<div class="phx-topic abstract-wrapper">Vern Hill, director of the Federal Maritime Commission's Bureau of Enforcement, said the commission </div>

Vern Hill, director of the Federal Maritime Commission's Bureau of Enforcement, said the commission

<div>Vern Hill, director of the Federal Maritime Commission's Bureau of Enforcement, said the commission pushed for a monetary settlement with Transpacific Stabilization Agreement members because its investigation uncovered possible violations of shipping act's Section 10, which lists prohibited practices by carriers.He said, though, that the commission's priority was to quickly and effectively end practices that discriminate against NVOs, and that seeking a large monetary settlement could have resulted in lengthy litigation. For that reason, the commission accepted a $1.35 million fine that amounts to less than $100,000 for each of the TSA's 14 members.Hill would not say whether the commission,...

Vern Hill, director of the Federal Maritime Commission's Bureau of Enforcement, said the commission pushed for a monetary settlement with Transpacific Stabilization Agreement members because its investigation uncovered possible violations of shipping act's Section 10, which lists prohibited practices by carriers. He said, though, that the commission's priority was to quickly and effectively end practices that discriminate against NVOs, and that seeking a large monetary settlement could have resulted in lengthy litigation. For that reason, the commission accepted a $1.35 million fine that amounts to less than $100,000 for each of the TSA's 14 members. Hill would not say whether the commission, in its fact-finding, uncovered specific incidents where TSA members acted in concert to treat NVOs differently from beneficial cargo owners. The FMC's settlement agreement requires evidence in the case to remain confidential. Carrier spokesmen emphasized that the FMC settlement agreement offered no evidence of shipping-act violations by carriers. "There is no finding of violations. We looked at this thoroughly; the TSA did not discriminate against NVOs in any way, shape or form," said Stanley Sher, attorney for the TSA. He said carriers hope the FMC settlement closes the issue. NVOs remain convinced that TSA members had a plan to discriminate against them. Bob Coleman, president of Total Logistics Resource of Portland, Ore., and of the Pacific Coast Council of forwarders and customs brokers, said that although the TSA may have never published such advice in the form of a guideline, when consolidators attempted to negotiate with carrier after carrier last year and heard the same response, it is logical to assume such strategies were at least discussed at TSA meetings. "Fifteen people can't all come up with the same ideas at the same time," Coleman said.

Forwarding

Ruling settles the issue - for now

<div class="phx-topic abstract-wrapper">US importers and their Mexican logistics and customs partners are experiencing longer wait times when northbound shipments arrive at border towns, and that’s inevitably raising transportation costs and leading to supply chain disruptions.</div>

US importers and their Mexican logistics and customs partners are experiencing longer wait times when northbound shipments arrive at border towns, and that’s inevitably raising transportation costs and leading to supply chain disruptions.

Feature image

<div class="phx-topic">Monterrey, Mexico — On the US-Mexico border, it’s not just the actual tariff amount that’s making trouble for shippers, but also the delays and increased paperwork associated with those levies, logistics managers said at the Redwood Logistics Cross-Border Logistics Council here. US importers and their Mexican logistics and customs partners are experiencing longer wait times when northbound shipments arrive at border towns such as Nuevo Laredo, the gateway to Laredo, Texas, the largest US land border crossing point. That’s inevitably pushing up transportation costs and leading to supply chain disruptions — whether goods are subject to tariffs or not, shippers and speakers at the event said. How high costs go depends on many factors, but the increases come with a bite. “We’re seeing Mexican soldiers opening trucks, breaking seals, as they search for fentanyl,” Alonso Gonzalez, vice president at GONTOR Logistics, a US and Mexican customs broker in Laredo, said at the conference last week. Mexican President Claudia Sheinbaum deployed her country’s National Guard to the border in February <a href="https://www.npr.org/2025/02/06/nx-s1-5288667/mexico-us-border-tariff-national-guard">to crack down on drug smuggling</a>. That has added another layer of delay and uncertainty for shippers in a suddenly more complex cross-border market. “Everything is being double- or triple-checked at the border when it’s crossing and [US-bound] exports are taking more time,” said Claudia Montemayor, international trade manager at H-E-B, a Texas-based supermarket chain with 70 stores in Mexico. That’s critical to H-E-B, which ships many foods with short shelf lives. Long delays northbound or southbound at the border can reduce the shelf life of products or extend the use of temperature-controlled tractor-trailers, driving transportation costs higher. A Redwood survey of more than 100 shippers found that more logistics managers were concerned about supply chain disruptions (38%) and inflation (37%) than higher tariffs (17%). “There are too many touchpoints when freight gets to the border,” said Jessica Solis, Mexico operations director for Redwood Mexico, a division of Redwood Logistics. In terms of freight volume headed to the US, “it’s been a mini-marathon every month,” she said. February, March and April all had tariff deadlines that <a href="https://www.joc.com/article/disrupted-cross-border-freight-shipping-braces-for-us-tariffs-5974787">pushed goods toward the border</a> in waves, Solis said. Although there’s no deadline for Mexico in May, “we anticipate a crazy end to April,” she said. “This is the peak season now [for 2025].” <h3>Riding the yo-yo </h3>For Dometic, a maker of outdoor products from camping stoves to marine electronics, “it’s been a yo-yo effect the past few months,” said Bill Fogt, the company’s senior vice president for the Americas. Dometic chose not to “pull forward” imports before the 25% tariff on Mexico went into effect. “We didn’t want to take a risk on growing inventories,” Fogt said, adding that has created a “yo-yo” effect. “We were stopping production, and weren’t sending anything across the border, and then we turned it back on two days later,” he said. “It was up and down.” Dometic was caught with too much inventory in 2022 when the market for recreational vehicles dropped post-pandemic, Fogt said. The shipper didn’t want to repeat that. “We kept our inventory low and then we just played the yo-yo game,” he said. The company has also delayed shipments to ensure they’re compliant with the rules of origin in the US-Mexico-Canada Agreement (USMCA). Most of the shippers at the Redwood Mexico conference said their shipments were USMCA-compliant, so far avoiding the 25% duty. However, proving a shipment is USMCA-compliant can be a costly and time-consuming process. Since the tariff was implemented in March, “our work has doubled or tripled,” said GONTOR Logistics’ Gonzalez. “Where we used to need only one HTS [Harmonized Tariff Schedule] code, we now may need as many as four or five codes,” he said. That’s because US Customs and Border Protection (CBP) wants verification that both products and their components conform to the USMCA rules. “A lot of shippers are going back and revisiting their USMCA content,” Gonzalez said. “They’re looking at percentages of aluminum and steel.” It’s as if a shipment once treated as a doll is now seen as a Russian nesting doll, and the origin of each of the interior dolls needs to be exactly accounted for under the USMCA. More frequent audits of customs brokers are likely. “We’ve never seen anything like this,” Gonzalez said. “Some of you have already been charged an increase by your US customs broker and if not, you will be. The rates are all going to go up.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Monterrey, Mexico — On the US-Mexico border, it’s not just the actual tariff amount that’s making trouble for shippers, but also the delays and increased paperwork associated with those levies, logistics managers said at the Redwood Logistics Cross-Border Logistics Council here. US importers and their Mexican logistics and customs partners are experiencing longer wait times when northbound shipments arrive at border towns such as Nuevo Laredo, the gateway to Laredo, Texas, the largest US land border crossing point. That’s inevitably pushing up transportation costs and leading to supply chain disruptions — whether goods are subject to tariffs or not, shippers and speakers at the event said. How high costs go depends on many factors, but the increases come with a bite. “We’re seeing Mexican soldiers opening trucks, breaking seals, as they search for fentanyl,” Alonso Gonzalez, vice president at GONTOR Logistics, a US and Mexican customs broker in Laredo, said at the conference last week. Mexican President Claudia Sheinbaum deployed her country’s National Guard to the border in February to crack down on drug smuggling . That has added another layer of delay and uncertainty for shippers in a suddenly more complex cross-border market. “Everything is being double- or triple-checked at the border when it’s crossing and [US-bound] exports are taking more time,” said Claudia Montemayor, international trade manager at H-E-B, a Texas-based supermarket chain with 70 stores in Mexico. That’s critical to H-E-B, which ships many foods with short shelf lives. Long delays northbound or southbound at the border can reduce the shelf life of products or extend the use of temperature-controlled tractor-trailers, driving transportation costs higher. A Redwood survey of more than 100 shippers found that more logistics managers were concerned about supply chain disruptions (38%) and inflation (37%) than higher tariffs (17%). “There are too many touchpoints when freight gets to the border,” said Jessica Solis, Mexico operations director for Redwood Mexico, a division of Redwood Logistics. In terms of freight volume headed to the US, “it’s been a mini-marathon every month,” she said. February, March and April all had tariff deadlines that pushed goods toward the border in waves, Solis said. Although there’s no deadline for Mexico in May, “we anticipate a crazy end to April,” she said. “This is the peak season now [for 2025].” Riding the yo-yo For Dometic, a maker of outdoor products from camping stoves to marine electronics, “it’s been a yo-yo effect the past few months,” said Bill Fogt, the company’s senior vice president for the Americas. Dometic chose not to “pull forward” imports before the 25% tariff on Mexico went into effect. “We didn’t want to take a risk on growing inventories,” Fogt said, adding that has created a “yo-yo” effect. “We were stopping production, and weren’t sending anything across the border, and then we turned it back on two days later,” he said. “It was up and down.” Dometic was caught with too much inventory in 2022 when the market for recreational vehicles dropped post-pandemic, Fogt said. The shipper didn’t want to repeat that. “We kept our inventory low and then we just played the yo-yo game,” he said. The company has also delayed shipments to ensure they’re compliant with the rules of origin in the US-Mexico-Canada Agreement (USMCA). Most of the shippers at the Redwood Mexico conference said their shipments were USMCA-compliant, so far avoiding the 25% duty. However, proving a shipment is USMCA-compliant can be a costly and time-consuming process. Since the tariff was implemented in March, “our work has doubled or tripled,” said GONTOR Logistics’ Gonzalez. “Where we used to need only one HTS [Harmonized Tariff Schedule] code, we now may need as many as four or five codes,” he said. That’s because US Customs and Border Protection (CBP) wants verification that both products and their components conform to the USMCA rules. “A lot of shippers are going back and revisiting their USMCA content,” Gonzalez said. “They’re looking at percentages of aluminum and steel.” It’s as if a shipment once treated as a doll is now seen as a Russian nesting doll, and the origin of each of the interior dolls needs to be exactly accounted for under the USMCA. More frequent audits of customs brokers are likely. “We’ve never seen anything like this,” Gonzalez said. “Some of you have already been charged an increase by your US customs broker and if not, you will be. The rates are all going to go up.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Supply chain

Trucking News

Truckload

Truck brokers

Surface

Tariff uncertainty pushing up transportation costs at US-Mexico border

<div class="phx-topic abstract-wrapper">Some ships are leaving China just half-full as the Trump administration’s rush of tariffs sends shippers into contortions about what to do with their freight. </div>

Some ships are leaving China just half-full as the Trump administration’s rush of tariffs sends shippers into contortions about what to do with their freight.

<div class="phx-topic">Ocean carriers on the eastbound trans-Pacific are poised to blank more voyages after a slew of booking cancellations last week that could leave some ships departing China half-empty through May. As the uncertainty around US tariffs on Chinese goods drags out, shippers face on-the-fly decisions about what to do with their suddenly more expensive freight. Port of Los Angeles Executive Director Gene Seroka said Friday that 12 sailings from China to the US West Coast in May have been canceled due to the Trump administration’s decision to put tariffs of 145% on most goods from China. Those dozen cancellations would put May’s blanks above April’s, according to data from third-party logistics provider Spedag Americas, which recorded 11 blanked voyages to Los Angeles during April, including three weekly voyages from a small independent carrier with about 2,000 TEUs of capacity. Ocean Alliance member Evergreen Marine, which operates the CPS service to Los Angeles, will have the service’s last scheduled voyage from Shanghai depart on Tuesday. No further sailings from China are scheduled until May 21, according to China-based shipping agents and the latest CPS schedule, which would mark four straight weeks of blanked service. The canceled voyages would remove 32,000 TEUs of capacity from the trans-Pacific over that period. Evergreen declined a request for comment about the CPS service. James Caradonna, executive vice president of Spedag Americas, told the Journal of Commerce that April’s blank sailings were for just one or two non-consecutive weeks. Carriers had been expected to start bringing more ships into service as 2025–26 annual service contracts are signed and seasonal summer shipments start. “Four consecutive weeks [of blank sailings on the service] is extreme,” Caradonna said. <h3>Half-full ships from China </h3>A senior vice president for an independent ocean carrier in the trans-Pacific trades told the Journal of Commerce that his company saw an immediate 30% drop in container bookings out of China last week due to the new tariffs. Other customers are requesting that containers already in-gated at origin not be loaded on ships, while others have asked that containers be pulled completely from the port, the source said, not an easy task inside of China’s high-volume gateways. Likewise, the source said there is concern that cargo already loaded on ships from China may be abandoned at US ports due to the tariff costs. He expects that ships leaving China for the US in the coming weeks will be less than half-full as the cancellations continue, forcing the carrier to blank more voyages. “People are canceling and putting cargo [from] China on pause,” the source said. “It will accelerate our blank sailing schedule because vessel utilization is dropping.” While utilization out of China is falling, he said ships in the Southeast Asia trade are seeing 90% to 100% utilization as US shippers seek to use the 90-day reprieve from reciprocal tariffs on other countries to frontload cargo, adding that vessels in China-US trades could be redeployed to Southeast Asia. Likewise, Asia-Mediterranean trades are seeing increasing strength, sending vessels in yet another direction. The longer the US and China engage in a back-and-forth on tariffs, the more it will force a long-term reconsideration of the carrier’s trans-Pacific network and whether there is enough volume out of China to support calls. “Our short-term reaction is to blank,” the source said. “But as people are accelerating their alternative sourcing — and this is giving everyone reason to accelerate those efforts — the effect is that we have to look at our rotations. We would probably eliminate some of the China ports.” Jason Cook, managing director of non-vessel-operating common carrier (NVO) Ardent Global Logistics, told the Journal of Commerce he’s seen a 60% drop in bookings out of China this week due to the tariffs. While the cancellations were initially among intermittent, low-volume shippers, he said the concerns about tariffs are now spreading to larger shippers with regular, consistent volume. “Whatever [was] leaving China on April 9, we [were] told to cancel it,” Cook said. “It’s not only the smaller customers, but the big ones as well saying we’re going to pause for two weeks.” April 9 was the date country-specific reciprocal tariffs took effect; they have since been paused for 90 days. But the China reciprocal tariffs remain in place. Ardent’s customers are also asking that their US-bound cargo at Chinese ports not be loaded or be removed from the marine terminal, Cook said. One customer tried to have the goods returned to the Chinese manufacturer, but it refused, he added. “The lack of clarity about tariffs has left so many customers confused that they are canceling all bookings, even if the container was already gated into the terminal,” Cook said. Cook is now fielding requests for use of bonded warehouses and foreign trade zones in the US as a short-term way to deal with the tariffs. He also expects that there will much more demand for freight out of Southeast Asia and India that will keep ships on those trades full. But with most of the empty containers still in China, US shippers may see delays at origin. “Once cargo out of China dries up, Southeast Asia is going to go a bit ballistic,” Cook said. “There’s not enough equipment and not enough calls. It’s setting up for some serious disruption.” <h3>Preparing for decline in volumes </h3>A New Jersey-based executive with a forwarder that handles 40,000 containers per year into the US told the Journal of Commerce there has been about a 20% drop in China-origin freight over the past week due to the tariffs. He said that most of the cancellations are among intermittent or low-volume shippers with about 2,000 containers per year. So far, the cancellations mostly just cover anything that would land in May, but as the tariff policy remains in place, he expects to see the cancellations start to affect cargo further out in June. The forwarder said some ocean carriers are deferring 2025 contract signings until May due to the uncertainty around tariffs. “I think this can get worse,” he said. A US-based executive for an alliance ocean carrier said that while some shippers immediately canceled bookings from China, other major customers are still proceeding with their shipments. But he said caution is increasing the longer Trump’s trade war with China drags out, adding that he expects tariffs will eventually cause more shippers to halt their freight from China. “Orders may be canceled or delayed until there’s more clarity on tariffs, so we’re preparing for a potential [volume] dip in the coming months,” the source said. And if the tariffs on China persist, the issue could reach far beyond volume retractions. According to Sanjay Tejwani, CEO of consulting firm 365 Logistics, the third quarter could bring tough decisions for some shippers moving Chinese cargo. “In Q3, if it remains as-is, some people are not going to ship,” said Tejwani. “Some things are just unaffordable. I am hearing that [some] containers might get abandoned. The importers may not even take delivery because they don’t want to pay the duties.” Benton Kauffman, head of trans-Pacific air and sea logistics at the forwarder DSV Global, told the Journal of Commerce Monday that overall eastbound freight in the trans-Pacific is down about 20%, but 60% of that volume is out of China. “I think in the next two weeks we will see Southeast Asia bounce back,” Kauffman said. A second carrier source said most retailers and direct importers are covered for at least the next three months because they have sufficient inventory to get them well into the summer. After that, they will have to decide how much they have to import and from which countries in the second half of the year, he said. “Eventually they will have to restock,” the carrier executive said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report. </div>

Ocean carriers on the eastbound trans-Pacific are poised to blank more voyages after a slew of booking cancellations last week that could leave some ships departing China half-empty through May. As the uncertainty around US tariffs on Chinese goods drags out, shippers face on-the-fly decisions about what to do with their suddenly more expensive freight. Port of Los Angeles Executive Director Gene Seroka said Friday that 12 sailings from China to the US West Coast in May have been canceled due to the Trump administration’s decision to put tariffs of 145% on most goods from China. Those dozen cancellations would put May’s blanks above April’s, according to data from third-party logistics provider Spedag Americas, which recorded 11 blanked voyages to Los Angeles during April, including three weekly voyages from a small independent carrier with about 2,000 TEUs of capacity. Ocean Alliance member Evergreen Marine, which operates the CPS service to Los Angeles, will have the service’s last scheduled voyage from Shanghai depart on Tuesday. No further sailings from China are scheduled until May 21, according to China-based shipping agents and the latest CPS schedule, which would mark four straight weeks of blanked service. The canceled voyages would remove 32,000 TEUs of capacity from the trans-Pacific over that period. Evergreen declined a request for comment about the CPS service. James Caradonna, executive vice president of Spedag Americas, told the Journal of Commerce that April’s blank sailings were for just one or two non-consecutive weeks. Carriers had been expected to start bringing more ships into service as 2025–26 annual service contracts are signed and seasonal summer shipments start. “Four consecutive weeks [of blank sailings on the service] is extreme,” Caradonna said. Half-full ships from China A senior vice president for an independent ocean carrier in the trans-Pacific trades told the Journal of Commerce that his company saw an immediate 30% drop in container bookings out of China last week due to the new tariffs. Other customers are requesting that containers already in-gated at origin not be loaded on ships, while others have asked that containers be pulled completely from the port, the source said, not an easy task inside of China’s high-volume gateways. Likewise, the source said there is concern that cargo already loaded on ships from China may be abandoned at US ports due to the tariff costs. He expects that ships leaving China for the US in the coming weeks will be less than half-full as the cancellations continue, forcing the carrier to blank more voyages. “People are canceling and putting cargo [from] China on pause,” the source said. “It will accelerate our blank sailing schedule because vessel utilization is dropping.” While utilization out of China is falling, he said ships in the Southeast Asia trade are seeing 90% to 100% utilization as US shippers seek to use the 90-day reprieve from reciprocal tariffs on other countries to frontload cargo, adding that vessels in China-US trades could be redeployed to Southeast Asia. Likewise, Asia-Mediterranean trades are seeing increasing strength, sending vessels in yet another direction. The longer the US and China engage in a back-and-forth on tariffs, the more it will force a long-term reconsideration of the carrier’s trans-Pacific network and whether there is enough volume out of China to support calls. “Our short-term reaction is to blank,” the source said. “But as people are accelerating their alternative sourcing — and this is giving everyone reason to accelerate those efforts — the effect is that we have to look at our rotations. We would probably eliminate some of the China ports.” Jason Cook, managing director of non-vessel-operating common carrier (NVO) Ardent Global Logistics, told the Journal of Commerce he’s seen a 60% drop in bookings out of China this week due to the tariffs. While the cancellations were initially among intermittent, low-volume shippers, he said the concerns about tariffs are now spreading to larger shippers with regular, consistent volume. “Whatever [was] leaving China on April 9, we [were] told to cancel it,” Cook said. “It’s not only the smaller customers, but the big ones as well saying we’re going to pause for two weeks.” April 9 was the date country-specific reciprocal tariffs took effect; they have since been paused for 90 days. But the China reciprocal tariffs remain in place. Ardent’s customers are also asking that their US-bound cargo at Chinese ports not be loaded or be removed from the marine terminal, Cook said. One customer tried to have the goods returned to the Chinese manufacturer, but it refused, he added. “The lack of clarity about tariffs has left so many customers confused that they are canceling all bookings, even if the container was already gated into the terminal,” Cook said. Cook is now fielding requests for use of bonded warehouses and foreign trade zones in the US as a short-term way to deal with the tariffs. He also expects that there will much more demand for freight out of Southeast Asia and India that will keep ships on those trades full. But with most of the empty containers still in China, US shippers may see delays at origin. “Once cargo out of China dries up, Southeast Asia is going to go a bit ballistic,” Cook said. “There’s not enough equipment and not enough calls. It’s setting up for some serious disruption.” Preparing for decline in volumes A New Jersey-based executive with a forwarder that handles 40,000 containers per year into the US told the Journal of Commerce there has been about a 20% drop in China-origin freight over the past week due to the tariffs. He said that most of the cancellations are among intermittent or low-volume shippers with about 2,000 containers per year. So far, the cancellations mostly just cover anything that would land in May, but as the tariff policy remains in place, he expects to see the cancellations start to affect cargo further out in June. The forwarder said some ocean carriers are deferring 2025 contract signings until May due to the uncertainty around tariffs. “I think this can get worse,” he said. A US-based executive for an alliance ocean carrier said that while some shippers immediately canceled bookings from China, other major customers are still proceeding with their shipments. But he said caution is increasing the longer Trump’s trade war with China drags out, adding that he expects tariffs will eventually cause more shippers to halt their freight from China. “Orders may be canceled or delayed until there’s more clarity on tariffs, so we’re preparing for a potential [volume] dip in the coming months,” the source said. And if the tariffs on China persist, the issue could reach far beyond volume retractions. According to Sanjay Tejwani, CEO of consulting firm 365 Logistics, the third quarter could bring tough decisions for some shippers moving Chinese cargo. “In Q3, if it remains as-is, some people are not going to ship,” said Tejwani. “Some things are just unaffordable. I am hearing that [some] containers might get abandoned. The importers may not even take delivery because they don’t want to pay the duties.” Benton Kauffman, head of trans-Pacific air and sea logistics at the forwarder DSV Global, told the Journal of Commerce Monday that overall eastbound freight in the trans-Pacific is down about 20%, but 60% of that volume is out of China. “I think in the next two weeks we will see Southeast Asia bounce back,” Kauffman said. A second carrier source said most retailers and direct importers are covered for at least the next three months because they have sufficient inventory to get them well into the summer. After that, they will have to decide how much they have to import and from which countries in the second half of the year, he said. “Eventually they will have to restock,” the carrier executive said. Contact Michael Angell at michael.angell@spglobal.com . Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report.

Container lines

North American ports

Trans-Pacific

Trans-Pacific blank sailings set to rise after China bookings drop sharply

<div class="phx-topic abstract-wrapper">Ongoing market uncertainty is expected to upend rates as the breakbulk sector continues to digest tariff ramifications on the specialized sector.</div>

Ongoing market uncertainty is expected to upend rates as the breakbulk sector continues to digest tariff ramifications on the specialized sector.

<div class="phx-topic">Bellwether multipurpose shipping indexes are bucking the instability trend overshadowing the specialized freight market, although experts warn of a lag that could soon catch up with freight rates.In its April multipurpose vessel (MPV) market briefing, shipbroker Toepfer said its Toepfer Multipurpose Index (TMI) is “performing better than anticipated.” The April TMI is $12,821 per day, up 0.16% month over month and up 4.58% from April 2024.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ea382181-08cd-4298-912f-87c79836bcf7"></dynamic-object></div>Uncertainty around the impact of US import tariffs and the proposal to charge fees to operators of Chinese-built ships calling at US ports is still affecting the MPV market, creating a “wait-and-see attitude,” Yorck Niclas Prehm, head of research with Toepfer Transport, told the Journal of Commerce. Toepfer noted that of the 14 US-flagged MPVs in its database, 12 are Chinese-built. This has led to a “significant slowdown in both spot and forward bookings towards the Americas,” Prehm added. Consequently, freight rates on those routes are under “considerable pressure.” Toepfer warned that its index’s suggestion of stability could change rapidly as sentiment falters. Mirroring that stability, Drewry’s General Cargo Index rose 2.9% month over month to 141 points in March, although its Project Cargo Transport Index dropped 1.16% to 171 points over the same period. The base point for both indexes is 100 starting on January 2019 — meaning that the calculations begin from that point onward. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1e7f3686-4313-47cb-9fe9-d40ac8e832e6"></dynamic-object></div>Toepfer’s TMI is based on expected average rates for six- to 12-month time charters for 12,500-deadweight-ton (dwt) “F-Type” vessels with safe working loads of 240-360 metric tons, as reported to Toepfer by owners and operators.A shipper who didn’t want to be identified told the Journal of Commerce that continued demand for imported steel products and even a revival of some breakbulk products in advance of tariffs has kept the breakbulk market buoyant, but that “the real problem is still the uncertainty.”In its newbuilding analysis, Toepfer reported that prices for a 12,500-dwt MPV built in China were $31.25 million in March, down 0.25% from the previous month.“We see a continuous sideways movement of newbuilding prices,” Toepfer said, adding that ordering activities for the first quarter fell compared with the end of 2024 as MPV operators wait to see the extent of the proposed tariff on port calls by China-built ships before placing orders.Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Bellwether multipurpose shipping indexes are bucking the instability trend overshadowing the specialized freight market, although experts warn of a lag that could soon catch up with freight rates. In its April multipurpose vessel (MPV) market briefing, shipbroker Toepfer said its Toepfer Multipurpose Index (TMI) is “performing better than anticipated.” The April TMI is $12,821 per day, up 0.16% month over month and up 4.58% from April 2024. Uncertainty around the impact of US import tariffs and the proposal to charge fees to operators of Chinese-built ships calling at US ports is still affecting the MPV market, creating a “wait-and-see attitude,” Yorck Niclas Prehm, head of research with Toepfer Transport, told the Journal of Commerce. Toepfer noted that of the 14 US-flagged MPVs in its database, 12 are Chinese-built. This has led to a “significant slowdown in both spot and forward bookings towards the Americas,” Prehm added. Consequently, freight rates on those routes are under “considerable pressure.” Toepfer warned that its index’s suggestion of stability could change rapidly as sentiment falters. Mirroring that stability, Drewry’s General Cargo Index rose 2.9% month over month to 141 points in March, although its Project Cargo Transport Index dropped 1.16% to 171 points over the same period. The base point for both indexes is 100 starting on January 2019 — meaning that the calculations begin from that point onward. Toepfer’s TMI is based on expected average rates for six- to 12-month time charters for 12,500-deadweight-ton (dwt) “F-Type” vessels with safe working loads of 240-360 metric tons, as reported to Toepfer by owners and operators. A shipper who didn’t want to be identified told the Journal of Commerce that continued demand for imported steel products and even a revival of some breakbulk products in advance of tariffs has kept the breakbulk market buoyant, but that “the real problem is still the uncertainty.” In its newbuilding analysis, Toepfer reported that prices for a 12,500-dwt MPV built in China were $31.25 million in March, down 0.25% from the previous month. “We see a continuous sideways movement of newbuilding prices,” Toepfer said, adding that ordering activities for the first quarter fell compared with the end of 2024 as MPV operators wait to see the extent of the proposed tariff on port calls by China-built ships before placing orders. Contact Carly Fields at carly.fields@spglobal.com .

Breakbulk carriers

Project cargo

Breakbulk News

Vessel operators warned not to rely on perceived stability in MPVs indexes

<div class="phx-topic abstract-wrapper">Although an agreement was reached on a greenhouse gas pricing measure, the Marine Environment Protection Committee meeting in London exposed deep divisions among member states on the way forward. </div>

Although an agreement was reached on a greenhouse gas pricing measure, the Marine Environment Protection Committee meeting in London exposed deep divisions among member states on the way forward.

<div class="phx-topic">The International Maritime Organization (IMO) Friday approved a proposal creating a global greenhouse gas (GHG) pricing measure, but delegates at the Marine Environment Protection Committee (MEPC) meeting in London were unable to agree on a “polluter pays” universal levy on all carbon emissions. In a debate described by attendees as “contentious and difficult,” the IMO managed to reach a compromise agreement on a two-tier pricing regulatory approach that will be finalized and adopted in October. “We are on track to decarbonize by around 2050, and this is another step in that process,” IMO Secretary-General Arsenio Dominguez told reporters, adding, however, that many challenges remain. Despite reaching an agreement on the GHG pricing measure, the MEPC meeting exposed deep divisions among member states, with <a href="https://www.joc.com/article/us-pulls-out-of-imo-climate-talks-threatens-retaliation-for-emissions-fees-5980359">the US delegation walking out and threatening to retaliate</a> against any member state charging emissions fees on US ships. “My next step is to work with the member states in understanding further the concerns they have and how to bring them to the table for the next round of discussions, then we will move into the implementation side,” Dominguez said. Bryan Wood-Thomas, vice president for environmental policy at the World Shipping Council (WSC) and the WSC’s lead IMO representative, welcomed the GHG agreement as a crucial next step on the road to decarbonization. But he said there was considerable work ahead to ensure the shipping industry had the rules and guidance necessary to use the low- or zero-carbon fuels that would power the world’s fleet in future years. “These regulations are a critical starting point that gives us the needed regulatory structure to address this critical issue that impacts every corner of the globe,” Wood-Thomas said in a statement Friday. <h3>Two-tier regulatory system </h3>Wood-Thomas said the agreement created a two-tiered regulatory measure that would apply emission fees proportional to the GHG intensity of the energy used by a ship, while providing a mechanism that encourages the use of cleaner zero- and near-zero-emission fuels and energy sources. A GHG fuel standard and framework will be established that, if adopted, will require continuous reduction in GHG fuel intensity beginning in 2028, with ongoing reductions to reach a “base” target of 30% and a “direct compliance target” of 43% by 2035. Under the tier system for non-compliant ships, the Tier 2 price for emissions above the base target would be set at $380 per ton of CO2 equivalent (CO2e), with the possibility to bank or pool surpluses. Tier 1 for ships that are compliant with the base target but still higher than the direct compliance target would face a charge of $100 per ton of CO2. While that would constitute a pricing mechanism, Angie Farrag-Thibault, vice president for global transportation at US-based climate campaigner Environmental Defense Fund (EDF), said the IMO had “missed a crucial opportunity to adopt a universal price on all shipping emissions.” But she was broadly positive about the measures agreed to at MEPC 83. “This framework allows for the shipping sector to steer away from fossil fuels, with full lifecycle emissions coverage, a greenhouse gas pricing mechanism and some provisions to support climate-vulnerable countries,” Farrag-Thibault said in a statement. An IMO “Net-Zero Fund” will be created to redistribute revenues from the pricing mechanism that will reward the use of zero or net-zero fuels and support “a just and equitable transition” for developing countries. <h3>Deal forces shipping to ‘continue polluting’ </h3>The lack of a universal pricing levy was greeted with deep disappointment by the Pacific islands’ delegation. During the vote to accept the framework agreement, the Pacific islands abstained, refusing to support a measure that did not include a universal carbon levy. “We cannot support an outcome that does not live up to the agreed strategy,” Manasseh Maelanga, the Solomon Islands’ minister of infrastructure development, said in a statement. “We will seek to improve this deal that, unchanged, will cause greater instability, and force shipping to continue polluting. That, we cannot accept.” Ralph Regenvanu, Vanuatu’s minister of climate change, blamed Saudi Arabia, the US “and fossil fuel allies” that, he said, “blocked progress at every turn.” Another criticism of the agreement was that it places the IMO’s interim emissions reduction targets at risk. Anaïs Rios, shipping policy officer at marine non-governmental organization Seas At Risk, said IMO member states had failed to uphold even the minimum target agreed to just two years ago, with the first benchmark — cutting emissions by 20% by 2030 — looking increasingly out of reach. “This week’s outcome misses even the IMO’s baseline, leaving the 2030 decarbonization target dead in the water, with potential disastrous long-term impacts for people and the planet,” said Rios. Dominguez, however, insisted to reporters that the target of reducing GHG emissions from international shipping by at least 20%, while striving for 30% by 2030 compared with 2008 levels, would still be achieved. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The International Maritime Organization (IMO) Friday approved a proposal creating a global greenhouse gas (GHG) pricing measure, but delegates at the Marine Environment Protection Committee (MEPC) meeting in London were unable to agree on a “polluter pays” universal levy on all carbon emissions. In a debate described by attendees as “contentious and difficult,” the IMO managed to reach a compromise agreement on a two-tier pricing regulatory approach that will be finalized and adopted in October. “We are on track to decarbonize by around 2050, and this is another step in that process,” IMO Secretary-General Arsenio Dominguez told reporters, adding, however, that many challenges remain. Despite reaching an agreement on the GHG pricing measure, the MEPC meeting exposed deep divisions among member states, with the US delegation walking out and threatening to retaliate against any member state charging emissions fees on US ships. “My next step is to work with the member states in understanding further the concerns they have and how to bring them to the table for the next round of discussions, then we will move into the implementation side,” Dominguez said. Bryan Wood-Thomas, vice president for environmental policy at the World Shipping Council (WSC) and the WSC’s lead IMO representative, welcomed the GHG agreement as a crucial next step on the road to decarbonization. But he said there was considerable work ahead to ensure the shipping industry had the rules and guidance necessary to use the low- or zero-carbon fuels that would power the world’s fleet in future years. “These regulations are a critical starting point that gives us the needed regulatory structure to address this critical issue that impacts every corner of the globe,” Wood-Thomas said in a statement Friday. Two-tier regulatory system Wood-Thomas said the agreement created a two-tiered regulatory measure that would apply emission fees proportional to the GHG intensity of the energy used by a ship, while providing a mechanism that encourages the use of cleaner zero- and near-zero-emission fuels and energy sources. A GHG fuel standard and framework will be established that, if adopted, will require continuous reduction in GHG fuel intensity beginning in 2028, with ongoing reductions to reach a “base” target of 30% and a “direct compliance target” of 43% by 2035. Under the tier system for non-compliant ships, the Tier 2 price for emissions above the base target would be set at $380 per ton of CO2 equivalent (CO2e), with the possibility to bank or pool surpluses. Tier 1 for ships that are compliant with the base target but still higher than the direct compliance target would face a charge of $100 per ton of CO2. While that would constitute a pricing mechanism, Angie Farrag-Thibault, vice president for global transportation at US-based climate campaigner Environmental Defense Fund (EDF), said the IMO had “missed a crucial opportunity to adopt a universal price on all shipping emissions.” But she was broadly positive about the measures agreed to at MEPC 83. “This framework allows for the shipping sector to steer away from fossil fuels, with full lifecycle emissions coverage, a greenhouse gas pricing mechanism and some provisions to support climate-vulnerable countries,” Farrag-Thibault said in a statement. An IMO “Net-Zero Fund” will be created to redistribute revenues from the pricing mechanism that will reward the use of zero or net-zero fuels and support “a just and equitable transition” for developing countries. Deal forces shipping to ‘continue polluting’ The lack of a universal pricing levy was greeted with deep disappointment by the Pacific islands’ delegation. During the vote to accept the framework agreement, the Pacific islands abstained, refusing to support a measure that did not include a universal carbon levy. “We cannot support an outcome that does not live up to the agreed strategy,” Manasseh Maelanga, the Solomon Islands’ minister of infrastructure development, said in a statement. “We will seek to improve this deal that, unchanged, will cause greater instability, and force shipping to continue polluting. That, we cannot accept.” Ralph Regenvanu, Vanuatu’s minister of climate change, blamed Saudi Arabia, the US “and fossil fuel allies” that, he said, “blocked progress at every turn.” Another criticism of the agreement was that it places the IMO’s interim emissions reduction targets at risk. Anaïs Rios, shipping policy officer at marine non-governmental organization Seas At Risk, said IMO member states had failed to uphold even the minimum target agreed to just two years ago, with the first benchmark — cutting emissions by 20% by 2030 — looking increasingly out of reach. “This week’s outcome misses even the IMO’s baseline, leaving the 2030 decarbonization target dead in the water, with potential disastrous long-term impacts for people and the planet,” said Rios. Dominguez, however, insisted to reporters that the target of reducing GHG emissions from international shipping by at least 20%, while striving for 30% by 2030 compared with 2008 levels, would still be achieved. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Transport, Trade and Regulation News

Maritime

IMO sets out path to decarbonize shipping after ‘contentious’ climate talks

<div class="phx-topic abstract-wrapper">No matter one’s political viewpoint, the current tariff situation prevents importers and supply chain providers from making any medium- to long-term decisions related to investments or changes in sourcing patterns, writes Lars Jensen.</div>

No matter one’s political viewpoint, the current tariff situation prevents importers and supply chain providers from making any medium- to long-term decisions related to investments or changes in sourcing patterns, writes Lars Jensen.

<div class="phx-topic">To call the global trade dispute the US has launched in recent weeks “turbulent” would be the understatement of the century. Clearly, the root cause of the turmoil is the Trump administration’s political agenda and aspirations. Whether a political agenda is seen as problematic or not is a subjective question and does not have an objective answer. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5981079_0.1.jpg"></img></div>The purpose of the following analysis is not to evaluate whether any specific political aspiration is desirable or problematic — instead, it seeks to look at the actual actions the government is taking and assess how they have impacted the container supply chain. The obvious direct cause of the turmoil has been the US’ approach to tariffs. This has three different levels: the anticipation of tariffs, the magnitude of the tariffs and the frequency with which they are changed. The anticipation of tariffs led some importers to frontload cargo even before Donald Trump’s inauguration in January. This was possible for goods that were not time-sensitive and where the importer had excess storage capacity at low marginal cost. How big the impact was for tariffs alone is hard to gauge, though, as importers were also frontloading in anticipation of a potential longshore strike on the US East and Gulf coasts in January. Hence, an objective quantification based solely on tariffs is not possible — a claim mainly supported by anecdotal evidence at this point. The magnitude of the tariffs will likely be a long-term factor. For some tariffs, it will quite simply result in goods being more expensive for US consumers. Hence, the impact will be felt mainly as a reduction in demand for the goods in question, although the effect can be dampened either by some changes in sourcing to lower-tariffed countries or by consumers buying cheaper substitute goods when possible. In the short term, there is anecdotal evidence that suggests US consumers increased spending in the past week — advancing purchases they were expecting later in 2025 to get the goods before tariffs impact them. To the degree this is happening, it will lead to reduced cargo demand later in 2025. In the medium term, higher tariffs will lead to reduced demand simply due to the increase in prices. The current 125% tariff on China and 10% on everyone else approximately translates to a $5,000 annual increase in costs for the average US household. <h3>‘Reasonable certainty’ missing </h3>In the very long term, it is clear that the US government’s ambition is to see manufacturing moved to the US. Should this happen, it would of course reduce container import volumes, although there is no empirical evidence to suggest that this would be the outcome. Previous attempts at using tariffs in recent decades to move production back to the US from China, Japan, South Korea and Taiwan did not lead to reshoring — instead, it led to a relocation to other non-US countries. One such example is the partial shift from China to Mexico given the tariffs introduced during the first Trump term. This did not materially lower container volumes, though, because the goods in Mexico are, to a large degree, made with Chinese and Asian components. And this leads to the third aspect of the tariff impact: the frequency of change. For importers to change their supply chain, sourcing and manufacturing, they must have a reasonable certainty of a stable trade environment going forward. The tariffs on China from the first Trump administration, combined with the uncertainty of the pandemic, led many to pursue a “China+1” strategy as that was considered more resilient. This is a slow, gradual shift playing out on a timeframe measured in years. Significant volumes shifted to countries such as Vietnam, Cambodia and Thailand — countries that were suddenly saddled with reciprocal tariffs higher than 40% in April 2025. Merely 12 hours after the reciprocal tariffs went into effect, they were suspended for 90 days. This fits the previous pattern where Mexico and Canada received 25% tariffs only to have them suspended after three days and then reimplemented after 30 days. Sourcing patterns and supply chain setups are planned and modified on cycles measured in quarters and years — not in days. The high frequency of tariff changes de facto makes it impossible for importers to make any informed decisions regarding changes to their sourcing locations or to invest in new manufacturing locations. This also makes it impossible to decide whether to locate a manufacturing unit in the US, as the financial baseline for the decision is extremely uncertain if tariffs change as rapidly and as dramatically as they have so far. No matter one’s political preferences, the current situation prevents importers and supply chain providers from making any medium- to long-term decisions related to investments or changes in sourcing patterns. The only rational approach importers can take — and this is, to a large degree, what they are doing — is to maintain their current setup and make tactical day-to-day decisions, such as delaying cargo in the face of new tariffs in anticipation that said tariffs will be rapidly withdrawn or postponed. Contact Lars Jensen at <a href="https://www.joc.com/article/lars.jensen@vespucci-maritime.com">lars.jensen@vespucci-maritime.com</a>.</div>

To call the global trade dispute the US has launched in recent weeks “turbulent” would be the understatement of the century. Clearly, the root cause of the turmoil is the Trump administration’s political agenda and aspirations. Whether a political agenda is seen as problematic or not is a subjective question and does not have an objective answer. The purpose of the following analysis is not to evaluate whether any specific political aspiration is desirable or problematic — instead, it seeks to look at the actual actions the government is taking and assess how they have impacted the container supply chain. The obvious direct cause of the turmoil has been the US’ approach to tariffs. This has three different levels: the anticipation of tariffs, the magnitude of the tariffs and the frequency with which they are changed. The anticipation of tariffs led some importers to frontload cargo even before Donald Trump’s inauguration in January. This was possible for goods that were not time-sensitive and where the importer had excess storage capacity at low marginal cost. How big the impact was for tariffs alone is hard to gauge, though, as importers were also frontloading in anticipation of a potential longshore strike on the US East and Gulf coasts in January. Hence, an objective quantification based solely on tariffs is not possible — a claim mainly supported by anecdotal evidence at this point. The magnitude of the tariffs will likely be a long-term factor. For some tariffs, it will quite simply result in goods being more expensive for US consumers. Hence, the impact will be felt mainly as a reduction in demand for the goods in question, although the effect can be dampened either by some changes in sourcing to lower-tariffed countries or by consumers buying cheaper substitute goods when possible. In the short term, there is anecdotal evidence that suggests US consumers increased spending in the past week — advancing purchases they were expecting later in 2025 to get the goods before tariffs impact them. To the degree this is happening, it will lead to reduced cargo demand later in 2025. In the medium term, higher tariffs will lead to reduced demand simply due to the increase in prices. The current 125% tariff on China and 10% on everyone else approximately translates to a $5,000 annual increase in costs for the average US household. ‘Reasonable certainty’ missing In the very long term, it is clear that the US government’s ambition is to see manufacturing moved to the US. Should this happen, it would of course reduce container import volumes, although there is no empirical evidence to suggest that this would be the outcome. Previous attempts at using tariffs in recent decades to move production back to the US from China, Japan, South Korea and Taiwan did not lead to reshoring — instead, it led to a relocation to other non-US countries. One such example is the partial shift from China to Mexico given the tariffs introduced during the first Trump term. This did not materially lower container volumes, though, because the goods in Mexico are, to a large degree, made with Chinese and Asian components. And this leads to the third aspect of the tariff impact: the frequency of change. For importers to change their supply chain, sourcing and manufacturing, they must have a reasonable certainty of a stable trade environment going forward. The tariffs on China from the first Trump administration, combined with the uncertainty of the pandemic, led many to pursue a “China+1” strategy as that was considered more resilient. This is a slow, gradual shift playing out on a timeframe measured in years. Significant volumes shifted to countries such as Vietnam, Cambodia and Thailand — countries that were suddenly saddled with reciprocal tariffs higher than 40% in April 2025. Merely 12 hours after the reciprocal tariffs went into effect, they were suspended for 90 days. This fits the previous pattern where Mexico and Canada received 25% tariffs only to have them suspended after three days and then reimplemented after 30 days. Sourcing patterns and supply chain setups are planned and modified on cycles measured in quarters and years — not in days. The high frequency of tariff changes de facto makes it impossible for importers to make any informed decisions regarding changes to their sourcing locations or to invest in new manufacturing locations. This also makes it impossible to decide whether to locate a manufacturing unit in the US, as the financial baseline for the decision is extremely uncertain if tariffs change as rapidly and as dramatically as they have so far. No matter one’s political preferences, the current situation prevents importers and supply chain providers from making any medium- to long-term decisions related to investments or changes in sourcing patterns. The only rational approach importers can take — and this is, to a large degree, what they are doing — is to maintain their current setup and make tactical day-to-day decisions, such as delaying cargo in the face of new tariffs in anticipation that said tariffs will be rapidly withdrawn or postponed. Contact Lars Jensen at lars.jensen@vespucci-maritime.com .

On-again, off-again tariffs will disrupt decision-making for importers

Use code GTW695 at checkout and save $800 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Arm your team with the most trusted information portal for the international container shipping industry.

Group Subscriptions - Wide Box

Get into a group subscription today

Use code STSW20 at checkout to save 20% on the first year of any annual subscription! 

Subscribe Now - Free Trials - Wide Box

SUBSCRIBE AND SAVE

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

Upgrade Subscription - Wide Box

UPGRADE AND SAVE

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Choose a subscription plan that works best for you!

Subscribe Now - Anonymous - Wide Box

SUBSCRIBE TODAY

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

SMC3rates_shutterstock_5247046.jpg

Shippers save money, time with automated transportation bidding tools

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

SMC3rates_shutterstock_5247046 (1).jpg

Filling the Supply Chain Education Gap with LTL Education Courses

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

Subscribe Now - Anonymous - Offer Box

Subscribe Today

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

Free Trial - Offer Box

Free Trial

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


Subscribe Now - Free Trials - Offer Box

GET INTO A GROUP SUBSCRIPTION: Arm your team with unlimited Journal of Commerce content

Group Subscriptions - Offer Box

Group Subscriptions

UPGRADE TO GOLD AND SAVE: Use code GTW695 at checkout and save $800 on first year of a Gold subscription!

Upgrade Subscription

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

Upgrade Subscription - Offer Box

A must-attend conference for shippers & logistics providers moving goods inland

Inland Conference - Rectangle Box

Attend Inland25

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

ISI Report - Rectangle Box

Intermodal Savings Index

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

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

Gateway - Rectangle Box

Gateway

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

The latest container shipping news and analysis of ocean container shipping, logistics, supply chains, technology solutions and end-to-end connectivity. Coverage includes the movement of containerized cargo handled by marine terminals and container ports, depots, container lines, drayage, consignees, importers and shippers, forwarders, non-vessel operating common carriers (NVOs) and off-dock warehousing providers. The Journal of Commerce's container shipping news includes news from the trans-Pacific, Asia–Europe, North America–Caribbean, Central and South America trades, and intra-Asia trades.

Trans-Atlantic

Asia-Europe

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

Container Shipping News | Journal of Commerce

Breakbulk News shipping | Journal of Commerce

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

Port News | Journal of Commerce

Port News

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

Latest News

Attend Inland25

Filling the Supply Chain Education Gap with LTL Education Courses

More News & Analysis

Tariff uncertainty pushing up transportation costs at US-Mexico border

Trans-Pacific blank sailings set to rise after China bookings drop sharply

Vessel operators warned not to rely on perceived stability in MPVs indexes