<div class="phx-topic abstract-wrapper">Canada is on the verge of a big decision: whether to continue granting a monopoly over export grain </div>

Canada is on the verge of a big decision: whether to continue granting a monopoly over export grain

<div>Canada is on the verge of a big decision: whether to continue granting a monopoly over export grain sales to the Canadian Wheat Board.The monopoly held by the Wheat Board, a government agency, has been thrown into question in recent years by a prairie revolt in parts of Canada's west. Some grain farmers, especially those living near the U.S. border, want to be able to sell their grain directly to buyers in the United States rather than empty their granaries to the Wheat Board, as required by law.The stakes are high for farmers on both sides of the border. For...

Canada is on the verge of a big decision: whether to continue granting a monopoly over export grain sales to the Canadian Wheat Board. The monopoly held by the Wheat Board, a government agency, has been thrown into question in recent years by a prairie revolt in parts of Canada's west. Some grain farmers, especially those living near the U.S. border, want to be able to sell their grain directly to buyers in the United States rather than empty their granaries to the Wheat Board, as required by law.The stakes are high for farmers on both sides of the border. For U.S. farmers, the Wheat Board monopoly is a double-edged sword. On one hand, the board limits exports of Canadian grain to the United States, leaving more of the U.S. market open for American farmers. On the other hand, the Wheat Board's monopoly - and its ability to make pricing decisions behind closed doors - allows it to sell in third markets at prices that undercut those of American farmers. SPLIT DECISION Last July, a long-awaited review of the export marketing monopoly led to a split decision. Canada's Western Grain Marketing Panel decided that some grain could be sold at market prices rather than the pooled prices determined by the Wheat Board. But the review panel said the Wheat Board should still retain its role as the sole exporter of Canadian grain. The recommendation was a disappointment to pressure groups seeking an end to the Wheat Board's monopoly. They say Canada should switch to a dual marketing system, with farmers given a choice between selling directly to foreign buyers and selling indirectly through the Wheat Board. Earlier this year, a convoy of farmers took their protest on the road. They drove a convoy of trucks loaded with grain across the U.S. border, in open defiance of the Wheat Board's monopoly. The farmers were subsequently charged by Canada Customs. Two have been brought to trial so far, with one defendant fined and the other acquitted. NO DUAL SYSTEM Supporters of the Wheat Board's monopoly say a dual system would be unworkable, because it would rob the Wheat Board of the clout it needs to set uniform prices for Canadian grain. That, they argue, would hurt all Canadian farmers. ''Farmers hoping to free ride on the system will only benefit if the activity is limited and not all farmers are allowed access to these sales,'' says a study published by the Wheat Board. Whichever way this debate is resolved, it appears the Wheat Board will be taking on a new look next year. Ralph Goodale, Canada's minister for agriculture and agrifood, unveiled plans in October to alter the structure and operations of the board. Mr. Goodale intends to transform the organization from a Crown Corporation into a mixed enterprise. He plans to appoint an interim board of governors next year to pave the way for a management structure where the majority of board members will be elected by farmers, starting in 1998. He also announced that barley farmers in western Canada will vote in February on whether barley still will be marketed by the board or sold on the open market. Most observers say a majority of barley farmers will come out in favor of staying with the board. LEVELING THE FIELD The possibility of freeing export sales of barley has won some plaudits in the United States. ''We welcome the barley decision. It is a step to establish a level playing field,'' said Terry Francl, senior economist at the American Farm Bureau Federation in Washington. But he expressed disappointment over the grain panel's recommendation to retain the Wheat Board's formal monopoly on sales. ''It would be illegal in this country. It's an unfair advantage that Canada has. The Wheat Board is a monopoly, and its pricing is not transparent,'' Mr. Francl said. The U.S. complaints about the Wheat Board may soon move to an international arena. Washington is expected to lobby hard to include proposed prohibitions on state trading enterprises, such as the Canadian Wheat Board, in the next round of world trade talks. The agenda for the next round will be the topic of a ministerial meeting of the World Trade Organization this month in Singapore.in Canada believe the Wheat Board has a lot of life left in it. Doug Mutch, executive director of the Canada Grains Council, said Washington has made little progress in advancing its view that state trading enterprises should be banished. PROMOTING US SALES ''Some look at the U.S. export enhancement program by the USDA, saying that it acts as a trade agency,'' he said, referring to the U.S. Department of Agriculture's subsidy program. By subsidizing U.S. grain exports, the export enhancement program promotes U.S. grain sales abroad. ''The Wheat Board is not the only state trading enterprise doing business. I think the question (at the WTO) is whether or not the Europeans jump into bed with the Americans,'' said Bob Roehle, a spokesman for the Wheat Board. Prairie Pools Inc., an umbrella organization for farmers in Western Canada, also is unconcerned about international pressure on the Wheat Board's monopoly. ''We have nothing to worry about,'' said Prairie Pools spokeswoman Patty Townsend. ''Our wheat board is pretty open and transparent. Also, there's recognition in the United States that if the Wheat Board went out of the barley market, this might actually lead to higher exports to the United States.''

STAKES HIGH IN WHEAT MONOPOLY DEBATE

<div class="phx-topic abstract-wrapper">Large customers are looking for large logistics partners that can offer more control over supply chains as international trade becomes more complex, the CEO tells TPM25. </div>

Large customers are looking for large logistics partners that can offer more control over supply chains as international trade becomes more complex, the CEO tells TPM25.

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<div class="phx-topic">Long Beach, California -- Consolidation in global freight forwarding “has to continue,” DSV Group CEO Jens Lund said Tuesday. “As you look at the 3PL (third-party logistics) market, it’s very fragmented,” especially compared with the ocean carrier market, he said. “That’s quite problematic for many of our customers, (particularly) the largest ones,” Lund told the Journal of Commerce’s TPM25 conference. “Customers are looking for control tower setups where they have single contacts, a more streamlined service.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951878_0.1.jpg"></img></div>Using fewer forwarders “makes (customers’) lives easier,” Lund said. “When you’re using multiple service providers, there are opportunities for disruption. The predictability you can get from having fewer logistics service providers is something customers want.” DSV’s $15.9 billion acquisition of DB Schenker last September, still awaiting final regulatory approval, will create the largest global freight forwarder, with about $43.7 billion in combined revenue based on 2023 data from research firm SJ Consulting Group. That would make DSV larger in terms of revenue than DHL, with $41.4 billion in revenue in 2023, and Kuehne + Nagel, which had $29.7 billion in revenue, SJ Consulting Group data shows. Independently, DSV had $23.1 billion in revenue on its own, and DB Schenker $20.7 billion. Beyond the largest companies, however, the global logistics industry has a long tail of smaller companies. Even DSV, combined with DB Schenker, will only have about 5% to 6% of the total global forwarding market in terms of revenue, Lund said. In contrast, container shipping line Mediterranean Shipping Co. (MCS) controls about 20% of its market in terms of revenue, Lund said. The ocean shipping market is more consolidated not just in terms of the number of companies but also through alliances. Not every importer or shipper wants to work with a single forwarder, Lund acknowledged. “If you look at shippers who want to have strong local relations, it doesn’t matter if we’re very consolidated or not,” he said. “But I think many companies are already consolidated, and that’s why we’re consolidating as well, so we can work on a global or regional level.” <h3>A ‘broader portfolio’ for customers </h3>DSV has grown in recent years through acquisitions, purchasing UTi in 2015 for $1.35 billion, Panalpina in 2019 for $4.6 billion and Agility’s Global Integrated Logistics (GIL) in 2021 for $4.2 billion. The DB Schenker purchase is a deal of a different magnitude. “I don’t think we’ve seen anything (in the DB Schenker acquisition) we haven’t in previous transactions, but it’s larger than any transaction we’ve done before,” Lund said. “Schenker is almost the same size as our company,” Lund said, a factor that can complicate integration post-acquisition. When the deal is completed, “we will have to have one culture, one company. We’re always quite firm about that,” he told TPM25. “Schenker has some areas where they’re stronger than us, and we have some where we’re stronger than them,” Lund said. “We’ll bring a broader portfolio to customers.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a></div>

Long Beach, California -- Consolidation in global freight forwarding “has to continue,” DSV Group CEO Jens Lund said Tuesday. “As you look at the 3PL (third-party logistics) market, it’s very fragmented,” especially compared with the ocean carrier market, he said. “That’s quite problematic for many of our customers, (particularly) the largest ones,” Lund told the Journal of Commerce’s TPM25 conference. “Customers are looking for control tower setups where they have single contacts, a more streamlined service.” Using fewer forwarders “makes (customers’) lives easier,” Lund said. “When you’re using multiple service providers, there are opportunities for disruption. The predictability you can get from having fewer logistics service providers is something customers want.” DSV’s $15.9 billion acquisition of DB Schenker last September, still awaiting final regulatory approval, will create the largest global freight forwarder, with about $43.7 billion in combined revenue based on 2023 data from research firm SJ Consulting Group. That would make DSV larger in terms of revenue than DHL, with $41.4 billion in revenue in 2023, and Kuehne + Nagel, which had $29.7 billion in revenue, SJ Consulting Group data shows. Independently, DSV had $23.1 billion in revenue on its own, and DB Schenker $20.7 billion. Beyond the largest companies, however, the global logistics industry has a long tail of smaller companies. Even DSV, combined with DB Schenker, will only have about 5% to 6% of the total global forwarding market in terms of revenue, Lund said. In contrast, container shipping line Mediterranean Shipping Co. (MCS) controls about 20% of its market in terms of revenue, Lund said. The ocean shipping market is more consolidated not just in terms of the number of companies but also through alliances. Not every importer or shipper wants to work with a single forwarder, Lund acknowledged. “If you look at shippers who want to have strong local relations, it doesn’t matter if we’re very consolidated or not,” he said. “But I think many companies are already consolidated, and that’s why we’re consolidating as well, so we can work on a global or regional level.” A ‘broader portfolio’ for customers DSV has grown in recent years through acquisitions, purchasing UTi in 2015 for $1.35 billion, Panalpina in 2019 for $4.6 billion and Agility’s Global Integrated Logistics (GIL) in 2021 for $4.2 billion. The DB Schenker purchase is a deal of a different magnitude. “I don’t think we’ve seen anything (in the DB Schenker acquisition) we haven’t in previous transactions, but it’s larger than any transaction we’ve done before,” Lund said. “Schenker is almost the same size as our company,” Lund said, a factor that can complicate integration post-acquisition. When the deal is completed, “we will have to have one culture, one company. We’re always quite firm about that,” he told TPM25. “Schenker has some areas where they’re stronger than us, and we have some where we’re stronger than them,” Lund said. “We’ll bring a broader portfolio to customers.” Contact William B. Cassidy at bill.cassidy@spglobal.com

Forwarding

Supply chain

TPM25: DSV’s Lund says more global forwarding consolidation is needed

<div class="phx-topic abstract-wrapper">While the new network will need two cycles to be fully phased in through the next two or three months, the Hapag-Lloyd CEO said Gemini was “off to a good start” with 550 port calls made so far and 45 of 57 services already started.</div>

While the new network will need two cycles to be fully phased in through the next two or three months, the Hapag-Lloyd CEO said Gemini was “off to a good start” with 550 port calls made so far and 45 of 57 services already started.

<div class="phx-topic">Long Beach, California -- The Gemini Cooperation alliance between Maersk and Hapag-Lloyd, which launched on Feb. 1, is already recording schedule reliability of above its promised 90%, Hapag-Lloyd CEO Rolf Habben Jansen told the Journal of Commerce’s TPM25 conference Tuesday. While the new network will need two cycles to be fully phased in through the next two or three months, Habben Jansen said Gemini was “off to a good start” with 550 port calls made so far and 45 of 57 services already started. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951878_0.1.jpg"></img></div>“Off course, a good start doesn’t tell you everything and there are some issues around the cargo that is phasing out of the old services,” he said. “In the first two cycles we will see some volatility of allocations and we will iron that out as we move forward.” About 340 vessels with combined capacity of 3.7 million TEUs are being phased in to Gemini’s shared east-west network that consists of 29 main line services and 28 intraregional shuttle services. Hapag-Lloyd and Maersk have promised to deliver a fast, flexible and interconnected ocean network with an industry-leading schedule reliability over 90% once fully phased in. Lars Mikael Jensen, global head of hubs at Maersk-owned APM Terminals, also expressed confidence the 90% reliability being experienced as the network is rolled out will be maintained. “We have taken some of the direct calls out of the main line loops and can now isolate any issue,” he said. “For instance, if there is bad weather or a strike in Busan, why should shippers in Shanghai or Ningbo suffer? We can isolate that problem and deal with more effectively.” Habben Jansen and Jensen spoke while appearing on a Gemini-related panel at TPM25. They were joined by Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst. When the Gemini Cooperation was announced in January last year, its “hub-and-spoke” model was greeted with skepticism by shippers who were concerned over the high level of transshipment involved, or shuttles, as the spoke part of the network is described by Gemini executives. While Vespucci Maritime’s Jensen believed the reliability target was achievable, that positivity was not shared by cargo owners, however. “Over the last year I have found no shipper willing to believe this,” he said. “Schedule reliability has been atrocious for the past five years, so shippers want to see it actually it improve first.” <h3>‘Proof’ in the pudding </h3>Habben Jansen acknowledged there was a “proof of the pudding is in the eating” element from cargo owners concerned about the shuttles, but he said transshipment has always been a large part of container shipping networks. “People say go to Gemini for transshipment and to others for no transshipment but let’s not forget that everyone in this industry does a lot of transshipment,” he said. "Before Gemini, Hapag-Lloyd used to transship 35% of our boxes. In Gemini we will tranship 40%. “The big change is the way we approach it has changed fundamentally,” Habben Jansen added. “It’s not ‘transhipment yes or no,’ because we all do it. But we do it in hubs that are controlled by us and based on processes that are significantly more structured than in the past.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Long Beach, California -- The Gemini Cooperation alliance between Maersk and Hapag-Lloyd, which launched on Feb. 1, is already recording schedule reliability of above its promised 90%, Hapag-Lloyd CEO Rolf Habben Jansen told the Journal of Commerce’s TPM25 conference Tuesday. While the new network will need two cycles to be fully phased in through the next two or three months, Habben Jansen said Gemini was “off to a good start” with 550 port calls made so far and 45 of 57 services already started. “Off course, a good start doesn’t tell you everything and there are some issues around the cargo that is phasing out of the old services,” he said. “In the first two cycles we will see some volatility of allocations and we will iron that out as we move forward.” About 340 vessels with combined capacity of 3.7 million TEUs are being phased in to Gemini’s shared east-west network that consists of 29 main line services and 28 intraregional shuttle services. Hapag-Lloyd and Maersk have promised to deliver a fast, flexible and interconnected ocean network with an industry-leading schedule reliability over 90% once fully phased in. Lars Mikael Jensen, global head of hubs at Maersk-owned APM Terminals, also expressed confidence the 90% reliability being experienced as the network is rolled out will be maintained. “We have taken some of the direct calls out of the main line loops and can now isolate any issue,” he said. “For instance, if there is bad weather or a strike in Busan, why should shippers in Shanghai or Ningbo suffer? We can isolate that problem and deal with more effectively.” Habben Jansen and Jensen spoke while appearing on a Gemini-related panel at TPM25. They were joined by Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst. When the Gemini Cooperation was announced in January last year, its “hub-and-spoke” model was greeted with skepticism by shippers who were concerned over the high level of transshipment involved, or shuttles, as the spoke part of the network is described by Gemini executives. While Vespucci Maritime’s Jensen believed the reliability target was achievable, that positivity was not shared by cargo owners, however. “Over the last year I have found no shipper willing to believe this,” he said. “Schedule reliability has been atrocious for the past five years, so shippers want to see it actually it improve first.” ‘Proof’ in the pudding Habben Jansen acknowledged there was a “proof of the pudding is in the eating” element from cargo owners concerned about the shuttles, but he said transshipment has always been a large part of container shipping networks. “People say go to Gemini for transshipment and to others for no transshipment but let’s not forget that everyone in this industry does a lot of transshipment,” he said. "Before Gemini, Hapag-Lloyd used to transship 35% of our boxes. In Gemini we will tranship 40%. “The big change is the way we approach it has changed fundamentally,” Habben Jansen added. “It’s not ‘transhipment yes or no,’ because we all do it. But we do it in hubs that are controlled by us and based on processes that are significantly more structured than in the past.” Contact Greg Knowler at greg.knowler@spglobal.com.

Container Shipping News

Container lines

Asia-Europe

Trans-Pacific

Maritime

TPM25: Gemini hitting 90% reliability target as new network rolls out: Habben Jansen

<div class="phx-topic abstract-wrapper">Contract logistics was the star performer in the company’s portfolio in 2024, with gross profit rising 4% to $4 billion.</div>

Contract logistics was the star performer in the company’s portfolio in 2024, with gross profit rising 4% to $4 billion.

<div class="phx-topic">Swiss logistics giant Kuehne + Nagel is facing a volatile business environment due to uncertain consumer demand and geopolitical risks but remains confident about growth prospects this year, company executives said Tuesday. “[The year] has started well. We are gaining market share in certain areas,” CEO Stefen Paul told an online earnings briefing. The gains include areas such as healthcare and e-commerce within K+N’s contract logistics division, he added. Paul said more details about the company’s financial outlook and future business direction would be given at a capital markets day on March 25. Paul and CFO Markus Blanka-Graff were commenting after reporting that K+N saw improved cargo volumes in the second half of last year. Highlighting the improvement, Blanka-Graff said fourth-quarter group earnings rose 11% to $354 million while revenue climbed 19% to $7.6 billion. The gains helped “deliver a solid financial result” for the full year, with revenue climbing 4% to $28 billion, Paul said during the briefing. But profitability remained under pressure, reflecting the wider difficult trading conditions. Total group earnings fell 16% to $1.3 billion for the full year while earnings before interest and taxes (EBIT) fell 13% to $1.9 billion. Contract logistics was the star performer in K+N’s portfolio in 2024, with gross profit rising 4% to $4 billion. Paul said contract logistics posted another year of record-high EBIT, which climbed 14% to $255 million. <h3>Mixed results in other divisions </h3>K+N’s sea freight division saw a 3% increase in underlying container volumes to 4.3 million TEUs last year, but gross profit slipped 11% to $2.3 billion. Paul was upbeat about the forecast contribution of IMC, the US drayage company whose acquisition was completed in early January. He estimated IMC would contribute between $50 and $60 per container in gross profit this year. Paul said there were better volumes in the company’s air freight division last year, with total volumes rising to 4 million metric tons. But while the division’s fourth-quarter EBIT was up 17% to $166 million, it was down 14% to $537 million for the full year. Road logistics also suffered from headwinds in key markets and yields were under pressure due to low demand and weakness in selected industries and regions, Paul said without giving details. The division saw EBIT drop 26% to $110 million last year, although full-year revenue was unchanged at about $4 billion. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Swiss logistics giant Kuehne + Nagel is facing a volatile business environment due to uncertain consumer demand and geopolitical risks but remains confident about growth prospects this year, company executives said Tuesday. “[The year] has started well. We are gaining market share in certain areas,” CEO Stefen Paul told an online earnings briefing. The gains include areas such as healthcare and e-commerce within K+N’s contract logistics division, he added. Paul said more details about the company’s financial outlook and future business direction would be given at a capital markets day on March 25. Paul and CFO Markus Blanka-Graff were commenting after reporting that K+N saw improved cargo volumes in the second half of last year. Highlighting the improvement, Blanka-Graff said fourth-quarter group earnings rose 11% to $354 million while revenue climbed 19% to $7.6 billion. The gains helped “deliver a solid financial result” for the full year, with revenue climbing 4% to $28 billion, Paul said during the briefing. But profitability remained under pressure, reflecting the wider difficult trading conditions. Total group earnings fell 16% to $1.3 billion for the full year while earnings before interest and taxes (EBIT) fell 13% to $1.9 billion. Contract logistics was the star performer in K+N’s portfolio in 2024, with gross profit rising 4% to $4 billion. Paul said contract logistics posted another year of record-high EBIT, which climbed 14% to $255 million. Mixed results in other divisions K+N’s sea freight division saw a 3% increase in underlying container volumes to 4.3 million TEUs last year, but gross profit slipped 11% to $2.3 billion. Paul was upbeat about the forecast contribution of IMC, the US drayage company whose acquisition was completed in early January. He estimated IMC would contribute between $50 and $60 per container in gross profit this year. Paul said there were better volumes in the company’s air freight division last year, with total volumes rising to 4 million metric tons. But while the division’s fourth-quarter EBIT was up 17% to $166 million, it was down 14% to $537 million for the full year. Road logistics also suffered from headwinds in key markets and yields were under pressure due to low demand and weakness in selected industries and regions, Paul said without giving details. The division saw EBIT drop 26% to $110 million last year, although full-year revenue was unchanged at about $4 billion. Contact Keith Wallis at keithwallis@hotmail.com .

Air Cargo

K+N sees volatility ahead from uncertain demand, geopolitical risks

<div class="phx-topic abstract-wrapper">The Barstow International Gateway (BIG) could cut transit times on international intermodal business and increase the resiliency of Southern California ports during freight surges, BNSF CEO Kate Farmer said.</div>

The Barstow International Gateway (BIG) could cut transit times on international intermodal business and increase the resiliency of Southern California ports during freight surges, BNSF CEO Kate Farmer said.

<div class="phx-topic">Long Beach, California — BNSF Railway is moving forward with its $1.5 billion Barstow International Gateway (BIG) project in California, a 4,800-acre logistics hub that would be North America’s largest intermodal facility, CEO Kate Farmer said Monday. BNSF believes the facility would increase fluidity through the ports of Los Angeles and Long Beach, Farmer told the Journal of Commerce’s TPM25 conference. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951878_0.1.jpg"></img></div>Located about 130 miles from the ports, BIG would handle transloaded cargo and international intermodal shipments bound for smaller inland markets while reducing port congestion and cutting emissions from trucks hauling containers between marine terminals and rail ramps. It is due to open in 2027 or 2028. The project was in jeopardy last year but is now proceeding after the California Air Resources Board withdrew a proposed locomotive emissions regulation on Jan. 15. The rule, which had drawn opposition from industry groups, was rescinded shortly before President Donald Trump took office. If completed, the facility is expected to improve cargo flow through West Coast marine terminals. “The real benefit is for the smaller markets like St. Louis, where we don’t have the density to run a dedicated IPI train daily,” Farmer said. “Right now, that freight sits in the marine terminals and waits. With BIG, we can flush the terminals, improving capacity for the high-volume lanes [such as Chicago, Dallas, Memphis and Kansas City].” Other potential destinations for shipments through Barstow include Cincinnati, Cleveland and Columbus, as well as new markets still under discussion. “We’re working with our customers on Southern California to Phoenix, Southern California to Denver — services that don’t exist today,” Farmer said. “Barstow allows us to aggregate that freight and have a more efficient operation.” OOCL, one of BNSF’s largest ocean carrier partners, has voiced strong support for the Barstow project. “It makes sense that major markets will continue to move directly from marine terminals, but having the flexibility to send smaller volume markets through Barstow with more regular service opens up new possibilities,” said Andrew Donohue, vice president of customer service for OOCL, speaking at TPM25. Exports, empty containers and bare railcars will be consolidated in Barstow for more efficient delivery to Southern California ports. The Barstow location would include warehousing, allowing shippers to consolidate cargo on-site while avoiding highway weight restrictions. The warehouses will be accessible by private roads, a setup similar to <a href="https://word-edit.officeapps.live.com/we/CPKC,%20Americold%20say%20to%20expand%20cold%20chain%20partnership%20into%20Mexico%20%7C%20Journal%20of%20Commerce">Canadian Pacific Kansas City’s deal with Americold</a>. <h3>Better communication with ocean carriers</h3>Farmer emphasized that a new transportation management system (TMS) will be key to BIG’s success, ensuring coordination among ocean carriers, terminal operators and the railroad. She said the system will complement, rather than compete with, the US Department of Transportation’s FLOW initiative. “The system will help us manage operations inside BIG and extend visibility to warehouses and distribution centers, which is a game changer,” Farmer said. “As we sit down and have these conversations with the ocean carriers, the key is the collaboration. It’s on a vessel for two weeks. We’re having conversations with ocean carriers, BCOs and the marine terminals.” BNSF also sees the Barstow project as a way to slow the shift of cargo away from the West Coast to ports along the East and Gulf coasts. Farmer said that if BIG can reduce transit times by two to three days and serve as a pressure relief valve during freight surges, then shippers may have greater confidence in the resilience of supply chains through West Coast ports. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Long Beach, California — BNSF Railway is moving forward with its $1.5 billion Barstow International Gateway (BIG) project in California, a 4,800-acre logistics hub that would be North America’s largest intermodal facility, CEO Kate Farmer said Monday. BNSF believes the facility would increase fluidity through the ports of Los Angeles and Long Beach, Farmer told the Journal of Commerce’s TPM25 conference. Located about 130 miles from the ports, BIG would handle transloaded cargo and international intermodal shipments bound for smaller inland markets while reducing port congestion and cutting emissions from trucks hauling containers between marine terminals and rail ramps. It is due to open in 2027 or 2028. The project was in jeopardy last year but is now proceeding after the California Air Resources Board withdrew a proposed locomotive emissions regulation on Jan. 15. The rule, which had drawn opposition from industry groups, was rescinded shortly before President Donald Trump took office. If completed, the facility is expected to improve cargo flow through West Coast marine terminals. “The real benefit is for the smaller markets like St. Louis, where we don’t have the density to run a dedicated IPI train daily,” Farmer said. “Right now, that freight sits in the marine terminals and waits. With BIG, we can flush the terminals, improving capacity for the high-volume lanes [such as Chicago, Dallas, Memphis and Kansas City].” Other potential destinations for shipments through Barstow include Cincinnati, Cleveland and Columbus, as well as new markets still under discussion. “We’re working with our customers on Southern California to Phoenix, Southern California to Denver — services that don’t exist today,” Farmer said. “Barstow allows us to aggregate that freight and have a more efficient operation.” OOCL, one of BNSF’s largest ocean carrier partners, has voiced strong support for the Barstow project. “It makes sense that major markets will continue to move directly from marine terminals, but having the flexibility to send smaller volume markets through Barstow with more regular service opens up new possibilities,” said Andrew Donohue, vice president of customer service for OOCL, speaking at TPM25. Exports, empty containers and bare railcars will be consolidated in Barstow for more efficient delivery to Southern California ports. The Barstow location would include warehousing, allowing shippers to consolidate cargo on-site while avoiding highway weight restrictions. The warehouses will be accessible by private roads, a setup similar to Canadian Pacific Kansas City’s deal with Americold . Better communication with ocean carriers Farmer emphasized that a new transportation management system (TMS) will be key to BIG’s success, ensuring coordination among ocean carriers, terminal operators and the railroad. She said the system will complement, rather than compete with, the US Department of Transportation’s FLOW initiative. “The system will help us manage operations inside BIG and extend visibility to warehouses and distribution centers, which is a game changer,” Farmer said. “As we sit down and have these conversations with the ocean carriers, the key is the collaboration. It’s on a vessel for two weeks. We’re having conversations with ocean carriers, BCOs and the marine terminals.” BNSF also sees the Barstow project as a way to slow the shift of cargo away from the West Coast to ports along the East and Gulf coasts. Farmer said that if BIG can reduce transit times by two to three days and serve as a pressure relief valve during freight surges, then shippers may have greater confidence in the resilience of supply chains through West Coast ports. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Surface

TPM25: BNSF believes Barstow hub can improve service to smaller markets

<div class="phx-topic abstract-wrapper">Fluor, KBR, TechnipFMC and Worley are predicting moderate to strong growth in project orders this year, buoyed by oil and gas work. </div>

Fluor, KBR, TechnipFMC and Worley are predicting moderate to strong growth in project orders this year, buoyed by oil and gas work.

<div class="phx-topic">With a dramatic shift in US federal policy to push oil and gas development, engineering, procurement and construction (EPC) companies are predicting an uptick in work that could dial up project cargo activity in 2025. A significant portion of project cargo comes from EPCs that procure and transport equipment and materials for the construction of major energy and industrial projects globally. The growth predictions come after varied results in the latest earnings period for four major EPCs — Fluor, KBR, TechnipFMC and Worley.Houston-based KBR is projecting double-digit revenue growth in 2025 after landing multiple large defense contracts in the fourth quarter. “We believe our business portfolio is well-aligned with the priorities of the new administration in the US, especially in the areas of national security and energy policy,” CEO Stuart Bradie said in the company’s 2024 earnings remarks on Feb. 24.Contract awards included $445 million from the Department of Defense, $187 million from the Department of State and $88 million from the US Naval Air Systems Command. In September, KBR secured a $10 billion joint contract with TechnipFMC for a liquefied natural gas (LNG) project in southwest Louisiana, while one of the company’s other LNG projects — a southeast Louisiana facility being developed by LNG provider Venture Global, achieved its first production in December. Along with the company’s acquisition of defense contractor LinQuest, defense and technology projects helped drive KBR’s 2024 revenues to $7.7 billion, a 17% increase over 2023. <h3>Orders on pace for TechnipFMC</h3>Multinational energy services contractor TechnipFMC is projecting its subsea energy business will reach $30 billion in orders over three years by the end of 2025.“We remain positive on the outlook for energy given the anticipated growth in demand, with affordability and security of supply now major considerations,” CEO Doug Pferdehirt said in the company’s Feb. 27 earnings remarks.Work orders rose 7% to $10.4 billion in the company’s subsea segment, which accounts for the lion’s share of TechnipFMC business and develops systems for undersea oil and gas exploration and extraction. In the fourth quarter, subsea orders included a contract exceeding $1 billion from TotalEnergies for the GranMorgu project, the first oil and gas development for offshore Suriname.Across all segments, orders increased 5% to $11.6 billion in 2024, driving up the company’s order backlog by 9% to $14.4 billion, while the company’s revenues grew 16% to $9.1 billion for the year.Australian engineering group Worley is projecting “moderate” growth in 2025 after market challenges curbed progress in the first half of the company’s fiscal year, which ended Dec. 31. In his Feb. 26 remarks on the company’s half-year earnings results, CEO Chris Ashton said “policy and economic headwinds” are influencing the pace of the energy transition, resulting in increased uncertainty and canceled projects. “This uncertainty has been further driven by ongoing geopolitical tensions, global inflation and supply chain challenges that continue to disrupt global markets in the sectors we serve,” Ashton said.One hurdle Worley cited — work delays on a Venture Global LNG facility under construction 20 miles south of New Orleans — was cleared Jan. 21 when the US government lifted a year-long ban on new LNG exports.Worley’s project backlog for its fiscal first half fell 14% to $7.9 billion because of the cancellation of a battery materials project in Sweden.Worley won $4.1 billion in work in the first half of the year, up 6% from the previous year. Revenues fell 3% to $3.5 billion. <h3>Fluor sets sights on datacenters</h3>After a decline in new contracts in 2024, Fluor is tapping into the growing demand for datacenters — and the large amounts of energy needed to power them.“We’re in conversations or have agreements with the top four data center developers,” CFO Jim Breuer said during the company’s Feb. 18 earnings call. Breuer will transition to the CEO role in May. On the call, current CEO David Constable cited potential opportunities for meeting the substantial energy demands the datacenters create. “Our expertise in power generation, both thermal and nuclear, is going to play a key role in supporting our clients’ needs,” Constable said.New awards fell 21% to $15.1 billion for the year, while Fluor works through a $28.5 billion backlog, which fell 3% from the previous year.Revenues rose 5.4% to $16.3 billion in 2024, and the company is projecting 15% revenue growth in 2025.Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

With a dramatic shift in US federal policy to push oil and gas development, engineering, procurement and construction (EPC) companies are predicting an uptick in work that could dial up project cargo activity in 2025. A significant portion of project cargo comes from EPCs that procure and transport equipment and materials for the construction of major energy and industrial projects globally. The growth predictions come after varied results in the latest earnings period for four major EPCs — Fluor, KBR, TechnipFMC and Worley. Houston-based KBR is projecting double-digit revenue growth in 2025 after landing multiple large defense contracts in the fourth quarter. “We believe our business portfolio is well-aligned with the priorities of the new administration in the US, especially in the areas of national security and energy policy,” CEO Stuart Bradie said in the company’s 2024 earnings remarks on Feb. 24. Contract awards included $445 million from the Department of Defense, $187 million from the Department of State and $88 million from the US Naval Air Systems Command. In September, KBR secured a $10 billion joint contract with TechnipFMC for a liquefied natural gas (LNG) project in southwest Louisiana, while one of the company’s other LNG projects — a southeast Louisiana facility being developed by LNG provider Venture Global, achieved its first production in December. Along with the company’s acquisition of defense contractor LinQuest, defense and technology projects helped drive KBR’s 2024 revenues to $7.7 billion, a 17% increase over 2023. Orders on pace for TechnipFMC Multinational energy services contractor TechnipFMC is projecting its subsea energy business will reach $30 billion in orders over three years by the end of 2025. “We remain positive on the outlook for energy given the anticipated growth in demand, with affordability and security of supply now major considerations,” CEO Doug Pferdehirt said in the company’s Feb. 27 earnings remarks. Work orders rose 7% to $10.4 billion in the company’s subsea segment, which accounts for the lion’s share of TechnipFMC business and develops systems for undersea oil and gas exploration and extraction. In the fourth quarter, subsea orders included a contract exceeding $1 billion from TotalEnergies for the GranMorgu project, the first oil and gas development for offshore Suriname. Across all segments, orders increased 5% to $11.6 billion in 2024, driving up the company’s order backlog by 9% to $14.4 billion, while the company’s revenues grew 16% to $9.1 billion for the year. Australian engineering group Worley is projecting “moderate” growth in 2025 after market challenges curbed progress in the first half of the company’s fiscal year, which ended Dec. 31. In his Feb. 26 remarks on the company’s half-year earnings results, CEO Chris Ashton said “policy and economic headwinds” are influencing the pace of the energy transition, resulting in increased uncertainty and canceled projects. “This uncertainty has been further driven by ongoing geopolitical tensions, global inflation and supply chain challenges that continue to disrupt global markets in the sectors we serve,” Ashton said. One hurdle Worley cited — work delays on a Venture Global LNG facility under construction 20 miles south of New Orleans — was cleared Jan. 21 when the US government lifted a year-long ban on new LNG exports. Worley’s project backlog for its fiscal first half fell 14% to $7.9 billion because of the cancellation of a battery materials project in Sweden. Worley won $4.1 billion in work in the first half of the year, up 6% from the previous year. Revenues fell 3% to $3.5 billion. Fluor sets sights on datacenters After a decline in new contracts in 2024, Fluor is tapping into the growing demand for datacenters — and the large amounts of energy needed to power them. “We’re in conversations or have agreements with the top four data center developers,” CFO Jim Breuer said during the company’s Feb. 18 earnings call. Breuer will transition to the CEO role in May. On the call, current CEO David Constable cited potential opportunities for meeting the substantial energy demands the datacenters create. “Our expertise in power generation, both thermal and nuclear, is going to play a key role in supporting our clients’ needs,” Constable said. New awards fell 21% to $15.1 billion for the year, while Fluor works through a $28.5 billion backlog, which fell 3% from the previous year. Revenues rose 5.4% to $16.3 billion in 2024, and the company is projecting 15% revenue growth in 2025. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

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

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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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