<div class="phx-topic abstract-wrapper">HOW TO USE: To determine the codes for specific products and services of interest to you, co</div>

HOW TO USE: To determine the codes for specific products and services of interest to you, co

<div>HOW TO USE:To determine the codes for specific products and services of interest to you, contact your nearest Commerce District Office and talk to a Trade Specialist. (For a brief explanation of the coding system, read below.)CODING SYSTEM:Manufactured products are coded according to the Numerical List of Manufactured Products (1972 SIC Basis) published by the Bureau of the Census. Codes beginning with 99 classify major projects, services and special product groups.IMPORTANT NOTICE:Firms are reminded that the Export Administration Amendments of 1977 and Export Administration Regulations (15 C.F.R., Part 369) prohibit certain forms of compliance with foreign boycotts, including furnishing information...

Maritime

EXPORT OPPORTUNITIES

<div class="phx-topic abstract-wrapper">A pledge by Houthi militants to focus ship attacks on Israel-linked vessels is not enough to encourage ocean carriers to end their diversions around Africa and return to transits via the Suez Canal. </div>

A pledge by Houthi militants to focus ship attacks on Israel-linked vessels is not enough to encourage ocean carriers to end their diversions around Africa and return to transits via the Suez Canal.

Feature image

<div class="phx-topic">Ocean carriers say they will only return to Red Sea transits “when it is safe to do so,” despite an announcement Sunday by Yemen’s Houthi militants that they will limit their attacks on shipping to Israel-affiliated vessels. The announcement was made in an email to the Yemen-based Humanitarian Operations Coordination Center (HOCC) <a href="https://www.joc.com/article/return-to-suez-not-a-certainty-even-after-israel-hamas-ceasefire-analysts-5923830">following the start of a 42-day ceasefire</a> in Gaza between Israel and Hamas, but the ocean carriers’ position on a return to the Red Sea remains unchanged. "We will closely analyze the latest developments and their impact on the security situation in the Red Sea. Otherwise, the following applies unchanged: we will return to the Red Sea when it is sufficiently safe to do so,” Hapag-Lloyd spokesman Tim Seifert told the Journal of Commerce Monday. Maersk released a similar statement Monday with the carrier calling developments in the region “positive.” “We will continue monitoring the situation in the Middle East closely and will return to the Red Sea and sailing through Bab al-Mandab when it is safe to do so,” Maersk noted. “It is still too early to speculate about timing, but these developments are a needed step in the right direction.” Houthi attacks on shipping began in November 2023 in support of Hamas after Israel launched its military operations in Gaza. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthi rebels in early 2024 said they would only attack Israel-linked vessels, but this was not borne out. Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&amp;P Global Market Intelligence, parent company of the Journal of Commerce, said last week there might be a relative decrease in the frequency of attacks against shipping after the ceasefire, but that would likely reflect degradation of Houthi capability after US and Israeli airstrikes. <h3>Flooding capacity </h3>As much as carriers extol the virtues of a return to Red Sea transits, the consensus among analysts is that it will lead to a period of supply chain disruption with ship schedules thrown out, followed by collapsing rates as excess capacity floods the market. In a report titled Exceptional profits period drawing to a close, investment bank Jefferies noted that, with rates expected to weaken through 2025, 90% of container ships typically using the shorter Suez route diverted around Africa, removing over 12% of fleet capacity. “Last year was one of the best years ever for the container industry as the sudden removal of this capacity, along with strong trade growth, pushed capacity utilization to an average of 87.5%,” noted the Jefferies report, well above the 75% utilization in 2024 had there been no diversions. “We expect continued positive earnings for the sector but a repeat of 2024 results seems difficult to achieve. The demand picture over the medium-term remains a major question as tariffs and reciprocal tariffs point to stunted trade growth in the coming years.” <h3>Downward pressure on spot rates</h3>Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter that a return to transits through the Red Sea would be good news for shippers and consumers, but bad news for carriers. “The high freight rates are clearly supported by the severe capacity absorption from the round-Africa services as a consequence of the Red Sea crisis,” he wrote. “A reversal back to Suez would bring the global supply-demand balance back to the level we saw towards the end of 2023. This in turn means that — after a somewhat turbulent period with port congestion issues in Europe — spot rates will drop sharply.” Average Asia-North Europe spot rates in the last week of November 2023 were $1,379 per FEU, according to rate benchmarking platform Xeneta. By mid-July 2024 the rate peaked at $8,558/FEU, and although falling through the second half, the spot rate has remained more than double the price recorded in November 2023. A return to the shorter voyages through the Red Sea will dramatically change the supply-demand picture and put significant downwards pressure on rates, Peter Sand, chief analyst at Xeneta, wrote in a report Monday. “Combined with record deliveries of new ships, the market will be flooded with capacity, with carriers needing to remove around 1.8 million TEUs to retain the status quo,” he said. “Scrapping of ships will increase and carriers have become much better at capacity management in recent years, but it is unlikely this will be enough to prevent freight rates from collapsing,” he added. <a href="https://www.joc.com/article/container-shipping-still-has-an-overcapacity-problem-but-its-far-from-insurmountable-5234357">Carriers have been playing down the impact</a> of overcapacity following the resumption of transits through Suez, pointing to an increase in scrapping (which has been close to zero for the last few years) and the ability to slow steam ships that have been at full speed since Africa diversions began. Still, Murphy said from a supply-demand perspective, “it is hard to see any other outcome than a rapid decline back towards the depths seen in 2023. At least for a temporary period,” he noted, adding that the market drop after the Suez route’s reopening would not be a “soft landing.” Contact Greg Knowler at <a href="greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers say they will only return to Red Sea transits “when it is safe to do so,” despite an announcement Sunday by Yemen’s Houthi militants that they will limit their attacks on shipping to Israel-affiliated vessels. The announcement was made in an email to the Yemen-based Humanitarian Operations Coordination Center (HOCC) following the start of a 42-day ceasefire in Gaza between Israel and Hamas, but the ocean carriers’ position on a return to the Red Sea remains unchanged. "We will closely analyze the latest developments and their impact on the security situation in the Red Sea. Otherwise, the following applies unchanged: we will return to the Red Sea when it is sufficiently safe to do so,” Hapag-Lloyd spokesman Tim Seifert told the Journal of Commerce Monday. Maersk released a similar statement Monday with the carrier calling developments in the region “positive.” “We will continue monitoring the situation in the Middle East closely and will return to the Red Sea and sailing through Bab al-Mandab when it is safe to do so,” Maersk noted. “It is still too early to speculate about timing, but these developments are a needed step in the right direction.” Houthi attacks on shipping began in November 2023 in support of Hamas after Israel launched its military operations in Gaza. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthi rebels in early 2024 said they would only attack Israel-linked vessels, but this was not borne out. Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&P Global Market Intelligence, parent company of the Journal of Commerce, said last week there might be a relative decrease in the frequency of attacks against shipping after the ceasefire, but that would likely reflect degradation of Houthi capability after US and Israeli airstrikes. Flooding capacity As much as carriers extol the virtues of a return to Red Sea transits, the consensus among analysts is that it will lead to a period of supply chain disruption with ship schedules thrown out, followed by collapsing rates as excess capacity floods the market. In a report titled Exceptional profits period drawing to a close, investment bank Jefferies noted that, with rates expected to weaken through 2025, 90% of container ships typically using the shorter Suez route diverted around Africa, removing over 12% of fleet capacity. “Last year was one of the best years ever for the container industry as the sudden removal of this capacity, along with strong trade growth, pushed capacity utilization to an average of 87.5%,” noted the Jefferies report, well above the 75% utilization in 2024 had there been no diversions. “We expect continued positive earnings for the sector but a repeat of 2024 results seems difficult to achieve. The demand picture over the medium-term remains a major question as tariffs and reciprocal tariffs point to stunted trade growth in the coming years.” Downward pressure on spot rates Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter that a return to transits through the Red Sea would be good news for shippers and consumers, but bad news for carriers. “The high freight rates are clearly supported by the severe capacity absorption from the round-Africa services as a consequence of the Red Sea crisis,” he wrote. “A reversal back to Suez would bring the global supply-demand balance back to the level we saw towards the end of 2023. This in turn means that — after a somewhat turbulent period with port congestion issues in Europe — spot rates will drop sharply.” Average Asia-North Europe spot rates in the last week of November 2023 were $1,379 per FEU, according to rate benchmarking platform Xeneta. By mid-July 2024 the rate peaked at $8,558/FEU, and although falling through the second half, the spot rate has remained more than double the price recorded in November 2023. A return to the shorter voyages through the Red Sea will dramatically change the supply-demand picture and put significant downwards pressure on rates, Peter Sand, chief analyst at Xeneta, wrote in a report Monday. “Combined with record deliveries of new ships, the market will be flooded with capacity, with carriers needing to remove around 1.8 million TEUs to retain the status quo,” he said. “Scrapping of ships will increase and carriers have become much better at capacity management in recent years, but it is unlikely this will be enough to prevent freight rates from collapsing,” he added. Carriers have been playing down the impact of overcapacity following the resumption of transits through Suez, pointing to an increase in scrapping (which has been close to zero for the last few years) and the ability to slow steam ships that have been at full speed since Africa diversions began. Still, Murphy said from a supply-demand perspective, “it is hard to see any other outcome than a rapid decline back towards the depths seen in 2023. At least for a temporary period,” he noted, adding that the market drop after the Suez route’s reopening would not be a “soft landing.” Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Trans-Pacific

Container lines

Carriers eye Red Sea transits after Houthi rebels pledge restraint

<div class="phx-topic abstract-wrapper">A planned US executive order to halt offshore wind turbine activities along the East Coast has the sector in turmoil.</div>

A planned US executive order to halt offshore wind turbine activities along the East Coast has the sector in turmoil.

<div class="phx-topic">Momentum is downshifting in the US offshore wind industry in anticipation of an executive order to halt development in the sector immediately after today’s inauguration of Donald Trump as US president. On Jan. 15, power-purchase contract signings set to take place that day for a pair of offshore wind projects in Massachusetts and Rhode Island were <a href="https://fileservice.eea.comacloud.net/FileService.Api/file/FileRoom/19881934">pushed back</a> until March 31.The decision marks the second time since November that utilities and state officials have delayed the contracts for the two projects — Avangrid’s 791-megawatt (MW) New England Wind 1 and OceanWinds’ 1,287 MW SouthCoast Wind.In a step forward for one of the projects, SouthCoast Wind on Jan. 17 received the final approval needed to move ahead with construction of its wind farm, which will include up to 141 turbines and up to five offshore substation platforms. “Receiving today’s final Bureau of Ocean Energy Management (BOEM) approval keeps SouthCoast Wind on track to delivering reliable domestic energy to New England’s homes and businesses,” Michael Brown, CEO of SouthCoast Wind and Ocean Winds North America CEO, told the Journal of Commerce in a prepared statement.The moves come after Republican U.S. Rep. Jefferson Van Drew of New Jersey said in a <a href="https://vandrew.house.gov/news/documentsingle.aspx?DocumentID=1801">Jan. 13 press release</a> that he has been working closely with Trump on drafting an executive order that would halt offshore wind turbine activities along the East Coast, while also laying the groundwork for “permanent measures” against the projects.“These offshore wind projects should have never been approved in the first place,” Van Drew said in the release. “The Biden administration’s reckless green agenda put politics over people, and that ends now.”US policy changes could strain the breakbulk and project cargo segment, which relies on wind energy as a significant cargo source.Trump has been a vocal adversary of offshore wind turbines and wrote in a Jan. 15 Truth Social post that “windmills are an economic and environmental disaster” and that he doesn’t “want even one built” during his administration. <h3>Ongoing projects could continue</h3>Charlie Papavizas, head of the maritime practice in the Washington, DC, office of Winston &amp; Strawn, told the Journal of Commerce that although an executive order would likely halt the offshore wind permitting process for at least six months, it should not affect fully permitted projects already under construction. Supporting this, during Jan. 16 confirmation hearings, Trump’s interior secretary nominee, Doug Burgum, said wind projects that are already in progress will continue “if they make sense.”Now in question, Papavizas said, is the dozen or so projects that are fully approved but not yet under construction. “What happens with those? Will they get their funding? Put turbines in the water? Hook up to the grid, but then there are no new ones for four years? We don’t know,” he said.Stephanie Francoeur, a spokeswoman for industry group Oceantic Network, told the Journal of Commerce that an executive order would undermine over $24 million in investments in the offshore wind supply chain, including shipyards and steel factories, and another $25 billion being spent on projects under construction.“An action that curtails domestic energy production, strands assets like vessels and manufacturing facilities, and curtails job creation would be in direct conflict with the incoming administration’s economic agenda,” Francoeur said.Offshore wind construction brought a windfall of cargo in 2024 to the Virginia Port Authority, which recorded a surge in breakbulk cargo volumes largely because of shipments for the 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) project that Virginia utility Dominion Energy is developing off the coast of Virginia Beach. The project is 43% complete but on pause until May to allow for whale migration past the project area. Joe Harris, spokesman for the Virginia Port Authority (VPA), told the Journal of Commerce that it will be impossible to determine the industry’s next steps before an official executive order materializes. But in the meantime, the Port is still performing over $220 million in upgrades to its 287-acre Portsmouth Marine Terminal, one of two multipurpose terminals in Norfolk Harbor and the staging site for the CVOW project components.“We’re going to continue to go forward with our investments at Portsmouth Marine Terminal,” he said.Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

Momentum is downshifting in the US offshore wind industry in anticipation of an executive order to halt development in the sector immediately after today’s inauguration of Donald Trump as US president. On Jan. 15, power-purchase contract signings set to take place that day for a pair of offshore wind projects in Massachusetts and Rhode Island were pushed back until March 31. The decision marks the second time since November that utilities and state officials have delayed the contracts for the two projects — Avangrid’s 791-megawatt (MW) New England Wind 1 and OceanWinds’ 1,287 MW SouthCoast Wind. In a step forward for one of the projects, SouthCoast Wind on Jan. 17 received the final approval needed to move ahead with construction of its wind farm, which will include up to 141 turbines and up to five offshore substation platforms. “Receiving today’s final Bureau of Ocean Energy Management (BOEM) approval keeps SouthCoast Wind on track to delivering reliable domestic energy to New England’s homes and businesses,” Michael Brown, CEO of SouthCoast Wind and Ocean Winds North America CEO, told the Journal of Commerce in a prepared statement. The moves come after Republican U.S. Rep. Jefferson Van Drew of New Jersey said in a Jan. 13 press release that he has been working closely with Trump on drafting an executive order that would halt offshore wind turbine activities along the East Coast, while also laying the groundwork for “permanent measures” against the projects. “These offshore wind projects should have never been approved in the first place,” Van Drew said in the release. “The Biden administration’s reckless green agenda put politics over people, and that ends now.” US policy changes could strain the breakbulk and project cargo segment, which relies on wind energy as a significant cargo source. Trump has been a vocal adversary of offshore wind turbines and wrote in a Jan. 15 Truth Social post that “windmills are an economic and environmental disaster” and that he doesn’t “want even one built” during his administration. Ongoing projects could continue Charlie Papavizas, head of the maritime practice in the Washington, DC, office of Winston & Strawn, told the Journal of Commerce that although an executive order would likely halt the offshore wind permitting process for at least six months, it should not affect fully permitted projects already under construction. Supporting this, during Jan. 16 confirmation hearings, Trump’s interior secretary nominee, Doug Burgum, said wind projects that are already in progress will continue “if they make sense.” Now in question, Papavizas said, is the dozen or so projects that are fully approved but not yet under construction. “What happens with those? Will they get their funding? Put turbines in the water? Hook up to the grid, but then there are no new ones for four years? We don’t know,” he said. Stephanie Francoeur, a spokeswoman for industry group Oceantic Network, told the Journal of Commerce that an executive order would undermine over $24 million in investments in the offshore wind supply chain, including shipyards and steel factories, and another $25 billion being spent on projects under construction. “An action that curtails domestic energy production, strands assets like vessels and manufacturing facilities, and curtails job creation would be in direct conflict with the incoming administration’s economic agenda,” Francoeur said. Offshore wind construction brought a windfall of cargo in 2024 to the Virginia Port Authority, which recorded a surge in breakbulk cargo volumes largely because of shipments for the 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) project that Virginia utility Dominion Energy is developing off the coast of Virginia Beach. The project is 43% complete but on pause until May to allow for whale migration past the project area. Joe Harris, spokesman for the Virginia Port Authority (VPA), told the Journal of Commerce that it will be impossible to determine the industry’s next steps before an official executive order materializes. But in the meantime, the Port is still performing over $220 million in upgrades to its 287-acre Portsmouth Marine Terminal, one of two multipurpose terminals in Norfolk Harbor and the staging site for the CVOW project components. “We’re going to continue to go forward with our investments at Portsmouth Marine Terminal,” he said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Energy projects

Project cargo

Breakbulk News

US offshore wind industry braces for federal halt

<div class="phx-topic abstract-wrapper">The announcement comes less than a month after FedEx said it would spin off FedEx Freight, which would be the largest standalone LTL provider in North America by revenue. </div>

The announcement comes less than a month after FedEx said it would spin off FedEx Freight, which would be the largest standalone LTL provider in North America by revenue.

<div class="phx-topic">Lance Moll, who has led FedEx Freight — the largest US trucking company — as president and CEO for nearly four years will retire at the end of January, FedEx announced late Friday. Moll will take an advisory role with the company until July 31 to ensure a smooth transition, FedEx said in a statement that did not mention a successor. Moll’s departure comes as FedEx prepares to spin off its US less-than-truckload (LTL) division, a process the company said in December would take 18 months. That separation remains on track, FedEx said in the statement, and will be overseen by John Smith, COO of US and Canadian surface operations at FedEx. Smith is the former president and CEO of FedEx Ground and FedEx Freight. Moll joined American Freightways as a dock worker in 1992. By the time American Freightways became FedEx Freight in 2001, he was an LTL terminal manager. He became senior vice president of operations in 2018 and president and CEO in 2021. FedEx Freight had $9.4 billion in revenue in its fiscal year that ended May 31; for calendar year 2023, the revenue figure was $10.2 billion. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Lance Moll, who has led FedEx Freight — the largest US trucking company — as president and CEO for nearly four years will retire at the end of January, FedEx announced late Friday. Moll will take an advisory role with the company until July 31 to ensure a smooth transition, FedEx said in a statement that did not mention a successor. Moll’s departure comes as FedEx prepares to spin off its US less-than-truckload (LTL) division, a process the company said in December would take 18 months. That separation remains on track, FedEx said in the statement, and will be overseen by John Smith, COO of US and Canadian surface operations at FedEx. Smith is the former president and CEO of FedEx Ground and FedEx Freight. Moll joined American Freightways as a dock worker in 1992. By the time American Freightways became FedEx Freight in 2001, he was an LTL terminal manager. He became senior vice president of operations in 2018 and president and CEO in 2021. FedEx Freight had $9.4 billion in revenue in its fiscal year that ended May 31; for calendar year 2023, the revenue figure was $10.2 billion. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

FedEx Freight says CEO Moll to retire Jan. 31

<div class="phx-topic abstract-wrapper">The largest intermodal provider in the US says it’s time for shippers to talk about higher rates for service but understands the shift is not likely to occur until the second half of the year.</div>

The largest intermodal provider in the US says it’s time for shippers to talk about higher rates for service but understands the shift is not likely to occur until the second half of the year.

<div class="phx-topic">J.B. Hunt Transport Services is warning shippers to prepare for higher rates for intermodal rail service in 2025 but acknowledges that market conditions may not favor carriers until the third quarter. The company on Thursday reported a 5% increase in fourth-quarter volume compared with the year-ago period as it moved 560,132 loads between October and December — the highest fourth-quarter volume in the company’s history. Still, revenue fell 2%, reflecting lower contract prices compared with the fourth quarter of 2023. Nonetheless, J.B. Hunt CEO Shelley Simpson said the US’ largest intermodal provider “will be coming out of the freight recession from a position of strength.” Simpson, during an earnings call Thursday, emphasized what she says is the value J.B. Hunt brings to customers, citing the company’s capacity and service levels. “We believe the value we create for our customers ... is unique in the market, and our returns should mirror that value,” she said. “[Both] we and our customers understand this.” J.B. Hunt’s fourth-quarter performance was bolstered by handling over 200,000 loads in October, a company record for any month. On a year-over-year basis, volume grew 4% in October, 7% in November and 3% in December; for the fourth quarter overall, West Coast shipments increased 4% and eastern US shipments were up 6%. Darren Field, president of J.B. Hunt’s intermodal division, expressed optimism about the company’s pricing strategy going forward. The company last week <a href="https://www.joc.com/article/intermodal-providers-navigate-tough-pricing-environment-at-start-of-year-5922679">sent a letter to customers</a> calling for transparent pricing discussions that reflect the company’s value and costs. “I’m very confident that the service product we’ve offered over the last two years has really earned us the right to have really strong confidence in what we’re providing value for and we’re going to share that with the customers and work on our price,” Field said. “How we think about this pricing cycle, it’s a conversation with one customer at a time.” <h3>Securing rate increases a challenge </h3>While some rate increases have been secured in Northern and Southern California, gains have been smaller than expected. Elsewhere, contract rates have remained flat or fallen, according to industry sources. Brad Delco, J.B. Hunt’s vice president of finance and investor relations, noted that first-quarter intermodal pricing is already set. The company is now focused on the second wave of shipper bids, typically implemented between late March and May. “There’s really not tremendous opportunities to move the intermodal price [in Q1],” Delco said. “...The work we’re doing right now will be reflected in how we look at Q3 and certainly the exit out of ’25 in ’26.” For intermodal rates to increase, leverage in truckload pricing must first shift toward carriers, according to data from the Journal of Commerce Intermodal Savings Index. So far, that shift has not occurred. Freight demand weakened in November and December year over year, according to DAT Freight and Analytics and the Cass Freight Index. While some shippers have agreed to small truckload rate increases to maintain partnerships, others have held firm on flat or reduced rates for 2025, with a willingness to revisit the issue mid-year if market conditions change. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

J.B. Hunt Transport Services is warning shippers to prepare for higher rates for intermodal rail service in 2025 but acknowledges that market conditions may not favor carriers until the third quarter. The company on Thursday reported a 5% increase in fourth-quarter volume compared with the year-ago period as it moved 560,132 loads between October and December — the highest fourth-quarter volume in the company’s history. Still, revenue fell 2%, reflecting lower contract prices compared with the fourth quarter of 2023. Nonetheless, J.B. Hunt CEO Shelley Simpson said the US’ largest intermodal provider “will be coming out of the freight recession from a position of strength.” Simpson, during an earnings call Thursday, emphasized what she says is the value J.B. Hunt brings to customers, citing the company’s capacity and service levels. “We believe the value we create for our customers ... is unique in the market, and our returns should mirror that value,” she said. “[Both] we and our customers understand this.” J.B. Hunt’s fourth-quarter performance was bolstered by handling over 200,000 loads in October, a company record for any month. On a year-over-year basis, volume grew 4% in October, 7% in November and 3% in December; for the fourth quarter overall, West Coast shipments increased 4% and eastern US shipments were up 6%. Darren Field, president of J.B. Hunt’s intermodal division, expressed optimism about the company’s pricing strategy going forward. The company last week sent a letter to customers calling for transparent pricing discussions that reflect the company’s value and costs. “I’m very confident that the service product we’ve offered over the last two years has really earned us the right to have really strong confidence in what we’re providing value for and we’re going to share that with the customers and work on our price,” Field said. “How we think about this pricing cycle, it’s a conversation with one customer at a time.” Securing rate increases a challenge While some rate increases have been secured in Northern and Southern California, gains have been smaller than expected. Elsewhere, contract rates have remained flat or fallen, according to industry sources. Brad Delco, J.B. Hunt’s vice president of finance and investor relations, noted that first-quarter intermodal pricing is already set. The company is now focused on the second wave of shipper bids, typically implemented between late March and May. “There’s really not tremendous opportunities to move the intermodal price [in Q1],” Delco said. “...The work we’re doing right now will be reflected in how we look at Q3 and certainly the exit out of ’25 in ’26.” For intermodal rates to increase, leverage in truckload pricing must first shift toward carriers, according to data from the Journal of Commerce Intermodal Savings Index. So far, that shift has not occurred. Freight demand weakened in November and December year over year, according to DAT Freight and Analytics and the Cass Freight Index. While some shippers have agreed to small truckload rate increases to maintain partnerships, others have held firm on flat or reduced rates for 2025, with a willingness to revisit the issue mid-year if market conditions change. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

J.B. Hunt preparing customers for boost in contract rail rates in 2025

<div class="phx-topic abstract-wrapper">With plenty of truck capacity still available, US shippers are trying to tamp down rising truck rates without driving off their current truckload carriers. </div>

With plenty of truck capacity still available, US shippers are trying to tamp down rising truck rates without driving off their current truckload carriers.

<div class="phx-topic">US shippers, concerned by the prospect of higher trucking costs later this year, are looking to keep rate hikes low in the current round of annual contract talks while trying to maintain their roster of incumbent trucking providers. That means striking a delicate balance. Shippers say they aren’t interested in taking rate increases at a time when their own demand is soft. But they also don’t want to lose truck capacity they may need in the second half of 2025. Risk management is rising to the fore, with uncertainty about the impact on demand of potential Trump administration tariffs and whether carriers will tighten capacity. Discussions with several shippers point to trucking contract rate increases in the low single-digit percentage range in this bidding cycle, both for truckload and less-than-truckload (LTL) providers, with fewer shippers keeping rates flat or gaining additional savings. “We have seen some stabilization in terms of truckload rates, but it’s not because demand is stronger, it’s because capacity has left the marketplace,” said Mike Regan, chief relationship officer at TranzAct Technologies, which helps shippers negotiate contracts. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="cd8d5a74-098f-439c-b972-aae97c9da91a"></dynamic-object></div>The Journal of Commerce average shipper-paid truckload spot rate, including surcharges, <a href="https://www.joc.com/article/us-truckload-spot-rates-rising-but-shippers-keeping-lid-on-contract-rates-5919921">rose 8 cents to $2.28 per mile</a> on a weighted basis in December from November. But contract rates tracked by DAT Freight &amp; Analytics have been flat. Freight demand slipped at the end of 2024, with US freight volumes dropping 6.5% in December year over year and 7.3% from November, according to the Cass Freight Shipments Index. For the full year, the index declined 4.1% following a 5.5% drop in 2023. Truckload capacity contracted as well at the end of 2024, but enough excess capacity remains to keep pricing power in shippers’ hands. “When truckload carriers are willing to accept 120-day payment terms, that tells you something,” said Regan. <h3>Keeping bridges in place </h3>But pushing for rate cuts after two years of falling truckload rates risks alienating suppliers that shippers will need when freight demand picks up. “There’s no need to burn bridges in this market,” one retailer who asked not to be identified told the Journal of Commerce. To keep incumbents in their networks, some shippers said they are not pressing their carriers hard for additional savings even when they may be available. “You could press for an additional 1% or 2% reduction, but would that carrier stay with you when the market turns?” said a manufacturer who asked not to be identified. For one trucking executive, the answer is “no.” “A 2% increase doesn’t get you where you need to be,” Kent Williams, executive vice president of sales and marketing for Averitt, told the Journal of Commerce. “Carriers are going to be after more than that.” Williams said Averitt has lost a few customers during this bidding cycle. “We’ve agreed to part ways,” he acknowledged. “We can’t continue to handle business at a loss or break-even. Shippers know carriers can’t sustain the rate levels they’ve had the last few years.” <h3>Expecting higher volumes </h3>Averitt, which has LTL and truckload operations, released a survey this week of more than 1,000 shippers that found more logistics managers are willing to accept some level of rate increase, with 70% of those surveyed expecting higher volumes. The 2025 State of the North American Supply Chain survey found 57.4% of shippers anticipate rate increases, compared with 51.9% in 2024. Only 26.2% said they expect no change in freight rates, while 16.4% believed rates would fall again in 2025. “Shippers are expecting rate increases, but different shippers will have different opinions on the size of those increases,” Williams said. “Obviously, supply chain managers are doing all they can to limit the size of the increases.” Shippers have yet to feel the pinch of tightening capacity, and that’s put carriers in a more difficult bargaining position, he said. “This isn’t like 2021 when shippers were willing to take double-digit increases to lock down capacity,” said Williams. Carriers are increasingly acknowledging the recovery from the freight downturn will take more time than initially expected, with higher rates more likely in the second half of 2025. “We will be living with the vast majority of our current [intermodal] pricing through the first half of 2025,” Darren P. Field, executive vice president and president of intermodal at J.B. Hunt Transport Services, said during a fourth quarter earnings call Thursday. “While we see capacity exit the industry every day, overall, there is still some excess capacity available in the [truckload] market,” Spencer Frazier, J. B. Hunt’s executive vice president of sales and marketing, said during the call. “Some customers are securing capacity a little earlier than normal, which has historically been a good indication that supply and demand dynamics are shifting,” Frazier said. With the trajectory of the freight market uncertain, some shippers are willing to spend a little more now in hopes they can avoid higher costs later. Spot truckload rates are expected to rise anywhere from 10% to 20% or higher by the end of the year. “Rates are going up. How fast and to what degree is the unknown,” Chris Pickett, chief commercial officer at digital shared truckload provider Flock Freight, said during a Jan. 7 LinkedIn podcast organized by logistics consultant Samantha Jones. “The shippers that leaned into innovation and strategic carrier programs during the downturn will be in a much better position in this shifting market,” Pickett said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US shippers, concerned by the prospect of higher trucking costs later this year, are looking to keep rate hikes low in the current round of annual contract talks while trying to maintain their roster of incumbent trucking providers. That means striking a delicate balance. Shippers say they aren’t interested in taking rate increases at a time when their own demand is soft. But they also don’t want to lose truck capacity they may need in the second half of 2025. Risk management is rising to the fore, with uncertainty about the impact on demand of potential Trump administration tariffs and whether carriers will tighten capacity. Discussions with several shippers point to trucking contract rate increases in the low single-digit percentage range in this bidding cycle, both for truckload and less-than-truckload (LTL) providers, with fewer shippers keeping rates flat or gaining additional savings. “We have seen some stabilization in terms of truckload rates, but it’s not because demand is stronger, it’s because capacity has left the marketplace,” said Mike Regan, chief relationship officer at TranzAct Technologies, which helps shippers negotiate contracts. The Journal of Commerce average shipper-paid truckload spot rate, including surcharges, rose 8 cents to $2.28 per mile on a weighted basis in December from November. But contract rates tracked by DAT Freight & Analytics have been flat. Freight demand slipped at the end of 2024, with US freight volumes dropping 6.5% in December year over year and 7.3% from November, according to the Cass Freight Shipments Index. For the full year, the index declined 4.1% following a 5.5% drop in 2023. Truckload capacity contracted as well at the end of 2024, but enough excess capacity remains to keep pricing power in shippers’ hands. “When truckload carriers are willing to accept 120-day payment terms, that tells you something,” said Regan. Keeping bridges in place But pushing for rate cuts after two years of falling truckload rates risks alienating suppliers that shippers will need when freight demand picks up. “There’s no need to burn bridges in this market,” one retailer who asked not to be identified told the Journal of Commerce. To keep incumbents in their networks, some shippers said they are not pressing their carriers hard for additional savings even when they may be available. “You could press for an additional 1% or 2% reduction, but would that carrier stay with you when the market turns?” said a manufacturer who asked not to be identified. For one trucking executive, the answer is “no.” “A 2% increase doesn’t get you where you need to be,” Kent Williams, executive vice president of sales and marketing for Averitt, told the Journal of Commerce. “Carriers are going to be after more than that.” Williams said Averitt has lost a few customers during this bidding cycle. “We’ve agreed to part ways,” he acknowledged. “We can’t continue to handle business at a loss or break-even. Shippers know carriers can’t sustain the rate levels they’ve had the last few years.” Expecting higher volumes Averitt, which has LTL and truckload operations, released a survey this week of more than 1,000 shippers that found more logistics managers are willing to accept some level of rate increase, with 70% of those surveyed expecting higher volumes. The 2025 State of the North American Supply Chain survey found 57.4% of shippers anticipate rate increases, compared with 51.9% in 2024. Only 26.2% said they expect no change in freight rates, while 16.4% believed rates would fall again in 2025. “Shippers are expecting rate increases, but different shippers will have different opinions on the size of those increases,” Williams said. “Obviously, supply chain managers are doing all they can to limit the size of the increases.” Shippers have yet to feel the pinch of tightening capacity, and that’s put carriers in a more difficult bargaining position, he said. “This isn’t like 2021 when shippers were willing to take double-digit increases to lock down capacity,” said Williams. Carriers are increasingly acknowledging the recovery from the freight downturn will take more time than initially expected, with higher rates more likely in the second half of 2025. “We will be living with the vast majority of our current [intermodal] pricing through the first half of 2025,” Darren P. Field, executive vice president and president of intermodal at J.B. Hunt Transport Services, said during a fourth quarter earnings call Thursday. “While we see capacity exit the industry every day, overall, there is still some excess capacity available in the [truckload] market,” Spencer Frazier, J. B. Hunt’s executive vice president of sales and marketing, said during the call. “Some customers are securing capacity a little earlier than normal, which has historically been a good indication that supply and demand dynamics are shifting,” Frazier said. With the trajectory of the freight market uncertain, some shippers are willing to spend a little more now in hopes they can avoid higher costs later. Spot truckload rates are expected to rise anywhere from 10% to 20% or higher by the end of the year. “Rates are going up. How fast and to what degree is the unknown,” Chris Pickett, chief commercial officer at digital shared truckload provider Flock Freight, said during a Jan. 7 LinkedIn podcast organized by logistics consultant Samantha Jones. “The shippers that leaned into innovation and strategic carrier programs during the downturn will be in a much better position in this shifting market,” Pickett said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Truckload

Shippers balance near-term market, long-term forecasts in trucking bids

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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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