<div class="phx-topic abstract-wrapper">Just a month after the European Commission announced that the block exemption regulation for carriers would not be renewed next April, the UK competition authority has also called for it to lapse upon expiry.</div>

Just a month after the European Commission announced that the block exemption regulation for carriers would not be renewed next April, the UK competition authority has also called for it to lapse upon expiry.

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<div>The UK’s competition regulator has proposed joining its European Commission counterpart in allowing container shipping’s antitrust immunity to lapse when the regulation expires next April. A final decision by the UK’s Competition and Markets Authority will be made after another round of industry feedback is considered in a public consultation that will close Dec. 15. “The CMA’s provisional view is that that the retained Consortia Block Exemption Regulation (CBER) should lapse on its expiry date of 25 April 2024, without replacement,” the agency said in a statement. Following the UK’s exit from the European Union, the EU’s block exemption regulations...

The UK’s competition regulator has proposed joining its European Commission counterpart in allowing container shipping’s antitrust immunity to lapse when the regulation expires next April. A final decision by the UK’s Competition and Markets Authority will be made after another round of industry feedback is considered in a public consultation that will close Dec. 15. “The CMA’s provisional view is that that the retained Consortia Block Exemption Regulation (CBER) should lapse on its expiry date of 25 April 2024, without replacement,” the agency said in a statement. Following the UK’s exit from the European Union, the EU’s block exemption regulations that were in force at the end of the Brexit transition period on Dec. 31, 2020, were retained in UK law. But the EC’s announcement last month that the CBER was “no longer fit for purpose” and would not be renewed next year blindsided most in the container shipping industry who were expecting a revision of the rule rather than its scrapping. Just a month later, the CMA has arrived at its provisional conclusion that there is no longer any benefit to the industry in maintaining the carriers’ exemption from UK competition law. ‘A sensible conclusion’ The move was welcomed by the British International Freight Association (BIFA), with the UK forwarding group’s director-general Steve Parker calling it a “sensible conclusion to the ongoing consultation.” “We are pleased that the CMA has effectively ... reached the same conclusion as the European Commission,” Parker said in a statement Monday. He warned, however, that the public consultation period could see more lobbying from carriers to retain some form of exemption from the UK competition law. “There is no room for complacency,” Parker said. “Given the possibility that the shipping lines will make new submissions to the CMA, BIFA will be working with our members to provide further argument that supports the decision to let the CBER lapse.” BIFA noted that members were “extremely concerned” that practices by container shipping lines, as well as easements and exemptions provided to them by the EU and UK, had distorted free market operations. The CBER was adopted by the European Commission in 2009 and has been renewed twice since then without change — in 2014 and 2020 — despite strong opposition from shippers, forwarders, terminals, port services providers and logistics associations. The moves by the European and UK competition watchdogs to scrap the regulation is part of a heightened global regulatory watchfulness of container shipping alliances even as one of the three largest pacts dissolves. The 2M Alliance between Maersk and Mediterranean Shipping Co. will end in early 2025 , leaving just two global agreements, Ocean Alliance and THE Alliance. In Australia, a decision on whether carriers will continue to enjoy immunity from antitrust regulations is expected soon. In the US, the latest attempt to implement fresh reforms to shipping law remains in limbo , eight months after a bill was introduced in the House of Representatives. Industry observers say the lack of movement is likely tied to federal regulators still sorting through the fallout of last year’s passage of the Ocean Shipping Reform Act of 2022. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Transport, Trade and Regulation News

Container lines

Maritime

UK watchdog calls for end to ocean carrier antitrust immunity

<div class="phx-topic abstract-wrapper">The largest cold chain storage company in the world is looking to maintain momentum through targeted acquisitions and diverse portfolio development, its co-founder told TPM25.</div>

The largest cold chain storage company in the world is looking to maintain momentum through targeted acquisitions and diverse portfolio development, its co-founder told TPM25.

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<div class="phx-topic">Long Beach, California — Cold storage leader Lineage Logistics is looking to build on the biggest initial public offering (IPO) of 2024 through new acquisitions and potential joint ventures in growth markets such as South America, its co-founder said Tuesday. Adam Forste told the Journal of Commerce’s TPM25 conference that the company has long leaned on acquisitions as a key approach to growth, citing more than 120 companies acquired since Lineage was conceived as a single warehouse in 2008. Forste said Lineage, which aims to offer end-to-end cold chain solutions, has even developed an acquisition playbook to streamline integration, including a dedicated integration team led by Lineage CEO Greg Lehmkuhl. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>As the largest cold chain storage company in the world, Lineage has more than 3 billion square feet of capacity across North America, Europe and Asia. Now Lineage — which raised more than $4.4 billion in its IPO last year — is looking at agile partnership models and structures to tackle growth opportunities in growing markets such as the Middle East, South America, India, Africa and Southeast Asia without distracting from Lineage’s core business. “What works in central South America may not be the right format in a place like India,” Forste said. Partnerships with local players have allowed Michigan-based Lineage to explore emerging markets, while continuing to bolster its existing business in established markets, said Forste. Lineage has managed to crack into the South American market using their partnership approach, which has been “incredibly successful,” he said. “We raised third-party capital for that business,” Forste said, referring to Lineage’s existing South American partnership. “We support them with technology and advice. But in three short years, they’ve grown that business to 75 warehouses in other countries in that market.” Additionally, Forste said Lineage aims to balance its acquisitions with development of new facilities — stressing the importance of acquiring companies that are in alignment with Lineage and offer the right growth opportunities, with high value put on both portfolio diversification and operational efficiency. “If you could aggregate and get diversity of commodity, customer and geography — we could insulate it and effectively reduce the risk [for] our own company and lower our cost of capital,” said Forste. “And that proved out to be true over a lot of different cycles.” Still, there are cold chain challenges on the horizon, Forste said. Inflation, tariffs and supply chain disruptions could impact the market, but he believes Lineage’s targeted expansions offer an advantage to customers. “We really think of ourselves as trying [to prioritize] the most important projects for our customers’ growth with the very best [returns] for our shareholders,” Forste said. “In any given market, that could be more acquisitions, it could be more developments. Right now, we’re seeing a blend of both.” Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Long Beach, California — Cold storage leader Lineage Logistics is looking to build on the biggest initial public offering (IPO) of 2024 through new acquisitions and potential joint ventures in growth markets such as South America, its co-founder said Tuesday. Adam Forste told the Journal of Commerce’s TPM25 conference that the company has long leaned on acquisitions as a key approach to growth, citing more than 120 companies acquired since Lineage was conceived as a single warehouse in 2008. Forste said Lineage, which aims to offer end-to-end cold chain solutions, has even developed an acquisition playbook to streamline integration, including a dedicated integration team led by Lineage CEO Greg Lehmkuhl. As the largest cold chain storage company in the world, Lineage has more than 3 billion square feet of capacity across North America, Europe and Asia. Now Lineage — which raised more than $4.4 billion in its IPO last year — is looking at agile partnership models and structures to tackle growth opportunities in growing markets such as the Middle East, South America, India, Africa and Southeast Asia without distracting from Lineage’s core business. “What works in central South America may not be the right format in a place like India,” Forste said. Partnerships with local players have allowed Michigan-based Lineage to explore emerging markets, while continuing to bolster its existing business in established markets, said Forste. Lineage has managed to crack into the South American market using their partnership approach, which has been “incredibly successful,” he said. “We raised third-party capital for that business,” Forste said, referring to Lineage’s existing South American partnership. “We support them with technology and advice. But in three short years, they’ve grown that business to 75 warehouses in other countries in that market.” Additionally, Forste said Lineage aims to balance its acquisitions with development of new facilities — stressing the importance of acquiring companies that are in alignment with Lineage and offer the right growth opportunities, with high value put on both portfolio diversification and operational efficiency. “If you could aggregate and get diversity of commodity, customer and geography — we could insulate it and effectively reduce the risk [for] our own company and lower our cost of capital,” said Forste. “And that proved out to be true over a lot of different cycles.” Still, there are cold chain challenges on the horizon, Forste said. Inflation, tariffs and supply chain disruptions could impact the market, but he believes Lineage’s targeted expansions offer an advantage to customers. “We really think of ourselves as trying [to prioritize] the most important projects for our customers’ growth with the very best [returns] for our shareholders,” Forste said. “In any given market, that could be more acquisitions, it could be more developments. Right now, we’re seeing a blend of both.” Contact Laura Robb at laura.robb@spglobal.com . 

Cool Cargo News

Supply chain

TPM25: Lineage using big 2024 IPO to launch company’s next moves

<div class="phx-topic abstract-wrapper">ONE’s chief executive took the opportunity of TPM’s silver anniversary to look back at how the industry has changed for the better over the years and call out some of the existing hurdles.</div>

ONE’s chief executive took the opportunity of TPM’s silver anniversary to look back at how the industry has changed for the better over the years and call out some of the existing hurdles.

<div class="phx-topic">Long Beach, California — Container shipping had to overcome many growing pains as it has risen to serve global trade, Ocean Network Express (ONE) Chief Executive Jeremy Nixon said, demonstrating the industry’s resiliency. While it has met those challenges, Nixon urged against complacency as new challenges continue to arise. Speaking Tuesday at the Journal of Commerce’s TPM25 conference, Nixon reflected on the event’s silver anniversary and about container shipping’s inflection points over the previous two decades as trade volumes, as well as ships and ports, grew larger. He said the industry has reached a new level of maturity, but it will continue to evolve and face further evolutions that remain unpredictable. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>The first TPM coincided with the 2001 terror attacks on the World Trade Center, which housed the US offices of many container carriers, Nixon said. Due to concerns about further terrorist attacks, container shipping had to adopt to the automated manifest system for pre-declaring inbound US cargo, along with using X-ray inspections, practices that have been adopted around the world. “Homeland Security needed to know what’s actually in these containers,” Nixon said. “Quickly after this, we had to come up with a process for declaring this online before the vessel arrived. That got replicated around the world.” As ships and volumes grew larger, ocean carriers began contending with series of accidents, including the 2013 sinking of the MOL Comfort, belonging to a parent of ONE. The loss of 4,000 containers was the largest industry accident to date. However, the industry responded through stricter guidelines on safe cargo handling, Nixon said. He pointed to the verified gross mass requirement put forth by the International Maritime Organization (IMO) that helped reduce container losses at sea as cargo weights had to be verified to ensure safer loading on ships. While container losses at sea have declined, Nixon pointed to further challenges in adequate cargo declaration. He said ONE recently flagged a consolidated shipment from Shanghai to the Middle East for further inspection due to irregularities around the weight and cargo declaration. While the bill of lading said it was cookware, the inspection revealed the shipper packed fireworks into the box. “We are working very closely as an industry to tighten up this type of misdeclaration,” Nixon said, adding that new digital tools such as artificial intelligence (AI) can be used in this regard. The industry has also had to better navigate its boom-bust cycles and the chaos that ensued from those. As carriers dealt with low freight rates, they were unable to meet the demands of US West Coast longshore labor, which struck the ports for 10 days in 2002 and prompted then-President George W. Bush to use the Taft Hartley Act to order dockworkers back on the job. <h3>Hanjin ‘wakeup call’ </h3>Nixon worked at P&amp;O Nedlloyd when it was acquired by Maersk in 2005. While it was an amicable deal, Nixon said there were problems with integrating the back-office systems of both carriers. NYK Line, Nixon’s later employer and another ONE parent, was also involved in a slot-sharing agreement with South Korea’s Hanjin Shipping, which faced bankruptcy in 2016. NYK boxes were stranded on Hanjin ships, and vice versa. The Hanjin bankruptcy was part of the impetus for MOL, NYK and K-Line consolidating their container ships into ONE, Nixon said, noting that bringing together three corporate cultures itself was a challenge. “Everybody’s balance sheet was so stretched and I think this is also one of the factors behind ONE coming together,” Nixon said. “Hanjin was a good wakeup call about what could happen.” The widening of the Panama Canal in 2016 was a major boost to the industry as it finally allowed ships larger than 4,800 TEUs to reach the US East Coast. The longer and wider ships were somewhat safer than the first Panamax ships, which were narrow and required more ballast to steady. However, since then, ports have been in a race to build longer berths and install taller cranes. Nixon said port capacity is still a major hurdle for the industry as the inability of marine terminals to efficiently handle large ships contributes to port congestion. “Carriers actually do want to run their networks on time,” he said. “The challenge is the port infrastructure has not really been able to keep up.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Long Beach, California — Container shipping had to overcome many growing pains as it has risen to serve global trade, Ocean Network Express (ONE) Chief Executive Jeremy Nixon said, demonstrating the industry’s resiliency. While it has met those challenges, Nixon urged against complacency as new challenges continue to arise. Speaking Tuesday at the Journal of Commerce’s TPM25 conference, Nixon reflected on the event’s silver anniversary and about container shipping’s inflection points over the previous two decades as trade volumes, as well as ships and ports, grew larger. He said the industry has reached a new level of maturity, but it will continue to evolve and face further evolutions that remain unpredictable. The first TPM coincided with the 2001 terror attacks on the World Trade Center, which housed the US offices of many container carriers, Nixon said. Due to concerns about further terrorist attacks, container shipping had to adopt to the automated manifest system for pre-declaring inbound US cargo, along with using X-ray inspections, practices that have been adopted around the world. “Homeland Security needed to know what’s actually in these containers,” Nixon said. “Quickly after this, we had to come up with a process for declaring this online before the vessel arrived. That got replicated around the world.” As ships and volumes grew larger, ocean carriers began contending with series of accidents, including the 2013 sinking of the MOL Comfort, belonging to a parent of ONE. The loss of 4,000 containers was the largest industry accident to date. However, the industry responded through stricter guidelines on safe cargo handling, Nixon said. He pointed to the verified gross mass requirement put forth by the International Maritime Organization (IMO) that helped reduce container losses at sea as cargo weights had to be verified to ensure safer loading on ships. While container losses at sea have declined, Nixon pointed to further challenges in adequate cargo declaration. He said ONE recently flagged a consolidated shipment from Shanghai to the Middle East for further inspection due to irregularities around the weight and cargo declaration. While the bill of lading said it was cookware, the inspection revealed the shipper packed fireworks into the box. “We are working very closely as an industry to tighten up this type of misdeclaration,” Nixon said, adding that new digital tools such as artificial intelligence (AI) can be used in this regard. The industry has also had to better navigate its boom-bust cycles and the chaos that ensued from those. As carriers dealt with low freight rates, they were unable to meet the demands of US West Coast longshore labor, which struck the ports for 10 days in 2002 and prompted then-President George W. Bush to use the Taft Hartley Act to order dockworkers back on the job. Hanjin ‘wakeup call’ Nixon worked at P&O Nedlloyd when it was acquired by Maersk in 2005. While it was an amicable deal, Nixon said there were problems with integrating the back-office systems of both carriers. NYK Line, Nixon’s later employer and another ONE parent, was also involved in a slot-sharing agreement with South Korea’s Hanjin Shipping, which faced bankruptcy in 2016. NYK boxes were stranded on Hanjin ships, and vice versa. The Hanjin bankruptcy was part of the impetus for MOL, NYK and K-Line consolidating their container ships into ONE, Nixon said, noting that bringing together three corporate cultures itself was a challenge. “Everybody’s balance sheet was so stretched and I think this is also one of the factors behind ONE coming together,” Nixon said. “Hanjin was a good wakeup call about what could happen.” The widening of the Panama Canal in 2016 was a major boost to the industry as it finally allowed ships larger than 4,800 TEUs to reach the US East Coast. The longer and wider ships were somewhat safer than the first Panamax ships, which were narrow and required more ballast to steady. However, since then, ports have been in a race to build longer berths and install taller cranes. Nixon said port capacity is still a major hurdle for the industry as the inability of marine terminals to efficiently handle large ships contributes to port congestion. “Carriers actually do want to run their networks on time,” he said. “The challenge is the port infrastructure has not really been able to keep up.” Contact Michael Angell at michael.angell@spglobal.com .

TPM25: Container shipping still evolving as new challenges arise: Nixon

<div class="phx-topic abstract-wrapper">Kate Farmer told TPM25 that people would be “shocked” at how much money the oft-targeted railroad spends on combating the increasingly sophisticated methods of cargo theft.</div>

Kate Farmer told TPM25 that people would be “shocked” at how much money the oft-targeted railroad spends on combating the increasingly sophisticated methods of cargo theft.

<div class="phx-topic">Long Beach, California — Combating cargo theft is a critically important issue for BNSF Railway, but it will require local, state and federal law enforcement to fully eradicate the increasingly organized and brazen criminal acts, the company’s CEO said. There has been a recent spike in US cargo thefts, including a Jan. 13 incident in Arizona during which thieves stole 1,985 pairs of unreleased Nike shoes worth more than $440,000 from a BNSF train, according to the <a href="https://www.latimes.com/california/story/2025-02-23/freight-train-heists-targeting-nike-merchandise-are-probed-as-related">Los Angeles Times</a>. Last November, criminals sabotaged another BNSF train in Arizona, forcing it to an emergency stop and stealing 180 unreleased Nike shoes worth $41,400. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>BNSF CEO Kate Farmer said fighting cargo theft is one of her top priorities. “If I told you how much money we were spending on prevention, people would be shocked,” Farmer told the Journal of Commerce’s TPM25 conference. “We are putting up electric fencing and building cement barriers in our intermodal facilities. Last year, our rail police spent 10,000 more hours in surveillance than the year before. We’re using drone technology between Barstow [California] and Belen [New Mexico]. We have heat technology, thermal technology and BNSF Police officers riding trains.” Cargo theft has affected <a href="https://www.joc.com/article/rail-industry-split-on-how-to-best-combat-cargo-theft-5742577">all major US railroads</a>, often targeting freight moving through urban rail hubs. In 2022, looters <a href="https://www.cbsnews.com/losangeles/news/thieves-raiding-cargo-containers-stealing-packages-on-downtown-section-of-union-pacific-train-tracks/">ransacked containers</a> outside Union Pacific Railroad’s (UP’s) Los Angeles Terminal Center, leaving the tracks strewn with discarded goods. Last October, thieves struck a UP train in Chicago that was <a href="https://www.nbcchicago.com/news/local/trains-halted-on-metra-line-due-to-groups-stealing-from-freight-traihttps:/www.nbcchicago.com/news/local/trains-halted-on-metra-line-due-to-groups-stealing-from-freight-trains-agency-says/3571665/?os=v&amp;ref=appns-agency-says/3571665/?os=v&amp;ref=app">being interchanged</a> with Norfolk Southern Railway. CSX Transportation has also reported <a href="https://www.joc.com/article/us-rail-cargo-crime-on-the-rise-as-thieves-methods-gain-sophistication-5219201">rising thefts in Memphis</a>. <h3>Growing sophistication among cargo thieves </h3>The scale and sophistication of recent thefts have raised concerns among law enforcement agencies. A federal investigator told the Los Angeles Times that some cargo theft operations rival the drug cartels of Sinaloa, Mexico, in their organization and sophistication. In a string of at least 10 cargo train burglaries since last March, thieves have targeted BNSF trains in California and Arizona. Criminals board slow-moving eastbound trains, wait until they reach remote stretches of the desert, and then sabotage the train or signals, forcing an emergency stop. Criminals will cut air brake hoses, disable signal boxes or sever control wires, disrupting train movements in ways similar to tampering with traffic lights. Some groups use follow vehicles to track shipments and deploy surveillance crews to monitor law enforcement activity. Despite the extensive security measures, Farmer said railroads must also receive stronger action from law enforcement at all levels. “We’ll have six folks that we will arrest on Monday, and then we will see them again on Friday, so this is not going to be something that the railroad is going to be able to solve on its own,” she said. “We cannot solve this alone as a rail industry. We absolutely must have federal involvement. I believe that it is starting to get the kind of attention in Washington that it needs, but we’ve got a long way to go.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Long Beach, California — Combating cargo theft is a critically important issue for BNSF Railway, but it will require local, state and federal law enforcement to fully eradicate the increasingly organized and brazen criminal acts, the company’s CEO said. There has been a recent spike in US cargo thefts, including a Jan. 13 incident in Arizona during which thieves stole 1,985 pairs of unreleased Nike shoes worth more than $440,000 from a BNSF train, according to the Los Angeles Times . Last November, criminals sabotaged another BNSF train in Arizona, forcing it to an emergency stop and stealing 180 unreleased Nike shoes worth $41,400. BNSF CEO Kate Farmer said fighting cargo theft is one of her top priorities. “If I told you how much money we were spending on prevention, people would be shocked,” Farmer told the Journal of Commerce’s TPM25 conference. “We are putting up electric fencing and building cement barriers in our intermodal facilities. Last year, our rail police spent 10,000 more hours in surveillance than the year before. We’re using drone technology between Barstow [California] and Belen [New Mexico]. We have heat technology, thermal technology and BNSF Police officers riding trains.” Cargo theft has affected all major US railroads , often targeting freight moving through urban rail hubs. In 2022, looters ransacked containers outside Union Pacific Railroad’s (UP’s) Los Angeles Terminal Center, leaving the tracks strewn with discarded goods. Last October, thieves struck a UP train in Chicago that was being interchanged with Norfolk Southern Railway. CSX Transportation has also reported rising thefts in Memphis . Growing sophistication among cargo thieves The scale and sophistication of recent thefts have raised concerns among law enforcement agencies. A federal investigator told the Los Angeles Times that some cargo theft operations rival the drug cartels of Sinaloa, Mexico, in their organization and sophistication. In a string of at least 10 cargo train burglaries since last March, thieves have targeted BNSF trains in California and Arizona. Criminals board slow-moving eastbound trains, wait until they reach remote stretches of the desert, and then sabotage the train or signals, forcing an emergency stop. Criminals will cut air brake hoses, disable signal boxes or sever control wires, disrupting train movements in ways similar to tampering with traffic lights. Some groups use follow vehicles to track shipments and deploy surveillance crews to monitor law enforcement activity. Despite the extensive security measures, Farmer said railroads must also receive stronger action from law enforcement at all levels. “We’ll have six folks that we will arrest on Monday, and then we will see them again on Friday, so this is not going to be something that the railroad is going to be able to solve on its own,” she said. “We cannot solve this alone as a rail industry. We absolutely must have federal involvement. I believe that it is starting to get the kind of attention in Washington that it needs, but we’ve got a long way to go.” Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Surface

TPM25: BNSF CEO says fighting cargo theft requires collective effort

<div class="phx-topic abstract-wrapper">The massive deal includes Hutchison’s 90% interests in the Panama Ports Company, which owns and operates the ports of Balboa and Cristobal on the Pacific and Atlantic entrances to the Panama Canal and has been the object of recent scrutiny from the Trump administration.</div>

The massive deal includes Hutchison’s 90% interests in the Panama Ports Company, which owns and operates the ports of Balboa and Cristobal on the Pacific and Atlantic entrances to the Panama Canal and has been the object of recent scrutiny from the Trump administration.

<div class="phx-topic">Amid growing ire within the new Trump administration over alleged Chinese influence in the operation of the Panama Canal, Hong Kong-based CK Hutchison stunned the maritime world Tuesday by announcing it had agreed to sell the majority of its Hutchison Port Holdings (HPH) global terminals network to a consortium comprised of BlackRock Group and Mediterranean Shipping Co.’s Terminal Investment Limited (TiL) in a $22.8 billion deal. The deal comprises two parts. The first covers HPH’s 90% interests in the Panama Ports Company, which owns and operates the ports of Balboa and Cristobal on the Pacific and Atlantic entrances to the Panama Canal. The second involves HPH’s 80% effective and controlling interest in subsidiary and associated companies that own and operate 43 ports comprising 199 berths in 23 countries including Felixstowe in Britain, ECT in Rotterdam, Manzanillo in Mexico, Busan in South Korea and Laem Chabang in Thailand. The agreement also covers all of HPH’s management resources, operations, terminal operating systems, IT and other systems, Hutchison said in a statement. Hutchison’s control of its Panama <a href="https://www.joc.com/article/fmc-chair-questions-level-playing-field-in-panama-canal-operations-5932469">ports has come under scrutiny from the Trump administration</a> due to the company’s alleged links to the Chinese government. The administration has used these claims, which Hutchison has denied, for the basis of threats to take back control of the canal zone, which the US signed over to Panama in 1999. Commenting on the specific sale of the Panama Ports Company, Frank Sixt, CK Hutchison’s co-managing director, said it was unrelated to the row over control of the ports. “I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports,” Sixt said. Hutchison’s ports in China, including those controlled by Hutchison’s Singapore-listed company HPH Trust that operates ports in Hong Kong, Shenzhen and South China, are excluded from the deal. <h3>Dwarfs recent port deals </h3>The deal is one of the world’s biggest ports sales, overshadowing the combined $4 billion sale of the Orient Overseas Container Line global ports business in 2006 and 2019 and Hutchison’s $4.4 billion disposal of a 20% stake in Hutchison Port Holdings to Singapore’s PSA in 2006. Hutchison said documents for the sale of the Panama Ports Company are expected to be signed on or before April 2. It gave no timeline for the sale of the remaining Hutchison ports portfolio. Sixt said the sale of the HPH ports business was “the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received.” “As a result, the transaction valuation agreed in principle is compelling, and the transaction is clearly in the best interest of our shareholders,” he said. Diego Aponte, MSC’s president and chairman of TiL, said the MSC group has a long-standing relationship with Hutchison Ports. “We are very focused on this industry, and we know that the investment in Hutchison Ports will be a very viable investment commercially,” Aponte said in the statement. TiL was formed in 2020 to secure container terminal capacity for MSC and currently handles more than 65 million TEUs annually at ports including Long Beach, Los Angeles, New York/New Jersey, Singapore, Ningbo, Rotterdam and Antwerp. By comparison, HPH handles about 60 million TEUs with a further 22 million TEUs handled by ports controlled by HPH Trust. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Amid growing ire within the new Trump administration over alleged Chinese influence in the operation of the Panama Canal, Hong Kong-based CK Hutchison stunned the maritime world Tuesday by announcing it had agreed to sell the majority of its Hutchison Port Holdings (HPH) global terminals network to a consortium comprised of BlackRock Group and Mediterranean Shipping Co.’s Terminal Investment Limited (TiL) in a $22.8 billion deal. The deal comprises two parts. The first covers HPH’s 90% interests in the Panama Ports Company, which owns and operates the ports of Balboa and Cristobal on the Pacific and Atlantic entrances to the Panama Canal. The second involves HPH’s 80% effective and controlling interest in subsidiary and associated companies that own and operate 43 ports comprising 199 berths in 23 countries including Felixstowe in Britain, ECT in Rotterdam, Manzanillo in Mexico, Busan in South Korea and Laem Chabang in Thailand. The agreement also covers all of HPH’s management resources, operations, terminal operating systems, IT and other systems, Hutchison said in a statement. Hutchison’s control of its Panama ports has come under scrutiny from the Trump administration due to the company’s alleged links to the Chinese government. The administration has used these claims, which Hutchison has denied, for the basis of threats to take back control of the canal zone, which the US signed over to Panama in 1999. Commenting on the specific sale of the Panama Ports Company, Frank Sixt, CK Hutchison’s co-managing director, said it was unrelated to the row over control of the ports. “I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports,” Sixt said. Hutchison’s ports in China, including those controlled by Hutchison’s Singapore-listed company HPH Trust that operates ports in Hong Kong, Shenzhen and South China, are excluded from the deal. Dwarfs recent port deals The deal is one of the world’s biggest ports sales, overshadowing the combined $4 billion sale of the Orient Overseas Container Line global ports business in 2006 and 2019 and Hutchison’s $4.4 billion disposal of a 20% stake in Hutchison Port Holdings to Singapore’s PSA in 2006. Hutchison said documents for the sale of the Panama Ports Company are expected to be signed on or before April 2. It gave no timeline for the sale of the remaining Hutchison ports portfolio. Sixt said the sale of the HPH ports business was “the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received.” “As a result, the transaction valuation agreed in principle is compelling, and the transaction is clearly in the best interest of our shareholders,” he said. Diego Aponte, MSC’s president and chairman of TiL, said the MSC group has a long-standing relationship with Hutchison Ports. “We are very focused on this industry, and we know that the investment in Hutchison Ports will be a very viable investment commercially,” Aponte said in the statement. TiL was formed in 2020 to secure container terminal capacity for MSC and currently handles more than 65 million TEUs annually at ports including Long Beach, Los Angeles, New York/New Jersey, Singapore, Ningbo, Rotterdam and Antwerp. By comparison, HPH handles about 60 million TEUs with a further 22 million TEUs handled by ports controlled by HPH Trust. Contact Keith Wallis at keithwallis@hotmail.com .

Port News

Hutchison inks $22.8 billion deal to sell majority of port holdings to BlackRock, TiL

<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.

<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. 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. 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 .

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

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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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