<div class="phx-topic abstract-wrapper">Freight is flowing more quickly through LTL terminals nationwide — a sign, carriers hope, of a steadier economic recovery.</div>

Freight is flowing more quickly through LTL terminals nationwide — a sign, carriers hope, of a steadier economic recovery.

<div>NAPLES, Fla. — There's a buzz about less-than-truckload transportation these days, and it's not the sound of drones.Despite predictions that tiny, unmanned aircraft flown by Amazon and others may drop packages on doorsteps some day, "until drones are invented that can handle 2,000 pound shipments, we're stuck with trucks," James Welch, chairman and CEO of YRC Worldwide, says.The buzz at the SMC3 summer conference here, where Welch spoke June 23, is being generated by freight flowing more quickly through LTL terminals nationwide — a sign, carriers hope, of a steadier economic recovery.LTL pricing is rising, perhaps by 3 to 4...

NAPLES, Fla. — There's a buzz about less-than-truckload transportation these days, and it's not the sound of drones. Despite predictions that tiny, unmanned aircraft flown by Amazon and others may drop packages on doorsteps some day, "until drones are invented that can handle 2,000 pound shipments, we're stuck with trucks," James Welch, chairman and CEO of YRC Worldwide, says. The buzz at the SMC3 summer conference here, where Welch spoke June 23, is being generated by freight flowing more quickly through LTL terminals nationwide — a sign, carriers hope, of a steadier economic recovery. LTL pricing is rising, perhaps by 3 to 4 percent in 2014, according to most sources, and carriers are getting better at figuring out how to price by lane and use technology to recoup transportation costs. That could lead to a more sustainable profitable industry, ensuring a healthier, more reliable and flexible carrier base for shippers. "I'm excited to work in this piece of the trucking industry," said Welch, who was hired at YRC Worldwide in 2011 to turn the company around after YRC suffered deep losses — a turnaround still in progress. "LTL carriers have always been resourceful, always found ways to meet the challenges we face," he said. "I'm convinced this group is smarter than we've been in the past." To date, most LTL operators are enjoying their best year since the end of the recession in 2009, with volume and tonnage rising and driving up pricing, despite the general economic wreckage of the first quarter. "Revenue has bounced back" after a severe winter raised havoc with U.S. supply chains, Welch said in an address to the more than 300 attendees at the SMC3 conference. The head of the $4.9 billion trucking holding company is largely optimistic about LTL's outlook. "There are some fundamental shifts in the economy we hope will remain strong," he said. For LTL, the key shift is in manufacturing activity, which increased for the 12th consecutive month in May, according to the Institute for Supply Management. The steady, if not stellar, improvement in manufacturing is a shot in the arm for LTL carriers, which depend more on industrial freight than their truckload counterparts, which are geared more toward retail shipments. "Services don't put freight on trucks, goods (manufactured) do," Welch said. Just how good a year 2014 will be for the LTL sector should become clearer as publicly owned carriers release second quarter earnings reports in July and August. "Despite the horrible winter, LTLs did pretty well" in the first quarter, David G. Ross, a managing director at investment research firm Stifel, said in a panel discussing the U.S. economy. "We think the second quarter will be even better for LTLs. Average tonnage per day is forecast to rise 6.7 percent (year-over-year). That's strong," he said. Welch and other LTL executives at the conference reported experiencing a "winter freight hangover" in March and April — a surge of freight that wasn't deliverable or was delayed by winter storms in the first quarter. Warmer temperatures pushed that freight into LTL networks. However, LTL demand remained elevated in May and June, they said, a sign the economic recovery has finally picked up its tepid pace. "June has stood up well," Welch said. But carriers are still wondering, he said, "Is this something we can bank on? Is the economic recovery really there?" That's because the recovery still lags when compared to previous upswings. During the recovery from the 2001-2003 downturn, U.S. gross domestic product grew 2.9 percent on average, while since 2009 GDP growth has averaged only 2.2 percent, Ross said. Economists recently surveyed by Reuters predict the U.S. economy will grow 2.2 percent this year, and 3 percent in 2015. At the SMC3 conference, Consulting Economist Don Ratajczak concurred with that estimate, but warned higher oil prices could drag the growth rate down. "Higher oil prices are slowing down the economy, but it hasn't slowed it down much yet," Ratajczak said. "Oil will make a difference if it stays up. If we're staring at West Texas crude costing $110 a barrel in September, we won't see 3 percent GDP growth in the fourth quarter," he said. Ratajczak previously forecast a return to 3 percent growth by that end-of-year period, but the recovery has been stubbornly slow. In part, that's because "we have fewer arrows in our quiver to jumpstart growth," Ross said. "We took what we could out of our homes before the housing bubble broke, and median household income is still below pre-recession levels." That's reflected in truck shipments, as well. The number of dry van loads is also lower than a decade ago, he said. That's partly because of weak consumer spending, but since 2008, higher fuel prices and the rise of intermodal rail also have checked growth in truckloads, Ross said. "Also, the dollar value of what's being moved is rising, while tonnage is (in the long-term) falling," a sign products and packaging are more compact and lighter. The LTL sector also is benefiting from tight capacity in the truckload business, Ross said. Because truckload carriers, from owner-operators to giants such as Swift Transportation and Schneider National, dominate the trucking landscape, it doesn't take much spillover from truckload trailers to LTL docks to make a big difference in LTL revenue. According to the Stifel analyst, if even 1 percent of the truckload freight were broken down, palletized and shipped by LTL, total LTL revenue could increase by more than $3 billion, or nearly 9 percent. Tightening truckload capacity is also strengthening LTL carriers' hand in pricing negotiations with customers. Ross expects the current "rate momentum" to continue through the end of the second quarter, at least. In the long term, LTL carriers should retain their pricing advantage "until the next recession," Ross said. Shippers at the SMC3 conference said finding ways to control rising U.S. transportation costs is their primary concern this year. One major roadblock for LTL carriers and their customers is the tightening market for truck drivers. Once primarily a long-haul truckload issue, the so-called driver shortage now affects every type of trucking operation, speakers at the SMC3 conference said. "This is everyone's problem," Welch said. During his stint as president of Yellow Transportation from 2000 through 2007, "we never had driver recruiters," he said. At YRC, a Teamsters company, "we were always able to attract drivers because of our benefits and pay." That's not the case post-recession, he said. "We have several recruiters now," Welch said. "If the economy shows improvement, I do believe capacity is going to be a real issue," he said. "Customers and carriers are going to have to form new kinds of relationships. The days of abusing the carrier over rates are in the past." Contact William B. Cassidy at wcassidy@joc.com and follow him on Twitter: @wbcassidy_joc .

LTL carriers building pricing power in 'strong' 2Q

<div class="phx-topic abstract-wrapper">The carrier is deriving an increasing share of its revenue from long-haul trans-Pacific and Asia-Europe services while the contribution from the intra-Asia trade declined last year.</div>

The carrier is deriving an increasing share of its revenue from long-haul trans-Pacific and Asia-Europe services while the contribution from the intra-Asia trade declined last year.

Feature image

<div class="phx-topic">Taiwan’s Yang Ming Marine Transport will buy three 8,000-TEU methanol-ready container ships from Japanese owner Shoei Kisen Kaisha for up to $360 million as the initial stage of a wider plan to acquire up to 13 vessels of between 8,000 and 15,000 TEU. The vessels “will strengthen Yang Ming’s global service network” as it increases its focus on long-haul trades, the carrier said in a statement. The ships are under construction at Japan’s Imabari Shipbuilding and due for delivery between 2028 and 2029. Yang Ming said the total cost of the vessels would be between $339 million and $360 million. The deal was confirmed Friday ahead of an investors conference Monday that showed Yang Ming is deriving an increasing share of revenue from long-haul trans-Pacific and Asia-Europe services while the contribution from its intra-Asia trade declined year over year. Acquisition of the other vessels under the expansion plan “will be carried out in accordance with internal procurement procedures to ensure mid- to long-term fleet stability and maintain service quality,” the carrier said. It gave no timeline for the remaining vessel acquisitions. Yang Ming’s directors agreed in December to acquire new ships to expand its network and replace 5,500-TEU and 6,500-TEU ships that are more than 20 years old. The carrier said it operated 99 vessels totaling 723,107 TEUs in the first quarter, including 38 chartered-in ships. Figures released during Monday’s conference show trans-Pacific and Asia-Europe services each contributed 38%, equivalent to $2.7 billion, to total revenue of $7 billion last year amid stronger freight rates. That compared with 35% for each trade in 2023, but on lower total revenues of $4.5 billion. The contribution from core intra-Asia services dropped to 9% last year from 12% a year earlier, while the proportion of revenues from longer-haul intra-Asia services to India and the Middle East also fell, to 15% from 18% in 2023. Yang Ming said it saw a mixed freight rate environment in January and February, with rates dipping last month on lower cargo volumes. Still, average revenue per TEU was $1,256 in the first two months, higher than $1,096/TEU the carrier recorded in the first two months of last year. Yang Ming said it expects cargo volume in the second quarter to “recover from the low levels in the first quarter,” though acknowledged that new tariffs, geopolitical conflicts and ongoing port congestion is creating uncertainty in the market. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

Taiwan’s Yang Ming Marine Transport will buy three 8,000-TEU methanol-ready container ships from Japanese owner Shoei Kisen Kaisha for up to $360 million as the initial stage of a wider plan to acquire up to 13 vessels of between 8,000 and 15,000 TEU. The vessels “will strengthen Yang Ming’s global service network” as it increases its focus on long-haul trades, the carrier said in a statement. The ships are under construction at Japan’s Imabari Shipbuilding and due for delivery between 2028 and 2029. Yang Ming said the total cost of the vessels would be between $339 million and $360 million. The deal was confirmed Friday ahead of an investors conference Monday that showed Yang Ming is deriving an increasing share of revenue from long-haul trans-Pacific and Asia-Europe services while the contribution from its intra-Asia trade declined year over year. Acquisition of the other vessels under the expansion plan “will be carried out in accordance with internal procurement procedures to ensure mid- to long-term fleet stability and maintain service quality,” the carrier said. It gave no timeline for the remaining vessel acquisitions. Yang Ming’s directors agreed in December to acquire new ships to expand its network and replace 5,500-TEU and 6,500-TEU ships that are more than 20 years old. The carrier said it operated 99 vessels totaling 723,107 TEUs in the first quarter, including 38 chartered-in ships. Figures released during Monday’s conference show trans-Pacific and Asia-Europe services each contributed 38%, equivalent to $2.7 billion, to total revenue of $7 billion last year amid stronger freight rates. That compared with 35% for each trade in 2023, but on lower total revenues of $4.5 billion. The contribution from core intra-Asia services dropped to 9% last year from 12% a year earlier, while the proportion of revenues from longer-haul intra-Asia services to India and the Middle East also fell, to 15% from 18% in 2023. Yang Ming said it saw a mixed freight rate environment in January and February, with rates dipping last month on lower cargo volumes. Still, average revenue per TEU was $1,256 in the first two months, higher than $1,096/TEU the carrier recorded in the first two months of last year. Yang Ming said it expects cargo volume in the second quarter to “recover from the low levels in the first quarter,” though acknowledged that new tariffs, geopolitical conflicts and ongoing port congestion is creating uncertainty in the market. Contact Keith Wallis at keithwallis@hotmail.com.

Container Shipping News

Container lines

Maritime

Yang Ming to buy three 8,000-TEU ships in first stage of fleet expansion

<div class="phx-topic abstract-wrapper">In creating the threat of a clearly significant penalty, the US Trade Representative essentially forced observers to not merely give a thumbs up or down to the proposal, but to offer alternative solutions. </div>

In creating the threat of a clearly significant penalty, the US Trade Representative essentially forced observers to not merely give a thumbs up or down to the proposal, but to offer alternative solutions.

<div class="phx-topic">Hearings this week held by the US Trade Representative (USTR) over the potential levying of fees on Chinese-built and -operated ships calling at US ports certainly struck a nerve in the maritime industry. The Section 301 investigation, officially known as “China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance,” prompted 520 comments submitted to the USTR by the March 24 deadline. More than 60 individuals gave testimony over two days of hearings. Perhaps the process was designed to elicit the heavy response the USTR received. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5971718_0.1.jpg"></img></div>By proposing fees of up to $1.5 million per US port call by Chinese tonnage, the industry had no option but to take notice. Some providing comments and testimony noted that the imposition of such fees would create an existential threat to their ability to serve US trades or specific ports, or, in some cases, to operate at all. In creating the threat of a clearly significant penalty, the USTR essentially forced those commenting to not merely give a thumbs up or down to the proposal, but to give alternative solutions based on the assumption that the Trump administration wanted something to be done to stimulate US shipbuilding. <h3>‘Think creatively’ </h3>“This essentially turned into a big brainstorming session,” Lauren Beagen, a trade attorney and former counsel at the US Federal Maritime Commission, told the Journal of Commerce this week. Beagen said the hearings forced the industry to think about ways that would allow the Trump administration to progress in its goals toward revitalizing the shipbuilding industry and US merchant fleet that likely wouldn’t have happened if the proposed penalties weren’t severe. “If the USTR just held a public hearing about how trade policies were impacting our shipbuilding industry, no one would have come,” she said. “This made everyone pay attention, and it also forced them to think creatively. How else would you have gotten the entire industry together to brainstorm like this.” To wit, a number of comments submitted to the USTR said the proposed fees were unworkable, but also had alternative suggestions to help invigorate US shipbuilding. The National Association of Waterfront Employers (NAWE), for instance, urged the USTR to consider a per-sailing fee, rather than a fee per port call, to prevent ocean carriers from consolidating port calls and hurting economic interests at US secondary and tertiary ports. <h3>Phased approach </h3>The Duluth Seaway Authority suggested the USTR phase in the port call fees and adopt a tiered approach to assessing the fees based on vessel and cargo types and the economic impact to the region. Similarly, the Port of New York and New Jersey said a phased approach to enforcing the fees would not penalize carriers for vessel and terminal investments that in some cases were made more than a decade ago. Container shipping analyst John McCown said in comments to the USTR that all fees collected in a prospective tariff program should go to a trust fund purely to support the US maritime sector. McCown estimated, using 2024 figures, that $58.9 billion would be collected annually in port fees, which represents 3.8% of the $1.5 trillion in imported goods moved via ocean, according to figures from UN Trade and Development (UNCTAD). “The good news/bad news is that the high value of container cargo puts that sector in the best position to absorb such large fees,” McCown wrote. And as an alternative to port call fees, he floated the idea of assessing per-container fees on boxes moving on Chinese-built ships that would be approximately equivalent to the amount China subsidizes its container line operators and shipbuilding industries. While that proposal, amounting to a fee of up to $60 per container, would generate far less revenue than the port call option, it would have a negligible impact on carrier networks and shippers’ supply chains, McCown argued. The broad effect of the port call fee proposal has been a call to arms across maritime and cargo interests to take seriously the administration’s efforts to reinvigorate US shipbuilding and operations in a way that would have been absent minus the threat of economic pain. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Hearings this week held by the US Trade Representative (USTR) over the potential levying of fees on Chinese-built and -operated ships calling at US ports certainly struck a nerve in the maritime industry. The Section 301 investigation, officially known as “China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance,” prompted 520 comments submitted to the USTR by the March 24 deadline. More than 60 individuals gave testimony over two days of hearings. Perhaps the process was designed to elicit the heavy response the USTR received. By proposing fees of up to $1.5 million per US port call by Chinese tonnage, the industry had no option but to take notice. Some providing comments and testimony noted that the imposition of such fees would create an existential threat to their ability to serve US trades or specific ports, or, in some cases, to operate at all. In creating the threat of a clearly significant penalty, the USTR essentially forced those commenting to not merely give a thumbs up or down to the proposal, but to give alternative solutions based on the assumption that the Trump administration wanted something to be done to stimulate US shipbuilding. ‘Think creatively’ “This essentially turned into a big brainstorming session,” Lauren Beagen, a trade attorney and former counsel at the US Federal Maritime Commission, told the Journal of Commerce this week. Beagen said the hearings forced the industry to think about ways that would allow the Trump administration to progress in its goals toward revitalizing the shipbuilding industry and US merchant fleet that likely wouldn’t have happened if the proposed penalties weren’t severe. “If the USTR just held a public hearing about how trade policies were impacting our shipbuilding industry, no one would have come,” she said. “This made everyone pay attention, and it also forced them to think creatively. How else would you have gotten the entire industry together to brainstorm like this.” To wit, a number of comments submitted to the USTR said the proposed fees were unworkable, but also had alternative suggestions to help invigorate US shipbuilding. The National Association of Waterfront Employers (NAWE), for instance, urged the USTR to consider a per-sailing fee, rather than a fee per port call, to prevent ocean carriers from consolidating port calls and hurting economic interests at US secondary and tertiary ports. Phased approach The Duluth Seaway Authority suggested the USTR phase in the port call fees and adopt a tiered approach to assessing the fees based on vessel and cargo types and the economic impact to the region. Similarly, the Port of New York and New Jersey said a phased approach to enforcing the fees would not penalize carriers for vessel and terminal investments that in some cases were made more than a decade ago. Container shipping analyst John McCown said in comments to the USTR that all fees collected in a prospective tariff program should go to a trust fund purely to support the US maritime sector. McCown estimated, using 2024 figures, that $58.9 billion would be collected annually in port fees, which represents 3.8% of the $1.5 trillion in imported goods moved via ocean, according to figures from UN Trade and Development (UNCTAD). “The good news/bad news is that the high value of container cargo puts that sector in the best position to absorb such large fees,” McCown wrote. And as an alternative to port call fees, he floated the idea of assessing per-container fees on boxes moving on Chinese-built ships that would be approximately equivalent to the amount China subsidizes its container line operators and shipbuilding industries. While that proposal, amounting to a fee of up to $60 per container, would generate far less revenue than the port call option, it would have a negligible impact on carrier networks and shippers’ supply chains, McCown argued. The broad effect of the port call fee proposal has been a call to arms across maritime and cargo interests to take seriously the administration’s efforts to reinvigorate US shipbuilding and operations in a way that would have been absent minus the threat of economic pain. Contact Eric Johnson at eric.johnson@spglobal.com .

Port News

Trans-Atlantic

Trans-Pacific

Transport, Trade and Regulation News

Plan to tax Chinese ships turned maritime malaise into ‘brainstorming session’

<div class="phx-topic abstract-wrapper">The move comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside of China to BlackRock and TiL, especially the Panama ports.</div>

The move comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside of China to BlackRock and TiL, especially the Panama ports.

<div class="phx-topic">Hong Kong-based CK Hutchison will miss next week’s target date to sign a deal selling its Panama Ports Company (PPC) to a consortium of BlackRock and Mediterranean Shipping Co. subsidiary Terminal Investment Limited (TiL). While the signing will not happen by the initial April 2 target date, the sale that has been shrouded in geopolitical intrigue has not been canceled, Hong Kong newspaper South China Morning Post reported Friday, quoting a source close to Hutchison. No new target date has been announced. The apparent delay comes as Hutchison is facing increasing pressure from the Chinese government over <a href="https://www.joc.com/article/hutchison-inks-228-billion-deal-to-sell-majority-of-port-holdings-to-blackrock-til-5955819">the $22.8 billion sale of its ports business outside of China to BlackRock and TiL</a>, especially the PPC-owned ports, Cristobal and Balboa, at either ends of the Panama Canal. On Friday, China’s State Administration for Market Regulation confirmed its second Anti-Monopoly Department will review the transaction “to protect fair competition in the market and safeguard the public interest.” The regulator gave no timeline for the probe in a notice published on its website. China has also reportedly told state-owned companies to halt new deals with CK Hutchison and other businesses linked to its founder, Hong Kong billionaire Li Ka-shing and his family, pending a review of their China operations, Bloomberg News reported Thursday. Only new ventures are covered by the moratorium, while existing operations are unaffected, Bloomberg said. Sale documentation for PPC was expected to be signed on or before April 2, Hutchison said in its March 4 announcement that it had reached an agreement “in principle” to sell PPC and its overseas ports network outside of China to BlackRock/TiL. The ports-telecoms-retail conglomerate had packaged PPC and its other global ports, excluding its China and Hong Kong terminals, into two separate contracts to enable a quicker sale of PPC and its two Panama ports. Hutchison has a 145-day exclusive negotiating period with BlackRock/TiL to sign final sale documents for both PPC and the other ports, which in total comprise 199 berths in 43 ports spread over 23 countries. The deal was announced amid growing ire within the new Trump administration over alleged Chinese influence in the operation of the Panama Canal. Beijing has not officially commented on the deal, saying it is a commercial transaction, but it has indicated its displeasure in other ways. That includes posting several critical commentaries on government websites, the most recent one on Wednesday, published by a Hong Kong-based pro-Beijing newspaper. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Hong Kong-based CK Hutchison will miss next week’s target date to sign a deal selling its Panama Ports Company (PPC) to a consortium of BlackRock and Mediterranean Shipping Co. subsidiary Terminal Investment Limited (TiL). While the signing will not happen by the initial April 2 target date, the sale that has been shrouded in geopolitical intrigue has not been canceled, Hong Kong newspaper South China Morning Post reported Friday, quoting a source close to Hutchison. No new target date has been announced. The apparent delay comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside of China to BlackRock and TiL , especially the PPC-owned ports, Cristobal and Balboa, at either ends of the Panama Canal. On Friday, China’s State Administration for Market Regulation confirmed its second Anti-Monopoly Department will review the transaction “to protect fair competition in the market and safeguard the public interest.” The regulator gave no timeline for the probe in a notice published on its website. China has also reportedly told state-owned companies to halt new deals with CK Hutchison and other businesses linked to its founder, Hong Kong billionaire Li Ka-shing and his family, pending a review of their China operations, Bloomberg News reported Thursday. Only new ventures are covered by the moratorium, while existing operations are unaffected, Bloomberg said. Sale documentation for PPC was expected to be signed on or before April 2, Hutchison said in its March 4 announcement that it had reached an agreement “in principle” to sell PPC and its overseas ports network outside of China to BlackRock/TiL. The ports-telecoms-retail conglomerate had packaged PPC and its other global ports, excluding its China and Hong Kong terminals, into two separate contracts to enable a quicker sale of PPC and its two Panama ports. Hutchison has a 145-day exclusive negotiating period with BlackRock/TiL to sign final sale documents for both PPC and the other ports, which in total comprise 199 berths in 43 ports spread over 23 countries. The deal was announced amid growing ire within the new Trump administration over alleged Chinese influence in the operation of the Panama Canal. Beijing has not officially commented on the deal, saying it is a commercial transaction, but it has indicated its displeasure in other ways. That includes posting several critical commentaries on government websites, the most recent one on Wednesday, published by a Hong Kong-based pro-Beijing newspaper. Contact Keith Wallis at keithwallis@hotmail.com .

International ports

Hutchison to delay Panama ports deal signing amid growing Beijing pressure

<div class="phx-topic abstract-wrapper">The deal comes as the world’s largest container shipping company looks to establish a bigger foothold in surface transportation. </div>

The deal comes as the world’s largest container shipping company looks to establish a bigger foothold in surface transportation.

<div class="phx-topic">A subsidiary of Mediterranean Shipping Co. has agreed in principle to acquire a majority ownership stake in intermodal logistics provider COFC Logistics, one of the most popular options for shippers looking to transport 53-foot domestic containers on BNSF Railway. Medlog USA, the MSC subsidiary, is expected to close the deal next week. It will keep the existing COFC Logistics management team in place, including CEO Garry Old. Terms of the deal were not disclosed. COFC hauls more than 100,000 intermodal shipments per year and grosses between $100 million and $500 million in revenue annually, according to Journal of Commerce estimates. Old, who will remain in his position for the next five years and retain a minority ownership stake in COFC, told the Journal of Commerce that shippers and intermodal marketing companies (IMCs) using COFC will not see any changes, adding that the company’s exclusive partnership with BNSF will remain intact. “The name is still the same, our email addresses, our logos, our brand will not change in any way,” Old said. “Our customers won’t notice any differences.” The deal comes as MSC attempts to get deeper into surface transportation in various countries and follows Medlog acquiring UK-based rail and road logistics provider Maritime Transport last September. Medlog made its first major splash in the US in 2022 when it acquired C&amp;K Holdings, which hauls ocean and domestic containers and owns terminals in nearly all US port cities, as well as rail ramps. Ohio-based COFC owns about 8,000 containers catering to customers who want to diversify their rail freight between BNSF and Union Pacific Railroad. Shippers who aren’t large enough to get the attention of leading IMC J.B. Hunt Transport Services will use brokers that team with COFC Logistics, although even large shippers use COFC to have multiple paths to access BNSF’s intermodal network. Medlog will infuse capital into COFC, which has faced the reality of intermodal contract rates falling from pandemic-level highs while operating costs keep rising. “We are restructuring some debt,” said Old. [The deal] improves our financial position.” Old said while asset-based and non-asset intermodal providers are struggling due to unsustainable rates, shippers don’t always tender the volumes they agree to, known as bid compliance. “Our industry needs to be better with BCO [beneficial cargo owner] compliance,” he said. “If the BCO is awarding 10,000 loads and it ends up being 1,000 loads, that’s a problem. That’s where the frustration sets in.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

A subsidiary of Mediterranean Shipping Co. has agreed in principle to acquire a majority ownership stake in intermodal logistics provider COFC Logistics, one of the most popular options for shippers looking to transport 53-foot domestic containers on BNSF Railway. Medlog USA, the MSC subsidiary, is expected to close the deal next week. It will keep the existing COFC Logistics management team in place, including CEO Garry Old. Terms of the deal were not disclosed. COFC hauls more than 100,000 intermodal shipments per year and grosses between $100 million and $500 million in revenue annually, according to Journal of Commerce estimates. Old, who will remain in his position for the next five years and retain a minority ownership stake in COFC, told the Journal of Commerce that shippers and intermodal marketing companies (IMCs) using COFC will not see any changes, adding that the company’s exclusive partnership with BNSF will remain intact. “The name is still the same, our email addresses, our logos, our brand will not change in any way,” Old said. “Our customers won’t notice any differences.” The deal comes as MSC attempts to get deeper into surface transportation in various countries and follows Medlog acquiring UK-based rail and road logistics provider Maritime Transport last September. Medlog made its first major splash in the US in 2022 when it acquired C&K Holdings, which hauls ocean and domestic containers and owns terminals in nearly all US port cities, as well as rail ramps. Ohio-based COFC owns about 8,000 containers catering to customers who want to diversify their rail freight between BNSF and Union Pacific Railroad. Shippers who aren’t large enough to get the attention of leading IMC J.B. Hunt Transport Services will use brokers that team with COFC Logistics, although even large shippers use COFC to have multiple paths to access BNSF’s intermodal network. Medlog will infuse capital into COFC, which has faced the reality of intermodal contract rates falling from pandemic-level highs while operating costs keep rising. “We are restructuring some debt,” said Old. [The deal] improves our financial position.” Old said while asset-based and non-asset intermodal providers are struggling due to unsustainable rates, shippers don’t always tender the volumes they agree to, known as bid compliance. “Our industry needs to be better with BCO [beneficial cargo owner] compliance,” he said. “If the BCO is awarding 10,000 loads and it ends up being 1,000 loads, that’s a problem. That’s where the frustration sets in.” Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

MSC subsidiary acquiring US intermodal provider COFC Logistics

<div class="phx-topic abstract-wrapper">Donald Trump’s latest tariffs targeting the auto sector have put key ro/ro ports on alert as they face a “chilling effect” on volumes.</div>

Donald Trump’s latest tariffs targeting the auto sector have put key ro/ro ports on alert as they face a “chilling effect” on volumes.

<div class="phx-topic">US roll-on/roll-off (ro/ro) ports are expressing apprehension about 25% tariffs on automobile imports that are due to take effect in a matter of days, with cargo activity already fluctuating at some ports.The White House announced Tuesday that President Donald Trump would impose the tariffs on auto imports and certain automobile parts starting April 2. The tariff announcement has dialed up concerns in the Pacific Northwest, where auto imports account for a significant and growing business for the Seattle-Tacoma gateway, Northwest Seaport Alliance (NWSA) spokesperson Melanie Stambaugh Babst told the Journal of Commerce. Spurred by growth of automobile imports between 2020 and 2023, the Port of Tacoma is more than doubling the size of its ro/ro terminal facilities <a href="https://www.joc.com/article/tacoma-to-boost-roro-capacity-in-200-million-expansion-plan-5967271">and reached a deal March 17 to build a new $200 million complex for ro/ro and breakbulk cargo</a>.“We expect these tariffs to have a chilling effect on auto volumes imported through Seattle and Tacoma, though much is unknown about how significant or quickly impacts to imported cargo volumes will be felt across the supply chain,” Babst said. Richard Scher, spokesperson for the Maryland Port Administration and the Port of Baltimore, told the Journal of Commerce that auto exporters will dictate how tariffs play out at US ports. “As with other cargoes, ultimately any tariff impacts are dependent on if shippers want to reduce or stop shipping into the United States during times of active tariffs,” Scher said.Imports accounted for 85% of the autos that moved through the Port of Baltimore in 2024, which handled the second-most cars and light trucks of any US port last year. Scher said that of the 750,000 cars and light trucks the port handled in 2024, approximately 641,000 of them were imports. Tariff developments have also presented uncertainties for California’s Port of Long Beach, a major hub for auto imports and where East Asian trade accounts for more than 90% of overall shipments. CEO Mario Cordero told the Journal of Commerce the port is keeping close watch as the tariffs unfold and will continue investing in rail and terminal improvements to streamline cargo movements. “Given the dynamic environment, we will have to wait and see how the latest round of tariffs will impact auto imports and the national economy,” Cordero said.<h3>Cargo trends in flux</h3>Although the long-term effects of tariffs remain unclear, there are indications that recent cargo activity is reflecting the immediate uncertainty. Foreign auto shipments into US ports intensified in the first few months of 2025, suggesting that companies are pushing cargo through before any tariffs take effect. Citing data from analytics firm Esgian, Reuters reported that in February, 33 ro/ro ships — mostly carrying new cars — left Europe for the US, up from 28 vessels in February 2024. Stan Omli, senior vice president at Esgian, told Reuters that those five additional ships would have been able to carry about 30,000 more vehicles across the Atlantic. “Evidence points to increased activity from Europe and the Far East ... those two regions represent the major export regions to the US,” Omli said.Activity has shifted in the other direction at the Port of Brunswick in Georgia, where year-over-year ro/ro shipments of autos and heavy equipment dropped 10% to 6,882 units in February. The port’s Colonel’s Island Terminal handled 42 vessel calls for the month, three fewer than February 2024, according to port data. The decline comes after Brunswick overtook Baltimore as the busiest US port for automobiles, handling over 2 million tons of ro/ro cargo in 2024. According to Brunswick, US-made exports account for over 90% of autos moved by rail at Colonel’s Island.During a Georgia Ports Authority board meeting earlier this week, CEO Griff Lynch said a slowdown in auto sales may have contributed to the February decrease in ro/ro shipments, according to a report by the Savannah Morning News. “With the tariffs, there’s a lot of posturing going on and that could have some short-term impacts on our business, for sure,” Lynch said in the report. “But it’s tough to tell right now because it is a moving target, and we just don’t know where it’s going to land.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

US roll-on/roll-off (ro/ro) ports are expressing apprehension about 25% tariffs on automobile imports that are due to take effect in a matter of days, with cargo activity already fluctuating at some ports. The White House announced Tuesday that President Donald Trump would impose the tariffs on auto imports and certain automobile parts starting April 2. The tariff announcement has dialed up concerns in the Pacific Northwest, where auto imports account for a significant and growing business for the Seattle-Tacoma gateway, Northwest Seaport Alliance (NWSA) spokesperson Melanie Stambaugh Babst told the Journal of Commerce. Spurred by growth of automobile imports between 2020 and 2023, the Port of Tacoma is more than doubling the size of its ro/ro terminal facilities and reached a deal March 17 to build a new $200 million complex for ro/ro and breakbulk cargo . “We expect these tariffs to have a chilling effect on auto volumes imported through Seattle and Tacoma, though much is unknown about how significant or quickly impacts to imported cargo volumes will be felt across the supply chain,” Babst said. Richard Scher, spokesperson for the Maryland Port Administration and the Port of Baltimore, told the Journal of Commerce that auto exporters will dictate how tariffs play out at US ports. “As with other cargoes, ultimately any tariff impacts are dependent on if shippers want to reduce or stop shipping into the United States during times of active tariffs,” Scher said. Imports accounted for 85% of the autos that moved through the Port of Baltimore in 2024, which handled the second-most cars and light trucks of any US port last year. Scher said that of the 750,000 cars and light trucks the port handled in 2024, approximately 641,000 of them were imports. Tariff developments have also presented uncertainties for California’s Port of Long Beach, a major hub for auto imports and where East Asian trade accounts for more than 90% of overall shipments. CEO Mario Cordero told the Journal of Commerce the port is keeping close watch as the tariffs unfold and will continue investing in rail and terminal improvements to streamline cargo movements. “Given the dynamic environment, we will have to wait and see how the latest round of tariffs will impact auto imports and the national economy,” Cordero said. Cargo trends in flux Although the long-term effects of tariffs remain unclear, there are indications that recent cargo activity is reflecting the immediate uncertainty. Foreign auto shipments into US ports intensified in the first few months of 2025, suggesting that companies are pushing cargo through before any tariffs take effect. Citing data from analytics firm Esgian, Reuters reported that in February, 33 ro/ro ships — mostly carrying new cars — left Europe for the US, up from 28 vessels in February 2024. Stan Omli, senior vice president at Esgian, told Reuters that those five additional ships would have been able to carry about 30,000 more vehicles across the Atlantic. “Evidence points to increased activity from Europe and the Far East ... those two regions represent the major export regions to the US,” Omli said. Activity has shifted in the other direction at the Port of Brunswick in Georgia, where year-over-year ro/ro shipments of autos and heavy equipment dropped 10% to 6,882 units in February. The port’s Colonel’s Island Terminal handled 42 vessel calls for the month, three fewer than February 2024, according to port data. The decline comes after Brunswick overtook Baltimore as the busiest US port for automobiles, handling over 2 million tons of ro/ro cargo in 2024. According to Brunswick, US-made exports account for over 90% of autos moved by rail at Colonel’s Island. During a Georgia Ports Authority board meeting earlier this week, CEO Griff Lynch said a slowdown in auto sales may have contributed to the February decrease in ro/ro shipments, according to a report by the Savannah Morning News. “With the tariffs, there’s a lot of posturing going on and that could have some short-term impacts on our business, for sure,” Lynch said in the report. “But it’s tough to tell right now because it is a moving target, and we just don’t know where it’s going to land.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

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

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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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