<div class="phx-topic abstract-wrapper">Dwell times at Vancouver rail facilities are approaching last winter’s levels, when port congestion was the worst in years, but terminal operators say the factors driving the current delays are not a harbinger.</div>

Dwell times at Vancouver rail facilities are approaching last winter’s levels, when port congestion was the worst in years, but terminal operators say the factors driving the current delays are not a harbinger.

<div><div><img></div>The port of Vancouver, Canada. Photo credit: Shutterstock.com.Container dwell times at <a>port of Vancouver</a> rail facilities exceeded five days this week and have been higher than the normal three-day dwell time since mid-September. That’s sending a chill through shippers in Canada and the US who fear that a repeat of the port congestion and deteriorating rail service of <a>last winter</a> might be approaching.However, DP World Canada says the <a>doubling</a> of dwell times is due mostly to a bunching of vessels arriving from Asia, and unusually strong cargo volumes, rather than an indicator of worse times ahead during Canada’s challenging winter...

The port of Vancouver, Canada. Photo credit: Shutterstock.com. Container dwell times at port of Vancouver rail facilities exceeded five days this week and have been higher than the normal three-day dwell time since mid-September. That’s sending a chill through shippers in Canada and the US who fear that a repeat of the port congestion and deteriorating rail service of last winter might be approaching. However, DP World Canada says the doubling of dwell times is due mostly to a bunching of vessels arriving from Asia, and unusually strong cargo volumes, rather than an indicator of worse times ahead during Canada’s challenging winter weather. Vancouver’s container volume in the first half of 2018 was up 5 percent to a record 1.64 million TEU, according to the port. Delays caused by full ships “We don’t see it as a precursor of winter. It’s just that the vessels are all full now,” said Maksim Mihic, general manager of DP World Canada, which operates the Centerm container terminal in Vancouver. He said Centerm intends to be back to normal dwell times in four to six weeks. The dwell times at GCT Canada’s Vanterm and Deltaport terminals were in the five-day to seven-day range, and Centerm’s dwell time was more than seven days, according to the Oct. 2 gateway terminal rail dwell performance report published by the port authority. This is troubling to beneficial cargo owners and freight forwarders because dwell times were at those levels from December 2017 through March 2018, when port congestion was the worst it had been in years. September rail metrics provided by the port show that dwell times at rail facilities — which have an impact on total port productivity — began to lengthen in mid-September. The September 14 report showed all three container terminals with dwell times in the three-day to five-day range, and they have nudged up a notch since then. Vancouver promotes its efficiency by advertising that its dwell times are normally three days or slightly lower. Gemini Shippers Association tracks dwell times at Prince Rupert, Vancouver, Seattle-Tacoma and Los Angeles-Long Beach, and Vancouver’s dwell so far this year “has been on average 37 percent longer than the average of the West Coast group,” Kenneth O’Brien, chief operating officer, said Friday. Commenting on the increasing container volumes being handled by all North American ports, O’Brien said, “Pushing these higher volumes through a generally constrained network has taxed shippers and alike. We continue to see challenges with terminal dwell, terminal-to-rail transfers, chassis shortages and drayage capacity as all being significant levers that need to be monitored and proactively managed.” The Canadian Pacific and Canadian National railroads provide intermodal service from Vancouver throughout Canada, and to Chicago and destinations south and east. Vancouver’s penetration of the US market continues to increase. Its market share in North America’s Pacific Northwest region increased from 45 percent in 2012 to 48.5 percent in 2017, according to PIERS, a JOC.com sister product. Therefore, economic and trade factors that affect the US also have a direct impact on the Vancouver gateway. Retailers and manufacturers this year have reacted to the the escalating US-China trade war by pushing forward their imports to stay ahead of one round of tariff announcements after another. The peak this year occurred in July , which is unusually early. The on-time performance issue A major problem this year in all of the major east-west trade lanes has been poor on-time performance. Services from Shanghai, the world’s largest port, are regularly two or three days late, and oftentimes more than that, according to terminal operators at US and Canadian West Coast ports. On-time performance to the West Coast of North America dropped to 65.6 percent in July/August from 78.1 percent in June/July, according to SeaIntel Maritime Intelligence. Shanghai in particular has struggled in handling the mega-ships with 20,000-TEU capacity in the Asia-Europe trade. Additionally, typhoons in Asia have thrown vessels off schedule. Mihic said vessels seem to be arriving in Vancouver on the same day, directly affecting yard, rail, and gate operations. Cosco Shipping’s Canada office Thursday reported that following the recent typhoon “most vessels were delayed and arrived at Vancouver in the same time frame,” causing congestion and challenges for rail operations. “We’ve seen a spike in ground count and dwell at Centerm recently, driven by vessel bunching due to extreme weather in Asia,” CP spokesperson Salem Woodrow said Thursday. CP said it is working closely with DP World to overcome the challenges. Otherwise, CP’s network is fluid and running smoothly both on the rail and at the inland terminals, the railroad stated. The Canadian International Freight Forwarders Association (CIFFA) said its members report longer-than-usual dwell times, and anecdotal reports show sometimes excessive delays. CIFFA on Thursday handled a query from a member seeking assistance on a container that was still at the port after 12 days. Longer dwell times are typical during the peak season, but strong volumes this year are making the impact greater, said Julia Kuzeljevich, CIFFA’s public affairs manager. Members are looking for relief in mid-October, she said. Intermodal yard expansion Yet another factor contributing to increased dwell times in Vancouver was the launch on Sept. 24 of the intermodal yard expansion at GCT Deltaport. The $300 million, semi-automated operation will eventually allow Deltaport to handle growing container volumes while improving productivity and safety, but the company has informed customers to expect delays during the ramp-up period. Eric Waltz, president of GCT Canada, said the new systems work and have been tested. “Now it’s about optimization,” he told JOC.com last week. Terminal operators, ocean carriers, and the railroads are proceeding with a sense of urgency to return operations to fluidity before winter weather arrives with its own set of challenges. Last year, rail dwell times surged from 3.8 days in November to 5.5 days in December due to an unusually harsh winter in western Canada. The Canadian Ministry of Transport takes winter quite seriously and requires CP and CN to deliver their winter contingency plans to the minister by mid-October. The Canadian railroads since last winter have invested in additional rolling stock and crew and have made network improvements to prepare for the peak season and winter weather. In a March 21 letter to CIFFA, Jean-Jacques Ruest, CN’s president and CEO, cited hundreds of millions of dollars that CN was spending to purchase 60 new locomotives and expand network capacity. Both railroads are preparing their winter contingency plans. The investments are paying off, the railroad stated Friday. “CN’s car supply is good and the system is fluid and we continue to see improvements as we complete capacity expansion projects on our core routes between the West Coast and Chicago, particularly in western Canada,” said company spokesman Patrick Waldron. Capital expenditures continue in double track infrastructure, purchase of locomotives and rail cars and the hiring of hundreds of new train crews, Waldron said. Both railroads are preparing their winter contingency plans. A CP white paper on railroading in the Canadian winter details how railroads must reduce train speed and train length when temperatures drop below 13 degrees Fahrenheit, prepare for avalanches in mountain passes, and preposition equipment that will be needed to maintain productive operations at rail terminals. However, the operational changes that ensure safety “unavoidably lower the system’s overall velocity, which in turn reduces the supply chain’s shipping capacity,” CP stated. The railroads continue to make progress as they fine-tune their winter programs, and CP has made “material improvements” in both velocity and train lengths in recent years, the white paper stated. Last winter’s harsh weather compromised rail service at Vancouver and Prince Rupert, 500 miles to the north. Prince Rupert has direct intermodal service to Chicago, Memphis, and New Orleans as well as throughout Canada. Prince Rupert so far this fall has maintained fluidity, said Brian Friesen, director of trade development and communications. “Average monthly dwell for August was right at our 2.5-day target, and September was actually just below,” he said. Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.

International ports

Vancouver rail delays ahead of winter worry shippers

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

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

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

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

Maritime

Transport, Trade and Regulation News

US shipbuilding incentives need more oversight: GAO

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

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

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

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

Container Shipping News

Container lines

Asia-Europe

Ocean carriers adjust calls as congestion chokes European hubs

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

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

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

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

Breakbulk News

Energy projects

Heavy-haul transport

Project cargo

Mixed US policy on carbon capture clouds project cargo demand

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

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

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

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

Forwarding

Trans-Pacific

Container lines pull back on India-US pricing push

<div class="phx-topic abstract-wrapper">The fresh capacity carriers rushed into the US’ busiest trade lane in April and May is no longer needed, sending rates on a downward spiral and forcing carriers to shelve proposed price hikes.</div>

The fresh capacity carriers rushed into the US’ busiest trade lane in April and May is no longer needed, sending rates on a downward spiral and forcing carriers to shelve proposed price hikes.

<div class="phx-topic">Ocean carriers have failed to implement a planned general rate increase (GRI) in the eastbound trans-Pacific this week, with vessel capacity on the route exceeding forward demand that has been in steady decline for weeks. And in yet another sign that the peak shipping season will be muted, carriers have also dropped plans to impose a peak season surcharge (PSS) on fixed-rate contracts to the US West Coast. That comes as spot rates paid by importers and freight-all-kinds (FAK) rates charged to forwarders continue to sink. “They went up quickly. It looks like they’re going down just as quickly,” Kurt McElroy, executive vice president at the forwarder Kerry Apex, said. “There’s not enough demand.” Carriers have announced PSSs of $1,000 per FEU to the US East Coast from July 1–14, according to carrier rate announcements shared with the Journal of Commerce, who spoke to eight forwarders and two carriers for this story. At least one container line is rolling PSSs into quarterly rates, but at approximately half the amount, two shippers said on the condition of anonymity. Rate activity in the largest US trade lane <a href="https://www.joc.com/article/importers-try-to-push-cargo-to-contract-rates-as-trans-pac-spot-market-surges-5244311">contrasts sharply with last year</a>, when spot rates surged as high as $10,000 per FEU to the East Coast and $8,000 to the West Coast in early July, while carriers were also able to impose a series of PSSs throughout the summer and fall. This year, uncertainty about the Trump administration’s trade policy resulted in massive frontloading of fall and holiday merchandise as US retailers rushed to bring in goods during a 90-day reprieve from so-called reciprocal tariffs. The pause on tariffs from most countries expires July 9, while a similar reprieve on China-sourced goods ends Aug. 14. That frontloading likely means weaker imports during the traditional August through October peak shipping season, said Christian Sur, executive vice president for ocean freight contract logistics at the forwarder Unique Logistics International. Last year, July to October volume was strong, but with all of the frontloading, especially from China, no one expects the volume to be as strong this year,” Sur said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8c13a3e-9f5a-412f-8741-adbf5e1a7779"></dynamic-object></div>As a result, spot rates have been sinking rapidly over the past month. Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged spot rates from North Asia to the West Coast at $2,200 per FEU as of July 1, down 15% on the week. Rates to the East Coast were $4,300 per FEU, 12% lower. Rate benchmarking platform Xeneta had the West Coast spot rate at $2,800 per FEU as of June 26, with the East Coast at $5,473 per FEU. Spot rates listed on some rate indexes can lag the rates importers and forwarders are actually paying by a week or longer. This week, most imports from Asia are moving at $4,400 to $4,500 per FEU to the East Coast and $2,400 to $2,500 per FEU to the West Coast, McElroy said. Retailers and forwarders who shop around can secure even lower prices from some carriers, said Jon Monroe, who serves as an adviser to forwarders. Some carriers are quoting sub-$4,000-per-FEU spot/FAK rates to the East Coast and sub-$2,000 per FEU to the West Coast, Monroe said. <h3>Tariffs a fading concern? </h3>Carriers ending PSSs on fixed-rate accounts for both importers and forwarders to the West Coast and limiting their PSSs to the East Coast to two weeks from July 1–14 indicate that going forward, no one is making bookings based on tariff deadlines, Sur said. “Tariffs are quickly becoming a non-issue,” he said. Ample vessel capacity for the coming months has also made shipper concerns about securing space this summer less of an issue than it was in past years. Data from maritime visibility provider eeSea shows that the recent addition of vessel capacity by trans-Pacific carriers has brought total capacity to 1.57 million TEUs in July, the highest for any month since 2021. Some 8.6% of that capacity is poised to be blanked. In August, the total capacity is scheduled to slip to 1.48 million TEUs, with 7.7% of the capacity scheduled to be blanked. Even with the blank sailings, the total capacity offered in the eastbound trans-Pacific will be almost 20% higher in July than July 2024 and 10.6% higher in August year over year, according to eeSea. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="c3135e8b-9bef-4f08-a278-5c853b855a74"></dynamic-object></div>Carriers rushed fresh capacity into the eastbound trans-Pacific in April and May when the Trump administration announced the pauses on higher tariffs. But once that surge in bookings was over, overcapacity took hold, sending rates on a downward spiral. A carrier source said the eastbound trans-Pac may witness additional blank sailings in the coming months. “Volumes are starting to go down and rates are falling because a lot of capacity was brought on,” the source said. “If management starts seeing the rates decline very quickly, they might remove the capacity.” <h3>August–October volumes difficult to forecast </h3>Projecting import volumes for the traditional August through October peak shipping season remains a hazy task, forwarders and carriers say. “This is a time when it is hard to predict where we are headed,” said Robert Khachatryan, CEO of the forwarder Freight Right Global Logistics. Still, Khachatryan said he does not detect huge demand building among importers. “The market is still soft and is likely to remain so at least through July,” a second carrier executive said. “But we can’t say beyond that. We’re in a wait-and-see mode.” A logistics manager for a large retailer told the Journal of Commerce she is still waiting on the company’s second-half forecast, but July and August look softer than last year. The source said July will be the retailer’s peak season. The retailer is still paying a $500 PSS into the West Coast, but that is down from $2,000 per FEU originally. Despite the frontloading by most retailers, there is still fall and holiday merchandise scheduled to be shipped. While import volumes will be down from last fall’s double-digit year-over-year increases, they won’t fall off the cliff. Ben Coleman, president of the forwarder Teampower Logistics, said there are clients with seasonal merchandise still scheduled to ship and others who will seek to rebuild their inventories. Another forwarder said the several months of frontloading did not rob the eastbound trans-Pacific of all its cargo this fall. “There are still retail goods that have to be moved,” the source said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Ocean carriers have failed to implement a planned general rate increase (GRI) in the eastbound trans-Pacific this week, with vessel capacity on the route exceeding forward demand that has been in steady decline for weeks. And in yet another sign that the peak shipping season will be muted, carriers have also dropped plans to impose a peak season surcharge (PSS) on fixed-rate contracts to the US West Coast. That comes as spot rates paid by importers and freight-all-kinds (FAK) rates charged to forwarders continue to sink. “They went up quickly. It looks like they’re going down just as quickly,” Kurt McElroy, executive vice president at the forwarder Kerry Apex, said. “There’s not enough demand.” Carriers have announced PSSs of $1,000 per FEU to the US East Coast from July 1–14, according to carrier rate announcements shared with the Journal of Commerce, who spoke to eight forwarders and two carriers for this story. At least one container line is rolling PSSs into quarterly rates, but at approximately half the amount, two shippers said on the condition of anonymity. Rate activity in the largest US trade lane contrasts sharply with last year , when spot rates surged as high as $10,000 per FEU to the East Coast and $8,000 to the West Coast in early July, while carriers were also able to impose a series of PSSs throughout the summer and fall. This year, uncertainty about the Trump administration’s trade policy resulted in massive frontloading of fall and holiday merchandise as US retailers rushed to bring in goods during a 90-day reprieve from so-called reciprocal tariffs. The pause on tariffs from most countries expires July 9, while a similar reprieve on China-sourced goods ends Aug. 14. That frontloading likely means weaker imports during the traditional August through October peak shipping season, said Christian Sur, executive vice president for ocean freight contract logistics at the forwarder Unique Logistics International. Last year, July to October volume was strong, but with all of the frontloading, especially from China, no one expects the volume to be as strong this year,” Sur said. As a result, spot rates have been sinking rapidly over the past month. Platts, a sister company of the Journal of Commerce within S&P Global, pegged spot rates from North Asia to the West Coast at $2,200 per FEU as of July 1, down 15% on the week. Rates to the East Coast were $4,300 per FEU, 12% lower. Rate benchmarking platform Xeneta had the West Coast spot rate at $2,800 per FEU as of June 26, with the East Coast at $5,473 per FEU. Spot rates listed on some rate indexes can lag the rates importers and forwarders are actually paying by a week or longer. This week, most imports from Asia are moving at $4,400 to $4,500 per FEU to the East Coast and $2,400 to $2,500 per FEU to the West Coast, McElroy said. Retailers and forwarders who shop around can secure even lower prices from some carriers, said Jon Monroe, who serves as an adviser to forwarders. Some carriers are quoting sub-$4,000-per-FEU spot/FAK rates to the East Coast and sub-$2,000 per FEU to the West Coast, Monroe said. Tariffs a fading concern? Carriers ending PSSs on fixed-rate accounts for both importers and forwarders to the West Coast and limiting their PSSs to the East Coast to two weeks from July 1–14 indicate that going forward, no one is making bookings based on tariff deadlines, Sur said. “Tariffs are quickly becoming a non-issue,” he said. Ample vessel capacity for the coming months has also made shipper concerns about securing space this summer less of an issue than it was in past years. Data from maritime visibility provider eeSea shows that the recent addition of vessel capacity by trans-Pacific carriers has brought total capacity to 1.57 million TEUs in July, the highest for any month since 2021. Some 8.6% of that capacity is poised to be blanked. In August, the total capacity is scheduled to slip to 1.48 million TEUs, with 7.7% of the capacity scheduled to be blanked. Even with the blank sailings, the total capacity offered in the eastbound trans-Pacific will be almost 20% higher in July than July 2024 and 10.6% higher in August year over year, according to eeSea. Carriers rushed fresh capacity into the eastbound trans-Pacific in April and May when the Trump administration announced the pauses on higher tariffs. But once that surge in bookings was over, overcapacity took hold, sending rates on a downward spiral. A carrier source said the eastbound trans-Pac may witness additional blank sailings in the coming months. “Volumes are starting to go down and rates are falling because a lot of capacity was brought on,” the source said. “If management starts seeing the rates decline very quickly, they might remove the capacity.” August–October volumes difficult to forecast Projecting import volumes for the traditional August through October peak shipping season remains a hazy task, forwarders and carriers say. “This is a time when it is hard to predict where we are headed,” said Robert Khachatryan, CEO of the forwarder Freight Right Global Logistics. Still, Khachatryan said he does not detect huge demand building among importers. “The market is still soft and is likely to remain so at least through July,” a second carrier executive said. “But we can’t say beyond that. We’re in a wait-and-see mode.” A logistics manager for a large retailer told the Journal of Commerce she is still waiting on the company’s second-half forecast, but July and August look softer than last year. The source said July will be the retailer’s peak season. The retailer is still paying a $500 PSS into the West Coast, but that is down from $2,000 per FEU originally. Despite the frontloading by most retailers, there is still fall and holiday merchandise scheduled to be shipped. While import volumes will be down from last fall’s double-digit year-over-year increases, they won’t fall off the cliff. Ben Coleman, president of the forwarder Teampower Logistics, said there are clients with seasonal merchandise still scheduled to ship and others who will seek to rebuild their inventories. Another forwarder said the several months of frontloading did not rob the eastbound trans-Pacific of all its cargo this fall. “There are still retail goods that have to be moved,” the source said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Port News

North American ports

Excess capacity sinks planned July 1 rate increase in eastbound trans-Pacific

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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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