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<div class="phx-topic abstract-wrapper">Retailers that survived the Great Recession through unprecedented, at times desperate, cost-cutting are transitioning from their slash-and-burn mentality to one of growth and prosperity next year and </div>

Retailers that survived the Great Recession through unprecedented, at times desperate, cost-cutting are transitioning from their slash-and-burn mentality to one of growth and prosperity next year and

<div>Retailers that survived the Great Recession through unprecedented, at times desperate, cost-cutting are transitioning from their slash-and-burn mentality to one of growth and prosperity next year and beyond. “As we exit 2010, retailers are cautiously optimistic, and are preparing for growth opportunities,” Casey Chroust, executive vice president of retail operations at the Retail Industry Leaders Association, said at a teleconference Oct. 19.RILA and the Auburn University College of Business used the occasion to discuss the findings in the university’s 2010 transportation study, “The State of the Retail Supply Chain,” in which more than 175 retailers were queried about their issues...

Retailers that survived the Great Recession through unprecedented, at times desperate, cost-cutting are transitioning from their slash-and-burn mentality to one of growth and prosperity next year and beyond. “As we exit 2010, retailers are cautiously optimistic, and are preparing for growth opportunities,” Casey Chroust, executive vice president of retail operations at the Retail Industry Leaders Association, said at a teleconference Oct. 19. RILA and the Auburn University College of Business used the occasion to discuss the findings in the university’s 2010 transportation study, “The State of the Retail Supply Chain,” in which more than 175 retailers were queried about their issues and strategies. Supply chain professionals in 2009 slashed transportation costs, safeguarding their industry from economic meltdown. They rationalized inventories to reduce inventory-carrying costs and streamlined the flow of goods from overseas factories to distribution centers and onto the store shelves. “They saved billions of dollars across the industry,” Chroust said. With ultra-lean operations in place, those same logistics professionals are being asked to secure vessel and inland transportation capacity and equipment and to stabilize freight rates in an environment where carriers have the upper hand. “We’re seeing some saber-rattling by carriers about raising rates because there is not enough capacity,” said Brian Gibson, professor of supply chain management at Auburn University and chief author of the study. Shifting to a growth strategy will be especially difficult because the industry is in a state of flux. Retail sales, though higher than in 2009, are inconsistent. Unemployment rates are lingering in the mid-9 percent range, high by historical standards. And projecting the level and duration of the economic recovery is a major challenge. “Supply chain professionals have to play economic forecaster,” Chroust said. And yet cargo volumes are robust, rising 10 to 15 percent over last year. The initial strength of the trade recovery took shippers and carriers by surprise early this year, straining capacity on sea and on land, and ratcheting up freight rates. The spot rate for shipping a 40-foot container from Hong Kong to Los Angeles on Oct. 18 was $2,300, 2 ½ times the $871 rate in August 2009, according to the Drewry Container Benchmark, a rate indicator started in 2005 by London-based Drewry Shipping Consultants. With trade recovering, supply chain strategists are changing their focus. In the 2009 Auburn University study, slashing supply chain costs was far and away the driving strategy. Today, infrastructure capacity, vessel and truck capacity and equipment availability are the top concerns. In short, shippers are putting more emphasis on service and getting the most bang for their transportation buck. The painful lessons of last winter — when tight capacity led to shipment delays and lost sales — are fresh. “We can’t get caught flat-footed if port capacity or equipment availability falls short,” Gibson said. In this respect, the transportation industry mirrors retailers’ experience: Expansion was put on hold. For retailers, new stores were delayed. For the transportation industry, infrastructure development ground to a halt, carriers delayed ship and truck purchases, manufacturing of marine and domestic containers stopped, and ocean carriers reduced effective vessel capacity by 10 to 15 percent through a new strategy known as slow-steaming. [Editorial note: image removed/no longer available] With cargo volumes growing again, the concerns of several years ago about insufficient infrastructure capacity have resurfaced. Infrastructure limitations were “back to the forefront” in the 2010 study because precious little infrastructure was developed over the past year-and-a-half, Gibson said. Keeping transportation costs low is still a requirement, but supply chain professionals were so successful last year that there are few opportunities left for cutting costs, Gibson said. In the current growth environment, these professionals are being asked to hold onto their gains while improving customer service. Balancing these objectives can result in “incongruent goals,” according to the study. For example, customers want continuous product availability at the stores, but retailers still have a mentality of rigorous inventory control. High-frequency deliveries from warehouses to stores may be warranted, while supply chain professionals are attempting to maximize the capacity utilization of trucks. Balancing these objectives will have an impact on operations at distribution centers, Gibson said. Warehouse operators will be asked to prepare store-ready displays, increase the velocity of product flow from overseas factories to regional distribution centers and improve transit times from the distribution centers to the stores. These requirements beg for greater visibility into the supply chain from origin to destination. Achieving visibility requires better collaboration among supply chain partners, Gibson said. At the same time, increasing velocity shouldn’t be accompanied by significant cost increases. Greater efficiencies can be obtained when shippers work with carriers to eliminate deadhead miles and arrange cargo backhauls so motor carriers get two-way traffic. The strategy becomes, “You help us take cost out, and we’ll help you take cost out,” Gibson said. Spending decisions in the coming year likely will focus on improving information systems, developing greater visibility into the supply chain and improving responsiveness to customer demands, according to the report. Streamlining the supply chain also requires that retailers address their internal inconsistencies. Retailers today sell merchandise at their stores, online and through catalogs, but they treat each as separate supply chains. This prevents retailers from leveraging their cargo volumes to reduce operational costs and negotiate more favorable transportation rates. A major challenge for retailers in the years ahead will involve integrating their multichannel supply chains to leverage their inventories and assets, according to the study. This may involve employing several distribution methods, including traditional distribution centers, direct-store deliveries and cross-docking. As freight volume grows, retailers must develop networks capable of moving large quantities of product with exceptional economies of scale, according to the report. As retailers develop these networks, they must monitor long-term trends such as oil prices, which will certainly rise as global trade increases. Ocean carriers have addressed the fuel situation through slow-steaming, which exploded on the scene last year. With carriers realizing unexpectedly huge savings, shipping executives say slow-steaming is here to stay. Retailers must factor into their supply chain strategies the increased transit times that occur as a result of slow-steaming. Sustainability, or reducing pollution and carbon emissions from the supply chain, is another permanent trend. Most retailers have a sustainability policy they are extending throughout their supply chains. The primary goal of sustainability is to reduce diesel pollution and the carbon footprint, but retailers also should consider the business benefits inherent in these efforts, according to the study. Therefore, reducing dead-head miles, installing solar power on warehouse roofs and replacing old fuel guzzlers with more efficient new trucks reduce operating costs while achieving environmental goals, the study noted. The 2-year-old clean-trucks plans at the ports of Los Angeles and Long Beach provide an example of how retailers are working with motor carriers to reduce harmful emissions while improving efficiency in harbor drayage. The ambitious plan calls for an 80 percent reduction in truck pollution by Jan. 1, 2012, to be achieved by replacing old, inefficient, polluting trucks with modern 2007 model or younger trucks. A number of RILA members met with their truckers to determine how much drayage costs would increase when the motor carriers replaced their old trucks with new ones costing about $100,000 each. The retailers agreed to pay higher drayage rates so owner-operators could afford the higher truck notes while still earning a profit. Today, more than 90 percent of the trucks in Los Angeles-Long Beach harbor comply with the emissions standards in the clean-trucks plans. The Coalition for Responsible Transportation has participated in similar programs in Oakland, the Pacific Northwest and New York-New Jersey, Chroust said. The coalition is working with ports in the Southeast on a clean-trucks plan based on the Southern California model, he said. Contact Bill Mongelluzzo at bmongelluzzo@joc.com .

Delivering Service

<div class="phx-topic abstract-wrapper">Advisors to beneficial cargo owners say mitigating future supply chain disruptions requires BCOs to proactively engage with ocean carriers and forwarders, seeking to build partnerships even if past experience suggests they end in disappointment.</div>

Advisors to beneficial cargo owners say mitigating future supply chain disruptions requires BCOs to proactively engage with ocean carriers and forwarders, seeking to build partnerships even if past experience suggests they end in disappointment.

Feature image

<div class="phx-topic">More than a year after global health agencies declared an end to the COVID-19 pandemic and nearly three years after the peak of the supply chain impact, the scars in the ocean container world have barely begun to heal. And given that market turbulence looks set to continue with a second Trump presidency, that healing may not have an opportunity for months or years to come. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5787232_0.1.jpg"></img></div>Advisors to beneficial cargo owners (BCOs) say mitigating future disruption requires BCOs to proactively engage with ocean carriers and forwarders, seeking to build partnerships even if past experience suggests they end in disappointment. Yet, those advisors say, many BCOs remain stuck in a mindset of wanting to “get back what was taken from them” during the pandemic when rates soared to historic highs. Yet despite whatever evidence may exist of external causes of the COVID-19 supply chain crisis, some shippers, echoing politicians up to and including President Joe Biden, continue to hold a grudge against carriers to the point that they are unwilling to engage in the relationship-building that advisors say is critical to managing ocean supply chains through an era of disruption. And that environment only looks set to continue assuming president-elect Trump makes good on threats to wage trade wars and given the possibility <a href="https://www.joc.com/article/ila-usmx-say-to-resume-talks-on-new-master-contract-in-november-5778794">of further East Coast labor disruption in January</a>. “The strained relationship between BCOs and ocean carriers post-pandemic has been significant, primarily due to repeated disruptions and lack of transparency throughout 2020–2022,” former Walmart logistics executive and current consultant Kevin Parkerson told the Journal of Commerce. “During this period, many BCOs felt they were deprioritized as ocean carriers reallocated capacity to secure spot rates that soared due to demand and port congestion,” Parkerson said. “This experience created a level of distrust that BCOs have struggled to overcome, as they now view carrier partnerships with caution and sometimes skepticism.” <h3>‘Revenge’ factor </h3>In the aftermath of historically high rates combined with historically poor service, and with the experience being repeated on a smaller scale in 2024, being willing to engage with carriers is proving a tall order for many BCOs. Even when logistics teams themselves understand the value of engaging, they lack support from internal colleagues with long memories and festering resentments. Such is the magnitude of grievance that BCOs’ aim is not just to drive rates back down to pre-pandemic levels, but to “take revenge” in seeking to recover money perceived to be unjustly taken from them during the pandemic. “For the last couple of years, everyone kind of had 2024 and now 2025 on the calendar as a recovery year. In other words, the time period when you can recover or get back what you feel like was taken from you, in the days of the tens of thousands of dollar rate levels,” Parkerson said. “And unfortunately, a lot of that is still the sentiment.” The process would be made easier if carriers themselves wanted to engage with customers, but even that seems to have broken down. Some carriers do wish to engage with certain customers, a trend that may pick up steam next year if the market softens under the strain of overcapacity. For their part, carriers — or at least some of them — seemed to have moved on from a prior mindset of seeking to work closely with customers. With a focus on blank sailings and a possible resurgence of slow-steaming next year to manage capacity — actions that benefit carriers at the expense of their customers — evidence of a partnership, such as quarterly business review meetings, has gone by the wayside. <h3>The need to build relationships </h3>But BCO advisors say that however difficult or counterintuitive it may be for shippers to engage with carriers, protecting their interests and extracting maximum value out of the containerized supply chain demands it. “I strongly advocate for building solid relationships with carriers and logistics service providers,” Parkerson said. “Cultivating strong, collaborative relationships with your carriers and LSPs can help mitigate some of the impacts of disruptions. While it may not eliminate challenges entirely, it can certainly soften the effects.” Others agree. In a <a href="https://www.joc.com/article/bco-partnerships-with-carriers-often-fail-but-are-still-critical-5780305">recent Journal of Commerce commentary</a>, former Newell Brands logistics leader Kristian Ording described an effort to improve volume forecasts provided by carriers, only to see the relationship get undermined under the strain of tight capacity. “As capacity tightened, unfortunately many of the carriers resorted to not confirming forecasts until the last minute, and in some cases either not confirming at all or accepting less bookings than forecast [and at times even (less) than allocated],” he wrote. Nevertheless, Ording said, he would still not give up on trying to strengthen partnerships with carriers when other opportunities arose. “Despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for beneficial cargo owners to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market,” he wrote. “I hope shippers keep this in mind as we all gear up for the 2025 contracting cycle.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

More than a year after global health agencies declared an end to the COVID-19 pandemic and nearly three years after the peak of the supply chain impact, the scars in the ocean container world have barely begun to heal. And given that market turbulence looks set to continue with a second Trump presidency, that healing may not have an opportunity for months or years to come. Advisors to beneficial cargo owners (BCOs) say mitigating future disruption requires BCOs to proactively engage with ocean carriers and forwarders, seeking to build partnerships even if past experience suggests they end in disappointment. Yet, those advisors say, many BCOs remain stuck in a mindset of wanting to “get back what was taken from them” during the pandemic when rates soared to historic highs. Yet despite whatever evidence may exist of external causes of the COVID-19 supply chain crisis, some shippers, echoing politicians up to and including President Joe Biden, continue to hold a grudge against carriers to the point that they are unwilling to engage in the relationship-building that advisors say is critical to managing ocean supply chains through an era of disruption. And that environment only looks set to continue assuming president-elect Trump makes good on threats to wage trade wars and given the possibility of further East Coast labor disruption in January . “The strained relationship between BCOs and ocean carriers post-pandemic has been significant, primarily due to repeated disruptions and lack of transparency throughout 2020–2022,” former Walmart logistics executive and current consultant Kevin Parkerson told the Journal of Commerce. “During this period, many BCOs felt they were deprioritized as ocean carriers reallocated capacity to secure spot rates that soared due to demand and port congestion,” Parkerson said. “This experience created a level of distrust that BCOs have struggled to overcome, as they now view carrier partnerships with caution and sometimes skepticism.” ‘Revenge’ factor In the aftermath of historically high rates combined with historically poor service, and with the experience being repeated on a smaller scale in 2024, being willing to engage with carriers is proving a tall order for many BCOs. Even when logistics teams themselves understand the value of engaging, they lack support from internal colleagues with long memories and festering resentments. Such is the magnitude of grievance that BCOs’ aim is not just to drive rates back down to pre-pandemic levels, but to “take revenge” in seeking to recover money perceived to be unjustly taken from them during the pandemic. “For the last couple of years, everyone kind of had 2024 and now 2025 on the calendar as a recovery year. In other words, the time period when you can recover or get back what you feel like was taken from you, in the days of the tens of thousands of dollar rate levels,” Parkerson said. “And unfortunately, a lot of that is still the sentiment.” The process would be made easier if carriers themselves wanted to engage with customers, but even that seems to have broken down. Some carriers do wish to engage with certain customers, a trend that may pick up steam next year if the market softens under the strain of overcapacity. For their part, carriers — or at least some of them — seemed to have moved on from a prior mindset of seeking to work closely with customers. With a focus on blank sailings and a possible resurgence of slow-steaming next year to manage capacity — actions that benefit carriers at the expense of their customers — evidence of a partnership, such as quarterly business review meetings, has gone by the wayside. The need to build relationships But BCO advisors say that however difficult or counterintuitive it may be for shippers to engage with carriers, protecting their interests and extracting maximum value out of the containerized supply chain demands it. “I strongly advocate for building solid relationships with carriers and logistics service providers,” Parkerson said. “Cultivating strong, collaborative relationships with your carriers and LSPs can help mitigate some of the impacts of disruptions. While it may not eliminate challenges entirely, it can certainly soften the effects.” Others agree. In a recent Journal of Commerce commentary , former Newell Brands logistics leader Kristian Ording described an effort to improve volume forecasts provided by carriers, only to see the relationship get undermined under the strain of tight capacity. “As capacity tightened, unfortunately many of the carriers resorted to not confirming forecasts until the last minute, and in some cases either not confirming at all or accepting less bookings than forecast [and at times even (less) than allocated],” he wrote. Nevertheless, Ording said, he would still not give up on trying to strengthen partnerships with carriers when other opportunities arose. “Despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for beneficial cargo owners to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market,” he wrote. “I hope shippers keep this in mind as we all gear up for the 2025 contracting cycle.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

BCOs should forsake ‘revenge’ to build ‘collaborative’ relationships with carriers

<div class="phx-topic abstract-wrapper">The work stoppage along Canada’s West Coast has also shut down rail operations, with CN suspending westbound rail service to British Columbia ports and CPKC halting acceptance of export and empty containers for the province. </div>

The work stoppage along Canada’s West Coast has also shut down rail operations, with CN suspending westbound rail service to British Columbia ports and CPKC halting acceptance of export and empty containers for the province.

<div class="phx-topic">A growing number of container ships on Tuesday were waiting out the labor lockout at British Columbia ports in hopes of a speedy resolution. Meanwhile, on the other side of the country, the strike at marine terminals in Montreal is halting all rail service at that port. Maersk said in an advisory that two ships in its TP1 service, the 6,350-TEU Marcos V and the 8,714-TEU San Felipe, are currently at anchorage at the ports of Vancouver and Prince Rupert, respectively. A third ship, the 5,085-TEU Seattle Express, is still expected to call Vancouver’s Fraser Surrey terminal this week, with any change in its rotation contingent upon the duration of the port’s closure. Container terminals at Vancouver and Prince Rupert were effectively shuttered after <a href="https://www.joc.com/article/bc-container-ports-ready-to-lock-out-longshore-foremen-after-strike-vote-5784004">the British Columbia Maritime Employers Association locked out members of the International Longshore and Warehouse Union Local 514</a> following a strike vote by its members. The strike by longshore foremen began Monday morning. The two sides remain at odds over terms of a new contract as well as <a href="https://www.joc.com/article/ilwu-canada-illegal-strike-ruling-averts-vancouver-shutdown-5192250">the implementation of new technology at DP World’s Vancouver terminal</a>. The prior contract expired in March 2023. Management is still onsite at Vancouver terminals monitoring refrigerated containers, according to a person familiar with the issue, but truck gates and berth operations are halted. Vancouver is Canada’s largest container terminal. The 12,726-TEU YM Target remains at berth at Vancouver’s Deltaport, with initial plans to wait out the work stoppage, the source added. Three other container ships are at anchorage outside of Vancouver, while the 4,250-TEU Cosco Auckland remains at berth at Prince Rupert. The backlog of ships, though, may grow. The Vancouver Fraser Port Authority said Tuesday that seven container ships have requested an anchorage at the port. While trying to maintain vessel schedules, Maersk is offering shippers relief from any charges associated with the work stoppage. It has suspended demurrage and export container detention across British Columbia ports, but Maersk said it is “still maintaining certain conditions for import detention.” The carrier said it will also open off-dock empty return locations for containers. The work stoppage along Canada’s West Coast has also shut down rail operations. Canadian National Railway (CN) suspended westbound rail service to British Columbia ports, with Canadian Pacific-Kansas City (CPKC) also stopping acceptance of export and empty containers for British Columbia. <h3>CN suspends Montreal service </h3>The shutdown of Canada’s West Coast ports comes as longshore workers affiliated with <a href="https://www.joc.com/article/montreal-warns-of-vessel-diversions-as-strike-against-msc-terminals-begins-5783311">the Canadian Union of Public Employees Local 375 stage an indefinite strike against two marine terminals operated by Termont in Montreal</a>. The Termont strike is also forcing CN to suspend all rail service in and out of Montreal, including at the Racine and Cast terminals operated by Montreal Gateway Terminals, which are not affected by the strike, Hapag-Lloyd said in an advisory Tuesday. The suspension also includes interchange services with CSX Transportation and Norfolk Southern in the Ohio Valley. “This action is due to operational constraints and uncertainty arising from the ongoing renewal of the Montreal longshoremen collective agreement,” Hapag-Lloyd said. “As a result, CN will suspend and remove all capacity at their inland terminals for exports destined for Cast and Racine until further notice.” Separately, Montreal’s Maritime Employers Association (MEA) started suspending salary guarantees for striking longshore workers Tuesday, saying it was necessary to “reduce the cumulative financial impact of repeated strikes and lower volumes at the Port of Montreal.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

A growing number of container ships on Tuesday were waiting out the labor lockout at British Columbia ports in hopes of a speedy resolution. Meanwhile, on the other side of the country, the strike at marine terminals in Montreal is halting all rail service at that port. Maersk said in an advisory that two ships in its TP1 service, the 6,350-TEU Marcos V and the 8,714-TEU San Felipe, are currently at anchorage at the ports of Vancouver and Prince Rupert, respectively. A third ship, the 5,085-TEU Seattle Express, is still expected to call Vancouver’s Fraser Surrey terminal this week, with any change in its rotation contingent upon the duration of the port’s closure. Container terminals at Vancouver and Prince Rupert were effectively shuttered after the British Columbia Maritime Employers Association locked out members of the International Longshore and Warehouse Union Local 514 following a strike vote by its members. The strike by longshore foremen began Monday morning. The two sides remain at odds over terms of a new contract as well as the implementation of new technology at DP World’s Vancouver terminal . The prior contract expired in March 2023. Management is still onsite at Vancouver terminals monitoring refrigerated containers, according to a person familiar with the issue, but truck gates and berth operations are halted. Vancouver is Canada’s largest container terminal. The 12,726-TEU YM Target remains at berth at Vancouver’s Deltaport, with initial plans to wait out the work stoppage, the source added. Three other container ships are at anchorage outside of Vancouver, while the 4,250-TEU Cosco Auckland remains at berth at Prince Rupert. The backlog of ships, though, may grow. The Vancouver Fraser Port Authority said Tuesday that seven container ships have requested an anchorage at the port. While trying to maintain vessel schedules, Maersk is offering shippers relief from any charges associated with the work stoppage. It has suspended demurrage and export container detention across British Columbia ports, but Maersk said it is “still maintaining certain conditions for import detention.” The carrier said it will also open off-dock empty return locations for containers. The work stoppage along Canada’s West Coast has also shut down rail operations. Canadian National Railway (CN) suspended westbound rail service to British Columbia ports, with Canadian Pacific-Kansas City (CPKC) also stopping acceptance of export and empty containers for British Columbia. CN suspends Montreal service The shutdown of Canada’s West Coast ports comes as longshore workers affiliated with the Canadian Union of Public Employees Local 375 stage an indefinite strike against two marine terminals operated by Termont in Montreal . The Termont strike is also forcing CN to suspend all rail service in and out of Montreal, including at the Racine and Cast terminals operated by Montreal Gateway Terminals, which are not affected by the strike, Hapag-Lloyd said in an advisory Tuesday. The suspension also includes interchange services with CSX Transportation and Norfolk Southern in the Ohio Valley. “This action is due to operational constraints and uncertainty arising from the ongoing renewal of the Montreal longshoremen collective agreement,” Hapag-Lloyd said. “As a result, CN will suspend and remove all capacity at their inland terminals for exports destined for Cast and Racine until further notice.” Separately, Montreal’s Maritime Employers Association (MEA) started suspending salary guarantees for striking longshore workers Tuesday, saying it was necessary to “reduce the cumulative financial impact of repeated strikes and lower volumes at the Port of Montreal.” Contact Michael Angell at michael.angell@spglobal.com .

Ships waiting out BC port closures in hopes of quick deal with longshore union

<div class="phx-topic abstract-wrapper">The major Chinese ports of Shanghai and Ningbo are currently experiencing delays of two to three days due to the lingering impacts of the storm that hit the region late last week.</div>

The major Chinese ports of Shanghai and Ningbo are currently experiencing delays of two to three days due to the lingering impacts of the storm that hit the region late last week.

<div class="phx-topic">Container shipping services in the East China Sea are facing ongoing disruption amid port congestion and vessel delays from the impact of Typhoon Kong-rey, which hit Taiwan late last week before moving northward to affect eastern China and Japan. Kaohsiung, Taiwan’s busiest container port, is experiencing berthing delays of up to two days after the port was closed as the storm, Taiwan’s fiercest typhoon in almost 30 years, traversed the southern part of the island on Oct. 31 and Nov. 1. Ships docking at Taiwan’s container ports, including Taipei and Keelung, are still facing waits of between two and three days, shipping executives said. The major Chinese ports of Shanghai and Ningbo are currently experiencing delays of a similar length due to the lingering impact of the typhoon. Terminals in both cities suspended operations Friday afternoon ahead of the storm’s arrival, with cargo handling gradually resuming later in the weekend, port officials said. Kuehne + Nagel said congestion at Shanghai is gradually easing, while bad weather, including dense fog, is also affecting operations at Qingdao, the forwarder said. Carrier Ocean Network Express (ONE) said Kong-rey is delaying vessels deployed on various trades, including its Japan-Thailand-Vietnam and Taiwan-Philippines shuttle services. ONE’s vessel schedules show the storm added four days to the normal eight-day transit between Yokohama and Laem Chabang in Thailand for the 2,858-TEU ACX Crystal operating its JTV service. There was an additional one-day delay to Cai Map port near Ho Chi Minh City in Vietnam due to port congestion. The 1,096-TEU Contship Era, operating ONE’s TWP2 shuttle service, was delayed five days in Kaohsiung and only departed the port Tuesday for Cebu in the Philippines. ONE said Tuesday that ships operating Asia-Europe services are still affected by delays caused by typhoons Bebinca and Pulasan, which hit Asia in September. The two storms are partly responsible for lengthening transit times by about 10 to 13 days. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

Container shipping services in the East China Sea are facing ongoing disruption amid port congestion and vessel delays from the impact of Typhoon Kong-rey, which hit Taiwan late last week before moving northward to affect eastern China and Japan. Kaohsiung, Taiwan’s busiest container port, is experiencing berthing delays of up to two days after the port was closed as the storm, Taiwan’s fiercest typhoon in almost 30 years, traversed the southern part of the island on Oct. 31 and Nov. 1. Ships docking at Taiwan’s container ports, including Taipei and Keelung, are still facing waits of between two and three days, shipping executives said. The major Chinese ports of Shanghai and Ningbo are currently experiencing delays of a similar length due to the lingering impact of the typhoon. Terminals in both cities suspended operations Friday afternoon ahead of the storm’s arrival, with cargo handling gradually resuming later in the weekend, port officials said. Kuehne + Nagel said congestion at Shanghai is gradually easing, while bad weather, including dense fog, is also affecting operations at Qingdao, the forwarder said. Carrier Ocean Network Express (ONE) said Kong-rey is delaying vessels deployed on various trades, including its Japan-Thailand-Vietnam and Taiwan-Philippines shuttle services. ONE’s vessel schedules show the storm added four days to the normal eight-day transit between Yokohama and Laem Chabang in Thailand for the 2,858-TEU ACX Crystal operating its JTV service. There was an additional one-day delay to Cai Map port near Ho Chi Minh City in Vietnam due to port congestion. The 1,096-TEU Contship Era, operating ONE’s TWP2 shuttle service, was delayed five days in Kaohsiung and only departed the port Tuesday for Cebu in the Philippines. ONE said Tuesday that ships operating Asia-Europe services are still affected by delays caused by typhoons Bebinca and Pulasan, which hit Asia in September. The two storms are partly responsible for lengthening transit times by about 10 to 13 days. Contact Keith Wallis at keithwallis@hotmail.com.

East China Sea container traffic facing delays, port congestion after typhoon

<div class="phx-topic abstract-wrapper">CMA CGM and Maersk are reshuffling their Mexico-Central America services beginning this month in response to chronic port congestion and berthing delays at key ports in the region.</div>

CMA CGM and Maersk are reshuffling their Mexico-Central America services beginning this month in response to chronic port congestion and berthing delays at key ports in the region.

<div class="phx-topic">Ocean carriers are experiencing extensive delays at ports in Mexico and Central America, which is leading several liners to revamp services or implement contingency plans to maintain reliability. The problems are being partly caused by strong trade volumes, especially from Mexico, carriers and forwarders say. Severe delays at Acajutla in El Salvador and Corinto in Nicaragua have led CMA CGM to implement a port congestion surcharge of $1,000 per container from Dec. 1 on shipments to and from the two countries, the carrier said in a customer advisory Tuesday. The surcharge on all types of cargo will remain until March 31, 2025. Meanwhile, CMA CGM and Maersk confirmed they are reshuffling their Mexico-Central America services from this month in response to chronic port congestion and berthing delays at key ports in the region. The French carrier is revamping its Asia-Mexico and West Coast South America (WCSA) services “to restore schedule reliability and ensure competitive transit times,” it said in an advisory last week. “Due to significant congestion in Mexico’s major ports, delays have been steadily increasing since mid-2024.” As a result, Manzanillo and Lazaro Cardenas will be dropped from CMA CGM’s Asia Central South America 1 (ACSA1) service, which will instead focus on West Coast South America ports and Ensenada, Mexico. The new rotation is Ningbo-Shanghai-Busan-Ensenada-Buenaventura (Colombia)-Callao-Posorja (Ecuador)-Yokohama, with a 21-day transit from Ningbo to Ensenada. The first vessel deployed on the new rotation will be the APL Turkey departing Ningbo on Nov. 21. CMA CGM will add Manzanillo and Lazaro Cardenas to its Asia-Mexico Express (M2X) service, while halting calls at Ensenada. The carrier said the revamped M2X rotation will concentrate “exclusively on Mexico’s main ports, improving direct transit times to and from Mexico.” The new M2X rotation is Shekou (Shenzhen)-Ningbo-Shanghai-Qingdao-Tianjin-Busan-Manzanillo-Lazaro Cardenas, with a 32-day voyage from Shekou to Manzanillo. The first vessel operating the revised rotation is the CMA CGM Alexander von Humbolt, departing Shekou on Nov. 16. Maersk said it is reshuffling its West Coast Central America services in response to “current market conditions, including heavy port congestion and extended berth waiting times.” The carrier said it will restrict Central American calls to Balboa (Panama), Corinto, and Puerto Quetzal (Guatemala) on its WCCA1 loop, while adding a WCCA3 service calling at Balboa, Lazaro Cadenas and Acajutla. The first vessel operating the updated WCCA1 service is expected to depart Balboa on Nov. 17, while the first WCCA3 vessel is set to leave Balboa on Nov. 24, Maersk said in a customer advisory. <h3>Hapag-Lloyd, ONE highlight delays </h3>Other carriers, including Hapag-Lloyd and Ocean Network Express (ONE), said their services are also being impacted by port disruption. “We are observing delays at ports in Mexico, Panama, and Cartagena [Colombia], primarily due to high yard utilization, which is affecting cargo movement and vessel schedules,” a ONE spokesperson told the Journal of Commerce. “We are actively monitoring the situation and exploring alternative solutions to ensure cargo reaches its destination as efficiently as possible while maintaining operational flexibility.” Echoing those comments, a Hapag-Lloyd spokesperson told the Journal of Commerce, “Ports in the Caribbean hubs are very congested and our services are heavily impacted by this.” Hapag-Lloyd highlighted issues at Mexico’s Manzanillo, which it said was partially working and experiencing heavy yard utilization, which meant there was low yard and vessel productivity. Just two ships each were berthed at Manzanillo, Lazaro Cardenas, Christobal and Balboa, with six in Cartagena, according to AIS Live, a sister product of the Journal of Commerce within S&amp;P Global. Freight forwarder Kuehne + Nagel highlighted ports where operations are being heavily disrupted, with wait times of up to three days at Manzanillo, four days at Christobal and seven days at Acajutla. Kuehne + Nagel’s visibility platform SeaExplorer noted that at Christobal, container yard occupancy is exceeding 95%, which has “slowed operations to 30 movements per hour, below the optimal 50,” which has caused worsening dwell times. Delays at Acajutla are being exacerbated by repairs to two berths, SeaExplorer said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Ocean carriers are experiencing extensive delays at ports in Mexico and Central America, which is leading several liners to revamp services or implement contingency plans to maintain reliability. The problems are being partly caused by strong trade volumes, especially from Mexico, carriers and forwarders say. Severe delays at Acajutla in El Salvador and Corinto in Nicaragua have led CMA CGM to implement a port congestion surcharge of $1,000 per container from Dec. 1 on shipments to and from the two countries, the carrier said in a customer advisory Tuesday. The surcharge on all types of cargo will remain until March 31, 2025. Meanwhile, CMA CGM and Maersk confirmed they are reshuffling their Mexico-Central America services from this month in response to chronic port congestion and berthing delays at key ports in the region. The French carrier is revamping its Asia-Mexico and West Coast South America (WCSA) services “to restore schedule reliability and ensure competitive transit times,” it said in an advisory last week. “Due to significant congestion in Mexico’s major ports, delays have been steadily increasing since mid-2024.” As a result, Manzanillo and Lazaro Cardenas will be dropped from CMA CGM’s Asia Central South America 1 (ACSA1) service, which will instead focus on West Coast South America ports and Ensenada, Mexico. The new rotation is Ningbo-Shanghai-Busan-Ensenada-Buenaventura (Colombia)-Callao-Posorja (Ecuador)-Yokohama, with a 21-day transit from Ningbo to Ensenada. The first vessel deployed on the new rotation will be the APL Turkey departing Ningbo on Nov. 21. CMA CGM will add Manzanillo and Lazaro Cardenas to its Asia-Mexico Express (M2X) service, while halting calls at Ensenada. The carrier said the revamped M2X rotation will concentrate “exclusively on Mexico’s main ports, improving direct transit times to and from Mexico.” The new M2X rotation is Shekou (Shenzhen)-Ningbo-Shanghai-Qingdao-Tianjin-Busan-Manzanillo-Lazaro Cardenas, with a 32-day voyage from Shekou to Manzanillo. The first vessel operating the revised rotation is the CMA CGM Alexander von Humbolt, departing Shekou on Nov. 16. Maersk said it is reshuffling its West Coast Central America services in response to “current market conditions, including heavy port congestion and extended berth waiting times.” The carrier said it will restrict Central American calls to Balboa (Panama), Corinto, and Puerto Quetzal (Guatemala) on its WCCA1 loop, while adding a WCCA3 service calling at Balboa, Lazaro Cadenas and Acajutla. The first vessel operating the updated WCCA1 service is expected to depart Balboa on Nov. 17, while the first WCCA3 vessel is set to leave Balboa on Nov. 24, Maersk said in a customer advisory. Hapag-Lloyd, ONE highlight delays Other carriers, including Hapag-Lloyd and Ocean Network Express (ONE), said their services are also being impacted by port disruption. “We are observing delays at ports in Mexico, Panama, and Cartagena [Colombia], primarily due to high yard utilization, which is affecting cargo movement and vessel schedules,” a ONE spokesperson told the Journal of Commerce. “We are actively monitoring the situation and exploring alternative solutions to ensure cargo reaches its destination as efficiently as possible while maintaining operational flexibility.” Echoing those comments, a Hapag-Lloyd spokesperson told the Journal of Commerce, “Ports in the Caribbean hubs are very congested and our services are heavily impacted by this.” Hapag-Lloyd highlighted issues at Mexico’s Manzanillo, which it said was partially working and experiencing heavy yard utilization, which meant there was low yard and vessel productivity. Just two ships each were berthed at Manzanillo, Lazaro Cardenas, Christobal and Balboa, with six in Cartagena, according to AIS Live, a sister product of the Journal of Commerce within S&P Global. Freight forwarder Kuehne + Nagel highlighted ports where operations are being heavily disrupted, with wait times of up to three days at Manzanillo, four days at Christobal and seven days at Acajutla. Kuehne + Nagel’s visibility platform SeaExplorer noted that at Christobal, container yard occupancy is exceeding 95%, which has “slowed operations to 30 movements per hour, below the optimal 50,” which has caused worsening dwell times. Delays at Acajutla are being exacerbated by repairs to two berths, SeaExplorer said. Contact Keith Wallis at keithwallis@hotmail.com .

Carriers revamp services amid port congestion in Mexico, Central America

<div class="phx-topic abstract-wrapper">As US trade with Mexico grows, railroads see a chance to challenge the dominance of the Mexican trucking industry — if the railroads’ intermodal partners can lock in new business and deliver reliable service.</div>

As US trade with Mexico grows, railroads see a chance to challenge the dominance of the Mexican trucking industry — if the railroads’ intermodal partners can lock in new business and deliver reliable service.

<div class="phx-topic">The Mexican sourcing market has become increasingly important to North American importers amid the rising threat of tariffs on goods from China. That’s been a boon to North American Class I railroads, who have seen their volumes from Mexico jump approximately 71% over the last five years. Yet despite new services and investments, the railroads haven’t been able to meaningfully increase their share of surface cross-border trade compared with trucking. Railroads cannot manage to exceed 15% of the total market and even fell below 10% this year, according to the US Bureau of Transportation Statistics (BTS), because of a slowdown in auto shipments. Still, there are reasons for intermodal providers to be optimistic about cracking the market share ceiling. The top three intermodal providers in the US — Hub Group, J.B. Hunt Transport Services and Schneider National — are devoting considerable resources in Mexico, and Union Pacific (UP) Railroad is working with non-asset brokers to serve Mexico. The focus on assets and staffing in Mexico that asset and non-asset providers are contributing shows there is optimism about growth opportunities. In addition, as more shippers open factories near Mexico City, San Luis Potosi and Silao, the lengths of haul will save money for shippers and reduce greenhouse gas (GHG) emissions. The longer the length of haul, the wider the spread between trucking and intermodal in delivering higher cost savings to the shipper. Longer lengths of haul also produce GHG savings since trains are more fuel-efficient than trucks in moving large amounts of freight. The longer the transit, the larger the benefits. From Monterrey, the border is about three hours via truck. From San Luis Potosi, it is eight hours. From Silao, it’s about 10 hours, and from Mexico City, it’s 12 hours. Thus, as more shippers open in Mexico City, San Luis Potosí and Silao, the better the case for intermodal providers to show why rail is worth considering. Yet there are many challenges under the current iteration of cross-border service. While train service has been reliable, the customs clearance process has been problematic at times, and it can be challenging to understand Mexico’s rules and regulations. Also, growth today is primarily occurring in Monterrey, where truck capacity is easier to find because the haul to Laredo can be made in a single day. It’s harder to find trucks to make eight-to-12-hour, multi-day long-hauls. <h3>Mexico trade growing, but truck leads the way </h3>As US trade with Mexico grows, railroads see a chance to challenge the dominance of the Mexican trucking industry — if the railroads’ intermodal partners can lock in new business and deliver reliable service. Mexico, which surpassed China last year to become America’s top trading partner, accounted for $798 billion in goods and services in 2023, according to US Census Bureau data. This growth is expected to continue amid rising geopolitical tensions between the US and China. Today, trucks carry more than 7 million loads across the US-Mexico border annually, while intermodal rail manages only 300,000, according to the BTS and the Intermodal Association of North America (IANA). Truckload data, however, does not distinguish between types of freight, grouping finished vehicles, fuel, and standard retail goods together. IANA’s data excludes empty rail containers crossing the border, making an official market share number difficult to nail down. For more than two decades, intermodal’s market share has fluctuated between 10% and 15%, but dropped this year into the single digits despite the launch of the <a href="https://www.joc.com/article/domestic-intermodal-volumes-jump-in-early-days-of-new-mexico-rail-services-5201551">Mexico Midwest Express and the Falcon Premium services</a>. “Mexico certainly has the length of haul characteristics that should make intermodal economics shine,” Larry Gross, president of Gross Transportation Consulting and a Journal of Commerce analyst, said. “But based on the numbers, the current intermodal offerings are lacking in one or more of the basic requirements for competing with truck: cost, service consistency, speed, [and] ease of use.” <h3>Overcoming rail’s growth hurdles </h3>A number of things will have to occur for intermodal to exceed the 15% market share threshold. One challenge is the cyclical nature of surface transportation. Current trucking rates are low, which reduces or eliminates the cost savings of choosing rail. To grow share, intermodal providers such as the top three — Hub Group, J.B. Hunt Transport Services, and Schneider National — must commit container capacity to Mexico and invest in personnel and sales staff. To succeed, however, midsized providers including C.H. Robinson, Matson Logistics, STG Logistics and Swift Intermodal will need to grow their existing Mexico franchises, and non-asset brokers who haven’t been in Mexico must enter. “How I would judge success is how many new customers we’ve engaged — our BCO [beneficial cargo owner] growth, which is up 30% from a year ago,” Pat Linden, UP’s assistant vice president of marketing and sales, said on Oct. 2 at the Journal of Commerce’s Inland Distribution Conference in Chicago. Engagement does not necessarily mean actual business, though. UP hosted a forum in Monterrey earlier this year to encourage intermodal marketing companies (IMCs) to open operations in Mexico. Even IMCs established in Mexico have dealt with delays in customs clearance this year at terminals owned by Mexican state railroad Ferromex, making it harder to compete with trucking. “Mexico is not a super easy place to do business and if you’ve never done business there before, there is a bit of a learning curve on how to do it, so we want to help make it less complicated,” Linden said. “The question for Mexico is that there is a bunch of cargo going north, but not much balance southbound. How can we get more shippers to send freight into Mexico? Getting freight southbound is an inhibitor to growth.” Similar to US-Asia trade, most containers going from the US to Mexico have nothing inside. Jonathan Wahba, senior vice-president of marketing and sales for Canadian Pacific-Kansas City (CPKC) is less focused on market share than on growth within his control. “In our legacy Canadian business, we launch four trains per night every night from Toronto to western Canada, and I see no reason we can’t do the same between Mexico and the US,” Wahba said at the Inland conference. “By the end of the decade, my goal is multiple daily trains in both directions.” Currently, the Mexico Midwest Express train from San Luis Potosi to Chicago is the only CPKC daily train originating in Mexico. CPKC hopes to launch a Mexico-to-Southeast train before the end of the year, but it’s not clear whether it would be a daily train or only a few days per week. <h3>New infrastructure, new markets </h3>CPKC’s second bridge in Laredo, opening this December, could be key to increasing volume. Today, a single bridge handles northbound and southbound trains in alternating time blocks, but a second bridge will enable simultaneous traffic in both directions. Expanding into new markets will also be necessary to shift market share. UP has seen organic growth since October 2023 when it launched a Mexico-to-Southeast US service connecting in Memphis. CPKC and CSX anticipate launching their joint Mexico-to-Southeast US service before the end of the year. To take share in that corridor, railroads will have to address competitive truck pricing that is often on par or cheaper than intermodal. Other areas in Mexico can be fertile ground to gain share against the trucking industry. Despite the present downturn, auto manufactures in the Southeast US are opening factories in Mexico, so rail operators must target markets deeper into the country beyond northern Mexico. CPKC’s Mexico Midwest Express currently originates in San Luis Potosí, but new clients could justify further expansion south to Toluca, an hour outside Mexico City. The Falcon Premium launches from Silao and is only just making inroads toward Mexico City, where demand is rising. “Mexico City’s terminal in Pantaco has historically handled mostly international cargo, but we’ve now designated a section for domestic intermodal,” Linden says. “This has sparked interest from shippers eager to explore new rail options.” Railroads must expand business south of Monterrey to capture market share because the relatively short truck transit to the border creates stiff competition between the two modes in northern Mexico. CPKC’s Mexico Midwest Express originates in San Luis Potosí in central Mexico, but if it can generate new customers with Schneider in Mexico City, then new service can be launched in Toluca, about an hour outside Mexico City. The Falcon Premium originates trains in Silao, but it hasn’t gotten a major foothold yet into Mexico City. “There has been a tremendous amount of discussion and conversation around Mexico City and how to move freight out of the city,” Linden said. “We have a lot of people coming to us with opportunities in Mexico City asking about options with Union Pacific.” A partnership between Hub Group and Transportes Easo, which owns a terminal in Mexico City and uses company drivers rather than owner-operators, gives the two intermodal providers an opportunity to compete with truck. “Our partnership is uniquely positioned to move equipment northbound, southbound, as well as intra-Mexico which allows for better management of capacity,” said Diego Anchustegui, chief marketing officer of Easo and president of the Mexico Intermodal Association. “We offer an intermodal heavyweight option that allows us to move freight more efficiently to the US, allowing us to better compete with truck.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The Mexican sourcing market has become increasingly important to North American importers amid the rising threat of tariffs on goods from China. That’s been a boon to North American Class I railroads, who have seen their volumes from Mexico jump approximately 71% over the last five years. Yet despite new services and investments, the railroads haven’t been able to meaningfully increase their share of surface cross-border trade compared with trucking. Railroads cannot manage to exceed 15% of the total market and even fell below 10% this year, according to the US Bureau of Transportation Statistics (BTS), because of a slowdown in auto shipments. Still, there are reasons for intermodal providers to be optimistic about cracking the market share ceiling. The top three intermodal providers in the US — Hub Group, J.B. Hunt Transport Services and Schneider National — are devoting considerable resources in Mexico, and Union Pacific (UP) Railroad is working with non-asset brokers to serve Mexico. The focus on assets and staffing in Mexico that asset and non-asset providers are contributing shows there is optimism about growth opportunities. In addition, as more shippers open factories near Mexico City, San Luis Potosi and Silao, the lengths of haul will save money for shippers and reduce greenhouse gas (GHG) emissions. The longer the length of haul, the wider the spread between trucking and intermodal in delivering higher cost savings to the shipper. Longer lengths of haul also produce GHG savings since trains are more fuel-efficient than trucks in moving large amounts of freight. The longer the transit, the larger the benefits. From Monterrey, the border is about three hours via truck. From San Luis Potosi, it is eight hours. From Silao, it’s about 10 hours, and from Mexico City, it’s 12 hours. Thus, as more shippers open in Mexico City, San Luis Potosí and Silao, the better the case for intermodal providers to show why rail is worth considering. Yet there are many challenges under the current iteration of cross-border service. While train service has been reliable, the customs clearance process has been problematic at times, and it can be challenging to understand Mexico’s rules and regulations. Also, growth today is primarily occurring in Monterrey, where truck capacity is easier to find because the haul to Laredo can be made in a single day. It’s harder to find trucks to make eight-to-12-hour, multi-day long-hauls. Mexico trade growing, but truck leads the way As US trade with Mexico grows, railroads see a chance to challenge the dominance of the Mexican trucking industry — if the railroads’ intermodal partners can lock in new business and deliver reliable service. Mexico, which surpassed China last year to become America’s top trading partner, accounted for $798 billion in goods and services in 2023, according to US Census Bureau data. This growth is expected to continue amid rising geopolitical tensions between the US and China. Today, trucks carry more than 7 million loads across the US-Mexico border annually, while intermodal rail manages only 300,000, according to the BTS and the Intermodal Association of North America (IANA). Truckload data, however, does not distinguish between types of freight, grouping finished vehicles, fuel, and standard retail goods together. IANA’s data excludes empty rail containers crossing the border, making an official market share number difficult to nail down. For more than two decades, intermodal’s market share has fluctuated between 10% and 15%, but dropped this year into the single digits despite the launch of the Mexico Midwest Express and the Falcon Premium services . “Mexico certainly has the length of haul characteristics that should make intermodal economics shine,” Larry Gross, president of Gross Transportation Consulting and a Journal of Commerce analyst, said. “But based on the numbers, the current intermodal offerings are lacking in one or more of the basic requirements for competing with truck: cost, service consistency, speed, [and] ease of use.” Overcoming rail’s growth hurdles A number of things will have to occur for intermodal to exceed the 15% market share threshold. One challenge is the cyclical nature of surface transportation. Current trucking rates are low, which reduces or eliminates the cost savings of choosing rail. To grow share, intermodal providers such as the top three — Hub Group, J.B. Hunt Transport Services, and Schneider National — must commit container capacity to Mexico and invest in personnel and sales staff. To succeed, however, midsized providers including C.H. Robinson, Matson Logistics, STG Logistics and Swift Intermodal will need to grow their existing Mexico franchises, and non-asset brokers who haven’t been in Mexico must enter. “How I would judge success is how many new customers we’ve engaged — our BCO [beneficial cargo owner] growth, which is up 30% from a year ago,” Pat Linden, UP’s assistant vice president of marketing and sales, said on Oct. 2 at the Journal of Commerce’s Inland Distribution Conference in Chicago. Engagement does not necessarily mean actual business, though. UP hosted a forum in Monterrey earlier this year to encourage intermodal marketing companies (IMCs) to open operations in Mexico. Even IMCs established in Mexico have dealt with delays in customs clearance this year at terminals owned by Mexican state railroad Ferromex, making it harder to compete with trucking. “Mexico is not a super easy place to do business and if you’ve never done business there before, there is a bit of a learning curve on how to do it, so we want to help make it less complicated,” Linden said. “The question for Mexico is that there is a bunch of cargo going north, but not much balance southbound. How can we get more shippers to send freight into Mexico? Getting freight southbound is an inhibitor to growth.” Similar to US-Asia trade, most containers going from the US to Mexico have nothing inside. Jonathan Wahba, senior vice-president of marketing and sales for Canadian Pacific-Kansas City (CPKC) is less focused on market share than on growth within his control. “In our legacy Canadian business, we launch four trains per night every night from Toronto to western Canada, and I see no reason we can’t do the same between Mexico and the US,” Wahba said at the Inland conference. “By the end of the decade, my goal is multiple daily trains in both directions.” Currently, the Mexico Midwest Express train from San Luis Potosi to Chicago is the only CPKC daily train originating in Mexico. CPKC hopes to launch a Mexico-to-Southeast train before the end of the year, but it’s not clear whether it would be a daily train or only a few days per week. New infrastructure, new markets CPKC’s second bridge in Laredo, opening this December, could be key to increasing volume. Today, a single bridge handles northbound and southbound trains in alternating time blocks, but a second bridge will enable simultaneous traffic in both directions. Expanding into new markets will also be necessary to shift market share. UP has seen organic growth since October 2023 when it launched a Mexico-to-Southeast US service connecting in Memphis. CPKC and CSX anticipate launching their joint Mexico-to-Southeast US service before the end of the year. To take share in that corridor, railroads will have to address competitive truck pricing that is often on par or cheaper than intermodal. Other areas in Mexico can be fertile ground to gain share against the trucking industry. Despite the present downturn, auto manufactures in the Southeast US are opening factories in Mexico, so rail operators must target markets deeper into the country beyond northern Mexico. CPKC’s Mexico Midwest Express currently originates in San Luis Potosí, but new clients could justify further expansion south to Toluca, an hour outside Mexico City. The Falcon Premium launches from Silao and is only just making inroads toward Mexico City, where demand is rising. “Mexico City’s terminal in Pantaco has historically handled mostly international cargo, but we’ve now designated a section for domestic intermodal,” Linden says. “This has sparked interest from shippers eager to explore new rail options.” Railroads must expand business south of Monterrey to capture market share because the relatively short truck transit to the border creates stiff competition between the two modes in northern Mexico. CPKC’s Mexico Midwest Express originates in San Luis Potosí in central Mexico, but if it can generate new customers with Schneider in Mexico City, then new service can be launched in Toluca, about an hour outside Mexico City. The Falcon Premium originates trains in Silao, but it hasn’t gotten a major foothold yet into Mexico City. “There has been a tremendous amount of discussion and conversation around Mexico City and how to move freight out of the city,” Linden said. “We have a lot of people coming to us with opportunities in Mexico City asking about options with Union Pacific.” A partnership between Hub Group and Transportes Easo, which owns a terminal in Mexico City and uses company drivers rather than owner-operators, gives the two intermodal providers an opportunity to compete with truck. “Our partnership is uniquely positioned to move equipment northbound, southbound, as well as intra-Mexico which allows for better management of capacity,” said Diego Anchustegui, chief marketing officer of Easo and president of the Mexico Intermodal Association. “We offer an intermodal heavyweight option that allows us to move freight more efficiently to the US, allowing us to better compete with truck.” Contact Ari Ashe at ari.ashe@spglobal.com .

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

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Shippers save money, time with automated transportation bidding tools

SSA Marine Mexico has made significant strides in modernizing its infrastructure at the Port of Manzanillo, investing $15 million to enhance operational efficiency and sustainability at its facilities. This move is part of the company's broader strategy to remain at the forefront of the shipping and logistics industry. •	Strengthening Sustainability with Advanced Technology <figure class="joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left"><img src="/content-assets/1730488295264_Cranes%20arrival%20to%20TEC%20I.png" alt="Cranes arrival to TEC I" class="joc_admin__inline-image-inherit"></figure> In July, SSA Marine Mexico added seven state-of-the-art E-RTG (Electric Rubber-Tired Gantry) cranes to its fleet, valued at $14 million. These advanced cranes were distributed across its two terminals: four cranes were assigned to the Multipurpose Terminal, and three to the Specialized Container Terminal I. What sets these cranes apart is their dual-operation capability, allowing them to function either on electric power or diesel fuel. This innovation plays a critical role in reducing the environmental impact of operations, contributing to a 7% increase in energy efficiency. This efficiency improvement is equivalent to eliminating nearly 4,000 tons of CO2 emissions annually, underscoring SSA Marine Mexico's commitment to sustainability. Through this acquisition, SSA Marine Mexico not only enhances its cargo-handling capabilities but also reinforces its leadership in integrating cutting-edge, eco-friendly technology in the maritime industry. The company continues to push the boundaries of efficiency and sustainability, ensuring long-term value for both its customers and the environment. •	Upgraded Facilities to Meet Growing Demand <figure class="joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left"><img src="/content-assets/1730488350634_Multipurpose%20terminal.png" alt="Multipurpose Terminal" class="joc_admin__inline-image-inherit"></figure> In addition to the new cranes, SSA Marine Mexico has completed crucial modernization and repair work across its Multipurpose Terminal and Specialized Facility at the Port of Manzanillo. This $1 million investment targeted critical infrastructure enhancements, focusing on both structural integrity and operational functionality. Key improvements included leveling approximately 12,000 square meters in the dock area, along with the removal of outdated concrete curbs and asphalt layers. The upgraded space now features high-resistance pavers designed to optimize water drainage and prevent pooling, ensuring safer and more efficient operations. Moreover, the Specialized Facility saw significant upgrades, including the leveling of key warehouse areas to facilitate smoother cargo handling processes. These infrastructure improvements directly enhance the handling of TEUS (Twenty-foot Equivalent Unit containers), further demonstrating SSA Marine Mexico's unwavering commitment to continuous modernization, operational safety, and efficiency. With these initiatives, SSA Marine Mexico is well-positioned to meet the growing demands of the global shipping industry while setting new standards in sustainable port operations. LINK:<a href="https://www.ssamarine.mx/ssa-ing/index" rel="noreferrer" class="joc_admin__link"> https://www.ssamarine.mx/ssa-ing/index</a>

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SSA Marine Mexico Modernizes Facilities with $15 Million Investment 

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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