<div class="phx-topic abstract-wrapper">Yellow claims its ability to “continue as a going concern” is being impaired by Teamster opposition to its restructuring.</div>

Yellow claims its ability to “continue as a going concern” is being impaired by Teamster opposition to its restructuring.

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<div>The Teamsters union and its largest trucking employer, Yellow, are apparently deadlocked in a disagreement over the company’s effort to combine its less-than-truckload (LTL) subsidiaries into one multi-regional carrier. The union is calling the company’s proposals “offensive,” while Yellow is warning that union stonewalling of its plans “has impaired Yellow’s ability to continue as a going concern.” That language has set LTL shippers on edge. Despite a decline in overall LTL shipments in the first quarter, LTL shippers aren’t seeing the scale of savings they’ve won in the truckload market, according to SJ Consulting Group. LTL revenue per shipment rose...

The Teamsters union and its largest trucking employer, Yellow, are apparently deadlocked in a disagreement over the company’s effort to combine its less-than-truckload (LTL) subsidiaries into one multi-regional carrier. The union is calling the company’s proposals “offensive,” while Yellow is warning that union stonewalling of its plans “has impaired Yellow’s ability to continue as a going concern.” That language has set LTL shippers on edge. Despite a decline in overall LTL shipments in the first quarter, LTL shippers aren’t seeing the scale of savings they’ve won in the truckload market, according to SJ Consulting Group. LTL revenue per shipment rose 2.7% year over year in the first quarter while shipments dropped 9.1%, and that’s a sign of resilient LTL pricing, the consulting firm said. Yellow and its 23,000 Teamster employees handle about 49,000 LTL shipments throughout the US daily, according to SJ Consulting. Finding alternatives to that capacity could prove costly. Any suggestion that a major carrier — Yellow is the US’s third-largest LTL provider by revenue and fifth-largest ranked by shipment count — could have trouble remaining a “going concern” raises warning flags for shippers. Yellow made that claim in a statement Tuesday, responding to a memo sent by the Teamsters Monday rejecting Yellow’s latest round of proposals to resolve their dispute. “I can’t imagine the Teamsters will not take this seriously,” an industrial LTL shipper who requested anonymity said. “We have contingencies in place but are concerned about what it will do to the overall LTL capacity” if Yellow was not available, the shipper told the Journal of Commerce. Shippers would have to lean more heavily on smaller regional operators and work with multiple carriers if a source of LTL capacity as large as Yellow were not available, or less available. The last time a comparable loss of capacity occurred was when Consolidated Freightways closed in 2002 . Shippers hope any contingency plans will not be needed. Yellow is not in immediate danger. The company did report a $9.3 million operating loss and a $54.6 million net loss in the first quarter, but Yellow also reduced its salary and benefits costs, cut its fuel and supplies spending, trimmed its purchased transportation and reported a 4.4% increase in revenue per shipment before fuel surcharges. According to SJ Consulting Group data, Yellow has about 10% of the market share by shipment volume held by the 10 largest LTL carriers, and about 11.7% of that group’s combined revenue. Holding pattern But the company is stuck in mid-transition from being an operator of one national and three regional LTL carriers to its goal of becoming one multi- or super-regional carrier. Yellow completed the combination of its national YRC Freight network in the West with regional carrier Reddaway’s network in “phase one” of its reorganization last year that covered 89 terminals and 20% of Yellow’s network. Phase two is much more ambitious, covering the Northeast, Midwest and Southeast, translating to about 70% of Yellow’s total network, three operating companies and many more union locals and supplementary agreements. The restructuring, which began in 2019 and accelerated in 2021 , is considered key to Yellow's attempt to achieve the sustainable profitability that has proved elusive since the company narrowly avoided bankruptcy in 2009. “The completion of the One Yellow implementation this year is of critical importance to Yellow,” the company said Tuesday. “By integrating its operating companies and network into a super-regional carrier, Yellow will strengthen jobs while greatly improving its competitive position in a marketplace increasingly dominated by non-union carriers.” Only three of the largest LTL carriers are unionized. The Teamsters announced tentative national and supplemental contract agreements with one of those carriers, ArcBest subsidiary ABF Freight System, on Wednesday. ABF is the seventh-largest LTL carrier. Teamster contract negotiations are under way with the third company, TFI International subsidiary TForce Freight, the sixth-largest US LTL provider. Teamster National Freight Director John A. Murphy said in his memo Monday the union is “agreeable” to reopening its contract with Yellow, which is due to expire next year, but said “we would still need to go through our normal process of obtaining membership surveys, holding local union proposal meetings, establishing bargaining committees” and conducting meetings to review initial proposals. Yellow had hoped for quicker action, submitting a proposed letter of agreement (LOA) to the union May 30 that would expedite the restructuring, while holding out the prospect of a contractual wage increase — if financing were available. The Teamsters rejected the suggestions. “The LOA is a one-way street in favor of the company,” Murphy said in his memo, obtained by the Journal of Commerce. Contact William B. Cassidy at bill.cassidy@spglobal.com and follow him on Twitter: @willbcassidy .

Trucking News

Surface

Standoff between Yellow, Teamsters puts LTL shippers on alert

<div class="phx-topic abstract-wrapper">Iran has yet to make good on its threat to close the Strait of Hormuz, but nervous carriers are preparing contingency plans as the region moves onto a war footing.</div>

Iran has yet to make good on its threat to close the Strait of Hormuz, but nervous carriers are preparing contingency plans as the region moves onto a war footing.

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<div class="phx-topic">Ocean carriers are poised to adjust schedules and omit key Persian Gulf transshipment hubs should Tehran carry out its threat to close the Strait of Hormuz to international shipping following Sunday’s US bombing raids on Iranian nuclear facilities. A series of customer advisories were issued by carriers on Monday, emphasizing the safety of crew, vessels and cargo as the shipping companies closely monitor a rapidly deteriorating security situation. “We are actively evaluating potential risks and stand ready to adjust our operations should conditions change,” Hapag-Lloyd said in an advisory. “At present, our vessels continue to transit the Strait of Hormuz. The safety and well-being of our crews and ships remain our highest priority.” The US launched airstrikes on three of Iran’s nuclear sites at Fordow, Natanz and Isfahan early Sunday in a dramatic escalation of the war between Iran and Israel. Iran’s parliament voted on June 22 in support of closing the Strait of Hormuz, though the final decision will be made by the Supreme Leader in consultation with the Supreme National Security Council. As of Monday, the only entrance to the Persian Gulf remained open to shipping. Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce analyst, said how and where Iran would retaliate against US interests in the region was being closely monitored. “But for commercial shipping, the question is not whether or not vessels are attacked -- the question is whether or not the risk itself is sufficient to cause a change in vessel deployment to reduce traffic through the Strait of Hormuz,” Jensen wrote in a LinkedIn post. In a country risk report Monday, S&amp;P Global Martime Intelligence noted that Iran’s leadership now almost certainly perceives a severe threat to its survival, whether direct or indirect, and that is likely to heavily influence decision making. "We expect Iran’s response to first remain focused on continued ballistic missile and [drone] attacks on Israel [and] being likely to attempt to impede transit through the Strait of Hormuz,” the report noted. Disrupting ship transits could include vessel seizures, GPS/AIS spoofing and the use of military boats to harass vessels, it added. CMA CGM said in its customer advisory that “the geopolitical context is evolving.” “At this stage, we confirm that shipping activities are proceeding as normal in the area, and that our operations and logistics chains remain unchanged,” the carrier stated. “We continue to ensure full service coverage across all routes and ports of call.” However, ocean visibility provider eeSea noted that CMA CGM’s CMA-LMX service has been renamed and rerouted. The Europe-Middle East service that has been operating in the Persian Gulf since September 2024 has dropped calls to Jebel Ali, Abu Dhabi and Jubail in the Gulf and has added an additional call to the Turkish port of Ambarli near Istanbul. The service is now advertised under the name CMA-LRX (Levant Red Sea Express) and will see a reduction of three slots and a total roundtrip time cut in half from 42 to 21 days. <h3>Hormuz closure would impact key transshipment hub </h3>Any closure of the Strait of Hormuz will be felt first in the energy markets. According to Platts, a sister company of the Journal of Commerce within S&amp;P Global, more than 17 million barrels of crude oil each day move through Hormuz, coming not just from Iran, but from Saudi Arabia, Kuwait, the UAE and Qatar. That is more than 20% of daily global crude production. But container traffic would face significant disruption as well, with 4% of global volume passing through the strait in 2024, primarily destined for the United Arab Emirates’ transshipment hubs of Jebel Ali and Khalifa, and for the ports of Dammam in Saudi Arabia and Doha in Qatar. Jebel Ali, which handled 15.5 million TEUs in 2024, has become the region’s leading transshipment hub with feeder services connecting ports across the Persian Gulf, South Asia and East Africa. A blockade of Hormuz would see calls diverted to neighboring Indian, Omani and East African ports where a surge in transshipment demand could lead to congestion and delays, a report from S&amp;P Global Market Intelligence noted. Multipurpose carrier AAL Shipping said in a statement Monday it was “deeply concerned” with the war between Israel and Iran and its impact on shipping in the region. “While our normal trade lane schedules currently remain unaffected, we are monitoring the situation and taking all necessary precautions to ensure the safety of our crew and cargo as we trade regional waters for our customers,” AAL said. But the carrier warned that there was also a rising cost element to the deteriorating situation in the Middle East. “We would highlight that such evolving threats can lead to increased insurance premiums and other security-related costs, affecting operational considerations for all parties,” it said. Meanwhile, at the other end of the war, Maersk announced it was cutting calls to the Israeli port of Haifa in the Mediterranean. "After carefully analyzing threat risk reports regarding the ongoing conflict between Israel and Iran – particularly the potential risks of calling specific Israeli ports and their implications for the safety of our crews – Maersk has made the decision to temporarily suspend vessel calls at the Port of Haifa, Israel, and also suspend cargo acceptance for Haifa,” the carrier said in an advisory Friday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com ">greg.knowler@spglobal.com</a></div>

Ocean carriers are poised to adjust schedules and omit key Persian Gulf transshipment hubs should Tehran carry out its threat to close the Strait of Hormuz to international shipping following Sunday’s US bombing raids on Iranian nuclear facilities. A series of customer advisories were issued by carriers on Monday, emphasizing the safety of crew, vessels and cargo as the shipping companies closely monitor a rapidly deteriorating security situation. “We are actively evaluating potential risks and stand ready to adjust our operations should conditions change,” Hapag-Lloyd said in an advisory. “At present, our vessels continue to transit the Strait of Hormuz. The safety and well-being of our crews and ships remain our highest priority.” The US launched airstrikes on three of Iran’s nuclear sites at Fordow, Natanz and Isfahan early Sunday in a dramatic escalation of the war between Iran and Israel. Iran’s parliament voted on June 22 in support of closing the Strait of Hormuz, though the final decision will be made by the Supreme Leader in consultation with the Supreme National Security Council. As of Monday, the only entrance to the Persian Gulf remained open to shipping. Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce analyst, said how and where Iran would retaliate against US interests in the region was being closely monitored. “But for commercial shipping, the question is not whether or not vessels are attacked -- the question is whether or not the risk itself is sufficient to cause a change in vessel deployment to reduce traffic through the Strait of Hormuz,” Jensen wrote in a LinkedIn post. In a country risk report Monday, S&P Global Martime Intelligence noted that Iran’s leadership now almost certainly perceives a severe threat to its survival, whether direct or indirect, and that is likely to heavily influence decision making. "We expect Iran’s response to first remain focused on continued ballistic missile and [drone] attacks on Israel [and] being likely to attempt to impede transit through the Strait of Hormuz,” the report noted. Disrupting ship transits could include vessel seizures, GPS/AIS spoofing and the use of military boats to harass vessels, it added. CMA CGM said in its customer advisory that “the geopolitical context is evolving.” “At this stage, we confirm that shipping activities are proceeding as normal in the area, and that our operations and logistics chains remain unchanged,” the carrier stated. “We continue to ensure full service coverage across all routes and ports of call.” However, ocean visibility provider eeSea noted that CMA CGM’s CMA-LMX service has been renamed and rerouted. The Europe-Middle East service that has been operating in the Persian Gulf since September 2024 has dropped calls to Jebel Ali, Abu Dhabi and Jubail in the Gulf and has added an additional call to the Turkish port of Ambarli near Istanbul. The service is now advertised under the name CMA-LRX (Levant Red Sea Express) and will see a reduction of three slots and a total roundtrip time cut in half from 42 to 21 days. Hormuz closure would impact key transshipment hub Any closure of the Strait of Hormuz will be felt first in the energy markets. According to Platts, a sister company of the Journal of Commerce within S&P Global, more than 17 million barrels of crude oil each day move through Hormuz, coming not just from Iran, but from Saudi Arabia, Kuwait, the UAE and Qatar. That is more than 20% of daily global crude production. But container traffic would face significant disruption as well, with 4% of global volume passing through the strait in 2024, primarily destined for the United Arab Emirates’ transshipment hubs of Jebel Ali and Khalifa, and for the ports of Dammam in Saudi Arabia and Doha in Qatar. Jebel Ali, which handled 15.5 million TEUs in 2024, has become the region’s leading transshipment hub with feeder services connecting ports across the Persian Gulf, South Asia and East Africa. A blockade of Hormuz would see calls diverted to neighboring Indian, Omani and East African ports where a surge in transshipment demand could lead to congestion and delays, a report from S&P Global Market Intelligence noted. Multipurpose carrier AAL Shipping said in a statement Monday it was “deeply concerned” with the war between Israel and Iran and its impact on shipping in the region. “While our normal trade lane schedules currently remain unaffected, we are monitoring the situation and taking all necessary precautions to ensure the safety of our crew and cargo as we trade regional waters for our customers,” AAL said. But the carrier warned that there was also a rising cost element to the deteriorating situation in the Middle East. “We would highlight that such evolving threats can lead to increased insurance premiums and other security-related costs, affecting operational considerations for all parties,” it said. Meanwhile, at the other end of the war, Maersk announced it was cutting calls to the Israeli port of Haifa in the Mediterranean. "After carefully analyzing threat risk reports regarding the ongoing conflict between Israel and Iran – particularly the potential risks of calling specific Israeli ports and their implications for the safety of our crews – Maersk has made the decision to temporarily suspend vessel calls at the Port of Haifa, Israel, and also suspend cargo acceptance for Haifa,” the carrier said in an advisory Friday. Contact Greg Knowler at greg.knowler@spglobal.com

Container Shipping News

Asia-Europe

International ports

Maritime

Carriers ‘stand ready’ to cut Persian Gulf calls as security threat escalates

<div class="phx-topic abstract-wrapper">From his hometown hub of Memphis, Fred Smith built FedEx from a $4 million inheritance to an $88 billion behemoth. </div>

From his hometown hub of Memphis, Fred Smith built FedEx from a $4 million inheritance to an $88 billion behemoth.

<div class="phx-topic">Fred Smith, the founder of FedEx who revolutionized parcel shipment through his visionary “hub-and-spoke” model, which helped to galvanize global trade, died Saturday at 80. From his hometown hub of Memphis, Fred Smith built FedEx from a $4 million inheritance to an $88 billion behemoth, with spokes reaching more than 210 countries and territories. His idea, famously rejected by his then college professor, collected packages at central points, from which they would be flown to various locations overnight. The US Marine veteran founded Federal Express in Little Rock, Arkansas in 1971, beginning operations in Memphis two years later with fewer than 400 employees and serving 25 cities. The company, which now has more than 500,00 employees, includes truck and delivery van service FedEx Ground, less-than-truckload carrier FedEx Freight, and forwarder FedEx Trade Networks. Smith was a forceful advocate for free trade, championing FedEx’s role in promoting economic growth and prosperity. “Trade has made America great, and expanding trade has been a bipartisan pursuit for over 80 years,” Smith told the National Council on Competitiveness a month before President Donald Trump’s first inauguration in January 2017. “The failure to continue to do so would be a severe mistake with enormous consequences for America and the world.” Smith vehemently lobbied for air cargo deregulation signed into law by President Jimmy Carter in 1977. “Protectionism squelches competition and lowers economic growth,” Smith said at the TPM Conference in 2014, where he was the keynote speaker. “Over the last few years, almost every trading nation has introduced policies that permit greater government intervention in the trade process.” Smith had more influence on federal regulation than any other transportation executive, and his impact rippled through all modes of shipping, said Satish Jindel, president of SJ Consulting Group. “He saw the importance of information about the documents and parcels being shipped long before businesses and people even had computers,” Jindel said. Calling him “more than just the pioneer and the founder,” FedEx CEO Raj Subramaniam said in a statement that Smith was the heart and soul of FedEx – its (people-first-philosophy) culture, values, integrity, and spirit.” Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com.">mark.szakonyi@spglobal.com</a>.</div>

Fred Smith, the founder of FedEx who revolutionized parcel shipment through his visionary “hub-and-spoke” model, which helped to galvanize global trade, died Saturday at 80. From his hometown hub of Memphis, Fred Smith built FedEx from a $4 million inheritance to an $88 billion behemoth, with spokes reaching more than 210 countries and territories. His idea, famously rejected by his then college professor, collected packages at central points, from which they would be flown to various locations overnight. The US Marine veteran founded Federal Express in Little Rock, Arkansas in 1971, beginning operations in Memphis two years later with fewer than 400 employees and serving 25 cities. The company, which now has more than 500,00 employees, includes truck and delivery van service FedEx Ground, less-than-truckload carrier FedEx Freight, and forwarder FedEx Trade Networks. Smith was a forceful advocate for free trade, championing FedEx’s role in promoting economic growth and prosperity. “Trade has made America great, and expanding trade has been a bipartisan pursuit for over 80 years,” Smith told the National Council on Competitiveness a month before President Donald Trump’s first inauguration in January 2017. “The failure to continue to do so would be a severe mistake with enormous consequences for America and the world.” Smith vehemently lobbied for air cargo deregulation signed into law by President Jimmy Carter in 1977. “Protectionism squelches competition and lowers economic growth,” Smith said at the TPM Conference in 2014, where he was the keynote speaker. “Over the last few years, almost every trading nation has introduced policies that permit greater government intervention in the trade process.” Smith had more influence on federal regulation than any other transportation executive, and his impact rippled through all modes of shipping, said Satish Jindel, president of SJ Consulting Group. “He saw the importance of information about the documents and parcels being shipped long before businesses and people even had computers,” Jindel said. Calling him “more than just the pioneer and the founder,” FedEx CEO Raj Subramaniam said in a statement that Smith was the heart and soul of FedEx – its (people-first-philosophy) culture, values, integrity, and spirit.” Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Air Cargo Forwarder News

Air Cargo Carriers News

Fred Smith, FedEx founder and visionary, dead at 80

<div class="phx-topic abstract-wrapper">With little relief forthcoming, cargo owners need to build delays into their shipping plans as port and ship capacity remain tight, speakers at the Agriculture Transportation Coalition’s annual meeting said.</div>

With little relief forthcoming, cargo owners need to build delays into their shipping plans as port and ship capacity remain tight, speakers at the Agriculture Transportation Coalition’s annual meeting said.

<div class="phx-topic">TACOMA — Ongoing congestion at Asian and European transshipment ports and stricter carbon emission rules are hurting vessel schedule reliability, industry experts said at an agriculture shipping conference this week. With little relief on either issue forthcoming, cargo owners need to build delays into their shipping plans as port and ship capacity remain tight. Speaking at the Agriculture Transportation Coalition’s (AgTC’s) annual meeting here, Kuehne + Nagel Vice President Bill Rooney said schedule reliability among ocean carriers is “still a dumpster fire.” He cited data that showed less than 60% of vessel calls in April globally were within a day of their scheduled berthing window. The post-COVID-19 high for schedule reliability was near 65%, Rooney said, adding that he doubts the industry can hit that target, much less pre-pandemic levels of service reliability. Agriculture shippers are among the most sensitive to poor schedule reliability due to the high handling costs and perishability of their products. “The traditional number was more like 75% or 80%,” Rooney said. “I’m not sure we’ll get back there.” Since its start this year, the Gemini Cooperation alliance of Maersk and Hapag-Lloyd has said it has been reaching its 90% schedule reliability goal regularly. However, Rooney said that likely reflects major linehaul services from the two carriers and not necessarily feeder or standalone services. Individually, Maersk and Hapag-Lloyd have global schedule reliability hovering under 70%, he estimated. “They may achieve 90% on your trade lane, but my advice is to check whether your port is now a feeder port versus a linehaul port,” said Rooney. Slower ships factor into the lower reliability, he said. In 2023, the global fleet averaged speeds at just under 14 knots, or about 16 miles per hour. That’s the slowest speed on record and about half the average speed that ships traveled 50 years earlier, he said. “If you were 12 hours behind schedule, you could step on the gas and make your slot at your terminal,” Rooney said. “That’s not happening ever again.” He added shippers will have to plan around the fact that schedule reliability will likely remain subpar indefinitely. “You want to build a resilient supply chain? Resiliency is recognizing that the ships are seldom on time,” Rooney said. <h3>IMO rules, port congestion </h3>In 2023, the International Maritime Organization’s (IMO’s) Carbon Intensity Indicator (CII) rating went into effect for ships, requiring them to report and collect fuel consumption data. Fabio Santucci, US president for Mediterranean Shipping Co., said lower speeds reduce fuel consumption to meet the increasingly strict CII ratings. “Vessels cannot legally afford to go any faster,” Santucci said. “That’s where we lost, as an industry, the ability to catch up.” Along with slower speeds, ports globally are operating at nearly full capacity, Santucci said. Overall, there were about 900 million TEUs of containers shipped globally in 2024, with nameplate port capacity at about 1 billion TEUs. Santucci said congestion both inside and outside a port takes up the remaining capacity, leaving little space to manage cargo. While North American ports are mostly fluid, other ports across the globe right now are experiencing congestion levels as high as during the pandemic, Santucci said, with the problem most acute at major transshipment ports. “If your cargo is transshipping, it’s witnessing congestion levels that are as high as those seen during COVID,” he said. “While we don’t see this effect in the United States, we have issues pretty much everywhere else in the world.” Among major European transshipment ports, <a href="https://www.joc.com/article/no-end-to-the-congestion-choking-gateway-ports-in-north-europe-5995853">Hamburg</a> and <a href="https://www.joc.com/article/bottlenecks-flare-in-barcelona-as-port-battles-rise-in-transshipment-volumes-5244343">Tanger Med</a> are “heavily disrupted,” according to a Kuehne + Nagel port status report. In the Western Hemisphere, Santucci said <a href="https://www.joc.com/article/cargo-bottlenecks-persist-at-mexicos-manzanillo-port-one-month-after-strike-6027313">Manzanillo</a> and the transshipment ports of Panama are also congested. Many ports throughout China are also congested, as are the Southeast Asia ports, including Malaysia’s Port Klang and <a href="https://www.joc.com/article/asia-port-disruption-wave-reaches-singapore-6014754">Singapore</a>, which Santucci said has been working at close to full capacity for months. “Singapore has been steadily working at 90% capacity for months and months and months,” Santucci said. “I can tell you that working at 90% capacity for months generates a lot of inefficiencies.” MSC’s large fleet allows it to offer more direct port calls, but Santucci said transshipping will remain a necessity for some services, particularly as shippers diversify their product sourcing to other countries. With only about 1% of the global container fleet idled, Santucci said carriers have little capacity to offer more direct services without the use of transshipping. “Transshipment is always going to remain the Achilles heel of any network,” he said. “The more you transship, the more issues and more costs you’re going to have.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

TACOMA — Ongoing congestion at Asian and European transshipment ports and stricter carbon emission rules are hurting vessel schedule reliability, industry experts said at an agriculture shipping conference this week. With little relief on either issue forthcoming, cargo owners need to build delays into their shipping plans as port and ship capacity remain tight. Speaking at the Agriculture Transportation Coalition’s (AgTC’s) annual meeting here, Kuehne + Nagel Vice President Bill Rooney said schedule reliability among ocean carriers is “still a dumpster fire.” He cited data that showed less than 60% of vessel calls in April globally were within a day of their scheduled berthing window. The post-COVID-19 high for schedule reliability was near 65%, Rooney said, adding that he doubts the industry can hit that target, much less pre-pandemic levels of service reliability. Agriculture shippers are among the most sensitive to poor schedule reliability due to the high handling costs and perishability of their products. “The traditional number was more like 75% or 80%,” Rooney said. “I’m not sure we’ll get back there.” Since its start this year, the Gemini Cooperation alliance of Maersk and Hapag-Lloyd has said it has been reaching its 90% schedule reliability goal regularly. However, Rooney said that likely reflects major linehaul services from the two carriers and not necessarily feeder or standalone services. Individually, Maersk and Hapag-Lloyd have global schedule reliability hovering under 70%, he estimated. “They may achieve 90% on your trade lane, but my advice is to check whether your port is now a feeder port versus a linehaul port,” said Rooney. Slower ships factor into the lower reliability, he said. In 2023, the global fleet averaged speeds at just under 14 knots, or about 16 miles per hour. That’s the slowest speed on record and about half the average speed that ships traveled 50 years earlier, he said. “If you were 12 hours behind schedule, you could step on the gas and make your slot at your terminal,” Rooney said. “That’s not happening ever again.” He added shippers will have to plan around the fact that schedule reliability will likely remain subpar indefinitely. “You want to build a resilient supply chain? Resiliency is recognizing that the ships are seldom on time,” Rooney said. IMO rules, port congestion In 2023, the International Maritime Organization’s (IMO’s) Carbon Intensity Indicator (CII) rating went into effect for ships, requiring them to report and collect fuel consumption data. Fabio Santucci, US president for Mediterranean Shipping Co., said lower speeds reduce fuel consumption to meet the increasingly strict CII ratings. “Vessels cannot legally afford to go any faster,” Santucci said. “That’s where we lost, as an industry, the ability to catch up.” Along with slower speeds, ports globally are operating at nearly full capacity, Santucci said. Overall, there were about 900 million TEUs of containers shipped globally in 2024, with nameplate port capacity at about 1 billion TEUs. Santucci said congestion both inside and outside a port takes up the remaining capacity, leaving little space to manage cargo. While North American ports are mostly fluid, other ports across the globe right now are experiencing congestion levels as high as during the pandemic, Santucci said, with the problem most acute at major transshipment ports. “If your cargo is transshipping, it’s witnessing congestion levels that are as high as those seen during COVID,” he said. “While we don’t see this effect in the United States, we have issues pretty much everywhere else in the world.” Among major European transshipment ports, Hamburg and Tanger Med are “heavily disrupted,” according to a Kuehne + Nagel port status report. In the Western Hemisphere, Santucci said Manzanillo and the transshipment ports of Panama are also congested. Many ports throughout China are also congested, as are the Southeast Asia ports, including Malaysia’s Port Klang and Singapore , which Santucci said has been working at close to full capacity for months. “Singapore has been steadily working at 90% capacity for months and months and months,” Santucci said. “I can tell you that working at 90% capacity for months generates a lot of inefficiencies.” MSC’s large fleet allows it to offer more direct port calls, but Santucci said transshipping will remain a necessity for some services, particularly as shippers diversify their product sourcing to other countries. With only about 1% of the global container fleet idled, Santucci said carriers have little capacity to offer more direct services without the use of transshipping. “Transshipment is always going to remain the Achilles heel of any network,” he said. “The more you transship, the more issues and more costs you’re going to have.” Contact Michael Angell at michael.angell@spglobal.com .

Port News

Container lines

Trans-Pacific

North American ports

Poor ocean reliability presents major challenge for US ag exporters

<div class="phx-topic abstract-wrapper">But sources do not think carriers will have an opportunity to net full recovery of the proposed amounts in the current market environment unless strategic capacity cuts occur. </div>

But sources do not think carriers will have an opportunity to net full recovery of the proposed amounts in the current market environment unless strategic capacity cuts occur.

<div class="phx-topic">Container carriers on the India-US East Coast trade lane appear optimistic about the market outlook ahead of the onset of traditional peak season bookings despite tariff-linked uncertainty. Major lines have already announced hefty rate hikes for July, with Maersk leading the pack. The Danish carrier plans to implement a peak season surcharge (PSS) of $4,000 per container for Indian loads to the US and Canada beginning July 16. July rate hike announcements from other major carriers are generally in the range of $1,000 to $2,000 per box, although some liners have lined up multiple rounds for the month. “All our recent vessels have sailed full,” a sales executive at a European carrier who didn’t want to be identified told the Journal of Commerce. “We are also tightly booked for the next two sailings.” That “sold-out” scenario is arguably in large part due to a big cut in capacity out of West India — as many as five void calls in June that followed schedule disruptions linked to regional trade and military tensions during May. As a result, Indian shippers have faced an increasing number of container rollovers in recent weeks. Traditionally, Maersk and Hapag-Lloyd have significant service contract volumes, which freight forwarder sources believe could help those carriers attempt larger rate increases for limited spot space during the peak season. Still, sources do not think carriers will have an opportunity to net full recovery of the proposed amounts in the current market environment unless strategic capacity cuts occur. While July vessel updates were not immediately available, CMA CGM is set to add more ships to its Indamex (India-USEC) service soon to improve schedule reliability that has taken a hit due to its inability to provide a weekly rotation after it began standalone operations amid the pressure of longer transits around southern Africa, sources say. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56199e2b-5df4-468f-a149-b18ae7c32e51"></dynamic-object></div>But a lack of pricing discipline from Asian operators — notably OOCL, Cosco Shipping and HMM working on slot charter capacity, as well as Ocean Network Express (ONE) — remains a concern for the lead carriers. “The best chance of rate recovery is often torpedoed by undercutting,” said a sales executive at a second European carrier. “With some voids expected, we should be able to rally an appreciable spot rate recovery.” Spot rates for India to the US East Coast were pegged at $2,650 per FEU as of June 19 by Platts, a sister company of the Journal of Commerce within S&amp;P Global. That’s down from $3,030 per FEU two weeks ago. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Container carriers on the India-US East Coast trade lane appear optimistic about the market outlook ahead of the onset of traditional peak season bookings despite tariff-linked uncertainty. Major lines have already announced hefty rate hikes for July, with Maersk leading the pack. The Danish carrier plans to implement a peak season surcharge (PSS) of $4,000 per container for Indian loads to the US and Canada beginning July 16. July rate hike announcements from other major carriers are generally in the range of $1,000 to $2,000 per box, although some liners have lined up multiple rounds for the month. “All our recent vessels have sailed full,” a sales executive at a European carrier who didn’t want to be identified told the Journal of Commerce. “We are also tightly booked for the next two sailings.” That “sold-out” scenario is arguably in large part due to a big cut in capacity out of West India — as many as five void calls in June that followed schedule disruptions linked to regional trade and military tensions during May. As a result, Indian shippers have faced an increasing number of container rollovers in recent weeks. Traditionally, Maersk and Hapag-Lloyd have significant service contract volumes, which freight forwarder sources believe could help those carriers attempt larger rate increases for limited spot space during the peak season. Still, sources do not think carriers will have an opportunity to net full recovery of the proposed amounts in the current market environment unless strategic capacity cuts occur. While July vessel updates were not immediately available, CMA CGM is set to add more ships to its Indamex (India-USEC) service soon to improve schedule reliability that has taken a hit due to its inability to provide a weekly rotation after it began standalone operations amid the pressure of longer transits around southern Africa, sources say. But a lack of pricing discipline from Asian operators — notably OOCL, Cosco Shipping and HMM working on slot charter capacity, as well as Ocean Network Express (ONE) — remains a concern for the lead carriers. “The best chance of rate recovery is often torpedoed by undercutting,” said a sales executive at a second European carrier. “With some voids expected, we should be able to rally an appreciable spot rate recovery.” Spot rates for India to the US East Coast were pegged at $2,650 per FEU as of June 19 by Platts, a sister company of the Journal of Commerce within S&P Global. That’s down from $3,030 per FEU two weeks ago. Contact Bency Mathew at bencyvmathew@gmail.com .

India-US liners attempt hefty peak season rate hikes despite trade volatility

<div class="phx-topic abstract-wrapper">Consultancy MDS Transmodal said the two companies will have just under half of the almost 176,700 TEUs in feeder ship capacity deployed in Europe and the Mediterranean.</div>

Consultancy MDS Transmodal said the two companies will have just under half of the almost 176,700 TEUs in feeder ship capacity deployed in Europe and the Mediterranean.

<div class="phx-topic">Cosco Shipping Lines has strengthened its short-sea capabilities in growing regional markets after signing two deals with Singapore-based X-Press Feeders, the world’s biggest feeder operator. The deals signed this week will significantly boost Cosco’s feeder shipping capabilities in Europe and the Mediterranean, accounting for 47% of deployed capacity. The tie-up will also give Cosco and X-Press the leading position in Latin America and the Middle East. The first deal covers a partnership agreement in which the carriers will cooperate on the development of feeder services in North Europe, the Mediterranean, the Middle East, Latin America and Asia. The second is a leasing agreement in which X-Press Feeders will provide Cosco Shipping Lines with rights of first refusal to charter newbuild vessels, which could be deployed to support joint services, X-Press said in a statement. The deals are aimed at providing greater flexibility and schedule integrity to overcome port congestion, which has been <a href="https://www.joc.com/article/months-of-congestion-ahead-for-north-europe-ports-antwerp-bruges-6028184">a particular problem in North European ports this year</a>. Consultancy MDS Transmodal said the two companies will have about 82,900 TEUs of the almost 176,700-TEU feeder ship capacity deployed in Europe and the Mediterranean. Cosco’s Diamond Line short-sea subsidiary is currently the largest feeder operator in the two markets with 48,000 TEUs, while X-Press Feeders is fourth with almost 35,000 TEUs, according to data prepared by MDS Transmodal. X-Press Feeders is the largest feeder operator in Latin America and the Gulf/Indian subcontinent, accounting for capacities of 21,000 TEUs and 44,000 TEUs, respectively, according to MDS Transmodal. “X-Press Feeders has had long-standing cooperation with Cosco on various trades which has now evolved and expanded into a wider strategic partnership,” a senior shipping executive with knowledge of the tie-up told the Journal of Commerce. X-Press Feeders has an extensive newbuilding program with 16 ships totaling 101,100 TEUs on order, including six 11,000-TEU vessels with methanol powering capabilities that will increase the feeder operator’s existing deployed capacity by 54%, according to maritime analyst Alphaliner. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Cosco Shipping Lines has strengthened its short-sea capabilities in growing regional markets after signing two deals with Singapore-based X-Press Feeders, the world’s biggest feeder operator. The deals signed this week will significantly boost Cosco’s feeder shipping capabilities in Europe and the Mediterranean, accounting for 47% of deployed capacity. The tie-up will also give Cosco and X-Press the leading position in Latin America and the Middle East. The first deal covers a partnership agreement in which the carriers will cooperate on the development of feeder services in North Europe, the Mediterranean, the Middle East, Latin America and Asia. The second is a leasing agreement in which X-Press Feeders will provide Cosco Shipping Lines with rights of first refusal to charter newbuild vessels, which could be deployed to support joint services, X-Press said in a statement. The deals are aimed at providing greater flexibility and schedule integrity to overcome port congestion, which has been a particular problem in North European ports this year . Consultancy MDS Transmodal said the two companies will have about 82,900 TEUs of the almost 176,700-TEU feeder ship capacity deployed in Europe and the Mediterranean. Cosco’s Diamond Line short-sea subsidiary is currently the largest feeder operator in the two markets with 48,000 TEUs, while X-Press Feeders is fourth with almost 35,000 TEUs, according to data prepared by MDS Transmodal. X-Press Feeders is the largest feeder operator in Latin America and the Gulf/Indian subcontinent, accounting for capacities of 21,000 TEUs and 44,000 TEUs, respectively, according to MDS Transmodal. “X-Press Feeders has had long-standing cooperation with Cosco on various trades which has now evolved and expanded into a wider strategic partnership,” a senior shipping executive with knowledge of the tie-up told the Journal of Commerce. X-Press Feeders has an extensive newbuilding program with 16 ships totaling 101,100 TEUs on order, including six 11,000-TEU vessels with methanol powering capabilities that will increase the feeder operator’s existing deployed capacity by 54%, according to maritime analyst Alphaliner. Contact Keith Wallis at keithwallis@hotmail.com .

Cosco boosts feeder reach under pair of deals with X-Press

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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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