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Platts Containers Update

<div class="phx-topic abstract-wrapper">A Reporter's Notebook headlined ''UP chief welcomes SP deal'' that appeared Sept. 5 on Page 8B shoul</div>

A Reporter's Notebook headlined ''UP chief welcomes SP deal'' that appeared Sept. 5 on Page 8B shoul

<div>A Reporter's Notebook headlined ''UP chief welcomes SP deal'' that appeared Sept. 5 on Page 8B should have quoted Union Pacific President and Chief Executive Ronald J. Burns as saying the sale of a resource unit will ''conclude 15 years of diversification and allow the company to focus on its grass-roots business. We want our customers to know we are focusing all our efforts on the railroad.''Mr. Burns also indicated that both UP and the resource unit are strong on their own and that now the resource unit will not have to compete for capital with the railroad.</div>...

A Reporter's Notebook headlined ''UP chief welcomes SP deal'' that appeared Sept. 5 on Page 8B should have quoted Union Pacific President and Chief Executive Ronald J. Burns as saying the sale of a resource unit will ''conclude 15 years of diversification and allow the company to focus on its grass-roots business. We want our customers to know we are focusing all our efforts on the railroad.'' Mr. Burns also indicated that both UP and the resource unit are strong on their own and that now the resource unit will not have to compete for capital with the railroad.

CLARIFICATION

<div class="phx-topic abstract-wrapper">Shipper, forwarder and customs broker associations want to see the members of the Digital Container Shipping Association accelerate efforts to create interoperable process standards. </div>

Shipper, forwarder and customs broker associations want to see the members of the Digital Container Shipping Association accelerate efforts to create interoperable process standards.

Feature image

<div class="phx-topic">Nearly three dozen trade groups are urging major shipping lines to advance digital standards and system interoperability for the benefit of shippers, forwarders and customs brokers. The renewed call, courtesy of a letter sent to carrier members of the Digital Container Shipping Association (DCSA), comes 11 months after many of the <a href="https://www.joc.com/article/groups-urge-dcsa-members-to-implement-standard-on-shipping-schedules-5244524">same trade groups initially called on shipping lines</a> to pursue progress on the standards DCSA has released. The association last week released its latest booking and electronic bill of lading standards, blueprints intended to help shipping lines create common user experiences for its customers. DCSA has already published a commercial schedules standard, which the trade groups lauded in a letter made public this week. “Implementing these standards ... demonstrates your commitment to customer needs, adherence to realistic timelines, and builds trust in your ability to deliver,” the most recent letter said. “We urge you to lead your organization and collaborate with fellow DCSA members to deliver greater benefits from digital standards and interoperability to your customers in 2025.” Among a checklist of a dozen recommendations to carriers, the letter calls for DCSA members to align implementation plans with other ocean carriers to minimize duplication work for customers, to invite customer participation in the development and implementation of standards, and to provide semi-annual progress updates from mid-2025. Signatories to the letter include the Agriculture Transportation Coalition, the National Customs Brokers and Forwarders Association of America, the Global Shipper Alliance and the Coalition of New England Companies for Trade, as well as numerous commodity-specific shipper associations, regional trade associations and individual customs brokers. DCSA members are CMA CGM, Evergreen, HMM, Hapag-Lloyd, Maersk, Mediterranean Shipping Co., Ocean Network Express (ONE), Yang Ming and Zim Integrated Shipping Services. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

Nearly three dozen trade groups are urging major shipping lines to advance digital standards and system interoperability for the benefit of shippers, forwarders and customs brokers. The renewed call, courtesy of a letter sent to carrier members of the Digital Container Shipping Association (DCSA), comes 11 months after many of the same trade groups initially called on shipping lines to pursue progress on the standards DCSA has released. The association last week released its latest booking and electronic bill of lading standards, blueprints intended to help shipping lines create common user experiences for its customers. DCSA has already published a commercial schedules standard, which the trade groups lauded in a letter made public this week. “Implementing these standards ... demonstrates your commitment to customer needs, adherence to realistic timelines, and builds trust in your ability to deliver,” the most recent letter said. “We urge you to lead your organization and collaborate with fellow DCSA members to deliver greater benefits from digital standards and interoperability to your customers in 2025.” Among a checklist of a dozen recommendations to carriers, the letter calls for DCSA members to align implementation plans with other ocean carriers to minimize duplication work for customers, to invite customer participation in the development and implementation of standards, and to provide semi-annual progress updates from mid-2025. Signatories to the letter include the Agriculture Transportation Coalition, the National Customs Brokers and Forwarders Association of America, the Global Shipper Alliance and the Coalition of New England Companies for Trade, as well as numerous commodity-specific shipper associations, regional trade associations and individual customs brokers. DCSA members are CMA CGM, Evergreen, HMM, Hapag-Lloyd, Maersk, Mediterranean Shipping Co., Ocean Network Express (ONE), Yang Ming and Zim Integrated Shipping Services. Contact Eric Johnson at eric.johnson@spglobal.com .

Trade groups renew push for ocean carrier movement on digitization

<div class="phx-topic abstract-wrapper">The tonnage injection comes amid an uptick in Asian manufacturers expanding business in Latin America, particularly Mexico.</div>

The tonnage injection comes amid an uptick in Asian manufacturers expanding business in Latin America, particularly Mexico.

<div class="phx-topic">Ocean Network Express (ONE) and Evergreen Line are increasing their tonnage deployed on the Asia-to-Latin-America lane to handle growing demand on a trade in which capacity has already doubled in three years. The tonnage injection comes amid an uptick in Asian manufacturers expanding business in Latin America, particularly Mexico. Singapore-based ONE is putting larger ships and adding new services on the trade, including the deployment of 13,828-TEU S-class newbuild container ships on its Asia-West Coast South America service from early March, according to a ONE spokesperson. Meanwhile, Evergreen’s new sailing schedules reflect its own service expansions and increased capacity on the trade. The new ONE vessels are up to 50% larger than the existing 8,900-TEU vessels they are likely to replace — those being Hapag-Lloyd ships that had been operating the routes under the old THE Alliance. Those vessels will be withdrawn now that the carrier has teamed with Maersk on the Gemini Cooperation. ONE hasn’t decided if all of its new 13,828-TEU vessels will be deployed on the Asia-South America trade. Figures from MDS Transmodal show quarterly deployed capacity on the lane has more than doubled in the last three years, climbing to more than 2 million TEUs in the first quarter. Capacity alone grew 20% year over year between the first quarter of 2024 and the first quarter of 2025, according to MDS data prepared for the Journal of Commerce.  “It seems like [the growth] is to accommodate a lot of the new Asian manufacturers that are setting up down there,” a forwarder with cargo on the trade told the Journal of Commerce.  <h3>New vessels, services </h3>Although the service rotation is still to be confirmed, a ONE spokesperson said the first of the larger newbuilds to be delivered, ONE Sparkle, is likely to be deployed on ONE’s Asia-Latin America service connecting Busan, Shanghai and Ningbo with Ensenada and Manzanillo in Mexico, Buenaventura (Colombia), Guayaquil (Ecuador) and Callao (Peru). Evergreen and Cosco Shipping teamed up to expand the Asia-South America West Coast 5 (WSA5) service in early February, according to Cosco. The service, which had previously been a purely Mexico-focused route, will now cover ports including Buenaventura, Guayaquil and Chancay in Peru — where Cosco launched operations last November. The S-class vessels will also expand the lane’s reefer capacity, with about two and a half times the number of reefer plugs available on comparable ships. They are specifically designed for deployment on burgeoning perishables trades that involve meat, fish and fruit exports between China and South America and on north-south routes, a ONE spokesperson told the Journal of Commerce. “With these new vessels we’ll have an increase in strategic coverage,” the spokesperson added.   <h3>Rate volatility </h3>Peter Sand, chief analyst at online benchmarking platform Xeneta, said contract rates on the trade lane are continuing to trend lower in February after a recent peak in September. Contract rates from China to the West Coast of South America were about $2,700 per FEU this month, down from almost $4,000 per FEU almost six months ago. Still, Sand was bullish about rate and trade growth fueled by further Chinese investment in Latin America, especially Mexico. “Overall, we see a trend for increasing manufacturing investments outside China going forward and a growth trend for China to Mexico and Canada,” he told the Journal of Commerce. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Ocean Network Express (ONE) and Evergreen Line are increasing their tonnage deployed on the Asia-to-Latin-America lane to handle growing demand on a trade in which capacity has already doubled in three years. The tonnage injection comes amid an uptick in Asian manufacturers expanding business in Latin America, particularly Mexico. Singapore-based ONE is putting larger ships and adding new services on the trade, including the deployment of 13,828-TEU S-class newbuild container ships on its Asia-West Coast South America service from early March, according to a ONE spokesperson. Meanwhile, Evergreen’s new sailing schedules reflect its own service expansions and increased capacity on the trade. The new ONE vessels are up to 50% larger than the existing 8,900-TEU vessels they are likely to replace — those being Hapag-Lloyd ships that had been operating the routes under the old THE Alliance. Those vessels will be withdrawn now that the carrier has teamed with Maersk on the Gemini Cooperation. ONE hasn’t decided if all of its new 13,828-TEU vessels will be deployed on the Asia-South America trade. Figures from MDS Transmodal show quarterly deployed capacity on the lane has more than doubled in the last three years, climbing to more than 2 million TEUs in the first quarter. Capacity alone grew 20% year over year between the first quarter of 2024 and the first quarter of 2025, according to MDS data prepared for the Journal of Commerce.  “It seems like [the growth] is to accommodate a lot of the new Asian manufacturers that are setting up down there,” a forwarder with cargo on the trade told the Journal of Commerce.  New vessels, services Although the service rotation is still to be confirmed, a ONE spokesperson said the first of the larger newbuilds to be delivered, ONE Sparkle, is likely to be deployed on ONE’s Asia-Latin America service connecting Busan, Shanghai and Ningbo with Ensenada and Manzanillo in Mexico, Buenaventura (Colombia), Guayaquil (Ecuador) and Callao (Peru). Evergreen and Cosco Shipping teamed up to expand the Asia-South America West Coast 5 (WSA5) service in early February, according to Cosco. The service, which had previously been a purely Mexico-focused route, will now cover ports including Buenaventura, Guayaquil and Chancay in Peru — where Cosco launched operations last November. The S-class vessels will also expand the lane’s reefer capacity, with about two and a half times the number of reefer plugs available on comparable ships. They are specifically designed for deployment on burgeoning perishables trades that involve meat, fish and fruit exports between China and South America and on north-south routes, a ONE spokesperson told the Journal of Commerce. “With these new vessels we’ll have an increase in strategic coverage,” the spokesperson added.   Rate volatility Peter Sand, chief analyst at online benchmarking platform Xeneta, said contract rates on the trade lane are continuing to trend lower in February after a recent peak in September. Contract rates from China to the West Coast of South America were about $2,700 per FEU this month, down from almost $4,000 per FEU almost six months ago. Still, Sand was bullish about rate and trade growth fueled by further Chinese investment in Latin America, especially Mexico. “Overall, we see a trend for increasing manufacturing investments outside China going forward and a growth trend for China to Mexico and Canada,” he told the Journal of Commerce. Contact Keith Wallis at keithwallis@hotmail.com . Contact Laura Robb at laura.robb@spglobal.com .

Carriers boost tonnage on Asia-WCSA to meet growing manufacturing demand

<div class="phx-topic abstract-wrapper">While the breakbulk sector failed to capitalize on the forward loading of steel to get in front of US import tariffs, it now has bigger concerns with US proposals to penalize Chinese-made MPVs.</div>

While the breakbulk sector failed to capitalize on the forward loading of steel to get in front of US import tariffs, it now has bigger concerns with US proposals to penalize Chinese-made MPVs.

<div class="phx-topic">Breakbulk carriers, having missed out on the rush to frontload steel cargoes ahead of US import tariffs, have turned their attention to the impact of possible US restrictions on Chinese-built and -operated ships on the multipurpose sector.January US steel imports surged 5.6% year over year, according to data from S&amp;P Global Commodity Insights. Statistics from the US International Trade Administration’s US Steel Import Monitor showed US imports of steel mill products hitting a seven-month high of 2.6 million metric tons in January. But the US Steel Import Monitor census data reporting to Feb. 18 put volumes back to a “normal” 1.3 million metric tons. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="98023d22-f087-45e1-995c-84fa8c6522e7"></dynamic-object></div>A specialist steel-as-breakbulk carrier speaking to the Journal of Commerce confirmed that they had not seen frontloading taking place in advance of the March 12 revocation of previously negotiated country-specific tariff exemptions.“Unless you import from close to the US, cargoes will not make it in time for the March 12 deadline anyway,” the source added. An analyst speaking to the Journal of Commerce agreed that frontloading would have shown in December to early February data “when tariff threats were simply threats.” However, tariff avoidance is now down the list of priorities for engineering, procurement and construction (EPC) companies after the Feb. 21 announcement from the US Trade Representative (USTR) of proposed penalties on Chinese-built and -operated ships calling on the US. <a href="https://www.joc.com/article/us-port-fees-could-hit-chinese-ships-under-trump-trade-proposal-5949409">Among the USTR’s proposals are a $1 million fee for each US port call of a Chinese-operated ship</a>, or a $1,000-per-net-ton fee applied on the ship’s carrying capacity. For all other ocean carriers, including MPVs, the USTR proposes a sliding port entrance fee of up to $1.5 million per Chinese-built vessel based on the percent of the carrier’s fleet built in China. Likewise, an additional fee of $1 million per vessel could also be assessed based on the percent of the carrier’s newbuild order book at Chinese shipyards. An EPC speaking to the Journal of Commerce said that most breakbulk operators have orders with Chinese yards and shippers are nearly always the sole importer in a port call.In 2024, China delivered 34% of all newbuildings to the global fleet, compared with 11% from Japan, 7% from South Korea and just 2% from the US, according to S&amp;P Global. Up to 40% of the global fleet is under construction in China, according to S&amp;P Global Market Intelligence. The tally is even higher for larger ships of over 10,000 deadweight tons — 63% of those are currently being built in China. For the multipurpose and heavy-lift fleet (MPV/HL), 51.8% of the existing fleet is Chinese-built, 23% is Japanese and 5% is Dutch. However, the share of the current order book is even more skewed toward Chinese yards, with 89% of all MPV/HL vessels on order there. Only about 35% is for Chinese operators.Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Breakbulk carriers, having missed out on the rush to frontload steel cargoes ahead of US import tariffs, have turned their attention to the impact of possible US restrictions on Chinese-built and -operated ships on the multipurpose sector. January US steel imports surged 5.6% year over year, according to data from S&P Global Commodity Insights. Statistics from the US International Trade Administration’s US Steel Import Monitor showed US imports of steel mill products hitting a seven-month high of 2.6 million metric tons in January. But the US Steel Import Monitor census data reporting to Feb. 18 put volumes back to a “normal” 1.3 million metric tons. A specialist steel-as-breakbulk carrier speaking to the Journal of Commerce confirmed that they had not seen frontloading taking place in advance of the March 12 revocation of previously negotiated country-specific tariff exemptions. “Unless you import from close to the US, cargoes will not make it in time for the March 12 deadline anyway,” the source added. An analyst speaking to the Journal of Commerce agreed that frontloading would have shown in December to early February data “when tariff threats were simply threats.” However, tariff avoidance is now down the list of priorities for engineering, procurement and construction (EPC) companies after the Feb. 21 announcement from the US Trade Representative (USTR) of proposed penalties on Chinese-built and -operated ships calling on the US. Among the USTR’s proposals are a $1 million fee for each US port call of a Chinese-operated ship , or a $1,000-per-net-ton fee applied on the ship’s carrying capacity. For all other ocean carriers, including MPVs, the USTR proposes a sliding port entrance fee of up to $1.5 million per Chinese-built vessel based on the percent of the carrier’s fleet built in China. Likewise, an additional fee of $1 million per vessel could also be assessed based on the percent of the carrier’s newbuild order book at Chinese shipyards. An EPC speaking to the Journal of Commerce said that most breakbulk operators have orders with Chinese yards and shippers are nearly always the sole importer in a port call. In 2024, China delivered 34% of all newbuildings to the global fleet, compared with 11% from Japan, 7% from South Korea and just 2% from the US, according to S&P Global. Up to 40% of the global fleet is under construction in China, according to S&P Global Market Intelligence. The tally is even higher for larger ships of over 10,000 deadweight tons — 63% of those are currently being built in China. For the multipurpose and heavy-lift fleet (MPV/HL), 51.8% of the existing fleet is Chinese-built, 23% is Japanese and 5% is Dutch. However, the share of the current order book is even more skewed toward Chinese yards, with 89% of all MPV/HL vessels on order there. Only about 35% is for Chinese operators. Contact Carly Fields at carly.fields@spglobal.com .

MPVs pass on steel frontloading surge as fleet concerns loom

<div class="phx-topic abstract-wrapper">The second tender from the Zero Emission Maritime Buyers Alliance calls for a carrier or a consortium of liners to move the equivalent of 1.5 million TEUs across the Pacific on ships powered by renewable synthetic fuels.</div>

The second tender from the Zero Emission Maritime Buyers Alliance calls for a carrier or a consortium of liners to move the equivalent of 1.5 million TEUs across the Pacific on ships powered by renewable synthetic fuels.

<div class="phx-topic">Ocean carriers have expressed strong interest in competing for an e-fuel-focused tender launched Tuesday by the Zero Emission Maritime Buyers Alliance (ZEMBA), according to the group’s president and CEO. The second tender from ZEMBA calls for a carrier or group of liners to move the equivalent of 1.5 million TEUs across the Pacific on ships powered by renewable synthetic fuels, with the aim of fast-tracking the commercial deployment of e-fuels at scale to create a competitive market. E-fuels are synthetic fuels produced using renewable electricity and include e-methanol and biomethane, a cleaner version of liquefied natural gas (LNG). ZEMBA head Ingrid Irigoyen described the response to the tender as “remarkable,” adding that carriers numbering “in the double digits” have stepped forward. “We have a strong group of carriers who registered their interest with us so we’re feeling quite bullish about being able to get some good e-fuel bids,” she told the Journal of Commerce. “Several bids are from top carriers and some are from smaller ones, which is going to see a mix of different fuels, different technologies, different sizes of carriers operating in different geographies,” she added. “It is a diverse group of market participants.” ZEMBA is a non-profit alliance of more than 40 freight buyers that includes global brands such as IKEA, Electrolux, Nike, Philips and Levi Strauss. Hapag-Lloyd last April <a href="https://www.joc.com/article/biofuel-not-the-answer-to-shipping-decarbonization-carriers-5945801">was awarded ZEMBA’s inaugural tender</a> for the zero-emission shipment of containers from Singapore to Rotterdam that will cover 1.2 billion TEU-miles over a two-year period beginning in 2025. While the first tender focused on biomethane, a qualifying bid for ZEMBA’s second tender that will be awarded later this year will be a proposal from a carrier or consortium for e-fuel-powered shipping over a three- to five-year period starting in 2027. All bids will need to demonstrate at least a 90% lifecycle emission reduction for primary propulsion of the vessels “compared to a high-emission fuel baseline,” the tender noted. The tender intends to aggregate approximately 86 billion metric ton nautical miles of demand for the emissions abatement associated with e-fuel-powered shipping. It will cover a negotiated “green premium” paid by shippers and will not involve the base freight rate. “Getting e-fuel-powered shipping on the water for the first time through this collaborative forward procurement will be a huge technical and commercial innovation milestone for the sector,” Irigoyen said. <h3>Seeking ‘supportive and sophisticated’ policy </h3>Irigoyen said the timing of the second tender was important as the International Maritime Organization (IMO) debates the composition of its mid-term measures, namely a global carbon pricing mechanism and a fuel standard. The IMO’s Maritime and Environment Protection Committee (MEPC) meeting will decide on the measures and finalize the legal framework in April with implementation planned for October. “We hope to be a source of inspiration and confidence-building for policy makers,” Irigoyen said. “We want to see policy that is supportive and sophisticated enough to capture the long-term strategic needs of this sector and get the scalable fuels supported in the market despite a high price point today so those costs can come down precipitously.” ZEMBA’s decision to focus on e-fuels in the second tender was because they are “vastly scalable,” Irigoyen said, and the cost reductions would be significant compared with biofuels that faced <a href="https://www.joc.com/article/biofuel-not-the-answer-to-shipping-decarbonization-carriers-5945801">sustainability questions, limited availability and competition</a> from other sectors. “The beauty of just going to market is that we don’t have to speculate,” she said. “We don’t have to speculate on pricing, we don’t have to speculate on availability and [we] will have concrete commercial offerings that meet our requirements. “It’s not our suggestion that the entire sector must switch immediately, but by having leader buyers, leader freight forwarders, leader carriers and leader fuel producers coming together through the execution of this project, I think we can enable that future to set sail,” Irigoyen added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers have expressed strong interest in competing for an e-fuel-focused tender launched Tuesday by the Zero Emission Maritime Buyers Alliance (ZEMBA), according to the group’s president and CEO. The second tender from ZEMBA calls for a carrier or group of liners to move the equivalent of 1.5 million TEUs across the Pacific on ships powered by renewable synthetic fuels, with the aim of fast-tracking the commercial deployment of e-fuels at scale to create a competitive market. E-fuels are synthetic fuels produced using renewable electricity and include e-methanol and biomethane, a cleaner version of liquefied natural gas (LNG). ZEMBA head Ingrid Irigoyen described the response to the tender as “remarkable,” adding that carriers numbering “in the double digits” have stepped forward. “We have a strong group of carriers who registered their interest with us so we’re feeling quite bullish about being able to get some good e-fuel bids,” she told the Journal of Commerce. “Several bids are from top carriers and some are from smaller ones, which is going to see a mix of different fuels, different technologies, different sizes of carriers operating in different geographies,” she added. “It is a diverse group of market participants.” ZEMBA is a non-profit alliance of more than 40 freight buyers that includes global brands such as IKEA, Electrolux, Nike, Philips and Levi Strauss. Hapag-Lloyd last April was awarded ZEMBA’s inaugural tender for the zero-emission shipment of containers from Singapore to Rotterdam that will cover 1.2 billion TEU-miles over a two-year period beginning in 2025. While the first tender focused on biomethane, a qualifying bid for ZEMBA’s second tender that will be awarded later this year will be a proposal from a carrier or consortium for e-fuel-powered shipping over a three- to five-year period starting in 2027. All bids will need to demonstrate at least a 90% lifecycle emission reduction for primary propulsion of the vessels “compared to a high-emission fuel baseline,” the tender noted. The tender intends to aggregate approximately 86 billion metric ton nautical miles of demand for the emissions abatement associated with e-fuel-powered shipping. It will cover a negotiated “green premium” paid by shippers and will not involve the base freight rate. “Getting e-fuel-powered shipping on the water for the first time through this collaborative forward procurement will be a huge technical and commercial innovation milestone for the sector,” Irigoyen said. Seeking ‘supportive and sophisticated’ policy Irigoyen said the timing of the second tender was important as the International Maritime Organization (IMO) debates the composition of its mid-term measures, namely a global carbon pricing mechanism and a fuel standard. The IMO’s Maritime and Environment Protection Committee (MEPC) meeting will decide on the measures and finalize the legal framework in April with implementation planned for October. “We hope to be a source of inspiration and confidence-building for policy makers,” Irigoyen said. “We want to see policy that is supportive and sophisticated enough to capture the long-term strategic needs of this sector and get the scalable fuels supported in the market despite a high price point today so those costs can come down precipitously.” ZEMBA’s decision to focus on e-fuels in the second tender was because they are “vastly scalable,” Irigoyen said, and the cost reductions would be significant compared with biofuels that faced sustainability questions, limited availability and competition from other sectors. “The beauty of just going to market is that we don’t have to speculate,” she said. “We don’t have to speculate on pricing, we don’t have to speculate on availability and [we] will have concrete commercial offerings that meet our requirements. “It’s not our suggestion that the entire sector must switch immediately, but by having leader buyers, leader freight forwarders, leader carriers and leader fuel producers coming together through the execution of this project, I think we can enable that future to set sail,” Irigoyen added. Contact Greg Knowler at greg.knowler@spglobal.com .

Global shipper group ‘bullish’ on e-fuel tender bids from ocean carriers

<div class="phx-topic abstract-wrapper">The FMC’s modified ruling in the TCW-Evergreen complaint allows room for carriers to charge late fees during port closures if the fees are reasonable. </div>

The FMC’s modified ruling in the TCW-Evergreen complaint allows room for carriers to charge late fees during port closures if the fees are reasonable.

<div class="phx-topic">The US Federal Maritime Commission (FMC) has ruled that while a container late fee Evergreen Marine charged a trucker was unreasonable, the ocean carrier did not violate the agency’s broader directive on whether the fees improve cargo fluidity. The FMC said in an order that drayage carrier TCW was entitled to a refund of $510 in detention fees on a container and chassis that Evergreen charged the trucker over a three-day period when the Port of Savannah was closed during Memorial Day weekend in 2020. <a href="https://www.joc.com/article/two-fmc-cases-test-limits-on-detention-and-demurrage-5247665">TCW filed a complaint with the agency in 2021</a> after receiving the invoice from Evergreen. The motor carrier argued the detention charge did not meet the FMC’s test for charging fees under the “incentive principle” for prompting shippers and cargo owners to move freight as quickly as possible. After <a href="https://www.joc.com/article/us-court-orders-fmc-to-review-evergreen-demurrage-ruling-5192254">a US appellate court ordered a review of the ruling in the case</a>, the FMC said in its mid-February ruling that Evergreen’s detention charges could still be considered unreasonable. TCW’s customer Yamaha did not make the empty container available for return until the Saturday of that Memorial Day weekend, the FMC said. TCW made Evergreen aware of that but was still charged detention for the three-day period. However, the FMC did reverse a cease-and-desist order against Evergreen from charging late fees during times when ports are closed. The appellate court ruled that the incentive principle for charging late fees could not be applied in the TCW case because there is no incentive to return a container when a marine terminal is closed. In its order, the FMC essentially agreed there are situations when bringing containers back to ports quickly before closure may not do much to improve freight fluidity. It cited situations where truckers under threat of late fees may rush to a port on Friday to return equipment but only to have that equipment remain idle over the weekend. “There is likely minimal positive effect on freight fluidity for these containers returned right before port closures,” the FMC order said. “Thus, detention charges in these circumstances would not serve the ultimate goal of promoting freight fluidity, but rather are serving to penalize shippers and truckers unreasonably.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) has ruled that while a container late fee Evergreen Marine charged a trucker was unreasonable, the ocean carrier did not violate the agency’s broader directive on whether the fees improve cargo fluidity. The FMC said in an order that drayage carrier TCW was entitled to a refund of $510 in detention fees on a container and chassis that Evergreen charged the trucker over a three-day period when the Port of Savannah was closed during Memorial Day weekend in 2020. TCW filed a complaint with the agency in 2021 after receiving the invoice from Evergreen. The motor carrier argued the detention charge did not meet the FMC’s test for charging fees under the “incentive principle” for prompting shippers and cargo owners to move freight as quickly as possible. After a US appellate court ordered a review of the ruling in the case , the FMC said in its mid-February ruling that Evergreen’s detention charges could still be considered unreasonable. TCW’s customer Yamaha did not make the empty container available for return until the Saturday of that Memorial Day weekend, the FMC said. TCW made Evergreen aware of that but was still charged detention for the three-day period. However, the FMC did reverse a cease-and-desist order against Evergreen from charging late fees during times when ports are closed. The appellate court ruled that the incentive principle for charging late fees could not be applied in the TCW case because there is no incentive to return a container when a marine terminal is closed. In its order, the FMC essentially agreed there are situations when bringing containers back to ports quickly before closure may not do much to improve freight fluidity. It cited situations where truckers under threat of late fees may rush to a port on Friday to return equipment but only to have that equipment remain idle over the weekend. “There is likely minimal positive effect on freight fluidity for these containers returned right before port closures,” the FMC order said. “Thus, detention charges in these circumstances would not serve the ultimate goal of promoting freight fluidity, but rather are serving to penalize shippers and truckers unreasonably.” Contact Michael Angell at michael.angell@spglobal.com .

FMC modifies TCW detention order in light of federal court ruling

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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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