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<div class="phx-topic abstract-wrapper">To comply with the European emissions trading system, ocean carriers will essentially need to become experts in carbon credit trading, on top of monitoring, verifying and reporting CO2 emissions.</div>

To comply with the European emissions trading system, ocean carriers will essentially need to become experts in carbon credit trading, on top of monitoring, verifying and reporting CO2 emissions.

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<div class="phx-topic">The impact of Europe’s emissions trading system (ETS) on the container shipping value chain is becoming apparent, with growing concerns that the industry is not prepared for the incoming carbon tax regime. Shipping will be included in Europe’s ETS on Jan. 1 when all emissions on voyages and port calls within the European Union and European Economic Area, and 50% of emissions on voyages into or out of the regions, will be subject to the carbon tax. To comply with the ETS, ocean carriers will essentially need to become experts in carbon credit trading, on top of monitoring, verifying and reporting CO2 emissions across regional fleets and their vessels operating in the region. “Container shipping will bear the biggest cost of all segments, driven by its outstanding importance to global maritime transport and the higher speeds and consumption of the vessels employed,” Albrecht Grell, managing director of Hamburg-based maritime data and technology firm OceanScore, told the Journal of Commerce Thursday. “European shipping is better prepared than non-European players, and larger companies are better prepared than smaller ones — with quite a few of the small ones basically not yet prepared at all,” Grell added. All ship operators will be required to monitor and report their emissions and surrender allowances for every ton of CO2 they emit. Shipping will be required to pay for allowances covering 40% of greenhouse gas emissions in 2024, rising to 70% in 2025 and 100% from 2026. Carbon credits, known as EU allowances (EUAs), will be purchased at a fixed price in the primary market through auctions arranged several times a year by the European Energy Exchange (EEX) on behalf of the EU. They can also be bought and sold on the secondary market over the counter through brokers or online trading platforms. Maersk and Hapag-Lloyd advised the market two weeks ago they will be <a href="https://www.joc.com/article/maersk-hapag-lloyd-put-shippers-notice-ahead-european-ets-surcharges_20230922.html">collecting an emissions surcharge from customers from the first quarter</a> of 2024, and CMA CGM today released estimates of €25/TEU from Asia to Europe and €20/TEU from Asia to the Mediterranean. “The surcharge amount will be shared mid-November and may be reviewed on a quarterly basis, depending on the updated version of the EU ETS regulation and the market value of carbon allowances,” CMA CGM said in a statement. <h2>Potentially huge liabilities </h2>Significant penalties await for non-compliance, with carriers required to make up any shortfall of allowances with an inflation-linked fine of €100 per tonne of CO2 equivalent for emissions the carriers have not covered by purchasing EUAs. Grell said a company also risks its entire fleet being expelled from trading in EU waters if the carrier fails to surrender sufficient allowances for a single vessel over two consecutive years or more. However, Grell warned of wider financial implications for shipping companies, with the need to buy and sell EUAs introducing a new element of balance sheet risk with exposure to potentially huge liabilities. The total annual cost to shipping after 2026 when the three-year phase-in period ends is estimated to be up to €10 billion. “This can translate into millions of euros in liabilities for the party responsible for buying and surrendering allowances, especially when managing or owning a large fleet,” Grell said. “It may also be difficult to pass on these costs to the charterer as the ‘polluter pays’ principle dictates due to possible disputes over EUA volumes or pricing.” <div class="wrapper-full"><dynamic-object type="jocchartid" resource-id="61d09dfb-b386-4ddc-bb5d-6e9e1894f118"></dynamic-object></div>Berlin CO2 management provider Zero44 released an ETS tool for trading in EUAs this week with software developed in partnership with MPC Container Ships, Harren Group and Zeaborn Ship Management. But the solutions provider said in a statement Wednesday that complying with the ETS presented significant challenges. “Since January this year, we have been working intensively on our ETS solution and, together with our development partners, have examined the complexity of regulation from all perspectives,” Friederike Hesse, co-founder and managing director of Zero44, said in the statement. A key challenge was that ETS accounting was annual and retrospective, with data verification to take place on March 31 in the year following the assessment period, and the submission of EUAs to be made in the following September. “This is a problem for the sector because charter contracts are structured differently in terms of timing,” Zero44 noted in the statement, adding that to prevent major financial risks, settlement of the ETS needed to be close to the time of each completed voyage rather than at a specific time each year. <h2>No clear view of responsibility </h2>Another major challenge raised by Zero44 was the multitude of business models and stakeholders involved in European ocean shipping. It was <a href="https://www.joc.com/article/europes-ets-creating-new-contractual-complexities-shipping-industry_20230503.html">an issue the Journal of Commerce highlighted in May</a> when concerns were expressed over how the huge cost of meeting the regulation could be factored into contracts between several parties in the shipping value chain. “Owners, charterers, international safety managers [ISMs], commercial managers and cargo owners are affected by the ETS and have to agree among themselves who is responsible for which measures within the ETS value chain and how often the settlement of allowance trading should take place,” Zero44 noted. “These agreements also influence each other. For example, an agreement between the owner and the charterer has an impact on the agreements between the owner and the ISM manager,” it added. “Time charters, voyage charters, pools and parceling each bring their own challenges.” A third challenge involved Europe’s Union Registry that is used to account for all industry EUAs but was not designed with the specificities and requirements of shipping in mind. Zero44 said links in the Union Registry between the EUAs and the ships, voyages, charterers and ship managers would have to be managed within a shipping company itself to allow the correct accounting of costs. Despite the uncertainties, with less than three months before the ETS is implemented, waiting to see how the ruling plays out is no longer an option, warned Grell. “Hope that ‘we will manage somehow, as always’ could be a risky proposition,” he said. “Preparations concerning [the] assessment of EUA ... as per specific regulation, processes, contractual arrangements with charterers and owners, and responsibilities in the companies are generally far from where they should be.” Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@spglobal.com</a>. </div>

The impact of Europe’s emissions trading system (ETS) on the container shipping value chain is becoming apparent, with growing concerns that the industry is not prepared for the incoming carbon tax regime. Shipping will be included in Europe’s ETS on Jan. 1 when all emissions on voyages and port calls within the European Union and European Economic Area, and 50% of emissions on voyages into or out of the regions, will be subject to the carbon tax. To comply with the ETS, ocean carriers will essentially need to become experts in carbon credit trading, on top of monitoring, verifying and reporting CO2 emissions across regional fleets and their vessels operating in the region. “Container shipping will bear the biggest cost of all segments, driven by its outstanding importance to global maritime transport and the higher speeds and consumption of the vessels employed,” Albrecht Grell, managing director of Hamburg-based maritime data and technology firm OceanScore, told the Journal of Commerce Thursday. “European shipping is better prepared than non-European players, and larger companies are better prepared than smaller ones — with quite a few of the small ones basically not yet prepared at all,” Grell added. All ship operators will be required to monitor and report their emissions and surrender allowances for every ton of CO2 they emit. Shipping will be required to pay for allowances covering 40% of greenhouse gas emissions in 2024, rising to 70% in 2025 and 100% from 2026. Carbon credits, known as EU allowances (EUAs), will be purchased at a fixed price in the primary market through auctions arranged several times a year by the European Energy Exchange (EEX) on behalf of the EU. They can also be bought and sold on the secondary market over the counter through brokers or online trading platforms. Maersk and Hapag-Lloyd advised the market two weeks ago they will be collecting an emissions surcharge from customers from the first quarter of 2024, and CMA CGM today released estimates of €25/TEU from Asia to Europe and €20/TEU from Asia to the Mediterranean. “The surcharge amount will be shared mid-November and may be reviewed on a quarterly basis, depending on the updated version of the EU ETS regulation and the market value of carbon allowances,” CMA CGM said in a statement. Potentially huge liabilities Significant penalties await for non-compliance, with carriers required to make up any shortfall of allowances with an inflation-linked fine of €100 per tonne of CO2 equivalent for emissions the carriers have not covered by purchasing EUAs. Grell said a company also risks its entire fleet being expelled from trading in EU waters if the carrier fails to surrender sufficient allowances for a single vessel over two consecutive years or more. However, Grell warned of wider financial implications for shipping companies, with the need to buy and sell EUAs introducing a new element of balance sheet risk with exposure to potentially huge liabilities. The total annual cost to shipping after 2026 when the three-year phase-in period ends is estimated to be up to €10 billion. “This can translate into millions of euros in liabilities for the party responsible for buying and surrendering allowances, especially when managing or owning a large fleet,” Grell said. “It may also be difficult to pass on these costs to the charterer as the ‘polluter pays’ principle dictates due to possible disputes over EUA volumes or pricing.” Berlin CO2 management provider Zero44 released an ETS tool for trading in EUAs this week with software developed in partnership with MPC Container Ships, Harren Group and Zeaborn Ship Management. But the solutions provider said in a statement Wednesday that complying with the ETS presented significant challenges. “Since January this year, we have been working intensively on our ETS solution and, together with our development partners, have examined the complexity of regulation from all perspectives,” Friederike Hesse, co-founder and managing director of Zero44, said in the statement. A key challenge was that ETS accounting was annual and retrospective, with data verification to take place on March 31 in the year following the assessment period, and the submission of EUAs to be made in the following September. “This is a problem for the sector because charter contracts are structured differently in terms of timing,” Zero44 noted in the statement, adding that to prevent major financial risks, settlement of the ETS needed to be close to the time of each completed voyage rather than at a specific time each year. No clear view of responsibility Another major challenge raised by Zero44 was the multitude of business models and stakeholders involved in European ocean shipping. It was an issue the Journal of Commerce highlighted in May when concerns were expressed over how the huge cost of meeting the regulation could be factored into contracts between several parties in the shipping value chain. “Owners, charterers, international safety managers [ISMs], commercial managers and cargo owners are affected by the ETS and have to agree among themselves who is responsible for which measures within the ETS value chain and how often the settlement of allowance trading should take place,” Zero44 noted. “These agreements also influence each other. For example, an agreement between the owner and the charterer has an impact on the agreements between the owner and the ISM manager,” it added. “Time charters, voyage charters, pools and parceling each bring their own challenges.” A third challenge involved Europe’s Union Registry that is used to account for all industry EUAs but was not designed with the specificities and requirements of shipping in mind. Zero44 said links in the Union Registry between the EUAs and the ships, voyages, charterers and ship managers would have to be managed within a shipping company itself to allow the correct accounting of costs. Despite the uncertainties, with less than three months before the ETS is implemented, waiting to see how the ruling plays out is no longer an option, warned Grell. “Hope that ‘we will manage somehow, as always’ could be a risky proposition,” he said. “Preparations concerning [the] assessment of EUA ... as per specific regulation, processes, contractual arrangements with charterers and owners, and responsibilities in the companies are generally far from where they should be.” Contact Greg Knowler at greg.knowler@spglobal.com .

Doubts growing over shipping’s readiness for Europe’s ETS carbon tax

Dry Maersk

Dry Hapag-Lloyd

Reefer Maersk

  Reefer Hapag-Lloyd

Maersk, Hapag-Lloyd ETS emissions surcharges on Asia-Europe trades

ETS emissions surcharges Asia-Europegreg2

<div class="phx-topic abstract-wrapper">Less-than-truckload volumes may be down as much as 15% from 2021, but carriers are pushing for rate hikes in single-digit percentages as they plan expansion. </div>

Less-than-truckload volumes may be down as much as 15% from 2021, but carriers are pushing for rate hikes in single-digit percentages as they plan expansion.

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<div class="phx-topic">US freight demand may be soft, but less-than-truckload (LTL) carriers are defying a two-year freight slump and increasing contractual pricing heading into 2025. Several large publicly-owned LTL providers have reported third-quarter contract renewal rates rising by anywhere from low single-digit to high single-digit percentages. That’s surprising in a market where LTL shipments overall are down and excess capacity at large carriers is heading toward 30%. LTL carriers also continue to invest in terminals, opening facilities bought from Yellow <a href="https://www.joc.com/article/yellow-puts-remaining-112-ltl-terminals-on-the-block-5737425">as they plan for long-term expansion</a>. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="458dda45-1e1c-4de2-9960-9b02e4cb2804"></dynamic-object></div>LTL’s pricing surge still stems from the July 2023 collapse of Yellow, at the time the third-largest US LTL provider, which cut into overall capacity in the sector. LTL carriers also have kept pricing discipline, eschewing discounts. Those carriers that have tried lower pricing face tough margin pressure from rising operating costs. An LTL shipper that did not want to be identified said carriers are still very selective when it comes to the freight they haul, despite overall soft demand. LTL providers are more strictly monitoring shipment dimensions and refusing lower margin freight, the source said. <h3>Single-digit rate hikes </h3>Long-haul LTL carriers Saia and XPO both reported contract rates rising in the high single-digit range year over year in the third quarter, with Saia fixing its average gain at 7.9%. That’s also the amount of the 2025 general rate increase Saia announced this week. Old Dominion Freight Line (ODFL), the second-largest US LTL provider, said it expects LTL yield excluding surcharges, a measure that often substitutes for rates, to rise by approximately 4% in the fourth quarter.Excluding fuel, ODFL’s yield, or revenue per hundredweight, rose 4.6% in the third quarter from a year ago. “We expect to continue to get increases,” CFO Adam Satterfield told Wall Street analysts last week. Overall, LTL tonnage is down about 15% from a peak in the second quarter of 2021, according to ODFL. However, the US LTL producer price index (PPI), a measure of all-inclusive LTL selling prices, is up 6.6% from its latest trough in April 2023 and 5.2% from Yellow’s collapse. The ongoing LTL pricing gains also suggest that US shippers are concerned about securing adequate capacity ahead of stronger freight demand. “When freight starts coming back, we’ll have the cycle for all cycles in LTL in terms of volume and yield and not having enough capacity,” XPO CEO Mario Harik told the Journal of Commerce Wednesday. <h3>Waiting for a new tide </h3>ODFL, XPO and Saia expect a gradual increase in LTL freight demand as lower interest rates generate more freight across manufacturing and retail sectors. “The tide is finally coming back in,” Satterfield told Wall Street analysts. He referred to LTL freight that had shifted to the truckload market in the past two years, where rates are considerably lower. After Yellow collapsed, “I think people were just trying to find a home for freight,” Satterfield said. ”So now we’re seeing an influx of business coming back, and once we renormalize, we’d expect that we’ll be able to pick up quite a bit of freight,” he said. ODFL’s daily shipment count dropped 3.4% year over year in the third quarter to 47,967 shipments a day on average, the company said. For the first nine months of 2024, the average daily shipment count was flat year over year at 47,781 shipments. Average daily volume at XPO fell 3.2% in the quarter to 51,921 shipments, while the volume count rose 1.9% year over year in the past nine months, to 52,281 shipments. Saia increased its daily volume by 8.5% from the year-ago quarter to 37,200 shipments. The carrier raised its revenue 8.6% to $841 million, a new third-quarter record for the company. Saia, now the seventh-largest LTL carrier ranked by revenue, has grown at a rapid rate over the past year, picking up business from Yellow and purchasing 28 terminals from the bankrupt company. Its volume growth began to slow after the anniversary of Yellow’s exit, but growth continues. Shipments per day at Saia are up about 4% in October to date after rising 8.6% year over year in September, Saia CFO Matthew Batteh said during an earnings call last week. ”Freight moves around a little bit when you take the rate increase at times,” Batteh said. “With the macro backdrop where it is, there are customers that may go find other options. And we’re willing to let that walk. We’re not going to go chase that.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US freight demand may be soft, but less-than-truckload (LTL) carriers are defying a two-year freight slump and increasing contractual pricing heading into 2025. Several large publicly-owned LTL providers have reported third-quarter contract renewal rates rising by anywhere from low single-digit to high single-digit percentages. That’s surprising in a market where LTL shipments overall are down and excess capacity at large carriers is heading toward 30%. LTL carriers also continue to invest in terminals, opening facilities bought from Yellow as they plan for long-term expansion . LTL’s pricing surge still stems from the July 2023 collapse of Yellow, at the time the third-largest US LTL provider, which cut into overall capacity in the sector. LTL carriers also have kept pricing discipline, eschewing discounts. Those carriers that have tried lower pricing face tough margin pressure from rising operating costs. An LTL shipper that did not want to be identified said carriers are still very selective when it comes to the freight they haul, despite overall soft demand. LTL providers are more strictly monitoring shipment dimensions and refusing lower margin freight, the source said. Single-digit rate hikes Long-haul LTL carriers Saia and XPO both reported contract rates rising in the high single-digit range year over year in the third quarter, with Saia fixing its average gain at 7.9%. That’s also the amount of the 2025 general rate increase Saia announced this week. Old Dominion Freight Line (ODFL), the second-largest US LTL provider, said it expects LTL yield excluding surcharges, a measure that often substitutes for rates, to rise by approximately 4% in the fourth quarter. Excluding fuel, ODFL’s yield, or revenue per hundredweight, rose 4.6% in the third quarter from a year ago. “We expect to continue to get increases,” CFO Adam Satterfield told Wall Street analysts last week. Overall, LTL tonnage is down about 15% from a peak in the second quarter of 2021, according to ODFL. However, the US LTL producer price index (PPI), a measure of all-inclusive LTL selling prices, is up 6.6% from its latest trough in April 2023 and 5.2% from Yellow’s collapse. The ongoing LTL pricing gains also suggest that US shippers are concerned about securing adequate capacity ahead of stronger freight demand. “When freight starts coming back, we’ll have the cycle for all cycles in LTL in terms of volume and yield and not having enough capacity,” XPO CEO Mario Harik told the Journal of Commerce Wednesday. Waiting for a new tide ODFL, XPO and Saia expect a gradual increase in LTL freight demand as lower interest rates generate more freight across manufacturing and retail sectors. “The tide is finally coming back in,” Satterfield told Wall Street analysts. He referred to LTL freight that had shifted to the truckload market in the past two years, where rates are considerably lower. After Yellow collapsed, “I think people were just trying to find a home for freight,” Satterfield said. ”So now we’re seeing an influx of business coming back, and once we renormalize, we’d expect that we’ll be able to pick up quite a bit of freight,” he said. ODFL’s daily shipment count dropped 3.4% year over year in the third quarter to 47,967 shipments a day on average, the company said. For the first nine months of 2024, the average daily shipment count was flat year over year at 47,781 shipments. Average daily volume at XPO fell 3.2% in the quarter to 51,921 shipments, while the volume count rose 1.9% year over year in the past nine months, to 52,281 shipments. Saia increased its daily volume by 8.5% from the year-ago quarter to 37,200 shipments. The carrier raised its revenue 8.6% to $841 million, a new third-quarter record for the company. Saia, now the seventh-largest LTL carrier ranked by revenue, has grown at a rapid rate over the past year, picking up business from Yellow and purchasing 28 terminals from the bankrupt company. Its volume growth began to slow after the anniversary of Yellow’s exit, but growth continues. Shipments per day at Saia are up about 4% in October to date after rising 8.6% year over year in September, Saia CFO Matthew Batteh said during an earnings call last week. ”Freight moves around a little bit when you take the rate increase at times,” Batteh said. “With the macro backdrop where it is, there are customers that may go find other options. And we’re willing to let that walk. We’re not going to go chase that.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

US LTL carriers raising rates as shippers keep wary eye on 2025

<div class="phx-topic abstract-wrapper">The Environmental Protection Agency will disburse nearly $3 billion in federal funds meant to offset the costs of upgrading thousands of pieces of yard equipment from diesel to electric power.</div>

The Environmental Protection Agency will disburse nearly $3 billion in federal funds meant to offset the costs of upgrading thousands of pieces of yard equipment from diesel to electric power.

<div class="phx-topic">US ports are poised for one of the largest ever upgrade cycles for container handling equipment after the federal government announced $2.8 billion in grants to replace diesel-powered yard equipment with electric equipment. With the grants, ports that abut residential areas can keep growing cargo volumes while diminishing the adverse effects of pollution and carbon emissions. The Environmental Protection Agency (EPA) said Tuesday its Clean Ports Program will fund 21 projects across US ports for replacing diesel-powered cargo handling equipment with electric equipment, making it the largest port segment for replacement grants after other areas including vessel shore power, solar installations and trucks and rail. The funds are available under the Biden administration’s Inflation Reduction Act. The Port of New York and New Jersey received $344 million, the third-largest grant behind the ports of Los Angeles and Virginia. Beth Rooney, port director for the Port Authority of New York and New Jersey, told the Journal of Commerce Wednesday that a large grant was needed to tackle a port-wide equipment upgrade. Rooney said there are some 2,700 pieces of equipment at local marine terminals that could be replaced under the program. Replacing that equipment will be the equivalent of removing 14,000 gasoline-powered cars from the road annually, she added, and remove a source of 67,000 tons of carbon dioxide emissions. New York-New Jersey also received another $3 million toward air monitoring and community engagement efforts. Since implementing a clean air action program in 2009, Rooney said the port pollution has decreased by half or more depending on the specific pollutant. Marine terminal operators in New Jersey have undertaken their own initiatives to reduce diesel pollution over the years. Port Newark Container Terminal deployed propane-powered yard tractors through a private grant, and Maher Terminals used a state program funded through the Volkswagen diesel mitigation trust to deploy hybrid and electric straddle carriers. However, the smaller, one-off grants will pale in their impact compared with the Clean Ports funding, Rooney said. “There’s been small grants over the years that have allowed us to do things like the truck replacement program and pilot programs associated with testing emissions reduction technology,” she said. “With $344 million, we’ll be able to really move the needle in terms of implementing stuff.” Other ports, too, will undertake system-wide equipment upgrades. The Port of Los Angeles will earmark part of its $411 million grant for replacing 425 pieces of diesel equipment. The Port of Virginia, which received $380 million, will do the same for some 150 pieces of equipment. <h3>Working with marine terminals </h3>Rooney said her agency is now working with marine terminals to identify specific equipment for upgrades. The grant funding will also be used toward building the necessary charging infrastructure and reinforcing the port’s local grid. As for the biggest source of port pollution and carbon emissions — drayage trucks — the grant will also be used to fund incentives for motor carriers to replace diesel trucks and study optimal sites for locating electric vehicle chargers. The Clean Ports grants are particularly welcomed by communities near US Northeast ports, which are typically surrounded by some of the highest population densities in the country. New Jersey’s Hudson County, home of CMA CGM’s Port Liberty Bayonne terminal and across Newark Bay from other major marine terminals, has the sixth-highest US population density, according to the US Census Bureau, after New York and San Francisco counties. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

US ports are poised for one of the largest ever upgrade cycles for container handling equipment after the federal government announced $2.8 billion in grants to replace diesel-powered yard equipment with electric equipment. With the grants, ports that abut residential areas can keep growing cargo volumes while diminishing the adverse effects of pollution and carbon emissions. The Environmental Protection Agency (EPA) said Tuesday its Clean Ports Program will fund 21 projects across US ports for replacing diesel-powered cargo handling equipment with electric equipment, making it the largest port segment for replacement grants after other areas including vessel shore power, solar installations and trucks and rail. The funds are available under the Biden administration’s Inflation Reduction Act. The Port of New York and New Jersey received $344 million, the third-largest grant behind the ports of Los Angeles and Virginia. Beth Rooney, port director for the Port Authority of New York and New Jersey, told the Journal of Commerce Wednesday that a large grant was needed to tackle a port-wide equipment upgrade. Rooney said there are some 2,700 pieces of equipment at local marine terminals that could be replaced under the program. Replacing that equipment will be the equivalent of removing 14,000 gasoline-powered cars from the road annually, she added, and remove a source of 67,000 tons of carbon dioxide emissions. New York-New Jersey also received another $3 million toward air monitoring and community engagement efforts. Since implementing a clean air action program in 2009, Rooney said the port pollution has decreased by half or more depending on the specific pollutant. Marine terminal operators in New Jersey have undertaken their own initiatives to reduce diesel pollution over the years. Port Newark Container Terminal deployed propane-powered yard tractors through a private grant, and Maher Terminals used a state program funded through the Volkswagen diesel mitigation trust to deploy hybrid and electric straddle carriers. However, the smaller, one-off grants will pale in their impact compared with the Clean Ports funding, Rooney said. “There’s been small grants over the years that have allowed us to do things like the truck replacement program and pilot programs associated with testing emissions reduction technology,” she said. “With $344 million, we’ll be able to really move the needle in terms of implementing stuff.” Other ports, too, will undertake system-wide equipment upgrades. The Port of Los Angeles will earmark part of its $411 million grant for replacing 425 pieces of diesel equipment. The Port of Virginia, which received $380 million, will do the same for some 150 pieces of equipment. Working with marine terminals Rooney said her agency is now working with marine terminals to identify specific equipment for upgrades. The grant funding will also be used toward building the necessary charging infrastructure and reinforcing the port’s local grid. As for the biggest source of port pollution and carbon emissions — drayage trucks — the grant will also be used to fund incentives for motor carriers to replace diesel trucks and study optimal sites for locating electric vehicle chargers. The Clean Ports grants are particularly welcomed by communities near US Northeast ports, which are typically surrounded by some of the highest population densities in the country. New Jersey’s Hudson County, home of CMA CGM’s Port Liberty Bayonne terminal and across Newark Bay from other major marine terminals, has the sixth-highest US population density, according to the US Census Bureau, after New York and San Francisco counties. Contact Michael Angell at michael.angell@spglobal.com .

US ports plan upgrades to electric yard equipment after securing EPA grants

<div class="phx-topic abstract-wrapper">Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative ILA labor agreement.</div>

Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative ILA labor agreement.

<div class="phx-topic">An extended peak season on the eastbound trans-Pacific is manifesting in unusual strength for imports from Asia, coming as carriers signal atypically low blank sailings for November and seek higher rates. Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative labor agreement at US East and Gulf coast ports. About 5.4% of the total capacity into the West Coast is forecast as of now to be blanked in November, according to data from maritime intelligence firm eeSea. The figure is about 8.1% on the East Coast. That’s down from the 11.5% blanked capacity observed in November of 2023 for ex-Asia imports into both regions. Next month’s blanks are down sharply from 16% to the West Coast and 21% to the East Coast in October, according to the eeSea data. “What we are seeing is a fairly robust November,” a carrier executive who did not want to be identified told the Journal of Commerce Wednesday. “For four weeks out, bookings look strong.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1c1d9578-c129-4d4e-a136-e220473bd136"></dynamic-object></div>And that is keeping rates afloat and far higher than where they were a year ago. The spot/freight-all-kinds (FAK) rate from Asia to the West Coast as of Oct. 28 was $4,200 per FEU, up 133% year over year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. The East Coast rate of $4,300 per FEU is up 87% from October 2023. Despite the elevated rates, carriers are notifying forwarders of general rate increases (GRIs) of about $500 to $600 per FEU they will attempt to pass on from Nov. 1. Normally, spot and FAK rates drop in the final two months of the year after holiday merchandise has been shipped from Asia. Peak season demand and vessel load factors have been strong this summer and fall. US imports from Asia in September totaled 1.72 million TEUs, up 16.7% year over year and hovering near a two-year high, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Forwarders and carriers say import volumes have remained robust in October. “I think carriers are surprised at how full they were in October,” said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. The National Retail Federation’s Global Port Tracker has <a href="https://www.joc.com/article/us-retailers-expect-modest-import-bump-in-october-to-close-out-peak-season-5745363">forecast a year-over-year increase of 3.1% in US imports in October</a>. “Ships are full, especially to the West Coast,” said a second US-based carrier executive. <h3>Several factors driving trans-Pac demand </h3>Forwarders attribute the strong volumes to the frontloading of shipments to East and Gulf coast ports ahead of a possible second strike by the International Longshoremen’s Association (ILA) <a href="https://www.joc.com/article/ila-usmx-say-to-resume-talks-on-new-master-contract-in-november-5778794">when its extended contract expires on Jan. 15</a>. Retailers are also concerned about a possible <a href="https://www.joc.com/article/potential-trump-tariffs-would-reset-business-strategy-for-us-importers-analyst-5765307">spike in tariffs on imports from China</a>, depending on the outcome of Tuesday’s US presidential election. The frontloading of spring merchandise before an early Lunar New Year in Asia on Jan. 29 is also keeping imports strong. “There’s a triple convergence of events,” said James Caradonna, executive vice president at the forwarder M&amp;R Spedag Group. Caradonna said some retailers are content to bring merchandise into their warehouses early and pay the storage fees rather than risk having their freight caught up in supply chain bottlenecks. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>The combination of strong demand and the modest blank sailings from Asian load ports is keeping vessel space tight. “There’s definitely some tightening,” said Kurt McElroy, executive vice president of the forwarder Kerry Apex. “[Customers] are booking two to three weeks in advance, especially from South China.” <h3>‘Erosion’ in peak season surcharges </h3>Forwarders and carriers told the Journal of Commerce that because vessel space is likely to remain tight through November and into December, peak season surcharges (PSSs), which are applied to fixed-rate contracts known as named-account (NAC) rates, are likely to remain in play even though the eastbound trans-Pacific is technically not in the traditional peak season. However, the $2,000 PSS that many forwarders have been paying since May 1 is softening. The first carrier executive said PSSs effective Nov. 1 are in the market at about $1,800 per FEU, with other carriers charging $1,000 to $1,200 per FEU. “We’ve seen erosion,” the source said. “[Customers] are putting a lot of pressure on us.” On the other hand, while some carriers are opening up more vessel space for named-account bookings, not all forwarders are getting as much of the lower-priced space as they would like, said Christian Sur, executive vice president for ocean freight contract logistics at the forwarder Unique Logistics International. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com ">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

An extended peak season on the eastbound trans-Pacific is manifesting in unusual strength for imports from Asia, coming as carriers signal atypically low blank sailings for November and seek higher rates. Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative labor agreement at US East and Gulf coast ports. About 5.4% of the total capacity into the West Coast is forecast as of now to be blanked in November, according to data from maritime intelligence firm eeSea. The figure is about 8.1% on the East Coast. That’s down from the 11.5% blanked capacity observed in November of 2023 for ex-Asia imports into both regions. Next month’s blanks are down sharply from 16% to the West Coast and 21% to the East Coast in October, according to the eeSea data. “What we are seeing is a fairly robust November,” a carrier executive who did not want to be identified told the Journal of Commerce Wednesday. “For four weeks out, bookings look strong.” And that is keeping rates afloat and far higher than where they were a year ago. The spot/freight-all-kinds (FAK) rate from Asia to the West Coast as of Oct. 28 was $4,200 per FEU, up 133% year over year, according to Platts, a sister company of the Journal of Commerce within S&P Global. The East Coast rate of $4,300 per FEU is up 87% from October 2023. Despite the elevated rates, carriers are notifying forwarders of general rate increases (GRIs) of about $500 to $600 per FEU they will attempt to pass on from Nov. 1. Normally, spot and FAK rates drop in the final two months of the year after holiday merchandise has been shipped from Asia. Peak season demand and vessel load factors have been strong this summer and fall. US imports from Asia in September totaled 1.72 million TEUs, up 16.7% year over year and hovering near a two-year high, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Forwarders and carriers say import volumes have remained robust in October. “I think carriers are surprised at how full they were in October,” said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. The National Retail Federation’s Global Port Tracker has forecast a year-over-year increase of 3.1% in US imports in October . “Ships are full, especially to the West Coast,” said a second US-based carrier executive. Several factors driving trans-Pac demand Forwarders attribute the strong volumes to the frontloading of shipments to East and Gulf coast ports ahead of a possible second strike by the International Longshoremen’s Association (ILA) when its extended contract expires on Jan. 15 . Retailers are also concerned about a possible spike in tariffs on imports from China , depending on the outcome of Tuesday’s US presidential election. The frontloading of spring merchandise before an early Lunar New Year in Asia on Jan. 29 is also keeping imports strong. “There’s a triple convergence of events,” said James Caradonna, executive vice president at the forwarder M&R Spedag Group. Caradonna said some retailers are content to bring merchandise into their warehouses early and pay the storage fees rather than risk having their freight caught up in supply chain bottlenecks. The combination of strong demand and the modest blank sailings from Asian load ports is keeping vessel space tight. “There’s definitely some tightening,” said Kurt McElroy, executive vice president of the forwarder Kerry Apex. “[Customers] are booking two to three weeks in advance, especially from South China.” ‘Erosion’ in peak season surcharges Forwarders and carriers told the Journal of Commerce that because vessel space is likely to remain tight through November and into December, peak season surcharges (PSSs), which are applied to fixed-rate contracts known as named-account (NAC) rates, are likely to remain in play even though the eastbound trans-Pacific is technically not in the traditional peak season. However, the $2,000 PSS that many forwarders have been paying since May 1 is softening. The first carrier executive said PSSs effective Nov. 1 are in the market at about $1,800 per FEU, with other carriers charging $1,000 to $1,200 per FEU. “We’ve seen erosion,” the source said. “[Customers] are putting a lot of pressure on us.” On the other hand, while some carriers are opening up more vessel space for named-account bookings, not all forwarders are getting as much of the lower-priced space as they would like, said Christian Sur, executive vice president for ocean freight contract logistics at the forwarder Unique Logistics International. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Strong imports, low blanks extend peak season on eastbound trans-Pacific

<div class="phx-topic abstract-wrapper">With this latest deal, the combined methanol offtake agreements Maersk now has in place will meet half the demand from its fast-growing dual-fuel fleet in 2027.</div>

With this latest deal, the combined methanol offtake agreements Maersk now has in place will meet half the demand from its fast-growing dual-fuel fleet in 2027.

<div class="phx-topic">Maersk has signed a long-term bio-methanol supply agreement with China’s LONGi Green Energy Technology Co. as the carrier works toward securing enough green fuel to power its fast-growing dual-fuel fleet. The carrier has taken delivery of seven dual-fuel, methanol-capable 16,592-TEU ships from an 18-vessel order. With this latest supply deal, the combined methanol offtake agreements Maersk has in place so far will meet half the demand from its fleet in 2027. “While we believe that the future of global logistics will see several pathways to net-zero, this agreement underscores the continued momentum for methanol projects that are pursued by ambitious developers across markets,” Emma Mazhari, head of energy markets at A.P. Moller-Maersk, said in a statement Wednesday. The need for ocean carriers to secure supply agreements for green fuels — particularly methanol and LNG — is becoming more urgent, with almost 80% of the total 1.7 million TEUs of ship orders made so far this year being for vessels capable of sailing on methanol or LNG, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. The ordered vessels are steadily coming online, and although they can sail on conventional bunker fuel in the meantime, meeting both internal and regulatory emissions targets will largely depend on operating on green fuels. <h3>Deep dive into methanol </h3>The agreement with Henan-based LONGi continues Maersk’s deep dive into methanol. But growing uncertainty over the future supply of low- or zero-carbon fuels has seen the carrier expanding its alternative fuels portfolio into areas once regarded as out of bounds, such as liquefied natural gas (LNG). The need to keep fuel options open and avoid being locked into one pathway was illustrated in a <a href="https://www.joc.com/article/maersks-lng-order-hedges-bet-on-green-fuel-technology-ceo-5703200">recent Maersk order for dual-fuel vessels totaling 800,000 TEUs</a> capable of sailing on methanol as well as LNG. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1a054077-7728-4ffd-abb8-b7aff17c3235"></dynamic-object></div>In an interview with the Journal of Commerce earlier this month, Morten Bo Christiansen, Maersk’s head of decarbonization, said including LNG-capability in the carrier’s dual-fuel fleet is designed to bring in a wider mix of fuels. “When we look at our road map to decarbonize and meet our science-based targets, it is methanol that plays the big role,” Christiansen said. “We expect to get some biomethane [a cleaner version of LNG], but we are still relying mostly on methanol because we have a reasonable certainty that we can get those green fuels at a reasonable cost. “We already have <a href="https://www.joc.com/article/maersk-inks-new-methanol-sourcing-deal-with-chinese-supplier-5234419">one deal of half a million [metric tons] secured</a>, and we have a rather promising pipeline of green methanol,” he added. Ammonia is increasingly being included in container shipping decarbonization conversations, with classification society DNV on Wednesday approving in principle a 15,000-TEU ammonia-fueled vessel design by Hyundai Heavy Industries. <h3>China in a ‘pioneering role’ </h3>Maersk did not disclose the volume that will be produced by LONGi’s central China plant, but the supply will begin in 2026 with full production by the end of the decade. The bio-methanol will be produced from agricultural residues such as straw and fruit tree cuttings. “China continues to play a pioneering role, and it is encouraging to also see strong market developments in other geographies as well,” Mazhari noted, adding that the carrier was involved in “several promising projects.” While Maersk moves to lock in supply of methanol, the fuel remains three to four times more expensive per ton than low sulfur fuel oil, a price differential that must be lowered, Rabab Raafat Boulos, COO at A.P. Moller-Maersk, said in Wednesday’s statement. “Global shipping’s main net-zero challenge is the price gap between fossil fuels and the alternatives with lower greenhouse gas emissions,” he noted. Even with current regulatory tools in place such as the European Union’s <a href="https://www.joc.com/article/european-parliament-approves-shipping-ets-but-stakeholders-wary-5202492">Emissions Trading System (ETS)</a> and <a href="https://www.joc.com/article/container-carriers-to-shoulder-bulk-of-europe-fuel-intensity-rule-5192246">FuelEU Maritime fuel intensity rules</a> that will be applied from Jan. 1, Maersk noted that only by the mid-2030s would it be more expensive to use fossil fuels on ships rather than green fuels. “We continue to strongly urge the International Maritime Organization’s (IMO’s) member states to level the playing field by adopting a global green fuel standard and an ambitious pricing mechanism which the industry urgently needs,” Boulos said. Member states of the IMO are working on reaching an agreement on the <a href="https://www.joc.com/article/midterm-emissions-plan-to-take-center-stage-at-upcoming-imo-meeting-5731399">proposed midterm measures</a> before they are approved at the MEPC 83 meeting in April 2025, with adoption of the measures in October next year. If the IMO is not able to roll out the midterm measures in autumn next year, there are fears the maritime industry will not be able to meet its interim targets. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Maersk has signed a long-term bio-methanol supply agreement with China’s LONGi Green Energy Technology Co. as the carrier works toward securing enough green fuel to power its fast-growing dual-fuel fleet. The carrier has taken delivery of seven dual-fuel, methanol-capable 16,592-TEU ships from an 18-vessel order. With this latest supply deal, the combined methanol offtake agreements Maersk has in place so far will meet half the demand from its fleet in 2027. “While we believe that the future of global logistics will see several pathways to net-zero, this agreement underscores the continued momentum for methanol projects that are pursued by ambitious developers across markets,” Emma Mazhari, head of energy markets at A.P. Moller-Maersk, said in a statement Wednesday. The need for ocean carriers to secure supply agreements for green fuels — particularly methanol and LNG — is becoming more urgent, with almost 80% of the total 1.7 million TEUs of ship orders made so far this year being for vessels capable of sailing on methanol or LNG, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. The ordered vessels are steadily coming online, and although they can sail on conventional bunker fuel in the meantime, meeting both internal and regulatory emissions targets will largely depend on operating on green fuels. Deep dive into methanol The agreement with Henan-based LONGi continues Maersk’s deep dive into methanol. But growing uncertainty over the future supply of low- or zero-carbon fuels has seen the carrier expanding its alternative fuels portfolio into areas once regarded as out of bounds, such as liquefied natural gas (LNG). The need to keep fuel options open and avoid being locked into one pathway was illustrated in a recent Maersk order for dual-fuel vessels totaling 800,000 TEUs capable of sailing on methanol as well as LNG. In an interview with the Journal of Commerce earlier this month, Morten Bo Christiansen, Maersk’s head of decarbonization, said including LNG-capability in the carrier’s dual-fuel fleet is designed to bring in a wider mix of fuels. “When we look at our road map to decarbonize and meet our science-based targets, it is methanol that plays the big role,” Christiansen said. “We expect to get some biomethane [a cleaner version of LNG], but we are still relying mostly on methanol because we have a reasonable certainty that we can get those green fuels at a reasonable cost. “We already have one deal of half a million [metric tons] secured , and we have a rather promising pipeline of green methanol,” he added. Ammonia is increasingly being included in container shipping decarbonization conversations, with classification society DNV on Wednesday approving in principle a 15,000-TEU ammonia-fueled vessel design by Hyundai Heavy Industries. China in a ‘pioneering role’ Maersk did not disclose the volume that will be produced by LONGi’s central China plant, but the supply will begin in 2026 with full production by the end of the decade. The bio-methanol will be produced from agricultural residues such as straw and fruit tree cuttings. “China continues to play a pioneering role, and it is encouraging to also see strong market developments in other geographies as well,” Mazhari noted, adding that the carrier was involved in “several promising projects.” While Maersk moves to lock in supply of methanol, the fuel remains three to four times more expensive per ton than low sulfur fuel oil, a price differential that must be lowered, Rabab Raafat Boulos, COO at A.P. Moller-Maersk, said in Wednesday’s statement. “Global shipping’s main net-zero challenge is the price gap between fossil fuels and the alternatives with lower greenhouse gas emissions,” he noted. Even with current regulatory tools in place such as the European Union’s Emissions Trading System (ETS) and FuelEU Maritime fuel intensity rules that will be applied from Jan. 1, Maersk noted that only by the mid-2030s would it be more expensive to use fossil fuels on ships rather than green fuels. “We continue to strongly urge the International Maritime Organization’s (IMO’s) member states to level the playing field by adopting a global green fuel standard and an ambitious pricing mechanism which the industry urgently needs,” Boulos said. Member states of the IMO are working on reaching an agreement on the proposed midterm measures before they are approved at the MEPC 83 meeting in April 2025, with adoption of the measures in October next year. If the IMO is not able to roll out the midterm measures in autumn next year, there are fears the maritime industry will not be able to meet its interim targets. Contact Greg Knowler at greg.knowler@spglobal.com .

Maersk secures long-term methanol supply in China production deal

<div class="phx-topic abstract-wrapper">The port will see almost half of its container capacity go offline beginning Thursday as the local longshore union declares an unlimited strike against two of Montreal’s largest marine terminals.</div>

The port will see almost half of its container capacity go offline beginning Thursday as the local longshore union declares an unlimited strike against two of Montreal’s largest marine terminals.

<div class="phx-topic">Two marine terminals handling Mediterranean Shipping Co.’s Montreal container services face a work stoppage starting this week after longshore workers there voted to authorize an indefinite strike targeting nearly half of the port’s container capacity. Termont International said Monday that Local 375 of the Canadian Union of Public Employees (CUPE) notified it that an “unlimited strike” will occur at Montreal’s Maisonneuve and Viau terminals starting Thursday at 11 AM local time. The terminal operator urged shippers with cargo at both terminals to schedule pickups by Wednesday evening. The strike at the two terminals will idle more than 1 million TEUs of Montreal’s total 2.3 million TEUs in terminal capacity. The port’s two other international container terminals, Racine and Cast, won’t be affected by the work stoppage. Termont, a joint venture between MSC’s Terminal Investment Limited, SSA Marine and Canadian stevedore Logistec, primarily handles MSC’s trans-Atlantic and north-south services into Montreal. The services include the Montreal Express 1 from Italy, the Med Canadian service and the Canada Gulf Bridge service that spans Mexico and US Gulf ports. MSC’s current schedule shows at least four of its ships — Anya, Celine, Nahara and England — scheduled to arrive at the Termont terminals by the end of the week. Another two ships in MSC services — Levina III and OOCL St. Lawrence — are scheduled to arrive at Montreal’s other terminals. Local 375’s latest labor action represents a further escalation of pressure tactics against the Maritime Employers Association (MEA), which has yet to agree on a new contract covering the port’s 1,200 longshore workers. Local 375 also started <a href="https://www.joc.com/article/montreal-says-congestion-risk-grows-as-dockworkers-refuse-overtime-5751118">an ongoing boycott of overtime work</a> at the port and held <a href="https://www.joc.com/article/port-of-montreal-to-face-three-day-strike-against-two-terminals-next-week-5737483">a three-day work stoppage at the Viau and Maisonneuve terminals</a> at the start of October. This past Sunday, Local 375 conducted <a href="https://www.joc.com/article/montreal-dockworkers-plan-one-day-port-strike-on-sunday-5773614">a one-day, port-wide strike at Montreal</a>. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>. </div>

Two marine terminals handling Mediterranean Shipping Co.’s Montreal container services face a work stoppage starting this week after longshore workers there voted to authorize an indefinite strike targeting nearly half of the port’s container capacity. Termont International said Monday that Local 375 of the Canadian Union of Public Employees (CUPE) notified it that an “unlimited strike” will occur at Montreal’s Maisonneuve and Viau terminals starting Thursday at 11 AM local time. The terminal operator urged shippers with cargo at both terminals to schedule pickups by Wednesday evening. The strike at the two terminals will idle more than 1 million TEUs of Montreal’s total 2.3 million TEUs in terminal capacity. The port’s two other international container terminals, Racine and Cast, won’t be affected by the work stoppage. Termont, a joint venture between MSC’s Terminal Investment Limited, SSA Marine and Canadian stevedore Logistec, primarily handles MSC’s trans-Atlantic and north-south services into Montreal. The services include the Montreal Express 1 from Italy, the Med Canadian service and the Canada Gulf Bridge service that spans Mexico and US Gulf ports. MSC’s current schedule shows at least four of its ships — Anya, Celine, Nahara and England — scheduled to arrive at the Termont terminals by the end of the week. Another two ships in MSC services — Levina III and OOCL St. Lawrence — are scheduled to arrive at Montreal’s other terminals. Local 375’s latest labor action represents a further escalation of pressure tactics against the Maritime Employers Association (MEA), which has yet to agree on a new contract covering the port’s 1,200 longshore workers. Local 375 also started an ongoing boycott of overtime work at the port and held a three-day work stoppage at the Viau and Maisonneuve terminals at the start of October. This past Sunday, Local 375 conducted a one-day, port-wide strike at Montreal . Contact Michael Angell at michael.angell@spglobal.com .

Montreal dockworkers target MSC’s terminals for strike this week

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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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News and analysis of ocean containerized cargo movement, logistics, supply chains, technology, and end-to-end connectivity. Maritime news and analysis of containerized ocean cargo movement, breakbulk and roll-on and roll-off shipping from origin to destination.

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US LTL carriers raising rates as shippers keep wary eye on 2025

US ports plan upgrades to electric yard equipment after securing EPA grants

Strong imports, low blanks extend peak season on eastbound trans-Pacific