<div class="phx-topic abstract-wrapper">Shippers have long bemoaned what they consider punitive detention and demurrage fees for exceeding contracted free time, but those charges can cost cargo owners more than the stated dollar amount.</div>

Shippers have long bemoaned what they consider punitive detention and demurrage fees for exceeding contracted free time, but those charges can cost cargo owners more than the stated dollar amount.

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<div>US importers lack a uniform method of tracking the moment a container leaves or returns to marine terminals in North America, a result of terminal and carrier fragmentation that has been highlighted further by port congestion this year.The lack of a single platform to get auditable timestamp information across US ports — particularly in Los Angeles and Long Beach — creates complexity and increases costs for shippers managing contracted container free time.The situation has become acute in 2021. As shippers scramble for any capacity available to them on the trans-Pacific trade, they often find their boxes unloaded at terminals they...

US importers lack a uniform method of tracking the moment a container leaves or returns to marine terminals in North America, a result of terminal and carrier fragmentation that has been highlighted further by port congestion this year. The lack of a single platform to get auditable timestamp information across US ports — particularly in Los Angeles and Long Beach — creates complexity and increases costs for shippers managing contracted container free time. The situation has become acute in 2021. As shippers scramble for any capacity available to them on the trans-Pacific trade, they often find their boxes unloaded at terminals they do not generally use, leading to a lack of coherent data relative to the terminals and drayage providers they are accustomed to using, importers tell JOC.com. Shippers have long bemoaned what they consider punitive detention and demurrage fees for exceeding contracted free time, but those charges can cost cargo owners more than the stated dollar amount. Contesting inaccurate detention and demurrage fees requires additional time and labor that adds to, and in some cases exceeds, the direct cost of the fees themselves. According to a large importer of apparel and footwear, disputing assessed detention and demurrage fees ties up millions of dollars annually for the company. In addition to the time and resources spent trying to resolve those disputes, the importer said it lacks an ironclad mechanism to prove that it did indeed retrieve or return a container when it said it had. For one thing, the importer said it is unable to timestamp when a container is made available for pickup or an empty container is returned, regardless of which terminal in Los Angeles or Long Beach is handling the containers. Secondarily, the importer has no repository in which to store that information and communicate it to the container line or terminal in the event of a billing dispute. The apparel shipper said it has some capital tied up in excessive-free-time disputes, but some of that capital burden falls on its drayage partners, given the nature of its contracts with those providers. Drayage operators often suffer from a lack of cash flow, and tens of thousands of dollars tied up in free-time disputes across their book of customers can be crippling. The scale of that tied-up capital is larger given the strain congestion is having on adherence to contracted free time. The need for feeds Conversations with numerous ports, terminal operators, forwarders, drayage providers, and logistics software companies yielded a murky picture of how a shipper might go about solving this issue. Visibility software providers largely say the ability to collect such data exists, particularly in terms of container availability status, although it is not as complete on the empty return side of the equation. Most providers admit there are systemic gaps that make it more difficult for an importer to do so, namely a lack of application program interfaces (APIs) or similar direct data connections between shippers and terminal operators. “An importer would for sure be able to see out-gate [information] for their cargo at all of [Los Angeles] and portions of [Long Beach],” Port of Los Angeles spokesperson Phillip Sanfield told JOC.com. “We have most of the data, but not all, since we don’t have direct feeds. We aren’t currently reporting in-gates, but it’s on our roadmap for later this year, part of an empty management program we are looking to add.” Los Angeles’ attempt to provide a unified platform across Los Angeles and Long Beach — called the Port Optimizer and operated by Wabtec — perfectly illustrates the difficulties in providing shippers with a complete data picture. Across the 12 container terminals in Southern California are multiple terminal operators, some operated by sister business units of container lines, hundreds of drayage companies, and an array of technology providers. This has created an environment of one-off relationships between terminals and software companies, many of which are designed to give terminals a competitive service edge over their neighbors, rather than a unified portwide approach to data sharing. Terminals have different investment, profit, and service priorities as well, stymieing efforts to normalize data across the country’s busiest port complex, sources told JOC.com. That leads to another point of contention from shippers: the companies ultimately responsible for providing container availability, out-gate, and empty return data are the same companies that collect fees for container detention and demurrage. As one drayage executive that asked not to be identified put it, “There are underlying profit centers around freight not moving.” In its May first-quarter earnings report, Maersk acknowledged the impact of increased excess-free-time fees on its financial performance. Non-freight-related revenue accounted for 13.5 percent of its total ocean revenue of $9.5 billion in the period, up from 13.2 percent in 2019. Non-freight ocean revenue for Maersk in the first three months of 2020 is a more muddled picture due to lower freight volumes that quarter and increased revenue from Maersk Oil Trading, its marine fuel procurement arm. “Other revenue increased by 6.2 percent, to $1.3 billion, primarily due to higher revenue from demurrage and detention,” the container carrier said in its 2021 first quarter report. Non-freight revenue at Hapag-Lloyd rose 9.7 percent year over year to 344.2 million euros (US $409.7 million) in the first quarter of 2021, the Hamburg-based line said in its most recent financial report, similarly attributing growth in that category to detention and demurrage fees. Of its $4.1 billion in total first-quarter revenue, 8.5 percent came from the non-freight category. That ratio was 9.3 percent in the same period in 2020 and 9.2 percent in 2019. Non-freight revenue “essentially comprises income from demurrage and detention and income from charter rent and the provision of container slots,” the line said in its financial report. Fragmented sourcing Technology abounds for shippers to manage detention and demurrage, often through a transportation management or rate management system, and these systems often enable a shipper to proactively forecast free-time costs. Those systems help shippers make decisions in the moment, and they can help provide a paper trail to underpin disputes over free time after an invoice has been issued. But like any other system of record, they depend on quality data from other sources, such as one that enables a shipper to capture a timestamp of its container leaving and arriving at a terminal, no matter the port, terminal, terminal operator, or carrier. This is where visibility data providers say they can offer a solution. Terminals provide container status data, but generally through their own systems, and not all are available via API. Visibility providers can play the role of collecting the data and standardizing it across the terminals. “Each terminal has its own way of displaying it,” said Akshay Dodeja, CEO of container visibility data provider Terminal49. “The only uniform way is through something like what we provide.” Dodeja said Terminal49 can provide a container availability or gate-out timestamp by container number “in the same format every time. We source the data from the carrier and terminal, wherever we see it first. They should be providing the accurate timestamp, since there is a gate transaction number that the trucker gets.” Kyle Hendersen, CEO of competing container visibility data provider Vizion, said information is more robust for loaded gate-outs than for empty returns. “The carriers are a source of the data, but it is best to get it directly from the terminal operators or their [terminal operating systems],” said Hendersen. “You can also triangulate on these events with drayage tracking data by some of the drayage tendering systems.” System fragmentation in Los Angeles and Long Beach is even more visible when looking at web portals for importers and their logistics partners to access operational information. “All terminals provide a proprietary availability website, and the multi-terminal availability websites are the Port Optimizer and eModal.com,” said John Cushing, president and CEO of PierPass, a not-for-profit entity created by terminal operators in Los Angeles and Long Beach to address portwide issues such as congestion, and founder of eModal, where he served as president until 2009. Results may vary In theory, data around the appointments truckers make in order to pick up and drop off containers could serve as a proxy in the absence of available terminal data. Containers have become a valuable commodity globally, and terminals and the carriers that call on them are eager to cycle empties back to more lucrative headhaul origins as quickly as possible. In Southern California, all Los Angeles and Long Beach container terminals require an appointment for import load pickup, “but there is no standard portswide requirement for empty return appointments,” Cushing said. “That is a terminal-by-terminal decision.” In fact, sources have told JOC.com that with a surfeit of empties to manage, many of which are awaiting pickup from vessels whose arrivals have been delayed by port congestion, terminals are relaxing empty return policies. Those operational challenges make it difficult for importers to manage data across all terminals in Southern California. The issue is not so much the specific dynamics and policies in play at any given time as much as it is the ability to adapt to whatever situational challenges might arise, the apparel importer told JOC.com. The impacts on importers vary greatly; some say they have found sufficient workarounds to get a handle on the data they need, at least from the terminals they use most frequently. “Our draymen timestamp out-gates manually and then feed them into our systems,” a household goods shipper who asked not to be identified told JOC.com. “We rely on them to make that happen. And since we use pretty seasoned draymen, we have found they can work with our carriers and the terminal operators to make sure it is timestamped accurately. We ask our drayman’s driver to take a picture of the time they are out-gating.” The importer added it has “tried to stay away from unusual terminals for now. When we do, we still get the carrier to intermodal it to the rail ramps we can pick up from.” That said, detention and demurrage is a “huge” problem to manage, the shipper said, due to the impacts of widespread port congestion on contracted free time and the differences between non-vessel-operating common carriers’ (NVOs) detention and demurrage policies. “We take it as an expense rather than part of the freight and landed cost on merchandise, so we have been better at margin control,” the source said. “We are constantly managing [detention and demurrage] from an execution perspective as well as a carrier payment negotiation perspective. This has stemmed from the fact that container shortages at origin have caused us to use multiple NVOs, all with their own free time to work with, rather than our preferred free time.” Unlike the apparel importer, the household goods shipper said it does not have any capital tied up in detention and demurrage disputes. “Most carriers have been forthcoming on negotiating those, and our relationships have held up in good stead,” the source said. Contact Eric Johnson at eric.johnson@ihsmarkit.com and follow him on Twitter: @LogTechEric .

Supply chain

Lack of uniform free time data adds US import complexity, costs

<div class="phx-topic abstract-wrapper">The long-term effects of US tariffs and the removal of the de minimis exemption has disrupted established air cargo flows and is clouding the industry outlook for the year.</div>

The long-term effects of US tariffs and the removal of the de minimis exemption has disrupted established air cargo flows and is clouding the industry outlook for the year.

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<div class="phx-topic">The air cargo industry is flying into a bumpy second half, with persistent uncertainty over US tariff levels and the bleeding of freight due to new US “de minimis” curbs on low-value Chinese goods. It is impacting every aspect of the industry, from disrupting cargo flows to capacity deployment to demand, and clouding the outlook for the year. ”We just simply cannot predict how that is going to play out,” Brie Carere, the company’s chief customer officer, told investors on the company’s fourth quarter earnings call on June 24. After volumes from the US to China “deteriorated sharply,” in May, FedEx said it couldn’t provide a full year forecast due to the “uncertain global demand,” environment. Global air cargo spot rates declined for a second consecutive month in June, down 4% year over year as the supply of capacity overtook demand for the first time in 19 months, according to rate benchmarking platform Xeneta. “We are starting to see the longer-term effects of all this uncertainty because a lot of damage has been done,” Niall van de Wouw, chief air freight officer at Xeneta, said in a market update Friday. “This might be the new reality for the foreseeable future as the industry is facing a much more challenging second half of the year. The air cargo market is losing altitude amid so much uncertainty,” he added. After eliminating the duty-free exemption for low-value shipments from China valued at under $800 on May 2, the US on May 14 reduced the de minimis tariff on the low-value imports from 120% to 54%. Items sent via post from China to the US will be charged a flat fee of $100, regardless of value. In 2024, e-commerce shipments accounted for about 50% of China-to-US air freight volume, filling dozens of freighters every day. Data from air cargo analyst Rotate showed that in the days following May 2, 40 freighters per day were pulled out of the trans-Pacific. The International Air Transport Association (IATA) noted in an industry outlook this week that tariffs and the removal of the de minimis exemption have disrupted established air cargo flows, forcing carriers to adjust or redeploy capacity on certain routes. “Uncertainty remains high, which impedes planning and optimization along the supply chain, and further loss of momentum in the coming months cannot be ruled out,” IATA warned. <h3>Refocusing e-commerce efforts </h3>Tim van Leeuwen, head of consulting at Rotate, said China-US air cargo demand in May fell 28% year over year, driven by declines in both general air cargo and e-commerce, with early June figures showing the trend has continued. “Direct China-US freighter capacity in June was down 11% compared to March, wiping out capacity growth we have seen over the past year and returning to similar capacity as June 2024,” he told the Journal of Commerce. “The e-commerce platforms seem to be refocusing their efforts, with significant growth of exports to the European Union and Asia-Pacific replacing lost demand to the US,” he noted. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0bd62abc-58b3-4d7e-bfd7-9616da3c9b9c"></dynamic-object></div>Faced with such an uncertain and volatile trade lane, Van de Wouw said forwarders were taking a cautious approach to the market. ”Around 46% of their procured volumes remain in the spot market, reflecting a belief that rates may yet fall further,” he said. “Their wait-and-see approach favours flexibility over long-term commitments — for now.” China-North America spot rates of $4.86/kg last week fell below $5/kg for the first time in almost two months, dropping 5% compared to the previous week, according to the Baltic Air Index (BAI). Spot rates from China to North Europe were at $4.23 per kilogram in the last week of June, down slightly compared to the previous week but remaining above the $4 mark since March. Dimerco Express Group put the total China-US cargo volumes decline at 60% in May and June, with e-commerce bookings down around 50%. The Taiwan-based forwarder noted in a July market outlook that there was no sign of recovery in e-commerce volume and scheduled freighter flights continue to be cancelled. <h3>Positive growth areas </h3>However, there are bright spots in the gloomy outlook. Demand out of Southeast Asia — particularly from Thailand and Vietnam — is rising ahead of the upcoming tariff deadline next week. President Donald Trump’s 90-day pause on so-called “reciprocal” tariffs ends at midnight on July 8. “Intra-Asia traffic is holding strong, especially on routes linking China with Taiwan, Vietnam, Thailand, Malaysia and Singapore,” said Kathy Liu, vice president of global sales and marketing at Dimerco Express Group. ”Capacity on these lanes is tight, and we’re seeing higher rates compared to the same period last year,” she added. The summer season will also bring increased demand for perishable exports on the trans-Pacific, both out of Asia and on the backhaul routes, good news for airlines facing such dramatic cuts in e-commerce volume. “Air imports from Asia are expected to rebound and grow during the summer months, driven by the early peak shipping season. Shippers are ramping up volumes, particularly toward Asia, with a growing shift from ocean to air,” the forwarder said. Air freight space on the westbound routes will likely remain tight, with possible booking delays or rollovers and Dimerco advised pre-booking at least five to seven days in advance for high-volume or time-sensitive cargo. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The air cargo industry is flying into a bumpy second half, with persistent uncertainty over US tariff levels and the bleeding of freight due to new US “de minimis” curbs on low-value Chinese goods. It is impacting every aspect of the industry, from disrupting cargo flows to capacity deployment to demand, and clouding the outlook for the year. ”We just simply cannot predict how that is going to play out,” Brie Carere, the company’s chief customer officer, told investors on the company’s fourth quarter earnings call on June 24. After volumes from the US to China “deteriorated sharply,” in May, FedEx said it couldn’t provide a full year forecast due to the “uncertain global demand,” environment. Global air cargo spot rates declined for a second consecutive month in June, down 4% year over year as the supply of capacity overtook demand for the first time in 19 months, according to rate benchmarking platform Xeneta. “We are starting to see the longer-term effects of all this uncertainty because a lot of damage has been done,” Niall van de Wouw, chief air freight officer at Xeneta, said in a market update Friday. “This might be the new reality for the foreseeable future as the industry is facing a much more challenging second half of the year. The air cargo market is losing altitude amid so much uncertainty,” he added. After eliminating the duty-free exemption for low-value shipments from China valued at under $800 on May 2, the US on May 14 reduced the de minimis tariff on the low-value imports from 120% to 54%. Items sent via post from China to the US will be charged a flat fee of $100, regardless of value. In 2024, e-commerce shipments accounted for about 50% of China-to-US air freight volume, filling dozens of freighters every day. Data from air cargo analyst Rotate showed that in the days following May 2, 40 freighters per day were pulled out of the trans-Pacific. The International Air Transport Association (IATA) noted in an industry outlook this week that tariffs and the removal of the de minimis exemption have disrupted established air cargo flows, forcing carriers to adjust or redeploy capacity on certain routes. “Uncertainty remains high, which impedes planning and optimization along the supply chain, and further loss of momentum in the coming months cannot be ruled out,” IATA warned. Refocusing e-commerce efforts Tim van Leeuwen, head of consulting at Rotate, said China-US air cargo demand in May fell 28% year over year, driven by declines in both general air cargo and e-commerce, with early June figures showing the trend has continued. “Direct China-US freighter capacity in June was down 11% compared to March, wiping out capacity growth we have seen over the past year and returning to similar capacity as June 2024,” he told the Journal of Commerce. “The e-commerce platforms seem to be refocusing their efforts, with significant growth of exports to the European Union and Asia-Pacific replacing lost demand to the US,” he noted. Faced with such an uncertain and volatile trade lane, Van de Wouw said forwarders were taking a cautious approach to the market. ”Around 46% of their procured volumes remain in the spot market, reflecting a belief that rates may yet fall further,” he said. “Their wait-and-see approach favours flexibility over long-term commitments — for now.” China-North America spot rates of $4.86/kg last week fell below $5/kg for the first time in almost two months, dropping 5% compared to the previous week, according to the Baltic Air Index (BAI). Spot rates from China to North Europe were at $4.23 per kilogram in the last week of June, down slightly compared to the previous week but remaining above the $4 mark since March. Dimerco Express Group put the total China-US cargo volumes decline at 60% in May and June, with e-commerce bookings down around 50%. The Taiwan-based forwarder noted in a July market outlook that there was no sign of recovery in e-commerce volume and scheduled freighter flights continue to be cancelled. Positive growth areas However, there are bright spots in the gloomy outlook. Demand out of Southeast Asia — particularly from Thailand and Vietnam — is rising ahead of the upcoming tariff deadline next week. President Donald Trump’s 90-day pause on so-called “reciprocal” tariffs ends at midnight on July 8. “Intra-Asia traffic is holding strong, especially on routes linking China with Taiwan, Vietnam, Thailand, Malaysia and Singapore,” said Kathy Liu, vice president of global sales and marketing at Dimerco Express Group. ”Capacity on these lanes is tight, and we’re seeing higher rates compared to the same period last year,” she added. The summer season will also bring increased demand for perishable exports on the trans-Pacific, both out of Asia and on the backhaul routes, good news for airlines facing such dramatic cuts in e-commerce volume. “Air imports from Asia are expected to rebound and grow during the summer months, driven by the early peak shipping season. Shippers are ramping up volumes, particularly toward Asia, with a growing shift from ocean to air,” the forwarder said. Air freight space on the westbound routes will likely remain tight, with possible booking delays or rollovers and Dimerco advised pre-booking at least five to seven days in advance for high-volume or time-sensitive cargo. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Forwarder News

Air Cargo Carriers News

Air Cargo

Trans-Pacific air cargo market flying into turbulent second half

<div class="phx-topic abstract-wrapper">The federal watchdog agency said the US Maritime Administration has financial levers to help the domestic shipbuilding industry but doesn’t know their effectiveness.</div>

The federal watchdog agency said the US Maritime Administration has financial levers to help the domestic shipbuilding industry but doesn’t know their effectiveness.

<div class="phx-topic">US shipbuilding capacity is hampered by underutilized and poorly funded government incentives, a federal watchdog agency said as it urged the US Maritime Administration (Marad) to take a more active role in programs aimed at reviving the domestic maritime industry. After a year-and-half study on the US commercial maritime industry, the Government Accountability Office (GAO) said that US shipbuilders face challenges in reviving their industry due to competition from other modes of transportation, fewer economies of scale than overseas shipbuilders and aging infrastructure. President Donald Trump has promoted domestic shipbuilding during his second term, and his administration is on track to tax Chinese tonnage starting Oct. 14. The GAO, often referred to as the congressional watchdog, suggested encouraging Jones Act vessels to move more goods between US ports, providing US shipbuilders with larger and more consistent order books, and partnering with foreign shipbuilders to modernize US yards. While government financial programs aim to offset some of the costs of building ships in the US, “the programs’ administration does not follow leading practices for assessing program performance,” the GAO said, adding that Marad needs to look more closely at its incentives. “The Maritime Administration cannot determine to what extent the programs are effective in growing the US maritime fleet because it has not established measurable goals for, or assessed the performance of, these programs,” the report said. The GAO report, funded through a 2023 defense spending bill, arrives after <a href="https://www.joc.com/article/trump-signs-order-for-us-shipbuilding-but-stays-mute-on-port-fees-5980539">President Trump’s April executive order</a> aimed at restoring US shipbuilding through steps such as developing a maritime action plan, establishing a trust fund for the US maritime industry, and collecting harbor maintenance fees on US imports that move through Canada and Mexico first. That effort will also be funded through <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">new tariffs to be collected starting in October</a> on Chinese-operated or -built ships that enter US ports. <h3>Programs under scrutiny </h3>For its part, Marad administers four programs aimed at domestic shipbuilding, but their effectiveness remains unclear, the report said. For example, the Federal Ship Financing Program, which offers loan guarantees for US-built ships, only executed guarantees for two vessel owners totaling $400 million over the last five years, the report said. While the guarantee is “a low-volume program, but has a high impact,” Marad has become more risk averse about which loans it will guarantee, the GAO report said, disincentivizing some companies from using the program. Another incentive, the Small Shipyard Grant Program, allows shipyards to buy new equipment. Congress appropriated about $20 million to the program annually since 2018, but it only received $8.75 million in funding for the 2024 fiscal year. However, the GAO found that shipbuilding and repair companies have requested about $50 million in grant funding. While the grantees said they benefitted from the program, the GAO said the program’s overall effectiveness is unclear because Marad “does not have measurable goals and does not assess the performance of the program.” Marad is supposed to collect data on how the grant improved shipyard operations, but the GAO found the data reporting is spotty. “Maritime Administration officials follow a multistep process for awarding grants to shipyards that apply to the Small Shipyard Grant program, but they do not document their decision rationale for why they award or do not award grants,” the GAO said, as it urged Marad to delve more deeply into its incentive programs. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US shipbuilding capacity is hampered by underutilized and poorly funded government incentives, a federal watchdog agency said as it urged the US Maritime Administration (Marad) to take a more active role in programs aimed at reviving the domestic maritime industry. After a year-and-half study on the US commercial maritime industry, the Government Accountability Office (GAO) said that US shipbuilders face challenges in reviving their industry due to competition from other modes of transportation, fewer economies of scale than overseas shipbuilders and aging infrastructure. President Donald Trump has promoted domestic shipbuilding during his second term, and his administration is on track to tax Chinese tonnage starting Oct. 14. The GAO, often referred to as the congressional watchdog, suggested encouraging Jones Act vessels to move more goods between US ports, providing US shipbuilders with larger and more consistent order books, and partnering with foreign shipbuilders to modernize US yards. While government financial programs aim to offset some of the costs of building ships in the US, “the programs’ administration does not follow leading practices for assessing program performance,” the GAO said, adding that Marad needs to look more closely at its incentives. “The Maritime Administration cannot determine to what extent the programs are effective in growing the US maritime fleet because it has not established measurable goals for, or assessed the performance of, these programs,” the report said. The GAO report, funded through a 2023 defense spending bill, arrives after President Trump’s April executive order aimed at restoring US shipbuilding through steps such as developing a maritime action plan, establishing a trust fund for the US maritime industry, and collecting harbor maintenance fees on US imports that move through Canada and Mexico first. That effort will also be funded through new tariffs to be collected starting in October on Chinese-operated or -built ships that enter US ports. Programs under scrutiny For its part, Marad administers four programs aimed at domestic shipbuilding, but their effectiveness remains unclear, the report said. For example, the Federal Ship Financing Program, which offers loan guarantees for US-built ships, only executed guarantees for two vessel owners totaling $400 million over the last five years, the report said. While the guarantee is “a low-volume program, but has a high impact,” Marad has become more risk averse about which loans it will guarantee, the GAO report said, disincentivizing some companies from using the program. Another incentive, the Small Shipyard Grant Program, allows shipyards to buy new equipment. Congress appropriated about $20 million to the program annually since 2018, but it only received $8.75 million in funding for the 2024 fiscal year. However, the GAO found that shipbuilding and repair companies have requested about $50 million in grant funding. While the grantees said they benefitted from the program, the GAO said the program’s overall effectiveness is unclear because Marad “does not have measurable goals and does not assess the performance of the program.” Marad is supposed to collect data on how the grant improved shipyard operations, but the GAO found the data reporting is spotty. “Maritime Administration officials follow a multistep process for awarding grants to shipyards that apply to the Small Shipyard Grant program, but they do not document their decision rationale for why they award or do not award grants,” the GAO said, as it urged Marad to delve more deeply into its incentive programs. Contact Michael Angell at michael.angell@spglobal.com .

Maritime

Transport, Trade and Regulation News

US shipbuilding incentives need more oversight: GAO

<div class="phx-topic abstract-wrapper">Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia continue to cause ships to arrive outside their scheduled European arrival windows.</div>

Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia continue to cause ships to arrive outside their scheduled European arrival windows.

<div class="phx-topic">Container lines are making another round of changes to services to mitigate persistent congestion at European ports, avoiding maxed out terminals and overwhelmed inland rail and waterway networks. Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia are causing ships to arrive outside their scheduled European arrival windows. Strong peak season demand is piling on the pressure with the wave of incoming volume adding to congestion and forcing carriers to divert some services away from the congested import gateways. Mediterranean Shipping Co. has adjusted its Asia-Europe services to mitigate the delays, omitting some ports and adding others, while congestion at London Gateway is seeing CMA CGM’s Safran service from Europe to the East Coast of South America calling at Southampton instead. Maersk was scheduled to return its north-south NeoSamba service to London Gateway after moving it to Southampton in early June because of congestion but has decided to maintain the Southampton call. “The current diversion from London Gateway to Southampton will be extended by an additional four weeks, to maintain high service reliability during peak demand periods and to avoid port congestion,” Maersk told customers in its July market update this week. HMM is reporting yard density of 80% and above at several terminals in Rotterdam, Hamburg and Antwerp with full berths and vessels arriving late. Data this week from port visibility provider Portcast shows 11 vessels waiting to berth at Antwerp-Bruges, nine at Hamburg and seven at Rotterdam. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="5eb289f4-4310-4545-b840-86a556bf3fac"></dynamic-object></div>Kuehne + Nagel’s visibility tool SeaExplorer noted that port congestion in North European ports of Antwerp, Hamburg and Bremerhaven was extending transit times, with delays in berthing, operational disruptions and high yard utilization over 92% identified as key factors. Disruption is also extending into inland transport networks. Ocean Network Express is warning of long wait times for trucks and barges in North European hubs, with some terminals suspending the redelivery of empties, while Maersk warned customers of rail disruption in Hamburg from July 2 until July 9. “During this period, no rail transport to or from the Port of Hamburg will be operationally feasible, and customers are kindly asked to change their ocean bookings from Hamburg to Bremerhaven where possible,” the carrier noted. <h3>Low water limits barge loading </h3>Intermodal transport operator Contargo said average waiting times for the handling of its barges this week were 78 hours in Antwerp and 64 hours in Rotterdam. Contargo also warned that low water levels on the Rhine were limiting barge loading and generating low water surcharges. In the north of Italy, major infrastructure works are scheduled on the national railway line serving ports of Genoa, La Spezia and Vado Ligure. At the Port of Genoa, no rail services will be available between Aug. 2 and 31, with Maersk not accepting rail cargo from July 21. In the first four months of 2025, total Asia-Europe volume was up 9% year over year at 6.13 million TEUs, with the Asia-North Europe segment rising 6.6% to 3.72 million TEUs and Asia-Mediterranean surging 12.14% to 2.4 million TEUs, according to the latest volume data from Container Trades Statistics. While Asia-Europe volume data for June is not yet available, carriers and forwarders are reporting robust cargo bookings through the summer months. At the same time, carriers have deployed a record amount of capacity on the North Europe corridor in July while also increasing blank sailings on the trade lane. Freight-all-kinds (FAK) rate increases for Asia-North Europe were imposed from July 1 by MSC ($4,300 per FEU) and CMA CGM ($4,100/FEU), pushing rates on the trade lane up almost $500 to $3,350/FEU, according to rate benchmarking platform Xeneta. Data from visibility provider eeSea shows carriers on Asia-North Europe will deploy a record 1.15 million TEUs in capacity in July and blank 85,727 TEUs. In August, the deployed capacity will drop to just over 1 million TEUs while 104,790 TEUs will be cut from the trade. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="6a5146cf-79d1-41fa-85fb-c1916fc625ac"></dynamic-object></div>Carriers are taking the opposite approach on Asia-Mediterranean, where a record 882,845 TEUs of capacity will be deployed in August, up 50,000 TEUs compared with July, eeSea data shows. Blank sailings will decline from almost 80,000 TEUs in July to 20,000 TEUs in August. “Strong demand from Asia to North Europe and the Mediterranean is forecast for the rest of July in line with seasonality ... we encourage customers to book as early as possible in order to secure space,” advised Maersk in its July update. Forwarders are giving their customers the same advice. “To avoid delays caused by congestion, blank sailings, and container shortages, it is recommended to book space at least one to two weeks in advance for Asia and EU ports,” Taiwan-based forwarder Dimerco Express Group noted in a July market report. Dimerco said some China origins were beginning to apply overweight surcharges to Asia-Europe containers as carriers prioritized light cargo and high-cube containers to improve ship utilization. “Early booking is strongly recommended for heavy cargo in small containers,” the forwarder warned. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Container lines are making another round of changes to services to mitigate persistent congestion at European ports, avoiding maxed out terminals and overwhelmed inland rail and waterway networks. Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia are causing ships to arrive outside their scheduled European arrival windows. Strong peak season demand is piling on the pressure with the wave of incoming volume adding to congestion and forcing carriers to divert some services away from the congested import gateways. Mediterranean Shipping Co. has adjusted its Asia-Europe services to mitigate the delays, omitting some ports and adding others, while congestion at London Gateway is seeing CMA CGM’s Safran service from Europe to the East Coast of South America calling at Southampton instead. Maersk was scheduled to return its north-south NeoSamba service to London Gateway after moving it to Southampton in early June because of congestion but has decided to maintain the Southampton call. “The current diversion from London Gateway to Southampton will be extended by an additional four weeks, to maintain high service reliability during peak demand periods and to avoid port congestion,” Maersk told customers in its July market update this week. HMM is reporting yard density of 80% and above at several terminals in Rotterdam, Hamburg and Antwerp with full berths and vessels arriving late. Data this week from port visibility provider Portcast shows 11 vessels waiting to berth at Antwerp-Bruges, nine at Hamburg and seven at Rotterdam. Kuehne + Nagel’s visibility tool SeaExplorer noted that port congestion in North European ports of Antwerp, Hamburg and Bremerhaven was extending transit times, with delays in berthing, operational disruptions and high yard utilization over 92% identified as key factors. Disruption is also extending into inland transport networks. Ocean Network Express is warning of long wait times for trucks and barges in North European hubs, with some terminals suspending the redelivery of empties, while Maersk warned customers of rail disruption in Hamburg from July 2 until July 9. “During this period, no rail transport to or from the Port of Hamburg will be operationally feasible, and customers are kindly asked to change their ocean bookings from Hamburg to Bremerhaven where possible,” the carrier noted. Low water limits barge loading Intermodal transport operator Contargo said average waiting times for the handling of its barges this week were 78 hours in Antwerp and 64 hours in Rotterdam. Contargo also warned that low water levels on the Rhine were limiting barge loading and generating low water surcharges. In the north of Italy, major infrastructure works are scheduled on the national railway line serving ports of Genoa, La Spezia and Vado Ligure. At the Port of Genoa, no rail services will be available between Aug. 2 and 31, with Maersk not accepting rail cargo from July 21. In the first four months of 2025, total Asia-Europe volume was up 9% year over year at 6.13 million TEUs, with the Asia-North Europe segment rising 6.6% to 3.72 million TEUs and Asia-Mediterranean surging 12.14% to 2.4 million TEUs, according to the latest volume data from Container Trades Statistics. While Asia-Europe volume data for June is not yet available, carriers and forwarders are reporting robust cargo bookings through the summer months. At the same time, carriers have deployed a record amount of capacity on the North Europe corridor in July while also increasing blank sailings on the trade lane. Freight-all-kinds (FAK) rate increases for Asia-North Europe were imposed from July 1 by MSC ($4,300 per FEU) and CMA CGM ($4,100/FEU), pushing rates on the trade lane up almost $500 to $3,350/FEU, according to rate benchmarking platform Xeneta. Data from visibility provider eeSea shows carriers on Asia-North Europe will deploy a record 1.15 million TEUs in capacity in July and blank 85,727 TEUs. In August, the deployed capacity will drop to just over 1 million TEUs while 104,790 TEUs will be cut from the trade. Carriers are taking the opposite approach on Asia-Mediterranean, where a record 882,845 TEUs of capacity will be deployed in August, up 50,000 TEUs compared with July, eeSea data shows. Blank sailings will decline from almost 80,000 TEUs in July to 20,000 TEUs in August. “Strong demand from Asia to North Europe and the Mediterranean is forecast for the rest of July in line with seasonality ... we encourage customers to book as early as possible in order to secure space,” advised Maersk in its July update. Forwarders are giving their customers the same advice. “To avoid delays caused by congestion, blank sailings, and container shortages, it is recommended to book space at least one to two weeks in advance for Asia and EU ports,” Taiwan-based forwarder Dimerco Express Group noted in a July market report. Dimerco said some China origins were beginning to apply overweight surcharges to Asia-Europe containers as carriers prioritized light cargo and high-cube containers to improve ship utilization. “Early booking is strongly recommended for heavy cargo in small containers,” the forwarder warned. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Container lines

Asia-Europe

Ocean carriers adjust calls as congestion chokes European hubs

<div class="phx-topic abstract-wrapper">The push and pull of US support for decarbonization efforts puts a question mark over potential project cargo demand. </div>

The push and pull of US support for decarbonization efforts puts a question mark over potential project cargo demand.

<div class="phx-topic">The US government is sending mixed messages about support for carbon capture and storage (CCS) projects, dialing up concerns about the segment’s future — and whether it will create a surge of project cargo and breakbulk activity. The Senate’s July 1 passage of the Congressional budget reconciliation bill on tax and spending — also known as President Donald Trump’s One Big Beautiful Bill Act — included the retention of a key tax credit for the CCS buildout. Lawmakers approved a version of the legislation that would preserve and expand the incentive known as the 45Q tax credit, which many later-stage CCS projects rely on. But the incentive’s rescue comes just weeks after the May 30 cancellation of 24 federal awards totaling nearly $3.7 billion for projects that primarily include CCS and decarbonization initiatives. The US Department of Energy (DOE) pulled the awards after determining that the projects “failed to advance the energy needs of the American people.” Tip Meckel, senior research scientist at the Gulf Coast Carbon Center, told the Journal of Commerce that although federal grants have been in the crosshairs, the future of CCS development depends even more so on the 45Q incentive. “I think overall there’s a sense that the impact on CCS may not be as big as everyone was thinking,” he said. While the $3.7 billion in funding had been approved for several projects that have yet to get off the ground, Meckel said the tax incentive is essential to projects that are well under way, and thus closer to the project cargo stage. “What passed in the Senate version of the bill was essentially what most people who support CCS were hoping for,” he said, explaining that the legislation maintains the tax credit writ large while increasing the credit’s value for certain projects. The bill will next advance to the House for final consideration. <h3>‘A foundational driver’ </h3>The 45Q credit was introduced in 2008 and increased significantly under the Inflation Reduction Act (IRA). But the incentive has met both resistance and support from Republican lawmakers, including some who proposed changes to the Senate bill that would do away with the incentive altogether. Madelyn Morrison, director of government affairs for the Carbon Capture Coalition, said in a July 1 statement that the Senate’s approved version of the bill retains “mission-critical elements” of the tax credit. “45Q is the foundational market driver for domestic carbon management deployment, and we appreciate the Senate Finance Committee and key Senate champions for advocating for improvements that strengthen the credit’s long-term effectiveness,” Morrison said. Carbon capture and storage is a climate mitigation strategy backed by the oil and gas industry and has been of particular interest to liquefied natural gas (LNG) companies that are pursuing CCS to power their facilities. CCS involves capturing carbon dioxide emitted from power plants and factories and storing it underground. Carbon capture and storage projects could generate a significant source of project and breakbulk cargo to move and install components such as pipelines, chemical plant equipment, compressors, heavy machinery and raw materials. <h3>Pulled funding sends message </h3>While the July 1 Senate vote marked a win for CCS development, the $3.7 billion funding pullback signaled a shot across the bow. The federal cuts included nearly $332 million for ExxonMobil to develop a world-scale blue hydrogen and CCS plant at its refinery complex in Baytown, Texas, and $540 million for Calpine to retrofit its natural gas-fired power plants in Baytown and Sutter County, California. But as Meckel pointed out, the lion’s share of the terminations was made to awards approved between the Nov. 5 US presidential election of Donald Trump and his Jan. 20 inauguration. That means the withdrawn awards represent a small subset of CCS projects, many of which are in the early stages of development. “The number is big, but the amount of money that had been allocated to date was actually quite small. So it was more of a savings on the books than an actual recovery of money that had been allocated,” he said. That’s not to say federal funding isn’t a concern, as additional cuts could be forthcoming. In total, the DOE has been reviewing 179 awards totaling over $15 billion for large-scale commercial energy projects, according to a May 15 memo from the department. Meckel said taking back federal monies for CCS and other clean energy projects could send a message that the US government has become an unreliable partner for energy development. “It decreases US competitiveness when we’re not pursuing these very forward-thinking energy projects, because in all likelihood the companies that are interested are going to develop them somewhere else,” he said. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

The US government is sending mixed messages about support for carbon capture and storage (CCS) projects, dialing up concerns about the segment’s future — and whether it will create a surge of project cargo and breakbulk activity. The Senate’s July 1 passage of the Congressional budget reconciliation bill on tax and spending — also known as President Donald Trump’s One Big Beautiful Bill Act — included the retention of a key tax credit for the CCS buildout. Lawmakers approved a version of the legislation that would preserve and expand the incentive known as the 45Q tax credit, which many later-stage CCS projects rely on. But the incentive’s rescue comes just weeks after the May 30 cancellation of 24 federal awards totaling nearly $3.7 billion for projects that primarily include CCS and decarbonization initiatives. The US Department of Energy (DOE) pulled the awards after determining that the projects “failed to advance the energy needs of the American people.” Tip Meckel, senior research scientist at the Gulf Coast Carbon Center, told the Journal of Commerce that although federal grants have been in the crosshairs, the future of CCS development depends even more so on the 45Q incentive. “I think overall there’s a sense that the impact on CCS may not be as big as everyone was thinking,” he said. While the $3.7 billion in funding had been approved for several projects that have yet to get off the ground, Meckel said the tax incentive is essential to projects that are well under way, and thus closer to the project cargo stage. “What passed in the Senate version of the bill was essentially what most people who support CCS were hoping for,” he said, explaining that the legislation maintains the tax credit writ large while increasing the credit’s value for certain projects. The bill will next advance to the House for final consideration. ‘A foundational driver’ The 45Q credit was introduced in 2008 and increased significantly under the Inflation Reduction Act (IRA). But the incentive has met both resistance and support from Republican lawmakers, including some who proposed changes to the Senate bill that would do away with the incentive altogether. Madelyn Morrison, director of government affairs for the Carbon Capture Coalition, said in a July 1 statement that the Senate’s approved version of the bill retains “mission-critical elements” of the tax credit. “45Q is the foundational market driver for domestic carbon management deployment, and we appreciate the Senate Finance Committee and key Senate champions for advocating for improvements that strengthen the credit’s long-term effectiveness,” Morrison said. Carbon capture and storage is a climate mitigation strategy backed by the oil and gas industry and has been of particular interest to liquefied natural gas (LNG) companies that are pursuing CCS to power their facilities. CCS involves capturing carbon dioxide emitted from power plants and factories and storing it underground. Carbon capture and storage projects could generate a significant source of project and breakbulk cargo to move and install components such as pipelines, chemical plant equipment, compressors, heavy machinery and raw materials. Pulled funding sends message While the July 1 Senate vote marked a win for CCS development, the $3.7 billion funding pullback signaled a shot across the bow. The federal cuts included nearly $332 million for ExxonMobil to develop a world-scale blue hydrogen and CCS plant at its refinery complex in Baytown, Texas, and $540 million for Calpine to retrofit its natural gas-fired power plants in Baytown and Sutter County, California. But as Meckel pointed out, the lion’s share of the terminations was made to awards approved between the Nov. 5 US presidential election of Donald Trump and his Jan. 20 inauguration. That means the withdrawn awards represent a small subset of CCS projects, many of which are in the early stages of development. “The number is big, but the amount of money that had been allocated to date was actually quite small. So it was more of a savings on the books than an actual recovery of money that had been allocated,” he said. That’s not to say federal funding isn’t a concern, as additional cuts could be forthcoming. In total, the DOE has been reviewing 179 awards totaling over $15 billion for large-scale commercial energy projects, according to a May 15 memo from the department. Meckel said taking back federal monies for CCS and other clean energy projects could send a message that the US government has become an unreliable partner for energy development. “It decreases US competitiveness when we’re not pursuing these very forward-thinking energy projects, because in all likelihood the companies that are interested are going to develop them somewhere else,” he said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Breakbulk News

Energy projects

Heavy-haul transport

Project cargo

Mixed US policy on carbon capture clouds project cargo demand

<div class="phx-topic abstract-wrapper">While vessels on the lead West India-US East Coast networks have continued to sail full, forwarders have linked the “sold-out” experience to capacity cutbacks and consequent cargo rollovers. </div>

While vessels on the lead West India-US East Coast networks have continued to sail full, forwarders have linked the “sold-out” experience to capacity cutbacks and consequent cargo rollovers.

<div class="phx-topic">Major container lines on the India-US East Coast route have drastically downgraded their peak season booking rate increase targets in July amid persistent demand headwinds Local freight forwarders who spoke with the Journal of Commerce said carriers have applied moderate rates in the $500-$600 range per container rather than the $1,500-$3,000 per box originally slated to hit spot rates starting July 1. The pullback on pricing pushes parallels similar actions by <a href="https://www.joc.com/article/excess-capacity-sinks-planned-july-1-rate-increase-in-eastbound-trans-pacific-6036946">ocean carriers on the Asia-North America trade lane</a>. “Most lines have set their rate quotes slightly up, but there is little buoyancy in the market for them to push prices higher than the levels they have already attempted,” said a Mumbai-based forwarder executive on condition of anonymity. “Cargo bookings are very slow.” Sources said carriers are effectively adjusting spot rates on a sailing-by-sailing or weekly basis to fill vessels, with asking prices from West India to New York now oscillating between $2,400 and $3,000 per FEU. “Some customers seem to be holding back on shipment plans, pending clarity on tariffs,” a sales executive at a European carrier told the Journal of Commerce. Still, several carriers have lined up another round of rate hikes — albeit at a lower scale — from July 15 in anticipation of stronger demand. While vessels on the lead West India-US East Coast networks have continued to sail full, forwarders have linked the “sold-out” experience to capacity cutbacks and consequent cargo rollovers. A significant portion of the declared capacity is also being blanked in July, with six void calls for West India reported across three weekly connections — the Indamex run by CMA CGM, Hapag-Lloyd’s TPI and Ocean Network Express’ WIN. Industry sources believe US import frontloading from China during the 90-day tariff reprieve may have slowed Indian shipment sourcing and that a pickup in westbound volumes would hinge on the tariff framework of a trade deal between Washington and New Delhi. India-US West Coast spot rates have flattened in the meantime due to the recent peak, with allocations on extended Asian routings for direct or transshipment loading improving in the last week. Mediterranean Shipping Co.’s cancellation of a July 1 peak season surcharge of $3,600 per TEU and $4,000 per FEU validates that correction. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Major container lines on the India-US East Coast route have drastically downgraded their peak season booking rate increase targets in July amid persistent demand headwinds Local freight forwarders who spoke with the Journal of Commerce said carriers have applied moderate rates in the $500-$600 range per container rather than the $1,500-$3,000 per box originally slated to hit spot rates starting July 1. The pullback on pricing pushes parallels similar actions by ocean carriers on the Asia-North America trade lane . “Most lines have set their rate quotes slightly up, but there is little buoyancy in the market for them to push prices higher than the levels they have already attempted,” said a Mumbai-based forwarder executive on condition of anonymity. “Cargo bookings are very slow.” Sources said carriers are effectively adjusting spot rates on a sailing-by-sailing or weekly basis to fill vessels, with asking prices from West India to New York now oscillating between $2,400 and $3,000 per FEU. “Some customers seem to be holding back on shipment plans, pending clarity on tariffs,” a sales executive at a European carrier told the Journal of Commerce. Still, several carriers have lined up another round of rate hikes — albeit at a lower scale — from July 15 in anticipation of stronger demand. While vessels on the lead West India-US East Coast networks have continued to sail full, forwarders have linked the “sold-out” experience to capacity cutbacks and consequent cargo rollovers. A significant portion of the declared capacity is also being blanked in July, with six void calls for West India reported across three weekly connections — the Indamex run by CMA CGM, Hapag-Lloyd’s TPI and Ocean Network Express’ WIN. Industry sources believe US import frontloading from China during the 90-day tariff reprieve may have slowed Indian shipment sourcing and that a pickup in westbound volumes would hinge on the tariff framework of a trade deal between Washington and New Delhi. India-US West Coast spot rates have flattened in the meantime due to the recent peak, with allocations on extended Asian routings for direct or transshipment loading improving in the last week. Mediterranean Shipping Co.’s cancellation of a July 1 peak season surcharge of $3,600 per TEU and $4,000 per FEU validates that correction. Contact Bency Mathew at bencyvmathew@gmail.com .

Forwarding

Trans-Pacific

Container lines pull back on India-US pricing push

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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

SMC3rates_shutterstock_5247046.jpg

Shippers save money, time with automated transportation bidding tools

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

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