimis and air cargo,” Levine said. “These platforms have already been increasing their use of ocean freight to build up inventories in Mexico and the US and there are reports that for American shoppers, Temu is already promoting items from sellers with US-based inventory,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Europe joins US in call for end to e-commerce ‘de minimis’ exemption

<div class="phx-topic abstract-wrapper">project44 is the latest established software provider to release a suite of artificial intelligence agents amid a torrent of startups building tools for logistics providers and shippers. </div>

project44 is the latest established software provider to release a suite of artificial intelligence agents amid a torrent of startups building tools for logistics providers and shippers.

<div class="phx-topic">The proliferation of artificial intelligence (AI)-focused tools flooding the global and domestic logistics markets is forcing shippers and intermediaries to better understand the benefits of so-called agentic AI. The last few months have seen a torrent of providers — new and established — releasing tools using AI agents, largely focused around data extraction or workflow efficiency. The newest trend is incumbent software vendors specifically using AI agents to enhance the user experience for existing data or application products they offer. On Wednesday, project44 became the latest to join the fray, announcing AI assistants that scrutinize visibility data quality, highlight global disruptions and allow users to more easily query their databases. “AI is only as good as the data it’s built on,” project44 CEO Jett McCandless said in a statement Wednesday. That was an allusion to the belief from most software experts that AI models trained on inaccurate data would only create new problems. The AI onslaught is potentially redrawing the lines of responsibility for data quality, from shippers and intermediaries to software vendors. project44’s announcement comes a month after freight visibility rival FourKites launched a suite of AI agents enabled by its own data. The move also comes amid a flurry of recent funding rounds into startup agentic AI technology providers catering to freight brokers, forwarders and customs brokers. Those include FreightHero, which landed an undisclosed early-stage round on Monday to build AI agents for freight brokerage back-office tasks, and Freightmate Ai landing a $5 million round in late January for document automation for forwarders. In December, agentic AI providers Vooma and HappyRobot both landed funding rounds to expand their tools for freight brokers. Other newer entrants include Reform, which works with a range of forwarders and customs brokers to automate workflows, and Amari AI, which automates the generation of customs entries for brokers. <h3>Nascent technology for industry </h3>Meanwhile, the burden has gone back to the product, and not the user, for being more responsible for good outcomes, James Coombes, CEO of forwarding automation software provider Raft, said Monday at the Manifest Conference in Las Vegas. Vendors still have a mountain to climb to get the industry to participate in this revolution. A number of intermediaries who spoke to the Journal of Commerce at Manifest said that agentic AI is exciting, and potentially transformative, but still nascent. The number of vendors competing in similar spaces is also confusing for the market, even for shippers and 3PLs that are actively trialing such solutions. Additionally, logistics software vendors expect the cost of building agentic applications to continue to come down, potentially commoditizing the market quickly. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

The proliferation of artificial intelligence (AI)-focused tools flooding the global and domestic logistics markets is forcing shippers and intermediaries to better understand the benefits of so-called agentic AI. The last few months have seen a torrent of providers — new and established — releasing tools using AI agents, largely focused around data extraction or workflow efficiency. The newest trend is incumbent software vendors specifically using AI agents to enhance the user experience for existing data or application products they offer. On Wednesday, project44 became the latest to join the fray, announcing AI assistants that scrutinize visibility data quality, highlight global disruptions and allow users to more easily query their databases. “AI is only as good as the data it’s built on,” project44 CEO Jett McCandless said in a statement Wednesday. That was an allusion to the belief from most software experts that AI models trained on inaccurate data would only create new problems. The AI onslaught is potentially redrawing the lines of responsibility for data quality, from shippers and intermediaries to software vendors. project44’s announcement comes a month after freight visibility rival FourKites launched a suite of AI agents enabled by its own data. The move also comes amid a flurry of recent funding rounds into startup agentic AI technology providers catering to freight brokers, forwarders and customs brokers. Those include FreightHero, which landed an undisclosed early-stage round on Monday to build AI agents for freight brokerage back-office tasks, and Freightmate Ai landing a $5 million round in late January for document automation for forwarders. In December, agentic AI providers Vooma and HappyRobot both landed funding rounds to expand their tools for freight brokers. Other newer entrants include Reform, which works with a range of forwarders and customs brokers to automate workflows, and Amari AI, which automates the generation of customs entries for brokers. Nascent technology for industry Meanwhile, the burden has gone back to the product, and not the user, for being more responsible for good outcomes, James Coombes, CEO of forwarding automation software provider Raft, said Monday at the Manifest Conference in Las Vegas. Vendors still have a mountain to climb to get the industry to participate in this revolution. A number of intermediaries who spoke to the Journal of Commerce at Manifest said that agentic AI is exciting, and potentially transformative, but still nascent. The number of vendors competing in similar spaces is also confusing for the market, even for shippers and 3PLs that are actively trialing such solutions. Additionally, logistics software vendors expect the cost of building agentic applications to continue to come down, potentially commoditizing the market quickly. Contact Eric Johnson at eric.johnson@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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