<div>Copyright 2006, Traffic World, Inc.As the global economy expands and integrates, so do supply chains. Experts from management consulting firm Accenture say new developments are accelerating the integration of the once separate functions of logistics and operations.Speaking at October''s Council of Supply Chain Management Professionals annual meeting Robert S. Forrest, senior manager in Accenture''s supply chain management practice, said the push for private label product lines is pressing retailers to pull together distribution strategies and normally separate operations.And Martin Conner, a partner in the consultant''s supply chain practice, said a similar result applies for shippers who turn to product lifecycle...

Copyright 2006, Traffic World, Inc. As the global economy expands and integrates, so do supply chains. Experts from management consulting firm Accenture say new developments are accelerating the integration of the once separate functions of logistics and operations. Speaking at October''s Council of Supply Chain Management Professionals annual meeting Robert S. Forrest, senior manager in Accenture''s supply chain management practice, said the push for private label product lines is pressing retailers to pull together distribution strategies and normally separate operations. And Martin Conner, a partner in the consultant''s supply chain practice, said a similar result applies for shippers who turn to product lifecycle management tools and strategies to reduce SKUs, cut costs and increase revenue. Product lifecycle management is a technology and strategy for reducing returns, simplifying and streamlining SKU portfolios and otherwise increasing visibility and control throughout and to some extent beyond the supply chain. By contrast, private label manufacturing and outsourcing seeks to reduce costs and bolster margins by differentiating and even increasing the number of a retailer''s SKUs. What these two trends have in common is that they extend integration of a shipper''s design, engineering, manufacturing and supply chain activities to achieve a holistic control over internal logistics, logistics providers and suppliers that promises synergies for even greater cost reductions. Retailers usually source private labels outside their companies but distribute them exclusively through the retailer''s outlets. They make merchandisers more like manufacturers, requiring tighter union between engineering, manufacturing and supply chain operations to minimize risk and expand margins. Private labels used to be a retailer''s way of lowering its price points and adding margin, Forrest said. Now, the product strategy has shifted to differentiation from competitors, and scaling product features and services to various buying markets. Private label products play on brand loyalty and give retailers better insight into their customers. Forrest said within five years private labels will account for 20 percent of overall sales, although some segments are ahead or behind others. "It depends on where you start out," he said. Private labels may be good for lowering costs and preserving margin, Forrest said, but they also add risk and supply chain complexity. Private label production usually means outsourcing, except in these cases the outsourced manufacturer is often the sole source of product. Lead times for replenishment may be lengthened; transportation routes and modes may have to be customized to the scheduling needs of both supplier and retailer. Product development, engineering, quality and international logistics become more collaborative. "As retailers expand private label, it has pretty significant implications on what capabilities and functions the retailers provide," Forrest said. Conner said the nascent but growing discipline of product lifecycle management started as a response to environmental and consumer protections in regulations such as Germany''s aggressive consumer product recycling mandate. As the strategy matured, however, some companies grasp the value of designing and manufacturing a new product with its end in clear view. "There are horror stories about companies that accidentally forgot to kill a product," he said. Product lifecycle management promotes an even higher degree of integration between engineering, manufacturing and the supply chain, Conner said. A small but growing number of companies have embraced the new discipline, but "There''s increasing realization that this is important," he said. "I think much of what needs to change is more identification of ownership of these global processes." Businesses are realizing the highly compartmentalized management of new products working through production and the supply chain creates headaches of its own. "Now it''s time to optimize purchase price; now it''s time to optimize distribution; now it''s time to optimize engineering," Conner said. "So the sort of ''benevolent dictator'' kind of changes at every lifecycle stage and every function. That''s a hard way to manage a thing." These business developments promote closer collaboration throughout an organization and with its suppliers, potentially leading to tighter supply chains, lower transport costs and higher profits. Both also draw upper levels of management into closer scrutiny of, and perhaps better support for, logistics management and professionals. The effect is clear in product lifecycle management, Conner said, where "The more C-level people who are becoming aware and chartering these things, the more properly they tend to be chartered."

Transport, Trade and Regulation News

Retailers Getting Integrated

<div class="phx-topic abstract-wrapper">The Singapore-based carrier reported strong demand on its two main trade lanes out of Asia in its most recent fiscal quarter, with the trans-Pacific recording 100% utilization. </div>

The Singapore-based carrier reported strong demand on its two main trade lanes out of Asia in its most recent fiscal quarter, with the trans-Pacific recording 100% utilization.

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<div class="phx-topic">Ocean Network Express (ONE) is now expecting $4 billion in net profit for its operating year ending March 31, upping the forecast by almost $1 billion after posting a strong fiscal third quarter with significant gains in revenue and earnings. The full-year net profit as forecast would be a 30% increase over the previous year, even as container shipping enters its traditional slack season following the rush to export in the runup to the Lunar New Year. “A slowdown in cargo movement is expected, coupled with increasing uncertainty in the business environment,” ONE said in its earnings statement Friday, adding that demand would recover after the Lunar New Year. In its fiscal Q3 ended Dec. 31, the Singapore-based carrier reported a 44% year-over-year increase in revenue to $4.8 billion, with revenue for the first nine months of the financial year growing 40% year over year to almost $15 billion. Quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.6 billion were up almost nine times compared with the same quarter in the previous year, while the nine-month EBITDA was almost three time higher at $5.1 billion. Strong gains were also reported in EBIT and net profit. The $1 billion in EBIT for the fiscal third quarter turned around a $248 million loss recorded in the comparative period the previous year, while the nine-month EBIT of $3.6 billion was a 95% improvement year over year. Net profit of $1.1 billion in Q3 also turned around an $83 million loss the previous year, and the nine-month net result of $3.9 billion was six times that of the same period the year before. Total Q3 volume of 3.2 million TEUs across all trade lanes was up 5% year over year; for the first nine months of ONE’s fiscal year — April to December — volume of 9.7 million TEUs was up 7.7%. <h3>Trans-Pacific utilization at 100% </h3>Supporting the increased volume were average spot rates that remained elevated from Asia to both North America and Europe. ONE deploys 32% of its capacity on the Asia-North America corridor, its largest trade lane, and reported 100% vessel utilization as eastbound volume increased 15% to 713,000 TEUs. For the first nine months, the carrier’s volume on the trans-Pacific was up almost 10% year over year at 2.1 million TEUs. “In the North America eastbound trade, cargo movement slowed down initially, but recovered in the latter half of the quarter, boosted by concern over the potential strike in the East Coast and Gulf ports,” ONE said. Asia-Europe services comprise 22% of ONE’s capacity. Fiscal Q3 volume on the westbound trade lane increased 9.4% to 418,000 TEUs with vessel utilization of 93%. Nine-month volume of 1.3 million TEUs was an 8% increase year over year. “In the Asia-Europe westbound trade, the advanced cargo rush for the holiday season in the second quarter led to a slowdown in cargo movement at the beginning of Q3, but cargo demand recovered gradually in November and December,” ONE said. Early earnings signals are showing that 2024 appears to have been another strong year for ocean carriers, with Cosco Shipping Holdings, parent of Cosco Shipping and OOCL, <a href="https://www.joc.com/article/cosco-forecasts-95-jump-in-2024-net-profit-on-robust-volumes-freight-rates-5920588">forecasting a 95% increase in net profit</a> to $7.5 billion. Hapag-Lloyd's profit expectations for last year are more subdued, with <a href="https://www.joc.com/article/strong-volume-high-rates-to-lift-hapag-lloyds-2024-earnings-5933806">the Hamburg-based carrier’s preliminary results</a> showing a 3.7% increase in pre-tax profit of $2.8 billion. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean Network Express (ONE) is now expecting $4 billion in net profit for its operating year ending March 31, upping the forecast by almost $1 billion after posting a strong fiscal third quarter with significant gains in revenue and earnings. The full-year net profit as forecast would be a 30% increase over the previous year, even as container shipping enters its traditional slack season following the rush to export in the runup to the Lunar New Year. “A slowdown in cargo movement is expected, coupled with increasing uncertainty in the business environment,” ONE said in its earnings statement Friday, adding that demand would recover after the Lunar New Year. In its fiscal Q3 ended Dec. 31, the Singapore-based carrier reported a 44% year-over-year increase in revenue to $4.8 billion, with revenue for the first nine months of the financial year growing 40% year over year to almost $15 billion. Quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.6 billion were up almost nine times compared with the same quarter in the previous year, while the nine-month EBITDA was almost three time higher at $5.1 billion. Strong gains were also reported in EBIT and net profit. The $1 billion in EBIT for the fiscal third quarter turned around a $248 million loss recorded in the comparative period the previous year, while the nine-month EBIT of $3.6 billion was a 95% improvement year over year. Net profit of $1.1 billion in Q3 also turned around an $83 million loss the previous year, and the nine-month net result of $3.9 billion was six times that of the same period the year before. Total Q3 volume of 3.2 million TEUs across all trade lanes was up 5% year over year; for the first nine months of ONE’s fiscal year — April to December — volume of 9.7 million TEUs was up 7.7%. Trans-Pacific utilization at 100% Supporting the increased volume were average spot rates that remained elevated from Asia to both North America and Europe. ONE deploys 32% of its capacity on the Asia-North America corridor, its largest trade lane, and reported 100% vessel utilization as eastbound volume increased 15% to 713,000 TEUs. For the first nine months, the carrier’s volume on the trans-Pacific was up almost 10% year over year at 2.1 million TEUs. “In the North America eastbound trade, cargo movement slowed down initially, but recovered in the latter half of the quarter, boosted by concern over the potential strike in the East Coast and Gulf ports,” ONE said. Asia-Europe services comprise 22% of ONE’s capacity. Fiscal Q3 volume on the westbound trade lane increased 9.4% to 418,000 TEUs with vessel utilization of 93%. Nine-month volume of 1.3 million TEUs was an 8% increase year over year. “In the Asia-Europe westbound trade, the advanced cargo rush for the holiday season in the second quarter led to a slowdown in cargo movement at the beginning of Q3, but cargo demand recovered gradually in November and December,” ONE said. Early earnings signals are showing that 2024 appears to have been another strong year for ocean carriers, with Cosco Shipping Holdings, parent of Cosco Shipping and OOCL, forecasting a 95% increase in net profit to $7.5 billion. Hapag-Lloyd's profit expectations for last year are more subdued, with the Hamburg-based carrier’s preliminary results showing a 3.7% increase in pre-tax profit of $2.8 billion. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Container lines

Maritime

ONE upgrades full-year profit forecast by $1 billion after robust Q3

<div class="phx-topic abstract-wrapper">Maersk and Hapag-Lloyd have made 90% schedule reliability a core promise of their new partnership, and the pledge will be under intense scrutiny by the carriers’ customers.</div>

Maersk and Hapag-Lloyd have made 90% schedule reliability a core promise of their new partnership, and the pledge will be under intense scrutiny by the carriers’ customers.

<div class="phx-topic">The first ships in Maersk and Hapag-Lloyd's new Gemini Cooperation set sail on Feb. 1, but it will be June before the hub-and-spoke network is fully phased in and all vessels are moving on Gemini schedules, the carriers said in separate statements Friday. About 340 vessels with combined capacity of 3.7 million TEUs will need to be phased in to the shared east-west network that will consist of 57 services — 29 main line services and 28 intraregional shuttle services. The oft-stated ambition of Gemini is to deliver a fast, flexible and interconnected ocean network with schedule reliability over 90% once fully phased in. On the eve of its launch, executives at both carriers were promoting the virtues of their hub-and-spoke network. “With its innovative design, we believe our customers will benefit from increased reliability, flexibility and more competitive products,” Johan Sigsgaard, chief product officer/ocean at Maersk, said in the carrier’s statement. “With our targeted schedule reliability, we will satisfy one of our customers’ most important needs even better and set a new quality standard in the industry,” Hapag-Lloyd CEO Rolf Habben Jansen said in the liner’s statement. “Thanks to our effective hub-and-spoke operating system, we can deploy larger vessels and thus simultaneously optimize speed, reduce idling times and thereby cut down on carbon emissions,” he added. “All of this saves our customers a lot of time and resources.” Still, Kathy Liu, vice president of global sales and marketing at Taiwan-based forwarder Dimerco Express Group, said although 90% reliability was “nice to have,” she did not believe it was a “must-have” for Dimerco’s ocean freight customers. “Customers are more concerned about end-to-end reliability, including port operations, rather than just hub-to-hub reliability,” Liu told the Journal of Commerce this week. “The type of products on ocean freight are normally not that urgently needed or require strict transit time, so from the customer side, we don’t see that sort of reliability as a must,” she added. “But for sure, if it can be achieved, it will be nice to have.” Carriers ‘may be able to pull off’ reliability pledge Shippers have expressed reservations at the extensive network of shuttles within the Gemini model, with the schedule reliability goal of 90% only covering the hub-to-hub transits. Platforms measuring on-time performance such as eeSea and Sea-Intelligence Maritime Analysis do not yet have accurate ways of measuring transshipment. However, Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, was upbeat over the on-time performance pledge <a href="https://www.linkedin.com/in/larsjensenvespuccimaritime/recent-activity/all/">in a LinkedIn post this week</a>. “The two Gemini Cooperation partners racked up the top-performing spot in seven out of 12 months in 2024 (according to Sea-Intelligence) — certainly at a low level just as everyone else, but this should be taken as an indication that they might indeed be able to pull off their announced plan to reach 90% reliability,” Jensen wrote. Gemini plans to solve the schedule reliability via its hub-and-spoke network, but Ocean Alliance, Premier Alliance and a standalone Mediterranean Shipping Co. (MSC) are sticking to traditional port-to-port services. The direct approach may be more familiar to shippers, but having many port calls will compound any delays experienced in a rotation, Sigsgaard told reporters in a Gemini webinar earlier this week. “The biggest correlating factor to delays is actually the number of stops,” he said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The first ships in Maersk and Hapag-Lloyd's new Gemini Cooperation set sail on Feb. 1, but it will be June before the hub-and-spoke network is fully phased in and all vessels are moving on Gemini schedules, the carriers said in separate statements Friday. About 340 vessels with combined capacity of 3.7 million TEUs will need to be phased in to the shared east-west network that will consist of 57 services — 29 main line services and 28 intraregional shuttle services. The oft-stated ambition of Gemini is to deliver a fast, flexible and interconnected ocean network with schedule reliability over 90% once fully phased in. On the eve of its launch, executives at both carriers were promoting the virtues of their hub-and-spoke network. “With its innovative design, we believe our customers will benefit from increased reliability, flexibility and more competitive products,” Johan Sigsgaard, chief product officer/ocean at Maersk, said in the carrier’s statement. “With our targeted schedule reliability, we will satisfy one of our customers’ most important needs even better and set a new quality standard in the industry,” Hapag-Lloyd CEO Rolf Habben Jansen said in the liner’s statement. “Thanks to our effective hub-and-spoke operating system, we can deploy larger vessels and thus simultaneously optimize speed, reduce idling times and thereby cut down on carbon emissions,” he added. “All of this saves our customers a lot of time and resources.” Still, Kathy Liu, vice president of global sales and marketing at Taiwan-based forwarder Dimerco Express Group, said although 90% reliability was “nice to have,” she did not believe it was a “must-have” for Dimerco’s ocean freight customers. “Customers are more concerned about end-to-end reliability, including port operations, rather than just hub-to-hub reliability,” Liu told the Journal of Commerce this week. “The type of products on ocean freight are normally not that urgently needed or require strict transit time, so from the customer side, we don’t see that sort of reliability as a must,” she added. “But for sure, if it can be achieved, it will be nice to have.” Carriers ‘may be able to pull off’ reliability pledge Shippers have expressed reservations at the extensive network of shuttles within the Gemini model, with the schedule reliability goal of 90% only covering the hub-to-hub transits. Platforms measuring on-time performance such as eeSea and Sea-Intelligence Maritime Analysis do not yet have accurate ways of measuring transshipment. However, Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, was upbeat over the on-time performance pledge in a LinkedIn post this week . “The two Gemini Cooperation partners racked up the top-performing spot in seven out of 12 months in 2024 (according to Sea-Intelligence) — certainly at a low level just as everyone else, but this should be taken as an indication that they might indeed be able to pull off their announced plan to reach 90% reliability,” Jensen wrote. Gemini plans to solve the schedule reliability via its hub-and-spoke network, but Ocean Alliance, Premier Alliance and a standalone Mediterranean Shipping Co. (MSC) are sticking to traditional port-to-port services. The direct approach may be more familiar to shippers, but having many port calls will compound any delays experienced in a rotation, Sigsgaard told reporters in a Gemini webinar earlier this week. “The biggest correlating factor to delays is actually the number of stops,” he said. Contact Greg Knowler at greg.knowler@spglobal.com .

Hub-and-spoke model in spotlight on eve of Gemini Cooperation launch

<div class="phx-topic abstract-wrapper">A spokesperson for NS says requiring truckers to have appointments to pick up containers at the Chicago facility allows for “stack grooming,” meaning it gives the railroad information in advance on which boxes to make available.</div>

A spokesperson for NS says requiring truckers to have appointments to pick up containers at the Chicago facility allows for “stack grooming,” meaning it gives the railroad information in advance on which boxes to make available.

<div class="phx-topic">Norfolk Southern Railway (NS) has introduced a mandatory appointment system for truckers to retrieve import containers at its Landers terminal in Chicago, marking the third location where the railroad has implemented such a program. The initiative, which began Wednesday, is part of a broader technological strategy aimed at improving terminal efficiency to benefit cargo owners, NS says. The program was first rolled out at NS’s Memphis, Tenn., terminal in 2023, followed by its Atlanta facility last year. “The appointment system is a proven tool for reducing congestion, building capacity, and streamlining operations,” a spokesperson for the railroad told the Journal of Commerce. “We [can] gain a better understanding of who is coming into the terminal and when.” The spokesperson said appointments to pick up containers allow for “stack grooming,” meaning it gives the railroad information in advance on which boxes to make available. The concept is similar to operations at the Port of Virginia, where cranes sort container stacks to prioritize those scheduled for imminent departure. Without an appointment system, a truck driver may arrive for a container that is buried deep within a stack, requiring a crane operator to dismantle and rebuild the stack — a time-consuming process that can cause widespread delays and ultimately disadvantage other importers. Despite the intended benefits, Norfolk Southern’s appointment system in Memphis and Atlanta encountered initial setbacks. In Memphis, crane malfunctions shortly after implementation hindered short-term efficiency. In Atlanta, truck drivers faced logistical hurdles, such as chassis depots being closed during early morning appointment slots. NS resolved the issues over time, but it strategically chose to launch the system in Chicago during January — a period of lower shipping volumes — to minimize disruptions. <h3>Measuring system success isn’t easy </h3>While a straightforward metric might be comparing average truck turn times before and after implementation, the reality of an appointment system is more nuanced. The system is part of a larger operational shift from what’s known as a wheeled terminal to a grounded terminal, which is common in marine ports. Wheeled terminals pre-mount containers onto chassis, allowing truckers to quickly hook up and exit. Grounded terminals, by contrast, require crane operators to retrieve containers from stacks, often resulting in longer turn times. NS moved to grounded terminal operations for two key reasons: greater storage capacity and increased flexibility for truckers to use their own chassis. NS hopes to maintain truck turn times comparable to wheeled terminals while leveraging the expanded capacity of grounded operations. In Atlanta, for example, the average turn time at the Austell terminal was about 30 minutes before the conversion, while it’s now 35 to 41 minutes as a grounded terminal with appointment systems. But NS said the transitions in Atlanta and Memphis resulted in greater predictability for retrieving cargo and less idling time, benefiting the importers ultimately. <h3>How drivers can reduce turn times </h3>One lesson learned from Atlanta and Memphis is that proactive planning can benefit all stakeholders. Appointments in Atlanta are currently scheduled an average of 2.8 hours ahead of pickup, while in Memphis, they are made only 1.4 hours in advance. Shorter lead times make it harder to pre-position containers for pickups. “We’d like to see those numbers get even better over time at all three facilities…to ensure adequate advanced notice,” the NS spokesperson said. One obstacle for truckers booking appointments further in advance is the unpredictability of container availability. Without a consistent timeframe between a train’s arrival and when cargo is ready for pickup, trucking companies often struggle to plan. As a result, available appointment slots frequently go unused. At the Austell terminal in Atlanta, for instance, full utilization of available appointment slots has occurred only 7.5% of the time this year. For the Rossville terminal in Memphis, that figure is less than 1% for the time period, according to NS figures. For drivers concerned about appointment availability, NS said it can offer up to 1,200 international container appointments per day in Landers. NS exceeded that capacity on only four days in 2024. Still, skepticism remains among truck drivers in Chicago. Conversations the Journal of Commerce has had with truck drivers in the market indicate concerns about the transition, especially when there is a major snowstorm in Chicago. Past rollouts in Atlanta and Memphis suggest new problems will arise, but eventually, the railroad, truckers and cargo owners will figure out how to adapt. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Norfolk Southern Railway (NS) has introduced a mandatory appointment system for truckers to retrieve import containers at its Landers terminal in Chicago, marking the third location where the railroad has implemented such a program. The initiative, which began Wednesday, is part of a broader technological strategy aimed at improving terminal efficiency to benefit cargo owners, NS says. The program was first rolled out at NS’s Memphis, Tenn., terminal in 2023, followed by its Atlanta facility last year. “The appointment system is a proven tool for reducing congestion, building capacity, and streamlining operations,” a spokesperson for the railroad told the Journal of Commerce. “We [can] gain a better understanding of who is coming into the terminal and when.” The spokesperson said appointments to pick up containers allow for “stack grooming,” meaning it gives the railroad information in advance on which boxes to make available. The concept is similar to operations at the Port of Virginia, where cranes sort container stacks to prioritize those scheduled for imminent departure. Without an appointment system, a truck driver may arrive for a container that is buried deep within a stack, requiring a crane operator to dismantle and rebuild the stack — a time-consuming process that can cause widespread delays and ultimately disadvantage other importers. Despite the intended benefits, Norfolk Southern’s appointment system in Memphis and Atlanta encountered initial setbacks. In Memphis, crane malfunctions shortly after implementation hindered short-term efficiency. In Atlanta, truck drivers faced logistical hurdles, such as chassis depots being closed during early morning appointment slots. NS resolved the issues over time, but it strategically chose to launch the system in Chicago during January — a period of lower shipping volumes — to minimize disruptions. Measuring system success isn’t easy While a straightforward metric might be comparing average truck turn times before and after implementation, the reality of an appointment system is more nuanced. The system is part of a larger operational shift from what’s known as a wheeled terminal to a grounded terminal, which is common in marine ports. Wheeled terminals pre-mount containers onto chassis, allowing truckers to quickly hook up and exit. Grounded terminals, by contrast, require crane operators to retrieve containers from stacks, often resulting in longer turn times. NS moved to grounded terminal operations for two key reasons: greater storage capacity and increased flexibility for truckers to use their own chassis. NS hopes to maintain truck turn times comparable to wheeled terminals while leveraging the expanded capacity of grounded operations. In Atlanta, for example, the average turn time at the Austell terminal was about 30 minutes before the conversion, while it’s now 35 to 41 minutes as a grounded terminal with appointment systems. But NS said the transitions in Atlanta and Memphis resulted in greater predictability for retrieving cargo and less idling time, benefiting the importers ultimately. How drivers can reduce turn times One lesson learned from Atlanta and Memphis is that proactive planning can benefit all stakeholders. Appointments in Atlanta are currently scheduled an average of 2.8 hours ahead of pickup, while in Memphis, they are made only 1.4 hours in advance. Shorter lead times make it harder to pre-position containers for pickups. “We’d like to see those numbers get even better over time at all three facilities…to ensure adequate advanced notice,” the NS spokesperson said. One obstacle for truckers booking appointments further in advance is the unpredictability of container availability. Without a consistent timeframe between a train’s arrival and when cargo is ready for pickup, trucking companies often struggle to plan. As a result, available appointment slots frequently go unused. At the Austell terminal in Atlanta, for instance, full utilization of available appointment slots has occurred only 7.5% of the time this year. For the Rossville terminal in Memphis, that figure is less than 1% for the time period, according to NS figures. For drivers concerned about appointment availability, NS said it can offer up to 1,200 international container appointments per day in Landers. NS exceeded that capacity on only four days in 2024. Still, skepticism remains among truck drivers in Chicago. Conversations the Journal of Commerce has had with truck drivers in the market indicate concerns about the transition, especially when there is a major snowstorm in Chicago. Past rollouts in Atlanta and Memphis suggest new problems will arise, but eventually, the railroad, truckers and cargo owners will figure out how to adapt. Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

North-American rail

Norfolk Southern launches appointment system at Landers terminal

<div class="phx-topic abstract-wrapper">Forwarders say that breakbulk and project cargo shippers are taking a greater interest in alternative fuel options for specialist ships.</div>

Forwarders say that breakbulk and project cargo shippers are taking a greater interest in alternative fuel options for specialist ships.

<div class="phx-topic">In working to meet International Maritime Organization requirements to curb greenhouse gas emissions, multipurpose and heavy-lift vessel operators are gravitating toward dual-fuel vessels as the new standard for newbuilds — including those that will call at US ports. Dual-fuel ships account for most of the newbuilds currently under construction, according to Thomas Damsgaard, head of the Americas office for shipowner association BIMCO.G2 Ocean is among the multipurpose vessel (MPV) operators expanding its fleet with vessels that will be able to accommodate both conventional and alternative fuels, with its first round of new vessels set to come online as early as 2026. Phil Curran, G2 Ocean’s head of fleet operations, told the Journal of Commerce that the operator has 10 newbuilds on order that will be alternative-fuel ready. All 10 of the 83,000-deadweight-ton open-hatch vessels will be built with dual-fuel engines and fuel supply systems, and with space allocated for additional fuel tanks.Curran said it’s too early to predict which fuel type will become the industry standard, but that ammonia and methanol are the most likely alternatives. “Our ships are designed with the flexibility to delay the decision on fuel type until the fuel supply market is more mature,” he said. “This allows our owners to commit to ordering newbuilds now without risking that the vessels will be negatively impacted from fuel availability.” G2 Ocean last August announced orders for two new ammonia-/methanol-ready open-hatch vessels, which are set to be delivered by October 2028 and January 2029, respectively. Those vessels will be in addition to the four new ammonia-ready vessels that will join the fleet in 2026, with four more ammonia dual-fuel vessels coming in the first half of 2027. Along with building new dual-fuel vessels, G2 Ocean has been operating some of its vessels with biofuel produced from waste and residue streams. <h3>US lacking in biofuel availability</h3>Biofuel is used on voyages between Europe and Canada, but the US lacks in its availability of the product. Curran said “robust supply chains” for biofuels are being developed in Europe and Asia but are lagging in the Americas. “Although the supply chain for biofuels is growing, we do see that global availability is still limited.”The newbuilds come as demand is mounting for sustainable fueling options. Meghan Toone, Americas regional operations manager for DHL’s industrial projects division, told the Journal of Commerce that breakbulk and project cargo shippers that rely on DHL for freight forwarding have been voicing more interest in alternative fuel options.“More so you see it with containers, but that conversation is coming up with our industrial project customers asking about how they can help make a pivot in their strategy, and how we can help them with that,” she said.Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

In working to meet International Maritime Organization requirements to curb greenhouse gas emissions, multipurpose and heavy-lift vessel operators are gravitating toward dual-fuel vessels as the new standard for newbuilds — including those that will call at US ports. Dual-fuel ships account for most of the newbuilds currently under construction, according to Thomas Damsgaard, head of the Americas office for shipowner association BIMCO. G2 Ocean is among the multipurpose vessel (MPV) operators expanding its fleet with vessels that will be able to accommodate both conventional and alternative fuels, with its first round of new vessels set to come online as early as 2026. Phil Curran, G2 Ocean’s head of fleet operations, told the Journal of Commerce that the operator has 10 newbuilds on order that will be alternative-fuel ready. All 10 of the 83,000-deadweight-ton open-hatch vessels will be built with dual-fuel engines and fuel supply systems, and with space allocated for additional fuel tanks. Curran said it’s too early to predict which fuel type will become the industry standard, but that ammonia and methanol are the most likely alternatives. “Our ships are designed with the flexibility to delay the decision on fuel type until the fuel supply market is more mature,” he said. “This allows our owners to commit to ordering newbuilds now without risking that the vessels will be negatively impacted from fuel availability.” G2 Ocean last August announced orders for two new ammonia-/methanol-ready open-hatch vessels, which are set to be delivered by October 2028 and January 2029, respectively. Those vessels will be in addition to the four new ammonia-ready vessels that will join the fleet in 2026, with four more ammonia dual-fuel vessels coming in the first half of 2027. Along with building new dual-fuel vessels, G2 Ocean has been operating some of its vessels with biofuel produced from waste and residue streams. US lacking in biofuel availability Biofuel is used on voyages between Europe and Canada, but the US lacks in its availability of the product. Curran said “robust supply chains” for biofuels are being developed in Europe and Asia but are lagging in the Americas. “Although the supply chain for biofuels is growing, we do see that global availability is still limited.” The newbuilds come as demand is mounting for sustainable fueling options. Meghan Toone, Americas regional operations manager for DHL’s industrial projects division, told the Journal of Commerce that breakbulk and project cargo shippers that rely on DHL for freight forwarding have been voicing more interest in alternative fuel options. “More so you see it with containers, but that conversation is coming up with our industrial project customers asking about how they can help make a pivot in their strategy, and how we can help them with that,” she said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Breakbulk carriers

Project cargo

Breakbulk News

MPV operators lean into orders for dual-fuel newbuilds

<div class="phx-topic abstract-wrapper">The largest US freight broker expects the first quarter of 2025 to be weak for trucking as the freight recession remains in place, but it is converting more customers to use its services for ocean freight. </div>

The largest US freight broker expects the first quarter of 2025 to be weak for trucking as the freight recession remains in place, but it is converting more customers to use its services for ocean freight.

<div class="phx-topic">C.H. Robinson sees the US freight recession lingering into 2025 as it expects truckload volumes to drop at the start of the year. But the largest US freight broker is looking to offset that weakness by cross-selling customers on its global forwarding business.Chief Executive David Bozeman said on the company’s fourth-quarter conference call late Wednesday that results outperformed expectations despite “what continues to be a historically prolonged freight recession with market growth in 2024 that did not materialize as had been projected.” Total revenue at the Minneapolis-based company reached $17.7 billion in 2024, just shy of the $18 billion consensus from S&amp;P Capital IQ estimates. However, full-year earnings of $4.51 per share managed to beat consensus estimates of $4.38. Michael Castagnetto, president of C.H. Robinson’s North American Surface Transportation (NAST) unit, noted that <a href="https://www.joc.com/article/shippers-balance-near-term-market-long-term-forecasts-in-trucking-bids-5925145">the Cass Freight Shipment Index</a> for the fourth quarter of 2024 was down 3.2% year on year and “the lowest read the industry has in the last 15 years.” NAST’s volumes for the fourth quarter were down 1% year on year. The segment’s full-year revenue dropped 6% to $11.7 billion, but better margins and increasing use of digital brokerage on each truckload boosted operating income 15% to $531 million. “From a volume standpoint, the market continues to be in a prolonged freight recession,” Castagnetto said. He added that industry volumes in the first quarter of 2025 could drop 2.5% sequentially based on historical trends in the Cass index. Transportation services provider Landstar Systems shared a similar outlook on its Wednesday conference call. It expects Q1 truckload volumes to be between 2% and 7% lower than the year-earlier quarter.<h3>Forwarding a standout</h3>Revenue in C.H. Robinson’s Global Forwarding business grew 27% in 2024 to $3.8 billion due to <a href="https://www.joc.com/article/early-lunar-new-year-tariffs-strike-risk-underpin-q4-strength-in-ocean-freight-5788905">strong ocean freight rates</a>, even though shipments only grew 3.5%. Operating income in the forwarding business rose 148% to $212 million. In addition to higher margins on each shipment, C.H. Robinson said automation and other productivity improvements enabled each forwarding employee to handle 30% more shipments per day last year than in 2022. The company noted in a December investor presentation that 20% of its Global Forwarding business is now coming from NAST customers. Castagnetto said the company is in the “early innings” of converting trucking customers to also use its forwarding services. “We have a lot of runway in front of us in those areas to grow, but also to move up the value stack as you think about that next stage of cross-selling, whether it’s NAST to global forwarding [or] global forwarding to NAST,” he said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

C.H. Robinson sees the US freight recession lingering into 2025 as it expects truckload volumes to drop at the start of the year. But the largest US freight broker is looking to offset that weakness by cross-selling customers on its global forwarding business. Chief Executive David Bozeman said on the company’s fourth-quarter conference call late Wednesday that results outperformed expectations despite “what continues to be a historically prolonged freight recession with market growth in 2024 that did not materialize as had been projected.” Total revenue at the Minneapolis-based company reached $17.7 billion in 2024, just shy of the $18 billion consensus from S&P Capital IQ estimates. However, full-year earnings of $4.51 per share managed to beat consensus estimates of $4.38. Michael Castagnetto, president of C.H. Robinson’s North American Surface Transportation (NAST) unit, noted that the Cass Freight Shipment Index for the fourth quarter of 2024 was down 3.2% year on year and “the lowest read the industry has in the last 15 years.” NAST’s volumes for the fourth quarter were down 1% year on year. The segment’s full-year revenue dropped 6% to $11.7 billion, but better margins and increasing use of digital brokerage on each truckload boosted operating income 15% to $531 million. “From a volume standpoint, the market continues to be in a prolonged freight recession,” Castagnetto said. He added that industry volumes in the first quarter of 2025 could drop 2.5% sequentially based on historical trends in the Cass index. Transportation services provider Landstar Systems shared a similar outlook on its Wednesday conference call. It expects Q1 truckload volumes to be between 2% and 7% lower than the year-earlier quarter. Forwarding a standout Revenue in C.H. Robinson’s Global Forwarding business grew 27% in 2024 to $3.8 billion due to strong ocean freight rates , even though shipments only grew 3.5%. Operating income in the forwarding business rose 148% to $212 million. In addition to higher margins on each shipment, C.H. Robinson said automation and other productivity improvements enabled each forwarding employee to handle 30% more shipments per day last year than in 2022. The company noted in a December investor presentation that 20% of its Global Forwarding business is now coming from NAST customers. Castagnetto said the company is in the “early innings” of converting trucking customers to also use its forwarding services. “We have a lot of runway in front of us in those areas to grow, but also to move up the value stack as you think about that next stage of cross-selling, whether it’s NAST to global forwarding [or] global forwarding to NAST,” he said. Contact Michael Angell at michael.angell@spglobal.com

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C.H. Robinson’s forwarding business offsets weak US truck market

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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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