<div class="phx-topic abstract-wrapper">The Pacific Northwest ports of Vancouver and Prince Rupert are moving forward with short-term marine terminal, rail, and roadway infrastructure projects, while on the East Coast, Halifax is extending a container terminal berth to handle larger ships and Montreal is increasing annual container handling capacity.</div>

The Pacific Northwest ports of Vancouver and Prince Rupert are moving forward with short-term marine terminal, rail, and roadway infrastructure projects, while on the East Coast, Halifax is extending a container terminal berth to handle larger ships and Montreal is increasing annual container handling capacity.

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<div>This story appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.Ports in Canada are working on a slew of terminal expansions and upgrades to handle projected steady future growth in cargo volumes.The Port of Halifax is moving to ensure it can handle mega-vessels with a berth expansion expected to come online in the first quarter of 2020, while the Port of Montreal is preparing for larger cargo volumes and the ports of Vancouver and Prince Rupert are focused on capitalizing on their strategic advantages in serving the North American market, especially the...

This story appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook. Ports in Canada are working on a slew of terminal expansions and upgrades to handle projected steady future growth in cargo volumes. The Port of Halifax is moving to ensure it can handle mega-vessels with a berth expansion expected to come online in the first quarter of 2020, while the Port of Montreal is preparing for larger cargo volumes and the ports of Vancouver and Prince Rupert are focused on capitalizing on their strategic advantages in serving the North American market, especially the American Midwest. In Halifax, the berth extension at the South End Container Terminal, also known as PSA Halifax, will enable it to handle two vessels of 14,000 TEU to 15,000 TEU at once. The port is pushing to complete the project by 2020, when port officials believe ocean carriers will be making decisions on where to send big ships over the next five years. The Port of Montreal will start an expansion of the Viau container terminal, one of four at the port, that will nearly double its capacity from 350,000 TEU to 600,000 TEU. The port also could begin work on a fifth terminal in 2020. Click to enlarge On the West Coast, the ports of Vancouver and Prince Rupert will move forward with short-term marine terminal, rail, and roadway infrastructure projects that will meet capacity needs at Canada’s West Coast gateway well into the latter half of the decade, when long-term terminal projects will boost annual capacity by 4 million TEU. Cargo volumes through Canada’s four largest ports — Montreal, Halifax, Vancouver, and Prince Rupert — grew 4 percent to 4.5 million TEU in the first nine months of 2019, according to port authority figures. That was a slight deceleration from the 5 percent year-over-year growth seen in all of 2018, according to the figures, which count loaded TEU for Montreal, Vancouver, and Prince Rupert, and both loaded and unloaded TEU for Halifax. West Coast collaboration Although Vancouver and Prince Rupert are two independent port authorities separated by 500 miles of coastline, they are synchronizing their development plans to ensure that the region has sufficient capacity for the coming decade, said Cliff Stewart, vice president of infrastructure at the Vancouver Fraser Port Authority. Vancouver’s volume in the first 10 months of 2019 increased 1.8 percent year over year to 2.16 million TEU, with a decline in imports offset by increasing exports, port figures show. Prince Rupert, meanwhile, saw container volume through October jump 15 percent to 646,638 TEU, with imports and exports both growing by double-digit percentages. Vancouver and Prince Rupert intend to capitalize on their strategic advantages, such as rapid ocean transit times from Asia and intermodal rail rates that are $400 to $600 cheaper to Chicago than through Seattle and Tacoma, according to a study last year by the Northwest Seaport Alliance. To do so, Vancouver and Prince Rupert must continue to expand their physical infrastructure. The combined ports are operating at 80 to 85 percent utilization, which is bumping up against the maximum utilization rate before service begins to deteriorate, according to terminal planners. Prince Rupert, which in 2018 added a second berth at its Fairview Container Terminal to increase annual capacity to 1.35 million TEU, is now expanding the container yard to increase capacity to 1.6 million TEU, said Brian Friesen, vice president of trade development and communications. When the project is completed in 2021, a second-phase expansion involving relocation of maintenance facilities will bring Prince Rupert’s capacity up to 1.8 million TEU by mid-2022, he said. In Vancouver, a Centerm container terminal expansion scheduled for completion in 2022 will increase capacity to 1.5 million TEU from 900,000 TEU at present. The increased capacity will represent three years of volume growth on Canada’s West Coast, Stewart said. Vancouver’s Vanterm container terminal is likewise involved in an expansion project that will add 200,000 TEU of capacity, he said. The ports are also improving road and rail access, which is expected to produce a residual benefit of increasing overall capacity and accelerating cargo velocity, Stewart said. Vancouver is adding two additional tracks at the Roberts Bank rail yard, a truck staging area at the Deltaport terminal, and rail capacity upgrades at its grain terminals. Prince Rupert is building a new entry bridge for Canadian National Railway’s main line to increase the capacity from single track to a triple track. East Coast competition Across the country, the Port of Montreal is moving to expand capacity to keep up with growing cargo volumes, which grew 4.8 percent to 1.46 million TEU in the first ten months of 2019, compared with the same period in 2018, figures from the port show. Montreal in 2020 expects to start a $55 million project to add 3.7 miles of track to the internal rail service that links the port’s five terminals with an interchange area served by Canadian National Railway and Canadian Pacific Railway. Port officials say the project will enable the port to assemble longer trains and will help reduce dwell times. Construction on the port’s fifth container terminal, a C$750 million ($570 million) project known as the Contrecoeur terminal, is also expected to begin in 2020. The port is waiting to hear from the two terminal operators — Termont Montréal, Inc., and Montreal Gateway Terminals Partnership (MGTP), each of which operates two of the port’s four main terminals — about whether they will form a joint venture on the project or submit separate bids. Halifax also is preparing for a significant long-term increase in cargo volumes, despite a 0.1 percent year-over-year decline to 416,877 TEU in the first nine months of 2019, according to figures from the Halifax Port Authority. That compared with a year-over-year drop of about 0.3 percent in the first nine months of 2018, the figures show. The Halifax Port Authority said it considers the berth extension only a temporary solution to expected cargo growth. In addition, the port is studying two longer-term expansion options: the creation of a second permanent berth at the PSA terminal with increased container storage space, as well as a potential new container terminal across the harbor from existing port facilities in Dartmouth. Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo .Contact Hugh R. Morley at hugh.morley@ihsmarkit.com and follow him on Twitter: @HughRMorley1 .

International ports

ARO 2020: Canadian ports preparing for strong cargo growth

<div class="phx-topic abstract-wrapper">The uptick in rates comes despite a 9% surge in deployed capacity on regional services since February, according to figures from British transport consultant MDS Transmodal. </div>

The uptick in rates comes despite a 9% surge in deployed capacity on regional services since February, according to figures from British transport consultant MDS Transmodal.

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<div class="phx-topic">Strong cargo demand from China to Southeast Asia and longer-haul intra-Asia markets propelled intra-Asia freight rates higher in June despite a surge of new shipping capacity entering the market, logistics and shipping executives say, with some expecting the buoyant conditions to continue in the second half of the year. “Depending on the carrier, rates are around $650 to $700 per TEU from Shanghai to Ho Chi Minh City and $800 to $900 per TEU from Shanghai to Bangkok,” a senior executive at a Hong Kong-based forwarder told the Journal of Commerce. The rates for China to Southeast Asia are generally the highest since Christmas and the pre-Lunar New Year period when they were $1,000 to $1,100 per TEU to Bangkok, according to the source. “They’ve been trending higher since the end of May/early June on increased demand possibly due to the US tariff [pause] window or higher regional growth,” the executive said. “We don’t really see any slowdown in demand.” Cliff Xu, Greater China CEO for Rhenus Air &amp; Ocean, said there is a “strong market” for China cargo outbound to Southeast Asia. “This could partially be due to stable growth in the Southeast Asian economies especially with Chinese companies’ growing investment or business expansion in the region,” he said. “Orders received from businesses within the intra-Southeast Asia market are also showing very positive growth.” Xu said the strong cargo demand seen in the first half would continue for the rest of the year. <h3>Boost in deployed capacity </h3>Peter Sand, chief analyst at online benchmarking platform Xeneta, said cargo demand in the intra-Asia region grew 6.6% in the first four months of this year. Exports from China to other Far East countries climbed 15% year over year between January and April, he added, quoting the latest Chinese government figures available. FIBS Logistics was more cautious, indicating China’s long Oct. 1 National Day holidays, which start at the end of September, could impact the trade environment. “The market development/picture for this year’s Chinese National Holiday is unclear,” a FIBS spokesperson said. “We might need to review the outlook again at the end of August, although the impact of the peak season on the intra-Asia trade is later than for long-haul because intra-Asia transit times are relatively short.” Rates on longer-haul intra-Asia routes to India have also climbed to their highest level in about six months, with rates from China to Nhava Sheva near $2,600/FEU, the highest since mid-January, according to Xeneta data. Rates from China to Dubai are up 35% since January to $3,000/FEU, although Sand attributed the increase to the military conflict in the Middle East, where operational costs, including higher fuel prices and security measures, have risen on concerns of increased risks to shipping. The uptick in rates comes despite a 9% surge in deployed capacity on regional services since February, according to figures specially prepared for the Journal of Commerce by British transport consultant MDS Transmodal. Data shows capacity increased from almost 4.3 million TEUs per month in February to nearly 4.7 million TEUs in June. The figures are likely higher because they don’t include capacity increases on mainline services to Europe or the Mediterranean, which include calls at ports in Asia. Carriers that saw the biggest increase in capacity deployment include Mediterranean Shipping Co., which deployed an extra 10% of capacity, or nearly 52,000 TEUs, to the intra-Asia trade between the first and second quarters. CMA CGM, Taiwan’s Wan Hai Lines and South Korea’s Sinokor Merchant Marine also boosted capacity, according to MDS figures. <h3>Equipment challenges in key ports </h3>That comes as shippers are facing equipment challenges in key export ports. FIBS Logistics said Monday all mainline carriers including Hapag-Lloyd, Evergreen Marine, CMA CGM and Cosco Shipping Lines are facing tight supply or shortages of equipment in Ho Chi Minh City and Haiphong, while CMA CGM is facing a tight supply of containers at Shanghai, Ningbo and Shenzhen and Taiwanese ports including Kaohsiung. Other carriers such as Hapag-Lloyd, Evergreen and HMM are experiencing equipment issues at other ports including Shanghai and Ningbo, according to FIBS. “Overall, space for intra-Asia remains tight and overbooked,” the FIBS Logistics spokesperson told the Journal of Commerce. Rhenus’ Xu said although the availability of equipment has generally improved year over year as carriers took delivery of new boxes, “ships exiting China may face tight supply of equipment in the short term before the long holidays in September.” Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Strong cargo demand from China to Southeast Asia and longer-haul intra-Asia markets propelled intra-Asia freight rates higher in June despite a surge of new shipping capacity entering the market, logistics and shipping executives say, with some expecting the buoyant conditions to continue in the second half of the year. “Depending on the carrier, rates are around $650 to $700 per TEU from Shanghai to Ho Chi Minh City and $800 to $900 per TEU from Shanghai to Bangkok,” a senior executive at a Hong Kong-based forwarder told the Journal of Commerce. The rates for China to Southeast Asia are generally the highest since Christmas and the pre-Lunar New Year period when they were $1,000 to $1,100 per TEU to Bangkok, according to the source. “They’ve been trending higher since the end of May/early June on increased demand possibly due to the US tariff [pause] window or higher regional growth,” the executive said. “We don’t really see any slowdown in demand.” Cliff Xu, Greater China CEO for Rhenus Air & Ocean, said there is a “strong market” for China cargo outbound to Southeast Asia. “This could partially be due to stable growth in the Southeast Asian economies especially with Chinese companies’ growing investment or business expansion in the region,” he said. “Orders received from businesses within the intra-Southeast Asia market are also showing very positive growth.” Xu said the strong cargo demand seen in the first half would continue for the rest of the year. Boost in deployed capacity Peter Sand, chief analyst at online benchmarking platform Xeneta, said cargo demand in the intra-Asia region grew 6.6% in the first four months of this year. Exports from China to other Far East countries climbed 15% year over year between January and April, he added, quoting the latest Chinese government figures available. FIBS Logistics was more cautious, indicating China’s long Oct. 1 National Day holidays, which start at the end of September, could impact the trade environment. “The market development/picture for this year’s Chinese National Holiday is unclear,” a FIBS spokesperson said. “We might need to review the outlook again at the end of August, although the impact of the peak season on the intra-Asia trade is later than for long-haul because intra-Asia transit times are relatively short.” Rates on longer-haul intra-Asia routes to India have also climbed to their highest level in about six months, with rates from China to Nhava Sheva near $2,600/FEU, the highest since mid-January, according to Xeneta data. Rates from China to Dubai are up 35% since January to $3,000/FEU, although Sand attributed the increase to the military conflict in the Middle East, where operational costs, including higher fuel prices and security measures, have risen on concerns of increased risks to shipping. The uptick in rates comes despite a 9% surge in deployed capacity on regional services since February, according to figures specially prepared for the Journal of Commerce by British transport consultant MDS Transmodal. Data shows capacity increased from almost 4.3 million TEUs per month in February to nearly 4.7 million TEUs in June. The figures are likely higher because they don’t include capacity increases on mainline services to Europe or the Mediterranean, which include calls at ports in Asia. Carriers that saw the biggest increase in capacity deployment include Mediterranean Shipping Co., which deployed an extra 10% of capacity, or nearly 52,000 TEUs, to the intra-Asia trade between the first and second quarters. CMA CGM, Taiwan’s Wan Hai Lines and South Korea’s Sinokor Merchant Marine also boosted capacity, according to MDS figures. Equipment challenges in key ports That comes as shippers are facing equipment challenges in key export ports. FIBS Logistics said Monday all mainline carriers including Hapag-Lloyd, Evergreen Marine, CMA CGM and Cosco Shipping Lines are facing tight supply or shortages of equipment in Ho Chi Minh City and Haiphong, while CMA CGM is facing a tight supply of containers at Shanghai, Ningbo and Shenzhen and Taiwanese ports including Kaohsiung. Other carriers such as Hapag-Lloyd, Evergreen and HMM are experiencing equipment issues at other ports including Shanghai and Ningbo, according to FIBS. “Overall, space for intra-Asia remains tight and overbooked,” the FIBS Logistics spokesperson told the Journal of Commerce. Rhenus’ Xu said although the availability of equipment has generally improved year over year as carriers took delivery of new boxes, “ships exiting China may face tight supply of equipment in the short term before the long holidays in September.” Contact Keith Wallis at keithwallis@hotmail.com .

Maritime

Container Shipping News

Container lines

Strong China demand buoys intra-Asia rates despite capacity surge

<div class="phx-topic abstract-wrapper">Loup Logistics provides direct access to nearly 80,000 rail-owned containers across North America, significantly expanding UP’s transloading options.</div>

Loup Logistics provides direct access to nearly 80,000 rail-owned containers across North America, significantly expanding UP’s transloading options.

<div class="phx-topic">A subsidiary of Union Pacific Railroad has launched a new transloading service that will transfer imports into rail-owned 53-foot containers for inland hauls, presenting new competition to rival BNSF Railway. Loup Logistics said Tuesday the “port-to-door” service will be available at any US port. Union Pacific currently relies on partners such as Hub Group, Schneider National and STG Logistics, among others, for transloaded freight. But Loup provides direct access to nearly 80,000 rail-owned containers across North America, significantly expanding UP’s transloading options. Formed in 2017, Loup works with non-asset intermodal marketing companies (IMCs) to provide a door-to-door domestic intermodal product. Loup’s service removes the burden of securing drayage and chassis, making it an appealing option for IMCs seeking turnkey solutions for their shippers. It remains unclear whether Loup will market the new transloading service directly to importers or continue partnering with IMCs to expand relationships with their customers. Logistics powerhouse J.B. Hunt Transport Services, a partner of BNSF, has aggressively expanded its <a href="https://www.joc.com/article/tpm23-intermodal-providers-banking-on-transloading-surge-5217461">transloading operations</a> in Los Angeles and the Seattle-Tacoma area in recent years. J.B. Hunt will also be a key partner in transloading through <a href="https://www.joc.com/article/tpm25-bnsf-believes-barstow-hub-can-improve-service-to-smaller-markets-5955620">BNSF’s Barstow International Gateway</a>, which is due to open in 2027. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

A subsidiary of Union Pacific Railroad has launched a new transloading service that will transfer imports into rail-owned 53-foot containers for inland hauls, presenting new competition to rival BNSF Railway. Loup Logistics said Tuesday the “port-to-door” service will be available at any US port. Union Pacific currently relies on partners such as Hub Group, Schneider National and STG Logistics, among others, for transloaded freight. But Loup provides direct access to nearly 80,000 rail-owned containers across North America, significantly expanding UP’s transloading options. Formed in 2017, Loup works with non-asset intermodal marketing companies (IMCs) to provide a door-to-door domestic intermodal product. Loup’s service removes the burden of securing drayage and chassis, making it an appealing option for IMCs seeking turnkey solutions for their shippers. It remains unclear whether Loup will market the new transloading service directly to importers or continue partnering with IMCs to expand relationships with their customers. Logistics powerhouse J.B. Hunt Transport Services, a partner of BNSF, has aggressively expanded its transloading operations in Los Angeles and the Seattle-Tacoma area in recent years. J.B. Hunt will also be a key partner in transloading through BNSF’s Barstow International Gateway , which is due to open in 2027. Contact Ari Ashe at ari.ashe@spglobal.com .

Surface

Rail News

North-American rail

Intermodal providers

Union Pacific subsidiary jumps into transloading with ‘port-to-door' service

<div class="phx-topic abstract-wrapper">Easing freight rates and demand suggest a “wait-and-see” approach by US importers as the July 9 end of the temporary reprieve on so-called “reciprocal” tariffs nears.</div>

Easing freight rates and demand suggest a “wait-and-see” approach by US importers as the July 9 end of the temporary reprieve on so-called “reciprocal” tariffs nears.

<div class="phx-topic">Ocean carriers are keeping trans-Atlantic capacity at high levels ahead of next week’s expiration of President Donald Trump’s 90-day pause on so-called “reciprocal” tariffs. Easing freight rates and demand, meanwhile, suggest a “wait-and-see” approach by US importers. The pause ends on July 9 as trade negotiations continue between the US and the European Union. Market expectations are for the 10% across-the-board tariffs on all US trading partners to be applied to the EU and be accompanied by some level of tariffs on automobiles, steel and aluminum. Trump has also suggested he could extend the pause on reciprocal tariffs while talks continue. With no certainty over the outcome of the trade talks, carriers are keeping capacity available to handle any increase in shipments once there is greater clarity around tariff levels. Data from ocean visibility provider eeSea shows that carriers will deploy 344,811 TEUs of capacity in July on the westbound trans-Atlantic, the highest in the past 12 months, then easing slightly to 327,226 TEUs in August. Just 24,840 TEUs will be blanked in July, while no blank sailings have yet been announced for August. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="739d3923-220d-4e28-bddd-a3113b21dddf"></dynamic-object></div>Meanwhile, Peter Sand, chief analyst at rate benchmarking platform Xeneta, said the decline in short-term rates slowed in May and June after they fell 21.6% in the first quarter. The North Europe-North America rate is now down 37% compared with the beginning of the year, at $1,206 per FEU, according to Xeneta. “It comes on the back of falling demand in January to April, down from last year by 0.5%, with deployed capacity on this trade growing from 75,000 TEUs per week in mid-February to 89,000 TEUs per week now,” Sand told the Journal of Commerce. “Looking into the early days of July, we anticipate a slide in rates to the extent of $40 to $50 per FEU,” he added. “At the same time, carriers have announced that capacity could increase to as much as 95,000 to 97,000 TEUs/week in July and August.” The spot market assessed by Platts, a sister company of the Journal of Commerce within S&amp;P Global, show that rates from North Europe to the East Coast of North America have remained at $1,700 per FEU since May 16. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="588a0a38-fc1c-473a-a9b5-5d71ec3b54dc"></dynamic-object></div>Casper Ellerbaek, global head of ocean freight at DHL Global Forwarding, said “some degree” of frontloading could be seen on westbound trans-Atlantic routes in some sectors, but noted that with the uncertainty surrounding the trade lane, it was hardly conclusive. “This does not warrant drawing any conclusions or making assessments about the general development of demand,” Ellerbaek told the Journal of Commerce. Imports from North Europe to the US came in at 196,580 TEUs in May, down from the peak so far this year of 212,730 TEUs in March, according to PIERS, also part of S&amp;P Global. US imports from the Mediterranean hit a 2025 high in April of 170,360 TEUs, but PIERS data for May shows a 19% drop in volume to 137,710 TEUs. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers are keeping trans-Atlantic capacity at high levels ahead of next week’s expiration of President Donald Trump’s 90-day pause on so-called “reciprocal” tariffs. Easing freight rates and demand, meanwhile, suggest a “wait-and-see” approach by US importers. The pause ends on July 9 as trade negotiations continue between the US and the European Union. Market expectations are for the 10% across-the-board tariffs on all US trading partners to be applied to the EU and be accompanied by some level of tariffs on automobiles, steel and aluminum. Trump has also suggested he could extend the pause on reciprocal tariffs while talks continue. With no certainty over the outcome of the trade talks, carriers are keeping capacity available to handle any increase in shipments once there is greater clarity around tariff levels. Data from ocean visibility provider eeSea shows that carriers will deploy 344,811 TEUs of capacity in July on the westbound trans-Atlantic, the highest in the past 12 months, then easing slightly to 327,226 TEUs in August. Just 24,840 TEUs will be blanked in July, while no blank sailings have yet been announced for August. Meanwhile, Peter Sand, chief analyst at rate benchmarking platform Xeneta, said the decline in short-term rates slowed in May and June after they fell 21.6% in the first quarter. The North Europe-North America rate is now down 37% compared with the beginning of the year, at $1,206 per FEU, according to Xeneta. “It comes on the back of falling demand in January to April, down from last year by 0.5%, with deployed capacity on this trade growing from 75,000 TEUs per week in mid-February to 89,000 TEUs per week now,” Sand told the Journal of Commerce. “Looking into the early days of July, we anticipate a slide in rates to the extent of $40 to $50 per FEU,” he added. “At the same time, carriers have announced that capacity could increase to as much as 95,000 to 97,000 TEUs/week in July and August.” The spot market assessed by Platts, a sister company of the Journal of Commerce within S&P Global, show that rates from North Europe to the East Coast of North America have remained at $1,700 per FEU since May 16. Casper Ellerbaek, global head of ocean freight at DHL Global Forwarding, said “some degree” of frontloading could be seen on westbound trans-Atlantic routes in some sectors, but noted that with the uncertainty surrounding the trade lane, it was hardly conclusive. “This does not warrant drawing any conclusions or making assessments about the general development of demand,” Ellerbaek told the Journal of Commerce. Imports from North Europe to the US came in at 196,580 TEUs in May, down from the peak so far this year of 212,730 TEUs in March, according to PIERS, also part of S&P Global. US imports from the Mediterranean hit a 2025 high in April of 170,360 TEUs, but PIERS data for May shows a 19% drop in volume to 137,710 TEUs. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Trans-Atlantic ocean trade readies for end to 90-day pause on US tariffs

<div class="phx-topic abstract-wrapper">The procedural reauthorization bill would provide funding for the agency for the next three fiscal years and add more outside expertise on ports and ocean carriers.</div>

The procedural reauthorization bill would provide funding for the agency for the next three fiscal years and add more outside expertise on ports and ocean carriers.

<div class="phx-topic">A bill reauthorizing the US Federal Maritime Commission (FMC) for another three years has been introduced in the House of Representatives, with the proposed legislation also adding more outside expertise to the agency for help on ocean carriers and ports and allowing for a complaint process covering freight indices. Representatives John Garamendi (D-Calif.), along with Dusty Johnson (R-SD), Mike Ezell (R-Miss.) and Salud Carbajal (D-Calif.), introduced the bill last week to reauthorize the FMC through 2029, Garamendi’s office said in a statement Monday. The bill, which includes funding for the agency, aims to build on Garamendi and Johnson’s work on the Ocean Shipping Reform Act of 2022 (OSRA-22), the statement said. “Ocean shipping is a critical aspect of America’s national, food and economic security,” Johnson said in the statement. That’s why our Federal Maritime Commission must be equipped with the proper tools to keep the industry operating above bar.” The reauthorization bill, which is a standard procedure for many federal agencies, outlines funding for the FMC through the next three fiscal years. The FMC’s budget will increase from $49.2 million in 2026 to $57 million in 2029, representing an average 5% annual increase over that time. Along with the funding, the bill includes <a href="https://www.joc.com/article/us-house-bills-keep-shipping-reform-effort-alive-even-after-freight-rate-plunge-5241752">tweaks to OSRA-22 that Garamendi and Johnson had been pushing for</a>. The reauthorization bill proposes the creation of a 13-member national port advisory committee. The committee would be comprised of five members from marine terminal operators, five from port authorities and three members of the longshore workforce. It also includes a new ocean carrier advisory committee with six members from ocean carriers and three from ocean forwarders or non-vessel-operating common carriers (NVOs). The bill also includes new regulations for freight index providers such as the Shanghai Shipping Exchange. OSRA-22 required that within three years of its passage, shipping exchanges be registered with the FMC and that their underlying rules and regulations for any service contracts using their indices be published. The new bill would also allow the FMC to investigate any complaints about “alleged incidents of market manipulation or other anticompetitive practices” by shipping exchanges. The legislation also extends the deadline for shipping exchanges to register with the FMC until two years after the reauthorization’s passage. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

A bill reauthorizing the US Federal Maritime Commission (FMC) for another three years has been introduced in the House of Representatives, with the proposed legislation also adding more outside expertise to the agency for help on ocean carriers and ports and allowing for a complaint process covering freight indices. Representatives John Garamendi (D-Calif.), along with Dusty Johnson (R-SD), Mike Ezell (R-Miss.) and Salud Carbajal (D-Calif.), introduced the bill last week to reauthorize the FMC through 2029, Garamendi’s office said in a statement Monday. The bill, which includes funding for the agency, aims to build on Garamendi and Johnson’s work on the Ocean Shipping Reform Act of 2022 (OSRA-22), the statement said. “Ocean shipping is a critical aspect of America’s national, food and economic security,” Johnson said in the statement. That’s why our Federal Maritime Commission must be equipped with the proper tools to keep the industry operating above bar.” The reauthorization bill, which is a standard procedure for many federal agencies, outlines funding for the FMC through the next three fiscal years. The FMC’s budget will increase from $49.2 million in 2026 to $57 million in 2029, representing an average 5% annual increase over that time. Along with the funding, the bill includes tweaks to OSRA-22 that Garamendi and Johnson had been pushing for . The reauthorization bill proposes the creation of a 13-member national port advisory committee. The committee would be comprised of five members from marine terminal operators, five from port authorities and three members of the longshore workforce. It also includes a new ocean carrier advisory committee with six members from ocean carriers and three from ocean forwarders or non-vessel-operating common carriers (NVOs). The bill also includes new regulations for freight index providers such as the Shanghai Shipping Exchange. OSRA-22 required that within three years of its passage, shipping exchanges be registered with the FMC and that their underlying rules and regulations for any service contracts using their indices be published. The new bill would also allow the FMC to investigate any complaints about “alleged incidents of market manipulation or other anticompetitive practices” by shipping exchanges. The legislation also extends the deadline for shipping exchanges to register with the FMC until two years after the reauthorization’s passage. Contact Michael Angell at michael.angell@spglobal.com .

Supply chain

Transport, Trade and Regulation News

Congress seeks reauthorization of FMC through 2029

<div class="phx-topic abstract-wrapper">Although spot rates from Asia to the US are dropping due to waning demand and overcapacity, the carrier is zeroing in on the e-commerce sector with its expedited transit times and the quick delivery of containers upon discharge from vessels. </div>

Although spot rates from Asia to the US are dropping due to waning demand and overcapacity, the carrier is zeroing in on the e-commerce sector with its expedited transit times and the quick delivery of containers upon discharge from vessels.

<div class="phx-topic">Hede Shipping in mid-July will launch its third expedited service from China to Los Angeles as the niche carrier seeks to expand its share of the trans-Pacific e-commerce market. Although spot rates from Asia to the US <a href="https://www.joc.com/article/trans-pacific-sailing-into-slowdown-asia-europe-outlook-brightens-analysts-6031694">continue to drop due to waning demand and overcapacity in the overall market</a>, China-based Hede is zeroing in on the e-commerce sector with its expedited transit times and the quick delivery of containers upon discharge from vessels. “The e-commerce market is already there. It’s here to stay,” Roger Zhang, COO of Duke Shipping, the exclusive agent for Hede’s trans-Pacific services, told the Journal of Commerce Monday. Still, the new service that launches July 16 comes as e-commerce volumes, more typically the domain of the air cargo market, <a href="https://www.joc.com/article/signs-of-air-cargo-recovery-on-the-trans-pacific-as-freighter-aircraft-return-6019701">are under pressure in the trans-Pacific</a>. The US on May 2 eliminated the duty-free exemption for low-value shipments from China valued at under $800. Less than two weeks later, the US reduced the so-called de minimis tariff on low-value imports from 120% to 54%. Items sent via post from China to the US will be charged a flat fee of $100, regardless of value. In 2024, e-commerce shipments accounted for about 50% of China-to-US air freight volume, according to rate benchmarking platform Xeneta. Since the duty-free status of low-value Chinese imports was revoked in May, the volume has declined. Hede’s new service initially will be biweekly, with a 14-day transit time from Nansha in South China to Los Angeles. Last year, Hede phased in two weekly services from Shanghai to Los Angeles covering northern and eastern China, Zhang said. The average transit time from China to Southern California for nonexpedited services ranges from 15 to 18 days. Average transit times from Shanghai to Los Angeles in May were 18 days, according to the latest data available from InforNexus. Hede’s new Nansha service will begin with three container ships ranging in size from 3,000 to 4,000 TEUs. Vessels operated by the alliance carriers are generally 10,000-TEU capacity or higher. At present, securing additional vessels is difficult, Zhang said. “The charter market is so hot,” he said. Hede competes in the expedited service space with Zim Integrated Shipping Services and CMA CGM. UWL offers an expedited service from Southeast Asia to Seattle. <h3>Expedited container handling landside in Los Angeles </h3>As with its first two trans-Pacific services, vessels will call at the West Basin Container Terminal (WBCT) in Los Angeles. Hede offers a wheeled operation at WBCT and a dedicated chassis pool. “Expedited containers are ready for pickup within 24 hours after discharge, offering a fast logistics solution for time-sensitive cargo,” Zhang said. The spot rate from Shanghai to Los Angeles as of last Thursday was $3,741 per FEU, down 27% week over week and 36% from June 5, according to Drewry. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Hede Shipping in mid-July will launch its third expedited service from China to Los Angeles as the niche carrier seeks to expand its share of the trans-Pacific e-commerce market. Although spot rates from Asia to the US continue to drop due to waning demand and overcapacity in the overall market , China-based Hede is zeroing in on the e-commerce sector with its expedited transit times and the quick delivery of containers upon discharge from vessels. “The e-commerce market is already there. It’s here to stay,” Roger Zhang, COO of Duke Shipping, the exclusive agent for Hede’s trans-Pacific services, told the Journal of Commerce Monday. Still, the new service that launches July 16 comes as e-commerce volumes, more typically the domain of the air cargo market, are under pressure in the trans-Pacific . The US on May 2 eliminated the duty-free exemption for low-value shipments from China valued at under $800. Less than two weeks later, the US reduced the so-called de minimis tariff on low-value imports from 120% to 54%. Items sent via post from China to the US will be charged a flat fee of $100, regardless of value. In 2024, e-commerce shipments accounted for about 50% of China-to-US air freight volume, according to rate benchmarking platform Xeneta. Since the duty-free status of low-value Chinese imports was revoked in May, the volume has declined. Hede’s new service initially will be biweekly, with a 14-day transit time from Nansha in South China to Los Angeles. Last year, Hede phased in two weekly services from Shanghai to Los Angeles covering northern and eastern China, Zhang said. The average transit time from China to Southern California for nonexpedited services ranges from 15 to 18 days. Average transit times from Shanghai to Los Angeles in May were 18 days, according to the latest data available from InforNexus. Hede’s new Nansha service will begin with three container ships ranging in size from 3,000 to 4,000 TEUs. Vessels operated by the alliance carriers are generally 10,000-TEU capacity or higher. At present, securing additional vessels is difficult, Zhang said. “The charter market is so hot,” he said. Hede competes in the expedited service space with Zim Integrated Shipping Services and CMA CGM. UWL offers an expedited service from Southeast Asia to Seattle. Expedited container handling landside in Los Angeles As with its first two trans-Pacific services, vessels will call at the West Basin Container Terminal (WBCT) in Los Angeles. Hede offers a wheeled operation at WBCT and a dedicated chassis pool. “Expedited containers are ready for pickup within 24 hours after discharge, offering a fast logistics solution for time-sensitive cargo,” Zhang said. The spot rate from Shanghai to Los Angeles as of last Thursday was $3,741 per FEU, down 27% week over week and 36% from June 5, according to Drewry. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

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Hede Shipping to launch third expedited service from China to Los Angeles

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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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