<div class="phx-topic abstract-wrapper">Delays on railroads have eased since mid-March in Chicago, Savannah, and Dallas, after a rough winter filled with delays, detention, per diem, and demurrage fees for shippers. Railroads are rushing to hire employees, lease locomotives, and build sidings to be prepared for the next seasonal wave in the second half of 2018.</div>

Delays on railroads have eased since mid-March in Chicago, Savannah, and Dallas, after a rough winter filled with delays, detention, per diem, and demurrage fees for shippers. Railroads are rushing to hire employees, lease locomotives, and build sidings to be prepared for the next seasonal wave in the second half of 2018.

<div>[Editorial note: image removed/no longer available]After a delay-filled start to 2018, railroads are rushing to hire employees, lease locomotives, and build sidings to be prepared for the next seasonal wave in the second half of 2018. Photo credit: Shutterstock.com.PALM DESERT, California — The US intermodal rail supply chain, exceedingly slow this winter, has eased over the last three to four weeks, a welcome relief to beleaguered shippers suffering from shipment delays ranging from five to 10 business days.Calmer weather and a downshift in manufacturing following the Lunar New Year provided a pause for an overstressed railroad network. Nevertheless, demand remains...

[Editorial note: image removed/no longer available] After a delay-filled start to 2018, railroads are rushing to hire employees, lease locomotives, and build sidings to be prepared for the next seasonal wave in the second half of 2018. Photo credit: Shutterstock.com. PALM DESERT, California — The US intermodal rail supply chain, exceedingly slow this winter, has eased over the last three to four weeks, a welcome relief to beleaguered shippers suffering from shipment delays ranging from five to 10 business days. Calmer weather and a downshift in manufacturing following the Lunar New Year provided a pause for an overstressed railroad network. Nevertheless, demand remains elevated and train speeds are about two miles per hour slower, or 4 percent down compared with the prior year, based on conversations with intermodal marketing companies (IMCs) and data from the American Association of Railroads (AAR). Data from the Intermodal Association of North America also showed that volumes were up 8.1 percent in March on a year-over-year and sequential basis, fueled by double-digit growth from February in domestic intermodal and a smaller gain on the international side. When trains eventually reached their destinations, the cargo idled in the rail yards as draymen balked at the idea of regional hauls requiring the use of an electronic logging device (ELD). Canadian National Railway , CSX Transportation , Union Pacific Railroad , and BNSF Railway restricted draymen returning containers during the height of the congestion, and trucking companies levied surcharges on shippers to pay their detained drivers. But shippers are experiencing even greater challenges in the US truckload market, so the Class I railroads offer a capacity option when supply is harder to find, IMCs told JOC.com at the Transportation Intermediaries Association Capital Ideas Conference from April 8 to 11. Railroads: selling ‘the lesser of two evils’ “For a few years, the intermodal sell was cost, cost, cost. Now we’re back to viewing intermodal as a capacity play. And this year, shippers are looking for alternate solutions within the transportation network,” said Shelli Austin, president of Intek Freight and Logistics. “We’re selling the lesser of two evils,” said Robert Rich, CEO of Roar Logistics. “I will tell a shipper, ‘I can get you an intermodal container tomorrow and it will take 10 days end-to-end to the West Coast or I can abide by our contract and it will take me 10 days to get you a truck and three days on the road.’ It’s like so-so pizza or Chinese food, it may not be the best, but it’s still good enough.” In Chicago, where the problem was acute , the worst of the worst seems to have passed. In January, there were about 3,000 clicks per day on LoadMatch.com to find a drayman in the Chicago market, today it is only 1,000 clicks. Terminal operations have also settled down with no restrictions on trucks returning containers since mid-March. "We have improved the efficiency of our Chicago terminal, both Bedford Park and 59th Street significantly. Everybody had challenges at Christmas time, especially in Chicago and Memphis when the winter weather came in at Christmas Day and just hung around for a month, so it slowed everybody down," said CSX CEO Jim Foote in an April 17 earnings call. “Part of the problem is also the number of cross-town trips that Norfolk Southern [Railway], [UP], and CSX have been trying to do and there are only a limited amount of trucks, and so you’re sucking all the capacity out of the market that should be on steel wheel interchanges,” one intermodal executive told JOC.com, speaking on the condition of anonymity. Access to equipment for Los Angeles to Chicago routes, which was a problem in February, is also improving according to the IMCs. For example, J.B. Hunt Transport Services sent customer alerts in February about the equipment shortage affecting its truckload and intermodal operations. The company declined to comment on the current situation following its earnings report on April 16. The AAR weekly data show a mixed picture in Chicago. UP’s dwell time is down to 39.3 hours versus 49.7 in mid-March, but CN deteriorated 4.1 hours and BNSF Railway only fell 0.4 hours. There have been a couple lingering complaints in Chicago about Canadian Pacific Railway , possibly connected to delays at the Port of Vancouver’s Centerm terminal. The Canadian International Freight Forwarders Association (CIFFA) has been told that CP has enough locomotives, crews, and railcars, but the problem was related to access to the terminal and vessel bunching that has since been resolved. CP’s weekly data show average dwell time in Chicago was about 11 hours in February but deteriorated to 14 to 15 hours in March, although the number returned to the February average in the first week of April. CEO Keith Creel, however, did not mention the issue in a letter to the Surface Transportation Board (STB) dated March 30. Intermodal conditions are also improved in Georgia. Clicks on LoadMatch’s Savannah drayage directory have fallen from 2,000 per day in late January to about 600 this past week. NS also reported dwell times in Atlanta averaged 14 hours for the week ending April 6 versus 16.6 hours in mid-March. In Memphis, Tennessee, however, draymen and IMCs are indicating conditions remain problematic with CSX and CN. Clicks on the Loadmatch.com directory were 500 per day in the most recent available week, down from the 800 average in the winter but a smaller rate of decline than in Chicago, Savannah, and Dallas-Fort Worth. Donna Lemm, executive vice president for IMC Companies, said that all the railroads were a mess in Memphis through mid-March because the terminal operators did not have a plan to handle the additional volume and chassis were in short supply. “It is fair to say that BNSF and UP improved in recent weeks, largely because the volume calmed down and chassis were more readily available, but CN and CSX continue to be a problem,” she said. But Foote said on the CSX earnings call that while Memphis "has been a challenge for us" that it is now running smoothly. Steve Clark, vice president of Memphis-based Dunavant Logistics Group , agreed that there were some improvements in March but finding a draymen continues to be a challenge. “Because of what has happened this winter, you can’t get a truck for seven to 10 days even now. It may not be as bad as it was in early February, it’s gradually getting better, but it is nowhere near it needs to be,” he said. “CN is working its way through the problems. There aren’t 900 grounded containers anymore, maybe it’s half of that. But there isn’t a quick solution because trains are still arriving, it’s not like you can shut off shipments.” Clark and Lemm said it is not as hard to find draymen to serve the UP facility in West Memphis, Arkansas, as it was in January and February. The West Memphis location requires going east to west on the interstate or traveling downtown Memphis to cross the Mississippi River into Arkansas, not an appetizing prospect for a driver this winter dealing with terminal delays on top of the highway congestion. Like Chicago, a reluctance to handle regional drayage is also a problem in Memphis, according to Clark. The distance between Memphis and Jackson, Mississippi, and Birmingham, Alabama, is about 220 to 250 miles, which makes a round trip in a single day difficult. Even a dray to Little Rock, Arkansas, about 130 miles, is greater than the 100-mile exemption to the ELD mandate. Kristy Knichel, CEO of Knichel Logistics, said CSX is not only inconsistent, it is just one of a couple concerns surrounding the carrier. “CSX now requires 500 shipments in a lane instead of 250 shipments to get lock-in pricing. UP tried to do the same thing but are now being more flexible with their small and mid-sized shippers. We told CSX that they need to do a better job communicating with these shippers about why they are doing this and how it will affect them,” she said. Getting inventive with equipment solutions While most conversations about equipment shortages involve chassis, the railroads are facing another problem: a container shortage. Shippers and IMCs are getting creative in finding ways to move cargo when 53-foot domestic containers are unavailable. The solutions are 40- or 45-foot international boxes and a return to trailer-on-flatcar service (TOFC). “ISO boxes have become huge as an alternative. Not everyone needs a big box,” Austin said. “It is a domestic move, but they are using an ISO box if one is available quickly. The use of trailers is up too.” “If it’s a rectangle and it can hold freight, shippers want it because they just have to get the items off their docks. Everyone is tapped out so shippers are willing to try different things than they usually would,” said a second intermodal executive, who spoke on the condition of anonymity because he was not authorized to speak on the matter. Jason Hilsenbeck, founder of LoadMatch.com, noted the domestic container storage is only on railroad-owned equipment. CSX, UP, NS, Kansas City Southern Railway , and Florida East Coast Railway fleets (EMHU, UMAX, CSXU, TMXU, and XFEU) owned 88,295 units as of February, or only 0.19 percent higher than the prior year. The number of privately owned containers grew 6.7 percent to 179,286 during the same period. The privately owned container owners include J.B. Hunt, Hub Group, Schneider National, XPO Logistics, and Knight-Swift Transportation Holdings. “Take EMHU, which is used by UP, NS, and CP; they’ve actually eliminated 70 containers last year. But look at J.B. Hunt, which added 4,200 containers last year, or Hub Group adding 2,500 or Schneider adding 1,000. There is no problem getting 53-foot containers, but you have to go to the private-asset companies because the railroads have not invested in their equipment,” Hilsenbeck said. He also noted that TOFC is becoming popular and recalled seeing e-commerce giant Amazon putting its Amazon Prime trailers on the rails in recent months. TOFC business rose 17.6 percent in March and 14.5 percent in the first quarter compared with the same periods in 2017. The railroads are ready to respond One intermodal executive compared the situation to someone on the beach during an earthquake. The executive, who was not authorized to speak on the matter, said that the railroads felt the tremors but chose to wait to confirm the existence and size of the tidal wave before reacting. Now the executive expects that the Class I railroads will properly invest in capacity to handle the next seasonal peak in the third and fourth quarters. CN interim CEO Jean-Jacques Ruest in March outlined a plan to restore high-quality service to the network through the purchase of 200 railcars, new locomotives, additional sidings on the West Canada to Chicago corridor, and the hiring and training of new conductors. Ruest also sent a letter to CIFFA on April 4 indicating that dwell times were 1.8 days in Prince Rupert, 2.7 days in Deltaport, 5.2 days in Vanterm, and 5 days in Centerm. “A critical component of our ability to grow and add resiliency to the network is to invest in track capacity from the West Coast to Toronto and Chicago [and] $250 million in capital has been targeted for this spring and fall in advance of next winter,” he wrote in the letter, obtained by JOC.com. CSX wrote in a March 28 letter to the STB that its metrics are better than one year ago, although the year-over-year comparison will soon go up against a major disruption that frustrated shippers last spring and summer. “We have the right plan and the right team in place to deliver on the potential of our extraordinary rail network and market reach,” wrote CSX CEO Jim Foote. UP CEO Lance Fritz told the STB that it has reactivated about 500 high-horsepower locomotives since mid-2017, including 100 since early February, and will be purchasing 56 new units as part of the capital budget. Fritz wrote that there are plans to hire 2,100 track, engine, and yard employees, restore furloughed employees to their jobs, and graduate 200 trainees each month between March and July to be deployed into the field. “The issues we are experiencing will affect our ability to serve customers in 2018. Even so, we are working aggressively to minimize customer impacts as we move to restore service to the levels our customers have come to expect,” Fritz wrote. NS CEO James Squires also acknowledged in an April 2 letter to the STB that “our local performance is currently 7 percent below where we typically perform. … These metrics are not where we want them to be. But we are committed to improving for our customers.” Squires said service has been resumed on a route between Macon, Georgia, and Birmingham, Alabama, which previously was ceased in early 2017. It has also leased 90 locomotives, of which 27 have been received and 22 are in service. KCS CEO Patrick Ottensmeyer discussed the lease of 25 locomotives at the end of 2017 and told the STB that there are no plans to add more in 2018. He also wrote that there are no major staffing issues because the railroad did not use furloughs in previous years. CP’s Creel wrote that the railroad will take possession of 110 remanufactured locomotives, of which 30 are already delivered and 80 will arrive before the end of August. He also set a goal of hiring 150 more employees to beef up staffing levels in Chicago; St. Paul; Enderlin, North Dakota; and the Quad Cities, Iowa. Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @ariashe_joc .

North-American rail

US intermodal rail fluidity improves, but larger questions remain

<div class="phx-topic abstract-wrapper">The journey time, about two to three days better than typical industry metrics, comes despite congestion in other parts of partner CPKC’s network.</div>

The journey time, about two to three days better than typical industry metrics, comes despite congestion in other parts of partner CPKC’s network.

Feature image

<div class="phx-topic">Schneider National said Friday its flagship Mexico Midwest Express (MMX) intermodal service with partner Canadian Pacific Kansas City (CPKC) is continuing to deliver strong results in 2025, offering faster transit times and higher on-time reliability than many cross-border alternatives despite congestion in other parts of CPKC’s network. The MMX service, launched two years ago, connects inland Mexican cities such as Monterrey and San Luis Potosí with Chicago via a single-line rail route. The service bypasses traditional interchange delays at the border, with two spans over the Laredo bridge and switching yards on each side of the border to handle crew changes. While Schneider did not disclose current shipment totals due to its quiet period ahead of the release of its second-quarter earnings, the company said MMX performance metrics through the first half of 2025 were strong, with average transit times of four days and a cargo theft rate of less than 0.02%. Schneider also said the on-time performance of MMX remains above 95%. The typical transit time from Monterrey to Chicago is about six or seven days. “Decreasing shipping time by even a few days matters to our customers because the faster products can get on the shelves, the faster those items can land in the hands of consumers,” Michael Baumgardt, Schneider’s senior vice president of intermodal, said in a statement. The Intermodal Association of North America (IANA) reported that railroads hauled a combined 86,000-plus domestic containers this year through May 31, a 21% increase compared with the same period a year earlier. Railroads hauled nearly 60,000 domestic containers to the Midwest during the same period, up 9% from a year earlier. Schneider is currently the only intermodal provider offering a true single-line cross-border solution from Mexico to the Midwest, eliminating any chance of delays caused by an interchange between two railroads. Schneider said service on the MMX has not deteriorated much since CPKC’s <a href="https://www.joc.com/article/cpkc-acknowledges-service-woes-to-us-regulators-vows-remediation-6030412">messy IT transition</a> in May that affected service in Texas, Louisiana, and Mississippi. The exception is that some shippers have experienced lengthy delays moving cargo from Laredo to Chicago because the container dwell inside the Laredo yard is up 122% since early May compared with a year ago. Schneider rivals <a href="https://www.joc.com/article/jb-hunt-launching-quantum-de-mexico-for-time-sensitive-cross-border-freight-6014579">J.B. Hunt Transport Services</a> and <a href="https://www.joc.com/article/hub-group-boosts-cross-border-business-in-jv-with-mexican-dray-carrier-5745355">Hub Group</a> have also ramped up investments in cross-border intermodal in recent months, introducing new services and partnerships aimed at capturing a growing share of freight moving between the US and Mexico. Union Pacific Railroad completed a pilot program this spring to speed up the handoff between Mexican and US crews by doing it inside UP’s Eagle Pass terminal rather than on the middle of the International Railway Bridge. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Schneider National said Friday its flagship Mexico Midwest Express (MMX) intermodal service with partner Canadian Pacific Kansas City (CPKC) is continuing to deliver strong results in 2025, offering faster transit times and higher on-time reliability than many cross-border alternatives despite congestion in other parts of CPKC’s network. The MMX service, launched two years ago, connects inland Mexican cities such as Monterrey and San Luis Potosí with Chicago via a single-line rail route. The service bypasses traditional interchange delays at the border, with two spans over the Laredo bridge and switching yards on each side of the border to handle crew changes. While Schneider did not disclose current shipment totals due to its quiet period ahead of the release of its second-quarter earnings, the company said MMX performance metrics through the first half of 2025 were strong, with average transit times of four days and a cargo theft rate of less than 0.02%. Schneider also said the on-time performance of MMX remains above 95%. The typical transit time from Monterrey to Chicago is about six or seven days. “Decreasing shipping time by even a few days matters to our customers because the faster products can get on the shelves, the faster those items can land in the hands of consumers,” Michael Baumgardt, Schneider’s senior vice president of intermodal, said in a statement. The Intermodal Association of North America (IANA) reported that railroads hauled a combined 86,000-plus domestic containers this year through May 31, a 21% increase compared with the same period a year earlier. Railroads hauled nearly 60,000 domestic containers to the Midwest during the same period, up 9% from a year earlier. Schneider is currently the only intermodal provider offering a true single-line cross-border solution from Mexico to the Midwest, eliminating any chance of delays caused by an interchange between two railroads. Schneider said service on the MMX has not deteriorated much since CPKC’s messy IT transition in May that affected service in Texas, Louisiana, and Mississippi. The exception is that some shippers have experienced lengthy delays moving cargo from Laredo to Chicago because the container dwell inside the Laredo yard is up 122% since early May compared with a year ago. Schneider rivals J.B. Hunt Transport Services and Hub Group have also ramped up investments in cross-border intermodal in recent months, introducing new services and partnerships aimed at capturing a growing share of freight moving between the US and Mexico. Union Pacific Railroad completed a pilot program this spring to speed up the handoff between Mexican and US crews by doing it inside UP’s Eagle Pass terminal rather than on the middle of the International Railway Bridge. Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

Schneider says MMX service delivering four-day Mexico-Chicago transit time

<div class="phx-topic abstract-wrapper">The project, due to begin Monday, will also improve truck access by upgrading the gate infrastructure and boost efficiency through the replacement of an outdated terminal operating system.</div>

The project, due to begin Monday, will also improve truck access by upgrading the gate infrastructure and boost efficiency through the replacement of an outdated terminal operating system.

<div class="phx-topic">The International Transportation Service (ITS) terminal in Long Beach will begin a $365 million upgrade on Monday that will increase its container capacity by about 50% and enable it to work two 18,000-TEU ships simultaneously. The work involves filling in a 19-acre slip at the terminal to make the property usable. Scheduled for completion in about three and a half years, the project will also improve truck access by upgrading the gate infrastructure and boost efficiency through the replacement of an outdated terminal operating system (TOS) with a new TOS, ITS CEO Kim Holtermand told the Journal of Commerce. “Our tech is quite old. It’s time to upgrade it,” Holtermand said. ITS is, in effect, two separate terminals separated by the slip, which hinders operational efficiency, Holtermand said. Filling in the slip will increase the terminal’s size to 277 acres and create a more efficient square-shaped facility. With a total of 3,500 linear feet of berth, ITS will be able to handle two super-post-Panamax container ships, or one 18,000-TEU vessel and two smaller ships simultaneously, he said. “It will be a large efficient facility with big [super post-Panamax] cranes and improved infrastructure,” Holtermand said. ITS’ annual throughput capacity will increase by about 50% to 1.5 million container moves, or 2.6 million TEUs, he said. <h3>Gate improvements expected to boost efficiency </h3>Included in the project will be a reconfiguration of the terminal’s gate complex and a new TOS that will streamline truck access and egress. Trucks calling at ITS in June had an average turn time of 71 minutes; the average turn time for the Long Beach-Los Angeles port complex in June was 62 minutes, according to the Harbor Trucking Association. ITS will also continue its efforts to electrify all its cargo-handling equipment by 2030 to meet the deadline set in the joint Los Angeles-Long Beach <a href="https://www.joc.com/article/la-lb-port-significantly-cuts-emissions-but-tougher-challenges-await-5742585">Clean Air Action Plan</a>, Holtermand said. The equipment will continue to be operated by dockworkers, he added. Noel Hacegaba, COO at the Port of Long Beach, said the ITS expansion project is the latest example of how the port and its stakeholders are not only growing, but growing green. Another project that will accomplish the port’s environmental goals is the <a href="https://www.joc.com/article/southern-california-ports-ready-to-defend-green-initiatives-from-trump-white-house-5927353">Pier B on-dock railyard</a> that will eliminate hundreds of truck trips each day by loading inland point intermodal (IPI) containers directly onto trains rather than trucking them to near-dock railyards, Hacegaba said. Construction of the Pier B facility continues to advance, he said, with completion expected in 2032. On-dock moves account for about 27% of Long Beach’s IPI volume; completion of the Pier B facility will raise that to about 35%, Hacegaba said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The International Transportation Service (ITS) terminal in Long Beach will begin a $365 million upgrade on Monday that will increase its container capacity by about 50% and enable it to work two 18,000-TEU ships simultaneously. The work involves filling in a 19-acre slip at the terminal to make the property usable. Scheduled for completion in about three and a half years, the project will also improve truck access by upgrading the gate infrastructure and boost efficiency through the replacement of an outdated terminal operating system (TOS) with a new TOS, ITS CEO Kim Holtermand told the Journal of Commerce. “Our tech is quite old. It’s time to upgrade it,” Holtermand said. ITS is, in effect, two separate terminals separated by the slip, which hinders operational efficiency, Holtermand said. Filling in the slip will increase the terminal’s size to 277 acres and create a more efficient square-shaped facility. With a total of 3,500 linear feet of berth, ITS will be able to handle two super-post-Panamax container ships, or one 18,000-TEU vessel and two smaller ships simultaneously, he said. “It will be a large efficient facility with big [super post-Panamax] cranes and improved infrastructure,” Holtermand said. ITS’ annual throughput capacity will increase by about 50% to 1.5 million container moves, or 2.6 million TEUs, he said. Gate improvements expected to boost efficiency Included in the project will be a reconfiguration of the terminal’s gate complex and a new TOS that will streamline truck access and egress. Trucks calling at ITS in June had an average turn time of 71 minutes; the average turn time for the Long Beach-Los Angeles port complex in June was 62 minutes, according to the Harbor Trucking Association. ITS will also continue its efforts to electrify all its cargo-handling equipment by 2030 to meet the deadline set in the joint Los Angeles-Long Beach Clean Air Action Plan , Holtermand said. The equipment will continue to be operated by dockworkers, he added. Noel Hacegaba, COO at the Port of Long Beach, said the ITS expansion project is the latest example of how the port and its stakeholders are not only growing, but growing green. Another project that will accomplish the port’s environmental goals is the Pier B on-dock railyard that will eliminate hundreds of truck trips each day by loading inland point intermodal (IPI) containers directly onto trains rather than trucking them to near-dock railyards, Hacegaba said. Construction of the Pier B facility continues to advance, he said, with completion expected in 2032. On-dock moves account for about 27% of Long Beach’s IPI volume; completion of the Pier B facility will raise that to about 35%, Hacegaba said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Container Shipping News

Port News

North American ports

Marine terminals

Maritime

Long Beach ITS terminal upgrade to boost capacity by about 50%

<div class="phx-topic abstract-wrapper">The decline came despite a 4.4% increase in total container volumes to 2 million TEUs, the carrier said in a quarterly update Friday.</div>

The decline came despite a 4.4% increase in total container volumes to 2 million TEUs, the carrier said in a quarterly update Friday.

<div class="phx-topic">OOCL’s second-quarter revenues dropped 6.5% year over year to $2.1 billion amid falling freight rates on trans-Pacific and Asia-Europe services, the carrier said in a quarterly update Friday. The revenue decline came despite a 4.4% increase in total container volumes to 2 million TEUs, the carrier said. OOCL, the liner offshoot of Hong Kong-listed Orient Overseas (International), a Cosco Shipping Holdings subsidiary, said second-quarter trans-Pacific revenues were also hit by a 4.3% fall in container volumes to 501,814 TEUs. Trans-Pacific revenues fell 18% to $753 million in the second quarter from $922 million a year earlier. OOCL said revenue from Asia-Europe services dropped 15% to $443 million in the April–June period despite a 3% increase in liftings to 361,722 TEUs. There were brighter results in OOCL’s two other main markets. Intra-Asia and Australasia remained OOCL’s biggest contributor to revenue and volumes after the carrier saw a 9% increase to $728 million in second-quarter revenue. Liftings climbed 8% to 951,940 TEUs. Revenue from trans-Atlantic services surged 25% to $194 million, while container volumes rose 21% to 147,824 TEUs. OOCL’s update only gave revenue and liftings figures; parent company OOIL will likely release full half-year results in mid-August. The carrier’s revenue result echoes that of Taiwan’s Big Three container lines, <a href="https://www.joc.com/article/taiwans-big-three-carriers-see-falling-q2-revenues-as-demand-slump-begins-6041608">which on Wednesday reported worsening second-quarter revenues</a> compared with the first quarter. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

OOCL’s second-quarter revenues dropped 6.5% year over year to $2.1 billion amid falling freight rates on trans-Pacific and Asia-Europe services, the carrier said in a quarterly update Friday. The revenue decline came despite a 4.4% increase in total container volumes to 2 million TEUs, the carrier said. OOCL, the liner offshoot of Hong Kong-listed Orient Overseas (International), a Cosco Shipping Holdings subsidiary, said second-quarter trans-Pacific revenues were also hit by a 4.3% fall in container volumes to 501,814 TEUs. Trans-Pacific revenues fell 18% to $753 million in the second quarter from $922 million a year earlier. OOCL said revenue from Asia-Europe services dropped 15% to $443 million in the April–June period despite a 3% increase in liftings to 361,722 TEUs. There were brighter results in OOCL’s two other main markets. Intra-Asia and Australasia remained OOCL’s biggest contributor to revenue and volumes after the carrier saw a 9% increase to $728 million in second-quarter revenue. Liftings climbed 8% to 951,940 TEUs. Revenue from trans-Atlantic services surged 25% to $194 million, while container volumes rose 21% to 147,824 TEUs. OOCL’s update only gave revenue and liftings figures; parent company OOIL will likely release full half-year results in mid-August. The carrier’s revenue result echoes that of Taiwan’s Big Three container lines, which on Wednesday reported worsening second-quarter revenues compared with the first quarter. Contact Keith Wallis at keithwallis@hotmail.com .

Container lines

Trans-Atlantic

Asia-Europe

Trans-Pacific

OOCL’s Q2 revenue slides on lower trans-Pacific, Asia-Europe rates

<div class="phx-topic abstract-wrapper">Adoption of digital bills of lading has been stronger in Asia, but US traction is necessary to help container lines meet a 2030 commitment to fully move to electronic documents.</div>

Adoption of digital bills of lading has been stronger in Asia, but US traction is necessary to help container lines meet a 2030 commitment to fully move to electronic documents.

<div class="phx-topic">US Bank has completed its first trade finance transaction using a digital ocean bill of lading (BoL), another small step toward the industry’s intent to transition to 100% digital BoLs by 2030. The transaction, disclosed by US Bank on Thursday, was facilitated by electronic bill of lading (eBL) software vendor WaveBL for a US-based exporter using Mediterranean Shipping Co., which issued the eBL. MSC is a WaveBL customer, one of two container lines using the software vendor; Zim Integrated Shipping Services is the other. Adoption of eBLs is growing, but off a low base, and is more commonly used in Asia, where the eBL software provider IQAX is getting traction among banks and export suppliers. The nine member carriers of the Digital Container Shipping Association (DCSA) committed in early 2023 to shift to 100% digital bills of lading by 2030. This week’s move by US Bank highlights the potential in American banks adopting a process to accommodate digital BoLs. Traditionally, bills of lading transfer titles between buyers and sellers at a point determined by the shipment’s Incoterm, and banks traditionally play a role in issuing letters of credit to suppliers. In theory, an eBL would negate the need for most letters of credit, as the digital data contained in the document can be used by the buyer, seller, shipping line and banks to understand the financial risk of the shipment. “Our clients are looking for smarter, more efficient ways to manage their import and export activities,” US Bank Senior Vice President Christine Bravo said in a statement. US Bank said a transaction such as this normally would require a courier to physically transport documents across continents, often taking several days. “By contrast, the digital process reduced that timeline to minutes, eliminating delays, [and] enhancing security and compliance,” the bank said. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

US Bank has completed its first trade finance transaction using a digital ocean bill of lading (BoL), another small step toward the industry’s intent to transition to 100% digital BoLs by 2030. The transaction, disclosed by US Bank on Thursday, was facilitated by electronic bill of lading (eBL) software vendor WaveBL for a US-based exporter using Mediterranean Shipping Co., which issued the eBL. MSC is a WaveBL customer, one of two container lines using the software vendor; Zim Integrated Shipping Services is the other. Adoption of eBLs is growing, but off a low base, and is more commonly used in Asia, where the eBL software provider IQAX is getting traction among banks and export suppliers. The nine member carriers of the Digital Container Shipping Association (DCSA) committed in early 2023 to shift to 100% digital bills of lading by 2030. This week’s move by US Bank highlights the potential in American banks adopting a process to accommodate digital BoLs. Traditionally, bills of lading transfer titles between buyers and sellers at a point determined by the shipment’s Incoterm, and banks traditionally play a role in issuing letters of credit to suppliers. In theory, an eBL would negate the need for most letters of credit, as the digital data contained in the document can be used by the buyer, seller, shipping line and banks to understand the financial risk of the shipment. “Our clients are looking for smarter, more efficient ways to manage their import and export activities,” US Bank Senior Vice President Christine Bravo said in a statement. US Bank said a transaction such as this normally would require a courier to physically transport documents across continents, often taking several days. “By contrast, the digital process reduced that timeline to minutes, eliminating delays, [and] enhancing security and compliance,” the bank said. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

US Bank eBL trial for US exporter notches another step toward 2030 goal

<div class="phx-topic abstract-wrapper">The Marseille-based liner has finalized operational plans to call off its remaining vessel-sharing agreements with the carriers after Gemini Cooperation-linked realignments.</div>

The Marseille-based liner has finalized operational plans to call off its remaining vessel-sharing agreements with the carriers after Gemini Cooperation-linked realignments.

<div class="phx-topic">CMA CGM is switching from vessel-sharing agreements (VSAs) to standalone operations across trades out of India in a new strategic approach as it expands its fleet. The Marseille-based liner has finalized operational plans to call off its two remaining VSAs with Hapag-Lloyd and Maersk after Gemini Cooperation-linked realignments. The upcoming disengagements include the Swahili Express (SWAX2) loop run with Hapag-Lloyd on the India-East Africa trade and the Midas network, involving two strings, operated with Maersk on the India-West Africa trade. CMA CGM has had three ships out of the five used on the joint SWAX2, with one vessel each from Hapag-Lloyd and Emirates Shipping Line (ESL). Midas has involved a fleet of 10 ships — six from Maersk and four from CMA CGM — on String 1 and three vessels from each on String 2. The French carrier has already sent its partners termination notices, due to take effect from next month for the SWAX2 operation and from late 2025/early 2026 for the Midas network. Sources at Hapag-Lloyd and Maersk in India were unavailable for comment. The Gemini launch in February saw CMA CGM delink from the decades-long consortium partnerships with Hapag-Lloyd on the India-US East Coast and North Europe trades. CMA CGM’s India VSA operations are now confined to Cosco Shipping/OOCL on the Epic service. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM is switching from vessel-sharing agreements (VSAs) to standalone operations across trades out of India in a new strategic approach as it expands its fleet. The Marseille-based liner has finalized operational plans to call off its two remaining VSAs with Hapag-Lloyd and Maersk after Gemini Cooperation-linked realignments. The upcoming disengagements include the Swahili Express (SWAX2) loop run with Hapag-Lloyd on the India-East Africa trade and the Midas network, involving two strings, operated with Maersk on the India-West Africa trade. CMA CGM has had three ships out of the five used on the joint SWAX2, with one vessel each from Hapag-Lloyd and Emirates Shipping Line (ESL). Midas has involved a fleet of 10 ships — six from Maersk and four from CMA CGM — on String 1 and three vessels from each on String 2. The French carrier has already sent its partners termination notices, due to take effect from next month for the SWAX2 operation and from late 2025/early 2026 for the Midas network. Sources at Hapag-Lloyd and Maersk in India were unavailable for comment. The Gemini launch in February saw CMA CGM delink from the decades-long consortium partnerships with Hapag-Lloyd on the India-US East Coast and North Europe trades. CMA CGM’s India VSA operations are now confined to Cosco Shipping/OOCL on the Epic service. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM ends existing Indian VSAs with Hapag-Lloyd, Maersk

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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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