<div class="phx-topic abstract-wrapper">Maersk Line said it will start manufacturing new containers in response to an &amp;ldquo;unprecedented&amp;rdquo; sh</div>

Maersk Line said it will start manufacturing new containers in response to an &ldquo;unprecedented&rdquo; sh

<div>Maersk Line said it will start manufacturing new containers in response to an &amp;ldquo;unprecedented&amp;rdquo; <a>shortage of boxes in Asia</a> caused by an unexpectedly strong rebound in cargo demand.The world&amp;rsquo;s largest ocean carrier also will lease containers to combat the shortage of boxes which it expects to worsen in the coming peak shipping season.<a>Asia-Europe Westbound Container Traffic</a>: By The Numbers.&amp;ldquo;We have also re-activated laid-up container ships to assist in repositioning containers as fast as possible from, for example, the east coast of North America and Latin America to Asia,&amp;rdquo; said Lars Reno Jakobsen, Head of Network and Product and a member...

Maersk Line said it will start manufacturing new containers in response to an &ldquo;unprecedented&rdquo; shortage of boxes in Asia caused by an unexpectedly strong rebound in cargo demand. The world&rsquo;s largest ocean carrier also will lease containers to combat the shortage of boxes which it expects to worsen in the coming peak shipping season. Asia-Europe Westbound Container Traffic : By The Numbers. &ldquo;We have also re-activated laid-up container ships to assist in repositioning containers as fast as possible from, for example, the east coast of North America and Latin America to Asia,&rdquo; said Lars Reno Jakobsen, Head of Network and Product and a member of Maersk Line&rsquo;s management board. Maersk last week cited equipment shortages when it announced a peak season surcharge of $750 for a 20-foot container and $1,000 for a 40-footer on the Asia-Europe trade effective July 15. &ldquo;The present market situation is unique. We are experiencing a demand surge in most trades which is a development that is both unprecedented and unexpected by us and our customers,&rdquo; Jakobsen said. The Asia-Europe trade is growing at an annualized rate of 23 percent compared to the market&rsquo;s single digit expectation just six months ago. &ldquo;Therefore we already see a very tight equipment situation. And we expect an even more pronounced and serious shortage of containers in the coming months as we enter the peak season,&rdquo; Jakobsen said. &ldquo;We have been working hard in the last couple of months to minimize the inconvenience for our customers. And we are adamant that we continue to live up to the container commitments we make, also through the peak season.&rdquo; During the container shipping recession from the end of 2008 through 2009 many ocean carriers and container leasing companies stopped sourcing and producing equipment, Maersk said. As carriers and shippers did not expect the current demand surge, the necessary equipment has not been ordered in 2010, ultimately resulting in the global shortage in equipment, it said. The carrier said the Asia-Europe peak season surcharge will help it to recover the higher costs caused by increased volumes and equipment shortages and ensure it can continue to offer its service in a sustainable manner. &ldquo; To make it easy and transparent for our customers in this trade we are only applying one peak season surcharge and we will therefore not announce separate surcharges or rate increases in connection with the peak season,&rdquo; the carrier said today, June 17. Maersk said it expects the equipment shortage to last through the third quarter of the year &ldquo;and will continue to work close together with all stakeholders, not least our customers, to further reduce equipment turnaround times.&rdquo; -- Contact Bruce Barnard at brucebarnard47@hotmail.com .

Maritime

Container lines

Forwarding

Maersk to Manufacture Containers to Relieve Shortage

<div class="phx-topic abstract-wrapper">The question is not whether the market will be strong in the first quarter, but rather how high rates will climb, writes analyst Richard Bright. </div>

The question is not whether the market will be strong in the first quarter, but rather how high rates will climb, writes analyst Richard Bright.

Feature image

<div class="phx-topic">While a projection for the short-term developmental trends of the global reefer charter market is relatively straightforward, it is becoming increasingly difficult to forecast a medium-term trend. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5923843_0.1.jpg"></img></div>That is because that even though there is broad consensus and plenty of supporting evidence that the global volume of perishable and other temperature-sensitive goods will continue to rise, a forecast for the reefer market is no longer contingent on the traditional supply and demand levers for reefer cargo. Instead, there are other variables, often entirely unrelated to the trade in perishable goods, that now determine the state of the reefer market, particularly for containers. This in itself is important because the pricing of reefer containers is the most critical variable in determining the strength of the specialized reefer charter market. In terms of market share, the specialized reefer holds less than 3% of global reefer capacity. Consequently, the mode is a price taker. That it holds an estimated 15% to 18% share of globally transported perishable goods is a testament partly to its greater efficiency and partly because there is a degree of demand inelasticity for the mode. That is to say in some trades and for specific reasons, cargo has legitimate commercial reasons to prefer the specialized alternative and is prepared to pay a premium for the privilege. However, while it may occupy an ever-shrinking niche and have some resistance to the shift in competitive reefer rates offered by the carriers because of this demand inelasticity, the mode is unsurprisingly not entirely immune to the behavior of the container market. What complicates matters is that in contrast to the logical manner in which specialized reefer rates are determined, how the carriers price reefer is something of a mystery. Rates often seem arbitrary and/or bear little relation to commercial or reefer market reality. This is not only because the list of direct and indirect reefer rate-determining variables for the carriers is long, but also because container shipping is vulnerable to “Black Swan,” “Grey Rhino,” “White Elephant” and “Black Jellyfish” events. The other major factor, or variable, is the competition among carriers in general and on specific trade lanes in particular. The latter is more important: The more service strings offered on a certain voyage, the greater the competition. This maintains pressure on individual carriers and keeps the cost to ship cargo realistic. However, the same is true vice-versa — the fewer the services, the lower the competition. This is why in the short-term, cargo (both reefer and general) is right to fear the growing consolidation of the container shipping industry. In the medium-to-long term, the disappearance of the specialized alternative will further rationalize options, at least for reefer cargo. <h3>Feeding on disruption </h3>What then of the reefer? It is not extreme to suggest that the specialized mode feeds on disruptions in the reefer container supply chain and well beyond. For example, during the COVID-19 pandemic, demand for the specialized reefer mode soared — not because of an increase in the trade in perishable products, but because the carriers were using their equipment as non-operational reefers (NORs) to transport better-paying general cargo, thereby creating a reefer capacity shortage. Meanwhile, the Russian invasion of Ukraine led to the abandonment of all containerized services, bar those from Mediterranean Shipping Co. This has led to the absorption of more specialized reefer capacity of which Cool Carriers continues to be the major beneficiary. Since October 2023, when the Houthi rebels in Yemen first attacked commercial vessels, the carriers have been forced to divert away from Suez and sail around the Cape of Good Hope. This had added time and expense to east-west carrier services. It has also, therefore, tied up more dry vans and reefer containers for longer, creating localized shortages where demand is strong. As an example, the combination of inventory shortages and the start to the Chilean cherry season saw container lines temporarily blank some reefer services out of Ecuador at the end of October. It also led to all the carriers announcing indefinite and hefty peak season surcharges (PSSs) for reefer exports from the West Coast of South America. Meanwhile, in the first quarter of the year, just the threat of a container port strike in the US has benefitted the specialized mode. Cargo had already factored in the potential for a strike: The combination of a shortage of equipment, high reefer container rates and concerns about the consequences of a stoppage led to a surge in interest for specialized reefer capacity among Peruvian table grape shippers in December and the launch of Seatrade’s Andes Express Service. There are other reasons to suggest that the first quarter of 2025 will see strong demand for reefer capacity. Most significantly is the return of Seatrade tonnage to Chile. Last season, which was complicated by the Panama Canal transit restrictions and slot reservation difficulties, no Seatrade vessel was employed in the Chilean trade to the US East Coast. This season, Seatrade is planning 11 to 15 sailings. The question, therefore, is not whether the market will be strong in the first quarter — it is how high rates will climb. Given that such a large proportion of the reefer fleet is fixed into liner schedules and Contracts of Affreightment (COAs), operators are not going to reap the full benefit. However, if it is true that the principal cause for the shortage of reefer equipment is the increase in Chilean cherry and Peruvian grape and blueberry volumes, the short- to medium-term future for the mode is actually quite secure. If the carriers cannot service the extraordinary peak in demand from the West Coast of South America (WCSA) in December and January without sacrificing custom in other trade lanes, the reefer mode can justify its existence and retain its relevance. More importantly, it might just occur to the carriers that a genuine inability to cover all the bases on the WCSA in December through March could have a positive collateral impact on their contract rates for reefer globally for the full 12 months. Contact Richard Bright at <a href="mailto:richard.bright@spitfireuk.net">richard.bright@spitfireuk.net</a>.</div>

While a projection for the short-term developmental trends of the global reefer charter market is relatively straightforward, it is becoming increasingly difficult to forecast a medium-term trend. That is because that even though there is broad consensus and plenty of supporting evidence that the global volume of perishable and other temperature-sensitive goods will continue to rise, a forecast for the reefer market is no longer contingent on the traditional supply and demand levers for reefer cargo. Instead, there are other variables, often entirely unrelated to the trade in perishable goods, that now determine the state of the reefer market, particularly for containers. This in itself is important because the pricing of reefer containers is the most critical variable in determining the strength of the specialized reefer charter market. In terms of market share, the specialized reefer holds less than 3% of global reefer capacity. Consequently, the mode is a price taker. That it holds an estimated 15% to 18% share of globally transported perishable goods is a testament partly to its greater efficiency and partly because there is a degree of demand inelasticity for the mode. That is to say in some trades and for specific reasons, cargo has legitimate commercial reasons to prefer the specialized alternative and is prepared to pay a premium for the privilege. However, while it may occupy an ever-shrinking niche and have some resistance to the shift in competitive reefer rates offered by the carriers because of this demand inelasticity, the mode is unsurprisingly not entirely immune to the behavior of the container market. What complicates matters is that in contrast to the logical manner in which specialized reefer rates are determined, how the carriers price reefer is something of a mystery. Rates often seem arbitrary and/or bear little relation to commercial or reefer market reality. This is not only because the list of direct and indirect reefer rate-determining variables for the carriers is long, but also because container shipping is vulnerable to “Black Swan,” “Grey Rhino,” “White Elephant” and “Black Jellyfish” events. The other major factor, or variable, is the competition among carriers in general and on specific trade lanes in particular. The latter is more important: The more service strings offered on a certain voyage, the greater the competition. This maintains pressure on individual carriers and keeps the cost to ship cargo realistic. However, the same is true vice-versa — the fewer the services, the lower the competition. This is why in the short-term, cargo (both reefer and general) is right to fear the growing consolidation of the container shipping industry. In the medium-to-long term, the disappearance of the specialized alternative will further rationalize options, at least for reefer cargo. Feeding on disruption What then of the reefer? It is not extreme to suggest that the specialized mode feeds on disruptions in the reefer container supply chain and well beyond. For example, during the COVID-19 pandemic, demand for the specialized reefer mode soared — not because of an increase in the trade in perishable products, but because the carriers were using their equipment as non-operational reefers (NORs) to transport better-paying general cargo, thereby creating a reefer capacity shortage. Meanwhile, the Russian invasion of Ukraine led to the abandonment of all containerized services, bar those from Mediterranean Shipping Co. This has led to the absorption of more specialized reefer capacity of which Cool Carriers continues to be the major beneficiary. Since October 2023, when the Houthi rebels in Yemen first attacked commercial vessels, the carriers have been forced to divert away from Suez and sail around the Cape of Good Hope. This had added time and expense to east-west carrier services. It has also, therefore, tied up more dry vans and reefer containers for longer, creating localized shortages where demand is strong. As an example, the combination of inventory shortages and the start to the Chilean cherry season saw container lines temporarily blank some reefer services out of Ecuador at the end of October. It also led to all the carriers announcing indefinite and hefty peak season surcharges (PSSs) for reefer exports from the West Coast of South America. Meanwhile, in the first quarter of the year, just the threat of a container port strike in the US has benefitted the specialized mode. Cargo had already factored in the potential for a strike: The combination of a shortage of equipment, high reefer container rates and concerns about the consequences of a stoppage led to a surge in interest for specialized reefer capacity among Peruvian table grape shippers in December and the launch of Seatrade’s Andes Express Service. There are other reasons to suggest that the first quarter of 2025 will see strong demand for reefer capacity. Most significantly is the return of Seatrade tonnage to Chile. Last season, which was complicated by the Panama Canal transit restrictions and slot reservation difficulties, no Seatrade vessel was employed in the Chilean trade to the US East Coast. This season, Seatrade is planning 11 to 15 sailings. The question, therefore, is not whether the market will be strong in the first quarter — it is how high rates will climb. Given that such a large proportion of the reefer fleet is fixed into liner schedules and Contracts of Affreightment (COAs), operators are not going to reap the full benefit. However, if it is true that the principal cause for the shortage of reefer equipment is the increase in Chilean cherry and Peruvian grape and blueberry volumes, the short- to medium-term future for the mode is actually quite secure. If the carriers cannot service the extraordinary peak in demand from the West Coast of South America (WCSA) in December and January without sacrificing custom in other trade lanes, the reefer mode can justify its existence and retain its relevance. More importantly, it might just occur to the carriers that a genuine inability to cover all the bases on the WCSA in December through March could have a positive collateral impact on their contract rates for reefer globally for the full 12 months. Contact Richard Bright at richard.bright@spitfireuk.net .

Container Shipping News

Cool Cargo News

Global reefer market set to soar amid disruption, strong demand

<div class="phx-topic abstract-wrapper">The moves by Hapag-Lloyd and CMA CGM come amid uncertainty about the outlook for the intra-Asia trade, with one analyst suggesting a possible rate war could see prices in the region tumble if there is no summer peak season.</div>

The moves by Hapag-Lloyd and CMA CGM come amid uncertainty about the outlook for the intra-Asia trade, with one analyst suggesting a possible rate war could see prices in the region tumble if there is no summer peak season.

<div class="phx-topic">Hapag-Lloyd and CMA CGM are bolstering their intra-Asia networks this month with a raft of new services and extra port calls ahead of the reshuffle of carrier alliances, including the launch of the Hapag-Lloyd/Maersk Gemini Cooperation partnership on Feb 1. Hapag-Lloyd said its new feeeders include a Vietnam-Cambodia-China (VCS) service that will better connect the two Southeast Asian countries with Gemini’s trans-Pacific and Asia networks. The service will be inaugurated on Jan. 18 with a call at Sihanoukville in Cambodia by the 1,900-TEU Nordatlantic. The rotation includes calls at Vung Tau, Haiphong, Yantian and Shekou. Other enhancements are a new India Asia Express (IAX) service that will connect ports in Asia, including Singapore and North Asia, with Mundra in India. It will link with the Gemini shuttle network to enable North America-bound cargo to connect at Qingdao and Busan, Hapag-Lloyd said in an advisory this week. The service will be inaugurated by the 4,957-TEU X-Press Odyssey that is due to arrive at Mundra on Feb. 16. The full rotation is Mundra-Singapore-Qingdao-Tianjin-Busan. Four other new services will connect the Gemini hubs at Singapore and Tanjung Pelepas in Malayasia with ports in Southeast Asia and East Asia. They are the China Philippines feeder (CPF) that will also connect Nansha in southern China and the Philippine ports of Batangas, Manila and Subic Bay beginning Feb. 14; the Jakarta feeder (JKF) that will have two weekly sailings linking Jakarta with the two Gemini hubs from Feb. 8; the Singapore Surabaya loop (SS1) service connecting Tanjung Pelepas and Singapore with Surabaya and Semarang in Indonesia beginning Feb. 13; and the Taiwan Express (TWX) linking the Gemini hubs with Taichung and Kaohsiung from Feb. 6. Tanjung Pelepas will also be added as a port call on the Vietnam-Indonesia-Straits (VIS) service to provide a direct connection between the existing VIS ports and Gemini’s east-west mainline network. CNC Line, the intra-Asia subsidiary of CMA CGM, said it will resume its NKT service connecting North and Southeast Asia that will improve connectivity with the updated Ocean Alliance 2025 east-west network <a href="https://www.joc.com/article/ocean-alliance-network-to-grow-trans-pacific-asia-europe-coverage-5921435">that was announced on Jan 13</a>. There will be direct calls from Thailand and Vietnam to South Korea, reducing transit times, CNC said. The service will be inaugurated by the 1,614-TEU Starship Aquila from Jan. 15. The full rotation is Incheon-Gwangyang-Busan-Hong Kong-Shekou-Laem Chabang-Bangkok-Laem Chabang-Ho Chi Minh City-Incheon. <h3>Regional rate war? </h3>The moves come amid uncertainty about the outlook for the intra-Asia trade, with a Drewry analyst suggesting a possible rate war could see rates in the region tumble if there is no summer peak season. Data from online benchmarking platform Xeneta and Container Trade Statistics (CTS) shows the intra-Asia peak season has shifted over the last three years from an early summer to an early fall high to more closely resemble the east-west mainline peak. Highlighting the current rate environment the intra-Asia trade, Stijn Rubens, senior consultant at Drewry Supply Chain Advisors, said average freight rates are likely to soften until the middle of the second quarter. Rubens said Drewry’s recently launched intra-Asia index showed rates softening, “which is indicative of sluggish volumes — i.e. no pre-Lunar New Year peak, and hence rates are likely to continue softening until the start of summer peak season.” FIBS Logistics agreed but said while rates generally may have slipped, they have nudged higher on some routes. “We have yet to see strong demand [for] after the Lunar New Year,” a Singapore-based senior executive at the company told the Journal of Commerce. “Intra-Asia space is still tight, partly due to bad weather, port and vessel delays,” the executive added. “Hence rate increases are positive for some corridors such as Japan/ Thailand/Indonesia.” Xeneta data shows intra-Asia rates started to ease on key trades from Shanghai to Singapore, Bangkok and Vietnam’s main ports — Ho Chi Minh City and Haiphong — at the beginning of January. Rates from Shanghai to Bangkok hit a 2024 high of about $2,000 per FEU in December, but had slipped to about $1,900 by Jan. 8. Similarly, spot rates from Shanghai to Vietnam’s main ports slipped from a 2024 high of $1,700 per FEU in December to $1,600 on Jan. 8. Drewry’s Rubens noted that rates still have some way to fall until they reach pre-COVID-19 levels. “With the new alliance structures phasing in during the first and second quarters, a rate war may make that happen without a summer peak,” he said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Hapag-Lloyd and CMA CGM are bolstering their intra-Asia networks this month with a raft of new services and extra port calls ahead of the reshuffle of carrier alliances, including the launch of the Hapag-Lloyd/Maersk Gemini Cooperation partnership on Feb 1. Hapag-Lloyd said its new feeeders include a Vietnam-Cambodia-China (VCS) service that will better connect the two Southeast Asian countries with Gemini’s trans-Pacific and Asia networks. The service will be inaugurated on Jan. 18 with a call at Sihanoukville in Cambodia by the 1,900-TEU Nordatlantic. The rotation includes calls at Vung Tau, Haiphong, Yantian and Shekou. Other enhancements are a new India Asia Express (IAX) service that will connect ports in Asia, including Singapore and North Asia, with Mundra in India. It will link with the Gemini shuttle network to enable North America-bound cargo to connect at Qingdao and Busan, Hapag-Lloyd said in an advisory this week. The service will be inaugurated by the 4,957-TEU X-Press Odyssey that is due to arrive at Mundra on Feb. 16. The full rotation is Mundra-Singapore-Qingdao-Tianjin-Busan. Four other new services will connect the Gemini hubs at Singapore and Tanjung Pelepas in Malayasia with ports in Southeast Asia and East Asia. They are the China Philippines feeder (CPF) that will also connect Nansha in southern China and the Philippine ports of Batangas, Manila and Subic Bay beginning Feb. 14; the Jakarta feeder (JKF) that will have two weekly sailings linking Jakarta with the two Gemini hubs from Feb. 8; the Singapore Surabaya loop (SS1) service connecting Tanjung Pelepas and Singapore with Surabaya and Semarang in Indonesia beginning Feb. 13; and the Taiwan Express (TWX) linking the Gemini hubs with Taichung and Kaohsiung from Feb. 6. Tanjung Pelepas will also be added as a port call on the Vietnam-Indonesia-Straits (VIS) service to provide a direct connection between the existing VIS ports and Gemini’s east-west mainline network. CNC Line, the intra-Asia subsidiary of CMA CGM, said it will resume its NKT service connecting North and Southeast Asia that will improve connectivity with the updated Ocean Alliance 2025 east-west network that was announced on Jan 13 . There will be direct calls from Thailand and Vietnam to South Korea, reducing transit times, CNC said. The service will be inaugurated by the 1,614-TEU Starship Aquila from Jan. 15. The full rotation is Incheon-Gwangyang-Busan-Hong Kong-Shekou-Laem Chabang-Bangkok-Laem Chabang-Ho Chi Minh City-Incheon. Regional rate war? The moves come amid uncertainty about the outlook for the intra-Asia trade, with a Drewry analyst suggesting a possible rate war could see rates in the region tumble if there is no summer peak season. Data from online benchmarking platform Xeneta and Container Trade Statistics (CTS) shows the intra-Asia peak season has shifted over the last three years from an early summer to an early fall high to more closely resemble the east-west mainline peak. Highlighting the current rate environment the intra-Asia trade, Stijn Rubens, senior consultant at Drewry Supply Chain Advisors, said average freight rates are likely to soften until the middle of the second quarter. Rubens said Drewry’s recently launched intra-Asia index showed rates softening, “which is indicative of sluggish volumes — i.e. no pre-Lunar New Year peak, and hence rates are likely to continue softening until the start of summer peak season.” FIBS Logistics agreed but said while rates generally may have slipped, they have nudged higher on some routes. “We have yet to see strong demand [for] after the Lunar New Year,” a Singapore-based senior executive at the company told the Journal of Commerce. “Intra-Asia space is still tight, partly due to bad weather, port and vessel delays,” the executive added. “Hence rate increases are positive for some corridors such as Japan/ Thailand/Indonesia.” Xeneta data shows intra-Asia rates started to ease on key trades from Shanghai to Singapore, Bangkok and Vietnam’s main ports — Ho Chi Minh City and Haiphong — at the beginning of January. Rates from Shanghai to Bangkok hit a 2024 high of about $2,000 per FEU in December, but had slipped to about $1,900 by Jan. 8. Similarly, spot rates from Shanghai to Vietnam’s main ports slipped from a 2024 high of $1,700 per FEU in December to $1,600 on Jan. 8. Drewry’s Rubens noted that rates still have some way to fall until they reach pre-COVID-19 levels. “With the new alliance structures phasing in during the first and second quarters, a rate war may make that happen without a summer peak,” he said. Contact Keith Wallis at keithwallis@hotmail.com .

Port News

International ports

Carriers bolster intra-Asia networks amid uncertain rate, demand outlook

<div class="phx-topic abstract-wrapper">The peace deal in Gaza is highlighting the capacity overhang facing container shipping once vessels absorbed by the longer voyages around southern Africa return to the shorter route via the Red Sea and Suez.</div>

The peace deal in Gaza is highlighting the capacity overhang facing container shipping once vessels absorbed by the longer voyages around southern Africa return to the shorter route via the Red Sea and Suez.

<div class="phx-topic">Commercial shipping will resume normal transits through the Suez Canal in late February at the earliest under the most optimistic analyst prediction made following the ceasefire agreement signed Wednesday between Israel and Hamas, assuming all conditions are met. While that best-case scenario was offered by Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, the peace deal in Gaza is highlighting the capacity overhang facing container shipping once vessels absorbed by the longer voyages around southern Africa return to the shorter route via the Red Sea and Suez Canal. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthis said their attacks were a sign of solidarity with Hamas. Jensen noted the best-case scenario for shipping would require that the six-week ceasefire that begins Jan. 19 sticks, and that the two other phases of the deal — a full withdrawal from Gaza by Israeli forces and a rebuilding plan in place for the territory — are also met. “There is no specificity at this point as to whether or when the Houthis will lift their proclaimed embargo against certain groups of merchant vessels passing through the southern Red Sea,” Jensen <a href="https://www.linkedin.com/search/results/all/?fetchDeterministicClustersOnly=true&amp;heroEntityKey=urn%3Ali%3Afsd_profile%3AACoAAABT06QBma5hiHVSOND3WOHMUNYfxwswFL8&amp;keywords=lars%20jensen&amp;origin=RICH_QUERY_TYPEAHEAD_HISTORY&amp;position=0&amp;searchId=1367a011-a129-45c7-bb5b-3a8cff1f4783&amp;sid=%3AIW&amp;spellCorrectionEnabled=true">wrote in a LinkedIn post Thursday</a>. “It is likely that shipping lines currently diverting around Africa want to see not only the ceasefire hold up ... but also see some meaningful traction on the negotiations for phase two and three of the ceasefire — as well as see some meaningful statements from the Houthis in terms of no longer targeting merchant vessels,” Jensen said. An analysis by S&amp;P Global Market Intelligence published Thursday noted that the main economic impact of the Red Sea route reopening would be to return capacity to the container shipping system, equivalent to about 6% to 8% of existing vessels. At the same time, new vessels adding nearly 24% of new capacity to the global fleet would be launched over the next three years. Still, Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&amp;P Global Market Intelligence, parent company of the Journal of Commerce, said the ceasefire would not bring safety to the Red Sea. “The Houthi are likely to continue to target international vessels in transit regardless of a ceasefire being agreed between Israel and Hamas or end to the wider conflict because it still is an effective means for them to demonstrate internal legitimacy and engage external actors, and secure revenue through protection payments,” Kennedy wrote in a report Thursday. “Even with the ceasefire outlined, there is still going to be an Israeli military presence in Gaza, and what is in effect a blockade of the strip.” <h3>Red Sea risks remain </h3>Mediterranean Shipping Co. and the revised carrier alliances have all indicated in their new 2025 schedules that Cape of Good Hope diversions will continue, although Suez transit services were included in the schedules as the preferred option to deploy once it was safe to return to the Red Sea. Peter Sand, chief analyst at rate benchmarking platform Xeneta, said carriers need to re-assess their risks for Red Sea transits, and while a ceasefire was likely to lower the overall risk, more certainty was needed before shipping’s full return can happen. “Carriers need some assurance from the Houthi rebels before they begin their return, at first with sub-10,000 TEU ships and the last ones to return will be the 24,000-TEU container ships,” Sand told the Journal of Commerce. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="476e3a1b-4a99-4f05-9eb9-1b3e0c96bf09"></dynamic-object></div>Container carriers entered 2025 with a record order book of 8.3 million TEUs that followed the delivery of vessels totaling 2.9 million TEUs in 2024, according to shipping association BIMCO. An average of 1.9 million TEUs in capacity will be delivered every year from 2025 to 2028, peaking at 2.2 million TEUs in 2027, BIMCO noted. Sand said that when it was safe for carriers to return to the shorter Suez route, 2 million TEUs of container shipping capacity would no longer be needed, leading to large-scale lay-ups, demolition and re-deployment of vessels. ”But none of it, alone or in total, will prevent freight rates from falling to levels seen in early Q4 2023,” he said. “The question is how fast that will be. We expect some operational troubles to keep freight rates volatile for one to two months.” Sand said while carriers have been good at capacity management in the past few years, the Suez return scenario was “next level.” ”You can’t just be smart and feed 2 million TEUs into other trades and expect no impact,” he said. “Upon return [to the Suez], fundamental overcapacity will reign once again.” Much of the capacity ordered over the past three years is for vessels greater than 14,500 TEUs that are being steadily deployed on the Asia-Europe trade where all available vessels are being utilized. Virtually no scrapping in the past few years has resulted in the number of ships 20 years old or older reaching 11% of the in-service fleet at 3.4 million TEUs. “It would require 680,000 TEUs per year to recycle all ships 20 years old or older during the next five years — the current annual record is 657,000 TEUs — but actual recycling is likely to end lower,” Niels Rasmussen, chief shipping analyst at BIMCO, wrote in a report this week, adding that as long as ships could not fully return to the Red Sea, recycling would continue to be low. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Commercial shipping will resume normal transits through the Suez Canal in late February at the earliest under the most optimistic analyst prediction made following the ceasefire agreement signed Wednesday between Israel and Hamas, assuming all conditions are met. While that best-case scenario was offered by Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, the peace deal in Gaza is highlighting the capacity overhang facing container shipping once vessels absorbed by the longer voyages around southern Africa return to the shorter route via the Red Sea and Suez Canal. Most commercial vessels have avoided the Suez for the past 14 months amid ongoing attacks by Houthi militants operating in Yemen, forcing ships to divert away from the Red Sea to the longer route around the Cape of Good Hope. The Houthis said their attacks were a sign of solidarity with Hamas. Jensen noted the best-case scenario for shipping would require that the six-week ceasefire that begins Jan. 19 sticks, and that the two other phases of the deal — a full withdrawal from Gaza by Israeli forces and a rebuilding plan in place for the territory — are also met. “There is no specificity at this point as to whether or when the Houthis will lift their proclaimed embargo against certain groups of merchant vessels passing through the southern Red Sea,” Jensen wrote in a LinkedIn post Thursday . “It is likely that shipping lines currently diverting around Africa want to see not only the ceasefire hold up ... but also see some meaningful traction on the negotiations for phase two and three of the ceasefire — as well as see some meaningful statements from the Houthis in terms of no longer targeting merchant vessels,” Jensen said. An analysis by S&P Global Market Intelligence published Thursday noted that the main economic impact of the Red Sea route reopening would be to return capacity to the container shipping system, equivalent to about 6% to 8% of existing vessels. At the same time, new vessels adding nearly 24% of new capacity to the global fleet would be launched over the next three years. Still, Jack Kennedy, associate director of country risk for the Middle East and North Africa at S&P Global Market Intelligence, parent company of the Journal of Commerce, said the ceasefire would not bring safety to the Red Sea. “The Houthi are likely to continue to target international vessels in transit regardless of a ceasefire being agreed between Israel and Hamas or end to the wider conflict because it still is an effective means for them to demonstrate internal legitimacy and engage external actors, and secure revenue through protection payments,” Kennedy wrote in a report Thursday. “Even with the ceasefire outlined, there is still going to be an Israeli military presence in Gaza, and what is in effect a blockade of the strip.” Red Sea risks remain Mediterranean Shipping Co. and the revised carrier alliances have all indicated in their new 2025 schedules that Cape of Good Hope diversions will continue, although Suez transit services were included in the schedules as the preferred option to deploy once it was safe to return to the Red Sea. Peter Sand, chief analyst at rate benchmarking platform Xeneta, said carriers need to re-assess their risks for Red Sea transits, and while a ceasefire was likely to lower the overall risk, more certainty was needed before shipping’s full return can happen. “Carriers need some assurance from the Houthi rebels before they begin their return, at first with sub-10,000 TEU ships and the last ones to return will be the 24,000-TEU container ships,” Sand told the Journal of Commerce. Container carriers entered 2025 with a record order book of 8.3 million TEUs that followed the delivery of vessels totaling 2.9 million TEUs in 2024, according to shipping association BIMCO. An average of 1.9 million TEUs in capacity will be delivered every year from 2025 to 2028, peaking at 2.2 million TEUs in 2027, BIMCO noted. Sand said that when it was safe for carriers to return to the shorter Suez route, 2 million TEUs of container shipping capacity would no longer be needed, leading to large-scale lay-ups, demolition and re-deployment of vessels. ”But none of it, alone or in total, will prevent freight rates from falling to levels seen in early Q4 2023,” he said. “The question is how fast that will be. We expect some operational troubles to keep freight rates volatile for one to two months.” Sand said while carriers have been good at capacity management in the past few years, the Suez return scenario was “next level.” ”You can’t just be smart and feed 2 million TEUs into other trades and expect no impact,” he said. “Upon return [to the Suez], fundamental overcapacity will reign once again.” Much of the capacity ordered over the past three years is for vessels greater than 14,500 TEUs that are being steadily deployed on the Asia-Europe trade where all available vessels are being utilized. Virtually no scrapping in the past few years has resulted in the number of ships 20 years old or older reaching 11% of the in-service fleet at 3.4 million TEUs. “It would require 680,000 TEUs per year to recycle all ships 20 years old or older during the next five years — the current annual record is 657,000 TEUs — but actual recycling is likely to end lower,” Niels Rasmussen, chief shipping analyst at BIMCO, wrote in a report this week, adding that as long as ships could not fully return to the Red Sea, recycling would continue to be low. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Return to Suez not a certainty even after Israel-Hamas ceasefire: analysts

<div class="phx-topic abstract-wrapper">With the president-elect looking to unwind some Biden administration policies, US port operators want to ensure that maritime transportation funding will not be unduly affected.</div>

With the president-elect looking to unwind some Biden administration policies, US port operators want to ensure that maritime transportation funding will not be unduly affected.

<div class="phx-topic">US ports on Wednesday laid out legislative priorities for the incoming Trump administration and new Congress that include continued federal spending for maritime transportation and navigation. While many of the priorities of the American Association of Port Authorities (AAPA) align with the president-elect’s campaign pledges, issues such as tariffs and clean energy funding at ports may face more challenges. AAPA said it met with Trump’s transition team and <a href="https://www.joc.com/article/former-congressman-tv-host-gets-trumps-nod-to-lead-dot-5820698">US Department of Transportation nominee Sean Duffy</a> to discuss its policy agenda for 2025. Among the group’s asks are permitting reform, easing restrictions on liquefied natural gas (LNG) development and reducing restrictions on vessel speed. AAPA said one of its top priorities is infrastructure spending. It asked Congress “not [to] rescind infrastructure spending” from the Inflation Reduction Act and the Bipartisan Infrastructure Law (BIL), two hallmark pieces of legislation from the outgoing Biden administration. BIL earmarked $17 billion specifically for ports through 2026, with the largest portion of that going to the US Army Corps of Engineers for maintenance of coastal and inland waterways. Some $2.25 billion of that law was funneled into the Port Infrastructure Development Program (PIDP), which has already issued $2 billion in grants since the BIL’s passage. The AAPA also asked that <a href="https://www.joc.com/article/port-nola-receives-more-federal-funds-for-proposed-container-terminal-5219974">other funding programs for ports</a>, <a href="https://www.joc.com/article/federal-grant-to-boost-baltimores-on-dock-rail-capacity-5242949">intermodal rail</a>, and <a href="https://www.joc.com/article/dot-offers-44-million-for-ny-nj-port-road-project-5249533">roads</a> be maintained. While Trump has not specifically addressed the BIL he has targeted the $3.5 trillion Inflation Reduction Act (IRA), saying in September he would “rescind all unspent funds” from the law. <a href="https://www.joc.com/article/project-cargo-optimism-buffeted-by-policy-unpredictability-5917316">Offshore wind</a>, and <a href="https://www.joc.com/article/offshore-project-delivers-virginia-cargo-windfall-5780771">breakbulk ports</a> by extension, expect to take the biggest hit from any change in the IRA. But container ports also <a href="https://www.joc.com/article/us-ports-plan-upgrades-to-electric-yard-equipment-after-securing-epa-grants-5782145">availed themselves of IRA funding</a>, chiefly for replacing diesel yard equipment with electric-powered machinery and installing charging stations for electric trucks. The IRA is also expected to help fund the Biden administration’s <a href="https://www.joc.com/article/white-house-counters-risk-of-chinese-port-cranes-with-20-billion-for-us-sourcing-5200230">$20 billion push</a> to establish a US-based manufacturer of ship-to-shore cranes. The program is bolstering electric vehicle battery and auto manufacturing, which is <a href="https://www.joc.com/article/southeast-gulf-ports-expect-container-uplift-from-electric-vehicle-plants-5224276">expected to boost cargo volumes through Southeast and Gulf ports</a>. Trump’s ability to roll back the IRA, though, remains unclear. Funds that have already been pledged to ports and others are considered safe. Additionally, rescinding unspent IRA funds would require an act of Congress. Although no Republicans voted for the IRA, 18 Republican representatives <a href="https://thehill.com/policy/energy-environment/4815990-mike-johnson-ira-clean-energy-tax-credits/">sent a letter last year to Speaker Mike Johnson</a> asking that IRA tax credits for clean energy projects remain intact. The AAPA also joined many other business groups in opposing Trump’s plans for fresh import tariffs, arguing that higher import duties may reduce cargo volumes and affect port revenues. “[But] any existing and expanded tariff revenue should be used to fund port infrastructure, which would strengthen our supply chains and have a deflationary effect on the economy,” the AAPA said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US ports on Wednesday laid out legislative priorities for the incoming Trump administration and new Congress that include continued federal spending for maritime transportation and navigation. While many of the priorities of the American Association of Port Authorities (AAPA) align with the president-elect’s campaign pledges, issues such as tariffs and clean energy funding at ports may face more challenges. AAPA said it met with Trump’s transition team and US Department of Transportation nominee Sean Duffy to discuss its policy agenda for 2025. Among the group’s asks are permitting reform, easing restrictions on liquefied natural gas (LNG) development and reducing restrictions on vessel speed. AAPA said one of its top priorities is infrastructure spending. It asked Congress “not [to] rescind infrastructure spending” from the Inflation Reduction Act and the Bipartisan Infrastructure Law (BIL), two hallmark pieces of legislation from the outgoing Biden administration. BIL earmarked $17 billion specifically for ports through 2026, with the largest portion of that going to the US Army Corps of Engineers for maintenance of coastal and inland waterways. Some $2.25 billion of that law was funneled into the Port Infrastructure Development Program (PIDP), which has already issued $2 billion in grants since the BIL’s passage. The AAPA also asked that other funding programs for ports , intermodal rail , and roads be maintained. While Trump has not specifically addressed the BIL he has targeted the $3.5 trillion Inflation Reduction Act (IRA), saying in September he would “rescind all unspent funds” from the law. Offshore wind , and breakbulk ports by extension, expect to take the biggest hit from any change in the IRA. But container ports also availed themselves of IRA funding , chiefly for replacing diesel yard equipment with electric-powered machinery and installing charging stations for electric trucks. The IRA is also expected to help fund the Biden administration’s $20 billion push to establish a US-based manufacturer of ship-to-shore cranes. The program is bolstering electric vehicle battery and auto manufacturing, which is expected to boost cargo volumes through Southeast and Gulf ports . Trump’s ability to roll back the IRA, though, remains unclear. Funds that have already been pledged to ports and others are considered safe. Additionally, rescinding unspent IRA funds would require an act of Congress. Although no Republicans voted for the IRA, 18 Republican representatives sent a letter last year to Speaker Mike Johnson asking that IRA tax credits for clean energy projects remain intact. The AAPA also joined many other business groups in opposing Trump’s plans for fresh import tariffs, arguing that higher import duties may reduce cargo volumes and affect port revenues. “[But] any existing and expanded tariff revenue should be used to fund port infrastructure, which would strengthen our supply chains and have a deflationary effect on the economy,” the AAPA said. Contact Michael Angell at michael.angell@spglobal.com .

Port infrastructure

North American ports

Transport, Trade and Regulation News

US ports urge Trump, Congress to keep funds in place but tariffs at bay

<div class="phx-topic abstract-wrapper">The Barstow International Gateway will be a transloading hub where the contents of ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach.</div>

The Barstow International Gateway will be a transloading hub where the contents of ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach.

<div class="phx-topic">The California Air Resources Board (CARB) has rescinded a proposed rule that would have required train locomotives operating in the state to produce zero emissions by 2030, a regulation that would have put a $1.5 billion project by BNSF Railway to expand its terminal in Barstow in serious jeopardy. BNSF can now move forward with the project that should be completed in 2027 or 2028. “Railroads are pleased that the California Air Resources Board has withdrawn its authorization request for the ill-conceived in-use locomotive rule,” the Association of American Railroads (AAR) said in a statement Wednesday. “As we move past this untenable proposal, railroads look forward to focusing on advancing their already strong sustainability profile and further reducing emissions in the years to come.” A US District Court judge last November paused the proposed Jan. 1 implementation of the locomotive emissions rule to determine whether it violated federal pre-emption laws on interstate commerce. The decision by CARB to drop the rule comes after the US Bureau of Land Management on Monday approved the sale of the federal land to BNSF on which the railroad will develop the Barstow Intermodal Gateway, or BIG. BIG will be a transloading hub where ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach. Aside from requiring zero-emission locomotives, the proposed CARB rule would have immediately banned any locomotive 23 years or older from operating in California. BNSF argued that the current technology isn’t viable to meet the zero-emission standards, adding the rule also would have limited the useful life of 25,000 relatively new diesel-electric hybrid locomotives. <h3>Hub would benefit stakeholders </h3>If BNSF’s Barstow hub is successful, it can have a positive impact on several supply chain stakeholders. For the railroad, it would boost transloading of imports into domestic containers using intermodal providers that don’t run into the same equipment challenges as the maritime industry. J.B. Hunt Transport Services, for example, owns its chassis, so BNSF can quickly mount a load off a train and place the unit in a parking spot. A successful Barstow terminal would also benefit shippers in several ways. Domestic intermodal providers are hyper-focused on box turns — meaning the number of revenue-paying loads an average container handles per month — in order to maximize revenue. BNSF partners such as J.B. Hunt are much more likely to send a driver immediately and deliver the load to the customer, rarely letting the box idle in the terminal for more than 24 to 48 hours. Also, customers who don’t transload will benefit because fewer loads would move in ocean containers. Transferring imports into domestic containers would free up the ocean boxes to be railed back to marine terminals in Los Angeles and Long Beach much faster, which benefits exporters requiring empty containers and helps ocean carriers moving boxes back to Asia. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The California Air Resources Board (CARB) has rescinded a proposed rule that would have required train locomotives operating in the state to produce zero emissions by 2030, a regulation that would have put a $1.5 billion project by BNSF Railway to expand its terminal in Barstow in serious jeopardy. BNSF can now move forward with the project that should be completed in 2027 or 2028. “Railroads are pleased that the California Air Resources Board has withdrawn its authorization request for the ill-conceived in-use locomotive rule,” the Association of American Railroads (AAR) said in a statement Wednesday. “As we move past this untenable proposal, railroads look forward to focusing on advancing their already strong sustainability profile and further reducing emissions in the years to come.” A US District Court judge last November paused the proposed Jan. 1 implementation of the locomotive emissions rule to determine whether it violated federal pre-emption laws on interstate commerce. The decision by CARB to drop the rule comes after the US Bureau of Land Management on Monday approved the sale of the federal land to BNSF on which the railroad will develop the Barstow Intermodal Gateway, or BIG. BIG will be a transloading hub where ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach. Aside from requiring zero-emission locomotives, the proposed CARB rule would have immediately banned any locomotive 23 years or older from operating in California. BNSF argued that the current technology isn’t viable to meet the zero-emission standards, adding the rule also would have limited the useful life of 25,000 relatively new diesel-electric hybrid locomotives. Hub would benefit stakeholders If BNSF’s Barstow hub is successful, it can have a positive impact on several supply chain stakeholders. For the railroad, it would boost transloading of imports into domestic containers using intermodal providers that don’t run into the same equipment challenges as the maritime industry. J.B. Hunt Transport Services, for example, owns its chassis, so BNSF can quickly mount a load off a train and place the unit in a parking spot. A successful Barstow terminal would also benefit shippers in several ways. Domestic intermodal providers are hyper-focused on box turns — meaning the number of revenue-paying loads an average container handles per month — in order to maximize revenue. BNSF partners such as J.B. Hunt are much more likely to send a driver immediately and deliver the load to the customer, rarely letting the box idle in the terminal for more than 24 to 48 hours. Also, customers who don’t transload will benefit because fewer loads would move in ocean containers. Transferring imports into domestic containers would free up the ocean boxes to be railed back to marine terminals in Los Angeles and Long Beach much faster, which benefits exporters requiring empty containers and helps ocean carriers moving boxes back to Asia. Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

North-American rail

BNSF Barstow project to proceed after CARB emissions rule withdrawn

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Choose a subscription plan that works best for you.

Subscribe Now - Anonymous - Wide Box

SUBSCRIBE TODAY

Use code STSW20 at checkout and save 20% on first year of any annual subscription plan.

Subscribe Now - Free Trials - Wide Box

SUBSCRIBE AND SAVE

Register today to redeem your Gold subscriber discount!

TPM Discount - Gold

Save 20% on TPM25

Use code GUW795 at checkout and save $700 on first year of a Gold subscription. 

Upgrade Subscription - Wide Box

UPGRADE TODAY AND SAVE

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 AND SAVE: Use code GUW795 at checkout and save $700 on first year of a Gold subscription. 

Upgrade Subscription - Offer Box

Upgrade Subscription

20% OFF ON TPM25: Register today and redeem your Gold subscriber discount!

TPM Discount - Gold 

20% OFF ON TPM25

SUBSCRIBE TODAY: Choose a subscription plan that works best for you.

Subscribe Now - Anonymous - Offer Box

Subscribe Today

START A FREE TRIAL: Access Journal of Commerce content for 30 days

Free Trial - Offer Box

Free Trial

SUBSCRIBE AND SAVE: Use code STSW20 at checkout to save 20% on first year of any subscription plan.


Subscribe Now - Free Trials - 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

The only editorially independent conference for the breakbulk & project cargo industry

Breakbulk Conference - Rectangle Box

Attend Breakbulk25

The premier conference for the global container shipping and supply chain community

TPM Conference - Rectangle Box

Attend TPM25

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

ISI Report - Rectangle Box

Intermodal Savings Index

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

Gateway - Rectangle Box

Gateway

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

Breakbulk News shipping | Journal of Commerce

Breakbulk News

Container shipping news and analysis of ocean container shipping, logistics, supply chains, technology and end-to-end connectivity.

Container Shipping News | Journal of Commerce

Stay informed on port news worldwide with Journal of Commerce. From decarbonization to labor updates, get insights on global developments.

Port News | Journal of Commerce

News and analysis of ocean containerized cargo movement, logistics, supply chains, technology, and end-to-end connectivity. Maritime news and analysis of containerized ocean cargo movement, breakbulk and roll-on and roll-off shipping from origin to destination.

Latest News

More News & Analysis

Global reefer market set to soar amid disruption, strong demand

Carriers bolster intra-Asia networks amid uncertain rate, demand outlook

Return to Suez not a certainty even after Israel-Hamas ceasefire: analysts