<div class="phx-topic abstract-wrapper">Restocking by US retailers will spur demand on the trans-Pacific and arrest the steep drop in freight rates in the second half of the year, according to Israel-based carrier Zim.</div>

Restocking by US retailers will spur demand on the trans-Pacific and arrest the steep drop in freight rates in the second half of the year, according to Israel-based carrier Zim.

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<div>Zim Integrated Shipping Services (Zim) reported another highly profitable year Monday, with elevated rate levels through the first three quarters of 2022 offsetting a significant decline in the spot market through the second half. “We experienced a steep downfall in rates since August last year, but we believe we are near the bottom of falling rates and soft demand,” Zim CFO Xavier Destriau told the Journal of Commerce in an interview after the release of the Israeli-based carrier’s 2022 annual result. “It has been an extreme reaction on one hand and an extreme correction on the other,” he added. “The...

Zim Integrated Shipping Services (Zim) reported another highly profitable year Monday, with elevated rate levels through the first three quarters of 2022 offsetting a significant decline in the spot market through the second half. “We experienced a steep downfall in rates since August last year, but we believe we are near the bottom of falling rates and soft demand,” Zim CFO Xavier Destriau told the Journal of Commerce in an interview after the release of the Israeli-based carrier’s 2022 annual result. “It has been an extreme reaction on one hand and an extreme correction on the other,” he added. “The situation will improve in the second half (of 2023) as the destocking from our US customers ends and demand starts to come back. When we talk with our customers, we clearly sense that the destocking that has been fuelling the rate erosion will come to an end quite soon.” Zim reported full-year revenue of $12.56 billion for 2022, up 17 percent year over year, driven by average revenue per TEU that increased 16 percent to $3,240. Earnings before interest and taxes (EBIT) hit a record $6.14 billion that was up 5.5 percent year over year, while net profit of $4.63 billion was almost the same as in 2021. The volume transported for the full year was down 3 percent at 3.38 million TEU. Eli Glickman, Zim’s president and CEO, called 2022 “an exceptional year” for the carrier that generated record operating profit. Buoyed by the positive result, Zim plans to pay out $2 billion to shareholders, or 44 percent of its full 2022 net income. “While macroeconomic uncertainties, the precipitous decline in freight rates over the past few months, and the supply-demand imbalance continue to drive a challenging near-term outlook for container shipping, we are confident in Zim’s strategy and believe we will generate positive EBIT in 2023,” Glickman said in a statement. Zim expects to generate adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.8 billion to $2.2 billion in 2023 and adjusted EBIT of between $100 million and $500 million. Sharp Q4 declines The depth of the market downturn in the last few months of 2022 was reflected in all Zim’s fourth-quarter year-over-year earnings metrics. Revenue declined 36 percent at $2.19 billion as average rates fell 41 percent to $2,122 per TEU. Earnings before interest and taxes (EBIT) of $585 million was down 360 percent, and the Q4 net profit of $417 million was one-fourth of that achieved in the last quarter of 2021. The fourth-quarter volume was down 4 percent at 823,000 TEU. Rates from Shanghai to Los Angeles lost 53 percent of their value in the fourth quarter of 2022, according to Platts, a sister company of the Journal of Commerce within S&P Global. Rates for North Asia to the US West Coast fell 2 percent last week to $1,250 per FEU. The declining rates were also forcing Zim to continually review its network strategy, which Destriau said led to the suspension of the expedited trans-Pacific service from China to the US West Coast that was launched in 2020. “We had to suspend the service as it could no longer generate the sort of premium that would make that sort of service profitable, and we could better deploy the vessels elsewhere,” he said. "If the rates stay where they are or go lower on other trades, we may decide to suspend some services,” Destriau said. “We have taken a few decisions in redeploying capacity to trades where we believe there are more opportunities to make money.” Contact Greg Knowler at greg.knowler@spglobal.com and follow him on Twitter: @greg_knowler .

Container Shipping News

Container lines

Trans-Pacific

Maritime

‘Precipitous’ fall in ocean spot market near bottom: Zim CFO

<div class="phx-topic abstract-wrapper">The deal will see Acuitive Solutions’ AcuAudit product integrated into Cass’s freight audit and payment platform, one widely used by large shippers.</div>

The deal will see Acuitive Solutions’ AcuAudit product integrated into Cass’s freight audit and payment platform, one widely used by large shippers.

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<div class="phx-topic">Freight payment and audit provider Cass Information Systems on Thursday said it has acquired AcuAudit, a product it says will enable it to deepen its reach in ocean and air freight auditing. Terms were not disclosed. The seller is logistics technology provider Acuitive Solutions, which predominantly serves the retail and high fashion industries with expedited shipment routing, parcel carrier management and auditing tools. Acuitive CEO Phil Marlowe will retain ownership of the rest of the company and serve as an advisor to Cass. Shippers use AcuAudit to audit ocean air freight bills, with an emphasis on understanding how transportation costs factor in a product’s total landed cost. It competes with a range of international freight-focused audit solutions as well as those offered by multimodal audit firms that tend to specialize in truckload invoice auditing. Cass is a part of the latter category as one of the largest audit and payment platforms for US shippers, with an associated index tracking freight economic activity using data from reconciled freight bills. “The Acuitive team has built a truly exceptional solution to support the advanced needs of global shippers,” Tony Urban, president of Cass’s freight audit and payment group, said in a statement. Marlowe said AcuAudit’s customers “will benefit from...being integrated into Cass, with its financial capabilities and global reach.” Contact Eric Johnson at eric.johnson@spglobal.com. </div>

Freight payment and audit provider Cass Information Systems on Thursday said it has acquired AcuAudit, a product it says will enable it to deepen its reach in ocean and air freight auditing. Terms were not disclosed. The seller is logistics technology provider Acuitive Solutions, which predominantly serves the retail and high fashion industries with expedited shipment routing, parcel carrier management and auditing tools. Acuitive CEO Phil Marlowe will retain ownership of the rest of the company and serve as an advisor to Cass. Shippers use AcuAudit to audit ocean air freight bills, with an emphasis on understanding how transportation costs factor in a product’s total landed cost. It competes with a range of international freight-focused audit solutions as well as those offered by multimodal audit firms that tend to specialize in truckload invoice auditing. Cass is a part of the latter category as one of the largest audit and payment platforms for US shippers, with an associated index tracking freight economic activity using data from reconciled freight bills. “The Acuitive team has built a truly exceptional solution to support the advanced needs of global shippers,” Tony Urban, president of Cass’s freight audit and payment group, said in a statement. Marlowe said AcuAudit’s customers “will benefit from...being integrated into Cass, with its financial capabilities and global reach.” Contact Eric Johnson at eric.johnson@spglobal.com.

Air Cargo

Logistics Technology News

Cass acquires international freight invoice auditing tool to widen modal reach

<div class="phx-topic abstract-wrapper">Shippers moving cargo on the inter-Americas lane can expect to see further volume growth in 2025, potentially reflected by increased attention and capacity from carriers.</div>

Shippers moving cargo on the inter-Americas lane can expect to see further volume growth in 2025, potentially reflected by increased attention and capacity from carriers.

<div class="phx-topic">The big picture: A combination of growing demand, port bottlenecks and vessel and equipment shortages pushed rates from the East Coast of South America to the US to their highest level since the COVID-19 pandemic last year. This year, the inter-Americas trade is poised for more growth, but that growth will likely come with congestion at South American ports and tight capacity on northbound services from the East Coast of South America that keeps rates elevated. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5914445_0.1.png"></img></div>A look back: Freight demand on the north-south trade connecting Latin America with North America increased in 2024, but actual volume growth was hindered by port congestion and a lack of available vessel space. Total container volumes between the US and the Carribean, Central America and South America rose 4.3% in the first 10 months of the year, with northbound shipments up 3.8% and southbound volumes up 4.8%, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Growing import demand in South America and poor vessel schedule reliability resulted in tight capacity for imports to the East Coast of South America throughout the year. At the same time, infrastructure projects at multiple ports in Latin America aimed at attracting additional volumes reduced operating capacity at those gateways. Vessel delays caused by the International Longshoremen’s Association’s (ILA’s) strike, which shut down all US East and Gulf coast ports for three days at the beginning of October, further exacerbated vessel bunching at South American ports. That, in turn, worsened existing equipment shortages, as ports and container carriers prioritized clearing the backlog of ships over repositioning empty containers inland for exporters. Some carriers opted to divert ships to lesser-used ports and/or blank sailings to keep ships on schedule, which further reduced effective vessel capacity on the trade and resulted in rolled cargo. Steady growth in rates accelerated in the lead up to the ILA strike, with average spot rates from the East Coast of South America to the US Gulf Coast peaking at $5,800 per FEU in late October, more than double the rate recorded just three months prior and up 251.5% from the same week in 2023, according to Platts, also part of S&amp;P Global. Those rates have since cooled, but only slightly, settling at $5,600 per FEU in the three weeks ending Dec. 13. A look ahead: Shippers moving cargo on the inter-Americas lane can expect to see further volume growth in 2025, potentially reflected by increased attention and capacity from carriers. Demand for US-made products in South America continues to increase, with petrochemicals offering another source of substantial southbound volume growth. The implications of a second Donald Trump presidency for trade policy remain unclear, but the change in administration — particularly the threat of universal tariffs on US imports — could increase costs. However, if Trump imposes much higher tariffs on imports from China, this could prompt US importers to shift some sourcing to Latin America, increasing north-south volumes. Another potential spanner in the works for intra-Americas shippers are the still-unresolved contract talks between the ILA and port employers on the US East and Gulf coasts. If an agreement is not reached by Jan. 15, the union will strike again, and if East and Gulf coast ports are closed for any meaningful amount of time, congestion and equipment shortages in South America are likely to flare up again. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="09c5f6da-205d-43ca-83e7-ae8373849666"></dynamic-object></div>The next inflection: With demand already growing and Trump tariffs potentially accelerating the nearshoring of US imports, the north-south trade is positioned for long-term growth. However, that growth remains dependent on ports expanding and carriers flexing up vessel capacity and equipment supply to handle the rising volumes. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com.</a></div>

The big picture: A combination of growing demand, port bottlenecks and vessel and equipment shortages pushed rates from the East Coast of South America to the US to their highest level since the COVID-19 pandemic last year. This year, the inter-Americas trade is poised for more growth, but that growth will likely come with congestion at South American ports and tight capacity on northbound services from the East Coast of South America that keeps rates elevated. A look back: Freight demand on the north-south trade connecting Latin America with North America increased in 2024, but actual volume growth was hindered by port congestion and a lack of available vessel space. Total container volumes between the US and the Carribean, Central America and South America rose 4.3% in the first 10 months of the year, with northbound shipments up 3.8% and southbound volumes up 4.8%, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Growing import demand in South America and poor vessel schedule reliability resulted in tight capacity for imports to the East Coast of South America throughout the year. At the same time, infrastructure projects at multiple ports in Latin America aimed at attracting additional volumes reduced operating capacity at those gateways. Vessel delays caused by the International Longshoremen’s Association’s (ILA’s) strike, which shut down all US East and Gulf coast ports for three days at the beginning of October, further exacerbated vessel bunching at South American ports. That, in turn, worsened existing equipment shortages, as ports and container carriers prioritized clearing the backlog of ships over repositioning empty containers inland for exporters. Some carriers opted to divert ships to lesser-used ports and/or blank sailings to keep ships on schedule, which further reduced effective vessel capacity on the trade and resulted in rolled cargo. Steady growth in rates accelerated in the lead up to the ILA strike, with average spot rates from the East Coast of South America to the US Gulf Coast peaking at $5,800 per FEU in late October, more than double the rate recorded just three months prior and up 251.5% from the same week in 2023, according to Platts, also part of S&P Global. Those rates have since cooled, but only slightly, settling at $5,600 per FEU in the three weeks ending Dec. 13. A look ahead: Shippers moving cargo on the inter-Americas lane can expect to see further volume growth in 2025, potentially reflected by increased attention and capacity from carriers. Demand for US-made products in South America continues to increase, with petrochemicals offering another source of substantial southbound volume growth. The implications of a second Donald Trump presidency for trade policy remain unclear, but the change in administration — particularly the threat of universal tariffs on US imports — could increase costs. However, if Trump imposes much higher tariffs on imports from China, this could prompt US importers to shift some sourcing to Latin America, increasing north-south volumes. Another potential spanner in the works for intra-Americas shippers are the still-unresolved contract talks between the ILA and port employers on the US East and Gulf coasts. If an agreement is not reached by Jan. 15, the union will strike again, and if East and Gulf coast ports are closed for any meaningful amount of time, congestion and equipment shortages in South America are likely to flare up again. The next inflection: With demand already growing and Trump tariffs potentially accelerating the nearshoring of US imports, the north-south trade is positioned for long-term growth. However, that growth remains dependent on ports expanding and carriers flexing up vessel capacity and equipment supply to handle the rising volumes. Contact Laura Robb at laura.robb@spglobal.com.

North American ports

International ports

Rising north-south trade hinges on fluid ports, vessel capacity

<div class="phx-topic abstract-wrapper">While the two sides have come to terms on wages, formal negotiations have stalled since mid-November as the union and maritime employers remain stuck on what provisions the deal will include about port automation.</div>

While the two sides have come to terms on wages, formal negotiations have stalled since mid-November as the union and maritime employers remain stuck on what provisions the deal will include about port automation.

<div class="phx-topic">The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) are set to resume talks for a new master contract on Jan. 7, sources said Tuesday.The scheduled resumption of negotiations leaves a small window before the <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882/">current contract extension runs out on Jan. 15</a> and a likely second strike by the ILA hits ports along the US East and Gulf coasts.The ILA and USMX declined to comment on the status of talks that affect 45,000 dockworkers.While the ILA and USMX have come to terms on wages for a new master contract, the formal negotiations have stalled since mid-November. The union and maritime employers remain stuck on what provisions the new master contract will include about port automation. The ILA has taken <a href="https://www.joc.com/article/ila-breaks-off-contract-talks-accuses-usmx-of-semi-automation-push-5810392">a hard line</a> against automation technology at ports under its jurisdiction. It singled out semi-automated rail mounted gantry cranes (RMGs) as a technology that <a href="https://www.joc.com/article/ila-targets-rail-mounted-gantry-cranes-amid-impasse-in-port-labor-talks-5874742">it wants to bar</a> from further implementation at East and Gulf coast ports under the new contract. The USMX countered that technology, including RMGs, boosts port productivity and creates more opportunities for longshore workers. Progress on the talks have been further complicated by <a href="https://www.joc.com/article/ila-plays-new-trump-card-in-automation-standoff-with-usmx-5905242">the attention of President-elect Donald Trump</a>, who sided with the ILA’s stance against automation. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) are set to resume talks for a new master contract on Jan. 7, sources said Tuesday. The scheduled resumption of negotiations leaves a small window before the current contract extension runs out on Jan. 15 and a likely second strike by the ILA hits ports along the US East and Gulf coasts. The ILA and USMX declined to comment on the status of talks that affect 45,000 dockworkers. While the ILA and USMX have come to terms on wages for a new master contract, the formal negotiations have stalled since mid-November. The union and maritime employers remain stuck on what provisions the new master contract will include about port automation. The ILA has taken a hard line against automation technology at ports under its jurisdiction. It singled out semi-automated rail mounted gantry cranes (RMGs) as a technology that it wants to bar from further implementation at East and Gulf coast ports under the new contract. The USMX countered that technology, including RMGs, boosts port productivity and creates more opportunities for longshore workers. Progress on the talks have been further complicated by the attention of President-elect Donald Trump , who sided with the ILA’s stance against automation. Contact Michael Angell at michael.angell@spglobal.com .

Marine terminals

Longshore labor

ILA, USMX contract talks set for Jan. 7 restart ahead of strike deadline: sources

<div class="phx-topic abstract-wrapper">Despite the kudos for railroads, some market players question the value of pandemic-era comparisons, suggesting that 2024’s peak season aligns more closely with pre-pandemic trends.</div>

Despite the kudos for railroads, some market players question the value of pandemic-era comparisons, suggesting that 2024’s peak season aligns more closely with pre-pandemic trends.

<div class="phx-topic">Following a prolonged peak shipping season, intermodal providers are crediting North American Class I railroads for handling the surge in volume better they did during the tumult of the COVID-19 pandemic. Admittedly, asset and non-asset intermodal marketing companies (IMCs) were irritated over disruptions in <a href="https://www.joc.com/article/imcs-dealing-with-rail-service-disruptions-amid-unusually-high-volumes-5909110">Chicago</a>, <a href="https://www.joc.com/article/la-lb-rail-dwells-on-the-rise-as-port-complex-enters-height-of-peak-season-5712900">Los Angeles</a>, Portland and Tacoma during the second half of 2024. Yet those challenges were not as severe as the backlogs experienced in 2020 and 2021 despite a more than 20% year-over-year jump in freight volumes originating in the Southwest US in October and November, IMCs say. Container availability, a problem during the pandemic, was manageable this peak season. Surcharges to use containers only went as high as <a href="https://www.joc.com/article/up-hikes-la-lb-surcharges-again-as-volumes-remain-elevated-5820708">$850 using rail-owned containers</a> and some private boxes of <a href="https://www.joc.com/article/hub-group-regains-rail-share-while-schneiders-q2-volume-stays-flat-5703104">Hub Group, Schneider National</a>, STG Logistics and Swift Intermodal. By comparison, Union Pacific levied fees as high as <a href="https://www.joc.com/article/up-shippers-to-pay-more-in-los-angeles-dallas-and-houston-5248207">$5,000 per box</a> in Los Angeles during the pandemic. Even J.B. Hunt Transport Services, which assessed surcharges exceeding $1,000 per container late this past summer, limited the fees to select customers in 2024. In 2020 and 2021, the railroads and private box owners assessed surcharges on almost every shipper. “We had shippers paying the surcharges in 2020–21, but we couldn’t secure a gate reservation [required to drop off containers] with Union Pacific Railroad for weeks,” said one IMC executive who asked not to be identified. “This year, none of our contractual shippers incurred surcharges, and Union Pacific consistently provided equipment for baseload commitments.” Chassis availability was not a problem for domestic and international intermodal shipments, unlike during the pandemic. While the ports of Los Angeles and Long Beach saw volume spikes and <a href="https://www.joc.com/article/la-lb-rail-dwells-spike-to-two-year-high-amid-record-imports-in-september-5750222">two-year highs in rail dwell times</a> this fall, no significant terminal congestion was reported in Chicago, Dallas, Kansas City or Memphis. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0abc8de8-f8a5-4611-bc92-e001a0bd8f26"></dynamic-object></div>Gate reservations in Los Angeles were hard to procure in September and October, but delays were measured in days, not weeks, according to IMC executives, who also noted BNSF and Union Pacific did a better job communicating than four years ago, which in turn made it possible to keep shippers informed. “The [East and Gulf coast] work stoppage [in October] forced retailers to pull forward some volume as well as reroute away from those ports in favor of Los Angeles-Long Beach,” said a second IMC executive. “Without that, peak intermodal volumes could have been tepid at best.” In the most recent Journal of Commerce Intermodal Service Scorecard survey, 77.4% of intermodal providers say they were satisfied with the performance of North American Class I railroads over the past six months, down from 91.1% in the spring poll. Almost 91% of shippers say they were satisfied with the intermodal providers in the second half of the year, approximately on par with the 90.4% in the first half, according to the survey. The results show that while IMCs felt service on the rails was slower and less reliable in the second half of the year compared with the first — when volume was lower — their shippers did not experience any significant supply chain disruptions over the past six months. The IMCs and railroads successfully insulated shippers from congestion in Los Angeles, whereas disruptions in 2020 and 2021 had a profound negative impact on shippers. More than 250 participants responded to the H2 survey, conducted between Nov. 1 and Dec. 31. <h3>Legit comparison? </h3>Despite the recent kudos for railroads, some market players question the value of pandemic-era comparisons, suggesting that 2024’s peak season aligns more closely with pre-pandemic trends. “It’s probably better to compare this year with a more ‘normal’ peak season than to compare it to the surge of COVID-19 as that seems an apples-to-oranges comparison,” another IMC executive said. There is evidence to support both sides of the question. Railroads hauled approximately 50,000 domestic containers from Los Angeles to Chicago in October — a record for any month — followed by 45,000 in November, the highest volume for that month in history, according to an analysis by the Journal of Commerce of data from the Intermodal Association of North America (IANA). The Los Angeles to Chicago route is the largest by volume annually for domestic and international intermodal. However, the US intermodal fleet has expanded by more than 80,000 containers, or 30%, in the last four years, according to an analysis of data from PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Some argue that this capacity growth may explain the smoother peak season despite the volume spike out of Los Angeles. Another barometer of success for the railroads is on-time performance. During the pandemic, railroads were required to report weekly on-time performance data for intermodal to the US Surface Transportation Board, and the western railroads set their benchmark as 80%. Railroads are no longer required to report the metric to federal officials, but some IMCs question whether 80% is too low of a standard as trucks can deliver a 90% or better on-time performance on the highest volume lanes out of Los Angeles. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Following a prolonged peak shipping season, intermodal providers are crediting North American Class I railroads for handling the surge in volume better they did during the tumult of the COVID-19 pandemic. Admittedly, asset and non-asset intermodal marketing companies (IMCs) were irritated over disruptions in Chicago , Los Angeles , Portland and Tacoma during the second half of 2024. Yet those challenges were not as severe as the backlogs experienced in 2020 and 2021 despite a more than 20% year-over-year jump in freight volumes originating in the Southwest US in October and November, IMCs say. Container availability, a problem during the pandemic, was manageable this peak season. Surcharges to use containers only went as high as $850 using rail-owned containers and some private boxes of Hub Group, Schneider National , STG Logistics and Swift Intermodal. By comparison, Union Pacific levied fees as high as $5,000 per box in Los Angeles during the pandemic. Even J.B. Hunt Transport Services, which assessed surcharges exceeding $1,000 per container late this past summer, limited the fees to select customers in 2024. In 2020 and 2021, the railroads and private box owners assessed surcharges on almost every shipper. “We had shippers paying the surcharges in 2020–21, but we couldn’t secure a gate reservation [required to drop off containers] with Union Pacific Railroad for weeks,” said one IMC executive who asked not to be identified. “This year, none of our contractual shippers incurred surcharges, and Union Pacific consistently provided equipment for baseload commitments.” Chassis availability was not a problem for domestic and international intermodal shipments, unlike during the pandemic. While the ports of Los Angeles and Long Beach saw volume spikes and two-year highs in rail dwell times this fall, no significant terminal congestion was reported in Chicago, Dallas, Kansas City or Memphis. Gate reservations in Los Angeles were hard to procure in September and October, but delays were measured in days, not weeks, according to IMC executives, who also noted BNSF and Union Pacific did a better job communicating than four years ago, which in turn made it possible to keep shippers informed. “The [East and Gulf coast] work stoppage [in October] forced retailers to pull forward some volume as well as reroute away from those ports in favor of Los Angeles-Long Beach,” said a second IMC executive. “Without that, peak intermodal volumes could have been tepid at best.” In the most recent Journal of Commerce Intermodal Service Scorecard survey, 77.4% of intermodal providers say they were satisfied with the performance of North American Class I railroads over the past six months, down from 91.1% in the spring poll. Almost 91% of shippers say they were satisfied with the intermodal providers in the second half of the year, approximately on par with the 90.4% in the first half, according to the survey. The results show that while IMCs felt service on the rails was slower and less reliable in the second half of the year compared with the first — when volume was lower — their shippers did not experience any significant supply chain disruptions over the past six months. The IMCs and railroads successfully insulated shippers from congestion in Los Angeles, whereas disruptions in 2020 and 2021 had a profound negative impact on shippers. More than 250 participants responded to the H2 survey, conducted between Nov. 1 and Dec. 31. Legit comparison? Despite the recent kudos for railroads, some market players question the value of pandemic-era comparisons, suggesting that 2024’s peak season aligns more closely with pre-pandemic trends. “It’s probably better to compare this year with a more ‘normal’ peak season than to compare it to the surge of COVID-19 as that seems an apples-to-oranges comparison,” another IMC executive said. There is evidence to support both sides of the question. Railroads hauled approximately 50,000 domestic containers from Los Angeles to Chicago in October — a record for any month — followed by 45,000 in November, the highest volume for that month in history, according to an analysis by the Journal of Commerce of data from the Intermodal Association of North America (IANA). The Los Angeles to Chicago route is the largest by volume annually for domestic and international intermodal. However, the US intermodal fleet has expanded by more than 80,000 containers, or 30%, in the last four years, according to an analysis of data from PIERS, a sister product of the Journal of Commerce within S&P Global. Some argue that this capacity growth may explain the smoother peak season despite the volume spike out of Los Angeles. Another barometer of success for the railroads is on-time performance. During the pandemic, railroads were required to report weekly on-time performance data for intermodal to the US Surface Transportation Board, and the western railroads set their benchmark as 80%. Railroads are no longer required to report the metric to federal officials, but some IMCs question whether 80% is too low of a standard as trucks can deliver a 90% or better on-time performance on the highest volume lanes out of Los Angeles. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

IMCs say railroads handled peak season surge better than pandemic

<div class="phx-topic abstract-wrapper">Shanghai and Ningbo are dealing with “serious” congestion, according to a forwarder, while labor shortages in Hamburg are causing berthing delays of up to 10 days.</div>

Shanghai and Ningbo are dealing with “serious” congestion, according to a forwarder, while labor shortages in Hamburg are causing berthing delays of up to 10 days.

<div class="phx-topic">Shippers and ocean carriers on the Asia-Europe trade will be facing vessel delays into February as a raft of issues ranging from holiday port closures, vessel bunching in Asia and labor shortages in Hamburg cause serious port congestion with lengthy ship queues and berth waiting times. Port congestion is severe in China, Japan and the Philippines partly due to a pre-holiday cargo rush, bad weather and yard congestion. “Shanghai and Ningbo are still suffering from serious port congestion,” a spokesperson at forwarder FIBS Logistics in Singapore told the Journal of Commerce. “There were more than 120 vessels at anchor waiting for berth off both ports last week. We understand it’s the most severe level of congestion worldwide.” The spokesperson added the congestion at the two Chinese ports was “unlikely to improve before the Lunar New Year,” which begins Jan. 29. Guangzhou-based Winsail International Logistics said Shanghai is experiencing berthing delays of three to four days depending on the terminal. “Qingdao and Ningbo are facing delays of two to three days,” a senior executive at the company told the Journal of Commerce. The source pointed out that intra-Asia regional services are suffering more delays than mainline services due to the short voyage lengths of two to three days between ports and the large number of calls on services. That was echoed by FIBS Logistics, with the spokesperson saying the forwarder is experiencing vessel delays of “more than two weeks on the Shanghai-Manila corridor” on a transit that should take five to six days. There were also more than 50 vessels waiting to berth in Manila last week amid severe congestion due to high yard utilization, partly due to the large volume of empty containers and vessel bunching caused by ships arriving late. Taiwan’s Evergreen Line said on Dec. 20 that it had deployed three sweeper vessels to load empty containers at Manila to ease congestion at off-dock container yards and container terminals. That came after the Confederation of Truckers Association of the Philippines had threatened to stop accepting import containers from Evergreen due to congestion issues. The Philippines customs bureau said the problem of handling empty containers was an issue facing all carriers, not just Evergreen. That comes as carriers are again experiencing equipment shortages at ports in China and Vietnam as shippers consign cargo ahead of the Lunar New Year. CMA CGM is the worst affected with a shortage or tight supply of containers last week at all main ports in mainland China, Taiwan and Vietnam, except Guangzhou and Hong Kong. Hapag-Lloyd and Evergreen are also seeing tight supply of 40-foot containers in Shanghai, Ningbo, Qingdao and Chongqing in China. Ocean Network Express (ONE), OOCL, Cosco Shipping and Evergreen are experiencing tight availability of 20-foot and 40-foot containers in Shenzhen. <h3>Lengthy delays in Hamburg </h3>Meanwhile, labor shortages at Hamburg are causing berthing delays of up to 10 days for ships operating Asia-Europe services for THE Alliance, according to sailing schedules released by ONE. The labor issues are part of a wider shortage of personnel, with nearly 40% of companies in Germany reporting staff shortages. The delays have been exacerbated by congestion and labor issues at other ports, including Rotterdam. Strikes, labor shortages and congestion at Genoa will delay berthing at the Italian port in January by up to six days for some vessels operating Asia-Mediterranean services, ONE schedules show. Christmas and New Year port closures at ports including Le Havre, Barcelona, La Spezia and Marseille-Fos have also added to delays on Asia-Europe and Mediterranean services. The holdups have contributed to schedule delays of about a month on some Asia-Europe services, with the longest a 35-day slippage in the arrival of the 23,964 TEU HMM Algeciras operating the Far East 4 service. The vessel was scheduled to arrive at London Gateway on Dec. 29 but is now not expected until Feb. 2, according to the latest port itinerary. Schedules show the ship is expected to face a 10-day delay in Rotterdam and an extra four-day wait at its next call, Hamburg, where it’s due on Jan. 25. The 23,664-TEU Busan Express, operating the FE3 service, is set for a 10-day wait at Hamburg, with berthing now scheduled for Jan. 17, according to ONE schedules. Its arrival has already been held up due to congestion and holiday port closures at Rotterdam. The short voyage between North European ports such as Le Havre and London Gateway gives little opportunity for vessels to claw back the accumulated delays. But schedules also show THE Alliance anticipates it will recover two days on the transit from Antwerp to the final call at Southampton on FE3 services. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

Shippers and ocean carriers on the Asia-Europe trade will be facing vessel delays into February as a raft of issues ranging from holiday port closures, vessel bunching in Asia and labor shortages in Hamburg cause serious port congestion with lengthy ship queues and berth waiting times. Port congestion is severe in China, Japan and the Philippines partly due to a pre-holiday cargo rush, bad weather and yard congestion. “Shanghai and Ningbo are still suffering from serious port congestion,” a spokesperson at forwarder FIBS Logistics in Singapore told the Journal of Commerce. “There were more than 120 vessels at anchor waiting for berth off both ports last week. We understand it’s the most severe level of congestion worldwide.” The spokesperson added the congestion at the two Chinese ports was “unlikely to improve before the Lunar New Year,” which begins Jan. 29. Guangzhou-based Winsail International Logistics said Shanghai is experiencing berthing delays of three to four days depending on the terminal. “Qingdao and Ningbo are facing delays of two to three days,” a senior executive at the company told the Journal of Commerce. The source pointed out that intra-Asia regional services are suffering more delays than mainline services due to the short voyage lengths of two to three days between ports and the large number of calls on services. That was echoed by FIBS Logistics, with the spokesperson saying the forwarder is experiencing vessel delays of “more than two weeks on the Shanghai-Manila corridor” on a transit that should take five to six days. There were also more than 50 vessels waiting to berth in Manila last week amid severe congestion due to high yard utilization, partly due to the large volume of empty containers and vessel bunching caused by ships arriving late. Taiwan’s Evergreen Line said on Dec. 20 that it had deployed three sweeper vessels to load empty containers at Manila to ease congestion at off-dock container yards and container terminals. That came after the Confederation of Truckers Association of the Philippines had threatened to stop accepting import containers from Evergreen due to congestion issues. The Philippines customs bureau said the problem of handling empty containers was an issue facing all carriers, not just Evergreen. That comes as carriers are again experiencing equipment shortages at ports in China and Vietnam as shippers consign cargo ahead of the Lunar New Year. CMA CGM is the worst affected with a shortage or tight supply of containers last week at all main ports in mainland China, Taiwan and Vietnam, except Guangzhou and Hong Kong. Hapag-Lloyd and Evergreen are also seeing tight supply of 40-foot containers in Shanghai, Ningbo, Qingdao and Chongqing in China. Ocean Network Express (ONE), OOCL, Cosco Shipping and Evergreen are experiencing tight availability of 20-foot and 40-foot containers in Shenzhen. Lengthy delays in Hamburg Meanwhile, labor shortages at Hamburg are causing berthing delays of up to 10 days for ships operating Asia-Europe services for THE Alliance, according to sailing schedules released by ONE. The labor issues are part of a wider shortage of personnel, with nearly 40% of companies in Germany reporting staff shortages. The delays have been exacerbated by congestion and labor issues at other ports, including Rotterdam. Strikes, labor shortages and congestion at Genoa will delay berthing at the Italian port in January by up to six days for some vessels operating Asia-Mediterranean services, ONE schedules show. Christmas and New Year port closures at ports including Le Havre, Barcelona, La Spezia and Marseille-Fos have also added to delays on Asia-Europe and Mediterranean services. The holdups have contributed to schedule delays of about a month on some Asia-Europe services, with the longest a 35-day slippage in the arrival of the 23,964 TEU HMM Algeciras operating the Far East 4 service. The vessel was scheduled to arrive at London Gateway on Dec. 29 but is now not expected until Feb. 2, according to the latest port itinerary. Schedules show the ship is expected to face a 10-day delay in Rotterdam and an extra four-day wait at its next call, Hamburg, where it’s due on Jan. 25. The 23,664-TEU Busan Express, operating the FE3 service, is set for a 10-day wait at Hamburg, with berthing now scheduled for Jan. 17, according to ONE schedules. Its arrival has already been held up due to congestion and holiday port closures at Rotterdam. The short voyage between North European ports such as Le Havre and London Gateway gives little opportunity for vessels to claw back the accumulated delays. But schedules also show THE Alliance anticipates it will recover two days on the transit from Antwerp to the final call at Southampton on FE3 services. Contact Keith Wallis at keithwallis@hotmail.com.

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

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

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