Breakbulk pop up 640x340 1.png

Event Pop Up

Events

Maritime

Surface

Air Cargo

Magazine

Supply chain

Resources

Gateway

Breakbulk News

Container Shipping News

Port News

Trucking News

Rail News

Air Cargo Forwarder News

Air Cargo Carriers News

Transport, Trade and Regulation News

Logistics Technology News

Cool Cargo News

Last Mile News

Industrial Real Estate News

Newsletters

Multimedia

White Papers

Special Reports

Press Releases

Media Kit

Other

Breakbulk carriers

Ro/ro cargo

Energy projects

Heavy-haul transport

Project cargo

Container lines

Trans-Atlantic

Forwarding

Asia-Europe

Trans-Pacific

Drayage

Port infrastructure

Breakbulk ports

North American ports

Marine terminals

International ports

Longshore labor

Truckload

Truck brokers

Flatbed

Trucking labor

North-American rail

International rail

Intermodal providers

Commentary

Podcasts

Webcasts

Videos

Annual Review and Outlook

Top Rankings

Quarterly Intelligence Report

Intermodal Savings Index

Domestic Intermodal Service Scorecard

Breakbulk Quarterly Intelligence

Platts Containers Update

Top 100 US Exporters

Top 100 US Importers

Top 25 LTL Trucking Companies

Top 25 North American Ports

Top 25 Truckload Companies

Top 40 Container Carriers

Top 50 3PLs

Top 50 Global Container Ports

Top 50 Global Transportation Providers

Top 50 Trucking Companies

<div class="phx-topic abstract-wrapper">A lawsuit filed Thursday in US District Court alleges the fourth-largest US freight broker e Worldwide Express engaged in a campaign of retaliation with a former agent.</div>

A lawsuit filed Thursday in US District Court alleges the fourth-largest US freight broker e Worldwide Express engaged in a campaign of retaliation with a former agent.

Feature image

<div class="phx-topic">Worldwide Express on Friday rejected accusations made in a lawsuit that the fourth-largest US freight broker failed to share profits and poached customers from a former less-than-truckload partner through hacking. The lawsuit, filed by Florida-based Freight Essentials in the US District Court of Texas, alleges that Dallas-based Worldwide Express, and its subsidiary GlobalTranz, engaged in a campaign to steal Freight Essentials’ customers that culminated in GlobalTranz allegedly hacking into Freight Essentials CEO Dylan Admire’s account. “We are aware of this matter, and we will be responding to these baseless accusations in the appropriate forum, which is the legal system,” Alison Smith, vice president of marketing strategy at Worldwide Express, said in an email to the Journal of Commerce Friday. “We will be vigorously defending ourselves against these claims. We have no further comment at this time.” Freight Essentials, according to the lawsuit, acted as a so-called business development company (BDC) for GlobalTranz from January 2020, a partnership in which Freight Essentials would find shipper volume to move through GlobalTranz’s pool of less-than-truckload capacity. The partnership generated more than $60 million in revenue, with the two companies splitting the margin. Over time, Admire discovered that GlobalTranz was allegedly misrepresenting costs, including fuel and insurance fees, to Freight Essentials and other BDCs by 15% to 30%, affecting the amount of margin paid to those BDCs, the lawsuit said. The lawsuit then contends that Worldwide engaged in a systematic campaign to retaliate against Freight Essentials by allegedly poaching some of Freight Essentials’ largest customers, including wooing them with financial incentives to ship directly with Worldwide Express. At one point, a GlobalTranz employee allegedly hacked into Admire’s account to change his password and multi-factor authentication, locking him out of his own system, the lawsuit said. The campaign included Worldwide Express setting up websites designed to look like that of Freight Essentials to divert customers, the lawsuit also alleges. Freight Essentials is seeking an array of punitive and compensatory damages to be decided at trial, along with injunctive relief that would prevent Worldwide from recruiting and using BDCs in gross margin sharing activities. Contact Eric Johnson at eric.johnson@spglobal.com. </div>

Worldwide Express on Friday rejected accusations made in a lawsuit that the fourth-largest US freight broker failed to share profits and poached customers from a former less-than-truckload partner through hacking. The lawsuit, filed by Florida-based Freight Essentials in the US District Court of Texas, alleges that Dallas-based Worldwide Express, and its subsidiary GlobalTranz, engaged in a campaign to steal Freight Essentials’ customers that culminated in GlobalTranz allegedly hacking into Freight Essentials CEO Dylan Admire’s account. “We are aware of this matter, and we will be responding to these baseless accusations in the appropriate forum, which is the legal system,” Alison Smith, vice president of marketing strategy at Worldwide Express, said in an email to the Journal of Commerce Friday. “We will be vigorously defending ourselves against these claims. We have no further comment at this time.” Freight Essentials, according to the lawsuit, acted as a so-called business development company (BDC) for GlobalTranz from January 2020, a partnership in which Freight Essentials would find shipper volume to move through GlobalTranz’s pool of less-than-truckload capacity. The partnership generated more than $60 million in revenue, with the two companies splitting the margin. Over time, Admire discovered that GlobalTranz was allegedly misrepresenting costs, including fuel and insurance fees, to Freight Essentials and other BDCs by 15% to 30%, affecting the amount of margin paid to those BDCs, the lawsuit said. The lawsuit then contends that Worldwide engaged in a systematic campaign to retaliate against Freight Essentials by allegedly poaching some of Freight Essentials’ largest customers, including wooing them with financial incentives to ship directly with Worldwide Express. At one point, a GlobalTranz employee allegedly hacked into Admire’s account to change his password and multi-factor authentication, locking him out of his own system, the lawsuit said. The campaign included Worldwide Express setting up websites designed to look like that of Freight Essentials to divert customers, the lawsuit also alleges. Freight Essentials is seeking an array of punitive and compensatory damages to be decided at trial, along with injunctive relief that would prevent Worldwide from recruiting and using BDCs in gross margin sharing activities. Contact Eric Johnson at eric.johnson@spglobal.com.

Worldwide Express rejects lawsuit claims of customer theft, hacking

<div class="phx-topic abstract-wrapper">A 30% increase in the total value of transportation and logistics acquisitions over the last six months signals a stronger market for M&amp;A emerging in 2025, PwC says in a market report.</div>

A 30% increase in the total value of transportation and logistics acquisitions over the last six months signals a stronger market for M&A emerging in 2025, PwC says in a market report.

<div class="phx-topic">Lower capital costs and shifting supply chain demands are setting the stage for a rebound in US logistics and transportation mergers and acquisitions (M&amp;A), auditing and advisory firm PwC said Friday. The total combined value of logistics and transportation M&amp;A rose 30% in the six months ending Nov. 15 from the previous six months, climbing to $51.5 billion, PwC said in a new market report. That brought the total value of US logistics M&amp;A in the first 11 months of 2024 to $91 billion. In the six months that ended May 15, the total M&amp;A value was $39.5 billion. The increase in deal value is likely a sign of improving investor confidence, with more companies anticipating higher profits amid supply and demand adjustments, said PwC. “The [US] transportation and logistics sector is witnessing an uptick in dealmaking spurred by favorable economic conditions and investor confidence,” the report said. “The trucking and railroad sectors will warrant close attention,” said PwC. The firm expects more consolidation among small trucking firms after <a href="https://www.joc.com/article/prolonged-us-freight-recession-to-drag-into-2025-transportation-executives-5818486">nearly three years of low rates</a>. Railroads, PwC said, may look for ways “to expand their ecosystem” through strategic alliances and acquisitions to better compete with trucking companies. With the US Federal Reserve’s cuts to the federal funds rate and the incoming Trump administration’s deregulatory agenda, “M&amp;A activity is set to rebound,” said PwC. “Strategic participants” rather than outside investors are driving deals, according to the report, as companies acquire direct competitors or expand into new services. Examples include third-party logistics provider RXO’s $1.025 billion <a href="https://www.joc.com/article/rxo-purchase-of-coyote-logistics-highlights-us-brokerage-market-pressures-5192296">purchase of Coyote Logistics</a> and Knight-Swift Transportation Holdings’ <a href="https://www.joc.com/article/interest-in-us-ltl-ma-activity-seen-rising-as-2025-approaches-5772881">less-than-truckload (LTL) acquisitions</a>. Global freight forwarder <a href="https://www.joc.com/article/value-of-schenker-takeover-will-manifest-in-expanding-services-dsv-ceo-5778478">DSV’s $15.9 billion acquisition</a> of Germany’s DB Schenker in September shows the same principle on an international scale. Among smaller logistics and transportation companies, acquisition activity has barely ebbed, with unrelenting pressure to expand in a tough market prompting deals. “If you’re not growing, you’re sinking,” Mike Moran, president of Moran Transportation, said in November after acquiring <a href="https://www.joc.com/article/smaller-us-ltl-carriers-increasingly-merging-in-sink-or-swim-market-5783875">competing midwestern LTL carrier</a> RMX Freight Systems. Heading into 2025, logistics and transportation companies have “a large amount of dry powder,” PwC said, referring to capital those companies can spend on acquisitions. They’ll be more likely to use that “powder” as freight rates and profits stabilize, PwC said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Lower capital costs and shifting supply chain demands are setting the stage for a rebound in US logistics and transportation mergers and acquisitions (M&A), auditing and advisory firm PwC said Friday. The total combined value of logistics and transportation M&A rose 30% in the six months ending Nov. 15 from the previous six months, climbing to $51.5 billion, PwC said in a new market report. That brought the total value of US logistics M&A in the first 11 months of 2024 to $91 billion. In the six months that ended May 15, the total M&A value was $39.5 billion. The increase in deal value is likely a sign of improving investor confidence, with more companies anticipating higher profits amid supply and demand adjustments, said PwC. “The [US] transportation and logistics sector is witnessing an uptick in dealmaking spurred by favorable economic conditions and investor confidence,” the report said. “The trucking and railroad sectors will warrant close attention,” said PwC. The firm expects more consolidation among small trucking firms after nearly three years of low rates . Railroads, PwC said, may look for ways “to expand their ecosystem” through strategic alliances and acquisitions to better compete with trucking companies. With the US Federal Reserve’s cuts to the federal funds rate and the incoming Trump administration’s deregulatory agenda, “M&A activity is set to rebound,” said PwC. “Strategic participants” rather than outside investors are driving deals, according to the report, as companies acquire direct competitors or expand into new services. Examples include third-party logistics provider RXO’s $1.025 billion purchase of Coyote Logistics and Knight-Swift Transportation Holdings’ less-than-truckload (LTL) acquisitions . Global freight forwarder DSV’s $15.9 billion acquisition of Germany’s DB Schenker in September shows the same principle on an international scale. Among smaller logistics and transportation companies, acquisition activity has barely ebbed, with unrelenting pressure to expand in a tough market prompting deals. “If you’re not growing, you’re sinking,” Mike Moran, president of Moran Transportation, said in November after acquiring competing midwestern LTL carrier RMX Freight Systems. Heading into 2025, logistics and transportation companies have “a large amount of dry powder,” PwC said, referring to capital those companies can spend on acquisitions. They’ll be more likely to use that “powder” as freight rates and profits stabilize, PwC said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Transportation M&A activity seen ready to rebound as value of deals rises

<div class="phx-topic abstract-wrapper">The union’s hardline stance against the further encroachment of automation at US ports received a big boost with the incoming administration saying maritime employers should look to labor to increase capacity and efficiency. </div>

The union’s hardline stance against the further encroachment of automation at US ports received a big boost with the incoming administration saying maritime employers should look to labor to increase capacity and efficiency.

<div class="phx-topic">President-elect Donald Trump has waded into contract negotiations between the International Longshoremen’s Association (ILA) and maritime employers, saying he supports the union’s stance against further port automation. However, ocean carriers and ports urged the incoming administration to also consider the broader implications of his stance for US businesses and consumers dependent on ports. Trump late Thursday posted a statement on Truth Social saying that investment in automation at US ports is not worth the “distress, hurt, and harm it causes for American workers, in this case, our longshoremen.” He added that terminal operators and ocean carriers looking at such investments should instead “spend it on the great men and women on our docks” instead of “machinery, which is expensive and will constantly have to be replaced.” Trump’s statement came after a two-hour meeting he had this week with ILA President Harold Daggett and Executive Vice President Dennis Daggett, <a href="https://www.joc.com/article/ila-looking-for-local-ports-to-bring-in-more-union-foremen-5244993">the second such meeting</a> Trump has had with union leadership. Harold Daggett met with then-candidate Trump in November 2023.Trump’s statement echoed many of the points the ILA has raised during its negotiations with the United States Maritime Alliance (USMX) for a new six-year contract covering East and Gulf coast ports. Trump noted that ocean carriers “have made a fortune in the US,” with the ILA recently releasing an estimate that the USMX’s top container lines made $385 billion in net profit between 2020 and 2023. “For the great privilege of accessing our markets, these foreign companies should hire our incredible American workers,” Trump’s statement said. <h3>ILA ‘grateful’ for Trump support</h3>Harold Daggett said in his own statement that he was “grateful to President Donald Trump for his courageous support for American ILA longshore workers.” He added that Trump’s position on automation should help remove the current sticking point that has stalled talks for a new master contract.“I hope this strong support from President Trump will encourage USMX to remove any language of automated or semi-automated equipment in their proposals moving forward, and we can get a new master contract without any disruptions,” Daggett said.After agreeing to <a href="https://www.joc.com/article/despite-tentative-wage-deal-usmx-and-ila-have-bumpy-road-ahead-on-other-key-issues-5743997">a contract extension that expires Jan. 15</a>, the ILA halted further negotiations with the USMX due to what the union said was the employers’ insistence on retaining current contract language permitting semi-automation at ports, as long both sides agree. Now, however, the ILA wants to remove that provision entirely. The union has cited <a href="https://www.joc.com/article/ila-targets-rail-mounted-gantry-cranes-amid-impasse-in-port-labor-talks-5874742">rail-mounted gantry cranes</a>, which allow a remote operator to move containers, as an example of semi-automation that reduces demand for longshore workers. The USMX responded in a statement late Thursday that technology investments are needed to “improve worker safety, boost port efficiency, increase port capacity, and strengthen our supply chains.” It added that efficient ports are important to the broader economy and are not just a concern of ocean carriers and longshore workers. “It’s clear President-elect Trump, USMX, and the ILA all share the goal of protecting and adding good-paying American jobs at our ports,” the USMX said in a statement, “But this contract goes beyond our ports — it is about supporting American consumers and giving American businesses access to the global marketplace — from farmers, to manufacturers, to small businesses, and innovative start-ups looking for new markets to sell their products.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

President-elect Donald Trump has waded into contract negotiations between the International Longshoremen’s Association (ILA) and maritime employers, saying he supports the union’s stance against further port automation. However, ocean carriers and ports urged the incoming administration to also consider the broader implications of his stance for US businesses and consumers dependent on ports. Trump late Thursday posted a statement on Truth Social saying that investment in automation at US ports is not worth the “distress, hurt, and harm it causes for American workers, in this case, our longshoremen.” He added that terminal operators and ocean carriers looking at such investments should instead “spend it on the great men and women on our docks” instead of “machinery, which is expensive and will constantly have to be replaced.” Trump’s statement came after a two-hour meeting he had this week with ILA President Harold Daggett and Executive Vice President Dennis Daggett, the second such meeting Trump has had with union leadership. Harold Daggett met with then-candidate Trump in November 2023. Trump’s statement echoed many of the points the ILA has raised during its negotiations with the United States Maritime Alliance (USMX) for a new six-year contract covering East and Gulf coast ports. Trump noted that ocean carriers “have made a fortune in the US,” with the ILA recently releasing an estimate that the USMX’s top container lines made $385 billion in net profit between 2020 and 2023. “For the great privilege of accessing our markets, these foreign companies should hire our incredible American workers,” Trump’s statement said. ILA ‘grateful’ for Trump support Harold Daggett said in his own statement that he was “grateful to President Donald Trump for his courageous support for American ILA longshore workers.” He added that Trump’s position on automation should help remove the current sticking point that has stalled talks for a new master contract. “I hope this strong support from President Trump will encourage USMX to remove any language of automated or semi-automated equipment in their proposals moving forward, and we can get a new master contract without any disruptions,” Daggett said. After agreeing to a contract extension that expires Jan. 15 , the ILA halted further negotiations with the USMX due to what the union said was the employers’ insistence on retaining current contract language permitting semi-automation at ports, as long both sides agree. Now, however, the ILA wants to remove that provision entirely. The union has cited rail-mounted gantry cranes , which allow a remote operator to move containers, as an example of semi-automation that reduces demand for longshore workers. The USMX responded in a statement late Thursday that technology investments are needed to “improve worker safety, boost port efficiency, increase port capacity, and strengthen our supply chains.” It added that efficient ports are important to the broader economy and are not just a concern of ocean carriers and longshore workers. “It’s clear President-elect Trump, USMX, and the ILA all share the goal of protecting and adding good-paying American jobs at our ports,” the USMX said in a statement, “But this contract goes beyond our ports — it is about supporting American consumers and giving American businesses access to the global marketplace — from farmers, to manufacturers, to small businesses, and innovative start-ups looking for new markets to sell their products.” Contact Michael Angell at michael.angell@spglobal.com .

ILA plays new Trump card in automation standoff with USMX

<div class="phx-topic abstract-wrapper">The wind energy sector provides a key source of project and breakbulk cargo, but US policy shifts could dampen future activity given that President-elect Donald Trump has been a vocal opponent of offshore wind.</div>

The wind energy sector provides a key source of project and breakbulk cargo, but US policy shifts could dampen future activity given that President-elect Donald Trump has been a vocal opponent of offshore wind.

<div class="phx-topic">With the US offshore wind industry at a crossroads ahead of a second Trump term, manufacturers and developers in the sector are having to choose whether to forge ahead or pull back on projects and technologies.The wind energy sector provides a key source of project and breakbulk cargo, and US policy shifts could dictate future cargo activity. President-elect Donald Trump has been a vocal opponent of offshore wind.In one recent sign of progress, floating offshore wind startup Aikido Technologies hailed the completion of a prototype of its fold-up, floating offshore wind platform in less than 40 working hours as a “new standard” for the industry, according to a Nov. 26 statement from the company. Based in San Francisco, Aikido was established in 2022 using seed money from an investment venture backed by Microsoft founder Bill Gates and Amazon founder and chief executive Jeff Bezos.Harvey, Louisiana-based Chet Morrison Contractors constructed the 100-killowatt (kW), quarter-scale Aikido One platform at Mississippi’s Port Pascagoula along the Gulf of Mexico, where Aikido is testing the structure.“One of the major advantages of this platform is that the most labor-intensive assemblies can be done on a relatively small footprint,” Morrison project manager Billy LeBoeuf told the Journal of Commerce.Touted as the largest floating wind platform in the US, the compact, semi-submersible structure was designed to help solve production challenges and port space limitations, according to the statement.The US Department of Energy (DOE) estimates that about two-thirds of the country’s offshore wind potential lies in ocean waters that are too deep for turbine platforms to be secured to the sea floor. But the buildout of the US floating offshore wind segment would require constructing new, specialized port facilities and vessels to accommodate the jumbo-size components that make up floating turbine platforms.“The main thing that makes this platform unique is the modular design,” LeBoeuf said, adding that the platform consists of 13 major components that can be completed offsite. “Once these components are delivered to the final assembly area, no additional welding is required.”Because of the platform’s compact configuration, traditional barges and smaller port areas can be used for assembling, transporting and loading the entire platform or its components, according to Aikido. <h3>New York wind farm plans on hold</h3>As some offshore wind developers are moving forward with their US plans, at least one company is pulling back following Trump’s election to a second term.Reports surfaced in late November that French energy giant TotalEnergies halted the development of a wind project off the coast of New York State.Speaking at an energy industry conference in London, TotalEnergies CEO Patrick Pouyanné said on Nov. 26 that he decided to put the company’s Attentive Energy wind farm project on pause following Trump’s election, according to reports by Bloomberg and Reuters.TotalEnergies secured a federal lease for the project in February 2022 with plans to develop an 84,332-acre wind farm with the potential to generate 3,000 MW of energy for nearly 1 million homes by the end of the decade. The project is in the early stages of permitting with the US Bureau of Ocean Energy Management (BOEM). Trump has pledged to halt offshore wind development “on day one” of taking office on Jan. 20. But offshore wind development liaison Toussaint Williams told the Journal of Commerce that even if action to slow the industry takes place at the federal level, the real power could remain with US governors whose states have projects under development or could otherwise advance the industry.On the East Coast, multiple projects are already under construction, with some 50% to 70% complete, Toussaint said. “Those projects are so far along that it’s really in the hands of the states now to set up workforce development initiatives, to double down on investments, and to create regional partnerships to help move those projects forward,” he said.Toussaint, who highlighted the role of US governors in his Plugged Into US Offshore Wind newsletter, categorized state leaders into three groups — supporters, pragmatists and skeptics of offshore wind. Among states with the potential to develop offshore wind, Toussaint said the lion’s share of governors fall into one of the first two categories.Given that assessment — and the fact that developers laid much of the groundwork for US offshore wind during the previous Trump administration — Toussaint said he is “cautiously optimistic, but leaning more toward the optimistic side” about the industry’s future domestically. “Trump will be in office for four years. Climate change isn’t going anywhere,” he said. “Let’s see what the results will be.”Contact Autumn Guisti at <a href="mailto:autumn@autumnguisti.com">autumn@autumnguisti.com</a>.</div>

With the US offshore wind industry at a crossroads ahead of a second Trump term, manufacturers and developers in the sector are having to choose whether to forge ahead or pull back on projects and technologies. The wind energy sector provides a key source of project and breakbulk cargo, and US policy shifts could dictate future cargo activity. President-elect Donald Trump has been a vocal opponent of offshore wind. In one recent sign of progress, floating offshore wind startup Aikido Technologies hailed the completion of a prototype of its fold-up, floating offshore wind platform in less than 40 working hours as a “new standard” for the industry, according to a Nov. 26 statement from the company. Based in San Francisco, Aikido was established in 2022 using seed money from an investment venture backed by Microsoft founder Bill Gates and Amazon founder and chief executive Jeff Bezos. Harvey, Louisiana-based Chet Morrison Contractors constructed the 100-killowatt (kW), quarter-scale Aikido One platform at Mississippi’s Port Pascagoula along the Gulf of Mexico, where Aikido is testing the structure. “One of the major advantages of this platform is that the most labor-intensive assemblies can be done on a relatively small footprint,” Morrison project manager Billy LeBoeuf told the Journal of Commerce. Touted as the largest floating wind platform in the US, the compact, semi-submersible structure was designed to help solve production challenges and port space limitations, according to the statement. The US Department of Energy (DOE) estimates that about two-thirds of the country’s offshore wind potential lies in ocean waters that are too deep for turbine platforms to be secured to the sea floor. But the buildout of the US floating offshore wind segment would require constructing new, specialized port facilities and vessels to accommodate the jumbo-size components that make up floating turbine platforms. “The main thing that makes this platform unique is the modular design,” LeBoeuf said, adding that the platform consists of 13 major components that can be completed offsite. “Once these components are delivered to the final assembly area, no additional welding is required.” Because of the platform’s compact configuration, traditional barges and smaller port areas can be used for assembling, transporting and loading the entire platform or its components, according to Aikido. New York wind farm plans on hold As some offshore wind developers are moving forward with their US plans, at least one company is pulling back following Trump’s election to a second term. Reports surfaced in late November that French energy giant TotalEnergies halted the development of a wind project off the coast of New York State. Speaking at an energy industry conference in London, TotalEnergies CEO Patrick Pouyanné said on Nov. 26 that he decided to put the company’s Attentive Energy wind farm project on pause following Trump’s election, according to reports by Bloomberg and Reuters. TotalEnergies secured a federal lease for the project in February 2022 with plans to develop an 84,332-acre wind farm with the potential to generate 3,000 MW of energy for nearly 1 million homes by the end of the decade. The project is in the early stages of permitting with the US Bureau of Ocean Energy Management (BOEM). Trump has pledged to halt offshore wind development “on day one” of taking office on Jan. 20. But offshore wind development liaison Toussaint Williams told the Journal of Commerce that even if action to slow the industry takes place at the federal level, the real power could remain with US governors whose states have projects under development or could otherwise advance the industry. On the East Coast, multiple projects are already under construction, with some 50% to 70% complete, Toussaint said. “Those projects are so far along that it’s really in the hands of the states now to set up workforce development initiatives, to double down on investments, and to create regional partnerships to help move those projects forward,” he said. Toussaint, who highlighted the role of US governors in his Plugged Into US Offshore Wind newsletter, categorized state leaders into three groups — supporters, pragmatists and skeptics of offshore wind. Among states with the potential to develop offshore wind, Toussaint said the lion’s share of governors fall into one of the first two categories. Given that assessment — and the fact that developers laid much of the groundwork for US offshore wind during the previous Trump administration — Toussaint said he is “cautiously optimistic, but leaning more toward the optimistic side” about the industry’s future domestically. “Trump will be in office for four years. Climate change isn’t going anywhere,” he said. “Let’s see what the results will be.” Contact Autumn Guisti at autumn@autumnguisti.com .

US offshore wind navigates uncertain future as new Trump term looms

<div class="phx-topic abstract-wrapper">A statement posted by the president-elect on social media Thursday made it clear he stood with the International Longshoremen’s Association and their opposition to automation at ports along the East and Gulf coasts.</div>

A statement posted by the president-elect on social media Thursday made it clear he stood with the International Longshoremen’s Association and their opposition to automation at ports along the East and Gulf coasts.

<div class="phx-topic">Did President-elect Donald Trump, in issuing a strong statement of support for East and Gulf coast dockworkers on Thursday, end any hope ocean carriers had of emerging from contract negotiations with anything other than a complete capitulation to the union’s demands? <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5905156_0.1.jpg"></img></div>Trump’s statement made it clear he stood with the International Longshoremen’s Association (ILA) and their opposition to automation at ports along the East and Gulf coasts, saying “the amount of money saved is nowhere near the distress, hurt and harm for American workers, in this case our longshoremen.” That spells a virtual dead end for ocean carriers wanting to push their interests to the max in stalled contract negotiations, some insiders tell the Journal of Commerce, given the role the White House has played in pushing through deals to end strikes or extended labor slowdown actions. Those insiders predict that ocean carriers represented by the United States Maritime Alliance (USMX) will now cave in to the demands of the ILA to eliminate existing rights port employers have to introduce automation. Trump’s post on Truth Social is “game over for carriers,” said one knowledgeable source. “No strike and they will give [the union] what they want and then fight another day.” The logic behind that point of view is the carriers who dominate USMX will not risk another head-to-head confrontation with a US president like the one they found themselves in during the three-day ILA strike in October, the first since the late 1970s. They walked away from that interaction having seen their group CEOs <a href="https://www.joc.com/article/behind-the-scenes-white-house-arm-twisting-got-ila-wage-deal-done-5747241">all but forced by the White House to agree to a staggering 62% wage increase</a> for ILA workers over the course of the next contract. Another confrontation this time with the incoming Trump administration could create unknown risks for the carriers’ lucrative business in the US. The alternative is to fight, which, although some see it as a remote possibility given carriers’ traditional desire to lay low, is one at least some carriers appear to be champing at the bit to give a try. That scenario is based on thinking that the carriers aren’t as powerless in the negotiations as it may appear, even though they are all but friendless politically in the US. Carriers in this point of view have a strong argument to make, if they could get their act together on the public relations front, that US ports are woefully costly and inefficient and require automation to enable US containerized trade to continue growing without constantly bumping up against capacity limitations at US ports. <h3>Carriers’ long and growing frustration </h3>Carriers have long-pent up frustrations with US ports, where cargo handling costs are the highest in the world, carriers say, yet they have no ability to directly pass those costs along to customers in the form terminal handling charges that they assess almost everywhere else in the world. The USMX began belatedly <a href="https://www.joc.com/article/ocean-carriers-take-harder-line-with-ila-as-january-strike-date-nears-5896887">making that point in early December</a>, a sign of its stepped-up PR strategy under pressure from their carrier board members. “Due to the lack of available new land in most ports, the only way for US East and Gulf coast ports to handle more volume is to densify terminals — enabling the movement of more cargo through their existing footprints,” <a href="https://www.usmx.com/assets/content/public-resources/12-3-24_Port_Modernization_and_Investment_in_Technology.pdf">USMX said</a>. “Port operations must evolve, and embracing modern technology is critical to this evolution.” Practically speaking, the two sides at least currently are careening toward another strike as of Jan. 15, the deadline set in October for a new contract. There has been no meaningful resumption of negotiations since June, but carriers are not motivated to get a deal done by the deadline and avoid another strike; if Jan. 15 arrives with no deal, the 62% increase is off the table, according to two carriers. Furthermore, in prior negotiating rounds with US dockworkers over several decades, carriers prioritized keeping the ports open and cargo flowing. But they no longer have such motivations given their recent experience that disruptions force up freight rates. That is why some carriers might be all too happy to allow a second strike to go forward, assuming the ILA chooses to strike as of Jan. 15, giving carriers leverage at the negotiating table because it would require their agreement to terms that would end the strike. One scenario is that the ILA strikes on Jan. 15 and the parties are forced into a deal on Jan. 20, the day of Trump’s inauguration. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com.</a></div>

Did President-elect Donald Trump, in issuing a strong statement of support for East and Gulf coast dockworkers on Thursday, end any hope ocean carriers had of emerging from contract negotiations with anything other than a complete capitulation to the union’s demands? Trump’s statement made it clear he stood with the International Longshoremen’s Association (ILA) and their opposition to automation at ports along the East and Gulf coasts, saying “the amount of money saved is nowhere near the distress, hurt and harm for American workers, in this case our longshoremen.” That spells a virtual dead end for ocean carriers wanting to push their interests to the max in stalled contract negotiations, some insiders tell the Journal of Commerce, given the role the White House has played in pushing through deals to end strikes or extended labor slowdown actions. Those insiders predict that ocean carriers represented by the United States Maritime Alliance (USMX) will now cave in to the demands of the ILA to eliminate existing rights port employers have to introduce automation. Trump’s post on Truth Social is “game over for carriers,” said one knowledgeable source. “No strike and they will give [the union] what they want and then fight another day.” The logic behind that point of view is the carriers who dominate USMX will not risk another head-to-head confrontation with a US president like the one they found themselves in during the three-day ILA strike in October, the first since the late 1970s. They walked away from that interaction having seen their group CEOs all but forced by the White House to agree to a staggering 62% wage increase for ILA workers over the course of the next contract. Another confrontation this time with the incoming Trump administration could create unknown risks for the carriers’ lucrative business in the US. The alternative is to fight, which, although some see it as a remote possibility given carriers’ traditional desire to lay low, is one at least some carriers appear to be champing at the bit to give a try. That scenario is based on thinking that the carriers aren’t as powerless in the negotiations as it may appear, even though they are all but friendless politically in the US. Carriers in this point of view have a strong argument to make, if they could get their act together on the public relations front, that US ports are woefully costly and inefficient and require automation to enable US containerized trade to continue growing without constantly bumping up against capacity limitations at US ports. Carriers’ long and growing frustration Carriers have long-pent up frustrations with US ports, where cargo handling costs are the highest in the world, carriers say, yet they have no ability to directly pass those costs along to customers in the form terminal handling charges that they assess almost everywhere else in the world. The USMX began belatedly making that point in early December , a sign of its stepped-up PR strategy under pressure from their carrier board members. “Due to the lack of available new land in most ports, the only way for US East and Gulf coast ports to handle more volume is to densify terminals — enabling the movement of more cargo through their existing footprints,” USMX said . “Port operations must evolve, and embracing modern technology is critical to this evolution.” Practically speaking, the two sides at least currently are careening toward another strike as of Jan. 15, the deadline set in October for a new contract. There has been no meaningful resumption of negotiations since June, but carriers are not motivated to get a deal done by the deadline and avoid another strike; if Jan. 15 arrives with no deal, the 62% increase is off the table, according to two carriers. Furthermore, in prior negotiating rounds with US dockworkers over several decades, carriers prioritized keeping the ports open and cargo flowing. But they no longer have such motivations given their recent experience that disruptions force up freight rates. That is why some carriers might be all too happy to allow a second strike to go forward, assuming the ILA chooses to strike as of Jan. 15, giving carriers leverage at the negotiating table because it would require their agreement to terms that would end the strike. One scenario is that the ILA strikes on Jan. 15 and the parties are forced into a deal on Jan. 20, the day of Trump’s inauguration. Contact Peter Tirschwell at peter.tirschwell@spglobal.com.

Trump’s backing of ILA puts pressure on carriers to cave to union’s demands

<div class="phx-topic abstract-wrapper">While cargo volume is expected to grow 5.8% next year, the airline association is warning that aircraft supply chain issues will raise costs, possibly limiting that growth.</div>

While cargo volume is expected to grow 5.8% next year, the airline association is warning that aircraft supply chain issues will raise costs, possibly limiting that growth.

<div class="phx-topic">The sustained demand that has kept air cargo in peak season mode all year is heading into a difficult 2025 with the capacity outlook clouded by aging aircraft, delivery delays of new planes and a backlog of orders, according to the International Air Transport Association (IATA). Cargo volumes are expected to reach 72.5 million metric tons next year, a 5.8% increase from 2024, IATA noted in its annual industry review this week. But aircraft supply chain issues will raise costs and could limit market growth, warned IATA Director-General Willie Walsh. “Supply chain issues are frustrating every airline with a triple whammy on revenues, costs and environmental performance,” Walsh said. “Load factors are at record highs and there is no doubt that if we had more aircraft they could be profitably deployed, so our revenues are being compromised.” New aircraft are urgently needed to both cater to growing cargo and passenger markets and to replace aging fleets. IATA data shows the average age of the global fleet now stands at a record 14.8 years, up from the 13.6-year average over the past 24 years. Yet aircraft deliveries have fallen sharply from the peak of 1,813 aircraft in 2018. IATA is expecting 1,254 aircraft to have been delivered this year, a 30% shortfall on what was predicted going into 2024. Deliveries in 2025 are forecast to rise to 1,802 planes, well below expectations for 2,293 deliveries, and further downward revisions on deliveries for next year are widely expected. On top of the delivery delays, the backlog of unfulfilled orders for new aircraft has reached 17,000 planes, a record high, and IATA said at present delivery rates, that would take 14 years to fulfill — double the six-year average backlog for the 2013–19 period. “The aging fleet that airlines are using has higher maintenance costs, burns more fuel, and takes more capital to keep it flying,” Walsh said. “And, on top of this, leasing rates have risen more than interest rates as competition among airlines intensified the scramble to find every way possible to expand capacity. “This is a time when airlines need to be fixing their battered post-pandemic balance sheets, but progress is effectively capped by supply chain issues that manufacturers need to resolve,” he added. <h3>Capacity remains in short supply </h3>Sustained demand out of Asia, driven in part by the robust e-commerce volume on the trans-Pacific and Asia-Europe corridors, is keeping capacity tight and rates at highly elevated levels. The average Shanghai to North Europe spot rate of $5.07 per kilogram this week was the highest in almost two years, while the Shanghai-North America rate of $6.61/kg is the highest so far this year, according to the Baltic Air Index (BAI). Rate benchmarking platform Xeneta shows global air freight volume in November recorded its 13th consecutive month of double-digit growth as load factors hit their highest level since April 2022. In the 11 months through November, demand has increased by more than 12% while available capacity has grown just 4.8% To serve the high demand out of Asia, airlines are repositioning freighters from other trade lanes <a href="https://www.joc.com/article/trans-atlantic-air-cargo-rates-take-off-as-capacity-shifts-to-asia-5904256">such as the trans-Atlantic</a>, where rates are soaring as demand outstrips available capacity. Managing the air cargo capacity shortage on key trade lanes is also a challenge for forwarders that are keeping up with demand by chartering freighters. “We have proactively secured extra capacity on charters and partial charters, mainly for e-commerce shipments to Europe and the Middle East,” Loïc Gay, deputy COO at CEVA Logistics, told the Journal of Commerce Friday. “During peak season in October and November, we also arranged ad-hoc charters from China to the US and Europe to accommodate the increased demand,” he added. “We plan to do the same again in January before the Chinese New Year.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

The sustained demand that has kept air cargo in peak season mode all year is heading into a difficult 2025 with the capacity outlook clouded by aging aircraft, delivery delays of new planes and a backlog of orders, according to the International Air Transport Association (IATA). Cargo volumes are expected to reach 72.5 million metric tons next year, a 5.8% increase from 2024, IATA noted in its annual industry review this week. But aircraft supply chain issues will raise costs and could limit market growth, warned IATA Director-General Willie Walsh. “Supply chain issues are frustrating every airline with a triple whammy on revenues, costs and environmental performance,” Walsh said. “Load factors are at record highs and there is no doubt that if we had more aircraft they could be profitably deployed, so our revenues are being compromised.” New aircraft are urgently needed to both cater to growing cargo and passenger markets and to replace aging fleets. IATA data shows the average age of the global fleet now stands at a record 14.8 years, up from the 13.6-year average over the past 24 years. Yet aircraft deliveries have fallen sharply from the peak of 1,813 aircraft in 2018. IATA is expecting 1,254 aircraft to have been delivered this year, a 30% shortfall on what was predicted going into 2024. Deliveries in 2025 are forecast to rise to 1,802 planes, well below expectations for 2,293 deliveries, and further downward revisions on deliveries for next year are widely expected. On top of the delivery delays, the backlog of unfulfilled orders for new aircraft has reached 17,000 planes, a record high, and IATA said at present delivery rates, that would take 14 years to fulfill — double the six-year average backlog for the 2013–19 period. “The aging fleet that airlines are using has higher maintenance costs, burns more fuel, and takes more capital to keep it flying,” Walsh said. “And, on top of this, leasing rates have risen more than interest rates as competition among airlines intensified the scramble to find every way possible to expand capacity. “This is a time when airlines need to be fixing their battered post-pandemic balance sheets, but progress is effectively capped by supply chain issues that manufacturers need to resolve,” he added. Capacity remains in short supply Sustained demand out of Asia, driven in part by the robust e-commerce volume on the trans-Pacific and Asia-Europe corridors, is keeping capacity tight and rates at highly elevated levels. The average Shanghai to North Europe spot rate of $5.07 per kilogram this week was the highest in almost two years, while the Shanghai-North America rate of $6.61/kg is the highest so far this year, according to the Baltic Air Index (BAI). Rate benchmarking platform Xeneta shows global air freight volume in November recorded its 13th consecutive month of double-digit growth as load factors hit their highest level since April 2022. In the 11 months through November, demand has increased by more than 12% while available capacity has grown just 4.8% To serve the high demand out of Asia, airlines are repositioning freighters from other trade lanes such as the trans-Atlantic , where rates are soaring as demand outstrips available capacity. Managing the air cargo capacity shortage on key trade lanes is also a challenge for forwarders that are keeping up with demand by chartering freighters. “We have proactively secured extra capacity on charters and partial charters, mainly for e-commerce shipments to Europe and the Middle East,” Loïc Gay, deputy COO at CEVA Logistics, told the Journal of Commerce Friday. “During peak season in October and November, we also arranged ad-hoc charters from China to the US and Europe to accommodate the increased demand,” he added. “We plan to do the same again in January before the Chinese New Year.” Contact Greg Knowler at greg.knowler@spglobal.com.

Capacity shortage, aging fleet to clip air cargo wings in 2025: IATA

<div class="phx-topic abstract-wrapper">The cyclical nature of container shipping hasn’t changed, but the industry has reached a point in which the big carriers can look forward to good long-term returns on investment and outside investor parties looking for a way in, writes Jeremy Masters. </div>

The cyclical nature of container shipping hasn’t changed, but the industry has reached a point in which the big carriers can look forward to good long-term returns on investment and outside investor parties looking for a way in, writes Jeremy Masters.

<div class="phx-topic">The industry has, in recent years, produced some eye-popping profits. It hasn’t always been that way. For a very long period since the advent of containerization, carriers made very poor average returns on investment. The consolidation of the industry after the 2016 demise of Hanjin started to tip the scales more in favor of the carriers, but COVID-19 and the Red Sea crisis, with their attendant implications for capacity demand exceeding supply, opened the door to mega returns, albeit temporary. The cyclical nature of the business has not changed (and it would not be surprising to see red ink next year) but we have reached a point now where the big carriers can look forward to good long-term returns on investment and investor parties outside the industry taking note. There are limited routes to ownership, however. The most obvious observation is that the barriers to entry are now high to starting a new carrier, particularly if the aspirant wants to acquire new capacity and operate in the major east-west container trades. Even if a new carrier emerges, with the possible exception of the Premier alliance, it is unlikely that the other consortiums would entertain a new entrant. Slot charters may be possible, but a new entrant would have to bring sufficient tonnage to the table that Mediterranean Shipping Co. and the three consortiums would see it in their interest to cooperate. The bill for getting critical mass is big. Fourteen 24,000-TEU ships to support a single Asia to Europe loop will cost approximately $3.5 billion at current newbuilding prices. Secondhand ships could be targeted, but older vessels operating conventional fuels are going to be an increasing issue in many trades. The charter market is expensive and particularly constrained in the larger, newer built sizes. Then there is the matter of operating such ships. Running a carrier is a complex task and expertise will be required in general management, finance, marketing and sales, vessel operations, container management, etc. — some of it in multiple geographies. A major stake in an existing top 10 carrier is a possibility, avoiding an injection of new disruptive capacity. But if a controlling interest is desired as well as freedom from government encumbrances then the list of potential targets will likely be small or even nil. Of course, if red ink really starts to flow among the major carriers, the selling price will tend to be more reasonable and home country governments and other interests will have to be more flexible, although their preference will undoubtedly be to find a domestic solution. A more viable approach might then be to enter regional trades by launching a new carrier or buying existing ones, and then stealthily advance into a deep sea route. For example, an entrant could serve intra-Asia first before expanding to regional trades such as in intra-East Mediterranean and the Black Sea. A new entrant could then launch a deepsea service between the two trades once operations are stable and could go on to gradually connect more markets with the same formula. Current carriers have employed similar techniques but tended in the opposite direction, with the main trades driving regional acquisitions or setting up regional networks to strengthen the overall network. Venturing into the territory of the carriers outside the top 10 may be more financially manageable and more easily achievable, but it doesn’t necessarily offer a competitive edge. For the more risk-accepting investors, the route to more rapid penetration and high returns would be to bring a new business model to the market. One area that is ripe for a disrupter is the ongoing conflict between carriers and their clients in the selling/buying of assured future space at an assured rate. Any carrier that can present a reliable and flexible model that ties both sides in will attract not just regular business but also some degree of speculative hedging business. The bottom line then is that the biggest carriers are in a very strong position now, and it’s tough to see a new entrant to the industry — even a cash rich one — being able to buy into the top echelons. There is still room in the industry, however, to enter the regional trades in a substantive way and to build outward. Alternatively, for those prepared to challenge the existing commercial model there could be a very successful future. The joke used to be that you could make a small fortune in container shipping by starting with a big one. Today there really is the possibility of going the other way. Contact Jeremy Masters at <a href="jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

The industry has, in recent years, produced some eye-popping profits. It hasn’t always been that way. For a very long period since the advent of containerization, carriers made very poor average returns on investment. The consolidation of the industry after the 2016 demise of Hanjin started to tip the scales more in favor of the carriers, but COVID-19 and the Red Sea crisis, with their attendant implications for capacity demand exceeding supply, opened the door to mega returns, albeit temporary. The cyclical nature of the business has not changed (and it would not be surprising to see red ink next year) but we have reached a point now where the big carriers can look forward to good long-term returns on investment and investor parties outside the industry taking note. There are limited routes to ownership, however. The most obvious observation is that the barriers to entry are now high to starting a new carrier, particularly if the aspirant wants to acquire new capacity and operate in the major east-west container trades. Even if a new carrier emerges, with the possible exception of the Premier alliance, it is unlikely that the other consortiums would entertain a new entrant. Slot charters may be possible, but a new entrant would have to bring sufficient tonnage to the table that Mediterranean Shipping Co. and the three consortiums would see it in their interest to cooperate. The bill for getting critical mass is big. Fourteen 24,000-TEU ships to support a single Asia to Europe loop will cost approximately $3.5 billion at current newbuilding prices. Secondhand ships could be targeted, but older vessels operating conventional fuels are going to be an increasing issue in many trades. The charter market is expensive and particularly constrained in the larger, newer built sizes. Then there is the matter of operating such ships. Running a carrier is a complex task and expertise will be required in general management, finance, marketing and sales, vessel operations, container management, etc. — some of it in multiple geographies. A major stake in an existing top 10 carrier is a possibility, avoiding an injection of new disruptive capacity. But if a controlling interest is desired as well as freedom from government encumbrances then the list of potential targets will likely be small or even nil. Of course, if red ink really starts to flow among the major carriers, the selling price will tend to be more reasonable and home country governments and other interests will have to be more flexible, although their preference will undoubtedly be to find a domestic solution. A more viable approach might then be to enter regional trades by launching a new carrier or buying existing ones, and then stealthily advance into a deep sea route. For example, an entrant could serve intra-Asia first before expanding to regional trades such as in intra-East Mediterranean and the Black Sea. A new entrant could then launch a deepsea service between the two trades once operations are stable and could go on to gradually connect more markets with the same formula. Current carriers have employed similar techniques but tended in the opposite direction, with the main trades driving regional acquisitions or setting up regional networks to strengthen the overall network. Venturing into the territory of the carriers outside the top 10 may be more financially manageable and more easily achievable, but it doesn’t necessarily offer a competitive edge. For the more risk-accepting investors, the route to more rapid penetration and high returns would be to bring a new business model to the market. One area that is ripe for a disrupter is the ongoing conflict between carriers and their clients in the selling/buying of assured future space at an assured rate. Any carrier that can present a reliable and flexible model that ties both sides in will attract not just regular business but also some degree of speculative hedging business. The bottom line then is that the biggest carriers are in a very strong position now, and it’s tough to see a new entrant to the industry — even a cash rich one — being able to buy into the top echelons. There is still room in the industry, however, to enter the regional trades in a substantive way and to build outward. Alternatively, for those prepared to challenge the existing commercial model there could be a very successful future. The joke used to be that you could make a small fortune in container shipping by starting with a big one. Today there really is the possibility of going the other way. Contact Jeremy Masters at jeremy@shippingmastershk.com .

New entrants have few paths into container shipping

<div class="phx-topic abstract-wrapper">It’s hard to see a world where AI isn’t a necessary component for financial durability in a sector that will always grapple with the volatility of freight rates and the ebbs and flows of demand and volumes. </div>

It’s hard to see a world where AI isn’t a necessary component for financial durability in a sector that will always grapple with the volatility of freight rates and the ebbs and flows of demand and volumes.

<div class="phx-topic">The last two years have been characterized by flat demand, volatile rates and increased costs in the logistics industry. But executives looking at data and comparing it with the pre-COVID era should bear in mind that one thing is vastly different this time around: We’re in the throes of a new technological wave around artificial intelligence (AI) that sets the stage for a meaningfully different environment of business building. AI has dominated discussions across industries in the last two years as buyers seek to separate signal from noise. This has sparked both enthusiasm and skepticism. Is AI in supply chain management merely a temporary trend, or does it possess the potential for lasting impact? Moreover, which AI applications are most likely to transform supply chain operations in the long run? At a supply chain conference earlier this year, I asked a room of about 200 executives how many were using generative AI in their everyday jobs. Almost every single hand went up. What was once a new, scary technology is proving to provide operational leverage in a period where margins are under secular pressure. Among service-intensive logistics services providers (LSPs) such as forwarders and freight brokers, AI is proving to be a valuable asset for coping with a litany of freight operations and back-office tasks. It turns out this tooling can help increase productivity in a way that reduces the cost to serve, or the expense required to execute a shipment. While it’s early days, we’re seeing harsh skepticism now turning into praise as early indicators of AI’s return on investment (ROI) are hard to ignore in an environment where companies have typically managed long-term margins through phases of retrenching and expansion. Given the service orientation of the supply chain, sales enablement is a key area of focus. We know of one upstart who has developed their own AI voice agent to handle preliminary sales calls on behalf of insurance brokers placing trucking liability policies. That is expected to improve sales conversions by at least 25% when rolled out across the organization. In another instance, a large freight broker mentioned cost reductions of 20% by having a voice agent qualify inbound calls from truckers looking for freight. This helps carrier sales professionals focus only on the higher-value carriers they believe fit their network and the needs of their shipper-clients. <h3>Understanding the promise of AI </h3>Lastly, emerging new business models are galvanizing the disruptive nature of AI. The adage among investors is to dub this new business model as “service-as-software.” It simply means that software now does the work rather than enabling it. Business models reflect that by simply “charging for the work,” allowing companies to bill directly for automated processes. That’s a shift akin to the previous migration to software-as-a-service (SaaS), but with an operational twist. Take customs brokerage and trade compliance, for example. Regardless of your politics, it’s clear that trade regulation will increase in complexity in the years to come. But the supply of customs brokers has been relatively flat, with more than 5,000 retirements expected by the end of the decade. Customs brokerage businesses are hard to manage to profitability and are often a loss-leader to cross-sell other freight services given how loyal customers can be to their customs broker. We’ve seen several startups develop an AI-native ability to broker customs at gross margins in excess of 50% and handle volumes per employee two to three times greater than incumbents. They’re also able to tie that to trade compliance workflows so organizations can make more informed decisions around sourcing and distribution to manage expenses while staying within the parameters of the law. We’re still in the early innings of understanding the promise AI brings to the supply chain, as well as how to develop and scale key processes around its capabilities. The thing that’s clear to me is that we cannot view the business environment and operational best practices of a bygone era as the baseline for the future. AI is something that’s here to stay and brings with it a large promise for an industry as service-heavy as supply chain. Data from these early deployments suggests that smaller teams can handle more volume without forsaking customer outcomes. If this continues, it’s hard to see a world where AI isn’t a necessary component for financial durability in a sector that will always grapple with the volatility of rates and the ebbs and flows of demand and freight volumes. Contact Santosh Sankar at <a href="mailto:santosh@dynamo.vc ">santosh@dynamo.vc</a>.</div>

The last two years have been characterized by flat demand, volatile rates and increased costs in the logistics industry. But executives looking at data and comparing it with the pre-COVID era should bear in mind that one thing is vastly different this time around: We’re in the throes of a new technological wave around artificial intelligence (AI) that sets the stage for a meaningfully different environment of business building. AI has dominated discussions across industries in the last two years as buyers seek to separate signal from noise. This has sparked both enthusiasm and skepticism. Is AI in supply chain management merely a temporary trend, or does it possess the potential for lasting impact? Moreover, which AI applications are most likely to transform supply chain operations in the long run? At a supply chain conference earlier this year, I asked a room of about 200 executives how many were using generative AI in their everyday jobs. Almost every single hand went up. What was once a new, scary technology is proving to provide operational leverage in a period where margins are under secular pressure. Among service-intensive logistics services providers (LSPs) such as forwarders and freight brokers, AI is proving to be a valuable asset for coping with a litany of freight operations and back-office tasks. It turns out this tooling can help increase productivity in a way that reduces the cost to serve, or the expense required to execute a shipment. While it’s early days, we’re seeing harsh skepticism now turning into praise as early indicators of AI’s return on investment (ROI) are hard to ignore in an environment where companies have typically managed long-term margins through phases of retrenching and expansion. Given the service orientation of the supply chain, sales enablement is a key area of focus. We know of one upstart who has developed their own AI voice agent to handle preliminary sales calls on behalf of insurance brokers placing trucking liability policies. That is expected to improve sales conversions by at least 25% when rolled out across the organization. In another instance, a large freight broker mentioned cost reductions of 20% by having a voice agent qualify inbound calls from truckers looking for freight. This helps carrier sales professionals focus only on the higher-value carriers they believe fit their network and the needs of their shipper-clients. Understanding the promise of AI Lastly, emerging new business models are galvanizing the disruptive nature of AI. The adage among investors is to dub this new business model as “service-as-software.” It simply means that software now does the work rather than enabling it. Business models reflect that by simply “charging for the work,” allowing companies to bill directly for automated processes. That’s a shift akin to the previous migration to software-as-a-service (SaaS), but with an operational twist. Take customs brokerage and trade compliance, for example. Regardless of your politics, it’s clear that trade regulation will increase in complexity in the years to come. But the supply of customs brokers has been relatively flat, with more than 5,000 retirements expected by the end of the decade. Customs brokerage businesses are hard to manage to profitability and are often a loss-leader to cross-sell other freight services given how loyal customers can be to their customs broker. We’ve seen several startups develop an AI-native ability to broker customs at gross margins in excess of 50% and handle volumes per employee two to three times greater than incumbents. They’re also able to tie that to trade compliance workflows so organizations can make more informed decisions around sourcing and distribution to manage expenses while staying within the parameters of the law. We’re still in the early innings of understanding the promise AI brings to the supply chain, as well as how to develop and scale key processes around its capabilities. The thing that’s clear to me is that we cannot view the business environment and operational best practices of a bygone era as the baseline for the future. AI is something that’s here to stay and brings with it a large promise for an industry as service-heavy as supply chain. Data from these early deployments suggests that smaller teams can handle more volume without forsaking customer outcomes. If this continues, it’s hard to see a world where AI isn’t a necessary component for financial durability in a sector that will always grapple with the volatility of rates and the ebbs and flows of demand and freight volumes. Contact Santosh Sankar at santosh@dynamo.vc .

Supply chains embrace the AI takeover to slash costs

Container spot rates are produced by S&P Global Platts editors who are engaging with market participants to assess the current value of freight-of-all-kinds (FAK) rates on major container trades. The rates include bunker adjustment factors, general rate increases and emergency rare restoration. They also include low-sulfur, equipment imbalance, and repositioning surcharges. The rates exclude terminal handling, port security, overweight container, delivery, and detention and demurrage charges. [Platts](https://www.spglobal.com/commodityinsights)

North Asia to US West Coast and East Coast container spot rates (Platts)

Platts North Asia to US East and West Coasts Weekly Gateway

<div class="phx-topic abstract-wrapper">Carrier executives who dominate the board of the United States Maritime Alliance tell the Journal of Commerce they are done with what they consider to be an overly passive approach demonstrated in recent months by USMX staff in the face of repeated provocations by ILA leadership.</div>

Carrier executives who dominate the board of the United States Maritime Alliance tell the Journal of Commerce they are done with what they consider to be an overly passive approach demonstrated in recent months by USMX staff in the face of repeated provocations by ILA leadership.

<div class="phx-topic">Container lines, after months of trying to maintain a low profile, are pushing harder on the need for automation at US East and Gulf coast ports as longshore labor refuses to negotiate on the technology issue and the union’s Jan. 15 strike threat nears. The United States Maritime Alliance’s (USMX’s) newfound assertiveness was on display last week in a <a href="https://www.usmx.com/assets/content/public-resources/12-3-24_Port_Modernization_and_Investment_in_Technology.pdf">rejoinder to the International Longshoremen’s Association (ILA) blaming</a> the contract impasse on rail-mounted gantry cranes sought by carriers: <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5896864_0.1.jpg"></img></div> “Modernization and investment in new technology are core priorities required to successfully bargain a new master contract with the ILA.” The missive was the first issue-focused statement from USMX, which until Dec. 3 had kept its messaging within negotiation updates. In comparison, the ILA has released a fiery video and multiple searing statements, including one even <a href="https://ilaunion.org/usmx-continues-weak-publicity-campaign-against-ila-with-unfair-labor-practices-suit-foreign-shipping-companies-exploiting-american-longshoremen-is-unfair-labor-practice-ila/">knocking USMX’s “weak publicity campaign.”</a> Carrier executives who dominate the board of the USMX tell the Journal of Commerce they are done with what they consider to be an overly passive approach demonstrated in recent months by USMX staff in the face of repeated provocations by ILA leadership. Sources told the Journal of Commerce that USMX staff advised the carriers to lay low and not confront the dockworkers over issues such as pay, productivity and automation even as the ILA castigated them as greedy, foreign-owned and bent on replacing American jobs with automation. Carriers are still smarting from the Biden administration <a href="https://www.joc.com/article/behind-the-scenes-white-house-arm-twisting-got-ila-wage-deal-done-5747241">essentially forcing their group CEOs</a> during an early October conference call to accept a 62% pay increase for dockworkers over a new six-year contract, which ended a three-day strike. “The carriers were assured by USMX that things would work out, that [ILA President Harold] Daggett is only posturing, so they weren’t aggressive in communicating how bad a deal this was,” a knowledgeable source told the Journal of Commerce. “In retrospect, we were advised to stay out of the spotlight, not engage in a fight in the media, [and] allow Harold to sound off unchecked, without resistance.” According to two sources, frustration with that strategy led to recent changes in responsibility among senior staff at USMX. At least among some of the carrier members of USMX, there’s a preference to take a harder line even if that means another ILA strike that is likely to draw in the new Trump administration. Key, at least for some carriers, is the fact that this time around the US presidential election isn’t hanging in the balance as it was in October. Back then, carrier CEOs were not willing to keep the strike going and potentially be exposed as a target for blame for influencing the election outcome. <h3>Gauging the Trump factor </h3>Similar to the Biden administration, President-elect Donald Trump has emphasized the foreign ownership of major container lines. On Oct. 1, the first day of the ILA’s strike, <a href="https://www.politico.com/news/2024/10/02/harris-trump-dockworkers-strike-00182238">the Trump camp told Politico</a>: “American workers should be able to negotiate for better wages, especially since the shipping companies are mostly foreign flag vessels...” In a Nov. 25 statement featuring a photo of Daggett’s “constructive meeting” with Trump that took place in late 2023, the union boss <a href="https://www.joc.com/article/trumps-labor-pick-draws-longshore-and-teamster-praise-but-trucker-ire-5846861">praised the incoming president’s nomination</a> of Rep. Lori Chavez-DeRemer as US labor secretary. Trump during the ILA’s three-day strike expressed sympathy for the dockworkers who “were decimated by this inflation.” Still, Trump’s labor sympathies aren’t shared by Elon Musk, his adviser and biggest reelection backer financially. Musk on Saturday <a href="https://x.com/elonmusk/status/1865426504886137218?s=46">retweeted a video</a> by libertarian pundit John Stossel titled, “America’s Stone Age Ports: How Unions Block Progress.” Flexport CEO Ryan Petersen, who estimates there’s an 80% chance of ILA striking come Jan. 15 due to a lack of an agreement on automation, notes the differing stances of Trump and Musk. “The big uncertainty is that Trump was very much pro-union back in October, while Elon has long been pro-automation,” Petersen said. “Does Trump listen to Elon or follow his natural instinct which is to be the man of the people?” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

Container lines, after months of trying to maintain a low profile, are pushing harder on the need for automation at US East and Gulf coast ports as longshore labor refuses to negotiate on the technology issue and the union’s Jan. 15 strike threat nears. The United States Maritime Alliance’s (USMX’s) newfound assertiveness was on display last week in a rejoinder to the International Longshoremen’s Association (ILA) blaming the contract impasse on rail-mounted gantry cranes sought by carriers: “Modernization and investment in new technology are core priorities required to successfully bargain a new master contract with the ILA.” The missive was the first issue-focused statement from USMX, which until Dec. 3 had kept its messaging within negotiation updates. In comparison, the ILA has released a fiery video and multiple searing statements, including one even knocking USMX’s “weak publicity campaign.” Carrier executives who dominate the board of the USMX tell the Journal of Commerce they are done with what they consider to be an overly passive approach demonstrated in recent months by USMX staff in the face of repeated provocations by ILA leadership. Sources told the Journal of Commerce that USMX staff advised the carriers to lay low and not confront the dockworkers over issues such as pay, productivity and automation even as the ILA castigated them as greedy, foreign-owned and bent on replacing American jobs with automation. Carriers are still smarting from the Biden administration essentially forcing their group CEOs during an early October conference call to accept a 62% pay increase for dockworkers over a new six-year contract, which ended a three-day strike. “The carriers were assured by USMX that things would work out, that [ILA President Harold] Daggett is only posturing, so they weren’t aggressive in communicating how bad a deal this was,” a knowledgeable source told the Journal of Commerce. “In retrospect, we were advised to stay out of the spotlight, not engage in a fight in the media, [and] allow Harold to sound off unchecked, without resistance.” According to two sources, frustration with that strategy led to recent changes in responsibility among senior staff at USMX. At least among some of the carrier members of USMX, there’s a preference to take a harder line even if that means another ILA strike that is likely to draw in the new Trump administration. Key, at least for some carriers, is the fact that this time around the US presidential election isn’t hanging in the balance as it was in October. Back then, carrier CEOs were not willing to keep the strike going and potentially be exposed as a target for blame for influencing the election outcome. Gauging the Trump factor Similar to the Biden administration, President-elect Donald Trump has emphasized the foreign ownership of major container lines. On Oct. 1, the first day of the ILA’s strike, the Trump camp told Politico : “American workers should be able to negotiate for better wages, especially since the shipping companies are mostly foreign flag vessels...” In a Nov. 25 statement featuring a photo of Daggett’s “constructive meeting” with Trump that took place in late 2023, the union boss praised the incoming president’s nomination of Rep. Lori Chavez-DeRemer as US labor secretary. Trump during the ILA’s three-day strike expressed sympathy for the dockworkers who “were decimated by this inflation.” Still, Trump’s labor sympathies aren’t shared by Elon Musk, his adviser and biggest reelection backer financially. Musk on Saturday retweeted a video by libertarian pundit John Stossel titled, “America’s Stone Age Ports: How Unions Block Progress.” Flexport CEO Ryan Petersen, who estimates there’s an 80% chance of ILA striking come Jan. 15 due to a lack of an agreement on automation, notes the differing stances of Trump and Musk. “The big uncertainty is that Trump was very much pro-union back in October, while Elon has long been pro-automation,” Petersen said. “Does Trump listen to Elon or follow his natural instinct which is to be the man of the people?” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Ocean carriers take harder line with ILA as January strike date nears

<div class="phx-topic abstract-wrapper">Fears that methanol will not be available in the coming years at the scale required to power a growing and thirsty ocean fleet are pushing the order book deeper down the LNG pathway.</div>

Fears that methanol will not be available in the coming years at the scale required to power a growing and thirsty ocean fleet are pushing the order book deeper down the LNG pathway.

<div class="phx-topic">The availability of green fuels to power vessels on the fast-growing dual-fuel order book as they come online over the next few years is “the single biggest worry we have,” according to Hapag-Lloyd’s Rolf Habben Jansen. “In five or 10 years from today, there will be significantly more ships that can sail on green fuel than there is green fuel available,” the Hamburg-based carrier CEO told customers during an online briefing Monday. “That keeps us awake and is why we are prepared to sign offtake agreements with suppliers for longer periods,” Habben Jansen added. “We are talking to various producers about the availability of green fuel, but we see the availability of green fuel as a big problem.” Hapag-Lloyd and Seaspan are converting five 10,100-TEU charter ships to a methanol dual-fuel propulsion system that will be ready in 2026. Maersk <a href="https://www.joc.com/article/maersks-methanol-ship-conversion-tests-retrofitting-business-case-5822762">retrofitted its first vessel to methanol</a> and returned it to service in November to join the nine 16,592-TEU methanol-capable ships that have so far been delivered from an 18-ship order. Other carriers that will also be hunting for methanol to power the vessels coming off their order books are Ocean Network Express, Evergreen, HMM and Cosco. In mid-November, Cosco Shipping Holdings <a href="https://www.joc.com/article/cosco-shareholders-back-22-billion-order-for-12-methanol-fueled-ships-5818358">made a $2.2 billion deal</a> for 12 dual-fuel 14,000-TEU vessels for delivery in 2027. <h3>Urgent moves for supply deals </h3>Carriers have been urgently trying to secure supply deals for the future as their dual-fuel ships are delivered. While the vessels will be able to sail on conventional bunker fuels, <a href="https://www.joc.com/article/tightening-europe-decarbonization-measures-will-raise-shipper-costs-carriers-5833489">tightening emissions controls by regulators</a> and <a href="https://www.joc.com/article/midterm-emissions-plan-to-take-center-stage-at-upcoming-imo-meeting-5731399">a global pricing measure</a> that the International Maritime Organization (IMO) wants in place by next October have lent an urgency to the sourcing of green fuel. Hapag-Lloyd in late November <a href="https://www.joc.com/article/hapag-lloyd-joins-maersk-in-chinese-methanol-supply-deal-5866031">signed an agreement with Chinese energy producer Goldwind</a> for the annual supply of 250,000 tons of green methanol per year from 2026, joining <a href="https://www.joc.com/article/hapag-lloyd-says-gemini-alliance-cargo-bookings-to-open-dec-3-5846853">Gemini Cooperation</a> partner Maersk <a href="https://www.joc.com/article/maersk-inks-new-methanol-sourcing-deal-with-chinese-supplier-5234419">that already has a 500,000-tons-per-year green methanol deal</a> with Goldwind. But Steve Esau, COO of LNG multi-sector industry coalition SEA-LNG, said many of the memorandums of understanding that ocean carriers have signed with methanol fuel producers have not yet matured into projects, raising concerns among shipowners. “The big energy suppliers are not really that interested in producing large volumes of green methanol for the shipping industry for various commercial reasons, and there is a realization that the fuel was not going to become available at the scale needed by the shipping industry,” Esau told the Journal of Commerce in a recent interview. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1a054077-7728-4ffd-abb8-b7aff17c3235"></dynamic-object></div>Esau said there was an emerging recognition within the shipping supply chain that methanol was a tiny market. “If you converted methanol into LNG equivalent, you’re looking at a methanol fossil fuel market of 50 million tons, most of it produced and consumed locally,” Esau said. “Compare that to LNG, which is closer to 500 million tons and has infrastructure for another billion tons of regasification capacity. You just don’t have that infrastructure in place for methanol.” The growing methanol supply concerns have seen carriers hedging their bets and directing significant investment toward building vessels capable of sailing on LNG. Alphaliner reports that six of the top 10 ocean carriers now have LNG-capable ships on their order books. That includes Maersk that last week confirmed an order for 20 dual-fuel LNG-capable ships totaling 300,000 TEUs, and Hapag-Lloyd, which last month <a href="https://www.joc.com/article/hapag-lloyd-makes-4-billion-move-down-lng-path-with-24-ship-dual-fuel-order-5787368">announced its preference for LNG-powered vessels</a> with an order for 24 ships. Mediterranean Shipping Co. (MSC) has also decided to move in the direction of LNG, CEO Soren Toft said in October. About 70% of the total 1.7 million TEUs of ship orders made so far this year were for ships capable of sailing on methanol or LNG, with LNG comprising 63% of the new orders, according to data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. In 2023, the methanol-LNG split was 66% in favor of methanol ships, Sea-web data shows. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The availability of green fuels to power vessels on the fast-growing dual-fuel order book as they come online over the next few years is “the single biggest worry we have,” according to Hapag-Lloyd’s Rolf Habben Jansen. “In five or 10 years from today, there will be significantly more ships that can sail on green fuel than there is green fuel available,” the Hamburg-based carrier CEO told customers during an online briefing Monday. “That keeps us awake and is why we are prepared to sign offtake agreements with suppliers for longer periods,” Habben Jansen added. “We are talking to various producers about the availability of green fuel, but we see the availability of green fuel as a big problem.” Hapag-Lloyd and Seaspan are converting five 10,100-TEU charter ships to a methanol dual-fuel propulsion system that will be ready in 2026. Maersk retrofitted its first vessel to methanol and returned it to service in November to join the nine 16,592-TEU methanol-capable ships that have so far been delivered from an 18-ship order. Other carriers that will also be hunting for methanol to power the vessels coming off their order books are Ocean Network Express, Evergreen, HMM and Cosco. In mid-November, Cosco Shipping Holdings made a $2.2 billion deal for 12 dual-fuel 14,000-TEU vessels for delivery in 2027. Urgent moves for supply deals Carriers have been urgently trying to secure supply deals for the future as their dual-fuel ships are delivered. While the vessels will be able to sail on conventional bunker fuels, tightening emissions controls by regulators and a global pricing measure that the International Maritime Organization (IMO) wants in place by next October have lent an urgency to the sourcing of green fuel. Hapag-Lloyd in late November signed an agreement with Chinese energy producer Goldwind for the annual supply of 250,000 tons of green methanol per year from 2026, joining Gemini Cooperation partner Maersk that already has a 500,000-tons-per-year green methanol deal with Goldwind. But Steve Esau, COO of LNG multi-sector industry coalition SEA-LNG, said many of the memorandums of understanding that ocean carriers have signed with methanol fuel producers have not yet matured into projects, raising concerns among shipowners. “The big energy suppliers are not really that interested in producing large volumes of green methanol for the shipping industry for various commercial reasons, and there is a realization that the fuel was not going to become available at the scale needed by the shipping industry,” Esau told the Journal of Commerce in a recent interview. Esau said there was an emerging recognition within the shipping supply chain that methanol was a tiny market. “If you converted methanol into LNG equivalent, you’re looking at a methanol fossil fuel market of 50 million tons, most of it produced and consumed locally,” Esau said. “Compare that to LNG, which is closer to 500 million tons and has infrastructure for another billion tons of regasification capacity. You just don’t have that infrastructure in place for methanol.” The growing methanol supply concerns have seen carriers hedging their bets and directing significant investment toward building vessels capable of sailing on LNG. Alphaliner reports that six of the top 10 ocean carriers now have LNG-capable ships on their order books. That includes Maersk that last week confirmed an order for 20 dual-fuel LNG-capable ships totaling 300,000 TEUs, and Hapag-Lloyd, which last month announced its preference for LNG-powered vessels with an order for 24 ships. Mediterranean Shipping Co. (MSC) has also decided to move in the direction of LNG, CEO Soren Toft said in October. About 70% of the total 1.7 million TEUs of ship orders made so far this year were for ships capable of sailing on methanol or LNG, with LNG comprising 63% of the new orders, according to data from Sea-web, a sister company of the Journal of Commerce within S&P Global. In 2023, the methanol-LNG split was 66% in favor of methanol ships, Sea-web data shows. Contact Greg Knowler at greg.knowler@spglobal.com .

Potential shortage of green fuels ‘keeps us awake’: Hapag-Lloyd CEO

<div class="phx-topic abstract-wrapper">The Global Port Tracker upgraded its forecast for imports over the next several months despite the threat of labor unrest and new tariffs by the incoming Trump administration. </div>

The Global Port Tracker upgraded its forecast for imports over the next several months despite the threat of labor unrest and new tariffs by the incoming Trump administration.

<div class="phx-topic">US retailers said Monday they expect a “continued surge” in imports through the spring due to cargo frontloading amid the specter of labor strife and new tariffs, although they held out hope both threats can be avoided. “Either a strike or new tariffs would be a blow to the economy and retailers are doing what they can to avoid the impact of either for as long as they can,” Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation (NRF), said in a statement. “We hope that both can be avoided, but bringing in cargo early is a prudent step to mitigate the impact on our industry, consumers and the nation’s economy.” Gold’s comments came as the NRF and Hackett Associates released their monthly Global Port Tracker (GPT), which significantly upgraded its import forecast from the November GPT. December imports are now projected at 2.14 million TEUs, up 14.3% year over year. Last month, retailers said December’s year-over-year gain would be 6.1%. The NRF now expects January imports to jump 12% compared with January 2024, up from the 2.5% gain forecast last month. February’s imports are expected to fall 4.1% year over year, although that’s an upgrade from the 9.3% decline originally forecast. March volumes are expected to jump 12.7% and April by 6.6% compared with the same months in 2024, according to the GPT. Total US imports for 2024 are now projected at 25.6 million TEUs, up 14.8% from 2023, the NRF said. Shippers are working <a href="https://www.joc.com/article/trans-pac-settles-into-sedate-december-before-new-years-uncertainties-5877172">to move goods</a> ahead of a potential Jan. 15 strike by the International Longshoremen’s Association (ILA), the threat of new tariffs by the incoming Trump administration, and an early Lunar New Year holiday on Jan. 29. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ec643cb2-b145-4f56-a0a1-51d368e4b4fc"></dynamic-object></div>The most recent data available from PIERS, a sister product of the Journal of Commerce within S&amp;P Global, showed October imports climbing 10% over the year, maintaining a months-long pattern of double-digit year-over-year increases. October marked the 18th consecutive month of US imports above 2 million TEUs. If NRF forecasts come to fruition as projected, November and December imports will break the pandemic-era record of 19 straight months. Still, October did mark the first month since May where month-over-month imports didn’t increase, instead sliding by about 3% to 2.44 million TEUs — the softest month since June. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US retailers said Monday they expect a “continued surge” in imports through the spring due to cargo frontloading amid the specter of labor strife and new tariffs, although they held out hope both threats can be avoided. “Either a strike or new tariffs would be a blow to the economy and retailers are doing what they can to avoid the impact of either for as long as they can,” Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation (NRF), said in a statement. “We hope that both can be avoided, but bringing in cargo early is a prudent step to mitigate the impact on our industry, consumers and the nation’s economy.” Gold’s comments came as the NRF and Hackett Associates released their monthly Global Port Tracker (GPT), which significantly upgraded its import forecast from the November GPT. December imports are now projected at 2.14 million TEUs, up 14.3% year over year. Last month, retailers said December’s year-over-year gain would be 6.1%. The NRF now expects January imports to jump 12% compared with January 2024, up from the 2.5% gain forecast last month. February’s imports are expected to fall 4.1% year over year, although that’s an upgrade from the 9.3% decline originally forecast. March volumes are expected to jump 12.7% and April by 6.6% compared with the same months in 2024, according to the GPT. Total US imports for 2024 are now projected at 25.6 million TEUs, up 14.8% from 2023, the NRF said. Shippers are working to move goods ahead of a potential Jan. 15 strike by the International Longshoremen’s Association (ILA), the threat of new tariffs by the incoming Trump administration, and an early Lunar New Year holiday on Jan. 29. The most recent data available from PIERS, a sister product of the Journal of Commerce within S&P Global, showed October imports climbing 10% over the year, maintaining a months-long pattern of double-digit year-over-year increases. October marked the 18th consecutive month of US imports above 2 million TEUs. If NRF forecasts come to fruition as projected, November and December imports will break the pandemic-era record of 19 straight months. Still, October did mark the first month since May where month-over-month imports didn’t increase, instead sliding by about 3% to 2.44 million TEUs — the softest month since June. Contact Laura Robb at laura.robb@spglobal.com . 

US import ‘surge’ to persist into spring amid continued frontloading: retailers

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Choose a subscription plan that works best for you

Subscribe Now - Anonymous - Wide Box

SUBSCRIBE TODAY

Use code STSW20 at checkout and save 20% on first year of any annual subscription plan

Subscribe Now - Free Trials - Wide Box

SUBSCRIBE AND SAVE 20%

Use code CM24W695 at checkout and upgrade to Gold for just $695! Valid for first year of subscription. Offer ends December 8.

Upgrade Subscription - Wide Box

CYBER MONDAY SALE EXTENDED

Register today to redeem your Gold subscriber discount!

TPM Discount - Gold

Save 20% on TPM25

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

SMC3rates_shutterstock_5247046.jpg

Shippers save money, time with automated transportation bidding tools

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

SMC3rates_shutterstock_5247046 (1).jpg

Filling the Supply Chain Education Gap with LTL Education Courses

SUBSCRIBE TODAY: Choose a subscription plan that works best for you

Subscribe Now - Anonymous - Offer Box

Subscribe Today

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

TPM Discount - Gold 

20% OFF ON TPM25

SUBSCRIBE AND SAVE 20%: Use code STSW20 at checkout to save 20% on first year of any subscription plan


Subscribe Now - Free Trials - Offer Box

START A FREE TRIAL: Access Journal of Commerce content for 30 days

Free Trial - Offer Box

Free Trial

UPGRADE TODAY AND SAVE: Use code GUW795 at checkout and save $700 on first year of a Gold subscription

Upgrade Subscription - Offer Box

Upgrade Subscription

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

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

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

ISI Report - Rectangle Box

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

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

Breakbulk Conference - Rectangle Box

Attend Breakbulk25

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

TPM Conference - Rectangle Box

Attend TPM25

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

Gateway - Rectangle Box

<div class="phx-topic abstract-wrapper">The direct sale of 12 terminals to Estes and R+L Carriers accelerates repositioning among the largest LTL carriers ahead of an anticipated increase in demand in 2025.</div>

The direct sale of 12 terminals to Estes and R+L Carriers accelerates repositioning among the largest LTL carriers ahead of an anticipated increase in demand in 2025.

<div class="phx-topic">The land rush reshaping the US less-than-truckload (LTL) sector is heating up, with bankrupt Yellow selling 12 terminals to two LTL trucking companies for $192.5 million. Eleven of those 12 terminals will go to Estes Express Lines, which will pay $142.5 million for seven owned and four leased facilities from Southern California to Georgia. R+L Carriers will pay $50 million for Yellow’s Maybrook, New York, terminal, which, with 304 doors was one of Yellow’s largest sites and a potential linchpin for any LTL network in the Northeast. Details of the latest sales by Yellow were <a href="https://document.epiq11.com/document/getdocumentsbydocket/?docketId=1130320&amp;projectCode=YRC&amp;docketNumber=5127&amp;source=DM">released Tuesday</a> by the US Bankruptcy Court for the District of Delaware. Yellow still has <a href="https://www.joc.com/article/yellow-puts-remaining-112-ltl-terminals-on-the-block-5737425">about 100 US terminals to auction</a>. The sales will help reshape the top tier of LTL carriers, giving Estes and R+L the ability to better compete with larger competitors in both network coverage and revenue. Estes and R+L, both privately owned carriers, are the fourth- and fifth-largest US and Canadian LTL providers, respectively, with $4.2 billion and $3.1 billion in revenue in 2023, according to SJ Consulting Group data. The only larger LTL providers are FedEx Freight, Old Dominion Freight Line and XPO. Estes and R+L are buying the terminals directly from Yellow, circumventing the auction process; Jan. 6, 2025, is the deadline for bids on the remaining properties. Estes is emerging as a leading beneficiary of Yellow’s collapse, having purchased 50 terminals to date. The Richmond, Virginia-based company’s latest purchases give it 1,310 additional doors. Saia and XPO have each purchased about 29 terminals from Yellow, with Knight-Swift Transportation acquiring 25 facilities. R+L <a href="https://www.joc.com/article/big-us-ltl-carriers-reap-lions-share-of-yellow-terminals-in-auction-5226003">acquired eight terminals</a> in late 2023. The collapse of Yellow more than a year ago continues to reset the competitive landscape for LTL carriers, which are anticipating higher freight demand in 2025 and more use of LTL services by shippers. The ongoing terminal sales not only reshape LTL networks but help broaden the LTL sector’s role in supply chains from ports to last-mile delivery. LTL carriers such as Estes are adding <a href="https://www.joc.com/article/estes-express-plans-near-port-expansion-as-new-generation-takes-charge-5220656">more port transloading business</a> to their portfolios but also are broadening their retail, warehousing and specialized services. As shippers work to shorten distances between distribution centers, suppliers and end-customers, LTL carriers see more opportunity to expand beyond their industrial base. <h3>Preparing for FedEx’s next move </h3>LTL carriers engaging in the land rush are also positioning themselves for a <a href="https://www.joc.com/article/fedex-freight-realigns-in-rapidly-changing-us-ltl-market-5731577">potential sale or spin-off</a> of the largest LTL provider, FedEx Freight, an LTL analyst said. “They’re preparing themselves to compete with a company that could grow to $12 billion or $14 billion” in annual revenue, said Satish Jindel, president of SJ Consulting Group. FedEx is assessing whether to <a href="https://www.joc.com/article/fedex-to-reassess-ltl-divisions-future-in-bid-to-leverage-recent-success-5192278">keep or part from its LTL subsidiary</a>, the largest US LTL carrier, and has said it plans to complete that assessment by the end of this year. Tuesday’s sales announcement came as Saia increased its borrowing capacity by $300 million to $600 million, in part to fund <a href="https://www.joc.com/article/saia-still-benefiting-from-yellows-collapse-as-us-ltl-market-resets-5244255">further network expansion</a>. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The land rush reshaping the US less-than-truckload (LTL) sector is heating up, with bankrupt Yellow selling 12 terminals to two LTL trucking companies for $192.5 million. Eleven of those 12 terminals will go to Estes Express Lines, which will pay $142.5 million for seven owned and four leased facilities from Southern California to Georgia. R+L Carriers will pay $50 million for Yellow’s Maybrook, New York, terminal, which, with 304 doors was one of Yellow’s largest sites and a potential linchpin for any LTL network in the Northeast. Details of the latest sales by Yellow were released Tuesday by the US Bankruptcy Court for the District of Delaware. Yellow still has about 100 US terminals to auction . The sales will help reshape the top tier of LTL carriers, giving Estes and R+L the ability to better compete with larger competitors in both network coverage and revenue. Estes and R+L, both privately owned carriers, are the fourth- and fifth-largest US and Canadian LTL providers, respectively, with $4.2 billion and $3.1 billion in revenue in 2023, according to SJ Consulting Group data. The only larger LTL providers are FedEx Freight, Old Dominion Freight Line and XPO. Estes and R+L are buying the terminals directly from Yellow, circumventing the auction process; Jan. 6, 2025, is the deadline for bids on the remaining properties. Estes is emerging as a leading beneficiary of Yellow’s collapse, having purchased 50 terminals to date. The Richmond, Virginia-based company’s latest purchases give it 1,310 additional doors. Saia and XPO have each purchased about 29 terminals from Yellow, with Knight-Swift Transportation acquiring 25 facilities. R+L acquired eight terminals in late 2023. The collapse of Yellow more than a year ago continues to reset the competitive landscape for LTL carriers, which are anticipating higher freight demand in 2025 and more use of LTL services by shippers. The ongoing terminal sales not only reshape LTL networks but help broaden the LTL sector’s role in supply chains from ports to last-mile delivery. LTL carriers such as Estes are adding more port transloading business to their portfolios but also are broadening their retail, warehousing and specialized services. As shippers work to shorten distances between distribution centers, suppliers and end-customers, LTL carriers see more opportunity to expand beyond their industrial base. Preparing for FedEx’s next move LTL carriers engaging in the land rush are also positioning themselves for a potential sale or spin-off of the largest LTL provider, FedEx Freight, an LTL analyst said. “They’re preparing themselves to compete with a company that could grow to $12 billion or $14 billion” in annual revenue, said Satish Jindel, president of SJ Consulting Group. FedEx is assessing whether to keep or part from its LTL subsidiary , the largest US LTL carrier, and has said it plans to complete that assessment by the end of this year. Tuesday’s sales announcement came as Saia increased its borrowing capacity by $300 million to $600 million, in part to fund further network expansion . Contact William B. Cassidy at bill.cassidy@spglobal.com .

New terminal sales by Yellow raising stakes for US LTL carriers

<div class="phx-topic abstract-wrapper">The Federal Maritime Commission said that it needs more information about the new grouping of ocean carriers known as the Premier Alliance before the vessel-sharing agreement can begin in February on US trades. </div>

The Federal Maritime Commission said that it needs more information about the new grouping of ocean carriers known as the Premier Alliance before the vessel-sharing agreement can begin in February on US trades.

<div class="phx-topic">The Federal Maritime Commission (FMC) on Friday has halted Premier Alliance from becoming effective next week as scheduled, citing insufficient information on the alliance set to sail in February. The FMC said the proposed agreement from Ocean Network Express, HMM and Yang Ming “lacks sufficient detail to allow for a complete analysis of potential competitive impacts and whether the agreement fully complies with all statutory requirements.” The Premier Alliance on Friday released details of its <a href="https://www.joc.com/article/north-america-trade-to-dominate-premier-alliances-network-launch-in-february-5877233">new network</a>. Premier members had been partners in the THE Alliance with Hapag-Lloyd. But with Hapag-Lloyd’s decision to bolt THE Alliance in favor of joining Maersk in the 2M Cooperation, the three carriers <a href="https://www.joc.com/article/msc-strikes-asia-europe-slot-share-with-former-thea-members-5723585">banded together</a> in September under a new name and with a slot-sharing agreement in the trans-Pacific trade with Mediterranean Shipping Co. The FMC has a 45-day window from when it collects the information to issue the formal go-ahead for the Premier Alliance, and any shippers wishing to weigh in will be able to do so during a 15-day window that starts next week. Such requests for additional information from the FMC are common, with the Gemini Cooperation <a href="https://www.joc.com/article/fmc-wants-maersk-hapag-lloyd-to-provide-more-details-on-gemini-alliance-5192298">itself having received</a> one in July. The agency later determined there were no competitive impacts to Gemini but vowed to keep <a href="https://www.joc.com/article/fmc-wont-block-gemini-alliance-but-vows-tight-monitoring-5724939">an eye</a> on the new alliance. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>. </div>

The Federal Maritime Commission (FMC) on Friday has halted Premier Alliance from becoming effective next week as scheduled, citing insufficient information on the alliance set to sail in February. The FMC said the proposed agreement from Ocean Network Express, HMM and Yang Ming “lacks sufficient detail to allow for a complete analysis of potential competitive impacts and whether the agreement fully complies with all statutory requirements.” The Premier Alliance on Friday released details of its new network . Premier members had been partners in the THE Alliance with Hapag-Lloyd. But with Hapag-Lloyd’s decision to bolt THE Alliance in favor of joining Maersk in the 2M Cooperation, the three carriers banded together in September under a new name and with a slot-sharing agreement in the trans-Pacific trade with Mediterranean Shipping Co. The FMC has a 45-day window from when it collects the information to issue the formal go-ahead for the Premier Alliance, and any shippers wishing to weigh in will be able to do so during a 15-day window that starts next week. Such requests for additional information from the FMC are common, with the Gemini Cooperation itself having received one in July. The agency later determined there were no competitive impacts to Gemini but vowed to keep an eye on the new alliance. Contact Michael Angell at michael.angell@spglobal.com .

FMC halts Premier Alliance start for more information

<div class="phx-topic abstract-wrapper">The extensive frontloading of imports that occurred this fall will keep cargo volumes modest this month, but the vagaries of labor negotiations and new tariffs threaten to disrupt the market in short order.</div>

The extensive frontloading of imports that occurred this fall will keep cargo volumes modest this month, but the vagaries of labor negotiations and new tariffs threaten to disrupt the market in short order.

<div class="phx-topic">The overheated trans–Pacific Ocean market is in the midst of a December respite after months of extensive frontloading, but can quickly become roiled again given the razor's-edge nature of longshore labor talks and the threats of new tariffs by the incoming Trump administration. “Once we get to January, whether it’s on the political front, the labor front, the alliance shake-up, everything is coming fast,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. Also in the background is an early Lunar New Year, which begins Jan. 29 and will likely mean imports from Asia perk up again from early January ahead of the holiday factory closures that take place in the region. The import pop will take place mostly at West Coast ports. “The East Coast will drop off. The West Coast will remain robust,” a carrier executive said. Meantime, with plentiful vessel capacity scheduled and reduced blanking, sources say they expect continued downward pressure on spot rates that have been in retreat since July. Rates from Asia to the US West Coast were at $2,400 per FEU as of Thursday, down 4% on the week and sharply off the July peak of over $8,000, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International, said there are three levels of spot/freight-all-kinds rates in the current market — “window” rates as high as $5,000 per FEU to the West Coast that some importers are willing to pay to ensure loading of their freight; the more prevalent market rates listed on the indexes, such as the $2,400 per FEU rate listed by Platts; and special “bullet” rates offered by some carriers in specific trade lanes based on demand. “Those (bullet) rates are in the low $2,000s, but they’re not across the board,” Sur said. Still, the market knows full well those rates are now at the mercy of a looming Jan. 15 deadline for the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) to reach agreement on a new master contract and head off a second strike at ports along the US East and Gulf coasts. A multiday ILA strike in January would sustain the diversion of cargo to West Coast ports and add to the complexity that importers already face in planning their supply chains. “My assessment is we are more likely to see a strike than not see a strike, and if we do get a strike, it will last longer,” Lars Jensen, CEO and partner at Vespucci Maritime, told a Journal of Commerce webinar Thursday. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div><h3>Navigating tariff uncertainty</h3>On the political front, importers are facing an increasingly tangible tariff threat in 2025 after President-elect Donald Trump’s plan to implement tariffs on foreign goods has <a href="https://www.joc.com/article/us-importers-dabbling-in-frontloading-ahead-of-new-tariff-threat-5821448">pushed some shippers to move cargo early.</a>The major uncertainty that importers will face after Trump takes office in January is what level of tariffs he will impose on which countries and when those tariffs will go into effect. “It’s fair to say nobody knows for sure,” Jensen said. It is likely that many retailers are preparing to frontload shipments if they haven’t already done so, especially if they have space in their warehouses to store the product until needed. Inventory levels at warehouses across the United States were generally high before the Black Friday in-store sales and Cyber Monday online sales, said Scott Weiss, vice president of technical sales-warehouse and distribution service for North America at A.P. Moeller-Maersk. The <a href="https://www.joc.com/article/cargo-push-to-continue-amid-mounting-market-pressures-zim-5821532">US inventory-to-retail sales ratio in September</a>, the most recent reading from the US Census Bureau, was elevated to levels not seen since before the pandemic buying spree began. “The sales were strong, so the inventory was here,” Weiss said. “However, as the inventory goes down through the holidays, space will open up for the frontloading of spring merchandise, which is occurring somewhat earlier than usual,” he said. Nevertheless, a consultant and former logistics manager at two national retailers said importers must assess inventory carrying costs and all the uncertainties surrounding tariffs as they review their frontloading plans. “There’s only so much you can frontload,” the source said. Many importers diversified supply chains after Trump’s initial round of tariffs that were implemented during his first term in office. “We successfully [addressed previous tariffs] through a combination of vendor collaboration, product reengineering and assortment changes, (and) moving product sourcing to other countries...,” said Five Below CEO Ken Bull. “We expect to utilize these tools and tactics again." <h3>Growing supply and stable demand</h3>Meanwhile, the US West Coast is poised for significant capacity injections in December and January, forecasted by maritime intelligence firm eeSea to reach a record 1.5 million TEUs in January. The company also forecasts a December blanking rate of about 1% on the East Coast and 6.7% for the West Coast. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="953f7c86-635d-4cba-9cb7-ffe651937158"></dynamic-object></div>If blanks and capacity estimates come to fruition at eeSea’s projected rates, actual capacity into the East Coast for December will climb by 27.6%, while West Coast capacity will drop 1.1%. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

The overheated trans–Pacific Ocean market is in the midst of a December respite after months of extensive frontloading, but can quickly become roiled again given the razor's-edge nature of longshore labor talks and the threats of new tariffs by the incoming Trump administration. “Once we get to January, whether it’s on the political front, the labor front, the alliance shake-up, everything is coming fast,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. Also in the background is an early Lunar New Year, which begins Jan. 29 and will likely mean imports from Asia perk up again from early January ahead of the holiday factory closures that take place in the region. The import pop will take place mostly at West Coast ports. “The East Coast will drop off. The West Coast will remain robust,” a carrier executive said. Meantime, with plentiful vessel capacity scheduled and reduced blanking, sources say they expect continued downward pressure on spot rates that have been in retreat since July. Rates from Asia to the US West Coast were at $2,400 per FEU as of Thursday, down 4% on the week and sharply off the July peak of over $8,000, according to Platts, a sister company of the Journal of Commerce within S&P Global. Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International, said there are three levels of spot/freight-all-kinds rates in the current market — “window” rates as high as $5,000 per FEU to the West Coast that some importers are willing to pay to ensure loading of their freight; the more prevalent market rates listed on the indexes, such as the $2,400 per FEU rate listed by Platts; and special “bullet” rates offered by some carriers in specific trade lanes based on demand. “Those (bullet) rates are in the low $2,000s, but they’re not across the board,” Sur said. Still, the market knows full well those rates are now at the mercy of a looming Jan. 15 deadline for the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) to reach agreement on a new master contract and head off a second strike at ports along the US East and Gulf coasts. A multiday ILA strike in January would sustain the diversion of cargo to West Coast ports and add to the complexity that importers already face in planning their supply chains. “My assessment is we are more likely to see a strike than not see a strike, and if we do get a strike, it will last longer,” Lars Jensen, CEO and partner at Vespucci Maritime, told a Journal of Commerce webinar Thursday. Navigating tariff uncertainty On the political front, importers are facing an increasingly tangible tariff threat in 2025 after President-elect Donald Trump’s plan to implement tariffs on foreign goods has pushed some shippers to move cargo early. The major uncertainty that importers will face after Trump takes office in January is what level of tariffs he will impose on which countries and when those tariffs will go into effect. “It’s fair to say nobody knows for sure,” Jensen said. It is likely that many retailers are preparing to frontload shipments if they haven’t already done so, especially if they have space in their warehouses to store the product until needed. Inventory levels at warehouses across the United States were generally high before the Black Friday in-store sales and Cyber Monday online sales, said Scott Weiss, vice president of technical sales-warehouse and distribution service for North America at A.P. Moeller-Maersk. The US inventory-to-retail sales ratio in September , the most recent reading from the US Census Bureau, was elevated to levels not seen since before the pandemic buying spree began. “The sales were strong, so the inventory was here,” Weiss said. “However, as the inventory goes down through the holidays, space will open up for the frontloading of spring merchandise, which is occurring somewhat earlier than usual,” he said. Nevertheless, a consultant and former logistics manager at two national retailers said importers must assess inventory carrying costs and all the uncertainties surrounding tariffs as they review their frontloading plans. “There’s only so much you can frontload,” the source said. Many importers diversified supply chains after Trump’s initial round of tariffs that were implemented during his first term in office. “We successfully [addressed previous tariffs] through a combination of vendor collaboration, product reengineering and assortment changes, (and) moving product sourcing to other countries...,” said Five Below CEO Ken Bull. “We expect to utilize these tools and tactics again." Growing supply and stable demand Meanwhile, the US West Coast is poised for significant capacity injections in December and January, forecasted by maritime intelligence firm eeSea to reach a record 1.5 million TEUs in January. The company also forecasts a December blanking rate of about 1% on the East Coast and 6.7% for the West Coast. If blanks and capacity estimates come to fruition at eeSea’s projected rates, actual capacity into the East Coast for December will climb by 27.6%, while West Coast capacity will drop 1.1%. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

Worldwide Express rejects lawsuit claims of customer theft, hacking

Featured Gateway Chart

Essential Reads

Ocean carriers take harder line with ILA as January strike date nears

Potential shortage of green fuels ‘keeps us awake’: Hapag-Lloyd CEO

US import ‘surge’ to persist into spring amid continued frontloading: retailers

Recent Commentary

New entrants have few paths into container shipping

Supply chains embrace the AI takeover to slash costs

Top 5 Most Read Stories