<div class="phx-topic abstract-wrapper">Shipping took another small step on its long and complex path towards decarbonization at the annual meeting of the International Maritime Organization Marine Environment Protection Committee meeting, but key issues around a carbon tax and zero-carbon fuel research fund remain unresolved. </div>

Shipping took another small step on its long and complex path towards decarbonization at the annual meeting of the International Maritime Organization Marine Environment Protection Committee meeting, but key issues around a carbon tax and zero-carbon fuel research fund remain unresolved.

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<div>A mandatory new measure to cut the carbon intensity of global shipping, formally adopted by the International Maritime Organization (IMO) this week, received a cautious welcome from container carriers Friday. The carbon intensity measure will link greenhouse gas (GHG) emissions to the amount of cargo carried over distance traveled. To measure their carbon intensity, all ships will be required to calculate their energy efficiency existing ship index (EEXI). That will provide a ship’s annual operational carbon intensity indicator (CII). Ships will be given a rating according to their energy efficiency, from A to E, with A being the highest rating....

A mandatory new measure to cut the carbon intensity of global shipping, formally adopted by the International Maritime Organization (IMO) this week, received a cautious welcome from container carriers Friday. The carbon intensity measure will link greenhouse gas (GHG) emissions to the amount of cargo carried over distance traveled. To measure their carbon intensity, all ships will be required to calculate their energy efficiency existing ship index (EEXI). That will provide a ship’s annual operational carbon intensity indicator (CII). Ships will be given a rating according to their energy efficiency, from A to E, with A being the highest rating. A ship rated D or E for three consecutive years will be required to submit a corrective action plan to show how the required index of C or above would be achieved. The amendments are expected to enter into force on Nov. 1, 2022, with the requirements for EEXI and CII certification coming into effect from Jan. 1, 2023, and the first rating given in 2024. A clause in the amendments also requires the IMO to review the effectiveness of the carbon intensity measures by Jan. 1, 2026, at the latest. However, Simon Bergulf, head of regulatory affairs for A.P. Moller-Maersk, said that although important progress was made at the IMO’s annual Marine Environment Protection Committee meeting (MEPC 76) that wrapped up Thursday, the meeting also exposed a “fundamental divide” between IMO member states on how to cut GHG emissions. “It was not an easy task for the chairman to maintain the discussions on the right track,” Bergulf said in a statement Friday. IMO Secretary General Kitack Lim alluded to the difficulties in reaching a global consensus during the week-long virtual summit in a statement after the conclusion of the MEPC 76 meeting. “The path to decarbonization is a long, but also a common path, in which we need to consider and respect each other’s views,” he said. ‘Urgent need’ to accelerate decarbonization Despite lengthy discussions, no agreement was reached on some key issues, including a potential carbon tax and a proposed research and development fund. Maersk earlier this month proposed implementing a tax of at least $150 per ton of carbon emitted from traditional marine bunker fuels, and the World Shipping Council has been pushing for the establishment of a $5 billion program to research and develop sustainable marine fuels , but discussions on both topics were pushed back to later this year. A spokesman for Hapag Lloyd said the shipping industry “had to do better” and significantly reduce its carbon footprint in the coming years. “While we appreciate the measures agreed at MEPC 76, it remains obvious that R&D around zero-carbon technologies and fuels remains a crucial point and [there is an] urgent need to pace up and expand at the next IMO MEPC meeting in November 2021,” the spokesman said Friday. The MEPC also insisted that climate change measures had to be implemented at a global level, rather than nationally or regionally, a position that will be challenged next month by the European Commission that intends to include shipping in its emissions trading scheme , or ETS, despite significant opposition from shipowners. The EC could reach a decision in mid-July when it reviews its carbon market. However, while pledging their support for the IMO’s emissions targets — a 50 percent reduction in absolute vessel emissions from 2008 levels by 2050, with emissions to be reduced to zero or near-zero as quickly as possible after 2050 — carriers remain unconvinced at the effectiveness of the new carbon intensity measure. “While Maersk welcomes the adoption of the short-term measures, the metrics to be used for their implementation are still unclear and this means that their effect remains to be seen,” Bergulf said. “Moreover, we find that the short-term measures lack incentives for high performing vessels and, thereby, for low- and zero-carbon fuels.” A shipping policy executive, who asked not to be identified, described the carbon intensity measure as a blunt instrument that “could get exactly the result designed, but not the result that is needed.” While acknowledging that the idea was for the rating to become part of a carrier’s decision-making process aimed at reducing a vessel’s emissions, he told JOC.com there were too many variables that might give a ship an unfair rating. These included new ships with better designs versus older vessels, uncertain cargo demands with ships having to speed up or slow down to maintain schedules, ships operating in challenging sea conditions, port congestion, and the carrying of refrigerated containers earning a ship a lower rating. European environmental group Transport & Environment (T&E) took those concerns more than a few steps further. In a statement Friday, T&E shipping program director Faig Abbasov accused the IMO of “greenwashing shipping with a hopelessly weak ship efficiency target,” noting that the targeted annual reduction in emissions would fall short of what is required to meet the Paris Climate Agreement. “The proposal shows total disregard for climate science and is nothing more than a cosmetic measure,” he said. The MEPC 76 noted concerns over carbon intensity calculations and said there would be an ongoing review of the measure to identify any potential negative effects on member states so the necessary adjustments could be made. The IMO encouraged member states, administrations, port authorities, and other stakeholders to provide incentives to ships rated as A or B, which it said would also send out a strong signal to the market and the financial sector. Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .

Maritime

Carriers unimpressed by IMO carbon intensity measure

<div class="phx-topic abstract-wrapper">While carriers are progressively mastering the dark arts of blank sailings, inexplicable and/or unexplainable surcharges and other supply restraints and revenue enhancements, no amount of those tactics will be sufficient to deal with the oversupply of capacity once the Red Sea reopens, writes John McCauley.</div>

While carriers are progressively mastering the dark arts of blank sailings, inexplicable and/or unexplainable surcharges and other supply restraints and revenue enhancements, no amount of those tactics will be sufficient to deal with the oversupply of capacity once the Red Sea reopens, writes John McCauley.

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<div class="phx-topic">It would be easy to be distracted by the noise in the supply chains of any organization today that has non-discretionary reliance on container shipping. By that I mean the organizations that have no transport or supply alternatives and are consigned to finding the right answers for their freight procurement. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5944344_0.1.jpg"></img></div>And there is plenty of noise to contend with — some real (Red Sea, China tariffs), some threats (more tariffs) and many unknowns (service levels under the new alliances). However, stripping all that away, it is essential for beneficial cargo owners (BCOs) to focus on what they know. And what they know is what volume they can anticipate TODAY for the forthcoming months up to a year, what their price history is with all carriers, and a view on what they can and cannot afford should rates go against them. What is also clear is that BCOs have learned a lot from the pandemic era about managing supply chain risk, balancing stock-outs and missed sales versus inventory carry, and to be less reliant on air freight as a reliable and available backup plan. BCOs have also seen a marked shift in carrier behavior. While relationships still count for tactical requirements, many of the decisions that were made locally (e.g. space availability for BCOs in excess of agreed quantities) have now been elevated to regional or central decision makers. Carriers are not passing up opportunities as they may have in the past, and BCOs, shippers and forwarders are feeling the impact. <h3>BCO chatter </h3>So how does this play out for the current contracting round? Here are some takeaways from discussions I am having with BCOs: Firstly, carriers are as cautious as BCOs in their approach. The potential for massive overcapacity should the Red Sea really open up (not just words or temporary truces) is a systemic threat to carriers. While carriers are progressively mastering the dark arts of blank sailings, inexplicable and/or unexplainable surcharges and other supply restraints and revenue enhancements, no amount of these tactics will be sufficient to deal with the oversupply of capacity once the Red Sea reopens. Secondly, an early indicator of a carrier’s expectations is their willingness to engage in three-month contracts, at best six, with a significant premium for a full year. Furthermore, very few carriers (I haven’t heard of any) are willing to give rates inclusive of surcharges. BCO tenders often specifically exclude surcharges, thereby giving surcharges a degree of credibility but also with a requirement they be discussed and agreed ahead of time for both the level of the surcharge and its duration. Thirdly, rate levels for backhauls continue to decline, and depending on the cargo characteristics, destination, weight, etc., close to zero all-in freight rates are back. Fourth, there is high skepticism of the new service levels, particularly Gemini Cooperation, and its ability to settle into expected (not promised) service levels. There is seemingly no appetite from carriers to link pricing to performance, even if shippers are willing to consider no or delayed show from their side. This surely indicates acknowledgement from carriers they do not expect significant improvement, at least in the short term. Finally, many BCOs recall the shenanigans about minimum quantity commitments (MQCs) and a 52-week division being held against them, particularly when volumes grew and space was denied or only given at premium rates. BCOs are likely to commit to less than 100% MQC to protect themselves on the upside and, regrettably, have some margin should volumes fall. <h3>De minimis unknowns </h3>So, what to make of all of this? The market is back in balance right now. BCOs I spoke to are not factoring in a return to Red Sea transit for this year. On that basis, the logic would be to stay in the short-term market of three months to a max of six. A full-year rate will likely attract a premium, but that may well be acceptable. The final thing to watch out for is the <a href="https://www.joc.com/article/europe-joins-us-in-call-for-end-to-e-commerce-de-minimis-exemption-5943108">de minimis drama</a>. It is not out of the question that air freight volumes may be adversely affected, and China exporters may find new solutions to deliver these items cheaply in the US and Europe. I expect this would not significantly affect the sea freight market but may make air freight cheaper for promotions, urgent shipments or high-value goods currently consigned to sea that could switch back to air. Of course, if the Red Sea does reopen and traffic resumes through the Suez Canal, all bets are off for rate levels. It would be worse than any slump seen in the 2010s. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>.</div>

It would be easy to be distracted by the noise in the supply chains of any organization today that has non-discretionary reliance on container shipping. By that I mean the organizations that have no transport or supply alternatives and are consigned to finding the right answers for their freight procurement. And there is plenty of noise to contend with — some real (Red Sea, China tariffs), some threats (more tariffs) and many unknowns (service levels under the new alliances). However, stripping all that away, it is essential for beneficial cargo owners (BCOs) to focus on what they know. And what they know is what volume they can anticipate TODAY for the forthcoming months up to a year, what their price history is with all carriers, and a view on what they can and cannot afford should rates go against them. What is also clear is that BCOs have learned a lot from the pandemic era about managing supply chain risk, balancing stock-outs and missed sales versus inventory carry, and to be less reliant on air freight as a reliable and available backup plan. BCOs have also seen a marked shift in carrier behavior. While relationships still count for tactical requirements, many of the decisions that were made locally (e.g. space availability for BCOs in excess of agreed quantities) have now been elevated to regional or central decision makers. Carriers are not passing up opportunities as they may have in the past, and BCOs, shippers and forwarders are feeling the impact. BCO chatter So how does this play out for the current contracting round? Here are some takeaways from discussions I am having with BCOs: Firstly, carriers are as cautious as BCOs in their approach. The potential for massive overcapacity should the Red Sea really open up (not just words or temporary truces) is a systemic threat to carriers. While carriers are progressively mastering the dark arts of blank sailings, inexplicable and/or unexplainable surcharges and other supply restraints and revenue enhancements, no amount of these tactics will be sufficient to deal with the oversupply of capacity once the Red Sea reopens. Secondly, an early indicator of a carrier’s expectations is their willingness to engage in three-month contracts, at best six, with a significant premium for a full year. Furthermore, very few carriers (I haven’t heard of any) are willing to give rates inclusive of surcharges. BCO tenders often specifically exclude surcharges, thereby giving surcharges a degree of credibility but also with a requirement they be discussed and agreed ahead of time for both the level of the surcharge and its duration. Thirdly, rate levels for backhauls continue to decline, and depending on the cargo characteristics, destination, weight, etc., close to zero all-in freight rates are back. Fourth, there is high skepticism of the new service levels, particularly Gemini Cooperation, and its ability to settle into expected (not promised) service levels. There is seemingly no appetite from carriers to link pricing to performance, even if shippers are willing to consider no or delayed show from their side. This surely indicates acknowledgement from carriers they do not expect significant improvement, at least in the short term. Finally, many BCOs recall the shenanigans about minimum quantity commitments (MQCs) and a 52-week division being held against them, particularly when volumes grew and space was denied or only given at premium rates. BCOs are likely to commit to less than 100% MQC to protect themselves on the upside and, regrettably, have some margin should volumes fall. De minimis unknowns So, what to make of all of this? The market is back in balance right now. BCOs I spoke to are not factoring in a return to Red Sea transit for this year. On that basis, the logic would be to stay in the short-term market of three months to a max of six. A full-year rate will likely attract a premium, but that may well be acceptable. The final thing to watch out for is the de minimis drama . It is not out of the question that air freight volumes may be adversely affected, and China exporters may find new solutions to deliver these items cheaply in the US and Europe. I expect this would not significantly affect the sea freight market but may make air freight cheaper for promotions, urgent shipments or high-value goods currently consigned to sea that could switch back to air. Of course, if the Red Sea does reopen and traffic resumes through the Suez Canal, all bets are off for rate levels. It would be worse than any slump seen in the 2010s. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Supply chain

Container lines

BCOs have plenty of ‘noise’ to contend with in container shipping market: analyst

<div class="phx-topic abstract-wrapper">Continued strong vehicle trade will more than offset a first-half dip in high and heavy equipment movements, while executives say the impact from possible US tariffs on vehicle imports from Mexico and Canada would be minimal.</div>

Continued strong vehicle trade will more than offset a first-half dip in high and heavy equipment movements, while executives say the impact from possible US tariffs on vehicle imports from Mexico and Canada would be minimal.

<div class="phx-topic">Vehicle carrier operators anticipate a bumper 2025, building on last year’s strong performance and supported by continued buoyant vehicle shipments from long-term contracts, shipping executives say.But volumes of high and heavy equipment, including construction and agricultural machinery, are likely to remain subdued in the first half of this year with a possible pickup in the second half going into 2026, they added. About 80% of Höegh Autoliners’ transportation volumes for 2025 and 2026 had been fixed by the end of last year on long-term contracts, CEO Andreas Enger said during a financial results briefing on Friday. The contracts have an average duration of approximately 30 months with net rates of more than $100 per cubic meter, he said. Enger added that the levels of forward contract cover and net freight rates were the highest ever for the company.“Höegh Autoliners starts 2025 with the strongest contract backlog the company has ever had,” he said. Lasse Kristoffersen, president and CEO of Wallenius Wilhelmsen, echoed Enger’s view, saying during a Feb. 12 briefing that Wallenius “had a very strong book of business that will carry us over the next couple of years.” That includes multi-year transportation contracts totaling $8.9 billion signed last year that are each worth more than $100 million, he said.Japan’s three leading vehicle carrier operators — K-Line, MOL and NYK — all forecast robust demand in separate earnings statements over the past two weeks, despite issues including port congestion. The issues of falling vessel charter rates and sluggish vehicle sales raised by Wallenius Wilhelmsen and Höegh Autoliners at the end of last year have also eased.Both companies said growth in vehicle exports, especially from China, are outpacing the increase in global vehicle sales. Total finished vehicle exports from China grew 20% last year to 5.9 million units, up from 4.9 million in 2023, Höegh Autoliners said Friday, quoting figures from China’s automobile makers association.Enger said the easing of charter rates is also providing the company with opportunities to charter additional ships at more competitive rates.<h3>Tariffs no real threat to car trade</h3>Both executives agreed the impact from possible US tariffs on vehicle imports from Mexico and Canada would be minimal. Enger said there had also been limited impact on transport volumes from the imposition of tariffs by the European Union on electric vehicle imports from China because Chinese manufacturers quickly switched to shipping hybrid vehicles.“We’ve been somewhat surprised by the speed and ability of our Chinese customers to shift their product mix from EVs to hybrid vehicles in response to tariffs in Europe,” Enger said.EV imports to European Union countries from China fell 11% to 580,000 units last year from 654,000 in 2023, but hybrid vehicle imports to the EU from China climbed 127% to 168,000 units, Höegh Autoliners said, quoting January’s Global Trade Atlas from S&amp;P Global, parent company of the Journal of Commerce.While vehicle shipments have eased in the first quarter, partly due to a seasonal slowdown, Kristoffersen said that has provided Wallenius the opportunity to resume selling spare capacity for spot cargoes, including for high and heavy equipment.Pointing to the drop in high and heavy shipments, Kristoffersen said fourth-quarter volumes hit their lowest level since 2019 and were down 29% from the fourth quarter in the prior year. The total for 2024 dropped 23% compared with 2023. Wallenius offset the decline by increasing the volumes of vehicle shipments, he said.While elevated interest rates and higher costs are impacting sales of construction and agricultural machinery, Wallenius said there are signs of renewed optimism that could translate into a rebound in sales and shipments.Oslo-listed Höegh Autoliners said net profit rose 5% to $620 million last year, up from $590 million in 2023, while revenues slipped to nearly $1.4 billion from almost $1.5 billion a year earlier.Wallenius reported a 9% increase in net profit to $1.1 billion in 2024 from $974 million in the prior year, while revenues edged up to $5.3 billion from $5.1 billion.Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Vehicle carrier operators anticipate a bumper 2025, building on last year’s strong performance and supported by continued buoyant vehicle shipments from long-term contracts, shipping executives say. But volumes of high and heavy equipment, including construction and agricultural machinery, are likely to remain subdued in the first half of this year with a possible pickup in the second half going into 2026, they added. About 80% of Höegh Autoliners’ transportation volumes for 2025 and 2026 had been fixed by the end of last year on long-term contracts, CEO Andreas Enger said during a financial results briefing on Friday. The contracts have an average duration of approximately 30 months with net rates of more than $100 per cubic meter, he said. Enger added that the levels of forward contract cover and net freight rates were the highest ever for the company. “Höegh Autoliners starts 2025 with the strongest contract backlog the company has ever had,” he said. Lasse Kristoffersen, president and CEO of Wallenius Wilhelmsen, echoed Enger’s view, saying during a Feb. 12 briefing that Wallenius “had a very strong book of business that will carry us over the next couple of years.” That includes multi-year transportation contracts totaling $8.9 billion signed last year that are each worth more than $100 million, he said. Japan’s three leading vehicle carrier operators — K-Line, MOL and NYK — all forecast robust demand in separate earnings statements over the past two weeks, despite issues including port congestion. The issues of falling vessel charter rates and sluggish vehicle sales raised by Wallenius Wilhelmsen and Höegh Autoliners at the end of last year have also eased. Both companies said growth in vehicle exports, especially from China, are outpacing the increase in global vehicle sales. Total finished vehicle exports from China grew 20% last year to 5.9 million units, up from 4.9 million in 2023, Höegh Autoliners said Friday, quoting figures from China’s automobile makers association. Enger said the easing of charter rates is also providing the company with opportunities to charter additional ships at more competitive rates. Tariffs no real threat to car trade Both executives agreed the impact from possible US tariffs on vehicle imports from Mexico and Canada would be minimal. Enger said there had also been limited impact on transport volumes from the imposition of tariffs by the European Union on electric vehicle imports from China because Chinese manufacturers quickly switched to shipping hybrid vehicles. “We’ve been somewhat surprised by the speed and ability of our Chinese customers to shift their product mix from EVs to hybrid vehicles in response to tariffs in Europe,” Enger said. EV imports to European Union countries from China fell 11% to 580,000 units last year from 654,000 in 2023, but hybrid vehicle imports to the EU from China climbed 127% to 168,000 units, Höegh Autoliners said, quoting January’s Global Trade Atlas from S&P Global, parent company of the Journal of Commerce. While vehicle shipments have eased in the first quarter, partly due to a seasonal slowdown, Kristoffersen said that has provided Wallenius the opportunity to resume selling spare capacity for spot cargoes, including for high and heavy equipment. Pointing to the drop in high and heavy shipments, Kristoffersen said fourth-quarter volumes hit their lowest level since 2019 and were down 29% from the fourth quarter in the prior year. The total for 2024 dropped 23% compared with 2023. Wallenius offset the decline by increasing the volumes of vehicle shipments, he said. While elevated interest rates and higher costs are impacting sales of construction and agricultural machinery, Wallenius said there are signs of renewed optimism that could translate into a rebound in sales and shipments. Oslo-listed Höegh Autoliners said net profit rose 5% to $620 million last year, up from $590 million in 2023, while revenues slipped to nearly $1.4 billion from almost $1.5 billion a year earlier. Wallenius reported a 9% increase in net profit to $1.1 billion in 2024 from $974 million in the prior year, while revenues edged up to $5.3 billion from $5.1 billion. Contact Keith Wallis at keithwallis@hotmail.com .

Ro/ro cargo

Breakbulk News

Long-term contracts expected to lift ro/ro operators to healthy 2025

<div class="phx-topic abstract-wrapper">Shipowners are having to make huge investments in vessels with a lifespan of over 20 years without a clear view of evolving regulations and technology that could render certain fuels unviable.</div>

Shipowners are having to make huge investments in vessels with a lifespan of over 20 years without a clear view of evolving regulations and technology that could render certain fuels unviable.

<div class="phx-topic">Choosing the right alternative fuel pathway is shaping up as a source of competition for ocean carriers during shipping’s transition period from fossil fuels to greener options, shipping industry experts say. Just how long that transition period will be remains unclear, but carriers are having to make their fuel choices now with the International Maritime Organization’s (IMO’s) interim emissions targets for 2030 fast approaching. Adding to the pressure on carriers are tightening regulations on CO2 emissions and fuel intensity that carry stiff penalties for non-compliance. Bryan Wood-Thomas, vice president of environmental policy at the World Shipping Council (WSC), told the Journal of Commerce that carriers had entire departments devoted to bunkering purchases and strategy and looking at how far out to extend supply contracts. “The baseline is an intensively competitive landscape, because you’re deciding who you’re going to buy fuel from on what contractual terms and over what period,” Wood-Thomas said. The fuel choice by carriers — at least for now — is increasingly between liquefied natural gas (LNG) and methanol that together comprised 70% of the total 1.7 million TEUs in orders made in 2024, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1a054077-7728-4ffd-abb8-b7aff17c3235"></dynamic-object></div>While methanol led the way in 2023, last year saw a resurgence in LNG-capable ship orders amid <a href="https://www.joc.com/article/potential-shortage-of-green-fuels-keeps-us-awake-hapag-lloyd-ceo-5896832">growing concerns over the availability at scale of methanol</a>. Both LNG and methanol are produced from fossil fuels, but the intention is to gradually replace conventional LNG with more sustainable bio-methane and enable dual-fuel methanol ships to be ammonia-ready. Despite significant challenges in using ammonia as a marine fuel because of high toxicity, it is beginning to feature on the order book. On Friday, Ocean Network Express (ONE) took delivery of the 13,800-TEU ONE Sparkle, the first of a 20-ship order for methanol- and ammonia-ready vessels. <h3>Surcharges ‘jealously guarded’ </h3>Peter Keller, chairman of maritime industry coalition SEA-LNG, said container shipping has always tried to protect currency and fuel from the volatility that governs those markets. “We’ve had fuel surcharges and currency surcharges since the early days of containerization, and the industry has jealously guarded those because they don’t need external sources becoming competitive advantages or disadvantages,” Keller told the Journal of Commerce. Competitive discussions around the price of fuel would continue as the industry moved down the pathway to greener energy sources, he said. “In the transition period there will be no way to generate a fuel surcharge that’s going to protect different price advantages or price differences between fuels,” Keller said. “It might be able to be done on a regional basis in terms of individual trade lanes, but certainly not globally." As a trade body representing container shipping, the WSC is fuel agnostic, but Wood-Thomas said it was clear that conventional LNG would have its attraction “for a period.” The question carriers would need to figure out is how long that attractive period would be, with the next question focusing on the availability of bio-LNG and, ultimately, green methane. “The investment value of LNG tonnage is the ability to convert over time to other fuels that may be your only choices in terms of compliance with a particular greenhouse gas [GHG] intensity standard,” Wood-Thomas said. “What is less certain about green methane is what the technical analysis [will] stack up to down the road.” This uncertainty was highlighted in a recent report by Tristan Smith, professor of energy and transport at the London-based UCL Energy Institute. Smith noted that shipowners were faced with the need to make huge investments in assets with a lifespan of over 20 years without a clear view of whether evolving regulations and technology would make those vessels obsolete. “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?” he asked. <h3>Risks are increasing </h3>Momentum is building behind a universal GHG price and a package of IMO mid-term measures to be rolled out this year. While the measures are aimed at strongly incentivizing the fuel transition, the risk facing shipowners as they choose fuel pathways is also increasing. “At the point when it is beyond doubt that fossil fuel technologies — including LNG as a fuel — face rapid contraction, it will be too late for many to take corrective action,” Smith warned. The IMO will be voting on mid-term measures that include a fuel standard and an economic pricing mechanism on carbon emissions at its Marine Environment Protection Committee (MEPC 83) meeting in April. Once approved, the IMO plans to implement the measures in October. Wood-Thomas said the decisions made at the IMO will be “massively important” with the economic measure intended to narrow the price gap between current bunker fuels and the greener alternatives. But he said for the transition to greener fuels to be effective, the IMO’s economic measures, whether direct carbon pricing or other mechanisms, needed to “actually enable the use of better, lower-emission fuels.” “Merely narrowing the price differential doesn’t necessarily cut it,” Wood-Thomas said. “For example, if we’re looking at a $1,500 per metric ton price on a particular fuel, and the measure cuts that gap by $300, it doesn’t matter. “Because you can’t run a vessel in a commercially viable manner if you are taking a $1,200 hit for every ton of fuel you burn, especially if your competitors are able to exist on another fuel footing,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Choosing the right alternative fuel pathway is shaping up as a source of competition for ocean carriers during shipping’s transition period from fossil fuels to greener options, shipping industry experts say. Just how long that transition period will be remains unclear, but carriers are having to make their fuel choices now with the International Maritime Organization’s (IMO’s) interim emissions targets for 2030 fast approaching. Adding to the pressure on carriers are tightening regulations on CO2 emissions and fuel intensity that carry stiff penalties for non-compliance. Bryan Wood-Thomas, vice president of environmental policy at the World Shipping Council (WSC), told the Journal of Commerce that carriers had entire departments devoted to bunkering purchases and strategy and looking at how far out to extend supply contracts. “The baseline is an intensively competitive landscape, because you’re deciding who you’re going to buy fuel from on what contractual terms and over what period,” Wood-Thomas said. The fuel choice by carriers — at least for now — is increasingly between liquefied natural gas (LNG) and methanol that together comprised 70% of the total 1.7 million TEUs in orders made in 2024, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. While methanol led the way in 2023, last year saw a resurgence in LNG-capable ship orders amid growing concerns over the availability at scale of methanol . Both LNG and methanol are produced from fossil fuels, but the intention is to gradually replace conventional LNG with more sustainable bio-methane and enable dual-fuel methanol ships to be ammonia-ready. Despite significant challenges in using ammonia as a marine fuel because of high toxicity, it is beginning to feature on the order book. On Friday, Ocean Network Express (ONE) took delivery of the 13,800-TEU ONE Sparkle, the first of a 20-ship order for methanol- and ammonia-ready vessels. Surcharges ‘jealously guarded’ Peter Keller, chairman of maritime industry coalition SEA-LNG, said container shipping has always tried to protect currency and fuel from the volatility that governs those markets. “We’ve had fuel surcharges and currency surcharges since the early days of containerization, and the industry has jealously guarded those because they don’t need external sources becoming competitive advantages or disadvantages,” Keller told the Journal of Commerce. Competitive discussions around the price of fuel would continue as the industry moved down the pathway to greener energy sources, he said. “In the transition period there will be no way to generate a fuel surcharge that’s going to protect different price advantages or price differences between fuels,” Keller said. “It might be able to be done on a regional basis in terms of individual trade lanes, but certainly not globally." As a trade body representing container shipping, the WSC is fuel agnostic, but Wood-Thomas said it was clear that conventional LNG would have its attraction “for a period.” The question carriers would need to figure out is how long that attractive period would be, with the next question focusing on the availability of bio-LNG and, ultimately, green methane. “The investment value of LNG tonnage is the ability to convert over time to other fuels that may be your only choices in terms of compliance with a particular greenhouse gas [GHG] intensity standard,” Wood-Thomas said. “What is less certain about green methane is what the technical analysis [will] stack up to down the road.” This uncertainty was highlighted in a recent report by Tristan Smith, professor of energy and transport at the London-based UCL Energy Institute. Smith noted that shipowners were faced with the need to make huge investments in assets with a lifespan of over 20 years without a clear view of whether evolving regulations and technology would make those vessels obsolete. “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?” he asked. Risks are increasing Momentum is building behind a universal GHG price and a package of IMO mid-term measures to be rolled out this year. While the measures are aimed at strongly incentivizing the fuel transition, the risk facing shipowners as they choose fuel pathways is also increasing. “At the point when it is beyond doubt that fossil fuel technologies — including LNG as a fuel — face rapid contraction, it will be too late for many to take corrective action,” Smith warned. The IMO will be voting on mid-term measures that include a fuel standard and an economic pricing mechanism on carbon emissions at its Marine Environment Protection Committee (MEPC 83) meeting in April. Once approved, the IMO plans to implement the measures in October. Wood-Thomas said the decisions made at the IMO will be “massively important” with the economic measure intended to narrow the price gap between current bunker fuels and the greener alternatives. But he said for the transition to greener fuels to be effective, the IMO’s economic measures, whether direct carbon pricing or other mechanisms, needed to “actually enable the use of better, lower-emission fuels.” “Merely narrowing the price differential doesn’t necessarily cut it,” Wood-Thomas said. “For example, if we’re looking at a $1,500 per metric ton price on a particular fuel, and the measure cuts that gap by $300, it doesn’t matter. “Because you can’t run a vessel in a commercially viable manner if you are taking a $1,200 hit for every ton of fuel you burn, especially if your competitors are able to exist on another fuel footing,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Transport, Trade and Regulation News

Ocean carriers seek competitive edge in choice of green fuels

<div class="phx-topic abstract-wrapper">Smaller forwarders on the trade lane are pooling their cargo volumes in formal and informal arrangements to get vessel space at favorable fixed rates as some carriers focus primarily on larger customers.</div>

Smaller forwarders on the trade lane are pooling their cargo volumes in formal and informal arrangements to get vessel space at favorable fixed rates as some carriers focus primarily on larger customers.

<div class="phx-topic">Smaller non-vessel-operating common carriers (NVOs) in the eastbound trans-Pacific are being advised to pool their volumes to secure vessel capacity and more favorable rates given that carrier-direct bookings on the trade are at their highest level since last April. The suggestion also comes as sources say some carriers are signing fixed-rate contracts only with the largest forwarders. “Smaller NVOs have to pool their cargo with a number of other NVOs. They do that [through co-loading in Asia] a lot,” an industry consultant who was formerly the logistics manager at two national retailers told the Journal of Commerce. Co-loading occurs mostly on an ad-hoc basis. A second method some NVOs choose for pooling cargo volumes is to participate in a formal working relationship with aggregators where fixed-rate, or named account (NAC), bookings are secured on a continuous basis year-round. Jon Monroe, an aggregator with more than two dozen forwarder partners in Asia, said an increasing number of mostly smaller NVOs have been participating in the aggregator model this past year as carriers have been focusing more on larger direct shippers and NVOs as spot and freight-all-kinds (FAK) rates remain high and space tight in the eastbound trans-Pacific. “This started some time ago,” Monroe said. “If you ship less than 500 TEUs a month, where do you go?” In May 2024, NVOs controlled 48.1% of the bookings in the eastbound Pacific. By December, NVO bookings had dropped to 45.9% of the market, according to data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4d1e7d47-859e-462d-9790-935e20f623d3"></dynamic-object></div>Some NVOs say the fixed-rate allocations in their current 2024–25 contracts, many of which expire at the end of April, have not been affected by the price and capacity trends in the market. One NVO source said he hasn’t experienced any difficulties in securing space, adding that the forwarder has “rock solid” allocations. <h3>Clear trend toward carrier focus on larger accounts </h3>Still, some NVOs are becoming increasingly agitated by what they describe as a clear trend among some carriers to focus on their larger accounts while ignoring smaller forwarders. “If the carriers keep this up at the current pace, it’s going to do away with the small to mid-size broker and forwarder,” said an NVO who did not want to be identified. But a carrier source told the Journal of Commerce it is not accurate to make a blanket statement that carriers will deal only with larger NVOs. “Carriers are very aware of refusing to handle someone’s cargo,” the source said. “No one is going to get refused. Everyone will get an offer.” Other sources said the problem from the perspective of smaller NVOs is that the carriers tell them to book their freight at the higher-priced FAK rates, which, in the current market, are much higher than the fixed-rate contracts the larger NVOs have with carriers. As carrier costs have increased in recent years, they have cut back on their sales staff and reduced travel budgets, and the carriers began to concentrate on fewer but larger clients, the consultant source said. “The greater the number of clients you have to deal with as a carrier, the more your costs go up,” he said. A second carrier source said some liners operate under a model in which they get 80% of their business from 20% of their customers. “For the smaller NVOs, it’s ‘Sorry, not interested. You can book on the spot market,’” the source said. On the other hand, a few carriers have built their business plan on the forwarder model and continue to deal with most forwarders, no matter their size. “My view of the market is the guy who books 5 TEUs today will book 500 TEUs tomorrow,” a third carrier source said. “We nurture those accounts.” <h3>Global changes offer opportunities for new relationships </h3>Carriers and forwarders say the uncertainties facing global shipping — including changes among alliance carriers, the possibility of shipping’s return to the Suez Canal and the rollout of tariffs by the Trump administration — have created an environment in which both parties should consider updating their relationships. “Our NAC accounts are still the same [until May 1], but we’ve started to look at the new market and the individual carriers,” said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. In the general trans-Pacific market, NVOs seem to be looking at the Premier Alliance carriers of Ocean Network Express, Yang Ming and HMM as liners that are receptive to freight tendered by smaller forwarders, Shames said. Carriers and NVOs say the new Gemini Cooperation alliance between Maersk Line and Hapag-Lloyd has raised some uncertainties among shippers with its hub-and-spoke network designed to improve on-time performance on major trade lanes. The concern is that secondary ports in Asia and the US could lose direct services or that transit times will increase, they say. Other carriers view the alliance changes as an opportunity to attract new customers and additional cargo. “The alliance changes are causing some concern among shippers and NVOs,” a fourth carrier source said. “Some carriers could backfill their vessels from these customers.” 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>

Smaller non-vessel-operating common carriers (NVOs) in the eastbound trans-Pacific are being advised to pool their volumes to secure vessel capacity and more favorable rates given that carrier-direct bookings on the trade are at their highest level since last April. The suggestion also comes as sources say some carriers are signing fixed-rate contracts only with the largest forwarders. “Smaller NVOs have to pool their cargo with a number of other NVOs. They do that [through co-loading in Asia] a lot,” an industry consultant who was formerly the logistics manager at two national retailers told the Journal of Commerce. Co-loading occurs mostly on an ad-hoc basis. A second method some NVOs choose for pooling cargo volumes is to participate in a formal working relationship with aggregators where fixed-rate, or named account (NAC), bookings are secured on a continuous basis year-round. Jon Monroe, an aggregator with more than two dozen forwarder partners in Asia, said an increasing number of mostly smaller NVOs have been participating in the aggregator model this past year as carriers have been focusing more on larger direct shippers and NVOs as spot and freight-all-kinds (FAK) rates remain high and space tight in the eastbound trans-Pacific. “This started some time ago,” Monroe said. “If you ship less than 500 TEUs a month, where do you go?” In May 2024, NVOs controlled 48.1% of the bookings in the eastbound Pacific. By December, NVO bookings had dropped to 45.9% of the market, according to data from PIERS, a sister company of the Journal of Commerce within S&P Global. Some NVOs say the fixed-rate allocations in their current 2024–25 contracts, many of which expire at the end of April, have not been affected by the price and capacity trends in the market. One NVO source said he hasn’t experienced any difficulties in securing space, adding that the forwarder has “rock solid” allocations. Clear trend toward carrier focus on larger accounts Still, some NVOs are becoming increasingly agitated by what they describe as a clear trend among some carriers to focus on their larger accounts while ignoring smaller forwarders. “If the carriers keep this up at the current pace, it’s going to do away with the small to mid-size broker and forwarder,” said an NVO who did not want to be identified. But a carrier source told the Journal of Commerce it is not accurate to make a blanket statement that carriers will deal only with larger NVOs. “Carriers are very aware of refusing to handle someone’s cargo,” the source said. “No one is going to get refused. Everyone will get an offer.” Other sources said the problem from the perspective of smaller NVOs is that the carriers tell them to book their freight at the higher-priced FAK rates, which, in the current market, are much higher than the fixed-rate contracts the larger NVOs have with carriers. As carrier costs have increased in recent years, they have cut back on their sales staff and reduced travel budgets, and the carriers began to concentrate on fewer but larger clients, the consultant source said. “The greater the number of clients you have to deal with as a carrier, the more your costs go up,” he said. A second carrier source said some liners operate under a model in which they get 80% of their business from 20% of their customers. “For the smaller NVOs, it’s ‘Sorry, not interested. You can book on the spot market,’” the source said. On the other hand, a few carriers have built their business plan on the forwarder model and continue to deal with most forwarders, no matter their size. “My view of the market is the guy who books 5 TEUs today will book 500 TEUs tomorrow,” a third carrier source said. “We nurture those accounts.” Global changes offer opportunities for new relationships Carriers and forwarders say the uncertainties facing global shipping — including changes among alliance carriers, the possibility of shipping’s return to the Suez Canal and the rollout of tariffs by the Trump administration — have created an environment in which both parties should consider updating their relationships. “Our NAC accounts are still the same [until May 1], but we’ve started to look at the new market and the individual carriers,” said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. In the general trans-Pacific market, NVOs seem to be looking at the Premier Alliance carriers of Ocean Network Express, Yang Ming and HMM as liners that are receptive to freight tendered by smaller forwarders, Shames said. Carriers and NVOs say the new Gemini Cooperation alliance between Maersk Line and Hapag-Lloyd has raised some uncertainties among shippers with its hub-and-spoke network designed to improve on-time performance on major trade lanes. The concern is that secondary ports in Asia and the US could lose direct services or that transit times will increase, they say. Other carriers view the alliance changes as an opportunity to attract new customers and additional cargo. “The alliance changes are causing some concern among shippers and NVOs,” a fourth carrier source said. “Some carriers could backfill their vessels from these customers.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Forwarding

Trans-Pacific

Small trans-Pac forwarders, feeling ignored by carriers, stay agile to secure capacity

<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.

<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 toward 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. Determining 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 a large amount 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 toward 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. Determining 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 a large amount 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 .

Evergreen makes $3.2 billion order for LNG-capable megaships

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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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