<div class="phx-topic abstract-wrapper">While strong volume and congestion at both ends of the trade lane are filling the available capacity, the canceled sailings suggest carriers expect demand to falter.</div>

While strong volume and congestion at both ends of the trade lane are filling the available capacity, the canceled sailings suggest carriers expect demand to falter.

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<div>The Ocean Alliance has announced a swathe of blank sailings on Asia-North Europe in April and May as carriers deploy “schedule recovery measures” to mitigate delays from congestion at European hubs. The move to withdraw capacity comes as Gemini Cooperation carriers Maersk and Hapag-Lloyd move in the opposite direction and <a>prepare to deploy more vessels</a> on Asia-North Europe to cover the European port delays and support their new network coverage. Three Ocean Alliance sailings from China were blanked last week with another five to come as part of so-called “schedule recovery measures,” member carrier CMA CGM said in a customer...

The Ocean Alliance has announced a swathe of blank sailings on Asia-North Europe in April and May as carriers deploy “schedule recovery measures” to mitigate delays from congestion at European hubs. The move to withdraw capacity comes as Gemini Cooperation carriers Maersk and Hapag-Lloyd move in the opposite direction and prepare to deploy more vessels on Asia-North Europe to cover the European port delays and support their new network coverage. Three Ocean Alliance sailings from China were blanked last week with another five to come as part of so-called “schedule recovery measures,” member carrier CMA CGM said in a customer advisory. “For each of those void sailings, we will propose an evacuation plan allowing you to book on an alternative service,” the advisory noted. Carriers also use blank sailings as a way of flexing capacity to match demand, and the withdrawn capacity suggests a slowdown in the strong volume that has combined with port delays and longer voyages around Africa to keep ships full since Lunar New Year. Some of the bank sailings were captured in the latest available data from visibility provider eeSea that shows carriers are significantly increasing capacity while reducing the number of canceled sailings on Asia-North Europe. But Peter Sand, chief analyst at rate benchmarking platform Xeneta, said the market should prepare for more blank sailings to be announced that will almost double the capacity to be withdrawn this month. “Despite the increased competition between carriers as they seek to lure new customers into their services and alliances, strategies to underpin freight rates such as blank sailings remain a go-to tool for carriers on Asia-North Europe and beyond,” Sand told the Journal of Commerce Friday. The head of ocean freight at a global forwarder based in Europe said strong underlying demand continues to keep space tight in the Asia-Europe trade lane. “It seems like demand is there because some carriers are even not accepting further bookings from China to Europe, but it is hard to see if it is temporary or will be sustained,” the source said. Several carriers on the Asia-North Europe trade lane even set new freight-all-kinds (FAK) rates on April 1 of up to $4,000 per FEU, but the increase was largely shrugged off by the market. Data from Platts, a sister company of the Journal of Commerce, shows the rate was at $1,900/FEU Friday, up $100 over the week prior. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Container lines

Asia-Europe

Maritime

Ocean Alliance rolls out series of blank sailings on Asia-North Europe

<div class="phx-topic abstract-wrapper">An initial flurry of activity will be followed by a drop in demand after e-commerce from China and Hong Kong no longer enjoys duty-free treatment, the head of the air cargo group tells the Journal of Commerce.</div>

An initial flurry of activity will be followed by a drop in demand after e-commerce from China and Hong Kong no longer enjoys duty-free treatment, the head of the air cargo group tells the Journal of Commerce.

<div class="phx-topic">A period of “panic” is likely to unfold over the next three weeks on trans-Pacific air freight markets as cargo owners try to get shipments into the US before the duty-free exclusion for low-value imports ends on May 2, according to The International Air Cargo Association (Tiaca). But the initial flurry of activity will be followed by a drop in demand for both general cargo as tariffs slow trade volume and e-commerce from China and Hong Kong no longer enjoys duty-free treatment, Tiaca Director-General Glyn Hughes told the Journal of Commerce Monday. “We can expect a lot of panic and advance purchases by consumers, so movements could increase over the next three weeks,” Hughes said. “Thereafter, the extra costs involved for the relatively low average-value shipment, believed to be in range of $50 to $60, will likely result in less e-commerce shipments on Asia to US routes.” All postal items valued at or under $800 previously qualifying for the US’ so-called “de minimis” exemption will become subject to a duty rate of either 30% of their value or $25 per item from May 2, increasing to $50 per item after June 1. Almost one billion US de minimis shipments last year were from China. As companies evaluate the economic viability of their products once new tariffs are applied, the overall general air cargo market from Asia to the US was also likely to suffer a downturn, Hughes noted. “We could see a drop in overall volumes of general cargo from all Asia origins as they have been hit particularly hard with tariff rates between 24% and 54%, depending on origin,” he said, adding that the downturn will have a knock-on impact on the deployment of freighters. “It would be reasonable to expect the current freighter capacity deployed on Asia-US to be redeployed on other trade lanes to avoid significant drops in load factors and rates,” Hughes said. ”We are in a period of transition as new economic partnerships will get forged as producers and consumers seek to protect themselves from inevitable tariff induced price rises,” he added. <h3>Short-term approach to contracting </h3>While the trans-Pacific market waits to see the response from US importers to the widespread tariffs, the uncertainty is playing out in air cargo contracting behavior on the China-US trade lane. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said the latest air cargo market data reflected the cautious “wait-and-see” approach being adopted by industry stakeholders. Shippers negotiating contracts in the first quarter preferred shorter-term agreements of three months or less, representing 79% of contracts negotiated, an increase of nearly 20 percentage points year over year. Forwarders continue to place approximately 45% of their volumes in the spot market. “With the growth of rates slowing overall, we’d normally expect to see shippers making longer capacity commitments to achieve more competitive rates, but right now, this is clearly a gamble few shippers are ready to take – and this is before we’re even seeing tariffs impacting volumes,” van de Wouw said in Xeneta’s latest market update. Average rates from Shanghai to North America were at $5.54 per kilogram this week, up 20% since the beginning of March and the third consecutive week the rate has been above $5/kg, according to the Baltic Air Index. Contact Greg Knowler at greg.knowler@spglobal.com. </div>

A period of “panic” is likely to unfold over the next three weeks on trans-Pacific air freight markets as cargo owners try to get shipments into the US before the duty-free exclusion for low-value imports ends on May 2, according to The International Air Cargo Association (Tiaca). But the initial flurry of activity will be followed by a drop in demand for both general cargo as tariffs slow trade volume and e-commerce from China and Hong Kong no longer enjoys duty-free treatment, Tiaca Director-General Glyn Hughes told the Journal of Commerce Monday. “We can expect a lot of panic and advance purchases by consumers, so movements could increase over the next three weeks,” Hughes said. “Thereafter, the extra costs involved for the relatively low average-value shipment, believed to be in range of $50 to $60, will likely result in less e-commerce shipments on Asia to US routes.” All postal items valued at or under $800 previously qualifying for the US’ so-called “de minimis” exemption will become subject to a duty rate of either 30% of their value or $25 per item from May 2, increasing to $50 per item after June 1. Almost one billion US de minimis shipments last year were from China. As companies evaluate the economic viability of their products once new tariffs are applied, the overall general air cargo market from Asia to the US was also likely to suffer a downturn, Hughes noted. “We could see a drop in overall volumes of general cargo from all Asia origins as they have been hit particularly hard with tariff rates between 24% and 54%, depending on origin,” he said, adding that the downturn will have a knock-on impact on the deployment of freighters. “It would be reasonable to expect the current freighter capacity deployed on Asia-US to be redeployed on other trade lanes to avoid significant drops in load factors and rates,” Hughes said. ”We are in a period of transition as new economic partnerships will get forged as producers and consumers seek to protect themselves from inevitable tariff induced price rises,” he added. Short-term approach to contracting While the trans-Pacific market waits to see the response from US importers to the widespread tariffs, the uncertainty is playing out in air cargo contracting behavior on the China-US trade lane. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said the latest air cargo market data reflected the cautious “wait-and-see” approach being adopted by industry stakeholders. Shippers negotiating contracts in the first quarter preferred shorter-term agreements of three months or less, representing 79% of contracts negotiated, an increase of nearly 20 percentage points year over year. Forwarders continue to place approximately 45% of their volumes in the spot market. “With the growth of rates slowing overall, we’d normally expect to see shippers making longer capacity commitments to achieve more competitive rates, but right now, this is clearly a gamble few shippers are ready to take – and this is before we’re even seeing tariffs impacting volumes,” van de Wouw said in Xeneta’s latest market update. Average rates from Shanghai to North America were at $5.54 per kilogram this week, up 20% since the beginning of March and the third consecutive week the rate has been above $5/kg, according to the Baltic Air Index. Contact Greg Knowler at greg.knowler@spglobal.com.

Air Cargo

Air Cargo Forwarder News

Air Cargo Carriers News

Prepare for period of ‘panic’ in trans-Pacific air cargo market: Tiaca

<div class="phx-topic abstract-wrapper">Damage from last fall’s Hurricane Helene continues to affect CSX’s operations in the Southeast, while the fast-tracking of construction work at Baltimore’s Howard Street Tunnel provides another challenge.</div>

Damage from last fall’s Hurricane Helene continues to affect CSX’s operations in the Southeast, while the fast-tracking of construction work at Baltimore’s Howard Street Tunnel provides another challenge.

<div class="phx-topic">Performance metrics for intermodal service on CSX Transportation fell to multi-year lows in the first quarter as the railroad dealt with effects of hurricane damage along a key route through the Carolinas and disruption caused by the fast-tracking of construction work at the Howard Street Tunnel project in Baltimore. CSX’s train speeds dropped to an average of 30 miles per hour in the first quarter, its lowest winter performance since 2018, according to data from the US Surface Transportation Board. A year ago, the average was 31.7 miles per hour. The railroad also experienced a rise in the number of loaded intermodal railcars sitting idle. CSX in Q1 averaged 47.3 railcars per day that sat idle for at least 48 hours, its highest such figure for a first quarter since 2022, according to STB data. In the final week of March alone, the CSX average jumped to 68.3 idle loaded railcars per day. The performance declines come after CSX consistently outpaced Norfolk Southern Railway in service in 2023 and 2024, according to the Journal of Commerce Intermodal Service Scorecard CSX said there were two reasons for the service declines. First, was lingering damage caused by Hurricane Helene last September to an important rail stretch along the Tennessee-North Carolina border. Second, CSX chose to fast-track construction of Baltimore’s Howard Street Tunnel, requiring truck trips to haul containers around the project. The decision on Howard Street comes with short-term pain, but a long-term payoff for volumes traveling between Baltimore and the Midwest and along the I-95 corridor between the Northeast and Southeast. “CSX is dedicated to running a reliable and efficient network and delivering on our customer service commitments – all while having a relentless focus on continuing to improve service metrics,” a CSX spokesperson said in a statement to the Journal of Commerce. “The Howard Street project was initially planned to take three years, however, with the switch to the full outage and construction beginning on Feb. 1, 2025, we’ve been able to accelerate the timeline to just 10-months with completion by the end of 2025.” Containers traveling south from New Jersey are now offloaded at the Seagirt Marine Terminal in Baltimore, trucked across the city to the Curtis Bay Terminal, and then reloaded onto a second train bound for the Southeast. Northbound shipments follow the reverse pattern. Trains are affected between Kearny, N.J.; and Atlanta, Jacksonville, Lakeland and Miami in Florida. Once complete, the new Howard Street Tunnel will allow double-stack CSX trains to operate on high-volume routes such as between Atlanta and New Jersey where Norfolk Southern has traditionally held an edge. “Once complete, the modernized tunnel is expected to enhance operational efficiency, bolster the competitiveness of CSX-served markets, and deliver significant benefits to our customers,” CSX said in a statement. <h3>Hurricane damaged track in the Carolinas </h3>Meanwhile, damage from Hurricane Helene last fall continues to affect CSX’s operations in the Southeast. The railroad’s Blue Ridge Subdivision, a 60-mile stretch of track in the mountains along the Tennessee–North Carolina border, sustained <a href="https://www.csx.com/index.cfm/about-us/projects-and-partnerships/blue-ridge-subdivision-recovery/">extensive flood damage</a>. In Poplar, N.C., the track was completely washed away, while in Erwin, Tenn., erosion from soil and rock completely covered the tracks. The Blue Ridge recovery efforts have been hampered by a series of winter storms. CSX hopes to reopen the stretch before the end of the year, with four individual parts of the track currently undergoing repairs. While the most direct impact from the hurricane damage has been to routes serving Rocky Mount and Charlotte, N.C., the disruption has had broader consequences. CSX has rerouted some traffic through Nashville, already a busy corridor for freight between Chicago and Atlanta, as well as across upstate New York via Buffalo, adding mileage and extending transit times. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

Performance metrics for intermodal service on CSX Transportation fell to multi-year lows in the first quarter as the railroad dealt with effects of hurricane damage along a key route through the Carolinas and disruption caused by the fast-tracking of construction work at the Howard Street Tunnel project in Baltimore. CSX’s train speeds dropped to an average of 30 miles per hour in the first quarter, its lowest winter performance since 2018, according to data from the US Surface Transportation Board. A year ago, the average was 31.7 miles per hour. The railroad also experienced a rise in the number of loaded intermodal railcars sitting idle. CSX in Q1 averaged 47.3 railcars per day that sat idle for at least 48 hours, its highest such figure for a first quarter since 2022, according to STB data. In the final week of March alone, the CSX average jumped to 68.3 idle loaded railcars per day. The performance declines come after CSX consistently outpaced Norfolk Southern Railway in service in 2023 and 2024, according to the Journal of Commerce Intermodal Service Scorecard CSX said there were two reasons for the service declines. First, was lingering damage caused by Hurricane Helene last September to an important rail stretch along the Tennessee-North Carolina border. Second, CSX chose to fast-track construction of Baltimore’s Howard Street Tunnel, requiring truck trips to haul containers around the project. The decision on Howard Street comes with short-term pain, but a long-term payoff for volumes traveling between Baltimore and the Midwest and along the I-95 corridor between the Northeast and Southeast. “CSX is dedicated to running a reliable and efficient network and delivering on our customer service commitments – all while having a relentless focus on continuing to improve service metrics,” a CSX spokesperson said in a statement to the Journal of Commerce. “The Howard Street project was initially planned to take three years, however, with the switch to the full outage and construction beginning on Feb. 1, 2025, we’ve been able to accelerate the timeline to just 10-months with completion by the end of 2025.” Containers traveling south from New Jersey are now offloaded at the Seagirt Marine Terminal in Baltimore, trucked across the city to the Curtis Bay Terminal, and then reloaded onto a second train bound for the Southeast. Northbound shipments follow the reverse pattern. Trains are affected between Kearny, N.J.; and Atlanta, Jacksonville, Lakeland and Miami in Florida. Once complete, the new Howard Street Tunnel will allow double-stack CSX trains to operate on high-volume routes such as between Atlanta and New Jersey where Norfolk Southern has traditionally held an edge. “Once complete, the modernized tunnel is expected to enhance operational efficiency, bolster the competitiveness of CSX-served markets, and deliver significant benefits to our customers,” CSX said in a statement. Hurricane damaged track in the Carolinas Meanwhile, damage from Hurricane Helene last fall continues to affect CSX’s operations in the Southeast. The railroad’s Blue Ridge Subdivision, a 60-mile stretch of track in the mountains along the Tennessee–North Carolina border, sustained extensive flood damage . In Poplar, N.C., the track was completely washed away, while in Erwin, Tenn., erosion from soil and rock completely covered the tracks. The Blue Ridge recovery efforts have been hampered by a series of winter storms. CSX hopes to reopen the stretch before the end of the year, with four individual parts of the track currently undergoing repairs. While the most direct impact from the hurricane damage has been to routes serving Rocky Mount and Charlotte, N.C., the disruption has had broader consequences. CSX has rerouted some traffic through Nashville, already a busy corridor for freight between Chicago and Atlanta, as well as across upstate New York via Buffalo, adding mileage and extending transit times. Contact Ari Ashe at ari.ashe@spglobal.com

Intermodal providers

North-American rail

CSX Q1 service metrics take hit amid storm recovery, tunnel project

<div class="phx-topic abstract-wrapper">The $12 million investment in Cargado will be used to expand the load board with other tools for freight brokers to tap into cross-border freight growth.</div>

The $12 million investment in Cargado will be used to expand the load board with other tools for freight brokers to tap into cross-border freight growth.

<div class="phx-topic">Cross-border load board provider Cargado on Monday landed a $12 million investment from venture investors a year after its launch, a sign that its backers see potential in helping freight brokers <a href="https://www.joc.com/article/new-cross-border-trucking-platform-aims-to-enable-brokers-5731985">facilitating freight volumes between the US and Mexico</a>. The investment will be used to expand the load board with other tools for freight brokers to tap into cross-border freight growth. “We’ve got customers asking for a lot of other things,” CEO Matt Silver told the Journal of Commerce. “We see the entire process, from getting freight to covering it and executing it, we eventually want to be involved in all of that. We don’t want to just be a load board.” Cargado currently has 200 broker customers and connections to 650 carriers serving the Mexico and cross-border markets. Its customers include eight of the top 10 US brokers, half of the top 100, and a collection of global freight forwarders needing a tool to access cross-border truckload capacity. The product is primarily designed to serve two use cases: first, to have large freight brokers with longstanding Mexico departments open new lanes, source new capacity and find trucks more quickly; and secondly, to help brokers without a Mexico presence meet demand from shippers asking them to find cross-border capacity more easily. The load board, Silver said, is designed to be cross-border-centric, so brokers aren’t having to manipulate a domestic load board to fulfill a purpose it wasn’t intended to serve. <h3>Mexico a freight ‘afterthought’ </h3>Despite the rapid growth of cross-border trade over the last decade, “Mexico is an afterthought when it comes to freight,” Silver said. “Some freight moves on the same trailer across the border, some is transloaded, there’s different cultures and a different language, [and] the border cross itself,” he added. “And lots of [transportation management systems] don’t support the ability to onboard Mexican trucking companies,” of which about 80% of 100,000 trucking companies in Mexico are owner-operators. “Cargado allows us to unlock trusted, vetted capacity,” John Sutton, director of corporate strategy at Sunset Transportation, one of Cargado’s early customers, said in a statement Monday. “Effectively leveraging Cargado enables even the most experienced and proven 3PLs servicing cross-border freight to reimagine how they source capacity, build relationships, and challenge operational norms.” Silver founded and sold cross-border technology platform Forager, acquired in 2022 by Arrive Logistics, while Cargado co-founder Rylan Hawkins spent seven years at Convoy, the <a href="https://www.joc.com/article/convoy-says-will-shut-operations-sell-off-technology-amid-market-downturn-5215523">now defunct broker</a> that helped usher in an era of so-called digital brokerage over the last decade. The funding round announced Monday was led by LGVP, with participation from new investors Conversion Capital, Assembly Ventures, Friends &amp; Family Capital, and existing investors Primary Venture Partners, Ironspring Ventures, Zenda Capital and Proeza Ventures. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Cross-border load board provider Cargado on Monday landed a $12 million investment from venture investors a year after its launch, a sign that its backers see potential in helping freight brokers facilitating freight volumes between the US and Mexico . The investment will be used to expand the load board with other tools for freight brokers to tap into cross-border freight growth. “We’ve got customers asking for a lot of other things,” CEO Matt Silver told the Journal of Commerce. “We see the entire process, from getting freight to covering it and executing it, we eventually want to be involved in all of that. We don’t want to just be a load board.” Cargado currently has 200 broker customers and connections to 650 carriers serving the Mexico and cross-border markets. Its customers include eight of the top 10 US brokers, half of the top 100, and a collection of global freight forwarders needing a tool to access cross-border truckload capacity. The product is primarily designed to serve two use cases: first, to have large freight brokers with longstanding Mexico departments open new lanes, source new capacity and find trucks more quickly; and secondly, to help brokers without a Mexico presence meet demand from shippers asking them to find cross-border capacity more easily. The load board, Silver said, is designed to be cross-border-centric, so brokers aren’t having to manipulate a domestic load board to fulfill a purpose it wasn’t intended to serve. Mexico a freight ‘afterthought’ Despite the rapid growth of cross-border trade over the last decade, “Mexico is an afterthought when it comes to freight,” Silver said. “Some freight moves on the same trailer across the border, some is transloaded, there’s different cultures and a different language, [and] the border cross itself,” he added. “And lots of [transportation management systems] don’t support the ability to onboard Mexican trucking companies,” of which about 80% of 100,000 trucking companies in Mexico are owner-operators. “Cargado allows us to unlock trusted, vetted capacity,” John Sutton, director of corporate strategy at Sunset Transportation, one of Cargado’s early customers, said in a statement Monday. “Effectively leveraging Cargado enables even the most experienced and proven 3PLs servicing cross-border freight to reimagine how they source capacity, build relationships, and challenge operational norms.” Silver founded and sold cross-border technology platform Forager, acquired in 2022 by Arrive Logistics, while Cargado co-founder Rylan Hawkins spent seven years at Convoy, the now defunct broker that helped usher in an era of so-called digital brokerage over the last decade. The funding round announced Monday was led by LGVP, with participation from new investors Conversion Capital, Assembly Ventures, Friends & Family Capital, and existing investors Primary Venture Partners, Ironspring Ventures, Zenda Capital and Proeza Ventures. Contact Eric Johnson at eric.johnson@spglobal.com .

Truckload

Truck brokers

Logistics Technology News

Mexico potential leads investors to back cross-border load board

<div class="phx-topic">The Ocean Alliance has announced a swathe of blank sailings on Asia-North Europe in April and May as carriers deploy “schedule recovery measures” to mitigate delays from congestion at European hubs. The move to withdraw capacity comes as Gemini Cooperation carriers Maersk and Hapag-Lloyd move in the opposite direction and <a href="https://www.joc.com/article/gemini-will-roll-out-more-ships-to-stop-cargo-from-rolling-habben-jansen-5976477">prepare to deploy more vessels</a> on Asia-North Europe to cover the European port delays and support their new network coverage. Three Ocean Alliance sailings from China were blanked last week with another five to come as part of so-called “schedule recovery measures,” member carrier CMA CGM said in a customer advisory. “For each of those void sailings, we will propose an evacuation plan allowing you to book on an alternative service,” the advisory noted. Carriers also use blank sailings as a way of flexing capacity to match demand, and the withdrawn capacity suggests a slowdown in the strong volume that has combined with port delays and longer voyages around Africa to keep ships full since Lunar New Year. Some of the bank sailings were captured in the latest available data from visibility provider eeSea that shows <a href="https://www.joc.com/article/asia-europe-carriers-hold-back-on-blanks-despite-rate-weakness-5976268">carriers are significantly increasing capacity</a> while reducing the number of canceled sailings on Asia-North Europe. But Peter Sand, chief analyst at rate benchmarking platform Xeneta, said the market should prepare for more blank sailings to be announced that will almost double the capacity to be withdrawn this month. “Despite the increased competition between carriers as they seek to lure new customers into their services and alliances, strategies to underpin freight rates such as blank sailings remain a go-to tool for carriers on Asia-North Europe and beyond,” Sand told the Journal of Commerce Friday. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="bf9f45a4-a69a-4ab8-9556-588dad0c74a8"></dynamic-object></div>The head of ocean freight at a global forwarder based in Europe said strong underlying demand continues to keep space tight in the Asia-Europe trade lane. “It seems like demand is there because some carriers are even not accepting further bookings from China to Europe, but it is hard to see if it is temporary or will be sustained,” the source said. Several carriers on the Asia-North Europe trade lane even set new freight-all-kinds (FAK) rates on April 1 of up to $4,000 per FEU, but the increase was largely shrugged off by the market. Data from Platts, a sister company of the Journal of Commerce, shows the rate was at $1,900/FEU Friday, up $100 over the week prior. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

<div class="phx-topic abstract-wrapper">Eighteen Republican members of Congress said the remedies laid out as part of the US’ investigation into China’s maritime dominance are unworkable for farmers, notably a port tax on Chinese vessels and the requirement that an increasing volume of US exports be shipped on US-flagged vessels. </div>

Eighteen Republican members of Congress said the remedies laid out as part of the US’ investigation into China’s maritime dominance are unworkable for farmers, notably a port tax on Chinese vessels and the requirement that an increasing volume of US exports be shipped on US-flagged vessels.

<div class="phx-topic">A group of 18 farm state Republican members of Congress is warning that a wide-ranging proposal by the US Trade Representative (USTR) to reinvigorate the US shipbuilding industry would instead damage domestic agriculture interests by adding hundreds of millions of dollars to transportation costs and reducing export volumes. In a letter Thursday to USTR Jamieson Greer, the members of Congress said the remedies laid out as part of the US’ so-called <a href="https://www.joc.com/article/plan-to-tax-chinese-ships-turned-maritime-malaise-into-brainstorming-session-5971753">Section 301 investigation</a> into China’s maritime dominance are unworkable for farmers, notably a port tax on Chinese vessels and the requirement that an increasing volume of US exports be shipped on US-flagged vessels. The letter was signed by representatives from Georgia, Iowa, Illinois, Minnesota, Missouri, Nebraska, North Dakota, Oregon, Pennsylvania, South Dakota and Washington and is notable in that it represents a large group of Republican House members coming out against a proposal from the Trump administration. Representatives said they feared how ocean carriers using Chinese-made or -operated vessels would respond to being charged as much as $1.5 million per US port call. “While China is the target of USTR’s proposed port fee, ocean carriers will inevitably shift the expense onto their American customers,” the letter read. “We are concerned this proposed action will have disproportionate harm on American farmers and ranchers.” Ag interests also stand to see their transportation costs for bulk exports increase between $372 million and $930 million because the existing US fleet and the USTR’s seven-year phase-in to require more exports on US-flagged vessels “is not adequate to accommodate the needs of the domestic agriculture industry,” the representatives wrote. The letter, which noted the US agriculture industry exports 20% of its total production, said containerized exporters will “face extreme risks” from the USTR proposal, adding the plan would reduce bulk export volumes while doubling the cost of exports. “Agricultural goods are the first to be left behind and the last to resume trade when disruptions in the maritime industry occur,” the letter read. “These actions will collectively undermine the competitiveness of US agriculture in the global marketplace.” Having the support of rural America tends to draw the attention of officials in Washington, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said at the Journal of Commerce’s TPM25 conference in March. “Members of Congress want to see [their] constituents — the ones who live and or work in their district [or] state — to see what they have to say,” Friedmann said. “Not some trade association. They listen to me when I bring [a] pistachio farmer with me ... real people, real constituents.” Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

A group of 18 farm state Republican members of Congress is warning that a wide-ranging proposal by the US Trade Representative (USTR) to reinvigorate the US shipbuilding industry would instead damage domestic agriculture interests by adding hundreds of millions of dollars to transportation costs and reducing export volumes. In a letter Thursday to USTR Jamieson Greer, the members of Congress said the remedies laid out as part of the US’ so-called Section 301 investigation into China’s maritime dominance are unworkable for farmers, notably a port tax on Chinese vessels and the requirement that an increasing volume of US exports be shipped on US-flagged vessels. The letter was signed by representatives from Georgia, Iowa, Illinois, Minnesota, Missouri, Nebraska, North Dakota, Oregon, Pennsylvania, South Dakota and Washington and is notable in that it represents a large group of Republican House members coming out against a proposal from the Trump administration. Representatives said they feared how ocean carriers using Chinese-made or -operated vessels would respond to being charged as much as $1.5 million per US port call. “While China is the target of USTR’s proposed port fee, ocean carriers will inevitably shift the expense onto their American customers,” the letter read. “We are concerned this proposed action will have disproportionate harm on American farmers and ranchers.” Ag interests also stand to see their transportation costs for bulk exports increase between $372 million and $930 million because the existing US fleet and the USTR’s seven-year phase-in to require more exports on US-flagged vessels “is not adequate to accommodate the needs of the domestic agriculture industry,” the representatives wrote. The letter, which noted the US agriculture industry exports 20% of its total production, said containerized exporters will “face extreme risks” from the USTR proposal, adding the plan would reduce bulk export volumes while doubling the cost of exports. “Agricultural goods are the first to be left behind and the last to resume trade when disruptions in the maritime industry occur,” the letter read. “These actions will collectively undermine the competitiveness of US agriculture in the global marketplace.” Having the support of rural America tends to draw the attention of officials in Washington, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said at the Journal of Commerce’s TPM25 conference in March. “Members of Congress want to see [their] constituents — the ones who live and or work in their district [or] state — to see what they have to say,” Friedmann said. “Not some trade association. They listen to me when I bring [a] pistachio farmer with me ... real people, real constituents.” Contact Laura Robb at laura.robb@spglobal.com .

Transport, Trade and Regulation News

Trans-Pacific

North American ports

Farm state House members say USTR proposal offers big risks to US ag interests

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

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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