<div class="phx-topic abstract-wrapper">Third-quarter earnings reports reveal across-the-board increases in transportation rates, with little sign pressure will ease soon.</div>

Third-quarter earnings reports reveal across-the-board increases in transportation rates, with little sign pressure will ease soon.

<div>[Editorial note: image removed/no longer available]Trucking rates are rising and there's no expectation the trend will dissipate in the short-term. Photo credit: ShutterstockA wave of industrial and consumer-based <a>freight demand</a> lifted revenue at a broad range of US transportation companies in the third quarter, and also put increasing pressure on transportation rates. Shippers should not be surprised to receive more than one rate hike this holiday season.UPS on Wednesday said it will raise ground and air rates an average of 4.9 percent on Dec. 24. FedEx announced in September a 4.9 percent general rate increase set for Jan. 1, 2018....

[Editorial note: image removed/no longer available] Trucking rates are rising and there's no expectation the trend will dissipate in the short-term. Photo credit: Shutterstock A wave of industrial and consumer-based freight demand lifted revenue at a broad range of US transportation companies in the third quarter, and also put increasing pressure on transportation rates. Shippers should not be surprised to receive more than one rate hike this holiday season. UPS on Wednesday said it will raise ground and air rates an average of 4.9 percent on Dec. 24. FedEx announced in September a 4.9 percent general rate increase set for Jan. 1, 2018. Less-than-truckload rates have been rising since the spring in advance of truckload pricing. “Tightening industry capacity and pricing increases accelerated the pace of our revenue growth for September,” said David S. Congdon, vice chairman and CEO of Old Dominion Freight Line, the third-largest US LTL carrier, which saw revenue rise 11.5 percent year over year. Jim Gattoni, president and CEO of truckload carrier Landstar System, said revenue per load hauled by trucks in the quarter rose 6 percent year over year. Month by month, revenue per load rose 3 percent in July, 4 percent in August, and shot up 9 percent in September. “The pricing environment for our truckload services strengthened throughout the 2017 third quarter,” Gattoni said Wednesday. Tighter capacity, especially following hurricanes Harvey and Irma in September, combined with stronger demand to push pricing up more rapidly. More than base rates are rising. Fuel surcharges are moving up and some carriers are raising accessorial charges as well. UPS earlier this year announced its first ever peak season surcharges for packages and heavier items during its busiest weeks before the holidays. Landside transport operators are following a course similar to that container shipping lines and air cargo carriers are taking, managing capacity and boosting rates in the face of rising demand. Carriers that saw rates plunge in 2015 and 2016 consider this “rate restoration” or “relief.” “In the most recent quarter, the data we see has ocean utilization at over 97 percent,” David Abney, CEO of UPS, said Thursday in an earnings call. “So you have a high demand environment now with capacity really becoming tight. Obviously, that's driving rates up.” That is true on land and sea. “In July, we indicated that we were starting to see signs of life in both pricing and demand in the truckload market,” said Doug Waggoner, chairman and CEO of Echo Global Logistics. Today, both are at “higher levels than at any recent time in our business.” In the third quarter, Echo’s truckload rates increased 14 percent and LTL rates 7 percent, Waggoner said in a call transcribed by Seeking Alpha. The logistics provider’s truckload “buy rates” that it paid carriers were up 15 percent year over year in the quarter, Waggoner said. Surface transportation pricing was thrown off-kilter to an extent by hurricanes Harvey and Irma, which disrupted the normal flow of goods just as the fall shipping season began. Spot market transportation rates soared in September, as recovery efforts consumed available capacity. The immediate impact of the storms has faded, but the report Friday that the US economy maintained a 3 percent gross domestic product growth rate in the third quarter — better than the 2.5 percent gain expected by economists — suggests pricing pressure will not ease soon. “I expect strong pricing to continue through the 2017 fourth quarter with revenue per load on loads hauled via truck to exceed the prior year fourth quarter in a low double-digit percentage range,” Landstar’s Gattoni said. That level of increase would show a gain from the third quarter. In a recent letter to customers, J.B. Hunt Transportation Services warned overall transportation costs could rise 10 percent or more. “This is one of the highest periods of turbulence and volatility in supply we have ever experienced, and we don’t think it will abate any time soon,” J.B. Hunt executives said in the letter. With the electronic logging mandate coming Dec. 18, the question facing shippers and 3PLs is how tight will truck capacity get in 2018 and how high will rates go? “I think everybody that's in this market today does believe that rates are heading north into 2018,” Waggoner said. Contact William B. Cassidy at bill.cassidy@joc.com and follow him on Twitter: @wbcassidy_joc

Truck brokers

Truckload

Under pressure, US transport rates keep rising

<div class="phx-topic abstract-wrapper">In creating the threat of a clearly significant penalty, the US Trade Representative essentially forced observers to not merely give a thumbs up or down to the proposal, but to offer alternative solutions. </div>

In creating the threat of a clearly significant penalty, the US Trade Representative essentially forced observers to not merely give a thumbs up or down to the proposal, but to offer alternative solutions.

Feature image

<div class="phx-topic">Hearings this week held by the US Trade Representative over the potential levying of fees on Chinese-built and operated ships calling at US ports certainly struck a nerve in the maritime industry. The Section 301 investigation, officially known as “China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance,” prompted 520 comments submitted to the USTR by the March 24 deadline. More than 60 individuals gave testimony over two days of hearings. Perhaps the process was designed to elicit the heavy response the USTR received. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5971718_0.1.jpg"></img></div>By proposing fees of up to $1.5 million per US port call by Chinese tonnage, the industry had no option but to take notice. Some providing comments and testimony noted that the imposition of such fees would create an existential threat to their ability to serve US trades, or specific ports, or, in some cases, to operate at all. In creating the threat of a clearly significant penalty, the USTR essentially forced those commenting to not merely give a thumbs up or down to the proposal, but to give alternative solutions based on the assumption that the Trump administration wanted something to be done to stimulate US shipbuilding. <h3>‘Think creatively’ </h3>“This essentially turned into a big brainstorming session,” Lauren Beagen, a trade attorney and former counsel at the US Federal Maritime Commission, told the Journal of Commerce this week. Beagen said the hearings forced the industry to think about ways that would allow the Trump administration to progress in its goals toward revitalizing the shipbuilding industry and US merchant fleet that likely wouldn’t have happened if the proposed penalties weren’t severe. “If the USTR just held a public hearing about how trade policies were impacting our shipbuilding industry, no one would have come,” she said. “This made everyone pay attention, and it also forced them to think creatively. How else would you have gotten the entire industry together to brainstorm like this.” To wit, a number of comments submitted to the USTR said the proposed fees were unworkable, but also had alternative suggestions to help invigorate US shipbuilding. The National Association of Waterfront Employers (NAWE), for instance, urged the USTR to consider a per-sailing fee, rather than a fee per port call, to prevent ocean carriers from consolidating port calls and hurting economic interests at US secondary and tertiary ports. <h3>Phased approach </h3>The Duluth Seaway Authority suggested the USTR phase in the port call fees and adopt a tiered approach to assessing the fees based on vessel and cargo types and the economic impact to the region. Similarly, the Port of New York and New Jersey said a phased approach to enforcing the fees would not penalize carriers for vessel and terminal investments that in some cases were made more than a decade ago. Container shipping analyst John McCown said in comments to the USTR that all fees collected in a prospective tariff program should go to a trust fund purely to support the US maritime sector. McCown estimated, using 2024 figures, that $58.9 billion would be collected annually in port fees, which represents 3.8% of the $1.5 trillion in imported goods moved via ocean, according to figures from UN Trade and Development (UNCTAD). “The good news/bad news is that the high value of container cargo puts that sector in the best position to absorb such large fees,” McCown wrote. And as an alternative to port call fees, he floated the idea of assessing per-container fees on boxes moving on Chinese-built ships that would be roughly equivalent to the amount China subsidizes its container line operators and shipbuilding industries. While that proposal, amounting to a fee of up to $60 per container, would generate far less revenue than the port call option, it would have a negligible impact on carrier networks and shippers’ supply chains, McCown argued. The broad effect of the port call fee proposal has been a call to arms across maritime and cargo interests to take seriously the administration’s efforts to reinvigorate US shipbuilding and operations in a way that would have been absent minus the threat of economic pain. Contact Eric Johnson at eric.johnson@spglobal.com. </div>

Hearings this week held by the US Trade Representative over the potential levying of fees on Chinese-built and operated ships calling at US ports certainly struck a nerve in the maritime industry. The Section 301 investigation, officially known as “China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance,” prompted 520 comments submitted to the USTR by the March 24 deadline. More than 60 individuals gave testimony over two days of hearings. Perhaps the process was designed to elicit the heavy response the USTR received. By proposing fees of up to $1.5 million per US port call by Chinese tonnage, the industry had no option but to take notice. Some providing comments and testimony noted that the imposition of such fees would create an existential threat to their ability to serve US trades, or specific ports, or, in some cases, to operate at all. In creating the threat of a clearly significant penalty, the USTR essentially forced those commenting to not merely give a thumbs up or down to the proposal, but to give alternative solutions based on the assumption that the Trump administration wanted something to be done to stimulate US shipbuilding. ‘Think creatively’ “This essentially turned into a big brainstorming session,” Lauren Beagen, a trade attorney and former counsel at the US Federal Maritime Commission, told the Journal of Commerce this week. Beagen said the hearings forced the industry to think about ways that would allow the Trump administration to progress in its goals toward revitalizing the shipbuilding industry and US merchant fleet that likely wouldn’t have happened if the proposed penalties weren’t severe. “If the USTR just held a public hearing about how trade policies were impacting our shipbuilding industry, no one would have come,” she said. “This made everyone pay attention, and it also forced them to think creatively. How else would you have gotten the entire industry together to brainstorm like this.” To wit, a number of comments submitted to the USTR said the proposed fees were unworkable, but also had alternative suggestions to help invigorate US shipbuilding. The National Association of Waterfront Employers (NAWE), for instance, urged the USTR to consider a per-sailing fee, rather than a fee per port call, to prevent ocean carriers from consolidating port calls and hurting economic interests at US secondary and tertiary ports. Phased approach The Duluth Seaway Authority suggested the USTR phase in the port call fees and adopt a tiered approach to assessing the fees based on vessel and cargo types and the economic impact to the region. Similarly, the Port of New York and New Jersey said a phased approach to enforcing the fees would not penalize carriers for vessel and terminal investments that in some cases were made more than a decade ago. Container shipping analyst John McCown said in comments to the USTR that all fees collected in a prospective tariff program should go to a trust fund purely to support the US maritime sector. McCown estimated, using 2024 figures, that $58.9 billion would be collected annually in port fees, which represents 3.8% of the $1.5 trillion in imported goods moved via ocean, according to figures from UN Trade and Development (UNCTAD). “The good news/bad news is that the high value of container cargo puts that sector in the best position to absorb such large fees,” McCown wrote. And as an alternative to port call fees, he floated the idea of assessing per-container fees on boxes moving on Chinese-built ships that would be roughly equivalent to the amount China subsidizes its container line operators and shipbuilding industries. While that proposal, amounting to a fee of up to $60 per container, would generate far less revenue than the port call option, it would have a negligible impact on carrier networks and shippers’ supply chains, McCown argued. The broad effect of the port call fee proposal has been a call to arms across maritime and cargo interests to take seriously the administration’s efforts to reinvigorate US shipbuilding and operations in a way that would have been absent minus the threat of economic pain. Contact Eric Johnson at eric.johnson@spglobal.com.

Port News

Container lines

Trans-Atlantic

Trans-Pacific

Transport, Trade and Regulation News

Proposal on Chinese ship fees turned maritime malaise into ‘brainstorming session’

<div class="phx-topic abstract-wrapper">The move comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside China to BlackRock and TiL, especially the Panama ports.</div>

The move comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside China to BlackRock and TiL, especially the Panama ports.

<div class="phx-topic">Hong Kong-based CK Hutchison will miss next week’s target date to sign a deal selling its Panama Ports Company to a consortium of BlackRock and Mediterranean Shipping Co. subsidiary Terminal Investment Limited (TiL). While the signing will not happen by the initial April 2 target date, the sale that has been shrouded in geopolitical intrigue has not been canceled, Hong Kong newspaper the South China Morning Post reported Friday, quoting a source close to Hutchison. No new target date has been announced. The apparent delay comes as Hutchison is facing increasing pressure from the Chinese government over <a href="https://www.joc.com/article/hutchison-inks-228-billion-deal-to-sell-majority-of-port-holdings-to-blackrock-til-5955819">the $22.8 billion sale of its ports business outside China to BlackRock and TiL</a>, especially the PPC owned ports, Christobal and Balboa, at either ends of the Panama Canal. On Friday, China’s State Administration for Market Regulation confirmed its Second Anti-Monopoly Department will review the transaction “to protect fair competition in the market and safeguard the public interest.” The regulator gave no timeline for the probe in a notice published on its website. China has also reportedly told state-owned companies to halt new deals with CK Hutchison and other businesses linked to its founder, Hong Kong billionaire Li Ka-shing and his family, pending a review of their China operations, Bloomberg News reported Thursday. Only new ventures are covered by the moratorium, while existing operations are unaffected, Bloomberg said. Sale documentation for PPC was expected to be signed on or before April 2, Hutchison said in its March 4 announcement that it had reached an agreement “in principle” to sell PPC and its overseas ports network outside China to BlackRock/TiL. The ports-telecoms-retail conglomerate had packaged PPC and its other global ports, excluding its China and Hong Kong terminals, into two separate contracts to enable a quicker sale of PPC and its two Panama ports. Hutchison has a 145-day exclusive negotiating period with BlackRock/TiL to sign final sale documents for both PPC and the other ports, which in total comprise 199 berths in 43 ports spread over 23 countries. The deal was announced amid growing ire within the new Trump administration over alleged Chinese influence in the operation of the Panama Canal. Beijing has not officially commented on the deal, saying it is a commercial transaction, but it has indicated its displeasure in other ways. That includes posting on government websites several critical commentaries, the most recent one on Wednesday, published by a Hong Kong-based pro-Beijing newspaper. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

Hong Kong-based CK Hutchison will miss next week’s target date to sign a deal selling its Panama Ports Company to a consortium of BlackRock and Mediterranean Shipping Co. subsidiary Terminal Investment Limited (TiL). While the signing will not happen by the initial April 2 target date, the sale that has been shrouded in geopolitical intrigue has not been canceled, Hong Kong newspaper the South China Morning Post reported Friday, quoting a source close to Hutchison. No new target date has been announced. The apparent delay comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside China to BlackRock and TiL , especially the PPC owned ports, Christobal and Balboa, at either ends of the Panama Canal. On Friday, China’s State Administration for Market Regulation confirmed its Second Anti-Monopoly Department will review the transaction “to protect fair competition in the market and safeguard the public interest.” The regulator gave no timeline for the probe in a notice published on its website. China has also reportedly told state-owned companies to halt new deals with CK Hutchison and other businesses linked to its founder, Hong Kong billionaire Li Ka-shing and his family, pending a review of their China operations, Bloomberg News reported Thursday. Only new ventures are covered by the moratorium, while existing operations are unaffected, Bloomberg said. Sale documentation for PPC was expected to be signed on or before April 2, Hutchison said in its March 4 announcement that it had reached an agreement “in principle” to sell PPC and its overseas ports network outside China to BlackRock/TiL. The ports-telecoms-retail conglomerate had packaged PPC and its other global ports, excluding its China and Hong Kong terminals, into two separate contracts to enable a quicker sale of PPC and its two Panama ports. Hutchison has a 145-day exclusive negotiating period with BlackRock/TiL to sign final sale documents for both PPC and the other ports, which in total comprise 199 berths in 43 ports spread over 23 countries. The deal was announced amid growing ire within the new Trump administration over alleged Chinese influence in the operation of the Panama Canal. Beijing has not officially commented on the deal, saying it is a commercial transaction, but it has indicated its displeasure in other ways. That includes posting on government websites several critical commentaries, the most recent one on Wednesday, published by a Hong Kong-based pro-Beijing newspaper. Contact Keith Wallis at keithwallis@hotmail.com.

Container Shipping News

International ports

Maritime

Hutchison to delay Panama ports deal signing amid growing Beijing pressure

<div class="phx-topic abstract-wrapper">The deal comes as the world’s largest container shipping company looks to establish a bigger foothold in surface transportation. </div>

The deal comes as the world’s largest container shipping company looks to establish a bigger foothold in surface transportation.

<div class="phx-topic">A subsidiary of Mediterranean Shipping Co. has agreed in principle to acquire a majority ownership stake in intermodal logistics provider COFC Logistics, one of the most popular options for shippers looking to transport 53-foot domestic containers on BNSF Railway. Medlog USA, the MSC subsidiary, is expected to close the deal next week. It will keep the existing COFC Logistics management team in place, including CEO Garry Old. Terms of the deal were not disclosed. COFC hauls more than 100,000 intermodal shipments per year and grosses between $100 million and $500 million in revenue annually, according to Journal of Commerce estimates. Old, who will remain in his position for the next five years and retain a minority ownership stake in COFC, told the Journal of Commerce that shippers and intermodal marketing companies (IMCs) using COFC will not see any changes, adding that the company’s exclusive partnership with BNSF will remain intact. “The name is still the same, our email addresses, our logos, our brand will not change in any way,” Old said. “Our customers won’t notice any differences.” The deal comes as MSC attempts to get deeper into surface transportation in various countries and follows Medlog acquiring UK-based rail and road logistics provider Maritime Transport last September. Medlog made its first major splash in the US in 2022 when it acquired C&amp;K Holdings, which hauls ocean and domestic containers and owns terminals in nearly all US port cities, as well as rail ramps. Ohio-based COFC owns about 8,000 containers catering to customers who want to diversify their rail freight between BNSF and Union Pacific Railroad. Shippers who aren’t large enough to get the attention of leading IMC J.B. Hunt Transport Services will use brokers that team with COFC Logistics, although even large shippers use COFC to have multiple paths to access BNSF’s intermodal network. Medlog will infuse capital into COFC, which has faced the reality of intermodal contract rates falling from pandemic-level highs while operating costs keep rising. “We are restructuring some debt,” said Old. [The deal] improves our financial position.” Old said while asset-based and non-asset intermodal providers are struggling due to unsustainable rates, shippers don’t always tender the volumes they agree to, known as bid compliance. “Our industry needs to be better with BCO [beneficial cargo owner] compliance,” he said. “If the BCO is awarding 10,000 loads and it ends up being 1,000 loads, that’s a problem. That’s where the frustration sets in.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

A subsidiary of Mediterranean Shipping Co. has agreed in principle to acquire a majority ownership stake in intermodal logistics provider COFC Logistics, one of the most popular options for shippers looking to transport 53-foot domestic containers on BNSF Railway. Medlog USA, the MSC subsidiary, is expected to close the deal next week. It will keep the existing COFC Logistics management team in place, including CEO Garry Old. Terms of the deal were not disclosed. COFC hauls more than 100,000 intermodal shipments per year and grosses between $100 million and $500 million in revenue annually, according to Journal of Commerce estimates. Old, who will remain in his position for the next five years and retain a minority ownership stake in COFC, told the Journal of Commerce that shippers and intermodal marketing companies (IMCs) using COFC will not see any changes, adding that the company’s exclusive partnership with BNSF will remain intact. “The name is still the same, our email addresses, our logos, our brand will not change in any way,” Old said. “Our customers won’t notice any differences.” The deal comes as MSC attempts to get deeper into surface transportation in various countries and follows Medlog acquiring UK-based rail and road logistics provider Maritime Transport last September. Medlog made its first major splash in the US in 2022 when it acquired C&K Holdings, which hauls ocean and domestic containers and owns terminals in nearly all US port cities, as well as rail ramps. Ohio-based COFC owns about 8,000 containers catering to customers who want to diversify their rail freight between BNSF and Union Pacific Railroad. Shippers who aren’t large enough to get the attention of leading IMC J.B. Hunt Transport Services will use brokers that team with COFC Logistics, although even large shippers use COFC to have multiple paths to access BNSF’s intermodal network. Medlog will infuse capital into COFC, which has faced the reality of intermodal contract rates falling from pandemic-level highs while operating costs keep rising. “We are restructuring some debt,” said Old. [The deal] improves our financial position.” Old said while asset-based and non-asset intermodal providers are struggling due to unsustainable rates, shippers don’t always tender the volumes they agree to, known as bid compliance. “Our industry needs to be better with BCO [beneficial cargo owner] compliance,” he said. “If the BCO is awarding 10,000 loads and it ends up being 1,000 loads, that’s a problem. That’s where the frustration sets in.” Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

MSC subsidiary acquiring US intermodal provider COFC Logistics

<div class="phx-topic abstract-wrapper">Donald Trump’s latest tariffs targeting the auto sector have put key ro/ro ports on alert as they face a “chilling effect” on volumes.</div>

Donald Trump’s latest tariffs targeting the auto sector have put key ro/ro ports on alert as they face a “chilling effect” on volumes.

<div class="phx-topic">US roll-on/roll-off (ro/ro) ports are expressing apprehension about 25% tariffs on automobile imports that are due to take effect in a matter of days, with cargo activity already fluctuating at some ports.The White House announced Tuesday that President Donald Trump would impose the tariffs on auto imports and certain automobile parts starting April 2. The tariff announcement has dialed up concerns in the Pacific Northwest, where auto imports account for a significant and growing business for the Seattle-Tacoma gateway, Northwest Seaport Alliance (NWSA) spokesperson Melanie Stambaugh Babst told the Journal of Commerce. Spurred by growth of automobile imports between 2020 and 2023, the Port of Tacoma is more than doubling the size of its ro/ro terminal facilities <a href="https://www.joc.com/article/tacoma-to-boost-roro-capacity-in-200-million-expansion-plan-5967271">and reached a deal March 17 to build a new $200 million complex for ro/ro and breakbulk cargo</a>.“We expect these tariffs to have a chilling effect on auto volumes imported through Seattle and Tacoma, though much is unknown about how significant or quickly impacts to imported cargo volumes will be felt across the supply chain,” Babst said. Richard Scher, spokesperson for the Maryland Port Administration and the Port of Baltimore, told the Journal of Commerce that auto exporters will dictate how tariffs play out at US ports. “As with other cargoes, ultimately any tariff impacts are dependent on if shippers want to reduce or stop shipping into the United States during times of active tariffs,” Scher said.Imports accounted for 85% of the autos that moved through the Port of Baltimore in 2024, which handled the second-most cars and light trucks of any US port last year. Scher said that of the 750,000 cars and light trucks the port handled in 2024, approximately 641,000 of them were imports. Tariff developments have also presented uncertainties for California’s Port of Long Beach, a major hub for auto imports and where East Asian trade accounts for more than 90% of overall shipments. CEO Mario Cordero told the Journal of Commerce the port is keeping close watch as the tariffs unfold and will continue investing in rail and terminal improvements to streamline cargo movements. “Given the dynamic environment, we will have to wait and see how the latest round of tariffs will impact auto imports and the national economy,” Cordero said.<h3>Cargo trends in flux</h3>Although the long-term effects of tariffs remain unclear, there are indications that recent cargo activity is reflecting the immediate uncertainty. Foreign auto shipments into US ports intensified in the first few months of 2025, suggesting that companies are pushing cargo through before any tariffs take effect. Citing data from analytics firm Esgian, Reuters reported that in February, 33 ro/ro ships — mostly carrying new cars — left Europe for the US, up from 28 vessels in February 2024. Stan Omli, senior vice president at Esgian, told Reuters that those five additional ships would have been able to carry about 30,000 more vehicles across the Atlantic. “Evidence points to increased activity from Europe and the Far East ... those two regions represent the major export regions to the US,” Omli said.Activity has shifted in the other direction at the Port of Brunswick in Georgia, where year-over-year ro/ro shipments of autos and heavy equipment dropped 10% to 6,882 units in February. The port’s Colonel’s Island Terminal handled 42 vessel calls for the month, three fewer than February 2024, according to port data. The decline comes after Brunswick overtook Baltimore as the busiest US port for automobiles, handling over 2 million tons of ro/ro cargo in 2024. According to Brunswick, US-made exports account for over 90% of autos moved by rail at Colonel’s Island.During a Georgia Ports Authority board meeting earlier this week, CEO Griff Lynch said a slowdown in auto sales may have contributed to the February decrease in ro/ro shipments, according to a report by the Savannah Morning News. “With the tariffs, there’s a lot of posturing going on and that could have some short-term impacts on our business, for sure,” Lynch said in the report. “But it’s tough to tell right now because it is a moving target, and we just don’t know where it’s going to land.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

US roll-on/roll-off (ro/ro) ports are expressing apprehension about 25% tariffs on automobile imports that are due to take effect in a matter of days, with cargo activity already fluctuating at some ports. The White House announced Tuesday that President Donald Trump would impose the tariffs on auto imports and certain automobile parts starting April 2. The tariff announcement has dialed up concerns in the Pacific Northwest, where auto imports account for a significant and growing business for the Seattle-Tacoma gateway, Northwest Seaport Alliance (NWSA) spokesperson Melanie Stambaugh Babst told the Journal of Commerce. Spurred by growth of automobile imports between 2020 and 2023, the Port of Tacoma is more than doubling the size of its ro/ro terminal facilities and reached a deal March 17 to build a new $200 million complex for ro/ro and breakbulk cargo . “We expect these tariffs to have a chilling effect on auto volumes imported through Seattle and Tacoma, though much is unknown about how significant or quickly impacts to imported cargo volumes will be felt across the supply chain,” Babst said. Richard Scher, spokesperson for the Maryland Port Administration and the Port of Baltimore, told the Journal of Commerce that auto exporters will dictate how tariffs play out at US ports. “As with other cargoes, ultimately any tariff impacts are dependent on if shippers want to reduce or stop shipping into the United States during times of active tariffs,” Scher said. Imports accounted for 85% of the autos that moved through the Port of Baltimore in 2024, which handled the second-most cars and light trucks of any US port last year. Scher said that of the 750,000 cars and light trucks the port handled in 2024, approximately 641,000 of them were imports. Tariff developments have also presented uncertainties for California’s Port of Long Beach, a major hub for auto imports and where East Asian trade accounts for more than 90% of overall shipments. CEO Mario Cordero told the Journal of Commerce the port is keeping close watch as the tariffs unfold and will continue investing in rail and terminal improvements to streamline cargo movements. “Given the dynamic environment, we will have to wait and see how the latest round of tariffs will impact auto imports and the national economy,” Cordero said. Cargo trends in flux Although the long-term effects of tariffs remain unclear, there are indications that recent cargo activity is reflecting the immediate uncertainty. Foreign auto shipments into US ports intensified in the first few months of 2025, suggesting that companies are pushing cargo through before any tariffs take effect. Citing data from analytics firm Esgian, Reuters reported that in February, 33 ro/ro ships — mostly carrying new cars — left Europe for the US, up from 28 vessels in February 2024. Stan Omli, senior vice president at Esgian, told Reuters that those five additional ships would have been able to carry about 30,000 more vehicles across the Atlantic. “Evidence points to increased activity from Europe and the Far East ... those two regions represent the major export regions to the US,” Omli said. Activity has shifted in the other direction at the Port of Brunswick in Georgia, where year-over-year ro/ro shipments of autos and heavy equipment dropped 10% to 6,882 units in February. The port’s Colonel’s Island Terminal handled 42 vessel calls for the month, three fewer than February 2024, according to port data. The decline comes after Brunswick overtook Baltimore as the busiest US port for automobiles, handling over 2 million tons of ro/ro cargo in 2024. According to Brunswick, US-made exports account for over 90% of autos moved by rail at Colonel’s Island. During a Georgia Ports Authority board meeting earlier this week, CEO Griff Lynch said a slowdown in auto sales may have contributed to the February decrease in ro/ro shipments, according to a report by the Savannah Morning News. “With the tariffs, there’s a lot of posturing going on and that could have some short-term impacts on our business, for sure,” Lynch said in the report. “But it’s tough to tell right now because it is a moving target, and we just don’t know where it’s going to land.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Ro/ro cargo

Breakbulk ports

North American ports

Breakbulk News

US ports anxious that new tariffs will drag down auto shipments

<div class="phx-topic abstract-wrapper">The carrier wants the tax imposed on CO2 emissions to raise the price of conventional bunkers high enough to force increased demand for low- and zero-emission fuels and narrow the yawning price gap between green and fossil energy.</div>

The carrier wants the tax imposed on CO2 emissions to raise the price of conventional bunkers high enough to force increased demand for low- and zero-emission fuels and narrow the yawning price gap between green and fossil energy.

<div class="phx-topic">Rotterdam — Maersk is pushing hard for a global fuel levy on carbon emissions to be agreed by International Maritime Organization (IMO) member states during two crucial meetings to be held in London over the next three weeks. The carrier wants the tax imposed on CO2 emissions to raise the price of conventional bunkers high enough to force increased demand for low- and zero-emission fuels and narrow the yawning price gap between green and fossil energy. “To avoid the pay-to-pollute scenario, the price should be around a minimum of $600 per ton,” Sanne Frías Henriksen, Maersk’s head of IMO and European Union public and regulatory affairs, told reporters in Rotterdam this week at the naming ceremony of the Adrian Maersk, the 12th of an 18-ship order of dual-fuel methanol-capable vessels. “The price level needs to be sufficiently high for the industry to actually buy the green fuels instead of just paying the penalties,” she added. Maersk wants the $600-per-ton-of-CO2 equivalent to cover the marginal abatement cost for alternative fuels, which could be a combination of a levy and a “remedial unit” price. The remedial unit price is calculated to make the baseline fuel — liquefied natural gas or very low sulfur fuel oil — as expensive as a fuel mix that complies with the required fuel intensity target for a given year. A pricing mechanism and a fuel intensity standard are part of the basket of midterm measures that will be thrashed out by member states next week at the IMO’s Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 19) next Monday and Tuesday. Recommendations from the ISWG will then go to the full meeting of the Marine Environment Protection Committee (MEPC) in London from April 7–11 that is tasked with achieving consensus on the midterm measures and approving the legal text so that whatever is decided can be rolled out in October. While there is huge political momentum to get a carbon levy across the finishing line at the IMO, there is an equally large discrepancy over the amount being proposed, with most countries indicating a price range of $18 to $150 per ton of CO2 emitted for the future levy. <h3>‘Just and equitable energy transition’ </h3>A report by the London-based UCL Energy Institute Shipping and Oceans Research Group released this week found that stable and predictable revenue generation, crucial for enabling “a just and equitable energy transition,” would only be possible in scenarios that have a levy component as well as a global fuel standard. But there is strong resistance to a fuel levy from some member states, including Brazil, China and South Africa, and tough negotiations are expected at the MEPC meeting. “It’s not an easy task,” Henriksen acknowledged. “There are so many elements in this fight that must fall into place, so I think it’s quite natural that there will be discussions until the very end.” Maersk CCO Karsten Kildahl told reporters that without global regulation to narrow the price gap between current and future fuels, it will be difficult to encourage cargo owners to pay more for cleaner transport. “Our customers would like to buy green [fuels], but they face heavy competition, and it is difficult for them to pay twice as much to get a green fuel instead of a black fuel,” Kildahl said at the ship naming ceremony. “What we hope is that the IMO, through MEPC 83, comes up with a proposal that takes from the black and gives to the green to even out the costs,” he added. But Kildahl acknowledged the difficulties in reaching consensus at the IMO with several proposals around the midterm measures on the table. Should no agreement be reached on a pricing mechanism that could narrow the fossil fuel-green fuel gap and generate sufficient revenue to fund the energy transition, “then the green transition will be a long, long process,” he warned. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com. ">greg.knowler@spglobal.com</a>.</div>

Rotterdam — Maersk is pushing hard for a global fuel levy on carbon emissions to be agreed by International Maritime Organization (IMO) member states during two crucial meetings to be held in London over the next three weeks. The carrier wants the tax imposed on CO2 emissions to raise the price of conventional bunkers high enough to force increased demand for low- and zero-emission fuels and narrow the yawning price gap between green and fossil energy. “To avoid the pay-to-pollute scenario, the price should be around a minimum of $600 per ton,” Sanne Frías Henriksen, Maersk’s head of IMO and European Union public and regulatory affairs, told reporters in Rotterdam this week at the naming ceremony of the Adrian Maersk, the 12th of an 18-ship order of dual-fuel methanol-capable vessels. “The price level needs to be sufficiently high for the industry to actually buy the green fuels instead of just paying the penalties,” she added. Maersk wants the $600-per-ton-of-CO2 equivalent to cover the marginal abatement cost for alternative fuels, which could be a combination of a levy and a “remedial unit” price. The remedial unit price is calculated to make the baseline fuel — liquefied natural gas or very low sulfur fuel oil — as expensive as a fuel mix that complies with the required fuel intensity target for a given year. A pricing mechanism and a fuel intensity standard are part of the basket of midterm measures that will be thrashed out by member states next week at the IMO’s Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 19) next Monday and Tuesday. Recommendations from the ISWG will then go to the full meeting of the Marine Environment Protection Committee (MEPC) in London from April 7–11 that is tasked with achieving consensus on the midterm measures and approving the legal text so that whatever is decided can be rolled out in October. While there is huge political momentum to get a carbon levy across the finishing line at the IMO, there is an equally large discrepancy over the amount being proposed, with most countries indicating a price range of $18 to $150 per ton of CO2 emitted for the future levy. ‘Just and equitable energy transition’ A report by the London-based UCL Energy Institute Shipping and Oceans Research Group released this week found that stable and predictable revenue generation, crucial for enabling “a just and equitable energy transition,” would only be possible in scenarios that have a levy component as well as a global fuel standard. But there is strong resistance to a fuel levy from some member states, including Brazil, China and South Africa, and tough negotiations are expected at the MEPC meeting. “It’s not an easy task,” Henriksen acknowledged. “There are so many elements in this fight that must fall into place, so I think it’s quite natural that there will be discussions until the very end.” Maersk CCO Karsten Kildahl told reporters that without global regulation to narrow the price gap between current and future fuels, it will be difficult to encourage cargo owners to pay more for cleaner transport. “Our customers would like to buy green [fuels], but they face heavy competition, and it is difficult for them to pay twice as much to get a green fuel instead of a black fuel,” Kildahl said at the ship naming ceremony. “What we hope is that the IMO, through MEPC 83, comes up with a proposal that takes from the black and gives to the green to even out the costs,” he added. But Kildahl acknowledged the difficulties in reaching consensus at the IMO with several proposals around the midterm measures on the table. Should no agreement be reached on a pricing mechanism that could narrow the fossil fuel-green fuel gap and generate sufficient revenue to fund the energy transition, “then the green transition will be a long, long process,” he warned. Contact Greg Knowler at greg.knowler@spglobal.com .

High fuel levy would avoid ‘pay-to-pollute’ scenario: Maersk

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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