<div class="phx-topic abstract-wrapper">The effects of the coronavirus have yet to be felt by Europe’s busiest container port, but it has joined Antwerp in issuing a grim prediction for the year ahead.</div>

The effects of the coronavirus have yet to be felt by Europe’s busiest container port, but it has joined Antwerp in issuing a grim prediction for the year ahead.

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<div>Rotterdam is warning that a 10 to 20 percent year-over-year drop in container volume is “very likely” this year as the disruptive effects of the coronavirus disease 2019 (COVID-19) reverberate through the global supply chain.The gloomy prediction echoes the downcast expectation made by nearby rival Antwerp last week when, while announcing <a>a 9.5 percent surge in volume in the first quarter</a>, said it was preparing for the inevitable impact on volume from the coronavirus measures in the second quarter.Rotterdam, Europe’s busiest container port, reported a throughput decline of 4.7 percent in the first quarter, with 3.54 million TEU crossing its...

Rotterdam is warning that a 10 to 20 percent year-over-year drop in container volume is “very likely” this year as the disruptive effects of the coronavirus disease 2019 (COVID-19) reverberate through the global supply chain. The gloomy prediction echoes the downcast expectation made by nearby rival Antwerp last week when, while announcing a 9.5 percent surge in volume in the first quarter , said it was preparing for the inevitable impact on volume from the coronavirus measures in the second quarter. Rotterdam, Europe’s busiest container port, reported a throughput decline of 4.7 percent in the first quarter, with 3.54 million TEU crossing its wharves, down 174,000 TEU from the first three months of 2019. In an operational update Thursday, Rotterdam said global disruption to production and supply chains, closed factories, tightening border controls, and restrictions on the movement of people, had led to “highly exceptional conditions” in the first quarter. In terms of overall tonnage handled in the first three months, Rotterdam throughput was down 9.3 percent year over year to 112.4 million metric tons (123.8 million tons), but record highs were recorded in the volume of liquefied natural gas (LNG) and biofuel over the same period. Just over half the containers handled by Rotterdam either originate in or are destined for Asia. Cargo growth at Rotterdam was already slowing, with increased competition from North Europe rivals pulling its throughput down by 5.7 percent in 2019 to 14.8 million TEU. The port’s first-half volume was up 6.4 percent before a poor second half kicked in, which Rotterdam attributed to weakening European economies and slowing trade with Asia, combined with only a marginal increase in transshipment But the real impact of the coronavirus — and subsequent economic recessions in Europe and the United States — on the port has yet to be felt, according to Allard Castelein, CEO of the Port of Rotterdam Authority, who warned that the Dutch hub was facing “unprecedented disruption.” “The impact of a decline in demand due to the corona crisis will become clear from April onwards,” Castelein said in the operational update.​ “A 10 to 20 percent drop in throughput volume on an annual basis would seem to be very likely. This will depend on how long the measures remain in place and on how quickly production and world trade recover.” Waiting on a recovery Also waiting for an end to regional stay-at-home orders aimed at stemming the spread of the coronavirus and a restarting of the European economy are ports at the Chinese end of the global supply chain. Complete China port data from the Shanghai Shipping Exchange will be released in the third week of April, but according to Theo Notteboom, a professor and academic in the port and maritime sector, terminals operated by Cosco Shipping Ports in China have seen far greater throughput declines in the first quarter than their European and US counterparts. In a LinkedIn post, Notteboom said the nationwide factory closures and travel restrictions in China that followed Chinese New Year had dragged down volume at Cosco-operated terminals in January and February, according to data he sourced from Cosco Shipping Ports. Although Chinese ports became fully operational again in March, they were now feeling the impact of the coronavirus on demand from Europe and North America, he said. Among the notable throughput declines pointed out by Notteboom, Dalian Container Terminal was down almost 30 percent year over year in the first quarter, Yantian International Container Terminal saw a drop in volume of 16 percent, and Guangzhou Terminals throughput was down about 11 percent. Ports around the world are unlikely to see an improvement in volume anytime soon. Faced with gloomy economic forecasts — economists this week revised their outlooks downwards — carriers have planned withdrawals of huge amounts of capacity over the next few weeks. Sea-Intelligence Maritime Consulting said the blanked sailings will result in 20 percent of the trans-Pacific capacity being taken out of service, while the Asia-Europe trades will see cumulative capacity cuts reaching 25 to 30 percent. The analyst estimates the capacity withdrawals will result in a volume loss of 6.4 million TEU by the end of June. Peter Sand, chief shipping analyst at BIMCO, said in a webinar hosted by the shipping association this week that a V-shaped recovery was not on the cards. “A slow and gradual recovery is likely. When we look at the containments imposed around the world, it is hard to see a massive rebound because of the very high cost this has had on the global economy,” Sand said. Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .

Maritime

Rotterdam predicts big volume hit from COVID-19

<div class="phx-topic abstract-wrapper">A source with knowledge of Friday’s incident said the UP train was being interchanged to Norfolk Southern Railway, although it’s unclear why the train was stationary in a residential area.</div>

A source with knowledge of Friday’s incident said the UP train was being interchanged to Norfolk Southern Railway, although it’s unclear why the train was stationary in a residential area.

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<div class="phx-topic">The theft of cargo from a Union Pacific (UP) train on the west side of Chicago on Friday highlights several challenges combating such crime, including how to handle interchanges between two Class I railroads in a major city. The incident, <a href="https://abc7chicago.com/post/chicago-crime-stolen-merchandise-sale-social-media-after-thieves-loot-freight-train-south-austin-residents-say/15422283/?ex_cid=TA_WLS_TW&amp;taid=670bd5e798f9f60001d38860&amp;utm_campaign=trueAnthem%3A+Trending+Content&amp;utm_medium=trueAnthem&amp;utm_source=twitter">which was caught on video</a>, also raises the question of whether the suspects received <a href="https://www.joc.com/article/us-rail-cargo-crime-on-the-rise-as-thieves-methods-gain-sophistication-5219201">inside information</a> because they hit only a handful of Hub Group boxes and rail-owned containers labelled “EMP” with electronics inside. Video shows the thieves ignoring dozens of other containers. UP said the train was in the middle of an interchange. A source with knowledge of the incident said the UP train was being interchanged to Norfolk Southern Railway, although it is unclear whether the Belt Railway of Chicago — a short-line railroad responsible for interchanges in the city — oversaw the transfer or why the train was stationary in a residential area. When a train is involved in an interchange, it is only supposed to do so in a secure yard or terminal. Chicago police announced six people were taken into custody, but only two individuals have been charged so far with misdemeanors. Some of the stolen merchandise was recovered. The targeting of specific cargo is different than what occurred to UP <a href="https://www.up.com/aboutup/community/inside_track/la-cargo-threats-aggressive-response-220116.htm">in Los Angeles</a> in 2021 and early 2022 when thieves ransacked containers and then littered the tracks with cargo they left behind. <h3>Threat is hard to stop </h3>Chicago and Memphis are major US junction points where North American Class I railroads from the eastern and western US and Canada all meet. The security of cargo being interchanged is also a major problem in Memphis, according to Memphis Police Sgt. Jason Moore, who spoke on the topic of cargo theft earlier this month at the Journal of Commerce’s <a href="https://www.joc.com/article/rail-industry-split-on-how-to-best-combat-cargo-theft-5742577">Inland Distribution Conference</a> (Inland24) in Chicago. “Up until recently, there have been times when an intermodal train in Memphis may sit for 36 hours or 48 hours and by the time the train is moving again, a bunch of cargo is gone,” Moore said at Inland24. “Where the trains are sitting are not always in the safest of locations in either city [Chicago or Memphis] and while the railroad police try their best, all our agencies are short on officers so it’s hard to cover all intermodal trains, especially those several thousand feet long.” Friday’s incident highlights another problem besides the insider threat and challenges of interchanging containers between railroads: law enforcement having its hands tied when it comes to punishment for those convicted of cargo theft Authorities point out that if merchandise is stolen from a foreign trade zone (FTZ), those arrested can be charged with federal crimes, including felonies that could result in 10 years in prison. But incidents such as the one in Chicago, which did not occur in an FTZ, result in only fines or short-term stints in jail. “Right now, we’re having these conversations [about punishment] on a per-incident basis, a per-container basis, and that’s not aggregating in a sufficient way for federal prosecutors to understand the economic damage or the true victims of these crimes,” Will Johnson, chief special agent with BNSF Police, the law enforcement division of BNSF Railway, said during Inland24. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The theft of cargo from a Union Pacific (UP) train on the west side of Chicago on Friday highlights several challenges combating such crime, including how to handle interchanges between two Class I railroads in a major city. The incident, which was caught on video , also raises the question of whether the suspects received inside information because they hit only a handful of Hub Group boxes and rail-owned containers labelled “EMP” with electronics inside. Video shows the thieves ignoring dozens of other containers. UP said the train was in the middle of an interchange. A source with knowledge of the incident said the UP train was being interchanged to Norfolk Southern Railway, although it is unclear whether the Belt Railway of Chicago — a short-line railroad responsible for interchanges in the city — oversaw the transfer or why the train was stationary in a residential area. When a train is involved in an interchange, it is only supposed to do so in a secure yard or terminal. Chicago police announced six people were taken into custody, but only two individuals have been charged so far with misdemeanors. Some of the stolen merchandise was recovered. The targeting of specific cargo is different than what occurred to UP in Los Angeles in 2021 and early 2022 when thieves ransacked containers and then littered the tracks with cargo they left behind. Threat is hard to stop Chicago and Memphis are major US junction points where North American Class I railroads from the eastern and western US and Canada all meet. The security of cargo being interchanged is also a major problem in Memphis, according to Memphis Police Sgt. Jason Moore, who spoke on the topic of cargo theft earlier this month at the Journal of Commerce’s Inland Distribution Conference (Inland24) in Chicago. “Up until recently, there have been times when an intermodal train in Memphis may sit for 36 hours or 48 hours and by the time the train is moving again, a bunch of cargo is gone,” Moore said at Inland24. “Where the trains are sitting are not always in the safest of locations in either city [Chicago or Memphis] and while the railroad police try their best, all our agencies are short on officers so it’s hard to cover all intermodal trains, especially those several thousand feet long.” Friday’s incident highlights another problem besides the insider threat and challenges of interchanging containers between railroads: law enforcement having its hands tied when it comes to punishment for those convicted of cargo theft Authorities point out that if merchandise is stolen from a foreign trade zone (FTZ), those arrested can be charged with federal crimes, including felonies that could result in 10 years in prison. But incidents such as the one in Chicago, which did not occur in an FTZ, result in only fines or short-term stints in jail. “Right now, we’re having these conversations [about punishment] on a per-incident basis, a per-container basis, and that’s not aggregating in a sufficient way for federal prosecutors to understand the economic damage or the true victims of these crimes,” Will Johnson, chief special agent with BNSF Police, the law enforcement division of BNSF Railway, said during Inland24. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Chicago cargo theft highlights larger challenges for intermodal container moves

<div class="phx-topic abstract-wrapper">The port reopened on Saturday after engineering firm Woolpert performed a survey to check for storm debris in shipping channels. </div>

The port reopened on Saturday after engineering firm Woolpert performed a survey to check for storm debris in shipping channels.

<div class="phx-topic">Port Tampa Bay has resumed vessel operations and reopened shipping channels after the gateway was <a href="https://www.joc.com/article/port-tampa-bay-effectively-shut-due-to-power-outage-in-aftermath-of-milton-5747209">forced to close for several days last week due to a loss of power caused by Hurricane Milton.</a> Vessel movement is restricted for now to one-way travel during daylight hours, the port said in an advisory on its website.The port reopened on Saturday after engineering firm Woolpert performed a survey to check for storm debris in shipping channels.“When a storm of this magnitude impacts a commerce-rich environment like Tampa, there is a high likelihood that it will drag debris into the navigation channels...,” Dave Neff, Woolpert’s vice president and maritime market director, said in a statement.The port on Saturday performed safety tests to ensure its facilities could discharge fuel after power was restored to all seven fuel terminals at the gateway on Friday.“Commercial vessel traffic is again being queued for a return to full operations at the port, meaning we are open for business,” said the port said in its advisory. “Some of the first vessels to return will be fuel tankers, cruise ships and vessels carrying perishable cargo.”Contact Laura Robb at Laura.Robb@spglobal.com.</div>

Port Tampa Bay has resumed vessel operations and reopened shipping channels after the gateway was forced to close for several days last week due to a loss of power caused by Hurricane Milton. Vessel movement is restricted for now to one-way travel during daylight hours, the port said in an advisory on its website. The port reopened on Saturday after engineering firm Woolpert performed a survey to check for storm debris in shipping channels. “When a storm of this magnitude impacts a commerce-rich environment like Tampa, there is a high likelihood that it will drag debris into the navigation channels...,” Dave Neff, Woolpert’s vice president and maritime market director, said in a statement. The port on Saturday performed safety tests to ensure its facilities could discharge fuel after power was restored to all seven fuel terminals at the gateway on Friday. “Commercial vessel traffic is again being queued for a return to full operations at the port, meaning we are open for business,” said the port said in its advisory. “Some of the first vessels to return will be fuel tankers, cruise ships and vessels carrying perishable cargo.” Contact Laura Robb at Laura.Robb@spglobal.com.

Container Shipping News

North American ports

Port News

Port Tampa Bay reopens after power restored following hurricane closure

<div class="phx-topic abstract-wrapper">DP World’s group chairman and CEO had initially ordered the cancellation of Monday’s announcement after being angered by comments made last week by two UK government officials.</div>

DP World’s group chairman and CEO had initially ordered the cancellation of Monday’s announcement after being angered by comments made last week by two UK government officials.

<div class="phx-topic">DP World on Monday confirmed it would move forward with a $1.3 billion expansion of the London Gateway terminal, ending a weekend political dust-up and giving UK ports a much-needed post-Brexit investment. The project involves construction of the final two berths at the planned six-berth terminal plus a second rail terminal; work is expected to be completed by 2030, DP World said in a statement. An all-electric fourth terminal at London Gateway costing $460 million is due to become fully operational early next year, the port operator said. The expansion announced Monday will boost capacity of London Gateway, located on the River Thames estuary about 30 miles east of London, to make it Britain’s largest container port within five years. The terminal handled 2.9 million TEUs last year. Felixstowe, operated by Hong Kong’s Hutchison Port Holdings, is currently the UK’s busiest container port, handling more than 4 million TEUs a year. Sultan Ahmed bin Sulayem, DP World’s group chairman and CEO, had ordered the cancellation of Monday’s announcement and a review of the London Gateway expansion plans after being angered by comments made last week by two UK government officials about the March 2022 sacking of nearly 800 sea staff by DP World subsidiary P&amp;O Ferries. Bin Sulayem reversed his decision after a flurry of weekend phone calls between DP World and senior British government officials. He agreed to attend the government’s international investment summit in London on Monday. Putting the spat behind him, bin Sulayem said in Monday’s statement that the new terminal development “underlines DP World’s long-term commitment to the UK.” <h3>‘Early interest’ in maritime sector by new government </h3>DP World’s investment comes as the British Ports Association (BPA) said Britain’s new Labor government, which took office just over three months ago, has started to ease the logjam of port modernization projects held up by planning-related delays. This includes approving plans by port operator PD Teesport to expand the current Teesport site in northeast England to embrace new facilities focused on breakbulk cargo. The Port of Immingham’s $261 million roll-on/roll-off terminal proposed by Associated British Ports and Stena Line in eastern England has also been giving the green light by the government, it was announced at the investment summit Monday. “The new government has shown early interest in the maritime sector, which is positive,” Mark Simmonds, BPA’s policy and external affairs director, told the Journal of Commerce. Simmonds expects the government to produce a “refreshed” ports policy statement “in the next few months” that would include needed improvements to rail and road links as well as port expansion, updating the current document produced 12 years ago. Government moves to ease planning restrictions could also help accelerate port development projects, Simmonds said. That comes as the latest government figures show UK ports saw total cargo volumes drop 5% last year to 435 million metric tons, while container volumes were largely unchanged at 10.5 million TEUs. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

DP World on Monday confirmed it would move forward with a $1.3 billion expansion of the London Gateway terminal, ending a weekend political dust-up and giving UK ports a much-needed post-Brexit investment. The project involves construction of the final two berths at the planned six-berth terminal plus a second rail terminal; work is expected to be completed by 2030, DP World said in a statement. An all-electric fourth terminal at London Gateway costing $460 million is due to become fully operational early next year, the port operator said. The expansion announced Monday will boost capacity of London Gateway, located on the River Thames estuary about 30 miles east of London, to make it Britain’s largest container port within five years. The terminal handled 2.9 million TEUs last year. Felixstowe, operated by Hong Kong’s Hutchison Port Holdings, is currently the UK’s busiest container port, handling more than 4 million TEUs a year. Sultan Ahmed bin Sulayem, DP World’s group chairman and CEO, had ordered the cancellation of Monday’s announcement and a review of the London Gateway expansion plans after being angered by comments made last week by two UK government officials about the March 2022 sacking of nearly 800 sea staff by DP World subsidiary P&O Ferries. Bin Sulayem reversed his decision after a flurry of weekend phone calls between DP World and senior British government officials. He agreed to attend the government’s international investment summit in London on Monday. Putting the spat behind him, bin Sulayem said in Monday’s statement that the new terminal development “underlines DP World’s long-term commitment to the UK.” ‘Early interest’ in maritime sector by new government DP World’s investment comes as the British Ports Association (BPA) said Britain’s new Labor government, which took office just over three months ago, has started to ease the logjam of port modernization projects held up by planning-related delays. This includes approving plans by port operator PD Teesport to expand the current Teesport site in northeast England to embrace new facilities focused on breakbulk cargo. The Port of Immingham’s $261 million roll-on/roll-off terminal proposed by Associated British Ports and Stena Line in eastern England has also been giving the green light by the government, it was announced at the investment summit Monday. “The new government has shown early interest in the maritime sector, which is positive,” Mark Simmonds, BPA’s policy and external affairs director, told the Journal of Commerce. Simmonds expects the government to produce a “refreshed” ports policy statement “in the next few months” that would include needed improvements to rail and road links as well as port expansion, updating the current document produced 12 years ago. Government moves to ease planning restrictions could also help accelerate port development projects, Simmonds said. That comes as the latest government figures show UK ports saw total cargo volumes drop 5% last year to 435 million metric tons, while container volumes were largely unchanged at 10.5 million TEUs. Contact Keith Wallis at keithwallis@hotmail.com .

Marine terminals

International ports

DP World reverses course, unveils expansion of London Gateway terminal

<div class="phx-topic abstract-wrapper">Healthy demand for “sophisticated” multipurpose vessels is being undercut by a sluggish market for standard MPVs. </div>

Healthy demand for “sophisticated” multipurpose vessels is being undercut by a sluggish market for standard MPVs.

<div class="phx-topic">Multipurpose vessel (MPV) trades in Asia-Pacific and the Middle East are stabilizing multipurpose freight rates, mitigating weaker performance in the European and American markets, analysts say. While operators of highly sophisticated heavy-lift and project vessels are enjoying healthy demand and a “decent” level of forward bookings, many carriers are facing “a more sluggish market and an imbalance in utilization across the various trade regions,” Toepfer Transport said in an Oct. 10 briefing note. Toepfer’s monthly multipurpose forecast index, the TMI, has increased slightly to $13,160 per day in October, up marginally from September’s $13,088. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4e087472-2f74-4489-a3b0-d2ae1e9e1c00"></dynamic-object></div>“We expect the sideways movement of the index to continue for the next few weeks, and our TMI panelists support this view, with the TMI-P6 indicating a total expected increase of only 2.26% over the next six months,” Yorck Niclas Prehm, head of research with Hamburg-based Toepfer Transport, told the Journal of Commerce. Prehm said he believes that decisions on some upcoming projects are being postponed until after the US presidential election and that the geopolitical situation as well as the macroeconomic situation do not indicate any “game-changing trend.” The MPV market is increasingly volatile for shippers, with port delays in the Middle East/Persian Gulf as terminals there handle cargo diverted from the Red Sea. Shippers are reluctant to book MPVs too far ahead as the risk of a delayed shipment is greater than the risk of a higher spot freight rate, shippers and carriers attending the Antwerp XL breakbulk conference last week told the Journal of Commerce. <h3>A reworked Drewry index </h3>Drewry this month replaced its old MPV Index, which was based on rates for three different breakbulk vessel types, with two indices measuring the cost of transporting two types of breakbulk cargo: general and project, according to Peter Molloy, senior analyst for multipurpose shipping with Drewry. The new Drewry General Cargo Index is based on a combination of time charter rates for general cargo ships with capacities between 3,000 and 20,000 deadweight tons (dwt), small feeder containerships, handysize dry bulk carriers, car carriers and a range of dry container freight rates. The Drewry Project Cargo Index is based on time charter rates of project cargo carriers with capacities between 10,000 and 25,000 dwt, along with all the components of the General Cargo Index. The weighting for each index is based on estimated proportions of cargo types on general cargo ships and project cargo carriers, respectively, and on fleet composition by size category. Drewry’s Project Cargo Transport Index reached 174.5 points in September, up 0.4% from August, while its General Cargo Index decreased 0.3% to 146.2 points. The base point for both indices is 100 as of January 2019, and they have been calculated forward from that point. Molloy told the Journal of Commerce there had been a recovery from the summer dip for smaller general cargo vessels. The index had stabilized because of higher utilization and lower competition from containers and dry bulk. Splitting the cargo types allows Drewry to better measure the impact of competing sectors over the two distinct cargo types, Molloy added. The new approach allows the weighting for competing sectors to be altered according to the changing market. “What we end up with is an actual general cargo index based on all these different scenarios, weighted differently,” he said. <h3>Prices rising </h3>Rising fleet utilization is reflected in both newbuild and second-hand MPV prices. Second-hand prices for a 30,000 dwt, 120/160 metric ton max lift, 10-year-old MPV/tweendecker increased 2.6% month over month in October to $19.5 million, Toepfer said. Newbuilding prices for the same type of ship have risen 0.5% to $52.75 million. “There are very few second-hand transactions for modern MPP [MPV] vessels and prices continue to be challenging for buyers,” Toepfer said. The analyst added that strong demand for newbuilding capacity from other shipping segments led to a “slight but significant” increase in newbuilding prices and extended delivery times. Toepfer’s TMI is based on expected average rates for six- to 12-month time charters for 12,500 dwt “F-Type” vessels with a safe working load of 240-360 metric tons, as reported to Toepfer by owners and operators. Toepfer addresses the short-sea market, as well as other markets, in separate reports. Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>.</div>

Multipurpose vessel (MPV) trades in Asia-Pacific and the Middle East are stabilizing multipurpose freight rates, mitigating weaker performance in the European and American markets, analysts say. While operators of highly sophisticated heavy-lift and project vessels are enjoying healthy demand and a “decent” level of forward bookings, many carriers are facing “a more sluggish market and an imbalance in utilization across the various trade regions,” Toepfer Transport said in an Oct. 10 briefing note. Toepfer’s monthly multipurpose forecast index, the TMI, has increased slightly to $13,160 per day in October, up marginally from September’s $13,088. “We expect the sideways movement of the index to continue for the next few weeks, and our TMI panelists support this view, with the TMI-P6 indicating a total expected increase of only 2.26% over the next six months,” Yorck Niclas Prehm, head of research with Hamburg-based Toepfer Transport, told the Journal of Commerce. Prehm said he believes that decisions on some upcoming projects are being postponed until after the US presidential election and that the geopolitical situation as well as the macroeconomic situation do not indicate any “game-changing trend.” The MPV market is increasingly volatile for shippers, with port delays in the Middle East/Persian Gulf as terminals there handle cargo diverted from the Red Sea. Shippers are reluctant to book MPVs too far ahead as the risk of a delayed shipment is greater than the risk of a higher spot freight rate, shippers and carriers attending the Antwerp XL breakbulk conference last week told the Journal of Commerce. A reworked Drewry index Drewry this month replaced its old MPV Index, which was based on rates for three different breakbulk vessel types, with two indices measuring the cost of transporting two types of breakbulk cargo: general and project, according to Peter Molloy, senior analyst for multipurpose shipping with Drewry. The new Drewry General Cargo Index is based on a combination of time charter rates for general cargo ships with capacities between 3,000 and 20,000 deadweight tons (dwt), small feeder containerships, handysize dry bulk carriers, car carriers and a range of dry container freight rates. The Drewry Project Cargo Index is based on time charter rates of project cargo carriers with capacities between 10,000 and 25,000 dwt, along with all the components of the General Cargo Index. The weighting for each index is based on estimated proportions of cargo types on general cargo ships and project cargo carriers, respectively, and on fleet composition by size category. Drewry’s Project Cargo Transport Index reached 174.5 points in September, up 0.4% from August, while its General Cargo Index decreased 0.3% to 146.2 points. The base point for both indices is 100 as of January 2019, and they have been calculated forward from that point. Molloy told the Journal of Commerce there had been a recovery from the summer dip for smaller general cargo vessels. The index had stabilized because of higher utilization and lower competition from containers and dry bulk. Splitting the cargo types allows Drewry to better measure the impact of competing sectors over the two distinct cargo types, Molloy added. The new approach allows the weighting for competing sectors to be altered according to the changing market. “What we end up with is an actual general cargo index based on all these different scenarios, weighted differently,” he said. Prices rising Rising fleet utilization is reflected in both newbuild and second-hand MPV prices. Second-hand prices for a 30,000 dwt, 120/160 metric ton max lift, 10-year-old MPV/tweendecker increased 2.6% month over month in October to $19.5 million, Toepfer said. Newbuilding prices for the same type of ship have risen 0.5% to $52.75 million. “There are very few second-hand transactions for modern MPP [MPV] vessels and prices continue to be challenging for buyers,” Toepfer said. The analyst added that strong demand for newbuilding capacity from other shipping segments led to a “slight but significant” increase in newbuilding prices and extended delivery times. Toepfer’s TMI is based on expected average rates for six- to 12-month time charters for 12,500 dwt “F-Type” vessels with a safe working load of 240-360 metric tons, as reported to Toepfer by owners and operators. Toepfer addresses the short-sea market, as well as other markets, in separate reports. Contact Carly Fields at carly.fields@spglobal.com .

Breakbulk carriers

Project cargo

Breakbulk News

Stabilizing MPV rates belie geographical imbalances

<div class="phx-topic abstract-wrapper">As damage from Helene and Milton is being tallied, logistics experts say the storms won’t do much to accelerate spot and contract truckload pricing in the long term. </div>

As damage from Helene and Milton is being tallied, logistics experts say the storms won’t do much to accelerate spot and contract truckload pricing in the long term.

<div class="phx-topic">The damage caused by hurricanes Helene and Milton will take months to fully repair, but the impact on freight markets and truckload pricing will not be as great as initially believed, logistics experts told the Journal of Commerce. “We will see an immediate increase in relief activity, and that will drive an inbound spot market surge” in the areas affected by Helene and Milton, Andy Dyer, CEO at Atlanta-based third-party logistics provider (3PL) AFS Logistics, said in an interview Thursday. However, despite <a href="https://www.joc.com/article/back-to-back-hurricanes-roil-us-truck-spot-market-pushing-up-rates-5745302">increases in spot market pricing</a> for dry-van, refrigerated and flatbed tractor-trailers last week, Dyer doesn’t believe relief efforts from the back-to-back hurricanes will siphon off enough trucks to drive up spot pricing beyond the battered Southeast. “With utmost compassion for all the individuals affected, the regions where these hurricanes hit are consumption markets, not production markets,” unlike Houston, which was flooded by Hurricane Harvey in 2017, Dyer said. ”I don’t see this as the beginning of a long-term freight-rate recovery” similar to the one seen in 2017 after Harvey and Hurricane Irma struck Texas and Florida within a month of each other,” he said. “It’s what everybody wants, but this isn’t it.” Dyer was joined by others who rejected a simple comparison between the back-to-back hurricanes of 2017 and this year’s Helene and Milton. “We were already in a bullish truckload spot market when Harvey struck [in August 2017], with freight volumes rising,” said Jason Miller, the Eli Broad professor of supply chain management at Michigan State University and a Journal of Commerce analyst. The current spot market is still traveling along a pricing bottom reached more than a year ago. “I don’t see these hurricanes as being the thing that shifts the freight market in a substantial manner,” Miller said. <h3>Short-term impact </h3>The bulk of the pricing impact will be felt in the immediate post-storm period as relief supplies head south, said David Spencer, vice president of market intelligence at Arrive Logistics, a 3PL in Austin, Texas. But a temporary pricing surge will eventually fade, he said. “While, in some cases, these storms may have been enough to disrupt routing guides, current market fundamentals, including a large contract-to-spot rate spread, should not result in much more than a short-lived surge in demand,” Spencer said. He said he does not expect year-over-year spot rate increases higher than 5% in the fourth quarter. An uptick in pricing may still constrain the overall market by keeping excess capacity on the road. “The recent spot rate volatility could actually work to help keep carriers on the brink of failure in the market longer due to increased spot opportunities,” he said. Spencer expects the increase in dry-van contract rates to reach a peak of 4% to 6% in the fourth quarter of 2025, while spot rates will reach a peak increase of 11% to 13% in the third quarter. <h3>Absorbing capacity </h3>Storm recovery efforts will command a significant amount of truck capacity, but there is more truck capacity available in 2024 than there was after the 2017 hurricanes. “We are still oversupplied to the tune of 100,000 to 120,000 carrier authorities,” Kendra Tucker, CEO of Truckstop.com, said at the Journal of Commerce 2024 Inland Distribution Conference last week. New entrants flooded the market from 2020 through 2022 and the number of carriers with active operating authorities has dropped since then, but “it’s still too many, just given the level of volume that we’ve got,” Tucker said. Kent Williams of Averitt, a less-than-truckload (LTL) and truckload carrier based in Cookeville, Tenn., is slightly more optimistic. “I think the impact of the hurricanes will move the needle on capacity,” although not by much, he told the Journal of Commerce. “I don’t think we’ll go all of a sudden from excess capacity and depressed rates to a market reset,” he said. “We may move closer to a balance in supply and demand.” Capacity can tighten even if trucks aren’t taken out of the market, Williams pointed out. “We’ve had to change routes and transit times because what was once doable under the driver hours of service rules is no longer doable,” he said. For example, LTL truck drivers who used to take Interstate 40 between Charlotte, NC, and Nashville are now rerouting through Atlanta, adding hours and miles to their trip. “That hasn’t affected our service standards between Charlotte and Nashville, but some routes to points on the perimeter can no longer be serviced the next day,” Williams said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The damage caused by hurricanes Helene and Milton will take months to fully repair, but the impact on freight markets and truckload pricing will not be as great as initially believed, logistics experts told the Journal of Commerce. “We will see an immediate increase in relief activity, and that will drive an inbound spot market surge” in the areas affected by Helene and Milton, Andy Dyer, CEO at Atlanta-based third-party logistics provider (3PL) AFS Logistics, said in an interview Thursday. However, despite increases in spot market pricing for dry-van, refrigerated and flatbed tractor-trailers last week, Dyer doesn’t believe relief efforts from the back-to-back hurricanes will siphon off enough trucks to drive up spot pricing beyond the battered Southeast. “With utmost compassion for all the individuals affected, the regions where these hurricanes hit are consumption markets, not production markets,” unlike Houston, which was flooded by Hurricane Harvey in 2017, Dyer said. ”I don’t see this as the beginning of a long-term freight-rate recovery” similar to the one seen in 2017 after Harvey and Hurricane Irma struck Texas and Florida within a month of each other,” he said. “It’s what everybody wants, but this isn’t it.” Dyer was joined by others who rejected a simple comparison between the back-to-back hurricanes of 2017 and this year’s Helene and Milton. “We were already in a bullish truckload spot market when Harvey struck [in August 2017], with freight volumes rising,” said Jason Miller, the Eli Broad professor of supply chain management at Michigan State University and a Journal of Commerce analyst. The current spot market is still traveling along a pricing bottom reached more than a year ago. “I don’t see these hurricanes as being the thing that shifts the freight market in a substantial manner,” Miller said. Short-term impact The bulk of the pricing impact will be felt in the immediate post-storm period as relief supplies head south, said David Spencer, vice president of market intelligence at Arrive Logistics, a 3PL in Austin, Texas. But a temporary pricing surge will eventually fade, he said. “While, in some cases, these storms may have been enough to disrupt routing guides, current market fundamentals, including a large contract-to-spot rate spread, should not result in much more than a short-lived surge in demand,” Spencer said. He said he does not expect year-over-year spot rate increases higher than 5% in the fourth quarter. An uptick in pricing may still constrain the overall market by keeping excess capacity on the road. “The recent spot rate volatility could actually work to help keep carriers on the brink of failure in the market longer due to increased spot opportunities,” he said. Spencer expects the increase in dry-van contract rates to reach a peak of 4% to 6% in the fourth quarter of 2025, while spot rates will reach a peak increase of 11% to 13% in the third quarter. Absorbing capacity Storm recovery efforts will command a significant amount of truck capacity, but there is more truck capacity available in 2024 than there was after the 2017 hurricanes. “We are still oversupplied to the tune of 100,000 to 120,000 carrier authorities,” Kendra Tucker, CEO of Truckstop.com, said at the Journal of Commerce 2024 Inland Distribution Conference last week. New entrants flooded the market from 2020 through 2022 and the number of carriers with active operating authorities has dropped since then, but “it’s still too many, just given the level of volume that we’ve got,” Tucker said. Kent Williams of Averitt, a less-than-truckload (LTL) and truckload carrier based in Cookeville, Tenn., is slightly more optimistic. “I think the impact of the hurricanes will move the needle on capacity,” although not by much, he told the Journal of Commerce. “I don’t think we’ll go all of a sudden from excess capacity and depressed rates to a market reset,” he said. “We may move closer to a balance in supply and demand.” Capacity can tighten even if trucks aren’t taken out of the market, Williams pointed out. “We’ve had to change routes and transit times because what was once doable under the driver hours of service rules is no longer doable,” he said. For example, LTL truck drivers who used to take Interstate 40 between Charlotte, NC, and Nashville are now rerouting through Atlanta, adding hours and miles to their trip. “That hasn’t affected our service standards between Charlotte and Nashville, but some routes to points on the perimeter can no longer be serviced the next day,” Williams said. Contact William B. Cassidy at bill.cassidy@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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