<div class="phx-topic abstract-wrapper">US truckload capacity isn’t so much declining as it is shifting, according to data, and that will pose challenges to shippers and carriers trying to access trucks, trailers, and drivers.</div>

US truckload capacity isn’t so much declining as it is shifting, according to data, and that will pose challenges to shippers and carriers trying to access trucks, trailers, and drivers.

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<div>US shippers are receiving mixed signals about truckload capacity as the freight market heads into the peak holiday shipping season. On one hand, the CEOs of several large trucking companies say small trucking firms are exiting the business at record numbers, forced out by low spot rates and high fuel prices. However, other data sources suggest trucking capacity is expanding, not shrinking.Werner Enterprises CEO Derek Leathers told analysts this week that more truckers have surrendered their registration in 19 out of the last 24 weeks than have sought authority. “Over the last four weeks we've seen a very sudden and...

US shippers are receiving mixed signals about truckload capacity as the freight market heads into the peak holiday shipping season. On one hand, the CEOs of several large trucking companies say small trucking firms are exiting the business at record numbers, forced out by low spot rates and high fuel prices. However, other data sources suggest trucking capacity is expanding, not shrinking. Werner Enterprises CEO Derek Leathers told analysts this week that more truckers have surrendered their registration in 19 out of the last 24 weeks than have sought authority. “Over the last four weeks we've seen a very sudden and noticeable increase in the quantity of those deactivations,” Leathers said. “You're seeing 3,500 to 4,000 trucks a week net coming out of the market.” “We believe we are in the early stages of capacity correction, especially with a small carrier community that increasingly relies on the spot market,” Schneider National CEO Mark Rourke said during a third-quarter earnings call with Wall Street analysts Oct. 27. “It is our assessment that a meaningful portion of the spot market has dropped below the break-even point for carriers.” The question is, what segment or segments of the market are losing capacity, and which are gaining trucks and perhaps drivers? Is a net loss of capacity occurring, or is this an ongoing shift of capacity away from the transactional spot market to the much larger — and still higher priced — contract market? “Contract and spot are different marketplaces with different types of carriers and different ideologies,” said Jeff Tucker, CEO of third-party logistics provider (3PL) Tucker Company Worldwide and QualifiedCarrier.com. “Volume on the spot market has dramatically declined, but the contract market has held in there. “Our contract customers are still giving us the volume they were giving us before,” Tucker told JOC.com in an interview Monday. The spot market is an increasingly small part of the whole trucking market, where capacity is becoming abundant. The transportation capacity index of the Logistics Managers Index (LMI) rose 1.3 percentage points from September to October, hitting 73.1, an all-time high reading for the index. Any reading over 50 in the LMI indexes, such as the Purchasing Managers Index (PMI), shows growth. “Even during the freight recession of 2019, we did not observe capacity coming online this quickly,” the universities that maintain the LMI said in their report, released Tuesday . The capacity index turned from contraction to expansion in April, when it rose to 56.9 from 45.7 the previous month. It’s unclear whether the trend might reverse without a significant increase in holiday spending, the LMI report said. The LMI is produced monthly by researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP). More carriers on the books Even if more trucking firms are seeking to revoke their authority than are applying for new authority, there were still more motor carriers registered and active at the end of September than there were in January 2022 or December last year, according to both the Federal Motor Carrier Safety Administration (FMCSA) and QualifiedCarriers.com, Tucker’s risk management firm for shippers. Data from the FMCSA’s Analysis & Information website show the number of registered trucking firms, including one-truck owner-operators, rose 11.4 percent from last December through September, reaching 503,354 interstate freight carriers of all sizes. That’s a surprisingly strong increase, and the FMCSA number may include trucking companies that already have had their authorities “deactivated.” But an audit of that data by QualifiedCarriers.com, which counts only those carriers with active operating authority and proof of insurance on file at the FMCSA, shows there were 1,418 more active carriers in total on the books in September than at the start of 2022, according to Tucker. He puts the total number, based on data from FMCSA, at 361,816 active for-hire carriers. There were even more small carriers in the market, with 2,057 additional carriers running one to 100 trucks, according to Tucker. There were 28 fewer companies with over 2,500 trucks in September, likely carriers bought by other firms. “The focus on revocations is implicitly assuming this is a decline in capacity when it probably represents more of a shift in capacity,” Jason Miller, associate professor of logistics at Michigan State University, told JOC.com Friday. Miller noted another set of data inconsistent with the idea that trucking capacity is rapidly declining: Business application requests, which represent requests for employer identification numbers, for transportation and warehousing remain high per the Census Bureau's Business Formation Statistics program. “I think we are seeing more of a repeat of 2019, where we saw tons of ‘failures’ but also saw lots of new entries and reallocation of drivers across firms, which means capacity isn't actually exiting as rapidly as thought,” Miller said. Data suggests a shrinking spot market and a still-expanding contract market. However, not all that additional capacity may be going to contract truckload and less-than-truckload providers. “We’ve seen a structural shift in how freight moves,” Dean Croke, principal analyst at DAT Freight & Analytics, told JOC.com this week. “That by default fuels growth for the box truck delivery guy.” Croke believes some tractor-trailer drivers exiting the spot market may be taking new jobs not at large carriers but in different types of distribution operations. There are opportunities in dedicated trucking, energy, and other businesses that need drivers. “I know guys who were working drop trailer pools last year who are now making about $85,000 a year delivering parcels for Amazon,” Croke said. Contact William B. Cassidy at bill.cassidy@spglobal.com and follow him on Twitter: @willbcassidy .

Truck brokers

Truckload

US truck capacity shifting as spot rates drop

<div class="phx-topic abstract-wrapper">But the South Korean carrier said uncertainty over the timing of a return to Suez Canal transits and the impact of US tariffs on trans-Pacific trade flows was clouding its 2025 outlook.</div>

But the South Korean carrier said uncertainty over the timing of a return to Suez Canal transits and the impact of US tariffs on trans-Pacific trade flows was clouding its 2025 outlook.

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<div class="phx-topic">Longer voyages around southern Africa amid continued Red Sea diversions and an increase in China-US trade elevated rates and delivered a solid 2024 annual result for HMM, the South Korean carrier reported Tuesday. But growing uncertainty over a return to Red Sea transits and the impact of US import tariffs on global trade flows was also clouding the outlook for 2025, the carrier warned in its earnings statement. “Despite strong financial performance, uncertainties persist due to US tariffs, supply chain shifts and overcapacity, which may pressure freight rates,” HMM said. For now, HMM is enjoying its 2024 result, which even with a sequential softening of all financial metrics in the fourth quarter saw the carrier still report a robust performance in the last three months of the year. That helped drive annual revenue 39% higher year over year to $8.05 billion, with operating profit of $2.42 billion five times that of 2023. Net profit for the year tripled to $2.6 billion. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="c84bfba2-e97b-45c9-b83e-d067127acec9"></dynamic-object></div>HMM’s operating margin of 30% -- also referred to as earnings before interest, taxes, depreciation and amortization (EBITDA) -- compares to those of its peers with Maersk reporting a 24.6% margin, Hapag-Lloyd 24.2% and Ocean Network Express 31.2%. <h3>Growing China-Mexico demand </h3>HMM did not provide its annual volumes or average freight rates, but noted that a factor contributing to the trans-Pacific increase in throughput and revenue was the FLX route that was launched in mid-2024 and captured growing demand between China and Mexico. The carrier also expanded its fleet during the year, adding 12 ships of 13,000 TEUs to its trans-Pacific services. Ocean carriers are highlighting in their annual outlooks the financial impact of a potential return to Red Sea transits because it will have such a significant hit on balance sheets as capacity absorbed by the longer voyages is released. “There is a huge number of container ships on order that will be delivered this year, and if the Red Sea reopens, expect to see a very depressed market,” Stephen Fewster, global head of shipping finance at ING bank, told the Journal of Commerce Tuesday. While the enormous financial benefit created by the longer voyages around Africa propelled Maersk to its third-most-profitable year in 2024, the carrier noted in its forecast for 2025 that profitability <a href="https://www.joc.com/article/maersks-profitability-in-2025-hinges-on-return-to-red-sea-clerc-5939261">would depend on when the diversions around Africa ended</a>. A mid-year return to the Red Sea would cause a break-even result, but diversions that continued all year could lead to an EBIT of $3 billion for the carrier. Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, <a href="https://www.linkedin.com/posts/larsjensenvespuccimaritime_problems-abound-in-rotterdam-maersk-advises-activity-7295058921742897154-jhvd?utm_source=share&amp;utm_medium=member_ios&amp;rcm=ACoAAAEaE6wBxuCBA3GF9B8BLvf-lPuv3EJkHFE">said in a LinkedIn post Tuesday</a> that the situation in Gaza was too tenuous for carriers to do anything but keep contingency plans for a return to the Red Sea on the shelf for now. “...With the current turmoil related to the [potential] US involvement, as well as threats by Hamas not to release the next batch of hostages as agreed, [which would] break the ceasefire agreement, I would expect carriers to hang on to their contingency plans and await an implementation [of those plans] until we see how the situation shapes up,” Jensen said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Longer voyages around southern Africa amid continued Red Sea diversions and an increase in China-US trade elevated rates and delivered a solid 2024 annual result for HMM, the South Korean carrier reported Tuesday. But growing uncertainty over a return to Red Sea transits and the impact of US import tariffs on global trade flows was also clouding the outlook for 2025, the carrier warned in its earnings statement. “Despite strong financial performance, uncertainties persist due to US tariffs, supply chain shifts and overcapacity, which may pressure freight rates,” HMM said. For now, HMM is enjoying its 2024 result, which even with a sequential softening of all financial metrics in the fourth quarter saw the carrier still report a robust performance in the last three months of the year. That helped drive annual revenue 39% higher year over year to $8.05 billion, with operating profit of $2.42 billion five times that of 2023. Net profit for the year tripled to $2.6 billion. HMM’s operating margin of 30% -- also referred to as earnings before interest, taxes, depreciation and amortization (EBITDA) -- compares to those of its peers with Maersk reporting a 24.6% margin, Hapag-Lloyd 24.2% and Ocean Network Express 31.2%. Growing China-Mexico demand HMM did not provide its annual volumes or average freight rates, but noted that a factor contributing to the trans-Pacific increase in throughput and revenue was the FLX route that was launched in mid-2024 and captured growing demand between China and Mexico. The carrier also expanded its fleet during the year, adding 12 ships of 13,000 TEUs to its trans-Pacific services. Ocean carriers are highlighting in their annual outlooks the financial impact of a potential return to Red Sea transits because it will have such a significant hit on balance sheets as capacity absorbed by the longer voyages is released. “There is a huge number of container ships on order that will be delivered this year, and if the Red Sea reopens, expect to see a very depressed market,” Stephen Fewster, global head of shipping finance at ING bank, told the Journal of Commerce Tuesday. While the enormous financial benefit created by the longer voyages around Africa propelled Maersk to its third-most-profitable year in 2024, the carrier noted in its forecast for 2025 that profitability would depend on when the diversions around Africa ended . A mid-year return to the Red Sea would cause a break-even result, but diversions that continued all year could lead to an EBIT of $3 billion for the carrier. Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst, said in a LinkedIn post Tuesday that the situation in Gaza was too tenuous for carriers to do anything but keep contingency plans for a return to the Red Sea on the shelf for now. “...With the current turmoil related to the [potential] US involvement, as well as threats by Hamas not to release the next batch of hostages as agreed, [which would] break the ceasefire agreement, I would expect carriers to hang on to their contingency plans and await an implementation [of those plans] until we see how the situation shapes up,” Jensen said. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Container lines

Maritime

Red Sea diversions, trans-Pacific volume drive HMM to solid annual result

<div class="phx-topic abstract-wrapper">Donald Trump said he planned to announce that the US would impose a 25% tariff on all imports of steel and aluminum, both of which are key cargo types for the breakbulk sector.</div>

Donald Trump said he planned to announce that the US would impose a 25% tariff on all imports of steel and aluminum, both of which are key cargo types for the breakbulk sector.

<div class="phx-topic">On the heels of a growth year for US steel imports, ports and steel traders are bracing for President Donald Trump to sign an executive order imposing tariffs on any steel coming into the United States. Trump told reporters on Sunday that he planned to announce on Monday that the US would impose a 25% tariff on all imports of steel and aluminum, both of which are key cargo types for the breakbulk sector. One US shipping manager for an international steel trader told the Journal of Commerce that tariffs have introduced uncertainty for orders that are already lined up and material that’s in the process of being shipped. “Everything we have in place is based on agreed pricing. How this will impact those contracts is up in the air,” the manager said. A Journal of Commerce analysis of US steel import data from S&amp;P Global Market Intelligence reveals that US steel product imports, excluding scrap, were 21.5 million tons in 2024, up 6.7% over 2023. Almost a quarter, or 24%, of those imports came from Canada. Brazil was second with an 18% share and Mexico was third with 13%. The new tariffs will hit those countries the hardest. The US imported less than half a million tons of steel products from China in 2024. Canada and Mexico heavily rely on the US as a steel trading partner, according to the analysis. Canada exports 5.6 million tons of steel products worldwide, 94% of which goes to the US, while Mexico exports 1.5 million tons of steel worldwide, 98% of which goes to the US. <h3>Steel ports tracking tariffs </h3>Lisa Ashley, spokesperson for Port Houston, told the Journal of Commerce that tariff activity is being monitored by the port, where steel accounts for about three-fourths of annual breakbulk volumes. In 2024, the port’s multipurpose terminals handled 4.5 million short tons of steel — the second-highest steel volume in five years and the third-highest in the last decade, according to port data. “Port Houston continues to monitor changes in international trade tariffs and potential impacts on our region,” Ashley said in a statement. At the Port of New Orleans, where steel is the number one breakbulk commodity, steel volumes grew 2% in 2024 to 740,498 short tons, Janine Mansour, director of trade development, told the Journal of Commerce. “We expect similar volumes during 2025 given the stability in this market and countries of origin,” Mansour said. In response to a Journal of Commerce inquiry about the potential impact of tariffs, Mansour referred to a Feb. 3 statement from Cary Davis, president and CEO of the American Association of Port Authorities. “Tariffs are taxes. Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses and increase costs for hard-working citizens,” Davis said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="331752ec-628b-4cc4-9a25-3fb7b932621f"></dynamic-object></div>Ernest Bezdek, senior director of trade development for the Port of Beaumont, said it is unlikely tariffs will alter steel business at the port. “We have not heard anything from our shippers or importers that would indicate a change in their plans for future business at this time,” Bezdek said. In 2024, the port handled 31,000 tons of breakbulk iron and steel, much of which consisted of steel billets, coils and rods for a neighboring steel mill that imports from a facility in Brazil, Bezdek said. Breakbulk steel and iron account for less than 5% of the port’s cargo volumes, and Bezdek said those levels should remain the same. “There may be some impacts down the road, but for the time being we’re not really concerned,” he said. Tariffs have been a concern for the aluminum trade since Trump took office. In a Jan. 22 quarterly earnings call for US-based aluminum producer Alcoa, CEO William Oplinger said the Trump administration’s discussions on tariffs could significantly affect the flow of metal between countries. He pointed out that the US imports two-thirds of its primary aluminum from Canada. “If there were to be tariffs on Canadian aluminum imports to the US, this would represent a threat to US industrial competitiveness,” Oplinger said. “A 25% tariff on current Canadian export volume to the US could represent $1.5 billion to $2 billion of additional annual cost for US customers.” Contact Autumn Guisti at <a href="mailto:autumn@autumnguisti.com">autumn@autumnguisti.com</a>.</div>

On the heels of a growth year for US steel imports, ports and steel traders are bracing for President Donald Trump to sign an executive order imposing tariffs on any steel coming into the United States. Trump told reporters on Sunday that he planned to announce on Monday that the US would impose a 25% tariff on all imports of steel and aluminum, both of which are key cargo types for the breakbulk sector. One US shipping manager for an international steel trader told the Journal of Commerce that tariffs have introduced uncertainty for orders that are already lined up and material that’s in the process of being shipped. “Everything we have in place is based on agreed pricing. How this will impact those contracts is up in the air,” the manager said. A Journal of Commerce analysis of US steel import data from S&P Global Market Intelligence reveals that US steel product imports, excluding scrap, were 21.5 million tons in 2024, up 6.7% over 2023. Almost a quarter, or 24%, of those imports came from Canada. Brazil was second with an 18% share and Mexico was third with 13%. The new tariffs will hit those countries the hardest. The US imported less than half a million tons of steel products from China in 2024. Canada and Mexico heavily rely on the US as a steel trading partner, according to the analysis. Canada exports 5.6 million tons of steel products worldwide, 94% of which goes to the US, while Mexico exports 1.5 million tons of steel worldwide, 98% of which goes to the US. Steel ports tracking tariffs Lisa Ashley, spokesperson for Port Houston, told the Journal of Commerce that tariff activity is being monitored by the port, where steel accounts for about three-fourths of annual breakbulk volumes. In 2024, the port’s multipurpose terminals handled 4.5 million short tons of steel — the second-highest steel volume in five years and the third-highest in the last decade, according to port data. “Port Houston continues to monitor changes in international trade tariffs and potential impacts on our region,” Ashley said in a statement. At the Port of New Orleans, where steel is the number one breakbulk commodity, steel volumes grew 2% in 2024 to 740,498 short tons, Janine Mansour, director of trade development, told the Journal of Commerce. “We expect similar volumes during 2025 given the stability in this market and countries of origin,” Mansour said. In response to a Journal of Commerce inquiry about the potential impact of tariffs, Mansour referred to a Feb. 3 statement from Cary Davis, president and CEO of the American Association of Port Authorities. “Tariffs are taxes. Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses and increase costs for hard-working citizens,” Davis said. Ernest Bezdek, senior director of trade development for the Port of Beaumont, said it is unlikely tariffs will alter steel business at the port. “We have not heard anything from our shippers or importers that would indicate a change in their plans for future business at this time,” Bezdek said. In 2024, the port handled 31,000 tons of breakbulk iron and steel, much of which consisted of steel billets, coils and rods for a neighboring steel mill that imports from a facility in Brazil, Bezdek said. Breakbulk steel and iron account for less than 5% of the port’s cargo volumes, and Bezdek said those levels should remain the same. “There may be some impacts down the road, but for the time being we’re not really concerned,” he said. Tariffs have been a concern for the aluminum trade since Trump took office. In a Jan. 22 quarterly earnings call for US-based aluminum producer Alcoa, CEO William Oplinger said the Trump administration’s discussions on tariffs could significantly affect the flow of metal between countries. He pointed out that the US imports two-thirds of its primary aluminum from Canada. “If there were to be tariffs on Canadian aluminum imports to the US, this would represent a threat to US industrial competitiveness,” Oplinger said. “A 25% tariff on current Canadian export volume to the US could represent $1.5 billion to $2 billion of additional annual cost for US customers.” Contact Autumn Guisti at autumn@autumnguisti.com .

Breakbulk News

Heavy-haul transport

Project cargo

Transport, Trade and Regulation News

Tariffs introduce uncertainty amid growth in US steel imports

<div class="phx-topic abstract-wrapper">While trucking companies and intermodal carriers believe contract rates will rise this summer, shippers are skeptical given past predictions that have fallen by the wayside. </div>

While trucking companies and intermodal carriers believe contract rates will rise this summer, shippers are skeptical given past predictions that have fallen by the wayside.

<div class="phx-topic">US intermodal and truckload carriers believe shippers are making a final push for lower contract rates before the market shifts this summer, pointing to signals that the prolonged freight recession may soon end. However, some logistics firms and shippers remain skeptical that the end of the recession is imminent. Carriers over the past year have repeatedly forecast a market rebound, only to see those predictions fall flat. The most recent projection, made in November, failed to materialize, as shippers largely maintained their leverage in early negotiations for annual contracts now in effect for 2025. While both carriers and shippers agree that truck capacity is tighter than it was a year ago, the consensus ends there. Werner Enterprises CEO Derek Leathers said that while there may be debate about the precise timing, market conditions are shifting. He pointed to rising tender rejection rates — shipments that carriers decline to haul — as a signal that capacity and demand are becoming more balanced. “It’s starting to sink in that it is a different day at a new moment,” Leathers said on Werner’s Feb. 6 earnings call. Nevertheless, several truckload shippers have told the Journal of Commerce they were able to lock in flat rates in their 2025 contracts and are not experiencing any noticeable uptick in tender rejections. <h3>No crystal ball </h3>Economists at Breakthrough, a firm that helps shippers calculate fuel surcharges, last summer predicted a mid-2025 inflection in trucking and rail markets — a forecast that may prove to be the most accurate yet. Nevertheless, carriers and brokers continue to speculate on the timing of a market shift. Michael Castagnetto, president of North American surface transportation at C.H. Robinson Worldwide, said uncertainty remains high because previous forecasts of the end of the freight recession have proven inaccurate. “[No one] can give you a crystal ball of what we think is going to happen in 2025,” he said on a Jan. 29 earnings call. “Everybody in our industry has been trying to predict that for the last 36 months and it keeps extending.” When pricing power does return to carriers, industry executives say it may resemble pre-pandemic trends, with less volatility and fewer extreme rate swings. Knight-Swift Transportation CEO Adam Miller said that early bidding activity suggests customers recognize that rates are trending upward, although the increase is likely to be gradual. “It’s not going to be a large inflection,” Miller said on a company earnings call last month. “It will be just a kind of a grind or just a slow progression.” <h3>Intermodal carriers’ pricing strategy </h3>Intermodal rates have historically lagged trucking rates, so a rebound in the truckload market must come first, which would cause shippers to seek cheaper rail options. Several asset-based and non-asset intermodal marketing companies (IMCs) expressed disappointment with the initial round of bids for this year, acknowledging they did not secure the rate increases they had sought for annual contracts beginning in 2025. Multiple intermodal providers told the Journal of Commerce that while their bids were competitive throughout the process, they often lost at the last minute to aggressive pricing from J.B. Hunt Transport Services and Hub Group. Phil Yeager, chief executive of Hub Group, said maintaining existing relationships with shippers is a priority before seeking rate increases. “It’s far better to have the volume and the ability to start to raise rates as an incumbent providing good service levels,” he said on a Feb. 6 earnings call. Schneider National, in contrast, has prioritized pricing discipline, resulting in slightly slower volume growth compared with J.B. Hunt and Hub Group in the fourth quarter. However, Schneider was the only one of the three to grow intermodal revenue year over year during the period. “As we went through the quarter, there was obviously a lot of demand out of our headhaul markets [such as Los Angeles], and we remain disciplined,” Jim Filter, Schneider’s group president of transportation and logistics, said on an earnings call last month. “Absolutely, our objective is to grow this business … but we’re not going to grow just to grow.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

US intermodal and truckload carriers believe shippers are making a final push for lower contract rates before the market shifts this summer, pointing to signals that the prolonged freight recession may soon end. However, some logistics firms and shippers remain skeptical that the end of the recession is imminent. Carriers over the past year have repeatedly forecast a market rebound, only to see those predictions fall flat. The most recent projection, made in November, failed to materialize, as shippers largely maintained their leverage in early negotiations for annual contracts now in effect for 2025. While both carriers and shippers agree that truck capacity is tighter than it was a year ago, the consensus ends there. Werner Enterprises CEO Derek Leathers said that while there may be debate about the precise timing, market conditions are shifting. He pointed to rising tender rejection rates — shipments that carriers decline to haul — as a signal that capacity and demand are becoming more balanced. “It’s starting to sink in that it is a different day at a new moment,” Leathers said on Werner’s Feb. 6 earnings call. Nevertheless, several truckload shippers have told the Journal of Commerce they were able to lock in flat rates in their 2025 contracts and are not experiencing any noticeable uptick in tender rejections. No crystal ball Economists at Breakthrough, a firm that helps shippers calculate fuel surcharges, last summer predicted a mid-2025 inflection in trucking and rail markets — a forecast that may prove to be the most accurate yet. Nevertheless, carriers and brokers continue to speculate on the timing of a market shift. Michael Castagnetto, president of North American surface transportation at C.H. Robinson Worldwide, said uncertainty remains high because previous forecasts of the end of the freight recession have proven inaccurate. “[No one] can give you a crystal ball of what we think is going to happen in 2025,” he said on a Jan. 29 earnings call. “Everybody in our industry has been trying to predict that for the last 36 months and it keeps extending.” When pricing power does return to carriers, industry executives say it may resemble pre-pandemic trends, with less volatility and fewer extreme rate swings. Knight-Swift Transportation CEO Adam Miller said that early bidding activity suggests customers recognize that rates are trending upward, although the increase is likely to be gradual. “It’s not going to be a large inflection,” Miller said on a company earnings call last month. “It will be just a kind of a grind or just a slow progression.” Intermodal carriers’ pricing strategy Intermodal rates have historically lagged trucking rates, so a rebound in the truckload market must come first, which would cause shippers to seek cheaper rail options. Several asset-based and non-asset intermodal marketing companies (IMCs) expressed disappointment with the initial round of bids for this year, acknowledging they did not secure the rate increases they had sought for annual contracts beginning in 2025. Multiple intermodal providers told the Journal of Commerce that while their bids were competitive throughout the process, they often lost at the last minute to aggressive pricing from J.B. Hunt Transport Services and Hub Group. Phil Yeager, chief executive of Hub Group, said maintaining existing relationships with shippers is a priority before seeking rate increases. “It’s far better to have the volume and the ability to start to raise rates as an incumbent providing good service levels,” he said on a Feb. 6 earnings call. Schneider National, in contrast, has prioritized pricing discipline, resulting in slightly slower volume growth compared with J.B. Hunt and Hub Group in the fourth quarter. However, Schneider was the only one of the three to grow intermodal revenue year over year during the period. “As we went through the quarter, there was obviously a lot of demand out of our headhaul markets [such as Los Angeles], and we remain disciplined,” Jim Filter, Schneider’s group president of transportation and logistics, said on an earnings call last month. “Absolutely, our objective is to grow this business … but we’re not going to grow just to grow.” Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

Stakeholders still in wait-and-see mode on US freight market turn

<div class="phx-topic abstract-wrapper">But with a large drop in imports forecast for the second half of February, terminal operators say they will get dwell times and cargo fluidity back to normal by the end of the month.</div>

But with a large drop in imports forecast for the second half of February, terminal operators say they will get dwell times and cargo fluidity back to normal by the end of the month.

<div class="phx-topic">Rail container dwell times at the ports of Los Angeles and Long Beach remained elevated in January amid an especially strong month in the eastbound trans-Pacific due to a spike in pre-Lunar New Year import volumes and frontloading <a href="https://www.joc.com/article/import-upgrade-from-us-retailers-comes-despite-trump-tariff-uncertainty-5940056">ahead of new US tariffs</a>. “We got behind [because of] heavy volume,” said Anthony Otto, president of Long Beach Container Terminal (LBCT). Rail container dwell times at LBCT last month increased to about five days from approximately three days in December, Otto said. According to Infor Nexus, which analyzes supply chain connectivity, the average rail container dwell time at the Port of Long Beach in January was 8.6 days, up from 8.29 days in December. Still, rail container dwells vary from terminal to terminal in the same port complex based on the volume of inland point intermodal (IPI) volume handled at each terminal and <a href="https://www.joc.com/article/la-lb-rail-dwells-show-improvement-but-import-bump-could-reverse-gains-5909628">the size and efficiency of the on-dock rail yard at each facility</a>. SSA Marine, which operates three container terminals in Long Beach, said January was a good month for them. “Rail is fine — a three-day dwell,” said Sal Ferrigno, vice president at SSA Marine. Yusen Terminals in Los Angeles last month was able to reduce the container backlog that had built up during especially strong cargo volumes in the fourth quarter, said Alan McCorkle, Yusen’s president. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="fcc9fbdd-4ba0-4540-ad21-bde43eab6d4e"></dynamic-object></div>The Port of Los Angeles last week reported that its average rail container dwell was 6.8 days. The elevated dwells came amid heavy import volumes landing in Southern California. We’re looking at the strongest January in the port’s history,” Noel Hacegaba, COO at the Port of Long Beach, told the Journal of Commerce. Hacegaba estimated that container volumes in Long Beach in January were about 13% higher than December. But further proving that measurements of rail container dwells vary by source, Hacegaba said dwells in Long Beach actually improved in January to about four days from 4.64 days in December. Prior to January, the largest US port complex had been steadily reducing rail container dwell times from the summer peak shipping season, according to data from the Pacific Merchant Shipping Association (PMSA). Average dwells at LA-LB’s 12 container terminals peaked at 9.86 days in October and then declined to 7.67 days in November and 6.53 days in December. PMSA, which represents terminal operators and shipping lines on the West Coast, has not yet released its January dwell times. <h3>Imports to fall in late February </h3>With a large drop in imports forecast for the second half of February after factories in Asia were closed for two weeks during the Lunar New Year holiday, terminal operators say they will get dwell times and cargo fluidity back to normal by the end of the month. “Long Beach marine terminals continue to reduce their container backlogs because utilization of their on-dock rail yards has been improving steadily,” Hacegaba said. Long Beach’s current utilization of its on-dock rail capacity is 25%, up from 23% in the previous two years and 17% during the COVID-19 pandemic. “The more intermodal we handle on dock, the more capacity we have for local cargo,” Hacegaba said. According to Port of Los Angeles forecasting tool Signal, February imports will peak this week at 143,271 TEUs, before falling to 87,213 TEUs in the week of Feb. 16. Despite the frontloading of merchandise over the past few months, US retailers <a href="https://www.joc.com/article/import-upgrade-from-us-retailers-comes-despite-trump-tariff-uncertainty-5940056">are still bullish on imports for the next few months</a>. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Rail container dwell times at the ports of Los Angeles and Long Beach remained elevated in January amid an especially strong month in the eastbound trans-Pacific due to a spike in pre-Lunar New Year import volumes and frontloading ahead of new US tariffs . “We got behind [because of] heavy volume,” said Anthony Otto, president of Long Beach Container Terminal (LBCT). Rail container dwell times at LBCT last month increased to about five days from approximately three days in December, Otto said. According to Infor Nexus, which analyzes supply chain connectivity, the average rail container dwell time at the Port of Long Beach in January was 8.6 days, up from 8.29 days in December. Still, rail container dwells vary from terminal to terminal in the same port complex based on the volume of inland point intermodal (IPI) volume handled at each terminal and the size and efficiency of the on-dock rail yard at each facility . SSA Marine, which operates three container terminals in Long Beach, said January was a good month for them. “Rail is fine — a three-day dwell,” said Sal Ferrigno, vice president at SSA Marine. Yusen Terminals in Los Angeles last month was able to reduce the container backlog that had built up during especially strong cargo volumes in the fourth quarter, said Alan McCorkle, Yusen’s president. The Port of Los Angeles last week reported that its average rail container dwell was 6.8 days. The elevated dwells came amid heavy import volumes landing in Southern California. We’re looking at the strongest January in the port’s history,” Noel Hacegaba, COO at the Port of Long Beach, told the Journal of Commerce. Hacegaba estimated that container volumes in Long Beach in January were about 13% higher than December. But further proving that measurements of rail container dwells vary by source, Hacegaba said dwells in Long Beach actually improved in January to about four days from 4.64 days in December. Prior to January, the largest US port complex had been steadily reducing rail container dwell times from the summer peak shipping season, according to data from the Pacific Merchant Shipping Association (PMSA). Average dwells at LA-LB’s 12 container terminals peaked at 9.86 days in October and then declined to 7.67 days in November and 6.53 days in December. PMSA, which represents terminal operators and shipping lines on the West Coast, has not yet released its January dwell times. Imports to fall in late February With a large drop in imports forecast for the second half of February after factories in Asia were closed for two weeks during the Lunar New Year holiday, terminal operators say they will get dwell times and cargo fluidity back to normal by the end of the month. “Long Beach marine terminals continue to reduce their container backlogs because utilization of their on-dock rail yards has been improving steadily,” Hacegaba said. Long Beach’s current utilization of its on-dock rail capacity is 25%, up from 23% in the previous two years and 17% during the COVID-19 pandemic. “The more intermodal we handle on dock, the more capacity we have for local cargo,” Hacegaba said. According to Port of Los Angeles forecasting tool Signal, February imports will peak this week at 143,271 TEUs, before falling to 87,213 TEUs in the week of Feb. 16. Despite the frontloading of merchandise over the past few months, US retailers are still bullish on imports for the next few months . Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port News

North American ports

January cargo spike kept Los Angeles-Long Beach rail dwells largely elevated

<div class="phx-topic abstract-wrapper">But Hackett Associates founder Ben Hackett said US port cargo “could be badly hit” if tariffs on Asian and European countries increase prices and prompt US consumers to buy less.</div>

But Hackett Associates founder Ben Hackett said US port cargo “could be badly hit” if tariffs on Asian and European countries increase prices and prompt US consumers to buy less.

<div class="phx-topic">US retailers Friday indicated they remain bullish about cargo volumes arriving at US ports for the next several months despite new tariffs on China and the threat of tariffs on Canada and Mexico, upgrading their forecast for imports through April. The latest Global Port Tracker (GPT), published monthly by Hackett Associates and the National Retail Federation (NRF), expects imports for February to record a marginal gain of just 0.2% from a year ago, but that’s an upgrade from the 4.5% decline forecast in the January GPT. Likewise, the February GPT forecasts an 11.1% increase in US imports for March, up from a projected 10.6% increase in the previous report. For April, the GPT now expects year-over-year volume growth of 8.2%, up slightly from January expectations of 8%. The import forecast for May saw a slight downward revision, with expectations now for 5.4% growth year over year versus the prior forecast of 5.9%. “Retailers have engaged in mitigation strategies to minimize the potential impact of tariffs, including frontloading of some products, but that can lead to increased challenges because of added warehousing and related costs,” Jonathan Gold, vice president for supply chain and customs policy at the NRF, said in a statement accompanying the February GPT. While January data is still being finalized, the NRF said it expects that US ports handled 2.11 million TEUs in imports, up 7.8% from January 2024 but down from expectations of a 10% bump. Meanwhile, retailers said the preliminary 2.14 million TEUs in imports handled by US ports in December would be a 14.4% year-over-year increase and the busiest December ever. <h3>Watching US tariffs </h3>Hackett Associates founder Ben Hackett said port cargo “could be badly hit” if tariffs on Asian and European countries increase prices and prompt US consumers to buy less. In addition to the 10% tariffs on China that went into effect this week, President Donald Trump announced 25% tariffs on imports from Mexico and Canada, then promptly suspended them for 30 days. Hackett said any North American tariffs would “initially have <a href="https://www.joc.com/article/north-american-intermodal-would-escape-tariffs-largely-unscathed-analyst-5939915">minimal impact</a> at ports” because most imports from Canada and Mexico enter the US via truck, rail or pipeline. “At this stage, the situation is fluid, and it’s too early to know if the tariffs will be implemented, removed or further delayed,” he said. “As such, our view of North American imports has not changed significantly for the next six months.” The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US retailers Friday indicated they remain bullish about cargo volumes arriving at US ports for the next several months despite new tariffs on China and the threat of tariffs on Canada and Mexico, upgrading their forecast for imports through April. The latest Global Port Tracker (GPT), published monthly by Hackett Associates and the National Retail Federation (NRF), expects imports for February to record a marginal gain of just 0.2% from a year ago, but that’s an upgrade from the 4.5% decline forecast in the January GPT. Likewise, the February GPT forecasts an 11.1% increase in US imports for March, up from a projected 10.6% increase in the previous report. For April, the GPT now expects year-over-year volume growth of 8.2%, up slightly from January expectations of 8%. The import forecast for May saw a slight downward revision, with expectations now for 5.4% growth year over year versus the prior forecast of 5.9%. “Retailers have engaged in mitigation strategies to minimize the potential impact of tariffs, including frontloading of some products, but that can lead to increased challenges because of added warehousing and related costs,” Jonathan Gold, vice president for supply chain and customs policy at the NRF, said in a statement accompanying the February GPT. While January data is still being finalized, the NRF said it expects that US ports handled 2.11 million TEUs in imports, up 7.8% from January 2024 but down from expectations of a 10% bump. Meanwhile, retailers said the preliminary 2.14 million TEUs in imports handled by US ports in December would be a 14.4% year-over-year increase and the busiest December ever. Watching US tariffs Hackett Associates founder Ben Hackett said port cargo “could be badly hit” if tariffs on Asian and European countries increase prices and prompt US consumers to buy less. In addition to the 10% tariffs on China that went into effect this week, President Donald Trump announced 25% tariffs on imports from Mexico and Canada, then promptly suspended them for 30 days. Hackett said any North American tariffs would “initially have minimal impact at ports” because most imports from Canada and Mexico enter the US via truck, rail or pipeline. “At this stage, the situation is fluid, and it’s too early to know if the tariffs will be implemented, removed or further delayed,” he said. “As such, our view of North American imports has not changed significantly for the next six months.” The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at laura.robb@spglobal.com . 

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Trans-Pacific

Import upgrade from US retailers comes despite Trump tariff uncertainty

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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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