<div class="phx-topic abstract-wrapper">The Israel-based carrier is urging shareholders to reelect its current slate of directors later this month after alternate nominees were put forth by dissident shareholders. </div>

The Israel-based carrier is urging shareholders to reelect its current slate of directors later this month after alternate nominees were put forth by dissident shareholders.

Feature image

<div class="phx-topic">A group of shareholders has launched a proxy fight to get their candidates elected to the board of Zim Integrated Shipping Services after the ocean carrier rejected <a href="https://www.joc.com/article/zim-says-reviewing-buyout-offers-including-one-from-ceo-6123362">an initial buyout offer from its chief executive</a> as too low and continues to review other potential bids. The Israel-based ocean carrier said in a statement Tuesday that a proxy advisor recommended shareholders reelect eight current board members at the company’s Dec. 26 annual meeting. The advisor also recommended that Zim shareholders vote against a slate of three directors nominated by an investor group that “made no attempt to work constructively with the board nor provided any suggestions for improving the company’s business or any other insight into how to create long-term value for shareholders,” Zim said. The investor group — Mor Gemel &amp; Pension Ltd., Reading Capital Ltd., and Sparta 24 — said in a letter nominating its candidates that it holds 5% of the company’s stock, Zim said. The investor group did not release the required stock exchange disclosures or a public statement about its proxy fight. There was no contact information available for the investors. The investor group put up their nominees after a report that Zim Chief Executive Eli Glickman made a buyout offer that was less than the company’s cash balance, Zim said in its statement. While Zim evaluated Glickman’s proposal, it “unanimously determined that it materially undervalued the company,” the carrier said. “The rumor that the board was willing to accept such an undervalued bid was clearly false,” Zim said. The investor group wants the company to issue a special dividend, Zim said, which would undermine Zim’s “liquidity and create substantial risk to shareholder value given our charter-intensive model, which requires adequate cash to navigate industry cycles.” Zim’s board said that it’s continuing a review of strategic alternatives that could include a merger or other another transaction. As part of that review, Zim has set up a transaction committee and appointed two additional outside directors to review any offers. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

A group of shareholders has launched a proxy fight to get their candidates elected to the board of Zim Integrated Shipping Services after the ocean carrier rejected an initial buyout offer from its chief executive as too low and continues to review other potential bids. The Israel-based ocean carrier said in a statement Tuesday that a proxy advisor recommended shareholders reelect eight current board members at the company’s Dec. 26 annual meeting. The advisor also recommended that Zim shareholders vote against a slate of three directors nominated by an investor group that “made no attempt to work constructively with the board nor provided any suggestions for improving the company’s business or any other insight into how to create long-term value for shareholders,” Zim said. The investor group — Mor Gemel & Pension Ltd., Reading Capital Ltd., and Sparta 24 — said in a letter nominating its candidates that it holds 5% of the company’s stock, Zim said. The investor group did not release the required stock exchange disclosures or a public statement about its proxy fight. There was no contact information available for the investors. The investor group put up their nominees after a report that Zim Chief Executive Eli Glickman made a buyout offer that was less than the company’s cash balance, Zim said in its statement. While Zim evaluated Glickman’s proposal, it “unanimously determined that it materially undervalued the company,” the carrier said. “The rumor that the board was willing to accept such an undervalued bid was clearly false,” Zim said. The investor group wants the company to issue a special dividend, Zim said, which would undermine Zim’s “liquidity and create substantial risk to shareholder value given our charter-intensive model, which requires adequate cash to navigate industry cycles.” Zim’s board said that it’s continuing a review of strategic alternatives that could include a merger or other another transaction. As part of that review, Zim has set up a transaction committee and appointed two additional outside directors to review any offers. Contact Michael Angell at michael.angell@spglobal.com .

Container lines

Container Shipping News

Maritime

Zim faces proxy fight after rejecting CEO’s buyout bid

<div class="phx-topic abstract-wrapper">Average intermodal train speeds among the four US Class I railroads have exceeded year-ago levels for 30 consecutive weeks dating back to early May, according to the Association of American Railroads. </div>

Average intermodal train speeds among the four US Class I railroads have exceeded year-ago levels for 30 consecutive weeks dating back to early May, according to the Association of American Railroads.

<div class="phx-topic">US Class I railroads have delivered a year of consistent, reliable intermodal service based on publicly reported metrics such as train speeds, railcars idling with containers on top, and the number of trains stopped while in transit. Among the four US Class I railroads, average intermodal train speeds have exceeded year-ago levels for 30 consecutive weeks dating back to early May, according to the Association of American Railroads (AAR). Train speeds were higher for all US railroads between January and November compared with a year ago. “Our intermodal speed, our performance in the terminals, our performance with the truck turns has been impeccable, to say the least,” CSX CEO Mike Cory said at the UBS Industrials and Transportation Conference on Dec. 2. “Our ability to absorb the incoming volume is there without any additional assets. With the speed, we’ve been setting records for both dwell and speed across the network.” Both Union Pacific Railroad (UP) and Norfolk Southern Railway (NS) posted their highest average intermodal train speeds in the first 11 months since 2020, according to the AAR data. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d9b4d6bd-0250-45bf-9d62-66214a1d8bcf"></dynamic-object></div>An average of 10 intermodal trains per day have been held due to crew issues, locomotive issues or other problems, according to data from the US Surface Transportation Board (STB), less than half the combined average of 2018, 2019, 2023 and 2024. Strong service can help railroads and intermodal marketing companies (IMCs) shed the lingering stigma of service disruptions over the past decade. The rail network was near a virtual meltdown during the worst of the pandemic-related freight surge in 2021 and 2022, a memory that has stayed with some shippers. Even before the pandemic, the rail networks suffered multiple service disruptions in the 2010s. UP’s service on the West Coast has stood out. It is the only railroad to have a positive Intermodal Service Z-Score every week of this year. The Z-Score is a Journal of Commerce metric that measures how far each railroad diverges from its own history on train speeds, trains held and idle rail cars. The positive Z-Score indicates that UP has outperformed its own average in all three categories since the beginning of the year dating back to 2017. UP has accomplished the feat while also handling more than 20% year-over-year growth in domestic intermodal volumes since July in Southern California, according to data provider RailState. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="752fed3a-b216-4e51-a58e-5cdfd2113fe9"></dynamic-object></div>Among both western railroads, domestic volume from the Southwest to the Southcentral US jumped by 11% between January and October, according to the Intermodal Association of North America (IANA). Traffic has also surged nearly 22% from the Southwest to the Pacific Northwest during the same period, a route where only UP runs. BNSF does not have track directly connecting California with Washington state. “Our domestic intermodal business has been a positive for us, and we’ve seen quite a bit of over-the-road conversion,” Kenny Rocker, UP’s executive vice president of sales, said at the UBS Conference. <h3>East Coast service also strong </h3>Demand within the CSX and Norfolk Southern domestic intermodal networks has also ticked up this year. Volume from the Southeast to the Northeast jumped 8.1% year over year between January and October, according to IANA. That includes routes connecting warehouses in Florida and Georgia to those in New Jersey and Pennsylvania. Domestic container volumes from the Midwest to the Southeast, which includes Chicago and the Ohio Valley, rose 9.2% year over year between January and October, IANA data shows. IMC J.B. Hunt Transport Services, which reported lower year-over-year volume on the West Coast in the third quarter, grew 6% on local East Coast loads moving on CSX and NS. “The service we provide has been really, really strong and as good a service as we’ve ever provided in my whole career,” Darren Field, president of J.B. Hunt intermodal, said at the UBS event last week. Brad Delco, J.B. Hunt’s CFO, added that growing local East Coast intermodal volume, where the price differential to trucking can be razor thin, is a “true testament to the collective service product that both J.B. Hunt and the railroads provide.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

US Class I railroads have delivered a year of consistent, reliable intermodal service based on publicly reported metrics such as train speeds, railcars idling with containers on top, and the number of trains stopped while in transit. Among the four US Class I railroads, average intermodal train speeds have exceeded year-ago levels for 30 consecutive weeks dating back to early May, according to the Association of American Railroads (AAR). Train speeds were higher for all US railroads between January and November compared with a year ago. “Our intermodal speed, our performance in the terminals, our performance with the truck turns has been impeccable, to say the least,” CSX CEO Mike Cory said at the UBS Industrials and Transportation Conference on Dec. 2. “Our ability to absorb the incoming volume is there without any additional assets. With the speed, we’ve been setting records for both dwell and speed across the network.” Both Union Pacific Railroad (UP) and Norfolk Southern Railway (NS) posted their highest average intermodal train speeds in the first 11 months since 2020, according to the AAR data. An average of 10 intermodal trains per day have been held due to crew issues, locomotive issues or other problems, according to data from the US Surface Transportation Board (STB), less than half the combined average of 2018, 2019, 2023 and 2024. Strong service can help railroads and intermodal marketing companies (IMCs) shed the lingering stigma of service disruptions over the past decade. The rail network was near a virtual meltdown during the worst of the pandemic-related freight surge in 2021 and 2022, a memory that has stayed with some shippers. Even before the pandemic, the rail networks suffered multiple service disruptions in the 2010s. UP’s service on the West Coast has stood out. It is the only railroad to have a positive Intermodal Service Z-Score every week of this year. The Z-Score is a Journal of Commerce metric that measures how far each railroad diverges from its own history on train speeds, trains held and idle rail cars. The positive Z-Score indicates that UP has outperformed its own average in all three categories since the beginning of the year dating back to 2017. UP has accomplished the feat while also handling more than 20% year-over-year growth in domestic intermodal volumes since July in Southern California, according to data provider RailState. Among both western railroads, domestic volume from the Southwest to the Southcentral US jumped by 11% between January and October, according to the Intermodal Association of North America (IANA). Traffic has also surged nearly 22% from the Southwest to the Pacific Northwest during the same period, a route where only UP runs. BNSF does not have track directly connecting California with Washington state. “Our domestic intermodal business has been a positive for us, and we’ve seen quite a bit of over-the-road conversion,” Kenny Rocker, UP’s executive vice president of sales, said at the UBS Conference. East Coast service also strong Demand within the CSX and Norfolk Southern domestic intermodal networks has also ticked up this year. Volume from the Southeast to the Northeast jumped 8.1% year over year between January and October, according to IANA. That includes routes connecting warehouses in Florida and Georgia to those in New Jersey and Pennsylvania. Domestic container volumes from the Midwest to the Southeast, which includes Chicago and the Ohio Valley, rose 9.2% year over year between January and October, IANA data shows. IMC J.B. Hunt Transport Services, which reported lower year-over-year volume on the West Coast in the third quarter, grew 6% on local East Coast loads moving on CSX and NS. “The service we provide has been really, really strong and as good a service as we’ve ever provided in my whole career,” Darren Field, president of J.B. Hunt intermodal, said at the UBS event last week. Brad Delco, J.B. Hunt’s CFO, added that growing local East Coast intermodal volume, where the price differential to trucking can be razor thin, is a “true testament to the collective service product that both J.B. Hunt and the railroads provide.” Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Intermodal providers

Surface

Rail service shakes off prior disruptions to close 2025 on high note

<div class="phx-topic abstract-wrapper">The move is part of the Chinese government’s ambition to accelerate the development of China as a maritime power, China Shipbuilding Group said.</div>

The move is part of the Chinese government’s ambition to accelerate the development of China as a maritime power, China Shipbuilding Group said.

<div class="phx-topic">China Cosco Shipping Group has signed a $7 billion deal with China Shipbuilding Group for a massive fleet renewal and expansion covering 87 ships, including container ships and multipurpose vessels, that is the largest single order for new ships ever placed with the Chinese shipbuilder. The deal was confirmed by China Shipbuilding in a statement Monday. China Cosco Shipping, parent company of ship operating subsidiaries including Cosco Shipping Holdings and Cosco Shipping Specialized Carriers, has not commented on the deal. No details on the number of different ships or sizes were given. There were also no details on the time frame for vessel deliveries. The orders are likely to be spread around several China Shipbuilding Group shipyards, including Guangzhou Shipyard International, which is currently building a 70,000-deadweight metric ton (dwt) semi-submersible vessel for Cosco Shipping Heavy Transport for likely delivery in 2027. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="00f898cc-0bf5-4e4d-80d3-6db9454b1165"></dynamic-object></div>The deal could also mark a departure for Cosco Shipping because its most recent container ship orders, including a deal for 14 18,500-TEU container ships placed in April, have been contracted with Cosco’s own shipyards including Dalian COSCO KHI Ship Engineering Co. and Nantong COSCO KHI Ship Engineering Co. “This new shipbuilding cooperation is a milestone in the joint development of the two groups,” China Shipbuilding said in its statement. The deal is also part of the Chinese government’s ambition to accelerate the development of China as a maritime power, the statement added. “At present, the global shipping and shipbuilding industry is facing profound changes, and the deep integration of green and low-carbon and digital intelligence technology has become an important direction for industrial development,” China Shipbuilding said. “Facing the future, the two sides will take this signing as a new starting point...” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9d9c4551-6e03-4e7a-b6ec-fea88b4d9485"></dynamic-object></div>Globally, there are currently 10.4 million TEUs on order, equivalent to 32% of the existing fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Cosco Shipping Holdings is currently the world’s fourth-largest container line with an in-service fleet totaling 3.45 million TEUs and a further 722,000 TEUs on order, according to Sea-web. Cosco Shipping Specialized Carriers has more than 150 ships, including MPVs and 20 heavy-lift semi-submersible ships. “If Cosco’s newly placed orders approach 700,000 TEUs, that would put Cosco in the race to potentially also overtake [second-place] Maersk,” Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce contributor, said in a LinkedIn post Tuesday. “Of course, with the strong caveat that carriers also adjust fleet size by buying and selling vessels secondhand as well as vary the portion of their fleet on charter.” Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

China Cosco Shipping Group has signed a $7 billion deal with China Shipbuilding Group for a massive fleet renewal and expansion covering 87 ships, including container ships and multipurpose vessels, that is the largest single order for new ships ever placed with the Chinese shipbuilder. The deal was confirmed by China Shipbuilding in a statement Monday. China Cosco Shipping, parent company of ship operating subsidiaries including Cosco Shipping Holdings and Cosco Shipping Specialized Carriers, has not commented on the deal. No details on the number of different ships or sizes were given. There were also no details on the time frame for vessel deliveries. The orders are likely to be spread around several China Shipbuilding Group shipyards, including Guangzhou Shipyard International, which is currently building a 70,000-deadweight metric ton (dwt) semi-submersible vessel for Cosco Shipping Heavy Transport for likely delivery in 2027. The deal could also mark a departure for Cosco Shipping because its most recent container ship orders, including a deal for 14 18,500-TEU container ships placed in April, have been contracted with Cosco’s own shipyards including Dalian COSCO KHI Ship Engineering Co. and Nantong COSCO KHI Ship Engineering Co. “This new shipbuilding cooperation is a milestone in the joint development of the two groups,” China Shipbuilding said in its statement. The deal is also part of the Chinese government’s ambition to accelerate the development of China as a maritime power, the statement added. “At present, the global shipping and shipbuilding industry is facing profound changes, and the deep integration of green and low-carbon and digital intelligence technology has become an important direction for industrial development,” China Shipbuilding said. “Facing the future, the two sides will take this signing as a new starting point...” Globally, there are currently 10.4 million TEUs on order, equivalent to 32% of the existing fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Cosco Shipping Holdings is currently the world’s fourth-largest container line with an in-service fleet totaling 3.45 million TEUs and a further 722,000 TEUs on order, according to Sea-web. Cosco Shipping Specialized Carriers has more than 150 ships, including MPVs and 20 heavy-lift semi-submersible ships. “If Cosco’s newly placed orders approach 700,000 TEUs, that would put Cosco in the race to potentially also overtake [second-place] Maersk,” Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce contributor, said in a LinkedIn post Tuesday. “Of course, with the strong caveat that carriers also adjust fleet size by buying and selling vessels secondhand as well as vary the portion of their fleet on charter.” Contact Keith Wallis at keithwallis@hotmail.com .

Cosco Shipping inks $7 billion deal for big fleet expansion

<div class="phx-topic abstract-wrapper">For the first time, US regulators can evaluate a rail merger not on assertions, but on what the data actually shows — and they can do it in hours, not months. </div>

For the first time, US regulators can evaluate a rail merger not on assertions, but on what the data actually shows — and they can do it in hours, not months.

<div class="phx-topic">The most important factor that will shape the Union Pacific (UP)-Norfolk Southern (NS) merger review isn’t network size, labor or the familiar debate over competition. It’s the arrival of artificial intelligence (AI) in a regulatory process that has never had this level of analytical horsepower. For the first time, the Surface Transportation Board (STB) and the Department of Justice (DOJ) can evaluate a rail merger not on assertions, but on what the data actually shows — and they can do it in hours, not months. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6131406_0.1.jpg"></img></div>Once UP and NS submit their formal application, the full filing becomes part of the public STB docket. With limited exceptions for sealed exhibits, every page will be posted online and fully downloadable. Anyone — regulators, competitors, ports, shippers, analysts — will have the same access at the same moment. I’ve already set up the prompts, tools, and workflows to download the filing the moment it posts, and will begin examining the sections that matter most, the way an operator would, not just an analyst. That accessibility alone changes the dynamic. In past mergers, volume itself was a defensive moat. This time, AI ensures everyone can analyze the document as quickly as the applicants who wrote it. Modern AI systems can ingest a 4,000-page filing in minutes and begin stress-testing it. Contradictions that once hid in appendices — mismatches between narrative claims and actual performance, optimistic cycle-time assumptions, recycled language posing as new analysis — surface immediately. A line-by-line integrity audit that previously required months now takes a few hours. That speed forces a different caliber of evidence. When UP and NS promise corridor-level velocity improvements, the STB will test those claims against historic dwell in the same terminals. When they assert minimal competitive harm, DOJ will compare their modeling with real origin/destination patterns, interchange frequencies, and lane elasticity. What once passed as “directionally accurate” will now be judged against observed performance. AI also exposes the control layers that traditionally operated in the shadows. In earlier writing, I described how TTX — the shared pool governing nearly every well car, autorack, and flatcar in North America — creates its own physics inside the network. Under conventional review, those mechanics were too complex and opaque to analyze meaningfully. With AI, they become visible. Regulators and stakeholders will be able to examine car-flow patterns, identify cycle-time asymmetries and determine whether the merged network benefits simply from having more gravitational pull inside a pooled system. Patterns that once felt anecdotal will become measurable. <h3>AI ‘does not bend to narrative’ </h3>Ports will feel this transparency immediately. Equipment velocity has always been a stronger determinant of port competitiveness than berth depth or crane count. AI will allow ports to model how the merger affects inland access — whether discretionary cargo tilts toward the merged network, whether high-capacity wells cycle more reliably in certain export corridors, and whether inland terminals feeding those ports become structurally advantaged. These are no longer theoretical concerns; they are quantifiable outcomes. Competitors will apply the same capabilities. Canadian National, BNSF, CSX and Canadian Pacific Kansas City will not submit abstract protests; they will submit counter-models. They will show where routing options shrink, where interchange loses practical meaning, and where inland terminals shift from shared gateways to effective chokepoints. AI turns what used to be rhetoric into structured evidence that regulators must consider. UP and NS will use AI as well — they would be negligent not to — but AI does not bend to narrative. It rewards consistency, exposes wishful thinking, and highlights unsupported assumptions. It cannot hide whether a merged network delivers sustained service improvement or simply consolidates power. It cannot disguise whether velocity gains are proven or aspirational. This is the real shift. AI forces a merit-based review in a way no previous merger has experienced. If UP-NS can demonstrate that a unified network produces faster turns, more reliable inland flows, stronger port connectivity, and broader access for shippers, AI will validate those claims. If the merger instead creates velocity asymmetry, reduces routing flexibility, or concentrates quiet control of pooled assets inside one dominant carrier, AI will reveal that as well. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals &amp; Switches. Contact him at  <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

The most important factor that will shape the Union Pacific (UP)-Norfolk Southern (NS) merger review isn’t network size, labor or the familiar debate over competition. It’s the arrival of artificial intelligence (AI) in a regulatory process that has never had this level of analytical horsepower. For the first time, the Surface Transportation Board (STB) and the Department of Justice (DOJ) can evaluate a rail merger not on assertions, but on what the data actually shows — and they can do it in hours, not months. Once UP and NS submit their formal application, the full filing becomes part of the public STB docket. With limited exceptions for sealed exhibits, every page will be posted online and fully downloadable. Anyone — regulators, competitors, ports, shippers, analysts — will have the same access at the same moment. I’ve already set up the prompts, tools, and workflows to download the filing the moment it posts, and will begin examining the sections that matter most, the way an operator would, not just an analyst. That accessibility alone changes the dynamic. In past mergers, volume itself was a defensive moat. This time, AI ensures everyone can analyze the document as quickly as the applicants who wrote it. Modern AI systems can ingest a 4,000-page filing in minutes and begin stress-testing it. Contradictions that once hid in appendices — mismatches between narrative claims and actual performance, optimistic cycle-time assumptions, recycled language posing as new analysis — surface immediately. A line-by-line integrity audit that previously required months now takes a few hours. That speed forces a different caliber of evidence. When UP and NS promise corridor-level velocity improvements, the STB will test those claims against historic dwell in the same terminals. When they assert minimal competitive harm, DOJ will compare their modeling with real origin/destination patterns, interchange frequencies, and lane elasticity. What once passed as “directionally accurate” will now be judged against observed performance. AI also exposes the control layers that traditionally operated in the shadows. In earlier writing, I described how TTX — the shared pool governing nearly every well car, autorack, and flatcar in North America — creates its own physics inside the network. Under conventional review, those mechanics were too complex and opaque to analyze meaningfully. With AI, they become visible. Regulators and stakeholders will be able to examine car-flow patterns, identify cycle-time asymmetries and determine whether the merged network benefits simply from having more gravitational pull inside a pooled system. Patterns that once felt anecdotal will become measurable. AI ‘does not bend to narrative’ Ports will feel this transparency immediately. Equipment velocity has always been a stronger determinant of port competitiveness than berth depth or crane count. AI will allow ports to model how the merger affects inland access — whether discretionary cargo tilts toward the merged network, whether high-capacity wells cycle more reliably in certain export corridors, and whether inland terminals feeding those ports become structurally advantaged. These are no longer theoretical concerns; they are quantifiable outcomes. Competitors will apply the same capabilities. Canadian National, BNSF, CSX and Canadian Pacific Kansas City will not submit abstract protests; they will submit counter-models. They will show where routing options shrink, where interchange loses practical meaning, and where inland terminals shift from shared gateways to effective chokepoints. AI turns what used to be rhetoric into structured evidence that regulators must consider. UP and NS will use AI as well — they would be negligent not to — but AI does not bend to narrative. It rewards consistency, exposes wishful thinking, and highlights unsupported assumptions. It cannot hide whether a merged network delivers sustained service improvement or simply consolidates power. It cannot disguise whether velocity gains are proven or aspirational. This is the real shift. AI forces a merit-based review in a way no previous merger has experienced. If UP-NS can demonstrate that a unified network produces faster turns, more reliable inland flows, stronger port connectivity, and broader access for shippers, AI will validate those claims. If the merger instead creates velocity asymmetry, reduces routing flexibility, or concentrates quiet control of pooled assets inside one dominant carrier, AI will reveal that as well. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals & Switches. Contact him at   paul.tonsager@multimodalsolutions.io .

North-American rail

AI will change UP-NS merger review in ways the industry has never seen

<div class="phx-topic abstract-wrapper">Mumbai-based forwarder executives have linked the pricing gains mainly to lower capacity amid multiple blank sailings during the month covering CMA CGM’s Epic service and Ocean Network Express’ IOX loop.</div>

Mumbai-based forwarder executives have linked the pricing gains mainly to lower capacity amid multiple blank sailings during the month covering CMA CGM’s Epic service and Ocean Network Express’ IOX loop.

<div class="phx-topic">Ocean carriers on India-Europe trades that navigated significant rate erosion in the past few months have been able to turn the tables in December amid lower capacity, according to new data obtained by the Journal of Commerce from local freight forwarders. Average freight-all-kinds (FAK) rates on the trade lane have climbed between $300 and $500 per FEU month to month, forwarders say. Booking rates from West India (Nhava Sheva/Mundra) to North Europe (Felixstowe/London Gateway) now stand between $1,100 and $1,400 per FEU, varying from carrier to carrier. That compares with early-November carrier pricing of $800 to $900 per FEU for the same port pair, which was the lowest level in two years. Mumbai-based forwarder executives have linked the December pricing gains mainly to lower capacity due to multiple blank sailings during the month covering CMA CGM’s Epic service and Ocean Network Express’ IOX loop. “It’s a good recovery for the carriers after suffering months of steady declines,” one source said. “Demand remains a wild card for them, [and there are] indications of a delayed onset of the seasonal grape export trade that typically begins in January.” <h3>Mid-month rate hike </h3>Lead carriers on the trade are preparing to implement a modest upward revision in their tariff rates for India-North Europe/Mediterranean loads. For example, Hapag-Lloyd said in a customer advisory it will increase published rates out of Nhava Sheva/Mundra and Ennore/Chennai by $200 per TEU/FEU for all sailings effective Dec. 16. Meanwhile, the Gemini Cooperation has expanded the port rotation of its India-Europe network, individually known as the “ME1” for Maersk and the “IOS” for Hapag-Lloyd, with a new stop at Wilhelmshaven in Germany beginning in late January in addition to the Hamburg call already in place. The updated rotation will be Jebel Ali, Mundra, Nhava Sheva, Salalah, Tanger Med, Rotterdam, Wilhelmshaven, Hamburg, London Gateway, Tanger Med, Salalah and back to Jebel Ali. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Ocean carriers on India-Europe trades that navigated significant rate erosion in the past few months have been able to turn the tables in December amid lower capacity, according to new data obtained by the Journal of Commerce from local freight forwarders. Average freight-all-kinds (FAK) rates on the trade lane have climbed between $300 and $500 per FEU month to month, forwarders say. Booking rates from West India (Nhava Sheva/Mundra) to North Europe (Felixstowe/London Gateway) now stand between $1,100 and $1,400 per FEU, varying from carrier to carrier. That compares with early-November carrier pricing of $800 to $900 per FEU for the same port pair, which was the lowest level in two years. Mumbai-based forwarder executives have linked the December pricing gains mainly to lower capacity due to multiple blank sailings during the month covering CMA CGM’s Epic service and Ocean Network Express’ IOX loop. “It’s a good recovery for the carriers after suffering months of steady declines,” one source said. “Demand remains a wild card for them, [and there are] indications of a delayed onset of the seasonal grape export trade that typically begins in January.” Mid-month rate hike Lead carriers on the trade are preparing to implement a modest upward revision in their tariff rates for India-North Europe/Mediterranean loads. For example, Hapag-Lloyd said in a customer advisory it will increase published rates out of Nhava Sheva/Mundra and Ennore/Chennai by $200 per TEU/FEU for all sailings effective Dec. 16. Meanwhile, the Gemini Cooperation has expanded the port rotation of its India-Europe network, individually known as the “ME1” for Maersk and the “IOS” for Hapag-Lloyd, with a new stop at Wilhelmshaven in Germany beginning in late January in addition to the Hamburg call already in place. The updated rotation will be Jebel Ali, Mundra, Nhava Sheva, Salalah, Tanger Med, Rotterdam, Wilhelmshaven, Hamburg, London Gateway, Tanger Med, Salalah and back to Jebel Ali. Contact Bency Mathew at bencyvmathew@gmail.com .

Asia-Europe

India-Europe carriers push December rates higher on tighter capacity

<div class="phx-topic abstract-wrapper">The softer global growth in October pulled the 12-month rolling average down to the lowest in 20 months, according to Drewry’s Simon Heaney. </div>

The softer global growth in October pulled the 12-month rolling average down to the lowest in 20 months, according to Drewry’s Simon Heaney.

<div class="phx-topic">Global container volume growth in October fell to its slowest pace since February as increased trade in Asia, Africa, the Middle East and Latin America was offset by falling US and European imports, according to new data from Container Trades Statistics (CTS). Global volumes expanded 2.1% year over year in October, with volumes in the first 10 months up 4.4% compared with a year earlier, according to CTS. The softer global growth in October pulled the 12-month rolling average down to the lowest level in 20 months, according to Simon Heaney, senior manager of container research at Drewry. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0bafc15c-1e46-45a2-91a6-3b0bb1eb82aa"></dynamic-object></div>“Regional container trade growth in 2025 is increasingly asymmetric, with economies commonly grouped — albeit loosely — under the term ‘Global South’ pulling decisively ahead of their ‘Western’ counterparts,” Heaney said. Import volumes into North America in October fell 6.7% compared with October 2024, while exports from Asia to Europe fell on a year-over-year basis for the first time since February, dropping 3%, according to CTS.But the plunge in US imports has been the biggest drag on global container volumes. US import volumes are on track to end the <a href="https://www.joc.com/article/december-us-imports-on-track-to-be-lowest-since-june-23-retailers-6130632">year down 1.4% at 25.2 million TEUs</a>, according to the Global Port Tracker released Monday. Moody’s Ratings on Nov. 18 warned that US import volumes in 2026 will be flat to down 2% from this year Comparably, shipowner association BIMCO forecasts that global container volumes will expand 2.5% to 3.5% next year, while volumes will end this year up 4.5% to 5.5% from 2024. There have been just two years in which US containerized import volumes have declined to the extent seen in recent months, analyst John McCown said last week on a Journal of Commerce webinar. The most recent was in the spring of 2020 when retailers and other importers slashed orders on fears that retail consumption would plunge in the early days of the pandemic, and the first was 2008–09 in the wake of the financial crisis, McCown said. “I think we’re looking at perhaps the worst performance year that I can recall, in 2026, in terms of volume growth,” McCown said. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Global container volume growth in October fell to its slowest pace since February as increased trade in Asia, Africa, the Middle East and Latin America was offset by falling US and European imports, according to new data from Container Trades Statistics (CTS). Global volumes expanded 2.1% year over year in October, with volumes in the first 10 months up 4.4% compared with a year earlier, according to CTS. The softer global growth in October pulled the 12-month rolling average down to the lowest level in 20 months, according to Simon Heaney, senior manager of container research at Drewry. “Regional container trade growth in 2025 is increasingly asymmetric, with economies commonly grouped — albeit loosely — under the term ‘Global South’ pulling decisively ahead of their ‘Western’ counterparts,” Heaney said. Import volumes into North America in October fell 6.7% compared with October 2024, while exports from Asia to Europe fell on a year-over-year basis for the first time since February, dropping 3%, according to CTS. But the plunge in US imports has been the biggest drag on global container volumes. US import volumes are on track to end the year down 1.4% at 25.2 million TEUs , according to the Global Port Tracker released Monday. Moody’s Ratings on Nov. 18 warned that US import volumes in 2026 will be flat to down 2% from this year Comparably, shipowner association BIMCO forecasts that global container volumes will expand 2.5% to 3.5% next year, while volumes will end this year up 4.5% to 5.5% from 2024. There have been just two years in which US containerized import volumes have declined to the extent seen in recent months, analyst John McCown said last week on a Journal of Commerce webinar. The most recent was in the spring of 2020 when retailers and other importers slashed orders on fears that retail consumption would plunge in the early days of the pandemic, and the first was 2008–09 in the wake of the financial crisis, McCown said. “I think we’re looking at perhaps the worst performance year that I can recall, in 2026, in terms of volume growth,” McCown said. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Global container volume growth slows on US, EU declines

<div class="phx-topic abstract-wrapper">Until the whole container shipping industry improves its reliability, the scope for any form of premium/bonus for above-target performance is low, writes John McCauley. </div>

Until the whole container shipping industry improves its reliability, the scope for any form of premium/bonus for above-target performance is low, writes John McCauley.

<div class="phx-topic">We are a strange bunch, we logisticians. One of our self-designed millstones is our key definition of success, and it is always unattainable either at an individual or aggregate level. For container shipping, I refer to on-time arrival (OTA), although for other modes this is usually on-time delivery. We measure on-time arrival as a percentage, with the only feasible outcome to fail; the only question is by how much. Those odds aren’t acceptable outside of shipping. The analogy frequently used is patient operation success in a hospital. If a patient operation is successful 999 times out of 1,000, do we want to be the one that didn’t make it? But seriously, as pertains to container shipping, there are factors beyond the control of the carrier, including severe weather at ports and on the water and strikes and other labor disruptions. That means a 100% on-time arrival within 24 hours of schedule is unachievable on a volume and consistent basis. However, levels of 60% to 65% at the industry level, with no historical precedent for greater achievement nor likelihood of ever getting there, mean we are in a doom loop of trying, other than hoping, to make it better. This is despite <a href="https://www.joc.com/article/value-unlocked-by-gemini-will-clear-path-for-premium-charge-maersk-ceo-6111339">the admirable efforts of the Gemini Cooperation alliance</a> of Maersk and Hapag-Lloyd to achieve superior reliability. Which leads to my observations about the suggestions of a premium for higher reliability levels, and particularly that carriers would want to claw back some of the benefits of lower inventory costs for beneficial cargo owners (BCOs). <h3>A few obstacles </h3>Firstly, all BCOs will keep a mix of carriers (dual or multi-sourcing) for multiple reasons, including schedule, risk of losing space, price, etc., which means that while one carrier may achieve above-market reliability, their benefit to BCOs will be dragged down by the performance of their other choices in the industry. As an example, Carrier A achieves 90% reliability, Carrier B 60%. You have to program your planning systems for one, not multiple, delivery durations. Which do you choose? None are ideal, too long and you unnecessarily extend inventory carry, but if those same shipments arrive early, you need warehousing. Secondly, what about all the other problems caused by poor reliability? Stock-outs, air freight, extra staffing, warehousing and more. Focusing on inventory highlights a cash flow problem; many of the others are either opportunity costs (stock-outs, lost sales) or real costs (additional warehousing, staffing, sales contract non-compliance). I am not at all saying that container shipping is responsible for all of this, but it is an important contributor to the problem. Thirdly, any premium/bonus for above-target performance must surely have an offset for under-performance. And by this I don’t mean adjusted performance taking account of externalities. The non-performance must be explanation/excuse agnostic, meaning if the one-time arrival is not met, then this is a fail. In other modes of transport, this is the norm and why targets are never set at 100% even for best-in-class. Finally, I am all for improved reliability; most actors in container shipping share that view. How to get there is tricky and requires strategic intent. Many carriers will see it as unachievable and not worth the effort given the likelihood of high uncertainty of any reward other than some degree of customer stickiness. Until the whole industry improves its reliability, the scope for any form of premium/bonus for above-target performance is low. The only way I can see it working is to have a premium attached to index-linked contracts, and even then, that must be linked to performance against an agreed target level with penalties. Given the favorable buy-side economics in current contracting, this may be one for carriers to put on the backburner. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>. </div>

We are a strange bunch, we logisticians. One of our self-designed millstones is our key definition of success, and it is always unattainable either at an individual or aggregate level. For container shipping, I refer to on-time arrival (OTA), although for other modes this is usually on-time delivery. We measure on-time arrival as a percentage, with the only feasible outcome to fail; the only question is by how much. Those odds aren’t acceptable outside of shipping. The analogy frequently used is patient operation success in a hospital. If a patient operation is successful 999 times out of 1,000, do we want to be the one that didn’t make it? But seriously, as pertains to container shipping, there are factors beyond the control of the carrier, including severe weather at ports and on the water and strikes and other labor disruptions. That means a 100% on-time arrival within 24 hours of schedule is unachievable on a volume and consistent basis. However, levels of 60% to 65% at the industry level, with no historical precedent for greater achievement nor likelihood of ever getting there, mean we are in a doom loop of trying, other than hoping, to make it better. This is despite the admirable efforts of the Gemini Cooperation alliance of Maersk and Hapag-Lloyd to achieve superior reliability. Which leads to my observations about the suggestions of a premium for higher reliability levels, and particularly that carriers would want to claw back some of the benefits of lower inventory costs for beneficial cargo owners (BCOs). A few obstacles Firstly, all BCOs will keep a mix of carriers (dual or multi-sourcing) for multiple reasons, including schedule, risk of losing space, price, etc., which means that while one carrier may achieve above-market reliability, their benefit to BCOs will be dragged down by the performance of their other choices in the industry. As an example, Carrier A achieves 90% reliability, Carrier B 60%. You have to program your planning systems for one, not multiple, delivery durations. Which do you choose? None are ideal, too long and you unnecessarily extend inventory carry, but if those same shipments arrive early, you need warehousing. Secondly, what about all the other problems caused by poor reliability? Stock-outs, air freight, extra staffing, warehousing and more. Focusing on inventory highlights a cash flow problem; many of the others are either opportunity costs (stock-outs, lost sales) or real costs (additional warehousing, staffing, sales contract non-compliance). I am not at all saying that container shipping is responsible for all of this, but it is an important contributor to the problem. Thirdly, any premium/bonus for above-target performance must surely have an offset for under-performance. And by this I don’t mean adjusted performance taking account of externalities. The non-performance must be explanation/excuse agnostic, meaning if the one-time arrival is not met, then this is a fail. In other modes of transport, this is the norm and why targets are never set at 100% even for best-in-class. Finally, I am all for improved reliability; most actors in container shipping share that view. How to get there is tricky and requires strategic intent. Many carriers will see it as unachievable and not worth the effort given the likelihood of high uncertainty of any reward other than some degree of customer stickiness. Until the whole industry improves its reliability, the scope for any form of premium/bonus for above-target performance is low. The only way I can see it working is to have a premium attached to index-linked contracts, and even then, that must be linked to performance against an agreed target level with penalties. Given the favorable buy-side economics in current contracting, this may be one for carriers to put on the backburner. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Premium pricing linked to vessel schedule reliability faces rough waters

<div class="phx-topic abstract-wrapper">With the proposed Union Pacific-Norfolk Southern merger, the US rail industry finds itself facing a new future but the same historical set of challenges.</div>

With the proposed Union Pacific-Norfolk Southern merger, the US rail industry finds itself facing a new future but the same historical set of challenges.

<div class="phx-topic">Oct. 14 marked the 45th anniversary of President Jimmy Carter signing The Harley O. Staggers Rail Act of 1980, named for the chairman of the House Committee on Interstate and Foreign Commerce (today the Committee on Energy and Commerce). However, the real “heavy lifting” to get the bill passed was by Rep. Jim Florio, the New Jersey Democrat who chaired the House Subcommittee on Commerce, Transportation, and Tourism. The Association of American Railroads (AAR) frequently points out how, by 1980, the railroad industry was on the brink of collapse until Congress passed bipartisan legislation to partially deregulate the industry, thereby allowing market-driven pricing, customer-specific contracts and the ability to shed unprofitable routes. However, this neglects the tortured decade of the 1970s when Congress was repeatedly drawn into legislating railroad matters. It started with The Rail Passenger Service Act of 1970, creating Amtrak. This relieved private railroads from their losses operating passenger service. But it was not enough to save Penn Central, so Congress passed the Regional Rail Reorganization Act of 1973 (the “3R Act”) to salvage viable freight operations from Penn Central and other failing rail lines in the Northeast, mid-Atlantic and Midwest. It created the United States Railway Association (USRA) to develop a “Final System Plan” for the reorganization into a single entity — Conrail. Finally, The Railroad Revitalization and Regulatory Reform Act of 1976 (The “4R Act”) approved the Final System Plan, enabling Conrail to start operations on April 1, 1976. It provided what it thought was sufficient funding — an initial federal “investment” of $2.026 billion for Conrail to acquire the assets of bankrupt Northeast and Midwest railroads and get its operations started. This funding turned out to be insufficient. Conrail subsequently sought and received an additional $3 billion. However, by 1979, it had almost exhausted that amount. Under the leadership of a new CEO, L. Stanley Crane, Conrail claimed that it could succeed as a private entity if the rail marketplace was deregulated. <h3>Regulation intended to perpetuate monopolies </h3>Railroads had been operating under a regulated system since the Interstate Commerce Act of 1887. This legislation was an early initiative of the Progressive era and preceded other efforts at regulation, such as the Sherman Antitrust Act three years later. The Interstate Commerce Commission (ICC) became the model for rate-of-return regulation of public utilities. The microeconomic theory is that a monopoly business can be regulated by having the government control the prices charged by the market to a level equal to the efficient costs of production, plus a government-permitted rate of return on capital. This model became the norm for oversight of many asset-based, network-operating businesses such as communications, utilities, and other transportation modes. What is overlooked by many is that — by design — regulation was intended to perpetuate monopolies because it ensured that excess capacity would be available in the event of war or other national emergencies. The monopoly license was maintained through a series of operating authorities that determined which providers could serve which markets. Consumers paid more — but hopefully not too much more. This legislation was passed when railroads were the primary means of freight and passenger transportation. However, the subsequent development of the Interstate Highway System and air traffic changed that dominant position. Meanwhile, the onset of persistent stagflation during the 1970s encouraged deregulatory efforts in many regulated industries. The Airline Deregulation Act of 1978 was a predecessor. However, the Interstate Commerce Commission, under Chairman Dan O’Neal, had already taken initiatives, permitted by the 4R Act, to deregulate certain rail sectors, such as intermodal. <h3>Key components of Staggers Act </h3>The Staggers Act had three key components: Railroads were able to negotiate contracts with a customer at market-based rates; reduced regulatory oversight over mergers and abandonments was enacted; and a regulatory backstop was established to protect shippers lacking effective competition. These legislative efforts completely inverted the commercial process. Regulation was cost-based pricing. Shippers were price takers. Deregulation begat price-based costing. The market determined the competitive price, and the carrier needed to find a way to produce the service so as to be profitable. This was accomplished in numerous ways: Railroad mergers enabled increased economies of scale and reduced overhead; technology supported cost reductions (e.g., end of train devices replacing the caboose); significant amounts of the networks were spun off to short line operations; and a reduction in train crew size from five to two and extending crew districts reduced costs significantly. The final step of this reduction required Congressional help in 1991, with the imposition of Presidential Emergency Board 219. But downsizing could only do so much. Topline growth was necessary. Into this opportunity stepped intermodal. As international traffic grew with globalization, a large part of the volume growth came from ocean carriers. Traditional domestic customers increased their volume, and major new customers, such as J.B. Hunt, entered as well. It was a win-win situation for everyone. Railroads filled excess capacity, and intermodal customers enjoyed reliable and cost-effective service. Everything went well until the summer of 1993. The weather that summer caused terrible service problems. As an industry, we missed the wakeup call. We were too eager to attribute the problems to a fluke weather condition, not recognizing that capacity utilization was nearing maximum. Since then, the industry has been dealing with the challenge of increasing the top and bottom lines simultaneously. This has frequently proven elusive. The advent of activist investors has only raised the stakes. With the proposed Union Pacific-Norfolk Southern merger, the industry finds itself facing a new future but the same historical set of challenges. In retrospect, it is clear to see how we got here, but it is less clear where we are going. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

Oct. 14 marked the 45th anniversary of President Jimmy Carter signing The Harley O. Staggers Rail Act of 1980, named for the chairman of the House Committee on Interstate and Foreign Commerce (today the Committee on Energy and Commerce). However, the real “heavy lifting” to get the bill passed was by Rep. Jim Florio, the New Jersey Democrat who chaired the House Subcommittee on Commerce, Transportation, and Tourism. The Association of American Railroads (AAR) frequently points out how, by 1980, the railroad industry was on the brink of collapse until Congress passed bipartisan legislation to partially deregulate the industry, thereby allowing market-driven pricing, customer-specific contracts and the ability to shed unprofitable routes. However, this neglects the tortured decade of the 1970s when Congress was repeatedly drawn into legislating railroad matters. It started with The Rail Passenger Service Act of 1970, creating Amtrak. This relieved private railroads from their losses operating passenger service. But it was not enough to save Penn Central, so Congress passed the Regional Rail Reorganization Act of 1973 (the “3R Act”) to salvage viable freight operations from Penn Central and other failing rail lines in the Northeast, mid-Atlantic and Midwest. It created the United States Railway Association (USRA) to develop a “Final System Plan” for the reorganization into a single entity — Conrail. Finally, The Railroad Revitalization and Regulatory Reform Act of 1976 (The “4R Act”) approved the Final System Plan, enabling Conrail to start operations on April 1, 1976. It provided what it thought was sufficient funding — an initial federal “investment” of $2.026 billion for Conrail to acquire the assets of bankrupt Northeast and Midwest railroads and get its operations started. This funding turned out to be insufficient. Conrail subsequently sought and received an additional $3 billion. However, by 1979, it had almost exhausted that amount. Under the leadership of a new CEO, L. Stanley Crane, Conrail claimed that it could succeed as a private entity if the rail marketplace was deregulated. Regulation intended to perpetuate monopolies Railroads had been operating under a regulated system since the Interstate Commerce Act of 1887. This legislation was an early initiative of the Progressive era and preceded other efforts at regulation, such as the Sherman Antitrust Act three years later. The Interstate Commerce Commission (ICC) became the model for rate-of-return regulation of public utilities. The microeconomic theory is that a monopoly business can be regulated by having the government control the prices charged by the market to a level equal to the efficient costs of production, plus a government-permitted rate of return on capital. This model became the norm for oversight of many asset-based, network-operating businesses such as communications, utilities, and other transportation modes. What is overlooked by many is that — by design — regulation was intended to perpetuate monopolies because it ensured that excess capacity would be available in the event of war or other national emergencies. The monopoly license was maintained through a series of operating authorities that determined which providers could serve which markets. Consumers paid more — but hopefully not too much more. This legislation was passed when railroads were the primary means of freight and passenger transportation. However, the subsequent development of the Interstate Highway System and air traffic changed that dominant position. Meanwhile, the onset of persistent stagflation during the 1970s encouraged deregulatory efforts in many regulated industries. The Airline Deregulation Act of 1978 was a predecessor. However, the Interstate Commerce Commission, under Chairman Dan O’Neal, had already taken initiatives, permitted by the 4R Act, to deregulate certain rail sectors, such as intermodal. Key components of Staggers Act The Staggers Act had three key components: Railroads were able to negotiate contracts with a customer at market-based rates; reduced regulatory oversight over mergers and abandonments was enacted; and a regulatory backstop was established to protect shippers lacking effective competition. These legislative efforts completely inverted the commercial process. Regulation was cost-based pricing. Shippers were price takers. Deregulation begat price-based costing. The market determined the competitive price, and the carrier needed to find a way to produce the service so as to be profitable. This was accomplished in numerous ways: Railroad mergers enabled increased economies of scale and reduced overhead; technology supported cost reductions (e.g., end of train devices replacing the caboose); significant amounts of the networks were spun off to short line operations; and a reduction in train crew size from five to two and extending crew districts reduced costs significantly. The final step of this reduction required Congressional help in 1991, with the imposition of Presidential Emergency Board 219. But downsizing could only do so much. Topline growth was necessary. Into this opportunity stepped intermodal. As international traffic grew with globalization, a large part of the volume growth came from ocean carriers. Traditional domestic customers increased their volume, and major new customers, such as J.B. Hunt, entered as well. It was a win-win situation for everyone. Railroads filled excess capacity, and intermodal customers enjoyed reliable and cost-effective service. Everything went well until the summer of 1993. The weather that summer caused terrible service problems. As an industry, we missed the wakeup call. We were too eager to attribute the problems to a fluke weather condition, not recognizing that capacity utilization was nearing maximum. Since then, the industry has been dealing with the challenge of increasing the top and bottom lines simultaneously. This has frequently proven elusive. The advent of activist investors has only raised the stakes. With the proposed Union Pacific-Norfolk Southern merger, the industry finds itself facing a new future but the same historical set of challenges. In retrospect, it is clear to see how we got here, but it is less clear where we are going. Contact Ted Prince at ted@tricitiesintermodal.com .

A look back at the ‘Staggers Act’ and where the US rail industry is today

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Global container volumes (CTS)

CTS Global TEU volumes (Monthly) Gateway

<div class="phx-topic abstract-wrapper">A group of Zim employees is said to object to a deal with Hapag-Lloyd due to the significant ownership stakes that the sovereign wealth funds of Saudi Arabia and Qatar have in the Hamburg-based carrier.</div>

A group of Zim employees is said to object to a deal with Hapag-Lloyd due to the significant ownership stakes that the sovereign wealth funds of Saudi Arabia and Qatar have in the Hamburg-based carrier.

<div class="phx-topic">Zim Integrated Shipping Services is reportedly fielding offers from other ocean carriers for a buyout, but the Israeli government’s stake in Zim and the partial Arabic state ownership of one potential suitor are complicating a possible deal. Israeli business newspaper Globes <a href="https://en.globes.co.il/en/article-hapag-lloyd-bids-for-zim-1001528325">reported Wednesday</a> that Zim received a buyout offer from Hapag-Lloyd as part of <a href="https://www.joc.com/article/zim-says-reviewing-buyout-offers-including-one-from-ceo-6123362">the strategic review its board of directors is undertaking</a>. Zim’s board is considering offers to sell the company, including one from its own Chief Executive Eli Glickman. A group of Zim employees is said to object to a deal with Hapag-Lloyd due to the significant ownership stakes that the sovereign wealth funds of Saudi Arabia and Qatar have in the Hamburg-based carrier, Globes reported. The two funds own a combined 22% of Hapag-Lloyd after its 2016 acquisition of United Arab Shipping Company. A Hapag-Lloyd spokesperson, asked to comment on the Globes report, told the Journal of Commerce, “We do not comment on market rumors.” Zim could not be reached for comment. Globes reported that Mediterranean Shipping Co. and Maersk have also expressed interest in Zim. A US-based Zim executive told the Journal of Commerce a deal with Hapag-Lloyd has about a “zero percent chance of happening” due to the Saudi and Qatari ownership stakes. “I believe with their ownership structure it makes such a relationship impossible,” said the executive, who did not want to be identified. “I don’t think anything other than Eli buying the company is likely.” Zim’s own governance structure complicates any potential deal. As part of the carrier’s privatization in 2004, Israel was granted a “special share” in the company that ensures the government can access Zim’s fleet in an emergency. The government, due to the special share, also “imposes certain limitations on our operating and managing activities,” Zim said in its last annual report. Those limitations include government approval for any merger or sale transaction, a requirement that the majority of Zim’s directors and its chief executive be Israeli citizens, and that the carrier remains incorporated in Israel. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Zim Integrated Shipping Services is reportedly fielding offers from other ocean carriers for a buyout, but the Israeli government’s stake in Zim and the partial Arabic state ownership of one potential suitor are complicating a possible deal. Israeli business newspaper Globes reported Wednesday that Zim received a buyout offer from Hapag-Lloyd as part of the strategic review its board of directors is undertaking . Zim’s board is considering offers to sell the company, including one from its own Chief Executive Eli Glickman. A group of Zim employees is said to object to a deal with Hapag-Lloyd due to the significant ownership stakes that the sovereign wealth funds of Saudi Arabia and Qatar have in the Hamburg-based carrier, Globes reported. The two funds own a combined 22% of Hapag-Lloyd after its 2016 acquisition of United Arab Shipping Company. A Hapag-Lloyd spokesperson, asked to comment on the Globes report, told the Journal of Commerce, “We do not comment on market rumors.” Zim could not be reached for comment. Globes reported that Mediterranean Shipping Co. and Maersk have also expressed interest in Zim. A US-based Zim executive told the Journal of Commerce a deal with Hapag-Lloyd has about a “zero percent chance of happening” due to the Saudi and Qatari ownership stakes. “I believe with their ownership structure it makes such a relationship impossible,” said the executive, who did not want to be identified. “I don’t think anything other than Eli buying the company is likely.” Zim’s own governance structure complicates any potential deal. As part of the carrier’s privatization in 2004, Israel was granted a “special share” in the company that ensures the government can access Zim’s fleet in an emergency. The government, due to the special share, also “imposes certain limitations on our operating and managing activities,” Zim said in its last annual report. Those limitations include government approval for any merger or sale transaction, a requirement that the majority of Zim’s directors and its chief executive be Israeli citizens, and that the carrier remains incorporated in Israel. Contact Michael Angell at michael.angell@spglobal.com .

Hapag-Lloyd buyout offer for Zim unlikely to get far: report

<div class="phx-topic abstract-wrapper">Despite lower volumes and elevated capacity, carriers have managed to keep rates at acceptable levels of late in part by favoring shorter, more frequent general rate increases. </div>

Despite lower volumes and elevated capacity, carriers have managed to keep rates at acceptable levels of late in part by favoring shorter, more frequent general rate increases.

<div class="phx-topic">Container lines over the past two months have been able to keep spot rates from crashing in the eastbound trans-Pacific despite US imports from Asia falling and while they deployed significantly more tonnage in the same period. But that high-wire act will become increasingly precarious over the next two months. Import volume declines are expected to accelerate over the next 60 days as forwarders bemoan a deep lull in new bookings due to shipper uncertainty. Yet carriers plan to keep capacity elevated, with tonnage from Asia to the US West Coast set to rise almost 13% year over year in January to hit what would be close to a 37-month high, according to data from Xeneta’s eeSea. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6127952_0.1.jpg"></img></div>The additional tonnage comes ahead of Lunar New Year in mid-February, but forwarders are skeptical that the historical shipping rush before Chinese factories slow or halt production for the celebrations will have much oomph. Ocean tonnage from Asia to the US East and Gulf coasts is set to hit a two-year high in January, up 14% from a year ago, according to eeSea. The spot rate from China to the US West Coast hit its 2025 low point on Oct. 3 at $1,300 per FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. In the two months since, carriers have been able to hold that line, with the rate bouncing as high as $2,220 in early November before retreating. It was at $1,500 per FEU as of Tuesday. Carriers have been able to avoid a sub-$1,300 market by resisting old urges to slash freight-all-kinds (FAK) rates. Instead, carriers have watched prices drift down and then reacted by adding some pep via general rate increases (GRIs) that were just successful enough to keep spot and FAK rates from collapsing. At the same time, liners have been protecting their individual market shares by offering so-called bullet rates to non-vessel-operating common carriers (NVOs). <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e5c8a2a0-9aa5-4787-bbed-bf4b7a9f9677"></dynamic-object></div>Rather than announcing a large $1,000 GRI on the first and 15th of each month, only to see the rate deteriorate within days, some carriers are coming in with smaller, rapid-fire GRIs almost weekly. They are able to do that under filing requirements of the Federal Maritime Commission (FMC). The FMC requires that carriers file a GRI with 30-day advance notice when attempting to raise spot rates. However, when dropping the intended GRI, the lower rate takes effect immediately upon filing, several forwarders said. For example, one alliance carrier that had filed for a large GRI effective Dec. 1 informed customers through its rate sheet of the following staggered schedule of smaller increases: Dec. 1, a $200 GRI to raise the spot rate to $1,900 per FEU to the West Coast, expiring Dec. 7; a second $200 GRI on Dec. 8, raising the rate to $2,100, expiring Dec. 14; another $200 GRI on Dec. 15, expiring Dec. 25, that raises the spot rate to $2,300. In that way, the carrier did not attempt to implement the $1,000 GRI that was supposed to take effect on Dec. 1, but rather is attempting to secure a series of $200 GRIs through the end of the month. “It’s crazy,” a carrier executive told the Journal of Commerce Tuesday. “It used to be a GRI every two weeks. Now [some carriers] are taking a week-to-week approach.” Trans-Pacific container lines are “conflicted,” the carrier source said. As a group, they want to minimize pricing damage in the current soft market, which many industry sources are forecasting will last into early 2026. But at the same time, they don’t want to individually lose market share, he said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8c13a3e-9f5a-412f-8741-adbf5e1a7779"></dynamic-object></div>Most carriers, be they alliance members or independents, continue to post GRIs twice each month, while at the same time they are offering discounted, or bullet, rates several hundred dollars lower on the same trade lanes. The bullet rates, also known as special commodity rates or voyage-specific rates, are available primarily for carriers’ largest customers, a forwarder told the Journal of Commerce. For example, while the posted spot/FAK rate from China to the West Coast on Tuesday was $1,500 per FEU, according to Platts, a forwarder told the Journal of Commerce, “I’ve got bullet rates of $1,350.” While carriers generally reserve bullet rates for their larger forwarder customers, there is a way around that barrier as well. A number of smaller forwarders participate in co-loading arrangements with a master co-loader, so they also have access to the lowest bullet rates. “We have co-loader rates that every day defy the GRIs,” said Ben Coleman, president of the forwarder Teampower Logistics. “We get far better rates from co-loaders than the posted rates.” The need for carriers to keep some semblance of a pricing floor will become increasingly urgent as trans-Pacific service contract negotiations intensify though the winter. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Executive Editor Mark Szakonyi contributed to this report. </div>

Container lines over the past two months have been able to keep spot rates from crashing in the eastbound trans-Pacific despite US imports from Asia falling and while they deployed significantly more tonnage in the same period. But that high-wire act will become increasingly precarious over the next two months. Import volume declines are expected to accelerate over the next 60 days as forwarders bemoan a deep lull in new bookings due to shipper uncertainty. Yet carriers plan to keep capacity elevated, with tonnage from Asia to the US West Coast set to rise almost 13% year over year in January to hit what would be close to a 37-month high, according to data from Xeneta’s eeSea. The additional tonnage comes ahead of Lunar New Year in mid-February, but forwarders are skeptical that the historical shipping rush before Chinese factories slow or halt production for the celebrations will have much oomph. Ocean tonnage from Asia to the US East and Gulf coasts is set to hit a two-year high in January, up 14% from a year ago, according to eeSea. The spot rate from China to the US West Coast hit its 2025 low point on Oct. 3 at $1,300 per FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global. In the two months since, carriers have been able to hold that line, with the rate bouncing as high as $2,220 in early November before retreating. It was at $1,500 per FEU as of Tuesday. Carriers have been able to avoid a sub-$1,300 market by resisting old urges to slash freight-all-kinds (FAK) rates. Instead, carriers have watched prices drift down and then reacted by adding some pep via general rate increases (GRIs) that were just successful enough to keep spot and FAK rates from collapsing. At the same time, liners have been protecting their individual market shares by offering so-called bullet rates to non-vessel-operating common carriers (NVOs). Rather than announcing a large $1,000 GRI on the first and 15th of each month, only to see the rate deteriorate within days, some carriers are coming in with smaller, rapid-fire GRIs almost weekly. They are able to do that under filing requirements of the Federal Maritime Commission (FMC). The FMC requires that carriers file a GRI with 30-day advance notice when attempting to raise spot rates. However, when dropping the intended GRI, the lower rate takes effect immediately upon filing, several forwarders said. For example, one alliance carrier that had filed for a large GRI effective Dec. 1 informed customers through its rate sheet of the following staggered schedule of smaller increases: Dec. 1, a $200 GRI to raise the spot rate to $1,900 per FEU to the West Coast, expiring Dec. 7; a second $200 GRI on Dec. 8, raising the rate to $2,100, expiring Dec. 14; another $200 GRI on Dec. 15, expiring Dec. 25, that raises the spot rate to $2,300. In that way, the carrier did not attempt to implement the $1,000 GRI that was supposed to take effect on Dec. 1, but rather is attempting to secure a series of $200 GRIs through the end of the month. “It’s crazy,” a carrier executive told the Journal of Commerce Tuesday. “It used to be a GRI every two weeks. Now [some carriers] are taking a week-to-week approach.” Trans-Pacific container lines are “conflicted,” the carrier source said. As a group, they want to minimize pricing damage in the current soft market, which many industry sources are forecasting will last into early 2026. But at the same time, they don’t want to individually lose market share, he said. Most carriers, be they alliance members or independents, continue to post GRIs twice each month, while at the same time they are offering discounted, or bullet, rates several hundred dollars lower on the same trade lanes. The bullet rates, also known as special commodity rates or voyage-specific rates, are available primarily for carriers’ largest customers, a forwarder told the Journal of Commerce. For example, while the posted spot/FAK rate from China to the West Coast on Tuesday was $1,500 per FEU, according to Platts, a forwarder told the Journal of Commerce, “I’ve got bullet rates of $1,350.” While carriers generally reserve bullet rates for their larger forwarder customers, there is a way around that barrier as well. A number of smaller forwarders participate in co-loading arrangements with a master co-loader, so they also have access to the lowest bullet rates. “We have co-loader rates that every day defy the GRIs,” said Ben Coleman, president of the forwarder Teampower Logistics. “We get far better rates from co-loaders than the posted rates.” The need for carriers to keep some semblance of a pricing floor will become increasingly urgent as trans-Pacific service contract negotiations intensify though the winter. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Executive Editor Mark Szakonyi contributed to this report.

Trans-Pacific

Trans-Pacific carriers tweak pricing strategy to keep rates from collapsing

<div class="phx-topic abstract-wrapper">Forwarders are bemoaning pricing changes WiseTech made this week to its CargoWise products, saying their technology costs will rise markedly because shippers will be unwilling to accept the pass-through costs. </div>

Forwarders are bemoaning pricing changes WiseTech made this week to its CargoWise products, saying their technology costs will rise markedly because shippers will be unwilling to accept the pass-through costs.

<div class="phx-topic">WiseTech Global this week unveiled a pricing model change to the forwarding industry’s most widely used software platform, triggering sharp backlash from customers who say the move will raise their costs between 20% and 50%. The change implemented on Monday by WiseTech is stirring market debate about pricing transparency and whether technology costs incurred by third-party logistics providers (3PLs) can be passed on to shippers. The new pricing model, called Value Pack Community Pricing, is for WiseTech’s flagship CargoWise set of products. The logistics software provider said the change is meant to simplify pricing for its customers and drive broader use of its other products. WiseTech CEO Zubin Appoo told the Journal of Commerce the shift is “not a pricing change, but a totally different commercial model.” The old pricing model was based on the number of users within a customer, with additional fees charged for certain features and set fees associated with cloud hosting and other infrastructure costs. The new model rolls all those fees into a single transaction cost based on the type of activity a forwarder chooses. For instance, management of a full import container with an associated inland leg would cost $19.95; a standalone import customs entry would cost $9.95. WiseTech’s intent is to get forwarders to use more of the products the company has developed and to help forwarders defray the cost of those products by passing the cost on to shippers. <h3>Forwarders see their costs rising </h3>But a variety of forwarders say the pricing change will increase their costs significantly — by 20% on the low end and 50% or more on the high end. That would, by default, cut their margins unless they are able to pass those additional costs on to customers. Most forwarders who spoke with the Journal of Commerce were skeptical that shippers would accept a technology line item on an invoice from a forwarder, especially in a competitive market where shippers can easily shop around for better rates. There was also unease at the rollout itself, with some US forwarders bemoaning the change happening over the Thanksgiving holiday weekend, and others suggesting that WiseTech should have made the shift on Jan. 1 so that accounting for the 2025 calendar year would have been more straightforward. One forwarder said the change this late in the year would affect its forecast costs for technology made at the start of the year. The forwarder generally projects a 10% increase annually for its cost of using CargoWise but expects the pricing change made Monday will drive its costs up between 25% and 35%. WiseTech announced to customers on Oct. 31 that the pricing change would go into effect Dec. 1, but some customers were still caught unaware. One forwarder described the rollout as “bananas.” “Everyone I know opened a ticket [with WiseTech] and got a response saying, ‘we’ll let you know when we release the new pricing,’” said another forwarder source. “Then we got the pricing information on Wednesday, and the upgrades got pushed Thursday.” Appoo, in a memo to customers Monday, said WiseTech would be pushing upgrades and patches in real time. <h3>CEO expects gradual acceptance </h3>WiseTech’s CEO said the pass-through costs would take time to be accepted in an industry that is generally reluctant to change but would eventually be thought of in the same vein as other costs that forwarders make on behalf of their customers and later recover. “The industry we work in operates in a disbursement model,” Appoo said. “There are customs fees, gate fees, port fees that 3PLs incur on behalf of the customer, and some are absorbed by the forwarder,” he said. “Standalone jobs [in the Value Pack pricing bundles] are $2 to $20. We’re talking a small number, a 0.1% charge added to customers and one of the smallest, if not the smallest, disbursements to the customer.” Appoo added that giving all its customers the ability to pass on technology costs to customers democratizes access to CargoWise because smaller players won’t experience the pricing “friction” of paying per seat, while larger customers will be able to scale WiseTech’s investments in artificial intelligence (AI) in a way smaller players might not. Another undercurrent at play is WiseTech’s ongoing deployment of AI to automate a range of individual processes and connected workflows within CargoWise, a development occurring amid broader use of AI across the forwarding industry. Appoo contends that AI will change the size of the workforce using CargoWise across its customers, and the old pricing model didn’t reflect the investment the technology provider devotes annually to maintaining and upgrading its product. That includes the development of AI agents to help CargoWise users get more value from their investment in the product. “We see how rapidly AI has progressed,” Appoo said. “It will cause labor reduction over the next year. That’s the more urgent motivation.” Still, industry participants are skeptical about the changes. “You’re introducing fees to a price-sensitive market that doesn’t have a track record for paying this fee,” said Robert Petti, CEO of logistics technology provider Prompt Global and a former CargoWise service partner. “Automatically there is going to be reluctance because of that. People are looking to ship for the lowest possible price. This [cost] will likely be eaten by forwarders. The choice of using CargoWise is the forwarder’s, not the [beneficial cargo owner’s].” The CEO of another logistics technology provider who did not want to be identified said the WiseTech change is the equivalent of going “to Taco Bell and they charge me a fee for their use of SAP.” “Every dollar counts for a forwarder’s bottom line,” said a third logistics technology provider CEO. Appoo is confident the industry will adapt, and learn to appreciate, WiseTech’s new model. “We have, over time, introduced things that customers haven’t necessarily asked for, and over time they see the value,” he said. “We’re not just a software vendor, we’re the operating system that runs their supply chain, the partner that makes sure they’re compliant, and the solution that gives them levels of efficiency they wouldn’t have access to before.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

WiseTech Global this week unveiled a pricing model change to the forwarding industry’s most widely used software platform, triggering sharp backlash from customers who say the move will raise their costs between 20% and 50%. The change implemented on Monday by WiseTech is stirring market debate about pricing transparency and whether technology costs incurred by third-party logistics providers (3PLs) can be passed on to shippers. The new pricing model, called Value Pack Community Pricing, is for WiseTech’s flagship CargoWise set of products. The logistics software provider said the change is meant to simplify pricing for its customers and drive broader use of its other products. WiseTech CEO Zubin Appoo told the Journal of Commerce the shift is “not a pricing change, but a totally different commercial model.” The old pricing model was based on the number of users within a customer, with additional fees charged for certain features and set fees associated with cloud hosting and other infrastructure costs. The new model rolls all those fees into a single transaction cost based on the type of activity a forwarder chooses. For instance, management of a full import container with an associated inland leg would cost $19.95; a standalone import customs entry would cost $9.95. WiseTech’s intent is to get forwarders to use more of the products the company has developed and to help forwarders defray the cost of those products by passing the cost on to shippers. Forwarders see their costs rising But a variety of forwarders say the pricing change will increase their costs significantly — by 20% on the low end and 50% or more on the high end. That would, by default, cut their margins unless they are able to pass those additional costs on to customers. Most forwarders who spoke with the Journal of Commerce were skeptical that shippers would accept a technology line item on an invoice from a forwarder, especially in a competitive market where shippers can easily shop around for better rates. There was also unease at the rollout itself, with some US forwarders bemoaning the change happening over the Thanksgiving holiday weekend, and others suggesting that WiseTech should have made the shift on Jan. 1 so that accounting for the 2025 calendar year would have been more straightforward. One forwarder said the change this late in the year would affect its forecast costs for technology made at the start of the year. The forwarder generally projects a 10% increase annually for its cost of using CargoWise but expects the pricing change made Monday will drive its costs up between 25% and 35%. WiseTech announced to customers on Oct. 31 that the pricing change would go into effect Dec. 1, but some customers were still caught unaware. One forwarder described the rollout as “bananas.” “Everyone I know opened a ticket [with WiseTech] and got a response saying, ‘we’ll let you know when we release the new pricing,’” said another forwarder source. “Then we got the pricing information on Wednesday, and the upgrades got pushed Thursday.” Appoo, in a memo to customers Monday, said WiseTech would be pushing upgrades and patches in real time. CEO expects gradual acceptance WiseTech’s CEO said the pass-through costs would take time to be accepted in an industry that is generally reluctant to change but would eventually be thought of in the same vein as other costs that forwarders make on behalf of their customers and later recover. “The industry we work in operates in a disbursement model,” Appoo said. “There are customs fees, gate fees, port fees that 3PLs incur on behalf of the customer, and some are absorbed by the forwarder,” he said. “Standalone jobs [in the Value Pack pricing bundles] are $2 to $20. We’re talking a small number, a 0.1% charge added to customers and one of the smallest, if not the smallest, disbursements to the customer.” Appoo added that giving all its customers the ability to pass on technology costs to customers democratizes access to CargoWise because smaller players won’t experience the pricing “friction” of paying per seat, while larger customers will be able to scale WiseTech’s investments in artificial intelligence (AI) in a way smaller players might not. Another undercurrent at play is WiseTech’s ongoing deployment of AI to automate a range of individual processes and connected workflows within CargoWise, a development occurring amid broader use of AI across the forwarding industry. Appoo contends that AI will change the size of the workforce using CargoWise across its customers, and the old pricing model didn’t reflect the investment the technology provider devotes annually to maintaining and upgrading its product. That includes the development of AI agents to help CargoWise users get more value from their investment in the product. “We see how rapidly AI has progressed,” Appoo said. “It will cause labor reduction over the next year. That’s the more urgent motivation.” Still, industry participants are skeptical about the changes. “You’re introducing fees to a price-sensitive market that doesn’t have a track record for paying this fee,” said Robert Petti, CEO of logistics technology provider Prompt Global and a former CargoWise service partner. “Automatically there is going to be reluctance because of that. People are looking to ship for the lowest possible price. This [cost] will likely be eaten by forwarders. The choice of using CargoWise is the forwarder’s, not the [beneficial cargo owner’s].” The CEO of another logistics technology provider who did not want to be identified said the WiseTech change is the equivalent of going “to Taco Bell and they charge me a fee for their use of SAP.” “Every dollar counts for a forwarder’s bottom line,” said a third logistics technology provider CEO. Appoo is confident the industry will adapt, and learn to appreciate, WiseTech’s new model. “We have, over time, introduced things that customers haven’t necessarily asked for, and over time they see the value,” he said. “We’re not just a software vendor, we’re the operating system that runs their supply chain, the partner that makes sure they’re compliant, and the solution that gives them levels of efficiency they wouldn’t have access to before.” Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Supply chain

WiseTech pricing change tests shippers’ willingness to absorb tech costs

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">Jim Vena blamed the delay on a contractor that must revise material that will be included in what will be a nearly 4,000-page filing to federal regulators.</div>

Jim Vena blamed the delay on a contractor that must revise material that will be included in what will be a nearly 4,000-page filing to federal regulators.

<div class="phx-topic">Union Pacific Railroad (UP) said Tuesday it will delay by two more weeks the filing of its application with the US Surface Transportation Board (STB) requesting formal approval for its proposed $85 billion acquisition of Norfolk Southern Railway (NS). UP CEO Jim Vena blamed the delay on a contractor that must revise material that will be included in what will be a nearly 4,000-page filing to federal regulators. The railroad had previously said it was targeting the first week of December to submit the formal application to the STB. “I was hoping [to file] at the end of this week [and] then we had one contractor that needed to do some re-work on some product,” Vena said at the UBS Global Industrials and Transportation Conference. “Am I happy? No ... [But] we want to make sure that the final [submission] is at a level that is exceptional.” Railroads often hire outside firms during complicated merger processes to provide economic analysis, financial modeling, and projections on questions such as how many trucks would be taken off highways. Consultants are also paid to field questions about their calculations during the application process. S&amp;P Global, the parent company of the Journal of Commerce, was among the firms hired to provide analysis during Canadian Pacific’s acquisition of Kansas City Southern Railway, which was finalized in 2023. Although the UP delay is minor, it likely eliminates any chance of a decision from the STB before the end of 2026. More realistically, a ruling is now expected in the first half of 2027. Regulators for the first time will be applying stricter rules enacted more than two decades ago to guide a deal of this size because the transaction qualifies as a “major” merger. The STB requires not only that Union Pacific and Norfolk Southern show that the deal will not reduce competition, but that it will actually enhance competition — i.e. that the combined railroad must improve the competitive landscape in the US. <h3>Competition heating up against UP </h3>Meanwhile, pressure around UP’s application is building as more companies weigh in on the proposed transaction. Canadian Pacific Kansas City (CPKC) CEO Keith Creel, speaking Tuesday at the same UBS conference as Vena, had sharp words for the deal. Creel said that while he does not “lose any sleep” over whether the deal is approved or rejected, he believes further consolidation of the industry leaves the supply chain more vulnerable. He compared the rail landscape to four airlines serving Chicago’s O’Hare and Midway airports — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. “Think about a world where there’s only two railroads or two airlines. If there was only United and Delta, do you think they’d be operating Midway and be operating O’Hare?” Creel said. “The likelihood is they go to O’Hare because that’s the workhorse. And then if O’Hare breaks, what do you do? You’ve got a nation that’s in gridlock. It’s the same for the railroad.”Creel acknowledged there is minimal overlap between CPKC and a combined UP-NS, noting that only about 5% of CPKC’s volume touches Norfolk Southern. Even so, he said CPKC will seek concessions from Union Pacific during the application process to demonstrate a pro-competition posture. Those concessions, Creel said, would include better access around Houston, which is critical for CPKC’s Mexico Midwest Express intermodal service to Chicago but depends on a stretch of track owned by Union Pacific. “What I’m going to ask for is a means to ensure that anticompetitive behavior is held at bay,” Creel said. “I know Jim [Vena]. I trust Jim, but Jim is not going to be [at Union Pacific] forever. But this decision is forever.” BNSF Railway last Friday filed a petition with the STB calling for an immediate investigation into whether Union Pacific has exhibited a pattern of anticompetitive and harmful conduct since Union Pacific and Southern Pacific merged in 1996. If the STB agreed to review the implementation of merger conditions issued nearly 30 years ago before ruling on the UP-NS merger, it would almost certainly delay the approval process. How long that might take is unclear, because there is no direct precedent. On Monday, the National Association of Waterfront Employers (NAWE) <a href="https://www.joc.com/article/ports-urge-strict-review-of-intermodal-impacts-from-up-ns-merger-6126527">sent a letter</a> to the STB expressing serious concerns about the impact of the UP-NS deal on international intermodal and on-dock rail in US ports. NAWE, whose members represent more than 90% of US marine terminal operators, warned that consolidation could reduce on-dock rail options and result in fewer choices for international intermodal flows into the US interior. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Union Pacific Railroad (UP) said Tuesday it will delay by two more weeks the filing of its application with the US Surface Transportation Board (STB) requesting formal approval for its proposed $85 billion acquisition of Norfolk Southern Railway (NS). UP CEO Jim Vena blamed the delay on a contractor that must revise material that will be included in what will be a nearly 4,000-page filing to federal regulators. The railroad had previously said it was targeting the first week of December to submit the formal application to the STB. “I was hoping [to file] at the end of this week [and] then we had one contractor that needed to do some re-work on some product,” Vena said at the UBS Global Industrials and Transportation Conference. “Am I happy? No ... [But] we want to make sure that the final [submission] is at a level that is exceptional.” Railroads often hire outside firms during complicated merger processes to provide economic analysis, financial modeling, and projections on questions such as how many trucks would be taken off highways. Consultants are also paid to field questions about their calculations during the application process. S&P Global, the parent company of the Journal of Commerce, was among the firms hired to provide analysis during Canadian Pacific’s acquisition of Kansas City Southern Railway, which was finalized in 2023. Although the UP delay is minor, it likely eliminates any chance of a decision from the STB before the end of 2026. More realistically, a ruling is now expected in the first half of 2027. Regulators for the first time will be applying stricter rules enacted more than two decades ago to guide a deal of this size because the transaction qualifies as a “major” merger. The STB requires not only that Union Pacific and Norfolk Southern show that the deal will not reduce competition, but that it will actually enhance competition — i.e. that the combined railroad must improve the competitive landscape in the US. Competition heating up against UP Meanwhile, pressure around UP’s application is building as more companies weigh in on the proposed transaction. Canadian Pacific Kansas City (CPKC) CEO Keith Creel, speaking Tuesday at the same UBS conference as Vena, had sharp words for the deal. Creel said that while he does not “lose any sleep” over whether the deal is approved or rejected, he believes further consolidation of the industry leaves the supply chain more vulnerable. He compared the rail landscape to four airlines serving Chicago’s O’Hare and Midway airports — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. “Think about a world where there’s only two railroads or two airlines. If there was only United and Delta, do you think they’d be operating Midway and be operating O’Hare?” Creel said. “The likelihood is they go to O’Hare because that’s the workhorse. And then if O’Hare breaks, what do you do? You’ve got a nation that’s in gridlock. It’s the same for the railroad.” Creel acknowledged there is minimal overlap between CPKC and a combined UP-NS, noting that only about 5% of CPKC’s volume touches Norfolk Southern. Even so, he said CPKC will seek concessions from Union Pacific during the application process to demonstrate a pro-competition posture. Those concessions, Creel said, would include better access around Houston, which is critical for CPKC’s Mexico Midwest Express intermodal service to Chicago but depends on a stretch of track owned by Union Pacific. “What I’m going to ask for is a means to ensure that anticompetitive behavior is held at bay,” Creel said. “I know Jim [Vena]. I trust Jim, but Jim is not going to be [at Union Pacific] forever. But this decision is forever.” BNSF Railway last Friday filed a petition with the STB calling for an immediate investigation into whether Union Pacific has exhibited a pattern of anticompetitive and harmful conduct since Union Pacific and Southern Pacific merged in 1996. If the STB agreed to review the implementation of merger conditions issued nearly 30 years ago before ruling on the UP-NS merger, it would almost certainly delay the approval process. How long that might take is unclear, because there is no direct precedent. On Monday, the National Association of Waterfront Employers (NAWE) sent a letter to the STB expressing serious concerns about the impact of the UP-NS deal on international intermodal and on-dock rail in US ports. NAWE, whose members represent more than 90% of US marine terminal operators, warned that consolidation could reduce on-dock rail options and result in fewer choices for international intermodal flows into the US interior. Contact Ari Ashe at ari.ashe@spglobal.com .

UP CEO says NS merger filing with US regulators to be delayed two weeks

<div class="phx-topic abstract-wrapper">The Transportation Intermediaries Association launched a hotline that its members can use to report suspected occurrences of cargo fraud and theft, regardless of the dollar value involved. </div>

The Transportation Intermediaries Association launched a hotline that its members can use to report suspected occurrences of cargo fraud and theft, regardless of the dollar value involved.

<div class="phx-topic">The Transportation Intermediaries Association (TIA) has established a partnership with the Federal Bureau of Investigation to aggregate truckload cargo theft and fraud incident information from its nearly 2,000 members. TIA this week launched a hotline that its members — freight brokers and other domestic intermediaries — can use to report suspected occurrences of cargo fraud and theft, regardless of the dollar value involved. The hotline is meant to give members a direct channel to report incidents in situations where a broker doesn’t know whom to contact at a local, state or federal level. TIA President and CEO Chris Burroughs told the Journal of Commerce Thursday that the association has long worked with the six-person cargo theft team at the FBI’s Philadelphia field office to combat theft and fraud. But after discovering that members lacked clarity about where to turn, TIA leadership decided it could take a role in aggregating incident report data on behalf of federal law enforcement. “We get calls on a daily basis from members with situations,” Burroughs said. “We’re not going to have 2,000 companies calling [the FBI field office]. Let us be the intermediary for that information.” TIA will use the hotline to field calls and gather 15 data points the FBI told TIA it needs to build cases against alleged criminal actors. Burroughs emphasized that an incident need not rise to a specific dollar amount to be reported to the hotline, a common roadblock that prevents brokers, carriers and shippers from reporting suspected theft or fraud. “The FBI is building a RICO [Racketeer Influenced and Corrupt Organizations] case, and so they don’t care about the dollar amount,” he said. “In aggregate, it’s billions of dollars.” <h3>Combating a rising threat </h3>The FBI’s cargo theft information website lists data-sharing platforms CargoNet and the Transported Asset Protection Association (TAPA) as partners in its battle against rising levels of fraud, much of which is coordinated by entities outside the US. Private sector freight marketplaces, notably DAT Freight &amp; Analytics and Truckstop.com, have made it a recent priority to eliminate fraud and theft facilitated on their platforms. And software providers built to vet truckload carriers, such as Highway, have focused intently on the issue. In addition, brokers and shippers can use risk management tools, such as Overhaul, to identify theft and report it directly to law enforcement. Burroughs said the broad threat of lost freight has hurt brokers as a whole, with shippers on their advisory board saying as much. Some shippers have told the Journal of Commerce that they are avoiding the use of brokers until the fraud and theft problems are under control. “We see this as a huge threat, which is why we’re spending so much time on this,” Burroughs said. “This is something keeping us up at night.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

The Transportation Intermediaries Association (TIA) has established a partnership with the Federal Bureau of Investigation to aggregate truckload cargo theft and fraud incident information from its nearly 2,000 members. TIA this week launched a hotline that its members — freight brokers and other domestic intermediaries — can use to report suspected occurrences of cargo fraud and theft, regardless of the dollar value involved. The hotline is meant to give members a direct channel to report incidents in situations where a broker doesn’t know whom to contact at a local, state or federal level. TIA President and CEO Chris Burroughs told the Journal of Commerce Thursday that the association has long worked with the six-person cargo theft team at the FBI’s Philadelphia field office to combat theft and fraud. But after discovering that members lacked clarity about where to turn, TIA leadership decided it could take a role in aggregating incident report data on behalf of federal law enforcement. “We get calls on a daily basis from members with situations,” Burroughs said. “We’re not going to have 2,000 companies calling [the FBI field office]. Let us be the intermediary for that information.” TIA will use the hotline to field calls and gather 15 data points the FBI told TIA it needs to build cases against alleged criminal actors. Burroughs emphasized that an incident need not rise to a specific dollar amount to be reported to the hotline, a common roadblock that prevents brokers, carriers and shippers from reporting suspected theft or fraud. “The FBI is building a RICO [Racketeer Influenced and Corrupt Organizations] case, and so they don’t care about the dollar amount,” he said. “In aggregate, it’s billions of dollars.” Combating a rising threat The FBI’s cargo theft information website lists data-sharing platforms CargoNet and the Transported Asset Protection Association (TAPA) as partners in its battle against rising levels of fraud, much of which is coordinated by entities outside the US. Private sector freight marketplaces, notably DAT Freight & Analytics and Truckstop.com, have made it a recent priority to eliminate fraud and theft facilitated on their platforms. And software providers built to vet truckload carriers, such as Highway, have focused intently on the issue. In addition, brokers and shippers can use risk management tools, such as Overhaul, to identify theft and report it directly to law enforcement. Burroughs said the broad threat of lost freight has hurt brokers as a whole, with shippers on their advisory board saying as much. Some shippers have told the Journal of Commerce that they are avoiding the use of brokers until the fraud and theft problems are under control. “We see this as a huge threat, which is why we’re spending so much time on this,” Burroughs said. “This is something keeping us up at night.” Contact Eric Johnson at eric.johnson@spglobal.com .

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