<div class="phx-topic abstract-wrapper">The successful railways of the '90s will concentrate on core, mainline operations, selling marginal </div>

The successful railways of the '90s will concentrate on core, mainline operations, selling marginal

<div>The successful railways of the '90s will concentrate on core, mainline operations, selling marginal routes to short line operators, said Ron Lawless, president and chief executive officer of Canadian National Railway Co.In a year-end statement, Mr. Lawless noted that Canada's railways today face increasing competition from lower-cost U.S. carriers and Canadian truckers.Changing market demands require Canada's railways to continue to introduce technology and greater productivity as well as to reduce trackage and work force, the CN official said."Canada's railways today are in a fragile state, earning less than the cost of capital they must borrow for renewal and growth," Mr....

The successful railways of the '90s will concentrate on core, mainline operations, selling marginal routes to short line operators, said Ron Lawless, president and chief executive officer of Canadian National Railway Co. In a year-end statement, Mr. Lawless noted that Canada's railways today face increasing competition from lower-cost U.S. carriers and Canadian truckers.Changing market demands require Canada's railways to continue to introduce technology and greater productivity as well as to reduce trackage and work force, the CN official said. "Canada's railways today are in a fragile state, earning less than the cost of capital they must borrow for renewal and growth," Mr. Lawless said. "In the case of Canadian National," he added, "we currently cannot earn enough of a return to pay for the C$2 billion (US$1.7 billion) of capital we need to invest in new and upgraded plant and equipment during the next five years." While CN's rail volume remains steady, revenues have been shrinking because of marketplace pressures. At C$3.3 billion, 1991 freight revenues were the same as 1984's. On the other hand, with the development of continental free trade, CN's revenues from transborder traffic have increased by 18 percent since 1984. Over the next five years, CN expects these revenues to grow by 6.4 percent annually. With a view to capturing more transborder traffic, CN recently integrated the marketing and operations of its three U.S. rail companies into a new entity called CN North America. Mr. Lawless recalled the railway's signing of strategic alliances with three major U.S. railways and CN's increased thrust toward double-stack container services. A C$155 million tunnel between Sarnia, Ontario, and Port Huron, Mich., large enough to handle double-stack container trains, is to be opened by 1994. In his year-end statement, Mr. Lawless reiterated his appeal to the federal government to change its taxation policies to allow Canadian railways to be on a level playing field with other carriers in North America.

CN CHIEF URGES RAILWAYS TO FOCUS ON CORE BUSINESS

<div class="phx-topic abstract-wrapper">In its request for proposals to develop Pier 500, the port will specify that it seeks to contract with a member company of the Pacific Maritime Association that pledges to follow the guidelines for terminal operations on the US West Coast.</div>

In its request for proposals to develop Pier 500, the port will specify that it seeks to contract with a member company of the Pacific Maritime Association that pledges to follow the guidelines for terminal operations on the US West Coast.

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<div class="phx-topic">Plans by the Port of Los Angeles to build a new 200-acre, two-berth container terminal are being driven by projections that the Southern California gateway of LA and Long Beach will reach its combined capacity of 40 million TEUs in 2040. The proposed Pier 500 container terminal, which will take about 10 years to complete once construction begins, will position the Southern California port complex of Los Angeles and Long Beach to handle growing cargo volumes well beyond 2040, Gene Seroka, executive director of the Port of Los Angeles, told the Journal of Commerce Thursday. The LA-LB port complex, the largest in the US, handled a combined 19.9 million laden and empty TEUs in 2024, about a 20% increase over the previous year, according to data on the ports’ websites. “Infrastructure like this always has a 20- to 30-year horizon,” Seroka said. Los Angeles earlier this week announced it was seeking proposals for the pre-development of Pier 500, which will have about 3,000 linear feet of available wharf space. It will be located just south of the port’s Pier 400, the largest container terminal in the US and operated by APM Terminals. No cost estimate was provided by the port. The TEU capacity of the new terminal will depend on the type of terminal the winning developer decides to build, whether manual or automated. And an actual construction timeline won’t be known until all environmental clearances are secured.<h3>Will seek PMA member to operate new terminal </h3>In its request for proposals to develop Pier 500, Los Angeles will specify that it seeks to contract with a member company of the Pacific Maritime Association (PMA) that pledges to follow the guidelines for terminal operations on the US West Coast, Seroka said. The PMA, which consists of ocean carriers and terminal operators, negotiates and administers the coastwide waterfront contract with the International Longshore and Warehouse Union (ILWU). The pre-development process will include all necessary environmental assessments required by both state and federal law. “The entire proposed Pier 500 project, from pre-development, entitlement procurement and environmental review and full buildout and operation is expected to take approximately 10 years,” the port said in a statement. Development and construction are expected to move forward faster than most new terminals built on landfill, Seroka said, because the port has identified a submerged 124-acre landfill site that is only 15 feet below the water line. “We’ll cap off the 15 feet, so construction should proceed quicker than for most projects,” Seroka said. “We’ve been dumping rocks there for years from various construction projects.” While construction proceeds, Los Angeles will continue to implement operational improvements at the port and enhance its data-sharing efforts with port stakeholders including shipping lines, terminal operators, drayage operators, railroads and warehouse operators to squeeze greater productivity from the existing infrastructure, Seroka said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a></div>

Plans by the Port of Los Angeles to build a new 200-acre, two-berth container terminal are being driven by projections that the Southern California gateway of LA and Long Beach will reach its combined capacity of 40 million TEUs in 2040. The proposed Pier 500 container terminal, which will take about 10 years to complete once construction begins, will position the Southern California port complex of Los Angeles and Long Beach to handle growing cargo volumes well beyond 2040, Gene Seroka, executive director of the Port of Los Angeles, told the Journal of Commerce Thursday. The LA-LB port complex, the largest in the US, handled a combined 19.9 million laden and empty TEUs in 2024, about a 20% increase over the previous year, according to data on the ports’ websites. “Infrastructure like this always has a 20- to 30-year horizon,” Seroka said. Los Angeles earlier this week announced it was seeking proposals for the pre-development of Pier 500, which will have about 3,000 linear feet of available wharf space. It will be located just south of the port’s Pier 400, the largest container terminal in the US and operated by APM Terminals. No cost estimate was provided by the port. The TEU capacity of the new terminal will depend on the type of terminal the winning developer decides to build, whether manual or automated. And an actual construction timeline won’t be known until all environmental clearances are secured. Will seek PMA member to operate new terminal In its request for proposals to develop Pier 500, Los Angeles will specify that it seeks to contract with a member company of the Pacific Maritime Association (PMA) that pledges to follow the guidelines for terminal operations on the US West Coast, Seroka said. The PMA, which consists of ocean carriers and terminal operators, negotiates and administers the coastwide waterfront contract with the International Longshore and Warehouse Union (ILWU). The pre-development process will include all necessary environmental assessments required by both state and federal law. “The entire proposed Pier 500 project, from pre-development, entitlement procurement and environmental review and full buildout and operation is expected to take approximately 10 years,” the port said in a statement. Development and construction are expected to move forward faster than most new terminals built on landfill, Seroka said, because the port has identified a submerged 124-acre landfill site that is only 15 feet below the water line. “We’ll cap off the 15 feet, so construction should proceed quicker than for most projects,” Seroka said. “We’ve been dumping rocks there for years from various construction projects.” While construction proceeds, Los Angeles will continue to implement operational improvements at the port and enhance its data-sharing efforts with port stakeholders including shipping lines, terminal operators, drayage operators, railroads and warehouse operators to squeeze greater productivity from the existing infrastructure, Seroka said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com

Port News

Trans-Pacific

North American ports

Marine terminals

Container Shipping News

Maritime

Port of Los Angeles looks to handle future growth with new terminal project

<div class="phx-topic abstract-wrapper">Multiple carrier sources who spoke with the Journal of Commerce say refrigerated volumes from India to the US are already down by as much as 50% from the normal pattern for seafood trade.</div>

Multiple carrier sources who spoke with the Journal of Commerce say refrigerated volumes from India to the US are already down by as much as 50% from the normal pattern for seafood trade.

<div class="phx-topic">Ocean carriers and freight forwarders out of India are reporting significant setbacks in reefer exports to the US as steep tariffs have created an increasingly unfavorable business environment. Indian perishables trades to the US primarily come from the seafood, frozen/packaged food and pharmaceutical industries. The market was initially hit by a 50% tariff effective Aug. 27, with the exception of pharmaceutical products. But the Indian drug industry has now also been targeted by US tariffs, though the full impact there is unknown in the absence of clarity. Multiple carrier sources who spoke with the Journal of Commerce agreed that India reefer volumes to the US are already down by 30% to 50% from the normal pattern for seafood export trade. Sources pegged India’s combined pre-tariff reefer trade to the US at about 750 FEUs a week. “We are seeing vulnerability in shrimp volumes....it could eventually lead to a more significant decline over time," said Bhavik Mota, Maersk’s director of regional ocean management for India, the Middle East and Africa. “The exports of goods such as pharmaceuticals are holding firm, but we will have to see which way it goes when the new tariff on pharma comes into force." Sanyukta Kulkarni, trade lane manager for the Indian subcontinent at global forwarder DSV, believes the downturn in India-US reefer volumes could become more pronounced in the coming months if there is no relief from the deep “tariff wounds.” “As a forwarder, we are starting to see the impact, but it’s not drastic at the moment as many importers have continued to fulfill their previously committed volumes with suppliers,” Kulkarni said. “Additionally, finding supply chain alternatives to match that scale will take time.” Forwarder sources explained that reefer bookings were expected to be strong between September and October as exporters typically try to rush shipments ahead of the onset of the local Hindu festival season of Diwali that involves extended holidays and factory production cutbacks and closures. <h3>Carriers adjust capacity to manage rates </h3>While reefer booking prices out of India have weakened, forwarders believe major carriers have been able to prevent a sharp fall by adjusting capacity via blank sailings and/or lower reefer plug allotments. Average freight-all-kinds (FAK) or contract rates for reefer loads from Nhava Sheva to New York now stand at $3,000 to $3,200 per FEU, a decline of up to $500 per FEU since early September, sources say. Amid the uncertainty, container lines are devising new strategies to support reefer trade out of India. Ocean Network Express (ONE) recently opened a dedicated intermodal reefer train service from Hyderabad in southern India – a hub for the Indian pharmaceutical industry – to Nhava Sheva Port in tandem with its US East Coast sailings. The US is the largest market for Indian pharmaceutical exports. And thanks to advanced reefer equipment management systems, including remote control capabilities, supply chains for that trade have dramatically consolidated on the ocean leg — 70% to 30% by air freight. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

Ocean carriers and freight forwarders out of India are reporting significant setbacks in reefer exports to the US as steep tariffs have created an increasingly unfavorable business environment. Indian perishables trades to the US primarily come from the seafood, frozen/packaged food and pharmaceutical industries. The market was initially hit by a 50% tariff effective Aug. 27, with the exception of pharmaceutical products. But the Indian drug industry has now also been targeted by US tariffs, though the full impact there is unknown in the absence of clarity. Multiple carrier sources who spoke with the Journal of Commerce agreed that India reefer volumes to the US are already down by 30% to 50% from the normal pattern for seafood export trade. Sources pegged India’s combined pre-tariff reefer trade to the US at about 750 FEUs a week. “We are seeing vulnerability in shrimp volumes....it could eventually lead to a more significant decline over time," said Bhavik Mota, Maersk’s director of regional ocean management for India, the Middle East and Africa. “The exports of goods such as pharmaceuticals are holding firm, but we will have to see which way it goes when the new tariff on pharma comes into force." Sanyukta Kulkarni, trade lane manager for the Indian subcontinent at global forwarder DSV, believes the downturn in India-US reefer volumes could become more pronounced in the coming months if there is no relief from the deep “tariff wounds.” “As a forwarder, we are starting to see the impact, but it’s not drastic at the moment as many importers have continued to fulfill their previously committed volumes with suppliers,” Kulkarni said. “Additionally, finding supply chain alternatives to match that scale will take time.” Forwarder sources explained that reefer bookings were expected to be strong between September and October as exporters typically try to rush shipments ahead of the onset of the local Hindu festival season of Diwali that involves extended holidays and factory production cutbacks and closures. Carriers adjust capacity to manage rates While reefer booking prices out of India have weakened, forwarders believe major carriers have been able to prevent a sharp fall by adjusting capacity via blank sailings and/or lower reefer plug allotments. Average freight-all-kinds (FAK) or contract rates for reefer loads from Nhava Sheva to New York now stand at $3,000 to $3,200 per FEU, a decline of up to $500 per FEU since early September, sources say. Amid the uncertainty, container lines are devising new strategies to support reefer trade out of India. Ocean Network Express (ONE) recently opened a dedicated intermodal reefer train service from Hyderabad in southern India – a hub for the Indian pharmaceutical industry – to Nhava Sheva Port in tandem with its US East Coast sailings. The US is the largest market for Indian pharmaceutical exports. And thanks to advanced reefer equipment management systems, including remote control capabilities, supply chains for that trade have dramatically consolidated on the ocean leg — 70% to 30% by air freight. Contact Bency Mathew at bencyvmathew@gmail.com.

Cool Cargo News

Tariffs lead to sharp decline in Indian reefer exports to US: industry sources

<div class="phx-topic abstract-wrapper">As production shifts to counter the impact of US tariffs, the diversification of consumer markets will create new growth opportunities for the air freight industry, observers say.</div>

As production shifts to counter the impact of US tariffs, the diversification of consumer markets will create new growth opportunities for the air freight industry, observers say.

<div class="phx-topic">The widespread imposition of US tariffs has changed trade flows as manufacturers take a “US-plus one” approach to production, driving a diversification of air cargo trade lanes that spells good news for the industry, the head of The International Air Cargo Association says. Tiaca Director-General Glyn Hughes told an air cargo webinar hosted by rate benchmarking platform Xeneta Thursday that carriers were agile enough to respond quickly to big geographical changes in demand driven by US policy and deploy the required capacity appropriately. ”Over the last few years, we’ve heard ‘China-plus’ one from a production perspective to diversify supply chain risks, and we’re now hearing much more about ‘US-plus’ one from a consumption perspective,” Hughes said. “We will see a lot more production shifts to parts of Southeast Asia and a diversification of consumer markets under those conditions, and more areas of production and more areas of increasing consumption is really good for air cargo,” he added. The shift in air cargo trade lanes was a result of the May 2 removal by the White House of the “de minimis” exemption from duties on Chinese imports valued at under $800. Dozens of daily freighters serving the massive trans-Pacific demand for e-commerce were no longer required, forcing airlines to urgently look for new markets. But as quickly as US demand for Chinese e-commerce plummeted, giant online platforms Temu and Shein shifted their estimated billion-dollar marketing budget from the US to Europe, providing employment for the fleet of no-longer-surplus freighters. “The Chinese online platforms were able to decide, nearly overnight, instead of spending a billion dollars of advertising in the US, it was moved to Europe and we started buying, shifting (air cargo) capacity all the way from the trans-Pacific into Europe as a result,” said Niall van de Wouw, chief air freight officer at Xeneta. “It was done so effectively that the rates have remained fairly stable despite tremendous fluctuations with a massive increase in volumes into Europe and a decrease in volumes into the US. I find this astounding,” van de Wouw told the Xeneta webinar. <h3>Muted activity on trans-Pacific </h3>Global air cargo spot rates registered a fifth consecutive month of year-over-year declines in September, falling 4% to an average of $2.54 per kilogram, according to Xeneta. Much of the downward pressure came from muted activity on trans-Atlantic and trans-Pacific routes, where repeated extensions of US tariff deadlines appear to have pulled forward volumes into the summer months. While rates declined globally, average outbound Shanghai–Europe rates from May through September were flat year over year at $4.20/kg, while average Shanghai-Chicago rates for the same period were down 9% at $5.10/kg, Baltic Air Index (BAI) data showed. In a market update Friday, Cargo Facts Consulting noted that with the global de minimis repeal now in effect and the US-China 90-day tariff truce set to expire in November, demand patterns remained highly uncertain, with tactical redeployments of freighter aircraft continuing to shape capacity. <h3>US policy diverting trade </h3>Tiaca’s Hughes said the shifting of air freight capacity will not be limited to e-commerce developments as the uncertainties around doing business with the US spill over into other sectors. “We're going to see other industries saying the potential volatility of moving freight to the US market could be too fractured or too risky where all of a sudden your cargo, whether it goes by air or ocean, could be hit with a 25%, 40%, 50% tariff, which makes it uneconomic and too risky to produce and send,” Hughes told the Xeneta webinar. Cargo Facts Consulting noted in its update that global trade momentum was positive, but the composition has shifted with e-commerce and time-sensitive components gaining market share of air cargo, while discretionary consumer electronics tied to China–US flows have remained under pressure. “The policy backdrop is prompting strategies that prioritize flexibility, additional entry points and country-of-origin diversification,” Cargo Facts said. In its fourth quarter outlook, the consultancy expects continued volatility into the peak season as the US removal of the de minimis exemption collides with reduced winter airline schedules and incremental net freighter growth. “Asia–Europe should remain the relative outperformer, supported by e-commerce, postal-parcel re-routing and alternative sourcing from North and Southeast Asia,” the Cargo Facts outlook noted. “Trans-Pacific strength will depend on how quickly platforms and consolidators adapt labeling, screening and routing to the new US requirements.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

The widespread imposition of US tariffs has changed trade flows as manufacturers take a “US-plus one” approach to production, driving a diversification of air cargo trade lanes that spells good news for the industry, the head of The International Air Cargo Association says. Tiaca Director-General Glyn Hughes told an air cargo webinar hosted by rate benchmarking platform Xeneta Thursday that carriers were agile enough to respond quickly to big geographical changes in demand driven by US policy and deploy the required capacity appropriately. ”Over the last few years, we’ve heard ‘China-plus’ one from a production perspective to diversify supply chain risks, and we’re now hearing much more about ‘US-plus’ one from a consumption perspective,” Hughes said. “We will see a lot more production shifts to parts of Southeast Asia and a diversification of consumer markets under those conditions, and more areas of production and more areas of increasing consumption is really good for air cargo,” he added. The shift in air cargo trade lanes was a result of the May 2 removal by the White House of the “de minimis” exemption from duties on Chinese imports valued at under $800. Dozens of daily freighters serving the massive trans-Pacific demand for e-commerce were no longer required, forcing airlines to urgently look for new markets. But as quickly as US demand for Chinese e-commerce plummeted, giant online platforms Temu and Shein shifted their estimated billion-dollar marketing budget from the US to Europe, providing employment for the fleet of no-longer-surplus freighters. “The Chinese online platforms were able to decide, nearly overnight, instead of spending a billion dollars of advertising in the US, it was moved to Europe and we started buying, shifting (air cargo) capacity all the way from the trans-Pacific into Europe as a result,” said Niall van de Wouw, chief air freight officer at Xeneta. “It was done so effectively that the rates have remained fairly stable despite tremendous fluctuations with a massive increase in volumes into Europe and a decrease in volumes into the US. I find this astounding,” van de Wouw told the Xeneta webinar. Muted activity on trans-Pacific Global air cargo spot rates registered a fifth consecutive month of year-over-year declines in September, falling 4% to an average of $2.54 per kilogram, according to Xeneta. Much of the downward pressure came from muted activity on trans-Atlantic and trans-Pacific routes, where repeated extensions of US tariff deadlines appear to have pulled forward volumes into the summer months. While rates declined globally, average outbound Shanghai–Europe rates from May through September were flat year over year at $4.20/kg, while average Shanghai-Chicago rates for the same period were down 9% at $5.10/kg, Baltic Air Index (BAI) data showed. In a market update Friday, Cargo Facts Consulting noted that with the global de minimis repeal now in effect and the US-China 90-day tariff truce set to expire in November, demand patterns remained highly uncertain, with tactical redeployments of freighter aircraft continuing to shape capacity. US policy diverting trade Tiaca’s Hughes said the shifting of air freight capacity will not be limited to e-commerce developments as the uncertainties around doing business with the US spill over into other sectors. “We're going to see other industries saying the potential volatility of moving freight to the US market could be too fractured or too risky where all of a sudden your cargo, whether it goes by air or ocean, could be hit with a 25%, 40%, 50% tariff, which makes it uneconomic and too risky to produce and send,” Hughes told the Xeneta webinar. Cargo Facts Consulting noted in its update that global trade momentum was positive, but the composition has shifted with e-commerce and time-sensitive components gaining market share of air cargo, while discretionary consumer electronics tied to China–US flows have remained under pressure. “The policy backdrop is prompting strategies that prioritize flexibility, additional entry points and country-of-origin diversification,” Cargo Facts said. In its fourth quarter outlook, the consultancy expects continued volatility into the peak season as the US removal of the de minimis exemption collides with reduced winter airline schedules and incremental net freighter growth. “Asia–Europe should remain the relative outperformer, supported by e-commerce, postal-parcel re-routing and alternative sourcing from North and Southeast Asia,” the Cargo Facts outlook noted. “Trans-Pacific strength will depend on how quickly platforms and consolidators adapt labeling, screening and routing to the new US requirements.” Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Forwarder News

Air Cargo Carriers News

Air Cargo

Post-tariff air freight market diversifies into ‘US-plus one’ strategy: Tiaca

<div class="phx-topic abstract-wrapper">The vagueness of China’s potential retaliation against the US puts not just US-flag vessels under threat, but also any individuals and organizations accused of harming Beijing’s shipping interests.</div>

The vagueness of China’s potential retaliation against the US puts not just US-flag vessels under threat, but also any individuals and organizations accused of harming Beijing’s shipping interests.

<div class="phx-topic">Halifax — Container lines are bracing for potentially getting caught in the crossfire between China and the United States over new US port fees that will take effect in two weeks unless the White House provides concessions. While ocean carriers, aside from China-based lines, <a href="https://www.joc.com/article/chinese-tonnage-moving-out-of-us-container-trade-ahead-of-new-fees-xeneta-6081320">have made moves to avoid the new fees</a> that start Oct. 14, China’s warning of retaliatory action against the US earlier this week reinjects uncertainty on the US trades. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6090908_0.1.jpg"></img></div>China on Sunday <a href="https://www.joc.com/article/china-flexes-maritime-power-in-response-to-coming-us-port-fee-6088252">implemented changes to its shipping law</a> allowing it to levy its own special fees and restrict vessels of countries accused of targeting its shipping operations. But the amendment doesn’t specify how China would determine whether a ship is considered to originate from the offending country. Such vague language means China could target not just US-flag vessels operated by Matson, but any vessel it determines was receiving US support, executives from two container lines told the Journal of Commerce. The sources, who did not want to be identified, said they expected the Trump administration to grant concessions to China-based carriers Cosco, its subsidiary OOCL and Hong Kong-based niche carrier Hede. However, the scale of the threat to operations and the unpredictability of the White House force all ocean carriers to prepare for the worst. <h3>‘Sky is basically the limit’ for China retaliation </h3>China’s “shot across the bow” in the form of the shipping law change allows the country to also target individuals and organizations, not just container operators, Lars Jensen, maritime analyst and Journal of Commerce contributor, told an industry event in Halifax on Wednesday. “This would impact Matson dramatically, which indirectly, would impact the services between the US mainland and Hawaii, and with the vague language that they reserve the right to go after individuals or organizations, well, then the sky is basically the limit,” Jensen said at the Halifax Supply Chain Forum. Maersk and CMA CGM also operate US-flag fleets. Cosco, OOCL and Hede are subject to higher US port fees than their peers but will remain serving the Asia-US trades. A Hede representative told the Journal of Commerce that reports it was suspending its expedited service were incorrect. Cosco, <a href="https://www.joc.com/article/cosco-says-no-changes-to-us-services-as-new-port-fees-approach-6082151">which told its US customers to expect little change in its services and rates</a>, has removed 52,000 TEUs in China-built tonnage since April and currently has about 215,000 TEUs on capacity deployed on US trades, according to an analysis by benchmarking platform Xeneta. On the Asia-US trade, China-built tonnage accounts for 499,000 TEUs, or 15% of the trade. Cosco and OOCL together handle the largest share of US imports from Asia, shipping nearly 16% of laden Asia imports in August. The US Trade Representative’s port fee plan was unveiled in February, just two months after the office concluded an investigation that determined China unfairly subsidizes its shipbuilding industry. The speed of the new US port fees — in place in less than 10 months — should give the industry pause, particularly in light of the Federal Maritime Commission’s current investigation into abuse of flags of convenience. “So the question is, then, what action will the US government take? Will we see restrictions facing flag states?,” Jensen said. “We certainly don’t know. But it seems very certain that [the White House will act] at some point during 2026.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Halifax — Container lines are bracing for potentially getting caught in the crossfire between China and the United States over new US port fees that will take effect in two weeks unless the White House provides concessions. While ocean carriers, aside from China-based lines, have made moves to avoid the new fees that start Oct. 14, China’s warning of retaliatory action against the US earlier this week reinjects uncertainty on the US trades. China on Sunday implemented changes to its shipping law allowing it to levy its own special fees and restrict vessels of countries accused of targeting its shipping operations. But the amendment doesn’t specify how China would determine whether a ship is considered to originate from the offending country. Such vague language means China could target not just US-flag vessels operated by Matson, but any vessel it determines was receiving US support, executives from two container lines told the Journal of Commerce. The sources, who did not want to be identified, said they expected the Trump administration to grant concessions to China-based carriers Cosco, its subsidiary OOCL and Hong Kong-based niche carrier Hede. However, the scale of the threat to operations and the unpredictability of the White House force all ocean carriers to prepare for the worst. ‘Sky is basically the limit’ for China retaliation China’s “shot across the bow” in the form of the shipping law change allows the country to also target individuals and organizations, not just container operators, Lars Jensen, maritime analyst and Journal of Commerce contributor, told an industry event in Halifax on Wednesday. “This would impact Matson dramatically, which indirectly, would impact the services between the US mainland and Hawaii, and with the vague language that they reserve the right to go after individuals or organizations, well, then the sky is basically the limit,” Jensen said at the Halifax Supply Chain Forum. Maersk and CMA CGM also operate US-flag fleets. Cosco, OOCL and Hede are subject to higher US port fees than their peers but will remain serving the Asia-US trades. A Hede representative told the Journal of Commerce that reports it was suspending its expedited service were incorrect. Cosco, which told its US customers to expect little change in its services and rates , has removed 52,000 TEUs in China-built tonnage since April and currently has about 215,000 TEUs on capacity deployed on US trades, according to an analysis by benchmarking platform Xeneta. On the Asia-US trade, China-built tonnage accounts for 499,000 TEUs, or 15% of the trade. Cosco and OOCL together handle the largest share of US imports from Asia, shipping nearly 16% of laden Asia imports in August. The US Trade Representative’s port fee plan was unveiled in February, just two months after the office concluded an investigation that determined China unfairly subsidizes its shipbuilding industry. The speed of the new US port fees — in place in less than 10 months — should give the industry pause, particularly in light of the Federal Maritime Commission’s current investigation into abuse of flags of convenience. “So the question is, then, what action will the US government take? Will we see restrictions facing flag states?,” Jensen said. “We certainly don’t know. But it seems very certain that [the White House will act] at some point during 2026.” Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container lines

China’s port fee warning to US puts ocean carriers on edge

<div class="phx-topic abstract-wrapper">The Class I railroad says the real entity behind the complaint is Norfolk Southern’s merger partner Union Pacific, which CPKC says has been delivering trains too long to safely operate. </div>

The Class I railroad says the real entity behind the complaint is Norfolk Southern’s merger partner Union Pacific, which CPKC says has been delivering trains too long to safely operate.

<div class="phx-topic">Canadian Pacific Kansas City (CPKC) shot down a complaint from Norfolk Southern (NS) that alleged CPKC is throttling access on a jointly owned track in the US Southeast, saying NS’ merger partner Union Pacific is ignoring the track’s safety protocols on the length of train blocks. CPKC said in a statement to the Journal of Commerce that it plans a detailed response to a filing NS made Tuesday with the US Surface Transportation Board (STB) regarding operation of <a href="https://www.joc.com/article/a-merged-cp-kcs-would-offer-new-cross-border-intermodal-growth-ramp-5250376">the Meridian Speedway</a>, a 320-mile track between Shreveport, Louisiana. and Meridian, Mississippi. The letter claimed that CPKC, <a href="https://www.joc.com/article/us-regulators-approve-cp-kcs-merger-to-form-first-us-canada-mexico-rail-5192986">the track’s majority owner and operator</a>, is failing to provide on-time service to NS, which has haulage rights on Meridian as its minority owner. It said two-thirds of CPKC trains hauling NS intermodal freight are behind schedule, pushing up to 100,000 loads to trucks. NS is asking the STB to require an action plan from CPKC that will address crew availability and how it will improve train speeds on the Meridian. “There has been a substantial deterioration in intermodal train service ... which has affected traffic to multiple intermodal customers, some of whom have diverted their traffic from rail service to trucks,” NS’ letter said. CPKC said in its statement that it is “preparing a detailed response to refute these misleading claims and representations” and that the railroad “has lived up to its commitments” that were part of the STB’s approval for Canadian Pacific’s takeover of Kansas City Southern. CPKC said it recently told Union Pacific (UP), which also ships freight on Meridian through its interchange agreements with NS, that UP’s train blocks are too long by some 2,500 feet. That length exceeds the design length for sidings on the single-track route, CPKC said. The railroad said that the shorter train lengths are outlined in Meridian’s operating agreement and benefit all customers through faster speeds and reliability, “We understand that delivering shorter trains at Shreveport requires adjustments by UP when it builds it trains out west,” CPKC said. “It is our responsibility in safely and efficiently operating the Speedway to ensure our customers’ interests are weighed and protected fairly as well, not only just what UP believes is in their best interest.” <h3>UPS, FedEx major Meridian customers </h3>Meridian is a key rail gateway to the Southeast, with UPS and FedEx both major customers for eastbound parcel traffic to Atlanta. According to one source familiar with matter, UPS has been having to truck its eastbound parcels since August due to the disruption. Speaking in Chicago Wednesday at the Journal of Commerce Inland Distribution conference, UP Chief Executive Jim Vena said <a href="https://www.joc.com/article/inland-25-ns-merger-wont-limit-access-to-other-railroads-up-ceo-6090216">Meridian was routinely handling train blocks exceeding 11,000 feet under Kansas City Southern</a>. But CPKC has now throttled those blocks down to 8,000 feet. While UP did not raise the issue with the STB because it’s not a party to Meridian’s operation, Vena said his company also addressed the matter in a letter directly to CPKC. He said UP would have more leverage in the matter due to the access it grants CPKC trains on tracks to Mexico. “They [CPKC] need to have a ‘come-to-Jesus’ moment,” Vena said. “All of a sudden you wake and then you tell me that you’re short of crews? Well, you’re short of crews because you decided not to run this 11,000-foot train that you always used to be able to run.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Canadian Pacific Kansas City (CPKC) shot down a complaint from Norfolk Southern (NS) that alleged CPKC is throttling access on a jointly owned track in the US Southeast, saying NS’ merger partner Union Pacific is ignoring the track’s safety protocols on the length of train blocks. CPKC said in a statement to the Journal of Commerce that it plans a detailed response to a filing NS made Tuesday with the US Surface Transportation Board (STB) regarding operation of the Meridian Speedway , a 320-mile track between Shreveport, Louisiana. and Meridian, Mississippi. The letter claimed that CPKC, the track’s majority owner and operator , is failing to provide on-time service to NS, which has haulage rights on Meridian as its minority owner. It said two-thirds of CPKC trains hauling NS intermodal freight are behind schedule, pushing up to 100,000 loads to trucks. NS is asking the STB to require an action plan from CPKC that will address crew availability and how it will improve train speeds on the Meridian. “There has been a substantial deterioration in intermodal train service ... which has affected traffic to multiple intermodal customers, some of whom have diverted their traffic from rail service to trucks,” NS’ letter said. CPKC said in its statement that it is “preparing a detailed response to refute these misleading claims and representations” and that the railroad “has lived up to its commitments” that were part of the STB’s approval for Canadian Pacific’s takeover of Kansas City Southern. CPKC said it recently told Union Pacific (UP), which also ships freight on Meridian through its interchange agreements with NS, that UP’s train blocks are too long by some 2,500 feet. That length exceeds the design length for sidings on the single-track route, CPKC said. The railroad said that the shorter train lengths are outlined in Meridian’s operating agreement and benefit all customers through faster speeds and reliability, “We understand that delivering shorter trains at Shreveport requires adjustments by UP when it builds it trains out west,” CPKC said. “It is our responsibility in safely and efficiently operating the Speedway to ensure our customers’ interests are weighed and protected fairly as well, not only just what UP believes is in their best interest.” UPS, FedEx major Meridian customers Meridian is a key rail gateway to the Southeast, with UPS and FedEx both major customers for eastbound parcel traffic to Atlanta. According to one source familiar with matter, UPS has been having to truck its eastbound parcels since August due to the disruption. Speaking in Chicago Wednesday at the Journal of Commerce Inland Distribution conference, UP Chief Executive Jim Vena said Meridian was routinely handling train blocks exceeding 11,000 feet under Kansas City Southern . But CPKC has now throttled those blocks down to 8,000 feet. While UP did not raise the issue with the STB because it’s not a party to Meridian’s operation, Vena said his company also addressed the matter in a letter directly to CPKC. He said UP would have more leverage in the matter due to the access it grants CPKC trains on tracks to Mexico. “They [CPKC] need to have a ‘come-to-Jesus’ moment,” Vena said. “All of a sudden you wake and then you tell me that you’re short of crews? Well, you’re short of crews because you decided not to run this 11,000-foot train that you always used to be able to run.” Contact Michael Angell at michael.angell@spglobal.com .

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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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