<div class="phx-topic abstract-wrapper">Spot freight rates on the Asia-Europe trade are changing daily, and the enormous pressure this places on forwarders trying to stay on top of the shifting prices is giving impetus to technology companies offering automated solutions to manage the volatility.
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Spot freight rates on the Asia-Europe trade are changing daily, and the enormous pressure this places on forwarders trying to stay on top of the shifting prices is giving impetus to technology companies offering automated solutions to manage the volatility.

<div>Spot freight rates on the <a>Asia-Europe</a> trade are changing daily, and the enormous pressure this places on forwarders trying to stay on top of shifting prices is giving impetus to technology companies offering automated solutions to manage the volatility.While automated rate platforms have been on the market for several years, the wild daily swings in freight rates have become a constant on some trades, led by Asia-Europe.“This was so different to what it was nine months ago,” said Harry Sangree, executive vice president at CargoSphere. “Technology-based solutions are what people are now thinking about in ways like never before. Before...

Spot freight rates on the Asia-Europe trade are changing daily, and the enormous pressure this places on forwarders trying to stay on top of shifting prices is giving impetus to technology companies offering automated solutions to manage the volatility.While automated rate platforms have been on the market for several years, the wild daily swings in freight rates have become a constant on some trades, led by Asia-Europe.“This was so different to what it was nine months ago,” said Harry Sangree, executive vice president at CargoSphere. “Technology-based solutions are what people are now thinking about in ways like never before. Before we sold systems that people used to compare and manage rates and quotations, but now the industry wants that on steroids.“To be competitive, a forwarder needs to get the data into their spreadsheets every day and that calls for a massive effort, or they will fall further and further behind.”Record low container freight rates on Asia-Europe and Asia-Mediterranean trades are encouraging shippers to place greater percentages of their cargo on the spot market, but this is making forwarders' lives difficult.A forwarder with offices in Hong Kong and Shanghai told JOC.com that keeping the freight rates updated had forced him to hire people whose sole duty was to input changing prices on the trades. "You won't believe the time and effort it takes to ensure my prices are competitive, and it is very frustrating," he said.Zvi Schreiber, CEO of Freightos, a logistics startup handling international freight, said the volatility was making freight pricing chaotic. “Some air and ocean rates can change multiple times a day, while few logistics providers can automate their data management,” he said.Schreiber said on a weekly basis, Freightos processed hundreds of rates with millions of new price points, an area that forwarders had highlighted as just one key area that could help them reduce costs and improve performance.“This isn’t limited to rate management; 86 percent of logistics providers have identified technology as the number one way to deal with the changing world of freight as it moves online,” he said.Freightos recently released a 2016 survey of logistics executives, The Future of Freight , that focused on the industry's evolution over the next five years and preparations for the future. Among its findings was that almost 90 percent of forwarders believe technology will secure their future. While the industry’s complexity and opacity may have prevented technology from penetrating the market for years, there has been a recent surge in technological innovation and adoption, the report said. With carrier-forwarder relationships frequently functioning as a bottleneck for otherwise optimized supply chains, shippers are now expecting improved visibility, pricing and routing. The Freightos study said to differentiate themselves, some of the world’s largest providers were moving toward technology that streamlines internal operations, optimizes freight movements and improves customer connectivity. These included companies such as Hellmann Worldwide Logistics , CEVA Logistics , Nippon Express and Kuehne+Nagel that were automating aspects of freight pricing, routing and sales. Automating the supply chain is something U.S.-based Haven is also working on, and CEO Matt Tillman said while people liked trading hand to hand, they realized it was no longer possible to do so efficiently.He said volatility in any market was hard to track if there was no centralized freight discovery mechanism, and after looking at the rate platforms available, there was no question that price discovery needed to be electronic.“Forwarders are basically buying and selling freight, so they need price discovery to be highly efficient. This electronic rate sourcing is necessary and has already happened in other industries,” Tillman said.“If as a shipper you can get to where you can maintain low inventory levels and an agile manufacturing process, and if that can be connected to an automated and agile logistics and transport process, that is really powerful. As a company, we are definitely trying to make that entire process as automated as possible.”Tillman said the data in the supply chain that has historically resided in people’s heads was now available in real time, and the software in the market has become powerful enough to make better decisions in real time based on that data.Providers of technology solutions to the supply chain are going through a purple patch with the volatility afflicting the container transport business not expected to level out anytime soon.“Everyone keeps waiting for the carriers to get religion and stop fighting to the bottom on prices, because everyone says they can’t survive if they keep doing that,” Sangree said. “But people have been saying that for years and it hasn’t happened.“Demand is going up 2 percent a year, but supply is going up 5 percent. Prices are going to be challenging and carriers are going to continue competing on price because they believe that is the way to fill their ships up, and so the volatility is not going to change in the foreseeable future.”Contact Greg Knowler at greg.knowler@ihs.com and follow him on Twitter: @greg_knowler .

Logistics Technology News

Automation seen as way to manage container spot rate volatility

<div class="phx-topic abstract-wrapper">The Transportation Intermediaries Association launched a hotline that its members can use to report suspected occurrences of cargo fraud and theft, regardless of the dollar value involved. </div>

The Transportation Intermediaries Association launched a hotline that its members can use to report suspected occurrences of cargo fraud and theft, regardless of the dollar value involved.

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<div class="phx-topic">The Transportation Intermediaries Association (TIA) has established a partnership with the Federal Bureau of Investigation to aggregate truckload cargo theft and fraud incident information from its nearly 2,000 members. TIA this week launched a hotline that its members — freight brokers and other domestic intermediaries — can use to report suspected occurrences of cargo fraud and theft, regardless of the dollar value involved. The hotline is meant to give members a direct channel to report incidents in situations where a broker doesn’t know whom to contact at a local, state or federal level. TIA President and CEO Chris Burroughs told the Journal of Commerce Thursday that the association has long worked with the six-person cargo theft team at the FBI’s Philadelphia field office to combat theft and fraud. But after discovering that members lacked clarity about where to turn, TIA leadership decided it could take a role in aggregating incident report data on behalf of federal law enforcement. “We get calls on a daily basis from members with situations,” Burroughs said. “We’re not going to have 2,000 companies calling [the FBI field office]. Let us be the intermediary for that information.” TIA will use the hotline to field calls and gather 15 data points the FBI told TIA it needs to build cases against alleged criminal actors. Burroughs emphasized that an incident need not rise to a specific dollar amount to be reported to the hotline, a common roadblock that prevents brokers, carriers and shippers from reporting suspected theft or fraud. “The FBI is building a RICO [Racketeer Influenced and Corrupt Organizations] case, and so they don’t care about the dollar amount,” he said. “In aggregate, it’s billions of dollars.” <h3>Combating a rising threat </h3>The FBI’s cargo theft information website lists data-sharing platforms CargoNet and the Transported Asset Protection Association (TAPA) as partners in its battle against rising levels of fraud, much of which is coordinated by entities outside the US. Private sector freight marketplaces, notably DAT Freight &amp; Analytics and Truckstop.com, have made it a recent priority to eliminate fraud and theft facilitated on their platforms. And software providers built to vet truckload carriers, such as Highway, have focused intently on the issue. In addition, brokers and shippers can use risk management tools, such as Overhaul, to identify theft and report it directly to law enforcement. Burroughs said the broad threat of lost freight has hurt brokers as a whole, with shippers on their advisory board saying as much. Some shippers have told the Journal of Commerce that they are avoiding the use of brokers until the fraud and theft problems are under control. “We see this as a huge threat, which is why we’re spending so much time on this,” Burroughs said. “This is something keeping us up at night.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

The Transportation Intermediaries Association (TIA) has established a partnership with the Federal Bureau of Investigation to aggregate truckload cargo theft and fraud incident information from its nearly 2,000 members. TIA this week launched a hotline that its members — freight brokers and other domestic intermediaries — can use to report suspected occurrences of cargo fraud and theft, regardless of the dollar value involved. The hotline is meant to give members a direct channel to report incidents in situations where a broker doesn’t know whom to contact at a local, state or federal level. TIA President and CEO Chris Burroughs told the Journal of Commerce Thursday that the association has long worked with the six-person cargo theft team at the FBI’s Philadelphia field office to combat theft and fraud. But after discovering that members lacked clarity about where to turn, TIA leadership decided it could take a role in aggregating incident report data on behalf of federal law enforcement. “We get calls on a daily basis from members with situations,” Burroughs said. “We’re not going to have 2,000 companies calling [the FBI field office]. Let us be the intermediary for that information.” TIA will use the hotline to field calls and gather 15 data points the FBI told TIA it needs to build cases against alleged criminal actors. Burroughs emphasized that an incident need not rise to a specific dollar amount to be reported to the hotline, a common roadblock that prevents brokers, carriers and shippers from reporting suspected theft or fraud. “The FBI is building a RICO [Racketeer Influenced and Corrupt Organizations] case, and so they don’t care about the dollar amount,” he said. “In aggregate, it’s billions of dollars.” Combating a rising threat The FBI’s cargo theft information website lists data-sharing platforms CargoNet and the Transported Asset Protection Association (TAPA) as partners in its battle against rising levels of fraud, much of which is coordinated by entities outside the US. Private sector freight marketplaces, notably DAT Freight & Analytics and Truckstop.com, have made it a recent priority to eliminate fraud and theft facilitated on their platforms. And software providers built to vet truckload carriers, such as Highway, have focused intently on the issue. In addition, brokers and shippers can use risk management tools, such as Overhaul, to identify theft and report it directly to law enforcement. Burroughs said the broad threat of lost freight has hurt brokers as a whole, with shippers on their advisory board saying as much. Some shippers have told the Journal of Commerce that they are avoiding the use of brokers until the fraud and theft problems are under control. “We see this as a huge threat, which is why we’re spending so much time on this,” Burroughs said. “This is something keeping us up at night.” Contact Eric Johnson at eric.johnson@spglobal.com .

Transport, Trade and Regulation News

Truck brokers

Truckload

Broker association to aggregate truckload theft, fraud information for FBI

<div class="phx-topic abstract-wrapper">A group of Zim employees is said to object to a deal with Hapag-Lloyd due to the significant ownership stakes that the sovereign wealth funds of Saudi Arabia and Qatar have in the Hamburg-based carrier.</div>

A group of Zim employees is said to object to a deal with Hapag-Lloyd due to the significant ownership stakes that the sovereign wealth funds of Saudi Arabia and Qatar have in the Hamburg-based carrier.

<div class="phx-topic">Zim Integrated Shipping Services is reportedly fielding offers from other ocean carriers for a buyout, but the Israeli government’s stake in Zim and the partial Arabic state ownership of one potential suitor are complicating a possible deal. Israeli business newspaper Globes <a href="https://en.globes.co.il/en/article-hapag-lloyd-bids-for-zim-1001528325">reported Wednesday</a> that Zim received a buyout offer from Hapag-Lloyd as part of <a href="https://www.joc.com/article/zim-says-reviewing-buyout-offers-including-one-from-ceo-6123362">the strategic review its board of directors is undertaking</a>. Zim’s board is considering offers to sell the company, including one from its own Chief Executive Eli Glickman. A group of Zim employees is said to object to a deal with Hapag-Lloyd due to the significant ownership stakes that the sovereign wealth funds of Saudi Arabia and Qatar have in the Hamburg-based carrier, Globes reported. The two funds own a combined 22% of Hapag-Lloyd after its 2016 acquisition of United Arab Shipping Company. A Hapag-Lloyd spokesperson, asked to comment on the Globes report, told the Journal of Commerce, “We do not comment on market rumors.” Zim could not be reached for comment. Globes reported that Mediterranean Shipping Co. and Maersk have also expressed interest in Zim. A US-based Zim executive told the Journal of Commerce a deal with Hapag-Lloyd has about a “zero percent chance of happening” due to the Saudi and Qatari ownership stakes. “I believe with their ownership structure it makes such a relationship impossible,” said the executive, who did not want to be identified. “I don’t think anything other than Eli buying the company is likely.” Zim’s own governance structure complicates any potential deal. As part of the carrier’s privatization in 2004, Israel was granted a “special share” in the company that ensures the government can access Zim’s fleet in an emergency. The government, due to the special share, also “imposes certain limitations on our operating and managing activities,” Zim said in its last annual report. Those limitations include government approval for any merger or sale transaction, a requirement that the majority of Zim’s directors and its chief executive be Israeli citizens, and that the carrier remains incorporated in Israel. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Zim Integrated Shipping Services is reportedly fielding offers from other ocean carriers for a buyout, but the Israeli government’s stake in Zim and the partial Arabic state ownership of one potential suitor are complicating a possible deal. Israeli business newspaper Globes reported Wednesday that Zim received a buyout offer from Hapag-Lloyd as part of the strategic review its board of directors is undertaking . Zim’s board is considering offers to sell the company, including one from its own Chief Executive Eli Glickman. A group of Zim employees is said to object to a deal with Hapag-Lloyd due to the significant ownership stakes that the sovereign wealth funds of Saudi Arabia and Qatar have in the Hamburg-based carrier, Globes reported. The two funds own a combined 22% of Hapag-Lloyd after its 2016 acquisition of United Arab Shipping Company. A Hapag-Lloyd spokesperson, asked to comment on the Globes report, told the Journal of Commerce, “We do not comment on market rumors.” Zim could not be reached for comment. Globes reported that Mediterranean Shipping Co. and Maersk have also expressed interest in Zim. A US-based Zim executive told the Journal of Commerce a deal with Hapag-Lloyd has about a “zero percent chance of happening” due to the Saudi and Qatari ownership stakes. “I believe with their ownership structure it makes such a relationship impossible,” said the executive, who did not want to be identified. “I don’t think anything other than Eli buying the company is likely.” Zim’s own governance structure complicates any potential deal. As part of the carrier’s privatization in 2004, Israel was granted a “special share” in the company that ensures the government can access Zim’s fleet in an emergency. The government, due to the special share, also “imposes certain limitations on our operating and managing activities,” Zim said in its last annual report. Those limitations include government approval for any merger or sale transaction, a requirement that the majority of Zim’s directors and its chief executive be Israeli citizens, and that the carrier remains incorporated in Israel. Contact Michael Angell at michael.angell@spglobal.com .

Container lines

Container Shipping News

Maritime

Hapag-Lloyd buyout offer for Zim unlikely to get far: report

<div class="phx-topic abstract-wrapper">COO Noel Hacegaba’s elevation to the top executive job would appear to be fait accompli after serving in senior management positions at the port for the past 15 years. </div>

COO Noel Hacegaba’s elevation to the top executive job would appear to be fait accompli after serving in senior management positions at the port for the past 15 years.

<div class="phx-topic">Noel Hacegaba, chief operating officer of the Port of Long Beach, has been nominated to be the port’s new executive director effective Jan. 1. Hacegaba’s nomination was made Wednesday by the Long Beach Board of Harbor Commissioners; the harbor commission will formally vote on his appointment at a board meeting Monday. Hacegaba would replace current Executive Director Mario Cordero, <a href="https://www.joc.com/article/cordero-to-retire-at-end-of-2025-after-eight-years-as-long-beach-executive-director-6091741">who announced in October he would retire at year’s end</a>. Hacegaba’s elevation to be Long Beach’s top executive would appear to be fait accompli. He has served in senior management positions at the port for the past 15 years, rising to his current role as chief operating officer. As COO, he oversees daily operations including commercial services, engineering, finance and administration, planning, environmental affairs and strategic advocacy. Harbor Commission President Frank Colonna called Hacegaba the “ideal choice” for the port’s top job. “Noel brings extensive experience managing all key port functions, deep knowledge of the goods movement industry and a collaborative leadership style that will serve the port well as we navigate future challenges and opportunities,” Colonna said in a statement. As COO, Hacegaba has negotiated several major business transactions, including the multibillion-dollar sales of Long Beach Container Terminal (LBCT) and Total Terminals International (TTI). “I am looking forward to working with our mayor, harbor commission and partners to accelerate our economic engine as we elevate the port’s profile internationally...” Hacegaba said in the statement. A graduate of the University of Southern California, Hacegaba holds undergraduate and graduate degrees in economics, business administration and planning. He earned a doctorate in public administration from the University of La Verne in California. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Noel Hacegaba, chief operating officer of the Port of Long Beach, has been nominated to be the port’s new executive director effective Jan. 1. Hacegaba’s nomination was made Wednesday by the Long Beach Board of Harbor Commissioners; the harbor commission will formally vote on his appointment at a board meeting Monday. Hacegaba would replace current Executive Director Mario Cordero, who announced in October he would retire at year’s end . Hacegaba’s elevation to be Long Beach’s top executive would appear to be fait accompli. He has served in senior management positions at the port for the past 15 years, rising to his current role as chief operating officer. As COO, he oversees daily operations including commercial services, engineering, finance and administration, planning, environmental affairs and strategic advocacy. Harbor Commission President Frank Colonna called Hacegaba the “ideal choice” for the port’s top job. “Noel brings extensive experience managing all key port functions, deep knowledge of the goods movement industry and a collaborative leadership style that will serve the port well as we navigate future challenges and opportunities,” Colonna said in a statement. As COO, Hacegaba has negotiated several major business transactions, including the multibillion-dollar sales of Long Beach Container Terminal (LBCT) and Total Terminals International (TTI). “I am looking forward to working with our mayor, harbor commission and partners to accelerate our economic engine as we elevate the port’s profile internationally...” Hacegaba said in the statement. A graduate of the University of Southern California, Hacegaba holds undergraduate and graduate degrees in economics, business administration and planning. He earned a doctorate in public administration from the University of La Verne in California. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port News

North American ports

Hacegaba nominated to be Port of Long Beach executive director

<div class="phx-topic abstract-wrapper">XPO and Saia reported year-over-year increases in daily shipment volume in November, while ODFL raised its yield as shipment volumes dropped. </div>

XPO and Saia reported year-over-year increases in daily shipment volume in November, while ODFL raised its yield as shipment volumes dropped.

<div class="phx-topic">Less-than-truckload (LTL) carriers are beginning to see shipments pick up toward the end of the year, although there’s been little change in overall US freight demand. Both XPO and Saia, the fourth- and sixth-largest US LTL providers, respectively, reported a year-over-year gain in shipments in November, reversing months of declining volumes. Old Dominion Freight Line (ODFL), the second-largest US LTL provider, saw its daily volume drop 9.4% in November, but its revenue per hundredweight climbed higher. Excluding fuel surcharges, ODFL’s LTL yield was up 5.2% year over year in November, an indication of higher pricing and cost management, not a race to secure freight. XPO saw LTL shipments per day increase 2.2% in November, but weight per shipment dropped 3.2%, pulling down tonnage 5.4% year over year. Saia last month increased its shipments per day by 2.6% from a year earlier, while LTL weight per shipment fell 0.8%. The November numbers from three of the largest US LTL providers indicate a more stable market in the fourth quarter, with large LTL carriers largely maintaining their pricing discipline and protecting still-healthy profit margins. Some freight may be shifting from carriers reluctant to budge on price, and those carriers may not be unhappy to see that freight go, for now. The November data may also reflect slightly higher industrial output and the shift of consumer goods to stores pre-holidays. <h3>PPI takes a dip </h3>The US LTL producer price index (PPI) for September, released last week after being delayed by the US government shutdown, fell from an all-time high of 268.4 in August to 267, its first decline since May. That’s a potential sign of pricing moderation. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7a3e2c48-cc85-49d8-bc2c-3eb8ee3be3da"></dynamic-object></div>Still, the LTL PPI is 9.8% higher than September 2024 and 15.7% higher than July 2023 when LTL provider Yellow shut its doors and declared bankruptcy. Shippers have told the Journal of Commerce that LTL carriers are pushing them hard to protect the yield on their existing volume but are more willing to cut pricing on new business. Analysts call this “defending their turf” during a period of soft demand. An increase in US manufacturing output may have given XPO and Saia a boost in November, when the S&amp;P Global Purchasing Manager’s Index (PMI) for US manufacturing came in at 52.2, the fourth consecutive month of expansion. But that growth isn’t as solid as the four-month run might suggest; manufacturing output increased as companies brought in raw materials and inputs ahead of higher US tariffs. Production this fall outpaced manufacturing sales, leading to higher inventories. “For two successive months now, warehouses have filled with unsold stock to a degree not previously seen since comparable data were available in 2007,” Chris Williamson, chief business economist for S&amp;P Global, said in a statement. “This unplanned accumulation of stock is usually a precursor to reduced production in the coming months,” Williamson said. That signals fewer shipments coming down the road. The Institute for Supply Management (ISM) PMI has remained in contraction for the past nine months, coming in at 48.2 in November. S&amp;P Global is the parent company of the Journal of Commerce. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Less-than-truckload (LTL) carriers are beginning to see shipments pick up toward the end of the year, although there’s been little change in overall US freight demand. Both XPO and Saia, the fourth- and sixth-largest US LTL providers, respectively, reported a year-over-year gain in shipments in November, reversing months of declining volumes. Old Dominion Freight Line (ODFL), the second-largest US LTL provider, saw its daily volume drop 9.4% in November, but its revenue per hundredweight climbed higher. Excluding fuel surcharges, ODFL’s LTL yield was up 5.2% year over year in November, an indication of higher pricing and cost management, not a race to secure freight. XPO saw LTL shipments per day increase 2.2% in November, but weight per shipment dropped 3.2%, pulling down tonnage 5.4% year over year. Saia last month increased its shipments per day by 2.6% from a year earlier, while LTL weight per shipment fell 0.8%. The November numbers from three of the largest US LTL providers indicate a more stable market in the fourth quarter, with large LTL carriers largely maintaining their pricing discipline and protecting still-healthy profit margins. Some freight may be shifting from carriers reluctant to budge on price, and those carriers may not be unhappy to see that freight go, for now. The November data may also reflect slightly higher industrial output and the shift of consumer goods to stores pre-holidays. PPI takes a dip The US LTL producer price index (PPI) for September, released last week after being delayed by the US government shutdown, fell from an all-time high of 268.4 in August to 267, its first decline since May. That’s a potential sign of pricing moderation. Still, the LTL PPI is 9.8% higher than September 2024 and 15.7% higher than July 2023 when LTL provider Yellow shut its doors and declared bankruptcy. Shippers have told the Journal of Commerce that LTL carriers are pushing them hard to protect the yield on their existing volume but are more willing to cut pricing on new business. Analysts call this “defending their turf” during a period of soft demand. An increase in US manufacturing output may have given XPO and Saia a boost in November, when the S&P Global Purchasing Manager’s Index (PMI) for US manufacturing came in at 52.2, the fourth consecutive month of expansion. But that growth isn’t as solid as the four-month run might suggest; manufacturing output increased as companies brought in raw materials and inputs ahead of higher US tariffs. Production this fall outpaced manufacturing sales, leading to higher inventories. “For two successive months now, warehouses have filled with unsold stock to a degree not previously seen since comparable data were available in 2007,” Chris Williamson, chief business economist for S&P Global, said in a statement. “This unplanned accumulation of stock is usually a precursor to reduced production in the coming months,” Williamson said. That signals fewer shipments coming down the road. The Institute for Supply Management (ISM) PMI has remained in contraction for the past nine months, coming in at 48.2 in November. S&P Global is the parent company of the Journal of Commerce. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

Large LTL carriers make some volume gains, but market still soft

<div class="phx-topic abstract-wrapper">Despite lower volumes and elevated capacity, carriers have managed to keep rates at acceptable levels of late in part by favoring shorter, more frequent general rate increases. </div>

Despite lower volumes and elevated capacity, carriers have managed to keep rates at acceptable levels of late in part by favoring shorter, more frequent general rate increases.

<div class="phx-topic">Container lines over the past two months have been able to keep spot rates from crashing in the eastbound trans-Pacific despite US imports from Asia falling and while they deployed significantly more tonnage in the same period. But that high-wire act will become increasingly precarious over the next two months. Import volume declines are expected to accelerate over the next 60 days as forwarders bemoan a deep lull in new bookings due to shipper uncertainty. Yet carriers plan to keep capacity elevated, with tonnage from Asia to the US West Coast set to rise almost 13% year over year in January to hit what would be close to a 37-month high, according to data from Xeneta’s eeSea. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6127952_0.1.jpg"></img></div>The additional tonnage comes ahead of Lunar New Year in mid-February, but forwarders are skeptical that the historical shipping rush before Chinese factories slow or halt production for the celebrations will have much oomph. Ocean tonnage from Asia to the US East and Gulf coasts is set to hit a two-year high in January, up 14% from a year ago, according to eeSea. The spot rate from China to the US West Coast hit its 2025 low point on Oct. 3 at $1,300 per FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. In the two months since, carriers have been able to hold that line, with the rate bouncing as high as $2,220 in early November before retreating. It was at $1,500 per FEU as of Tuesday. Carriers have been able to avoid a sub-$1,300 market by resisting old urges to slash freight-all-kinds (FAK) rates. Instead, carriers have watched prices drift down and then reacted by adding some pep via general rate increases (GRIs) that were just successful enough to keep spot and FAK rates from collapsing. At the same time, liners have been protecting their individual market shares by offering so-called bullet rates to non-vessel-operating common carriers (NVOs). <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e5c8a2a0-9aa5-4787-bbed-bf4b7a9f9677"></dynamic-object></div>Rather than announcing a large $1,000 GRI on the first and 15th of each month, only to see the rate deteriorate within days, some carriers are coming in with smaller, rapid-fire GRIs almost weekly. They are able to do that under filing requirements of the Federal Maritime Commission (FMC). The FMC requires that carriers file a GRI with 30-day advance notice when attempting to raise spot rates. However, when dropping the intended GRI, the lower rate takes effect immediately upon filing, several forwarders said. For example, one alliance carrier that had filed for a large GRI effective Dec. 1 informed customers through its rate sheet of the following staggered schedule of smaller increases: Dec. 1, a $200 GRI to raise the spot rate to $1,900 per FEU to the West Coast, expiring Dec. 7; a second $200 GRI on Dec. 8, raising the rate to $2,100, expiring Dec. 14; another $200 GRI on Dec. 15, expiring Dec. 25, that raises the spot rate to $2,300. In that way, the carrier did not attempt to implement the $1,000 GRI that was supposed to take effect on Dec. 1, but rather is attempting to secure a series of $200 GRIs through the end of the month. “It’s crazy,” a carrier executive told the Journal of Commerce Tuesday. “It used to be a GRI every two weeks. Now [some carriers] are taking a week-to-week approach.” Trans-Pacific container lines are “conflicted,” the carrier source said. As a group, they want to minimize pricing damage in the current soft market, which many industry sources are forecasting will last into early 2026. But at the same time, they don’t want to individually lose market share, he said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8c13a3e-9f5a-412f-8741-adbf5e1a7779"></dynamic-object></div>Most carriers, be they alliance members or independents, continue to post GRIs twice each month, while at the same time they are offering discounted, or bullet, rates several hundred dollars lower on the same trade lanes. The bullet rates, also known as special commodity rates or voyage-specific rates, are available primarily for carriers’ largest customers, a forwarder told the Journal of Commerce. For example, while the posted spot/FAK rate from China to the West Coast on Tuesday was $1,500 per FEU, according to Platts, a forwarder told the Journal of Commerce, “I’ve got bullet rates of $1,350.” While carriers generally reserve bullet rates for their larger forwarder customers, there is a way around that barrier as well. A number of smaller forwarders participate in co-loading arrangements with a master co-loader, so they also have access to the lowest bullet rates. “We have co-loader rates that every day defy the GRIs,” said Ben Coleman, president of the forwarder Teampower Logistics. “We get far better rates from co-loaders than the posted rates.” The need for carriers to keep some semblance of a pricing floor will become increasingly urgent as trans-Pacific service contract negotiations intensify though the winter. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Executive Editor Mark Szakonyi contributed to this report. </div>

Container lines over the past two months have been able to keep spot rates from crashing in the eastbound trans-Pacific despite US imports from Asia falling and while they deployed significantly more tonnage in the same period. But that high-wire act will become increasingly precarious over the next two months. Import volume declines are expected to accelerate over the next 60 days as forwarders bemoan a deep lull in new bookings due to shipper uncertainty. Yet carriers plan to keep capacity elevated, with tonnage from Asia to the US West Coast set to rise almost 13% year over year in January to hit what would be close to a 37-month high, according to data from Xeneta’s eeSea. The additional tonnage comes ahead of Lunar New Year in mid-February, but forwarders are skeptical that the historical shipping rush before Chinese factories slow or halt production for the celebrations will have much oomph. Ocean tonnage from Asia to the US East and Gulf coasts is set to hit a two-year high in January, up 14% from a year ago, according to eeSea. The spot rate from China to the US West Coast hit its 2025 low point on Oct. 3 at $1,300 per FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global. In the two months since, carriers have been able to hold that line, with the rate bouncing as high as $2,220 in early November before retreating. It was at $1,500 per FEU as of Tuesday. Carriers have been able to avoid a sub-$1,300 market by resisting old urges to slash freight-all-kinds (FAK) rates. Instead, carriers have watched prices drift down and then reacted by adding some pep via general rate increases (GRIs) that were just successful enough to keep spot and FAK rates from collapsing. At the same time, liners have been protecting their individual market shares by offering so-called bullet rates to non-vessel-operating common carriers (NVOs). Rather than announcing a large $1,000 GRI on the first and 15th of each month, only to see the rate deteriorate within days, some carriers are coming in with smaller, rapid-fire GRIs almost weekly. They are able to do that under filing requirements of the Federal Maritime Commission (FMC). The FMC requires that carriers file a GRI with 30-day advance notice when attempting to raise spot rates. However, when dropping the intended GRI, the lower rate takes effect immediately upon filing, several forwarders said. For example, one alliance carrier that had filed for a large GRI effective Dec. 1 informed customers through its rate sheet of the following staggered schedule of smaller increases: Dec. 1, a $200 GRI to raise the spot rate to $1,900 per FEU to the West Coast, expiring Dec. 7; a second $200 GRI on Dec. 8, raising the rate to $2,100, expiring Dec. 14; another $200 GRI on Dec. 15, expiring Dec. 25, that raises the spot rate to $2,300. In that way, the carrier did not attempt to implement the $1,000 GRI that was supposed to take effect on Dec. 1, but rather is attempting to secure a series of $200 GRIs through the end of the month. “It’s crazy,” a carrier executive told the Journal of Commerce Tuesday. “It used to be a GRI every two weeks. Now [some carriers] are taking a week-to-week approach.” Trans-Pacific container lines are “conflicted,” the carrier source said. As a group, they want to minimize pricing damage in the current soft market, which many industry sources are forecasting will last into early 2026. But at the same time, they don’t want to individually lose market share, he said. Most carriers, be they alliance members or independents, continue to post GRIs twice each month, while at the same time they are offering discounted, or bullet, rates several hundred dollars lower on the same trade lanes. The bullet rates, also known as special commodity rates or voyage-specific rates, are available primarily for carriers’ largest customers, a forwarder told the Journal of Commerce. For example, while the posted spot/FAK rate from China to the West Coast on Tuesday was $1,500 per FEU, according to Platts, a forwarder told the Journal of Commerce, “I’ve got bullet rates of $1,350.” While carriers generally reserve bullet rates for their larger forwarder customers, there is a way around that barrier as well. A number of smaller forwarders participate in co-loading arrangements with a master co-loader, so they also have access to the lowest bullet rates. “We have co-loader rates that every day defy the GRIs,” said Ben Coleman, president of the forwarder Teampower Logistics. “We get far better rates from co-loaders than the posted rates.” The need for carriers to keep some semblance of a pricing floor will become increasingly urgent as trans-Pacific service contract negotiations intensify though the winter. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Executive Editor Mark Szakonyi contributed to this report.

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Trans-Pacific carriers tweak pricing strategy to keep rates from collapsing

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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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Filling the Supply Chain Education Gap with LTL Education Courses

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