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<div class="phx-topic abstract-wrapper">BNSF has partnered with the Northwest Seaport Alliance to open a new intermodal rail yard near the Port of Tacoma that will serve cargo destined for US Midwest markets. </div>

BNSF has partnered with the Northwest Seaport Alliance to open a new intermodal rail yard near the Port of Tacoma that will serve cargo destined for US Midwest markets.

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<div>BNSF Railway is offering shippers at the Port of Tacoma more domestic intermodal capacity into the US Midwest with the opening of a new yard near the port, part of a growth initiative with its domestic trucking partner, J.B. Hunt Transportation. BNSF said Wednesday it has partnered with the Northwest Seaport Alliance (NWSA) to open the Tacoma South facility, which will handle 50,000 container lifts per year. The Class I railroad said the Tacoma yard would complement its Seattle harbor intermodal facility. BNSF said the Tacoma yard is <a>part of its expanded partnership with J.B. Hunt</a>, which was announced in...

BNSF Railway is offering shippers at the Port of Tacoma more domestic intermodal capacity into the US Midwest with the opening of a new yard near the port, part of a growth initiative with its domestic trucking partner, J.B. Hunt Transportation. BNSF said Wednesday it has partnered with the Northwest Seaport Alliance (NWSA) to open the Tacoma South facility, which will handle 50,000 container lifts per year. The Class I railroad said the Tacoma yard would complement its Seattle harbor intermodal facility. BNSF said the Tacoma yard is part of its expanded partnership with J.B. Hunt , which was announced in March. J.B. Hunt has pledged to increase its 53-foot domestic container fleet by some 40 percent during the next five years as BNSF looks to replace the volumes lost by the end of its deal with Knight-Swift Transportation last year and pending exit of Schneider National, with both going to Union Pacific Railroad (UP). By mid-August, the Tacoma yard will start offering intermodal service into Chicago with J.B. Hunt. Intermodal sources say that BNSF’s route from the Pacific Northwest offers a shorter and faster route to Chicago than UP. “The new Tacoma South facility builds upon our joint initiative with J.B. Hunt to substantially improve capacity in the intermodal marketplace while also meeting the expanding needs of our customers,” Tom Williams, BNSF vice president, said in a statement announcing the new yard. PNW a growing option for shippers The Pacific Northwest has been growing its inland point intermodal (IPI) business into the US Midwest as vessel and rail congestion at California ports have shippers looking for different options. Both BNSF and UP are limiting the number of ocean containers they are hauling into the US Midwest from the Southern California ports due to inland congestion. The Pacific Northwest sent 109,396 domestic intermodal containers to the US Midwest in the first six months of 2022, according to data from the Intermodal Association of North America (IANA), a 13 percent increase from the year-earlier period. Southern California sent out almost four times that many containers to the Midwest during the first half of 2022, although its volumes are up 7 percent, IANA data show. But more of that IPI cargo from the Pacific Northwest has been flowing from the NWSA’s Seattle terminals rather than Tacoma. Data from PIERS, a sister product of JOC.com within S&P Global, showed that Chicago was listed as the ultimate destination for 15,810 TEU of imports through Tacoma during the first half of 2022, a 16 percent drop from the year-earlier period. Seattle, though, saw its Chicago-destined import volumes increase 14 percent during the first six months of 2022 to 17,626 TEU, PIERS data show. Overall, Tacoma saw import volumes in the first six months of 2022 of 403,444 TEU, a 2 percent decline from the year-earlier period. Contact Michael Angell at michael.angell@ihsmarkit.com and follow him on Twitter at @michael_angell . 

BNSF taps Tacoma for new Midwest intermodal freight gateway

<div class="phx-topic abstract-wrapper">The groups want the US customs agency to rule that tariffs should be assessed according to a good’s origin port, not a secondary port through which it might have been transshipped. </div>

The groups want the US customs agency to rule that tariffs should be assessed according to a good’s origin port, not a secondary port through which it might have been transshipped.

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<div class="phx-topic">A wide-ranging coalition of shipper and logistics service provider groups is urging US Customs and Border Protection (CBP) and the Department of Homeland Security (DHS) to clarify whether goods transshipped before the Trump administration imposed tariffs on most nations on April 5 will be subject to those additional costs. At issue is whether goods that departed from their origin ports prior to the April 5 deadline, but were then transshipped at another port en route to their US destination ports, are subject to the tariffs, issued under the president’s authority through the International Emergency Economic Powers Act (IEEPA). In a letter dated June 27, 94 shipper, customs broker and forwarder organizations, including the National Retail Federation, Retail Industry Leaders Association, National Industrial Transportation League and National Customs Brokers and Forwarders Association of America, said communication between CBP and the trade community has offered “differing and sometimes contradictory responses.” The groups assert that previous CBP rulings dictate that relay legs or diversions of cargo shouldn’t impact the duty levels of goods, citing, in particular, the “sale for exportation standard” that underpins transactions between buyers and sellers of goods. “Numerous CBP rulings clarify that CBP relies on documentary evidence, such as invoices, purchase orders and/or bills of lading, when confirming that the ultimate destination for goods always was the United States and there was never a contingency of diversion,” the letter said. “The sale for exportation standard is consistent with and supports the finding that relay vessels originating in the initial country of export should meet the in-transit exception and eligibility should be based on the initial country of loading and export.” The transshipment issue has been a thorn in the side of importers trying to navigate the IEEPA tariffs, as CBP’s original guidance on April 4 wasn’t clear, according to a range of trade compliance experts. Subsequent guidance issued by CBP on May 15, which included a set of frequently asked questions, <a href="https://www.joc.com/article/scheduling-linked-to-10-tariffs-causing-confusion-angst-for-us-importers-6009281">included details on how transshipment would impact tariff exemptions</a>. <h3>Seeking better communication </h3>Import groups argue that transshipment is often out of the hands of the cargo owners responsible for paying tariffs. In the letter, the groups asked for guidance around the IEEPA tariffs to be conveyed via a consistent channel to avoid confusion among the trade community. “With the proliferation of communication channels, it is vital for the trade community to have one consistent and reliable repository of information regarding updates and changes to trade practices, policies and procedures,” the letter said. The groups also asked CBP and DHS to avoid cutting agency resources to execute and enforce changing tariffs. The IEEPA tariffs are currently caught up in a legal dispute, with the US Court of International Trade (CIT) <a href="https://www.joc.com/article/federal-court-ruling-blocking-tariffs-resets-shipping-outlook-6013402">ruling in late May</a> that President Donald Trump had overstepped his authority in using the act to justify his tariffs. But a US Court of Appeals for the Federal Circuit temporarily stayed the CIT’s order, preserving the tariffs until a hearing on the case is held. The US Supreme Court on June 20 declined to fast track a case brought by two toy importers challenging the tariffs. Trade attorneys speaking at the American Association of Exporters and Importers in Washington, DC, on Friday said they expect the dual challenges to IEEPA tariffs — the CIT challenge and the toy importers’ case — to take a minimum of six months to be resolved, and likely longer. The Trump administration, meanwhile, said last week it will likely extend the reprieve on the reciprocal tariffs that are due to expire July 9 on all countries except China, Mexico and Canada. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

A wide-ranging coalition of shipper and logistics service provider groups is urging US Customs and Border Protection (CBP) and the Department of Homeland Security (DHS) to clarify whether goods transshipped before the Trump administration imposed tariffs on most nations on April 5 will be subject to those additional costs. At issue is whether goods that departed from their origin ports prior to the April 5 deadline, but were then transshipped at another port en route to their US destination ports, are subject to the tariffs, issued under the president’s authority through the International Emergency Economic Powers Act (IEEPA). In a letter dated June 27, 94 shipper, customs broker and forwarder organizations, including the National Retail Federation, Retail Industry Leaders Association, National Industrial Transportation League and National Customs Brokers and Forwarders Association of America, said communication between CBP and the trade community has offered “differing and sometimes contradictory responses.” The groups assert that previous CBP rulings dictate that relay legs or diversions of cargo shouldn’t impact the duty levels of goods, citing, in particular, the “sale for exportation standard” that underpins transactions between buyers and sellers of goods. “Numerous CBP rulings clarify that CBP relies on documentary evidence, such as invoices, purchase orders and/or bills of lading, when confirming that the ultimate destination for goods always was the United States and there was never a contingency of diversion,” the letter said. “The sale for exportation standard is consistent with and supports the finding that relay vessels originating in the initial country of export should meet the in-transit exception and eligibility should be based on the initial country of loading and export.” The transshipment issue has been a thorn in the side of importers trying to navigate the IEEPA tariffs, as CBP’s original guidance on April 4 wasn’t clear, according to a range of trade compliance experts. Subsequent guidance issued by CBP on May 15, which included a set of frequently asked questions, included details on how transshipment would impact tariff exemptions . Seeking better communication Import groups argue that transshipment is often out of the hands of the cargo owners responsible for paying tariffs. In the letter, the groups asked for guidance around the IEEPA tariffs to be conveyed via a consistent channel to avoid confusion among the trade community. “With the proliferation of communication channels, it is vital for the trade community to have one consistent and reliable repository of information regarding updates and changes to trade practices, policies and procedures,” the letter said. The groups also asked CBP and DHS to avoid cutting agency resources to execute and enforce changing tariffs. The IEEPA tariffs are currently caught up in a legal dispute, with the US Court of International Trade (CIT) ruling in late May that President Donald Trump had overstepped his authority in using the act to justify his tariffs. But a US Court of Appeals for the Federal Circuit temporarily stayed the CIT’s order, preserving the tariffs until a hearing on the case is held. The US Supreme Court on June 20 declined to fast track a case brought by two toy importers challenging the tariffs. Trade attorneys speaking at the American Association of Exporters and Importers in Washington, DC, on Friday said they expect the dual challenges to IEEPA tariffs — the CIT challenge and the toy importers’ case — to take a minimum of six months to be resolved, and likely longer. The Trump administration, meanwhile, said last week it will likely extend the reprieve on the reciprocal tariffs that are due to expire July 9 on all countries except China, Mexico and Canada. Contact Eric Johnson at eric.johnson@spglobal.com .

Shipper groups urge CBP to clarify tariff transshipment confusion

<div class="phx-topic abstract-wrapper">The Global Cold Chain Alliance urged European leaders to recognize the importance of investment in logistics for the resilience of Europe’s food supply chain. </div>

The Global Cold Chain Alliance urged European leaders to recognize the importance of investment in logistics for the resilience of Europe’s food supply chain.

<div class="phx-topic">The European food supply chain should expect disruptions from weather, economics and geopolitics to increase in severity and frequency in the coming decades, according to roundtable talks between cold chain representatives and members of the European Parliament. The Global Cold Chain Alliance (GCCA) urged European leaders to recognize the importance of investment in logistics for the resilience of Europe’s food supply chain. That came as the two sides met in Brussels last week to address a series of growing challenges facing the temperature-controlled industry. “Recent geopolitical, economic, health and extreme weather crises have highlighted the vulnerabilities of Europe’s food supply chain, and we should expect major disruptions of this type to increase in severity and frequency over the coming decades,” Julie Hanson, director for Europe at GCCA, said in a statement following the roundtable. The European Parliament is developing a new “EU Preparedness Union Strategy,” which aims to enhance Europe’s resilience and crisis management capabilities and includes plans for a Europe-wide approach to stockpiling food. Hanson said cold storage and refrigerated transportation were central to having a resilient European food chain, but they are often overlooked by lawmakers. ”EU policy must support and incentivize investment into the facilities, vehicles, resources and skills that the cold chain needs for today and for the future,” she said. Adrian-George Axinia, a member of the European Parliament, said tackling the vulnerabilities in the cold chain exposed by recent crises “is our key priority during the current legislature.” “Current economic challenges are lessons we should carefully acknowledge so that recovery and resilience occur based on well-implemented mechanisms,” he said in the GCCA statement following the roundtable. “We have to make sure any new crisis will have an immediate and efficient response,” he added. “Research, innovation and skills development have proven over the years to be successful paths to future solid foundations for better crisis response and management.” Key challenges discussed during the roundtable included the consideration of the cold chain as “critical infrastructure,” opportunities to remove barriers to investment, and the vital role of secure and free-flowing trade within the EU and with the world outside Europe. Another challenge are the incentives necessary to accelerate innovation, from energy generation and efficiency to automation and leading-edge equipment. <h3>Enduring tailwinds in logistics </h3>The European temperature-controlled logistics industry was the subject of a research report from OC&amp;C Strategy Consultants earlier this year that identified four strategic trends shaping the business. European outsourced cold storage capacity will grow 5% to 6% annually, supported by enduring tailwinds such as changing consumer consumption patterns, an increased need for external storage and growing demand for cost-effective frozen and chilled products. The research found food in Europe was being transported further, and that more food was being frozen, was being stocked longer to mitigate the risk of scarcity, and more food was being stored with external providers. A second trend was in the mergers and acquisitions area (M&amp;A). Over the past decade, the European cold storage market has seen significant M&amp;A activity, particularly driven by international platforms pursuing buy-and-build strategies. Yet 40% of market capacity still lies with independent operators, suggesting ample headroom for further consolidation, the OC&amp;C research found. As the food supply chain consolidates and globalizes, another trend identified in the research was that cold storage operators were facing heightened expectations from customers demanding higher service levels, supply chain visibility and alignment with environmental, social and governance (ESG) standards. Automation was the fourth trend identified by OC&amp;C. Its research found the cold storage market was a leading innovator in automation, partly driven by the scarcity and cost of labor. However, automation has been mostly implemented in areas where cold storage handled high and predictable volumes of relatively standard-sized pallets and uniform assortments that required little value-added services. “Going forward, we expect that automation will go beyond such situations and also address product categories that are less standard, predictable and uniform, such as retail products,” OC&amp;C noted in its research report, adding that the reach of automation in the cold chain will “considerably increase its reach in the coming decade.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The European food supply chain should expect disruptions from weather, economics and geopolitics to increase in severity and frequency in the coming decades, according to roundtable talks between cold chain representatives and members of the European Parliament. The Global Cold Chain Alliance (GCCA) urged European leaders to recognize the importance of investment in logistics for the resilience of Europe’s food supply chain. That came as the two sides met in Brussels last week to address a series of growing challenges facing the temperature-controlled industry. “Recent geopolitical, economic, health and extreme weather crises have highlighted the vulnerabilities of Europe’s food supply chain, and we should expect major disruptions of this type to increase in severity and frequency over the coming decades,” Julie Hanson, director for Europe at GCCA, said in a statement following the roundtable. The European Parliament is developing a new “EU Preparedness Union Strategy,” which aims to enhance Europe’s resilience and crisis management capabilities and includes plans for a Europe-wide approach to stockpiling food. Hanson said cold storage and refrigerated transportation were central to having a resilient European food chain, but they are often overlooked by lawmakers. ”EU policy must support and incentivize investment into the facilities, vehicles, resources and skills that the cold chain needs for today and for the future,” she said. Adrian-George Axinia, a member of the European Parliament, said tackling the vulnerabilities in the cold chain exposed by recent crises “is our key priority during the current legislature.” “Current economic challenges are lessons we should carefully acknowledge so that recovery and resilience occur based on well-implemented mechanisms,” he said in the GCCA statement following the roundtable. “We have to make sure any new crisis will have an immediate and efficient response,” he added. “Research, innovation and skills development have proven over the years to be successful paths to future solid foundations for better crisis response and management.” Key challenges discussed during the roundtable included the consideration of the cold chain as “critical infrastructure,” opportunities to remove barriers to investment, and the vital role of secure and free-flowing trade within the EU and with the world outside Europe. Another challenge are the incentives necessary to accelerate innovation, from energy generation and efficiency to automation and leading-edge equipment. Enduring tailwinds in logistics The European temperature-controlled logistics industry was the subject of a research report from OC&C Strategy Consultants earlier this year that identified four strategic trends shaping the business. European outsourced cold storage capacity will grow 5% to 6% annually, supported by enduring tailwinds such as changing consumer consumption patterns, an increased need for external storage and growing demand for cost-effective frozen and chilled products. The research found food in Europe was being transported further, and that more food was being frozen, was being stocked longer to mitigate the risk of scarcity, and more food was being stored with external providers. A second trend was in the mergers and acquisitions area (M&A). Over the past decade, the European cold storage market has seen significant M&A activity, particularly driven by international platforms pursuing buy-and-build strategies. Yet 40% of market capacity still lies with independent operators, suggesting ample headroom for further consolidation, the OC&C research found. As the food supply chain consolidates and globalizes, another trend identified in the research was that cold storage operators were facing heightened expectations from customers demanding higher service levels, supply chain visibility and alignment with environmental, social and governance (ESG) standards. Automation was the fourth trend identified by OC&C. Its research found the cold storage market was a leading innovator in automation, partly driven by the scarcity and cost of labor. However, automation has been mostly implemented in areas where cold storage handled high and predictable volumes of relatively standard-sized pallets and uniform assortments that required little value-added services. “Going forward, we expect that automation will go beyond such situations and also address product categories that are less standard, predictable and uniform, such as retail products,” OC&C noted in its research report, adding that the reach of automation in the cold chain will “considerably increase its reach in the coming decade.” Contact Greg Knowler at greg.knowler@spglobal.com .

Cold chain industry calls for greater support from European lawmakers

<div class="phx-topic abstract-wrapper">The trade group of ocean carriers is exempt from US antitrust scrutiny under an agreement it filed with the FMC five years ago, but the agency is now questioning that arrangement. </div>

The trade group of ocean carriers is exempt from US antitrust scrutiny under an agreement it filed with the FMC five years ago, but the agency is now questioning that arrangement.

<div class="phx-topic">The Federal Maritime Commission (FMC) is reviewing why the World Shipping Council should fall under US shipping law, a probe that could end the antitrust exemption for the WSC’s ocean carrier members to discuss cooperative matters. The FMC announced Thursday it was investigating the “working arrangement” between WSC’s members and whether that agreement violates US shipping law. Under US shipping law, ocean carriers or other regulated entities must file agreements to cooperate on commercial matters, exempting them from antitrust claims. WSC filed its cooperation agreement with the FMC in 2020, two decades after it was formed. The FMC ordered the WSC to show why the agency has “jurisdiction over the agreement and should not cancel the agreement as outside the agency’s jurisdiction.” The WSC agreement does not cover rates, operations, capacity or other strictly commercial matters. However, the group said it filed the agreement so members could discuss other issues such as safety, environmental and legal matters that could fall under FMC jurisdiction. But the FMC questioned that view in its Thursday order. The agency said the WSC may not be a regulated entity under the Shipping Act because it does not provide ocean transportation services. While its members are ocean carriers, within the confines of the agreement filed with the FMC, the members are not acting under their capacity as regulated carriers, the agency said. “An entity engaged only in the discussion and lobbying activities under the agreement would not qualify as an ‘ocean common carrier’ under the Shipping Act because it is performing none of the functions that define a common carrier,” the FMC said. The agency conceded that the WSC’s work on cargo screening may fall under the type of operational activities that are covered in FMC-filed agreements. But the agency said courts have previously ruled the WSC’s type of agreement “was meant as a narrow catch-all closely related to other explicitly operations-focused agreement categories” in US shipping law. While FMC agreements allow carriers and others to avoid antitrust scrutiny, “a trade association not involved in providing ocean transportation service does not appear to be engaged in the type of conduct Congress intended to immunize from scrutiny by antitrust enforcers and private plaintiffs,” the FMC’s order said. <h3>Two months to reply</h3>The FMC has given the WSC two months to reply to the order, with the agency’s final decision expected next March. WSC said in a statement to the Journal of Commerce that its 2020 agreement was filed “in accordance with its legal obligation (under US shipping law) and with the encouragement of the FMC.” “As a global trade association, the World Shipping Council takes its regulatory compliance responsibilities very seriously,” WSC said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

The Federal Maritime Commission (FMC) is reviewing why the World Shipping Council should fall under US shipping law, a probe that could end the antitrust exemption for the WSC’s ocean carrier members to discuss cooperative matters. The FMC announced Thursday it was investigating the “working arrangement” between WSC’s members and whether that agreement violates US shipping law. Under US shipping law, ocean carriers or other regulated entities must file agreements to cooperate on commercial matters, exempting them from antitrust claims. WSC filed its cooperation agreement with the FMC in 2020, two decades after it was formed. The FMC ordered the WSC to show why the agency has “jurisdiction over the agreement and should not cancel the agreement as outside the agency’s jurisdiction.” The WSC agreement does not cover rates, operations, capacity or other strictly commercial matters. However, the group said it filed the agreement so members could discuss other issues such as safety, environmental and legal matters that could fall under FMC jurisdiction. But the FMC questioned that view in its Thursday order. The agency said the WSC may not be a regulated entity under the Shipping Act because it does not provide ocean transportation services. While its members are ocean carriers, within the confines of the agreement filed with the FMC, the members are not acting under their capacity as regulated carriers, the agency said. “An entity engaged only in the discussion and lobbying activities under the agreement would not qualify as an ‘ocean common carrier’ under the Shipping Act because it is performing none of the functions that define a common carrier,” the FMC said. The agency conceded that the WSC’s work on cargo screening may fall under the type of operational activities that are covered in FMC-filed agreements. But the agency said courts have previously ruled the WSC’s type of agreement “was meant as a narrow catch-all closely related to other explicitly operations-focused agreement categories” in US shipping law. While FMC agreements allow carriers and others to avoid antitrust scrutiny, “a trade association not involved in providing ocean transportation service does not appear to be engaged in the type of conduct Congress intended to immunize from scrutiny by antitrust enforcers and private plaintiffs,” the FMC’s order said. Two months to reply The FMC has given the WSC two months to reply to the order, with the agency’s final decision expected next March. WSC said in a statement to the Journal of Commerce that its 2020 agreement was filed “in accordance with its legal obligation (under US shipping law) and with the encouragement of the FMC.” “As a global trade association, the World Shipping Council takes its regulatory compliance responsibilities very seriously,” WSC said. Contact Michael Angell at michael.angell@spglobal.com

FMC probes legal standing of World Shipping Council agreement

<div class="phx-topic abstract-wrapper">New bottlenecks in Louisiana and Mississippi are now affecting freight flows between Mexico and the Southeast US.</div>

New bottlenecks in Louisiana and Mississippi are now affecting freight flows between Mexico and the Southeast US.

<div class="phx-topic">Canadian Pacific Kansas City (CPKC) is making progress in restoring normal rail service in the southern US following a troubled systems integration, but the epicenter of disruptions has shifted from Texas to critical points in Louisiana and Mississippi, where intermodal and carload traffic converge. Congestion initially began in Laredo and Wylie, Texas, outside Dallas after a <a href="https://www.joc.com/article/cpkc-grapples-with-complaints-over-us-canada-terminal-operations-6009914">May 3 systems upgrade</a> went poorly as CPKC was transitioning legacy Kansas City Southern (KCS) systems to Canadian Pacific networks. Service in Wylie has largely returned to normal, but new bottlenecks in Shreveport, Louisiana, and Jackson, Mississippi, are now affecting freight flows between Mexico and the Southeast US. “CPKC is continuing to devote the resources and attention necessary to return service levels to the normal range expeditiously,” CPKC wrote in a <a href="https://www.stb.gov/cpkc-merger-oversight/">June 25 letter</a> to the US Surface Transportation Board (STB). “CPKC continues to project that it will achieve a return of service performance to the normal range for the vast majority of customers by the second half of July.” CPKC dwell times in the hot spots have risen sharply since May, according to data from the Association of American Railroads (AAR). In Shreveport, the railroad’s average dwell time has increased nearly 70% year over year in the last seven weeks. In Jackson, it is up 77%. In Laredo, another intermodal crew change location, CPKC dwells have skyrocketed 127% during the same period, according to the AAR data. CPKC told the STB that company executives remain stationed at key locations, including Shreveport and Jackson, to address the ongoing issues. Inconsistent container flow Shreveport is the largest switching yard on the former Kansas City Southern network, while Jackson is the second-largest. Switching yards primarily handle non-containerized freight, but Jackson and Shreveport also serve as crew change locations for intermodal trains traveling between Mexico/Texas and the Southeast. Multiple CPKC customers have said the flow of containers between Mexico/Texas and the Southeast has been inconsistent in recent weeks. “On northbound Mexico to the Southeast, we experienced long delays at the ramp after customs cleared but before boxes were loaded and moved on a train, although it has improved in the last week,” one customer said. “Customer service is struggling [and] getting information on distressed freight is difficult.” A second customer said their shipments have gotten stuck in various Gulf Coast locations in recent weeks. CPKC told the STB the on-time performance to deliver railcars to non-containerized customers improved in all parts of the network week over week through June 20, but the on-time performance of manifest trains, which carry a mix of cargo and go into yards such as Jackson and Shreveport, fell week over week, to 55.8%. Delays in Jackson and Shreveport also affect interchange partners such as CSX Transportation and Norfolk Southern Railway (NS). Train crews are scheduled around expected handoff times, but when CPKC trains arrive late, crews on connecting railroads can exhaust their federally mandated hours before reaching the next crew change point, further compounding delays. NS interchanges freight with CPKC in Shreveport and Meridian, Mississippi, while CSX exchanges containers in Myrtlewood, Alabama. CPKC said it plans to focus on this stretch of the network in the coming week. “[Staff] will maintain their in-person presence at locations across the legacy KCS network to support operating personnel and customers … with a focus in the coming week on the Southeast Division (areas east and southeast of Shreveport),” the railroad said in its letter to the STB. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Canadian Pacific Kansas City (CPKC) is making progress in restoring normal rail service in the southern US following a troubled systems integration, but the epicenter of disruptions has shifted from Texas to critical points in Louisiana and Mississippi, where intermodal and carload traffic converge. Congestion initially began in Laredo and Wylie, Texas, outside Dallas after a May 3 systems upgrade went poorly as CPKC was transitioning legacy Kansas City Southern (KCS) systems to Canadian Pacific networks. Service in Wylie has largely returned to normal, but new bottlenecks in Shreveport, Louisiana, and Jackson, Mississippi, are now affecting freight flows between Mexico and the Southeast US. “CPKC is continuing to devote the resources and attention necessary to return service levels to the normal range expeditiously,” CPKC wrote in a June 25 letter to the US Surface Transportation Board (STB). “CPKC continues to project that it will achieve a return of service performance to the normal range for the vast majority of customers by the second half of July.” CPKC dwell times in the hot spots have risen sharply since May, according to data from the Association of American Railroads (AAR). In Shreveport, the railroad’s average dwell time has increased nearly 70% year over year in the last seven weeks. In Jackson, it is up 77%. In Laredo, another intermodal crew change location, CPKC dwells have skyrocketed 127% during the same period, according to the AAR data. CPKC told the STB that company executives remain stationed at key locations, including Shreveport and Jackson, to address the ongoing issues. Inconsistent container flow Shreveport is the largest switching yard on the former Kansas City Southern network, while Jackson is the second-largest. Switching yards primarily handle non-containerized freight, but Jackson and Shreveport also serve as crew change locations for intermodal trains traveling between Mexico/Texas and the Southeast. Multiple CPKC customers have said the flow of containers between Mexico/Texas and the Southeast has been inconsistent in recent weeks. “On northbound Mexico to the Southeast, we experienced long delays at the ramp after customs cleared but before boxes were loaded and moved on a train, although it has improved in the last week,” one customer said. “Customer service is struggling [and] getting information on distressed freight is difficult.” A second customer said their shipments have gotten stuck in various Gulf Coast locations in recent weeks. CPKC told the STB the on-time performance to deliver railcars to non-containerized customers improved in all parts of the network week over week through June 20, but the on-time performance of manifest trains, which carry a mix of cargo and go into yards such as Jackson and Shreveport, fell week over week, to 55.8%. Delays in Jackson and Shreveport also affect interchange partners such as CSX Transportation and Norfolk Southern Railway (NS). Train crews are scheduled around expected handoff times, but when CPKC trains arrive late, crews on connecting railroads can exhaust their federally mandated hours before reaching the next crew change point, further compounding delays. NS interchanges freight with CPKC in Shreveport and Meridian, Mississippi, while CSX exchanges containers in Myrtlewood, Alabama. CPKC said it plans to focus on this stretch of the network in the coming week. “[Staff] will maintain their in-person presence at locations across the legacy KCS network to support operating personnel and customers … with a focus in the coming week on the Southeast Division (areas east and southeast of Shreveport),” the railroad said in its letter to the STB. Contact Ari Ashe at ari.ashe@spglobal.com .

CPKC disruptions in Gulf states now impacting carload, intermodal traffic

<div class="phx-topic abstract-wrapper">Diversifying suppliers out of China has been a long-term trend among tech companies, but a recent acceleration of that shift is driven by fresh trade tensions rather than a desire to divest entirely, says Everstream Analytics.</div>

Diversifying suppliers out of China has been a long-term trend among tech companies, but a recent acceleration of that shift is driven by fresh trade tensions rather than a desire to divest entirely, says Everstream Analytics.

<div class="phx-topic">Escalating trade tensions and ongoing tariff uncertainties are adding to rising labor costs, prompting technology giants to accelerate the diversification of suppliers away from China, according to a new report from supply chain insight provider Everstream Analytics. While the diversification of manufacturing has been a long-term trend, the recent increase in that shift is being driven more by the need to reduce short-term risk in the face of recent trade disruption rather than a desire to completely divest from China, noted Jena Santoro, global head of research and analytics at Everstream. “Our analysis shows Thailand and Vietnam have nearly doubled their tech suppliers since 2019, while companies like HP are committing to move 90% of their manufacturing out of China by next year,” Santoro told the Journal of Commerce Thursday. The report, “Shifting away from China,” analyzed supplier data from 2019 to 2024 from tech majors that included Samsung, Apple, Dell, Nokia and NXP, and found the companies were moving core product lines to alternative manufacturing centers. India, Malaysia, Thailand, Vietnam and Taiwan have emerged as the most prominent alternative suppliers to China for the technology industry, the report found. The products most affected by the diversification strategies were smartphones, smart watches, computers and laptops. “But the reality is that China spent more than 30 years building its manufacturing ecosystem, and it may take just as long for alternatives to match that scale,” Santoro said. “So, while companies are absolutely diversifying, and they need to, this is about reducing risk, not replacing China entirely. At least not anytime soon.” <h3>End of 90-day pause on tariffs </h3>The Everstream report highlighted the upcoming end to the 90-day pause on US tariffs on China on Aug. 14 and the trade restrictions that could be imposed following its expiry. “Trade between China and the US remains unstable, with the current negotiations only resulting in a 90-day pause on the escalated tariff scheme, which includes a 125% import tariff on Chinese goods,” the report stated. “This level of tariff would make many technology products prohibitively expensive if manufactured entirely in China, creating strong financial incentives for diversification,” it added. “Global technology manufacturers will likely continue to seek alternative suppliers in countries perceived as less risky for business continuity.” On top of the trade tensions are long-term trends in China’s workforce that have led to an increasingly less cost-efficient labor market, a factor that has long encouraged companies to consider investing in cheaper production systems in other parts of the world as a way to increase margins. That trend shows no signs of reversal, as China no longer has the developing economy wages it once had. “Given these ... realities, technology supply chains with procurement operations integrated in China have become less stable and reliably more expensive than potential alternatives,” the Everstream report found. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Escalating trade tensions and ongoing tariff uncertainties are adding to rising labor costs, prompting technology giants to accelerate the diversification of suppliers away from China, according to a new report from supply chain insight provider Everstream Analytics. While the diversification of manufacturing has been a long-term trend, the recent increase in that shift is being driven more by the need to reduce short-term risk in the face of recent trade disruption rather than a desire to completely divest from China, noted Jena Santoro, global head of research and analytics at Everstream. “Our analysis shows Thailand and Vietnam have nearly doubled their tech suppliers since 2019, while companies like HP are committing to move 90% of their manufacturing out of China by next year,” Santoro told the Journal of Commerce Thursday. The report, “Shifting away from China,” analyzed supplier data from 2019 to 2024 from tech majors that included Samsung, Apple, Dell, Nokia and NXP, and found the companies were moving core product lines to alternative manufacturing centers. India, Malaysia, Thailand, Vietnam and Taiwan have emerged as the most prominent alternative suppliers to China for the technology industry, the report found. The products most affected by the diversification strategies were smartphones, smart watches, computers and laptops. “But the reality is that China spent more than 30 years building its manufacturing ecosystem, and it may take just as long for alternatives to match that scale,” Santoro said. “So, while companies are absolutely diversifying, and they need to, this is about reducing risk, not replacing China entirely. At least not anytime soon.” End of 90-day pause on tariffs The Everstream report highlighted the upcoming end to the 90-day pause on US tariffs on China on Aug. 14 and the trade restrictions that could be imposed following its expiry. “Trade between China and the US remains unstable, with the current negotiations only resulting in a 90-day pause on the escalated tariff scheme, which includes a 125% import tariff on Chinese goods,” the report stated. “This level of tariff would make many technology products prohibitively expensive if manufactured entirely in China, creating strong financial incentives for diversification,” it added. “Global technology manufacturers will likely continue to seek alternative suppliers in countries perceived as less risky for business continuity.” On top of the trade tensions are long-term trends in China’s workforce that have led to an increasingly less cost-efficient labor market, a factor that has long encouraged companies to consider investing in cheaper production systems in other parts of the world as a way to increase margins. That trend shows no signs of reversal, as China no longer has the developing economy wages it once had. “Given these ... realities, technology supply chains with procurement operations integrated in China have become less stable and reliably more expensive than potential alternatives,” the Everstream report found. Contact Greg Knowler at greg.knowler@spglobal.com.

Tech giants shift production out of China as trade tariffs raise supply risk: analysis

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

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Shippers save money, time with automated transportation bidding tools

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

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