image (2).png

Subscription Sale Pop Up - Free/Free Trials

Events

Maritime

Surface

Air Cargo

Magazine

Supply chain

Gateway

Breakbulk News

Container Shipping News

Port News

Trucking News

Rail News

Air Cargo Forwarder News

Air Cargo Carriers News

Transport, Trade and Regulation News

Logistics Technology News

Cool Cargo News

Last Mile News

Industrial Real Estate News

Special Reports

Quarterly Intelligence Report

Breakbulk carriers

Ro/ro cargo

Energy projects

Heavy-haul transport

Project cargo

Container lines

Trans-Atlantic

Forwarding

Asia-Europe

Trans-Pacific

Drayage

Port infrastructure

Breakbulk ports

North American ports

Marine terminals

International ports

Longshore labor

Truckload

Truck brokers

Flatbed

Trucking labor

North-American rail

International rail

Intermodal providers

Intermodal Savings Index

Domestic Intermodal Service Scorecard

Breakbulk Quarterly Intelligence

<div class="phx-topic abstract-wrapper">The Intermodal Association of North America’s board of directors has elected Barry D. Michaels, Union Pacific Railroad Company’s vice president of intermodal operations, as chairman.</div>

The Intermodal Association of North America’s board of directors has elected Barry D. Michaels, Union Pacific Railroad Company’s vice president of intermodal operations, as chairman.

<div>The Intermodal Association of North America’s board of directors <a>has elected</a> Barry D. Michaels, Union Pacific Railroad Company’s vice president of intermodal operations, as chairman.Michaels succeeds David Manning, president of Tennessee Express, who remains a member of the board. Michaels previously served as chair in 2004 and 2005.The 13-member board elected Phil Shook, director of intermodal operations at C.H. Robinson Worldwide, as IANA’s 2013 vice chairman, and Don Aiken, vice president of intermodal operations at Schneider National, as treasurer.The board also re-elected Kevin Lhotak, president of Reliable Transportation Specialists, and Michael Wilson, senior vice president at Hamburg Sud North America,...

The Intermodal Association of North America’s board of directors has elected Barry D. Michaels, Union Pacific Railroad Company’s vice president of intermodal operations, as chairman. Michaels succeeds David Manning, president of Tennessee Express, who remains a member of the board. Michaels previously served as chair in 2004 and 2005. The 13-member board elected Phil Shook, director of intermodal operations at C.H. Robinson Worldwide, as IANA’s 2013 vice chairman, and Don Aiken, vice president of intermodal operations at Schneider National, as treasurer. The board also re-elected Kevin Lhotak, president of Reliable Transportation Specialists, and Michael Wilson, senior vice president at Hamburg Sud North America, for three-year terms.

Intermodal Association of North America Announces Board Changes

<div class="phx-topic abstract-wrapper">Container lines are looking to capitalize on a ramp-up in Asia–US bookings during the 90-day tariff reduction that followed Monday’s deal between the Trump administration and China.</div>

Container lines are looking to capitalize on a ramp-up in Asia–US bookings during the 90-day tariff reduction that followed Monday’s deal between the Trump administration and China.

Feature image

<div class="phx-topic">Major container lines are seeking spot rates on service from China to the US West Coast that are more than double the current level as they look to capitalize on an anticipated surge of volume triggered by a 90-day pause in the steepest US tariffs. Container spot rates are already spiking following the Monday announcement, and if carriers are successful in imposing a combination of general rate increases (GRIs) and peak season surcharges (PSSs) set to take effect June 1, pricing would jump to roughly $6,000 per FEU to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers regardless of size, while PSSs are only imposed on smaller shippers that don’t have agreements with carriers prohibiting their use. Momentum appears to be on the carriers’ side. Hapag-Lloyd said it has seen <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">a 50% increase in bookings</a> from China to the US this week, while forwarders have reported jumps as high as 100%. Given the short window of the agreement, and the need to ship fall and holiday merchandise before tariffs may increase if the deal falls apart, forwarders report that bookings are soaring. “It’s shades of 2024,” Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV, told the Journal of Commerce, referring to last summer, when container spot rates jumped to upwards of $8,000 per FEU to the West Coast during acrimonious dockworker contract negotiations on the East and Gulf coasts. As of Wednesday, average spot rates from Asia to the West Coast rose to $2,567 per FEU, up from $1,600 per FEU at the end of March, while Asia–East Coast pricing rose to $3,567 per FEU from $2,600 per FEU during the same period, according to Platts, a sister product of the Journal of Commerce within S&amp;P Global. Last year, spot rates <a href="https://www.joc.com/article/carriers-to-deploy-extra-loaders-to-los-angeles-long-beach-amid-import-surge-5714861">peaked at $8,133 per FEU to the West Coast</a> and $10,133 per FEU to the East Coast in the week of July 5. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="46178020-96a6-492f-89e0-3e6fc2624113"></dynamic-object></div>Carriers Hapag-Lloyd, Mediterranean Shipping Co. (MSC), CMA CGM, Ocean Network Express (ONE) and Zim Integrated Shipping have filed spot rates of $6,000 per FEU starting June 1. Another round of increases is poised for June 15, with Hapag-Lloyd, MSC and CMA CGM set to increase rates to $8,000 per FEU, according to rate notices from the carriers. “Of course, these are just their filings,” noted a forwarder who asked not to be identified. “We will see what levels they really pass on once we get to these dates.” <h3>Bookings from China surge </h3>The carrier rate increases appear to be supported by a spike in bookings since the US and China announced an agreement that reduced US tariffs on Chinese goods from 145% to 30% for at least the next 90 days. “There’s definitely been a ramp up in orders during this 90-day window,” said Robert Khachatryan, CEO of forwarder Freight Right Global Logistics. Khachatryan explained that importers appear to be in a rush to get their shipments into the US while the 30% tariff on China is in effect. They are concerned that after 90 days, if a permanent agreement is not reached, the tariffs could shoot back up. “Everyone seems to be concerned with the 90-day window,” Khachatryan said. Revelyst, an importer of outdoor apparel, paused its purchase orders with factories in China in April, said John Pace, senior manager of global logistics. Now, the company is prioritizing those shipments that are ready to move, to be followed by shipments that will depart in the coming weeks as factories ramp up production. A carrier executive who asked not to be identified told the Journal of Commerce that factories in China should be able to quickly increase production as most vendors paused or slowed down production after the 145% duty went into effect in early April, rather than completely shutting down and laying off staff. Like Khachatryan, the carrier executive said importers are frontloading as much merchandise as they can. “They have to ship now in case there is another tariff increase in August,” the source said. However, forwarders and importers say the huge increases in spot rates and surcharges that carriers announced over the past few days would put a large dent in the savings they had anticipated from the tariff cuts. “We are being careful,” Pace said. “Shipping rates are certainly a factor in our decisions.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Major container lines are seeking spot rates on service from China to the US West Coast that are more than double the current level as they look to capitalize on an anticipated surge of volume triggered by a 90-day pause in the steepest US tariffs. Container spot rates are already spiking following the Monday announcement, and if carriers are successful in imposing a combination of general rate increases (GRIs) and peak season surcharges (PSSs) set to take effect June 1, pricing would jump to roughly $6,000 per FEU to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers regardless of size, while PSSs are only imposed on smaller shippers that don’t have agreements with carriers prohibiting their use. Momentum appears to be on the carriers’ side. Hapag-Lloyd said it has seen a 50% increase in bookings from China to the US this week, while forwarders have reported jumps as high as 100%. Given the short window of the agreement, and the need to ship fall and holiday merchandise before tariffs may increase if the deal falls apart, forwarders report that bookings are soaring. “It’s shades of 2024,” Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV, told the Journal of Commerce, referring to last summer, when container spot rates jumped to upwards of $8,000 per FEU to the West Coast during acrimonious dockworker contract negotiations on the East and Gulf coasts. As of Wednesday, average spot rates from Asia to the West Coast rose to $2,567 per FEU, up from $1,600 per FEU at the end of March, while Asia–East Coast pricing rose to $3,567 per FEU from $2,600 per FEU during the same period, according to Platts, a sister product of the Journal of Commerce within S&P Global. Last year, spot rates peaked at $8,133 per FEU to the West Coast and $10,133 per FEU to the East Coast in the week of July 5. Carriers Hapag-Lloyd, Mediterranean Shipping Co. (MSC), CMA CGM, Ocean Network Express (ONE) and Zim Integrated Shipping have filed spot rates of $6,000 per FEU starting June 1. Another round of increases is poised for June 15, with Hapag-Lloyd, MSC and CMA CGM set to increase rates to $8,000 per FEU, according to rate notices from the carriers. “Of course, these are just their filings,” noted a forwarder who asked not to be identified. “We will see what levels they really pass on once we get to these dates.” Bookings from China surge The carrier rate increases appear to be supported by a spike in bookings since the US and China announced an agreement that reduced US tariffs on Chinese goods from 145% to 30% for at least the next 90 days. “There’s definitely been a ramp up in orders during this 90-day window,” said Robert Khachatryan, CEO of forwarder Freight Right Global Logistics. Khachatryan explained that importers appear to be in a rush to get their shipments into the US while the 30% tariff on China is in effect. They are concerned that after 90 days, if a permanent agreement is not reached, the tariffs could shoot back up. “Everyone seems to be concerned with the 90-day window,” Khachatryan said. Revelyst, an importer of outdoor apparel, paused its purchase orders with factories in China in April, said John Pace, senior manager of global logistics. Now, the company is prioritizing those shipments that are ready to move, to be followed by shipments that will depart in the coming weeks as factories ramp up production. A carrier executive who asked not to be identified told the Journal of Commerce that factories in China should be able to quickly increase production as most vendors paused or slowed down production after the 145% duty went into effect in early April, rather than completely shutting down and laying off staff. Like Khachatryan, the carrier executive said importers are frontloading as much merchandise as they can. “They have to ship now in case there is another tariff increase in August,” the source said. However, forwarders and importers say the huge increases in spot rates and surcharges that carriers announced over the past few days would put a large dent in the savings they had anticipated from the tariff cuts. “We are being careful,” Pace said. “Shipping rates are certainly a factor in our decisions.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

Trans-Pacific carriers announce massive June rate hikes

<div class="phx-topic abstract-wrapper">Industry backlash mitigated the costliest components of the US Trade Representative’s proposed fees, but surcharges from some carriers are still likely on the way, writes Executive Editor Mark Szakonyi. </div>

Industry backlash mitigated the costliest components of the US Trade Representative’s proposed fees, but surcharges from some carriers are still likely on the way, writes Executive Editor Mark Szakonyi.

<div class="phx-topic">The revised US plan to tax Chinese tonnage released last month is staggeringly less disruptive to the shipping industry than what was first released in February but still stands to increase shipping costs. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6005401_0.1.jpg"></img></div>Most container lines will be on the hook for approximately $1 million per voyage, a significant climbdown from the <a href="https://www.joc.com/article/us-port-fees-could-hit-chinese-ships-under-trump-trade-proposal-5949409">$1 million to $1.5 million per port call initially outlined</a> when the plan was introduced by the US Trade Representative (USTR) on Feb. 21. That plan would have cost the industry $24 billion, according to maritime analyst Lars Jensen. “It’s definitely a vast improvement over the first version,” said Stuart Sandlin, Hapag-Lloyd’s North America president, adding that the original plan would have cost the carrier nearly $90 million weekly. “That’s a big number and now it’s not. It’s dramatically less than that.” The industry backlash to the original proposal came on multiple fronts. <a href="https://www.joc.com/article/farm-state-house-members-say-ustr-proposal-offers-big-risks-to-us-ag-interests-5977289">Agriculture exporters warned</a> of additional costs that carriers would pass onto them and smaller ports fretted about lost services if fees were assessed at each port call. Central American, Caribbean and niche vessel operators testified to being <a href="https://www.joc.com/article/ustrs-china-tonnage-tax-would-squeeze-smaller-trades-stakeholders-5967638">unable to spread the stiff port fees</a> across their smaller cargo capacity, while major carriers lobbied in the backroom. Federal Maritime Chairman Louis Sola said the agency also helped the USTR understand the implications, with ultimately all of the maritime regulators’ recommendations being implemented in the latest version. “We put our fingers on the scale to minimize some of the impacts on the industry that were not contemplated in the original proposal,” Sola said in a May 8 interview, stressing that it was an industrywide effort. The <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">revised version exempts</a> Chinese-built ships in US-flag fleets, container ships that are 4,000 TEUs or smaller, voyages of less than 2,000 nautical miles or Chinese-built ships owned by US-based carriers. <h3>Per voyage vs. per call </h3>Carriers will be levied solely on the first US port calls rather than on each US call, and tonnage taxes are capped at five sailings annually. Equally important, carriers will no longer be penalized come October for having Chinese-built vessels in their fleet — only for the Chinese-built vessels they deploy on US trades. The modification to the tonnage tax plan incentivizes carriers to remove China-built ships from US trades and replace them with vessels constructed in South Korea and Japan. “We do have options, and we are evaluating those options as we speak,” Fabio Santucci, president of US operations for Mediterranean Shipping Co., said at the Georgia International Trade Conference in late April. “Implementation is October, so I really think everybody has plenty of time to adjust and plan.” So far, it looks like MSC will not have to undergo too many changes to accommodate the new fees. Based on current schedules, only two of the nine ships in MSC’s Pearl Shikra service to the US West Coast are Chinese-built — the 9,408-TEU MSC Desiree and the 8,496-TEU MSC Benin. The carrier’s two other trans-Pacific West Coast services primarily use South Korean-built vessels, along with a few Japanese ones. Other carriers, though, may have more work to do to mitigate the fees. Five of the 12 ships currently in the Gemini Cooperation’s US2 service to the US East Coast are Chinese built, with those under long-term charter by Gemini partner Hapag-Lloyd. <h3>Bearing a larger brunt </h3>Cosco and OOCL don’t have that ability and face tariffs more than twice as large as their peers. The USTR doesn’t mince words on its goal, saying the aim is “to further disincentivize use of Chinese shipping services.” Cosco and OOCL handle the largest share of the trans-Pacific market, accounting for 17% of US import moves from Asia in March, according to PIERS, a sister company of the Journal of Commerce within PIERS. The cost of drawing the White House’s ire per TEU is steep. Consultancy Bluspark estimates the tonnage taxes rates rising over the next three years will equate to between $550 and $1,600 per TEU for Chinese operators, compared with a $175 to $400 per TEU ramp-up for carriers not domiciled in China. That could spur Cosco and OOCL to lean on their Ocean Alliance partners CMA CGM and Evergreen Line. In such a scenario, Cosco and OOCL would shift their trans-Pacific vessels to other trades while keeping access to the US market through their vessel sharing agreement with Evergreen and CMA CGM. The easing of US and China tariffs on goods and commodities announced Monday also opens the door for deals in which the tonnage tariff is leveraged for something the Trump administration wants. In the meantime, container lines are already eyeing surcharges and considering how to mitigate the imminent increase in operating costs. “There’s going to be a cost increase somewhere for someone and we will have to assume that there will be reverberations outside of the US as well because everything is connected,” Santucci said. Not all carriers are preparing to impose surcharges tied to USTR, with Maersk telling customers May 8 it didn’t foresee a need for new fees nor a change in its service rotation. Just 5% of Maerk’s global volumes come from China. President Donald Trump’s effort to <a href="https://www.joc.com/article/trumps-expansionist-worldview-puts-us-maritime-interests-in-spotlight-5946935">galvanize US shipbuilding</a> and knock China for subsidizing its own industry may change what ships call the United States, but it doesn’t seem to be denting Chinese shipyard production. Of the 93 container ship orders made to Chinese shipyards this year, 62 have been placed since the February release of the original tariff plan, according to an HSBC investor analysis placed on order since May 8. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. Senior Editor Michael Angell contributed to this column. </div>

The revised US plan to tax Chinese tonnage released last month is staggeringly less disruptive to the shipping industry than what was first released in February but still stands to increase shipping costs. Most container lines will be on the hook for approximately $1 million per voyage, a significant climbdown from the $1 million to $1.5 million per port call initially outlined when the plan was introduced by the US Trade Representative (USTR) on Feb. 21. That plan would have cost the industry $24 billion, according to maritime analyst Lars Jensen. “It’s definitely a vast improvement over the first version,” said Stuart Sandlin, Hapag-Lloyd’s North America president, adding that the original plan would have cost the carrier nearly $90 million weekly. “That’s a big number and now it’s not. It’s dramatically less than that.” The industry backlash to the original proposal came on multiple fronts. Agriculture exporters warned of additional costs that carriers would pass onto them and smaller ports fretted about lost services if fees were assessed at each port call. Central American, Caribbean and niche vessel operators testified to being unable to spread the stiff port fees across their smaller cargo capacity, while major carriers lobbied in the backroom. Federal Maritime Chairman Louis Sola said the agency also helped the USTR understand the implications, with ultimately all of the maritime regulators’ recommendations being implemented in the latest version. “We put our fingers on the scale to minimize some of the impacts on the industry that were not contemplated in the original proposal,” Sola said in a May 8 interview, stressing that it was an industrywide effort. The revised version exempts Chinese-built ships in US-flag fleets, container ships that are 4,000 TEUs or smaller, voyages of less than 2,000 nautical miles or Chinese-built ships owned by US-based carriers. Per voyage vs. per call Carriers will be levied solely on the first US port calls rather than on each US call, and tonnage taxes are capped at five sailings annually. Equally important, carriers will no longer be penalized come October for having Chinese-built vessels in their fleet — only for the Chinese-built vessels they deploy on US trades. The modification to the tonnage tax plan incentivizes carriers to remove China-built ships from US trades and replace them with vessels constructed in South Korea and Japan. “We do have options, and we are evaluating those options as we speak,” Fabio Santucci, president of US operations for Mediterranean Shipping Co., said at the Georgia International Trade Conference in late April. “Implementation is October, so I really think everybody has plenty of time to adjust and plan.” So far, it looks like MSC will not have to undergo too many changes to accommodate the new fees. Based on current schedules, only two of the nine ships in MSC’s Pearl Shikra service to the US West Coast are Chinese-built — the 9,408-TEU MSC Desiree and the 8,496-TEU MSC Benin. The carrier’s two other trans-Pacific West Coast services primarily use South Korean-built vessels, along with a few Japanese ones. Other carriers, though, may have more work to do to mitigate the fees. Five of the 12 ships currently in the Gemini Cooperation’s US2 service to the US East Coast are Chinese built, with those under long-term charter by Gemini partner Hapag-Lloyd. Bearing a larger brunt Cosco and OOCL don’t have that ability and face tariffs more than twice as large as their peers. The USTR doesn’t mince words on its goal, saying the aim is “to further disincentivize use of Chinese shipping services.” Cosco and OOCL handle the largest share of the trans-Pacific market, accounting for 17% of US import moves from Asia in March, according to PIERS, a sister company of the Journal of Commerce within PIERS. The cost of drawing the White House’s ire per TEU is steep. Consultancy Bluspark estimates the tonnage taxes rates rising over the next three years will equate to between $550 and $1,600 per TEU for Chinese operators, compared with a $175 to $400 per TEU ramp-up for carriers not domiciled in China. That could spur Cosco and OOCL to lean on their Ocean Alliance partners CMA CGM and Evergreen Line. In such a scenario, Cosco and OOCL would shift their trans-Pacific vessels to other trades while keeping access to the US market through their vessel sharing agreement with Evergreen and CMA CGM. The easing of US and China tariffs on goods and commodities announced Monday also opens the door for deals in which the tonnage tariff is leveraged for something the Trump administration wants. In the meantime, container lines are already eyeing surcharges and considering how to mitigate the imminent increase in operating costs. “There’s going to be a cost increase somewhere for someone and we will have to assume that there will be reverberations outside of the US as well because everything is connected,” Santucci said. Not all carriers are preparing to impose surcharges tied to USTR, with Maersk telling customers May 8 it didn’t foresee a need for new fees nor a change in its service rotation. Just 5% of Maerk’s global volumes come from China. President Donald Trump’s effort to galvanize US shipbuilding and knock China for subsidizing its own industry may change what ships call the United States, but it doesn’t seem to be denting Chinese shipyard production. Of the 93 container ship orders made to Chinese shipyards this year, 62 have been placed since the February release of the original tariff plan, according to an HSBC investor analysis placed on order since May 8. Contact Mark Szakonyi at mark.szakonyi@spglobal.com . Senior Editor Michael Angell contributed to this column.

Revised China tonnage tax less disruptive, still costly

<div class="phx-topic abstract-wrapper">Intermodal providers might see a small bullwhip effect, in which international volume declines in May and June but rebounds in July and August as shipments delayed due to now-paused tariffs on Chinese goods begin arriving in Southern California.</div>

Intermodal providers might see a small bullwhip effect, in which international volume declines in May and June but rebounds in July and August as shipments delayed due to now-paused tariffs on Chinese goods begin arriving in Southern California.

<div class="phx-topic">Western US Class I railroads say they are preparing for a potential midsummer surge of imports from China following a 90-day suspension of steeper US tariffs on Chinese-made goods. To avoid a repeat of past breakdowns, such as during the COVID-19 pandemic, BNSF Railway and Union Pacific Railroad (UP) are ensuring they have sufficient staff, locomotives and equipment at critical terminals across the US. Both railroads outlined strategies to handle a likely uptick in cargo, including building longer trains, combining different train types, constructing trains differently and creating special trains temporarily. BNSF and UP say it is not clear yet how strong the rebound will be, with some ocean carriers and forwarders reporting a surge in booking of upward of 50%. “The month of June is where we think that air pocket will hit [most],” Jon Gabriel, BNSF’s group vice president of intermodal, told the Journal of Commerce. “Coming out of the Fourth of July is when what’s being put on vessels now would all start to hit. In the months of July and August, largely speaking.” UP CEO Jim Vena said the lull in volumes, sparked by US President Donald Trump raising tariffs on Chinese goods to 145% in early April before <a href="https://word-edit.officeapps.live.com/we/Eastbound%20trans-Pac%20spot%20rates%20in%20revival%20mode%20in%20wake%20of%20US-China%20trade%20deal%20%7C%20Journal%20of%20Commerce">reducing them to 30% Monday</a>, has begun to show in the numbers. “We can react [with] locomotives very fast; we have 500 of them parked, ready to go,” Vena said at the Bank of America Industrials Conference Wednesday. “We had a 30% increase in international intermodal last year, and we handled it. We’ve built a railroad that has some capacity to be able to flex.” <h3>A collaborative effort </h3>BNSF is positioning empty railcars and locomotives in California, Arizona, and Washington, while staying in close contact with ocean carriers, drayage companies, and third-party terminal operators such as ITS ConGlobal and Parsec. “Our terminal operators are in all the conversations; they are not cutting staff during this lull,” Gabriel said. “If we can give an extra vacation or two in June, let’s do that. But let’s also know it’s going to be a short-lived lull, and we must quickly snap back. It’s important to protect the business and keep it on the railroad versus trucking.” Those conversations also include chassis providers. Gabriel said he’s spoken with the CEOs of major providers such as DCLI, Flexi-Van Leasing, and TRAC Intermodal about what to expect in July and August. To provide a service with minimal dwell, both railroads are focusing on increasing train lengths and reconfiguring train designs to optimize throughput. During quiet periods, a standard international intermodal train may run 1.5 miles long. But in peak periods, railroads can stretch those trains to more than 2 miles. However, crane operators can only lift a finite number of containers per hour, which could lead to extended unloading times, impacting the ability of inland terminals to handle a continuous flow of incoming and outgoing trains. “We can pivot from a lull to a surge without disrupting the network,” UP COO Eric Gehringer said during an April 24 earnings call. “The tools we have today let us do that in hours or days, not weeks like in the past.” BNSF and UP could also send trains directly to smaller inland cities — e.g., Cincinnati, Houston or St. Louis — that normally would be part of a larger train going to Chicago, Dallas, Memphis or Kansas City. “We may run direct point-to-point trains, and I really like that because it reduces cargo transit times,” Gabriel explained. “It could also be that instead of one Chicago train a day, we run two trains. If you didn’t make the noon train, no worries, you’ll be on the 4 o’clock train. That helps all destinations, but certainly those smaller markets benefit more.” With just weeks to prepare, both railroads are betting that early coordination will be enough to keep freight moving and shippers from turning to long-haul trucking as a temporary solution. “It’s the calm before the whiplash,” said a former CN intermodal operations executive who asked not to be identified. “It’s one thing to say you have stored locomotives. It’s another thing to have trained crane operators, chassis, yard labor, and truck capacity all available at the same time. That’s where things broke down in 2021.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Western US Class I railroads say they are preparing for a potential midsummer surge of imports from China following a 90-day suspension of steeper US tariffs on Chinese-made goods. To avoid a repeat of past breakdowns, such as during the COVID-19 pandemic, BNSF Railway and Union Pacific Railroad (UP) are ensuring they have sufficient staff, locomotives and equipment at critical terminals across the US. Both railroads outlined strategies to handle a likely uptick in cargo, including building longer trains, combining different train types, constructing trains differently and creating special trains temporarily. BNSF and UP say it is not clear yet how strong the rebound will be, with some ocean carriers and forwarders reporting a surge in booking of upward of 50%. “The month of June is where we think that air pocket will hit [most],” Jon Gabriel, BNSF’s group vice president of intermodal, told the Journal of Commerce. “Coming out of the Fourth of July is when what’s being put on vessels now would all start to hit. In the months of July and August, largely speaking.” UP CEO Jim Vena said the lull in volumes, sparked by US President Donald Trump raising tariffs on Chinese goods to 145% in early April before reducing them to 30% Monday , has begun to show in the numbers. “We can react [with] locomotives very fast; we have 500 of them parked, ready to go,” Vena said at the Bank of America Industrials Conference Wednesday. “We had a 30% increase in international intermodal last year, and we handled it. We’ve built a railroad that has some capacity to be able to flex.” A collaborative effort BNSF is positioning empty railcars and locomotives in California, Arizona, and Washington, while staying in close contact with ocean carriers, drayage companies, and third-party terminal operators such as ITS ConGlobal and Parsec. “Our terminal operators are in all the conversations; they are not cutting staff during this lull,” Gabriel said. “If we can give an extra vacation or two in June, let’s do that. But let’s also know it’s going to be a short-lived lull, and we must quickly snap back. It’s important to protect the business and keep it on the railroad versus trucking.” Those conversations also include chassis providers. Gabriel said he’s spoken with the CEOs of major providers such as DCLI, Flexi-Van Leasing, and TRAC Intermodal about what to expect in July and August. To provide a service with minimal dwell, both railroads are focusing on increasing train lengths and reconfiguring train designs to optimize throughput. During quiet periods, a standard international intermodal train may run 1.5 miles long. But in peak periods, railroads can stretch those trains to more than 2 miles. However, crane operators can only lift a finite number of containers per hour, which could lead to extended unloading times, impacting the ability of inland terminals to handle a continuous flow of incoming and outgoing trains. “We can pivot from a lull to a surge without disrupting the network,” UP COO Eric Gehringer said during an April 24 earnings call. “The tools we have today let us do that in hours or days, not weeks like in the past.” BNSF and UP could also send trains directly to smaller inland cities — e.g., Cincinnati, Houston or St. Louis — that normally would be part of a larger train going to Chicago, Dallas, Memphis or Kansas City. “We may run direct point-to-point trains, and I really like that because it reduces cargo transit times,” Gabriel explained. “It could also be that instead of one Chicago train a day, we run two trains. If you didn’t make the noon train, no worries, you’ll be on the 4 o’clock train. That helps all destinations, but certainly those smaller markets benefit more.” With just weeks to prepare, both railroads are betting that early coordination will be enough to keep freight moving and shippers from turning to long-haul trucking as a temporary solution. “It’s the calm before the whiplash,” said a former CN intermodal operations executive who asked not to be identified. “It’s one thing to say you have stored locomotives. It’s another thing to have trained crane operators, chassis, yard labor, and truck capacity all available at the same time. That’s where things broke down in 2021.” Contact Ari Ashe at ari.ashe@spglobal.com .

BNSF, UP prepping for July cargo rebound after tariff-induced lull

<div class="phx-topic abstract-wrapper">Rates are climbing quickly amid fresh Chinese volumes headed to the US, with an expected crunch in vessel capacity and the potential for port congestion driving the gains.  </div>

Rates are climbing quickly amid fresh Chinese volumes headed to the US, with an expected crunch in vessel capacity and the potential for port congestion driving the gains. 

<div class="phx-topic">Spot rates in the eastbound trans-Pacific are on a rapid rise as stakeholders on the trade lane expect a significant increase in cargo on the water in the wake of the <a href="https://www.joc.com/article/capacity-crunch-beckons-on-eastbound-trans-pacific-after-us-china-deal-6002956">preliminary tariff deal agreed to last weekend between the US and China</a>.  While various pricing indexes have yet to reflect the post-deal jump in rates, forwarder sources say they are seeing May 15 general rate increases (GRIs) of about $1,000 for both the US West and East coasts, with an expected <a href="https://www.joc.com/article/capacity-crunch-beckons-on-eastbound-trans-pacific-after-us-china-deal-6002956">crunch in vessel capacity</a> and the potential for port congestion driving the gains.  “We know that a lot of capacity has come out and there’s going to be a tremendous amount of volume that has to move,” said Rachel Shames, vice president of procurement and pricing at CV International. “No one knows how much, but we know it’s going to strain the system. The question is: How high will rates go?” In addition to the $1,000 GRIs carriers are due to implement this week, sources say an additional hike of $1,000 to $3,000 per FEU could be on tap for June 1. And several forwarders who spoke to the Journal of Commerce said shippers already need to book at $6,000 per FEU or above to guarantee space. In a research note Wednesday, analysts at Jefferies said Asia-West Coast spot rates are now being quoted at $3,000 per FEU, with East Coast rates at $4,000/FEU. Just how far rates could rise depends in large part on volumes, as not all observers are ready to categorize the coming flush of imports as a sustained surge. “It is too early to gauge whether this week’s volume surge is a simple return of normal volumes, a pull forward of demand, or an early start to peak season,” Jefferies said. “As of now though, spot rates are likely to continue gaining given limited vessel capacity near term.” Platts, a sister company of the Journal of Commerce within S&amp;P Global, shows North Asia to West Coast rates at $2,500 per FEU as of Wednesday, up $700 from a month ago. East Coast rates were at $3,500/FEU, up $500 month over month. But in the early days of a rapidly moving market, pricing indexes have yet to catch up to actual rate levels. A source at a non-vessel-operating common carrier (NVO) said he is rescinding quotes made to clients in April, unable to honor the initial offers in the new market environment. That same source saw bookings increase by about 200% this week. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div><h3>Carrier moves </h3>An unbalanced supply and demand dynamic is fostering a hospitable environment for the rate hikes after carriers reduced capacity on the trans-Pacific in response to canceled bookings out of China in April in the aftermath of the US tariffs slapped on Beijing. On Wednesday, <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">Hapag-Lloyd reported an increase of more than 50%</a> in China-US bookings since the preliminary trade deal was signed over the weekend, also noting double-digit increases compared with pre-tariff cargo volumes — likely exacerbated by cargo held in China since early April. CEO Rolf Habben Jensen said the carrier expects “a surge in volume in the upcoming 60 or 90 days.” “But beyond that it is very difficult to predict and will depend on what kind of [trade] agreements will be closed between the US and other countries,” he said. Hapag-Lloyd and Gemini Cooperation partner Maersk each said they had swapped out large vessels for smaller ships on the eastbound trans-Pacific due to the decreased volumes but will reinstate the larger vessels now that demand has rebounded. “Over the next 90 days, there’s clearly going to be pent up supply that sits in China that needs to be reintroduced to the supply chain and [be brought to the US],” Charles van der Steene, president of Maersk North America, <a href="https://www.cnbc.com/video/2025/05/14/were-ready-to-reintroduce-capacity-on-the-trade-out-of-china-says-maersks-charles-van-der-steene.html">told CNBC</a>. “To bring capacity back in for vessels that have been redeployed elsewhere will be more difficult.” While the most prominent carriers operating on the trade lane are working to undo capacity reductions, several forwarder and shipper sources expect opportunistic behavior from some of the more agile carriers. “Big carriers, which reasonably anticipated continued import reductions and announced repositions [and] service suspensions ... will need to reverse course to take advantage of the coming import demand,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, told the Journal of Commerce. “Some of the smaller, nimble carriers that jumped in during the COVID crisis will jump in now.” <h3>Added concerns </h3>As bookings climb and the market faces an increasingly significant capacity imbalance, stakeholders are concerned about the longer-term impacts of the changes, such as port congestion, equipment availability and manufacturing delays. Forwarder sources say West Coast ports will be particularly appealing for shippers due to the lower transit times from Asia and the uncertainty around what will happen after the 90-day cooling off period between Washington and Beijing ends. “It’s all about when you can clear customs, and obviously that is much faster on the West Coast because the ships arrive much earlier,” said Stephen Nothdurft, vice president of North American sales at forwarder MOL Consolidation Service. “You can get three ships cleared [if you ship to the] West Coast before one even gets to the East Coast. I don’t know that people are abandoning the East Coast loaders, per se, but having cargo on the shortest transit possible [is important to importers].” And while orders are increasing, manufacturing delays as some factories in China ramp back up to full speed could slow some US importers down, causing concerns within the 90-day deadline to take advantage of the reduced tariffs. Several importers reported factory closures in China as demand waned, and manufacturers will likely need some runway to reach traditional output levels. Forwarder and shipper sources are reporting some manufacturing delays of several weeks to a month. Meanwhile, fresh data from PIERS, a sister product of the Journal of Commerce within S&amp;P Global, shows that US imports from Asia and China specifically rose in April, likely reflecting the last rush of boats on the water ahead of the April 9 implementation of new tariffs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4ed96169-fa34-4b46-81e8-b67860854e39"></dynamic-object></div>US imports from Asia last month rose to 1.59 million TEUs, up 3.9% from 1.53 million TEUs in March and up 14.5% from April 2024. US imports from China were at 849,390 TEUs, up 5.8% from 802,570 TEUs in March and 12.3% higher than a year ago. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  Senior Editor Bill Mongelluzzo contributed to this report.</div>

Spot rates in the eastbound trans-Pacific are on a rapid rise as stakeholders on the trade lane expect a significant increase in cargo on the water in the wake of the preliminary tariff deal agreed to last weekend between the US and China .  While various pricing indexes have yet to reflect the post-deal jump in rates, forwarder sources say they are seeing May 15 general rate increases (GRIs) of about $1,000 for both the US West and East coasts, with an expected crunch in vessel capacity and the potential for port congestion driving the gains.  “We know that a lot of capacity has come out and there’s going to be a tremendous amount of volume that has to move,” said Rachel Shames, vice president of procurement and pricing at CV International. “No one knows how much, but we know it’s going to strain the system. The question is: How high will rates go?” In addition to the $1,000 GRIs carriers are due to implement this week, sources say an additional hike of $1,000 to $3,000 per FEU could be on tap for June 1. And several forwarders who spoke to the Journal of Commerce said shippers already need to book at $6,000 per FEU or above to guarantee space. In a research note Wednesday, analysts at Jefferies said Asia-West Coast spot rates are now being quoted at $3,000 per FEU, with East Coast rates at $4,000/FEU. Just how far rates could rise depends in large part on volumes, as not all observers are ready to categorize the coming flush of imports as a sustained surge. “It is too early to gauge whether this week’s volume surge is a simple return of normal volumes, a pull forward of demand, or an early start to peak season,” Jefferies said. “As of now though, spot rates are likely to continue gaining given limited vessel capacity near term.” Platts, a sister company of the Journal of Commerce within S&P Global, shows North Asia to West Coast rates at $2,500 per FEU as of Wednesday, up $700 from a month ago. East Coast rates were at $3,500/FEU, up $500 month over month. But in the early days of a rapidly moving market, pricing indexes have yet to catch up to actual rate levels. A source at a non-vessel-operating common carrier (NVO) said he is rescinding quotes made to clients in April, unable to honor the initial offers in the new market environment. That same source saw bookings increase by about 200% this week. Carrier moves An unbalanced supply and demand dynamic is fostering a hospitable environment for the rate hikes after carriers reduced capacity on the trans-Pacific in response to canceled bookings out of China in April in the aftermath of the US tariffs slapped on Beijing. On Wednesday, Hapag-Lloyd reported an increase of more than 50% in China-US bookings since the preliminary trade deal was signed over the weekend, also noting double-digit increases compared with pre-tariff cargo volumes — likely exacerbated by cargo held in China since early April. CEO Rolf Habben Jensen said the carrier expects “a surge in volume in the upcoming 60 or 90 days.” “But beyond that it is very difficult to predict and will depend on what kind of [trade] agreements will be closed between the US and other countries,” he said. Hapag-Lloyd and Gemini Cooperation partner Maersk each said they had swapped out large vessels for smaller ships on the eastbound trans-Pacific due to the decreased volumes but will reinstate the larger vessels now that demand has rebounded. “Over the next 90 days, there’s clearly going to be pent up supply that sits in China that needs to be reintroduced to the supply chain and [be brought to the US],” Charles van der Steene, president of Maersk North America, told CNBC . “To bring capacity back in for vessels that have been redeployed elsewhere will be more difficult.” While the most prominent carriers operating on the trade lane are working to undo capacity reductions, several forwarder and shipper sources expect opportunistic behavior from some of the more agile carriers. “Big carriers, which reasonably anticipated continued import reductions and announced repositions [and] service suspensions ... will need to reverse course to take advantage of the coming import demand,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, told the Journal of Commerce. “Some of the smaller, nimble carriers that jumped in during the COVID crisis will jump in now.” Added concerns As bookings climb and the market faces an increasingly significant capacity imbalance, stakeholders are concerned about the longer-term impacts of the changes, such as port congestion, equipment availability and manufacturing delays. Forwarder sources say West Coast ports will be particularly appealing for shippers due to the lower transit times from Asia and the uncertainty around what will happen after the 90-day cooling off period between Washington and Beijing ends. “It’s all about when you can clear customs, and obviously that is much faster on the West Coast because the ships arrive much earlier,” said Stephen Nothdurft, vice president of North American sales at forwarder MOL Consolidation Service. “You can get three ships cleared [if you ship to the] West Coast before one even gets to the East Coast. I don’t know that people are abandoning the East Coast loaders, per se, but having cargo on the shortest transit possible [is important to importers].” And while orders are increasing, manufacturing delays as some factories in China ramp back up to full speed could slow some US importers down, causing concerns within the 90-day deadline to take advantage of the reduced tariffs. Several importers reported factory closures in China as demand waned, and manufacturers will likely need some runway to reach traditional output levels. Forwarder and shipper sources are reporting some manufacturing delays of several weeks to a month. Meanwhile, fresh data from PIERS, a sister product of the Journal of Commerce within S&P Global, shows that US imports from Asia and China specifically rose in April, likely reflecting the last rush of boats on the water ahead of the April 9 implementation of new tariffs. US imports from Asia last month rose to 1.59 million TEUs, up 3.9% from 1.53 million TEUs in March and up 14.5% from April 2024. US imports from China were at 849,390 TEUs, up 5.8% from 802,570 TEUs in March and 12.3% higher than a year ago. Contact Laura Robb at laura.robb@spglobal.com .  Senior Editor Bill Mongelluzzo contributed to this report.

Eastbound trans-Pac spot rates in revival mode in wake of US-China trade deal

<div class="phx-topic abstract-wrapper">The canal agency highlighted data that refutes Trump administration claims about unfair treatment at the waterway, while the International Chamber of Shipping said freedom of navigation is a global responsibility. </div>

The canal agency highlighted data that refutes Trump administration claims about unfair treatment at the waterway, while the International Chamber of Shipping said freedom of navigation is a global responsibility.

<div class="phx-topic">The agency in charge of the Panama Canal is pushing back against claims by the US Federal Maritime Commission (FMC) that it discriminates against US waterborne commerce and says Chinese ownership of nearby ports has no bearing on ship transits through the waterway. The Panama Canal Authority (ACP) delivered the comments Tuesday in response to the FMC’s review of “<a href="https://www.joc.com/article/fmc-probes-ocean-chokepoints-as-trump-looks-to-rule-the-waves-5962937">international maritime chokepoints</a>” that will be included in its next report to Congress. Along with probes into six other major shipping lanes, the FMC highlighted the Panama Canal’s “geopolitical importance,” adding that it is “crucial to the interests of the United States.” In response to any unfair treatment in waterborne commerce, the FMC said the US could deny the entry of ships registered to countries “responsible for creating unfavorable conditions.” The canal has become the subject of renewed interest in the US after President Donald Trump called the 1977 treaty giving Panama control of the canal a “rip-off” and urged “taking back” that control. Trump also alleged <a href="https://www.joc.com/article/panama-canal-transit-data-belies-trumps-claims-of-chinas-control-project44-5948559">China has gained influence over canal transits</a> and that the US vessels pay higher tolls than those of other countries. “No conditions exist at the Panama Canal, and no actions have been taken by the ACP in administering the canal, that discriminate against the United States, US interests, or global maritime trade involving the United States,” the ACP said. The agency’s comments cited language in the 1977 treaty that required the canal to be operated as a neutral waterway open to ships from any country. Panamanian law gives the ACP sole authority over the canal, relieving it of any political pressure from the Panamanian government. A separate treaty between the US and Panama gives navy ships of both countries’ priority transits during emergencies. While US naval vessels do pay transit tolls, they do not have to pay the reservation fees that commercial ships pay. Since canal ownership was officially transferred in 1999, the US Navy has paid about $1 million per year in canal tolls, according to the ACP, with US warships accounting for less than 1% of vessel traffic during that time. ACP also said there is no discrimination against US commercial shipping, citing data that shows 75% of the cargo going through the canal originates or ends in the US. The flag registry of ships going through the canal also doesn’t indicate any favoritism, the ACP said. <h3>FMC should follow ‘legal norms’ </h3>Part of Trump’s claims about Chinese influence over the canal stems from <a href="https://www.joc.com/article/hutchison-to-delay-panama-ports-deal-signing-amid-growing-beijing-pressure-5971728">Hong Kong-based CK Hutchison operating two nearby marine terminals</a>, which are now part of <a href="https://www.joc.com/article/hutchison-deal-shows-thirst-of-big-carriers-to-control-global-terminal-assets-5960717">a possible acquisition</a> by US investment fund BlackRock and Terminal Investment Limited, a unit of Mediterranean Shipping Co. The ACP noted Hutchison’s port concessions are granted by Panama, which also granted concessions to US, Taiwanese and Singaporean operators. Moreover, the ACP said there is no requirement for ships to stop at the Hutchison terminals and there is no evidence the Hutchison terminals are favoring one nation’s ships over another’s. “To the extent concerns have been expressed about the potential for future actions by Hutchison or the government of China, to the ACP’s knowledge those concerns remain hypothetical,” the ACP said. “These concerns contrast with the commission’s regulations, which require a finding that unfavorable conditions do exist before it acts.” As to whether the FMC can take any action over maritime chokepoints, the International Chamber of Shipping (ICS) said in its comments to the agency that the 1982 United Nations Convention on the Law of Sea (UNCLOS) governs international shipping lanes. While 170 countries have ratified UNCLOS, the US remains a holdout. But the ICS noted that a 1983 policy statement from then-President Ronald Reagan supported the basic outline of UNCLOS. The ICS added that countries surrounding the shipping lanes mentioned in the FMC probe have agreed to ensure safe and neutral transits. The ICS admits there are chokepoints, such as where the Houthi attacks on commercial vessels going into the Suez Canal occur and in Russia’s dominance of the Northern Sea Passage. However, it said the FMC alone is in no position to police those lanes. “While operational and security risks exist in any international waterway, these do not constitute grounds for unilateral action by individual states,” the ICS said. “Any future assessments or policy decisions stemming from the FMC investigation should remain anchored in respect for established international legal norms and multilateral engagement.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The agency in charge of the Panama Canal is pushing back against claims by the US Federal Maritime Commission (FMC) that it discriminates against US waterborne commerce and says Chinese ownership of nearby ports has no bearing on ship transits through the waterway. The Panama Canal Authority (ACP) delivered the comments Tuesday in response to the FMC’s review of “ international maritime chokepoints ” that will be included in its next report to Congress. Along with probes into six other major shipping lanes, the FMC highlighted the Panama Canal’s “geopolitical importance,” adding that it is “crucial to the interests of the United States.” In response to any unfair treatment in waterborne commerce, the FMC said the US could deny the entry of ships registered to countries “responsible for creating unfavorable conditions.” The canal has become the subject of renewed interest in the US after President Donald Trump called the 1977 treaty giving Panama control of the canal a “rip-off” and urged “taking back” that control. Trump also alleged China has gained influence over canal transits and that the US vessels pay higher tolls than those of other countries. “No conditions exist at the Panama Canal, and no actions have been taken by the ACP in administering the canal, that discriminate against the United States, US interests, or global maritime trade involving the United States,” the ACP said. The agency’s comments cited language in the 1977 treaty that required the canal to be operated as a neutral waterway open to ships from any country. Panamanian law gives the ACP sole authority over the canal, relieving it of any political pressure from the Panamanian government. A separate treaty between the US and Panama gives navy ships of both countries’ priority transits during emergencies. While US naval vessels do pay transit tolls, they do not have to pay the reservation fees that commercial ships pay. Since canal ownership was officially transferred in 1999, the US Navy has paid about $1 million per year in canal tolls, according to the ACP, with US warships accounting for less than 1% of vessel traffic during that time. ACP also said there is no discrimination against US commercial shipping, citing data that shows 75% of the cargo going through the canal originates or ends in the US. The flag registry of ships going through the canal also doesn’t indicate any favoritism, the ACP said. FMC should follow ‘legal norms’ Part of Trump’s claims about Chinese influence over the canal stems from Hong Kong-based CK Hutchison operating two nearby marine terminals , which are now part of a possible acquisition by US investment fund BlackRock and Terminal Investment Limited, a unit of Mediterranean Shipping Co. The ACP noted Hutchison’s port concessions are granted by Panama, which also granted concessions to US, Taiwanese and Singaporean operators. Moreover, the ACP said there is no requirement for ships to stop at the Hutchison terminals and there is no evidence the Hutchison terminals are favoring one nation’s ships over another’s. “To the extent concerns have been expressed about the potential for future actions by Hutchison or the government of China, to the ACP’s knowledge those concerns remain hypothetical,” the ACP said. “These concerns contrast with the commission’s regulations, which require a finding that unfavorable conditions do exist before it acts.” As to whether the FMC can take any action over maritime chokepoints, the International Chamber of Shipping (ICS) said in its comments to the agency that the 1982 United Nations Convention on the Law of Sea (UNCLOS) governs international shipping lanes. While 170 countries have ratified UNCLOS, the US remains a holdout. But the ICS noted that a 1983 policy statement from then-President Ronald Reagan supported the basic outline of UNCLOS. The ICS added that countries surrounding the shipping lanes mentioned in the FMC probe have agreed to ensure safe and neutral transits. The ICS admits there are chokepoints, such as where the Houthi attacks on commercial vessels going into the Suez Canal occur and in Russia’s dominance of the Northern Sea Passage. However, it said the FMC alone is in no position to police those lanes. “While operational and security risks exist in any international waterway, these do not constitute grounds for unilateral action by individual states,” the ICS said. “Any future assessments or policy decisions stemming from the FMC investigation should remain anchored in respect for established international legal norms and multilateral engagement.” Contact Michael Angell at michael.angell@spglobal.com .

Panama Canal Authority hits back at FMC ‘chokepoint’ probe as unwarranted

Use code GTW695 at checkout and save $800 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Use code MDRW695 at checkout and save $800 on first year of a Gold subscription!

Upgrade Subscription - Wide Box

MEMORIAL DAY SALE

Arm your team with the most trusted information portal for the international container shipping industry.

Group Subscriptions - Wide Box

Get into a group subscription today

Use code MDW25 at checkout to save 25% on the first year of any annual subscription! 

Subscribe Now - Free Trials - Wide Box

Use code MDW25 at checkout and save 25% on any annual subscription!

Subscribe Now - Anonymous - Wide Box

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

SMC3rates_shutterstock_5247046.jpg

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>

SMC3rates_shutterstock_5247046 (1).jpg

Filling the Supply Chain Education Gap with LTL Education Courses

UPGRADE TO GOLD AND SAVE: Use code GTW695 at checkout and save $800 on first year of a Gold subscription!

Upgrade Subscription

MEMORIAL DAY SALE: Use code MDW25 at checkout to save 25% on first year of any annual subscription!


Subscribe Now - Free Trials - Offer Box

Subscribe Today

GET INTO A GROUP SUBSCRIPTION: Arm your team with unlimited Journal of Commerce content

Group Subscriptions - Offer Box

Group Subscriptions

MEMORIAL DAY SALE: Use code MDW25 at checkout and save 25% on any annual subscription!

Subscribe Now - Anonymous - Offer Box

MEMORIAL DAY SALE: Use code MDRW695 at checkout and save $800 on first year of a Gold subscription! 

Upgrade Subscription - Offer Box

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

A must-attend conference for shippers & logistics providers moving goods inland

Inland Conference - Rectangle Box

Attend Inland25

A premium access index of savings using domestic intermodal vs. OTR 

ISI Report - Rectangle Box

An extensive dashboard of charts organized by trade lane, mode, and topic

Gateway - Rectangle Box

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

The Journal of Commerce’s analysis and coverage of North American and global rail news encompasses Class I railroad, intermodal marketing providers, and supporting drayage and truckload services. Reporting on freight railroad news today, journalists track volume, intermodal freight rates, service levels, precision schedule railroading, transloading, regulation, union labor and network investment at domestic and international intermodal terminals.

Stay updated with our rail transport news and trends. Journal of Commerce covers intermodal news, and port connectivity news in the container rail transport sector.

Rail News | Journal of Commerce

The Journal of Commerce’s surface transport news and analysis focuses on landside transport movement — from railroad news to trucking news — including full load trucking, less-than-truckload (LTL), refrigerated (or reefer) trucking, flatbed and domestic and international intermodal rail, and how it connects with seaports, inland rail hubs, distribution centers and transloading operations. Reporting on the surface transport sector covers the movement of domestic shipments within the United States and international cargoes transported via domestic equipment including trailers and 53-foot containers.

Discover comprehensive trucking news and trends with Journal of Commerce - from trucking LTL to regulation and trucking supply and demand.

Trucking News | Journal of Commerce

Explore the world of ground transport news - from trucks to railroads, intermodal connections, and port ties. Daily insights on US and global shipments.

Latest News

Breakbulk Quarterly

Filling the Supply Chain Education Gap with LTL Education Courses

More News & Analysis

Trans-Pacific carriers announce massive June rate hikes

Revised China tonnage tax less disruptive, still costly

BNSF, UP prepping for July cargo rebound after tariff-induced lull