<div class="phx-topic abstract-wrapper">Jan. 27, 1997Included are list prices of suppliers. Quotations do not necessarily represent </div>

Jan. 27, 1997Included are list prices of suppliers. Quotations do not necessarily represent

<div>Jan. 27, 1997Included are list prices of suppliers. Quotations do not necessarily represent prices at which transactions have actually occurred. *Prices underlying Industrial Price IndexFOODSBEEF Midwest dressed steers,3,500-700 lbs, $ cwt. 94.32BUTTER Chicago, AA, $ per lb. 91.00COCOA NY, Ivory Coast $ per metric ton 1,556COCONUT OIL, Crude, Pacific c per lb. 37.75COFFEE NY, Brazil, Santos 4s c per lb. 139.00NY, Colombian c per lb. 155.00COTTONSEED OIL, Miss. Valley c per lb. 26.00EGGS fcy. lg. white, $ per doz. .83-.88HAMS skinned, $ cwt. 72.00LARD Chicago prime west. c per lb. 25.50PEANUT OIL, Southeast, Crude c per lb. 43.50SOYOIL Crude, Decatur,...

Jan. 27, 1997 Included are list prices of suppliers. Quotations do not necessarily represent prices at which transactions have actually occurred. *Prices underlying Industrial Price Index FOODS BEEF Midwest dressed steers, 3,500-700 lbs, $ cwt. 94.32 BUTTER Chicago, AA, $ per lb. 91.00 COCOA NY, Ivory Coast $ per metric ton 1,556 COCONUT OIL, Crude, Pacific c per lb. 37.75 COFFEE NY, Brazil, Santos 4s c per lb. 139.00 NY, Colombian c per lb. 155.00 COTTONSEED OIL, Miss. Valley c per lb. 26.00 EGGS fcy. lg. white, $ per doz. .83-.88 HAMS skinned, $ cwt. 72.00 LARD Chicago prime west. c per lb. 25.50 PEANUT OIL, Southeast, Crude c per lb. 43.50 SOYOIL Crude, Decatur, IL-c per lb. 23.20 SUGAR, LONDON bulk, converted 10.20 SUGAR, WORLD supplied by NY Coffee, Sugar, Cocoa Exchange 10.94 GRAINS BARLEY, FEED Duluth 2 feed $ per bushel 2.00 CORN Chicago No. 3 yellow $ per bushel 2.70 OATS Chicago No. 2 white $ per bushel 1.62 1/8 SOYBEANS Chicago No. 1 yellow $ per bu. 7.48 WHEAT Chicago No. 2 soft red $ per bu. 3.72 WHEAT KC, No.2 hard $ per bushel 4.42 1/4-4.62 1/2 TEXTILES *BURLAP NY 10 oz., 40 in. $ per yd. 35.25 *COTTON 1 1/16 in., slm, av. 7 mkts per lb. 71.11 *POLYESTER FIBER NY blend staple branded 71.00 *PRINT CLOTH NY DNR 48 in. 78x76 yds per lb. 91.02 METALS *ALUMINUM LME spot, $ per ton 1,618.50 COPPER NY electrolytic wire bars, c per lb. 123.00 *COPPER, SCRAP NY No.2, c per lb. 87.00 *LEAD pig, common corroding c per lb. 50.00 *SCRAP STEEL No.1 heavy melting, $ per ton Pitts. 131.00-132.00 Chi. 131.00-132.00 Phila. 120.00-122.00 SILVER Handy & Harman per troy ounce 5.5280 *TIN Grade A, NY Merchants $ per lb. 2.77 *ZINC spec high grade c per lb. 56.71 INDUSTRIALS *BENZENE c per gallon 119.00 *CRUDE OIL $ per barrel 24.09 *HARDWOOD LUMBER red oak flooring select $ Per Thou. Bd. Ft. 1,565.00 *HIDES Chicago, raw heavy native steers per lb. 90.50 *PLYWOOD Chicago CDX 1/2 in. 4/5 ply west. sheath $ Per Thou. Bd. Ft. 300.00 *RUBBER NY crude, No. 1RSS c per lb. 64.50 *TALLOW Chicago inedible prime c per lb. 22.25

SPOT COMMODITIES

<div class="phx-topic abstract-wrapper">After raising rates in anticipation of higher volumes, several top carriers have now dropped spot booking rates from West India to North Europe by between $300 and $500 per container, according to freight forwarder sources in Mumbai.</div>

After raising rates in anticipation of higher volumes, several top carriers have now dropped spot booking rates from West India to North Europe by between $300 and $500 per container, according to freight forwarder sources in Mumbai.

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<div class="phx-topic">Container lines with larger trade stakes on the India-Europe route are reporting lower vessel space demand, prompting them to implement spot rate adjustments on a sailing-by-sailing or weekly basis. After raising rates in anticipation of higher volumes, several top carriers have now dropped spot booking rates from West India to North Europe by between $300 and $500 per container, according to freight forwarder sources in Mumbai. Forwarder sources have noted two plausible reasons for the cargo pressure: a slower-than-expected seasonal grape export market that typically runs between February and April and an additional capacity injection from “opportunistic” regional operators. For Indian-grown grape exports, Maersk and Hapag-Lloyd, now partners in the Gemini Cooperation, are predominant. Sensing the headwinds, both carriers have adjusted their rates downward week over week, forcing others to follow suit. “The grape season hasn’t been as buoyant as expected,” a sales executive at Maersk (India) who didn’t want to be identified told the Journal of Commerce. “The market is heavily oversupplied.” Some recent vessels on the premier India/Europe networks, particularly the ME1/IOS under Gemini, have sailed short of full loading allocations despite a shipment push linked to fiscal year-end closing export flows. “The trade outlook seems to be weakening,” a second carrier source said. “As things stand, it’s unlikely to get any better in the near term.” <h3>New capacity enters the market </h3>Forwarders put updated Nhava Sheva-London Gateway/Felixstowe spot pricing by carrier for upcoming March sailings at: Maersk — $1,579 per TEU and $1,749 per FEU; CMA CGM — $1,862 and $2,010; and Hapag-Lloyd — $1,812 and $1,919. Capacity continues to enter the Indian market. Last week, Maersk began its revamped MECL string connecting West India and North America with the Maersk Atlanta docking at Mundra Port, a third Indian port call the carrier added to enhance loading capacity. Meanwhile, India’s goods export trade by value slipped 2.5% in January year over year, new data shows. “This [export] drop is attributable to the volatility in commodity and metal prices, as well as ongoing trade disruptions such as the [US] tariff war and currency fluctuations,” Ashwani Kumar, president of the Federation of Indian Export Organizations (FIEO), said in a statement. “This calls for a focused approach to export diversification, targeting new markets and products, and for the continuation of trade facilitation measures and export incentives.” Contact Bency Mathew at <a href="https://www.joc.com/article/bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Container lines with larger trade stakes on the India-Europe route are reporting lower vessel space demand, prompting them to implement spot rate adjustments on a sailing-by-sailing or weekly basis. After raising rates in anticipation of higher volumes, several top carriers have now dropped spot booking rates from West India to North Europe by between $300 and $500 per container, according to freight forwarder sources in Mumbai. Forwarder sources have noted two plausible reasons for the cargo pressure: a slower-than-expected seasonal grape export market that typically runs between February and April and an additional capacity injection from “opportunistic” regional operators. For Indian-grown grape exports, Maersk and Hapag-Lloyd, now partners in the Gemini Cooperation, are predominant. Sensing the headwinds, both carriers have adjusted their rates downward week over week, forcing others to follow suit. “The grape season hasn’t been as buoyant as expected,” a sales executive at Maersk (India) who didn’t want to be identified told the Journal of Commerce. “The market is heavily oversupplied.” Some recent vessels on the premier India/Europe networks, particularly the ME1/IOS under Gemini, have sailed short of full loading allocations despite a shipment push linked to fiscal year-end closing export flows. “The trade outlook seems to be weakening,” a second carrier source said. “As things stand, it’s unlikely to get any better in the near term.” New capacity enters the market Forwarders put updated Nhava Sheva-London Gateway/Felixstowe spot pricing by carrier for upcoming March sailings at: Maersk — $1,579 per TEU and $1,749 per FEU; CMA CGM — $1,862 and $2,010; and Hapag-Lloyd — $1,812 and $1,919. Capacity continues to enter the Indian market. Last week, Maersk began its revamped MECL string connecting West India and North America with the Maersk Atlanta docking at Mundra Port, a third Indian port call the carrier added to enhance loading capacity. Meanwhile, India’s goods export trade by value slipped 2.5% in January year over year, new data shows. “This [export] drop is attributable to the volatility in commodity and metal prices, as well as ongoing trade disruptions such as the [US] tariff war and currency fluctuations,” Ashwani Kumar, president of the Federation of Indian Export Organizations (FIEO), said in a statement. “This calls for a focused approach to export diversification, targeting new markets and products, and for the continuation of trade facilitation measures and export incentives.” Contact Bency Mathew at bencyvmathew@gmail.com .

Container Shipping News

Port News

Container lines

International ports

Maritime

India-Europe liners abruptly drop rates amid weakening cargo prospects

<div class="phx-topic abstract-wrapper">Reshuffling port calls because of a potential Trump administration fee on Chinese-built and -operated ships would place additional strain on the US intermodal supply chain, railroad executives say.</div>

Reshuffling port calls because of a potential Trump administration fee on Chinese-built and -operated ships would place additional strain on the US intermodal supply chain, railroad executives say.

<div class="phx-topic">If a Trump administration proposal to <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">tax Chinese-built and -operated ships</a> calling at US ports is enacted, the nation’s Class I railroads could face the challenge of attempting to move cargo through fewer entry points without disrupting service, railroad executives said Tuesday. Executives from CSX Transportation and Union Pacific Railroad (UP), speaking at the J.P. Morgan Industrials Conference, said while they could accommodate a shift toward larger ports, it would not come without “significant” disruption. “Certainly, this potential port fee that could come into play would have a significant disruptive impact,” said CSX CFO Sean Pelkey. “If there’s more consolidation at ports that we serve and there’s more volume that wants to come into those ports, that’s a good thing. We can be a part of the solution for that. But it could also result in more congestion as well, which could have significant disruptive effects.” Congestion on the rail network is a key concern. During last year’s peak shipping season, service disruptions on the US West Coast coincided with double-digit percentage growth in cargo volume. In October, 795 of UP’s loaded intermodal railcars sat idle for at least 48 hours, according to the US Surface Transportation Board. That same month, UP’s average intermodal train speed fell to 27.9 miles per hour during the week of Oct. 9–16, its slowest week since 2019. Mediterranean Shipping Co. CEO Soren Toft <a href="https://www.joc.com/article/tpm25-port-tax-on-chinese-ships-will-make-some-routes-unviable-mscs-toft-5954640">said at TPM25 last week</a> that it would no longer be economically viable for carriers to call smaller US ports if the Trump plan was implemented, something echoed by UP CEO Jennifer Hamann. “It does lend preference to the larger ports...,” Hamann said at the J.P. Morgan event. Eric Gehringer, Union Pacific’s executive vice president of operations, said recent capital investments have given the railroad the flexibility to absorb volume shifts from smaller ports such as Oakland to major gateways such as Los Angeles. “[In] Inland Empire, we’ve been able to add another 70,000 lifts last year and we’re going to add in even more than that this year,” Gehringer said at the J.P. Morgan event. “If you think about the whole intermodal network in total over the last handful of years, we’ve added in almost 1 million lifts across our network. We’ve been building in this capacity, and we’ll be able to handle that volume.” According to a Journal of Commerce analysis of data from the Intermodal Association of North America, approximately 10,000 to 15,000 ocean containers move by rail each year from Oakland to Chicago, similar to the volume from the Port of Mobile and the Port of Philadelphia to Chicago. By comparison, BNSF Railway and Union Pacific haul that same volume from Southern California to Chicago every 10 to 14 days. There are no other rail-served routes handling more than 10,000 international loads annually from ports in Jacksonville, Mobile, New Orleans, Philadelphia or Wilmington, North Carolina. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

If a Trump administration proposal to tax Chinese-built and -operated ships calling at US ports is enacted, the nation’s Class I railroads could face the challenge of attempting to move cargo through fewer entry points without disrupting service, railroad executives said Tuesday. Executives from CSX Transportation and Union Pacific Railroad (UP), speaking at the J.P. Morgan Industrials Conference, said while they could accommodate a shift toward larger ports, it would not come without “significant” disruption. “Certainly, this potential port fee that could come into play would have a significant disruptive impact,” said CSX CFO Sean Pelkey. “If there’s more consolidation at ports that we serve and there’s more volume that wants to come into those ports, that’s a good thing. We can be a part of the solution for that. But it could also result in more congestion as well, which could have significant disruptive effects.” Congestion on the rail network is a key concern. During last year’s peak shipping season, service disruptions on the US West Coast coincided with double-digit percentage growth in cargo volume. In October, 795 of UP’s loaded intermodal railcars sat idle for at least 48 hours, according to the US Surface Transportation Board. That same month, UP’s average intermodal train speed fell to 27.9 miles per hour during the week of Oct. 9–16, its slowest week since 2019. Mediterranean Shipping Co. CEO Soren Toft said at TPM25 last week that it would no longer be economically viable for carriers to call smaller US ports if the Trump plan was implemented, something echoed by UP CEO Jennifer Hamann. “It does lend preference to the larger ports...,” Hamann said at the J.P. Morgan event. Eric Gehringer, Union Pacific’s executive vice president of operations, said recent capital investments have given the railroad the flexibility to absorb volume shifts from smaller ports such as Oakland to major gateways such as Los Angeles. “[In] Inland Empire, we’ve been able to add another 70,000 lifts last year and we’re going to add in even more than that this year,” Gehringer said at the J.P. Morgan event. “If you think about the whole intermodal network in total over the last handful of years, we’ve added in almost 1 million lifts across our network. We’ve been building in this capacity, and we’ll be able to handle that volume.” According to a Journal of Commerce analysis of data from the Intermodal Association of North America, approximately 10,000 to 15,000 ocean containers move by rail each year from Oakland to Chicago, similar to the volume from the Port of Mobile and the Port of Philadelphia to Chicago. By comparison, BNSF Railway and Union Pacific haul that same volume from Southern California to Chicago every 10 to 14 days. There are no other rail-served routes handling more than 10,000 international loads annually from ports in Jacksonville, Mobile, New Orleans, Philadelphia or Wilmington, North Carolina. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

North American ports

Proposed US tax on Chinese ship calls could pressure intermodal networks

<div class="phx-topic abstract-wrapper">The explosion of logistics software-as-a-service tools is leading shippers to build data foundations that reside outside of their internal systems. </div>

The explosion of logistics software-as-a-service tools is leading shippers to build data foundations that reside outside of their internal systems.

<div class="phx-topic">Shippers wrestling with decisions on which software and data partners to use are starting to build internal data warehousing capabilities to make it easier to test which of those providers are solving actual problems. That’s a new development and a shift from the traditional environment in which a shipper wanting to trial a new technology would have to create a time-consuming and expensive integration with each new prospective provider. Data warehouses are repositories where an enterprise can house information across its organization — not only in logistics and transportation — to make it easier to store, manage and analyze large amounts of data. Among the largest providers of data warehouses, also called data lakes, are Snowflake, Databricks, Microsoft Azure and Amazon. “We knew we needed a data warehouse, and it was a fairly fast standup,” Julia Bedanova, COO at Million Dollar Baby, said at the Journal of Commerce’s TPM25 conference in Long Beach last week. “Within three months we were getting value out of that, because we invested in that foundation with Databricks first versus integrating with all these various solutions providers, or with sheer force, forcing the integrations.” That foundation has allowed Million Dollar Baby to trial and use a number of software-as-a-service (SaaS) and data-as-a-service (DaaS) products to support its logistics team. “The [application programming interfaces] are easy and clean, all of my partners are able to look into it and we’re able to exchange data in a very safe and segregated manner,” she said. “That was a critical piece to us being able to accelerate scaling and trying new solutions.” The process has become so streamlined, in fact, that Bedanova had to recently exert some control over the number of SaaS products to which Million Dollar Baby is subscribed. “One of the things we’ve been observing, and almost in awe of, is how huge that SaaS line in our budget has ballooned over the years,” she said. “It’s quadrupled over the last three years. It’s not just supply chain, it’s across the board. [Shippers] are becoming that much more dependent on SaaS companies.” <h3>Enabling a multi-vendor approach </h3>Another shipper, Abercrombie &amp; Fitch, also noted its use of Databricks as a backbone that enabled predictive estimated times of arrival (ETAs) for import shipments in which it depends on two software vendors and a third-party logistics provider to collaborate. “We’ve changed the way we integrate with partners,” Kristen Kravitz, group vice president of transportation at Abercrombie, said during a separate session at TPM25. “We’ve moved to a Power BI environment with Databricks.” Power BI is a data visualization tool that helps businesses build reports. Tying it to a data warehouse that pulls data from all of a company’s systems is becoming de rigeur, according to numerous software executives who spoke to the Journal of Commerce at TPM25. In Abercrombie’s case, the company was transitioning from relying wholly on a retired E2open product for track and trace to one that pulled data from project44 and its origin management provider Century Supply Chain Solutions into the E2open transportation management system it uses. That relied not only on cooperation between those providers — who would ordinarily compete fiercely with one another for Abercrombie’s business — but on Abercrombie’s ability to make data from its internal systems more accurate and accessible. “We wanted to pull better information in with the platforms we’re already using, whether it’s E2open, project44 or Century,” Kravitz said. “It’s unlocked much better reporting and visibility for us. Making better, faster, data-driven decisions was a big piece of this. We needed to modernize the foundation.” Kravitz said that Abercrombie historically relied on E2open to integrate with its vendors and partners for visibility. “We just didn’t have the resources,” she said. “And now our architecture allows us to do that to a greater degree. Some of it is [the data warehouse] but some of it is work we’ve done internally to change the way we connect as well.” <h3>‘No choice’ </h3>Gautam Prem Jain, CEO of transportation management visibility software vendor GoComet, said at TPM25 that “most companies don’t have a choice” when it comes to integrations. “They have their [enterprise resource planning system] set up in a certain way and now they need to figure out how to make do,” he said. “It’s up to SaaS providers to not make it harder to test and buy in that environment. “It’s a catch-22 situation. If you integrate, it will take six months to a year to show value,” Jain added. “The [proof of concept] should be able to happen without integration quickly to demonstrate the [return on investment] because enterprises want to be able to see value really fast.” Logistics technology integration specialists are aware of the trend, among both forwarders and shippers. Coneksion, formerly Youredi, is used by shippers and forwarders to connect to shipping lines, ports, terminals and software vendors and is an integration partner with Azure. Prompt, which provides software to both segments, said it has a data warehouse product specifically designed to plug into widely-used forwarding software platforms such as CargoWise One and Magaya. Chain.io, which also serves both segments, has a native integration with Snowflake. Chain CEO Brian Glick told the Journal of Commerce that its work revolves around sanitizing and structuring the data before it goes into a data warehouse. “Otherwise, lots of bad and unstructured data goes in and people have trouble making sense of it when they want to do analytics,” Glick said. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

Shippers wrestling with decisions on which software and data partners to use are starting to build internal data warehousing capabilities to make it easier to test which of those providers are solving actual problems. That’s a new development and a shift from the traditional environment in which a shipper wanting to trial a new technology would have to create a time-consuming and expensive integration with each new prospective provider. Data warehouses are repositories where an enterprise can house information across its organization — not only in logistics and transportation — to make it easier to store, manage and analyze large amounts of data. Among the largest providers of data warehouses, also called data lakes, are Snowflake, Databricks, Microsoft Azure and Amazon. “We knew we needed a data warehouse, and it was a fairly fast standup,” Julia Bedanova, COO at Million Dollar Baby, said at the Journal of Commerce’s TPM25 conference in Long Beach last week. “Within three months we were getting value out of that, because we invested in that foundation with Databricks first versus integrating with all these various solutions providers, or with sheer force, forcing the integrations.” That foundation has allowed Million Dollar Baby to trial and use a number of software-as-a-service (SaaS) and data-as-a-service (DaaS) products to support its logistics team. “The [application programming interfaces] are easy and clean, all of my partners are able to look into it and we’re able to exchange data in a very safe and segregated manner,” she said. “That was a critical piece to us being able to accelerate scaling and trying new solutions.” The process has become so streamlined, in fact, that Bedanova had to recently exert some control over the number of SaaS products to which Million Dollar Baby is subscribed. “One of the things we’ve been observing, and almost in awe of, is how huge that SaaS line in our budget has ballooned over the years,” she said. “It’s quadrupled over the last three years. It’s not just supply chain, it’s across the board. [Shippers] are becoming that much more dependent on SaaS companies.” Enabling a multi-vendor approach Another shipper, Abercrombie & Fitch, also noted its use of Databricks as a backbone that enabled predictive estimated times of arrival (ETAs) for import shipments in which it depends on two software vendors and a third-party logistics provider to collaborate. “We’ve changed the way we integrate with partners,” Kristen Kravitz, group vice president of transportation at Abercrombie, said during a separate session at TPM25. “We’ve moved to a Power BI environment with Databricks.” Power BI is a data visualization tool that helps businesses build reports. Tying it to a data warehouse that pulls data from all of a company’s systems is becoming de rigeur, according to numerous software executives who spoke to the Journal of Commerce at TPM25. In Abercrombie’s case, the company was transitioning from relying wholly on a retired E2open product for track and trace to one that pulled data from project44 and its origin management provider Century Supply Chain Solutions into the E2open transportation management system it uses. That relied not only on cooperation between those providers — who would ordinarily compete fiercely with one another for Abercrombie’s business — but on Abercrombie’s ability to make data from its internal systems more accurate and accessible. “We wanted to pull better information in with the platforms we’re already using, whether it’s E2open, project44 or Century,” Kravitz said. “It’s unlocked much better reporting and visibility for us. Making better, faster, data-driven decisions was a big piece of this. We needed to modernize the foundation.” Kravitz said that Abercrombie historically relied on E2open to integrate with its vendors and partners for visibility. “We just didn’t have the resources,” she said. “And now our architecture allows us to do that to a greater degree. Some of it is [the data warehouse] but some of it is work we’ve done internally to change the way we connect as well.” ‘No choice’ Gautam Prem Jain, CEO of transportation management visibility software vendor GoComet, said at TPM25 that “most companies don’t have a choice” when it comes to integrations. “They have their [enterprise resource planning system] set up in a certain way and now they need to figure out how to make do,” he said. “It’s up to SaaS providers to not make it harder to test and buy in that environment. “It’s a catch-22 situation. If you integrate, it will take six months to a year to show value,” Jain added. “The [proof of concept] should be able to happen without integration quickly to demonstrate the [return on investment] because enterprises want to be able to see value really fast.” Logistics technology integration specialists are aware of the trend, among both forwarders and shippers. Coneksion, formerly Youredi, is used by shippers and forwarders to connect to shipping lines, ports, terminals and software vendors and is an integration partner with Azure. Prompt, which provides software to both segments, said it has a data warehouse product specifically designed to plug into widely-used forwarding software platforms such as CargoWise One and Magaya. Chain.io, which also serves both segments, has a native integration with Snowflake. Chain CEO Brian Glick told the Journal of Commerce that its work revolves around sanitizing and structuring the data before it goes into a data warehouse. “Otherwise, lots of bad and unstructured data goes in and people have trouble making sense of it when they want to do analytics,” Glick said. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Shippers investing in data warehousing capability to increase software options

<div class="phx-topic abstract-wrapper">As a top tier of mega carriers has emerged through consolidation and organic growth, so has the need of those carriers to align their dominance on the ocean with capacity at ports.</div>

As a top tier of mega carriers has emerged through consolidation and organic growth, so has the need of those carriers to align their dominance on the ocean with capacity at ports.

<div class="phx-topic">Container lines going back to Sea-Land Service Inc. have seen value in controlling marine terminals, but the advantages — and the competition to acquire key facilities — are intensifying in line with growing port congestion, finite port capacity and the growing dominance of a top tier of mega carriers. Securing port access and the efficiencies it brings, while allowing competitors to be blocked out, was the major victory achieved by Mediterranean Shipping Co. by participating via its terminal operating unit in the <a href="https://www.joc.com/article/hutchison-inks-228-billion-deal-to-sell-majority-of-port-holdings-to-blackrock-til-5955819">$23 billion deal with BlackRock to acquire the non-China assets of CK Hutchison’s terminal portfolio</a>. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5960667_0.1.jpg"></img></div>As a top tier of mega carriers has emerged through consolidation and organic growth, so has the need of those carriers to align their dominance on the ocean with capacity at ports. “The aspiration of major carriers and alliances today is the ability to control their own destiny with regard to port and terminal operating capability,” said Peter Levesque, advanced leadership fellow at Harvard University who has led terminal operating businesses, including Modern Terminals and Ports America. MSC, through its Terminal Investment Limited (TiL) unit, will gain access to terminals at 43 ports in 23 countries totaling 199 berths — although some of those <a href="https://www.joc.com/article/big-hutchison-deal-could-reshuffle-global-ports-network-drewry-5958162">terminals may be divested pursuant to antitrust review in Europe</a> — and will emerge as the world’s largest terminal operator. “The fact that TIL is involved in this deal with Blackrock speaks volumes as to what MSC looks to achieve in global terminal operating capability and competitive advantage,” Levesque said. The competition among carriers for prized port assets can be seen on multiple fronts. Hapag-Lloyd last year announced the creation of a terminal operating unit, reflecting its commitment to “expansive terminal operations,” and <a href="https://www.joc.com/article/hapag-lloyds-ports-arm-buys-majority-stake-in-le-havre-terminal-5959230">on Monday announced the acquisition of a majority stake in a Le Havre terminal operator</a>. Growing terminal portfolios are controlled by Maersk, CMA CGM and Ocean Network Express. “There is a tendency for each shipping line now to build their own terminal portfolio,” said Robbert van Trooijen, head of consultancy Inception Partners LLC Inc. and the former Maersk head of Asia-Pacific and Latin America. Carriers are growing increasingly aggressive in pursuit of ports. In its winning bid to acquire Global Container Terminal facilities at Bayonne and Staten Island, CMA CGM agreed to the surprise terms of sharing detention and demurrage revenue with the Port Authority of New York and New Jersey, and to helping fund quayside improvements. <a href="https://www.ckh.com.hk/en/media/press_each.php?id=3431">CK Hutchison said</a> the TiL/BlackRock deal resulted from a “competitive process in which numerous bids and expressions of interest were received,” which reportedly included other carriers. <h3>Moves driven by port congestion, capacity constraints </h3>Carriers’ urgency in acquiring terminals reflects concerns about growing port congestion globally combined with limited greenfield port projects. “Globally, terminal capacity is under significant constraint. Globally, port congestion is growing,” said van Trooijen. “There is a lack of greenfield projects out there that will deliver expansion, so getting your hands on existing capacity, and especially a portfolio of this size, this was a once-in-a-decade opportunity.” The ratio of a ship’s time at sea versus time in port has grown from 80-20 to 70-30 in recent years, said Johnson Leung of Linerlytica. China in recent years has stopped building port capacity ahead of demand as it did for many years, leading to growing congestion at Shanghai and Ningbo. Controlling terminals enables carriers to control costs at the terminal, tightly coordinate port calls and ensure its ships are guaranteed priority on arrival and departure. Control of hub ports is deemed the essential ingredient in delivering the <a href="https://www.joc.com/article/tpm25-gemini-hitting-90-reliability-target-as-new-network-rolls-out-habben-jansen-5955794">90%-plus schedule reliability promised by the hub-and-spoke Gemini alliance.</a>“Controlling key port infrastructure provides carriers with cost and operating efficiencies that are difficult to achieve with non-carrier-affiliated terminals and government port authorities,” Levesque said. The growing dominance of the top tier of carriers, where MSC crossed the 20% market share threshold and the top five carriers control 65% of capacity, according to Alphaliner, is forcing third-party terminal businesses to align with key carriers able to provide the volume needed to keep terminals profitable. “For a big terminal operator, you increasingly need to have a long-term relationship with carriers with whom you have more than average cooperation if you want to safeguard your future for the long term,” van Trooijen said. “Terminal operators who are successful are the ones who have developed long-term carrier relationships.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

Container lines going back to Sea-Land Service Inc. have seen value in controlling marine terminals, but the advantages — and the competition to acquire key facilities — are intensifying in line with growing port congestion, finite port capacity and the growing dominance of a top tier of mega carriers. Securing port access and the efficiencies it brings, while allowing competitors to be blocked out, was the major victory achieved by Mediterranean Shipping Co. by participating via its terminal operating unit in the $23 billion deal with BlackRock to acquire the non-China assets of CK Hutchison’s terminal portfolio . As a top tier of mega carriers has emerged through consolidation and organic growth, so has the need of those carriers to align their dominance on the ocean with capacity at ports. “The aspiration of major carriers and alliances today is the ability to control their own destiny with regard to port and terminal operating capability,” said Peter Levesque, advanced leadership fellow at Harvard University who has led terminal operating businesses, including Modern Terminals and Ports America. MSC, through its Terminal Investment Limited (TiL) unit, will gain access to terminals at 43 ports in 23 countries totaling 199 berths — although some of those terminals may be divested pursuant to antitrust review in Europe — and will emerge as the world’s largest terminal operator. “The fact that TIL is involved in this deal with Blackrock speaks volumes as to what MSC looks to achieve in global terminal operating capability and competitive advantage,” Levesque said. The competition among carriers for prized port assets can be seen on multiple fronts. Hapag-Lloyd last year announced the creation of a terminal operating unit, reflecting its commitment to “expansive terminal operations,” and on Monday announced the acquisition of a majority stake in a Le Havre terminal operator . Growing terminal portfolios are controlled by Maersk, CMA CGM and Ocean Network Express. “There is a tendency for each shipping line now to build their own terminal portfolio,” said Robbert van Trooijen, head of consultancy Inception Partners LLC Inc. and the former Maersk head of Asia-Pacific and Latin America. Carriers are growing increasingly aggressive in pursuit of ports. In its winning bid to acquire Global Container Terminal facilities at Bayonne and Staten Island, CMA CGM agreed to the surprise terms of sharing detention and demurrage revenue with the Port Authority of New York and New Jersey, and to helping fund quayside improvements. CK Hutchison said the TiL/BlackRock deal resulted from a “competitive process in which numerous bids and expressions of interest were received,” which reportedly included other carriers. Moves driven by port congestion, capacity constraints Carriers’ urgency in acquiring terminals reflects concerns about growing port congestion globally combined with limited greenfield port projects. “Globally, terminal capacity is under significant constraint. Globally, port congestion is growing,” said van Trooijen. “There is a lack of greenfield projects out there that will deliver expansion, so getting your hands on existing capacity, and especially a portfolio of this size, this was a once-in-a-decade opportunity.” The ratio of a ship’s time at sea versus time in port has grown from 80-20 to 70-30 in recent years, said Johnson Leung of Linerlytica. China in recent years has stopped building port capacity ahead of demand as it did for many years, leading to growing congestion at Shanghai and Ningbo. Controlling terminals enables carriers to control costs at the terminal, tightly coordinate port calls and ensure its ships are guaranteed priority on arrival and departure. Control of hub ports is deemed the essential ingredient in delivering the 90%-plus schedule reliability promised by the hub-and-spoke Gemini alliance. “Controlling key port infrastructure provides carriers with cost and operating efficiencies that are difficult to achieve with non-carrier-affiliated terminals and government port authorities,” Levesque said. The growing dominance of the top tier of carriers, where MSC crossed the 20% market share threshold and the top five carriers control 65% of capacity, according to Alphaliner, is forcing third-party terminal businesses to align with key carriers able to provide the volume needed to keep terminals profitable. “For a big terminal operator, you increasingly need to have a long-term relationship with carriers with whom you have more than average cooperation if you want to safeguard your future for the long term,” van Trooijen said. “Terminal operators who are successful are the ones who have developed long-term carrier relationships.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Marine terminals

Hutchison deal shows thirst of big carriers to control global terminal assets

<div class="phx-topic abstract-wrapper">US-bound spot truck shipments from Canada are shrinking but rates are rising, while Mexico-US spot market shipments outpace pricing, according to DAT Freight &amp; Analytics. </div>

US-bound spot truck shipments from Canada are shrinking but rates are rising, while Mexico-US spot market shipments outpace pricing, according to DAT Freight & Analytics.

<div class="phx-topic">The flow of goods moving across the US-Canada border shrank last week, but not the cost of moving them, as a trade war between the two neighbors deepened. Rates in the Toronto-to-Chicago lane, one of the heaviest for cross-border truck traffic between the US and Canada, rose 18% week over week while spot volumes dropped 20% in the week ended March 7, according to DAT Freight &amp; Analytics. From Chicago to Toronto, rates rose 8% while loads dropped 2% week over week. Canadian spot market capacity has been shrinking. Available Canadian spot truck capacity fell 29% year over year in January despite a 2% increase from December, according to Loadlink Technologies, a sister company of DAT within Roper Industries. The push to move high volumes of goods south ahead of US tariffs exacerbated that tightness. The story was different on the southern US border last week, where shipments from Mexico rose 12% week over week and 19% year over year, according to DAT. However, northbound spot rates from the border in March were up only 3 cents per mile from February. That reflects the differences in cross-border trucking between the US, Mexico and Canada. US-bound loads from Mexico are typically transferred to US trucks at the border, often through cross docks in border entry points such as Laredo, Texas. Southbound Canadian shipments move straight to their destinations. Pause and restart <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.joc.com%2Farticle%2Ftpm25-chaos-erupts-as-us-tariffs-disrupt-cross-border-trucking-with-mexico-canada-5957555&amp;data=05%7C02%7Ckevin.saville2%40spglobal.com%7C4d58a1be910c4d2a0c9208dd600782fc%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C638772307560798379%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=22fWzX9CigDH8nfsQQU8bw9ix2Fv603N%2FAEb3N%2BzhtU%3D&amp;reserved=0">Freight flows across both borders were scrambled</a> when the US implemented 25% tariffs on goods from Canada and Mexico last Tuesday, delaying shipments and raising costs. Many shippers temporarily “hit the pause button” on US-bound loads from Mexico when tariffs took effect, said Jordan Dewart, president of Mexico for Redwood Logistics. The White House rolled back some tariffs on Mexico and Canada last Wednesday, postponing import taxes on the Canadian and Mexican automotive sectors until April 2. “Our American automotive industry, which provides American jobs, should not suffer significant disruption just because of the structure of its supply chain,” the White House said in a statement. Tariffs for goods that meet rules of origin under the US-Mexico-Canada Agreement (USMCA), including many agricultural products, were also delayed until April 2. The exemptions cover about 38% of Canadian goods and 50% of Mexican goods, according to the White House. That means about 62% of Canadian goods and half of Mexican products are still subject to US tariffs. Shippers can expect high cross-border freight volumes and rates to continue as the April 2 deadline approaches. In the meantime, Mexico and Canada have slapped retaliatory tariffs on US goods. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The flow of goods moving across the US-Canada border shrank last week, but not the cost of moving them, as a trade war between the two neighbors deepened. Rates in the Toronto-to-Chicago lane, one of the heaviest for cross-border truck traffic between the US and Canada, rose 18% week over week while spot volumes dropped 20% in the week ended March 7, according to DAT Freight & Analytics. From Chicago to Toronto, rates rose 8% while loads dropped 2% week over week. Canadian spot market capacity has been shrinking. Available Canadian spot truck capacity fell 29% year over year in January despite a 2% increase from December, according to Loadlink Technologies, a sister company of DAT within Roper Industries. The push to move high volumes of goods south ahead of US tariffs exacerbated that tightness. The story was different on the southern US border last week, where shipments from Mexico rose 12% week over week and 19% year over year, according to DAT. However, northbound spot rates from the border in March were up only 3 cents per mile from February. That reflects the differences in cross-border trucking between the US, Mexico and Canada. US-bound loads from Mexico are typically transferred to US trucks at the border, often through cross docks in border entry points such as Laredo, Texas. Southbound Canadian shipments move straight to their destinations. Pause and restart Freight flows across both borders were scrambled when the US implemented 25% tariffs on goods from Canada and Mexico last Tuesday, delaying shipments and raising costs. Many shippers temporarily “hit the pause button” on US-bound loads from Mexico when tariffs took effect, said Jordan Dewart, president of Mexico for Redwood Logistics. The White House rolled back some tariffs on Mexico and Canada last Wednesday, postponing import taxes on the Canadian and Mexican automotive sectors until April 2. “Our American automotive industry, which provides American jobs, should not suffer significant disruption just because of the structure of its supply chain,” the White House said in a statement. Tariffs for goods that meet rules of origin under the US-Mexico-Canada Agreement (USMCA), including many agricultural products, were also delayed until April 2. The exemptions cover about 38% of Canadian goods and 50% of Mexican goods, according to the White House. That means about 62% of Canadian goods and half of Mexican products are still subject to US tariffs. Shippers can expect high cross-border freight volumes and rates to continue as the April 2 deadline approaches. In the meantime, Mexico and Canada have slapped retaliatory tariffs on US goods. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

Cross-border spot truck rates rise as shippers ride tariff rollercoaster

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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