<div class="phx-topic abstract-wrapper">The trans-Atlantic has largely managed to avoid the extreme rate increases of the other east-west routes, but that may be about to change.
 
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The trans-Atlantic has largely managed to avoid the extreme rate increases of the other east-west routes, but that may be about to change.

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<div class="phx-topic">The relative stability of the trans-Atlantic trade is about to be disturbed by rate increases and capacity management as carriers search for vessels to deploy on busier east-west routes.Substantial rate increases have been announced by Hapag-Lloyd, CMA CGM, and Mediterranean Shipping Co. for March and April, while Sea-Intelligence Maritime Analysis noted in its latest weekly newsletter that withdrawn vessels could be shifted to more profitable trades, such as the trans-Pacific.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5255031_1.0.PNG"></img><a href="https://www.joc.com/sites/default/files/u283871/1_2%20Mar_Transatlantic%20rates.PNG">Click to enlarge</a>.</div>“From a carrier perspective, the operational reality is that there is a capacity shortage in some trades where the rate levels are historically high, and at the same time, the rate levels have not increased in the trans-Atlantic,” Alan Murphy, CEO of Sea-Intelligence, wrote in the newsletter.“With a large number of vessels being stuck in congestion outside port on the US West Coast, vessel redeployment from less-profitable trades could well be argued as a measure of first aid to the trans-Pacific trade,” he added. “From a quantitative level, there appears to be a drive to shift capacity to more profitable trades, which in turn can only have one consequence: An increase of trans-Atlantic rate levels.”Short-term rates of up to three months from North Europe to the US East Coast have so far managed to avoid the record increases of the other east-west trades, rising by 9.36 percent in the past 12 months to $2,196 per FEU, according to rate benchmarking platform Xeneta. Over the same period, rates on the trans-Pacific were up 173 percent; on China-North Europe, rates are currently 446 percent higher year over year.But things may be about to change on the trans-Atlantic. From April 1, Hapag-Lloyd will increase its freight all kinds (FAK) rates by 333 percent to $7,320 per FEU, while CMA CGM plans to set its rate levels 282 percent higher than today’s rate at $6,200 per FEU. From March 1, MSC will set its FAK rate from Antwerp to Montreal at $4,200 per FEU.<h2>Aspirational price hikes</h2>The FAK rates announced by carriers serving Europe trades are aspirational and depend on their acceptance by cargo owners and forwarders. Carriers adopted the FAK system following the outlawing of general rate increase announcements in 2016 after the European Commission regarded the practice as signaling to the market.Data from eeSea, a platform that maps carrier schedules, shows seven sailings are set to be blanked in March on the trans-Atlantic compared with two during the same month last year, but Simon Sundboell, founder and CEO of eeSea, said carriers were also inserting “hidden” blanks.“As an example, when five of five vessels on a trans-Atlantic string are six days late, they make the choice to push all five vessels by one day, and slot into the weeks after,” he told JOC.com. “Effectively, they've lost one sailing out of 52 in a year by doing this, but it goes under the radar. Hence the phrasing, schedule recovery. There's not really much choice, though; they realistically can't catch up five vessels by six days.”The need for vessel slidings to recover schedules during the current period of heavy supply chain disruption was highlighted by Hapag-Lloyd CEO Rolf Habben Jansen during an interview at JOC’s virtual TPM21 conference.“Sometimes we have to strike a voyage because the ship doesn’t return on time,” he explained. “For example, in LA-Long Beach, we have more ships at anchor than at berth and it takes longer for those ships to get back to Asia. That doesn’t mean the sailing has been blanked. In essence it means that the voyage slides because there is simply too much delay. Today, we do not blank any sailings if we have a ship available.”Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com </a>and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

Trans-Atlantic

Container lines

Trans-Atlantic braces for rate hikes as capacity shifts elsewhere

<div class="phx-topic abstract-wrapper">Several top French shippers have committed to a wind-driven sailing service on the trans-Atlantic as part of efforts to further reduce their cargo’s carbon footprint.
 
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Several top French shippers have committed to a wind-driven sailing service on the trans-Atlantic as part of efforts to further reduce their cargo’s carbon footprint.

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<div class="phx-topic">Shipowner and operator NEOLINE plans to deploy wind-powered vessels on a containerized ocean service between France and North America by 2023, and has already signed up some of France’s largest shippers to the emissions-cutting transportation mode.Tire manufacturer Michelin this week committed to transporting tires loaded in containers from Halifax, Canada, to the French port of Saint-Nazaire Montoir-de-Bretagne on the NEOLINE service, which will also call at the archipelago of Saint Pierre and Miquelon off the coast of Newfoundland, and at the US East Coast port of Baltimore.In December, French cognac producer Jas Hennessy &amp; Co. signed a letter of intent with NEOLINE to transport 4 million bottles in containers every year on the Nantes-based company’s sailing ships between Montoir-de-Bretagne in France and Baltimore. Automobile producer Groupe Renault, boat maker Groupe Beneteau, and heavy equipment manufacturer Manitou Group have also committed to using the service.After commencing the trans-Atlantic service with its first vessel in 2023, a second vessel will be added a year later. During that time, Michelin will gradually shift at least 50 percent of its containers transported from North America to Europe to the NEOLINE service, the company said.NEOLINE was created in 2015 for the purpose of developing and operating the wind-driven ships. The decarbonized service relies on clean and renewable wind energy as the main propulsion for its 136-meter-long cargo ships, each of which will have 4,200 square meters of sails.Equipped with two loading ramps, the “Neoliner” ships will be able to load cargo units of various sizes with a nominal capacity of 280 TEU, or 500 cars in a roll-on/roll-off (ro/ro) configuration. The vessels will sail at 11 knots, slower than traditional ships, which are designed to travel at about 24 knots, or 18 to 20 knots when slow steaming. At 11 knots, the Neoliner would complete a sailing from Baltimore to France in around 14 days, as opposed to nine days at 18 knots. However, on a trans-Atlantic sailing, the ships will produce approximately 90 percent less carbon dioxide (CO2) emissions than conventional vessels of the same size.Jean Zanuttini, president of NEOLINE, said its orderbook for the westbound service from Europe to North America in 2023 was already “well filled,” and Michelin was the first to commit to the eastbound leg.“With our sailing cargo ships, we are developing a mode of transport that is more environmentally friendly, adapted to the current economic and logistical reality of shippers, and not dependent on fossil fuels,” Zanuttini said. He added that construction of the first vessel would begin soon.<h2>Sailing ships fit emissions-cutting drive</h2>Pierre-Martin Huet, Michelin Group supply chain director, said the carbon-free shipping method was in line with the CSR strategy where the group was continually testing new solutions to decarbonize its logistics operations.“It will contribute to achieving the objective of reducing CO2 emissions from logistics by 15 percent in absolute terms between 2018 and 2030,” he said in a statement.According to Laurent Boillot, president of Jas Hennessy &amp; Co., 94 percent of the company’s cargo moves via maritime transport, and the collaboration with NEOLINE is part of an ongoing push to increase sustainability in its transportation operations that was initiated years ago.As an industry, maritime transport emits about 940 million tons of CO2 annually and is responsible for about 2.5 percent of global greenhouse gas (GHG) emissions, according to the International Maritime Organization (IMO).The IMO in 2018 adopted a resolution that set two goals for GHG reductions in shipping, for the first time bringing the shipping industry broadly into line with the goals of the UN’s Paris Agreement to combat climate change. The first of those targets is a 40 percent increase in overall fleet efficiency by 2030, and the second is a 50 percent reduction in absolute emissions from 2008 levels by 2050, with emissions to be reduced to zero or near zero as quickly as possible after 2050.With the tight timelines for cleaning up its act, the shipping industry is <a href="https://www.joc.com/technology/shipping-decarbonization-research-centers-fuel-cells_20200421.html">intensely focused on developing alternative fuels</a> and has remained skeptical about wind-assisted energy systems being able to advance decarbonization goals. Despite the technology being promoted for years, it has gained little traction across a wider industry.However, most of those doubts have been centered around the viability of wind technology to propel large ocean-going vessels, with <a href="https://www.joc.com/maritime-news/k-line-sets-sail-wind-assisted-decarbonization-strategy_20200527.html">images of bulk carriers flying giant kites</a> doing little to convince the skeptics.NEOLINE is a member of the <a href="http://wind-ship.org/en/grid-homepage/">International Windship Association</a>, an industry body promoting wind propulsion for cargo ships that has expanded its membership significantly over the last few years as shipping companies, classification societies, tech providers, and environmental groups search for ways to decarbonize the supply chain.Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

Maritime

French shippers fill sails of trans-Atlantic wind-powered service

<div class="phx-topic abstract-wrapper">US imports from Europe have been rising steadily since August, with the trans-Atlantic so far able to shrug off the severe disruption experienced on the trades out of Asia.</div>

US imports from Europe have been rising steadily since August, with the trans-Atlantic so far able to shrug off the severe disruption experienced on the trades out of Asia.

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<div class="phx-topic">Carriers and shippers on the trans-Atlantic are expecting the current strong demand on the trade to strengthen further this year as COVID-19 vaccines are rolled out and locked down industry sectors reopen.US import volume from Europe has been rising since August, with the growth accelerating through the end of the year. December volume grew 7.6 percent year over year after an almost 3 percent gain in November, according to data from PIERS, a sister company of JOC.com within IHS Markit.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5255441_1.0.PNG"></img><a href="https://www.joc.com/sites/default/files/u283871/Atlantic%20US%20imports%202020.PNG">Click to enlarge</a>.</div>For the full year, US imports from Europe fell 6.3 percent to 2.2 million TEU, with the first-half lockdowns to curb the spread of the coronavirus disease 2019 (COVID-19) impacting high-volume commodities such as machinery and spare parts.“Based on the indicators we are looking at and what we see from customers, demand will be robust, although not as much as on the Asia trades,” said Holger Oetjen, senior director trade management for the Atlantic at Hapag-Lloyd. “We expect the Atlantic is getting back to normal and the recovery is a lot quicker than previously feared.”In anticipation of strengthening demand, carriers will cut trans-Atlantic blank sailings sharply through the first quarter. <a href="https://www.eesea.com/blank-sailings">Blank sailings data from eeSea</a> show that from 23 canceled sailings in January, which represent 11.6 percent of the total number of sailings that month, just two sailings will be cut in March, or 1.7 percent.However, in an indication of the uncertainties that continue to cloud the market, THE Alliance’s trans-Atlantic network restructuring from the second quarter will see the continued suspension of the group’s ALS1 service linking North Europe ports with the US East Coast. THE Alliance will continue to operate four services on the trade.Oetjen acknowledged that lockdowns across Europe and increasingly restrictive anti-coronavirus measures in the US made predictions difficult, but said the vaccine rollout is improving the outlook.“There is light at the end of the tunnel because of vaccines, and that could mean people go back to spending on services, on travel and entertainment,” he said. “This is not something that can be shipped in containers, but as those industries come back to life, they will create more employment, there will be more money going around, and the stimulus packages are coming. As time goes on, and more people are vaccinated, the situation will improve.”<h2>Vaccines to drive demand</h2>That optimistic view was shared by Alison Leavitt, managing director of the Wine and Spirits Shippers Association. PIERS data shows US imports of beverage and spirits in 2020 increased 3.2 percent year over year to 291,440 TEU, but the vast majority of that growth was condensed into the last five months.“The demand is going to remain strong and get stronger as the year goes on,” Leavitt told JOC.com, agreeing that the vaccines would stimulate a return of businesses that have been shut down for the past year.“The travel industry will play a huge part in this demand growth once people are vaccinated and travel ramps up,” she said. “We do a lot of business with the cruise ship and airline industry, where thousands of containers were taken off the table last year. But we are starting to see the cruise ship importers bringing some products back, anticipating the industry will start up again in late summer or fall.”The trans-Atlantic is largely free of the severe equipment shortages and soaring rate levels being seen on the trans-Pacific and Asia-Europe trade, but it is not immune to the disruption. Port congestion in the UK and European ports, and an overwhelmed US inland supply chain, is delaying the turnaround of containers and limiting the ability of carriers to reposition boxes.While Oetjen said the trans-Atlantic “was pretty well covered,” he said equipment problems in Europe were having an effect on the trade.“The whole system is carefully crafted and is thrown out of whack at the moment because of the congestion we are seeing, which has created a shortfall here and there,” he said.Rates have risen slowly but steadily since the end of September, with the average spot market rate this week of $2,022 per FEU, an increase of 6.4 percent over the week of Sept. 30, but barely 1 percent up on the same week in 2020, according to data from rate benchmarking platform Xeneta. By contrast, headhaul trans-Pacific and Asia–Europe spot rates had skyrocketed 150 percent and 302 percent year over year, respectively, as of Jan. 22, according to Xeneta. Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

Trans-Atlantic container trade growth accelerating

<div class="phx-topic abstract-wrapper">A surprisingly strong rebound in the US economy through November bodes well for the headhaul trade between Europe and North America in 2021.</div>

A surprisingly strong rebound in the US economy through November bodes well for the headhaul trade between Europe and North America in 2021.

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<div class="phx-topic">This story appears in the print edition of the Jan. 4, 2021, Journal of Commerce Annual Review and Outlook.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5255786_1.0.png"></img></div>Volumes of the leading commodities imported to the United States from Europe has increased steadily since June, adding a welcome touch of positivity to the outlook for the trans-Atlantic trade, a lane far less affected by the seasonal volatility that dominates the trans-Pacific and Asia–Europe trades.However, there remains little visibility into 2021, with the picture clouded by the the dramatic rise in COVID-19 infection levels expected in the US over the next few months and by any subsequent restrictions on non-essential travel and commerce, which could have a significant bearing on the strength of demand in the early part of the new year.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5255788_1.0.png"></img><a href="https://www.joc.com/sites/default/files/u4595771/PIERS%20WB%20TA%20Volumes%20Oct.%202020.png">Click to enlarge</a>.</div>“Any projection depends on how the pandemic surges, the new second- and third-wave shutdowns, their impact on consumer behaviors, and the speed of vaccine distributions,” advised Judah Levine, group research lead at freight rate marketplace Freightos.A steady rebound in demand kept carriers busy through the end of 2020, with October volumes of beverages and spirits, the top EU–North America commodity, reaching 48,642 TEU, a 45 percent increase from June, when initial COVID-19 lockdowns ended on both sides of the Atlantic, according to data from PIERS, a sister product of JOC.com within IHS Markit. US furniture imports from Europe jumped 86 percent to 18,806 TEU in October compared with June, while shipments of vehicles and parts soared almost 150 percent to 18,561 TEU for the month.Despite the rising volume, the 2M Alliance partners Maersk and Mediterranean Shipping Co. are maintaining the suspension of one of their four trans-Atlantic services to the end of the year. However, the carriers deployed larger vessels on the remaining trans-Atlantic loops from November to compensate for the cut service, preventing spot freight rates from following rising demand.“Carriers increased trans-Atlantic capacity in November, and rates have stayed level at about $1,875 per FEU, based on the Freightos Baltic Index, and are about on par with last year, indicating that volumes have remained healthy since the rebound in August,” Levine said.<h2>Early optimism</h2><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5255810_1.0.png"></img><a href="https://www.joc.com/sites/default/files/u4595771/Drewry%20WB%20TA%20Spot%20Rates%2011-26-20.png">Click to enlarge</a>.</div>The trans-Atlantic trade stands in stark contrast to the trans-Pacific and Asia–Europe lanes, where spot rates have reached record levels as demand overwhelms the Asia export supply pipeline.However, Rolf Habben Jansen, CEO of Hapag-Lloyd, told JOC.com that the trans-Atlantic has always lagged the other trades in responding to global demand shocks.“It held up longer than Asia–Europe and the trans-Pacific, and it has been down a little longer,” Habben Jansen said in a November interview. “We have only seen the trans-Atlantic start to recover in the last four to six weeks, and it has been quite strong. I would like the demand levels to remain more or less where they are today, and as the volume is normalizing, it seems the likelihood that will happen is high. But one of the things we have learned through this crisis is that the picture can change rapidly.”Bill Villalon, president of the forwarder APL Logistics, said demand growth in 2020 and potential transport of millions of COVID-19 vaccine doses bodes well for the Europe–Americas trade in 2021.“Based on our research, we believe that a successful vaccine rollout will be key to robust volumes in this trade, and all trades,” he told JOC.com, adding that although the firm hopes US President-elect Joe Biden will begin to unwind US tariffs on EU goods put in place by the Trump administration when he takes office, “there is no way to accurately predict this.”There is also largely positive news coming from Europe, despite indications that European GDP may have contracted again in the fourth quarter. EU GDP jumped 11.6 percent in the third quarter of 2020, the sharpest quarterly increase since the EU began tracking the continent-wide metric in 1995, but only after falling 11.4 percent in the second quarter, the sharpest quarterly decline since 1995, and 3.2 percent in the first quarter, according to Eurostat, the statistical office of the European Union.Purchasing Managers' Index® (PMI®) data from IHS Markit indicated that manufacturing output continued to grow “at a decent pace” in November, said Chris Williamson, chief business economist at IHS Markit, parent company of JOC.com. The monthly PMI survey found increased production and order requirements meant that firms continued to increase their purchasing activity, with growth reaching two-year highs.“Germany was once again the main engine behind the region’s expansion, enjoying a rate of output and orderbook growth that has been rarely exceeded over the survey’s 25-year history,” said Williamson.Williamson said positive sentiment is also being seen in the US, despite the latest wave of COVID-19 infections, as manufacturing growth in November accelerated to the highest level in over six years. “Most encouraging was the breakdown of the rise in new orders, which underpinned the expansion,” he said. “Although demand for consumer goods remained somewhat subdued, mainly reflecting rising virus infection rates, demand for investment goods such as business equipment and machinery rose sharply.”Looking ahead to 2021, Williamson said expectations for US consumer spending “have surged to the most optimistic for over six years, reflecting the combination of a post-election lift to confidence and encouraging news that vaccines may allow a return to more normal business conditions in the not-too-distant future.”Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

Outlook 2021: Steady trans-Atlantic trade sees demand rebound

<div class="phx-topic abstract-wrapper">Alternatives to expensive air freight have been available on the trans-Pacific for years, but as space constraints make air cargo an increasingly unreliable option, a new expedited ocean product will soon be launched on the trans-Atlantic.</div>

Alternatives to expensive air freight have been available on the trans-Pacific for years, but as space constraints make air cargo an increasingly unreliable option, a new expedited ocean product will soon be launched on the trans-Atlantic.

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<div class="phx-topic">APL Logistics will launch an expedited ocean service from Europe to the United States in November as an alternative to air cargo where chronic capacity constraints have cut reliability on the trans-Atlantic and driven rates to record levels.According to president of APL Logistics Bill Villalon, port-to-port transit will be nine to 10 days, competitive with air at six to seven days, while the cost will be one-third to half that of air cargo. But he noted that the real selling point of the expedited ocean service was reliability, rather than speed or even price.“This is a capacity and reliability issue,” he said. “When you compare ocean transit to air, it is misleading because the airport-to-airport transit does not reflect the true time from tender to shelf. The true transit time has to take into account the availability of capacity, and from an ocean standpoint, your capacity is not capped as it is in air.”<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5251798_1.0.PNG"></img><a href="https://www.joc.com/sites/default/files/u283871/26%20Oct_Air%20cargo%20EU-US.PNG">Click to enlarge</a>.</div>Still, ocean is facing its own reliability issues, with the latest data from Sea-Intelligence Maritime Analysis showing on-time performance by carriers on the trans-Atlantic falling to 71.5 percent in September from 86.6 percent in June. Villalon said APL Logistics’ premium ocean service will operate from Bremerhaven in Germany to Norfolk on the US East Coast, offering time-definite delivery to destinations throughout the United States. The expedited product is modeled on the company’s expedited OceanGuaranteed on the trans-Pacific, which Villalon said has been successful for more than a decade.“The trans-Atlantic product will use the same business model as the trans-Pacific, which is consolidation at origin, expedited transit using specific strings that we pick according to historically low disruption factors and schedule reliability,” he told JOC.com.“On the trans-Pacific, once the shipment gets to the US port of entry, we control the deconsolidation and then use XPO Logistics’ less-than-truckload (LTL) network,” Villalon added. “We drop those shipments in the LTL network in North America and then we have delivery into any zip code. We will do the same thing in the trans-Atlantic. When the shipments hit Norfolk they will go right into the LTL network of XPO.”Europe to North America routes are dominated by passenger aircraft that carry cargo below decks, and when the travel bans were imposed in late March to combat the spreading of the coronavirus disease 2019 (COVID-19), it removed at least half the available cargo capacity on the trade lane overnight. With countries on both sides of the Atlantic locked down until June, the available capacity was filled with medical supplies, personal protective equipment (PPE), and perishables, while freight rates soared to record highs.Although the urgent demand for PPE has diminished for now, online shopping, perishables, and general air cargo now compete for limited space, and rates have remained elevated with most of the passenger fleet still grounded. On the Frankfurt-North America route, the average rate this week is $3.40 per kilogram, up 84 percent compared with the same week in 2019.<h2>Shippers want reliability over speed</h2><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5251802_1.0.PNG"></img><a href="https://www.joc.com/sites/default/files/u283871/26%20Oct_WCI%20rate.PNG">Click to enlarge</a>.</div>Villalon said APL’s research into the expedited product suggested that one-third of the freight being shipped by air was based around getting a delivery window and not because it was a faster mode of transport.“You need a shipment in maybe two weeks, but if there is nothing available over that two weeks, then that becomes problematic, so you default to air freight,” he said. “You pay more than you have to, and you get it sooner than you wanted, but at least you know you have it at your distribution center or at your plant.“This product is meant to be complementary to air and not to eliminate it,” he added. “If someone is facing a plant shutdown, this is not the alternative, but air capacity is going to be tight in the next year, especially if there is a significant distribution of vaccines.”According to Villalon, while less-than-containerload (LCL) cargo is typically priced per cubic meter, the APL Logistics expedited product rate is in kilograms, designed to mimic air freight and allow shippers to immediately see the comparability.He did not name the carriers or the alliance APL Logistics will be using on the trans-Atlantic, but said the particular string identified carries a high proportion of auto parts and US military cargo, and has reliable schedules.However, Villalon said the trans-Pacific services had shown that getting the containers to the port and discharged quickly from the ship was only one part of the expedited product, especially during times of heavy demand.“You have handling delays, truck and chassis capacity shortages that lead to delays in getting out of town, whereas the LTL network is scheduled so the capacity is highly reliable and can be delivered to any zip code at a price that is very user-friendly and can be easily calculated,” he said.Villalon told JOC.com another significant factor driving interest in ocean services over air cargo was the need to reduce greenhouse gas (GHG) emissions in supply chains.“We are assisting customers in designing their supply chains to minimize their carbon footprint,” he said. “We have data around the differences per ocean carrier based on their GHG profile, and we can identify places in the supply chain where the greatest amount of carbon is being emitted.“There are increasing numbers of companies being asked to publish this information by their boards, and in many cases this is going into annual reports,” Villalon added. “Much like the financials are reported, investors are demanding GHG emissions information. So this is not just an alternative to air.”Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

APL Logistics brings expedited ocean service to trans-Atlantic

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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

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>

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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>

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">Maersk and MSC do not believe demand on the trans-Atlantic through the fourth quarter will be strong enough to support four Europe–North America loops.</div>

Maersk and MSC do not believe demand on the trans-Atlantic through the fourth quarter will be strong enough to support four Europe–North America loops.

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<div class="phx-topic">2M Alliance partners Maersk and Mediterranean Shipping Co. have extended the suspension of one of their four trans-Atlantic services to the end of the year, despite a spike in US import volumes in August and September.Maersk and MSC will blank all voyages on the TA4/NEUATL4 service, “up to and including voyage 052W (week 52), which was scheduled to depart Antwerp on Dec. 21,” MSC told customers in an advisory this week.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5252183_1.0.PNG"></img><a href="https://www.joc.com/sites/default/files/u283871/24%20Sept_EU-US%20WCI%20rate.PNG">Click to enlarge</a>.</div>“To continue MSC’s prudent approach to capacity management during the COVID-19 (coronavirus disease 2019) crisis, we intend to prolong our trans-Atlantic network seasonal blank sailing program, in line with market demand across Europe and the USA,” MSC said.But the extended suspension comes despite the Europe–North America container trade <a href="https://www.joc.com/maritime-news/trans-atlantic-container-volumes-rebounding_20200925.html">seeing a spike in volume in August</a>, recording its first year-over-year growth since April, according to data from PIERS, a sister company of JOC.com within IHS Markit. Forwarders and carriers tell JOC.com the August volume momentum continued through September.Maersk and MSC first withdrew the North Europe–US East Coast loop in April after the coronavirus locked down countries on both sides of the Atlantic. The TA4/NEUATL4 would turn in five weeks with the rotation of Antwerp, Rotterdam, Bremerhaven, Liverpool, New York (Newark), Savannah, Port Everglades, Charleston, and Antwerp.The ports will be served by the three other trans-Atlantic loops operated by the 2M partners, except for Liverpool and Port Everglades, according to Alphaliner’s latest weekly newsletter.<h2>Leaving of Liverpool</h2>The omission of Liverpool means alternative routing of cargo is required, said Alison Leavitt, managing director of the Boston-based Wine and Spirits Shippers Association (WSSA).“Artificial space restrictions on the trans-Atlantic trade continue to lead to full vessels on the North Europe to US lane,” she told JOC.com. “The continued cancellation of the Liverpool to New York string creates congestion in [Liverpool] as well, and as much as we love using Liverpool for an exit port for Scotch whisky, there are plenty of alternatives so we are able to keep cargo moving.”Alphaliner said Maersk and MSC were partly compensating for the loss of capacity of the TA/NEUATL4 loop by deploying larger ships in the other trans-Atlantic services.The 5,700-TEU MSC Soraya and 4,822-TEU Maersk Gironde of the North Europe–USEC–US Gulf TA3/NEUATL3, which now serves Newark as first US port of discharge, will be replaced next week by the 9,411-TEU MSC Chloe and the 6,648-TEU Sealand Illinois.Next month, Maersk also intends to deploy the 7,250-TEU Maersk Sembawang on its TA2/NEUATL2 service as a replacement for the 5,060-TEU Santiago, while the 6,478-TEU Maersk Hartford will take over from the 4,822-TEU Maersk Iowa on the TA1/NEUATL1 loop.Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

2M extends blanked trans-Atlantic service until year-end

<div class="phx-topic abstract-wrapper">A long-awaited recovery in the trans-Atlantic trade appears to be underway with a steep increase in US import volume from Europe for some previously hard-hit commodities.</div>

A long-awaited recovery in the trans-Atlantic trade appears to be underway with a steep increase in US import volume from Europe for some previously hard-hit commodities.

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<div class="phx-topic">The Europe-North America container trade saw a spike in volume in August as US imports of high-volume commodities increased sharply, despite economic recessions on both sides of the Atlantic.It was the trade’s first year-over-year growth since April, when COVID-19 lockdowns in the United States and European Union brought demand to a standstill, and forwarders and carriers tell JOC.com the August volume momentum has continued through September.Containerized US imports from Europe were up almost 11 percent in August compared with the same month last year, a stark turnaround from year-over-year declines of 6.8 percent in July and 25 percent in June, according to data from PIERS, a sister company of JOC.com within IHS Markit. Imports of the seven top commodities from Europe increased almost 4 percent year over year, with some product sectors showing sharp turnarounds in demand.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5252251_1.0.PNG"></img><a href="https://www.joc.com/sites/default/files/u283871/25%20Sept_US%20imports%20from%20Europe.PNG">Click to enlarge</a>.</div>The highest growth was in the wine and spirits sector, which in August recorded a 27 percent year-over-year increase in volume. This was a dramatic improvement on the 9 percent decline in volume seen in July compared with the same month last year.Alison Leavitt, managing director of the Wine and Spirits Shippers Association (WSSA), said volume being shipped into the US was almost at “normal” levels for this time of year, and would likely continue into the beginning of the fourth quarter.“We expect alcoholic beverages to be a strong seller during the holiday months, despite the limitations on gatherings and restaurant-bar openings, and the space situation is manageable as long as we do not have unexpected blank sailings in the upcoming months,” Leavitt told JOC.com.According to Sea-Intelligence Maritime Analysis, the last blank sailing announced by the carriers was in early August (week 31), although the 2M Alliance of Maersk Line and Mediterranean Shipping Co. have extended the suspension of their TA4/NEUATL4 trans-Atlantic loop through September. The service, which deploys five vessels of 5,300 TEU, was originally suspended until mid-July.The automotive market is also on the rebound after being hit hard by the COVID-19 pandemic. PIERS data show the 12,476 TEU of vehicles and parts shipped from Europe to North America in August was down 25 percent compared with the same month last year, but it was a considerable improvement on the 49 percent decline recorded in July, and the 66 percent decrease in June.A spokesperson for Hapag-Lloyd said demand on the trans-Atlantic has been rising since June, leading to strong utilization of its vessels, led by the automotive sector.“There is no boom like on the trans-Pacific, but a continuous improvement of volume, which we expect to continue also in the fourth quarter,” the spokesperson said. “Especially automotive transports have recovered after decreasing in the second quarter.”Other US imports from Europe that have rebounded in August include plastics, up 14 percent year over year after posting an 18 percent decline in July, and furniture, which was up 19 percent after a 26 percent drop in July compared with the same month last year.<h2>Rate levels not following rising demand</h2>However, the improvement in demand has not been matched by corresponding increases in freight rates on the westbound trans-Atlantic, as it has <a href="https://www.joc.com/maritime-news/container-lines/asia%E2%80%93us-west-coast-spot-rate-eclipses-4000-feu-drewry-index_20200924.html">in the trans-Pacific trade</a>. According to data from online rate marketplace Xeneta, the average levels of both short- and long-term Europe–US rates through August and September were lower than during the same months last year. A snapshot of the spot market on the Xeneta platform on Sept. 24 shows rates at $2,018 per FEU, down 9.5 percent year over year, and long-term rates at $1,855 per FEU, a drop of 6.5 percent compared with the same week last year.The Drewry World Container Index (WCI) estimated average Rotterdam to New York spot rates at $2,437 per FEU on Sept. 17, up 4 percent year over year.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5252257_1.0.PNG"></img><a href="https://www.joc.com/sites/default/files/u283871/24%20Sept_EU-US%20WCI%20rate.PNG">Click to enlarge</a>.</div>Significant increases in freight all kinds (FAK) rates from Oct. 1 have been announced by some carriers on the trans-Atlantic from Europe to Canada. On the North Europe–Canada East Coast route, the FAK settings range from $3,900 to $6,700 per FEU, while Mediterranean–Canada East Coast rates range from $3,600 to $4,516 per FEU. Similar to general rate increases in the trans-Pacific, however, these FAK rates are aspirational, and it remains to be seen whether shippers will actually pay the much higher prices.“Fortunately, the trans-Atlantic market does not suffer with the massive price swings typical in the trans-Pacific and we are able to plan together with our carriers to manage any uptick or downturns in the market,” Leavitt said.Erik Devetak, head of product at Xeneta, said most of the capacity that had been removed from the trans-Atlantic via blank sailings during the second and third quarters has now been reinstated, but contract rate levels were growing. “It looks like there is a shift in mentality globally from shippers in accepting higher rates and that is slowly finding its way to the trans-Atlantic,” he said.Interestingly, the Xeneta platform shows that the highest long-term rate contract was 17 percent above the average short-term rate level, a peculiarity that was also picked up by BIMCO analysis.Peter Sand, chief shipping analyst for BIMCO, told JOC.com that some long-term contract rates were actually higher than the spot rates as the spot market remained weak on the headhaul westbound trans-Atlantic trade.“Capacity management is either not applied on this trade lane, or not working anywhere near as well as on most other trade lanes,” he said. “For Q4, BIMCO expects more of the same. Europe to North America is a very steady trade with no real peak season. Obviously, the trans-Atlantic is not a focus area for the carriers.”Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

Trans-Atlantic container volumes rebounding

<div class="phx-topic abstract-wrapper">Aggressive capacity management in response to the effects of the COVID-19 crisis and escalating tariffs has helped the top 10 container carriers operating in the Europe–US trade increase their share of the market so far in 2020.</div>

Aggressive capacity management in response to the effects of the COVID-19 crisis and escalating tariffs has helped the top 10 container carriers operating in the Europe–US trade increase their share of the market so far in 2020.

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JOC Rankings: Top trans-Atlantic carriers, ports weather lower volumes

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