<div class="phx-topic abstract-wrapper">China's factories will soon close for Golden Week, but for thousands of polluting manufacturers that have felt the firm hand of Beijing's environment regulator, the end of the holidays may not herald a return to business.</div>

China's factories will soon close for Golden Week, but for thousands of polluting manufacturers that have felt the firm hand of Beijing's environment regulator, the end of the holidays may not herald a return to business.

<div>Factories across China are preparing to shut down to celebrate the country’s national holidays that begin on Oct. 1, but it may only bring a brief respite to the thousands of factories facing closure under Beijing’s anti-pollution drive.The widespread closure of polluting factories is being seen by those in the supply chain as a permanent move with the intention of pushing manufacturers of low value goods out of China, said Gary Huang, founder of China sourcing consultancy 80/20 Sourcing and co-chairman of the AmCham Shanghai Supply Chain Committee.“In fact, the sentiment is that these heavy polluters mainly make low value...

Factories across China are preparing to shut down to celebrate the country’s national holidays that begin on Oct. 1, but it may only bring a brief respite to the thousands of factories facing closure under Beijing’s anti-pollution drive.The widespread closure of polluting factories is being seen by those in the supply chain as a permanent move with the intention of pushing manufacturers of low value goods out of China, said Gary Huang, founder of China sourcing consultancy 80/20 Sourcing and co-chairman of the AmCham Shanghai Supply Chain Committee.“In fact, the sentiment is that these heavy polluters mainly make low value items and China is willing to allow these industries to move out of China and to India, Cambodia, etc.,” he said. “We are entering a holiday soon in the beginning of October. I believe I'll have a better idea of [the] South China impact around mid-October.”The tough enforcement of regulations enacted in 2013 is being carried out by China’s Ministry of Environmental Protection and has already shuttered thousands of factories in the north of the country. The inspectors now have their eyes on auditing manufacturers in the southern provinces.“South China will be privy to these audits,” said Huang. “We understand that Guangzhou will be under review later in the fourth quarter and going into 2018. I suggest [shippers] talk to their suppliers and be vigilant about monitoring this process. And also have a contingency plan.”Sources in China report that governmental environmental inspection efforts started to move from Northern China to Central China in the third week of September. “We believe this will create an impact on Ningbo shipping volumes as there are numerous small manufacturers involved in producing lower end consumer articles of all sorts,” said a supply chain expert. He said the factory audits would scrutinize businesses involved in decorative home products, such as Christmas ornaments, as well as manufacturers involved in producing electric circuit boards. Some of the closed North China factories were expected to resume production by mid-October, but there has been little clarity on the issue.It is no secret that Beijing has long wanted its producers to move up the value chain and lead the country away from the massive pollution that has been a byproduct of China’s rapid economic growth. After years of poor enforcement, China’s Ministry of Environmental Protection in June stopped treading lightly and began to shut down thousands of factories in Northern China that did not comply with state emissions regulations.The factory closures are spread across China’s main manufacturing areas, from Jilin Province in the north to Zhejiang Province south of Shanghai, with increasing focus on the giant inland cities of Chongqing and Chengdu. Guangzhou factories are next on the Ministry of Environmental Protection’s crackdown list as inspectors begin to move southwards.Joerg Hoppe, DB Schenker director and head of ocean freight for North and Central China, said there was an environmental inspection and cleanup effort taking place in China with strong governmental enforcement actions. “This has had a visibly negative impact on shipping volumes out of Northern China,” he said.Low value cargo is transported by ocean, and the factory closures were having an impact on container volume being exported from China, according to an APL spokesperson. He said this was particularly apparent for North China exports.Kuehne + Nagel also said they were “clearly” seeing a drop off in container volume being exported from China, particularly in the north of the country.Drewry said the massive factory closure in China would taper off the pre-Golden Week volume spike this year with rates falling rapidly on the Asia-Europe and the trans-Pacific trades.But Huang said the cleanup campaign was also looking beyond environmental compliance and towards general business licensing, certificates, and zoning, with the authorities using the crackdown to enforce overall compliance with business regulations.For those shippers affected by closing factories, their options are limited. Although for some of the bigger shippers, switching manufacturing to factories in Vietnam, Thailand, Cambodia, or India may be possible, it will be difficult to match China’s well-established manufacturing network of factories and suppliers.But a serious problem for shippers sourcing in China is that even if their manufacturers are in compliance with the strict new pollution regulations, the suppliers of the factories may not be. This is almost impossible to police.The Asia-based supply chain director for a global electronics manufacturer said the factory closures were affecting all finished goods and parts vendors in Zhejiang Province just south of Shanghai that were involved in what was being labeled “environmentally impactful” manufacturing activities, such as die-casting, painting, plating, and printing. Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .

Supply chain

Importers warned closed Chinese factories may never reopen

<div class="phx-topic abstract-wrapper">Pitt Ohio’s acquisition of Sutton Transport is the latest in a string of acquisitions rebuilding the LTL sector from the middle out, and more regional acquisitions are expected.</div>

Pitt Ohio’s acquisition of Sutton Transport is the latest in a string of acquisitions rebuilding the LTL sector from the middle out, and more regional acquisitions are expected.

Feature image

<div class="phx-topic">The US less-than-truckload (LTL) market is entering a new phase of consolidation in early 2025, led by regional LTL trucking companies building greater density and reach. The action is hottest perhaps in the Midwest, where the shutdown of Holland, a regional subsidiary of Yellow, in 2023 left a hole in the LTL market that has not been filled. There is a need for LTL carriers that can provide premium on-time, next-day service at scale across the region stretching from Ohio and the Great Lakes to the Great Plains. As M&amp;A activity continues, shippers may see regional LTL pricing stabilize or rise, but not drop, as larger carriers impose more disciplined pricing in local and regional markets. And although the LTL landscape may appear crowded, “there is still room in the market for good carriers,” said Mike Moran, president of Moran Transportation, a regional LTL provider based in Chicago. Moran <a href="https://www.joc.com/article/smaller-us-ltl-carriers-increasingly-merging-in-sink-or-swim-market-5783875">acquired RMX Freight Systems</a> in October, adding three Midwestern states to its LTL network. Pitt Ohio Transportation Group’s purchase of Sutton Transport, completed Jan. 1, is the latest in a string of acquisitions. Terms of the acquisition were not disclosed. Sutton, with 13 terminals across eight states, will bolster the 10-state network of Dohrn Transfer, a separate Pitt Ohio company that has its headquarters in Rock Island, Illinois. “The trend moving forward is going to be increased growth and scale of LTL operations,” said Geoffrey Muessig, chief marketing officer for Pittsburgh-based Pitt Ohio. Wisconsin-based Sutton will help Pitt Ohio build greater density within Dohrn’s existing market footprint, speeding freight and maintaining fluidity as demand grows — as is expected in 2025. “In the regional LTL market, density improves service and results,” said Muessig. “We saw the opportunity to combine the strengths of the Sutton and Dohrn networks.” Pitt Ohio will employ a “three-pronged” approach to the integration, blending sales first, then technology and ultimately operations, he said, adding: “We’re going to take our time.” <h3>More M&amp;A seen ahead </h3>The Pitt Ohio-Sutton deal won’t be the last significant LTL acquisition this year, according to an LTL freight and parcel market consultant. “Count on at least three smaller regional LTL carriers folding into bigger ones in 2025,” said Satish Jindel, president of transportation research firm SJ Consulting Group, which helped broker the Pitt Ohio-Sutton transaction.Jindel pointed to the Moran-RMX deal as well as Knight-Swift Transportation Holdings’ purchase of <a href="https://www.joc.com/article/knight-swift-acquisition-expands-ltl-network-coast-to-coast-5703164">Dependable Highway Express</a> last July as examples of the trend. The Pitt Ohio-Sutton deal is the latest development reshaping LTL networks while helping to broaden the sector’s role in supply chains from ports to last-mile delivery. LTL carriers are broadening their retail, warehousing and specialized services and adding more <a href="https://www.joc.com/article/estes-express-plans-near-port-expansion-as-new-generation-takes-charge-5220656">port transloading business</a>. As shippers work to shorten distances between distribution centers, suppliers and end-customers, LTL carriers see more opportunity to expand beyond their industrial base. The LTL market is already highly consolidated, with the 40 largest LTL providers claiming 84% of total LTL revenue of $62.2 billion in 2023, according to Jindel’s data. The largest Midwestern LTL provider, Dayton Freight System, has about 70 terminals throughout the region and more than $1 billion in annual revenue. Pitt Ohio is the 13th largest US LTL provider ranked by revenue, while Sutton is ranked 31st. Combined, the companies would have had more than $1 billion in revenue in 2023 — coming in just below Dayton Freight in the SJ Consulting Group/Journal of Commerce <a href="https://www.joc.com/article/journal-of-commerce-rankings-ltl-sector-revenue-drops-despite-yellow-distortion-5199865">Top 40 LTL Carrier rankings</a>. “The Top 10 LTL carriers [revenue-wise] are getting bigger, the Top 20 are all aiming to get into the Top 10 and everyone else is scrambling to get into the Top 20,” Muessig said. Larger LTL players have been more focused on growth through real estate purchases, particularly the ongoing auction of hundreds of terminals once operated by Yellow. The bankrupt company still has about 100 leased or owned terminals to auction or sell. Rising operating costs, including the need for more sophisticated technology, are putting more pressure on smaller LTL carriers to find larger partners or purchasers. “I think there’s absolutely going to be more consolidation as the time goes on,” Moran said. Many smaller carriers “are not pricing the freight right,” he said. By that, he means pricing shipments at too low a margin. “After a period of time, they simply can’t survive,” he said. “They need a way out and an acquisition is one.” For that reason, he thinks more regional mergers may be good for the LTL sector in the Midwest and elsewhere, with larger firms imposing more disciplined pricing. “There’s a need for carriers that can provide excellent service at an acceptable price,” Moran said. “‘Acceptable’ is a challenging term at times, depending on whether you’re a carrier or a shipper, but there’s plenty of room out there for good quality carriers.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The US less-than-truckload (LTL) market is entering a new phase of consolidation in early 2025, led by regional LTL trucking companies building greater density and reach. The action is hottest perhaps in the Midwest, where the shutdown of Holland, a regional subsidiary of Yellow, in 2023 left a hole in the LTL market that has not been filled. There is a need for LTL carriers that can provide premium on-time, next-day service at scale across the region stretching from Ohio and the Great Lakes to the Great Plains. As M&A activity continues, shippers may see regional LTL pricing stabilize or rise, but not drop, as larger carriers impose more disciplined pricing in local and regional markets. And although the LTL landscape may appear crowded, “there is still room in the market for good carriers,” said Mike Moran, president of Moran Transportation, a regional LTL provider based in Chicago. Moran acquired RMX Freight Systems in October, adding three Midwestern states to its LTL network. Pitt Ohio Transportation Group’s purchase of Sutton Transport, completed Jan. 1, is the latest in a string of acquisitions. Terms of the acquisition were not disclosed. Sutton, with 13 terminals across eight states, will bolster the 10-state network of Dohrn Transfer, a separate Pitt Ohio company that has its headquarters in Rock Island, Illinois. “The trend moving forward is going to be increased growth and scale of LTL operations,” said Geoffrey Muessig, chief marketing officer for Pittsburgh-based Pitt Ohio. Wisconsin-based Sutton will help Pitt Ohio build greater density within Dohrn’s existing market footprint, speeding freight and maintaining fluidity as demand grows — as is expected in 2025. “In the regional LTL market, density improves service and results,” said Muessig. “We saw the opportunity to combine the strengths of the Sutton and Dohrn networks.” Pitt Ohio will employ a “three-pronged” approach to the integration, blending sales first, then technology and ultimately operations, he said, adding: “We’re going to take our time.” More M&A seen ahead The Pitt Ohio-Sutton deal won’t be the last significant LTL acquisition this year, according to an LTL freight and parcel market consultant. “Count on at least three smaller regional LTL carriers folding into bigger ones in 2025,” said Satish Jindel, president of transportation research firm SJ Consulting Group, which helped broker the Pitt Ohio-Sutton transaction. Jindel pointed to the Moran-RMX deal as well as Knight-Swift Transportation Holdings’ purchase of Dependable Highway Express last July as examples of the trend. The Pitt Ohio-Sutton deal is the latest development reshaping LTL networks while helping to broaden the sector’s role in supply chains from ports to last-mile delivery. LTL carriers are broadening their retail, warehousing and specialized services and adding more port transloading business . As shippers work to shorten distances between distribution centers, suppliers and end-customers, LTL carriers see more opportunity to expand beyond their industrial base. The LTL market is already highly consolidated, with the 40 largest LTL providers claiming 84% of total LTL revenue of $62.2 billion in 2023, according to Jindel’s data. The largest Midwestern LTL provider, Dayton Freight System, has about 70 terminals throughout the region and more than $1 billion in annual revenue. Pitt Ohio is the 13th largest US LTL provider ranked by revenue, while Sutton is ranked 31st. Combined, the companies would have had more than $1 billion in revenue in 2023 — coming in just below Dayton Freight in the SJ Consulting Group/Journal of Commerce Top 40 LTL Carrier rankings . “The Top 10 LTL carriers [revenue-wise] are getting bigger, the Top 20 are all aiming to get into the Top 10 and everyone else is scrambling to get into the Top 20,” Muessig said. Larger LTL players have been more focused on growth through real estate purchases, particularly the ongoing auction of hundreds of terminals once operated by Yellow. The bankrupt company still has about 100 leased or owned terminals to auction or sell. Rising operating costs, including the need for more sophisticated technology, are putting more pressure on smaller LTL carriers to find larger partners or purchasers. “I think there’s absolutely going to be more consolidation as the time goes on,” Moran said. Many smaller carriers “are not pricing the freight right,” he said. By that, he means pricing shipments at too low a margin. “After a period of time, they simply can’t survive,” he said. “They need a way out and an acquisition is one.” For that reason, he thinks more regional mergers may be good for the LTL sector in the Midwest and elsewhere, with larger firms imposing more disciplined pricing. “There’s a need for carriers that can provide excellent service at an acceptable price,” Moran said. “‘Acceptable’ is a challenging term at times, depending on whether you’re a carrier or a shipper, but there’s plenty of room out there for good quality carriers.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

M&A activity redrawing regional LTL map in US Midwest and beyond

<div class="phx-topic abstract-wrapper">More uptake of transactional pricing in the less-than-truckload market is a sign that some carriers are targeting smaller or more infrequent LTL shippers.</div>

More uptake of transactional pricing in the less-than-truckload market is a sign that some carriers are targeting smaller or more infrequent LTL shippers.

<div class="phx-topic">Dynamic pricing tools are allowing less-than-truckload (LTL) shippers and brokers, especially smaller ones, to connect with LTL carriers looking for new sources of freight. That is widening the market reach for LTL carriers that have typically relied almost exclusively on contracts or general tariff rates for pricing. The incremental shift toward more spot pricing in the LTL market speaks less to titanic change in how shippers are procuring than it does about there being easier paths for certain LTL carriers to reach shippers directly. While the vast majority of LTL freight continues to move on shipper-specific contract pricing or more general pricing often used by brokers, there is an uptick in spot, or transactional, pricing in the LTL market, sources tell the Journal of Commerce. Some attribute this uptick primarily to the currently soft LTL market, with regular customers seeking competitive rates outside their contracts, or first-time LTL shippers or brokers using transactional rates to test the LTL waters. US LTL shipment volume in 2024 was relatively flat after a more than 6% drop in 2023, according to Satish Jindel, president of SJ Consulting Group. But digital tools are making transactional pricing easier for carriers to provide to customers, especially infrequent shippers or ones not accustomed to shipping LTL. “We are seeing and hearing of an increased demand and usage of transactional or spot LTL quotes both from discussions with carriers and 3PLs,” said Brian Thompson, chief commercial officer at SMC3, a trucking data and technology provider specializing in LTL pricing. <h3>APIs make LTL accessible </h3>Thompson said the increase in spot-quoted shipments is due to a boost in the availability of application programming interface (API)-based quoting, with more LTL carriers now offering this option for their customers to obtain spot quotes. Many shipper- and broker-focused transportation management systems (TMSs) now offer direct API connections to carriers. Additionally, a number of carriers are requiring or incentivizing their customers to come directly to them for a quote via API, especially 3PL partners offering transactional quotes, Thompson said. Spot quotes used to be limited to large LTL shipments weighing a minimum of 4,000 or 5,000 pounds, but in recent years carriers have expanded the use of those quoting methods to price transactional business from brokers, 3PLs, freight forwarders and small shippers, Thompson added. “Carriers are also starting to utilize more advanced pricing methodologies that incorporate prospective costing of individual shipments and an advanced business rules engine to price individual shipments with more certainty based on the carrier’s needs at the time of quote,” he said. Indeed, LTL carriers have even started to vacuum up shipments in the 500-pound ballpark that ordinarily would have been routed to parcel carriers. <h3>Targeting small shippers </h3>LTL carriers are looking for new customers and new sources of freight, including smaller shippers and even transloaded international freight. “In the last quarter we grew shipment count with small customers by more than 10%,” Mario Harik, CEO of XPO, the third-largest US LTL provider, told the Journal of Commerce. XPO has invested in technology, real estate and in its sales force, increasing its number of sales agents by 25% in 2024 to pursue smaller shippers, Harik said, adding contractual rates represent about 80% of XPO’s business. Shippers can obtain rate quotes based on pricing agreements directly from XPO’s website. The development of transactional pricing tools accomplishes a couple of key goals for certain LTL carriers. It lets them lure in shippers that would have been outside their traditional customer bases, either in terms of the size, number or frequency of shipments. Secondly, it lets carriers work directly with shippers, taking that business out of the hands of brokers. ”Carriers dynamically adjust these rates,” said Curtis Garrett, CEO of LTL technology provider RateHero and a consultant to the LTL industry. “It’s a lever they have to fill capacity.” Garrett said the newest transactional pricing development is that some carriers are using it as a quicker way to onboard customers, either direct to shipper or through small and midsized brokers. “It cuts down on the admin back and forth and length of time to get a new customer set up and quoting,” he said. “Some carriers are putting this in the hands of their sales reps when they go visit a prospect. They can set them up and turn pricing on for them on the spot, which means more business quicker, but it usually falls into that transactional or dynamic bucket.” Not all LTL carriers are going this route, however. An LTL carrier executive who asked not to be identified told the Journal of Commerce they’re not seeing any major shift away from contractual business but added that the carrier doesn’t encourage that type of business, either. The executive said brokers are getting a bit more transactional business and that some LTL freight that moved to full truckload when truckload rates were low may be shifting back to LTL in drips and drabs. “Everybody has a TMS now, and that makes tendering an irregular, smaller LTL shipment outside of a contract easier,” the source said. <h3>A more ‘layered’ market </h3>Wider access to TMSs, whether it’s a shipper TMS that can manage across multiple modes or an LTL carrier TMS through which dynamic pricing can be offered, is impacting the market. “The rapid acceleration of technology, particularly through TMSs that offer multiple rate options, has created new opportunities for smaller clients,” said Dean Jones, chief commercial officer at third-party logistics provider AFS Logistics. “These systems allow them to access competitive rates without the need for traditional contractual arrangements.” Jones said 3PLs are also luring shippers outside contractual rate structures through ancillary services, whether via access to diverse rate options, a bundled TMS, freight audit and payment (FAP) or fully managed transportation. “This bundled approach eliminates the need for individual rate negotiations and provides clients with a streamlined, end-to-end solution powered by transactional rates embedded within the broader program,” he said. Jones added, however, that the majority of AFS’s clients operate under so-called client-specific pricing (CSP) contracts. “Across our customer base we don’t see any transactional spot quoting happening with LTL carriers,” said Shannon Vaillancourt, CEO of RateLinx, which provides TMS and freight audit tools to shippers. “All of our customers are on contract rates and are rate-shopping between the carriers.” Vaillancourt said customers he spoke to about an increase in transactional rates were skeptical about relying on spot quotes. “They really like the certainty of their contract rates and also were very confident that their contract rates were the ‘best’ rate out there,” he said. The uptick in transactional rates then speaks to a more layered market, with some carriers embracing dynamic rate availability and others more than happy to rely wholly on contractual pricing for shippers. The emergence of MyCarrier, a technology platform that lets LTL carriers provide a digital quoting and booking interface direct to shippers, is an example of this evolution. Last Thursday, FreightWise announced a partnership to incorporate rates from LTL carrier Estes directly into its TMS and that of Kuebix, a shipper-oriented, LTL-focused TMS that FreightWise acquired in 2023. Garrett said his company is working with a few LTL carriers on streamlining the process to get small and midsized brokers set up so they can push volume to those LTL carriers. The intent is to use technology to offset the high cost and risk that carriers have historically seen with small or infrequent LTL customers due to poor data and shipping practices. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. Senior Editor William B. Cassidy contributed to this report. </div>

Dynamic pricing tools are allowing less-than-truckload (LTL) shippers and brokers, especially smaller ones, to connect with LTL carriers looking for new sources of freight. That is widening the market reach for LTL carriers that have typically relied almost exclusively on contracts or general tariff rates for pricing. The incremental shift toward more spot pricing in the LTL market speaks less to titanic change in how shippers are procuring than it does about there being easier paths for certain LTL carriers to reach shippers directly. While the vast majority of LTL freight continues to move on shipper-specific contract pricing or more general pricing often used by brokers, there is an uptick in spot, or transactional, pricing in the LTL market, sources tell the Journal of Commerce. Some attribute this uptick primarily to the currently soft LTL market, with regular customers seeking competitive rates outside their contracts, or first-time LTL shippers or brokers using transactional rates to test the LTL waters. US LTL shipment volume in 2024 was relatively flat after a more than 6% drop in 2023, according to Satish Jindel, president of SJ Consulting Group. But digital tools are making transactional pricing easier for carriers to provide to customers, especially infrequent shippers or ones not accustomed to shipping LTL. “We are seeing and hearing of an increased demand and usage of transactional or spot LTL quotes both from discussions with carriers and 3PLs,” said Brian Thompson, chief commercial officer at SMC3, a trucking data and technology provider specializing in LTL pricing. APIs make LTL accessible Thompson said the increase in spot-quoted shipments is due to a boost in the availability of application programming interface (API)-based quoting, with more LTL carriers now offering this option for their customers to obtain spot quotes. Many shipper- and broker-focused transportation management systems (TMSs) now offer direct API connections to carriers. Additionally, a number of carriers are requiring or incentivizing their customers to come directly to them for a quote via API, especially 3PL partners offering transactional quotes, Thompson said. Spot quotes used to be limited to large LTL shipments weighing a minimum of 4,000 or 5,000 pounds, but in recent years carriers have expanded the use of those quoting methods to price transactional business from brokers, 3PLs, freight forwarders and small shippers, Thompson added. “Carriers are also starting to utilize more advanced pricing methodologies that incorporate prospective costing of individual shipments and an advanced business rules engine to price individual shipments with more certainty based on the carrier’s needs at the time of quote,” he said. Indeed, LTL carriers have even started to vacuum up shipments in the 500-pound ballpark that ordinarily would have been routed to parcel carriers. Targeting small shippers LTL carriers are looking for new customers and new sources of freight, including smaller shippers and even transloaded international freight. “In the last quarter we grew shipment count with small customers by more than 10%,” Mario Harik, CEO of XPO, the third-largest US LTL provider, told the Journal of Commerce. XPO has invested in technology, real estate and in its sales force, increasing its number of sales agents by 25% in 2024 to pursue smaller shippers, Harik said, adding contractual rates represent about 80% of XPO’s business. Shippers can obtain rate quotes based on pricing agreements directly from XPO’s website. The development of transactional pricing tools accomplishes a couple of key goals for certain LTL carriers. It lets them lure in shippers that would have been outside their traditional customer bases, either in terms of the size, number or frequency of shipments. Secondly, it lets carriers work directly with shippers, taking that business out of the hands of brokers. ”Carriers dynamically adjust these rates,” said Curtis Garrett, CEO of LTL technology provider RateHero and a consultant to the LTL industry. “It’s a lever they have to fill capacity.” Garrett said the newest transactional pricing development is that some carriers are using it as a quicker way to onboard customers, either direct to shipper or through small and midsized brokers. “It cuts down on the admin back and forth and length of time to get a new customer set up and quoting,” he said. “Some carriers are putting this in the hands of their sales reps when they go visit a prospect. They can set them up and turn pricing on for them on the spot, which means more business quicker, but it usually falls into that transactional or dynamic bucket.” Not all LTL carriers are going this route, however. An LTL carrier executive who asked not to be identified told the Journal of Commerce they’re not seeing any major shift away from contractual business but added that the carrier doesn’t encourage that type of business, either. The executive said brokers are getting a bit more transactional business and that some LTL freight that moved to full truckload when truckload rates were low may be shifting back to LTL in drips and drabs. “Everybody has a TMS now, and that makes tendering an irregular, smaller LTL shipment outside of a contract easier,” the source said. A more ‘layered’ market Wider access to TMSs, whether it’s a shipper TMS that can manage across multiple modes or an LTL carrier TMS through which dynamic pricing can be offered, is impacting the market. “The rapid acceleration of technology, particularly through TMSs that offer multiple rate options, has created new opportunities for smaller clients,” said Dean Jones, chief commercial officer at third-party logistics provider AFS Logistics. “These systems allow them to access competitive rates without the need for traditional contractual arrangements.” Jones said 3PLs are also luring shippers outside contractual rate structures through ancillary services, whether via access to diverse rate options, a bundled TMS, freight audit and payment (FAP) or fully managed transportation. “This bundled approach eliminates the need for individual rate negotiations and provides clients with a streamlined, end-to-end solution powered by transactional rates embedded within the broader program,” he said. Jones added, however, that the majority of AFS’s clients operate under so-called client-specific pricing (CSP) contracts. “Across our customer base we don’t see any transactional spot quoting happening with LTL carriers,” said Shannon Vaillancourt, CEO of RateLinx, which provides TMS and freight audit tools to shippers. “All of our customers are on contract rates and are rate-shopping between the carriers.” Vaillancourt said customers he spoke to about an increase in transactional rates were skeptical about relying on spot quotes. “They really like the certainty of their contract rates and also were very confident that their contract rates were the ‘best’ rate out there,” he said. The uptick in transactional rates then speaks to a more layered market, with some carriers embracing dynamic rate availability and others more than happy to rely wholly on contractual pricing for shippers. The emergence of MyCarrier, a technology platform that lets LTL carriers provide a digital quoting and booking interface direct to shippers, is an example of this evolution. Last Thursday, FreightWise announced a partnership to incorporate rates from LTL carrier Estes directly into its TMS and that of Kuebix, a shipper-oriented, LTL-focused TMS that FreightWise acquired in 2023. Garrett said his company is working with a few LTL carriers on streamlining the process to get small and midsized brokers set up so they can push volume to those LTL carriers. The intent is to use technology to offset the high cost and risk that carriers have historically seen with small or infrequent LTL customers due to poor data and shipping practices. Contact Eric Johnson at eric.johnson@spglobal.com . Senior Editor William B. Cassidy contributed to this report.

Logistics Technology News

Truck brokers

US LTL carriers widen market reach through spot pricing technology

<div class="phx-topic abstract-wrapper">US energy and climate regulations and policies are expected to shift with the incoming Trump administration, although the magnitude of that shift is still unknown.</div>

US energy and climate regulations and policies are expected to shift with the incoming Trump administration, although the magnitude of that shift is still unknown.

<div class="phx-topic">The big picture: A massive slate of energy, infrastructure, and industrial projects in the US, including chip manufacturing, LNG, power generation, carbon capture, wind energy and more, is fueling optimism among project cargo logistics providers. However, uncertainty around potential changes in government funding, focus and regulations, including the threat of new tariffs, are tempering that optimism, particularly for projects related to clean energy. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5914608_0.1.png"></img></div>A look back: As a range of energy and manufacturing projects gained traction in 2024, project cargo shippers and forwarders sounded downright chipper. “Things are breaking loose,” one shipper told the Journal of Commerce. Many US projects had been galvanized by billions of dollars in tax credits, grants, and loans made available by the Biden administration, including $369 billion in Inflation Reduction Act (IRA) funding, $412 billion in Department of Energy (DOE) loan authorizations that includes some IRA funds and $39 billion in CHIPS and Science grants intended to boost investment. New chip manufacturing projects worth nearly $450 billion had been announced by mid-2024, according to the Semiconductor Industry Association. Capital spending in North America on just renewable power generation was expected to reach $73.2 billion in 2024, $80.9 billion in 2025 and $92.5 billion in 2026, according to forecasts compiled by S&amp;P Global, parent company of the Journal of Commerce, prior to the US presidential election. Capital spending on conventional power generation, including nuclear and gas, was forecast at $8.6 billion in 2024, $7.1 billion in 2025 and $8 billion in 2026. The projects supported by this spending will take years to roll out, but many supported by Biden-era funding could be slowed, thwarted or redirected by policy changes imposed by a second Trump administration. A look ahead: US energy and climate regulations and policies are expected to shift with the incoming administration, although the magnitude of that shift is still unknown. “The most likely trajectory for the next four years is one of looser regulation, tighter trade restrictions and championing of fossil fuels,” noted a report from S&amp;P Global Energy View. While a true repeal of the IRA is not possible, Congress can undo, modify or slow-walk some portions of the program. DOE loans are more vulnerable, as billions in allocated funding were still tied up pre-closure negotiations when Donald Trump won the election, according to Kenneth Hansen, a partner in the projects group of Norton Rose Fulbright. Trump’s eventual Secretary of Energy — he has nominated oil industry executive Chris Wright — can cancel DOE applications that have not reached closing provisions status for any reason, Hansen told the Journal of Commerce. Once contracts are signed, awards are difficult to pull back, but as things stand now, there are “strong reasons for being concerned that [this funding] is at risk,” he said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="fe42f2b0-af0b-44ee-bea1-3e8f7e0cf3fe"></dynamic-object></div>The next inflection: Breakbulk and project cargo shippers are also bracing for potential effects from Trump-era tariffs. While costs matter, a more fundamental concern is “unpredictability,” a project shipper who asked not to be identified told the Journal of Commerce. Project supply chains take years to establish, and they can’t be reconfigured quickly in response to increased import tariffs. Some manufactured pieces take two years from design to completion and are manufactured in specialized yards around the world. “We can’t navigate around the tariffs,” the shipper said. “The companies that can make what we need are in the single digits, and it’s a manufacturing base that does not exist in the US.” Contact Janet Nodar at <a href="mailto:janet.nodar@spglobal.com">janet.nodar@spglobal.com.</a></div>

The big picture: A massive slate of energy, infrastructure, and industrial projects in the US, including chip manufacturing, LNG, power generation, carbon capture, wind energy and more, is fueling optimism among project cargo logistics providers. However, uncertainty around potential changes in government funding, focus and regulations, including the threat of new tariffs, are tempering that optimism, particularly for projects related to clean energy. A look back: As a range of energy and manufacturing projects gained traction in 2024, project cargo shippers and forwarders sounded downright chipper. “Things are breaking loose,” one shipper told the Journal of Commerce. Many US projects had been galvanized by billions of dollars in tax credits, grants, and loans made available by the Biden administration, including $369 billion in Inflation Reduction Act (IRA) funding, $412 billion in Department of Energy (DOE) loan authorizations that includes some IRA funds and $39 billion in CHIPS and Science grants intended to boost investment. New chip manufacturing projects worth nearly $450 billion had been announced by mid-2024, according to the Semiconductor Industry Association. Capital spending in North America on just renewable power generation was expected to reach $73.2 billion in 2024, $80.9 billion in 2025 and $92.5 billion in 2026, according to forecasts compiled by S&P Global, parent company of the Journal of Commerce, prior to the US presidential election. Capital spending on conventional power generation, including nuclear and gas, was forecast at $8.6 billion in 2024, $7.1 billion in 2025 and $8 billion in 2026. The projects supported by this spending will take years to roll out, but many supported by Biden-era funding could be slowed, thwarted or redirected by policy changes imposed by a second Trump administration. A look ahead: US energy and climate regulations and policies are expected to shift with the incoming administration, although the magnitude of that shift is still unknown. “The most likely trajectory for the next four years is one of looser regulation, tighter trade restrictions and championing of fossil fuels,” noted a report from S&P Global Energy View. While a true repeal of the IRA is not possible, Congress can undo, modify or slow-walk some portions of the program. DOE loans are more vulnerable, as billions in allocated funding were still tied up pre-closure negotiations when Donald Trump won the election, according to Kenneth Hansen, a partner in the projects group of Norton Rose Fulbright. Trump’s eventual Secretary of Energy — he has nominated oil industry executive Chris Wright — can cancel DOE applications that have not reached closing provisions status for any reason, Hansen told the Journal of Commerce. Once contracts are signed, awards are difficult to pull back, but as things stand now, there are “strong reasons for being concerned that [this funding] is at risk,” he said. The next inflection: Breakbulk and project cargo shippers are also bracing for potential effects from Trump-era tariffs. While costs matter, a more fundamental concern is “unpredictability,” a project shipper who asked not to be identified told the Journal of Commerce. Project supply chains take years to establish, and they can’t be reconfigured quickly in response to increased import tariffs. Some manufactured pieces take two years from design to completion and are manufactured in specialized yards around the world. “We can’t navigate around the tariffs,” the shipper said. “The companies that can make what we need are in the single digits, and it’s a manufacturing base that does not exist in the US.” Contact Janet Nodar at janet.nodar@spglobal.com.

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<div class="phx-topic abstract-wrapper">Increased orders and decreased recycling in 2024 helped capacity, but the volumes are still not where they need to be to balance the MPV fleet.</div>

Increased orders and decreased recycling in 2024 helped capacity, but the volumes are still not where they need to be to balance the MPV fleet.

<div class="phx-topic">An already firm multipurpose ship market will strengthen further in 2025, keeping freight rates elevated and capacity tight, market sources say.Shipbroker Toepfer Transport expects demand for multipurpose vessel (MPV) tonnage to “significantly increase” beginning in the third quarter of 2025. Consequently, its Multipurpose Index (TMI) is forecast to rise from its December 2024 level of $13,110 per day by the second half of 2025, Toepfer said in its year-end Multipurpose Shipping Report. The average TMI rate for 2024 was $12,605, well above the 10-year average of $10,193. Toepfer’s TMI is based on expected average rates for six- to 12-month time charters for 12,500-deadweight-ton (dwt) “F-Type” vessels with a safe working load of 240 to 360 metric tons, as reported to Toepfer by owners and operators. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ea382181-08cd-4298-912f-87c79836bcf7"></dynamic-object></div>Freight rates are rising as the gap between ship supply and cargo demand widens with aging tonnage partly to blame, according to a freight forwarder. Kai vonTaube, head of global chartering at deugro, told the Journal of Commerce that the MPV fleet is heavily weighted toward the 11- to 15-year age bracket. Toepfer reported 147 ships totaling 2.62 million dwt in that age range in its December report, equal to 15.79% of the total fleet. vonTaube said that the average age within that bracket is nearer to 14 to 15 years rather than 10, so vessels are regularly tipping over into the next bracket. This has commercial implications, he said. “Many clients consider vessels older than 15 years as overage, and they don’t want them,” vonTaube said. “So, we have increasing demand at the same time as the MPV fleet is shrinking. New building activity makes up for 3% to 4% of the fleet right now. That’s certainly not enough.”Increased orders and decreased recycling in 2024 have helped, but the volumes are still not where they need to be to balance the MPV fleet. The number of new MPVs delivered in 2024 increased from six to 13, and the number of ships sent for recycling increased from four to 10 year over year, Toepfer said. vonTaube said that the problem with capacity will not be resolved in 2025. “In fact, it will get worse,” he said, estimating that over half of the world’s MPV fleet will be overaged by 2028. Incoming environmental regulations will further reduce MPV fleet capacity, vonTaube said.“There is certainly a fair chunk of older MPV vessels that will eventually be banned from certain regions, which will again artificially reduce the capacity of the MPV fleet,” he said. <h3>Middle East projects a market driver</h3>The continuing avoidance of the Red Sea is further exacerbating the ship supply/demand imbalance. In a December report, Oslo, Norway-based shipping data analyst Esgian said in 2024 most ro/ro carriers opted for the longer Cape of Good Hope route for security reasons. “The extended sailing time restricts the global fleet’s cargo-carrying ability by as much as +/-5%, equating to about 35 vessels being sidelined annually,” Esgian said. “The continued reliance on the Cape route has tangible negative effects on both commercial activities and CO2 emissions.”The analyst expects a “significant impact” on the supply/demand balance for ro/ro vessels once the situation in the Red Sea stabilizes.On the cargo side, the Middle East and renewables are set to be significant drivers for breakbulk cargo volumes in 2025. Mega projects in the Middle East are already in play, or ready to be executed in 2025, adding to MPV cargo demand this year. ”The contracts are signed, the equipment is purchased and under production,” vonTaube said. “It’s not something at the end of the rainbow everyone is hoping for.”That has led to a shift in trade trends for MPVs. While the Middle East remains a huge import region, old equipment is now coming out of the region and heading to Asia for refurbishment, replacement or repair, or into the secondhand market. “This will increase further into 2025,” vonTaube said. Some regions, including North Europe, are expected to remain weak in 2025, and possibly into 2026. But a constant increase in freight rates in Asia and longer lead times to secure a ship are set to continue, vonTaube said. “If I needed to secure space for 10,000 tons of project cargo [in Asia] a year ago, a three-week lead time was enough,” he said. “Now I need almost double that to find the vessel.”Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

An already firm multipurpose ship market will strengthen further in 2025, keeping freight rates elevated and capacity tight, market sources say. Shipbroker Toepfer Transport expects demand for multipurpose vessel (MPV) tonnage to “significantly increase” beginning in the third quarter of 2025. Consequently, its Multipurpose Index (TMI) is forecast to rise from its December 2024 level of $13,110 per day by the second half of 2025, Toepfer said in its year-end Multipurpose Shipping Report. The average TMI rate for 2024 was $12,605, well above the 10-year average of $10,193. Toepfer’s TMI is based on expected average rates for six- to 12-month time charters for 12,500-deadweight-ton (dwt) “F-Type” vessels with a safe working load of 240 to 360 metric tons, as reported to Toepfer by owners and operators. Freight rates are rising as the gap between ship supply and cargo demand widens with aging tonnage partly to blame, according to a freight forwarder. Kai vonTaube, head of global chartering at deugro, told the Journal of Commerce that the MPV fleet is heavily weighted toward the 11- to 15-year age bracket. Toepfer reported 147 ships totaling 2.62 million dwt in that age range in its December report, equal to 15.79% of the total fleet. vonTaube said that the average age within that bracket is nearer to 14 to 15 years rather than 10, so vessels are regularly tipping over into the next bracket. This has commercial implications, he said. “Many clients consider vessels older than 15 years as overage, and they don’t want them,” vonTaube said. “So, we have increasing demand at the same time as the MPV fleet is shrinking. New building activity makes up for 3% to 4% of the fleet right now. That’s certainly not enough.” Increased orders and decreased recycling in 2024 have helped, but the volumes are still not where they need to be to balance the MPV fleet. The number of new MPVs delivered in 2024 increased from six to 13, and the number of ships sent for recycling increased from four to 10 year over year, Toepfer said. vonTaube said that the problem with capacity will not be resolved in 2025. “In fact, it will get worse,” he said, estimating that over half of the world’s MPV fleet will be overaged by 2028. Incoming environmental regulations will further reduce MPV fleet capacity, vonTaube said. “There is certainly a fair chunk of older MPV vessels that will eventually be banned from certain regions, which will again artificially reduce the capacity of the MPV fleet,” he said. Middle East projects a market driver The continuing avoidance of the Red Sea is further exacerbating the ship supply/demand imbalance. In a December report, Oslo, Norway-based shipping data analyst Esgian said in 2024 most ro/ro carriers opted for the longer Cape of Good Hope route for security reasons. “The extended sailing time restricts the global fleet’s cargo-carrying ability by as much as +/-5%, equating to about 35 vessels being sidelined annually,” Esgian said. “The continued reliance on the Cape route has tangible negative effects on both commercial activities and CO2 emissions.” The analyst expects a “significant impact” on the supply/demand balance for ro/ro vessels once the situation in the Red Sea stabilizes. On the cargo side, the Middle East and renewables are set to be significant drivers for breakbulk cargo volumes in 2025. Mega projects in the Middle East are already in play, or ready to be executed in 2025, adding to MPV cargo demand this year. ”The contracts are signed, the equipment is purchased and under production,” vonTaube said. “It’s not something at the end of the rainbow everyone is hoping for.” That has led to a shift in trade trends for MPVs. While the Middle East remains a huge import region, old equipment is now coming out of the region and heading to Asia for refurbishment, replacement or repair, or into the secondhand market. “This will increase further into 2025,” vonTaube said. Some regions, including North Europe, are expected to remain weak in 2025, and possibly into 2026. But a constant increase in freight rates in Asia and longer lead times to secure a ship are set to continue, vonTaube said. “If I needed to secure space for 10,000 tons of project cargo [in Asia] a year ago, a three-week lead time was enough,” he said. “Now I need almost double that to find the vessel.” Contact Carly Fields at carly.fields@spglobal.com .

Capacity-bound MPV operators poised for strong year amid firming rates

<div class="phx-topic abstract-wrapper">The IMO tends to move at a glacial pace, but with 2030 emissions targets looming, it no longer has that luxury.</div>

The IMO tends to move at a glacial pace, but with 2030 emissions targets looming, it no longer has that luxury.

<div class="phx-topic">The big picture: The need to narrow the price gap between fossil fuels and cleaner alternatives is the single most important challenge facing the maritime industry as it strives to meet interim emissions targets on the way to reaching net-zero by 2050. Making renewable energy more competitive will drive up investment in clean technologies and scale up sustainable fuel production, but it will rely on increased government support to bridge the operational cost gap of transitioning to alternative energy sources. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5914605_0.1.png"></img></div>A look back: Most ocean carriers have set their targets for achieving net-zero emissions at 2040 or 2045, but to achieve those ambitious goals, they must first hit the interim emissions targets of the International Maritime Organization (IMO) that require a 20% cut — striving for 30% — by 2030. That’s going to be difficult, however, given a lack of clarity around which green fuel or fuels will be supplied at an adequate scale to power the global fleet. That uncertainty has been evident in recent container ship orders, with 80% of the 1.7 million TEUs in vessel capacity ordered in the first 10 months of 2024 capable of sailing on methanol or LNG, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. And even as carriers hedged their ship order bets on fuels for which they have been able to secure supply agreements, carbon dioxide emissions rose sharply in 2024. Starting in late 2023, the diversion of vessels around southern Africa due to the Red Sea crisis added two weeks and over 2,000 nautical miles to voyages that normally would have transited the Suez Canal. The combination of these longer voyages, higher sailing speeds necessary for ships to maintain their schedules and resulting port congestion in Asia and Europe caused greenhouse gas (GHG) emissions to return to the peak levels recorded in 2008, according to data compiled by rate benchmarking platform Xeneta. A look ahead: The rising emissions are a worrying development for the IMO as pressure builds from across the maritime supply chain for it to adopt and roll out mid-term measures including the establishment of a global fuel standard for marine fuels and a global pricing mechanism for GHG emissions. With 176 member states — all with different agendas — the IMO tends to move at a glacial pace when adopting global regulations, but with just five years to reach 2030 emissions-reduction targets, it no longer has that luxury. Legal text for the mid-term measures must be thrashed out and approved at the next Marine Environment Protection Committee (MEPC) meeting in April 2025 so the measures can be implemented in October if the maritime industry is to have any hope of achieving its 2030 targets. The next inflection: A return to the shorter Suez Canal route, which is by no means assured in 2025, would give the maritime industry a significant leg up in its efforts to meet its looming GHG targets. Carriers would immediately slow down ships, drastically reducing fuel consumption, and the release of additional capacity would allow them to send large swathes of older, less-efficient tonnage to the demolition yard. But ultimately, closing the yawning gap in pricing between traditional and alternative fuels with a polluter-pays mechanism that taxes GHG emissions and places all carriers on the same playing field, whatever future fuel pathway they decide to sail down, is the only way the industry can meet those targets. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

The big picture: The need to narrow the price gap between fossil fuels and cleaner alternatives is the single most important challenge facing the maritime industry as it strives to meet interim emissions targets on the way to reaching net-zero by 2050. Making renewable energy more competitive will drive up investment in clean technologies and scale up sustainable fuel production, but it will rely on increased government support to bridge the operational cost gap of transitioning to alternative energy sources. A look back: Most ocean carriers have set their targets for achieving net-zero emissions at 2040 or 2045, but to achieve those ambitious goals, they must first hit the interim emissions targets of the International Maritime Organization (IMO) that require a 20% cut — striving for 30% — by 2030. That’s going to be difficult, however, given a lack of clarity around which green fuel or fuels will be supplied at an adequate scale to power the global fleet. That uncertainty has been evident in recent container ship orders, with 80% of the 1.7 million TEUs in vessel capacity ordered in the first 10 months of 2024 capable of sailing on methanol or LNG, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. And even as carriers hedged their ship order bets on fuels for which they have been able to secure supply agreements, carbon dioxide emissions rose sharply in 2024. Starting in late 2023, the diversion of vessels around southern Africa due to the Red Sea crisis added two weeks and over 2,000 nautical miles to voyages that normally would have transited the Suez Canal. The combination of these longer voyages, higher sailing speeds necessary for ships to maintain their schedules and resulting port congestion in Asia and Europe caused greenhouse gas (GHG) emissions to return to the peak levels recorded in 2008, according to data compiled by rate benchmarking platform Xeneta. A look ahead: The rising emissions are a worrying development for the IMO as pressure builds from across the maritime supply chain for it to adopt and roll out mid-term measures including the establishment of a global fuel standard for marine fuels and a global pricing mechanism for GHG emissions. With 176 member states — all with different agendas — the IMO tends to move at a glacial pace when adopting global regulations, but with just five years to reach 2030 emissions-reduction targets, it no longer has that luxury. Legal text for the mid-term measures must be thrashed out and approved at the next Marine Environment Protection Committee (MEPC) meeting in April 2025 so the measures can be implemented in October if the maritime industry is to have any hope of achieving its 2030 targets. The next inflection: A return to the shorter Suez Canal route, which is by no means assured in 2025, would give the maritime industry a significant leg up in its efforts to meet its looming GHG targets. Carriers would immediately slow down ships, drastically reducing fuel consumption, and the release of additional capacity would allow them to send large swathes of older, less-efficient tonnage to the demolition yard. But ultimately, closing the yawning gap in pricing between traditional and alternative fuels with a polluter-pays mechanism that taxes GHG emissions and places all carriers on the same playing field, whatever future fuel pathway they decide to sail down, is the only way the industry can meet those targets. Contact Greg Knowler at greg.knowler@spglobal.com.

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Suez diversions, lack of IMO agreement put 2030 emissions targets at risk

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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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The Journal of Commerce’s supply chain news and analysis impacting the management of end-to-end supply chains reports on supply chain strategies, cargo visibility, inventory trends, sourcing, customs certification and contract logistics. Supply chain news coverage also delves into refrigerated shipping advancements and management of inventory status, regulatory updates and government funding projects.

Stay informed with the latest regulation news and trade updates. Explore comprehensive transportation news and trade regulations today.

Transport, Trade and Regulation News | Journal of Commerce

Our logistics technology news include logistics technology startups, solutions, and the impact of technology on logistics and supply chain management.

Logistics Technology News | Journal of Commerce

A thorough cool cargoes news by Journal of Commerce. Learn about the latest trends in refrigerated cargo transportation, weight capacity, technology, and more.

Cool Cargoes News | Journal of Commerce

Cool Cargo News

Journal of Commerce keeps you informed on the latest last mile news with comprehensive coverage of carriers, logistics, and last mile transportation solutions.

Last Mile News | Journal of Commerce

Last Mile News

Discover the latest industrial real estate news and trends. Covering projects, real estate supply chain, logistics, pricing, cross dock facilities, and more.

Industrial Real Estate News | Journal of Commerce

Industrial Real Estate News

Stay updated on supply chain strategies, cargo visibility, inventory trends and more with our comprehensive supply chain news and analysis.

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More News & Analysis

M&A activity redrawing regional LTL map in US Midwest and beyond

US LTL carriers widen market reach through spot pricing technology

Project cargo optimism buffeted by policy ‘unpredictability’