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<div class="phx-topic abstract-wrapper">SHIPPING INDUSTRY HELDIN VERY LOW ESTEEMROTTERDAM - Shipping has one of the worst reputation</div>

SHIPPING INDUSTRY HELDIN VERY LOW ESTEEMROTTERDAM - Shipping has one of the worst reputation

<div>SHIPPING INDUSTRY HELDIN VERY LOW ESTEEMROTTERDAM - Shipping has one of the worst reputations of any industry in the minds of the American public, a leading tanker industry official says.A survey of U.S. public opinion found ''shipping is coupled with the tobacco industry on the popularity scale,'' Dagfinn Lunde, managing director of the International Association of Independent Tanker Owners, told industry executives Friday.The dreadful image from which shipping suffers reflects the fact that most accidents occur within sight of land. Furthermore, the more spectacular accidents have involved modern vessels owned by reputable companies, not substandard ships that the rest of...

SHIPPING INDUSTRY HELD IN VERY LOW ESTEEMROTTERDAM - Shipping has one of the worst reputations of any industry in the minds of the American public, a leading tanker industry official says. A survey of U.S. public opinion found ''shipping is coupled with the tobacco industry on the popularity scale,'' Dagfinn Lunde, managing director of the International Association of Independent Tanker Owners, told industry executives Friday. The dreadful image from which shipping suffers reflects the fact that most accidents occur within sight of land. Furthermore, the more spectacular accidents have involved modern vessels owned by reputable companies, not substandard ships that the rest of the industry claims to be the cause of the problem, he said. AMERICAN FREIGHTWAYS NET INCOME UP 28 PERCENT HARRISON, Ark. - American Freightways Corp. reported that third-quarter net income climbed 28 percent to $3.1 million, or 10 cents a share, which was attributed to yield improvements, market share improvements and a modest improvement in economic conditions. Revenue climbed 29 percent to $192.5 million. The 42 percent operating income growth reflected an improvement in the expense to revenue (operating) ratio from 95.7 percent to 95.2 percent. Less-than-truckload tonnage increased 21 percent, while the shipment count climbed 26 percent. American Freightways also claimed improved results could be attributed to higher service levels at the same time that unidentified competitors were having difficulties. Earnings for the first three quarters were $6.4 million, down 62 percent. Revenue was 27 percent higher at $539.7 million, reflecting a difficult pricing environment. Operating income was $21.0 million after nine months, down 38 percent. USFREIGHTWAYS REPORTS HIGHER REVENUE ROSEMONT, Ill. - USFreightways boosted third quarter 1996 net income by 26 percent to $11 million, or 49 cents a share, on the strength of an 18 percent boost in revenue to $343.2 million. Nearly half of the revenue boost was attributed to acquisitions of Transus, a Southeast less-than-truckload carrier and Interamerican, a logistics firm. During the first three quarters, net income was $23.5 million, or $1.05 a share, down 12 percent. Revenue was 13 percent higher at $989.0 million. Chief Executive Cam Carruth said third-quarter results benefited from a stronger economy and stronger pricing, in contrast to a more sluggish economy and more competitive rate environment during the first half of 1996. USFreightways expects to take a 10-cents-a-share fourth-quarter charge to cover restructuring at Red Star, its struggling Northeast operating unit. Among other trucking subsidiaries, Holland and Bestway reported improved operating margins, while the Dugan and Reddaway operations had unfavorable year-to-year comparisons.

BRIEFS

<div class="phx-topic abstract-wrapper">Container lines in the US’ busiest trade lane, determined to avoid a repeat of last year when they believe they significantly underpriced their services, are seeking rate gains of 20% to 30% for the upcoming service year. </div>

Container lines in the US’ busiest trade lane, determined to avoid a repeat of last year when they believe they significantly underpriced their services, are seeking rate gains of 20% to 30% for the upcoming service year.

Feature image

<div class="phx-topic">Trans-Pacific container lines, during their first round of talks with shippers for 2025-26 annual service contracts, have been seeking rates 20% to 30% higher than the current year’s levels, market sources say. In actual dollar terms, that means carriers are asking for $2,000 per FEU to the West Coast and $3,000 per FEU to the East Coast for next year’s contracts, most of which start on May 1. “The feeling is that $2,000/$3,000 is achievable,” Benton Kauffman, head of trans-Pacific air and sea logistics at the forwarder DSV Global Transport Logistics, told the Journal of Commerce. Carriers are trying to avoid a repeat of last spring when they believe they underpriced their services, settling at West Coast rates of $1,500 to $1,600 per FEU and East Coast rates at $2,500 to $2,600 per FEU for 2025-25 contracts. Most large and mid-size importers have wrapped up the first round of their 2025-26 service contract negotiations and intend to finalize the agreements in the coming month, according to forwarders in the eastbound trans-Pacific, the largest US trade lane. “Most of our clients want to wrap up by the end of March,” Kauffman said. Last year, many service contract negotiations continued well into April. Non-vessel-operating common carriers (NVOs), ocean carriers and transportation consultants agree that US imports from Asia in the coming months, while likely to be down from the double-digit growth last year, will support a range of rates a few hundred dollars per FEU on either side of the $2,000/$3,000 per FEU the carriers are aiming for, depending on the size of the importers. “It should be really close to those numbers,” said Kevin Parkerson, a transportation consultant and former logistics manager at national retailers. “The small to mid-size [beneficial cargo owners] may be a little bit north of $2,000/$3,000.” <h3>Largest retailers not as influential as in past years </h3>It appears that carriers this year are not waiting for the few largest big-box retailers to set the floor for service contract rates before they finalize negotiations with second- and third-tier of importers, said Sanjay Tejwani, CEO of the consulting firm 365 Logistics. If mid-size BCOs are signing contracts at $2,000/$3,000 per FEU, the several largest retailers may lose bargaining power if they insist on paying $1,200-$1,400 for the West Coast and $2,200-$2,400 to the East Coast, Tejwani said. “That may put a reverse pressure on the larger big-box retailers,” he said. A carrier executive said that while pricing always plays a key role in a customer’s service contract negotiating strategy, a more important factor this year, given the changes in carrier alliances that took effect in February, is securing the vessel space based on minimum quantity commitments (MQCs) that importers feel they will need for the life of the contracts. “A lot of shippers want to lock in space,” the source said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4ed96169-fa34-4b46-81e8-b67860854e39"></dynamic-object></div>A mid-size BCO that imports home furnishings said his team has had a “fair amount of healthy debate” on pricing with its core carrier. Rather than waiting until later in March to finalize the contract, he is ready in the coming week to present a final offer that will cover as much as 60% of the total volume the company plans to import in the coming year. The remaining 40% will then be spread out over several carriers and NVOs. “We used to worry about putting too many eggs into one basket, but this carrier has done a great job for us,” the importer said. <h3>Some retailers going slow in contract talks </h3>On the other hand, some importers are in no rush to finalize their contract negotiations because the general feeling among shippers and analysts is that while supply and demand will return to normal seasonal levels in March as factories in Asia return to full production after the Lunar New Year lull, import growth this year will be down considerably from last year. US imports from Asia were up 12.7% in January year over year after growing 17.6% in 2024 from 2023, according to PIERS, a Journal of Commerce sister company within S&amp;P Global. Ben Coleman, president of the NVO Teampower Logistics, said that while space is always a concern for importers, vessel capacity is scheduled to increase about 10% while import volume growth will likely be in the mid-single digits. “A number of BCOs don’t want to rush into this,” Coleman said. Spot pricing in the eastbound trans-Pacific also plays a role in pricing annual service contracts, and the spot market has been dropping rapidly during the Lunar New Year lull. The West Coast spot rate as of Feb. 27 was $2,450 per FEU, down 11% on the week and 37% year over year. The East Coast spot rate of $3,575 per FEU is down 9% week over week and 38% year over year, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Carriers have filed general rate increases (GRIs) effective March 1 and March 15 with the intention of propping up spot rates during contract negotiations. But there is widespread skepticism whether the GRIs will stick, especially because some carriers are undercutting current spot rates with special “bullet” rates below $2,000 to the West Coast. “We’re already starting to see a few carriers being very aggressive in their pricing,” an NVO said. <h3>GRIs losing significance? </h3>Kauffman said that GRIs have lost much of the significance they had in past years because carriers have been successful in propping rates up through peak season surcharges. PSSs are added to customers’ contract rates by mutual consent of the carrier and the importer. In the past, PSSs were levied during the peak volume months of August through October, but they are now a year-around tactic deployed by carriers to prop up rates. “PSSs have replaced the GRI,” Kauffman said. “We don’t like it, but we’re explaining this to our customers.” Despite the significant uncertainties facing the trans-Pacific trade this year, notably the Trump administration’s tariffs and their impact on consumer demand, and the eventual return of commerce through the Suez Canal that would likely result in a surge of overcapacity, retailers will have to agree on contract pricing soon because seasonal and special-event shipments continue to be shipped, noted an industry consultant who was formerly a logistics manager at big-box retailers. “You can pause some of your merchandise, but not all of it,” the source said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a></div>

Trans-Pacific container lines, during their first round of talks with shippers for 2025-26 annual service contracts, have been seeking rates 20% to 30% higher than the current year’s levels, market sources say. In actual dollar terms, that means carriers are asking for $2,000 per FEU to the West Coast and $3,000 per FEU to the East Coast for next year’s contracts, most of which start on May 1. “The feeling is that $2,000/$3,000 is achievable,” Benton Kauffman, head of trans-Pacific air and sea logistics at the forwarder DSV Global Transport Logistics, told the Journal of Commerce. Carriers are trying to avoid a repeat of last spring when they believe they underpriced their services, settling at West Coast rates of $1,500 to $1,600 per FEU and East Coast rates at $2,500 to $2,600 per FEU for 2025-25 contracts. Most large and mid-size importers have wrapped up the first round of their 2025-26 service contract negotiations and intend to finalize the agreements in the coming month, according to forwarders in the eastbound trans-Pacific, the largest US trade lane. “Most of our clients want to wrap up by the end of March,” Kauffman said. Last year, many service contract negotiations continued well into April. Non-vessel-operating common carriers (NVOs), ocean carriers and transportation consultants agree that US imports from Asia in the coming months, while likely to be down from the double-digit growth last year, will support a range of rates a few hundred dollars per FEU on either side of the $2,000/$3,000 per FEU the carriers are aiming for, depending on the size of the importers. “It should be really close to those numbers,” said Kevin Parkerson, a transportation consultant and former logistics manager at national retailers. “The small to mid-size [beneficial cargo owners] may be a little bit north of $2,000/$3,000.” Largest retailers not as influential as in past years It appears that carriers this year are not waiting for the few largest big-box retailers to set the floor for service contract rates before they finalize negotiations with second- and third-tier of importers, said Sanjay Tejwani, CEO of the consulting firm 365 Logistics. If mid-size BCOs are signing contracts at $2,000/$3,000 per FEU, the several largest retailers may lose bargaining power if they insist on paying $1,200-$1,400 for the West Coast and $2,200-$2,400 to the East Coast, Tejwani said. “That may put a reverse pressure on the larger big-box retailers,” he said. A carrier executive said that while pricing always plays a key role in a customer’s service contract negotiating strategy, a more important factor this year, given the changes in carrier alliances that took effect in February, is securing the vessel space based on minimum quantity commitments (MQCs) that importers feel they will need for the life of the contracts. “A lot of shippers want to lock in space,” the source said. A mid-size BCO that imports home furnishings said his team has had a “fair amount of healthy debate” on pricing with its core carrier. Rather than waiting until later in March to finalize the contract, he is ready in the coming week to present a final offer that will cover as much as 60% of the total volume the company plans to import in the coming year. The remaining 40% will then be spread out over several carriers and NVOs. “We used to worry about putting too many eggs into one basket, but this carrier has done a great job for us,” the importer said. Some retailers going slow in contract talks On the other hand, some importers are in no rush to finalize their contract negotiations because the general feeling among shippers and analysts is that while supply and demand will return to normal seasonal levels in March as factories in Asia return to full production after the Lunar New Year lull, import growth this year will be down considerably from last year. US imports from Asia were up 12.7% in January year over year after growing 17.6% in 2024 from 2023, according to PIERS, a Journal of Commerce sister company within S&P Global. Ben Coleman, president of the NVO Teampower Logistics, said that while space is always a concern for importers, vessel capacity is scheduled to increase about 10% while import volume growth will likely be in the mid-single digits. “A number of BCOs don’t want to rush into this,” Coleman said. Spot pricing in the eastbound trans-Pacific also plays a role in pricing annual service contracts, and the spot market has been dropping rapidly during the Lunar New Year lull. The West Coast spot rate as of Feb. 27 was $2,450 per FEU, down 11% on the week and 37% year over year. The East Coast spot rate of $3,575 per FEU is down 9% week over week and 38% year over year, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Carriers have filed general rate increases (GRIs) effective March 1 and March 15 with the intention of propping up spot rates during contract negotiations. But there is widespread skepticism whether the GRIs will stick, especially because some carriers are undercutting current spot rates with special “bullet” rates below $2,000 to the West Coast. “We’re already starting to see a few carriers being very aggressive in their pricing,” an NVO said. GRIs losing significance? Kauffman said that GRIs have lost much of the significance they had in past years because carriers have been successful in propping rates up through peak season surcharges. PSSs are added to customers’ contract rates by mutual consent of the carrier and the importer. In the past, PSSs were levied during the peak volume months of August through October, but they are now a year-around tactic deployed by carriers to prop up rates. “PSSs have replaced the GRI,” Kauffman said. “We don’t like it, but we’re explaining this to our customers.” Despite the significant uncertainties facing the trans-Pacific trade this year, notably the Trump administration’s tariffs and their impact on consumer demand, and the eventual return of commerce through the Suez Canal that would likely result in a surge of overcapacity, retailers will have to agree on contract pricing soon because seasonal and special-event shipments continue to be shipped, noted an industry consultant who was formerly a logistics manager at big-box retailers. “You can pause some of your merchandise, but not all of it,” the source said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com Contact Laura Robb at laura.robb@spglobal.com

Trans-Pacific carriers reaching higher in early 2025-26 contract talks

<div class="phx-topic abstract-wrapper">The sector is off to a strong start to the year, but tariff-driven trade tensions and other concerns could have a negative impact on the global air freight market, according to industry groups. </div>

The sector is off to a strong start to the year, but tariff-driven trade tensions and other concerns could have a negative impact on the global air freight market, according to industry groups.

<div class="phx-topic">Global air freight is headed for another year of tight capacity and elevated rate levels, but a series of economic, geopolitical and regulatory risks are stacking up to cloud the outlook, the head of The International Air Cargo Association (TIACA) says. Glyn Hughes, TIACA’s director-general, warned that the widespread risks posed a threat to the industry forecast of 5% growth in air cargo demand this year that was based on expected global GDP growth of 3.2%. “We see trade tensions as an elevated risk as tariffs are being weaponized in the political forum,” Hughes told a media briefing Wednesday. “We believe international trade and the integration of economies is a way for global prosperity, and anything impacting that could have a negative impact on our industry.” Hughes highlighted a number of risks, including moves in the US and Europe to remove the so-called de minimis exemption for low-value imports from China, declining consumer confidence in the US, tariffs and retaliatory measures, low backhaul load factors, Red Sea diversions and an uncertain outcome of peace talks in Ukraine. All those factors were leaving air cargo in “a fragile situation,” he said. Willie Walsh, director-general of the International Air Transport Association (IATA), was more positive in his monthly air cargo update on Thursday, pointing to external factors such as trade growth, declining fuel costs and expanding e-commerce that were bullish for air cargo. But he, too, warned that global trade was facing disruption that could change market conditions. “In particular, the wild card is the potential for tariff-driven trade policies from the US Trump administration,” Walsh said. President Donald Trump on Thursday posted a social media message saying he <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">intends to add another 10% levy on Chinese imports</a>, citing what he says is that country’s role in the illegal drug trade. Those tariffs, which go into effect March 4, would be on top of an initial 10% tariff on Chinese goods that Trump announced at the start of February. Air cargo is coming off a record 2024 that saw 12% growth in global volume, but both demand and rates were starting to fall, according to IATA. “January marked 18 consecutive months of growth for air cargo, but the month’s 3.2% year-on-year growth is a moderation from double-digit peaks in 2024,” Walsh said in his update. “Similarly, yields, while still above January 2024 levels, saw a 9.9% decline from December as cargo load factors also declined by an average of 1.5 percentage points.” <h3>Bracing for de minimis clampdown </h3>Strong e-commerce demand last year filled all available capacity out of China and kept the industry in peak season mode, and Hughes said the expectation was for online demand to remain robust. However, US moves to <a href="https://www.joc.com/article/europe-joins-us-in-call-for-end-to-e-commerce-de-minimis-exemption-5943108">clamp down on low-value Chinese imports</a> would impact that demand. “We continue to focus on e-commerce expansion but because of certain policy changes there is an elevated risk associated with this,” he said. 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. 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. 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 earlier this month, the exemption was restored. “US Customs and Border Patrol weren’t able and capable of handling the inspections, and they weren’t capable and able to handle the levy and the collection of the applicable duties and tariffs,” Hughes said. “We anticipate it being at least two or three months before they can look at implementing the appropriate systems.” Another issue outside the control of airlines was the closing of Russian airspace to western carriers, which continues to add significant costs and flying time for airlines on routes between Asia and Europe. And Hughes said a Ukraine peace deal currently being negotiated between the US and Russia would not automatically translate into an opening of Russian skies. “Russian restrictions were imposed as a retaliatory measure to sanctions from certain states so there will be several other measures that will need to take place before we see completely reopened air space,” Hughes said. Yet another challenge was the growing cargo imbalance between Asia and major destination markets. Despite freighters flying full on routes from Asia to the US, Europe and the Middle East in January ahead of Lunar New Year, cargo volume on the backhaul routes was low, with airlines having to price the weak return legs into the freight costs. “The inequality we see in air cargo transport is evident and is becoming even more fragmented and diverse as we go forward,” Hughes said. He noted that the backhaul Europe-to-Asia dynamic load factor in January was 36%, Middle East-to-Asia was 29% and North America-to-North Asia was 43%. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Global air freight is headed for another year of tight capacity and elevated rate levels, but a series of economic, geopolitical and regulatory risks are stacking up to cloud the outlook, the head of The International Air Cargo Association (TIACA) says. Glyn Hughes, TIACA’s director-general, warned that the widespread risks posed a threat to the industry forecast of 5% growth in air cargo demand this year that was based on expected global GDP growth of 3.2%. “We see trade tensions as an elevated risk as tariffs are being weaponized in the political forum,” Hughes told a media briefing Wednesday. “We believe international trade and the integration of economies is a way for global prosperity, and anything impacting that could have a negative impact on our industry.” Hughes highlighted a number of risks, including moves in the US and Europe to remove the so-called de minimis exemption for low-value imports from China, declining consumer confidence in the US, tariffs and retaliatory measures, low backhaul load factors, Red Sea diversions and an uncertain outcome of peace talks in Ukraine. All those factors were leaving air cargo in “a fragile situation,” he said. Willie Walsh, director-general of the International Air Transport Association (IATA), was more positive in his monthly air cargo update on Thursday, pointing to external factors such as trade growth, declining fuel costs and expanding e-commerce that were bullish for air cargo. But he, too, warned that global trade was facing disruption that could change market conditions. “In particular, the wild card is the potential for tariff-driven trade policies from the US Trump administration,” Walsh said. President Donald Trump on Thursday posted a social media message saying he intends to add another 10% levy on Chinese imports , citing what he says is that country’s role in the illegal drug trade. Those tariffs, which go into effect March 4, would be on top of an initial 10% tariff on Chinese goods that Trump announced at the start of February. Air cargo is coming off a record 2024 that saw 12% growth in global volume, but both demand and rates were starting to fall, according to IATA. “January marked 18 consecutive months of growth for air cargo, but the month’s 3.2% year-on-year growth is a moderation from double-digit peaks in 2024,” Walsh said in his update. “Similarly, yields, while still above January 2024 levels, saw a 9.9% decline from December as cargo load factors also declined by an average of 1.5 percentage points.” Bracing for de minimis clampdown Strong e-commerce demand last year filled all available capacity out of China and kept the industry in peak season mode, and Hughes said the expectation was for online demand to remain robust. However, US moves to clamp down on low-value Chinese imports would impact that demand. “We continue to focus on e-commerce expansion but because of certain policy changes there is an elevated risk associated with this,” he said. 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. 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. 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 earlier this month, the exemption was restored. “US Customs and Border Patrol weren’t able and capable of handling the inspections, and they weren’t capable and able to handle the levy and the collection of the applicable duties and tariffs,” Hughes said. “We anticipate it being at least two or three months before they can look at implementing the appropriate systems.” Another issue outside the control of airlines was the closing of Russian airspace to western carriers, which continues to add significant costs and flying time for airlines on routes between Asia and Europe. And Hughes said a Ukraine peace deal currently being negotiated between the US and Russia would not automatically translate into an opening of Russian skies. “Russian restrictions were imposed as a retaliatory measure to sanctions from certain states so there will be several other measures that will need to take place before we see completely reopened air space,” Hughes said. Yet another challenge was the growing cargo imbalance between Asia and major destination markets. Despite freighters flying full on routes from Asia to the US, Europe and the Middle East in January ahead of Lunar New Year, cargo volume on the backhaul routes was low, with airlines having to price the weak return legs into the freight costs. “The inequality we see in air cargo transport is evident and is becoming even more fragmented and diverse as we go forward,” Hughes said. He noted that the backhaul Europe-to-Asia dynamic load factor in January was 36%, Middle East-to-Asia was 29% and North America-to-North Asia was 43%. Contact Greg Knowler at greg.knowler@spglobal.com .

Numerous risk factors threatening to slow robust air cargo demand

<div class="phx-topic abstract-wrapper">Digital forwarders that emerged over the past decade are coming of age in the era of AI, but not all will make it to the other end.</div>

Digital forwarders that emerged over the past decade are coming of age in the era of AI, but not all will make it to the other end.

<div class="phx-topic">A confluence of events in the world of forwarding technology over the past few weeks suggests that the industry is poised to transition into a new phase of so-called digital forwarding, largely driven by the rapid advances of artificial intelligence (AI). Flexport, the flagship brand among the cohort of digital forwarders to have emerged over the past decade, on Monday launched a catalog of product updates focused around AI capabilities. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951977_0.1.jpg"></img></div>Also this week, WiseTech Global, the leading software provider for forwarders, hinted at a growing desire to serve the supply chain management market while also acknowledging that AI will play an ever-larger role in the solutions it builds. Meanwhile, the Berlin-based digital forwarder Forto is exploring a sale of its business, trade publication The Information reported in mid-February. Those public announcements are set against the rapid rise of AI as a force influencing how forwarders manage everything from quoting, to data entry, to invoice auditing, to customs filings. Those dynamics should not be considered in isolation. “To the extent we’re behind on AI, we’re paranoid and investing like crazy in it,” Flexport CEO Ryan Petersen told the Journal of Commerce Wednesday. “I’m paranoid because it’s a fact that, in aggregate, there’s more AI talent in the world outside of Flexport than inside it.” But Flexport has advantages, Petersen said, that the outside world building AI products doesn’t. “The scale we have gives us data to fine tune the models in ways smaller startups can’t,” he said. “We can also cherry-pick the best use cases to use AI across the whole flow. And distribution, because of our customer base, means we can go live with things the minute we build them.” The product release on Monday included a clutch of AI-enabled tools, from legitimately new tools such as a database that’s searchable using natural language prompts to build analytics reports, to bedrock international logistics tools such as sailing preference, booking, and container allocation products. Many are features that Flexport’s internal team were using that are now being made available to its customers, Petersen said. <h3>‘High-value, high-volume things’ </h3>Meanwhile, WiseTech Global, which announced strong first-half fiscal year results this week, said it is looking at “high-value, high-volume things our customers want” as areas to focus its efforts on AI. The company has 24 of the top 25 global forwarders as customers for its transportation management, tracking, accounting and customs software. “We are obviously watching what [AI-focused software providers] are doing,” WiseTech Executive Chairman Richard White told the Journal of Commerce Wednesday. “But AI doesn’t blot out the sun. You still have databases and workflows. AI won’t rewrite the world.” White did say AI is making a mark in areas that make jobs easier to do. He specifically mentioned how AI products are helping software developers create code and validate human-written code. On the customer side, “we’re looking at AI as a way to make components of work easier,” he said. “But it’s a very rapidly moving landscape. And if you put your stake down on one thing, you’ll get passed.” Indeed, it’s harder to find a software vendor or forwarder not experimenting with AI, and specifically AI agents, than one that is. “AI use cases are real and they often make sense,” said Jonas Krumland, CEO of Logward, a technology provider for shippers spun out of the German forwarder Leschaco. “It’s not that hard to make them accessible.” The challenge, Krumland said, is that it takes effort and a volume of logistics-specific data to train the models behind AI tools. “People are largely too scared to invest,” he said. “The fact that logistics does not have enough structured data and hence [broad generative AI tools] are the only way forward has not been broadly understood. But once this changes, we’ll see a real breakthrough.” Indeed, it feels as if the concept of digital forwarding, long decried by industry veterans as a shiny wrapper on nothing new, has come of age in the era of AI. That makes the struggles of Forto, which saw CEO Michael Wax depart earlier in February, more intriguing. At a time when forwarders writ large are figuring out what tools to use to make them more operationally efficient and the customer experience less cumbersome, Forto would seem to have missed its time. The company raised nearly $600 million in venture capital since its founding in 2016. That, and a more than $2 billion valuation in 2022, weighed on the business as it struggled with a rough market for forwarders in 2023 and early 2024. Flexport, by comparison, has raised $2.7 billion, an amount that has been both a blessing and a curse. The funding has enabled it to navigate downturns in the international freight market, manage in-house turmoil during the six-month period where Dave Clark served as CEO, and invest in technology to differentiate itself in a largely commoditized market. But that funding has also constrained the number of paths Flexport can take, whether by acquisition or going public. <h3>Upending global logistics </h3>Digital forwarders that didn’t raise huge amounts of venture capital in the last decade have seen rosier outcomes. iContainers, one of the original companies to emerge in the digital forwarding era, has found its niche after merging with Agility’s former in-house digital forwarder Shipa Freight. Ovrsea, a French digital forwarder, was acquired by Bollore in 2021 and now serves as Bollore’s in-house digital channel. ExFreight, likely the first digital forwarder, has carved a quiet but successful niche in marrying international and domestic legs through customers lured by its electronic quoting tool. Digital forwarders in other regions, such as Shipwaves in India and Nowports in Latin America, have seen various degrees of success. But the latter is struggling against the same forces as Forto and Flexport, a large valuation built on multiple rounds of venture funding. Now, venture capital groups seem likely to take another run at upending global logistics through investment into dozens of AI-focused startups tackling discrete forwarding functions. These startups, tackling things as mundane as product classification or contract data extraction from emails, are able to build products faster than their predecessors. That creates an awkward environment in which companies built as recently 2020 are seen as a bit behind the times since the advent of generative AI, as products such as ChatGPT and Co-Pilot have heralded a lightning-fast era of coding and product development. “I used to say we were the first forwarder built after the web browser, but now there are probably companies that can say they’re first since ChatGPT,” Flexport’s Petersen said. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

A confluence of events in the world of forwarding technology over the past few weeks suggests that the industry is poised to transition into a new phase of so-called digital forwarding, largely driven by the rapid advances of artificial intelligence (AI). Flexport, the flagship brand among the cohort of digital forwarders to have emerged over the past decade, on Monday launched a catalog of product updates focused around AI capabilities. Also this week, WiseTech Global, the leading software provider for forwarders, hinted at a growing desire to serve the supply chain management market while also acknowledging that AI will play an ever-larger role in the solutions it builds. Meanwhile, the Berlin-based digital forwarder Forto is exploring a sale of its business, trade publication The Information reported in mid-February. Those public announcements are set against the rapid rise of AI as a force influencing how forwarders manage everything from quoting, to data entry, to invoice auditing, to customs filings. Those dynamics should not be considered in isolation. “To the extent we’re behind on AI, we’re paranoid and investing like crazy in it,” Flexport CEO Ryan Petersen told the Journal of Commerce Wednesday. “I’m paranoid because it’s a fact that, in aggregate, there’s more AI talent in the world outside of Flexport than inside it.” But Flexport has advantages, Petersen said, that the outside world building AI products doesn’t. “The scale we have gives us data to fine tune the models in ways smaller startups can’t,” he said. “We can also cherry-pick the best use cases to use AI across the whole flow. And distribution, because of our customer base, means we can go live with things the minute we build them.” The product release on Monday included a clutch of AI-enabled tools, from legitimately new tools such as a database that’s searchable using natural language prompts to build analytics reports, to bedrock international logistics tools such as sailing preference, booking, and container allocation products. Many are features that Flexport’s internal team were using that are now being made available to its customers, Petersen said. ‘High-value, high-volume things’ Meanwhile, WiseTech Global, which announced strong first-half fiscal year results this week, said it is looking at “high-value, high-volume things our customers want” as areas to focus its efforts on AI. The company has 24 of the top 25 global forwarders as customers for its transportation management, tracking, accounting and customs software. “We are obviously watching what [AI-focused software providers] are doing,” WiseTech Executive Chairman Richard White told the Journal of Commerce Wednesday. “But AI doesn’t blot out the sun. You still have databases and workflows. AI won’t rewrite the world.” White did say AI is making a mark in areas that make jobs easier to do. He specifically mentioned how AI products are helping software developers create code and validate human-written code. On the customer side, “we’re looking at AI as a way to make components of work easier,” he said. “But it’s a very rapidly moving landscape. And if you put your stake down on one thing, you’ll get passed.” Indeed, it’s harder to find a software vendor or forwarder not experimenting with AI, and specifically AI agents, than one that is. “AI use cases are real and they often make sense,” said Jonas Krumland, CEO of Logward, a technology provider for shippers spun out of the German forwarder Leschaco. “It’s not that hard to make them accessible.” The challenge, Krumland said, is that it takes effort and a volume of logistics-specific data to train the models behind AI tools. “People are largely too scared to invest,” he said. “The fact that logistics does not have enough structured data and hence [broad generative AI tools] are the only way forward has not been broadly understood. But once this changes, we’ll see a real breakthrough.” Indeed, it feels as if the concept of digital forwarding, long decried by industry veterans as a shiny wrapper on nothing new, has come of age in the era of AI. That makes the struggles of Forto, which saw CEO Michael Wax depart earlier in February, more intriguing. At a time when forwarders writ large are figuring out what tools to use to make them more operationally efficient and the customer experience less cumbersome, Forto would seem to have missed its time. The company raised nearly $600 million in venture capital since its founding in 2016. That, and a more than $2 billion valuation in 2022, weighed on the business as it struggled with a rough market for forwarders in 2023 and early 2024. Flexport, by comparison, has raised $2.7 billion, an amount that has been both a blessing and a curse. The funding has enabled it to navigate downturns in the international freight market, manage in-house turmoil during the six-month period where Dave Clark served as CEO, and invest in technology to differentiate itself in a largely commoditized market. But that funding has also constrained the number of paths Flexport can take, whether by acquisition or going public. Upending global logistics Digital forwarders that didn’t raise huge amounts of venture capital in the last decade have seen rosier outcomes. iContainers, one of the original companies to emerge in the digital forwarding era, has found its niche after merging with Agility’s former in-house digital forwarder Shipa Freight. Ovrsea, a French digital forwarder, was acquired by Bollore in 2021 and now serves as Bollore’s in-house digital channel. ExFreight, likely the first digital forwarder, has carved a quiet but successful niche in marrying international and domestic legs through customers lured by its electronic quoting tool. Digital forwarders in other regions, such as Shipwaves in India and Nowports in Latin America, have seen various degrees of success. But the latter is struggling against the same forces as Forto and Flexport, a large valuation built on multiple rounds of venture funding. Now, venture capital groups seem likely to take another run at upending global logistics through investment into dozens of AI-focused startups tackling discrete forwarding functions. These startups, tackling things as mundane as product classification or contract data extraction from emails, are able to build products faster than their predecessors. That creates an awkward environment in which companies built as recently 2020 are seen as a bit behind the times since the advent of generative AI, as products such as ChatGPT and Co-Pilot have heralded a lightning-fast era of coding and product development. “I used to say we were the first forwarder built after the web browser, but now there are probably companies that can say they’re first since ChatGPT,” Flexport’s Petersen said. Contact Eric Johnson at eric.johnson@spglobal.com .

Next phase of digital forwarding on collision course with AI revolution

<div class="phx-topic abstract-wrapper">The cost of the US Trade Representative’s proposal for levying fees on Chinese ships and ocean carriers would fall to US shippers, who would also face fewer service options, the analyst says.</div>

The cost of the US Trade Representative’s proposal for levying fees on Chinese ships and ocean carriers would fall to US shippers, who would also face fewer service options, the analyst says.

<div class="phx-topic">The container shipping industry is weighing the potential cost of the Trump administration’s proposal to tax Chinese-built and -operated ships calling US ports, with many seeing US shippers ultimately bearing those costs. Similar to other tariffs, the port tax sets up winners and losers in the industry, depending on fleet composition and how they operate. On the conclusion of an investigation initiated during the Biden administration into anti-competitive practices of China’s shipbuilding industry, the US Trade Representative (USTR) last week <a href="https://www.joc.com/article/us-port-fees-could-hit-chinese-ships-under-trump-trade-proposal-5949409">released its suggested remedies</a>, including fees up to $1 million for Chinese-operated ships calling US ports. Operators outside of China could face sliding scale fees of up to $1.5 million per port call for Chinese-built ships, depending on factors such as the carrier’s current fleet and orders at Chinese shipyards. Other proposed remedies call for fees based on a ship’s net tonnage and an export cargo preference requirement for US-based fleets. While ships of Chinese origin comprise about one-third of the global container fleet, consultancy Drewry Shipping estimates that 80% of the ships calling the US could get hit with the fee due to their Chinese origin, operation or the carrier’s order book. China’s Cosco Shipping and its Hong Kong-based OOCL subsidiary would take the most direct hit from the proposed new fees. The two carriers had a combined 1,379 US port calls over the previous 12 months according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global, translating into over $1 billion in port taxes under the Trump plan. Drewry said South Korea’s HMM and Taiwan’s Evergreen Marine might avoid the worst of the tariffs due to the large number of South Korean, Japanese and Taiwanese ships in their fleets. Niche US-based carriers such as Matson would also be exempt but risk retaliation from China due to their port calls there, Drewry added. Other carrier fleets also include a mix of ships from South Korean and Japanese shipyards that would be exempt from the tax. They could likewise redeploy Chinese-built ships to non-US trade lanes. However, it will be tough to entirely avoid the fees due to the high number of new ships that will come from China over the next two years. Sea-web data shows that Chinese shipyards account for 5.6 million TEUs of new container ship orders — two-thirds of all newbuilds. With most carriers having some Chinese-built ships in their fleet and on order, Drewry estimates that ocean carriers generally could be on the hook for $2 million to $3 million in fees for each US voyage based on multiple port calls. Shippers could face added costs of $450 to $1,000 per standard container, Drewry added. <h3>‘Draconian’ fee </h3>If enacted, the World Shipping Council (WSC) said the “draconian” fee proposal would cause ocean carriers to make major adjustments to their service networks, including reducing US port calls while increasing costs for shippers. “USTR’s proposed draconian $1 million-plus per US port visit fees, if carried forward, would cause broad economic harm across all sectors of the US supply chain,” the WSC said in a statement. “The fees would result in fewer US port calls, higher prices for US consumers, and severe impacts for exporters.” While the new fees aim to incentivize the US shipbuilding industry, the National Retail Federation (NRF) questioned whether that goal can be reached. The NRF, in a response last year to the Biden administration’s investigation of China, said it would require a $5 million fee per port call to offset the estimated $50 billion cost for adding US shipyard capacity. “This is much too high for the shipper to absorb,” the NRF said in its comments. “The fee will be passed on to the owners of the freight: American importers, and ultimately, their customers: American farmers, manufacturers and families.” The Trump proposal’s cargo preference requirement for US fleets to carry US exports would also do little for trade, the Agriculture Transportation Coalition (AgTC) said in a briefing to its members. The higher freight costs of US-crewed ships would make it too expensive to ship low-margin farm goods across the globe, according to the group. “Nothing we produce in agriculture or forest products here in the US cannot be sourced from a foreign country,” AgTC said. “If we cannot deliver to our overseas customer affordably and dependably, they will find alternative sources, and US ag loses that market.” <h3>More tariffs coming </h3>The proposed port fees would compound the immediate cost increases that shippers face under the Trump administration. President Donald Trump on Thursday posted a social media message saying he intends to add another 10% levy on Chinese imports, citing what he says is that country’s role in the illegal drug trade. Those tariffs, which go into effect March 4, would be on top of an initial 10% tariff on Chinese goods that Trump announced at the start of February. Trump’s post also said he will impose the threatened 25% tariffs on imports from Canada and Mexico next week due to what he called “unacceptable levels” of illegal drugs coming from both countries into the US. The tariffs were delayed when first announced in February after Canada and Mexico agreed to enhance their border security. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>.</div>

The container shipping industry is weighing the potential cost of the Trump administration’s proposal to tax Chinese-built and -operated ships calling US ports, with many seeing US shippers ultimately bearing those costs. Similar to other tariffs, the port tax sets up winners and losers in the industry, depending on fleet composition and how they operate. On the conclusion of an investigation initiated during the Biden administration into anti-competitive practices of China’s shipbuilding industry, the US Trade Representative (USTR) last week released its suggested remedies , including fees up to $1 million for Chinese-operated ships calling US ports. Operators outside of China could face sliding scale fees of up to $1.5 million per port call for Chinese-built ships, depending on factors such as the carrier’s current fleet and orders at Chinese shipyards. Other proposed remedies call for fees based on a ship’s net tonnage and an export cargo preference requirement for US-based fleets. While ships of Chinese origin comprise about one-third of the global container fleet, consultancy Drewry Shipping estimates that 80% of the ships calling the US could get hit with the fee due to their Chinese origin, operation or the carrier’s order book. China’s Cosco Shipping and its Hong Kong-based OOCL subsidiary would take the most direct hit from the proposed new fees. The two carriers had a combined 1,379 US port calls over the previous 12 months according to Sea-web, a sister company of the Journal of Commerce within S&P Global, translating into over $1 billion in port taxes under the Trump plan. Drewry said South Korea’s HMM and Taiwan’s Evergreen Marine might avoid the worst of the tariffs due to the large number of South Korean, Japanese and Taiwanese ships in their fleets. Niche US-based carriers such as Matson would also be exempt but risk retaliation from China due to their port calls there, Drewry added. Other carrier fleets also include a mix of ships from South Korean and Japanese shipyards that would be exempt from the tax. They could likewise redeploy Chinese-built ships to non-US trade lanes. However, it will be tough to entirely avoid the fees due to the high number of new ships that will come from China over the next two years. Sea-web data shows that Chinese shipyards account for 5.6 million TEUs of new container ship orders — two-thirds of all newbuilds. With most carriers having some Chinese-built ships in their fleet and on order, Drewry estimates that ocean carriers generally could be on the hook for $2 million to $3 million in fees for each US voyage based on multiple port calls. Shippers could face added costs of $450 to $1,000 per standard container, Drewry added. ‘Draconian’ fee If enacted, the World Shipping Council (WSC) said the “draconian” fee proposal would cause ocean carriers to make major adjustments to their service networks, including reducing US port calls while increasing costs for shippers. “USTR’s proposed draconian $1 million-plus per US port visit fees, if carried forward, would cause broad economic harm across all sectors of the US supply chain,” the WSC said in a statement. “The fees would result in fewer US port calls, higher prices for US consumers, and severe impacts for exporters.” While the new fees aim to incentivize the US shipbuilding industry, the National Retail Federation (NRF) questioned whether that goal can be reached. The NRF, in a response last year to the Biden administration’s investigation of China, said it would require a $5 million fee per port call to offset the estimated $50 billion cost for adding US shipyard capacity. “This is much too high for the shipper to absorb,” the NRF said in its comments. “The fee will be passed on to the owners of the freight: American importers, and ultimately, their customers: American farmers, manufacturers and families.” The Trump proposal’s cargo preference requirement for US fleets to carry US exports would also do little for trade, the Agriculture Transportation Coalition (AgTC) said in a briefing to its members. The higher freight costs of US-crewed ships would make it too expensive to ship low-margin farm goods across the globe, according to the group. “Nothing we produce in agriculture or forest products here in the US cannot be sourced from a foreign country,” AgTC said. “If we cannot deliver to our overseas customer affordably and dependably, they will find alternative sources, and US ag loses that market.” More tariffs coming The proposed port fees would compound the immediate cost increases that shippers face under the Trump administration. President Donald Trump on Thursday posted a social media message saying he intends to add another 10% levy on Chinese imports, citing what he says is that country’s role in the illegal drug trade. Those tariffs, which go into effect March 4, would be on top of an initial 10% tariff on Chinese goods that Trump announced at the start of February. Trump’s post also said he will impose the threatened 25% tariffs on imports from Canada and Mexico next week due to what he called “unacceptable levels” of illegal drugs coming from both countries into the US. The tariffs were delayed when first announced in February after Canada and Mexico agreed to enhance their border security. Contact Michael Angell at michael.angell@spglobal.com .

US port tax would scramble ocean services, raise shipper costs: Drewry

<div class="phx-topic abstract-wrapper">While the US-based carrier experienced a strong 2024, growth this year is under threat due to tariffs and the unknowns involving when Red Sea transits will resume.</div>

While the US-based carrier experienced a strong 2024, growth this year is under threat due to tariffs and the unknowns involving when Red Sea transits will resume.

<div class="phx-topic">The continued strength of US-based carrier Matson’s eastbound China business will depend on the scale and effect of tariffs imposed by the Trump administration, the company’s CEO says. The uncertain outlook, shared in Matson’s 2024 earnings call on Tuesday, comes in the wake of a strong year for the carrier, which saw its ocean transportation revenue surge more than 13% to $2.8 billion compared with 2023. At the same time, the carrier’s China volumes increased 7.2% to 37,400 TEUs year over year. Its total volumes, however, slipped almost 2% to 106,000 FEUs. “Beyond the first quarter, we expect freight rates will largely be driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors, supply chain activity, and the trajectory of the US economy,” CEO Matt Cox said. Cox said the impact of tariffs on Matson’s China freight rates depends on several factors, including tariff absorption by the supply chain, how other countries respond to the tariffs, and the potential shift from air to ocean as a means for shippers to find savings. “It’s also possible that manufactured goods currently shipped by air from China will become even more expensive and shippers may look to our expedited ocean services, which are significantly less expensive for only a few extra days of transit time,” he said. President Donald Trump on Thursday said he would hit Chinese-made goods with a new 10% tariff that will go into effect March 4, doubling the 10% tariff that began in February. Cox also said the “magnitude and product range” of the tariffs could impact overall freight demand as shippers, transportation providers, retailers and consumers are forced to eat the additional costs. More so, Cox said the tariffs could influence importers to shift their supply chains away from China. <h3>Beyond the tariffs </h3>Meanwhile, Red Sea navigability poses a significant wild card for trans-Pacific freight rates in 2025, Matson’s CEO said. “The Red Sea absorbed 2 million TEUs of capacity as the international ocean carriers adjusted their deployments to accommodate for that longer transit [around southern Africa],” said Cox. “[If or when] that ends, we’ll see that capacity being freed up into these transportation networks and that [could] erase some of the rate increases we saw.” With rates largely supported by frontloading amid volatility linked to <a href="mailto:https://www.joc.com/article/ila-ratifies-new-six-year-deal-with-higher-entry-pay-automation-protection-5951338">potential longshore labor disruption</a> and the extended Red Sea transits, Matson’s ocean transportation operating income during the fourth quarter rose almost 107% to $137.4 million. The company also saw its total consolidated revenue increase by almost 13% in the fourth quarter to $890.3 million. “The stronger seasonal demand we experienced in the fourth quarter was in part due to customers advancing freight ahead of a potential [labor] disruption and proposed tariff increases,” Cox said during the earnings call. “We also saw some customers in late December moving freight ahead of the earlier Lunar New Year this year.” Matson also said it plans to increase capital expenditures for its fleet this year, with $305 million put toward new vessel construction. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

The continued strength of US-based carrier Matson’s eastbound China business will depend on the scale and effect of tariffs imposed by the Trump administration, the company’s CEO says. The uncertain outlook, shared in Matson’s 2024 earnings call on Tuesday, comes in the wake of a strong year for the carrier, which saw its ocean transportation revenue surge more than 13% to $2.8 billion compared with 2023. At the same time, the carrier’s China volumes increased 7.2% to 37,400 TEUs year over year. Its total volumes, however, slipped almost 2% to 106,000 FEUs. “Beyond the first quarter, we expect freight rates will largely be driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors, supply chain activity, and the trajectory of the US economy,” CEO Matt Cox said. Cox said the impact of tariffs on Matson’s China freight rates depends on several factors, including tariff absorption by the supply chain, how other countries respond to the tariffs, and the potential shift from air to ocean as a means for shippers to find savings. “It’s also possible that manufactured goods currently shipped by air from China will become even more expensive and shippers may look to our expedited ocean services, which are significantly less expensive for only a few extra days of transit time,” he said. President Donald Trump on Thursday said he would hit Chinese-made goods with a new 10% tariff that will go into effect March 4, doubling the 10% tariff that began in February. Cox also said the “magnitude and product range” of the tariffs could impact overall freight demand as shippers, transportation providers, retailers and consumers are forced to eat the additional costs. More so, Cox said the tariffs could influence importers to shift their supply chains away from China. Beyond the tariffs Meanwhile, Red Sea navigability poses a significant wild card for trans-Pacific freight rates in 2025, Matson’s CEO said. “The Red Sea absorbed 2 million TEUs of capacity as the international ocean carriers adjusted their deployments to accommodate for that longer transit [around southern Africa],” said Cox. “[If or when] that ends, we’ll see that capacity being freed up into these transportation networks and that [could] erase some of the rate increases we saw.” With rates largely supported by frontloading amid volatility linked to potential longshore labor disruption and the extended Red Sea transits, Matson’s ocean transportation operating income during the fourth quarter rose almost 107% to $137.4 million. The company also saw its total consolidated revenue increase by almost 13% in the fourth quarter to $890.3 million. “The stronger seasonal demand we experienced in the fourth quarter was in part due to customers advancing freight ahead of a potential [labor] disruption and proposed tariff increases,” Cox said during the earnings call. “We also saw some customers in late December moving freight ahead of the earlier Lunar New Year this year.” Matson also said it plans to increase capital expenditures for its fleet this year, with $305 million put toward new vessel construction. Contact Laura Robb at laura.robb@spglobal.com . 

China tariff uncertainty gives trans-Pacific business cloudy outlook: Matson

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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