<div class="phx-topic abstract-wrapper">Cargo volumes have been robust out of Asia in the last two months, with carriers and airports reporting decent increases.</div>

Cargo volumes have been robust out of Asia in the last two months, with carriers and airports reporting decent increases.

<div class="phx-topic">Asia’s airports and airlines are beginning to hit their peak season stride with rising <a href="http://www.joc.com/air-cargo">air cargo</a> volumes being reported for October and solid forward bookings expected for November.The world’s largest air freight hub, Hong Kong, reported its cargo volume up by 7.1 percent in October compared with the same month last year, with 462,000 tons crossing its busy apron. The airport has handled 3.7 million tonnes from January through October, almost 2 percent up year-over-year.The Hong Kong Airport Authority attributed the growth to the robust 13 percent year-over-year increase in transshipment. “Among the key trading regions, traffic to and from Europe and Southeast Asia increased most significantly during the month,” the authority said.A heavy contributor to the growth at Hong Kong airport was Cathay Pacific, its biggest single source of air freight. In October, Cathay reported cargo traffic up 3.2 percent year-over-year to 985 million revenue ton kilometers, continuing a sharp upturn in volume since June. RTKs measure the number of revenue tons of cargo (freight and mail) carried and then multiplied by the distance. For the first 10 months of this year, Cathay’s cargo traffic was up 0.4 percent from 2015 to 8.7 billion RTKs.Cathay’s general manager cargo sales and marketing Mark Sutch said demand was strong in October and the tonnage was continuing to grow. “We had some negative impact on our forecasts during the month from typhoon disruptions and unscheduled aircraft maintenance but overall exports from Europe, Asia, and mainland China were robust,” he said. “The team continues to work hard to push up the yield, and the rates are getting back to peak season levels. The new twice-weekly service to Portland, introduced in early November, further strengthened our US network.”In China, Shanghai Pudong International Airport Cargo Terminal Co., the largest handler at the airport, <a href="http://www.joc.com/air-cargo/pactl-cargo-volume-hits-october-high-heads-record-year_20161114.html">recorded its highest ever monthly total</a> in October. Pactl handled 169,322 tons of air cargo, a year-over-year volume growth of 8.9 percent. Throughput from January through October was also the highest ever 10-month result in the terminal’s history, with 1.48 million tons handled during the period.A steady rise in cargo tonnage from January to October also has Lutz Grzegorz, vice president of Pactl, predicting another big year for the Sino-German terminal. Pactl handled close to 1.76 million tons of air freight in 2015.“We managed to significantly grow our international imports and domestic exports in the last couple of months. This is mainly due to the fact that the demand for high-value consumer goods picked up again,” he said. Grzegorz expects cargo volumes to continue to grow through November and December. “In line with this positive trend, we are confident of achieving another annual record by the end of 2016.”The increase in domestic demand could be clearly seen in the cargo traffic figures of China’s flag carrier. Air China reported a 14.7 percent increase in domestic traffic that grew to almost 164 million RTKs in October. International traffic was up 8.2 percent to 498 million RTKs. The Beijing-based carrier's total RTKs in October increased by 9.4 percent compared with the same year in 2015, and cargo traffic was up 5.6 percent for the first 10 months of the year.China Southern’s October traffic was up 6.4 percent to 612 million RTKs, with international traffic up almost 10 percent and domestic volumes down 6.9 percent. For the first 10 months of the year, the Guangzhou-based carrier’s cargo volumes were up 9.2 percent to 5.5 billion RTKs.Shanghai-based China Eastern also extended its growth run, with October traffic up 5.1 percent compared with the same month last year to 490 million RTKs. International traffic was up 6.2 percent, and domestic traffic grew 2.5 percent. Traffic for the first 10 months was basically flat.The International Air Transport Association and the Association of Asia Pacific Airlines have yet to release their October cargo results but it appears carriers are heading for a solid peak season this year, at least in volume terms.However, when it comes to improving yields, that is difficult in the oversupplied air freight market. The industry has become saturated with bellyhold space as airlines upgrade their fleets to newer models with vastly increased below deck capacity, which is dragging down freight rates on many routes.Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="http://www.twitter.com/greg_knowler">@greg_knowler.</a></div>

Asia’s airports and airlines are beginning to hit their peak season stride with rising air cargo volumes being reported for October and solid forward bookings expected for November.The world’s largest air freight hub, Hong Kong, reported its cargo volume up by 7.1 percent in October compared with the same month last year, with 462,000 tons crossing its busy apron. The airport has handled 3.7 million tonnes from January through October, almost 2 percent up year-over-year.The Hong Kong Airport Authority attributed the growth to the robust 13 percent year-over-year increase in transshipment. “Among the key trading regions, traffic to and from Europe and Southeast Asia increased most significantly during the month,” the authority said.A heavy contributor to the growth at Hong Kong airport was Cathay Pacific, its biggest single source of air freight. In October, Cathay reported cargo traffic up 3.2 percent year-over-year to 985 million revenue ton kilometers, continuing a sharp upturn in volume since June. RTKs measure the number of revenue tons of cargo (freight and mail) carried and then multiplied by the distance. For the first 10 months of this year, Cathay’s cargo traffic was up 0.4 percent from 2015 to 8.7 billion RTKs.Cathay’s general manager cargo sales and marketing Mark Sutch said demand was strong in October and the tonnage was continuing to grow. “We had some negative impact on our forecasts during the month from typhoon disruptions and unscheduled aircraft maintenance but overall exports from Europe, Asia, and mainland China were robust,” he said. “The team continues to work hard to push up the yield, and the rates are getting back to peak season levels. The new twice-weekly service to Portland, introduced in early November, further strengthened our US network.”In China, Shanghai Pudong International Airport Cargo Terminal Co., the largest handler at the airport, recorded its highest ever monthly total in October. Pactl handled 169,322 tons of air cargo, a year-over-year volume growth of 8.9 percent. Throughput from January through October was also the highest ever 10-month result in the terminal’s history, with 1.48 million tons handled during the period.A steady rise in cargo tonnage from January to October also has Lutz Grzegorz, vice president of Pactl, predicting another big year for the Sino-German terminal. Pactl handled close to 1.76 million tons of air freight in 2015.“We managed to significantly grow our international imports and domestic exports in the last couple of months. This is mainly due to the fact that the demand for high-value consumer goods picked up again,” he said. Grzegorz expects cargo volumes to continue to grow through November and December. “In line with this positive trend, we are confident of achieving another annual record by the end of 2016.”The increase in domestic demand could be clearly seen in the cargo traffic figures of China’s flag carrier. Air China reported a 14.7 percent increase in domestic traffic that grew to almost 164 million RTKs in October. International traffic was up 8.2 percent to 498 million RTKs. The Beijing-based carrier's total RTKs in October increased by 9.4 percent compared with the same year in 2015, and cargo traffic was up 5.6 percent for the first 10 months of the year.China Southern’s October traffic was up 6.4 percent to 612 million RTKs, with international traffic up almost 10 percent and domestic volumes down 6.9 percent. For the first 10 months of the year, the Guangzhou-based carrier’s cargo volumes were up 9.2 percent to 5.5 billion RTKs.Shanghai-based China Eastern also extended its growth run, with October traffic up 5.1 percent compared with the same month last year to 490 million RTKs. International traffic was up 6.2 percent, and domestic traffic grew 2.5 percent. Traffic for the first 10 months was basically flat.The International Air Transport Association and the Association of Asia Pacific Airlines have yet to release their October cargo results but it appears carriers are heading for a solid peak season this year, at least in volume terms.However, when it comes to improving yields, that is difficult in the oversupplied air freight market. The industry has become saturated with bellyhold space as airlines upgrade their fleets to newer models with vastly increased below deck capacity, which is dragging down freight rates on many routes.Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.

Air Cargo Carriers News

Air Cargo

Asia’s carriers, airports report solid peak season volumes

<div class="phx-topic abstract-wrapper">The National Shipper Advisory Committee, which guides the maritime regulator on ocean freight issues, meets once a year to drive policy decisions.</div>

The National Shipper Advisory Committee, which guides the maritime regulator on ocean freight issues, meets once a year to drive policy decisions.

Feature image

<div class="phx-topic">The US Federal Maritime Commission (FMC) on Thursday said it is searching for new members to serve on its National Shipper Advisory Committee (NSAC), which advises the federal agency on policy related to ocean freight. The advisory committee, composed of 24 individuals representing import and export cargo interests, specifically counsels the FMC on issues of supply chain competitiveness, reliability, integrity, and fairness. The committee is evenly split between import and export entities. “The commission intends for membership to reflect a balanced mix of shippers, and selections will be made based on factors such as commodities shipped, ports used, geographic areas served, and origins of cargo, as well as other relevant factors,” the FMC said in a statement. The agency added it was “looking for applicants with extensive shipping and US oceanic supply chain knowledge, as well as an eagerness to collaborate and share their expertise on various issues...” The NSAC, originally formed in 2021, has provided guidance on an array of issues, from <a href="https://www.joc.com/article/bentzel-wants-partial-fmc-oversight-over-rail-demurrage-5243057">rail demurrage</a> and a <a href="https://www.joc.com/article/us-draft-legislation-seeks-to-update-osra-22-boost-china-scrutiny-5220516">rewrite of the Ocean Shipping Reform Act</a> (OSRA) during the pandemic, to more recent efforts, including <a href="https://www.joc.com/article/fmc-rules-for-truckers-in-chassis-dispute-with-ocean-carriers-5234355">chassis disputes</a> with ocean carriers and a push for a “<a href="https://www.joc.com/article/shipper-bill-of-rights-takes-aim-at-ocean-carrier-accountability-transparency-5958197">shipper’s bill of rights</a>.” Some NASC members have privately expressed concerns that the FMC wasn’t sure how to handle its recommendations, partly due to the committee being the first of its kind to report to the agency. <a href="https://www.federalregister.gov/documents/2026/05/14/2026-09667/solicitation-for-applications-to-serve-as-members-on-the-national-shipper-advisory-committee">NSAC members serve three-year terms</a>, with the committee meeting at least once a year, although more frequent meetings can potentially be convened by the FMC or a majority of committee members. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) on Thursday said it is searching for new members to serve on its National Shipper Advisory Committee (NSAC), which advises the federal agency on policy related to ocean freight. The advisory committee, composed of 24 individuals representing import and export cargo interests, specifically counsels the FMC on issues of supply chain competitiveness, reliability, integrity, and fairness. The committee is evenly split between import and export entities. “The commission intends for membership to reflect a balanced mix of shippers, and selections will be made based on factors such as commodities shipped, ports used, geographic areas served, and origins of cargo, as well as other relevant factors,” the FMC said in a statement. The agency added it was “looking for applicants with extensive shipping and US oceanic supply chain knowledge, as well as an eagerness to collaborate and share their expertise on various issues...” The NSAC, originally formed in 2021, has provided guidance on an array of issues, from rail demurrage and a rewrite of the Ocean Shipping Reform Act (OSRA) during the pandemic, to more recent efforts, including chassis disputes with ocean carriers and a push for a “ shipper’s bill of rights .” Some NASC members have privately expressed concerns that the FMC wasn’t sure how to handle its recommendations, partly due to the committee being the first of its kind to report to the agency. NSAC members serve three-year terms , with the committee meeting at least once a year, although more frequent meetings can potentially be convened by the FMC or a majority of committee members. Contact Eric Johnson at eric.johnson@spglobal.com .

Transport, Trade and Regulation News

Maritime

FMC searching for new members to serve on shipper advisory board

<div class="phx-topic abstract-wrapper">The producer price indexes for truckload and LTL transportation in the US both leapt about 20% year over year in April, revealing growing pressure on supply chains.</div>

The producer price indexes for truckload and LTL transportation in the US both leapt about 20% year over year in April, revealing growing pressure on supply chains.

<div class="phx-topic">The US producer price indexes (PPIs) for trucking last month leapt in nearly vertical lines so steep they could cause vertigo. The long-distance truckload PPI jumped 11.4% in April from March, reaching 202.2, according to data released by the US Bureau of Labor Statistics (BLS) Wednesday. That’s an 18.9% year-over-year increase for the all-inclusive measure of truckload pricing. April’s less-than-truckload (LTL) PPI shot up 12% from March and climbed 20% year over year to a record-breaking 311 — the biggest annualized increase in the LTL index since June 2022. In comparison, the April PPI for intermodal freight rail transportation was flat from March and only up less than 1 percentage point year over year, BLS data showed. The trucking PPIs represent final “selling prices” paid by thousands of shippers, including fuel surcharges and spot and contract base rates. The April PPIs show the impact of war-driven diesel prices in the US that have been more than 50% higher year over year since March 23. The average US retail diesel as of May 11 was $5.64 per gallon, flat with the previous week but up 62.2% from a year ago, according to the US Energy Information Administration (EIA). The US average diesel price has been above $5 per gallon for nine weeks. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="dd129e5b-5d7d-4cc2-a3fe-d9f34fdebe58"></dynamic-object></div>The PPIs for truckload and LTL services rose even quicker than aggregate US producer prices, which were up 1.4% from March in April and up 6% year over year, according to the BLS. The April increase is the largest advance for the PPI since a 1.7% leap in March 2022. The consumer price index (CPI), a measure of inflation, rose 3.8% year over year in April. Subtracting food and energy costs, the CPI rose 2.8% year over year. The PPIs are likely to stay elevated, buoyed by fuel prices, in particular the cost of diesel, which is used across freight transportation modes. Higher energy costs are inflating cost pressures throughout supply chains. The New York Federal Reserve Bank’s <a href="https://www.newyorkfed.org/research/policy/gscpi#/interactive">Global Supply Chain Pressure Index</a> (GSCPI) rose from 0.68 in March to 1.82 in April, a leap that closely matches the trajectory of the trucking PPIs. <h3>‘Surcharges on everything’ </h3>Shippers are seeing the immediate impact of the diesel price spike in higher fuel surcharges from their transportation and logistics providers. “As soon as we have to haul anything anywhere, there’s fuel surcharges on everything,” Amardeip Singh Doman, CEO of Doman Building Materials Group, said in a quarterly earnings call Monday. “We’re doing the best we can to navigate through that.” Doman, which distributes lumber and other building products throughout the US, is trying to pass the higher cost of surcharges through to customers, where possible, he said, noting: “We’re just trying to break even if we can on it and push it through.” Shippers are <a href="https://www.joc.com/article/rising-fuel-costs-forcing-us-truck-shippers-to-shift-freight-6214133">struggling to respond</a> to rapid price increases, said Jenny Vander Zandem, COO of transportation and fuel management company Breakthrough. “They don’t have many levers they can pull” to quickly mitigate higher costs, she said in an interview. And that’s forcing shippers to consider the prospect of higher fuel costs long term. “Forecasts have moved from something we would do annually to quarterly, monthly and now even more frequently with clients,” said Vander Zandem. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4f41d0db-fdca-4d0e-841e-6a45e944cc38"></dynamic-object></div>Whether the Strait of Hormuz is reopened or not, high diesel prices will linger, Matt Muenster, chief economist at Breakthrough, told the Journal of Commerce. From ports to inland truck stops, “this is a low sulfur fuel conundrum,” Muenster said. “There’s a structural challenge at work here because refiners can’t just increase production for these particular fuels.” US production, he said, is geared toward gasoline. US diesel inventories are down 11% from their five-year average, Muenster said, as the US continues to export diesel. “We’re going to have more stress in the diesel market in autumn when agriculture and transportation put more heat under the diesel barrel,” he said. “Summer usually offers time for diesel inventories to build, but if they continue to draw it will add pressure.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The US producer price indexes (PPIs) for trucking last month leapt in nearly vertical lines so steep they could cause vertigo. The long-distance truckload PPI jumped 11.4% in April from March, reaching 202.2, according to data released by the US Bureau of Labor Statistics (BLS) Wednesday. That’s an 18.9% year-over-year increase for the all-inclusive measure of truckload pricing. April’s less-than-truckload (LTL) PPI shot up 12% from March and climbed 20% year over year to a record-breaking 311 — the biggest annualized increase in the LTL index since June 2022. In comparison, the April PPI for intermodal freight rail transportation was flat from March and only up less than 1 percentage point year over year, BLS data showed. The trucking PPIs represent final “selling prices” paid by thousands of shippers, including fuel surcharges and spot and contract base rates. The April PPIs show the impact of war-driven diesel prices in the US that have been more than 50% higher year over year since March 23. The average US retail diesel as of May 11 was $5.64 per gallon, flat with the previous week but up 62.2% from a year ago, according to the US Energy Information Administration (EIA). The US average diesel price has been above $5 per gallon for nine weeks. The PPIs for truckload and LTL services rose even quicker than aggregate US producer prices, which were up 1.4% from March in April and up 6% year over year, according to the BLS. The April increase is the largest advance for the PPI since a 1.7% leap in March 2022. The consumer price index (CPI), a measure of inflation, rose 3.8% year over year in April. Subtracting food and energy costs, the CPI rose 2.8% year over year. The PPIs are likely to stay elevated, buoyed by fuel prices, in particular the cost of diesel, which is used across freight transportation modes. Higher energy costs are inflating cost pressures throughout supply chains. The New York Federal Reserve Bank’s Global Supply Chain Pressure Index (GSCPI) rose from 0.68 in March to 1.82 in April, a leap that closely matches the trajectory of the trucking PPIs. ‘Surcharges on everything’ Shippers are seeing the immediate impact of the diesel price spike in higher fuel surcharges from their transportation and logistics providers. “As soon as we have to haul anything anywhere, there’s fuel surcharges on everything,” Amardeip Singh Doman, CEO of Doman Building Materials Group, said in a quarterly earnings call Monday. “We’re doing the best we can to navigate through that.” Doman, which distributes lumber and other building products throughout the US, is trying to pass the higher cost of surcharges through to customers, where possible, he said, noting: “We’re just trying to break even if we can on it and push it through.” Shippers are struggling to respond to rapid price increases, said Jenny Vander Zandem, COO of transportation and fuel management company Breakthrough. “They don’t have many levers they can pull” to quickly mitigate higher costs, she said in an interview. And that’s forcing shippers to consider the prospect of higher fuel costs long term. “Forecasts have moved from something we would do annually to quarterly, monthly and now even more frequently with clients,” said Vander Zandem. Whether the Strait of Hormuz is reopened or not, high diesel prices will linger, Matt Muenster, chief economist at Breakthrough, told the Journal of Commerce. From ports to inland truck stops, “this is a low sulfur fuel conundrum,” Muenster said. “There’s a structural challenge at work here because refiners can’t just increase production for these particular fuels.” US production, he said, is geared toward gasoline. US diesel inventories are down 11% from their five-year average, Muenster said, as the US continues to export diesel. “We’re going to have more stress in the diesel market in autumn when agriculture and transportation put more heat under the diesel barrel,” he said. “Summer usually offers time for diesel inventories to build, but if they continue to draw it will add pressure.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Rail News

Truckload

Surface

War-driven fuel prices send trucking PPIs, shipper costs skyward

<div class="phx-topic abstract-wrapper">The unanimous ruling in a case involving C.H. Robinson adds a new layer of responsibility for brokers to consider the safety history of the motor carriers they hire to haul loads.</div>

The unanimous ruling in a case involving C.H. Robinson adds a new layer of responsibility for brokers to consider the safety history of the motor carriers they hire to haul loads.

<div class="phx-topic">Federal law does not automatically shield freight brokers from lawsuits alleging they hired unsafe carriers involved in accidents, the US Supreme Court ruled Thursday, a decision likely to reshape how shippers and third-party logistics providers assess carrier risk. The unanimous decision in Montgomery v. Caribe Transport II does not make brokers liable every time a truck crashes. But it removes a major legal shield the brokerage industry has relied on for years. The case involved a December 2017 crash in Illinois involving a Caribe Transport II truck that struck a vehicle parked on the side of the road. The accident injured Shawn Montgomery, who was forced to have one of his legs amputated. C.H. Robinson brokered the freight to Caribe. Robinson argued that brokers arrange transportation but do not own trucks, maintain equipment, hire drivers, or operate vehicles. Because selecting a carrier is a brokerage service, the company argued that negligent hiring claims against brokers should be preempted by federal law. But Justice Amy Coney Barrett, writing for the court, rejected that argument, allowing Montgomery’s lawsuit against Caribe and Robinson to proceed. “Montgomery’s negligent hiring claim thus falls within the FAAAA’s [Federal Aviation Administration Authorization Act’s] safety exception, which saves it from preemption,” Barrett wrote. “The safety exception saves only a subset of preempted claims: those involving regulations concerning motor vehicle safety. State laws related to motor carrier prices, routes, and services that have no relationship to safety remain preempted [by federal law].” The case is centered on the FAAAA, a federal law that broadly preempts state regulation of freight rates, routes and services. The question before the court was whether that preemption also blocks state law negligent hiring claims against brokers, or whether those claims survive under the law’s safety exception. Montgomery sued C.H. Robinson, claiming the broker negligently hired Caribe, which had a “conditional” safety rating from the Federal Motor Carrier Safety Administration (FMCSA) and several violations involving driver qualification, hours of service, vehicle maintenance, and crash rates. Lower courts sided with Robinson, stating that FAAAA blocked the claim because the law preempts state rules related to freight rates, routes and services. But the Supreme Court ruling Thursday reversed that, deciding that a broker does not have to own, drive, or repair trucks for its carrier-selection decision to involve highway safety. “Requiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore ‘concerns’ motor vehicles — most obviously, the trucks that will transport the goods,” Barrett wrote. “So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception.” C.H. Robinson said it was “disappointed with the outcome [but] respects the court’s ruling.” “While we are disappointed in the court’s decision, we will continue to operate responsibly, support stronger federal enforcement, and work constructively with regulators, carriers, and customers to strengthen the national safety system and support safe, reliable transportation across the country,” the company said in a statement. The Transportation Intermediaries Association (TIA) said it was “deeply disappointed with the decision.” “...The law and legal precedent for decades has given the federal government, not states, the responsibility for setting safety standards for motor carriers,” TIA said in a statement. “To date, carriers, not brokers, have been responsible for complying with these standards.” <h3>Brokers can’t fall back on FMCSA registration </h3>Justices Brett Kavanaugh and Samuel Alito said the case was a close one, but they concurred with the unanimous opinion. Kavanaugh and Alito pointed out that motor carriers are already open to lawsuits for injuries on a state level, and rejected the idea that FMCSA registration alone ends the safety conversation for brokers. “Given that Congress in the FAA Authorization Act sought economic deregulation — not safety deregulation — it is hard to read the statute as written and conclude that Congress subtly sliced and diced state tort law so that trucking companies would be subject to state tort suits for accidents, but brokers would operate free of any such tort liability,” they wrote. The ruling does not impose a new checklist or instruct brokers on how to vet carriers. But it enforces an important standard of reasonable care when deciding whether a broker was negligent in hiring. For a small carrier with clean authority and no visible problems, reasonable care may be simple. For a carrier with a conditional safety rating, a poor crash record, or repeated serious violations, reasonable care may now mean more than what the brokerage industry has historically been accustomed to. Contact Ari Ashe at <a href="mailto:Ari.Ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Federal law does not automatically shield freight brokers from lawsuits alleging they hired unsafe carriers involved in accidents, the US Supreme Court ruled Thursday, a decision likely to reshape how shippers and third-party logistics providers assess carrier risk. The unanimous decision in Montgomery v. Caribe Transport II does not make brokers liable every time a truck crashes. But it removes a major legal shield the brokerage industry has relied on for years. The case involved a December 2017 crash in Illinois involving a Caribe Transport II truck that struck a vehicle parked on the side of the road. The accident injured Shawn Montgomery, who was forced to have one of his legs amputated. C.H. Robinson brokered the freight to Caribe. Robinson argued that brokers arrange transportation but do not own trucks, maintain equipment, hire drivers, or operate vehicles. Because selecting a carrier is a brokerage service, the company argued that negligent hiring claims against brokers should be preempted by federal law. But Justice Amy Coney Barrett, writing for the court, rejected that argument, allowing Montgomery’s lawsuit against Caribe and Robinson to proceed. “Montgomery’s negligent hiring claim thus falls within the FAAAA’s [Federal Aviation Administration Authorization Act’s] safety exception, which saves it from preemption,” Barrett wrote. “The safety exception saves only a subset of preempted claims: those involving regulations concerning motor vehicle safety. State laws related to motor carrier prices, routes, and services that have no relationship to safety remain preempted [by federal law].” The case is centered on the FAAAA, a federal law that broadly preempts state regulation of freight rates, routes and services. The question before the court was whether that preemption also blocks state law negligent hiring claims against brokers, or whether those claims survive under the law’s safety exception. Montgomery sued C.H. Robinson, claiming the broker negligently hired Caribe, which had a “conditional” safety rating from the Federal Motor Carrier Safety Administration (FMCSA) and several violations involving driver qualification, hours of service, vehicle maintenance, and crash rates. Lower courts sided with Robinson, stating that FAAAA blocked the claim because the law preempts state rules related to freight rates, routes and services. But the Supreme Court ruling Thursday reversed that, deciding that a broker does not have to own, drive, or repair trucks for its carrier-selection decision to involve highway safety. “Requiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore ‘concerns’ motor vehicles — most obviously, the trucks that will transport the goods,” Barrett wrote. “So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception.” C.H. Robinson said it was “disappointed with the outcome [but] respects the court’s ruling.” “While we are disappointed in the court’s decision, we will continue to operate responsibly, support stronger federal enforcement, and work constructively with regulators, carriers, and customers to strengthen the national safety system and support safe, reliable transportation across the country,” the company said in a statement. The Transportation Intermediaries Association (TIA) said it was “deeply disappointed with the decision.” “...The law and legal precedent for decades has given the federal government, not states, the responsibility for setting safety standards for motor carriers,” TIA said in a statement. “To date, carriers, not brokers, have been responsible for complying with these standards.” Brokers can’t fall back on FMCSA registration Justices Brett Kavanaugh and Samuel Alito said the case was a close one, but they concurred with the unanimous opinion. Kavanaugh and Alito pointed out that motor carriers are already open to lawsuits for injuries on a state level, and rejected the idea that FMCSA registration alone ends the safety conversation for brokers. “Given that Congress in the FAA Authorization Act sought economic deregulation — not safety deregulation — it is hard to read the statute as written and conclude that Congress subtly sliced and diced state tort law so that trucking companies would be subject to state tort suits for accidents, but brokers would operate free of any such tort liability,” they wrote. The ruling does not impose a new checklist or instruct brokers on how to vet carriers. But it enforces an important standard of reasonable care when deciding whether a broker was negligent in hiring. For a small carrier with clean authority and no visible problems, reasonable care may be simple. For a carrier with a conditional safety rating, a poor crash record, or repeated serious violations, reasonable care may now mean more than what the brokerage industry has historically been accustomed to. Contact Ari Ashe at ari.ashe@spglobal.com .

Truck brokers

Trucking labor

Supreme Court ruling strips broker protection linked to carrier safety

<div class="phx-topic abstract-wrapper">Terminal operators and port authorities must transition from their historic, passive roles as infrastructure caretakers into active orchestrators of integrated logistics ecosystems, writes Robbert van Trooijen.</div>

Terminal operators and port authorities must transition from their historic, passive roles as infrastructure caretakers into active orchestrators of integrated logistics ecosystems, writes Robbert van Trooijen.

<div class="phx-topic">In my <a href="https://www.joc.com/article/landside-infrastructure-is-container-shippings-next-great-chokepoint-6209457">most recent piece for the Journal of Commerce</a>, I argued that the real battle for supply chains has shifted inland. Building larger vessels or rushing mega-alliances into service will not solve systemic disruptions if vessels can’t find a berth. So, naturally, many players in the ports and terminals sector place great emphasis on engineering inside the gate. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6220550_0.1.jpg"></img></div>Whether investing in a greenfield project or expanding a brownfield footprint, port authorities and gateway terminal operators tend to focus most of their attention on the infrastructure and hardware within the gate, such as the draft alongside, the length of the quayside, the deployment of super post-Panamax gantry cranes, the projected yard density, and straddle carrier fleets. After all, these are the things that matter to the primary customers, the ocean carriers. However, even with electrification and automation, hardware tends to be less of a differentiator these days. Most modern terminals have deep draft, 25 to 30 gross moves per hour, efficient quayside operations, and some degree of automation. So where does it go wrong? We all know the infamous “white elephants”: state-of-the-art terminals built to world-class specifications that ultimately failed to achieve a decent return on investment. Although it may come across as an oversimplification, I would argue that one of the reasons for waning loyalty or suboptimal results, particularly for competing gateway terminals serving the same catchment area, is that the operators treated the long-term loyalty of the shipper or consignee as an afterthought. Back in 2007, I witnessed Thomas W. Malnight, then a leading professor of strategy and general management at IMD business school, teach a master class where he challenged the maritime community with a radical strategic shift. Malnight advocated that port ecosystems must look past their immediate ocean carrier clients and focus more on “the customer’s customer” — the shipper or consignee. He taught us that the ultimate metric of a gateway terminal’s value is how effectively it can convince the cargo owner to remain anchored to that specific ecosystem over a decade. The rationale is surprisingly simple: Once a large enough number of beneficial cargo owners (BCOs) are loyal to a port ecosystem, the ocean carriers will follow suit, and the tables have turned. To achieve this, terminal operators and port authorities must transition from their historic, passive roles as infrastructure caretakers into active orchestrators of integrated logistics ecosystems. This pivot requires moving beyond the traditional port gate to discover what end-users genuinely require to secure long-term cargo commitments. <h3>Shippers’ needs transcend infrastructure </h3>When we ask BCOs what they need, the answers transcend fundamental maritime infrastructure. Shippers do not build supply chain resilience around the number of container cranes on a dock. They demand reliable, seamless multimodal connections, including hinterland rail access and barge routes. They seek competitive trade environments such as specialized free zone setups equipped with bonded warehouses, cross-docking hubs, cold chain infrastructure, [potentially] air-sea setups for high-value goods, and access to an affordable and strategically located hinterland optimized for potential assembly plants. Constructing this caliber of landside ecosystem is difficult to achieve for a port authority acting in isolation. But with a clear master plan that includes collaboration among provincial, state and municipal public bodies; private investors; and diverse logistics service providers, the foundation is there for long-term success. Robbert van Trooijen, founder of Inception Partners and a McKinsey Senior Advisor, had a 33-year tenure with The Nedlloyd Group, P&amp;O Nedlloyd and the Maersk Group. Contact him at <a href="mailto:robbert@inceptionpartners.org">robbert@inceptionpartners.org</a>. </div>

In my most recent piece for the Journal of Commerce, I argued that the real battle for supply chains has shifted inland. Building larger vessels or rushing mega-alliances into service will not solve systemic disruptions if vessels can’t find a berth. So, naturally, many players in the ports and terminals sector place great emphasis on engineering inside the gate. Whether investing in a greenfield project or expanding a brownfield footprint, port authorities and gateway terminal operators tend to focus most of their attention on the infrastructure and hardware within the gate, such as the draft alongside, the length of the quayside, the deployment of super post-Panamax gantry cranes, the projected yard density, and straddle carrier fleets. After all, these are the things that matter to the primary customers, the ocean carriers. However, even with electrification and automation, hardware tends to be less of a differentiator these days. Most modern terminals have deep draft, 25 to 30 gross moves per hour, efficient quayside operations, and some degree of automation. So where does it go wrong? We all know the infamous “white elephants”: state-of-the-art terminals built to world-class specifications that ultimately failed to achieve a decent return on investment. Although it may come across as an oversimplification, I would argue that one of the reasons for waning loyalty or suboptimal results, particularly for competing gateway terminals serving the same catchment area, is that the operators treated the long-term loyalty of the shipper or consignee as an afterthought. Back in 2007, I witnessed Thomas W. Malnight, then a leading professor of strategy and general management at IMD business school, teach a master class where he challenged the maritime community with a radical strategic shift. Malnight advocated that port ecosystems must look past their immediate ocean carrier clients and focus more on “the customer’s customer” — the shipper or consignee. He taught us that the ultimate metric of a gateway terminal’s value is how effectively it can convince the cargo owner to remain anchored to that specific ecosystem over a decade. The rationale is surprisingly simple: Once a large enough number of beneficial cargo owners (BCOs) are loyal to a port ecosystem, the ocean carriers will follow suit, and the tables have turned. To achieve this, terminal operators and port authorities must transition from their historic, passive roles as infrastructure caretakers into active orchestrators of integrated logistics ecosystems. This pivot requires moving beyond the traditional port gate to discover what end-users genuinely require to secure long-term cargo commitments. Shippers’ needs transcend infrastructure When we ask BCOs what they need, the answers transcend fundamental maritime infrastructure. Shippers do not build supply chain resilience around the number of container cranes on a dock. They demand reliable, seamless multimodal connections, including hinterland rail access and barge routes. They seek competitive trade environments such as specialized free zone setups equipped with bonded warehouses, cross-docking hubs, cold chain infrastructure, [potentially] air-sea setups for high-value goods, and access to an affordable and strategically located hinterland optimized for potential assembly plants. Constructing this caliber of landside ecosystem is difficult to achieve for a port authority acting in isolation. But with a clear master plan that includes collaboration among provincial, state and municipal public bodies; private investors; and diverse logistics service providers, the foundation is there for long-term success. Robbert van Trooijen, founder of Inception Partners and a McKinsey Senior Advisor, had a 33-year tenure with The Nedlloyd Group, P&O Nedlloyd and the Maersk Group. Contact him at robbert@inceptionpartners.org .

Supply chain

Port infrastructure

Marine terminals

Beyond the terminal gate: Why the future lies in logistical ecosystems

<div class="phx-topic abstract-wrapper">Carrier sources have reported an average berthing delay of two days for regular services and up to five days for ad-hoc vessel calls at both ports, with the problems driven by inadequate drayage capacity.</div>

Carrier sources have reported an average berthing delay of two days for regular services and up to five days for ad-hoc vessel calls at both ports, with the problems driven by inadequate drayage capacity.

<div class="phx-topic">Supply chain stakeholders at India’s Nhava Sheva and Mundra ports have been struggling to deploy adequate drayage capacity to keep export/import cargo flowing in recent weeks, leaving ocean carriers grappling with multiple operational challenges. Sources say inter-terminal container transfers linked to transshipment activity have also been affected. The inland cutbacks are primarily due to an unusual shortage of truck drivers after a large number of domestic migrant workers returned to their hometowns for a variety of reasons. Labor availability typically drops every year during the April–June summer holiday period, but a crunch of this scale was unexpected, port sources say. Carrier sources have reported an average berthing delay of two days for regular/window services and up to five days for ad-hoc vessel calls at Nhava Sheva and Mundra. Mega-liners with dedicated terminal operations are able to manage vessel turnarounds better, however. Late vessel arrivals from previous ports of call are adding to the delays, a bigger concern for Mundra given the pattern of Indian service rotations. To relieve the heightened berth pressure, the busier terminals at Adani Ports’ Mundra are now turning away ad-hoc callers, sources said. “There has been an acute shortage of drivers, coupled with disruptions at the port, due to which we anticipate that first- and last-mile movement of containers may get impacted,” inland service provider Adani Logistics told customers in an advisory. “We strongly recommend engaging with your respective shipping lines regarding any financial implications that may arise ... which may be due to reasons beyond our control...” On-dock yards in Nhava Sheva and Mundra are overflowing with containers, triggering abrupt gate closings by terminals for cargo intake into the wharf, a major concern for carriers trying to push westbound cargo lifts. “The window to gate in exports is short and constantly changing,” said an executive at a leading European carrier who didn’t want to be identified. “That also means shippers have to run around quickly to organize a container trailer, often unable to find one in the present situation.” <h3>Container ‘no-shows’ also a problem </h3>Sunil Vaswani, executive director of India’s Container Shipping Lines Association, acknowledged that deployed trucking capacity remains a challenge. “The evacuation of import containers out of the terminals at Nhava Sheva still remains slow, which in turn impacts vessel productivity and berthing windows,” Vaswani said. “At Mundra, the import inventory situation is not as critical as at Nhava Sheva because about half of the boxes [there] move by rail.” Carriers are also said to be seeing a higher number of container “no-shows” because of the drayage disruption. Booked containers failing to turn up for loading generally run a penalty risk for shippers. Additionally, the slowdown in inter-terminal activity is weighing on the pace of evacuating Middle East-linked transshipment volumes currently held at Indian docks. As container dwells climb and service reliability deteriorates, freight depot owners and customs brokers are seeking safeguards for potential liability consequences. “Given the exceptional and unforeseen nature of the current situation, it may be treated as force majeure,” a trade notice from the Container Freight Stations Association of India said. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Supply chain stakeholders at India’s Nhava Sheva and Mundra ports have been struggling to deploy adequate drayage capacity to keep export/import cargo flowing in recent weeks, leaving ocean carriers grappling with multiple operational challenges. Sources say inter-terminal container transfers linked to transshipment activity have also been affected. The inland cutbacks are primarily due to an unusual shortage of truck drivers after a large number of domestic migrant workers returned to their hometowns for a variety of reasons. Labor availability typically drops every year during the April–June summer holiday period, but a crunch of this scale was unexpected, port sources say. Carrier sources have reported an average berthing delay of two days for regular/window services and up to five days for ad-hoc vessel calls at Nhava Sheva and Mundra. Mega-liners with dedicated terminal operations are able to manage vessel turnarounds better, however. Late vessel arrivals from previous ports of call are adding to the delays, a bigger concern for Mundra given the pattern of Indian service rotations. To relieve the heightened berth pressure, the busier terminals at Adani Ports’ Mundra are now turning away ad-hoc callers, sources said. “There has been an acute shortage of drivers, coupled with disruptions at the port, due to which we anticipate that first- and last-mile movement of containers may get impacted,” inland service provider Adani Logistics told customers in an advisory. “We strongly recommend engaging with your respective shipping lines regarding any financial implications that may arise ... which may be due to reasons beyond our control...” On-dock yards in Nhava Sheva and Mundra are overflowing with containers, triggering abrupt gate closings by terminals for cargo intake into the wharf, a major concern for carriers trying to push westbound cargo lifts. “The window to gate in exports is short and constantly changing,” said an executive at a leading European carrier who didn’t want to be identified. “That also means shippers have to run around quickly to organize a container trailer, often unable to find one in the present situation.” Container ‘no-shows’ also a problem Sunil Vaswani, executive director of India’s Container Shipping Lines Association, acknowledged that deployed trucking capacity remains a challenge. “The evacuation of import containers out of the terminals at Nhava Sheva still remains slow, which in turn impacts vessel productivity and berthing windows,” Vaswani said. “At Mundra, the import inventory situation is not as critical as at Nhava Sheva because about half of the boxes [there] move by rail.” Carriers are also said to be seeing a higher number of container “no-shows” because of the drayage disruption. Booked containers failing to turn up for loading generally run a penalty risk for shippers. Additionally, the slowdown in inter-terminal activity is weighing on the pace of evacuating Middle East-linked transshipment volumes currently held at Indian docks. As container dwells climb and service reliability deteriorates, freight depot owners and customs brokers are seeking safeguards for potential liability consequences. “Given the exceptional and unforeseen nature of the current situation, it may be treated as force majeure,” a trade notice from the Container Freight Stations Association of India said. Contact Bency Mathew at bencyvmathew@gmail.com .

Port News

Drayage

International ports

Rising container dwells hobble vessel flows at India’s Nhava Sheva, Mundra ports

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