<div class="phx-topic abstract-wrapper">Information is the best lubricant for today's high-tech manufacturing systems, speakers at a recent </div>

Information is the best lubricant for today's high-tech manufacturing systems, speakers at a recent

<div>Information is the best lubricant for today's high-tech manufacturing systems, speakers at a recent conference here said.On-site results led to this conclusion, said Richard Albrecht, staff programmer, International Business Machines Corp., Armonk, N.Y.Mr. Albrecht is assigned to the IBM Manufacturing EDI Project office in Rochester, Minn. He was speaking at the American National Standards Institute's X12 Group's seminar and technical exhibit.IBM calls its Just-in-Time distribution system continuous flow manufacturing, Mr. Albrecht noted. Without EDI, implementation of continuous flow manufacturing is virtually impossible, he said.Big plans have been set for IBM's use of EDI. We have a goal that by 1991,...

Information is the best lubricant for today's high-tech manufacturing systems, speakers at a recent conference here said. On-site results led to this conclusion, said Richard Albrecht, staff programmer, International Business Machines Corp., Armonk, N.Y.Mr. Albrecht is assigned to the IBM Manufacturing EDI Project office in Rochester, Minn. He was speaking at the American National Standards Institute's X12 Group's seminar and technical exhibit. IBM calls its Just-in-Time distribution system continuous flow manufacturing, Mr. Albrecht noted. Without EDI, implementation of continuous flow manufacturing is virtually impossible, he said. Big plans have been set for IBM's use of EDI. We have a goal that by 1991, we'll have 2,000 suppliers actively participating in EDI worldwide. And we've projected a saving of $60 million annually by 1991 in direct purchases, he said. Smooth flow in manufacturing means efficient use of production resources and tighter inventory. Because of this, there is an information float, and it's just as costly as the float in your checking account, he said. The key ingredient in creating a workable EDI system is extension of the technology outside IBM's corporate boundaries. IBM has strongly suggested its suppliers use the technology, Mr. Albrecht said. Those who want to make best use of the technology should recognize it is only one ingredient in the automation mix, he said. Our tools include enabling our office system to interact with EDI, electronic funds transfer, actual EDI transmission of data transaction, and bar coding or automatic identification. Also in our tool bag are computer- integrated manufacturing, the ability to trade graphics data and expert systems. We're not just talking about standardized data transaction. In the future, electronically transmitted information to and from IBM will include data specification, statistical process control information, delivery schedules, quality data files, memos, letters, notes, EFT remittance advices and computer-aided design/computer-aided manufacturing information. IBM will transmit and retrieve information through public EDI communications networks rather than creating a system of its own, Mr. Albrecht said. These are also known as value-added networks. We chose to use a value-added network so we'd have a bumper between the computers of our suppliers and our own internal computer, for security reasons, he said. IBM only requires that the people it communicates with use EDI standards. Hardware and other software is not specified, he said. We feel if we own and control that hardware and software, we'll be effectively stifling our suppliers' own ongoing EDI relations with their customers and suppliers, Mr. Albrecht said. Though the investments needed are significant, the savings that result will be even greater, he predicted. Clerical savings, although just a few cents per transaction, taken over millions of transactions, added up to quite a bit. And we'll eliminate a lot of travel. People won't have to hop on an airplane when something goes wrong, he said.

SMOOTH FLOW SEEN DIFFICULT WITHOUT ELECTRONIC GREASE

<div class="phx-topic abstract-wrapper">Mumbai-based forwarder executives have linked the pricing gains mainly to lower capacity amid multiple blank sailings during the month covering CMA CGM’s Epic service and Ocean Network Express’ IOX loop.</div>

Mumbai-based forwarder executives have linked the pricing gains mainly to lower capacity amid multiple blank sailings during the month covering CMA CGM’s Epic service and Ocean Network Express’ IOX loop.

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<div class="phx-topic">Ocean carriers on India-Europe trades that navigated significant rate erosion in the past few months have been able to turn the tables in December amid lower capacity, according to new data obtained by the Journal of Commerce from local freight forwarders. Average freight-all-kinds (FAK) rates on the trade lane have climbed between $300 to $500 per FEU month on month, forwarders say. Booking rates from West India (Nhava Sheva/Mundra) to North Europe (Felixstowe/London Gateway) now stand at between $1,100 and $1,400 per FEU, varying from carrier to carrier. That compares with early-November carrier pricing of $800 to $900 per FEU for the same port pair, which was the lowest level in two years. Mumbai-based forwarder executives have linked the December pricing gains mainly to lower capacity due to multiple blank sailings during the month covering CMA CGM’s Epic service and Ocean Network Express’ IOX loop. “It’s a good recovery for the carriers after suffering months of steady declines,” one source said. “Demand remains a wild card for them, (and there are) indications of a delayed onset of the seasonal grape export trade that typically begins in January.” <h3>Mid-month rate hike </h3>Lead carriers on the trade are preparing to implement a modest upward revision in their tariff rates for India-North Europe/Mediterranean loads. For example, Hapag-Lloyd said in a customer advisory it will increase published rates out of Nhava Sheva/Mundra and Ennore/Chennai by $200 per TEU/FEU for all sailings effective Dec. 16. Meanwhile, the Gemini Cooperation has expanded the port rotation of its India-Europe network, individually known as the "ME1" for Maersk and the "IOS" for Hapag-Lloyd, with a new stop at Wilhelmshaven in Germany beginning in late January in addition to the Hamburg call already in place. The updated rotation will be Jebel Ali, Mundra, Nhava Sheva, Salalah, Tanger Med, Rotterdam, Wilhelmshaven, Hamburg, London Gateway, Tanger Med, Salalah and back to Jebel Ali. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Ocean carriers on India-Europe trades that navigated significant rate erosion in the past few months have been able to turn the tables in December amid lower capacity, according to new data obtained by the Journal of Commerce from local freight forwarders. Average freight-all-kinds (FAK) rates on the trade lane have climbed between $300 to $500 per FEU month on month, forwarders say. Booking rates from West India (Nhava Sheva/Mundra) to North Europe (Felixstowe/London Gateway) now stand at between $1,100 and $1,400 per FEU, varying from carrier to carrier. That compares with early-November carrier pricing of $800 to $900 per FEU for the same port pair, which was the lowest level in two years. Mumbai-based forwarder executives have linked the December pricing gains mainly to lower capacity due to multiple blank sailings during the month covering CMA CGM’s Epic service and Ocean Network Express’ IOX loop. “It’s a good recovery for the carriers after suffering months of steady declines,” one source said. “Demand remains a wild card for them, (and there are) indications of a delayed onset of the seasonal grape export trade that typically begins in January.” Mid-month rate hike Lead carriers on the trade are preparing to implement a modest upward revision in their tariff rates for India-North Europe/Mediterranean loads. For example, Hapag-Lloyd said in a customer advisory it will increase published rates out of Nhava Sheva/Mundra and Ennore/Chennai by $200 per TEU/FEU for all sailings effective Dec. 16. Meanwhile, the Gemini Cooperation has expanded the port rotation of its India-Europe network, individually known as the "ME1" for Maersk and the "IOS" for Hapag-Lloyd, with a new stop at Wilhelmshaven in Germany beginning in late January in addition to the Hamburg call already in place. The updated rotation will be Jebel Ali, Mundra, Nhava Sheva, Salalah, Tanger Med, Rotterdam, Wilhelmshaven, Hamburg, London Gateway, Tanger Med, Salalah and back to Jebel Ali. Contact Bency Mathew at bencyvmathew@gmail.com .

Container lines

Asia-Europe

Container Shipping News

Maritime

India-Europe carriers push December rates higher on tighter capacity

<div class="phx-topic abstract-wrapper">The softer global growth in October pulled the 12-month rolling average down to the lowest in 20 months, according to Drewry’s Simon Heaney. </div>

The softer global growth in October pulled the 12-month rolling average down to the lowest in 20 months, according to Drewry’s Simon Heaney.

<div class="phx-topic">Global container volume growth in October fell to its slowest pace since February as increased trade in Asia, Africa, the Middle East and Latin America was offset by falling US and European imports, according to new data from Container Trades Statistics (CTS). Global volumes expanded 2.1% year over year in October, with volumes in the first 10 months up 4.4% compared with a year earlier, according to CTS. The softer global growth in October pulled the 12-month rolling average down to the lowest level in 20 months, according to Simon Heaney, senior manager of container research at Drewry. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0bafc15c-1e46-45a2-91a6-3b0bb1eb82aa"></dynamic-object></div>“Regional container trade growth in 2025 is increasingly asymmetric, with economies commonly grouped — albeit loosely — under the term ‘Global South’ pulling decisively ahead of their ‘Western’ counterparts,” Heaney said. Import volumes into North America in October fell 6.7% compared with October 2024, while exports from Asia to Europe fell on a year-over-year basis for the first time since February, dropping 3%, according to CTS.But the plunge in US imports has been the biggest drag on global container volumes. US import volumes are on track to end the <a href="https://www.joc.com/article/december-us-imports-on-track-to-be-lowest-since-june-23-retailers-6130632">year down 1.4% at 25.2 million TEUs</a>, according to the Global Port Tracker released Monday. Moody’s Ratings on Nov. 18 warned that US import volumes in 2026 will be flat to down 2% from this year Comparably, shipowner association BIMCO forecasts that global container volumes will expand 2.5% to 3.5% next year, while volumes will end this year up 4.5% to 5.5% from 2024. There have been just two years in which US containerized import volumes have declined to the extent seen in recent months, analyst John McCown said last week on a Journal of Commerce webinar. The most recent was in the spring of 2020 when retailers and other importers slashed orders on fears that retail consumption would plunge in the early days of the pandemic, and the first was 2008–09 in the wake of the financial crisis, McCown said. “I think we’re looking at perhaps the worst performance year that I can recall, in 2026, in terms of volume growth,” McCown said. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Global container volume growth in October fell to its slowest pace since February as increased trade in Asia, Africa, the Middle East and Latin America was offset by falling US and European imports, according to new data from Container Trades Statistics (CTS). Global volumes expanded 2.1% year over year in October, with volumes in the first 10 months up 4.4% compared with a year earlier, according to CTS. The softer global growth in October pulled the 12-month rolling average down to the lowest level in 20 months, according to Simon Heaney, senior manager of container research at Drewry. “Regional container trade growth in 2025 is increasingly asymmetric, with economies commonly grouped — albeit loosely — under the term ‘Global South’ pulling decisively ahead of their ‘Western’ counterparts,” Heaney said. Import volumes into North America in October fell 6.7% compared with October 2024, while exports from Asia to Europe fell on a year-over-year basis for the first time since February, dropping 3%, according to CTS. But the plunge in US imports has been the biggest drag on global container volumes. US import volumes are on track to end the year down 1.4% at 25.2 million TEUs , according to the Global Port Tracker released Monday. Moody’s Ratings on Nov. 18 warned that US import volumes in 2026 will be flat to down 2% from this year Comparably, shipowner association BIMCO forecasts that global container volumes will expand 2.5% to 3.5% next year, while volumes will end this year up 4.5% to 5.5% from 2024. There have been just two years in which US containerized import volumes have declined to the extent seen in recent months, analyst John McCown said last week on a Journal of Commerce webinar. The most recent was in the spring of 2020 when retailers and other importers slashed orders on fears that retail consumption would plunge in the early days of the pandemic, and the first was 2008–09 in the wake of the financial crisis, McCown said. “I think we’re looking at perhaps the worst performance year that I can recall, in 2026, in terms of volume growth,” McCown said. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Global container volume growth slows on US, EU declines

<div class="phx-topic abstract-wrapper">The weak import numbers come as the National Retail Federation is projecting record holiday sales in the US of more than $1 trillion for the first time, up between 3.7% and 4.2% from 2024.</div>

The weak import numbers come as the National Retail Federation is projecting record holiday sales in the US of more than $1 trillion for the first time, up between 3.7% and 4.2% from 2024.

<div class="phx-topic">Containerized imports into the US this month are expected to fall to their lowest level in two and a half years, while ongoing tariff uncertainty will keep volumes at a significant year-over-year deficit at least into the second quarter of next year, US retailers said Tuesday. Projected December imports of 1.86 million TEUs would be the lowest since June 2023, the National Retail Federation (NRF) and Hackett Associates said in their latest Global Port Tracker (GPT). And the weakened cargo picture shows no signs of abating, with GPT’s first forecast for April 2026 imports projecting 1.97 million TEUs, down 11% from the same month a year earlier. “We are seeing the results of the tariffs in weakening cargo demand going forward from the fourth quarter of this year and likely into the first half of next year,” Ben Hackett, founder of Hackett Associates, said in a statement accompanying the monthly port tracker. “Container shipping rates are already declining on both coasts due to less need for cargo space for goods from both Asia and Europe.” The projected April imports would follow a down first quarter, with volumes in January, February and March expected to be, respectively, 10.3%, 8.5% and 16.8% lower than the corresponding months in 2025. The weak import numbers come as the NRF is projecting record holiday sales in the US of more than $1 trillion for the first time, up between 3.7% and 4.2% from 2024. US retail sales rose 0.2% in September, according to the Commerce Department, while a Conference Board survey on Nov. 22 revealed falling US consumer confidence had reached the lowest since April, when the US began its tariff onslaught. “Stores are stocked up and ready for a record holiday season, but there is still a great deal of uncertainty about what will happen in 2026 with trade policy,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said in the statement. December’s projected imports of 1.86 million TEUs would be down almost 13% from a year ago, and while November’s figures are not yet reported, NRF expects 1.91 million TEUs, 11.6% lower year over year. For all of 2025, NRF expects imports of 25.2 million TEUs, down 1.4% from 2024. The GPT covers the ports of Los Angeles/Long Beach, Oakland, and Seattle and Tacoma on the West Coast; New York/New Jersey, the Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast. Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>.</div>

Containerized imports into the US this month are expected to fall to their lowest level in two and a half years, while ongoing tariff uncertainty will keep volumes at a significant year-over-year deficit at least into the second quarter of next year, US retailers said Tuesday. Projected December imports of 1.86 million TEUs would be the lowest since June 2023, the National Retail Federation (NRF) and Hackett Associates said in their latest Global Port Tracker (GPT). And the weakened cargo picture shows no signs of abating, with GPT’s first forecast for April 2026 imports projecting 1.97 million TEUs, down 11% from the same month a year earlier. “We are seeing the results of the tariffs in weakening cargo demand going forward from the fourth quarter of this year and likely into the first half of next year,” Ben Hackett, founder of Hackett Associates, said in a statement accompanying the monthly port tracker. “Container shipping rates are already declining on both coasts due to less need for cargo space for goods from both Asia and Europe.” The projected April imports would follow a down first quarter, with volumes in January, February and March expected to be, respectively, 10.3%, 8.5% and 16.8% lower than the corresponding months in 2025. The weak import numbers come as the NRF is projecting record holiday sales in the US of more than $1 trillion for the first time, up between 3.7% and 4.2% from 2024. US retail sales rose 0.2% in September, according to the Commerce Department, while a Conference Board survey on Nov. 22 revealed falling US consumer confidence had reached the lowest since April, when the US began its tariff onslaught. “Stores are stocked up and ready for a record holiday season, but there is still a great deal of uncertainty about what will happen in 2026 with trade policy,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said in the statement. December’s projected imports of 1.86 million TEUs would be down almost 13% from a year ago, and while November’s figures are not yet reported, NRF expects 1.91 million TEUs, 11.6% lower year over year. For all of 2025, NRF expects imports of 25.2 million TEUs, down 1.4% from 2024. The GPT covers the ports of Los Angeles/Long Beach, Oakland, and Seattle and Tacoma on the West Coast; New York/New Jersey, the Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast. Contact Kevin Saville at kevin.saville2@spglobal.com .

Port News

North American ports

December US imports on track to be lowest since June ’23: retailers

<div class="phx-topic abstract-wrapper">After 27 consecutive months of plus-40% year-over-year growth, China’s total cross-border e-commerce sales were flat in October, according to Xeneta.</div>

After 27 consecutive months of plus-40% year-over-year growth, China’s total cross-border e-commerce sales were flat in October, according to Xeneta.

<div class="phx-topic">Air freight peak season on the main trade lanes out of Asia got off to a mixed start, with solid growth in e-commerce shipments to Europe in October offset by a sharp drop in online demand from the US, according to new data. The US’ scrapping of duty-free access for low-value goods through the “de minimis” exemption is having a dramatic impact on e-commerce exports from China at both ends of the demand scale, according to rate benchmarking platform Xeneta. “After 27 straight months of plus-40% year-over-year growth, China’s total cross-border e-commerce sales were flat in October, based on the latest market data from China Customs,” Niall van de Wouw, Xeneta’s chief air freight officer, said in a market update. “Even robust expansion from China to Europe — up 47% in October — was offset by declines to the rest of Asia, down 3%, and a dramatic 51% drop in e-commerce shipment volumes to the US in this new post-de minimis environment,” van de Wouw noted. Data from the International Air Transport Association (IATA) shows that total Asia-North America volume declined 1.4% year over year in October. While an improvement from the 3.5% contraction registered in the previous month, it marks the sixth consecutive decrease for the lane and the seventh in 2025. Asia to Europe demand maintained the strong pace seen since April, up 11.7% year over year in October and only marginally down from September. To serve the strong demand, airlines shifted significant freighter capacity to the trade lane, according to data from air cargo analyst Rotate. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="26caec84-1a5c-435b-b0da-c02f19434600"></dynamic-object></div>Still, the impact of the US tariffs on air cargo is becoming clearer, with Willie Walsh, IATA’s director-general, also pointing to the contraction in Asia-North America demand amid double-digit growth on the Asia-Europe, intra-Asia and Middle East-Europe trades. “The shifting growth pattern shows that air cargo is enabling global supply chains to adapt to the impact of US tariffs,” Walsh said in IATA’s monthly market review, adding that although headline figures for October were generally positive, they revealed “concerning trends of [a] slowdown,” with North America experiencing a significant contraction. <h3>Unsettling trend </h3>Van de Wouw shared this view, noting that although the emerging trend was unsettling for the air freight market, it was not as dramatic as was feared and was not yet hitting US consumer demand “to a concerning level.” But he warned that the situation was likely to change in 2026. “Some [US] shippers have absorbed the increases and are yet to pass on these extra costs to consumers, but with stocks running low and inventory replenishment on the horizon, we expect to see more tariff impact on air cargo volumes next year,” he said. Despite strong growth in October, e-commerce volumes into Europe could also be impacted by increasing regulation, with the EU set to introduce its own accelerated de-minimis reform in 2026 to close loopholes exploited by low-value shipments. With uncertainty over demand, capacity and regulatory changes, the global air cargo industry will head into 2026 with expectations of only modest, low single-digit growth for the year ahead, Van de Wouw said. “We expect supply to grow more than demand in 2026, and that will have an impact on rates,” he said. “Right now, the consensus is the market will do well to achieve demand growth of 2%-3% in 2026.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Air freight peak season on the main trade lanes out of Asia got off to a mixed start, with solid growth in e-commerce shipments to Europe in October offset by a sharp drop in online demand from the US, according to new data. The US’ scrapping of duty-free access for low-value goods through the “de minimis” exemption is having a dramatic impact on e-commerce exports from China at both ends of the demand scale, according to rate benchmarking platform Xeneta. “After 27 straight months of plus-40% year-over-year growth, China’s total cross-border e-commerce sales were flat in October, based on the latest market data from China Customs,” Niall van de Wouw, Xeneta’s chief air freight officer, said in a market update. “Even robust expansion from China to Europe — up 47% in October — was offset by declines to the rest of Asia, down 3%, and a dramatic 51% drop in e-commerce shipment volumes to the US in this new post-de minimis environment,” van de Wouw noted. Data from the International Air Transport Association (IATA) shows that total Asia-North America volume declined 1.4% year over year in October. While an improvement from the 3.5% contraction registered in the previous month, it marks the sixth consecutive decrease for the lane and the seventh in 2025. Asia to Europe demand maintained the strong pace seen since April, up 11.7% year over year in October and only marginally down from September. To serve the strong demand, airlines shifted significant freighter capacity to the trade lane, according to data from air cargo analyst Rotate. Still, the impact of the US tariffs on air cargo is becoming clearer, with Willie Walsh, IATA’s director-general, also pointing to the contraction in Asia-North America demand amid double-digit growth on the Asia-Europe, intra-Asia and Middle East-Europe trades. “The shifting growth pattern shows that air cargo is enabling global supply chains to adapt to the impact of US tariffs,” Walsh said in IATA’s monthly market review, adding that although headline figures for October were generally positive, they revealed “concerning trends of [a] slowdown,” with North America experiencing a significant contraction. Unsettling trend Van de Wouw shared this view, noting that although the emerging trend was unsettling for the air freight market, it was not as dramatic as was feared and was not yet hitting US consumer demand “to a concerning level.” But he warned that the situation was likely to change in 2026. “Some [US] shippers have absorbed the increases and are yet to pass on these extra costs to consumers, but with stocks running low and inventory replenishment on the horizon, we expect to see more tariff impact on air cargo volumes next year,” he said. Despite strong growth in October, e-commerce volumes into Europe could also be impacted by increasing regulation, with the EU set to introduce its own accelerated de-minimis reform in 2026 to close loopholes exploited by low-value shipments. With uncertainty over demand, capacity and regulatory changes, the global air cargo industry will head into 2026 with expectations of only modest, low single-digit growth for the year ahead, Van de Wouw said. “We expect supply to grow more than demand in 2026, and that will have an impact on rates,” he said. “Right now, the consensus is the market will do well to achieve demand growth of 2%-3% in 2026.” Contact Greg Knowler at greg.knowler@spglobal.com .

Diverging demand for e-commerce drives muted start to air cargo peak season

<div class="phx-topic abstract-wrapper">A former DOT deputy assistant secretary in the Biden administration says tradable, guaranteed slot reservations would create a scenario enabling greater efficiencies for both shippers and carriers.</div>

A former DOT deputy assistant secretary in the Biden administration says tradable, guaranteed slot reservations would create a scenario enabling greater efficiencies for both shippers and carriers.

<div class="phx-topic">A new venture launched by a former US Department of Transportation (DOT) official is attempting in a novel way to create an alternative for container shippers and carriers who are forced into the spot market when market conditions disincentivize shipping under signed contracts. Shippers typically get forced into the spot market in tight markets when their actual volume exceeds weekly contracted allocations (minimum quantity commitments, or MQCs), a scenario many would prefer to avoid. Carriers, meanwhile, must turn to the spot market to fill their ships when booked cargo fails to show up at the port, known as downfalls. But Andrew Petrisin, a former DOT deputy assistant secretary for multimodal freight who led the FLOW project under the Biden administration, says tradable, guaranteed slot reservations would create an alternative scenario enabling greater efficiencies for both shippers and carriers. He’s created an online platform called Laneway that attempts to achieve exactly that. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6130493_0.1.jpg"></img></div>For shippers, being able to buy or sell tradable reservations, what Petrisin calls “Allocation Equivalent Units,” would enable them to ship under their existing carrier contracts, supporting their carrier relationships without having to direct cargo through third parties in periods when their volumes exceed their weekly contracted allocation. It avoids shippers having to go to the spot market given the uncertain costs and the need to juggle various spot quotes. By using the system, shippers can acquire or dispose of weekly allocations in the frequent scenario when their weekly volume diverges from their weekly allocation due to the vagaries of manufacturing output and other factors. For carriers, the opportunity is to reduce downfalls, which can exceed 30% on certain sailings, while keeping business — and margins — that would otherwise be captured in the spot, or freight-all-kinds (FAK), market. For both shippers and carriers, these outcomes would be the result of guaranteed slot reservations sold by carriers to shippers and then traded freely thereafter, whether among shippers or between shippers and non-vessel-operating common carriers (NVOs) for use by the NVOs’ named accounts. “It’s a market that allows the reservation to be tradable,” Petrisin told the Journal of Commerce. “The carrier sets the initial price; the shipper pays at the point of sale, and then after that it trades freely.” <h3>Addressing a core issue </h3>In effect, Laneway is addressing a core issue of risk management in a chaotic container shipping environment, where shippers see their cargo shut out from capacity, jeopardizing revenues and customer relationships. Others are trying to solve the same problem in different ways, such as container freight futures. Under that scenario, the shipper signs an index-linked contract that avoids their rates becoming unappealing to the carrier, and then hedges adverse price movements using container freight futures. Laneway’s tradable reservations, whose price would fluctuate on the free market, are not derivatives like container freight futures but rather the guaranteed right to capacity under shippers’ existing contracts. “Laneway doesn’t dictate the price, but I imagine the price will fluctuate based on the week of the year, overall market conditions, and other factors,” Petrisin said. While at DOT, Petrisin led development of the Freight Logistics Optimization Works, or FLOW, a well-regarded initiative kept active by the Trump administration that enables players to monitor capacity and enable them to proactively identify and respond to delays. The Laneway idea, by being tied to contracts versus the spot market, contrasts with a number of carrier spot product offerings that offer both quotes and guaranteed space. These include Maersk Spot, Hapag-Lloyd’s Quick Quotes Spot, Evergreen’s GreenX, and ONE’s ONE Quote. Other carrier spot products allow for quotes, but without space confirmation. <h3>Could FAK market shrink? </h3>The ability to access guaranteed space in the contract domain has been lacking, Petrisin said. “While some contract products now offer guaranteed space, you can’t flexibly manage that guaranteed space as your volume changes,” he said. According to Petrisin, creating fungible contract allocations through tradable slot capacity, if the concept takes off, could shrink the FAK market. However, as he sees it, this wouldn’t eliminate or threaten the forwarder; while their traditional NVOCC business may decrease, forwarders can facilitate capacity trades for their shippers in their role as order managers and receive a cut of the market commission. Petrisin is building a pipeline of carriers, forwarders and shippers to begin listing and trading reservations, including having shippers reach out to the carriers to indicate their interest in buying this new product. “This is all about aligning incentives between parties for a positive sum outcome, which is a core lesson I took away from FLOW,” he said. Petrisin said a system of tradable reservations would help reduce no-show rates that can exceed 30% for specific sailings, which force carriers onto the spot market to fill ships at the last minute, or sail underutilized. “Much of the current spot market is ‘spillover’ from the contract market,” he said. “There will always be a true spot market for shippers who need one-off bookings on a given lane, but by eliminating the ‘spillover’ market we will cut costs for shippers, increase profits for carriers, and provide forwarders more reliable revenue. “Carriers care about rate then service, and shippers care about service then rate,” he added. “A tradable reservation enables both parties to hedge what they care about most.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

A new venture launched by a former US Department of Transportation (DOT) official is attempting in a novel way to create an alternative for container shippers and carriers who are forced into the spot market when market conditions disincentivize shipping under signed contracts. Shippers typically get forced into the spot market in tight markets when their actual volume exceeds weekly contracted allocations (minimum quantity commitments, or MQCs), a scenario many would prefer to avoid. Carriers, meanwhile, must turn to the spot market to fill their ships when booked cargo fails to show up at the port, known as downfalls. But Andrew Petrisin, a former DOT deputy assistant secretary for multimodal freight who led the FLOW project under the Biden administration, says tradable, guaranteed slot reservations would create an alternative scenario enabling greater efficiencies for both shippers and carriers. He’s created an online platform called Laneway that attempts to achieve exactly that. For shippers, being able to buy or sell tradable reservations, what Petrisin calls “Allocation Equivalent Units,” would enable them to ship under their existing carrier contracts, supporting their carrier relationships without having to direct cargo through third parties in periods when their volumes exceed their weekly contracted allocation. It avoids shippers having to go to the spot market given the uncertain costs and the need to juggle various spot quotes. By using the system, shippers can acquire or dispose of weekly allocations in the frequent scenario when their weekly volume diverges from their weekly allocation due to the vagaries of manufacturing output and other factors. For carriers, the opportunity is to reduce downfalls, which can exceed 30% on certain sailings, while keeping business — and margins — that would otherwise be captured in the spot, or freight-all-kinds (FAK), market. For both shippers and carriers, these outcomes would be the result of guaranteed slot reservations sold by carriers to shippers and then traded freely thereafter, whether among shippers or between shippers and non-vessel-operating common carriers (NVOs) for use by the NVOs’ named accounts. “It’s a market that allows the reservation to be tradable,” Petrisin told the Journal of Commerce. “The carrier sets the initial price; the shipper pays at the point of sale, and then after that it trades freely.” Addressing a core issue In effect, Laneway is addressing a core issue of risk management in a chaotic container shipping environment, where shippers see their cargo shut out from capacity, jeopardizing revenues and customer relationships. Others are trying to solve the same problem in different ways, such as container freight futures. Under that scenario, the shipper signs an index-linked contract that avoids their rates becoming unappealing to the carrier, and then hedges adverse price movements using container freight futures. Laneway’s tradable reservations, whose price would fluctuate on the free market, are not derivatives like container freight futures but rather the guaranteed right to capacity under shippers’ existing contracts. “Laneway doesn’t dictate the price, but I imagine the price will fluctuate based on the week of the year, overall market conditions, and other factors,” Petrisin said. While at DOT, Petrisin led development of the Freight Logistics Optimization Works, or FLOW, a well-regarded initiative kept active by the Trump administration that enables players to monitor capacity and enable them to proactively identify and respond to delays. The Laneway idea, by being tied to contracts versus the spot market, contrasts with a number of carrier spot product offerings that offer both quotes and guaranteed space. These include Maersk Spot, Hapag-Lloyd’s Quick Quotes Spot, Evergreen’s GreenX, and ONE’s ONE Quote. Other carrier spot products allow for quotes, but without space confirmation. Could FAK market shrink? The ability to access guaranteed space in the contract domain has been lacking, Petrisin said. “While some contract products now offer guaranteed space, you can’t flexibly manage that guaranteed space as your volume changes,” he said. According to Petrisin, creating fungible contract allocations through tradable slot capacity, if the concept takes off, could shrink the FAK market. However, as he sees it, this wouldn’t eliminate or threaten the forwarder; while their traditional NVOCC business may decrease, forwarders can facilitate capacity trades for their shippers in their role as order managers and receive a cut of the market commission. Petrisin is building a pipeline of carriers, forwarders and shippers to begin listing and trading reservations, including having shippers reach out to the carriers to indicate their interest in buying this new product. “This is all about aligning incentives between parties for a positive sum outcome, which is a core lesson I took away from FLOW,” he said. Petrisin said a system of tradable reservations would help reduce no-show rates that can exceed 30% for specific sailings, which force carriers onto the spot market to fill ships at the last minute, or sail underutilized. “Much of the current spot market is ‘spillover’ from the contract market,” he said. “There will always be a true spot market for shippers who need one-off bookings on a given lane, but by eliminating the ‘spillover’ market we will cut costs for shippers, increase profits for carriers, and provide forwarders more reliable revenue. “Carriers care about rate then service, and shippers care about service then rate,” he added. “A tradable reservation enables both parties to hedge what they care about most.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

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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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