Website_Extended_640x340 1.png

Subscription Sale Pop Up

Events

Maritime

Surface

Air Cargo

Magazine

Supply chain

Breakbulk News

Container Shipping News

Port News

Trucking News

Rail News

Air Cargo Forwarder News

Air Cargo Carriers News

Transport, Trade and Regulation News

Logistics Technology News

Cool Cargo News

Last Mile News

Industrial Real Estate News

Special Reports

Breakbulk carriers

Ro/ro cargo

Energy projects

Heavy-haul transport

Project cargo

Container lines

Trans-Atlantic

Forwarding

Asia-Europe

Trans-Pacific

Drayage

Port infrastructure

Breakbulk ports

North American ports

Marine terminals

International ports

Longshore labor

Truckload

Truck brokers

Flatbed

Trucking labor

North-American rail

International rail

<div class="phx-topic abstract-wrapper">Before May 5, when President Donald Trump announced that tariffs on $200 billion of Chinese imports would rise from 10 percent to 25 percent, carriers were relatively sanguine about 2019 and for good reasons.</div>

Before May 5, when President Donald Trump announced that tariffs on $200 billion of Chinese imports would rise from 10 percent to 25 percent, carriers were relatively sanguine about 2019 and for good reasons.

3606491_FI.png

<div>The sharp and sudden escalation of trade tensions between the United States and China, after a deal seemed imminent, casts a shadow on trans-Pacific containerized supply chains, elevating risk for carriers after exhibiting newfound strength in recently <a>concluded service contracting</a>.Before May 5, when President Donald Trump announced that tariffs on $200 billion of Chinese imports would rise from 10 to 25 percent, carriers were relatively sanguine about 2019 and for good reasons. The contract season was well-timed for carriers, coming in the aftermath of the front-loading of volumes and resulting market tightness ahead of threatened Dec. 31 tariffs on China.Hapag-Lloyd’s...

The sharp and sudden escalation of trade tensions between the United States and China, after a deal seemed imminent, casts a shadow on trans-Pacific containerized supply chains, elevating risk for carriers after exhibiting newfound strength in recently concluded service contracting . Before May 5, when President Donald Trump announced that tariffs on $200 billion of Chinese imports would rise from 10 to 25 percent, carriers were relatively sanguine about 2019 and for good reasons. The contract season was well-timed for carriers, coming in the aftermath of the front-loading of volumes and resulting market tightness ahead of threatened Dec. 31 tariffs on China. Hapag-Lloyd’s trans-Pacific rates were up 7 percent in the first quarter, the highest increase among any of the regions in which it operates, according to its first-quarter earnings report issued on May 9. That rare instance of trade policy impacting logistics, plus the continuing strong US economy this year, kept the trans-Pacific market relatively tight in the first quarter, raising the specter for shippers that capacity could remain tight deeper into 2019 and contributing to what amounted to a minor victory for carriers in the just-completed negotiations. It's possible some early effects of consolidation in driving solidarity among carriers enabled them to secure approximately $200 to $300 per container increases in annual contracts and importantly helped them lock in guarantees on reimbursement from shippers for the higher anticipated costs of low-sulfur fuel as of Jan. 1, 2020, when the International Maritime Organization’s stronger ban on sulfur emissions takes effect. Hapag-Lloyd in its first-quarter earnings report noted that global supply growth is estimated by Drewry to be 3.1 percent while global demand as forecast by IHS Markit is 4.7 percent, thus, at least on a global level, this points to tightening capacity. Also citing Transmodal data from April, Hapag-Lloyd noted that the container ship order book stands at just 11 percent of existing capacity, down from 61 percent in 2007 and an average figure of 16 percent over the past five years. Speaking of the first quarter, Hapag-Lloyd CEO Rolf Habben-Jansen said, “We achieved a good result and got the year off to a very decent start.” Looking further down the road in 2019, another factor in carriers’ favor, which surely will be to shippers’ disadvantage, will be a large number of ships temporarily removed from service for installation of scrubbers, which will allow the ships to continue burning high-sulfur bunker fuel and still comply with the IMO 2020 rule. But the US tariffs and the swift retaliation by China is a new dark cloud. The tariffs seem very likely to impact trade and economic growth. IHS Markit chief economist Nariman Behravesh said, “We estimate that the impact of the announced tariffs by the US and China will cut global growth by 0.2 to 0.3 percentage points. If the threatened tariffs [25 percent on an additional $300 billion in Chinese imports] are also implemented, then these estimates would be doubled. “The trade impacts are typically bigger. I would estimate a 0.5 percentage point hit to growth from the announced tariffs and double that if the threats are implemented,” he said. Because of the trade war, container volume growth this year could come in as little as 2 percent, according to London-based ship broker Braemar ACM, as quoted by The Wall Street Journal. If Trump goes through with his newest threat, Alphaliner warns eastbound trans-Pacific volume will fall at least 8 percent in 2019 after rising 8.3 percent in 2018. Increased sourcing from other Asian countries won’t make up for the shortfall, the maritime analyst said in its weekly newsletter. The newest tariff shock hits the trans-Pacific before the traditional summer peak season and threatens carriers with downward pressure on spot rates. The escalating trade war comes on the heels of 2019 global trade estimates already downgraded. Hapag-Lloyd noted that the International Monetary Fund forecasts that global trade, not just container trade, will expand 3.4 percent in 2019, a forecast down from its 4 percent growth expectation in January. IHS Markit, parent of JOC.com, observed a “mild strengthening of momentum” in global growth in the first quarter, but notes, “The downside risks have once again risen … in particular, the raising of US tariffs on Chinese imports on May 10 — and Chinese retaliation [announced May 13] — could lead to a damaging upward spiral of trade hostilities and seriously hurt growth.” From a carrier standpoint, further risks remain. The IMO 2020 rule, despite the benefits in temporary capacity withdrawals, will be a huge and abrupt change to the market overall, and the success carriers had ensuring reimbursement for higher costs in the trans-Pacific only covers 13 percent of global volumes and doesn’t guarantee similar success in other trade lanes. With volume pressures mounting and a minimum $10 billion low-sulfur fuel bill hanging over the industry, 2019 is a year that will test carriers' resolve. Contact Peter Tirschwell at peter.tirschwell@ihsmarkit.com and follow him on Twitter: @petertirschwell .

New tariffs and threats cast shadow on trans-Pacific

<div class="phx-topic abstract-wrapper">CMA CGM and Maersk are reshuffling their Mexico-Central America services beginning this month in response to chronic port congestion and berthing delays at key ports in the region.</div>

CMA CGM and Maersk are reshuffling their Mexico-Central America services beginning this month in response to chronic port congestion and berthing delays at key ports in the region.

Feature image

<div class="phx-topic">Ocean carriers are experiencing extensive delays at ports in Mexico and Central America, which is leading several liners to revamp services or implement contingency plans to maintain reliability. The problems are being partly caused by strong trade volumes, especially from Mexico, carriers and forwarders say. Severe delays at Acajutla in El Salvador and Corinto in Nicaragua has led CMA CGM to implement a port congestion surcharge of $1,000 per container from Dec. 1 on shipments to and from the two countries, the carrier said in a customer advisory Tuesday. The surcharge on all types of cargo will remain until March 31, 2025. Meanwhile, CMA CGM and Maersk confirmed they are reshuffling their Mexico-Central America services from this month in response to chronic port congestion and berthing delays at key ports in the region. The French carrier is revamping its Asia-Mexico and West Coast South America (WCSA) services “to restore schedule reliability and ensure competitive transit times,” it said in an advisory last week. “Due to significant congestion in Mexico’s major ports, delays have been steadily increasing since mid-2024.” As a result, Manzanillo and Lazaro Cardenas will be dropped from CMA CGM’s Asia Central South America 1 (ACSA1) service, which will instead focus on West Coast South America ports and Ensenada, Mexico. The new rotation is Ningbo-Shanghai-Busan-Ensenada-Buenaventura (Colombia)-Callao-Posorja (Ecuador)-Yokohama, with a 21-day transit from Ningbo to Ensenada. The first vessel deployed on the new rotation will be the APL Turkey departing Ningbo on Nov. 21. CMA CGM will add Manzanillo and Lazaro Cardenas to its Asia-Mexico Express (M2X) service, while halting calls at Ensenada. The carrier said the revamped M2X rotation will concentrate “exclusively on Mexico’s main ports, improving direct transit times to and from Mexico.” The new M2X rotation is Shekou (Shenzhen)-Ningbo-Shanghai-Qingdao-Tianjin-Busan-Manzanillo-Lazaro Cardenas, with a 32-day voyage from Shekou to Manzanillo. The first vessel operating the revised rotation is the CMA CGM Alexander von Humbolt, departing Shekou on Nov. 16. Maersk said it is reshuffling its West Coast Central America services in response to “current market conditions, including heavy port congestion and extended berth waiting times.” The carrier said it will restrict Central American calls to Balboa (Panama), Corinto, and Puerto Quetzal (Guatemala) on its WCCA1 loop, while adding a WCCA3 service calling at Balboa, Lazaro Cadenas and Acajutla. The first vessel operating the updated WCCA1 service is expected to depart Balboa on Nov. 17, while the first WCCA3 vessel is set to leave Balboa on Nov. 24, Maersk said in a customer advisory. <h3>Hapag-Lloyd, ONE highlight delays </h3>Other carriers, including Hapag-Lloyd and Ocean Network Express (ONE), said their services are also being impacted by port disruption. “We are observing delays at ports in Mexico, Panama, and Cartagena (Colombia), primarily due to high yard utilization, which is affecting cargo movement and vessel schedules,” a ONE spokesperson told the Journal of Commerce. “We are actively monitoring the situation and exploring alternative solutions to ensure cargo reaches its destination as efficiently as possible while maintaining operational flexibility.” Echoing those comments, a Hapag-Lloyd spokesperson told the Journal of Commerce: “Ports in the Caribbean hubs are very congested and our services are heavily impacted by this.” Hapag-Lloyd highlighted issues at Mexico’s Manzanillo, which it said was partially working and experiencing heavy yard utilization, which meant there was low yard and vessel productivity. Just two ships each were berthed at Manzanillo, Lazaro Cardenas, Christobal and Balboa, with six in Cartagena, according to AIS Live, a sister product of the Journal of Commerce within S&amp;P Global. Freight forwarder Kuehne + Nagel highlighted ports where operations are being heavily disrupted, with wait times of up to three days at Manzanillo, four days at Christobal and seven days at Acajutla. Kuehne + Nagel’s visibility platform SeaExplorer noted that at Christobal, container yard occupancy is exceeding 95%, which has “slowed operations to 30 movements per hour, below the optimal 50,” which has caused worsening dwell times. Delays at Acajutla are being exacerbated by repairs to two berths, SeaExplorer said. Contact Keith Wallis at keithwallis@hotmail.com. </div>

Ocean carriers are experiencing extensive delays at ports in Mexico and Central America, which is leading several liners to revamp services or implement contingency plans to maintain reliability. The problems are being partly caused by strong trade volumes, especially from Mexico, carriers and forwarders say. Severe delays at Acajutla in El Salvador and Corinto in Nicaragua has led CMA CGM to implement a port congestion surcharge of $1,000 per container from Dec. 1 on shipments to and from the two countries, the carrier said in a customer advisory Tuesday. The surcharge on all types of cargo will remain until March 31, 2025. Meanwhile, CMA CGM and Maersk confirmed they are reshuffling their Mexico-Central America services from this month in response to chronic port congestion and berthing delays at key ports in the region. The French carrier is revamping its Asia-Mexico and West Coast South America (WCSA) services “to restore schedule reliability and ensure competitive transit times,” it said in an advisory last week. “Due to significant congestion in Mexico’s major ports, delays have been steadily increasing since mid-2024.” As a result, Manzanillo and Lazaro Cardenas will be dropped from CMA CGM’s Asia Central South America 1 (ACSA1) service, which will instead focus on West Coast South America ports and Ensenada, Mexico. The new rotation is Ningbo-Shanghai-Busan-Ensenada-Buenaventura (Colombia)-Callao-Posorja (Ecuador)-Yokohama, with a 21-day transit from Ningbo to Ensenada. The first vessel deployed on the new rotation will be the APL Turkey departing Ningbo on Nov. 21. CMA CGM will add Manzanillo and Lazaro Cardenas to its Asia-Mexico Express (M2X) service, while halting calls at Ensenada. The carrier said the revamped M2X rotation will concentrate “exclusively on Mexico’s main ports, improving direct transit times to and from Mexico.” The new M2X rotation is Shekou (Shenzhen)-Ningbo-Shanghai-Qingdao-Tianjin-Busan-Manzanillo-Lazaro Cardenas, with a 32-day voyage from Shekou to Manzanillo. The first vessel operating the revised rotation is the CMA CGM Alexander von Humbolt, departing Shekou on Nov. 16. Maersk said it is reshuffling its West Coast Central America services in response to “current market conditions, including heavy port congestion and extended berth waiting times.” The carrier said it will restrict Central American calls to Balboa (Panama), Corinto, and Puerto Quetzal (Guatemala) on its WCCA1 loop, while adding a WCCA3 service calling at Balboa, Lazaro Cadenas and Acajutla. The first vessel operating the updated WCCA1 service is expected to depart Balboa on Nov. 17, while the first WCCA3 vessel is set to leave Balboa on Nov. 24, Maersk said in a customer advisory. Hapag-Lloyd, ONE highlight delays Other carriers, including Hapag-Lloyd and Ocean Network Express (ONE), said their services are also being impacted by port disruption. “We are observing delays at ports in Mexico, Panama, and Cartagena (Colombia), primarily due to high yard utilization, which is affecting cargo movement and vessel schedules,” a ONE spokesperson told the Journal of Commerce. “We are actively monitoring the situation and exploring alternative solutions to ensure cargo reaches its destination as efficiently as possible while maintaining operational flexibility.” Echoing those comments, a Hapag-Lloyd spokesperson told the Journal of Commerce: “Ports in the Caribbean hubs are very congested and our services are heavily impacted by this.” Hapag-Lloyd highlighted issues at Mexico’s Manzanillo, which it said was partially working and experiencing heavy yard utilization, which meant there was low yard and vessel productivity. Just two ships each were berthed at Manzanillo, Lazaro Cardenas, Christobal and Balboa, with six in Cartagena, according to AIS Live, a sister product of the Journal of Commerce within S&P Global. Freight forwarder Kuehne + Nagel highlighted ports where operations are being heavily disrupted, with wait times of up to three days at Manzanillo, four days at Christobal and seven days at Acajutla. Kuehne + Nagel’s visibility platform SeaExplorer noted that at Christobal, container yard occupancy is exceeding 95%, which has “slowed operations to 30 movements per hour, below the optimal 50,” which has caused worsening dwell times. Delays at Acajutla are being exacerbated by repairs to two berths, SeaExplorer said. Contact Keith Wallis at keithwallis@hotmail.com.

Carriers revamp services amid port congestion in Mexico, Central America

<div class="phx-topic abstract-wrapper">As US trade with Mexico grows, railroads see a chance to challenge the dominance of the Mexican trucking industry — if the railroads’ intermodal partners can lock in new business and deliver reliable service.</div>

As US trade with Mexico grows, railroads see a chance to challenge the dominance of the Mexican trucking industry — if the railroads’ intermodal partners can lock in new business and deliver reliable service.

<div class="phx-topic">The Mexican sourcing market has become increasingly important to North American importers amid the rising threat of tariffs on goods from China. That’s been a boon to North American Class I railroads, who have seen their volumes from Mexico jump approximately 71% over the last five years. Yet despite new services and investments, the railroads haven’t been able to meaningfully increase their share of surface cross-border trade compared with trucking. Railroads cannot manage to exceed 15% of the total market and even fell below 10% this year, according to the US Bureau of Transportation Statistics (BTS), because of a slowdown in auto shipments. Still, there are reasons for intermodal providers to be optimistic about cracking the market share ceiling. The top three intermodal providers in the US — Hub Group, J.B. Hunt Transport Services and Schneider National — are devoting considerable resources in Mexico, and Union Pacific (UP) Railroad is working with non-asset brokers to serve Mexico. The focus on assets and staffing in Mexico that asset and non-asset providers are contributing shows there is optimism about growth opportunities. In addition, as more shippers open factories near Mexico City, San Luis Potosi and Silao, the lengths of haul will save money for shippers and reduce greenhouse gas (GHG) emissions. The longer the length of haul, the wider the spread between trucking and intermodal in delivering higher cost savings to the shipper. Longer lengths of haul also produce GHG savings since trains are more fuel-efficient than trucks in moving large amounts of freight. The longer the transit, the larger the benefits. From Monterrey, the border is about three hours via truck. From San Luis Potosi, it is eight hours. From Silao, it’s about 10 hours, and from Mexico City, it’s 12 hours. Thus, as more shippers open in Mexico City, San Luis Potosí and Silao, the better the case for intermodal providers to show why rail is worth considering. Yet there are many challenges under the current iteration of cross-border service. While train service has been reliable, the customs clearance process has been problematic at times, and it can be challenging to understand Mexico’s rules and regulations. Also, growth today is primarily occurring in Monterrey, where truck capacity is easier to find because the haul to Laredo can be made in a single day. It’s harder to find trucks to make eight-to-12-hour, multi-day long-hauls. <h3>Mexico trade growing, but truck leads the way </h3>As US trade with Mexico grows, railroads see a chance to challenge the dominance of the Mexican trucking industry — if the railroads’ intermodal partners can lock in new business and deliver reliable service. Mexico, which surpassed China last year to become America’s top trading partner, accounted for $798 billion in goods and services in 2023, according to US Census Bureau data. This growth is expected to continue amid rising geopolitical tensions between the US and China. Today, trucks carry more than 7 million loads across the US-Mexico border annually, while intermodal rail manages only 300,000, according to the BTS and the Intermodal Association of North America (IANA). Truckload data, however, does not distinguish between types of freight, grouping finished vehicles, fuel, and standard retail goods together. IANA’s data excludes empty rail containers crossing the border, making an official market share number difficult to nail down. For more than two decades, intermodal’s market share has fluctuated between 10% and 15%, but dropped this year into the single digits despite the launch of the <a href="https://www.joc.com/article/domestic-intermodal-volumes-jump-in-early-days-of-new-mexico-rail-services-5201551">Mexico Midwest Express and the Falcon Premium services</a>. “Mexico certainly has the length of haul characteristics that should make intermodal economics shine,” Larry Gross, president of Gross Transportation Consulting and a Journal of Commerce analyst, said. “But based on the numbers, the current intermodal offerings are lacking in one or more of the basic requirements for competing with truck: cost, service consistency, speed, [and] ease of use.” <h3>Overcoming rail’s growth hurdles </h3>A number of things will have to occur for intermodal to exceed the 15% market share threshold. One challenge is the cyclical nature of surface transportation. Current trucking rates are low, which reduces or eliminates the cost savings of choosing rail. To grow share, intermodal providers such as the top three — Hub Group, J.B. Hunt Transport Services, and Schneider National — must commit container capacity to Mexico and invest in personnel and sales staff. To succeed, however, midsized providers including C.H. Robinson, Matson Logistics, STG Logistics and Swift Intermodal will need to grow their existing Mexico franchises, and non-asset brokers who haven’t been in Mexico must enter. “How I would judge success is how many new customers we’ve engaged — our BCO [beneficial cargo owner] growth, which is up 30% from a year ago,” Pat Linden, UP’s assistant vice president of marketing and sales, said on Oct. 2 at the Journal of Commerce’s Inland Distribution Conference in Chicago. Engagement does not necessarily mean actual business, though. UP hosted a forum in Monterrey earlier this year to encourage intermodal marketing companies (IMCs) to open operations in Mexico. Even IMCs established in Mexico have dealt with delays in customs clearance this year at terminals owned by Mexican state railroad Ferromex, making it harder to compete with trucking. “Mexico is not a super easy place to do business and if you’ve never done business there before, there is a bit of a learning curve on how to do it, so we want to help make it less complicated,” Linden said. “The question for Mexico is that there is a bunch of cargo going north, but not much balance southbound. How can we get more shippers to send freight into Mexico? Getting freight southbound is an inhibitor to growth.” Similar to US-Asia trade, most containers going from the US to Mexico have nothing inside. Jonathan Wahba, senior vice-president of marketing and sales for Canadian Pacific-Kansas City (CPKC) is less focused on market share than on growth within his control. “In our legacy Canadian business, we launch four trains per night every night from Toronto to western Canada, and I see no reason we can’t do the same between Mexico and the US,” Wahba said at the Inland conference. “By the end of the decade, my goal is multiple daily trains in both directions.” Currently, the Mexico Midwest Express train from San Luis Potosi to Chicago is the only CPKC daily train originating in Mexico. CPKC hopes to launch a Mexico-to-Southeast train before the end of the year, but it’s not clear whether it would be a daily train or only a few days per week. <h3>New infrastructure, new markets </h3>CPKC’s second bridge in Laredo, opening this December, could be key to increasing volume. Today, a single bridge handles northbound and southbound trains in alternating time blocks, but a second bridge will enable simultaneous traffic in both directions. Expanding into new markets will also be necessary to shift market share. UP has seen organic growth since October 2023 when it launched a Mexico-to-Southeast US service connecting in Memphis. CPKC and CSX anticipate launching their joint Mexico-to-Southeast US service before the end of the year. To take share in that corridor, railroads will have to address competitive truck pricing that is often on par or cheaper than intermodal. Other areas in Mexico can be fertile ground to gain share against the trucking industry. Despite the present downturn, auto manufactures in the Southeast US are opening factories in Mexico, so rail operators must target markets deeper into the country beyond northern Mexico. CPKC’s Mexico Midwest Express currently originates in San Luis Potosí, but new clients could justify further expansion south to Toluca, an hour outside Mexico City. The Falcon Premium launches from Silao and is only just making inroads toward Mexico City, where demand is rising. “Mexico City’s terminal in Pantaco has historically handled mostly international cargo, but we’ve now designated a section for domestic intermodal,” Linden says. “This has sparked interest from shippers eager to explore new rail options.” Railroads must expand business south of Monterrey to capture market share because the relatively short truck transit to the border creates stiff competition between the two modes in northern Mexico. CPKC’s Mexico Midwest Express originates in San Luis Potosí in central Mexico, but if it can generate new customers with Schneider in Mexico City, then new service can be launched in Toluca, about an hour outside Mexico City. The Falcon Premium originates trains in Silao, but it hasn’t gotten a major foothold yet into Mexico City. “There has been a tremendous amount of discussion and conversation around Mexico City and how to move freight out of the city,” Linden said. “We have a lot of people coming to us with opportunities in Mexico City asking about options with Union Pacific.” A partnership between Hub Group and Transportes Easo, which owns a terminal in Mexico City and uses company drivers rather than owner-operators, gives the two intermodal providers an opportunity to compete with truck. “Our partnership is uniquely positioned to move equipment northbound, southbound, as well as intra-Mexico which allows for better management of capacity,” said Diego Anchustegui, chief marketing officer of Easo and president of the Mexico Intermodal Association. “We offer an intermodal heavyweight option that allows us to move freight more efficiently to the US, allowing us to better compete with truck.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The Mexican sourcing market has become increasingly important to North American importers amid the rising threat of tariffs on goods from China. That’s been a boon to North American Class I railroads, who have seen their volumes from Mexico jump approximately 71% over the last five years. Yet despite new services and investments, the railroads haven’t been able to meaningfully increase their share of surface cross-border trade compared with trucking. Railroads cannot manage to exceed 15% of the total market and even fell below 10% this year, according to the US Bureau of Transportation Statistics (BTS), because of a slowdown in auto shipments. Still, there are reasons for intermodal providers to be optimistic about cracking the market share ceiling. The top three intermodal providers in the US — Hub Group, J.B. Hunt Transport Services and Schneider National — are devoting considerable resources in Mexico, and Union Pacific (UP) Railroad is working with non-asset brokers to serve Mexico. The focus on assets and staffing in Mexico that asset and non-asset providers are contributing shows there is optimism about growth opportunities. In addition, as more shippers open factories near Mexico City, San Luis Potosi and Silao, the lengths of haul will save money for shippers and reduce greenhouse gas (GHG) emissions. The longer the length of haul, the wider the spread between trucking and intermodal in delivering higher cost savings to the shipper. Longer lengths of haul also produce GHG savings since trains are more fuel-efficient than trucks in moving large amounts of freight. The longer the transit, the larger the benefits. From Monterrey, the border is about three hours via truck. From San Luis Potosi, it is eight hours. From Silao, it’s about 10 hours, and from Mexico City, it’s 12 hours. Thus, as more shippers open in Mexico City, San Luis Potosí and Silao, the better the case for intermodal providers to show why rail is worth considering. Yet there are many challenges under the current iteration of cross-border service. While train service has been reliable, the customs clearance process has been problematic at times, and it can be challenging to understand Mexico’s rules and regulations. Also, growth today is primarily occurring in Monterrey, where truck capacity is easier to find because the haul to Laredo can be made in a single day. It’s harder to find trucks to make eight-to-12-hour, multi-day long-hauls. Mexico trade growing, but truck leads the way As US trade with Mexico grows, railroads see a chance to challenge the dominance of the Mexican trucking industry — if the railroads’ intermodal partners can lock in new business and deliver reliable service. Mexico, which surpassed China last year to become America’s top trading partner, accounted for $798 billion in goods and services in 2023, according to US Census Bureau data. This growth is expected to continue amid rising geopolitical tensions between the US and China. Today, trucks carry more than 7 million loads across the US-Mexico border annually, while intermodal rail manages only 300,000, according to the BTS and the Intermodal Association of North America (IANA). Truckload data, however, does not distinguish between types of freight, grouping finished vehicles, fuel, and standard retail goods together. IANA’s data excludes empty rail containers crossing the border, making an official market share number difficult to nail down. For more than two decades, intermodal’s market share has fluctuated between 10% and 15%, but dropped this year into the single digits despite the launch of the Mexico Midwest Express and the Falcon Premium services . “Mexico certainly has the length of haul characteristics that should make intermodal economics shine,” Larry Gross, president of Gross Transportation Consulting and a Journal of Commerce analyst, said. “But based on the numbers, the current intermodal offerings are lacking in one or more of the basic requirements for competing with truck: cost, service consistency, speed, [and] ease of use.” Overcoming rail’s growth hurdles A number of things will have to occur for intermodal to exceed the 15% market share threshold. One challenge is the cyclical nature of surface transportation. Current trucking rates are low, which reduces or eliminates the cost savings of choosing rail. To grow share, intermodal providers such as the top three — Hub Group, J.B. Hunt Transport Services, and Schneider National — must commit container capacity to Mexico and invest in personnel and sales staff. To succeed, however, midsized providers including C.H. Robinson, Matson Logistics, STG Logistics and Swift Intermodal will need to grow their existing Mexico franchises, and non-asset brokers who haven’t been in Mexico must enter. “How I would judge success is how many new customers we’ve engaged — our BCO [beneficial cargo owner] growth, which is up 30% from a year ago,” Pat Linden, UP’s assistant vice president of marketing and sales, said on Oct. 2 at the Journal of Commerce’s Inland Distribution Conference in Chicago. Engagement does not necessarily mean actual business, though. UP hosted a forum in Monterrey earlier this year to encourage intermodal marketing companies (IMCs) to open operations in Mexico. Even IMCs established in Mexico have dealt with delays in customs clearance this year at terminals owned by Mexican state railroad Ferromex, making it harder to compete with trucking. “Mexico is not a super easy place to do business and if you’ve never done business there before, there is a bit of a learning curve on how to do it, so we want to help make it less complicated,” Linden said. “The question for Mexico is that there is a bunch of cargo going north, but not much balance southbound. How can we get more shippers to send freight into Mexico? Getting freight southbound is an inhibitor to growth.” Similar to US-Asia trade, most containers going from the US to Mexico have nothing inside. Jonathan Wahba, senior vice-president of marketing and sales for Canadian Pacific-Kansas City (CPKC) is less focused on market share than on growth within his control. “In our legacy Canadian business, we launch four trains per night every night from Toronto to western Canada, and I see no reason we can’t do the same between Mexico and the US,” Wahba said at the Inland conference. “By the end of the decade, my goal is multiple daily trains in both directions.” Currently, the Mexico Midwest Express train from San Luis Potosi to Chicago is the only CPKC daily train originating in Mexico. CPKC hopes to launch a Mexico-to-Southeast train before the end of the year, but it’s not clear whether it would be a daily train or only a few days per week. New infrastructure, new markets CPKC’s second bridge in Laredo, opening this December, could be key to increasing volume. Today, a single bridge handles northbound and southbound trains in alternating time blocks, but a second bridge will enable simultaneous traffic in both directions. Expanding into new markets will also be necessary to shift market share. UP has seen organic growth since October 2023 when it launched a Mexico-to-Southeast US service connecting in Memphis. CPKC and CSX anticipate launching their joint Mexico-to-Southeast US service before the end of the year. To take share in that corridor, railroads will have to address competitive truck pricing that is often on par or cheaper than intermodal. Other areas in Mexico can be fertile ground to gain share against the trucking industry. Despite the present downturn, auto manufactures in the Southeast US are opening factories in Mexico, so rail operators must target markets deeper into the country beyond northern Mexico. CPKC’s Mexico Midwest Express currently originates in San Luis Potosí, but new clients could justify further expansion south to Toluca, an hour outside Mexico City. The Falcon Premium launches from Silao and is only just making inroads toward Mexico City, where demand is rising. “Mexico City’s terminal in Pantaco has historically handled mostly international cargo, but we’ve now designated a section for domestic intermodal,” Linden says. “This has sparked interest from shippers eager to explore new rail options.” Railroads must expand business south of Monterrey to capture market share because the relatively short truck transit to the border creates stiff competition between the two modes in northern Mexico. CPKC’s Mexico Midwest Express originates in San Luis Potosí in central Mexico, but if it can generate new customers with Schneider in Mexico City, then new service can be launched in Toluca, about an hour outside Mexico City. The Falcon Premium originates trains in Silao, but it hasn’t gotten a major foothold yet into Mexico City. “There has been a tremendous amount of discussion and conversation around Mexico City and how to move freight out of the city,” Linden said. “We have a lot of people coming to us with opportunities in Mexico City asking about options with Union Pacific.” A partnership between Hub Group and Transportes Easo, which owns a terminal in Mexico City and uses company drivers rather than owner-operators, gives the two intermodal providers an opportunity to compete with truck. “Our partnership is uniquely positioned to move equipment northbound, southbound, as well as intra-Mexico which allows for better management of capacity,” said Diego Anchustegui, chief marketing officer of Easo and president of the Mexico Intermodal Association. “We offer an intermodal heavyweight option that allows us to move freight more efficiently to the US, allowing us to better compete with truck.” Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

North American railroads have ambitious plans to win share from trucks in Mexico

<div class="phx-topic abstract-wrapper">A slower-than-expected transition to renewable energy sources is augmenting — rather than replacing — investment in traditional oil and gas, boosting project cargo demand.</div>

A slower-than-expected transition to renewable energy sources is augmenting — rather than replacing — investment in traditional oil and gas, boosting project cargo demand.

<div class="phx-topic">Reports of the demise of fossil fuels — and, by extension, the oil and gas project cargo market — may have been exaggerated, or at the very least, a bit premature. Flouting predictions of a slowdown in exploration and production as the world transitions to more environmentally friendly energy sources, oil and gas projects are continuing alongside renewable energy generation, fueling strong cargo demand, according to engineering, procurement and construction firms (EPCs), forwarders, and ocean carriers. “We have seen quite a bit of activity this year from both traditional offshore oil and gas and renewable projects,” Peter Hansen, president of Cosco Shipping Heavy Transport, told the Journal of Commerce. “We have signed many forward contracts of both types this year.” During the Breakbulk Americas conference in Houston in October, oil and gas-focused cargo owner, forwarder and carrier executives described the environment as “robust” but “challenging,” even “chaotic.” While projects are picking up for all sectors, the trend favors relatively small projects, upgrades and expansions, one project forwarder who asked not to be identified said during the event. He singled out the US oil and gas market as “definitely moving,” while South America is a busy area for both oil and gas and power generation. He said shippers and carriers are now actively engaging with forwarders, whereas before they were making loose inquiries, another sign that planned projects are starting to move from the drawing board to the real world. “We are having more ‘real’ conversations — more tangible discussions — and engagement with carriers, although they are still conservative about commitment,” the forwarder told the Journal of Commerce. Global capital spending on oil and gas generation — a major source of heavy and oversized project cargo — is expected to increase 20% year over year in 2024 and a further 13% in 2025, according to S&amp;P Global Commodity Insights. S&amp;P Global is the parent company of the Journal of Commerce. <h3>A lengthy transition </h3>With renewable energy generation still merely augmenting, rather than replacing, traditional sources, oil demand is likely to stay on an upward trajectory in the medium term, according to Norwegian consultant Rystad Energy. “The probability of a fast transition away from oil decreases unless we witness breakthroughs in those low-carbon energy carriers that can technically and economically substitute oil,” Claudio Galimberti, global market analysis director at Rystad Energy, said in an Aug. 13 commentary. Rystad forecasts $100 billion worth of offshore gas projects will be approved in Southeast Asia alone, mostly in Indonesia and Malaysia, between 2024 and 2028. But that comes as exploration budgets for new oil and gas resources have flatlined at about $15 billion a year since 2020 with no real change likely until at least 2027, according to data from consultant Wood Mackenzie. In an October project tracker report, Wood Mackenzie pointed to a raft of reasons for the plateau in exploration spending, including higher supply chain costs and tighter financing as major banks shift their focus to renewable energy from oil and gas. “The decline in the number of projects being approved and no expansion in exploration activities will impact MPV and module carrier operators,” an energy analyst who asked not to be identified told the Journal of Commerce. “The good news is continued investment in on- and offshore wind, liquefied natural gas and new energy resources such as ammonia and hydrogen should offset the decline in oil and gas cargo related volumes.” Global investment in renewable power generation — a broad category that includes wind, solar, nuclear, geothermal, hydro and biomass — is expected to grow 14% this year, 9% in 2025 and 5% in 2026, according to S&amp;P Global Commodity Insights. Multipurpose and heavy-lift (MPV/HL) carriers including United Heavy Lift and G2 Ocean have reported a steady increase in wind energy-related cargoes, which they say now account for approximately 50% of their volumes, and Americas-based MPV/HL executives told the Journal of Commerce they’ve seen pick up across a range of project types, including LNG, hydro and nuclear. Several EPCs also noted that cargo is moving or anticipated for domestic projects related to microchip manufacturing and other technologies. “There are more sectors — data storage, semi-conductors — it’s all new stuff,” said a project forwarder who asked not to be identified. <h3>Approvals slowing </h3>The number of oil and gas projects receiving a positive final investment decision (FID), a prerequisite to cargo movement, has also been dwindling. Nearly 20 schemes worth about $100 billion are expected to get the FID green light by the end of 2024, according to Wood Mackenzie, a sharp decrease from a March report in which it estimated 30 upstream projects valued at $125 billion would move forward this year. A similar dynamic played out in 2023, when 23 schemes worth about $130 billion received FID approval, against an earlier estimate of 30 projects valued at $185 billion. “There’s been a steady decline in both the total number and overall value of offshore hydrocarbon projects getting FID approval over the last few years, with final investment decisions postponed to subsequent years,” the energy analyst said. “There’s an undoubted need for the development of new oil and gas resources. But the current energy transition to cleaner fuels like wind and solar is making it more difficult for oil majors and national oil companies to assess when those resources will be needed, which in turn is affecting their financial viability.” Global oil demand is predicted to peak at about 102 million barrels per day by 2030, after which demand will ease, according to the International Energy Agency (IEA). Low-emissions sources are expected to generate more than half of the world’s electricity before 2030, according to the IEA’s World Energy Outlook 2024 report published Oct. 16. Maritime classification society DNV predicted global oil demand could peak in 2026 in its 2024 Energy Transition Outlook report, also published in mid-October. Oil major BP, in its July energy forecast, said oil demand could fall to under 80 million barrels per day by 2050 from 101.7 million barrels per day in 2023 amid the shift to cleaner fuels. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Reports of the demise of fossil fuels — and, by extension, the oil and gas project cargo market — may have been exaggerated, or at the very least, a bit premature. Flouting predictions of a slowdown in exploration and production as the world transitions to more environmentally friendly energy sources, oil and gas projects are continuing alongside renewable energy generation, fueling strong cargo demand, according to engineering, procurement and construction firms (EPCs), forwarders, and ocean carriers. “We have seen quite a bit of activity this year from both traditional offshore oil and gas and renewable projects,” Peter Hansen, president of Cosco Shipping Heavy Transport, told the Journal of Commerce. “We have signed many forward contracts of both types this year.” During the Breakbulk Americas conference in Houston in October, oil and gas-focused cargo owner, forwarder and carrier executives described the environment as “robust” but “challenging,” even “chaotic.” While projects are picking up for all sectors, the trend favors relatively small projects, upgrades and expansions, one project forwarder who asked not to be identified said during the event. He singled out the US oil and gas market as “definitely moving,” while South America is a busy area for both oil and gas and power generation. He said shippers and carriers are now actively engaging with forwarders, whereas before they were making loose inquiries, another sign that planned projects are starting to move from the drawing board to the real world. “We are having more ‘real’ conversations — more tangible discussions — and engagement with carriers, although they are still conservative about commitment,” the forwarder told the Journal of Commerce. Global capital spending on oil and gas generation — a major source of heavy and oversized project cargo — is expected to increase 20% year over year in 2024 and a further 13% in 2025, according to S&P Global Commodity Insights. S&P Global is the parent company of the Journal of Commerce. A lengthy transition With renewable energy generation still merely augmenting, rather than replacing, traditional sources, oil demand is likely to stay on an upward trajectory in the medium term, according to Norwegian consultant Rystad Energy. “The probability of a fast transition away from oil decreases unless we witness breakthroughs in those low-carbon energy carriers that can technically and economically substitute oil,” Claudio Galimberti, global market analysis director at Rystad Energy, said in an Aug. 13 commentary. Rystad forecasts $100 billion worth of offshore gas projects will be approved in Southeast Asia alone, mostly in Indonesia and Malaysia, between 2024 and 2028. But that comes as exploration budgets for new oil and gas resources have flatlined at about $15 billion a year since 2020 with no real change likely until at least 2027, according to data from consultant Wood Mackenzie. In an October project tracker report, Wood Mackenzie pointed to a raft of reasons for the plateau in exploration spending, including higher supply chain costs and tighter financing as major banks shift their focus to renewable energy from oil and gas. “The decline in the number of projects being approved and no expansion in exploration activities will impact MPV and module carrier operators,” an energy analyst who asked not to be identified told the Journal of Commerce. “The good news is continued investment in on- and offshore wind, liquefied natural gas and new energy resources such as ammonia and hydrogen should offset the decline in oil and gas cargo related volumes.” Global investment in renewable power generation — a broad category that includes wind, solar, nuclear, geothermal, hydro and biomass — is expected to grow 14% this year, 9% in 2025 and 5% in 2026, according to S&P Global Commodity Insights. Multipurpose and heavy-lift (MPV/HL) carriers including United Heavy Lift and G2 Ocean have reported a steady increase in wind energy-related cargoes, which they say now account for approximately 50% of their volumes, and Americas-based MPV/HL executives told the Journal of Commerce they’ve seen pick up across a range of project types, including LNG, hydro and nuclear. Several EPCs also noted that cargo is moving or anticipated for domestic projects related to microchip manufacturing and other technologies. “There are more sectors — data storage, semi-conductors — it’s all new stuff,” said a project forwarder who asked not to be identified. Approvals slowing The number of oil and gas projects receiving a positive final investment decision (FID), a prerequisite to cargo movement, has also been dwindling. Nearly 20 schemes worth about $100 billion are expected to get the FID green light by the end of 2024, according to Wood Mackenzie, a sharp decrease from a March report in which it estimated 30 upstream projects valued at $125 billion would move forward this year. A similar dynamic played out in 2023, when 23 schemes worth about $130 billion received FID approval, against an earlier estimate of 30 projects valued at $185 billion. “There’s been a steady decline in both the total number and overall value of offshore hydrocarbon projects getting FID approval over the last few years, with final investment decisions postponed to subsequent years,” the energy analyst said. “There’s an undoubted need for the development of new oil and gas resources. But the current energy transition to cleaner fuels like wind and solar is making it more difficult for oil majors and national oil companies to assess when those resources will be needed, which in turn is affecting their financial viability.” Global oil demand is predicted to peak at about 102 million barrels per day by 2030, after which demand will ease, according to the International Energy Agency (IEA). Low-emissions sources are expected to generate more than half of the world’s electricity before 2030, according to the IEA’s World Energy Outlook 2024 report published Oct. 16. Maritime classification society DNV predicted global oil demand could peak in 2026 in its 2024 Energy Transition Outlook report, also published in mid-October. Oil major BP, in its July energy forecast, said oil demand could fall to under 80 million barrels per day by 2050 from 101.7 million barrels per day in 2023 amid the shift to cleaner fuels. Contact Keith Wallis at keithwallis@hotmail.com .

Stream of oil and gas business keeps project sector humming

<div class="phx-topic abstract-wrapper">Maritime employers say they will commence a lockout of the longshore foremen after their union began a threatened strike Monday morning, a move that will force marine terminals in the province to close.</div>

Maritime employers say they will commence a lockout of the longshore foremen after their union began a threatened strike Monday morning, a move that will force marine terminals in the province to close.

<div class="phx-topic">British Columbia’s container ports are set for an indefinite shut down this week as maritime employers planned to lock out longshore foremen after they began a strike Monday. While the lockout would not technically affect other longshore workers, uncertainty about the job actions taken by the foremen’s union will force marine terminals to shutter. The British Columbia Maritime Employers Association (BCMEA) said in a statement Monday that the International Longshore and Warehouse Union (ILWU) 514, representing about 730 longshore foremen, <a href="https://www.joc.com/article/bc-container-ports-ready-to-lock-out-longshore-foremen-after-strike-vote-5784004">began its strike Monday morning at ports across the province</a>. In response, the BCMEA said it would begin a lockout of Local 514 members with Monday’s evening shift and “continuing until further notice.” Canadian labor law requires that employers see strike activity commence before issuing a formal lockout notice. That strike activity could take the form of an actual picket, a refusal to work an overtime shift, or similar job actions. Canada’s Labor Minister Steve MacKinnon said in a statement Saturday that while federal mediators are available, “it is the responsibility of the parties to reach an agreement.” The Vancouver Fraser Port Authority said that it expects disruptions at the Port of Vancouver beginning Monday. Vancouver is Canada’s largest container port. The vessel impact appears limited so far as only one ship, the 12,726-TEU YM Target, is currently at berth in Vancouver, according to Sea-web a sister product of the Journal of Commerce within S&amp;P Global. The 4,250-TEU Cosco Auckland is currently at berth at the Port of Prince Rupert, which would also be affected by a work stoppage. No container ships are sitting at Vancouver’s anchorages due to inclement weather in the region. At least seven container ships are scheduled to call Vancouver through mid-November, Sea-web data shows. Three are expected to call Prince Rupert. Canadian Pacific-Kansas City railroad said in a schedule update Monday that it’s no longer accepting export cargo for Vancouver due to the strike. <h3>Union ‘extremely angry’ about lockout </h3>Local 514 said in a statement last week that its members are “extremely angry” that the BCMEA planned to lock out its members. The union said its members were only planning to refuse overtime work or <a href="https://www.joc.com/article/ilwu-canada-illegal-strike-ruling-averts-vancouver-shutdown-5192250">to implement new technology</a> at the port, rather than a full-blown walkout. The union alleged the lockout is an “attempt to force the federal government to intervene in the dispute.” But the BCMEA said in a Saturday statement that the lockout was a necessary precaution. Canadian labor law allows unions to change from one type of job action to another, creating a risk for a full-blown walkout, BCMEA said. Due to the heavy reliance on overtime shifts for cargo handling, a refusal to work overtime would severely disrupt port operations anyway, and terminals won’t request longshore labor without union supervision. “Once a union commences strike action, the Canada Labor Code has no restrictions on the union subsequently changing the nature of its strike,” the BCMEA said in Saturday’s statement. “For example, a strike may start as an overtime ban and escalate — in minutes, hours or days — to a full-scale strike action without notice, where all workers walk off the job. This potential creates tremendous uncertainty and significant operational and safety challenges for operators.” Local 514 has been working without a collective bargaining agreement since March 2023. The BCMEA is offering longshore foremen a 19.2% raise over four years, <a href="https://www.joc.com/article/ilwu-canada-contract-ratification-ensures-bc-port-peace-5220992">similar to the pay raise accepted by other ILWU longshore workers in Canada</a>. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

British Columbia’s container ports are set for an indefinite shut down this week as maritime employers planned to lock out longshore foremen after they began a strike Monday. While the lockout would not technically affect other longshore workers, uncertainty about the job actions taken by the foremen’s union will force marine terminals to shutter. The British Columbia Maritime Employers Association (BCMEA) said in a statement Monday that the International Longshore and Warehouse Union (ILWU) 514, representing about 730 longshore foremen, began its strike Monday morning at ports across the province . In response, the BCMEA said it would begin a lockout of Local 514 members with Monday’s evening shift and “continuing until further notice.” Canadian labor law requires that employers see strike activity commence before issuing a formal lockout notice. That strike activity could take the form of an actual picket, a refusal to work an overtime shift, or similar job actions. Canada’s Labor Minister Steve MacKinnon said in a statement Saturday that while federal mediators are available, “it is the responsibility of the parties to reach an agreement.” The Vancouver Fraser Port Authority said that it expects disruptions at the Port of Vancouver beginning Monday. Vancouver is Canada’s largest container port. The vessel impact appears limited so far as only one ship, the 12,726-TEU YM Target, is currently at berth in Vancouver, according to Sea-web a sister product of the Journal of Commerce within S&P Global. The 4,250-TEU Cosco Auckland is currently at berth at the Port of Prince Rupert, which would also be affected by a work stoppage. No container ships are sitting at Vancouver’s anchorages due to inclement weather in the region. At least seven container ships are scheduled to call Vancouver through mid-November, Sea-web data shows. Three are expected to call Prince Rupert. Canadian Pacific-Kansas City railroad said in a schedule update Monday that it’s no longer accepting export cargo for Vancouver due to the strike. Union ‘extremely angry’ about lockout Local 514 said in a statement last week that its members are “extremely angry” that the BCMEA planned to lock out its members. The union said its members were only planning to refuse overtime work or to implement new technology at the port, rather than a full-blown walkout. The union alleged the lockout is an “attempt to force the federal government to intervene in the dispute.” But the BCMEA said in a Saturday statement that the lockout was a necessary precaution. Canadian labor law allows unions to change from one type of job action to another, creating a risk for a full-blown walkout, BCMEA said. Due to the heavy reliance on overtime shifts for cargo handling, a refusal to work overtime would severely disrupt port operations anyway, and terminals won’t request longshore labor without union supervision. “Once a union commences strike action, the Canada Labor Code has no restrictions on the union subsequently changing the nature of its strike,” the BCMEA said in Saturday’s statement. “For example, a strike may start as an overtime ban and escalate — in minutes, hours or days — to a full-scale strike action without notice, where all workers walk off the job. This potential creates tremendous uncertainty and significant operational and safety challenges for operators.” Local 514 has been working without a collective bargaining agreement since March 2023. The BCMEA is offering longshore foremen a 19.2% raise over four years, similar to the pay raise accepted by other ILWU longshore workers in Canada . Contact Michael Angell at michael.angell@spglobal.com .

BC container ports set for shutdown after foremen begin strike

<div class="phx-topic abstract-wrapper">Weak economic trends have kept the pressure on industrial end-markets serviced by Linde and Air Liquide, which provide key cargo for the breakbulk and project cargo segments.</div>

Weak economic trends have kept the pressure on industrial end-markets serviced by Linde and Air Liquide, which provide key cargo for the breakbulk and project cargo segments.

<div class="phx-topic">Economic uncertainties including geopolitical tensions and lower commodity prices are creating headwinds for global industrial gas suppliers while they look to North American project investment for a boost as they approach the end of the fiscal year.Suppliers Linde and Air Liquide cited the challenges in their third-quarter earnings reports. Both companies provide key cargo for the breakbulk and project cargo segments as they supply shipments including large equipment, gas storage tanks and other industrial items.Based on the turbulent market conditions, global industrial gas supplier Linde scaled back its full-year earnings forecast, while the North American market proved to be a bright spot for the company’s third-quarter results.“As anticipated, weak economic trends persisted through the third quarter, most notably in the industrial end-markets,” Linde CEO Sanjiv Lamba said in remarks on Oct. 31. Lamba referenced 1% to 2% declines in sales from the previous quarter in industrial segments including manufacturing, metals, and chemicals and energy. “However, we did experience some positive growth over the prior year, including in North America, which had almost 40% of global sales,” he said. Overall, third-quarter sales grew 2% to $8.4 billion.Linde’s third-quarter project backlog reached $10.1 billion, up 25% from a year ago, after the company signed the largest sale-of-gas project in its history — Dow Chemical’s Fort Saskatchewan Path2Zero expansion project in Alberta, Canada. Linde is investing over $2 billion to provide industrial gas services for the project, a clean hydrogen production facility that would replace natural gas with blue hydrogen to achieve net-zero carbon emissions. The project is due to come online in 2028.Lamba said North American project activity continues to progress, but the trend contrasts with sluggish activity in most of Europe, the Middle East and Africa, as well as parts of Asia-Pacific, primarily China.“The combination of geopolitical tension and economic uncertainty has suppressed large ticket purchases, which tend to correlate with industrial markets, such as steel, glass, and chemicals,” he said. “Currently, we don’t see any meaningful catalyst to reverse this trend for the remainder of this year.” <h3>Air Liquide bets on US pipeline</h3>Investments in energy transition projects helped offset declining commodity prices that hindered third-quarter performance for French industrial gas supplier Air Liquide. In his third-quarter earnings remarks, CEO François Jackow said that despite a “difficult market environment,” the company focused on growth opportunities in areas such as energy transition projects, which accounted for 40% of Air Liquide’s portfolio. The company reported an investment backlog of $4.9 billion and a record $1.5 billion in new investments for the third quarter. “This is a solid indicator of future growth when the projects currently under construction will start,” Jackow said during the company’s Oct. 23 earnings call.Air Liquide last month announced a $150 million investment in a project to extend its production capacity and its Tennessee pipeline network. The project is part of a long-term contract to supply oxygen for a Clarksville, Tenn., electric vehicle battery plant owned by South Korean chemical producer LG Chem. Year-over-year quarterly earnings slipped 0.7% to $7.3 billion, reflecting lower energy prices. For the company’s gas and services segment, which accounts for 95% of Air Liquide’s overall business, revenues fell 0.6% year over year to $7 billion for the quarter.Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

Economic uncertainties including geopolitical tensions and lower commodity prices are creating headwinds for global industrial gas suppliers while they look to North American project investment for a boost as they approach the end of the fiscal year. Suppliers Linde and Air Liquide cited the challenges in their third-quarter earnings reports. Both companies provide key cargo for the breakbulk and project cargo segments as they supply shipments including large equipment, gas storage tanks and other industrial items. Based on the turbulent market conditions, global industrial gas supplier Linde scaled back its full-year earnings forecast, while the North American market proved to be a bright spot for the company’s third-quarter results. “As anticipated, weak economic trends persisted through the third quarter, most notably in the industrial end-markets,” Linde CEO Sanjiv Lamba said in remarks on Oct. 31. Lamba referenced 1% to 2% declines in sales from the previous quarter in industrial segments including manufacturing, metals, and chemicals and energy. “However, we did experience some positive growth over the prior year, including in North America, which had almost 40% of global sales,” he said. Overall, third-quarter sales grew 2% to $8.4 billion. Linde’s third-quarter project backlog reached $10.1 billion, up 25% from a year ago, after the company signed the largest sale-of-gas project in its history — Dow Chemical’s Fort Saskatchewan Path2Zero expansion project in Alberta, Canada. Linde is investing over $2 billion to provide industrial gas services for the project, a clean hydrogen production facility that would replace natural gas with blue hydrogen to achieve net-zero carbon emissions. The project is due to come online in 2028. Lamba said North American project activity continues to progress, but the trend contrasts with sluggish activity in most of Europe, the Middle East and Africa, as well as parts of Asia-Pacific, primarily China. “The combination of geopolitical tension and economic uncertainty has suppressed large ticket purchases, which tend to correlate with industrial markets, such as steel, glass, and chemicals,” he said. “Currently, we don’t see any meaningful catalyst to reverse this trend for the remainder of this year.” Air Liquide bets on US pipeline Investments in energy transition projects helped offset declining commodity prices that hindered third-quarter performance for French industrial gas supplier Air Liquide. In his third-quarter earnings remarks, CEO François Jackow said that despite a “difficult market environment,” the company focused on growth opportunities in areas such as energy transition projects, which accounted for 40% of Air Liquide’s portfolio. The company reported an investment backlog of $4.9 billion and a record $1.5 billion in new investments for the third quarter. “This is a solid indicator of future growth when the projects currently under construction will start,” Jackow said during the company’s Oct. 23 earnings call. Air Liquide last month announced a $150 million investment in a project to extend its production capacity and its Tennessee pipeline network. The project is part of a long-term contract to supply oxygen for a Clarksville, Tenn., electric vehicle battery plant owned by South Korean chemical producer LG Chem. Year-over-year quarterly earnings slipped 0.7% to $7.3 billion, reflecting lower energy prices. For the company’s gas and services segment, which accounts for 95% of Air Liquide’s overall business, revenues fell 0.6% year over year to $7 billion for the quarter. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

North American projects provide lifeline for industrial gas suppliers

Upgrade to Gold today for just $695
Use code FSUW695 at checkout
Valid for first year of subscription

Upgrade Subscription - Wide Box

FALL SALE EXTENDED

Subscribe today and save 25%!
Use code FSSW25 at checkout
Valid for first year of subscription

Subscribe Now - Anonymous - Wide Box

Subscribe today and save 25%
Use code FSSW25 at checkout
Valid for first year of subscription

Subscribe Now - Free Trials - Wide Box

Register today to redeem your Gold subscriber discount!

TPM Discount - Gold

Save 20% on TPM25

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

SMC3rates_shutterstock_5247046.jpg

Shippers save money, time with automated transportation bidding tools

SSA Marine Mexico has made significant strides in modernizing its infrastructure at the Port of Manzanillo, investing $15 million to enhance operational efficiency and sustainability at its facilities. This move is part of the company's broader strategy to remain at the forefront of the shipping and logistics industry. •	Strengthening Sustainability with Advanced Technology <figure class="joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left"><img src="/content-assets/1730488295264_Cranes%20arrival%20to%20TEC%20I.png" alt="Cranes arrival to TEC I" class="joc_admin__inline-image-inherit"></figure> In July, SSA Marine Mexico added seven state-of-the-art E-RTG (Electric Rubber-Tired Gantry) cranes to its fleet, valued at $14 million. These advanced cranes were distributed across its two terminals: four cranes were assigned to the Multipurpose Terminal, and three to the Specialized Container Terminal I. What sets these cranes apart is their dual-operation capability, allowing them to function either on electric power or diesel fuel. This innovation plays a critical role in reducing the environmental impact of operations, contributing to a 7% increase in energy efficiency. This efficiency improvement is equivalent to eliminating nearly 4,000 tons of CO2 emissions annually, underscoring SSA Marine Mexico's commitment to sustainability. Through this acquisition, SSA Marine Mexico not only enhances its cargo-handling capabilities but also reinforces its leadership in integrating cutting-edge, eco-friendly technology in the maritime industry. The company continues to push the boundaries of efficiency and sustainability, ensuring long-term value for both its customers and the environment. •	Upgraded Facilities to Meet Growing Demand <figure class="joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left"><img src="/content-assets/1730488350634_Multipurpose%20terminal.png" alt="Multipurpose Terminal" class="joc_admin__inline-image-inherit"></figure> In addition to the new cranes, SSA Marine Mexico has completed crucial modernization and repair work across its Multipurpose Terminal and Specialized Facility at the Port of Manzanillo. This $1 million investment targeted critical infrastructure enhancements, focusing on both structural integrity and operational functionality. Key improvements included leveling approximately 12,000 square meters in the dock area, along with the removal of outdated concrete curbs and asphalt layers. The upgraded space now features high-resistance pavers designed to optimize water drainage and prevent pooling, ensuring safer and more efficient operations. Moreover, the Specialized Facility saw significant upgrades, including the leveling of key warehouse areas to facilitate smoother cargo handling processes. These infrastructure improvements directly enhance the handling of TEUS (Twenty-foot Equivalent Unit containers), further demonstrating SSA Marine Mexico's unwavering commitment to continuous modernization, operational safety, and efficiency. With these initiatives, SSA Marine Mexico is well-positioned to meet the growing demands of the global shipping industry while setting new standards in sustainable port operations. LINK:<a href="https://www.ssamarine.mx/ssa-ing/index" rel="noreferrer" class="joc_admin__link"> https://www.ssamarine.mx/ssa-ing/index</a>

Cranes arrival to TEC I.png

SSA Marine Mexico Modernizes Facilities with $15 Million Investment 

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>

SMC3rates_shutterstock_5247046 (1).jpg

Filling the Supply Chain Education Gap with LTL Education Courses

20% OFF ON TPM25: Register today and redeem your Gold subscriber discount!

TPM Discount - Gold 

20% OFF ON TPM25

FALL SALE EXTENDED: Use code FSSW25 and save 25% on annual subscription!


Subscribe Now - Free Trials - Offer Box

Subscribe Today

FALL SALE EXTENDED: Use code FSUW695 and upgrade to a Gold subscription today for just $695!

Upgrade Subscription - Offer Box

Upgrade Subscription

FALL SALE EXTENDED: Use code FSSW25 and save 25% on any annual subscription!

Subscribe Now - Anonymous - Offer Box

The premier conference for the global container shipping and supply chain community

TPM Conference - Rectangle Box

Attend TPM25

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

A premium access index of savings using domestic intermodal vs. OTR 

ISI Report - Rectangle Box

Intermodal Savings Index

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

An extensive dashboard of charts organized by trade lane, mode, and topic

Gateway - Rectangle Box

Gateway

The only editorially independent conference for the breakbulk & project cargo industry

Breakbulk Conference - Rectangle Box

Attend Breakbulk25

The latest container shipping news and analysis of ocean container shipping, logistics, supply chains, technology solutions and end-to-end connectivity. Coverage includes the movement of containerized cargo handled by marine terminals and container ports, depots, container lines, drayage, consignees, importers and shippers, forwarders, non-vessel operating common carriers (NVOs) and off-dock warehousing providers. The Journal of Commerce's container shipping news includes news from the trans-Pacific, Asia–Europe, North America–Caribbean, Central and South America trades, and intra-Asia trades.

Container shipping news and analysis of ocean container shipping, logistics, supply chains, technology and end-to-end connectivity.

Container Shipping News | Journal of Commerce

Breakbulk News shipping | Journal of Commerce

Stay informed on port news worldwide with Journal of Commerce. From decarbonization to labor updates, get insights on global developments.

Port News | Journal of Commerce

News and analysis of ocean containerized cargo movement, logistics, supply chains, technology, and end-to-end connectivity. Maritime news and analysis of containerized ocean cargo movement, breakbulk and roll-on and roll-off shipping from origin to destination.

Latest News

More News & Analysis

Carriers revamp services amid port congestion in Mexico, Central America

North American railroads have ambitious plans to win share from trucks in Mexico

Stream of oil and gas business keeps project sector humming