<div class="phx-topic abstract-wrapper">The carrier said its ability to capture market share was directly linked to a shift in trade dynamics as mainline operators outsourced intra-regional services to more agile operators.</div>

The carrier said its ability to capture market share was directly linked to a shift in trade dynamics as mainline operators outsourced intra-regional services to more agile operators.

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<div class="phx-topic">Intra-Europe specialist carrier Unifeeder tripled its market share in the Mediterranean in 2024 as deep-sea liners diverting around Africa to avoid the Red Sea outsourced coverage of the region to smaller operators. The DP World subsidiary said in a statement Tuesday its market share of the intra-Mediterranean trade had risen from 1.5% in 2023 to 4.3% last year, with data from Alphaliner showing that Unifeeder recorded the highest capacity growth of all carriers in the region. Unifeeder CEO Martin Gaard Christiansen said the carrier’s growth in the Mediterranean and Black Sea was a result of the rapidly evolving shipping landscape in the region. ”The shipping industry is going through profound shifts, with geopolitical and economic factors driving the need for more agile and responsive supply chain solutions,” Gaard said in the statement. Vessel diversions around southern Africa add up to two weeks to transit times and absorb an additional 10% of capacity. Rather than connect with ports deep inside the Mediterranean, deep-sea carriers, in a bid to maintain weekly schedules, <a href="https://www.joc.com/article/ocean-carriers-slash-port-calls-as-red-sea-disruptions-grow-5219908">instead offload south Europe cargo at hubs</a> in North Europe or at ports just inside the Atlantic entrance to the Mediterranean. The cargo is then transhipped eastward to destinations inside the Mediterranean or Black Sea. Unifeeder said the intra-Mediterranean trade sector as a whole saw overall capacity expand 9.3%, or almost 50,000 TEUs, by December last year compared to December 2023. The carrier noted that its ability to capture market share was directly linked to a shift in trade dynamics as mainline operators outsourced intra-regional services to more agile operators. <h3>Increasing Mediterranean transshipment </h3>Those changes in the Asia-Mediterranean network led to a host of new services being rolled out across the Med and Black Sea last year by both mainline carriers and smaller intra-Europe operators. Unifeeder alone launched seven new intra-Mediterranean services in the past 12 months, adding 10,600 TEUs of capacity and increasing its average vessel size to 1,186 TEUs, with plans to expand services into the Black Sea later this month. The carrier’s Mediterranean fleet now totals 20 vessels with a total capacity of 24,000 TEUs. <a href="https://www.joc.com/article/turkish-liners-shift-to-india-for-suez-routings-with-relays-to-us-europe-5919049">Turkish shipping company Arkas</a> last week announced the Feb. 10 launch of its direct India Med Service that will operate four vessels, each having a capacity of 2,500-2,800 TEUs. The additional volume coming into the Mediterranean from India will see Arkas restructuring its network with a new Blue Med Service merging two existing services jointly operated with CMA CGM. Unimed will launch a new service to connect Turkey to Bulgaria this month, while from Jan. 24 CMA CGM will add their new Odessa Express connecting Odessa with Piraeus and Ambarli in Turkey using two ships of 1,100 TEUs and 1,500 TEUs. Maersk this week launched its new Mediterranean Sea C (SLN) service that has replaced the Mediterranean Sea A (SLZ) and Mediterranean Sea B (SLH) services it operates jointly with Arkas. Ocean Network Express (ONE) on Jan. 18 will launch two feeder services covering the Adriatic and south Mediterranean. The Adriatic Service 1 (AD1) will use three ships of 1,000 TEUs and replace ONE’s existing Adriatic Israel Butterfly (AIB) service. There is set to be a significant increase in intra-Mediterranean ocean traffic from Feb. 1 when the <a href="https://www.joc.com/article/hapag-lloyd-says-gemini-alliance-cargo-bookings-to-open-dec-3-5846853">Gemini Cooperation between Maersk and Hapag-Lloyd</a> is launched. According to published Gemini schedules, vessels on the Asia-Mediterranean trade will provide weekly connectivity with Asia at gateway ports in Spain, Italy, the Adriatic and Turkey, with shuttles transporting cargo to destination terminals. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Intra-Europe specialist carrier Unifeeder tripled its market share in the Mediterranean in 2024 as deep-sea liners diverting around Africa to avoid the Red Sea outsourced coverage of the region to smaller operators. The DP World subsidiary said in a statement Tuesday its market share of the intra-Mediterranean trade had risen from 1.5% in 2023 to 4.3% last year, with data from Alphaliner showing that Unifeeder recorded the highest capacity growth of all carriers in the region. Unifeeder CEO Martin Gaard Christiansen said the carrier’s growth in the Mediterranean and Black Sea was a result of the rapidly evolving shipping landscape in the region. ”The shipping industry is going through profound shifts, with geopolitical and economic factors driving the need for more agile and responsive supply chain solutions,” Gaard said in the statement. Vessel diversions around southern Africa add up to two weeks to transit times and absorb an additional 10% of capacity. Rather than connect with ports deep inside the Mediterranean, deep-sea carriers, in a bid to maintain weekly schedules, instead offload south Europe cargo at hubs in North Europe or at ports just inside the Atlantic entrance to the Mediterranean. The cargo is then transhipped eastward to destinations inside the Mediterranean or Black Sea. Unifeeder said the intra-Mediterranean trade sector as a whole saw overall capacity expand 9.3%, or almost 50,000 TEUs, by December last year compared to December 2023. The carrier noted that its ability to capture market share was directly linked to a shift in trade dynamics as mainline operators outsourced intra-regional services to more agile operators. Increasing Mediterranean transshipment Those changes in the Asia-Mediterranean network led to a host of new services being rolled out across the Med and Black Sea last year by both mainline carriers and smaller intra-Europe operators. Unifeeder alone launched seven new intra-Mediterranean services in the past 12 months, adding 10,600 TEUs of capacity and increasing its average vessel size to 1,186 TEUs, with plans to expand services into the Black Sea later this month. The carrier’s Mediterranean fleet now totals 20 vessels with a total capacity of 24,000 TEUs. Turkish shipping company Arkas last week announced the Feb. 10 launch of its direct India Med Service that will operate four vessels, each having a capacity of 2,500-2,800 TEUs. The additional volume coming into the Mediterranean from India will see Arkas restructuring its network with a new Blue Med Service merging two existing services jointly operated with CMA CGM. Unimed will launch a new service to connect Turkey to Bulgaria this month, while from Jan. 24 CMA CGM will add their new Odessa Express connecting Odessa with Piraeus and Ambarli in Turkey using two ships of 1,100 TEUs and 1,500 TEUs. Maersk this week launched its new Mediterranean Sea C (SLN) service that has replaced the Mediterranean Sea A (SLZ) and Mediterranean Sea B (SLH) services it operates jointly with Arkas. Ocean Network Express (ONE) on Jan. 18 will launch two feeder services covering the Adriatic and south Mediterranean. The Adriatic Service 1 (AD1) will use three ships of 1,000 TEUs and replace ONE’s existing Adriatic Israel Butterfly (AIB) service. There is set to be a significant increase in intra-Mediterranean ocean traffic from Feb. 1 when the Gemini Cooperation between Maersk and Hapag-Lloyd is launched. According to published Gemini schedules, vessels on the Asia-Mediterranean trade will provide weekly connectivity with Asia at gateway ports in Spain, Italy, the Adriatic and Turkey, with shuttles transporting cargo to destination terminals. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Container lines

Asia-Europe

Maritime

Unifeeder boosts market share as Red Sea diversions grow Med business

<div class="phx-topic abstract-wrapper">The Doha-based carrier will expand the digital connectivity of its containers to improve real-time visibility across the global cargo and passenger network.</div>

The Doha-based carrier will expand the digital connectivity of its containers to improve real-time visibility across the global cargo and passenger network.

<div class="phx-topic">Qatar Airways Cargo has begun to attach digital tags to its fleet of 42,000 air freight containers in a bid to provide real-time visibility and improve equipment utilization in the largest such digitalization project undertaken by an airline. The Doha-based carrier said Tuesday it has partnered with Unilode Aviation Solutions, a specialist in the management of unit load devices (ULDs) — the containers used by airlines to transport cargo — to cover the carriage of ULDs across its global freight and passenger network. Mark Drusch, chief cargo officer at Qatar Airways Cargo, described the digitalization move as “transformative” for the carrier. "We (will be) able to allocate ULDs more effectively across our vast network of destinations, and this in turn will increase asset utilization, reduce costs and contribute to a more sustainable and environmentally friendly operation,” Drusch said in a statement. Airlines have recognized the long-term benefits of digitalizing their ULD fleets and are making progress. But it is slow going, with challenges that include initial investment costs and standardization across the industry. While temperature-sensitive high-value shipments such as pharmaceuticals are tracked in real time, ULDs stuffed with general air cargo and e-commerce do not enjoy the same level of visibility. “With this partnership we are confident that it will reshape ULD digitalization across the industry and contribute to a more connected, efficient and sustainable aviation ecosystem,” Unilode CEO Ross Marino said. Unilode’s tag and reader network will enable real-time visibility and tracking of ULDs while providing Qatar Airways Cargo with enhanced data analytics to improve ULD utilization and further reduce costs. The visibility helps airlines and forwarders monitor the location and status of their cargo, reducing the risk of loss or misplacement. The efficient use of ULDs also plays a key role in making air cargo more sustainable and better able to comply with tightening regulations. Load factors can be improved, while better tracking leads to more efficient routing and handling, minimizing the environmental impact. And as regulations become stricter, digital records of ULDs can help ensure compliance with safety and security standards. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Qatar Airways Cargo has begun to attach digital tags to its fleet of 42,000 air freight containers in a bid to provide real-time visibility and improve equipment utilization in the largest such digitalization project undertaken by an airline. The Doha-based carrier said Tuesday it has partnered with Unilode Aviation Solutions, a specialist in the management of unit load devices (ULDs) — the containers used by airlines to transport cargo — to cover the carriage of ULDs across its global freight and passenger network. Mark Drusch, chief cargo officer at Qatar Airways Cargo, described the digitalization move as “transformative” for the carrier. "We (will be) able to allocate ULDs more effectively across our vast network of destinations, and this in turn will increase asset utilization, reduce costs and contribute to a more sustainable and environmentally friendly operation,” Drusch said in a statement. Airlines have recognized the long-term benefits of digitalizing their ULD fleets and are making progress. But it is slow going, with challenges that include initial investment costs and standardization across the industry. While temperature-sensitive high-value shipments such as pharmaceuticals are tracked in real time, ULDs stuffed with general air cargo and e-commerce do not enjoy the same level of visibility. “With this partnership we are confident that it will reshape ULD digitalization across the industry and contribute to a more connected, efficient and sustainable aviation ecosystem,” Unilode CEO Ross Marino said. Unilode’s tag and reader network will enable real-time visibility and tracking of ULDs while providing Qatar Airways Cargo with enhanced data analytics to improve ULD utilization and further reduce costs. The visibility helps airlines and forwarders monitor the location and status of their cargo, reducing the risk of loss or misplacement. The efficient use of ULDs also plays a key role in making air cargo more sustainable and better able to comply with tightening regulations. Load factors can be improved, while better tracking leads to more efficient routing and handling, minimizing the environmental impact. And as regulations become stricter, digital records of ULDs can help ensure compliance with safety and security standards. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo

Air Cargo Carriers News

Qatar Cargo launches 'transformative’ digitalization drive for air containers

<div class="phx-topic abstract-wrapper">The twin complaints to the FMC charge that several ocean carriers pushed the shippers into paying surcharges and premium rates totaling $5.5 million, while creating another $76 million in added spot market costs. </div>

The twin complaints to the FMC charge that several ocean carriers pushed the shippers into paying surcharges and premium rates totaling $5.5 million, while creating another $76 million in added spot market costs.

<div class="phx-topic">Two US shippers, including the parent company of retailer Crate &amp; Barrel, want the Federal Maritime Commission (FMC) to investigate ocean carriers for not providing enough vessel space during the pandemic surge, alleging they also extracted surcharges and higher rates for previously agreed-upon container volumes in violation of US shipping law and forced the shippers into the then-costly spot market. The complaints are a further shot across the bow on the enforceability of service contracts and whether service refusals for some customers were a legitimate response to overwhelming demand during the COVID-19 era. In a pair of complaints published by FMC last week, Euromarket Designs, the parent of Crate &amp; Barrel, and housewares and furniture distributor Nielsen &amp; Bainbridge both allege that a host of ocean carriers failed to honor service contracts with the two shippers between 2020 and 2022, resulting in delays and a shortfall in expected cargo volumes. Instead, the shippers claim that carriers sought surcharges for getting their allocated cargo on a ship. All in, Euromarket said its freight bills with Mediterranean Shipping Co., HMM and Ocean Network Express (ONE) increased $5.5 million due to surcharges and higher rates. Nielsen &amp; Bainbridge said it paid $4 million more to ONE, OOCL and Evergreen Line for carrying cargo under its existing contracts.Even with the premiums, the two shippers said they were not able to get all the space they required during the 2020–22 service years. As a result, they were forced into the spot market where they say they paid a combined $76.5 million for capacity they expected to get under their service contracts. Nielsen &amp; Bainbridge filed for bankruptcy last year, turning itself over to private equity lenders KKR &amp; Co. and Silver Point Capital. The company said in its filing the higher freight costs “significantly contributed” to its bankruptcy. Along with an FMC investigation, the complainants asked for reparations from the carriers for the alleged violations. Representatives of the carriers did not immediately respond to the allegations. <h3>Similar complaints lobbed at carriers </h3>The twin complaints mirror similar ones filed in the wake of the pandemic-era container surge alleging refusal of service by carriers, with those cases having mixed success. MCS Industries, another home goods importer, alleged in 2021 that MSC and Cosco Shipping <a href="https://www.joc.com/article/us-importer-complains-of-container-line-collusion-to-fmc-5249085">failed to honor service contracts</a> and agreed-upon rate structures, the first such complaint on the issue of service contract fulfillment. MCS eventually entered into a settlement with Cosco.Food importer MSRF alleged in 2022 that HMM and Yang Ming did not honor service contracts that forced the shipper into the more expensive spot market. An FMC administrative law judge found <a href="https://www.joc.com/article/fmc-judge-rules-in-favor-of-hmm-in-rolled-cargo-complaint-5220361">HMM did try to accommodate MSRF’s cargo</a> by renegotiating contracts, while Yang Ming eventually settled with the shipper. Prior to the two recent filings, the largest complaints about refusal of service have come from Bed Bath &amp; Beyond. The bankrupt retailer alleged in <a href="https://www.joc.com/article/bed-bath-beyond-files-fmc-complaint-against-yang-ming-in-capacity-dispute-5220648">two complaints from 2023</a> that OOCL and Yang Ming caused a combined $40 million in damages for their alleged refusal to provide sufficient vessel space under existing contracts. The two cases are still pending. The alleged violations occurred before the June 2022 implementation of the Ocean Shipping Reform Act of 2022 (OSRA-22), which prohibits ocean carriers from <a href="https://www.joc.com/article/fmc-refusal-of-service-rule-risks-overreacting-to-pandemic-market-5216058">“unreasonable refusals” of cargo space to shippers</a>. In July 2024, the FMC published its final rules on how it would treat instances where carriers refused cargo space to customers. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Two US shippers, including the parent company of retailer Crate & Barrel, want the Federal Maritime Commission (FMC) to investigate ocean carriers for not providing enough vessel space during the pandemic surge, alleging they also extracted surcharges and higher rates for previously agreed-upon container volumes in violation of US shipping law and forced the shippers into the then-costly spot market. The complaints are a further shot across the bow on the enforceability of service contracts and whether service refusals for some customers were a legitimate response to overwhelming demand during the COVID-19 era. In a pair of complaints published by FMC last week, Euromarket Designs, the parent of Crate & Barrel, and housewares and furniture distributor Nielsen & Bainbridge both allege that a host of ocean carriers failed to honor service contracts with the two shippers between 2020 and 2022, resulting in delays and a shortfall in expected cargo volumes. Instead, the shippers claim that carriers sought surcharges for getting their allocated cargo on a ship. All in, Euromarket said its freight bills with Mediterranean Shipping Co., HMM and Ocean Network Express (ONE) increased $5.5 million due to surcharges and higher rates. Nielsen & Bainbridge said it paid $4 million more to ONE, OOCL and Evergreen Line for carrying cargo under its existing contracts. Even with the premiums, the two shippers said they were not able to get all the space they required during the 2020–22 service years. As a result, they were forced into the spot market where they say they paid a combined $76.5 million for capacity they expected to get under their service contracts. Nielsen & Bainbridge filed for bankruptcy last year, turning itself over to private equity lenders KKR & Co. and Silver Point Capital. The company said in its filing the higher freight costs “significantly contributed” to its bankruptcy. Along with an FMC investigation, the complainants asked for reparations from the carriers for the alleged violations. Representatives of the carriers did not immediately respond to the allegations. Similar complaints lobbed at carriers The twin complaints mirror similar ones filed in the wake of the pandemic-era container surge alleging refusal of service by carriers, with those cases having mixed success. MCS Industries, another home goods importer, alleged in 2021 that MSC and Cosco Shipping failed to honor service contracts and agreed-upon rate structures, the first such complaint on the issue of service contract fulfillment. MCS eventually entered into a settlement with Cosco. Food importer MSRF alleged in 2022 that HMM and Yang Ming did not honor service contracts that forced the shipper into the more expensive spot market. An FMC administrative law judge found HMM did try to accommodate MSRF’s cargo by renegotiating contracts, while Yang Ming eventually settled with the shipper. Prior to the two recent filings, the largest complaints about refusal of service have come from Bed Bath & Beyond. The bankrupt retailer alleged in two complaints from 2023 that OOCL and Yang Ming caused a combined $40 million in damages for their alleged refusal to provide sufficient vessel space under existing contracts. The two cases are still pending. The alleged violations occurred before the June 2022 implementation of the Ocean Shipping Reform Act of 2022 (OSRA-22), which prohibits ocean carriers from “unreasonable refusals” of cargo space to shippers . In July 2024, the FMC published its final rules on how it would treat instances where carriers refused cargo space to customers. Contact Michael Angell at michael.angell@spglobal.com .

Transport, Trade and Regulation News

Two US shippers latest to allege carriers bumped contract cargo to spot market

<div class="phx-topic abstract-wrapper">Shipper-paid spot truck pricing from major US ports rose faster than the average US rate in late 2024 as importers prepared for a potential longshore strike.</div>

Shipper-paid spot truck pricing from major US ports rose faster than the average US rate in late 2024 as importers prepared for a potential longshore strike.

<div class="phx-topic">The cost of hauling goods from major US seaport markets jumped significantly toward the end of 2024, with outbound truckload spot rates that rose in a normal seasonal pattern getting an additional boost from a potential strike at ports along the East and Gulf coasts. Whether spot rates from US ports will continue to rise now that the threat of a longshore labor crisis <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">appears to have been avoided</a> is unclear as truckload demand and pricing nationwide struggle to rise out of the trough they’ve been in since mid-2023. The average outbound dry-van shipper-paid truckload spot rate from New York and New Jersey rose 7% month over month in December to $2.38 per mile, according to a Journal of Commerce analysis of pricing data on more than 4,000 lanes from DAT Freight &amp; Analytics, Loadsmart, Sunset Transportation, and a survey of truckload brokers. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="85735c83-384d-4a76-8c32-aba98a29c1a8"></dynamic-object></div>On the West Coast, the average outbound truckload spot rate from Los Angeles rose 5% in December to $2.77 per mile, a 26-month high. In Seattle, the average rate rose 4% from the prior month, climbing to $2.37 per mile. That was a 19% increase for Seattle from May, which, coupled with a 10.8% rate hike from Los Angeles in the same period points to the impact of cargo shifting from the East and Gulf coasts — and from Canada in the case of Seattle — to the West. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b11cfbac-4bbf-48e7-b4cd-2b6fe7e02d82"></dynamic-object></div>In contrast, the Journal of Commerce <a href="https://www.joc.com/article/us-truckload-spot-rates-rising-but-shippers-keeping-lid-on-contract-rates-5919921">national average shipper-paid spot rate</a> stayed in a narrow price band of $2.16 to $2.20 from February through November before rising 8 cents to $2.28 per mile in December. That’s a 2-cent-per-mile increase from December 2023. In a year-over-year comparison, the outbound rate from Los Angeles was up 11.3% in December, while the nationwide average was up 1.3%. “The Los Angeles freight market has rebounded much faster [in 2024] than most other markets,” Dean Croke, principal analyst at DAT, said. DAT expects double-digit growth in outbound truckload volumes from Los Angeles in 2025. <h3>Shippers skeptical </h3>Despite rising spot rates, shippers who have spoken to the Journal of Commerce have not indicated that they are paying significantly higher contract rates in 2025 deals. There is skepticism in the shipper community that spot rate inflation in trucking during the back half of the year will translate into higher contract rates. That’s because any lingering labor threat will go away if the longshoremen ratify a tentative six-year contract, while any decision on raising tariffs on China could come soon after Donald Trump’s inauguration. Once those issues are resolved, shippers believe some freight will return to the eastern US, causing demand in Los Angeles and Seattle to dip in 2025. The skepticism is also based on the perception of capacity. Shippers have not complained about struggling to find a truck to haul their freight or a squeeze on available drivers to handle business. Without the shipper struggling to get capacity in some way, it might be difficult for carriers to get anything more than a low to mid-single-digit percentage rate increase to cover inflation. Sources tell the Journal of Commerce that truckload carriers are struggling to get rate increases in annual contract negotiations with shippers. “You’re not seeing an inflection point yet, but we are getting closer to a point of equilibrium,” said Croke. Overall, spot truckload rates are expected to decline in January and February, typically weaker months for trucking demand. The extent of that decline may depend on the severity of winter weather, but demand tends to only pick up closer to the spring season. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The cost of hauling goods from major US seaport markets jumped significantly toward the end of 2024, with outbound truckload spot rates that rose in a normal seasonal pattern getting an additional boost from a potential strike at ports along the East and Gulf coasts. Whether spot rates from US ports will continue to rise now that the threat of a longshore labor crisis appears to have been avoided is unclear as truckload demand and pricing nationwide struggle to rise out of the trough they’ve been in since mid-2023. The average outbound dry-van shipper-paid truckload spot rate from New York and New Jersey rose 7% month over month in December to $2.38 per mile, according to a Journal of Commerce analysis of pricing data on more than 4,000 lanes from DAT Freight & Analytics, Loadsmart, Sunset Transportation, and a survey of truckload brokers. On the West Coast, the average outbound truckload spot rate from Los Angeles rose 5% in December to $2.77 per mile, a 26-month high. In Seattle, the average rate rose 4% from the prior month, climbing to $2.37 per mile. That was a 19% increase for Seattle from May, which, coupled with a 10.8% rate hike from Los Angeles in the same period points to the impact of cargo shifting from the East and Gulf coasts — and from Canada in the case of Seattle — to the West. In contrast, the Journal of Commerce national average shipper-paid spot rate stayed in a narrow price band of $2.16 to $2.20 from February through November before rising 8 cents to $2.28 per mile in December. That’s a 2-cent-per-mile increase from December 2023. In a year-over-year comparison, the outbound rate from Los Angeles was up 11.3% in December, while the nationwide average was up 1.3%. “The Los Angeles freight market has rebounded much faster [in 2024] than most other markets,” Dean Croke, principal analyst at DAT, said. DAT expects double-digit growth in outbound truckload volumes from Los Angeles in 2025. Shippers skeptical Despite rising spot rates, shippers who have spoken to the Journal of Commerce have not indicated that they are paying significantly higher contract rates in 2025 deals. There is skepticism in the shipper community that spot rate inflation in trucking during the back half of the year will translate into higher contract rates. That’s because any lingering labor threat will go away if the longshoremen ratify a tentative six-year contract, while any decision on raising tariffs on China could come soon after Donald Trump’s inauguration. Once those issues are resolved, shippers believe some freight will return to the eastern US, causing demand in Los Angeles and Seattle to dip in 2025. The skepticism is also based on the perception of capacity. Shippers have not complained about struggling to find a truck to haul their freight or a squeeze on available drivers to handle business. Without the shipper struggling to get capacity in some way, it might be difficult for carriers to get anything more than a low to mid-single-digit percentage rate increase to cover inflation. Sources tell the Journal of Commerce that truckload carriers are struggling to get rate increases in annual contract negotiations with shippers. “You’re not seeing an inflection point yet, but we are getting closer to a point of equilibrium,” said Croke. Overall, spot truckload rates are expected to decline in January and February, typically weaker months for trucking demand. The extent of that decline may depend on the severity of winter weather, but demand tends to only pick up closer to the spring season. Contact Ari Ashe at ari.ashe@spglobal.com . Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

North American ports

Truckload

Surface

Trucking rates out of US ports rise on frontloading, cargo shift

<div class="phx-topic abstract-wrapper">The US is seeking to amend rules regarding so-called de minimis shipments, which have skyrocketed since the pandemic. </div>

The US is seeking to amend rules regarding so-called de minimis shipments, which have skyrocketed since the pandemic.

<div class="phx-topic">US Customs and Border Protection (CBP) on Monday said it was seeking industry comment on new regulations it wants to implement that would address the growing risk of illicit or counterfeit goods entering the country as low-value imports, also known as de minimis shipments. The industry will have 60 days to comment on the proposed rulemaking, announced in September, that seeks to improve the data collection around imports using the de minimis provision. CBP said it processes more than 4 million de minimis shipments each day, with 2024 volume up nearly 50% from 2023. “Current regulations require importers to provide minimal information to CBP for these shipments, compared to those required for other types of cargo,” the agency said in a notice. “The overwhelming volume of low-value shipments and lack of actionable data collected pursuant to current regulations inhibit CBP’s ability to identify and interdict high-risk shipments that may contain illegal drugs such as illicit fentanyl, merchandise that poses a risk to public safety, counterfeit or pirated goods, or other contraband.” CBP said the intent of the rulemaking is to better target high-risk shipments. It is also aimed at revising the current process for entering information on low-value shipments to require additional data elements that would help CBP verify eligibility for duty- and tax-free entry by creating a fully electronic process for filers to transmit data prior to a shipment’s arrival. “This data will reduce the burden for CBP officers who process these large volumes of shipments, leading to more accurate targeting,” the agency said. The rulemaking was announced in September by the Biden administration to address growing unease with the volume of duty-free packages arriving in the US. De minimis regulations allow one shipment of less than $800 in value to move between a single shipper and single consignee per day. Advocates for tighter de minimis regulations argue that the process is being misused by e-commerce retailers in Asia to legally avoid duties and taxes. CBP currently operates two programs — the Section 321 data pilot and entry Type 86 — that mandate shippers and customs brokers provide additional data on de minimis shipments. The benefit of providing more data is enhanced compliance with de minimis regulations and faster clearance of goods. According to CBP’s de minimis dashboard, more than half of all de minimis shipments in 2024 moved via Type 86 entries. The agency also said more than 90% of US imports by bill of lading volume qualify for de minimis, a figure it described as “growing in epic proportions.” In August, five US senators introduced a bipartisan bill to curtail the use of de minimis by prohibiting certain product categories from using the duty exemption. The legislation, which remains in committee, would also mandate that de minimis shipments provide additional data to CBP, while increasing penalties for violations. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

US Customs and Border Protection (CBP) on Monday said it was seeking industry comment on new regulations it wants to implement that would address the growing risk of illicit or counterfeit goods entering the country as low-value imports, also known as de minimis shipments. The industry will have 60 days to comment on the proposed rulemaking, announced in September, that seeks to improve the data collection around imports using the de minimis provision. CBP said it processes more than 4 million de minimis shipments each day, with 2024 volume up nearly 50% from 2023. “Current regulations require importers to provide minimal information to CBP for these shipments, compared to those required for other types of cargo,” the agency said in a notice. “The overwhelming volume of low-value shipments and lack of actionable data collected pursuant to current regulations inhibit CBP’s ability to identify and interdict high-risk shipments that may contain illegal drugs such as illicit fentanyl, merchandise that poses a risk to public safety, counterfeit or pirated goods, or other contraband.” CBP said the intent of the rulemaking is to better target high-risk shipments. It is also aimed at revising the current process for entering information on low-value shipments to require additional data elements that would help CBP verify eligibility for duty- and tax-free entry by creating a fully electronic process for filers to transmit data prior to a shipment’s arrival. “This data will reduce the burden for CBP officers who process these large volumes of shipments, leading to more accurate targeting,” the agency said. The rulemaking was announced in September by the Biden administration to address growing unease with the volume of duty-free packages arriving in the US. De minimis regulations allow one shipment of less than $800 in value to move between a single shipper and single consignee per day. Advocates for tighter de minimis regulations argue that the process is being misused by e-commerce retailers in Asia to legally avoid duties and taxes. CBP currently operates two programs — the Section 321 data pilot and entry Type 86 — that mandate shippers and customs brokers provide additional data on de minimis shipments. The benefit of providing more data is enhanced compliance with de minimis regulations and faster clearance of goods. According to CBP’s de minimis dashboard, more than half of all de minimis shipments in 2024 moved via Type 86 entries. The agency also said more than 90% of US imports by bill of lading volume qualify for de minimis, a figure it described as “growing in epic proportions.” In August, five US senators introduced a bipartisan bill to curtail the use of de minimis by prohibiting certain product categories from using the duty exemption. The legislation, which remains in committee, would also mandate that de minimis shipments provide additional data to CBP, while increasing penalties for violations. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

CBP seeks industry input on rules curbing low-value shipment abuse

<div class="phx-topic abstract-wrapper">Multiple forwarder sources who spoke with the Journal of Commerce confirmed that the portal booking specifics are still unavailable for February voyages from India to Europe.</div>

Multiple forwarder sources who spoke with the Journal of Commerce confirmed that the portal booking specifics are still unavailable for February voyages from India to Europe.

<div class="phx-topic">Indian freight forwarders are still waiting to learn when Gemini alliance partners Maersk and Hapag-Lloyd will open spot bookings to Europe even as the so-called hub-and-spoke network moves closer to its official Feb. 1 launch. Hapag-Lloyd earlier told customers that Dec. 3 would be the booking start date for all Gemini services. But multiple forwarder sources who spoke with the Journal of Commerce confirmed that the portal booking specifics are still unavailable for February voyages from India to Europe. “While the inaugural sailing schedules have been declared, the network hasn’t begun accepting spot bookings as of now,” said a sales executive at a Mumbai-based forwarding house. “Some rollover adjustments from the current independent networks and other commercial considerations could be holding things back.” Gemini <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.joc.com%2Farticle%2Fgemini-to-bulk-up-capacity-on-india-europe-trade-amid-rate-push-pressure-5911491&amp;data=05%7C02%7Ckevin.saville2%40spglobal.com%7C137c532edf0d471c908508dd33c2e925%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C638723634416921183%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=KvNS921FK3lhQ3kswi9JR2bd%2BDoRoQb5v9h9sHBju9c%3D&amp;reserved=0">has three direct services out of India for North Europe</a> — two with stops at Mundra and Nhava Sheva for northwestern India trade, and one for southern India trade over Ennore (Chennai). The first westbound Gemini sailing on the West India-Europe trade will be the Houston Express, operated by Hapag-Lloyd, with an estimated time of arrival in Mundra of Feb. 9, while the southern India leg is due to begin with the Maersk Stadelhorn calling at Ennore on Feb. 11, sources said. A second forwarder said as Maersk has the largest market share of the seasonal grape market out of India to Europe, which typically moves under carrier service contracts, the availability of space on early Gemini vessels could in some part hinge on this reefer trade that market sources generally expect to exceed last year’s volumes. Hapag-Lloyd and Mediterranean Shipping Co. are also major carriers for Indian-grown grape exports, which normally peak from February through March. As contract negotiations move into the closing stages, forwarder sources expect average carrier rates to hover at about $3,500 per FEU for grape bookings from West India to Europe. That range compares with early-January spot pricing of between $1,800 and $1,900 per FEU for standard dry loads from Nhava Sheva to London Gateway or Felixstowe. “A stronger grape season could cut into the spot booking space, thus driving rates up after steady declines,” the second forwarder source said. Shrugging off forwarder claims, Bhavik Mota, Maersk’s director of regional ocean management for India/Middle East/Africa, told the Journal of Commerce the Gemini network transition remains “on schedule.” “Bookings are open on the Gemini network,” said Mota. “There are no rollovers that could impact bookings.” He also reiterated that the network has been structured globally with Maersk providing 60% of the capacity and Hapag-Lloyd 40%. Hapag-Lloyd (India) was unavailable for comment. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Indian freight forwarders are still waiting to learn when Gemini alliance partners Maersk and Hapag-Lloyd will open spot bookings to Europe even as the so-called hub-and-spoke network moves closer to its official Feb. 1 launch. Hapag-Lloyd earlier told customers that Dec. 3 would be the booking start date for all Gemini services. But multiple forwarder sources who spoke with the Journal of Commerce confirmed that the portal booking specifics are still unavailable for February voyages from India to Europe. “While the inaugural sailing schedules have been declared, the network hasn’t begun accepting spot bookings as of now,” said a sales executive at a Mumbai-based forwarding house. “Some rollover adjustments from the current independent networks and other commercial considerations could be holding things back.” Gemini has three direct services out of India for North Europe — two with stops at Mundra and Nhava Sheva for northwestern India trade, and one for southern India trade over Ennore (Chennai). The first westbound Gemini sailing on the West India-Europe trade will be the Houston Express, operated by Hapag-Lloyd, with an estimated time of arrival in Mundra of Feb. 9, while the southern India leg is due to begin with the Maersk Stadelhorn calling at Ennore on Feb. 11, sources said. A second forwarder said as Maersk has the largest market share of the seasonal grape market out of India to Europe, which typically moves under carrier service contracts, the availability of space on early Gemini vessels could in some part hinge on this reefer trade that market sources generally expect to exceed last year’s volumes. Hapag-Lloyd and Mediterranean Shipping Co. are also major carriers for Indian-grown grape exports, which normally peak from February through March. As contract negotiations move into the closing stages, forwarder sources expect average carrier rates to hover at about $3,500 per FEU for grape bookings from West India to Europe. That range compares with early-January spot pricing of between $1,800 and $1,900 per FEU for standard dry loads from Nhava Sheva to London Gateway or Felixstowe. “A stronger grape season could cut into the spot booking space, thus driving rates up after steady declines,” the second forwarder source said. Shrugging off forwarder claims, Bhavik Mota, Maersk’s director of regional ocean management for India/Middle East/Africa, told the Journal of Commerce the Gemini network transition remains “on schedule.” “Bookings are open on the Gemini network,” said Mota. “There are no rollovers that could impact bookings.” He also reiterated that the network has been structured globally with Maersk providing 60% of the capacity and Hapag-Lloyd 40%. Hapag-Lloyd (India) was unavailable for comment. Contact Bency Mathew at bencyvmathew@gmail.com .

Indian forwarders seek clarity on spot booking program for Gemini Europe sailings

<div class="phx-topic abstract-wrapper">After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons v. Ogden, no one has been reckless enough to try to upend it. </div>

After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons v. Ogden, no one has been reckless enough to try to upend it.

<div class="phx-topic">Last year marked 200 years of the Commerce Clause jurisprudence that underpins the modern, national American economy. In 2025, we may need to protect it. In 1824, the US Supreme Court decided Gibbons v. Ogden, the first major case to interpret the constitutional power of Congress to “regulate commerce among the several states,” or commonly known as the Commerce Clause. To reach this decision, the Court struck down a significant restriction on which ships were allowed access to navigation and an individual state’s seaports. And, as a result, Gibbons created the legal underpinnings of a unified national economy.  The specific legal question at issue in Gibbons was whether one state could deny access to ships from other states based on their means of propulsion: the use of a steam engine instead of sail. But the bigger implication of the question was whether the country would return to the fractured multi-state economy that existed under the Articles of Confederation. In 2024, however, Gibbons’ bicentennial was not celebrated by the environmental advocacy group Pacific Environment, who started advocating for the state of California to institute a “port access fee” based on “the carbon intensity of ship engines.”  This is literally advocating for a Gibbons-like state imposition of a restriction on navigational access to a port based on a ship’s use of a certain type of propulsion system.  In a May 2024 report, Pacific Environment also proclaimed that California should “lead the world to reduce emissions from ocean cargo ships, lower climate impacts, and improve air quality around ports.” The justification? The California “State Legislature is relatively nimble compared to the US Congress and less affected by national politics.” In the early 1800s, before canals and railroads opened up the interior of the continent, the introduction of steam propulsion on ships revolutionized commerce by virtually eliminating physical constraints on river trade. The State of New York wanted to limit the means of propulsion of ships calling on its ports, at the expense of free trade, competition, consumers and the burgeoning US economy. As a result, the Supreme Court in Gibbons needed to decide if New York could constitutionally restrict navigation by barring certain types of vessels from its ports based on their use of a steam engine. And to answer this, the young nation’s highest Court first had to grapple with another, larger question: If the Constitution guarantees free rights of navigation to ships under the Commerce Clause, then is New York’s ban preempted? Gibbons minced no words: “All America understands, and has uniformly understood, the word ‘commerce’ to comprehend navigation.” The Constitution granted the federal government authority over “commercial intercourse between nations, and parts of nations,” and “the power over commerce with foreign nations, and among the several states is vested in Congress as absolutely as it would be in a single government,” the court said.   <h3>California proposals </h3>In 2025, after two centuries of giving Chief Justice John Marshall the final word on the matter, should we reopen this fundamental question of whether states should be able to decide which ships are allowed to call on their ports based on a vessel’s system of propulsion?   In Southern California in 2023, the staff of the South Coast Air Quality Management District (AQMD) started a process to consider indirect regulation of ship propulsion systems. The staff was musing about the adoption of a regulation that would penalize ports or marine terminals that did not “route cleaner ships” or require “new, cleaner vessel designs” for vessels calling at the nation’s busiest container port complex in Los Angeles and Long Beach. AQMD’s board has yet to decide if the staff’s proposed concepts will proceed. California State’s air regulators are also starting a discussion in 2025 around reducing emissions from oceangoing vessels in transit. But whether they stick to incentives and voluntary measures in support of federal and International Maritime Organization (IMO) standards or they take the bait of the ship engine regulations proposed by Pacific Environment remains to be seen.  If either the state or a local air district acts directly to restrict the means of vessel propulsion as a condition of access to state seaports, it would be a novelty — the first direct tests of Gibbons’ rules and its conclusion that the right of navigation is commerce, and therefore the province of Congress and the federal government. And these would be novel cases for good reason. After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons, no one has been reckless enough to try to upend it. Contact Mike Jacob at <a href="mailto:mjacob@pmsaship.com">mjacob@pmsaship.com.</a></div>

Last year marked 200 years of the Commerce Clause jurisprudence that underpins the modern, national American economy. In 2025, we may need to protect it. In 1824, the US Supreme Court decided Gibbons v. Ogden, the first major case to interpret the constitutional power of Congress to “regulate commerce among the several states,” or commonly known as the Commerce Clause. To reach this decision, the Court struck down a significant restriction on which ships were allowed access to navigation and an individual state’s seaports. And, as a result, Gibbons created the legal underpinnings of a unified national economy.  The specific legal question at issue in Gibbons was whether one state could deny access to ships from other states based on their means of propulsion: the use of a steam engine instead of sail. But the bigger implication of the question was whether the country would return to the fractured multi-state economy that existed under the Articles of Confederation. In 2024, however, Gibbons’ bicentennial was not celebrated by the environmental advocacy group Pacific Environment, who started advocating for the state of California to institute a “port access fee” based on “the carbon intensity of ship engines.”  This is literally advocating for a Gibbons-like state imposition of a restriction on navigational access to a port based on a ship’s use of a certain type of propulsion system.  In a May 2024 report, Pacific Environment also proclaimed that California should “lead the world to reduce emissions from ocean cargo ships, lower climate impacts, and improve air quality around ports.” The justification? The California “State Legislature is relatively nimble compared to the US Congress and less affected by national politics.” In the early 1800s, before canals and railroads opened up the interior of the continent, the introduction of steam propulsion on ships revolutionized commerce by virtually eliminating physical constraints on river trade. The State of New York wanted to limit the means of propulsion of ships calling on its ports, at the expense of free trade, competition, consumers and the burgeoning US economy. As a result, the Supreme Court in Gibbons needed to decide if New York could constitutionally restrict navigation by barring certain types of vessels from its ports based on their use of a steam engine. And to answer this, the young nation’s highest Court first had to grapple with another, larger question: If the Constitution guarantees free rights of navigation to ships under the Commerce Clause, then is New York’s ban preempted? Gibbons minced no words: “All America understands, and has uniformly understood, the word ‘commerce’ to comprehend navigation.” The Constitution granted the federal government authority over “commercial intercourse between nations, and parts of nations,” and “the power over commerce with foreign nations, and among the several states is vested in Congress as absolutely as it would be in a single government,” the court said.   California proposals In 2025, after two centuries of giving Chief Justice John Marshall the final word on the matter, should we reopen this fundamental question of whether states should be able to decide which ships are allowed to call on their ports based on a vessel’s system of propulsion?   In Southern California in 2023, the staff of the South Coast Air Quality Management District (AQMD) started a process to consider indirect regulation of ship propulsion systems. The staff was musing about the adoption of a regulation that would penalize ports or marine terminals that did not “route cleaner ships” or require “new, cleaner vessel designs” for vessels calling at the nation’s busiest container port complex in Los Angeles and Long Beach. AQMD’s board has yet to decide if the staff’s proposed concepts will proceed. California State’s air regulators are also starting a discussion in 2025 around reducing emissions from oceangoing vessels in transit. But whether they stick to incentives and voluntary measures in support of federal and International Maritime Organization (IMO) standards or they take the bait of the ship engine regulations proposed by Pacific Environment remains to be seen.  If either the state or a local air district acts directly to restrict the means of vessel propulsion as a condition of access to state seaports, it would be a novelty — the first direct tests of Gibbons’ rules and its conclusion that the right of navigation is commerce, and therefore the province of Congress and the federal government. And these would be novel cases for good reason. After 200 years of building the world’s greatest economy on the settled Commerce Clause jurisprudence of Gibbons, no one has been reckless enough to try to upend it. Contact Mike Jacob at mjacob@pmsaship.com.

Protecting navigation and the Commerce Clause in 2025

<div class="phx-topic abstract-wrapper">MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with the Premier Alliance and ZIM.</div>

MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with the Premier Alliance and ZIM.

<div class="phx-topic">When it became clear that the restructuring of the industry in the east-west trades in early 2025 meant moving from three major networks — 2M, Ocean Alliance and THE Alliance — to four major networks — Ocean, Gemini, Premier and a standalone Mediterranean Shipping Co. — radical overcapacity was in the cards. Even though the carriers knew they were moving into dangerous territory, they didn’t have many options to curtail capacity if they wanted to build robust networks benefiting from the economies of scale that come with larger ships. The most viable option to limit the overall capacity injection at the front end was for the carriers to orchestrate some overlap of the reconfigured networks. Maersk and Hapag-Lloyd made it clear at the outset that the Gemini Cooperation alliance could not entertain more members or slot agreements if it was to deliver the kind of quality level it aspires to. This left it to MSC, Ocean and Premier to take some initiatives; as we have seen, MSC has led the charge. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="bc8c7bab-e415-4fea-861b-3926a4691794"></dynamic-object></div>With the dissolution of the 2M alliance, many industry observers assumed that MSC would operate entirely independently in the east-west trade. This was based on its clear desire to control its own destiny and be nimble in building products to answer client needs. Pundits underestimated MSC’s history of balancing its longer-term objectives with the realities and opportunities of the immediate market. We don’t know the number of slots bought and sold in MSC’s deal with Premier, but with the number of loops MSC will be operating to North Europe and the Med and the capacity it has deployed, it’s a reasonable assumption it is selling more slots than it’s buying, which probably suits the carrier well at this point of evolution. Conversely, the ZIM Integrated Shipping Services deal has helped reduce the capacity injection that MSC needed to make post-2M. (Maersk has been a much bigger contributor of tonnage to the US East Coast than MSC within 2M.) Furthermore, in as much as it has reduced the overall injection of capacity, which reduces overall oversupply in the east-west trade, that will also help rates stay up longer, which MSC also benefits from. It’s hard to see — once all the 25 new deployments are bedded in — that it will stem the capacity influx tide sufficiently to defy rate level gravity. Short, of course, of labor troubles becoming long term or other black swan events over and above the Suez problem. <h3>‘Competitive edge’ for MSC </h3>Meanwhile, the other benefit of the slot agreements MSC has made — particularly for the USEC and Gulf — is that it has enhanced the quality of its network and thus given it more of a competitive edge. The charts don’t give the full picture on service, and every shipper will look at their particular mix of port pairs and what service combo of frequency, transit time and reliability they want. Gemini will point out that this dry set of numbers does nothing to factor in the reliability they will be targeting. It would be correct, but the charts do highlight the fact that shippers will often have to make their pick between frequency and more direct port pairs on one side and dependable departures/arrivals on the other. What the charts also confirm is that in the trades where it has made slot deals, MSC has a competitive overall product that has been enhanced by the slot arrangements. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="886ef5d7-6ed6-45c1-b099-a851968de973"></dynamic-object></div>MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with Premier and ZIM. If MSC carries on accumulating tonnage at the rate it is now, it’s an open question whether the deals with Premier and ZIM will look as attractive for them in the future as they do now. Of course, Premier — or its individual carriers — and ZIM may also have other options when the time comes. Contact Jeremy Masters at <a href="https://www.joc.com/article/jeremy@shippingmastershk.com">jeremy@shippingmastershk.com.</a></div>

When it became clear that the restructuring of the industry in the east-west trades in early 2025 meant moving from three major networks — 2M, Ocean Alliance and THE Alliance — to four major networks — Ocean, Gemini, Premier and a standalone Mediterranean Shipping Co. — radical overcapacity was in the cards. Even though the carriers knew they were moving into dangerous territory, they didn’t have many options to curtail capacity if they wanted to build robust networks benefiting from the economies of scale that come with larger ships. The most viable option to limit the overall capacity injection at the front end was for the carriers to orchestrate some overlap of the reconfigured networks. Maersk and Hapag-Lloyd made it clear at the outset that the Gemini Cooperation alliance could not entertain more members or slot agreements if it was to deliver the kind of quality level it aspires to. This left it to MSC, Ocean and Premier to take some initiatives; as we have seen, MSC has led the charge. With the dissolution of the 2M alliance, many industry observers assumed that MSC would operate entirely independently in the east-west trade. This was based on its clear desire to control its own destiny and be nimble in building products to answer client needs. Pundits underestimated MSC’s history of balancing its longer-term objectives with the realities and opportunities of the immediate market. We don’t know the number of slots bought and sold in MSC’s deal with Premier, but with the number of loops MSC will be operating to North Europe and the Med and the capacity it has deployed, it’s a reasonable assumption it is selling more slots than it’s buying, which probably suits the carrier well at this point of evolution. Conversely, the ZIM Integrated Shipping Services deal has helped reduce the capacity injection that MSC needed to make post-2M. (Maersk has been a much bigger contributor of tonnage to the US East Coast than MSC within 2M.) Furthermore, in as much as it has reduced the overall injection of capacity, which reduces overall oversupply in the east-west trade, that will also help rates stay up longer, which MSC also benefits from. It’s hard to see — once all the 25 new deployments are bedded in — that it will stem the capacity influx tide sufficiently to defy rate level gravity. Short, of course, of labor troubles becoming long term or other black swan events over and above the Suez problem. ‘Competitive edge’ for MSC Meanwhile, the other benefit of the slot agreements MSC has made — particularly for the USEC and Gulf — is that it has enhanced the quality of its network and thus given it more of a competitive edge. The charts don’t give the full picture on service, and every shipper will look at their particular mix of port pairs and what service combo of frequency, transit time and reliability they want. Gemini will point out that this dry set of numbers does nothing to factor in the reliability they will be targeting. It would be correct, but the charts do highlight the fact that shippers will often have to make their pick between frequency and more direct port pairs on one side and dependable departures/arrivals on the other. What the charts also confirm is that in the trades where it has made slot deals, MSC has a competitive overall product that has been enhanced by the slot arrangements. MSC, which embarked on a major journey to establish a competitive independent network post-2M, has been helped by forging something mutually beneficial with Premier and ZIM. If MSC carries on accumulating tonnage at the rate it is now, it’s an open question whether the deals with Premier and ZIM will look as attractive for them in the future as they do now. Of course, Premier — or its individual carriers — and ZIM may also have other options when the time comes. Contact Jeremy Masters at jeremy@shippingmastershk.com.

MSC takes measured steps toward long-term goals

Los Angeles

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Seattle

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The *Journal of Commerce* calculates outbound port rates using data from Cargo Chief, DAT Freight & Analytics, digital freight broker Loadsmart, and an anonymous survey of truckload brokers. Outbound port rates cover Los Angeles-Long Beach, Oakland, and Seattle on the West Coast, and Houston, New York-New Jersey, Virginia, and Savannah on the Gulf and East coasts.

Outbound spot dry van trucking rates from LA, Seattle (Various sources)

Outbound spot dry van trucking rates from US West Coast ports Gateway

<div class="phx-topic abstract-wrapper">Capacity will continue to be the greatest challenge facing cargo owners moving goods from Asia by air this year. </div>

Capacity will continue to be the greatest challenge facing cargo owners moving goods from Asia by air this year.

<div class="phx-topic">The big picture: Capacity constraints on outbound air cargo routes from Asia, particularly China, will persist in 2025, with volumes continuing to outstrip available space. Airlines have been postponing the retirement of freighters to cope with booming e-commerce demand in the US and Europe, but many of those aircraft are at the end of their working life, and production delays at both Boeing and Airbus are slowing the arrival of any new capacity. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5914611_0.1.png"></img></div>A look back: Air cargo on the two main trade lanes from Asia to North America and Europe was stuck in a perpetual peak season throughout 2024. Following the traditional air freight peak season in the fourth quarter of 2023, hostilities in the Red Sea — and the resulting diversion of container ships around southern Africa — forced shippers of time-sensitive cargo into the air. As planes leaving Asia began to quickly fill up, competition for space emerged from an unexpected source: e-commerce platforms contracting directly with airlines. Even as online shopping demand accelerated during the COVID-19 pandemic, the major e-commerce platforms typically had fulfillment centers in destination markets. Chinese e-commerce giants Temu and Shein changed all that, cutting out forwarders and contracting space directly with airlines to move packages into the US and Europe. US package imports by the end of September were more than 1 billion units compared with 140 million units in 2023, according to a White House briefing, as the platforms made use of its generous “de minimis” value threshold; shipments valued at less than $800 in the US and €150 in the EU are exempt from import duties. The e-commerce platforms in the past year have factored this into their US and EU supply chains, which almost exclusively use air cargo. Although available capacity increased almost 5% during the first 10 months of the year, demand grew more than 12%, according to rate benchmarking and analytics platform Xeneta, pushing global load factors and rates to their highest levels in two years. A look ahead: Capacity will continue to be the greatest challenge facing cargo owners moving goods from Asia by air in 2025. As e-commerce siphons off huge amounts of space directly from airlines, forwarders are coming under increasing pressure to secure capacity for their customers shipping traditional cargo. That pressure is often translated into forwarders chartering freighter capacity at a high cost, adding further upward pressure on rates, especially during historical peaks around Lunar New Year and November online sales promotions. Exacerbating ongoing space constraints for shippers is an increasing shortage of intra-Asia capacity as airlines shift planes to the more lucrative long-haul routes. The heavy competition for limited space will likely keep rates elevated throughout 2025. Scrutiny of Chinese online platforms by US authorities is also likely to intensify next year, with plans in place to reform the US de minimis program that will almost certainly be accelerated by the new Trump administration. The next inflection: Even if the US significantly lowers the de minimis value threshold, however, it is unlikely to have any real impact on air cargo demand out of China. The average value order of US e-commerce transactions is about $170, according to Hong Kong-based CEIC economists. More important is a US proposal put forward in September 2024 by the Biden administration that, if adopted, could result in 40% of e-commerce products no longer covered by de minimis regulations and include 70% of textile and apparel exports from China. That would have a significant negative impact on sales via e-commerce platforms that rely on direct shipments to US consumers from China. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

The big picture: Capacity constraints on outbound air cargo routes from Asia, particularly China, will persist in 2025, with volumes continuing to outstrip available space. Airlines have been postponing the retirement of freighters to cope with booming e-commerce demand in the US and Europe, but many of those aircraft are at the end of their working life, and production delays at both Boeing and Airbus are slowing the arrival of any new capacity. A look back: Air cargo on the two main trade lanes from Asia to North America and Europe was stuck in a perpetual peak season throughout 2024. Following the traditional air freight peak season in the fourth quarter of 2023, hostilities in the Red Sea — and the resulting diversion of container ships around southern Africa — forced shippers of time-sensitive cargo into the air. As planes leaving Asia began to quickly fill up, competition for space emerged from an unexpected source: e-commerce platforms contracting directly with airlines. Even as online shopping demand accelerated during the COVID-19 pandemic, the major e-commerce platforms typically had fulfillment centers in destination markets. Chinese e-commerce giants Temu and Shein changed all that, cutting out forwarders and contracting space directly with airlines to move packages into the US and Europe. US package imports by the end of September were more than 1 billion units compared with 140 million units in 2023, according to a White House briefing, as the platforms made use of its generous “de minimis” value threshold; shipments valued at less than $800 in the US and €150 in the EU are exempt from import duties. The e-commerce platforms in the past year have factored this into their US and EU supply chains, which almost exclusively use air cargo. Although available capacity increased almost 5% during the first 10 months of the year, demand grew more than 12%, according to rate benchmarking and analytics platform Xeneta, pushing global load factors and rates to their highest levels in two years. A look ahead: Capacity will continue to be the greatest challenge facing cargo owners moving goods from Asia by air in 2025. As e-commerce siphons off huge amounts of space directly from airlines, forwarders are coming under increasing pressure to secure capacity for their customers shipping traditional cargo. That pressure is often translated into forwarders chartering freighter capacity at a high cost, adding further upward pressure on rates, especially during historical peaks around Lunar New Year and November online sales promotions. Exacerbating ongoing space constraints for shippers is an increasing shortage of intra-Asia capacity as airlines shift planes to the more lucrative long-haul routes. The heavy competition for limited space will likely keep rates elevated throughout 2025. Scrutiny of Chinese online platforms by US authorities is also likely to intensify next year, with plans in place to reform the US de minimis program that will almost certainly be accelerated by the new Trump administration. The next inflection: Even if the US significantly lowers the de minimis value threshold, however, it is unlikely to have any real impact on air cargo demand out of China. The average value order of US e-commerce transactions is about $170, according to Hong Kong-based CEIC economists. More important is a US proposal put forward in September 2024 by the Biden administration that, if adopted, could result in 40% of e-commerce products no longer covered by de minimis regulations and include 70% of textile and apparel exports from China. That would have a significant negative impact on sales via e-commerce platforms that rely on direct shipments to US consumers from China. Contact Greg Knowler at greg.knowler@spglobal.com.

Air Cargo Forwarder News

Ex-Asia air freight capacity constraints to persist in 2025

<div class="phx-topic abstract-wrapper">With shippers under pressure to finalize production plans with Asian factories amid ongoing vessel diversions around Africa and elevated rates, there is little point in delaying the signing of annual contracts.</div>

With shippers under pressure to finalize production plans with Asian factories amid ongoing vessel diversions around Africa and elevated rates, there is little point in delaying the signing of annual contracts.

<div class="phx-topic">Asia-Europe shippers have begun locking in annual contracts as the capacity-constrained trade lane is likely to remain firmly in favor of ocean carriers through the traditional post-Lunar New Year slowdown. Short-term rates have hovered near $5,000 per FEU on the Asia-North Europe lane since mid-December, according to the pricing indices, as healthy demand and ongoing diversions around southern Africa absorb significant amounts of capacity — estimated at more than 10% by analysts and carriers. With little expectation of any return to Suez transits this year, and with pressure mounting to set 2025 production plans with factories in Asia, Asia-Europe shippers are agreeing to annual contracts. “We know that shippers have monitored and analyzed the market closely throughout last year, postponing the signing of new contracts as much as possible, but at some point, you must strike,” Peter Sand, chief analyst for rate benchmarking platform Xeneta, told the Journal of Commerce Wednesday. “It seems to be the case that many shippers have moved forward with their tendering processes amidst the turbulent market as no massive postponement has taken place,” he added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="db6ec523-b5f8-4a58-9f56-029ba9f0b967"></dynamic-object></div>Data from Xeneta shows long-term rates signed in the last three months on Asia-North Europe were up 52% year over year at $2,804 per FEU, while Asia-Mediterranean routes were flat at $2,436 per FEU. However, Sand said shippers should not be “overly disappointed” considering contract rates on both trade lanes are down sharply since September. Chantal McRoberts, director and head of advisory for the Drewry Supply Chain team, said China-North Europe contracts agreed in December were about $1,400 to $1,600 per FEU higher than the rates in the same period in 2023. “This jump in costs may have changed with the contracts just starting, but there has clearly been a 30%-plus inflation in recent contract negotiations on this trade route,” she told the Journal of Commerce, adding that Drewry was also hearing of some “strong” offers on quarterly rates in the Asia-Europe market. <h3>Stronger leverage </h3>In a container market update Wednesday, Jefferies Equity Research also highlighted moves by cargo owners to lock in long-term rates. “Liners have much stronger negotiating leverage, as evidenced by recent 2025 Asia-Europe contracts concluding at $2,500-$3,000 per FEU as compared to 2024 contracts which were concluded at best at $2,000,” the Jefferies update said. “Freight rates have ebbed and flowed at elevated levels since Red Sea diversions began and more recently have benefited from the normal pre-Lunar New Year ordering, which has been compounded by uncertainty related to looming US tariffs and potential US East Coast port disruptions,” the bank added. Jefferies is expecting the higher contract levels to have a positive impact on carrier financial results in the first quarter. “We are raising our 1Q25 estimates to reflect a strong start to 2025,” the bank noted. “We expect earnings to be front-loaded this year due to the normal pullback following Lunar New Year and potential destocking later in 2025.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Asia-Europe shippers have begun locking in annual contracts as the capacity-constrained trade lane is likely to remain firmly in favor of ocean carriers through the traditional post-Lunar New Year slowdown. Short-term rates have hovered near $5,000 per FEU on the Asia-North Europe lane since mid-December, according to the pricing indices, as healthy demand and ongoing diversions around southern Africa absorb significant amounts of capacity — estimated at more than 10% by analysts and carriers. With little expectation of any return to Suez transits this year, and with pressure mounting to set 2025 production plans with factories in Asia, Asia-Europe shippers are agreeing to annual contracts. “We know that shippers have monitored and analyzed the market closely throughout last year, postponing the signing of new contracts as much as possible, but at some point, you must strike,” Peter Sand, chief analyst for rate benchmarking platform Xeneta, told the Journal of Commerce Wednesday. “It seems to be the case that many shippers have moved forward with their tendering processes amidst the turbulent market as no massive postponement has taken place,” he added. Data from Xeneta shows long-term rates signed in the last three months on Asia-North Europe were up 52% year over year at $2,804 per FEU, while Asia-Mediterranean routes were flat at $2,436 per FEU. However, Sand said shippers should not be “overly disappointed” considering contract rates on both trade lanes are down sharply since September. Chantal McRoberts, director and head of advisory for the Drewry Supply Chain team, said China-North Europe contracts agreed in December were about $1,400 to $1,600 per FEU higher than the rates in the same period in 2023. “This jump in costs may have changed with the contracts just starting, but there has clearly been a 30%-plus inflation in recent contract negotiations on this trade route,” she told the Journal of Commerce, adding that Drewry was also hearing of some “strong” offers on quarterly rates in the Asia-Europe market. Stronger leverage In a container market update Wednesday, Jefferies Equity Research also highlighted moves by cargo owners to lock in long-term rates. “Liners have much stronger negotiating leverage, as evidenced by recent 2025 Asia-Europe contracts concluding at $2,500-$3,000 per FEU as compared to 2024 contracts which were concluded at best at $2,000,” the Jefferies update said. “Freight rates have ebbed and flowed at elevated levels since Red Sea diversions began and more recently have benefited from the normal pre-Lunar New Year ordering, which has been compounded by uncertainty related to looming US tariffs and potential US East Coast port disruptions,” the bank added. Jefferies is expecting the higher contract levels to have a positive impact on carrier financial results in the first quarter. “We are raising our 1Q25 estimates to reflect a strong start to 2025,” the bank noted. “We expect earnings to be front-loaded this year due to the normal pullback following Lunar New Year and potential destocking later in 2025.” Contact Greg Knowler at greg.knowler@spglobal.com .

Ocean carriers in control on Asia-Europe trade as cargo contracts closed

<div class="phx-topic abstract-wrapper">Local freight forwarders believe any extra capacity entering the Indian market from smaller ship operators working around an “opportunistic approach” has the potential to spoil rate recovery efforts by large carriers.</div>

Local freight forwarders believe any extra capacity entering the Indian market from smaller ship operators working around an “opportunistic approach” has the potential to spoil rate recovery efforts by large carriers.

<div class="phx-topic">Indian ports are seeing a capacity rush from Turkish container carriers willing to offer sailings via the traditional shorter Suez Canal route as mainline heavyweights continue to reroute vessels via the Cape of Good Hope amid the persistent threat of militant attacks in the Red Sea. The new, emboldened entrants include Turcon Line, with headquarters in Istanbul, and Izmir-based Arkas Line. They join a hot trend already set off by niche Asian-origin feeder lines, notably Singapore’s SeaLead, on India-Red Sea trades through vessel-sharing arrangements. Turcon will launch a service, known as the Turkey-Red Sea-India (TRI), out of Nhava Sheva and Mundra beginning in February, initially using four vessels that the carrier said will be upsized to five ships in June to provide a weekly rotation. It is expected to add between 10,000 TEUs to 15,000 TEUs of capacity a month for Indian loads. The TRI features a roundtrip rotation of Ambarli (Istanbul), Evyap (Izmit), Aliaga, Mersin, Aqaba, Jeddah, Nhava Sheva, Mundra, Jeddah, Aqaba, Alexandria and Ambarli. “The service offers the fastest transit from Turkey to India via the Suez Canal and the Red Sea, creating a vital link for the growing India-Turkey trade,” Turcon said in a statement. “The service will also offer connections via rail to strategic and important ICD [inland container depot] locations in North India.” Significantly, the newcomer for Indian trades is targeting a much wider market on the back of its Red Sea network reach. “The service will also connect Mundra and Nhava Sheva ports with America, North Europe and the Mediterranean via Turkon Line’s transshipment hub ports in Turkey,” the carrier said. Declared transit times from Nhava Sheva are 42 days to Norfolk and 44 days to New York, as well as 37 days to Antwerp and 44 days to Felixstowe. Turcon’s Indian operations will be handled by Mumbai-based third-party agent Abrao Group. Similarly, Arkas has announced the launch of a Suez routing connecting West India to the Mediterranean, also beginning next month. Arkas operates a fleet of 50 vessels. Mainline carriers have avoided the Suez and Red Sea for about 14 months, rerouting around southern Africa amid ongoing attacks on commercial shipping by Houthi militants operating in Yemen. <h3>Mixed reaction from market players </h3>While welcoming more services, local freight forwarders who spoke with the Journal of Commerce believe any extra capacity entering the market from smaller ship operators working around an “opportunistic approach” has the potential to spoil rate recovery efforts by mega carriers, especially on the India-US trade lane that continues to suffer week-over-week rate declines. Sources put early-January average spot pricing at $1,400 per FEU for bookings from Nhava Sheva to New York. Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged India-US East Coast rates at $1,500 per FEU as of Jan. 7, down 2% on the week. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="893ffa5c-0a69-45c7-a555-425e44318711"></dynamic-object></div>Jitendra Srivastava, CEO of Mumbai-based forwarder Triton Logistics &amp; Maritime, had a positive take on the new ocean network. “This offers efficient and cost-effective solutions for businesses engaged in bilateral trade between India and Turkey, and even beyond,” Srivastava said. Mainline carriers appear resigned to what is building around them. “There will always be some opportunistic players,” a senior executive at a European carrier who didn’t want to be identified told the Journal of Commerce. “There could also be some shippers looking for the cheapest pricing.” Still, larger shippers voiced skepticism regarding last-mile reliability for alternative Red Sea-centric options. “There are cargo flow risks when dealing with a startup-like solution trying to exploit a disruption for profit,” a source said. Two-way trade between India and Turkey stood at approximately $10.5 billion by value in fiscal year 2023–24, with engineering and electronics goods leading Indian exports, data shows. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Indian ports are seeing a capacity rush from Turkish container carriers willing to offer sailings via the traditional shorter Suez Canal route as mainline heavyweights continue to reroute vessels via the Cape of Good Hope amid the persistent threat of militant attacks in the Red Sea. The new, emboldened entrants include Turcon Line, with headquarters in Istanbul, and Izmir-based Arkas Line. They join a hot trend already set off by niche Asian-origin feeder lines, notably Singapore’s SeaLead, on India-Red Sea trades through vessel-sharing arrangements. Turcon will launch a service, known as the Turkey-Red Sea-India (TRI), out of Nhava Sheva and Mundra beginning in February, initially using four vessels that the carrier said will be upsized to five ships in June to provide a weekly rotation. It is expected to add between 10,000 TEUs to 15,000 TEUs of capacity a month for Indian loads. The TRI features a roundtrip rotation of Ambarli (Istanbul), Evyap (Izmit), Aliaga, Mersin, Aqaba, Jeddah, Nhava Sheva, Mundra, Jeddah, Aqaba, Alexandria and Ambarli. “The service offers the fastest transit from Turkey to India via the Suez Canal and the Red Sea, creating a vital link for the growing India-Turkey trade,” Turcon said in a statement. “The service will also offer connections via rail to strategic and important ICD [inland container depot] locations in North India.” Significantly, the newcomer for Indian trades is targeting a much wider market on the back of its Red Sea network reach. “The service will also connect Mundra and Nhava Sheva ports with America, North Europe and the Mediterranean via Turkon Line’s transshipment hub ports in Turkey,” the carrier said. Declared transit times from Nhava Sheva are 42 days to Norfolk and 44 days to New York, as well as 37 days to Antwerp and 44 days to Felixstowe. Turcon’s Indian operations will be handled by Mumbai-based third-party agent Abrao Group. Similarly, Arkas has announced the launch of a Suez routing connecting West India to the Mediterranean, also beginning next month. Arkas operates a fleet of 50 vessels. Mainline carriers have avoided the Suez and Red Sea for about 14 months, rerouting around southern Africa amid ongoing attacks on commercial shipping by Houthi militants operating in Yemen. Mixed reaction from market players While welcoming more services, local freight forwarders who spoke with the Journal of Commerce believe any extra capacity entering the market from smaller ship operators working around an “opportunistic approach” has the potential to spoil rate recovery efforts by mega carriers, especially on the India-US trade lane that continues to suffer week-over-week rate declines. Sources put early-January average spot pricing at $1,400 per FEU for bookings from Nhava Sheva to New York. Platts, a sister company of the Journal of Commerce within S&P Global, pegged India-US East Coast rates at $1,500 per FEU as of Jan. 7, down 2% on the week. Jitendra Srivastava, CEO of Mumbai-based forwarder Triton Logistics & Maritime, had a positive take on the new ocean network. “This offers efficient and cost-effective solutions for businesses engaged in bilateral trade between India and Turkey, and even beyond,” Srivastava said. Mainline carriers appear resigned to what is building around them. “There will always be some opportunistic players,” a senior executive at a European carrier who didn’t want to be identified told the Journal of Commerce. “There could also be some shippers looking for the cheapest pricing.” Still, larger shippers voiced skepticism regarding last-mile reliability for alternative Red Sea-centric options. “There are cargo flow risks when dealing with a startup-like solution trying to exploit a disruption for profit,” a source said. Two-way trade between India and Turkey stood at approximately $10.5 billion by value in fiscal year 2023–24, with engineering and electronics goods leading Indian exports, data shows. Contact Bency Mathew at bencyvmathew@gmail.com .

Port News

International ports

Turkish liners shift to India for Suez routings with relays to US, Europe

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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

SMC3rates_shutterstock_5247046.jpg

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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<div class="phx-topic abstract-wrapper">While the draft language of the tentative agreement was not disclosed, the two sides said the deal includes language that covers the contentious issue of port automation and new technologies. </div>

While the draft language of the tentative agreement was not disclosed, the two sides said the deal includes language that covers the contentious issue of port automation and new technologies.

<div class="phx-topic">The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) late Wednesday said they have reached a tentative agreement on a new master contract that covers ports from Maine to Texas. While the deal needs approval from ILA locals and USMX members, it avoids another port strike and ensures shippers of labor peace along the US East and Gulf coasts for the next six years. The ILA and the USMX said in separate statements the agreement includes language that covers the contentious issue of port automation and new technologies. While the draft language of the tentative agreement was not available, one source said that marine terminals will have some leeway in implementing new technologies in return for more longshore jobs. Talks on a new master contract broke down in November due to the union’s concerns about the impact on jobs from <a href="https://www.joc.com/article/ila-targets-rail-mounted-gantry-cranes-amid-impasse-in-port-labor-talks-5874742">the use of semi-automated rail-mounted gantry cranes</a> (RMGs) at marine terminals. “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports — making them safer and more efficient and creating the capacity they need to keep our supply chains strong,” the statement said. Details of the agreement were not publicly disclosed, pending final approval by both sides. The deal was reached a week before a Jan. 15 strike deadline that was set <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">in October at the end of the three-day ILA strike</a> that was settled with an agreement on wages. The 45,000 dockworkers at East and Gulf coast ports will work under the current contract until the tentative agreement is ratified by the wage-scale committees of local unions. But sources indicate that the locals are likely to support the contract negotiated by ILA President Harold Daggett and Executive Vice President Dennis Daggett. The breakthrough came after four days of talks in Teaneck, New Jersey, on a new master contract. Those talks included side discussions on the impact of new technology on longshore jobs, ahead of <a href="https://www.joc.com/article/ila-usmx-contract-talks-set-for-jan-7-restart-ahead-of-strike-deadline-sources-5913854">broader talks that restarted on Jan. 7</a> that covered benefits and specific longshore crafts such as checkers and clerks. In December, the union enlisted President-elect Donald Trump to advocate on behalf of their stance against automation. On Wednesday, the ILA issued its own statement thanking Trump for his “bold stance [that] helped prevent a second coastwide strike.” “President Trump clearly demonstrated his unwavering support for our ILA union and longshore workers with his statement ‘heard round the world’ backing our position to protect American longshore jobs against the ravages of automated terminals,” Harold Daggett said in the statement. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com.</a></div>

The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) late Wednesday said they have reached a tentative agreement on a new master contract that covers ports from Maine to Texas. While the deal needs approval from ILA locals and USMX members, it avoids another port strike and ensures shippers of labor peace along the US East and Gulf coasts for the next six years. The ILA and the USMX said in separate statements the agreement includes language that covers the contentious issue of port automation and new technologies. While the draft language of the tentative agreement was not available, one source said that marine terminals will have some leeway in implementing new technologies in return for more longshore jobs. Talks on a new master contract broke down in November due to the union’s concerns about the impact on jobs from the use of semi-automated rail-mounted gantry cranes (RMGs) at marine terminals. “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports — making them safer and more efficient and creating the capacity they need to keep our supply chains strong,” the statement said. Details of the agreement were not publicly disclosed, pending final approval by both sides. The deal was reached a week before a Jan. 15 strike deadline that was set in October at the end of the three-day ILA strike that was settled with an agreement on wages. The 45,000 dockworkers at East and Gulf coast ports will work under the current contract until the tentative agreement is ratified by the wage-scale committees of local unions. But sources indicate that the locals are likely to support the contract negotiated by ILA President Harold Daggett and Executive Vice President Dennis Daggett. The breakthrough came after four days of talks in Teaneck, New Jersey, on a new master contract. Those talks included side discussions on the impact of new technology on longshore jobs, ahead of broader talks that restarted on Jan. 7 that covered benefits and specific longshore crafts such as checkers and clerks. In December, the union enlisted President-elect Donald Trump to advocate on behalf of their stance against automation. On Wednesday, the ILA issued its own statement thanking Trump for his “bold stance [that] helped prevent a second coastwide strike.” “President Trump clearly demonstrated his unwavering support for our ILA union and longshore workers with his statement ‘heard round the world’ backing our position to protect American longshore jobs against the ravages of automated terminals,” Harold Daggett said in the statement. Contact Michael Angell at michael.angell@spglobal.com.

Longshore labor

ILA, USMX reach tentative deal that avoids another port strike

<div class="phx-topic abstract-wrapper">It’s important for railroads to prevent export containers from clogging their terminals because domestic and international intermodal cargo share terminal space.</div>

It’s important for railroads to prevent export containers from clogging their terminals because domestic and international intermodal cargo share terminal space.

<div class="phx-topic">Norfolk Southern Railway (NS) has begun to wind down accepting export containers for movement from inland terminals to key ports along the US East Coast ahead of a possible longshore strike next week. NS, in a “port curtailment” schedule issued to customers, said all exports from Cleveland to the Port of New York and New Jersey and the Port of Virginia will not be accepted after Wednesday. Freight going from Chicago to the Virginia International Gateway terminal must be tendered by Friday and to Norfolk Intermodal Terminals by Saturday. The railroad said freight from Detroit to the Port of Virginia will stop being accepted on Friday, with no freight to the Port of New York and New Jersey accepted as of Saturday. No exports going to terminals at the Port of Virginia will be accepted from any location after Friday, NS said. Exports from Chicago and Pittsburgh to the Port of New York and New Jersey will be accepted through Saturday, while no cargo will be accepted beginning Sunday from any location that is destined for the port’s Elizabeth Marine Terminal or Global Container Terminals. Norfolk Southern has not released a schedule yet for export cutoffs to ports in Charleston or Savannah. The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) were meeting in New Jersey this week in a bid to hammer out the final details of a new master contract and head off a strike that would begin Jan. 15, suspending container operations at ports along the East and Gulf coasts. It is important for railroads to prevent exports or empties from clogging their terminals because domestic and international intermodal cargo share terminal space, except in Chicago. If too much international cargo gets stuck inside terminals, it can disrupt customers who ship 53-foot domestic containers via rail, as happened during the COVID-19 pandemic. On an average weekday, about 600 to 1,000 loaded exports are hauled on trains from inland hubs to the Port of New York and New Jersey and about 1,000 to 1,500 to the Port of Virginia, according to a Journal of Commerce analysis of data from the Association of American Railroads (AAR) and the Intermodal Association of North America (IANA). CSX Transportation, the other eastern Class I railroad hauling containers between the Midwest and East Coast, has not issued any deadlines to in-gate containers, but it will adjust if a strike occurs. “In the event of an East Coast port disruption, CSX is prepared to pause both interchange traffic as well as in-gate activity and temporarily adjust terminal reservations in accordance with port shutdown plans,” CSX said in a statement to the Journal of Commerce. “CSX is making every effort to accommodate as much freight as possible in a fluid situation.” During the three-day ILA strike in October, CSX took a similar approach of accepting and storing outbound loads until there was no available space left inside the terminals. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Norfolk Southern Railway (NS) has begun to wind down accepting export containers for movement from inland terminals to key ports along the US East Coast ahead of a possible longshore strike next week. NS, in a “port curtailment” schedule issued to customers, said all exports from Cleveland to the Port of New York and New Jersey and the Port of Virginia will not be accepted after Wednesday. Freight going from Chicago to the Virginia International Gateway terminal must be tendered by Friday and to Norfolk Intermodal Terminals by Saturday. The railroad said freight from Detroit to the Port of Virginia will stop being accepted on Friday, with no freight to the Port of New York and New Jersey accepted as of Saturday. No exports going to terminals at the Port of Virginia will be accepted from any location after Friday, NS said. Exports from Chicago and Pittsburgh to the Port of New York and New Jersey will be accepted through Saturday, while no cargo will be accepted beginning Sunday from any location that is destined for the port’s Elizabeth Marine Terminal or Global Container Terminals. Norfolk Southern has not released a schedule yet for export cutoffs to ports in Charleston or Savannah. The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) were meeting in New Jersey this week in a bid to hammer out the final details of a new master contract and head off a strike that would begin Jan. 15, suspending container operations at ports along the East and Gulf coasts. It is important for railroads to prevent exports or empties from clogging their terminals because domestic and international intermodal cargo share terminal space, except in Chicago. If too much international cargo gets stuck inside terminals, it can disrupt customers who ship 53-foot domestic containers via rail, as happened during the COVID-19 pandemic. On an average weekday, about 600 to 1,000 loaded exports are hauled on trains from inland hubs to the Port of New York and New Jersey and about 1,000 to 1,500 to the Port of Virginia, according to a Journal of Commerce analysis of data from the Association of American Railroads (AAR) and the Intermodal Association of North America (IANA). CSX Transportation, the other eastern Class I railroad hauling containers between the Midwest and East Coast, has not issued any deadlines to in-gate containers, but it will adjust if a strike occurs. “In the event of an East Coast port disruption, CSX is prepared to pause both interchange traffic as well as in-gate activity and temporarily adjust terminal reservations in accordance with port shutdown plans,” CSX said in a statement to the Journal of Commerce. “CSX is making every effort to accommodate as much freight as possible in a fluid situation.” During the three-day ILA strike in October, CSX took a similar approach of accepting and storing outbound loads until there was no available space left inside the terminals. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Norfolk Southern begins limiting export container moves ahead of possible strike

<div class="phx-topic abstract-wrapper">More uptake of transactional pricing in the less-than-truckload market is a sign that some carriers are targeting smaller or more infrequent LTL shippers.</div>

More uptake of transactional pricing in the less-than-truckload market is a sign that some carriers are targeting smaller or more infrequent LTL shippers.

<div class="phx-topic">Dynamic pricing tools are allowing less-than-truckload (LTL) shippers and brokers, especially smaller ones, to connect with LTL carriers looking for new sources of freight. That is widening the market reach for LTL carriers that have typically relied almost exclusively on contracts or general tariff rates for pricing. The incremental shift toward more spot pricing in the LTL market speaks less to titanic change in how shippers are procuring than it does about there being easier paths for certain LTL carriers to reach shippers directly. While the vast majority of LTL freight continues to move on shipper-specific contract pricing or more general pricing often used by brokers, there is an uptick in spot, or transactional, pricing in the LTL market, sources tell the Journal of Commerce. Some attribute this uptick primarily to the currently soft LTL market, with regular customers seeking competitive rates outside their contracts, or first-time LTL shippers or brokers using transactional rates to test the LTL waters. US LTL shipment volume in 2024 was relatively flat after a more than 6% drop in 2023, according to Satish Jindel, president of SJ Consulting Group. But digital tools are making transactional pricing easier for carriers to provide to customers, especially infrequent shippers or ones not accustomed to shipping LTL. “We are seeing and hearing of an increased demand and usage of transactional or spot LTL quotes both from discussions with carriers and 3PLs,” said Brian Thompson, chief commercial officer at SMC3, a trucking data and technology provider specializing in LTL pricing. <h3>APIs make LTL accessible </h3>Thompson said the increase in spot-quoted shipments is due to a boost in the availability of application programming interface (API)-based quoting, with more LTL carriers now offering this option for their customers to obtain spot quotes. Many shipper- and broker-focused transportation management systems (TMSs) now offer direct API connections to carriers. Additionally, a number of carriers are requiring or incentivizing their customers to come directly to them for a quote via API, especially 3PL partners offering transactional quotes, Thompson said. Spot quotes used to be limited to large LTL shipments weighing a minimum of 4,000 or 5,000 pounds, but in recent years carriers have expanded the use of those quoting methods to price transactional business from brokers, 3PLs, freight forwarders and small shippers, Thompson added. “Carriers are also starting to utilize more advanced pricing methodologies that incorporate prospective costing of individual shipments and an advanced business rules engine to price individual shipments with more certainty based on the carrier’s needs at the time of quote,” he said. Indeed, LTL carriers have even started to vacuum up shipments in the 500-pound ballpark that ordinarily would have been routed to parcel carriers. <h3>Targeting small shippers </h3>LTL carriers are looking for new customers and new sources of freight, including smaller shippers and even transloaded international freight. “In the last quarter we grew shipment count with small customers by more than 10%,” Mario Harik, CEO of XPO, the third-largest US LTL provider, told the Journal of Commerce. XPO has invested in technology, real estate and in its sales force, increasing its number of sales agents by 25% in 2024 to pursue smaller shippers, Harik said, adding contractual rates represent about 80% of XPO’s business. Shippers can obtain rate quotes based on pricing agreements directly from XPO’s website. The development of transactional pricing tools accomplishes a couple of key goals for certain LTL carriers. It lets them lure in shippers that would have been outside their traditional customer bases, either in terms of the size, number or frequency of shipments. Secondly, it lets carriers work directly with shippers, taking that business out of the hands of brokers. “Carriers dynamically adjust these rates,” said Curtis Garrett, CEO of LTL technology provider RateHero and a consultant to the LTL industry. “It’s a lever they have to fill capacity.” Garrett said the newest transactional pricing development is that some carriers are using it as a quicker way to onboard customers, either direct to shipper or through small and midsized brokers. “It cuts down on the admin back and forth and length of time to get a new customer set up and quoting,” he said. “Some carriers are putting this in the hands of their sales reps when they go visit a prospect. They can set them up and turn pricing on for them on the spot, which means more business quicker, but it usually falls into that transactional or dynamic bucket.” Not all LTL carriers are going this route, however. An LTL carrier executive who asked not to be identified told the Journal of Commerce they’re not seeing any major shift away from contractual business but added that the carrier doesn’t encourage that type of business, either. The executive said brokers are getting a bit more transactional business and that some LTL freight that moved to full truckload when truckload rates were low may be shifting back to LTL in drips and drabs. “Everybody has a TMS now, and that makes tendering an irregular, smaller LTL shipment outside of a contract easier,” the source said. <h3>A more ‘layered’ market </h3>Wider access to TMSs, whether it’s a shipper TMS that can manage across multiple modes or an LTL carrier TMS through which dynamic pricing can be offered, is impacting the market. “The rapid acceleration of technology, particularly through TMSs that offer multiple rate options, has created new opportunities for smaller clients,” said Dean Jones, chief commercial officer at third-party logistics provider AFS Logistics. “These systems allow them to access competitive rates without the need for traditional contractual arrangements.” Jones said 3PLs are also luring shippers outside contractual rate structures through ancillary services, whether via access to diverse rate options, a bundled TMS, freight audit and payment (FAP) or fully managed transportation. “This bundled approach eliminates the need for individual rate negotiations and provides clients with a streamlined, end-to-end solution powered by transactional rates embedded within the broader program,” he said. Jones added, however, that the majority of AFS’s clients operate under so-called client-specific pricing (CSP) contracts. “Across our customer base we don’t see any transactional spot quoting happening with LTL carriers,” said Shannon Vaillancourt, CEO of RateLinx, which provides TMS and freight audit tools to shippers. “All of our customers are on contract rates and are rate-shopping between the carriers.” Vaillancourt said customers he spoke to about an increase in transactional rates were skeptical about relying on spot quotes. “They really like the certainty of their contract rates and also were very confident that their contract rates were the ‘best’ rate out there,” he said. The uptick in transactional rates then speaks to a more layered market, with some carriers embracing dynamic rate availability and others more than happy to rely wholly on contractual pricing for shippers. The emergence of MyCarrier, a technology platform that lets LTL carriers provide a digital quoting and booking interface direct to shippers, is an example of this evolution. Last Thursday, FreightWise announced a partnership to incorporate rates from LTL carrier Estes directly into its TMS and that of Kuebix, a shipper-oriented, LTL-focused TMS that FreightWise acquired in 2023. Garrett said his company is working with a few LTL carriers on streamlining the process to get small and midsized brokers set up so they can push volume to those LTL carriers. The intent is to use technology to offset the high cost and risk that carriers have historically seen with small or infrequent LTL customers due to poor data and shipping practices. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. Senior Editor William B. Cassidy contributed to this report. </div>

Dynamic pricing tools are allowing less-than-truckload (LTL) shippers and brokers, especially smaller ones, to connect with LTL carriers looking for new sources of freight. That is widening the market reach for LTL carriers that have typically relied almost exclusively on contracts or general tariff rates for pricing. The incremental shift toward more spot pricing in the LTL market speaks less to titanic change in how shippers are procuring than it does about there being easier paths for certain LTL carriers to reach shippers directly. While the vast majority of LTL freight continues to move on shipper-specific contract pricing or more general pricing often used by brokers, there is an uptick in spot, or transactional, pricing in the LTL market, sources tell the Journal of Commerce. Some attribute this uptick primarily to the currently soft LTL market, with regular customers seeking competitive rates outside their contracts, or first-time LTL shippers or brokers using transactional rates to test the LTL waters. US LTL shipment volume in 2024 was relatively flat after a more than 6% drop in 2023, according to Satish Jindel, president of SJ Consulting Group. But digital tools are making transactional pricing easier for carriers to provide to customers, especially infrequent shippers or ones not accustomed to shipping LTL. “We are seeing and hearing of an increased demand and usage of transactional or spot LTL quotes both from discussions with carriers and 3PLs,” said Brian Thompson, chief commercial officer at SMC3, a trucking data and technology provider specializing in LTL pricing. APIs make LTL accessible Thompson said the increase in spot-quoted shipments is due to a boost in the availability of application programming interface (API)-based quoting, with more LTL carriers now offering this option for their customers to obtain spot quotes. Many shipper- and broker-focused transportation management systems (TMSs) now offer direct API connections to carriers. Additionally, a number of carriers are requiring or incentivizing their customers to come directly to them for a quote via API, especially 3PL partners offering transactional quotes, Thompson said. Spot quotes used to be limited to large LTL shipments weighing a minimum of 4,000 or 5,000 pounds, but in recent years carriers have expanded the use of those quoting methods to price transactional business from brokers, 3PLs, freight forwarders and small shippers, Thompson added. “Carriers are also starting to utilize more advanced pricing methodologies that incorporate prospective costing of individual shipments and an advanced business rules engine to price individual shipments with more certainty based on the carrier’s needs at the time of quote,” he said. Indeed, LTL carriers have even started to vacuum up shipments in the 500-pound ballpark that ordinarily would have been routed to parcel carriers. Targeting small shippers LTL carriers are looking for new customers and new sources of freight, including smaller shippers and even transloaded international freight. “In the last quarter we grew shipment count with small customers by more than 10%,” Mario Harik, CEO of XPO, the third-largest US LTL provider, told the Journal of Commerce. XPO has invested in technology, real estate and in its sales force, increasing its number of sales agents by 25% in 2024 to pursue smaller shippers, Harik said, adding contractual rates represent about 80% of XPO’s business. Shippers can obtain rate quotes based on pricing agreements directly from XPO’s website. The development of transactional pricing tools accomplishes a couple of key goals for certain LTL carriers. It lets them lure in shippers that would have been outside their traditional customer bases, either in terms of the size, number or frequency of shipments. Secondly, it lets carriers work directly with shippers, taking that business out of the hands of brokers. “Carriers dynamically adjust these rates,” said Curtis Garrett, CEO of LTL technology provider RateHero and a consultant to the LTL industry. “It’s a lever they have to fill capacity.” Garrett said the newest transactional pricing development is that some carriers are using it as a quicker way to onboard customers, either direct to shipper or through small and midsized brokers. “It cuts down on the admin back and forth and length of time to get a new customer set up and quoting,” he said. “Some carriers are putting this in the hands of their sales reps when they go visit a prospect. They can set them up and turn pricing on for them on the spot, which means more business quicker, but it usually falls into that transactional or dynamic bucket.” Not all LTL carriers are going this route, however. An LTL carrier executive who asked not to be identified told the Journal of Commerce they’re not seeing any major shift away from contractual business but added that the carrier doesn’t encourage that type of business, either. The executive said brokers are getting a bit more transactional business and that some LTL freight that moved to full truckload when truckload rates were low may be shifting back to LTL in drips and drabs. “Everybody has a TMS now, and that makes tendering an irregular, smaller LTL shipment outside of a contract easier,” the source said. A more ‘layered’ market Wider access to TMSs, whether it’s a shipper TMS that can manage across multiple modes or an LTL carrier TMS through which dynamic pricing can be offered, is impacting the market. “The rapid acceleration of technology, particularly through TMSs that offer multiple rate options, has created new opportunities for smaller clients,” said Dean Jones, chief commercial officer at third-party logistics provider AFS Logistics. “These systems allow them to access competitive rates without the need for traditional contractual arrangements.” Jones said 3PLs are also luring shippers outside contractual rate structures through ancillary services, whether via access to diverse rate options, a bundled TMS, freight audit and payment (FAP) or fully managed transportation. “This bundled approach eliminates the need for individual rate negotiations and provides clients with a streamlined, end-to-end solution powered by transactional rates embedded within the broader program,” he said. Jones added, however, that the majority of AFS’s clients operate under so-called client-specific pricing (CSP) contracts. “Across our customer base we don’t see any transactional spot quoting happening with LTL carriers,” said Shannon Vaillancourt, CEO of RateLinx, which provides TMS and freight audit tools to shippers. “All of our customers are on contract rates and are rate-shopping between the carriers.” Vaillancourt said customers he spoke to about an increase in transactional rates were skeptical about relying on spot quotes. “They really like the certainty of their contract rates and also were very confident that their contract rates were the ‘best’ rate out there,” he said. The uptick in transactional rates then speaks to a more layered market, with some carriers embracing dynamic rate availability and others more than happy to rely wholly on contractual pricing for shippers. The emergence of MyCarrier, a technology platform that lets LTL carriers provide a digital quoting and booking interface direct to shippers, is an example of this evolution. Last Thursday, FreightWise announced a partnership to incorporate rates from LTL carrier Estes directly into its TMS and that of Kuebix, a shipper-oriented, LTL-focused TMS that FreightWise acquired in 2023. Garrett said his company is working with a few LTL carriers on streamlining the process to get small and midsized brokers set up so they can push volume to those LTL carriers. The intent is to use technology to offset the high cost and risk that carriers have historically seen with small or infrequent LTL customers due to poor data and shipping practices. Contact Eric Johnson at eric.johnson@spglobal.com . Senior Editor William B. Cassidy contributed to this report.

Truck brokers

US LTL carriers widen market reach through spot pricing technology

<div class="phx-topic abstract-wrapper">Pitt Ohio’s acquisition of Sutton Transport is the latest in a string of acquisitions rebuilding the LTL sector from the middle out, and more regional acquisitions are expected.</div>

Pitt Ohio’s acquisition of Sutton Transport is the latest in a string of acquisitions rebuilding the LTL sector from the middle out, and more regional acquisitions are expected.

<div class="phx-topic">The US less-than-truckload (LTL) market is entering a new phase of consolidation in early 2025, led by regional LTL trucking companies building greater density and reach. The action is hottest perhaps in the Midwest, where the shutdown of Holland, a regional subsidiary of Yellow, in 2023 left a hole in the LTL market that has not been filled. There is a need for LTL carriers that can provide premium on-time, next-day service at scale across the region stretching from Ohio and the Great Lakes to the Great Plains. As M&amp;A activity continues, shippers may see regional LTL pricing stabilize or rise, but not drop, as larger carriers impose more disciplined pricing in local and regional markets. And although the LTL landscape may appear crowded, “there is still room in the market for good carriers,” said Mike Moran, president of Moran Transportation, a regional LTL provider based in Chicago. Moran <a href="https://www.joc.com/article/smaller-us-ltl-carriers-increasingly-merging-in-sink-or-swim-market-5783875">acquired RMX Freight Systems</a> in October, adding three Midwestern states to its LTL network. Pitt Ohio Transportation Group’s purchase of Sutton Transport, completed Jan. 1, is the latest in a string of acquisitions. Terms of the acquisition were not disclosed. Sutton, with 13 terminals across eight states, will bolster the 10-state network of Dohrn Transfer, a separate Pitt Ohio company that has its headquarters in Rock Island, Illinois. “The trend moving forward is going to be increased growth and scale of LTL operations,” said Geoffrey Muessig, chief marketing officer for Pittsburgh-based Pitt Ohio. Wisconsin-based Sutton will help Pitt Ohio build greater density within Dohrn’s existing market footprint, speeding freight and maintaining fluidity as demand grows — as is expected in 2025. “In the regional LTL market, density improves service and results,” said Muessig. “We saw the opportunity to combine the strengths of the Sutton and Dohrn networks.” Pitt Ohio will employ a “three-pronged” approach to the integration, blending sales first, then technology and ultimately operations, he said, adding: “We’re going to take our time.” <h3>More M&amp;A seen ahead </h3>The Pitt Ohio-Sutton deal won’t be the last significant LTL acquisition this year, according to an LTL freight and parcel market consultant. “Count on at least three smaller regional LTL carriers folding into bigger ones in 2025,” said Satish Jindel, president of transportation research firm SJ Consulting Group, which helped broker the Pitt Ohio-Sutton transaction.Jindel pointed to the Moran-RMX deal as well as Knight-Swift Transportation Holdings’ purchase of <a href="https://www.joc.com/article/knight-swift-acquisition-expands-ltl-network-coast-to-coast-5703164">Dependable Highway Express</a> last July as examples of the trend. The Pitt Ohio-Sutton deal is the latest development reshaping LTL networks while helping to broaden the sector’s role in supply chains from ports to last-mile delivery. LTL carriers are broadening their retail, warehousing and specialized services and adding more <a href="https://www.joc.com/article/estes-express-plans-near-port-expansion-as-new-generation-takes-charge-5220656">port transloading business</a>. As shippers work to shorten distances between distribution centers, suppliers and end-customers, LTL carriers see more opportunity to expand beyond their industrial base. The LTL market is already highly consolidated, with the 40 largest LTL providers claiming 84% of total LTL revenue of $62.2 billion in 2023, according to Jindel’s data. The largest Midwestern LTL provider, Dayton Freight System, has about 70 terminals throughout the region and more than $1 billion in annual revenue. Pitt Ohio is the 13th largest US LTL provider ranked by revenue, while Sutton is ranked 31st. Combined, the companies would have had more than $1 billion in revenue in 2023 — coming in just below Dayton Freight in the SJ Consulting Group/Journal of Commerce <a href="https://www.joc.com/article/journal-of-commerce-rankings-ltl-sector-revenue-drops-despite-yellow-distortion-5199865">Top 40 LTL Carrier rankings</a>. “The Top 10 LTL carriers [revenue-wise] are getting bigger, the Top 20 are all aiming to get into the Top 10 and everyone else is scrambling to get into the Top 20,” Muessig said. Larger LTL players have been more focused on growth through real estate purchases, particularly the ongoing auction of hundreds of terminals once operated by Yellow. The bankrupt company still has about 100 leased or owned terminals to auction or sell. Rising operating costs, including the need for more sophisticated technology, are putting more pressure on smaller LTL carriers to find larger partners or purchasers. “I think there’s absolutely going to be more consolidation as the time goes on,” Moran said. Many smaller carriers “are not pricing the freight right,” he said. By that, he means pricing shipments at too low a margin. “After a period of time, they simply can’t survive,” he said. “They need a way out and an acquisition is one.” For that reason, he thinks more regional mergers may be good for the LTL sector in the Midwest and elsewhere, with larger firms imposing more disciplined pricing. “There’s a need for carriers that can provide excellent service at an acceptable price,” Moran said. “‘Acceptable’ is a challenging term at times, depending on whether you’re a carrier or a shipper, but there’s plenty of room out there for good quality carriers.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The US less-than-truckload (LTL) market is entering a new phase of consolidation in early 2025, led by regional LTL trucking companies building greater density and reach. The action is hottest perhaps in the Midwest, where the shutdown of Holland, a regional subsidiary of Yellow, in 2023 left a hole in the LTL market that has not been filled. There is a need for LTL carriers that can provide premium on-time, next-day service at scale across the region stretching from Ohio and the Great Lakes to the Great Plains. As M&A activity continues, shippers may see regional LTL pricing stabilize or rise, but not drop, as larger carriers impose more disciplined pricing in local and regional markets. And although the LTL landscape may appear crowded, “there is still room in the market for good carriers,” said Mike Moran, president of Moran Transportation, a regional LTL provider based in Chicago. Moran acquired RMX Freight Systems in October, adding three Midwestern states to its LTL network. Pitt Ohio Transportation Group’s purchase of Sutton Transport, completed Jan. 1, is the latest in a string of acquisitions. Terms of the acquisition were not disclosed. Sutton, with 13 terminals across eight states, will bolster the 10-state network of Dohrn Transfer, a separate Pitt Ohio company that has its headquarters in Rock Island, Illinois. “The trend moving forward is going to be increased growth and scale of LTL operations,” said Geoffrey Muessig, chief marketing officer for Pittsburgh-based Pitt Ohio. Wisconsin-based Sutton will help Pitt Ohio build greater density within Dohrn’s existing market footprint, speeding freight and maintaining fluidity as demand grows — as is expected in 2025. “In the regional LTL market, density improves service and results,” said Muessig. “We saw the opportunity to combine the strengths of the Sutton and Dohrn networks.” Pitt Ohio will employ a “three-pronged” approach to the integration, blending sales first, then technology and ultimately operations, he said, adding: “We’re going to take our time.” More M&A seen ahead The Pitt Ohio-Sutton deal won’t be the last significant LTL acquisition this year, according to an LTL freight and parcel market consultant. “Count on at least three smaller regional LTL carriers folding into bigger ones in 2025,” said Satish Jindel, president of transportation research firm SJ Consulting Group, which helped broker the Pitt Ohio-Sutton transaction. Jindel pointed to the Moran-RMX deal as well as Knight-Swift Transportation Holdings’ purchase of Dependable Highway Express last July as examples of the trend. The Pitt Ohio-Sutton deal is the latest development reshaping LTL networks while helping to broaden the sector’s role in supply chains from ports to last-mile delivery. LTL carriers are broadening their retail, warehousing and specialized services and adding more port transloading business . As shippers work to shorten distances between distribution centers, suppliers and end-customers, LTL carriers see more opportunity to expand beyond their industrial base. The LTL market is already highly consolidated, with the 40 largest LTL providers claiming 84% of total LTL revenue of $62.2 billion in 2023, according to Jindel’s data. The largest Midwestern LTL provider, Dayton Freight System, has about 70 terminals throughout the region and more than $1 billion in annual revenue. Pitt Ohio is the 13th largest US LTL provider ranked by revenue, while Sutton is ranked 31st. Combined, the companies would have had more than $1 billion in revenue in 2023 — coming in just below Dayton Freight in the SJ Consulting Group/Journal of Commerce Top 40 LTL Carrier rankings . “The Top 10 LTL carriers [revenue-wise] are getting bigger, the Top 20 are all aiming to get into the Top 10 and everyone else is scrambling to get into the Top 20,” Muessig said. Larger LTL players have been more focused on growth through real estate purchases, particularly the ongoing auction of hundreds of terminals once operated by Yellow. The bankrupt company still has about 100 leased or owned terminals to auction or sell. Rising operating costs, including the need for more sophisticated technology, are putting more pressure on smaller LTL carriers to find larger partners or purchasers. “I think there’s absolutely going to be more consolidation as the time goes on,” Moran said. Many smaller carriers “are not pricing the freight right,” he said. By that, he means pricing shipments at too low a margin. “After a period of time, they simply can’t survive,” he said. “They need a way out and an acquisition is one.” For that reason, he thinks more regional mergers may be good for the LTL sector in the Midwest and elsewhere, with larger firms imposing more disciplined pricing. “There’s a need for carriers that can provide excellent service at an acceptable price,” Moran said. “‘Acceptable’ is a challenging term at times, depending on whether you’re a carrier or a shipper, but there’s plenty of room out there for good quality carriers.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

M&A activity redrawing regional LTL map in US Midwest and beyond

<div class="phx-topic abstract-wrapper">A confluence of factors, including vessel bunching at Asian load ports and a pre-Lunar New Year cargo surge, have combined to cause congestion at the port and reduce its railcar availability.</div>

A confluence of factors, including vessel bunching at Asian load ports and a pre-Lunar New Year cargo surge, have combined to cause congestion at the port and reduce its railcar availability.

<div class="phx-topic">Port of Vancouver stakeholders expect they will have to navigate at least three more weeks of congestion as Canada’s largest port works to clear a backlog of rail containers that built up in December. A confluence of factors — including vessel bunching at Asian load ports, a pre-Lunar New Year cargo surge, <a href="https://www.joc.com/article/bc-container-ports-set-for-shutdown-after-foremen-begin-strike-5785499">a strike by dockworker foremen</a> in November and shorter trains due to winter operating conditions — combined to cause congestion at the port and reduce Vancouver’s railcar availability last month. As a result, the average rail container dwell time at the port’s four container terminals spiked to 6.9 days in December — the highest since last March – and up from 5.2 days in November and 4.5 days in October, according to data on the port’s website. “We are seeing an increase in the number of vessels waiting to enter the Port of Vancouver due to arrival delays associated with winter weather in Asia and the seasonal pre-Lunar New Year impact causing a surge in volume,” a spokesperson for the Vancouver Fraser Port Authority told the Journal of Commerce Wednesday. “As such, we anticipate that high on-dock times will continue for the rest of January.” Terminal operators and the railroads say they are chipping away at the rail container backlog and note conditions will improve further at the end of the month when import volumes are expected to drop significantly due to many factories in Asia closing for a week or two for the Lunar New Year celebrations that start Jan. 29. <h3>Train restrictions during Canadian cold snap </h3>Canadian National Railway (CN) in December was already recovering from a backlog of rail containers from the dockworkers’ strike and vessel bunching when a cold snap in Western Canada resulted in operating restrictions, including running shorter trains, that impacted CN’s network velocity, a CN spokesperson told the Journal of Commerce. “CN is working closely with the port operators to clear out these volumes as the vessel discharge normalizes over the next three weeks,” a spokesperson for the railroad said. “We are already seeing some improvements and are confident that the dwell metric will fall back to normal levels as we catch up on the backlog over the next few weeks.” Canadian Pacific Kansas City (CPKC) said Thursday its railcars are cycling efficiently through its network and that the supply of cars is good. Demand is forecast to remain strong through January, a CPKC spokesperson said. DP World Canada, which operates the Centerm terminal in Vancouver, said it is working with the railroads to handle the increased import volumes leading up to the Lunar New Year on Jan. 29. “We should be back to normal in a few weeks,” said CEO Doug Smith. Meanwhile, the elevated rail container dwell times at the marine terminals have not had an impact on drayage operations in Vancouver, said David Earle, CEO of the British Columbia Trucking Association. The only change Earle said he’s noted in recent days is that a small number of inbound containers that had been booked to leave the terminals by rail are being redirected to long-haul truckers for movement inland. <h3>Prince Rupert back to normal </h3>The Port of Prince Rupert, which faced challenges similar to Vancouver last month, saw its rail container dwell times spike to an average of nearly 10 days in mid-December, said Brian Friesen, vice president of trade development at the port. The average dwell dropped to 6.1 days for the week of Dec. 20 and has continued to slide in January. “The dwells are now below two days,” Friesen said. “It’s all fluid now.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Port of Vancouver stakeholders expect they will have to navigate at least three more weeks of congestion as Canada’s largest port works to clear a backlog of rail containers that built up in December. A confluence of factors — including vessel bunching at Asian load ports, a pre-Lunar New Year cargo surge, a strike by dockworker foremen in November and shorter trains due to winter operating conditions — combined to cause congestion at the port and reduce Vancouver’s railcar availability last month. As a result, the average rail container dwell time at the port’s four container terminals spiked to 6.9 days in December — the highest since last March – and up from 5.2 days in November and 4.5 days in October, according to data on the port’s website. “We are seeing an increase in the number of vessels waiting to enter the Port of Vancouver due to arrival delays associated with winter weather in Asia and the seasonal pre-Lunar New Year impact causing a surge in volume,” a spokesperson for the Vancouver Fraser Port Authority told the Journal of Commerce Wednesday. “As such, we anticipate that high on-dock times will continue for the rest of January.” Terminal operators and the railroads say they are chipping away at the rail container backlog and note conditions will improve further at the end of the month when import volumes are expected to drop significantly due to many factories in Asia closing for a week or two for the Lunar New Year celebrations that start Jan. 29. Train restrictions during Canadian cold snap Canadian National Railway (CN) in December was already recovering from a backlog of rail containers from the dockworkers’ strike and vessel bunching when a cold snap in Western Canada resulted in operating restrictions, including running shorter trains, that impacted CN’s network velocity, a CN spokesperson told the Journal of Commerce. “CN is working closely with the port operators to clear out these volumes as the vessel discharge normalizes over the next three weeks,” a spokesperson for the railroad said. “We are already seeing some improvements and are confident that the dwell metric will fall back to normal levels as we catch up on the backlog over the next few weeks.” Canadian Pacific Kansas City (CPKC) said Thursday its railcars are cycling efficiently through its network and that the supply of cars is good. Demand is forecast to remain strong through January, a CPKC spokesperson said. DP World Canada, which operates the Centerm terminal in Vancouver, said it is working with the railroads to handle the increased import volumes leading up to the Lunar New Year on Jan. 29. “We should be back to normal in a few weeks,” said CEO Doug Smith. Meanwhile, the elevated rail container dwell times at the marine terminals have not had an impact on drayage operations in Vancouver, said David Earle, CEO of the British Columbia Trucking Association. The only change Earle said he’s noted in recent days is that a small number of inbound containers that had been booked to leave the terminals by rail are being redirected to long-haul truckers for movement inland. Prince Rupert back to normal The Port of Prince Rupert, which faced challenges similar to Vancouver last month, saw its rail container dwell times spike to an average of nearly 10 days in mid-December, said Brian Friesen, vice president of trade development at the port. The average dwell dropped to 6.1 days for the week of Dec. 20 and has continued to slide in January. “The dwells are now below two days,” Friesen said. “It’s all fluid now.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

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