<div class="phx-topic abstract-wrapper">The ocean shipping industry faces two overriding challenges: improving cost efficiencies and improving customer experiences.</div>

The ocean shipping industry faces two overriding challenges: improving cost efficiencies and improving customer experiences.

<div>[Editorial note: image removed/no longer available]Recently, my company, INTTRA, hosted a two-day summit that brought together CIOs and sea freight and e-commerce thought leaders from the world’s largest ocean carriers and global shippers. Together, we took a hard look at obstacles in our industry’s business processes — and at what it will take to bridge them. Participants expressed a consensus around two overriding challenges: improving cost efficiencies and improving customer experiences.The first challenge is finding optimal ways to reduce costs to improve profitability. A recent INTTRA survey illustrates why operating costs are an issue. Approximately US$14 billion in inefficiencies were...

[Editorial note: image removed/no longer available] Recently, my company, INTTRA, hosted a two-day summit that brought together CIOs and sea freight and e-commerce thought leaders from the world’s largest ocean carriers and global shippers. Together, we took a hard look at obstacles in our industry’s business processes — and at what it will take to bridge them. Participants expressed a consensus around two overriding challenges: improving cost efficiencies and improving customer experiences. The first challenge is finding optimal ways to reduce costs to improve profitability. A recent INTTRA survey illustrates why operating costs are an issue. Approximately US$14 billion in inefficiencies were identified in ocean transport business transaction processes (based on internal INTTRA research) — an issue that automation can resolve. Yet ocean transport remains mired in manual processes, and it’s clear that the industry is ripe for change. The second challenge is the issue of our time: improving customer experiences in a real-time world. Customer expectations have risen, with e-commerce changing industries such as retail, travel, and finance for the better. With online evolution raising the benchmark on superior service, customers now expect the same level of experience in our industry. In fact, customers have a hard time understanding why ocean transport hasn’t kept up with the pace of sharper customer focus. How can the industry address these two overriding challenges? After speaking with the CIOs participating in our discussion, I’ve identified four strategic priorities that we can take to drive costs down and raise customer experiences through new electronic shipping — or e-shipping — technologies. They are: Priority 1: Automating Processes for a Digital World. It’s well-documented that manual processes are inefficient and error-prone, often leading to unnecessary corrections, shipment disruptions and delays. Human error plays a large part in this, but even more damaging is the industry’s lack of an embrace of digital strategies. Large logistics companies like Kuehne + Nagel are upending the status quo, becoming early adopters of e-shipping-enabled processes, including global roll-outs of e-invoicing and dispute resolution tools, which enable a faster, more automated way of conducting business. Expect other firms to follow suit in 2014. Automation also addresses other business processes, especially those that involve customer “pain points.” One example: With manual processes, a shipper booking a container shipment might wait hours or days before receiving confirmation from a carrier that both equipment and space are available and booked. Compare that to the experience of placing an online order with an airline or retailer, where one receives an immediate confirmation, along with details on what’s been paid, and a tracking number to monitor the status and progress of a shipment. Automated processes are now a growing point of emphasis for carriers and transportation intermediaries that want to drive down costs, reduce errors, and deliver the experiences their customers increasingly expect. Those who fulfill these automated expectations will be a step ahead of the inevitable shift. Priority 2: Improving Data Quality in the Shipment Supply Chain Studies show that fewer than one in 10 logistics professionals have complete visibility into the transport supply chain (according to KPMG Global Manufacturing Outlook--Competitive Advantage: enhancing supply chain networks for efficiency and innovation. 2013, 335 respondents). The most common culprit: lack of quality data. It’s no coincidence that 63 percent of chief supply chain officers at best-in-class companies are targeting supply-chain visibility as a top management priority for improvement this year (Aberdeen report, November 2013: CSCO 2014: Top Three Supply Chain Execution Priorities). Many data quality issues are driven by bill of lading errors caused by manual data entry or the “re-keying” of shipping instructions into operating systems. Automation will accelerate “straight-through processing” of these documents, which dramatically improves data quality and reduces redundant costs and excessive corrections. As C-suite executives evaluate the costly impact that poor data has on their bottom line, look for the ocean shipping community to invest more heavily in solutions that will improve data quality. Additionally, using a standardized method for when data is captured and how it is structured makes data more consistent and actionable. To date, there has been little agreement around the critical points in the ocean shipping supply chain—mainly when data should be captured and recorded. Instead, carriers track hundreds of different events and milestones in different ways, using various formats and transmission methods. Has a container arrived when a ship enters port? Or when it is unloaded at the dock? Having a standardized way to track container event data is critical to driving consistency in data delivery — and gets us closer to the real-time transaction processing, tracking and alerts that ground and air carriers already use to their advantage. Increasingly, collaborative industry networks provide the platform for driving standardization, since they can bring together carriers and transportation intermediaries into a single location, where all agree to share operational data and visibility information. With this enhanced level of granularity, customers can gain an early look at the information that matters to them, and intervene in the event of delays or costly problems. Priority 3: Ensuring Timely Updates It’s clear we need to banish irritating information delays. Logistics professionals demand access to timely data, including rates, equipment and space availability, as well as immediate booking confirmations and ‘invoice to shipment’ tracking. They’re tired of checking multiple systems or making multiple phone calls to get answers. Instead, they expect critical information to be delivered directly and instantly to their desktop or mobile device through a consolidated interface. These customer expectations will drive the technology investments CIOs make in 2014 and beyond as ocean carriers begin modeling what is working well in other industries. The online travel site Expedia is a great example of where we’re headed. Through a single web portal, Expedia consolidates and delivers online rates, instant bookings and confirmations; tracks trip details; and collects payments in a timely fashion—areas where the ocean shipping industry has been deficient. As data becomes more visible and standardized, expect carriers and shippers to consolidate, share and act on information in new, Expedia-like ways, using collaborative, cloud-based tools and networks. Priority 4: The “Consumerization” of Technology As new employees are hired into the industry, both those from a younger generation and those engaged in new consumer technologies, they bring expectations about how technologies should be employed in the workplace. Most demand the same types of mobile and collaborative capabilities used in their daily lives as consumers — from smartphones, tablets and mobile apps to networks that make information and people accessible from anywhere. With real-time access the norm, their multimedia, multimodal experiences will impact and change business dramatically. It’s no surprise that those same pressures are making their way into ocean transport. The rapid interaction of social media has changed how global communications, brands and promotions are driven in the digital age. And workplaces that 10 years ago had never considered incorporating consumer-based technologies are now responding to “bring your own device” (BYOD) trends that equip team members to work while on the go. As e-shipping grows, with its emphasis on speed and simplicity, the broader use of mobile devices and apps is the next logical step, enabling industry employees to be more responsive to customers and colleagues. Moreover, the industry is rapidly moving to adopt cloud-based models that smooth the shipping process as data becomes more complex. Offering the ability to view and track shipment information on a collaborative solution based in the cloud simplifies the process, while lowering the cost of doing business. In fact, according to Aberdeen, when it comes to freight -forwarding best practices, those classified as leaders are four times as likely to use collaborative multiparty cloud-based solutions for supply chain shipment visibility (Aberdeen Group report: Freight Forwarding Best Practices for Emerging Markets). This is a positive development that reduces the cost barriers to implementing the capabilities required for shippers and carriers to gain a competitive edge. Urgency Accelerates Change It’s clear that momentum is building and that change is on the way for the ocean transport industry. We’re seeing more CIOs focus on advancing the industry through investments in technology and by introducing exciting strategic roadmaps. Carriers and transportation intermediaries investing in new automated work processes will achieve a faster return on investments through new efficiencies, while shippers are selecting carriers who can deliver the rich flow of timely information relied on to elevate customer experiences. The time to act is now. Although the rise of e-shipping has been slow, advancements in digital technology and networks have accelerated the benefits driven by a new digitized era. The opportunities for carriers and transportation intermediaries are game-changing, and those who don’t share a sense of urgency to “go digital” risk being left behind. Now is the time to establish a strategy for collaborating in a connected world, and incorporating industry-standard solutions that will benefit customers — and the bottom line. Ivan Latanision is chief product officer and leads INTTRA’s global product management, software development, engineering, and infrastructure operations organizations. Contact him at ivan.latanision@inttra.com . Text

Forwarding

The ocean shipping evolution: Key priorities for ocean transport logistics

<div class="phx-topic abstract-wrapper">The industry says consistency and communication are the key to minimizing disruption to port traffic during the project to repair the deck of the Vincent Thomas Bridge.</div>

The industry says consistency and communication are the key to minimizing disruption to port traffic during the project to repair the deck of the Vincent Thomas Bridge.

Feature image

<div class="phx-topic">The state of California’s plan to minimize disruption of truck traffic serving the Port of Los Angeles during a 16-month-long bridge repair project is building confidence among harbor truckers and other stakeholders that they’ll be able to plan and manage accordingly. The California Department of Transportation is designating and re-paving detour routes and has agreed to establish an extensive real-time communications network to update motorists and truckers about traffic conditions in the Los Angeles-Long Beach port complex throughout the construction project, Matt Schrap, CEO of the Harbor Trucking Association (HTA), told the Journal of Commerce Wednesday. “We need consistency. If communication is consistent, we can plan,” he said. The Vincent Thomas Bridge deck replacement project will begin this winter with one-directional night closures to be announced. This is just the prelude to full closure of the bridge for 16 months from November 2026 to March 2028, Rimma Tebeleva, senior transportation engineer and project manager at Caltrans District 7, told the Los Angeles-Long Beach Propeller Club on Wednesday. The bridge, located at the approach to Los Angeles harbor, handles 53,000 vehicles each day, about 3,400 of which are heavy-duty trucks, Tebeleva said. Caltrans in recent months has held meetings with port stakeholders including representatives of the HTA; the Pacific Merchant Shipping Association, which represents terminal operators; the Pacific Maritime Association and the International Longshore and Warehouse Union, which represent management and labor; and the Port of Los Angeles. “We are currently working with port pilots, engineers and consultants to fully understand the impacts from construction,” a port spokesman told the Journal of Commerce. The traffic management and communications program will respond in real time to issues as they arise, said Kenneth Young, chief in the Office of the District Traffic Manager at Caltrans District 7. “It will detect queries as they develop and advise on alternate routes,” Young told the meeting. He added that Caltrans intends to divert traffic as necessary to state highways in order to minimize use of local roadways. Schrap agreed that this strategy is necessary in order to prevent friction in communities near the port. “We don’t want trucks going through neighborhoods,” he said. The work in the coming year will involve temporary placement of a platform underneath the bridge to support it during the construction process, Tebeleva said. This will reduce the air draft underneath the bridge by about 2.5 feet during construction. Port engineers and pilots are studying the impact this will have on vessel traffic in the channel, the port spokesman said. The Vincent Thomas Bridge opened in 1963. In recent years, structural problems such as cement cracking have accelerated, Tebeleva said. Schrap said the working group will continue to alert Caltrans on measures port stakeholders feel are needed to maintain traffic flow in the harbor area, and he anticipates the agency will respond accordingly. “We feel our messaging has gotten through. We feel we’re in a good place,” he said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

The state of California’s plan to minimize disruption of truck traffic serving the Port of Los Angeles during a 16-month-long bridge repair project is building confidence among harbor truckers and other stakeholders that they’ll be able to plan and manage accordingly. The California Department of Transportation is designating and re-paving detour routes and has agreed to establish an extensive real-time communications network to update motorists and truckers about traffic conditions in the Los Angeles-Long Beach port complex throughout the construction project, Matt Schrap, CEO of the Harbor Trucking Association (HTA), told the Journal of Commerce Wednesday. “We need consistency. If communication is consistent, we can plan,” he said. The Vincent Thomas Bridge deck replacement project will begin this winter with one-directional night closures to be announced. This is just the prelude to full closure of the bridge for 16 months from November 2026 to March 2028, Rimma Tebeleva, senior transportation engineer and project manager at Caltrans District 7, told the Los Angeles-Long Beach Propeller Club on Wednesday. The bridge, located at the approach to Los Angeles harbor, handles 53,000 vehicles each day, about 3,400 of which are heavy-duty trucks, Tebeleva said. Caltrans in recent months has held meetings with port stakeholders including representatives of the HTA; the Pacific Merchant Shipping Association, which represents terminal operators; the Pacific Maritime Association and the International Longshore and Warehouse Union, which represent management and labor; and the Port of Los Angeles. “We are currently working with port pilots, engineers and consultants to fully understand the impacts from construction,” a port spokesman told the Journal of Commerce. The traffic management and communications program will respond in real time to issues as they arise, said Kenneth Young, chief in the Office of the District Traffic Manager at Caltrans District 7. “It will detect queries as they develop and advise on alternate routes,” Young told the meeting. He added that Caltrans intends to divert traffic as necessary to state highways in order to minimize use of local roadways. Schrap agreed that this strategy is necessary in order to prevent friction in communities near the port. “We don’t want trucks going through neighborhoods,” he said. The work in the coming year will involve temporary placement of a platform underneath the bridge to support it during the construction process, Tebeleva said. This will reduce the air draft underneath the bridge by about 2.5 feet during construction. Port engineers and pilots are studying the impact this will have on vessel traffic in the channel, the port spokesman said. The Vincent Thomas Bridge opened in 1963. In recent years, structural problems such as cement cracking have accelerated, Tebeleva said. Schrap said the working group will continue to alert Caltrans on measures port stakeholders feel are needed to maintain traffic flow in the harbor area, and he anticipates the agency will respond accordingly. “We feel our messaging has gotten through. We feel we’re in a good place,” he said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Maritime

Port News

Trucking News

Port infrastructure

Marine terminals

North American ports

LA port stakeholders warming to plan to mitigate impact of bridge project

<div class="phx-topic abstract-wrapper">Sources have linked some of the US-India blankings to carriers shifting capacity to capitalize on surging volumes on the eastbound trans-Pacific trade following a temporary 90-day tariff truce between the US and China.</div>

Sources have linked some of the US-India blankings to carriers shifting capacity to capitalize on surging volumes on the eastbound trans-Pacific trade following a temporary 90-day tariff truce between the US and China.

<div class="phx-topic">Ocean freight rates from India to US East Coast trade are gaining momentum as carriers shift vessels to the trans-Pacific following a pause in the steepest US tariffs on Chinese goods. Carriers plan to blank five sailings across two India-US East Coast services — the CMA CGM-operated Indamex and Ocean Network Express’ (ONE’s) WIN service — in June, in addition to one sailing on the Indamex in late May, according to forwarders. The US and China on May 12 agreed to pause reciprocal tariffs for at least 90 days while they negotiate a more permanent trade agreement, prompting a rush of bookings out of China and a <a href="https://www.joc.com/article/trans-pacific-services-set-for-restart-as-carriers-scramble-to-restore-capacity-6009352">rapid redeployment of capacity</a> that had been idled or shifted to other trade lanes. A federal trade court on Wednesday <a href="https://www.joc.com/article/federal-court-ruling-blocking-tariffs-resets-shipping-outlook-6013402">struck down the US tariffs on Chinese goods</a>, along with a blanket 10% duty on imports from India. The administration of President Donald Trump will likely appeal. Although US imports from India have been rising for months — hitting a nearly two-year high in March and April, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global — that hasn’t been enough to move the needle on spot rates. That is, until this week. Average India-US East Coast spot rates surged to $2,733 per FEU this week, up 30.2% from last week and 32.7% year over year, according to Platts, also part of S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="012ef4fa-2944-47b8-a1aa-f17c27744520"></dynamic-object></div>All major carriers on the West India-US East Coast trade lane have lined up multiple rounds of general rate increases (GRIs) and peak season surcharges (PSSs) — ranging from $1,500 to $2,500 per container — through June. Sources who spoke with the Journal of Commerce believe the tightening of capacity gives carriers an opportunity to push through rate hikes of at least $1,000 per container beginning June 1. Hapag-Lloyd, for example, will roll that amount into its spot pricing, while Maersk has pushed back a planned $1,500-per-box PSS from June 2 to June 16. Forwarders also said spot space on Maersk’s first two sailings in June is already sold out. “With anticipated lower capacity, our estimate is that average spot booking rates [ex-West India] will land somewhere between $2,500 and $3,000 per FEU in June,” an executive at a Mumbai-based forwarder who asked not to be identified told the Journal of Commerce. “For long-term contract clients, the average level should be between $2,500 to $2,700 per FEU.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Ocean freight rates from India to US East Coast trade are gaining momentum as carriers shift vessels to the trans-Pacific following a pause in the steepest US tariffs on Chinese goods. Carriers plan to blank five sailings across two India-US East Coast services — the CMA CGM-operated Indamex and Ocean Network Express’ (ONE’s) WIN service — in June, in addition to one sailing on the Indamex in late May, according to forwarders. The US and China on May 12 agreed to pause reciprocal tariffs for at least 90 days while they negotiate a more permanent trade agreement, prompting a rush of bookings out of China and a rapid redeployment of capacity that had been idled or shifted to other trade lanes. A federal trade court on Wednesday struck down the US tariffs on Chinese goods , along with a blanket 10% duty on imports from India. The administration of President Donald Trump will likely appeal. Although US imports from India have been rising for months — hitting a nearly two-year high in March and April, according to PIERS, a sister product of the Journal of Commerce within S&P Global — that hasn’t been enough to move the needle on spot rates. That is, until this week. Average India-US East Coast spot rates surged to $2,733 per FEU this week, up 30.2% from last week and 32.7% year over year, according to Platts, also part of S&P Global. All major carriers on the West India-US East Coast trade lane have lined up multiple rounds of general rate increases (GRIs) and peak season surcharges (PSSs) — ranging from $1,500 to $2,500 per container — through June. Sources who spoke with the Journal of Commerce believe the tightening of capacity gives carriers an opportunity to push through rate hikes of at least $1,000 per container beginning June 1. Hapag-Lloyd, for example, will roll that amount into its spot pricing, while Maersk has pushed back a planned $1,500-per-box PSS from June 2 to June 16. Forwarders also said spot space on Maersk’s first two sailings in June is already sold out. “With anticipated lower capacity, our estimate is that average spot booking rates [ex-West India] will land somewhere between $2,500 and $3,000 per FEU in June,” an executive at a Mumbai-based forwarder who asked not to be identified told the Journal of Commerce. “For long-term contract clients, the average level should be between $2,500 to $2,700 per FEU.” Contact Bency Mathew at bencyvmathew@gmail.com .

Container Shipping News

Container lines

Trans-Pacific

Restrained capacity sparks India-US ocean rate momentum

<div class="phx-topic abstract-wrapper">Union Pacific Railroad struggled during the pandemic with wheeled facilities where containers are pre-mounted onto chassis before a driver arrives, but in 2021 and 2022 there were periods with no chassis to be found.</div>

Union Pacific Railroad struggled during the pandemic with wheeled facilities where containers are pre-mounted onto chassis before a driver arrives, but in 2021 and 2022 there were periods with no chassis to be found.

<div class="phx-topic">Union Pacific Railroad (UP) is taking a different operational approach at its soon-to-open intermodal terminal in Kansas City, choosing to stack containers rather than keep on chassis to better respond to import surges. Union Pacific will place all international containers into stacks, rather than place them on chassis in parking spots, adopting lessons learned during the pandemic, when inland terminals became chokepoints in the global supply chain. The Kansas City terminal will operate more like a traditional marine terminal, with stacks and crane operators lifting boxes to and from trucks. “We integrated the hybrid model into our new Kansas City Intermodal Terminal to provide a high level of fluidity for drivers and our customers, and to maximize capacity at the facility,” said Robynn Tysver, spokesperson for UP, in a statement to the Journal of Commerce. “A grounded operation provides for the efficient delivery of marine containers to any pool or trucker-owned chassis.” Before the pandemic, UP and rival BNSF Railway both handled international and domestic containers in what is known as a “wheeled” operation. All containers were mounted onto chassis as they were unloaded off the train, then placed in designated parking spots to enable truck drivers to retrieve loads more quickly. During 2021 and 2022, however, the “wheeled” operation for international freight buckled after a widespread marine chassis shortage across the US. Terminal crews were unable to unload incoming trains because the chassis were in short supply. Containers sat idle with no place to go, contributing to gridlock that rippled back to the ports of Los Angeles and Long Beach. The new “hybrid” terminal in Kansas City reflects an important lesson from that ordeal. All ocean freight will now be placed into container stacks, while domestic containers will remain in parking spots. Union Pacific has been focused this year on capturing a larger share between <a href="https://www.joc.com/article/union-pacific-makes-push-to-grab-more-los-angeles-to-kansas-city-freight-5933096">Los Angeles and Kansas City</a>, a route where BNSF Railway has maintained an edge thanks to faster transit times and more consistent service. UP believes the new, larger terminal, along with upgrades to infrastructure and scheduling, will close that gap significantly. Instead of Los Angeles-Kansas City being a block within a larger train to places like Chicago, UP will run dedicated trains between the two cities, reflecting the growing importance of the Midwest city to US commerce.<h3>Applying the right lessons </h3>Union Pacific’s approach in Kansas City mirrors a change made in <a href="https://www.joc.com/article/up-shifting-to-stacked-container-operation-at-joliet-for-california-imports-5227108">February 2023</a> at its Global IV terminal in Joliet, outside of Chicago, where all ocean containers traveling to and from the ports of Los Angeles and Long Beach are placed in stacks. The distinction between international and domestic intermodal is becoming increasingly important across the US. As Norfolk Southern Railway noted <a href="https://www.joc.com/article/norfolk-southern-revamping-international-network-in-2023-5218178">in late 2022</a>, domestic intermodal operations face far fewer chassis shortages because providers including J.B. Hunt Transport Services, Schneider National and others own their chassis fleets. By contrast, international cargo relies upon third-party lessors such as DCLI, Flexi-Van Leasing, and TRAC Intermodal to supply roadworthy equipment. UP has already gained experience operating grounded terminals. The Twin Cities Intermodal Terminal, opened in 2021, operates entirely with stacked containers due to its smaller volume. BNSF has also made strides to reflect new realities. Most international cargo traveling through BNSF Logistics Park Chicago and Memphis is grounded. BNSF retained the “wheeled” model in the Fort Worth terminal while also expanding the footprint to accommodate future surges. Both railroads are also responding to a fundamental shift in chassis provisioning in the US. Since the pandemic, cargo owners and truckers have purchased or leased their own chassis to reduce their dependence on shared pools. This flexibility is especially valuable in merchant haulage, where cargo owners retain control over equipment choices outside the port. “[A grounded operation] avoids the need for flips from pool chassis to private chassis, while freeing up space and managing fluidity, allow[ing] us to handle more volume,” UP said in the statement. “Additionally, by leveraging the UPGo app, drivers can coordinate pickups, including those in stack, to increase efficiency and productivity for drivers and terminal operations.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Union Pacific Railroad (UP) is taking a different operational approach at its soon-to-open intermodal terminal in Kansas City, choosing to stack containers rather than keep on chassis to better respond to import surges. Union Pacific will place all international containers into stacks, rather than place them on chassis in parking spots, adopting lessons learned during the pandemic, when inland terminals became chokepoints in the global supply chain. The Kansas City terminal will operate more like a traditional marine terminal, with stacks and crane operators lifting boxes to and from trucks. “We integrated the hybrid model into our new Kansas City Intermodal Terminal to provide a high level of fluidity for drivers and our customers, and to maximize capacity at the facility,” said Robynn Tysver, spokesperson for UP, in a statement to the Journal of Commerce. “A grounded operation provides for the efficient delivery of marine containers to any pool or trucker-owned chassis.” Before the pandemic, UP and rival BNSF Railway both handled international and domestic containers in what is known as a “wheeled” operation. All containers were mounted onto chassis as they were unloaded off the train, then placed in designated parking spots to enable truck drivers to retrieve loads more quickly. During 2021 and 2022, however, the “wheeled” operation for international freight buckled after a widespread marine chassis shortage across the US. Terminal crews were unable to unload incoming trains because the chassis were in short supply. Containers sat idle with no place to go, contributing to gridlock that rippled back to the ports of Los Angeles and Long Beach. The new “hybrid” terminal in Kansas City reflects an important lesson from that ordeal. All ocean freight will now be placed into container stacks, while domestic containers will remain in parking spots. Union Pacific has been focused this year on capturing a larger share between Los Angeles and Kansas City , a route where BNSF Railway has maintained an edge thanks to faster transit times and more consistent service. UP believes the new, larger terminal, along with upgrades to infrastructure and scheduling, will close that gap significantly. Instead of Los Angeles-Kansas City being a block within a larger train to places like Chicago, UP will run dedicated trains between the two cities, reflecting the growing importance of the Midwest city to US commerce. Applying the right lessons Union Pacific’s approach in Kansas City mirrors a change made in February 2023 at its Global IV terminal in Joliet, outside of Chicago, where all ocean containers traveling to and from the ports of Los Angeles and Long Beach are placed in stacks. The distinction between international and domestic intermodal is becoming increasingly important across the US. As Norfolk Southern Railway noted in late 2022 , domestic intermodal operations face far fewer chassis shortages because providers including J.B. Hunt Transport Services, Schneider National and others own their chassis fleets. By contrast, international cargo relies upon third-party lessors such as DCLI, Flexi-Van Leasing, and TRAC Intermodal to supply roadworthy equipment. UP has already gained experience operating grounded terminals. The Twin Cities Intermodal Terminal, opened in 2021, operates entirely with stacked containers due to its smaller volume. BNSF has also made strides to reflect new realities. Most international cargo traveling through BNSF Logistics Park Chicago and Memphis is grounded. BNSF retained the “wheeled” model in the Fort Worth terminal while also expanding the footprint to accommodate future surges. Both railroads are also responding to a fundamental shift in chassis provisioning in the US. Since the pandemic, cargo owners and truckers have purchased or leased their own chassis to reduce their dependence on shared pools. This flexibility is especially valuable in merchant haulage, where cargo owners retain control over equipment choices outside the port. “[A grounded operation] avoids the need for flips from pool chassis to private chassis, while freeing up space and managing fluidity, allow[ing] us to handle more volume,” UP said in the statement. “Additionally, by leveraging the UPGo app, drivers can coordinate pickups, including those in stack, to increase efficiency and productivity for drivers and terminal operations.” Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

UP’s KC terminal will change approach on ocean cargo

<div class="phx-topic abstract-wrapper">A portion of the money will be used for Project 11, which will ultimately allow an additional 1,400 vessels of all types to call the port each year by deepening portions of the channel to accommodate larger ships. </div>

A portion of the money will be used for Project 11, which will ultimately allow an additional 1,400 vessels of all types to call the port each year by deepening portions of the channel to accommodate larger ships. 

<div class="phx-topic">Port Houston will receive $131 million from the US Army Corps of Engineers’ (USACE’s) fiscal year 2025 work plan, with 25% of that helping to fund the so-called Project 11, the multi-year endeavor that will widen the Houston Ship Channel to accommodate two-way traffic of neo-Panamax vessels. The other $98 million will be used for the ongoing operation and maintenance of the key ship channel, Port Houston said. The $33 million for <a href="https://www.joc.com/article/houstons-new-port-chief-plots-terminal-fluidity-as-key-to-container-growth-5719796">the widening project</a> brings it to about 87% funding, with $162 million in federal funding left to come. “This means that Port Houston is no longer obligated to pay the costs to dredge these locally preferred plan [LPP] elements of Project 11,” Port Houston told the Journal of Commerce. The port said Project 11 is expected to be completed in October 2029, pending the receipt of the balance of federal funding. It will ultimately allow an additional 1,400 vessels of all types to call the port each year, deepening portions of the channel to 46.5 feet to accommodate larger ships.  “We are waiting to see the president’s budget specifics released for [fiscal year] 2026, which could come this week,” the port said. “We hope to see funding included in it for Project 11 and/or [operations and maintenance] for the next fiscal year.” As Project 11 continues, the Houston-area’s Cedar Port industrial park and barge port is pursuing an unrelated dredging project that could increase <a href="https://www.joc.com/article/stakeholders-look-to-advance-possible-houston-area-dredging-project-6009979">container competition on the Gulf Coast</a>.Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Port Houston will receive $131 million from the US Army Corps of Engineers’ (USACE’s) fiscal year 2025 work plan, with 25% of that helping to fund the so-called Project 11, the multi-year endeavor that will widen the Houston Ship Channel to accommodate two-way traffic of neo-Panamax vessels. The other $98 million will be used for the ongoing operation and maintenance of the key ship channel, Port Houston said. The $33 million for the widening project brings it to about 87% funding, with $162 million in federal funding left to come. “This means that Port Houston is no longer obligated to pay the costs to dredge these locally preferred plan [LPP] elements of Project 11,” Port Houston told the Journal of Commerce. The port said Project 11 is expected to be completed in October 2029, pending the receipt of the balance of federal funding. It will ultimately allow an additional 1,400 vessels of all types to call the port each year, deepening portions of the channel to 46.5 feet to accommodate larger ships.  “We are waiting to see the president’s budget specifics released for [fiscal year] 2026, which could come this week,” the port said. “We hope to see funding included in it for Project 11 and/or [operations and maintenance] for the next fiscal year.” As Project 11 continues, the Houston-area’s Cedar Port industrial park and barge port is pursuing an unrelated dredging project that could increase container competition on the Gulf Coast . Contact Laura Robb at laura.robb@spglobal.com . 

Port Houston secures $131 million in federal funds for ship channel work

<div class="phx-topic abstract-wrapper">The US Court of International Trade on Wednesday stated that President Donald Trump’s tariffs exceed his authority. </div>

The US Court of International Trade on Wednesday stated that President Donald Trump’s tariffs exceed his authority.

<div class="phx-topic">A federal trade court’s striking down of President Donald Trump’s series of tariffs against most of its trading partners resets shipping expectations after months of whiplash but adds yet more uncertainty for importers. The US Court of International Trade on Wednesday blocked Trump’s use of emergency powers to impose a 10% tax across most countries and the 145% tariff hanging over US imports from China amid a 90-day reprieve. The decision will almost certainly be appealed, adding uncertainty to importers. “The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court stated. The decision, if upheld, would draw a close to more than six months of uncertainty on the future of US tariffs and retaliatory measures against US exporters. The Trump administration may find other ways to impose leverage in trade negotiations. Anticipation of Trump’s second term and his reelection spurred importers to frontload cargo for months, before pulling back on orders after he announced a 145% tariff on April 9. The US and China agreed on May 12 to a 90-day cooling off period in which reciprocal tariffs on Chinese goods were reduced to 30%. Before the decision Thursday, container lines warned that container space from Asia to the US would be tight through June as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August. This is a developing story. </div>

A federal trade court’s striking down of President Donald Trump’s series of tariffs against most of its trading partners resets shipping expectations after months of whiplash but adds yet more uncertainty for importers. The US Court of International Trade on Wednesday blocked Trump’s use of emergency powers to impose a 10% tax across most countries and the 145% tariff hanging over US imports from China amid a 90-day reprieve. The decision will almost certainly be appealed, adding uncertainty to importers. “The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court stated. The decision, if upheld, would draw a close to more than six months of uncertainty on the future of US tariffs and retaliatory measures against US exporters. The Trump administration may find other ways to impose leverage in trade negotiations. Anticipation of Trump’s second term and his reelection spurred importers to frontload cargo for months, before pulling back on orders after he announced a 145% tariff on April 9. The US and China agreed on May 12 to a 90-day cooling off period in which reciprocal tariffs on Chinese goods were reduced to 30%. Before the decision Thursday, container lines warned that container space from Asia to the US would be tight through June as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August. This is a developing story.

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Federal court ruling blocking tariffs resets shipping outlook

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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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