<div>It has been well known that air cargo carriers have struggled with invoice accuracy for years, with legacy systems with limited flexibility and inherent flaws in the booking process are contributing factors.Only one in four carriers can adjust rates across six or more factors, including market, product, commodity, unit load device (ULD), weight/volume, and market fluctuations, according to an Accenture Air Cargo study. Almost 60 percent believe that rate calculation inconsistencies are the top contributor to invoice errors, a major source of customer dissatisfaction and revenue leakage. In fact, invoice errors reach “high” levels for fully one-third of carriers in...

It has been well known that air cargo carriers have struggled with invoice accuracy for years, with legacy systems with limited flexibility and inherent flaws in the booking process are contributing factors. Only one in four carriers can adjust rates across six or more factors, including market, product, commodity, unit load device (ULD), weight/volume, and market fluctuations, according to an Accenture Air Cargo study. Almost 60 percent believe that rate calculation inconsistencies are the top contributor to invoice errors, a major source of customer dissatisfaction and revenue leakage. In fact, invoice errors reach “high” levels for fully one-third of carriers in the Accenture survey. Considering that CASS shows that the direct air cargo carrier market topped $26.4 billion in 2016 and that data research company MarketLine shows that the global (direct and indirect) air freight market topped $101.3 billion in 2016, hundreds of millions of dollars are being disputed by customers. However, invoicing issues are a double-edged sword. The data that we have collected from working with major global carriers over the past 12 years shows that invoicing issues do not discriminate. Carriers with a high overcharge rate also have a high under-billing rate, while those with lower under-billing rates have fewer overcharges. Analyzing the data further shows that under-billings on average equate to approximately 2.5 percent of overcharges. The under-billing to overcharge range is 1.67 percent to 3.25 percent — this makes overcharges an extremely good indicator of under-billings. Based on the current over-charge rate, the data shows that there is more than $250 million in revenue leakage that direct and indirect air cargo carriers face. While staggering, this number does not account for turnover relating to customer friction and distrust in the carriers’ billing capabilities. More than ever, there is a need for carriers to focus on protecting and improving the customer experience, while also guarding their revenue. The customer experience will not be improved unless invoice accuracy improves. With carriers holding onto legacy systems, and using flawed, manual processes during booking and invoicing, the customer experience will continue to suffer. In some cases, carriers are using terminal management systems built by companies they acquired in the 1990s or early 2000s. They are then overlaying these systems with visibility, and billing systems, which were not designed to communicate with each other; broken interfaces and data integrity issues are compounding the problem. Meanwhile, carriers are being inundated with invoice adjustments relating to overcharges, and it is become a major resource drain. Accounts payable auditing firms representing the customers seem to be the only ones benefiting from this massive invoicing issue. Until carriers focus on why these invoicing issues continue to persist, and what process changes need to be made to fix the systemic issues, the customer experience will continue to be disrupted. Invoicing errors are not a one-sided issue, yet there are very few auditing firms tackling under-billing concerns. As a result, customers have a strong advantage. They have the luxury of disputing overcharges while profiting from under-billings at the carriers’ expense. There is very little to no revenue protection for the carriers as most generic auditing firms don’t have the sophistication and resources to provide a revenue audit. The air cargo industry has many complexities that make it unique, such as commodity-based pricing, numerous container types, and surcharges, and volatile rates that are constantly changing. Without the right technology and shipping knowledge, it’s difficult to hone in on the problems and isolate invoicing issues before they reach the customer. There are very few firms that provide revenue protection services to air cargo carriers. It is a specialized field that requires adequate expertise, technology, and bandwidth. While revenue yields are improving, the customer experience continues to suffer. Specialized third-party revenue protection firms may be the only opportunity for carriers to recapture under-billed revenue, level the playing field with their customers, and ultimately improve invoice accuracy. No matter the internal factors or issues that may be causing the problem, a sophisticated third-party revenue protection service can quickly identify the issue, protect the revenue and add to the bottom-line. As gaps are brought to the attention of the carrier, process improvements can be implemented that drive up invoice accuracy. Under-billing rates typically drop 20 percent after the first year and overall invoice accuracy rates improve, meaning there are fewer overcharges and less customer disruption. Carriers are also benefitting from a faster quote to cash process, a reduction in the cash conversion cycle and days sales outstanding as they receive less and less invoice disputes and more on-time payments. These results show third-party revenue protection services can recoup a significant amount of under-billed revenue, and ultimately improve the customer experience at the same time. Mark Palladino is a revenue protection expert and principal of ARG LLC, which helps air cargo carriers prevent unnecessary losses. Contact him at mcpalladino@argglobal.net .

Air Cargo Carriers News

Poor invoicing costs cargo airlines cash and customers

<div class="phx-topic abstract-wrapper">A growing need to replace aging US hydropower units adds weight to project demand from the renewable energy sector.</div>

A growing need to replace aging US hydropower units adds weight to project demand from the renewable energy sector.

Feature image

<div class="phx-topic">Efforts to restore aging hydropower facilities across the US have been part of an uptick in project activity, helping feed the growing renewable energy segment driving breakbulk and project cargo demand.The latest hydro project news came Dec. 2, when renewable energy equipment manufacturer GE Vernova announced a deal with Dominion Energy to modernize two of the five hydropower units at the nearly 100-year-old Saluda Hydro power plant, which Dominion operates in South Carolina. The first unit is expected to be retrofitted by 2027. Dominion Energy South Carolina spokesperson Matt Long told the Journal of Commerce that Dominion is making major upgrades to the Saluda units to ensure their long-term reliability and operations.The upgrades are part of a multi-year restoration effort Dominion is working on at the 203-megawatt (MW) Saluda plant, as well as a piece of Dominion’s overall hydropower strategy. Including the Saluda plant, Dominion operates nine hydroelectric facilities across its territories in Virginia, North Carolina and South Carolina. According to Dominion’s latest annual report, hydro accounted for 5% to 11% of its energy supply sources in those territories. “Hydropower will continue to play a key role in Dominion Energy’s increasingly clean energy portfolio,” Long said.<h3>Renewed interest in hydro</h3>US hydropower generation is on track to rise by 6% in 2024 after falling last year to its lowest level since 2001, according to an April analysis by the US Energy Information Administration (EIA). Growth is expected in nearly every part of the country, with the largest hydropower increases coming in the Southeast, Northwest and the Rockies.Hydropower accounts for about 27% of total US renewable electricity generated in the United States and nearly 6% of total US electricity, according to the US Department of Energy (DOE). Defined as the production of electricity through the force of moving water — often when released through a dam or reservoir — hydropower is a centuries-old method used to generate power. But in recent years, hydro has garnered interest as a renewable energy solution, alongside wind, solar, nuclear, geothermal and biomass resources.Part of that solution entails updating the US’ aging hydropower infrastructure, as several facilities are over a century old and surpassing their lifespan of 50 to 100 years. But there are also new hydro facilities in development, including four proposed projects in rural Alaska and Washington state that received $76 million in federal funding in February.Under President Joe Biden’s administration, the Infrastructure Investment and Jobs Act carved out $553.6 million for projects to maintain and enhance existing hydroelectric facilities. Along with ensuring the facilities will continue to provide electricity, the funding would also enable hydro plants to integrate renewable energy sources including wind and solar. In September, the DOE selected 293 hydroelectric projects across 33 states to receive up to $430 million in incentives to upgrade existing facilities. A second round of program funding will be announced in 2025.<h3>Supply chain limitations</h3>The modernization of existing hydropower facilities, along with new construction, could drive expansion of domestic manufacturing and foreign investments in the US hydropower supply chain, according to the DOE.But there are vulnerabilities that the supply chain will need to overcome. “Severely limited or nonexistent domestic suppliers,” unpredictable demand signals, and “inequitable” foreign competition were identified as major gaps in the domestic hydropower supply chain in an August 2024 analysis by the DOE. About half of hydropower facilities are federally owned, with the other half split between public and private entities, according to the National Hydropower Association.There are indications that federal support for US hydropower development could continue under the administration of President-elect Donald Trump, although it’s unclear what that might look like. Whereas Trump has fiercely opposed offshore wind as a solution to meet US energy needs, he has advocated for advancing hydropower as a renewable energy resource. Trump’s campaign agenda indicated that the president-elect “will champion America’s great dams and hydroelectric power,” although did not provide specific plans.Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

Efforts to restore aging hydropower facilities across the US have been part of an uptick in project activity, helping feed the growing renewable energy segment driving breakbulk and project cargo demand. The latest hydro project news came Dec. 2, when renewable energy equipment manufacturer GE Vernova announced a deal with Dominion Energy to modernize two of the five hydropower units at the nearly 100-year-old Saluda Hydro power plant, which Dominion operates in South Carolina. The first unit is expected to be retrofitted by 2027. Dominion Energy South Carolina spokesperson Matt Long told the Journal of Commerce that Dominion is making major upgrades to the Saluda units to ensure their long-term reliability and operations. The upgrades are part of a multi-year restoration effort Dominion is working on at the 203-megawatt (MW) Saluda plant, as well as a piece of Dominion’s overall hydropower strategy. Including the Saluda plant, Dominion operates nine hydroelectric facilities across its territories in Virginia, North Carolina and South Carolina. According to Dominion’s latest annual report, hydro accounted for 5% to 11% of its energy supply sources in those territories. “Hydropower will continue to play a key role in Dominion Energy’s increasingly clean energy portfolio,” Long said. Renewed interest in hydro US hydropower generation is on track to rise by 6% in 2024 after falling last year to its lowest level since 2001, according to an April analysis by the US Energy Information Administration (EIA). Growth is expected in nearly every part of the country, with the largest hydropower increases coming in the Southeast, Northwest and the Rockies. Hydropower accounts for about 27% of total US renewable electricity generated in the United States and nearly 6% of total US electricity, according to the US Department of Energy (DOE). Defined as the production of electricity through the force of moving water — often when released through a dam or reservoir — hydropower is a centuries-old method used to generate power. But in recent years, hydro has garnered interest as a renewable energy solution, alongside wind, solar, nuclear, geothermal and biomass resources. Part of that solution entails updating the US’ aging hydropower infrastructure, as several facilities are over a century old and surpassing their lifespan of 50 to 100 years. But there are also new hydro facilities in development, including four proposed projects in rural Alaska and Washington state that received $76 million in federal funding in February. Under President Joe Biden’s administration, the Infrastructure Investment and Jobs Act carved out $553.6 million for projects to maintain and enhance existing hydroelectric facilities. Along with ensuring the facilities will continue to provide electricity, the funding would also enable hydro plants to integrate renewable energy sources including wind and solar. In September, the DOE selected 293 hydroelectric projects across 33 states to receive up to $430 million in incentives to upgrade existing facilities. A second round of program funding will be announced in 2025. Supply chain limitations The modernization of existing hydropower facilities, along with new construction, could drive expansion of domestic manufacturing and foreign investments in the US hydropower supply chain, according to the DOE. But there are vulnerabilities that the supply chain will need to overcome. “Severely limited or nonexistent domestic suppliers,” unpredictable demand signals, and “inequitable” foreign competition were identified as major gaps in the domestic hydropower supply chain in an August 2024 analysis by the DOE. About half of hydropower facilities are federally owned, with the other half split between public and private entities, according to the National Hydropower Association. There are indications that federal support for US hydropower development could continue under the administration of President-elect Donald Trump, although it’s unclear what that might look like. Whereas Trump has fiercely opposed offshore wind as a solution to meet US energy needs, he has advocated for advancing hydropower as a renewable energy resource. Trump’s campaign agenda indicated that the president-elect “will champion America’s great dams and hydroelectric power,” although did not provide specific plans. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Energy projects

Project cargo

Breakbulk News

US hydropower restoration projects offer stimulus for project cargo demand

<div class="phx-topic abstract-wrapper">Industrial projects reliant on imported steel are expected to feel the pinch of an import and quality crackdown in the country.</div>

Industrial projects reliant on imported steel are expected to feel the pinch of an import and quality crackdown in the country.

<div class="phx-topic">Breakbulk imports into India have been disrupted by the double whammy of a clampdown on inbound steel trade and more stringent quality requirements, with concerns of a knock-on effect on industrial projects.Steel products make up a significant portion of Indian breakbulk trade and volume fluctuations directly impact marine terminals equipped with multipurpose berths. Smaller steel lots are also shipped in containers, contributing incremental traffic for liner calls and box terminals. Importers told the Journal of Commerce they faced considerable customs clearance delays for steel consignments landed at various Indian docks through October, with officials unwilling to issue the mandatory quality approval or a “no objection certificate” (NOC) due to a lack of clarity over the policy. Following the release of updated guidelines in late November, most stranded cargoes have been flushed out, but not without consignees incurring substantial additional port charges, including ground rent and storage fees, sources said. The policy change is said to be an outcome of hard lobbying from local steelmakers, who were pushing policymakers to curb the influx of cheap imports flooding the Indian market. India’s steel imports surged 41% year over year in the first half of fiscal year 2024-25 (April-September), according to India Ministry of Steel data.While welcoming government measures to safeguard domestic interests, industry sources said protectionist sentiment could negatively impact the nascent steel sector, a segment critical to an Indian economy seeking sustained growth. <h3>EPCs, forwarders count cost of trade curbs</h3>“India's contemplation of a 25% import duty on steel…could have significant implications for micro small-to-medium enterprises that rely on steel as a key raw material,” Ajay Sahai, director general at the Federation of Indian Export Organizations, told the Journal of Commerce. "The government must strike a workable balance between the two sides."A supply chain expert with knowledge of steel industry dynamics said stricter norms and a possible 25% safeguard duty on India’s steel imports “will drastically strain steel supply.”“It’s not that India is highly dependent on imports, but it’s the availability of low-priced imported steel that drives the supply side,” the source said. Sources also highlighted the significance of steel-consuming sectors like engineering, automobile and construction for the national flagship “Make-in-India” program. “All of this [politics] is creating a lot of uncertainty, which has significant repercussions for everyone in the steel supply chain,” another industry analyst told the Journal of Commerce. “It’s just not helping the market.” Local freight forwarders in India active in the steel trade also raised concerns over the regulatory complexities and the potential business impact. “Online data uploading on the steel import monitoring system (SIM), a prerequisite to clearance, is now the importer’s responsibility, which is painful and adds costs,” said Manoj Subramanian, senior general manager of corporate sales at Mumbai-based Flyjac Logistics. “The strain could affect various ongoing infrastructure projects, including metro and bullet rail developments, and if the stalemate continues, projects lined up in the renewable energy sector will also likely take a hit.” Contact Bency Matthew at <a href="mailto:bencymathew@gmail.com">bencymathew@gmail.com</a>.</div>

Breakbulk imports into India have been disrupted by the double whammy of a clampdown on inbound steel trade and more stringent quality requirements, with concerns of a knock-on effect on industrial projects. Steel products make up a significant portion of Indian breakbulk trade and volume fluctuations directly impact marine terminals equipped with multipurpose berths. Smaller steel lots are also shipped in containers, contributing incremental traffic for liner calls and box terminals. Importers told the Journal of Commerce they faced considerable customs clearance delays for steel consignments landed at various Indian docks through October, with officials unwilling to issue the mandatory quality approval or a “no objection certificate” (NOC) due to a lack of clarity over the policy. Following the release of updated guidelines in late November, most stranded cargoes have been flushed out, but not without consignees incurring substantial additional port charges, including ground rent and storage fees, sources said. The policy change is said to be an outcome of hard lobbying from local steelmakers, who were pushing policymakers to curb the influx of cheap imports flooding the Indian market. India’s steel imports surged 41% year over year in the first half of fiscal year 2024-25 (April-September), according to India Ministry of Steel data. While welcoming government measures to safeguard domestic interests, industry sources said protectionist sentiment could negatively impact the nascent steel sector, a segment critical to an Indian economy seeking sustained growth. EPCs, forwarders count cost of trade curbs “India's contemplation of a 25% import duty on steel…could have significant implications for micro small-to-medium enterprises that rely on steel as a key raw material,” Ajay Sahai, director general at the Federation of Indian Export Organizations, told the Journal of Commerce. "The government must strike a workable balance between the two sides." A supply chain expert with knowledge of steel industry dynamics said stricter norms and a possible 25% safeguard duty on India’s steel imports “will drastically strain steel supply.” “It’s not that India is highly dependent on imports, but it’s the availability of low-priced imported steel that drives the supply side,” the source said. Sources also highlighted the significance of steel-consuming sectors like engineering, automobile and construction for the national flagship “Make-in-India” program. “All of this [politics] is creating a lot of uncertainty, which has significant repercussions for everyone in the steel supply chain,” another industry analyst told the Journal of Commerce. “It’s just not helping the market.” Local freight forwarders in India active in the steel trade also raised concerns over the regulatory complexities and the potential business impact. “Online data uploading on the steel import monitoring system (SIM), a prerequisite to clearance, is now the importer’s responsibility, which is painful and adds costs,” said Manoj Subramanian, senior general manager of corporate sales at Mumbai-based Flyjac Logistics. “The strain could affect various ongoing infrastructure projects, including metro and bullet rail developments, and if the stalemate continues, projects lined up in the renewable energy sector will also likely take a hit.” Contact Bency Matthew at bencymathew@gmail.com .

Breakbulk carriers

Breakbulk ports

Breakbulk trade stymied by India’s steel import curbs

<div class="phx-topic abstract-wrapper">The Federal Maritime Commission said that it needs more information about the new grouping of ocean carriers known as the Premier Alliance before the vessel-sharing agreement can begin in February on US trades. </div>

The Federal Maritime Commission said that it needs more information about the new grouping of ocean carriers known as the Premier Alliance before the vessel-sharing agreement can begin in February on US trades.

<div class="phx-topic">The Federal Maritime Commission (FMC) on Friday has halted Premier Alliance from becoming effective next week as scheduled, citing insufficient information on the alliance set to sail in February. The FMC said the proposed agreement from Ocean Network Express, HMM and Yang Ming “lacks sufficient detail to allow for a complete analysis of potential competitive impacts and whether the agreement fully complies with all statutory requirements.” The Premier Alliance on Friday released details of its <a href="https://www.joc.com/article/north-america-trade-to-dominate-premier-alliances-network-launch-in-february-5877233">new network</a>. Premier members had been partners in the THE Alliance with Hapag-Lloyd. But with Hapag-Lloyd’s decision to bolt THE Alliance in favor of joining Maersk in the 2M Cooperation, the three carriers <a href="https://www.joc.com/article/msc-strikes-asia-europe-slot-share-with-former-thea-members-5723585">banded together</a> in September under a new name and with a slot-sharing agreement in the trans-Pacific trade with Mediterranean Shipping Co. The FMC has a 45-day window from when it collects the information to issue the formal go-ahead for the Premier Alliance, and any shippers wishing to weigh in will be able to do so during a 15-day window that starts next week. Such requests for additional information from the FMC are common, with the Gemini Cooperation <a href="https://www.joc.com/article/fmc-wants-maersk-hapag-lloyd-to-provide-more-details-on-gemini-alliance-5192298">itself having received</a> one in July. The agency later determined there were no competitive impacts to Gemini but vowed to keep <a href="https://www.joc.com/article/fmc-wont-block-gemini-alliance-but-vows-tight-monitoring-5724939">an eye</a> on the new alliance. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>. </div>

The Federal Maritime Commission (FMC) on Friday has halted Premier Alliance from becoming effective next week as scheduled, citing insufficient information on the alliance set to sail in February. The FMC said the proposed agreement from Ocean Network Express, HMM and Yang Ming “lacks sufficient detail to allow for a complete analysis of potential competitive impacts and whether the agreement fully complies with all statutory requirements.” The Premier Alliance on Friday released details of its new network . Premier members had been partners in the THE Alliance with Hapag-Lloyd. But with Hapag-Lloyd’s decision to bolt THE Alliance in favor of joining Maersk in the 2M Cooperation, the three carriers banded together in September under a new name and with a slot-sharing agreement in the trans-Pacific trade with Mediterranean Shipping Co. The FMC has a 45-day window from when it collects the information to issue the formal go-ahead for the Premier Alliance, and any shippers wishing to weigh in will be able to do so during a 15-day window that starts next week. Such requests for additional information from the FMC are common, with the Gemini Cooperation itself having received one in July. The agency later determined there were no competitive impacts to Gemini but vowed to keep an eye on the new alliance. Contact Michael Angell at michael.angell@spglobal.com .

Transport, Trade and Regulation News

Asia-Europe

Trans-Pacific

Container lines

FMC halts Premier Alliance start for more information

<div class="phx-topic abstract-wrapper">The Asia-North America trade will be featured on 13 of the initial 24 services inaugurated by the ONE-HMM-Yang Ming partnership.</div>

The Asia-North America trade will be featured on 13 of the initial 24 services inaugurated by the ONE-HMM-Yang Ming partnership.

<div class="phx-topic">The Asia-North America trade will be the cornerstone of the Premier Alliance's network when it launches its initial 24 services in February, according to schedules released Friday by alliance members Ocean Network Express (ONE) and HMM. The first tranche of services will cover four main east-west trades — trans-Pacific, Asia-Europe, Asia-Mediterranean and Asia-Middle East, the schedules showed. Taiwan’s Yang Ming Marine Transport is the third member of the Premier Alliance. Network documents released by ONE show the Premier Alliance will eventually grow to operate 34 services transiting via the Cape of Good Hope, with 29 services on the Red Sea/Suez Canal transit option. The alliance has not yet announced which routing it will choose for the February launch, although the Maersk/Hapag-Lloyd Gemini Cooperation <a href="https://www.joc.com/article/maersk-rules-out-suez-canal-routings-for-gemini-launch-5746470">has already opted to transit via southern Africa</a> given the still-unsettled security situation in the Red Sea and Gulf of Aden. The Asia-North America trade will dominate the Premier Alliance network whichever routing is selected, with 13 services out of the initial 24 focused on the Americas trade.The first sailing to the US West Coast will be on Feb. 3 when the 8,084-TEU Conti Conquest deployed on the Pacific Southwest 3 service departs Singapore. The first sailing to the US East Coast will be by the 13,870-TEU One Manchester operating the EC3 service that will depart Thailand’s Laem Chabang port on Feb. 8. Vessel schedules show nine services will operate to the West Coast in February, with four to the East Coast. Alliance carriers have not yet released details of March sailings from Asia. The alliance carriers said the launch of two further services — Pacific Southwest 5 (PS5) and Pacific Northwest 4 (PN4) — between Asia and the West Coast have been postponed until May; none of the carriers gave an explanation for the delay. Instead, the Premier Alliance will strengthen coverage of three other West Coast services with extra port calls. The Premier Alliance network also shows seven services on the Asia-Europe trade, of which six will be inaugurated in February, and seven on the Asia-Mediterranean/Middle East loop, with five launched in February. The number of services on the Asia-Europe and Asia-Mediterranean routes will remain the same whether the Cape of Good Hope or Red Sea/Suez Canal routing is chosen. The first Asia-Europe sailing by the new alliance will be made by the 8,212-TEU One Henry Hudson on the Far East Pacific 1 service that will depart Shimizu, Japan, on Feb. 4. The 15,908-TEU MSC Venice, deployed on the MD3 service, will inaugurate the first sailing on Premier’s Asia-Mediterranean trade when it departs Xingang in China on Feb. 2. Mediterranean Shipping Co. <a href="https://www.joc.com/article/mscs-global-scale-enables-standalone-network-coverage-5726563">has a slot-swap arrangement</a> with the Premier Alliance. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

The Asia-North America trade will be the cornerstone of the Premier Alliance's network when it launches its initial 24 services in February, according to schedules released Friday by alliance members Ocean Network Express (ONE) and HMM. The first tranche of services will cover four main east-west trades — trans-Pacific, Asia-Europe, Asia-Mediterranean and Asia-Middle East, the schedules showed. Taiwan’s Yang Ming Marine Transport is the third member of the Premier Alliance. Network documents released by ONE show the Premier Alliance will eventually grow to operate 34 services transiting via the Cape of Good Hope, with 29 services on the Red Sea/Suez Canal transit option. The alliance has not yet announced which routing it will choose for the February launch, although the Maersk/Hapag-Lloyd Gemini Cooperation has already opted to transit via southern Africa given the still-unsettled security situation in the Red Sea and Gulf of Aden. The Asia-North America trade will dominate the Premier Alliance network whichever routing is selected, with 13 services out of the initial 24 focused on the Americas trade. The first sailing to the US West Coast will be on Feb. 3 when the 8,084-TEU Conti Conquest deployed on the Pacific Southwest 3 service departs Singapore. The first sailing to the US East Coast will be by the 13,870-TEU One Manchester operating the EC3 service that will depart Thailand’s Laem Chabang port on Feb. 8. Vessel schedules show nine services will operate to the West Coast in February, with four to the East Coast. Alliance carriers have not yet released details of March sailings from Asia. The alliance carriers said the launch of two further services — Pacific Southwest 5 (PS5) and Pacific Northwest 4 (PN4) — between Asia and the West Coast have been postponed until May; none of the carriers gave an explanation for the delay. Instead, the Premier Alliance will strengthen coverage of three other West Coast services with extra port calls. The Premier Alliance network also shows seven services on the Asia-Europe trade, of which six will be inaugurated in February, and seven on the Asia-Mediterranean/Middle East loop, with five launched in February. The number of services on the Asia-Europe and Asia-Mediterranean routes will remain the same whether the Cape of Good Hope or Red Sea/Suez Canal routing is chosen. The first Asia-Europe sailing by the new alliance will be made by the 8,212-TEU One Henry Hudson on the Far East Pacific 1 service that will depart Shimizu, Japan, on Feb. 4. The 15,908-TEU MSC Venice, deployed on the MD3 service, will inaugurate the first sailing on Premier’s Asia-Mediterranean trade when it departs Xingang in China on Feb. 2. Mediterranean Shipping Co. has a slot-swap arrangement with the Premier Alliance. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Maritime

North America trade to dominate Premier Alliance’s network launch in February

<div class="phx-topic abstract-wrapper">The extensive frontloading of imports that occurred this fall will keep cargo volumes modest this month, but the vagaries of labor negotiations and new tariffs threaten to disrupt the market in short order.</div>

The extensive frontloading of imports that occurred this fall will keep cargo volumes modest this month, but the vagaries of labor negotiations and new tariffs threaten to disrupt the market in short order.

<div class="phx-topic">The overheated trans–Pacific Ocean market is in the midst of a December respite after months of extensive frontloading, but can quickly become roiled again given the razor's-edge nature of longshore labor talks and the threats of new tariffs by the incoming Trump administration. “Once we get to January, whether it’s on the political front, the labor front, the alliance shake-up, everything is coming fast,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. Also in the background is an early Lunar New Year, which begins Jan. 29 and will likely mean imports from Asia perk up again from early January ahead of the holiday factory closures that take place in the region. The import pop will take place mostly at West Coast ports. “The East Coast will drop off. The West Coast will remain robust,” a carrier executive said. Meantime, with plentiful vessel capacity scheduled and reduced blanking, sources say they expect continued downward pressure on spot rates that have been in retreat since July. Rates from Asia to the US West Coast were at $2,400 per FEU as of Thursday, down 4% on the week and sharply off the July peak of over $8,000, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International, said there are three levels of spot/freight-all-kinds rates in the current market — “window” rates as high as $5,000 per FEU to the West Coast that some importers are willing to pay to ensure loading of their freight; the more prevalent market rates listed on the indexes, such as the $2,400 per FEU rate listed by Platts; and special “bullet” rates offered by some carriers in specific trade lanes based on demand. “Those (bullet) rates are in the low $2,000s, but they’re not across the board,” Sur said. Still, the market knows full well those rates are now at the mercy of a looming Jan. 15 deadline for the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) to reach agreement on a new master contract and head off a second strike at ports along the US East and Gulf coasts. A multiday ILA strike in January would sustain the diversion of cargo to West Coast ports and add to the complexity that importers already face in planning their supply chains. “My assessment is we are more likely to see a strike than not see a strike, and if we do get a strike, it will last longer,” Lars Jensen, CEO and partner at Vespucci Maritime, told a Journal of Commerce webinar Thursday. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div><h3>Navigating tariff uncertainty</h3>On the political front, importers are facing an increasingly tangible tariff threat in 2025 after President-elect Donald Trump’s plan to implement tariffs on foreign goods has <a href="https://www.joc.com/article/us-importers-dabbling-in-frontloading-ahead-of-new-tariff-threat-5821448">pushed some shippers to move cargo early.</a>The major uncertainty that importers will face after Trump takes office in January is what level of tariffs he will impose on which countries and when those tariffs will go into effect. “It’s fair to say nobody knows for sure,” Jensen said. It is likely that many retailers are preparing to frontload shipments if they haven’t already done so, especially if they have space in their warehouses to store the product until needed. Inventory levels at warehouses across the United States were generally high before the Black Friday in-store sales and Cyber Monday online sales, said Scott Weiss, vice president of technical sales-warehouse and distribution service for North America at A.P. Moeller-Maersk. The <a href="https://www.joc.com/article/cargo-push-to-continue-amid-mounting-market-pressures-zim-5821532">US inventory-to-retail sales ratio in September</a>, the most recent reading from the US Census Bureau, was elevated to levels not seen since before the pandemic buying spree began. “The sales were strong, so the inventory was here,” Weiss said. “However, as the inventory goes down through the holidays, space will open up for the frontloading of spring merchandise, which is occurring somewhat earlier than usual,” he said. Nevertheless, a consultant and former logistics manager at two national retailers said importers must assess inventory carrying costs and all the uncertainties surrounding tariffs as they review their frontloading plans. “There’s only so much you can frontload,” the source said. Many importers diversified supply chains after Trump’s initial round of tariffs that were implemented during his first term in office. “We successfully [addressed previous tariffs] through a combination of vendor collaboration, product reengineering and assortment changes, (and) moving product sourcing to other countries...,” said Five Below CEO Ken Bull. “We expect to utilize these tools and tactics again." <h3>Growing supply and stable demand</h3>Meanwhile, the US West Coast is poised for significant capacity injections in December and January, forecasted by maritime intelligence firm eeSea to reach a record 1.5 million TEUs in January. The company also forecasts a December blanking rate of about 1% on the East Coast and 6.7% for the West Coast. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="953f7c86-635d-4cba-9cb7-ffe651937158"></dynamic-object></div>If blanks and capacity estimates come to fruition at eeSea’s projected rates, actual capacity into the East Coast for December will climb by 27.6%, while West Coast capacity will drop 1.1%. 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>

The overheated trans–Pacific Ocean market is in the midst of a December respite after months of extensive frontloading, but can quickly become roiled again given the razor's-edge nature of longshore labor talks and the threats of new tariffs by the incoming Trump administration. “Once we get to January, whether it’s on the political front, the labor front, the alliance shake-up, everything is coming fast,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. Also in the background is an early Lunar New Year, which begins Jan. 29 and will likely mean imports from Asia perk up again from early January ahead of the holiday factory closures that take place in the region. The import pop will take place mostly at West Coast ports. “The East Coast will drop off. The West Coast will remain robust,” a carrier executive said. Meantime, with plentiful vessel capacity scheduled and reduced blanking, sources say they expect continued downward pressure on spot rates that have been in retreat since July. Rates from Asia to the US West Coast were at $2,400 per FEU as of Thursday, down 4% on the week and sharply off the July peak of over $8,000, according to Platts, a sister company of the Journal of Commerce within S&P Global. Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International, said there are three levels of spot/freight-all-kinds rates in the current market — “window” rates as high as $5,000 per FEU to the West Coast that some importers are willing to pay to ensure loading of their freight; the more prevalent market rates listed on the indexes, such as the $2,400 per FEU rate listed by Platts; and special “bullet” rates offered by some carriers in specific trade lanes based on demand. “Those (bullet) rates are in the low $2,000s, but they’re not across the board,” Sur said. Still, the market knows full well those rates are now at the mercy of a looming Jan. 15 deadline for the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) to reach agreement on a new master contract and head off a second strike at ports along the US East and Gulf coasts. A multiday ILA strike in January would sustain the diversion of cargo to West Coast ports and add to the complexity that importers already face in planning their supply chains. “My assessment is we are more likely to see a strike than not see a strike, and if we do get a strike, it will last longer,” Lars Jensen, CEO and partner at Vespucci Maritime, told a Journal of Commerce webinar Thursday. Navigating tariff uncertainty On the political front, importers are facing an increasingly tangible tariff threat in 2025 after President-elect Donald Trump’s plan to implement tariffs on foreign goods has pushed some shippers to move cargo early. The major uncertainty that importers will face after Trump takes office in January is what level of tariffs he will impose on which countries and when those tariffs will go into effect. “It’s fair to say nobody knows for sure,” Jensen said. It is likely that many retailers are preparing to frontload shipments if they haven’t already done so, especially if they have space in their warehouses to store the product until needed. Inventory levels at warehouses across the United States were generally high before the Black Friday in-store sales and Cyber Monday online sales, said Scott Weiss, vice president of technical sales-warehouse and distribution service for North America at A.P. Moeller-Maersk. The US inventory-to-retail sales ratio in September , the most recent reading from the US Census Bureau, was elevated to levels not seen since before the pandemic buying spree began. “The sales were strong, so the inventory was here,” Weiss said. “However, as the inventory goes down through the holidays, space will open up for the frontloading of spring merchandise, which is occurring somewhat earlier than usual,” he said. Nevertheless, a consultant and former logistics manager at two national retailers said importers must assess inventory carrying costs and all the uncertainties surrounding tariffs as they review their frontloading plans. “There’s only so much you can frontload,” the source said. Many importers diversified supply chains after Trump’s initial round of tariffs that were implemented during his first term in office. “We successfully [addressed previous tariffs] through a combination of vendor collaboration, product reengineering and assortment changes, (and) moving product sourcing to other countries...,” said Five Below CEO Ken Bull. “We expect to utilize these tools and tactics again." Growing supply and stable demand Meanwhile, the US West Coast is poised for significant capacity injections in December and January, forecasted by maritime intelligence firm eeSea to reach a record 1.5 million TEUs in January. The company also forecasts a December blanking rate of about 1% on the East Coast and 6.7% for the West Coast. If blanks and capacity estimates come to fruition at eeSea’s projected rates, actual capacity into the East Coast for December will climb by 27.6%, while West Coast capacity will drop 1.1%. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

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

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Shippers save money, time with automated transportation bidding tools

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

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