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<div class="phx-topic abstract-wrapper">The roll-on, roll-off shipping market is relatively upbeat after emerging surprisingly unscathed from a year of tough economic and geopolitical challenges. The outlook for pure car carriers, however, is looking less optimistic against a backdrop of rising supply and subdued demand for automobiles.</div>

The roll-on, roll-off shipping market is relatively upbeat after emerging surprisingly unscathed from a year of tough economic and geopolitical challenges. The outlook for pure car carriers, however, is looking less optimistic against a backdrop of rising supply and subdued demand for automobiles.

<div class="phx-topic">The roll-on, roll-off shipping market is relatively upbeat after emerging surprisingly unscathed from a year of tough economic and geopolitical challenges. The outlook for pure car carriers, however, is looking less optimistic against a backdrop of rising supply and subdued global demand for automobiles and shrinking shipments to previously fast-growing markets such as Russia, Nigeria and Brazil because of collapsing oil revenue and depreciating currencies.These niche markets rarely make headlines in an industry dominated by container ships, tankers and bulk carriers. When they do, it’s usually because of negative news such as last October’s sinking of the El Faro off the Bahamas, with the loss of 33 lives and the antitrust fines imposed on large car carriers by regulators in several markets — including China, the U.S. and South Africa.Car carriers have had to cope with market conditions that have been just as volatile as those for their bigger industry counterparts and are bracing for a new round of consolidation that likely will result in some big names joining forces and others shutting down.From a wider ro-ro perspective, the introduction of the low-sulfur fuel regulation in the primary markets in the North Sea, the English Channel and the Baltic Sea in January 2015 was viewed as a game-changer that would “shake the sector in its foundations,” according to ship broker and consultant Barry Rogliano Salles.But it didn’t, largely because low bunker fuel prices put a cap on operating costs, ruling out the need to raise freight rates significantly at the risk of losing business to rival modes, notably trucking.“Overall, the industry showed good resilience and adapted well to the new market conditions riding on the wave of solid cargo flows in North Europe, the western Mediterranean and Turkey,” Paris-based BRS said recently.The industry’s fears that the new emission regulations would lead to bankruptcies, route closures and the loss of cargo to trucking in the key North European market never materialized, though the recent modest rise in oil prices could still impact inefficient operators. For now, the outlook appears relatively optimistic, with the largest companies confident they can repeat 2015’s healthy profits.DFDS, one of Europe’s largest ro-ro carriers, boosted operating profit 73 percent to 1.2 billion kroner ($223 million) in 2015 on an 8 percent increase in freight traffic across its extensive network, higher capacity utilization on the U.K.-France route and improved operational efficiency helped by the installation of so-called scrubbers on some vessels to meet the new low-sulfur limits.The Danish group, which operates approximately 55 ships and shut down some routes ahead of the new emissions regime, expects traffic to grow further this year, while revenue, excluding bunker surcharges, is forecast to increase 6 percent.The rebound in cargo was highlighted by a 10.1 percent surge in ro-ro volume at Rotterdam, Europe’s largest port, to 22.1 million tons in 2015. Driving that increase was solid economic growth in the U.K. — Europe’s major ro-ro market — and the diversion of traffic from Calais, France, because of strikes, breakdowns in the Channel Tunnel and disruptions caused by migrants seeking to enter Britain from the French port. Rotterdam’s container traffic, by contrast, dipped 0.5 percent, and conventional and breakbulk volume declined 5.5 percent.This year got off to a mixed start, with traffic growth varying from market to market. The Port of Dublin posted a 7.1 percent increase in ro-ro traffic in the first quarter, reflecting strong traffic across Irish Sea routes. But Antwerp’s ro-ro traffic crept up just 0.4 percent to 1.1 million metric tons after growing 4.1 percent in 2015. The Mediterranean market is looking reasonably healthy, too. Routes linking Turkey, France and Italy are winning traffic from trucks, which face increasing disruption on routes through the Balkans because of the waves of Syrian migrants entering the European Union via Greece.The scenario is different in other, more peripheral, markets in North Africa, the Middle East and the Black Sea because of political upheaval and slumping crude prices that have slashed the purchasing power of oil-producing nations. The previously vibrant Libyan ro-ro market, for example, nearly collapsed because of security concerns. Experienced operators such as Italy’s Grimaldi Group and Ignazio Messina are still running services on a regular basis, however.Ro-ro activity in the Black Sea, which took a hit from the Crimea crisis, suffered another major setback toward the end of 2015 when the Kremlin imposed import restrictions on Turkish products in retaliation to the shooting down of a Russian fighter jet by Turkish planes. This hit the fruit and vegetable trade between the two countries, the backbone of the Black Sea ro-ro market.The Algerian market suffered a double blow from a restriction on vehicle imports and the plunge in the nation’s oil and gas earnings, resulting in services to and from France and Italy being abandoned or downsized.Traffic also is declining on the Europe-West Africa route because of falling demand linked to lower oil revenue and import restrictions in some markets. Just three lines currently operate ro-ro and ro-ro/container services to the region: Grimaldi, the dominant global market leader with about 100 vessels; Spain’s Marguisa; and recent arrival MNM Shipping.Grimaldi has enhanced its reputation as a ro-ro pioneer with its Atlantic Container Line subsidiary preparing to deploy the second of five fourth-generation container/ro-ro vessels. The Atlantic Sail was delivered eight months later than scheduled, partly because of last-minute design adjustments based on the operational experience of the first G4 vessel, the Atlantic Star, which began operations on the North Atlantic in December.The 57,600-deadweight-ton vessels are the largest con/ro-ros afloat with a container capacity of 3,800 twenty-foot-equivalent units, compared with the 1,850 TEUs of the 30-year-old G3 vessels they are replacing, and a ro-ro capacity of 28,900 square meters, compared with 18,900 square meters.ACL is expected to announce a revised rotation, including the addition of a southern Atlantic port, when all five of the Chinese-built vessels are delivered by the end of this year. For now, the company is chartering slots on five Hapag-Lloyd trans-Atlantic services and recently struck a deal to buy space on the Europe-New York leg of Mediterranean Shipping Co.’s Ecuador Express until the end of the year.The ro-ro orderbook is growing only slightly, with just 13 vessels of a combined capacity of 54,500 lane meters delivered in 2015, up from 10 ships of 40,700 lane meters a year earlier. Again, the majority of the vessels were large deep-sea con/ro-ro units — four for Grimaldi, three for Messina, and one each for ACL, Hawaii-based shipping line Pasha and one for a charter owner, BRS noted.Eleven vessels are scheduled for delivery this year, including four for ACL, two for Vancouver, British Columbia-based Seaspan, and one each for Nordana, Australia’s Searoad and “K” Line of Japan.Overall, the global ro-ro fleet is shrinking, with only eight vessels ordered in 2015 despite shipyards touting low prices.The outlook, however, is mixed and varies between regions. “Although the ro-ro industry will remain highly Euro-centric and therefore somewhat sheltered from major shocks, we expect eventual spill-over effects to be felt across the board,” BRS said. “We also remain extremely concerned about the detrimental effects of geopolitical instability in the Near East and North Africa on the demand side.”After several years of low charter rates and intense scrapping activity that allowed only the strongest companies to survive, the ro-ro sector is becoming a two-tier market, according to BRS. “A select number of owners/operators with strong balance sheets and financial power to invest in new tonnage will continue to dominate, leading to further consolidation,” it said.One of those operators, Antwerp-based Colbelfret, has ordered two vessels with capacities of about 7,700 lane meters, double the size of its current largest ships, and capable of running on liquefied natural gas. The company also is investing approximately $110 million to equip its terminals to handle the mega-ships.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5253084_1.0.jpg"></img>l</div>Meanwhile, car carriers face more bearish times, according to BRS. “2015 will go down in history as the year in which the sector took two steps back, eroding most of the progress that had been achieved since the Lehman Brothers-induced global financial crisis,” it said.Carriers idled some 20 ships at the end of 2015, mainly in the Asia-Pacific region, because of weak demand that cut charter rates 30 percent year-over-year and began to impact the market for larger tonnage.The outlook for the global light vehicle market this year is subdued as stalling or declining sales in emerging markets offset rising demand in developed economies. “As a result, we do not expect that demand for tonnage will rebound, and even less that it will be able to do so to the extent of employing all the idle capacity,” BRS said. “We therefore fear that the sector’s regression will continue into 2016.”Of the 50 ships ordered last year, 22 have not yet secured a charter. Added to earlier speculative orders, that rises to 26 ships, or 30 percent of the total order book.The big car carrier operators, buttressed by long-term contracts with major manufacturers spanning global routes, are sanguine about the future. “The car and ro-ro markets are expected to remain challenging, with pressure on profitability,” said Thomas Wilhelmsen, CEO of Norway’s Wilh. Wilhelmsen Holding, one of the major car carriers, which now generates more than 50 percent of its profit from maritime services and logistics. “We are positioned to grow organically and through mergers and acquisitions. We are looking for new opportunities. We have a strong balance sheet. Our liquid funds combined with listed entities give us the financial flexibility to act on opportunities.”Øyvind Ervik, the COO of Short Sea and Logistics at Oslo-based Höegh Autoliners: “The year ahead is framed with uncertainty, but there are opportunities ahead for the well-positioned players.”Many shipping sectors, he said, face the need for increased scrapping of tonnage to reduce overcapacity. “The PCTC (pure car and truck carrier) industry is, however, in a better position than many other sectors,” Ervik added. “With appropriate rearrangement of smaller tonnage for deep-sea to short-sea and recycling of old and less-efficient vessels, the industry will give way to the new, larger and smarter vessels without much implication to total deep-sea capacity.”Höegh, meanwhile, continues to expand its operations. It began monthly sailings to Cartagena, Colombia, from Europe, in February, to strengthen its foothold in the Caribbean and Latin American market. It also acquired SC Lines’ Caribbean service to boost its short-sea network that links the Colombian port, Port Everglades, the Bahamas, Jamaica, the Dominican Republic, Haiti, Mexico and Panama.Business continues on for both the ro-ro and car carrier markets, but change is on the way as consolidation becomes ever more pressing. Contact Bruce Barnard at <a href="mailto:brucebarnard47@hotmail.com">brucebarnard47@hotmail.com</a>.</div>

The roll-on, roll-off shipping market is relatively upbeat after emerging surprisingly unscathed from a year of tough economic and geopolitical challenges. The outlook for pure car carriers, however, is looking less optimistic against a backdrop of rising supply and subdued global demand for automobiles and shrinking shipments to previously fast-growing markets such as Russia, Nigeria and Brazil because of collapsing oil revenue and depreciating currencies. These niche markets rarely make headlines in an industry dominated by container ships, tankers and bulk carriers. When they do, it’s usually because of negative news such as last October’s sinking of the El Faro off the Bahamas, with the loss of 33 lives and the antitrust fines imposed on large car carriers by regulators in several markets — including China, the U.S. and South Africa. Car carriers have had to cope with market conditions that have been just as volatile as those for their bigger industry counterparts and are bracing for a new round of consolidation that likely will result in some big names joining forces and others shutting down. From a wider ro-ro perspective, the introduction of the low-sulfur fuel regulation in the primary markets in the North Sea, the English Channel and the Baltic Sea in January 2015 was viewed as a game-changer that would “shake the sector in its foundations,” according to ship broker and consultant Barry Rogliano Salles. But it didn’t, largely because low bunker fuel prices put a cap on operating costs, ruling out the need to raise freight rates significantly at the risk of losing business to rival modes, notably trucking. “Overall, the industry showed good resilience and adapted well to the new market conditions riding on the wave of solid cargo flows in North Europe, the western Mediterranean and Turkey,” Paris-based BRS said recently. The industry’s fears that the new emission regulations would lead to bankruptcies, route closures and the loss of cargo to trucking in the key North European market never materialized, though the recent modest rise in oil prices could still impact inefficient operators. For now, the outlook appears relatively optimistic, with the largest companies confident they can repeat 2015’s healthy profits. DFDS, one of Europe’s largest ro-ro carriers, boosted operating profit 73 percent to 1.2 billion kroner ($223 million) in 2015 on an 8 percent increase in freight traffic across its extensive network, higher capacity utilization on the U.K.-France route and improved operational efficiency helped by the installation of so-called scrubbers on some vessels to meet the new low-sulfur limits. The Danish group, which operates approximately 55 ships and shut down some routes ahead of the new emissions regime, expects traffic to grow further this year, while revenue, excluding bunker surcharges, is forecast to increase 6 percent. The rebound in cargo was highlighted by a 10.1 percent surge in ro-ro volume at Rotterdam, Europe’s largest port, to 22.1 million tons in 2015. Driving that increase was solid economic growth in the U.K. — Europe’s major ro-ro market — and the diversion of traffic from Calais, France, because of strikes, breakdowns in the Channel Tunnel and disruptions caused by migrants seeking to enter Britain from the French port. Rotterdam’s container traffic, by contrast, dipped 0.5 percent, and conventional and breakbulk volume declined 5.5 percent. This year got off to a mixed start, with traffic growth varying from market to market. The Port of Dublin posted a 7.1 percent increase in ro-ro traffic in the first quarter, reflecting strong traffic across Irish Sea routes. But Antwerp’s ro-ro traffic crept up just 0.4 percent to 1.1 million metric tons after growing 4.1 percent in 2015. The Mediterranean market is looking reasonably healthy, too. Routes linking Turkey, France and Italy are winning traffic from trucks, which face increasing disruption on routes through the Balkans because of the waves of Syrian migrants entering the European Union via Greece. The scenario is different in other, more peripheral, markets in North Africa, the Middle East and the Black Sea because of political upheaval and slumping crude prices that have slashed the purchasing power of oil-producing nations. The previously vibrant Libyan ro-ro market, for example, nearly collapsed because of security concerns. Experienced operators such as Italy’s Grimaldi Group and Ignazio Messina are still running services on a regular basis, however. Ro-ro activity in the Black Sea, which took a hit from the Crimea crisis, suffered another major setback toward the end of 2015 when the Kremlin imposed import restrictions on Turkish products in retaliation to the shooting down of a Russian fighter jet by Turkish planes. This hit the fruit and vegetable trade between the two countries, the backbone of the Black Sea ro-ro market. The Algerian market suffered a double blow from a restriction on vehicle imports and the plunge in the nation’s oil and gas earnings, resulting in services to and from France and Italy being abandoned or downsized. Traffic also is declining on the Europe-West Africa route because of falling demand linked to lower oil revenue and import restrictions in some markets. Just three lines currently operate ro-ro and ro-ro/container services to the region: Grimaldi, the dominant global market leader with about 100 vessels; Spain’s Marguisa; and recent arrival MNM Shipping. Grimaldi has enhanced its reputation as a ro-ro pioneer with its Atlantic Container Line subsidiary preparing to deploy the second of five fourth-generation container/ro-ro vessels. The Atlantic Sail was delivered eight months later than scheduled, partly because of last-minute design adjustments based on the operational experience of the first G4 vessel, the Atlantic Star, which began operations on the North Atlantic in December. The 57,600-deadweight-ton vessels are the largest con/ro-ros afloat with a container capacity of 3,800 twenty-foot-equivalent units, compared with the 1,850 TEUs of the 30-year-old G3 vessels they are replacing, and a ro-ro capacity of 28,900 square meters, compared with 18,900 square meters. ACL is expected to announce a revised rotation, including the addition of a southern Atlantic port, when all five of the Chinese-built vessels are delivered by the end of this year. For now, the company is chartering slots on five Hapag-Lloyd trans-Atlantic services and recently struck a deal to buy space on the Europe-New York leg of Mediterranean Shipping Co.’s Ecuador Express until the end of the year. The ro-ro orderbook is growing only slightly, with just 13 vessels of a combined capacity of 54,500 lane meters delivered in 2015, up from 10 ships of 40,700 lane meters a year earlier. Again, the majority of the vessels were large deep-sea con/ro-ro units — four for Grimaldi, three for Messina, and one each for ACL, Hawaii-based shipping line Pasha and one for a charter owner, BRS noted. Eleven vessels are scheduled for delivery this year, including four for ACL, two for Vancouver, British Columbia-based Seaspan, and one each for Nordana, Australia’s Searoad and “K” Line of Japan. Overall, the global ro-ro fleet is shrinking, with only eight vessels ordered in 2015 despite shipyards touting low prices. The outlook, however, is mixed and varies between regions. “Although the ro-ro industry will remain highly Euro-centric and therefore somewhat sheltered from major shocks, we expect eventual spill-over effects to be felt across the board,” BRS said. “We also remain extremely concerned about the detrimental effects of geopolitical instability in the Near East and North Africa on the demand side.” After several years of low charter rates and intense scrapping activity that allowed only the strongest companies to survive, the ro-ro sector is becoming a two-tier market, according to BRS. “A select number of owners/operators with strong balance sheets and financial power to invest in new tonnage will continue to dominate, leading to further consolidation,” it said. One of those operators, Antwerp-based Colbelfret, has ordered two vessels with capacities of about 7,700 lane meters, double the size of its current largest ships, and capable of running on liquefied natural gas. The company also is investing approximately $110 million to equip its terminals to handle the mega-ships. l Meanwhile, car carriers face more bearish times, according to BRS. “2015 will go down in history as the year in which the sector took two steps back, eroding most of the progress that had been achieved since the Lehman Brothers-induced global financial crisis,” it said. Carriers idled some 20 ships at the end of 2015, mainly in the Asia-Pacific region, because of weak demand that cut charter rates 30 percent year-over-year and began to impact the market for larger tonnage. The outlook for the global light vehicle market this year is subdued as stalling or declining sales in emerging markets offset rising demand in developed economies. “As a result, we do not expect that demand for tonnage will rebound, and even less that it will be able to do so to the extent of employing all the idle capacity,” BRS said. “We therefore fear that the sector’s regression will continue into 2016.” Of the 50 ships ordered last year, 22 have not yet secured a charter. Added to earlier speculative orders, that rises to 26 ships, or 30 percent of the total order book. The big car carrier operators, buttressed by long-term contracts with major manufacturers spanning global routes, are sanguine about the future. “The car and ro-ro markets are expected to remain challenging, with pressure on profitability,” said Thomas Wilhelmsen, CEO of Norway’s Wilh. Wilhelmsen Holding, one of the major car carriers, which now generates more than 50 percent of its profit from maritime services and logistics. “We are positioned to grow organically and through mergers and acquisitions. We are looking for new opportunities. We have a strong balance sheet. Our liquid funds combined with listed entities give us the financial flexibility to act on opportunities.” Øyvind Ervik, the COO of Short Sea and Logistics at Oslo-based Höegh Autoliners: “The year ahead is framed with uncertainty, but there are opportunities ahead for the well-positioned players.” Many shipping sectors, he said, face the need for increased scrapping of tonnage to reduce overcapacity. “The PCTC (pure car and truck carrier) industry is, however, in a better position than many other sectors,” Ervik added. “With appropriate rearrangement of smaller tonnage for deep-sea to short-sea and recycling of old and less-efficient vessels, the industry will give way to the new, larger and smarter vessels without much implication to total deep-sea capacity.” Höegh, meanwhile, continues to expand its operations. It began monthly sailings to Cartagena, Colombia, from Europe, in February, to strengthen its foothold in the Caribbean and Latin American market. It also acquired SC Lines’ Caribbean service to boost its short-sea network that links the Colombian port, Port Everglades, the Bahamas, Jamaica, the Dominican Republic, Haiti, Mexico and Panama. Business continues on for both the ro-ro and car carrier markets, but change is on the way as consolidation becomes ever more pressing. Contact Bruce Barnard at brucebarnard47@hotmail.com .

Roll-on, roll-off shipping weathers economic storm

<div class="phx-topic abstract-wrapper">While some carriers reported a positive outlook for freight stemming from power generation and mining projects, others noted that demand for offshore wind has been dented by regulatory upheaval. </div>

While some carriers reported a positive outlook for freight stemming from power generation and mining projects, others noted that demand for offshore wind has been dented by regulatory upheaval.

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<div class="phx-topic">The recent postponement of the International Maritime Organization’s (IMO) net-zero emissions framework has compounded ongoing market uncertainty amid unpredictable US trade and tariff policies, operators in the project cargo and multipurpose vessel (MPV) sector say. Although the One World Shipbrokers’ Market Sentiment Index (MSI) rose marginally from 53 to 53.3 in the third quarter, its first increase of 2025, the 27 MPV carriers surveyed for the benchmark indicator reported increasing uncertainty amid a strong outlook for freight demand, said Justin Archard, managing partner at One World Shipbrokers. “The combination of regulations changing frequently in the US, together with increasingly arbitrary power in policy making, means carriers are wedged between a short-term market which is sitting on its hands and hoping a full-blown trade war does not erupt, and a longer-term market that is offering increasing project cargoes,” Archard told the Journal of Commerce. And with the IMO <a href="https://www.joc.com/article/delay-in-imo-decarbonization-plans-robs-green-fuel-investors-of-certainty-6101250">delaying a full vote on the net-zero framework</a> for at least a year, thanks in large part to US opposition, ship owners and fuel suppliers lack the certainty they need to fund the transition to net-zero fuels, he added. “Rather than moving toward greater clarity, companies are finding it harder to anticipate the rules and frameworks that affect their operations,” an MPV carrier said in comments for the MSI report. “The absence of consistency and transparency continues to delay projects and decision-making, as organizations hesitate amid ongoing ambiguity.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="69dec518-45f6-4724-a701-dc94e23bec33"></dynamic-object></div>While some carriers reported a positive outlook for freight stemming from power generation and mining projects, others noted that demand for offshore wind has been dented by regulatory upheaval. “The Trump administration has pulled funding for wind projects on federal land, casting a pall over European wind project developers,” Archard said. In addition, both Denmark and Germany suspended offshore wind auctions over the summer when no bids came forward. Contact Felicity Landon at <a href="mailto:felicity@felicitylandon.com">felicity@felicitylandon.com</a>. </div>

The recent postponement of the International Maritime Organization’s (IMO) net-zero emissions framework has compounded ongoing market uncertainty amid unpredictable US trade and tariff policies, operators in the project cargo and multipurpose vessel (MPV) sector say. Although the One World Shipbrokers’ Market Sentiment Index (MSI) rose marginally from 53 to 53.3 in the third quarter, its first increase of 2025, the 27 MPV carriers surveyed for the benchmark indicator reported increasing uncertainty amid a strong outlook for freight demand, said Justin Archard, managing partner at One World Shipbrokers. “The combination of regulations changing frequently in the US, together with increasingly arbitrary power in policy making, means carriers are wedged between a short-term market which is sitting on its hands and hoping a full-blown trade war does not erupt, and a longer-term market that is offering increasing project cargoes,” Archard told the Journal of Commerce. And with the IMO delaying a full vote on the net-zero framework for at least a year, thanks in large part to US opposition, ship owners and fuel suppliers lack the certainty they need to fund the transition to net-zero fuels, he added. “Rather than moving toward greater clarity, companies are finding it harder to anticipate the rules and frameworks that affect their operations,” an MPV carrier said in comments for the MSI report. “The absence of consistency and transparency continues to delay projects and decision-making, as organizations hesitate amid ongoing ambiguity.” While some carriers reported a positive outlook for freight stemming from power generation and mining projects, others noted that demand for offshore wind has been dented by regulatory upheaval. “The Trump administration has pulled funding for wind projects on federal land, casting a pall over European wind project developers,” Archard said. In addition, both Denmark and Germany suspended offshore wind auctions over the summer when no bids came forward. Contact Felicity Landon at felicity@felicitylandon.com .

Rising MSI belies heightened uncertainty in multipurpose vessel sector

<div class="phx-topic abstract-wrapper">While most of the carrier’s vessels continue to be diverted around southern Africa, the backhaul rerouting of two Ocean Alliance vessels through the Suez suggests security concerns may be diminishing. </div>

While most of the carrier’s vessels continue to be diverted around southern Africa, the backhaul rerouting of two Ocean Alliance vessels through the Suez suggests security concerns may be diminishing.

<div class="phx-topic">CMA CGM appears to be testing the feasibility of a return to Red Sea transits with two of its Ocean Alliance megaships returning to Asia via the Suez Canal, the first alliance services to pass through the conflict region in two years. The 17,859-TEU CMA CGM Benjamin Franklin, deployed on the NEU4 service, has turned into the Mediterranean on its backhaul eastbound leg to Asia, analyst Linerlytica <a href="https://www.linkedin.com/company/linerlytica/posts/?feedView=all">wrote in a LinkedIn post Thursday</a>. Linerlytica noted that the 23,112-TEU CMA CGM Sorbonne, which operates on the Ocean Alliance’s NEU5 service, was also heading for the Mediterranean on its eastbound leg. Asked whether CMA CGM was testing the waters for a potential return to Red Sea and Suez Canal transits, a spokesperson said the carrier was “closely monitoring developments in the region,” but most of the group’s vessels continue to be rerouted via the Cape of Good Hope in southern Africa. “CMA CGM does not plan to resume transits through the Suez Canal on a large scale in the short term,” the spokesperson told the Journal of Commerce, adding the caveat: “unless security conditions allow it.” Houthi militants in Yemen began attacking commercial shipping in late 2023 in support of Palestinians in Gaza, forcing carriers to divert around southern Africa and adding significant time to journeys that have used up an estimated 7% of global capacity. While a ceasefire between Israel and Hamas has been in effect since Oct. 9, the situation in Gaza remains volatile. A previous ceasefire in January lasted two months before Israeli airstrikes resumed. While CMA CGM’s two alliance megaships prepare to head through the Red Sea, the carrier has also been expanding its REX2 China-Red Sea service and its wholly operated weekly Medex service connecting India and the Middle East with the Mediterranean. Ships on both services will travel through the Houthi-controlled waters. The CMA CGM spokesperson said while the carrier “hopes for a return to stability and security for all, the group’s top priority remains the safety of its seafarers, its vessels, and its customers’ cargo.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

CMA CGM appears to be testing the feasibility of a return to Red Sea transits with two of its Ocean Alliance megaships returning to Asia via the Suez Canal, the first alliance services to pass through the conflict region in two years. The 17,859-TEU CMA CGM Benjamin Franklin, deployed on the NEU4 service, has turned into the Mediterranean on its backhaul eastbound leg to Asia, analyst Linerlytica wrote in a LinkedIn post Thursday . Linerlytica noted that the 23,112-TEU CMA CGM Sorbonne, which operates on the Ocean Alliance’s NEU5 service, was also heading for the Mediterranean on its eastbound leg. Asked whether CMA CGM was testing the waters for a potential return to Red Sea and Suez Canal transits, a spokesperson said the carrier was “closely monitoring developments in the region,” but most of the group’s vessels continue to be rerouted via the Cape of Good Hope in southern Africa. “CMA CGM does not plan to resume transits through the Suez Canal on a large scale in the short term,” the spokesperson told the Journal of Commerce, adding the caveat: “unless security conditions allow it.” Houthi militants in Yemen began attacking commercial shipping in late 2023 in support of Palestinians in Gaza, forcing carriers to divert around southern Africa and adding significant time to journeys that have used up an estimated 7% of global capacity. While a ceasefire between Israel and Hamas has been in effect since Oct. 9, the situation in Gaza remains volatile. A previous ceasefire in January lasted two months before Israeli airstrikes resumed. While CMA CGM’s two alliance megaships prepare to head through the Red Sea, the carrier has also been expanding its REX2 China-Red Sea service and its wholly operated weekly Medex service connecting India and the Middle East with the Mediterranean. Ships on both services will travel through the Houthi-controlled waters. The CMA CGM spokesperson said while the carrier “hopes for a return to stability and security for all, the group’s top priority remains the safety of its seafarers, its vessels, and its customers’ cargo.” Contact Greg Knowler at greg.knowler@spglobal.com .

CMA CGM alliance megaships test Red Sea waters on return to Asia

<div class="phx-topic abstract-wrapper">But the state will pass, for now, on any proposals being pushed by port stakeholders to raise the height of the Vincent Thomas Bridge, a move that would allow bigger vessels to call at three of the port’s terminals.</div>

But the state will pass, for now, on any proposals being pushed by port stakeholders to raise the height of the Vincent Thomas Bridge, a move that would allow bigger vessels to call at three of the port’s terminals.

<div class="phx-topic">The redecking of the Vincent Thomas Bridge in Los Angeles harbor will start early next year as planned, while an effort by the port and terminal operators to raise the clearance of the span to facilitate the passage of super post-Panamax container ships is looking unlikely in the short term. The California State Transportation Agency (CalSTA) told port stakeholders over the past two weeks it is paramount that redecking work begin soon on the 63-year-old bridge before any attempt is made to raise the height of the structure, according to Mike Jacob, president of the Pacific Merchant Shipping Association (PMSA). Jacob said PMSA, which represents shipping lines and terminal operators, is onboard with the agency in this matter. “The funding is there [for the redecking],” he said. “The engineering is done. It received environmental clearance.” CalSTA, the cabinet level agency that oversees transportation-related departments, said the state has access to hundreds of millions of dollars in federal funds for the California Department of Transportation (Caltrans) to complete the necessary structural and safety repairs of the bridge. In a statement Tuesday to the Journal of Commerce regarding the possibility of raising the height of the Vincent Thomas Bridge, CalSTA said it “welcomes continued discussions to a path forward for that possibility while we work to make sure the bridge is structurally sound and safe for the motoring public in the meantime.” The Vincent Thomas Bridge, located at the entry to Los Angeles harbor, handles 53,000 vehicles a day, including about 3,400 heavy-duty trucks, according to Caltrans. Traffic disruptions are anticipated throughout the redecking project. Gene Seroka, executive director of the Port of Los Angeles, <a href="https://www.joc.com/article/la-port-wants-california-to-raise-bridge-to-accommodate-big-ships-6087396">said the current limit on vessels passing under the structure is 15,000 TEUs in capacity</a>. Increasing the clearance from 185 feet to 211 feet will allow up to 23,000-TEU vessels to reach the three terminals on the land side of the bridge: Yusen Terminals, TraPac and West Basin. There are six container terminals in total in Los Angeles. <h3>Caltrans attempting to minimize traffic disruptions </h3>The redecking project, scheduled to begin in January, will require one-directional bridge closures for nine months. <a href="https://www.joc.com/article/la-port-stakeholders-warming-to-plan-to-mitigate-impact-of-bridge-project-6013847">Full closure of the bridge will occur from November 2026 to March 2028</a>, a Caltrans representative told a meeting of the Propeller Club of Los Angeles and Long Beach in May. Caltrans has identified an alternative network of surface streets that will allow truck and vehicular traffic to move into and out of the harbor area during the lengthy bridge closure. Street upgrades are underway, and Caltrans has set up a communications network for real-time traffic updates, the agency representative said. If the state adopted the port’s plan to raise the bridge clearance by 26 feet, the total cost of the project would increase from $1.5 billion to $2.2 billion, and the bridge closure would increase from 16 months to 28 months. Seroka told the Journal of Commerce the port and terminal operators will maintain a dialogue with the state on eventually raising the height of the bridge. “While we were hopeful that we would be able to include a bridge raising component into Caltrans’ pending critical maintenance project, we’re encouraged by the strong support of the administration to quickly explore additional projects, which could include raising the bridge or building a new crossing,” Seroka said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The redecking of the Vincent Thomas Bridge in Los Angeles harbor will start early next year as planned, while an effort by the port and terminal operators to raise the clearance of the span to facilitate the passage of super post-Panamax container ships is looking unlikely in the short term. The California State Transportation Agency (CalSTA) told port stakeholders over the past two weeks it is paramount that redecking work begin soon on the 63-year-old bridge before any attempt is made to raise the height of the structure, according to Mike Jacob, president of the Pacific Merchant Shipping Association (PMSA). Jacob said PMSA, which represents shipping lines and terminal operators, is onboard with the agency in this matter. “The funding is there [for the redecking],” he said. “The engineering is done. It received environmental clearance.” CalSTA, the cabinet level agency that oversees transportation-related departments, said the state has access to hundreds of millions of dollars in federal funds for the California Department of Transportation (Caltrans) to complete the necessary structural and safety repairs of the bridge. In a statement Tuesday to the Journal of Commerce regarding the possibility of raising the height of the Vincent Thomas Bridge, CalSTA said it “welcomes continued discussions to a path forward for that possibility while we work to make sure the bridge is structurally sound and safe for the motoring public in the meantime.” The Vincent Thomas Bridge, located at the entry to Los Angeles harbor, handles 53,000 vehicles a day, including about 3,400 heavy-duty trucks, according to Caltrans. Traffic disruptions are anticipated throughout the redecking project. Gene Seroka, executive director of the Port of Los Angeles, said the current limit on vessels passing under the structure is 15,000 TEUs in capacity . Increasing the clearance from 185 feet to 211 feet will allow up to 23,000-TEU vessels to reach the three terminals on the land side of the bridge: Yusen Terminals, TraPac and West Basin. There are six container terminals in total in Los Angeles. Caltrans attempting to minimize traffic disruptions The redecking project, scheduled to begin in January, will require one-directional bridge closures for nine months. Full closure of the bridge will occur from November 2026 to March 2028 , a Caltrans representative told a meeting of the Propeller Club of Los Angeles and Long Beach in May. Caltrans has identified an alternative network of surface streets that will allow truck and vehicular traffic to move into and out of the harbor area during the lengthy bridge closure. Street upgrades are underway, and Caltrans has set up a communications network for real-time traffic updates, the agency representative said. If the state adopted the port’s plan to raise the bridge clearance by 26 feet, the total cost of the project would increase from $1.5 billion to $2.2 billion, and the bridge closure would increase from 16 months to 28 months. Seroka told the Journal of Commerce the port and terminal operators will maintain a dialogue with the state on eventually raising the height of the bridge. “While we were hopeful that we would be able to include a bridge raising component into Caltrans’ pending critical maintenance project, we’re encouraged by the strong support of the administration to quickly explore additional projects, which could include raising the bridge or building a new crossing,” Seroka said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Redecking project on Los Angeles harbor bridge to begin in early 2026

<div class="phx-topic abstract-wrapper">APM Terminals said the new $131 million berth would increase Mobile’s container capacity by 50%, with an eye on cargo owners that need to reach markets in the US Midwest and Southeast.</div>

APM Terminals said the new $131 million berth would increase Mobile’s container capacity by 50%, with an eye on cargo owners that need to reach markets in the US Midwest and Southeast.

<div class="phx-topic">APM Terminals and the Port of Mobile plan to build a third container berth for handling ultra-large container ships at the Alabama port, boosting its capacity by 50%. Plans for the new berth follow the completion of upgrades to Mobile’s container yard and a dredging project that made it the deepest port on the Gulf Coast. The Maersk subsidiary and the Alabama Port Authority said in a statement Tuesday they are jointly funding the $131 million project that would add a 1,300-foot berth along APM Mobile’s southern end. Construction of the new berth is expected to begin in early 2026 and take two years to complete. With the third berth, APM Mobile will have a nameplate capacity of 1.4 million TEUs, with seven super post-Panamax container cranes. As part of the project, APM agreed to a 20-year lease extension on its Mobile facility that will include higher lease payments to cover the port’s end of the deal. APM will now operate the Mobile terminal through 2058. APM said in the statement the new berth will allow ships to get in and out of the port faster by reducing instances of vessel anchoring and other delays. Plans for the new berth — Mobile’s fifth expansion — coincide with <a href="https://www.joc.com/article/port-of-mobile-approves-apm-terminal-expansion-5206847">the near completion of a fourth expansion project that saw APM’s northern container yard footprint grow 28% to 147 acres</a>. APM is also completing upgrades to Mobile’s railyard, including a flyover bridge for bringing containers from the yard. Mobile and the US Army Corps of Engineers <a href="https://www.joc.com/article/harbor-deepening-primes-mobile-for-bigger-ships-first-us-calls-6092987">earlier this month completed deepening the port’s harbor to 50 feet</a>. While typically a second call after the Port of Houston for Gulf Coast services, Mobile is looking to compete more with other Southeast and West Coast ports for discretionary intermodal cargo. Mobile is also seeing upgrades to its rail network through an inland port it is co-developing with CSX Transportation. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

APM Terminals and the Port of Mobile plan to build a third container berth for handling ultra-large container ships at the Alabama port, boosting its capacity by 50%. Plans for the new berth follow the completion of upgrades to Mobile’s container yard and a dredging project that made it the deepest port on the Gulf Coast. The Maersk subsidiary and the Alabama Port Authority said in a statement Tuesday they are jointly funding the $131 million project that would add a 1,300-foot berth along APM Mobile’s southern end. Construction of the new berth is expected to begin in early 2026 and take two years to complete. With the third berth, APM Mobile will have a nameplate capacity of 1.4 million TEUs, with seven super post-Panamax container cranes. As part of the project, APM agreed to a 20-year lease extension on its Mobile facility that will include higher lease payments to cover the port’s end of the deal. APM will now operate the Mobile terminal through 2058. APM said in the statement the new berth will allow ships to get in and out of the port faster by reducing instances of vessel anchoring and other delays. Plans for the new berth — Mobile’s fifth expansion — coincide with the near completion of a fourth expansion project that saw APM’s northern container yard footprint grow 28% to 147 acres . APM is also completing upgrades to Mobile’s railyard, including a flyover bridge for bringing containers from the yard. Mobile and the US Army Corps of Engineers earlier this month completed deepening the port’s harbor to 50 feet . While typically a second call after the Port of Houston for Gulf Coast services, Mobile is looking to compete more with other Southeast and West Coast ports for discretionary intermodal cargo. Mobile is also seeing upgrades to its rail network through an inland port it is co-developing with CSX Transportation. Contact Michael Angell at michael.angell@spglobal.com .

APM to move ahead with Mobile’s third berth after harbor deepening

<div class="phx-topic abstract-wrapper">The largest US intermodal provider’s relationships with competing eastern railroads Norfolk Southern and CSX are shifting and will continue evolving through 2026 as the proposed merger between NS and UP winds its way through the regulatory process. </div>

The largest US intermodal provider’s relationships with competing eastern railroads Norfolk Southern and CSX are shifting and will continue evolving through 2026 as the proposed merger between NS and UP winds its way through the regulatory process.

<div class="phx-topic">If federal regulators approve Union Pacific Railroad’s (UP’s) proposed $85 billion acquisition of Norfolk Southern Railway (NS), J.B. Hunt Transport Services — the largest US intermodal provider — could be forced to rethink how it routes both coast-to-coast and East Coast freight. J.B. Hunt’s relationships with Norfolk Southern and CSX Transportation are already shifting and will continue evolving through 2026. How much will change is unclear, however, as J.B. Hunt wants relationships with both eastern railroads, even if Union Pacific and Norfolk Southern become one. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6105166_0.1.jpg"></img></div>The stakes couldn’t be higher. J.B. Hunt handles more than two million intermodal loads a year and controls more than 125,000 containers, a fleet larger than the combined totals of competing intermodal providers C.H. Robinson, Hub Group, Schneider National, Swift Intermodal and several peers. On the West Coast, J.B. Hunt and BNSF Railway operate under the long-standing Quantum Agreement, a joint-service partnership created more than 35 years ago. In the East, J.B. relies primarily on Norfolk Southern, but has steadily expanded its CSX footprint in recent years. If UP acquired NS, some industry analysts have speculated J.B. Hunt would shift everything to CSX. The premise is based on the budding relationship between BNSF and CSX. “[It] has been perceived that J.B. Hunt would have to move our traffic to CSX. That’s not accurate at all,” Darren Field, president of J.B. Hunt’s intermodal division, said on an Oct. 16 earnings call. “There’s nothing [about the merger] that would mean our current Norfolk Southern footprint we have today would be required to change.” In a sense, though, the relationship has already begun to change. J.B. Hunt uses the new BNSF-CSX service launched in September from Phoenix to Atlanta and Southern California to <a href="https://www.joc.com/article/bnsf-csx-unveil-new-joint-intermodal-lanes-in-aftermath-of-up-ns-merger-6067789">Charlotte and Jacksonville</a>. Other BNSF and CSX combinations could include J.B. Hunt along the way. NS referenced the J.B. Hunt volume loss in the Southeast during its most recent earnings call. “While not big in the third quarter, we started to see some of the revenue erosion from competitor reactions to the merger,” NS CEO Mark George said on the Oct. 24 call. “We expect the impact to grow in the fourth quarter and continue to be a challenge over the near and medium term.” BNSF, which has waged a campaign against the UP-NS merger, warns that 300 intermodal lanes <a href="https://www.joc.com/article/up-ceo-pushing-to-file-formal-ns-merger-application-by-dec-1-6102362">could vanish</a> if the deal is approved, including all BNSF-NS interchanges. Likewise, CSX has said publicly that collaboration, not consolidation, can address the reasons why shippers still choose trucks over rail. J.B. Hunt is unlikely to take sides to keep the peace with NS and CSX. “Our long-term agreements and strong relationships with NS, CSX and BNSF should provide the basis for us to adapt to any changes in the industry,” J.B. Hunt CEO Shelley Simpson said on the company’s Oct. 16 earnings call. Strong rail service is one reason why J.B. Hunt grew its local East Coast intermodal volume by <a href="https://www.joc.com/article/jb-hunt-intermodal-volume-retracts-amid-cost-cutting-measures-6098480">6% year over year</a> in the third quarter, while West Coast freight dropped 6% during the same period. <h3>Norfolk Southern remains crucial </h3>The gravitational pull to BNSF and CSX is expected to strengthen in 2026. One industry source, who asked not to be identified, told the Journal of Commerce that J.B. Hunt is involved in every BNSF-CSX discussion on joint services, providing volume commitments to bolster the products from the outset. Nevertheless, NS remains central to J.B. Hunt’s eastern network. More than half of J.B. Hunt’s business with NS remains in the eastern US, according to the railroad. NS provides J.B. Hunt with access to major distribution centers strewn across central Pennsylvania, including Allentown, Bethlehem and Harrisburg. CSX cannot replicate that opportunity. NS also provides a single-line service between Kansas City and the East Coast, while CSX doesn’t operate in Kansas City. And the separate Crescent Corridor serves as a competitive edge — a double-stack-cleared NS route from Memphis through Birmingham, Atlanta, Charlotte and Harrisburg to Newark — providing faster transits than CSX on high-volume routes. UP has also offered to honor the J.B. Hunt-Norfolk Southern partnership. “If J.B. Hunt wants to still do lanes within the East with Norfolk Southern like they do today, we’ll certainly let them do that,” UP CEO Jim Vena said at the Journal of Commerce’s Inland 2025 Distribution Conference on Oct. 1. The UP-J.B. Hunt relationship makes sense for both sides. UP retains access to a large number of intermodal shipments, while J.B. Hunt can continue to provide truck-competitive services to shippers. <h3>The CSX pull will only grow </h3>The pull toward CSX will intensify, however, as its partnership with BNSF expands. With Southeast service now live, BNSF and CSX are eyeing the Northeast. CSX’s double-stack clearance through Baltimore <a href="https://www.joc.com/article/csx-restarts-baltimore-tunnel-service-for-double-stack-in-2026-6087384">next spring</a> could unlock additional joint BNSF-CSX routes from Southern California to Philadelphia and Newark, covering nearly every major East Coast hub from Florida to New Jersey. Striking such a deal makes economic sense for all parties. Details of the BNSF-J.B. Hunt Quantum Agreement are limited, but it functions as a one-of-a-kind intermodal revenue-sharing model. The formula has never been disclosed, but Quantum links BNSF and J.B. Hunt’s profitability to the volume on their intermodal lanes. If BNSF secures favorable terms with CSX, then everyone stands to benefit. The pool of revenue split between BNSF and J.B. Hunt is higher, especially if CSX charges less than NS. If a deal includes a seamless interchange, such as the one in Birmingham, for example, then J.B. Hunt’s expenses are lower, also increasing the shared revenue pool. And CSX wins by taking market share away from NS, its chief rival. J.B. Hunt must tread carefully, deepening its CSX ties without severing them with Norfolk Southern. That two-way pressure could spur both eastern railroads to compete harder, ultimately benefiting shippers along the way. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

If federal regulators approve Union Pacific Railroad’s (UP’s) proposed $85 billion acquisition of Norfolk Southern Railway (NS), J.B. Hunt Transport Services — the largest US intermodal provider — could be forced to rethink how it routes both coast-to-coast and East Coast freight. J.B. Hunt’s relationships with Norfolk Southern and CSX Transportation are already shifting and will continue evolving through 2026. How much will change is unclear, however, as J.B. Hunt wants relationships with both eastern railroads, even if Union Pacific and Norfolk Southern become one. The stakes couldn’t be higher. J.B. Hunt handles more than two million intermodal loads a year and controls more than 125,000 containers, a fleet larger than the combined totals of competing intermodal providers C.H. Robinson, Hub Group, Schneider National, Swift Intermodal and several peers. On the West Coast, J.B. Hunt and BNSF Railway operate under the long-standing Quantum Agreement, a joint-service partnership created more than 35 years ago. In the East, J.B. relies primarily on Norfolk Southern, but has steadily expanded its CSX footprint in recent years. If UP acquired NS, some industry analysts have speculated J.B. Hunt would shift everything to CSX. The premise is based on the budding relationship between BNSF and CSX. “[It] has been perceived that J.B. Hunt would have to move our traffic to CSX. That’s not accurate at all,” Darren Field, president of J.B. Hunt’s intermodal division, said on an Oct. 16 earnings call. “There’s nothing [about the merger] that would mean our current Norfolk Southern footprint we have today would be required to change.” In a sense, though, the relationship has already begun to change. J.B. Hunt uses the new BNSF-CSX service launched in September from Phoenix to Atlanta and Southern California to Charlotte and Jacksonville . Other BNSF and CSX combinations could include J.B. Hunt along the way. NS referenced the J.B. Hunt volume loss in the Southeast during its most recent earnings call. “While not big in the third quarter, we started to see some of the revenue erosion from competitor reactions to the merger,” NS CEO Mark George said on the Oct. 24 call. “We expect the impact to grow in the fourth quarter and continue to be a challenge over the near and medium term.” BNSF, which has waged a campaign against the UP-NS merger, warns that 300 intermodal lanes could vanish if the deal is approved, including all BNSF-NS interchanges. Likewise, CSX has said publicly that collaboration, not consolidation, can address the reasons why shippers still choose trucks over rail. J.B. Hunt is unlikely to take sides to keep the peace with NS and CSX. “Our long-term agreements and strong relationships with NS, CSX and BNSF should provide the basis for us to adapt to any changes in the industry,” J.B. Hunt CEO Shelley Simpson said on the company’s Oct. 16 earnings call. Strong rail service is one reason why J.B. Hunt grew its local East Coast intermodal volume by 6% year over year in the third quarter, while West Coast freight dropped 6% during the same period. Norfolk Southern remains crucial The gravitational pull to BNSF and CSX is expected to strengthen in 2026. One industry source, who asked not to be identified, told the Journal of Commerce that J.B. Hunt is involved in every BNSF-CSX discussion on joint services, providing volume commitments to bolster the products from the outset. Nevertheless, NS remains central to J.B. Hunt’s eastern network. More than half of J.B. Hunt’s business with NS remains in the eastern US, according to the railroad. NS provides J.B. Hunt with access to major distribution centers strewn across central Pennsylvania, including Allentown, Bethlehem and Harrisburg. CSX cannot replicate that opportunity. NS also provides a single-line service between Kansas City and the East Coast, while CSX doesn’t operate in Kansas City. And the separate Crescent Corridor serves as a competitive edge — a double-stack-cleared NS route from Memphis through Birmingham, Atlanta, Charlotte and Harrisburg to Newark — providing faster transits than CSX on high-volume routes. UP has also offered to honor the J.B. Hunt-Norfolk Southern partnership. “If J.B. Hunt wants to still do lanes within the East with Norfolk Southern like they do today, we’ll certainly let them do that,” UP CEO Jim Vena said at the Journal of Commerce’s Inland 2025 Distribution Conference on Oct. 1. The UP-J.B. Hunt relationship makes sense for both sides. UP retains access to a large number of intermodal shipments, while J.B. Hunt can continue to provide truck-competitive services to shippers. The CSX pull will only grow The pull toward CSX will intensify, however, as its partnership with BNSF expands. With Southeast service now live, BNSF and CSX are eyeing the Northeast. CSX’s double-stack clearance through Baltimore next spring could unlock additional joint BNSF-CSX routes from Southern California to Philadelphia and Newark, covering nearly every major East Coast hub from Florida to New Jersey. Striking such a deal makes economic sense for all parties. Details of the BNSF-J.B. Hunt Quantum Agreement are limited, but it functions as a one-of-a-kind intermodal revenue-sharing model. The formula has never been disclosed, but Quantum links BNSF and J.B. Hunt’s profitability to the volume on their intermodal lanes. If BNSF secures favorable terms with CSX, then everyone stands to benefit. The pool of revenue split between BNSF and J.B. Hunt is higher, especially if CSX charges less than NS. If a deal includes a seamless interchange, such as the one in Birmingham, for example, then J.B. Hunt’s expenses are lower, also increasing the shared revenue pool. And CSX wins by taking market share away from NS, its chief rival. J.B. Hunt must tread carefully, deepening its CSX ties without severing them with Norfolk Southern. That two-way pressure could spur both eastern railroads to compete harder, ultimately benefiting shippers along the way. Contact Ari Ashe at ari.ashe@spglobal.com .

J.B. Hunt’s East Coast strategy is shifting as rail alliances realign

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

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Journal of Commerce Magazine

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

ISI Report - Rectangle Box

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

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

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

Gateway - Rectangle Box

Customers scoring their intermodal partners to identify the best service providers

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Intermodal Service Scorecard

A premium access outlook critical to shippers and transportation providers

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Quarterly Intelligence

The premier conference for the global container shipping and supply chain community

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The only editorially independent conference for the breakbulk & project cargo industry

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The latest container shipping news and analysis of ocean container shipping, logistics, supply chains, technology solutions and end-to-end connectivity. Coverage includes the movement of containerized cargo handled by marine terminals and container ports, depots, container lines, drayage, consignees, importers and shippers, forwarders, non-vessel operating common carriers (NVOs) and off-dock warehousing providers. The Journal of Commerce's container shipping news includes news from the trans-Pacific, Asia–Europe, North America–Caribbean, Central and South America trades, and intra-Asia trades.

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

Container Shipping News | Journal of Commerce

The Journal of Commerce is the industry’s source for maritime news and analysis about ocean container shipping, logistics, supply chains, global shipping ports, shipping technology solutions and end-to-end connectivity. Coverage tracks the movement of containerized cargo — from origin to destination — handled by marine terminals in the US and abroad, depots, container ports, container lines, drayage, consignees and shippers, forwarders, non-vessel operating common carriers (NVOs) and off-dock warehousing providers, as well as pricing, capacity, volume and reliability on the trans-Pacific, Asia–Europe, North America–Caribbean, Central and South American and intra-Asia trades.

Discover comprehensive trucking news and trends with Journal of Commerce - from trucking LTL to regulation and trucking supply and demand.

Breakbulk News shipping | Journal of Commerce

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

Port News | Journal of Commerce

News and analysis of ocean containerized cargo movement, logistics, supply chains, technology, and end-to-end connectivity. Maritime news and analysis of containerized ocean cargo movement, breakbulk and roll-on and roll-off shipping from origin to destination.

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