<div>It has been well known that air cargo carriers have struggled with invoice accuracy for years, with legacy systems with limited flexibility and inherent flaws in the booking process are contributing factors.Only one in four carriers can adjust rates across six or more factors, including market, product, commodity, unit load device (ULD), weight/volume, and market fluctuations, according to an Accenture Air Cargo study. Almost 60 percent believe that rate calculation inconsistencies are the top contributor to invoice errors, a major source of customer dissatisfaction and revenue leakage. In fact, invoice errors reach “high” levels for fully one-third of carriers in...

It has been well known that air cargo carriers have struggled with invoice accuracy for years, with legacy systems with limited flexibility and inherent flaws in the booking process are contributing factors. Only one in four carriers can adjust rates across six or more factors, including market, product, commodity, unit load device (ULD), weight/volume, and market fluctuations, according to an Accenture Air Cargo study. Almost 60 percent believe that rate calculation inconsistencies are the top contributor to invoice errors, a major source of customer dissatisfaction and revenue leakage. In fact, invoice errors reach “high” levels for fully one-third of carriers in the Accenture survey. Considering that CASS shows that the direct air cargo carrier market topped $26.4 billion in 2016 and that data research company MarketLine shows that the global (direct and indirect) air freight market topped $101.3 billion in 2016, hundreds of millions of dollars are being disputed by customers. However, invoicing issues are a double-edged sword. The data that we have collected from working with major global carriers over the past 12 years shows that invoicing issues do not discriminate. Carriers with a high overcharge rate also have a high under-billing rate, while those with lower under-billing rates have fewer overcharges. Analyzing the data further shows that under-billings on average equate to approximately 2.5 percent of overcharges. The under-billing to overcharge range is 1.67 percent to 3.25 percent — this makes overcharges an extremely good indicator of under-billings. Based on the current over-charge rate, the data shows that there is more than $250 million in revenue leakage that direct and indirect air cargo carriers face. While staggering, this number does not account for turnover relating to customer friction and distrust in the carriers’ billing capabilities. More than ever, there is a need for carriers to focus on protecting and improving the customer experience, while also guarding their revenue. The customer experience will not be improved unless invoice accuracy improves. With carriers holding onto legacy systems, and using flawed, manual processes during booking and invoicing, the customer experience will continue to suffer. In some cases, carriers are using terminal management systems built by companies they acquired in the 1990s or early 2000s. They are then overlaying these systems with visibility, and billing systems, which were not designed to communicate with each other; broken interfaces and data integrity issues are compounding the problem. Meanwhile, carriers are being inundated with invoice adjustments relating to overcharges, and it is become a major resource drain. Accounts payable auditing firms representing the customers seem to be the only ones benefiting from this massive invoicing issue. Until carriers focus on why these invoicing issues continue to persist, and what process changes need to be made to fix the systemic issues, the customer experience will continue to be disrupted. Invoicing errors are not a one-sided issue, yet there are very few auditing firms tackling under-billing concerns. As a result, customers have a strong advantage. They have the luxury of disputing overcharges while profiting from under-billings at the carriers’ expense. There is very little to no revenue protection for the carriers as most generic auditing firms don’t have the sophistication and resources to provide a revenue audit. The air cargo industry has many complexities that make it unique, such as commodity-based pricing, numerous container types, and surcharges, and volatile rates that are constantly changing. Without the right technology and shipping knowledge, it’s difficult to hone in on the problems and isolate invoicing issues before they reach the customer. There are very few firms that provide revenue protection services to air cargo carriers. It is a specialized field that requires adequate expertise, technology, and bandwidth. While revenue yields are improving, the customer experience continues to suffer. Specialized third-party revenue protection firms may be the only opportunity for carriers to recapture under-billed revenue, level the playing field with their customers, and ultimately improve invoice accuracy. No matter the internal factors or issues that may be causing the problem, a sophisticated third-party revenue protection service can quickly identify the issue, protect the revenue and add to the bottom-line. As gaps are brought to the attention of the carrier, process improvements can be implemented that drive up invoice accuracy. Under-billing rates typically drop 20 percent after the first year and overall invoice accuracy rates improve, meaning there are fewer overcharges and less customer disruption. Carriers are also benefitting from a faster quote to cash process, a reduction in the cash conversion cycle and days sales outstanding as they receive less and less invoice disputes and more on-time payments. These results show third-party revenue protection services can recoup a significant amount of under-billed revenue, and ultimately improve the customer experience at the same time. Mark Palladino is a revenue protection expert and principal of ARG LLC, which helps air cargo carriers prevent unnecessary losses. Contact him at mcpalladino@argglobal.net .

Air Cargo Carriers News

Poor invoicing costs cargo airlines cash and customers

<div class="phx-topic abstract-wrapper">Higher costs and shifting deadlines are making business difficult for small cargo owners and those shipping low-value goods.</div>

Higher costs and shifting deadlines are making business difficult for small cargo owners and those shipping low-value goods.

Feature image

<div class="phx-topic">For years, the guessing game for international logistics managers revolved around ocean freight rate levels and transit time predictability. But today, the biggest unknown for those same managers is the lack of certainty around how US tariffs will impact their total cost of goods sold. More import logistics managers, particularly for smaller cargo owners and those shipping low-value goods, are having to change sourcing locations or stop shipping from any of those spots entirely due to higher tariffs making the cost of buying the goods uneconomical. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6053066_0.1.jpg"></img></div>This is further complicated by shifting deadlines guiding when various tariffs take effect and forces another consideration on the part of logistics managers who are traditionally focused more on the cost of securing transportation. That broadens the degree to which those logistics managers need to think about things like sourcing and trade compliance. Indeed, US tariff policy now swings more often and abruptly than ocean spot rates. Some US importers of India-sourced goods are now forced to reconsider whether to keep ordering from the country after President Donald Trump on Wednesday announced a 25% tariff, dealing a blow to India being seen as an emerging production alternative to China. US importers of goods from the European Union are weighing similar considerations <a href="https://www.joc.com/article/trans-atlantic-trade-dispute-averted-as-us-eu-reach-weekend-deal-6051144">after last weekend’s announcement</a> of a 15% US tariff, while the Aug 1. deadline for higher tariffs to kick in against other trade partners looms. The shipping industry is split on whether the deadline will hold or be pushed again after Trump granted an initial extension. A separate Aug. 14 deadline on higher China tariffs <a href="https://www.reuters.com/world/china/us-china-tariff-truce-holds-now-us-says-trump-has-final-say-2025-07-29/">appears headed for an extension</a> after US and Chinese officials failed to reach a deal during talks this week in Stockholm. <h3>Importers’ muddied planning </h3>The whiplash effect of the Trump administration’s trade policy is muddying the ability of US importers to plan in a way that OL-USA President Alan Baer said he can’t recall seeing in his 50 years in the industry. US import customers have asked the forwarder to go as far as pulling containers off the docks at origin because the extent of US tariffs no longer make importing feasible, he said. Other customers have, less dramatically, simply held off on placing new orders and leaned on production lines in countries less affected by US tariffs. Or they’ve pulled back significantly their orders. One US importer of women’s undergarments used to ship 100 containers monthly from China, but the current US tariffs at 30% makes selling all the items to Walmart infeasible, he said. “So, they're trying to reprice,” said Baer. “They're looking at, okay, we can't take it in China anymore, so they moved some sourcing to Ethiopia. They moved some sourcing to Ghana, and it's a shell game for a lot of companies at the moment, waiting for the dust to settle to figure out where they should try to make stuff that they want to sell.” Larger retailers are certainly mindful of the changing tariff environment and can adjust where to source certain products, to a degree, when they have relationships with manufacturers in multiple countries. They also have more leverage to force the suppliers to take on more of the cost, allowing retailers to spare American consumers higher costs, for now. All this uncertainty translates into foggier-than-usual forecasts from cargo owners to carriers, and results in shoulder shrugs from shippers when asked about demand in the medium-term. It’s hardly surprising, then, that more container capacity than needed returned to the trans-Pacific after China bookings began rebounding in mid-May when Trump announced the 90-day pause on US tariffs of 145%. Barometers of future import demand are of limited help to carriers. Consumer sentiment may be improving and the labor market resilient, but economists and a growing number of companies warn that the true impact of higher tariffs on the US economy will show in the cost of products in the second half of the year. The rise in the consumer price index, climbing to 2.7% in June from 2.4% in May — highest since February — may signal that the impact of higher tariffs is only now beginning to be felt. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

For years, the guessing game for international logistics managers revolved around ocean freight rate levels and transit time predictability. But today, the biggest unknown for those same managers is the lack of certainty around how US tariffs will impact their total cost of goods sold. More import logistics managers, particularly for smaller cargo owners and those shipping low-value goods, are having to change sourcing locations or stop shipping from any of those spots entirely due to higher tariffs making the cost of buying the goods uneconomical. This is further complicated by shifting deadlines guiding when various tariffs take effect and forces another consideration on the part of logistics managers who are traditionally focused more on the cost of securing transportation. That broadens the degree to which those logistics managers need to think about things like sourcing and trade compliance. Indeed, US tariff policy now swings more often and abruptly than ocean spot rates. Some US importers of India-sourced goods are now forced to reconsider whether to keep ordering from the country after President Donald Trump on Wednesday announced a 25% tariff, dealing a blow to India being seen as an emerging production alternative to China. US importers of goods from the European Union are weighing similar considerations after last weekend’s announcement of a 15% US tariff, while the Aug 1. deadline for higher tariffs to kick in against other trade partners looms. The shipping industry is split on whether the deadline will hold or be pushed again after Trump granted an initial extension. A separate Aug. 14 deadline on higher China tariffs appears headed for an extension after US and Chinese officials failed to reach a deal during talks this week in Stockholm. Importers’ muddied planning The whiplash effect of the Trump administration’s trade policy is muddying the ability of US importers to plan in a way that OL-USA President Alan Baer said he can’t recall seeing in his 50 years in the industry. US import customers have asked the forwarder to go as far as pulling containers off the docks at origin because the extent of US tariffs no longer make importing feasible, he said. Other customers have, less dramatically, simply held off on placing new orders and leaned on production lines in countries less affected by US tariffs. Or they’ve pulled back significantly their orders. One US importer of women’s undergarments used to ship 100 containers monthly from China, but the current US tariffs at 30% makes selling all the items to Walmart infeasible, he said. “So, they're trying to reprice,” said Baer. “They're looking at, okay, we can't take it in China anymore, so they moved some sourcing to Ethiopia. They moved some sourcing to Ghana, and it's a shell game for a lot of companies at the moment, waiting for the dust to settle to figure out where they should try to make stuff that they want to sell.” Larger retailers are certainly mindful of the changing tariff environment and can adjust where to source certain products, to a degree, when they have relationships with manufacturers in multiple countries. They also have more leverage to force the suppliers to take on more of the cost, allowing retailers to spare American consumers higher costs, for now. All this uncertainty translates into foggier-than-usual forecasts from cargo owners to carriers, and results in shoulder shrugs from shippers when asked about demand in the medium-term. It’s hardly surprising, then, that more container capacity than needed returned to the trans-Pacific after China bookings began rebounding in mid-May when Trump announced the 90-day pause on US tariffs of 145%. Barometers of future import demand are of limited help to carriers. Consumer sentiment may be improving and the labor market resilient, but economists and a growing number of companies warn that the true impact of higher tariffs on the US economy will show in the cost of products in the second half of the year. The rise in the consumer price index, climbing to 2.7% in June from 2.4% in May — highest since February — may signal that the impact of higher tariffs is only now beginning to be felt. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Transport, Trade and Regulation News

Trans-Pacific

Supply chain

Tariff volatility puts smaller US importers in planning limbo

<div class="phx-topic abstract-wrapper">While not yet reflected in freight rates, analysts and forwarders report growing space constraints out of Southeast Asian origins. </div>

While not yet reflected in freight rates, analysts and forwarders report growing space constraints out of Southeast Asian origins.

<div class="phx-topic">European air freight importers are being indirectly affected by a tariff-driven shift in Asian trade flows that is putting capacity out of Southeast Asia under increasing pressure. While deployed air cargo capacity on routes from Southeast Asia to both Europe and the US remains flat this week compared with the average of the past four weeks, the shifting of volume from China to its southern neighbors is tightening available space, according to Jonathan Mellink, head of sales at air cargo analyst Rotate. “Shippers have shifted supply chains to cater for the differences in [US] tariff levies on different countries of origin, and we see these goods — computers, smartphones, auto parts — that were mostly coming out of China are being sourced in other locations,” Mellink told an air freight webinar hosted by Rhenus Logistics this week. For example, Mellink said 90% of all video game consoles were exported from China last year, but 50% of the products were now being sourced from Vietnam. Another example included Apple iPhones made in India, where significant volumes produced for the European market have been shifted to the US. While some electronics such as laptops, semiconductors and smartphones are excluded from the 10% US “reciprocal tariff” on Chinese imports, all imports of Chinese origin are subject to the 20% fentanyl tariff. “Shippers are trying to be agile and change their supply chains to benefit from at least some of the tariff differences out there,” Mellink said. Still, Chris Bode, vice president of global air freight at Rhenus Logistics, said exporters shifting thousands of tons of air freight from China to Southeast Asian manufacturing hubs such as Thailand and Vietnam risk overloading the outbound market. “[Thailand and Vietnam] are exporting roughly 40,000 tons a month on average, and when suddenly you have another 3,000 tons of a single commodity that was originally from China, it can affect global supply and demand,” Bode told the air freight webinar. “If a customer today is importing automotive-related cargo from Thailand into Germany, he will feel the impact of the US tariffs, even though he’s not involved directly with China-US trade,” he added. “It is important to understand how this new supply-demand is going to balance out and what its impact will be on customers that do not have direct trade flows with the US.” <h3>Keeping eggs ‘in the China basket’ </h3>The shifting of trade flows also poses a challenge to airlines, especially those deeply committed to the Chinese market, such as Abu Dhabi’s Etihad Airways. Leonard Rodrigues, director of revenue management and network planning at Etihad Cargo, told the webinar that the carrier in June signed a joint business agreement with Shenzhen-based SF Airlines, the largest cargo carrier in China. “It’s going to be very interesting to see what the impact of the tariffs and the trade volatility will be, because a big share of our eggs is in the China basket,” he told the air freight webinar, noting that Etihad in the past year has increased the number of weekly China flights from 11 to 18. However, Rodrigues said “making life easier” was the fact that Etihad Cargo had low exposure to the US, with only 3% of its freighter capacity deployed on Asia-US trade routes. Another factor insulating the carrier from the shifting trade flows was its size, as Etihad Cargo is a small player compared with the major air freight operators. Despite the shifting trade flows, Rodrigues pointed to the stability of air freight rates, with China-US rates this week close to levels seen during Chinese New Year in early February and China-North Europe up 10% over that time. China-North America rates were at $5.02 per kilogram this week while the China-Europe market was at $4.25/kg, according to the Baltic Air Index. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

European air freight importers are being indirectly affected by a tariff-driven shift in Asian trade flows that is putting capacity out of Southeast Asia under increasing pressure. While deployed air cargo capacity on routes from Southeast Asia to both Europe and the US remains flat this week compared with the average of the past four weeks, the shifting of volume from China to its southern neighbors is tightening available space, according to Jonathan Mellink, head of sales at air cargo analyst Rotate. “Shippers have shifted supply chains to cater for the differences in [US] tariff levies on different countries of origin, and we see these goods — computers, smartphones, auto parts — that were mostly coming out of China are being sourced in other locations,” Mellink told an air freight webinar hosted by Rhenus Logistics this week. For example, Mellink said 90% of all video game consoles were exported from China last year, but 50% of the products were now being sourced from Vietnam. Another example included Apple iPhones made in India, where significant volumes produced for the European market have been shifted to the US. While some electronics such as laptops, semiconductors and smartphones are excluded from the 10% US “reciprocal tariff” on Chinese imports, all imports of Chinese origin are subject to the 20% fentanyl tariff. “Shippers are trying to be agile and change their supply chains to benefit from at least some of the tariff differences out there,” Mellink said. Still, Chris Bode, vice president of global air freight at Rhenus Logistics, said exporters shifting thousands of tons of air freight from China to Southeast Asian manufacturing hubs such as Thailand and Vietnam risk overloading the outbound market. “[Thailand and Vietnam] are exporting roughly 40,000 tons a month on average, and when suddenly you have another 3,000 tons of a single commodity that was originally from China, it can affect global supply and demand,” Bode told the air freight webinar. “If a customer today is importing automotive-related cargo from Thailand into Germany, he will feel the impact of the US tariffs, even though he’s not involved directly with China-US trade,” he added. “It is important to understand how this new supply-demand is going to balance out and what its impact will be on customers that do not have direct trade flows with the US.” Keeping eggs ‘in the China basket’ The shifting of trade flows also poses a challenge to airlines, especially those deeply committed to the Chinese market, such as Abu Dhabi’s Etihad Airways. Leonard Rodrigues, director of revenue management and network planning at Etihad Cargo, told the webinar that the carrier in June signed a joint business agreement with Shenzhen-based SF Airlines, the largest cargo carrier in China. “It’s going to be very interesting to see what the impact of the tariffs and the trade volatility will be, because a big share of our eggs is in the China basket,” he told the air freight webinar, noting that Etihad in the past year has increased the number of weekly China flights from 11 to 18. However, Rodrigues said “making life easier” was the fact that Etihad Cargo had low exposure to the US, with only 3% of its freighter capacity deployed on Asia-US trade routes. Another factor insulating the carrier from the shifting trade flows was its size, as Etihad Cargo is a small player compared with the major air freight operators. Despite the shifting trade flows, Rodrigues pointed to the stability of air freight rates, with China-US rates this week close to levels seen during Chinese New Year in early February and China-North Europe up 10% over that time. China-North America rates were at $5.02 per kilogram this week while the China-Europe market was at $4.25/kg, according to the Baltic Air Index. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo

Tariff-linked trade flow shift tightens Asian air freight capacity

<div class="phx-topic abstract-wrapper">Cargo movers are holding back on executing breakbulk and project cargo shipments as much as possible until there is a clearer picture of costs in the current unsettled market. </div>

Cargo movers are holding back on executing breakbulk and project cargo shipments as much as possible until there is a clearer picture of costs in the current unsettled market.

<div class="phx-topic">“Strategic inaction” is the order of the day in the tariff uncertainty-hit multipurpose vessel (MPV) sector, shippers say. Carlos Cortes, supply chain director for North America at wood products shipper CMPC Forest Products, told the Journal of Commerce the company is continuing to monitor tariff developments, “but we are holding back on executing until we can get better visibility of the final situation,” a direction he described as “strategic inaction.” Cortes noted a slight decline in North American MPV freight rates, but said it was “nothing significant” for contracted rates. “For me, the main takeaway is that the North America market is stable and holding on amid the geopolitical and economic conditions,” he said. Cortes added that he hadn’t seen major changes to capacity availability. “We are expediting vessels as much as we can and for now haven’t experienced major disruptions,” he said. “We will need to see how this changes if [tariffs] are finally confirmed in August.” Continued stability in multipurpose freight rates could be the “calm before the storm” or an indication of a resilient market environment, said specialist broker Toepfer Transport. In its July 25 Multipurpose Shipping Report, the broker said its bellwether Toepfer Multipurpose Index (TMI) remains stable, with almost no significant up or down movement. The index stood at $12,905 per day for July, up just 0.07% from June. The TMI is based on expected average rates for six- to 12-month time charters for 12,500-deadweight-ton (dwt) “F-Type” vessels with safe working loads (SWLs) of 240 to 360 metric tons, as reported to Toepfer by owners and operators. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ea382181-08cd-4298-912f-87c79836bcf7"></dynamic-object></div><h3>Geopolitical tensions continue to bite </h3>Toepfer said the hoped-for reopening of Red Sea routes to the Suez Canal by the end of the year <a href="https://www.joc.com/article/new-houthi-attacks-likely-kill-hopes-of-shipping-returning-to-red-sea-this-year-6040923">has gone by the boards due to the recent Houthi attacks on commercial vessels</a> and tensions surrounding Israel and Iran. “The expected decline in tonnage-miles for breakbulk and project cargoes associated with the resumption of the Suez transit will not occur in the near future,” the broker said. Meanwhile, the volatility around US import tariffs has compounded market uncertainty, making it difficult to predict project costs and risks involving the US supply chain. A similar downbeat forecast applies to Europe, where weak exports are still sufficient to sustain break-even income for carriers, but “there is no indication of improvement over the next few months,” Toepfer said. A silver lining for the MPV market is that exports from the Far East “continue to ensure the effective utilization of the fleet and the generation of sufficient income for carriers,” Toepfer said. And in Africa, carriers have reported to the broker that there has been “a significant increase of cargo export.” Charters are also steadily moving with the majority of F500 and F600 XL-type MPVs ordered on speculation and fixed at rate levels that reflect the stable-to-positive sentiment of carriers and the expectations of the investors and banks behind the newbuildings. While ordering activity in the MPV space is currently limited — a fault of the “current mismatch between charter rates and prices,” Toepfer said — behind the scenes, there is “a sense of optimism and a readiness to seize opportunities, as many are eager to be prepared once the conditions align.” Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>. </div>

“Strategic inaction” is the order of the day in the tariff uncertainty-hit multipurpose vessel (MPV) sector, shippers say. Carlos Cortes, supply chain director for North America at wood products shipper CMPC Forest Products, told the Journal of Commerce the company is continuing to monitor tariff developments, “but we are holding back on executing until we can get better visibility of the final situation,” a direction he described as “strategic inaction.” Cortes noted a slight decline in North American MPV freight rates, but said it was “nothing significant” for contracted rates. “For me, the main takeaway is that the North America market is stable and holding on amid the geopolitical and economic conditions,” he said. Cortes added that he hadn’t seen major changes to capacity availability. “We are expediting vessels as much as we can and for now haven’t experienced major disruptions,” he said. “We will need to see how this changes if [tariffs] are finally confirmed in August.” Continued stability in multipurpose freight rates could be the “calm before the storm” or an indication of a resilient market environment, said specialist broker Toepfer Transport. In its July 25 Multipurpose Shipping Report, the broker said its bellwether Toepfer Multipurpose Index (TMI) remains stable, with almost no significant up or down movement. The index stood at $12,905 per day for July, up just 0.07% from June. The TMI is based on expected average rates for six- to 12-month time charters for 12,500-deadweight-ton (dwt) “F-Type” vessels with safe working loads (SWLs) of 240 to 360 metric tons, as reported to Toepfer by owners and operators. Geopolitical tensions continue to bite Toepfer said the hoped-for reopening of Red Sea routes to the Suez Canal by the end of the year has gone by the boards due to the recent Houthi attacks on commercial vessels and tensions surrounding Israel and Iran. “The expected decline in tonnage-miles for breakbulk and project cargoes associated with the resumption of the Suez transit will not occur in the near future,” the broker said. Meanwhile, the volatility around US import tariffs has compounded market uncertainty, making it difficult to predict project costs and risks involving the US supply chain. A similar downbeat forecast applies to Europe, where weak exports are still sufficient to sustain break-even income for carriers, but “there is no indication of improvement over the next few months,” Toepfer said. A silver lining for the MPV market is that exports from the Far East “continue to ensure the effective utilization of the fleet and the generation of sufficient income for carriers,” Toepfer said. And in Africa, carriers have reported to the broker that there has been “a significant increase of cargo export.” Charters are also steadily moving with the majority of F500 and F600 XL-type MPVs ordered on speculation and fixed at rate levels that reflect the stable-to-positive sentiment of carriers and the expectations of the investors and banks behind the newbuildings. While ordering activity in the MPV space is currently limited — a fault of the “current mismatch between charter rates and prices,” Toepfer said — behind the scenes, there is “a sense of optimism and a readiness to seize opportunities, as many are eager to be prepared once the conditions align.” Contact Carly Fields at carly.fields@spglobal.com .

Maritime

Breakbulk News

MPV shippers adopt ‘strategic inaction’ operating model to counter instability

<div class="phx-topic abstract-wrapper">A wave of AI-based tools for software developers is likely to raise shipper expectations around the effectiveness and cost of logistics software applications. </div>

A wave of AI-based tools for software developers is likely to raise shipper expectations around the effectiveness and cost of logistics software applications.

<div class="phx-topic">Logistics software vendors and third-party logistics providers (3PLs) are turning en masse toward a relatively new cohort of artificial intelligence (AI)-based code development tools, a trend that’s likely to accelerate and broaden the scope of products aimed at shippers across modes. The impact of these tools is only just starting to reveal itself, with technology providers, whether standalone or part of a 3PL, telling the Journal of Commerce they are using code development tools in an ever-expanding way. Those tools — which notably include fast-growing brands such as Cursor, Windsurf, Base44 and Lovable, among dozens of others — help companies generate, test and audit code, depending on their strengths. The potential impacts of the tools on customers are numerous. Logistics technology providers can build applications, features, or whole new products faster. They can expand the capacity of their engineering teams, without adding headcount, by having coding products build or edit base code, theoretically bringing down a provider’s operating costs. They can also audit code faster and, in general, more accurately than human engineers are able to. “Over 55% of our net new code is now AI-generated using tools like Cursor,” said project44 CEO Jett McCandless. “This includes everything from feature scaffolding to test creation. AI is now an embedded part of how we write and review code.” McCandless said project44 went from virtually no AI-generated code in late 2024 to 45% by March 2025, surpassing 50% by June. “The speed of adoption reflects both developer enthusiasm and a company-wide shift to treat AI as a foundational tool, not a novelty,” he said. <h3>Not alone </h3>And project44 is hardly alone on this fast-moving path. “We started using Cursor almost a year ago, and by the end of 2024 we were at 36% and currently on a journey to get it to 50%,” said Graham Parker, CEO of logistic software vendor ShipAngel. “We were at 44% in June — a little behind target but still an insane leap in a single year. And some of our [venture capital investor’s] portfolio companies in other sectors are at 80% already. “Headcount-wise, you could look at it and say you can now do the work of 20 engineers with maybe five to seven.” Parker pointed to the CEOs of major tech companies such as Microsoft, OpenAI and Anthropic all saying 90% of code will be written with AI within a year. Journal of Commerce parent company S&amp;P Global recently signed a deal with Anthropic, whose code generation software Claude is one of the cohort of tools being used by developers. “It’s hard to disagree when they likely see unreleased models with this capability or least the clear path to it,” Parker said. Among software developers catering to the logistics industry, the biggest value is the speed and efficiency with which they can create what’s known in software circles as minimum viable products (MVPs). “We’ve probably cut the time to complete a project in half, but that doesn’t necessarily correlate into that project being more worthwhile,” said Tobias Haahr Nielsen, founder of Anthem Agency, which does outsourced software production work in the supply chain and logistics industry. “One major value of AI is that creating MVPs is significantly easier because you can get the AI to do what would otherwise take a long time to write out.” That means, for instance, the MVP might not hit the target, but testing five different iterations would be faster than building one in a traditional development environment. “It’s significantly cheaper to just get an AI agent that has an 80% accuracy rate,” Nielsen said. “So one-fifth fail, but we’re aware of it. That’s very valuable if you’re just testing out the solution. It helps answer the question: would there actually be a use case here?” <h3>Different tools for different uses </h3>The breadth of code development tools available also signals a diversified market that assumes not every technology provider’s needs are the same. Some companies need advanced code generation tools to reduce the costs of hiring and retaining high-level engineering talent. Others want tools that allow people in semi-technical roles — say, a product manager — to build a quick prototype based on a conversation with a customer. There are even products that allow beginners to spin up basic applications through natural language prompts akin to asking ChatGPT to create a PowerPoint presentation. “It gives smaller companies an advantage in that we don’t have to adhere to what tools our development team can and can’t use,” said Jake Hoffman, chief technology officer at logistics software provider Gnosis Freight. “If there’s something that will help us, we’re going to try it out.” Hoffman said Gnosis has “doubled down” on AI development tools, including Cursor, Windsurf and Devin. He said those tools will bridge the gap between developers and non-technical logistics experts in the way no-code and low-code software products bridged the gap between super users and entry-level users of logistics software. He said the tools Gnosis uses tackle tasks as varied as code generation, comprehending how existing code works, and checking for “AI hallucination.” “If I write something six months ago and we hire a new person, we can have that program explain to them why it was written and what it’s intended for,” Hoffman said. <h3>Humans remain important </h3>McCandless said project44’s engineers still take the lead on security-sensitive logic, performance-critical systems and new architectures. “That’s where judgment, experience, and creativity outperform AI suggestions,” he said. “We let AI handle the bulk and humans handle the edge cases and innovation. We prioritize engineers who can design systems and collaborate with AI. Some roles, like manual quality assurance or maintenance, are shrinking as AI absorbs that work. Teams are leaner but more productive.” But the tools are not magic bullets yet. “Cursor works best when the scope is clear and repetitive,” McCandless said. “It’s less effective in legacy codebases or workflows that require interpreting ambiguous business logic. That’s where engineers step in to guide the process.” Parker, however, said he’s seen Cursor improve at tasks with which it once struggled. “Cursor started out being good at writing basic code, then it became good at editing, then auditing, and now architecture,” he said. “You can talk to it and ask questions and it will give you the ‘why.’” While logistics software companies seem largely convinced of the power of AI code development tools, some say the jury is still out on whether it is making engineers more efficient. METR, a research non-profit group measuring the impact of AI capabilities, said in early July that a test of nearly 250 coding tasks undertaken using AI tools slowed developers by 19% when the developers believed they would be 24% faster using those tools. “When AI is allowed, developers spend less time actively coding and searching for information, and instead spend time prompting AI, waiting on or reviewing AI outputs, or idle,” METR said in its report. That has specific relevance to the logistics industry, where the going theory has been that developers with domain expertise in freight and transportation are more effective because they understand the nuances of what customers want. “It’s not the process itself, it’s the nuance in a process,” Hoffman said. “You have code and AI agents that can now speak to the nuance of a process.” For instance, a developer that understands the business case for the software he or she is building can be more effective in prompting AI code generation tools. “The prompt for a new customer can be, ‘look how we implemented for these customers. Do the same, but for this customer call it discharge instead of available date,’” Hoffman said. <h3>Tech titans fuel progress </h3>In terms of the pace of development, Hoffman said the logistics industry is benefiting from intense competition in the generative AI world in both general purpose and industry-specific solutions. “All the big companies in our industry are building on top of OpenAI, Gemini and Grok, and they’re all beating each other up on models,” he said. “So there are two layers of competition where it’s getting better all the time.” Parker said the usage rate in logistics tech will inevitably lag other sectors. “Some of these products are trained on large existing code bases and, as we know, there is a lot less modern logistics code than, say, in [customer relationship management] software,” he said. But he has no doubt that customers will come to demand products from companies using AI development tools. “This era will usher in a new capability to create great products much faster than before, replace legacy products and iterate at lightning speed,” Parker said. “For customers of logistics software, it will drive a higher bar and better products.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Logistics software vendors and third-party logistics providers (3PLs) are turning en masse toward a relatively new cohort of artificial intelligence (AI)-based code development tools, a trend that’s likely to accelerate and broaden the scope of products aimed at shippers across modes. The impact of these tools is only just starting to reveal itself, with technology providers, whether standalone or part of a 3PL, telling the Journal of Commerce they are using code development tools in an ever-expanding way. Those tools — which notably include fast-growing brands such as Cursor, Windsurf, Base44 and Lovable, among dozens of others — help companies generate, test and audit code, depending on their strengths. The potential impacts of the tools on customers are numerous. Logistics technology providers can build applications, features, or whole new products faster. They can expand the capacity of their engineering teams, without adding headcount, by having coding products build or edit base code, theoretically bringing down a provider’s operating costs. They can also audit code faster and, in general, more accurately than human engineers are able to. “Over 55% of our net new code is now AI-generated using tools like Cursor,” said project44 CEO Jett McCandless. “This includes everything from feature scaffolding to test creation. AI is now an embedded part of how we write and review code.” McCandless said project44 went from virtually no AI-generated code in late 2024 to 45% by March 2025, surpassing 50% by June. “The speed of adoption reflects both developer enthusiasm and a company-wide shift to treat AI as a foundational tool, not a novelty,” he said. Not alone And project44 is hardly alone on this fast-moving path. “We started using Cursor almost a year ago, and by the end of 2024 we were at 36% and currently on a journey to get it to 50%,” said Graham Parker, CEO of logistic software vendor ShipAngel. “We were at 44% in June — a little behind target but still an insane leap in a single year. And some of our [venture capital investor’s] portfolio companies in other sectors are at 80% already. “Headcount-wise, you could look at it and say you can now do the work of 20 engineers with maybe five to seven.” Parker pointed to the CEOs of major tech companies such as Microsoft, OpenAI and Anthropic all saying 90% of code will be written with AI within a year. Journal of Commerce parent company S&P Global recently signed a deal with Anthropic, whose code generation software Claude is one of the cohort of tools being used by developers. “It’s hard to disagree when they likely see unreleased models with this capability or least the clear path to it,” Parker said. Among software developers catering to the logistics industry, the biggest value is the speed and efficiency with which they can create what’s known in software circles as minimum viable products (MVPs). “We’ve probably cut the time to complete a project in half, but that doesn’t necessarily correlate into that project being more worthwhile,” said Tobias Haahr Nielsen, founder of Anthem Agency, which does outsourced software production work in the supply chain and logistics industry. “One major value of AI is that creating MVPs is significantly easier because you can get the AI to do what would otherwise take a long time to write out.” That means, for instance, the MVP might not hit the target, but testing five different iterations would be faster than building one in a traditional development environment. “It’s significantly cheaper to just get an AI agent that has an 80% accuracy rate,” Nielsen said. “So one-fifth fail, but we’re aware of it. That’s very valuable if you’re just testing out the solution. It helps answer the question: would there actually be a use case here?” Different tools for different uses The breadth of code development tools available also signals a diversified market that assumes not every technology provider’s needs are the same. Some companies need advanced code generation tools to reduce the costs of hiring and retaining high-level engineering talent. Others want tools that allow people in semi-technical roles — say, a product manager — to build a quick prototype based on a conversation with a customer. There are even products that allow beginners to spin up basic applications through natural language prompts akin to asking ChatGPT to create a PowerPoint presentation. “It gives smaller companies an advantage in that we don’t have to adhere to what tools our development team can and can’t use,” said Jake Hoffman, chief technology officer at logistics software provider Gnosis Freight. “If there’s something that will help us, we’re going to try it out.” Hoffman said Gnosis has “doubled down” on AI development tools, including Cursor, Windsurf and Devin. He said those tools will bridge the gap between developers and non-technical logistics experts in the way no-code and low-code software products bridged the gap between super users and entry-level users of logistics software. He said the tools Gnosis uses tackle tasks as varied as code generation, comprehending how existing code works, and checking for “AI hallucination.” “If I write something six months ago and we hire a new person, we can have that program explain to them why it was written and what it’s intended for,” Hoffman said. Humans remain important McCandless said project44’s engineers still take the lead on security-sensitive logic, performance-critical systems and new architectures. “That’s where judgment, experience, and creativity outperform AI suggestions,” he said. “We let AI handle the bulk and humans handle the edge cases and innovation. We prioritize engineers who can design systems and collaborate with AI. Some roles, like manual quality assurance or maintenance, are shrinking as AI absorbs that work. Teams are leaner but more productive.” But the tools are not magic bullets yet. “Cursor works best when the scope is clear and repetitive,” McCandless said. “It’s less effective in legacy codebases or workflows that require interpreting ambiguous business logic. That’s where engineers step in to guide the process.” Parker, however, said he’s seen Cursor improve at tasks with which it once struggled. “Cursor started out being good at writing basic code, then it became good at editing, then auditing, and now architecture,” he said. “You can talk to it and ask questions and it will give you the ‘why.’” While logistics software companies seem largely convinced of the power of AI code development tools, some say the jury is still out on whether it is making engineers more efficient. METR, a research non-profit group measuring the impact of AI capabilities, said in early July that a test of nearly 250 coding tasks undertaken using AI tools slowed developers by 19% when the developers believed they would be 24% faster using those tools. “When AI is allowed, developers spend less time actively coding and searching for information, and instead spend time prompting AI, waiting on or reviewing AI outputs, or idle,” METR said in its report. That has specific relevance to the logistics industry, where the going theory has been that developers with domain expertise in freight and transportation are more effective because they understand the nuances of what customers want. “It’s not the process itself, it’s the nuance in a process,” Hoffman said. “You have code and AI agents that can now speak to the nuance of a process.” For instance, a developer that understands the business case for the software he or she is building can be more effective in prompting AI code generation tools. “The prompt for a new customer can be, ‘look how we implemented for these customers. Do the same, but for this customer call it discharge instead of available date,’” Hoffman said. Tech titans fuel progress In terms of the pace of development, Hoffman said the logistics industry is benefiting from intense competition in the generative AI world in both general purpose and industry-specific solutions. “All the big companies in our industry are building on top of OpenAI, Gemini and Grok, and they’re all beating each other up on models,” he said. “So there are two layers of competition where it’s getting better all the time.” Parker said the usage rate in logistics tech will inevitably lag other sectors. “Some of these products are trained on large existing code bases and, as we know, there is a lot less modern logistics code than, say, in [customer relationship management] software,” he said. But he has no doubt that customers will come to demand products from companies using AI development tools. “This era will usher in a new capability to create great products much faster than before, replace legacy products and iterate at lightning speed,” Parker said. “For customers of logistics software, it will drive a higher bar and better products.” Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Code generation tools altering efficiency, capacity for logistics technology providers

<div class="phx-topic abstract-wrapper">As tariff fatigue sets in, US retailers are concentrating more on their product delivery needs rather than adjusting their supply chains on the fly to the vagaries of the Trump administration’s trade policy.</div>

As tariff fatigue sets in, US retailers are concentrating more on their product delivery needs rather than adjusting their supply chains on the fly to the vagaries of the Trump administration’s trade policy.

<div class="phx-topic">The whiplash reality of the Trump administration’s tariff policy is no longer driving sharp swings in import volumes from Asia, but expectations of more blank sailings to curb the capacity overhang in the trans-Pacific could still jostle the weakening inbound trade. US retailers are giving less thought to the tariffs in terms of their ordering for the rest of the year, having gained at least some degree of clarity through the several trade deals that have been announced to date. Importantly, a growing number of retail logistics managers and importers, exhausted by the US’ ever-shifting trade policy, have given up on trying to beat moving tariff deadlines. “It doesn’t seem that tariffs and trade deals are quite the driving factor that they had been as recently as six to eight weeks ago,” Stephen Nothdurft, vice president of sales for North America at the forwarder MOL Consolidation Services, told the Journal of Commerce. “The import community has kind of decided, ‘It is what it is, and we can’t control it, but what we can control is just making sure our freight is on the shelf when we need it.’” Indeed, the prospects of a final rush of cargo tied to US trade policy announcements are fading, even if some forwarders and carriers hold out for a final pop in volumes in August. “Strategic planning and long-term decision-making based on tariff deadlines makes no sense because you just don’t know what those deadlines will be from week to week,” the logistics manager of a national furniture retailer told the Journal of Commerce. Ocean carriers <a href="https://www.joc.com/article/looming-august-tariff-deadline-prompts-carriers-to-pull-trans-pacific-capacity-6045526">plan to deploy less tonnage</a> from Asia to the United States in August than in July, according to ocean visibility provider eeSea. So far, ocean carriers are planning to blank less capacity next month than in July, although carriers warn that may change as container spot rates keep falling. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="88ff376b-3b44-447f-ae0f-22d6a0011592"></dynamic-object></div>Spot rates, a measure of how capacity matches up with demand, have been falling since late May and early June, according to various indexes. At a little more than $2,000 per FEU, spot rates from China to the US West Coast are down 70% from a year ago, according to the Shanghai Containerized Freight Index. Some cargo owner customers are still uncertain whether the Aug. 1 deadline — in which the 10% blanket tariff on all US imports will revert to higher levels for countries that haven’t hashed out an agreement with the Trump administration — will hold, a carrier executive said. He added that while some tariff-related price increases have taken place, they haven’t blunted consumer demand enough to have a noticeable impact on import volumes. One automotive industry importer said that at the current 10% reciprocal tariff rate, his company can move product as the sector has absorbed that level. “However, we will not take product into the US at rates above 15% to 20% as some countries have negotiated,” he said. “We have completely pulled out of China due to tariffs.” <h3>GRIs unlikely to stick </h3>While carriers may attempt to impose general rate increases (GRIs) on the first and 15th of each month, forwarders and importers on the trans-Pacific <a href="https://www.joc.com/article/pause-in-tariff-hikes-drives-big-gains-in-trans-pacific-spot-rates-6017111">do not expect any further rate hikes this peak season to stick.</a> “There’s no impetus to keep prices high,” Nothdurft said. “I don’t know what the carriers are banking on in August, but it doesn’t appear that those ships are full, either.” A steady stream of frontloading of fall and holiday merchandise has taken the wind out of carrier attempts to sustain price increases. “A lot of cargo for the rest of the year is already here in the US so there is no need for anyone to rush any huge amounts of cargo into the US for the next few months,” said Sanjay Tejwani, chief executive officer at the consulting firm 365 Logistics. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a2606c91-b30c-4219-b617-9491b44b6af1"></dynamic-object></div>Even some carriers agree that the extensive frontloading that has already taken place in the eastbound trans-Pacific means cargo volumes may drop off dramatically in the fourth quarter. “I think it’s going to be a bad Q4,” a carrier executive told the Journal of Commerce. For importers, planning their supply chains while attempting to balance the cost of ocean transportation with the delivery of their product to store shelves on schedule requires the use of several forms of shipping. John Pace, senior manager of global logistics at Revelyst, a manufacturer of outdoor performance gear, said that for merchandise that was ordered months ago and is scheduled to be delivered this summer and fall, he can use the preferred mode of regular ocean shipping. As delivery deadlines approach for products with tighter deadlines, he will shift some shipments to expedited ocean service with guaranteed next-day container availability landside. Pace said he will use air freight as a last resort. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

The whiplash reality of the Trump administration’s tariff policy is no longer driving sharp swings in import volumes from Asia, but expectations of more blank sailings to curb the capacity overhang in the trans-Pacific could still jostle the weakening inbound trade. US retailers are giving less thought to the tariffs in terms of their ordering for the rest of the year, having gained at least some degree of clarity through the several trade deals that have been announced to date. Importantly, a growing number of retail logistics managers and importers, exhausted by the US’ ever-shifting trade policy, have given up on trying to beat moving tariff deadlines. “It doesn’t seem that tariffs and trade deals are quite the driving factor that they had been as recently as six to eight weeks ago,” Stephen Nothdurft, vice president of sales for North America at the forwarder MOL Consolidation Services, told the Journal of Commerce. “The import community has kind of decided, ‘It is what it is, and we can’t control it, but what we can control is just making sure our freight is on the shelf when we need it.’” Indeed, the prospects of a final rush of cargo tied to US trade policy announcements are fading, even if some forwarders and carriers hold out for a final pop in volumes in August. “Strategic planning and long-term decision-making based on tariff deadlines makes no sense because you just don’t know what those deadlines will be from week to week,” the logistics manager of a national furniture retailer told the Journal of Commerce. Ocean carriers plan to deploy less tonnage from Asia to the United States in August than in July, according to ocean visibility provider eeSea. So far, ocean carriers are planning to blank less capacity next month than in July, although carriers warn that may change as container spot rates keep falling. Spot rates, a measure of how capacity matches up with demand, have been falling since late May and early June, according to various indexes. At a little more than $2,000 per FEU, spot rates from China to the US West Coast are down 70% from a year ago, according to the Shanghai Containerized Freight Index. Some cargo owner customers are still uncertain whether the Aug. 1 deadline — in which the 10% blanket tariff on all US imports will revert to higher levels for countries that haven’t hashed out an agreement with the Trump administration — will hold, a carrier executive said. He added that while some tariff-related price increases have taken place, they haven’t blunted consumer demand enough to have a noticeable impact on import volumes. One automotive industry importer said that at the current 10% reciprocal tariff rate, his company can move product as the sector has absorbed that level. “However, we will not take product into the US at rates above 15% to 20% as some countries have negotiated,” he said. “We have completely pulled out of China due to tariffs.” GRIs unlikely to stick While carriers may attempt to impose general rate increases (GRIs) on the first and 15th of each month, forwarders and importers on the trans-Pacific do not expect any further rate hikes this peak season to stick. “There’s no impetus to keep prices high,” Nothdurft said. “I don’t know what the carriers are banking on in August, but it doesn’t appear that those ships are full, either.” A steady stream of frontloading of fall and holiday merchandise has taken the wind out of carrier attempts to sustain price increases. “A lot of cargo for the rest of the year is already here in the US so there is no need for anyone to rush any huge amounts of cargo into the US for the next few months,” said Sanjay Tejwani, chief executive officer at the consulting firm 365 Logistics. Even some carriers agree that the extensive frontloading that has already taken place in the eastbound trans-Pacific means cargo volumes may drop off dramatically in the fourth quarter. “I think it’s going to be a bad Q4,” a carrier executive told the Journal of Commerce. For importers, planning their supply chains while attempting to balance the cost of ocean transportation with the delivery of their product to store shelves on schedule requires the use of several forms of shipping. John Pace, senior manager of global logistics at Revelyst, a manufacturer of outdoor performance gear, said that for merchandise that was ordered months ago and is scheduled to be delivered this summer and fall, he can use the preferred mode of regular ocean shipping. As delivery deadlines approach for products with tighter deadlines, he will shift some shipments to expedited ocean service with guaranteed next-day container availability landside. Pace said he will use air freight as a last resort. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

Container Shipping News

Container lines

Forwarding

US tariff volatility no longer driving trans-Pacific trade plans

Use code TPM25GW995 at checkout to save $500 on first year of a Gold subscription and 20% on a TPM26 registration!

Subscribe Now - FT/Anonymous to Gold - Wide Box

SAVE ON A GOLD SUBSCRIPTION AND TPM26

Use code GTW695 at checkout and save $800 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Use code TPMGW595 at checkout to save $900 on first year of a Gold subscription and 20% on a TPM26 registration!

Upgrade Subscription - S/SP to Gold - Wide Box

UPGRADE TO GOLD FOR JUST $595

Arm your team with the most trusted information portal for the international container shipping industry.

Group Subscriptions - Wide Box

Get into a group subscription today

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Use code STS20 at checkout to save 20% on a Silver or Silver Plus annual subscription! 

Subscribe Now - FT/Anonymous to S/SP - Wide Box

SUBSCRIBE AND SAVE

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

SMC3rates_shutterstock_5247046.jpg

Shippers save money, time with automated transportation bidding tools

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

SMC3rates_shutterstock_5247046 (1).jpg

Filling the Supply Chain Education Gap with LTL Education Courses

SAVE ON A GOLD SUBSCRIPTION: Use code TPM25GW995 to save $500 on an annual Gold subscription and 20% on a TPM26 registration!

Subscribe Now - FT/Anonymous to Gold - Offer Box

UPGRADE TO GOLD AND SAVE: Use code GTW695 at checkout and save $800 on first year of a Gold subscription!

Upgrade Subscription

SUBSCRIBE AND SAVE: Use code STSW20 to save 20% on first year of a Silver or Silver Plus annual subscription!


Subscribe Now - FT/Anonymous to S/SP - Offer Box

GET INTO A GROUP SUBSCRIPTION: Arm your team with unlimited Journal of Commerce content

Group Subscriptions - Offer Box

Group Subscriptions

UPGRADE TO GOLD AND SAVE: Use code TPMGW595 at checkout to save $900 on first year of a Gold subscription and 20% on TPM26! 

Upgrade Subscription - S/SP to Gold - Offer Box

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

Free Trial - Offer Box

Free Trial

Monthly publication providing an editorial deep dive into global supply chain news

Journal of Commerce Magazine - Rectangle Box

Journal of Commerce Magazine

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

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

A must-attend conference for shippers & logistics providers moving goods inland

Inland Conference - Rectangle Box

Attend Inland25

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

ISI Report - Rectangle Box

Intermodal Savings Index

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

Gateway - Rectangle Box

Gateway

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

Air cargo carriers news and analysis from the Journal of Commerce covers updates of air cargo carriers, pricing, air craft carrier capacity, rates, routings and technology.

Stay informed with air cargo carriers news. Journal of Commerce covers updates on air cargo carriers, air craft carrier capacity, rates routings and technology.

Air Cargo Carriers News | Journal of Commerce

The Journal of Commerce’s air cargo news covers the movement of air cargo, including air cargo shipping, air cargo carriers, air freight forwarders, air freight, air shipments, cargo airports and cargo news. It also tracks air cargo trends, air freight news, shifting of cargo between air and ocean, airports and airfreight delays and congestion.

Journal of Commerce offers extensive air freight forwarder news and analysis of air cargo forwarding, including topics such as strategies, capacity, services.

Air Cargo Forwarder News | Journal of Commerce

Air Cargo Forwarder News

Get the latest air cargo news and analysis with JOC. From carriers to trends, get insights into air freight news, air cargo shipping, and more.

Latest News

More News & Analysis

Tariff volatility puts smaller US importers in planning limbo

Tariff-linked trade flow shift tightens Asian air freight capacity

MPV shippers adopt ‘strategic inaction’ operating model to counter instability