<div class="phx-topic abstract-wrapper">Bulk carrier Scorpio and specialized oil and gas heavy load carrier OHT shift toward the offshore wind industry as the sector is poised to expand by 270 percent. 
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Bulk carrier Scorpio and specialized oil and gas heavy load carrier OHT shift toward the offshore wind industry as the sector is poised to expand by 270 percent.

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<div>An expected surge in offshore wind turbine installations has led two carriers to sign agreements worth a potential $2.3 billion for the construction of up to eight turbine installation vessels.New York-listed Scorpio Bulkers and Norway’s Offshore Heavy Transport (OHT) said in recent days they saw an increasing number of opportunities in the offshore wind sector.David Morant, managing director of Scorpio Bulkers, said during an analysts' conference call Tuesday that offshore wind turbine installations are expected to surge 270 percent over the next 10 years, from 2,733 in 2020 to 26,901 in 2030. Average output from each turbine will nearly double...

An expected surge in offshore wind turbine installations has led two carriers to sign agreements worth a potential $2.3 billion for the construction of up to eight turbine installation vessels. New York-listed Scorpio Bulkers and Norway’s Offshore Heavy Transport (OHT) said in recent days they saw an increasing number of opportunities in the offshore wind sector. David Morant, managing director of Scorpio Bulkers, said during an analysts' conference call Tuesday that offshore wind turbine installations are expected to surge 270 percent over the next 10 years, from 2,733 in 2020 to 26,901 in 2030. Average output from each turbine will nearly double in that timespan, from 7.2 MW to 13.6 MW, requiring larger and more sophisticated vessels to transport blades, pylons, and associated equipment, Morant said. Ships will also be kept busy maintaining and repowering existing wind farms with more efficient equipment. The wind energy sector is “insulated from economic cycles with projects in Europe but with growth opportunities in America, Asia, and the rest of the world,” Morant said. Scorpio Bulkers has signed a letter of intent with South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering for a GustoMSC NG-16000X design wind turbine installation vessel. The deal includes options for three sister ships, which will be confirmed depending on market conditions, Scorpio executives said. The first vessel, due for delivery in 2023, will cost between $265 million and $290 million depending on final design and equipment specifications. Scorpio Bulkers chairman and chief executive Emanuele Lauro told analysts that Scorpio began looking at the renewable energy sector about two years ago and focused on offshore wind 12 to 15 months ago, talking to customers, designers, end-users, and shipyards. But it’s only been in the last two weeks that the company decided to invest in new ships. The technical aspects of the first vessel will be finalized over the next five to 10 weeks and a shipbuilding contract will be signed in the early part of the fourth quarter, he said. This will be the beginning of Scorpio’s transition into the renewables sector, he said. “Wind energy is a multi-year growth story. Wind power is a cost-effective method of clean energy. We think it’s the right opportunity at the right time,” Lauro said during the conference call. Current charter rates are about $220,000 per day for similar ships, Morant said, and he expects rates to increase on a shortage of high-specification wind turbine installation vessels in 2023 and 2024. Shipbroker Clarksons Platou Renewables said there are five vessels currently in service to install turbines larger than 10 MW and says a further 10 vessels will be needed to meet demand by 2024. The initial Scorpio vessel will be able to install wind turbines over 185 meters (607 feet) above sea level and in water depths of more than 65 meters (213 feet), the largest turbines currently designed. Shift from oil, gas Just days before Scorpio's announcement, semi-submersible carrier Offshore Heavy Transport signaled a similar shift, signing a deal for two wind turbine generator installation vessels that also will be built to a GustoMSC design. Offshore wind projects are augmenting OHT’s traditional heavy lift and project cargo business, mainly in the oil and gas sector, that uses a fleet of five open-deck semi-submersible heavy-load vessels, according to a company statement. Offshore wind, with its increasingly long and heavy components, will be a cornerstone of the global transition to sustainable energy; OHT said it intends to be a leader in heavy transport and installation. “In doing so, we are responding to client concerns about the lack of capable vessel capacity in the booming offshore wind market,” OHT CEO Torgeir Ramstad said, echoing Morant's comments about a likely shortage of high-specification vessels. The OHT ships, to be constructed by Chinese shipbuilder China Merchants Heavy Industry, will be equipped with a 2,500-ton capacity crane capable of installing turbines in water up to 65 meters (213 feet) deep, OHT said. The first vessel is to be delivered in 2023, with the arrival of the second to be agreed on. The agreement includes options for two additional vessels. China Merchants Heavy Industry is already constructing another specialized vessel, the Alfa Lift, for OHT that in 2022 will begin transporting and installing monopile foundations for the Dogger Bank wind farm. Dogger Bank, more than 80 miles off the coast of northeast England, is a joint venture by Scottish energy company SSE and Equinor, according to Power Technology. The wind farm will use GE's 12-megawatt, 260-meter (850 feet) tall Haliade-X turbines, which have turbine blades 107 meters (351 feet) long, according to GE. OHT's move away from oil and gas into offshore wind projects came after the company saw an increasing number of opportunities in the segment, including Scotland’s Moray East project, for which OHT is transporting 48 jacket foundations from the United Arab Emirates, the company said. OHT delivered a consignment of nine wind turbines and one offshore substation jacket on its 64,900 deadweight-ton (dwt) open-deck semi-submersible heavy lift vessel Hawk in mid-July. A total of 103 jackets will be installed in the Moray Firth to provide foundations for 100 offshore wind turbine generators and three offshore substation platforms, OHT said. Three undersea cables will connect the substations to shore, where electricity generated by the turbines will augment Britain’s national power network, OHT said. Contact special correspondent Keith Wallis at keith.wallis@hotmail.com .

Breakbulk carriers

Energy projects

Heavy load, bulk carriers pivot to offshore wind amid expected growth

<div class="phx-topic abstract-wrapper">The head of the Agriculture Transportation Coalition told TPM25 that US exports of logs, fruits, nuts, soybeans and other agricultural products appear to be slowing due to China’s tariff countermeasures.</div>

The head of the Agriculture Transportation Coalition told TPM25 that US exports of logs, fruits, nuts, soybeans and other agricultural products appear to be slowing due to China’s tariff countermeasures.

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<div class="phx-topic">Long Beach, California — Ocean carriers and US shippers are preparing themselves for the Trump administration’s reciprocal measures against China’s shipping industry, even as the details of those measures remain to be worked out. A leading lobbyist for US shippers says the escalating trade war is already hurting US exporters, who may be the one voice in Washington that can temper Trump’s moves. Several shippers told the Journal of Commerce that during meetings they held at TPM25 to discuss new ocean freight contracts, they discussed <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">the US Trade Representative’s (USTR’s) proposed $1 million fee on US port calls by Chinese ocean carriers</a>, as well as similar fees on other ocean carriers with ships on order from China. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div> The USTR has scheduled a March 24 public hearing on the fees. While the actual regulation still needs to be worked out, ocean carriers are readying a variety of responses, the shippers said. Those include spinoffs of their China-built ships into separate fleets that serve intra-Asia and European markets. Non-Chinese carriers are also floating surcharges to cover the port fees or asking for premium rates due to their lack of exposure to China-built ships. The risk of surcharges and the potential for reduced port calls due to the port fees will impact a broad swath of US shippers, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said Wednesday at TPM25. However, the political will to halt those fees, as well the onslaught of Trump’s other actions that will affect shippers, is lacking, he added. While trade groups such as AgTC consistently voice concerns about how Trump’s actions affect shippers, Friedmann questioned the usefulness of those actions, saying that members of Congress “are not going to feel sorry for Walmart or Amazon.” However, he said appeals by individual constituents appear to be carrying more political weight. “When you’ve got a family pistachio grower, a congressman will drop everything on his schedule to drive 40 miles out to their orchard,” Friedmann said. Those types of appeals may be having some influence, he added, as some Republican lawmakers have started pushing back on Trump’s moves due to their impact on US farmers. China’s counter-tariffs on US imports appear to be already having an effect, Friedmann said, citing a log exporter that halted shipping several containers from the Pacific Northwest to China because of higher costs. He said exports of fruits, nuts, soybeans and other agricultural products also appear to be slowing due to China’s countermeasures. Even more troubling, China explicitly banned US soybean exports from three major traders — Louis Dreyfus, CHS and Export Trading Group, a joint venture of Bunge, South Korea’s Pan Ocean and US farmer cooperative Agtegra. While China used the pretext of sanitary issues with the exports, Friedmann said the move suggests a long-term decoupling from the US as China sources from other countries. “We don’t grow anything in the US that can’t be sourced from other countries,” he said. <h3>Dockworkers exposed </h3>Along with US farmers and small businesses sharing their stories of pain due to Trump’s moves, Friedmann said dockworkers are very exposed to Trump’s actions to reduce trade. While it was ironworker and shipbuilder unions that pushed the port fees, Friedmann said that longshore unions are well-placed to lobby against further trade measures. “Everybody in the trade community has got to convince the [longshore unions] that, regardless [of] what these other unions say, you need to protect your own jobs,” he said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Long Beach, California — Ocean carriers and US shippers are preparing themselves for the Trump administration’s reciprocal measures against China’s shipping industry, even as the details of those measures remain to be worked out. A leading lobbyist for US shippers says the escalating trade war is already hurting US exporters, who may be the one voice in Washington that can temper Trump’s moves. Several shippers told the Journal of Commerce that during meetings they held at TPM25 to discuss new ocean freight contracts, they discussed the US Trade Representative’s (USTR’s) proposed $1 million fee on US port calls by Chinese ocean carriers , as well as similar fees on other ocean carriers with ships on order from China. The USTR has scheduled a March 24 public hearing on the fees. While the actual regulation still needs to be worked out, ocean carriers are readying a variety of responses, the shippers said. Those include spinoffs of their China-built ships into separate fleets that serve intra-Asia and European markets. Non-Chinese carriers are also floating surcharges to cover the port fees or asking for premium rates due to their lack of exposure to China-built ships. The risk of surcharges and the potential for reduced port calls due to the port fees will impact a broad swath of US shippers, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said Wednesday at TPM25. However, the political will to halt those fees, as well the onslaught of Trump’s other actions that will affect shippers, is lacking, he added. While trade groups such as AgTC consistently voice concerns about how Trump’s actions affect shippers, Friedmann questioned the usefulness of those actions, saying that members of Congress “are not going to feel sorry for Walmart or Amazon.” However, he said appeals by individual constituents appear to be carrying more political weight. “When you’ve got a family pistachio grower, a congressman will drop everything on his schedule to drive 40 miles out to their orchard,” Friedmann said. Those types of appeals may be having some influence, he added, as some Republican lawmakers have started pushing back on Trump’s moves due to their impact on US farmers. China’s counter-tariffs on US imports appear to be already having an effect, Friedmann said, citing a log exporter that halted shipping several containers from the Pacific Northwest to China because of higher costs. He said exports of fruits, nuts, soybeans and other agricultural products also appear to be slowing due to China’s countermeasures. Even more troubling, China explicitly banned US soybean exports from three major traders — Louis Dreyfus, CHS and Export Trading Group, a joint venture of Bunge, South Korea’s Pan Ocean and US farmer cooperative Agtegra. While China used the pretext of sanitary issues with the exports, Friedmann said the move suggests a long-term decoupling from the US as China sources from other countries. “We don’t grow anything in the US that can’t be sourced from other countries,” he said. Dockworkers exposed Along with US farmers and small businesses sharing their stories of pain due to Trump’s moves, Friedmann said dockworkers are very exposed to Trump’s actions to reduce trade. While it was ironworker and shipbuilder unions that pushed the port fees, Friedmann said that longshore unions are well-placed to lobby against further trade measures. “Everybody in the trade community has got to convince the [longshore unions] that, regardless [of] what these other unions say, you need to protect your own jobs,” he said. Contact Michael Angell at michael.angell@spglobal.com .

Container Shipping News

Maritime

Supply chain

TPM25: US exporters starting to feel pinch of Trump trade war with China

<div class="phx-topic abstract-wrapper">The new service that will start in April will enhance Vietnam’s connectivity with Brazil, which is already Vietnam’s largest trading partner in Latin America. </div>

The new service that will start in April will enhance Vietnam’s connectivity with Brazil, which is already Vietnam’s largest trading partner in Latin America.

<div class="phx-topic">CMA CGM and Maersk will become the latest carriers to launch a joint Asia-East Coast South America (ECSA) service with a semi-express loop that is specifically targeting the significant trade growth between Brazil and Vietnam. The move follows a tie-up between HMM and Ocean Network Express (ONE) that will see the two carriers begin an express service linking Busan and South China with Brazil. Both the CMA CGM/Maersk and HMM/ONE connections will begin in April, just as container freight rates are anticipated to rise, according to one Brazilian-based freight forwarder. “Demand is stable and freight rates on Asia-ECSA are around $2,100 per FEU, at least until the middle of March,” Fabrizio De Paulis, managing director of forwarder De Paulis Logistics &amp; SCM, told the Journal of Commerce. “Rates will likely increase in April on improved demand,” he added. De Paulis pointed out rates have seen a steep decline since hitting about $8,000/FEU last July. CMA CGM said its Asia-South America East Coast 3 (SEAS3) service — known as the ASAS2 for Maersk — will provide a “unique service from Vietnam” while also streamlining shipments between Asia and Brazil with the limited number of port calls improving transit times. This is the first time CMA CGM and Maersk have teamed up on an Asia-ECSA service. Their separate existing services involve multiple ports calls in Asia and South America, including Argentina and Uruguay. Maersk said there will be a 37-day transit from Shanghai to Santos, 33 days from Shekou (Shenzhen) to Santos, and 29 days from Vung Tau to Santos, Latin America’s largest port. CMA CGM is providing seven vessels with a nominal capacity of 6,500 TEUs, while Maersk is deploying four ships on the service. The full rotation is Shanghai-Shekou-Vung Tau-Singapore-Santos-Singapore-Shanghai. <h3>Boost for Vietnam-Brazil connectivity </h3>Both CMA CGM and Maersk said the Vung Tau call will enhance Vietnam’s connectivity with Brazil, which is already Vietnam’s largest trading partner in Latin America. That comes as bilateral trade between the two countries is set to top $10 billion this year and $15 billion by 2030, up from about $8 billion last year, according to comments made last November by Vietnam Prime Minister Pham Minh Chinh. Vietnam’s exports to Brazil include seafood, rubber, textiles and footwear, while Brazil’s exports to Vietnam comprise soybeans, animal feed and cotton. CMA CGM said the calls at Vung Tau and Singapore will provide opportunities for transshipment cargo from other countries in Southeast Asia, including Thailand. The loop will be the first new service to call at the Santos Brasil Tecon Terminal since CMA CGM last September said it would acquire a 48% stake in Santos Brasil, the country’s leading terminal operator. The new service will provide shippers in Latin America and the Caribbean with additional options for Asia-bound cargo, with Santos acting as CMA CGM’s regional hub connecting other countries in the region. ONE and HMM will start their joint Asia-ECSA service in April from Busan, also with limited port calls to enhance transit times. The rotation is Busan–South China–Singapore–Rio Grande–Santos–Santa Catarina–Singapore–Hong Kong–Busan. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

CMA CGM and Maersk will become the latest carriers to launch a joint Asia-East Coast South America (ECSA) service with a semi-express loop that is specifically targeting the significant trade growth between Brazil and Vietnam. The move follows a tie-up between HMM and Ocean Network Express (ONE) that will see the two carriers begin an express service linking Busan and South China with Brazil. Both the CMA CGM/Maersk and HMM/ONE connections will begin in April, just as container freight rates are anticipated to rise, according to one Brazilian-based freight forwarder. “Demand is stable and freight rates on Asia-ECSA are around $2,100 per FEU, at least until the middle of March,” Fabrizio De Paulis, managing director of forwarder De Paulis Logistics & SCM, told the Journal of Commerce. “Rates will likely increase in April on improved demand,” he added. De Paulis pointed out rates have seen a steep decline since hitting about $8,000/FEU last July. CMA CGM said its Asia-South America East Coast 3 (SEAS3) service — known as the ASAS2 for Maersk — will provide a “unique service from Vietnam” while also streamlining shipments between Asia and Brazil with the limited number of port calls improving transit times. This is the first time CMA CGM and Maersk have teamed up on an Asia-ECSA service. Their separate existing services involve multiple ports calls in Asia and South America, including Argentina and Uruguay. Maersk said there will be a 37-day transit from Shanghai to Santos, 33 days from Shekou (Shenzhen) to Santos, and 29 days from Vung Tau to Santos, Latin America’s largest port. CMA CGM is providing seven vessels with a nominal capacity of 6,500 TEUs, while Maersk is deploying four ships on the service. The full rotation is Shanghai-Shekou-Vung Tau-Singapore-Santos-Singapore-Shanghai. Boost for Vietnam-Brazil connectivity Both CMA CGM and Maersk said the Vung Tau call will enhance Vietnam’s connectivity with Brazil, which is already Vietnam’s largest trading partner in Latin America. That comes as bilateral trade between the two countries is set to top $10 billion this year and $15 billion by 2030, up from about $8 billion last year, according to comments made last November by Vietnam Prime Minister Pham Minh Chinh. Vietnam’s exports to Brazil include seafood, rubber, textiles and footwear, while Brazil’s exports to Vietnam comprise soybeans, animal feed and cotton. CMA CGM said the calls at Vung Tau and Singapore will provide opportunities for transshipment cargo from other countries in Southeast Asia, including Thailand. The loop will be the first new service to call at the Santos Brasil Tecon Terminal since CMA CGM last September said it would acquire a 48% stake in Santos Brasil, the country’s leading terminal operator. The new service will provide shippers in Latin America and the Caribbean with additional options for Asia-bound cargo, with Santos acting as CMA CGM’s regional hub connecting other countries in the region. ONE and HMM will start their joint Asia-ECSA service in April from Busan, also with limited port calls to enhance transit times. The rotation is Busan–South China–Singapore–Rio Grande–Santos–Santa Catarina–Singapore–Hong Kong–Busan. Contact Keith Wallis at keithwallis@hotmail.com .

Container lines

CMA CGM, Maersk become latest to launch joint express Asia-ECSA service

<div class="phx-topic abstract-wrapper">The bleak timeline from Europe’s busiest port is based on the chaos that resulted when the Ever Given was freed after six days of blocking the Suez Canal in 2021.</div>

The bleak timeline from Europe’s busiest port is based on the chaos that resulted when the Ever Given was freed after six days of blocking the Suez Canal in 2021.

<div class="phx-topic">Long Beach, California — The backlog of containers that would result from ocean carriers resuming Red Sea transits would take months to clear from Europe’s port hubs, Hanna Stelzel, the director of containers for the Port of Rotterdam, told the Journal of Commerce’s TPM25 conference this week. Once the Red Sea is deemed safe enough for commercial shipping, vessels taking the shorter route would overtake those diverting around southern Africa, with severe congestion expected as a result. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>Stelzel said the timeline for clearing the backlog of boxes at Rotterdam was based on the disruption caused when the Ever Given was freed after six days of blocking the Suez Canal in 2021. “It will be very challenging, but what we learned from the Suez blockage was that by widening our anchorage area it gave us an advantage and we have put that into practice,” Stelzel said. It is estimated that more than 1.9 million TEUs of capacity were delayed during the six-day Ever Given blockage in 2021. Carrier schedules were heavily disrupted for months at ports in North Europe and along the US East Coast. But the diversions around Africa over the past 15 months as carriers avoid potential attacks in the Red Sea by Houthi militants operating in Yemen have absorbed about 10% of global container shipping capacity, and the impact of resuming Suez transits will be far greater. In addition to expanding its anchorage area, Rotterdam has improved its sharing of data and collaboration across its customer supply chain to manage the expected congestion, Stelzel said. <h3>‘Severe risk’ to vessels remains </h3>But given the fragility of the ceasefire between Israel and Hamas and the potential for the Hamas-backing Houthis to resume attacks on shipping in the Red Sea, the port congestion that will emerge from a return to the Suez is unlikely to be this year’s problem. Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global, parent company of the Journal of Commerce, said in his one-year outlook there remains a “severe risk” to vessels transiting the Red Sea. “We expect the ceasefire process is likely to break down in the next 12 months and military operations will resume in Gaza,” was Kennedy’s bleak assessment given during a TPM25 session on the Red Sea situation. Kennedy said the Houthis will use that as a justification for resuming their own rocket attacks on Israel, which he predicts will result in airstrikes from the US, thus triggering a resumption of attacks on commercial shipping in the Red Sea. A more optimistic view of the resumption of Suez Canal transits was presented by Tom Behrens Sorensen, chairman of ECCO Global Shoe Production, who said Chinese- and Russian-flagged carriers were already transiting the Red Sea. “Once the carriers in the first alliance return to Suez, all the rest will have to follow, and in my view, that will happen in the second half,” he told an Asia-Europe panel discussion at TPM25. “Obviously, there are lot of caveats in this in terms of how the political situation evolves, but I’m cautiously optimistic that it will happen in the third or fourth quarter because the temptation [to resume Suez transits] is too big,” Behrens Sorensen added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Long Beach, California — The backlog of containers that would result from ocean carriers resuming Red Sea transits would take months to clear from Europe’s port hubs, Hanna Stelzel, the director of containers for the Port of Rotterdam, told the Journal of Commerce’s TPM25 conference this week. Once the Red Sea is deemed safe enough for commercial shipping, vessels taking the shorter route would overtake those diverting around southern Africa, with severe congestion expected as a result. Stelzel said the timeline for clearing the backlog of boxes at Rotterdam was based on the disruption caused when the Ever Given was freed after six days of blocking the Suez Canal in 2021. “It will be very challenging, but what we learned from the Suez blockage was that by widening our anchorage area it gave us an advantage and we have put that into practice,” Stelzel said. It is estimated that more than 1.9 million TEUs of capacity were delayed during the six-day Ever Given blockage in 2021. Carrier schedules were heavily disrupted for months at ports in North Europe and along the US East Coast. But the diversions around Africa over the past 15 months as carriers avoid potential attacks in the Red Sea by Houthi militants operating in Yemen have absorbed about 10% of global container shipping capacity, and the impact of resuming Suez transits will be far greater. In addition to expanding its anchorage area, Rotterdam has improved its sharing of data and collaboration across its customer supply chain to manage the expected congestion, Stelzel said. ‘Severe risk’ to vessels remains But given the fragility of the ceasefire between Israel and Hamas and the potential for the Hamas-backing Houthis to resume attacks on shipping in the Red Sea, the port congestion that will emerge from a return to the Suez is unlikely to be this year’s problem. Jack Kennedy, head of Middle East and North Africa country risk at S&P Global, parent company of the Journal of Commerce, said in his one-year outlook there remains a “severe risk” to vessels transiting the Red Sea. “We expect the ceasefire process is likely to break down in the next 12 months and military operations will resume in Gaza,” was Kennedy’s bleak assessment given during a TPM25 session on the Red Sea situation. Kennedy said the Houthis will use that as a justification for resuming their own rocket attacks on Israel, which he predicts will result in airstrikes from the US, thus triggering a resumption of attacks on commercial shipping in the Red Sea. A more optimistic view of the resumption of Suez Canal transits was presented by Tom Behrens Sorensen, chairman of ECCO Global Shoe Production, who said Chinese- and Russian-flagged carriers were already transiting the Red Sea. “Once the carriers in the first alliance return to Suez, all the rest will have to follow, and in my view, that will happen in the second half,” he told an Asia-Europe panel discussion at TPM25. “Obviously, there are lot of caveats in this in terms of how the political situation evolves, but I’m cautiously optimistic that it will happen in the third or fourth quarter because the temptation [to resume Suez transits] is too big,” Behrens Sorensen added. Contact Greg Knowler at greg.knowler@spglobal.com .

Port News

Asia-Europe

International ports

TPM25: Months of port congestion face carriers’ Red Sea return: Rotterdam

<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.

<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

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

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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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