<div class="phx-topic abstract-wrapper">Susumu Temporin, president of Mitsui O.S.K. Lines Ltd. said his company is negotiating with Kawasaki</div>

Susumu Temporin, president of Mitsui O.S.K. Lines Ltd. said his company is negotiating with Kawasaki

<div>Susumu Temporin, president of Mitsui O.S.K. Lines Ltd. said his company is negotiating with Kawasaki Kisen Kaisha for a new joint express service to the U.S. West Coast this summer.In a wide-ranging interview at company headquarters, Mr. Temporin also explained the company's recent about-face on its all-water U.S. East Coast service, outlined his vision of the shipping industry in five years and said the rising yen makes 1993 a dire year at best for the Japanese shipping industry."Our biggest problem is now survival," he said in his well-appointed office in central Tokyo. "If the yen goes to 100, we cannot...

Susumu Temporin, president of Mitsui O.S.K. Lines Ltd. said his company is negotiating with Kawasaki Kisen Kaisha for a new joint express service to the U.S. West Coast this summer. In a wide-ranging interview at company headquarters, Mr. Temporin also explained the company's recent about-face on its all-water U.S. East Coast service, outlined his vision of the shipping industry in five years and said the rising yen makes 1993 a dire year at best for the Japanese shipping industry."Our biggest problem is now survival," he said in his well-appointed office in central Tokyo. "If the yen goes to 100, we cannot survive. We will die as a shipping industry. Not as Mitsui O.S.K. but as an industry." Japanese carriers can't cut costs any further, he said, so the future will depend on increased business. Mr. Temporin confirmed that negotiations were under way with "K" Line for a new express service between Southeast Asia and the U.S. West Coast. Several other lines have recently initiated express service reflecting the growing trade with Southeast Asia. These include services by President Neptune Orient Lines Ltd. and Nippon Yusen Kaisha; Sea-Land Service Inc. and A.P. Moller/Maersk; and American President Lines Ltd. and Orient Overseas Container Line Ltd. Mr. Temporin said MOL would contribute ships from the NYK-MOL U.S. East Coast all-water service just wrapping up. The new service should begin sometime in the next few months, he said. Mr. Temporin declined to comment on pervasive rumors in shipping circles that MOL will merge with "K" Line, a move "K" Line has vehemently denied. ''As partners of "K" Line, we have no comment," Mr. Temporin said. But two Western carrier officials in Japan said they expect further consolidation. "And NYK will use all its political influence to argue that it shouldn't absorb "K" Line given it already absorbed Y.S. Line and Japan Line," one official said. Although NYK Line is entering the trans-Atlantic this spring, and other Far Eastern-based lines are known to be looking at the Atlantic, MOL at this time is staying our of the cut-throat trade. The MOL executive said it is possible to be a global carrier by serving major customers through freight forwarders. "It's an awful trade therefore MOL has no interest to inaugurate trans- Atlantic service for years to come," he said. One European carrier official in Tokyo agreed it was possible to be a mega- carrier and avoid this trade depending on the extent of a company's north- south service. But another industry executive said privately he doubted a major player could ignore the Atlantic. The strengthening yen will make fiscal 1993 a grim year for Japanese-flag carriers even in the Pacific, Mr. Temporin said. He said he expects the yen to strengthen to 100 to the U.S. dollar. It is currently at about 115. During the boom years of the 1980s, Japanese carriers had operating profits of 3.5 percent of total revenue, but these are now 1 percent to 1.5 percent. Customers must be convinced to pay more for value-added and total distribution services, he said. For the 1992 fiscal year ended April 1, 1993, Mitsui O.S.K. will announced operating profit of just $61 million on total revenue of $4.26 billion, a 50 percent decline in profits, Mr. Temporin said. He added that he sees little prospect of a turnaround before late fiscal 1993 as it will take at least six months for the Japanese economy to recover and another six months for cargo volumes to pick up. MOL's off-again, on-again partnership with NYK Line in recent months in service to the U.S. East coast was embarrassing for both lines. Mr. Temporin said the reversals were painful but necessary. MOL first announced on Dec. 24 that it was going to offer its own weekly all-water service from the Far East to the U.S. East Coast despite the high cost. This was necessary because the existing MOL-NYK East Coast space sharing agreement is set to expire this spring and NYK had joined forces with Hapag- Lloyd Inc., leaving MOL out in the cold. But a few weeks later it was forced to retract that statement and announce it was buying space from NYK Line and Hapag Lloyd after all. Mr. Temporin says the turnaround was difficult. "It was painful for us, but it was also painful for NYK because they had just finished (setting vessel shares)," he said. But the alternative would have been disastrous for the trade, he adds. What actually happened, Mr. Temporin said, was something of a rude awakening by both companies. Shortly after Mitsui O.S.K. announced on Dec. 24 that it would initiate its own weekly East Coast service, officials at MOL and NYK held discussions and realized a more-than-doubling of weekly calls would torpedo rates and also have a spill-over effect. "If we damaged freight rates to the East Coast, this would instantly affect the West Coast," he added. The carriers also had their reputations to consider, he said. The trans- Pacific Stabilization Agreement had been largely negotiated by MOL, NYK and APL, he said. "NYK and MOL, the two carriers that promoted it, would (now) be destroyers of this idea." As it now stands, MOL will slot charter the equivalent of 350 20-foot containers, or TEUs, per sailing for the next two years. After two years, both carriers can re-evaluate their East Coast services and perhaps consolidate these with Caribbean or South American services, he said. Finally, Mr. Temporin predicted that the next several years will see the emergence of 10 global carriers - four Europeans, two Americans and four Asians. These carriers will make and break partnerships for the next several years before they find the right fit, he added. The predicted the 10 will be P&O Containers Ltd., Nedlloyd Lines, Hapag- Lloyd Ltd. and Maersk Lines in Europe; Sea-Land Service Inc. and American President Lines Ltd. in the United States; and NYK, MOL, "K" Line, and Evergreen Marine Corp. in Asia.

Maritime

MITSUI CHIEF SAYS TALKS UNDER WAY FOR NEW US SERVICE

<div class="phx-topic abstract-wrapper">Matt Schrap, who has headed the HTA for the past four years, told the Journal of Commerce he is transitioning to another job but will remain with the group through late August.</div>

Matt Schrap, who has headed the HTA for the past four years, told the Journal of Commerce he is transitioning to another job but will remain with the group through late August.

Feature image

<div class="phx-topic">The Harbor Trucking Association, which represents drayage operators at ports along the US West Coast, has launched a nationwide search for a new CEO after announcing that Matt Schrap is leaving the organization. Schrap, who has headed the HTA for the past four years, told the Journal of Commerce he is transitioning to another job but will remain with the group through late August. HTA said in a statement on Tuesday it is seeking “a strategic leader with proven experience in transportation, logistics and stakeholder engagement.” The Long Beach-based HTA represents the interests of drayage operators serving the ports of Los Angeles, Long Beach, Oakland, Seattle and Tacoma. It publishes a detailed monthly report on truck turn times at container terminals in Southern California and Oakland. Drayage operators have been dealing with <a href="https://www.joc.com/article/tariff-related-disruption-spreading-as-us-shippers-pause-plans-5989017">supply chain disruptions due to tariff uncertainties</a>, fluctuating vessel arrivals as <a href="https://www.joc.com/article/us-supply-chain-planning-must-involve-a-mix-of-the-known-and-unknown-6008684">carriers blank multiple sailings in the trans-Pacific</a>, and mounting empty containers at marine terminals. Longer-standing issues such as <a href="https://www.joc.com/article/empty-containers-piling-up-in-los-angeles-long-beach-after-january-import-surge-5966996">securing sufficient appointment slots at marine terminals</a> are also a challenge. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a></div>

The Harbor Trucking Association, which represents drayage operators at ports along the US West Coast, has launched a nationwide search for a new CEO after announcing that Matt Schrap is leaving the organization. Schrap, who has headed the HTA for the past four years, told the Journal of Commerce he is transitioning to another job but will remain with the group through late August. HTA said in a statement on Tuesday it is seeking “a strategic leader with proven experience in transportation, logistics and stakeholder engagement.” The Long Beach-based HTA represents the interests of drayage operators serving the ports of Los Angeles, Long Beach, Oakland, Seattle and Tacoma. It publishes a detailed monthly report on truck turn times at container terminals in Southern California and Oakland. Drayage operators have been dealing with supply chain disruptions due to tariff uncertainties , fluctuating vessel arrivals as carriers blank multiple sailings in the trans-Pacific , and mounting empty containers at marine terminals. Longer-standing issues such as securing sufficient appointment slots at marine terminals are also a challenge. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com

Port News

Trucking News

Drayage

North American ports

Marine terminals

Surface

HTA seeks new CEO amid multiple challenges for West Coast drayage operators

<div class="phx-topic abstract-wrapper">A calendar quirk is causing consternation for importers of non-Chinese goods with long lead times who believed they had avoided the first salvo of US tariffs by loading their cargo before the prescribed “load-by” date and are now facing unexpected costs.</div>

A calendar quirk is causing consternation for importers of non-Chinese goods with long lead times who believed they had avoided the first salvo of US tariffs by loading their cargo before the prescribed “load-by” date and are now facing unexpected costs.

<div class="phx-topic">Some US importers with long ocean transit times, including those who move cargo through transshipment hubs, will be on the hook for the 10% US tariffs now in place on non-Chinese goods even if those goods beat an April 5 load-by deadline to avoid the tariffs. That’s because of a shorter-than-usual length of time set by the Trump administration encompassing the cutoff dates between when goods needed to depart their origin ports and arrive at destination ports. And that scheduling quirk is causing consternation for importers who believed they had avoided the first salvo of tariffs by loading their cargo before the prescribed date and are now facing unexpected costs. Don Pisano, president of American Coffee Corp., said shipments from Southeast Asia to US Gulf ports regularly take 60 days, longer than the gap between the “load-by” April 5 deadline set by the White House and the May 27 arrival date set by US Customs and Border Protection (CBP) in which the goods must be “entered for consumption.” “It seems completely arbitrary and punitive,” Pisano told the Journal of Commerce. Pisano pointed to another example on a different lane, a containerized shipment of coffee that left Brazil’s Port of Santos in late March on a service that went west through the Panama Canal, to Shanghai and then to the US West Coast. “That’s not arriving until May 29, and we’ll have to pay $20,000 in tariffs because [the carrier] routed it through Shanghai,” he said. Further, shippers whose goods were transshipped, with the final leg departing after April 5, will also be subject to the 10% US tariffs, even if the cargo shipped from origin prior to April 5. In many cases, the decision to transship is out of the control of importers. <h3>Delay in ‘end-date’ guidance </h3>Gabrielle Griffith, a director at BPE Global, a trade compliance consulting firm, said an end date for the in-transit exemption was not initially specified <a href="https://www.joc.com/article/trump-announces-10-across-the-board-tariffs-on-all-us-imports-5975639">when the reciprocal tariffs were imposed April 2 through President Donald Trump’s executive order</a>. The end-date guidance came two days later, on April 4, in a separate message in the Cargo Systems Messaging Service (CSMS), a channel CBP uses to communicate with the trade community. Griffith said the April 4 message from CBP added the May 27 cutoff in order to, in the agency’s words, “prevent abuse of exemption,” and was reiterated by CBP on April 8. Pisano’s contention is that most goods aiming to beat the April 5 deadline were loaded or on the water prior to either of those guidance messages being issued, since importers were racing to beat the deadline. Griffith said the end-date provision aligns with prior CBP practices for tariff exclusions but differs from earlier executive orders issued under the International Emergency Economic Powers Act (IEPPA) that lacked time limits. The end-date was not specified in Trump’s executive order, but CBP has some leeway to interpret the application of that order. <h3>Transshipment confusion </h3>The transshipment issue is potentially more vexing for importers, since CBP’s original guidance on April 4 wasn’t clear, according to a range of trade compliance experts. At issue is whether reciprocal tariffs would be exempted if goods departed their origin port before April 5, or if transshipped, departed the final leg of their ocean journey prior to April 5. Guidance issued by CBP on May 15, which included a set of frequently asked questions (FAQs), included details on how transshipment would impact tariff exemptions. The guidance painted a scenario where prior to the cutoff date for the reciprocal tariff in-transit provision, US-bound cargo is loaded onto a vessel destined for a foreign port prior to shipment to the US. At that foreign port, after April 5, the cargo is transferred onto a different vessel destined for the US. “The cargo in this scenario does not qualify for the in-transit exception for reciprocal tariffs because the US bound cargo was laden onto a vessel destined for the US after the cutoff date irrespective of when it departed from the original port of lading,” CBP wrote, responding to its own rhetorical question in the guidance. A trade attorney who did not want to be identified told the Journal of Commerce that the May 15 guidance on transshipment is “inconsistent with previous guidance we received from CBP on the same question, so we are trying to reconcile this.” The fact that guidance on transshipment came six weeks after the initial executive order will now impact importers for whom it wasn’t clear that such a routing wouldn’t be exempted, Pisano said. “It took them six weeks to come up with the wrong conclusion,” he said. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com.</a></div>

Some US importers with long ocean transit times, including those who move cargo through transshipment hubs, will be on the hook for the 10% US tariffs now in place on non-Chinese goods even if those goods beat an April 5 load-by deadline to avoid the tariffs. That’s because of a shorter-than-usual length of time set by the Trump administration encompassing the cutoff dates between when goods needed to depart their origin ports and arrive at destination ports. And that scheduling quirk is causing consternation for importers who believed they had avoided the first salvo of tariffs by loading their cargo before the prescribed date and are now facing unexpected costs. Don Pisano, president of American Coffee Corp., said shipments from Southeast Asia to US Gulf ports regularly take 60 days, longer than the gap between the “load-by” April 5 deadline set by the White House and the May 27 arrival date set by US Customs and Border Protection (CBP) in which the goods must be “entered for consumption.” “It seems completely arbitrary and punitive,” Pisano told the Journal of Commerce. Pisano pointed to another example on a different lane, a containerized shipment of coffee that left Brazil’s Port of Santos in late March on a service that went west through the Panama Canal, to Shanghai and then to the US West Coast. “That’s not arriving until May 29, and we’ll have to pay $20,000 in tariffs because [the carrier] routed it through Shanghai,” he said. Further, shippers whose goods were transshipped, with the final leg departing after April 5, will also be subject to the 10% US tariffs, even if the cargo shipped from origin prior to April 5. In many cases, the decision to transship is out of the control of importers. Delay in ‘end-date’ guidance Gabrielle Griffith, a director at BPE Global, a trade compliance consulting firm, said an end date for the in-transit exemption was not initially specified when the reciprocal tariffs were imposed April 2 through President Donald Trump’s executive order . The end-date guidance came two days later, on April 4, in a separate message in the Cargo Systems Messaging Service (CSMS), a channel CBP uses to communicate with the trade community. Griffith said the April 4 message from CBP added the May 27 cutoff in order to, in the agency’s words, “prevent abuse of exemption,” and was reiterated by CBP on April 8. Pisano’s contention is that most goods aiming to beat the April 5 deadline were loaded or on the water prior to either of those guidance messages being issued, since importers were racing to beat the deadline. Griffith said the end-date provision aligns with prior CBP practices for tariff exclusions but differs from earlier executive orders issued under the International Emergency Economic Powers Act (IEPPA) that lacked time limits. The end-date was not specified in Trump’s executive order, but CBP has some leeway to interpret the application of that order. Transshipment confusion The transshipment issue is potentially more vexing for importers, since CBP’s original guidance on April 4 wasn’t clear, according to a range of trade compliance experts. At issue is whether reciprocal tariffs would be exempted if goods departed their origin port before April 5, or if transshipped, departed the final leg of their ocean journey prior to April 5. Guidance issued by CBP on May 15, which included a set of frequently asked questions (FAQs), included details on how transshipment would impact tariff exemptions. The guidance painted a scenario where prior to the cutoff date for the reciprocal tariff in-transit provision, US-bound cargo is loaded onto a vessel destined for a foreign port prior to shipment to the US. At that foreign port, after April 5, the cargo is transferred onto a different vessel destined for the US. “The cargo in this scenario does not qualify for the in-transit exception for reciprocal tariffs because the US bound cargo was laden onto a vessel destined for the US after the cutoff date irrespective of when it departed from the original port of lading,” CBP wrote, responding to its own rhetorical question in the guidance. A trade attorney who did not want to be identified told the Journal of Commerce that the May 15 guidance on transshipment is “inconsistent with previous guidance we received from CBP on the same question, so we are trying to reconcile this.” The fact that guidance on transshipment came six weeks after the initial executive order will now impact importers for whom it wasn’t clear that such a routing wouldn’t be exempted, Pisano said. “It took them six weeks to come up with the wrong conclusion,” he said. Contact Eric Johnson at eric.johnson@spglobal.com.

Container Shipping News

Transport, Trade and Regulation News

Trans-Pacific

Supply chain

Scheduling linked to 10% tariffs causing confusion, angst for US importers

<div class="phx-topic abstract-wrapper">Hapag-Lloyd is betting it can extract economic value for itself through smart containers in the form of improved fleet utilization, thereby de-risking the uptake – or lack thereof – from customers.</div>

Hapag-Lloyd is betting it can extract economic value for itself through smart containers in the form of improved fleet utilization, thereby de-risking the uptake – or lack thereof – from customers.

<div class="phx-topic">Hapag-Lloyd is testing whether a major investment in container sensors deployed on its two-million-unit container fleet can take cargo visibility, a longtime source of frustration to shippers, to a new level. That bet comes as container lines continue to struggle to commercialize such investments by charging shippers for more accurate and continuous location and condition data. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6009190_0.1.jpg"></img></div>“The smart container industry has faced challenges in scaling due to [the] lack of customer's willingness to pay for the additional service, and carriers’ difficulties in justifying the internal [return on investment],” said a study by consultancy Roland Burger published in November. Hapag-Lloyd is trying to change this paradigm by betting it can extract economic value for itself through smart containers in the form of improved fleet utilization, thereby de-risking the uptake – or lack thereof – from customers. “What carriers do with visibility operationally will justify their investment initially, enabling the subsequent pursuit of the other commercial use case categories,” said Erik Lund, managing director for maritime and logistics at Nexxiot, which along with Orbcomm supplies the IoT devices used by Hapag-Lloyd. The ROI for a carrier, excluding revenue from customers, can come from multiple sources, including reducing empty repositioning costs if boxes can be more easily redirected to the next user versus having to flow through a depot. A carrier can also use smart containers to better position empties where they expect demand to materialize, thus being in a better place to accept spot bookings, theoretically at a more competitive cost than other lines because they don't need to move that empty after receiving a booking request. “If I have much more accurate information about where my empty is I am going to get greater utilization out of my container fleet overall,” said Curtis Spencer, CEO of Bloodhound Tracking Devices, a subscription-based IoT device provider to the industry. But even if an acceptable return on investment is achieved through improved asset utilization, it still leaves unanswered the question of whether smart containers can produce a breakthrough in visibility valuable enough for shippers that significant numbers would be willing to pay for it. The question boils down to this: Will a continuously emitting IoT device attached to the outside of a container create an accurate and consistent enough data flow that it can drive more meaningful decisions versus milestone-based visibility methods long criticized for inaccurate and incomplete data? With Hapag-Lloyd having installed tracking devices on 90% of its container fleet (with a goal to reach 100% “shortly”), and this summer rolling out a predictive ETA service for shippers, the premise will soon be put to the test. Even if the data is good enough, scale, at least currently, is still a limitation. Hapag-Lloyd is only one carrier, with Zim Integrated Shipping Services and Ocean Network Express having announced similar plans. And standards don’t yet exist for smart containers to transmit while aboard the ships of alliance partners, according to the Digital Container Shipping Association (DCSA). Other carriers such as Mediterranean Shipping Co. (MSC), the world’s largest, are using smart containers selectively in reefer and to combat drug smuggling in the wake of the 2019 cocaine seizure aboard an MSC ship in Philadelphia. MSC's use of Traxens is also available for shippers on an ad hoc basis if they want continuous premium tracking, but it's used sparingly. <h3>Lack of ‘transformative outcomes’ </h3>Ocean visibility made progress in recent years with the advent of niche specialists like project44 and FourKites, which aggregate data feeds from multiple sources for customers. But both companies have recently appeared to de-emphasize visibility as their core product propositions amid larger questions about overall value creation. As previously reported by the Journal of Commerce, the more than $1.4 billion of venture capital invested into freight visibility providers over the last five years has not translated into transformative outcomes for users. A different approach – sensors attached to the cargo or the pallet inside the container – has found a market in shipper-specific scenarios for high-value or sensitive cargoes, including electronics and pharma, but faces a reverse logistics challenge in needing to be removed and re-delivered after each transit. “We have not seen a mass scale adoption for broader logistics [beneficial cargo owners] use cases,” said Nexxiot’s Lund. “We’re still at the foot of the mountain as an industry.” According to Hapag-Lloyd, its product will be differentiated in a few ways. “The material difference lies in two main dimensions: first, our inland ETA prediction will use the container GPS data – which is available independent from which route the container is travelling on or which trucker/rail company is currently moving the box,” said Olaf Habert, who leads the program at Hapag-Lloyd. “Second, we are deploying purpose-built prediction algorithms for container transportation across all modes of transport,” Habert added. “Therefore, we are targeting for our ETA prediction for inland destinations to be accurate within a couple of hours.” The bigger question is whether, via smart containers, ocean carriers are able break into what for them has been an elusive value-added logistics market. Maersk has embraced that strategy fully, with mixed results, through its integrator strategy. According to the Roland Burger study, “The shipping industry, characterized by highly volatile freight rates, has struggled to monetize value-added services, often absorbing their costs into global ocean freight.” Will IoT containers meet the same fate? Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com.</a>Senior Technology Editor Eric Johnson contributed to this analysis. </div>

Hapag-Lloyd is testing whether a major investment in container sensors deployed on its two-million-unit container fleet can take cargo visibility, a longtime source of frustration to shippers, to a new level. That bet comes as container lines continue to struggle to commercialize such investments by charging shippers for more accurate and continuous location and condition data. “The smart container industry has faced challenges in scaling due to [the] lack of customer's willingness to pay for the additional service, and carriers’ difficulties in justifying the internal [return on investment],” said a study by consultancy Roland Burger published in November. Hapag-Lloyd is trying to change this paradigm by betting it can extract economic value for itself through smart containers in the form of improved fleet utilization, thereby de-risking the uptake – or lack thereof – from customers. “What carriers do with visibility operationally will justify their investment initially, enabling the subsequent pursuit of the other commercial use case categories,” said Erik Lund, managing director for maritime and logistics at Nexxiot, which along with Orbcomm supplies the IoT devices used by Hapag-Lloyd. The ROI for a carrier, excluding revenue from customers, can come from multiple sources, including reducing empty repositioning costs if boxes can be more easily redirected to the next user versus having to flow through a depot. A carrier can also use smart containers to better position empties where they expect demand to materialize, thus being in a better place to accept spot bookings, theoretically at a more competitive cost than other lines because they don't need to move that empty after receiving a booking request. “If I have much more accurate information about where my empty is I am going to get greater utilization out of my container fleet overall,” said Curtis Spencer, CEO of Bloodhound Tracking Devices, a subscription-based IoT device provider to the industry. But even if an acceptable return on investment is achieved through improved asset utilization, it still leaves unanswered the question of whether smart containers can produce a breakthrough in visibility valuable enough for shippers that significant numbers would be willing to pay for it. The question boils down to this: Will a continuously emitting IoT device attached to the outside of a container create an accurate and consistent enough data flow that it can drive more meaningful decisions versus milestone-based visibility methods long criticized for inaccurate and incomplete data? With Hapag-Lloyd having installed tracking devices on 90% of its container fleet (with a goal to reach 100% “shortly”), and this summer rolling out a predictive ETA service for shippers, the premise will soon be put to the test. Even if the data is good enough, scale, at least currently, is still a limitation. Hapag-Lloyd is only one carrier, with Zim Integrated Shipping Services and Ocean Network Express having announced similar plans. And standards don’t yet exist for smart containers to transmit while aboard the ships of alliance partners, according to the Digital Container Shipping Association (DCSA). Other carriers such as Mediterranean Shipping Co. (MSC), the world’s largest, are using smart containers selectively in reefer and to combat drug smuggling in the wake of the 2019 cocaine seizure aboard an MSC ship in Philadelphia. MSC's use of Traxens is also available for shippers on an ad hoc basis if they want continuous premium tracking, but it's used sparingly. Lack of ‘transformative outcomes’ Ocean visibility made progress in recent years with the advent of niche specialists like project44 and FourKites, which aggregate data feeds from multiple sources for customers. But both companies have recently appeared to de-emphasize visibility as their core product propositions amid larger questions about overall value creation. As previously reported by the Journal of Commerce, the more than $1.4 billion of venture capital invested into freight visibility providers over the last five years has not translated into transformative outcomes for users. A different approach – sensors attached to the cargo or the pallet inside the container – has found a market in shipper-specific scenarios for high-value or sensitive cargoes, including electronics and pharma, but faces a reverse logistics challenge in needing to be removed and re-delivered after each transit. “We have not seen a mass scale adoption for broader logistics [beneficial cargo owners] use cases,” said Nexxiot’s Lund. “We’re still at the foot of the mountain as an industry.” According to Hapag-Lloyd, its product will be differentiated in a few ways. “The material difference lies in two main dimensions: first, our inland ETA prediction will use the container GPS data – which is available independent from which route the container is travelling on or which trucker/rail company is currently moving the box,” said Olaf Habert, who leads the program at Hapag-Lloyd. “Second, we are deploying purpose-built prediction algorithms for container transportation across all modes of transport,” Habert added. “Therefore, we are targeting for our ETA prediction for inland destinations to be accurate within a couple of hours.” The bigger question is whether, via smart containers, ocean carriers are able break into what for them has been an elusive value-added logistics market. Maersk has embraced that strategy fully, with mixed results, through its integrator strategy. According to the Roland Burger study, “The shipping industry, characterized by highly volatile freight rates, has struggled to monetize value-added services, often absorbing their costs into global ocean freight.” Will IoT containers meet the same fate? Contact Peter Tirschwell at peter.tirschwell@spglobal.com. Senior Technology Editor Eric Johnson contributed to this analysis.

Container lines

Carriers forge new paths in ongoing quest to monetize visibility investments

<div class="phx-topic abstract-wrapper">The 15,000-square-foot, 37-dock-door facility is the latest example of how LTL carriers are expanding into drayage, container handling and global supply chains. </div>

The 15,000-square-foot, 37-dock-door facility is the latest example of how LTL carriers are expanding into drayage, container handling and global supply chains.

<div class="phx-topic">US less-than-truckload (LTL) carrier Pitt Ohio is bridging the gap between domestic and international freight by opening its first marine terminal in Norfolk, Virginia. The 15,000-square-foot, 37-dock-door facility is the latest example of how LTL carriers are <a href="https://www.joc.com/article/us-import-disruption-opens-up-ltl-transload-opportunities-5249857">expanding into drayage</a>, container handling and global supply chains. It is a new direction for trucking companies looking to route more freight into their networks. From the Norfolk terminal, Pittsburgh-based Pitt Ohio will coordinate inland transportation, customs clearance and related services, the company said in a statement Tuesday. Pitt Ohio is also a non-vessel-operating common carrier (NVO,). The 14th-largest US LTL carrier in 2024, Pitt Ohio said it will use its own chassis to maintain control over shipments for importers and exporters while integrating maritime, inland transportation and warehousing. The Norfolk terminal has been several years in the making. Pitt Ohio, which has been hauling regional LTL freight since 1979, was <a href="https://www.joc.com/article/disruption-forcing-us-importers-to-take-greater-control-of-landside-logistics-5246609">drawn into the drayage business</a> during the COVID-19 pandemic, when shipper customers turned to the company for help. The pandemic saw increased interest in transloading, which requires the type of cross-dock operation that has sustained LTL carriers since the 1920s. In addition to Pitt Ohio, carriers such as Estes Express Lines, <a href="https://www.joc.com/article/averitt-connects-teu-to-ltl-market-in-houston-5207737">Averitt</a> and A. Duie Pyle are building and opening terminals near seaports. LTL freight is still primarily sourced from domestic industrial manufacturers, but e-commerce and the shrinking size of shipments are driving more freight toward LTL. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US less-than-truckload (LTL) carrier Pitt Ohio is bridging the gap between domestic and international freight by opening its first marine terminal in Norfolk, Virginia. The 15,000-square-foot, 37-dock-door facility is the latest example of how LTL carriers are expanding into drayage , container handling and global supply chains. It is a new direction for trucking companies looking to route more freight into their networks. From the Norfolk terminal, Pittsburgh-based Pitt Ohio will coordinate inland transportation, customs clearance and related services, the company said in a statement Tuesday. Pitt Ohio is also a non-vessel-operating common carrier (NVO,). The 14th-largest US LTL carrier in 2024, Pitt Ohio said it will use its own chassis to maintain control over shipments for importers and exporters while integrating maritime, inland transportation and warehousing. The Norfolk terminal has been several years in the making. Pitt Ohio, which has been hauling regional LTL freight since 1979, was drawn into the drayage business during the COVID-19 pandemic, when shipper customers turned to the company for help. The pandemic saw increased interest in transloading, which requires the type of cross-dock operation that has sustained LTL carriers since the 1920s. In addition to Pitt Ohio, carriers such as Estes Express Lines, Averitt and A. Duie Pyle are building and opening terminals near seaports. LTL freight is still primarily sourced from domestic industrial manufacturers, but e-commerce and the shrinking size of shipments are driving more freight toward LTL. Contact William B. Cassidy at bill.cassidy@spglobal.com .

LTL trucker Pitt Ohio opens marine terminal near Norfolk port

<div class="phx-topic abstract-wrapper">The US price index for LTL trucking, bolstered by new contracts, is as high as it’s ever been, but the truckload sector is stuck in a two-year trough. </div>

The US price index for LTL trucking, bolstered by new contracts, is as high as it’s ever been, but the truckload sector is stuck in a two-year trough.

<div class="phx-topic">US less-than-truckload (LTL) pricing has flatlined, but at the highest point on record, according to the US Bureau of Labor Statistics (BLS). The current BLS long-distance LTL producer price index (PPI) of 259 has remained stable from February through April, level with its previous pandemic-era peak in June 2022. The BLS uses pricing data from December 2003 as its base (100) for calculating the LTL and truckload PPIs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9014abeb-369b-4328-97ae-ee1793647b6e"></dynamic-object></div>The April reading is 4.9% higher than a year ago and 12.1% higher than July 2023, when the <a href="https://www.joc.com/article/yellows-collapse-already-pushing-ltl-rates-higher-as-capacity-tightens-5216052">collapse of Yellow</a> into bankruptcy set LTL costs climbing for the next 22 months. The LTL PPI is a measure of the total “selling price” LTL customers pay carriers for services, including accessorial fees and fuel surcharges as well as base LTL trucking rates. It is a metric tracking the total cost of LTL services to shippers, rather than base rates. The LTL PPI flatlined from September through December 2024 before jumping 5.8% from December to January and climbing another 0.8% in February to its current plateau. The jump in early 2025 most likely corresponds with new rates set by contract renewals. The PPI corresponds closely with contractual rate increases reported by LTL carriers in recent first-quarter earnings reports and in interviews with the Journal of Commerce. Most carriers reported annualized rate increases in the <a href="https://www.joc.com/article/us-ltl-rates-rising-despite-falling-volumes-more-cautious-shippers-5996463">mid-single-digit percentage range</a> in the first quarter. New contract agreements are still coming into effect. To date, tariff-related variations in demand have had little effect on the US LTL market. The rebound in LTL pricing stands in contrast to the performance of the truckload sector, where pricing is still close to the bottom of a trough first entered in June 2023. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ca91266b-e12d-4977-9e6a-03d09f9b08f0"></dynamic-object></div>The BLS long-distance truckload PPI of 175.2 fell just less than 1 percentage point in April and is down 2.6% from January and 24.6% from its pandemic-era peak in May 2022. The basic explanation for the LTL/truckload divergence is capacity. The loss of Yellow put more than 300 LTL terminals on the market; not all of them have been sold or returned to service. The LTL sector as a whole added only 83 terminals in 2024, bringing its total to 3,216 facilities, according to SJ Consulting Group. That is a 2.7% gain over 2023. The truckload sector <a href="https://www.joc.com/article/large-truckload-carriers-make-capacity-cuts-but-trucks-reenter-the-market-6004177">still has excess capacity</a>, with about 37% more carriers with active operating authorities than in 2019, data from the Federal Motor Carrier Safety Administration shows. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

US less-than-truckload (LTL) pricing has flatlined, but at the highest point on record, according to the US Bureau of Labor Statistics (BLS). The current BLS long-distance LTL producer price index (PPI) of 259 has remained stable from February through April, level with its previous pandemic-era peak in June 2022. The BLS uses pricing data from December 2003 as its base (100) for calculating the LTL and truckload PPIs. The April reading is 4.9% higher than a year ago and 12.1% higher than July 2023, when the collapse of Yellow into bankruptcy set LTL costs climbing for the next 22 months. The LTL PPI is a measure of the total “selling price” LTL customers pay carriers for services, including accessorial fees and fuel surcharges as well as base LTL trucking rates. It is a metric tracking the total cost of LTL services to shippers, rather than base rates. The LTL PPI flatlined from September through December 2024 before jumping 5.8% from December to January and climbing another 0.8% in February to its current plateau. The jump in early 2025 most likely corresponds with new rates set by contract renewals. The PPI corresponds closely with contractual rate increases reported by LTL carriers in recent first-quarter earnings reports and in interviews with the Journal of Commerce. Most carriers reported annualized rate increases in the mid-single-digit percentage range in the first quarter. New contract agreements are still coming into effect. To date, tariff-related variations in demand have had little effect on the US LTL market. The rebound in LTL pricing stands in contrast to the performance of the truckload sector, where pricing is still close to the bottom of a trough first entered in June 2023. The BLS long-distance truckload PPI of 175.2 fell just less than 1 percentage point in April and is down 2.6% from January and 24.6% from its pandemic-era peak in May 2022. The basic explanation for the LTL/truckload divergence is capacity. The loss of Yellow put more than 300 LTL terminals on the market; not all of them have been sold or returned to service. The LTL sector as a whole added only 83 terminals in 2024, bringing its total to 3,216 facilities, according to SJ Consulting Group. That is a 2.7% gain over 2023. The truckload sector still has excess capacity , with about 37% more carriers with active operating authorities than in 2019, data from the Federal Motor Carrier Safety Administration shows. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Truckload

US LTL pricing maintains record high as truckload slumps

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

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Use code MDRW695 at checkout and save $800 on first year of a Gold subscription!

Upgrade Subscription - Wide Box

MEMORIAL DAY SALE

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

Group Subscriptions - Wide Box

Get into a group subscription today

Use code MDW25 at checkout to save 25% on the first year of any annual subscription! 

Subscribe Now - Free Trials - Wide Box

Use code MDW25 at checkout and save 25% on any annual subscription!

Subscribe Now - Anonymous - Wide Box

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

SMC3rates_shutterstock_5247046.jpg

Shippers save money, time with automated transportation bidding tools

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

SMC3rates_shutterstock_5247046 (1).jpg

Filling the Supply Chain Education Gap with LTL Education Courses

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

Upgrade Subscription

MEMORIAL DAY SALE: Use code MDW25 at checkout to save 25% on first year of any annual subscription!


Subscribe Now - Free Trials - Offer Box

Subscribe Today

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

Group Subscriptions - Offer Box

Group Subscriptions

MEMORIAL DAY SALE: Use code MDW25 at checkout and save 25% on any annual subscription!

Subscribe Now - Anonymous - Offer Box

MEMORIAL DAY SALE: Use code MDRW695 at checkout and save $800 on first year of a Gold subscription! 

Upgrade Subscription - Offer Box

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

Journal of Commerce Magazine - Rectangle Box

Journal of Commerce Magazine

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

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

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

Inland Conference - Rectangle Box

Attend Inland25

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

ISI Report - Rectangle Box

Intermodal Savings Index

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

Gateway - Rectangle Box

Gateway

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

Breakbulk News shipping | Journal of Commerce

Breakbulk News

Container shipping news and analysis of ocean container shipping, logistics, supply chains, technology and end-to-end connectivity.

Container Shipping News | Journal of Commerce

Stay informed on port news worldwide with Journal of Commerce. From decarbonization to labor updates, get insights on global developments.

Port News | Journal of Commerce

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.

Latest News

More News & Analysis

HTA seeks new CEO amid multiple challenges for West Coast drayage operators

Scheduling linked to 10% tariffs causing confusion, angst for US importers

Carriers forge new paths in ongoing quest to monetize visibility investments