<div class="phx-topic abstract-wrapper">This week’s top 10 stories on JOC.com makes one thing abundantly clear: All eyes are on the U.S. West Coast labor negotiation. The top three stories all centered around negotiations between the Pacific Maritime Association and the International Longshore and Warehouse Union. Several other stories stayed on the familiar topic of West Coast port congestion and the shakeups it has caused in supply chains. Several other business news items also crept into the list. 
 </div>

This week’s top 10 stories on JOC.com makes one thing abundantly clear: All eyes are on the U.S. West Coast labor negotiation. The top three stories all centered around negotiations between the Pacific Maritime Association and the International Longshore and Warehouse Union. Several other stories stayed on the familiar topic of West Coast port congestion and the shakeups it has caused in supply chains. Several other business news items also crept into the list.

<div><div><img></div>This week’s top 10 stories on JOC.com makes one thing abundantly clear: All eyes are on the U.S. West Coast labor negotiation. The top three stories all centered around negotiations between the Pacific Maritime Association and the International Longshore and Warehouse Union. Several other stories stayed on the familiar topic of West Coast port congestion and the shakeups it has caused in supply chains. Several other business news items also crept into the list.<ol><li><a>ILWU, PMA prep for negotiations as container stacks rise</a></li> <li><a>ILWU, PMA contract negotiations resume</a></li> <li><a>Caucus will determine whether ILWU signs tentative contract or not</a></li> <li><a>G6 service to...

This week’s top 10 stories on JOC.com makes one thing abundantly clear: All eyes are on the U.S. West Coast labor negotiation. The top three stories all centered around negotiations between the Pacific Maritime Association and the International Longshore and Warehouse Union. Several other stories stayed on the familiar topic of West Coast port congestion and the shakeups it has caused in supply chains. Several other business news items also crept into the list. ILWU, PMA prep for negotiations as container stacks rise ILWU, PMA contract negotiations resume Caucus will determine whether ILWU signs tentative contract or not G6 service to skip LA port call, citing congestion Congestion forced shippers into air freight at the height of the market, Drewry says LA-LB congestion wreaks more havoc on liner schedule reliability Port congestion here to stay, MOL executive says ILWU monopoly is main cause of negotiation strife Hapag-Lloyd, CSAV complete merger, creating the world’s fourth-largest ocean carrier Maersk Line to terminate US-flag service in trans-Pacific

North American ports

Weekly wrap-up: Attention stays on West Coast port issues

<div class="phx-topic abstract-wrapper">The conflicting interests became apparent last week when the Suez Canal Authority issued a statement indicating that Maersk planned to resume normal transits in December, triggering a quick response from the carrier that no timeline had been set. </div>

The conflicting interests became apparent last week when the Suez Canal Authority issued a statement indicating that Maersk planned to resume normal transits in December, triggering a quick response from the carrier that no timeline had been set.

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<div class="phx-topic">Geopolitical forces favoring the resumption of container trade through the Red Sea and the corresponding commercial reluctance to do so are converging after nearly two years of most ships diverting around southern Africa to avoid attacks by Houthi militants. The conflicting interests became apparent in late November when the Suez Canal Authority (SCA) issued a statement indicating that Maersk planned to resume normal transits in December, triggering a quick response from the carrier that no timeline had been set. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6126957_0.1.jpg"></img></div>But the contours of a clash are taking shape. Facing monthly losses of $800 million, Egypt President Abdel Fattah El-Sisi said earlier this year the country desperately wants full use of the canal to resume without further delay. After exerting little influence to reopen the Canal, Egypt saw fresh hope after the Oct. 13 Israel-Hamas peace summit in Sharm El-Sheikh, Egypt, attended by Sisi, US President Donald Trump and representatives of 20 countries. The SCA on Nov. 25 said the event “succeeded in paving the way for restoring the rates of traffic in the region back to normal.” Despite the pushback by Maersk and its Gemini partner Hapag-Lloyd, the peace conference was potentially significant regarding the Suez. The conference endorsed the October agreement between Hamas and Israel to end the war in Gaza, the hostilities that led the Houthis to start firing on shipping in late 2023. So, in theory, the end of active fighting between Israel and Hamas should end the attacks and fully reopen the waterway. But it’s not so simple. Mideast analysts have little confidence that hostilities have truly ended, and thus say the pause in attacks by the Houthis disclosed in early November is in fact not permanent. The tenuous nature of Mideast peace was reflected in ships failing to return to the Red Sea following a May announcement by Trump of a deal with the Houthis, under which the US would stop bombing the Iran-aligned group and the militants would stop menacing ships seeking to transit the Red Sea and Suez Canal. <h3>Carriers’ views are complex </h3>Carriers say they believe the Suez is the natural route connecting Asia and Europe. CMA CGM Egypt &amp; Sudan Cluster CEO Tariq Zaghloul was quoted by the Canal authority in early November saying “there is no alternative to the Suez.” But carriers are also disinclined to resume normal transits and perform extensive reworking of their networks, including transshipment points, only to have to re-divert if shipping were to come under renewed attack. Thus, in assessing the real situation, they have thus far concluded that not enough has changed to warrant resumption of normal routings between Asia and Europe and Asia and the North American East Coast. “The Houthi decision to pause attacks is probably a tactical decision to allow the group to rearm and rebuild damaged infrastructure,” Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global Market Intelligence, wrote on Nov. 12 in an assessment he said is unchanged as of Nov. 26. “Although it reduces the likelihood of attacks on shipping while the Gaza ceasefire holds, there remains a severe risk of attacks on vessels in transit in the one-year outlook if, as is likely, the ceasefire between Hamas and Israel breaks down permanently without progressing to its later stages,” Kennedy said. There are reasons why it’s to the Houthi’s advantage to continue the attacks, he said. “The Houthi have incentive to continue some level of attack activity in the Red Sea and against Israel in the one-year outlook in order to secure external financial and military support and to continue to generate domestic support within Yemen,” Kennedy said. S&amp;P Global is the parent company of the Journal of Commerce. With the ongoing diversions serving as stark evidence that Mideast peace is tenuous, Egypt — in citing the peace conference as having cleared the way to normal transits — is hoping to draw a straight line between geopolitics and the ongoing diversions. And they are hoping the US draws the same line, seeing the issue in big picture terms and rejecting obstacles tied to the operational realities of shipping. “If the (Trump) administration links the canal disruption directly to their broader peace deal efforts in the Middle East, they could ramp up the regulatory or diplomatic playbook,” said Andrew Petrisin, who served as deputy assistant secretary for multimodal freight within the US Department of Transportation from June 2024 to January 2025 and is now CEO of Laneway, an online platform that enables the trading of guaranteed container space. Petrisin told the Journal of Commerce the White House, in an effort to pressure carriers to resume transits through the Suez, could try to frame the vessel diversions as causing rising costs for consumers. “If they decide that avoiding the Suez is driving inflation, given the recent election results and the focus on affordability, they may try to frame the carriers' safety decisions as raising prices,” Petrisin said. “Politically, this angle is an easier sell than a complex argument about how commercial shipping impacts a peace treaty.” Economists have previously told the Journal of Commerce they see no evidence in data that the diversions are impacting inflation in the US. Any effort to point the finger at ocean carriers would echo the Biden administration’s rhetoric blaming carriers for price gouging during the pandemic. <h3>US security guarantees? </h3>From the point of view of carriers, their reluctance to resume Suez transits remains high due to safety risks. The financial advantage of vessel diversions, never mentioned by carriers, is a consideration in the background given that resumption of Suez transits would dump around 10% of global capacity back into the market and soften freight rates, although the effect would be muted over several months by the extensive port congestion many believe would result from a massive realignment of East-West networks. “There are many pieces to fall in place before they can (resume Suez transits), and insurance is one factor,” said Patrick Fay, CEO of BOC International. Thus, according to industry sources, resuming Suez transits would likely require more than mere rhetoric from the US administration. For example, the US would likely have to put security guarantees in place beyond what it has already done, perhaps increasing its naval presence in the region, industry sources say. But that would run into a view expressed by Mideast analysts that the Houthis are too agile and dug in within Yemen to be eliminated as a military threat to shipping. And if efforts were made by the US to impose fines on carriers for not using the Suez, were it to come to that, carriers would resist, Petrisin believes. “I don't see a world where they risk the safety of their people and fleets for fear of a port fee,” he said. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Geopolitical forces favoring the resumption of container trade through the Red Sea and the corresponding commercial reluctance to do so are converging after nearly two years of most ships diverting around southern Africa to avoid attacks by Houthi militants. The conflicting interests became apparent in late November when the Suez Canal Authority (SCA) issued a statement indicating that Maersk planned to resume normal transits in December, triggering a quick response from the carrier that no timeline had been set. But the contours of a clash are taking shape. Facing monthly losses of $800 million, Egypt President Abdel Fattah El-Sisi said earlier this year the country desperately wants full use of the canal to resume without further delay. After exerting little influence to reopen the Canal, Egypt saw fresh hope after the Oct. 13 Israel-Hamas peace summit in Sharm El-Sheikh, Egypt, attended by Sisi, US President Donald Trump and representatives of 20 countries. The SCA on Nov. 25 said the event “succeeded in paving the way for restoring the rates of traffic in the region back to normal.” Despite the pushback by Maersk and its Gemini partner Hapag-Lloyd, the peace conference was potentially significant regarding the Suez. The conference endorsed the October agreement between Hamas and Israel to end the war in Gaza, the hostilities that led the Houthis to start firing on shipping in late 2023. So, in theory, the end of active fighting between Israel and Hamas should end the attacks and fully reopen the waterway. But it’s not so simple. Mideast analysts have little confidence that hostilities have truly ended, and thus say the pause in attacks by the Houthis disclosed in early November is in fact not permanent. The tenuous nature of Mideast peace was reflected in ships failing to return to the Red Sea following a May announcement by Trump of a deal with the Houthis, under which the US would stop bombing the Iran-aligned group and the militants would stop menacing ships seeking to transit the Red Sea and Suez Canal. Carriers’ views are complex Carriers say they believe the Suez is the natural route connecting Asia and Europe. CMA CGM Egypt & Sudan Cluster CEO Tariq Zaghloul was quoted by the Canal authority in early November saying “there is no alternative to the Suez.” But carriers are also disinclined to resume normal transits and perform extensive reworking of their networks, including transshipment points, only to have to re-divert if shipping were to come under renewed attack. Thus, in assessing the real situation, they have thus far concluded that not enough has changed to warrant resumption of normal routings between Asia and Europe and Asia and the North American East Coast. “The Houthi decision to pause attacks is probably a tactical decision to allow the group to rearm and rebuild damaged infrastructure,” Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligence, wrote on Nov. 12 in an assessment he said is unchanged as of Nov. 26. “Although it reduces the likelihood of attacks on shipping while the Gaza ceasefire holds, there remains a severe risk of attacks on vessels in transit in the one-year outlook if, as is likely, the ceasefire between Hamas and Israel breaks down permanently without progressing to its later stages,” Kennedy said. There are reasons why it’s to the Houthi’s advantage to continue the attacks, he said. “The Houthi have incentive to continue some level of attack activity in the Red Sea and against Israel in the one-year outlook in order to secure external financial and military support and to continue to generate domestic support within Yemen,” Kennedy said. S&P Global is the parent company of the Journal of Commerce. With the ongoing diversions serving as stark evidence that Mideast peace is tenuous, Egypt — in citing the peace conference as having cleared the way to normal transits — is hoping to draw a straight line between geopolitics and the ongoing diversions. And they are hoping the US draws the same line, seeing the issue in big picture terms and rejecting obstacles tied to the operational realities of shipping. “If the (Trump) administration links the canal disruption directly to their broader peace deal efforts in the Middle East, they could ramp up the regulatory or diplomatic playbook,” said Andrew Petrisin, who served as deputy assistant secretary for multimodal freight within the US Department of Transportation from June 2024 to January 2025 and is now CEO of Laneway, an online platform that enables the trading of guaranteed container space. Petrisin told the Journal of Commerce the White House, in an effort to pressure carriers to resume transits through the Suez, could try to frame the vessel diversions as causing rising costs for consumers. “If they decide that avoiding the Suez is driving inflation, given the recent election results and the focus on affordability, they may try to frame the carriers' safety decisions as raising prices,” Petrisin said. “Politically, this angle is an easier sell than a complex argument about how commercial shipping impacts a peace treaty.” Economists have previously told the Journal of Commerce they see no evidence in data that the diversions are impacting inflation in the US. Any effort to point the finger at ocean carriers would echo the Biden administration’s rhetoric blaming carriers for price gouging during the pandemic. US security guarantees? From the point of view of carriers, their reluctance to resume Suez transits remains high due to safety risks. The financial advantage of vessel diversions, never mentioned by carriers, is a consideration in the background given that resumption of Suez transits would dump around 10% of global capacity back into the market and soften freight rates, although the effect would be muted over several months by the extensive port congestion many believe would result from a massive realignment of East-West networks. “There are many pieces to fall in place before they can (resume Suez transits), and insurance is one factor,” said Patrick Fay, CEO of BOC International. Thus, according to industry sources, resuming Suez transits would likely require more than mere rhetoric from the US administration. For example, the US would likely have to put security guarantees in place beyond what it has already done, perhaps increasing its naval presence in the region, industry sources say. But that would run into a view expressed by Mideast analysts that the Houthis are too agile and dug in within Yemen to be eliminated as a military threat to shipping. And if efforts were made by the US to impose fines on carriers for not using the Suez, were it to come to that, carriers would resist, Petrisin believes. “I don't see a world where they risk the safety of their people and fleets for fear of a port fee,” he said. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Container lines

Asia-Europe

Maritime

Complexity of resumption of Suez transits beginning to take shape

<div class="phx-topic abstract-wrapper">First-quarter charges will rise across all trade lanes that cover the European Union from Jan. 1, when carriers will be responsible for 100% of their carbon emissions. </div>

First-quarter charges will rise across all trade lanes that cover the European Union from Jan. 1, when carriers will be responsible for 100% of their carbon emissions.

<div class="phx-topic">The cost of ocean carriers complying with evolving European Union emissions regulations will rise significantly from Jan. 1, with some shipping companies advising cargo owners of increases in emissions surcharges in excess of 50%. From 2026, the EU Emissions Trading System (ETS) will require shipping lines to account for 100% of carbon emissions, up from 70% in 2025, as part of its phased rollout. Under the ETS “cap and trade” system, carriers must buy or receive allowances to cover their emissions. The average price of European Union Allowances (EUAs) over the three months to Nov. 15 were assessed by Maersk as €76.75 ($89.13). Based on that calculation, Maersk announced that from Jan. 1, its first-quarter “emissions surcharge” will rise across all trade lanes that cover the European Union, with increases on some trade lanes topping 50%. Among the Maersk trade lanes affected in the first quarter are Asia-North Europe, where ETS charges will rise from $114 to $168 per FEU; Asia to the Mediterranean from $80 to $130/FEU, the Mediterranean to North America from $151 to $236/FEU and North Europe to US from $89 to $139/FEU. Also increasing is the cost of compliance with the FuelEU Maritime regulation, under which carriers must gradually reduce the greenhouse gas intensity in fuels; those costs are included in the emissions surcharge. Maersk noted that FuelEU costs were up because rising biofuel costs combined with declining fossil fuel prices were making compliance more expensive. <h3>Direct impact on cost structure </h3>Maersk’s partner in the Gemini Cooperation alliance, Hapag-Lloyd, includes ETS and FuelEU costs in its EU ETS surcharge; the Hamburg-based carrier estimates the surcharge will rise 45% on Jan. 1. CMA CGM said in a customer advisory Monday it was anticipating a surcharge increase of 43%, with Europe’s 100% implementation of the ETS having a direct impact on its cost structure. The surcharges will be levied under CMA CGM’s “energy transition surcharge” and vary across different trade lanes involving European ports. For example, the ETS surcharge on Shanghai-Rotterdam in the first quarter will rise by almost $50 to $168/FEU from Jan. 1. Ocean Network Express (ONE) announced its “Europe environmental surcharge [EES]” that will increase from $134 to $186/FEU on Asia/Oceania to Europe trades, from $172 to $266/FEU on West Asia to the Mediterranean, and from $88 to $122/FEU on Europe-North America routes. On all bookings from China, excluding Hong Kong, the carriers will add ETS surcharges to the base freight rate for regulatory reasons; the same is true on bookings from Taiwan. “Instead of a surcharge, the EES portion will be incorporated and considered as a part of freight,” ONE said in its customer advisory. The carriers, in their customer advisories, used the surcharge-raising opportunity to market their lower emissions services that predominantly use biofuel under a “mass balance” approach that governs the chain of custody. Cargo moved under premium priced services such as Maersk’s ECO Delivery, Hapag-Lloyd's Ship Green or CMA CGM’s ACT+ can significantly reduce carbon emissions. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The cost of ocean carriers complying with evolving European Union emissions regulations will rise significantly from Jan. 1, with some shipping companies advising cargo owners of increases in emissions surcharges in excess of 50%. From 2026, the EU Emissions Trading System (ETS) will require shipping lines to account for 100% of carbon emissions, up from 70% in 2025, as part of its phased rollout. Under the ETS “cap and trade” system, carriers must buy or receive allowances to cover their emissions. The average price of European Union Allowances (EUAs) over the three months to Nov. 15 were assessed by Maersk as €76.75 ($89.13). Based on that calculation, Maersk announced that from Jan. 1, its first-quarter “emissions surcharge” will rise across all trade lanes that cover the European Union, with increases on some trade lanes topping 50%. Among the Maersk trade lanes affected in the first quarter are Asia-North Europe, where ETS charges will rise from $114 to $168 per FEU; Asia to the Mediterranean from $80 to $130/FEU, the Mediterranean to North America from $151 to $236/FEU and North Europe to US from $89 to $139/FEU. Also increasing is the cost of compliance with the FuelEU Maritime regulation, under which carriers must gradually reduce the greenhouse gas intensity in fuels; those costs are included in the emissions surcharge. Maersk noted that FuelEU costs were up because rising biofuel costs combined with declining fossil fuel prices were making compliance more expensive. Direct impact on cost structure Maersk’s partner in the Gemini Cooperation alliance, Hapag-Lloyd, includes ETS and FuelEU costs in its EU ETS surcharge; the Hamburg-based carrier estimates the surcharge will rise 45% on Jan. 1. CMA CGM said in a customer advisory Monday it was anticipating a surcharge increase of 43%, with Europe’s 100% implementation of the ETS having a direct impact on its cost structure. The surcharges will be levied under CMA CGM’s “energy transition surcharge” and vary across different trade lanes involving European ports. For example, the ETS surcharge on Shanghai-Rotterdam in the first quarter will rise by almost $50 to $168/FEU from Jan. 1. Ocean Network Express (ONE) announced its “Europe environmental surcharge [EES]” that will increase from $134 to $186/FEU on Asia/Oceania to Europe trades, from $172 to $266/FEU on West Asia to the Mediterranean, and from $88 to $122/FEU on Europe-North America routes. On all bookings from China, excluding Hong Kong, the carriers will add ETS surcharges to the base freight rate for regulatory reasons; the same is true on bookings from Taiwan. “Instead of a surcharge, the EES portion will be incorporated and considered as a part of freight,” ONE said in its customer advisory. The carriers, in their customer advisories, used the surcharge-raising opportunity to market their lower emissions services that predominantly use biofuel under a “mass balance” approach that governs the chain of custody. Cargo moved under premium priced services such as Maersk’s ECO Delivery, Hapag-Lloyd's Ship Green or CMA CGM’s ACT+ can significantly reduce carbon emissions. Contact Greg Knowler at greg.knowler@spglobal.com .

Transport, Trade and Regulation News

Trans-Atlantic

Container Shipping News

Ocean carriers unveil hefty increases in Europe emissions surcharges

<div class="phx-topic abstract-wrapper">The National Association of Waterfront Employers said intermodal service from ports could degrade further unless service commitments are made in the proposed $85 billion deal. </div>

The National Association of Waterfront Employers said intermodal service from ports could degrade further unless service commitments are made in the proposed $85 billion deal.

<div class="phx-topic">The National Association of Waterfront Employers (NAWE) became the first group in ocean freight to weigh in on the proposed merger of Union Pacific and Norfolk Southern, arguing a combined railroad could mean less competition and further erosion in intermodal service reliability at US ports.In a Dec. 1 letter to the US Surface Transportation Board (STB), NAWE said its members are concerned that reducing the number of Class I railroads through UP’s $85 billion acquisition of NS will further degrade intermodal service at ports. “Marine terminals need an intermodal rail service to handle increasing volumes of trade in order to provide streamlined imports and exports from increasingly strained port complexes,” NAWE’s letter said. “We are greatly concerned as to whether a reduction of two of the four major remaining competitors offering intermodal rail service will serve to benefit our industry.” NAWE, which represents marine terminals and stevedoring companies, said that Class I railroads, in general, are only taking a “best efforts” approach to providing intermodal service at ports. The group said the railroad industry’s focus on maintaining high operating ratios and “precision scheduled railroading” means less reliable intermodal service. Instead, railroads are leaving it to port operators and marine terminals to invest in rail operations “while the railroad usually takes more of an ‘if you build it, I may carry your cargo, if I see fit,’ approach,” NAWE’s letter said. “This results in a situation where the marine terminal industry finances and manages all the placement of intermodal on-dock rail transport, sometimes with very little in return on commitments in level of service,” the group wrote to STB, the federal regulator who will ultimately decide the fate of the proposed merger.<h3>Argues for intermodal growth at smaller ports</h3>Ocean carriers and ports have generally avoided public comments on the merger plans. NAWE said many of its members have good working relationships with the railroads, but it sees more potential for intermodal services to expand outside of larger ports by offering shippers more reach through less crowded gateways. The combination of two Class I railroads serving both coasts will further concentrate international intermodal freight at already busy ports, it said. “We need intermodal railroad services that expand the reach and capacity of medium-sized ports so they grow, but more fundamentally, we need to build a stronger business partnership with the railroads,” NAWE said. “Other port areas of the nation continue to struggle for commitment of service and greater level of investment to help spur growth.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

The National Association of Waterfront Employers (NAWE) became the first group in ocean freight to weigh in on the proposed merger of Union Pacific and Norfolk Southern, arguing a combined railroad could mean less competition and further erosion in intermodal service reliability at US ports. In a Dec. 1 letter to the US Surface Transportation Board (STB), NAWE said its members are concerned that reducing the number of Class I railroads through UP’s $85 billion acquisition of NS will further degrade intermodal service at ports. “Marine terminals need an intermodal rail service to handle increasing volumes of trade in order to provide streamlined imports and exports from increasingly strained port complexes,” NAWE’s letter said. “We are greatly concerned as to whether a reduction of two of the four major remaining competitors offering intermodal rail service will serve to benefit our industry.” NAWE, which represents marine terminals and stevedoring companies, said that Class I railroads, in general, are only taking a “best efforts” approach to providing intermodal service at ports. The group said the railroad industry’s focus on maintaining high operating ratios and “precision scheduled railroading” means less reliable intermodal service. Instead, railroads are leaving it to port operators and marine terminals to invest in rail operations “while the railroad usually takes more of an ‘if you build it, I may carry your cargo, if I see fit,’ approach,” NAWE’s letter said. “This results in a situation where the marine terminal industry finances and manages all the placement of intermodal on-dock rail transport, sometimes with very little in return on commitments in level of service,” the group wrote to STB, the federal regulator who will ultimately decide the fate of the proposed merger. Argues for intermodal growth at smaller ports Ocean carriers and ports have generally avoided public comments on the merger plans. NAWE said many of its members have good working relationships with the railroads, but it sees more potential for intermodal services to expand outside of larger ports by offering shippers more reach through less crowded gateways. The combination of two Class I railroads serving both coasts will further concentrate international intermodal freight at already busy ports, it said. “We need intermodal railroad services that expand the reach and capacity of medium-sized ports so they grow, but more fundamentally, we need to build a stronger business partnership with the railroads,” NAWE said. “Other port areas of the nation continue to struggle for commitment of service and greater level of investment to help spur growth.” Contact Michael Angell at michael.angell@spglobal.com .

North-American rail

Intermodal providers

Ports urge strict review of intermodal impacts from UP-NS merger

<div class="phx-topic abstract-wrapper">o9 Solutions contends that client data and confidential information on its platform were passed to SAP while three of its sales executives moved to the German software giant. </div>

o9 Solutions contends that client data and confidential information on its platform were passed to SAP while three of its sales executives moved to the German software giant.

<div class="phx-topic">Supply chain software vendor o9 Solutions is alleging that three of its former sales executives were recruited to join SAP so the German software giant could get access to proprietary and confidential documents related to o9’s platform, according to a lawsuit filed in the US District Court. The lawsuit, filed last week in Dallas where o9 is based, contends that its former chief revenue officer Stephane de Barse and sales executives Stijn-Pieter van Houten and Sean Zonneveld had systematically downloaded confidential system and client files over a few months before giving their notice, while coordinating the downloads with SAP before joining that company earlier this year. The lawsuit alleges that SAP, under pressure to upgrade its existing Advanced Planning and Optimization (APO) supply chain management platform, planned to retire that tool by 2027 and migrate its customers to its new supply chain management solution, called Integrated Business Planning (IBP). “However, contrary to SAP’s expectation, the market has demonstrated significant resistance and hesitation towards implementing SAP’s IBP platform due to its high costs, long timeline, operational risks, and poor implementation and support for existing customization,” o9 said in the lawsuit. “As a result of the failings in SAP’s offerings, numerous APO customers decided to move away from SAP services to other vendors, including o9, for a better, more refined platform.” Among the allegations in the lawsuit, o9 contends that de Barse, after giving notice on Jan. 3, 2025, that he would be departing the company Feb. 28, coordinated with the other two defendants to download specific client files and coordinate with SAP. The lawsuit alleges that the defendants downloaded approximately 22,000 documents in all, violating the terms of their contracts and US and Texas trade secret laws, with o9 seeking a judgment that would prevent the three executives from competing with o9, requiring them to return any downloaded documents and being awarded unspecified punitive damages. <h3>SAP says ‘not aware of any wrongdoing’ </h3>SAP, in a statement to the Journal of Commerce, said it takes o9’s allegations “very seriously.” “SAP is committed to the highest standards of business ethics and respects the intellectual property rights of others,” SAP said. “Our commitment to integrity and doing business the right way is unwavering — these principles are the foundation of our company. While SAP is not aware of any wrongdoing, we take these allegations very seriously and are looking into them. SAP will respond, as appropriate, through the legal process.” Founded in 2009, o9 provides supply chain management software to shippers, a market where it competes with SAP and dozens of other providers that help shippers coordinate planning and execution of manufacturing, transportation, warehousing and distribution processes. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Supply chain software vendor o9 Solutions is alleging that three of its former sales executives were recruited to join SAP so the German software giant could get access to proprietary and confidential documents related to o9’s platform, according to a lawsuit filed in the US District Court. The lawsuit, filed last week in Dallas where o9 is based, contends that its former chief revenue officer Stephane de Barse and sales executives Stijn-Pieter van Houten and Sean Zonneveld had systematically downloaded confidential system and client files over a few months before giving their notice, while coordinating the downloads with SAP before joining that company earlier this year. The lawsuit alleges that SAP, under pressure to upgrade its existing Advanced Planning and Optimization (APO) supply chain management platform, planned to retire that tool by 2027 and migrate its customers to its new supply chain management solution, called Integrated Business Planning (IBP). “However, contrary to SAP’s expectation, the market has demonstrated significant resistance and hesitation towards implementing SAP’s IBP platform due to its high costs, long timeline, operational risks, and poor implementation and support for existing customization,” o9 said in the lawsuit. “As a result of the failings in SAP’s offerings, numerous APO customers decided to move away from SAP services to other vendors, including o9, for a better, more refined platform.” Among the allegations in the lawsuit, o9 contends that de Barse, after giving notice on Jan. 3, 2025, that he would be departing the company Feb. 28, coordinated with the other two defendants to download specific client files and coordinate with SAP. The lawsuit alleges that the defendants downloaded approximately 22,000 documents in all, violating the terms of their contracts and US and Texas trade secret laws, with o9 seeking a judgment that would prevent the three executives from competing with o9, requiring them to return any downloaded documents and being awarded unspecified punitive damages. SAP says ‘not aware of any wrongdoing’ SAP, in a statement to the Journal of Commerce, said it takes o9’s allegations “very seriously.” “SAP is committed to the highest standards of business ethics and respects the intellectual property rights of others,” SAP said. “Our commitment to integrity and doing business the right way is unwavering — these principles are the foundation of our company. While SAP is not aware of any wrongdoing, we take these allegations very seriously and are looking into them. SAP will respond, as appropriate, through the legal process.” Founded in 2009, o9 provides supply chain management software to shippers, a market where it competes with SAP and dozens of other providers that help shippers coordinate planning and execution of manufacturing, transportation, warehousing and distribution processes. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

SAP sued by supply chain software competitor over alleged trade secret theft

<div class="phx-topic abstract-wrapper">The railroad says the appointment system will create more “predictable operations” by controlling the number of containers that are in-gated each day.</div>

The railroad says the appointment system will create more “predictable operations” by controlling the number of containers that are in-gated each day.

<div class="phx-topic">Norfolk Southern Railway (NS) has begun requiring truck drivers to make reservations to drop off domestic intermodal loads, with a system-wide rollout of the program scheduled to continue through March. As of Dec. 1, drivers must secure a reservation to deliver domestic containers to the NS terminal in Charlotte, North Carolina. Reservations are now also required in Atlanta; Columbus, Ohio; Jacksonville, Florida.; Kansas City, Missouri; Memphis and St. Louis after a “soft” rollout of the appointment system over the past few months, NS said, adding that one additional terminal will be added each week for the next 16 weeks. “We softly rolled [our mandatory appointment system] out for domestic [intermodal] in a handful of lanes, mostly between Chicago and New England,” Norfolk Southern said in a statement to intermodal partners that was seen by the Journal of Commerce. “After a year’s worth of testing and systems enhancements, we will be rolling [it] out systemwide.” The railroad says the reservation system will create more “predictable operations.” By controlling the number of containers that are in-gated each day, NS says it can reduce so-called origin dwell, or how long a container sits before being loaded on a train. Lower dwell times prevent terminals from becoming congested and preserve capacity to unload inbound trains quickly, according to the railroad. “By reducing variability and enhancing operational predictability, we aim to deliver better service and support to our customers,” NS said in the advisory. Key rollout dates ahead include Dec. 8 in Philadelphia; Feb. 2 in Harrisburg, Pennsylvania; Feb. 9 in Newark (Croxton), New Jersey; and Feb. 23 at Chicago’s 47th Street terminal. International intermodal customers already use a reservation system at several NS hubs, including Atlanta, Memphis and Chicago. BNSF Railway is now the only Class I North American railroad that does not require reservations for domestic intermodal drop-offs. <h3>Extra step for IMCs </h3>NS will host information sessions across its network to brief motor carriers and intermodal marketing companies (IMCs) on the new requirements. Sessions are scheduled in Cincinnati on Dec. 10 and Louisville on Dec. 11, ahead of those markets adopting the reservations system in mid-January. The change adds a planning step for IMCs to ensure loads depart on time by booking and providing reservation numbers to third-party drayage carriers. During peak periods, NS may also cap how many containers an IMC can ingate daily, potentially delaying some shipments. High-volume IMCs will receive a daily allocation of reservation slots per terminal. Once that allotment is exceeded, IMCs must use an open pool of remaining slots on a first-come, first-served basis. CSX Transportation — NS’ chief competitor in the eastern US domestic market — has used a similar reservation system since 2019. During the pandemic-era freight surge, reservation slots at times filled for days in Chicago and other hubs, leaving IMCs waiting to ingate containers. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Norfolk Southern Railway (NS) has begun requiring truck drivers to make reservations to drop off domestic intermodal loads, with a system-wide rollout of the program scheduled to continue through March. As of Dec. 1, drivers must secure a reservation to deliver domestic containers to the NS terminal in Charlotte, North Carolina. Reservations are now also required in Atlanta; Columbus, Ohio; Jacksonville, Florida.; Kansas City, Missouri; Memphis and St. Louis after a “soft” rollout of the appointment system over the past few months, NS said, adding that one additional terminal will be added each week for the next 16 weeks. “We softly rolled [our mandatory appointment system] out for domestic [intermodal] in a handful of lanes, mostly between Chicago and New England,” Norfolk Southern said in a statement to intermodal partners that was seen by the Journal of Commerce. “After a year’s worth of testing and systems enhancements, we will be rolling [it] out systemwide.” The railroad says the reservation system will create more “predictable operations.” By controlling the number of containers that are in-gated each day, NS says it can reduce so-called origin dwell, or how long a container sits before being loaded on a train. Lower dwell times prevent terminals from becoming congested and preserve capacity to unload inbound trains quickly, according to the railroad. “By reducing variability and enhancing operational predictability, we aim to deliver better service and support to our customers,” NS said in the advisory. Key rollout dates ahead include Dec. 8 in Philadelphia; Feb. 2 in Harrisburg, Pennsylvania; Feb. 9 in Newark (Croxton), New Jersey; and Feb. 23 at Chicago’s 47th Street terminal. International intermodal customers already use a reservation system at several NS hubs, including Atlanta, Memphis and Chicago. BNSF Railway is now the only Class I North American railroad that does not require reservations for domestic intermodal drop-offs. Extra step for IMCs NS will host information sessions across its network to brief motor carriers and intermodal marketing companies (IMCs) on the new requirements. Sessions are scheduled in Cincinnati on Dec. 10 and Louisville on Dec. 11, ahead of those markets adopting the reservations system in mid-January. The change adds a planning step for IMCs to ensure loads depart on time by booking and providing reservation numbers to third-party drayage carriers. During peak periods, NS may also cap how many containers an IMC can ingate daily, potentially delaying some shipments. High-volume IMCs will receive a daily allocation of reservation slots per terminal. Once that allotment is exceeded, IMCs must use an open pool of remaining slots on a first-come, first-served basis. CSX Transportation — NS’ chief competitor in the eastern US domestic market — has used a similar reservation system since 2019. During the pandemic-era freight surge, reservation slots at times filled for days in Chicago and other hubs, leaving IMCs waiting to ingate containers. Contact Ari Ashe at ari.ashe@spglobal.com .

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Norfolk Southern to roll out reservation system on domestic intermodal

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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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