<div class="phx-topic abstract-wrapper">The challenge of taking blockchain pilots and proofs of concepts to wide-scale adoption is that the latter requires a broad adoption from a range of parties. But with a smart contract, that requirement is much smaller. </div>

The challenge of taking blockchain pilots and proofs of concepts to wide-scale adoption is that the latter requires a broad adoption from a range of parties. But with a smart contract, that requirement is much smaller.

3589451_FI.jpg

<div>Amid a lack of viable <a>blockchain</a> solutions and numerous and oft-competing platforms, digital tools — dubbed “smart contracts” and typically accessed via blockchain — offer container shipping a way to streamline payments and tether those payments to physical movements. The tools are designed to replace traditional contracts for a host of reasons: to reduce latency in payment, to eliminate discrepancies in the invoicing and payment process, and to link processes to real-world physical events. The goal of a smart contract is essentially to make contracts self-executing and enforceable, which is to say automated. Theoretically, if a smart contract is properly...

Amid a lack of viable blockchain solutions and numerous and oft-competing platforms, digital tools — dubbed “smart contracts” and typically accessed via blockchain — offer container shipping a way to streamline payments and tether those payments to physical movements. The tools are designed to replace traditional contracts for a host of reasons: to reduce latency in payment, to eliminate discrepancies in the invoicing and payment process, and to link processes to real-world physical events. The goal of a smart contract is essentially to make contracts self-executing and enforceable, which is to say automated. Theoretically, if a smart contract is properly set up, processes are automatically initiated. Smart contracts — just two parties needed to start one The reason smart contracts are more tangible is that they can be agreed upon by as few as two parties, just as with traditional contracts. So, even though a blockchain may require, say, 30 parties to make it valuable, any two parties on that platform can engage in a smart contract that’s not visible to the other 28 parties. The challenge of taking blockchain pilots and proofs of concepts to wide-scale adoption is that the latter requires a broad adoption from a range of parties. In a chicken-or-egg scenario, there needs to be enough parties using a blockchain platform to make the solutions on the blockchain valuable to those parties. That’s daunting because it requires buy-in from a large number of stakeholders. Some of those stakeholders are directly competitive in nature (think shippers in the same industry), some have adversarial commercial relationships with each other (think shippers and liner carriers), and some are competing for the same set of customers (think liner carriers and non-vessel-operating common carriers ). In logistics terms, the easiest way to think about a smart contract is a scenario where a process is triggered by an event. For instance, the event could be receipt of a container at a distribution facility, triggering an electronic payment from one party to another at a specific date. The value in that scenario is the elimination of the time required to produce an invoice, manually initiate a payment, and resolve billing discrepancies. The optimal trigger — a digital event The most optimal trigger is a digital event. In the container receipt example, that would mean a sensor (often referred to as an Internet of Things [IoT] device) sends a message that the container has reached a geographic threshold, initiating the process (instructions that one party pay the other electronically). The less optimal scenario would see a more manual trigger, such as a signature on an iPad, initiate the automatic payment. The reason smart contracts are tied to blockchain is that blockchains are intended to provide a greater level of trust in the data contained within them, a vital component when payment is being rendered. According to advocates of smart contracts, parties can take any terms and conditions from a traditional contract and bring them into a smart contract. Alternatively, they could stipulate in a traditional contract that a smart contract be the mechanism used to transact. It’s important to note that smart contracts are essentially pieces of code, not just electronic versions of paper contracts. In programmatic terms, they’re set up as “if-then” scenarios — if something happens, then something else happens. Those scenarios can involve one step or multiple steps, depending on what is in the contract and how many parties are involved. Aside from providing a mechanism to improve efficiency of transactions, proponents of a smart contract also tout its ability to eliminate terms in traditional contracts that aren’t enforced. For instance, if two parties agree to boilerplate language in a contract, but enforcing an aspect of that contract is commercially not viable or impractical, the two parties would just eliminate that term in a smart contract. That elimination would not just happen for efficiency’s sake — in programmatic terms, if any part of a smart contract is not fulfilled, the contract wouldn’t be executed. The minimum quantity commitments (MQCs) negotiated in annual ocean freight contracts between shippers and ocean carriers springs to mind as a contract clause that is never enforced by carriers for fear of damaging the commercial relationship with a customer. If that annual contract was executed on blockchain, the carrier would have to exclude the MQC unless it was willing to have it be enforced. Similarly, the shipper would have to agree to the MQC and any resultant penalty in a smart contract. More likely, the two parties would drop the clause and focus the terms of the contract on areas that they both agreed to enforce. Contact Eric Johnson at eric.johnson@ihsmarkit.com and follow him on Twitter: @LogTechEric.

Container lines

Logistics Technology News

Smart contracts for shipping offer shortcut to blockchain adoption

<div class="phx-topic abstract-wrapper">If suppliers, producers and distributors could eliminate some or most transportation moves, including container shipping, they would, writes John McCauley.</div>

If suppliers, producers and distributors could eliminate some or most transportation moves, including container shipping, they would, writes John McCauley.

Feature image

<div class="phx-topic">Let’s start with a basic premise first taught to me in the 1990s — logistics is waste. As a long-time logistician, this statement and realization was somewhat shocking. Yet, on deeper analysis, the truism is true. All along the supply chain, from raw material to finished product, any unnecessary actions — whether movement or storage or waiting — only add costs that a customer would not pay for if broken down. The Japanese auto industry understood this early on and created supplier hubs to minimize these non-value-added waste steps. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6081112_0.1.jpg"></img></div>Why does this matter in container shipping? Because container shipping, like all transport moves of any material or product in a supply chain, is waste. I’m not saying it doesn’t serve a purpose, but it is waste. If suppliers, producers and distributors could eliminate some or most transportation moves, including container shipping, they would. How does this fit with the view that trade is essential and that, by design in most cases, container shipping is also essential and complementary to the needs of others? Again, let’s step back and remind ourselves of the evolution of trade. In its simplest form, trade was the means of transferring goods from places of surplus to places of deficit. Shipping helped that trade and allowed economies to expand. Most of the movement was, therefore, of bulk goods, wheat, corn, rice, coal, metals and so on. Thus grew the bulk shipping business. It thrived for centuries and is still today, and for the foreseeable future, a workhouse of primary goods trade. What has changed is comparative advantage. The greater the comparative advantage (assuming quality similarity) one producer had, the greater the likelihood that this trade flow became dominant. Meanwhile, smaller quantity items moved in bulk, in holds loaded and unloaded on slings. Container shipping consigned those days to history’s dustbin. Larger volumes could move at lower unit cost as post-war economies expanded, and demand/trade grew exponentially. As a result, the new technology of container shipping enabled trade growth with benefits in product security, safety and delivery lead time. The creation of consortia and the overall framework of container ship conferences enabled that latter point. These were meant to ensure reliability of supply to the market and enable price certainty for shippers and buyers. <h3>Container shipping as a ‘facilitator’ of expansion </h3>From the late 90s through the noughts, container trade boomed, which allowed container shipping companies to innovate with new and larger vessel sizes, terminals, cranes and infrastructure, also fueled by the outsourcing and offshoring of much of their production. However, they also served to stimulate demand. As companies looked to lower costs through outsourcing and offshoring, container shipping became a facilitator of this expansion. China’s joining the World Trade Organization and its dramatic rise in manufacturing quantity and quality meant that any company anywhere had a simple choice – maintain your production in your country of demand and risk competitors offshoring and being more cost competitive, or send some (or all) of your production offshore. Yet supply disruptions and service unreliability from container shipping and the undeniable fear of the economic power of China have started to lead to divestment away from China, with many companies favoring one of three main options: nearshoring (bringing production into a favored nation for assembly/finishing and using free trade agreements to allow low-cost inventory management); inshoring (bringing back of all facets of production to the primary country of demand); or a China-plus-one approach (adding another offshore country as a dual or multiple supply source). So where does that leave us at this point? Trade and container shipping have a strong interdependence. The primary difference is that trade defines demand while container shipping is a hostage to derived demand. In practical terms, this means that container shipping is highly relevant and important for demand signals for its upstream supply markets (terminals, cranes, ships, containers) and those industries look to container shipping for demand signals, many of which require significant long-term investment and capital. But container shipping is nothing without trade. Trade shifts are out of a carrier’s control, and they are stuck if they invest in, for instance, 20,000-TEU-capacity vessels, only to find that trade has declined and those vessels are useless to serve other trades. For their part, shippers need to critically review why they use container shipping as it has become the least reliable form of transportation mode available. The answer should be that, whenever possible, they must switch away or at least build more robust and resilient supply chains using container shipping. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com.</a></div>

Let’s start with a basic premise first taught to me in the 1990s — logistics is waste. As a long-time logistician, this statement and realization was somewhat shocking. Yet, on deeper analysis, the truism is true. All along the supply chain, from raw material to finished product, any unnecessary actions — whether movement or storage or waiting — only add costs that a customer would not pay for if broken down. The Japanese auto industry understood this early on and created supplier hubs to minimize these non-value-added waste steps. Why does this matter in container shipping? Because container shipping, like all transport moves of any material or product in a supply chain, is waste. I’m not saying it doesn’t serve a purpose, but it is waste. If suppliers, producers and distributors could eliminate some or most transportation moves, including container shipping, they would. How does this fit with the view that trade is essential and that, by design in most cases, container shipping is also essential and complementary to the needs of others? Again, let’s step back and remind ourselves of the evolution of trade. In its simplest form, trade was the means of transferring goods from places of surplus to places of deficit. Shipping helped that trade and allowed economies to expand. Most of the movement was, therefore, of bulk goods, wheat, corn, rice, coal, metals and so on. Thus grew the bulk shipping business. It thrived for centuries and is still today, and for the foreseeable future, a workhouse of primary goods trade. What has changed is comparative advantage. The greater the comparative advantage (assuming quality similarity) one producer had, the greater the likelihood that this trade flow became dominant. Meanwhile, smaller quantity items moved in bulk, in holds loaded and unloaded on slings. Container shipping consigned those days to history’s dustbin. Larger volumes could move at lower unit cost as post-war economies expanded, and demand/trade grew exponentially. As a result, the new technology of container shipping enabled trade growth with benefits in product security, safety and delivery lead time. The creation of consortia and the overall framework of container ship conferences enabled that latter point. These were meant to ensure reliability of supply to the market and enable price certainty for shippers and buyers. Container shipping as a ‘facilitator’ of expansion From the late 90s through the noughts, container trade boomed, which allowed container shipping companies to innovate with new and larger vessel sizes, terminals, cranes and infrastructure, also fueled by the outsourcing and offshoring of much of their production. However, they also served to stimulate demand. As companies looked to lower costs through outsourcing and offshoring, container shipping became a facilitator of this expansion. China’s joining the World Trade Organization and its dramatic rise in manufacturing quantity and quality meant that any company anywhere had a simple choice – maintain your production in your country of demand and risk competitors offshoring and being more cost competitive, or send some (or all) of your production offshore. Yet supply disruptions and service unreliability from container shipping and the undeniable fear of the economic power of China have started to lead to divestment away from China, with many companies favoring one of three main options: nearshoring (bringing production into a favored nation for assembly/finishing and using free trade agreements to allow low-cost inventory management); inshoring (bringing back of all facets of production to the primary country of demand); or a China-plus-one approach (adding another offshore country as a dual or multiple supply source). So where does that leave us at this point? Trade and container shipping have a strong interdependence. The primary difference is that trade defines demand while container shipping is a hostage to derived demand. In practical terms, this means that container shipping is highly relevant and important for demand signals for its upstream supply markets (terminals, cranes, ships, containers) and those industries look to container shipping for demand signals, many of which require significant long-term investment and capital. But container shipping is nothing without trade. Trade shifts are out of a carrier’s control, and they are stuck if they invest in, for instance, 20,000-TEU-capacity vessels, only to find that trade has declined and those vessels are useless to serve other trades. For their part, shippers need to critically review why they use container shipping as it has become the least reliable form of transportation mode available. The answer should be that, whenever possible, they must switch away or at least build more robust and resilient supply chains using container shipping. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com.

Supply chain

Maritime

Moving beyond the ‘waste’ inherent in ‘essential’ container shipping

<div class="phx-topic abstract-wrapper">Research reports published to coincide with London International Shipping Week say although progress is being made towards decarbonization in shipping, there are growing concerns the sector is falling behind in efforts to reduce its carbon footprint.</div>

Research reports published to coincide with London International Shipping Week say although progress is being made towards decarbonization in shipping, there are growing concerns the sector is falling behind in efforts to reduce its carbon footprint.

<div class="phx-topic">The shipping sector is not on course to meet its 2030 interim climate targets or 2050 net-zero ambitions because weak demand signals and stalled financing are delaying the transition to sustainable fuels and negatively affecting future supply, new decarbonization research reports say. The reports, published Tuesday to coincide with London International Shipping Week, noted that although progress is being made towards decarbonization in shipping, there are growing concerns the sector responsible for at least 3% of global emissions is falling behind in efforts to reduce its carbon footprint. Domagoj Baresic, senior research fellow at the London-based UCL Energy Institute, said technology readiness was no longer a limiting factor with the expansion of fuel supply initiatives and pilot projects across multiple regions, but demand and finance have not kept pace. “Unless all these levers move together, the 2030 tipping point will remain out of reach and supply developments could also stall,” Baresic wrote in the Progress Towards Shipping’s 2030 breakthrough – 2025 edition. The report is a joint effort by the UCL Energy Institute, the Global Maritime Forum’s Getting to Zero Coalition and the Race to Zero, a global non-governmental campaign led by the Climate High-Level Champions. “This underscores the importance of treating this transition as a systems challenge, not just a fuel challenge,” Baresic added. The report warned that demand was off track, with current estimates predicting a significant shortfall in vessels capable of sailing on scalable zero-emission fuels. Unless demand was significantly ramped up, the current order book would only deliver around 37% of the fuel demand needed to achieve the 2030 target. On the equally critical financial side, despite early progress in scalable zero-emission fuels investment, momentum has stalled, with funding continuing to flow disproportionately toward conventional fossil-fueled vessels. Stronger policy signals would be essential to unlocking more private capital, Baresic’s report stated. <h3>Lack of alternative fuel availability </h3>Dual-fuel ships capable of running on methanol or liquefied natural gas (LNG) comprised 70% of the total 1.7 million TEUs of vessel capacity ordered in 2024, according to data from Sea-web, a sister product of the Journal of Commerce within S&amp;P Global. But even among vessels designed for alternative fuels, the lack of availability means many still rely on conventional fossil fuels for a significant portion of their operation. Data from rate benchmarking platform Xeneta and shipping analyst Marine Benchmark shows carrier emissions reached a record high in 2024, driven up by the vessel diversions around southern Africa. Global container emissions increased 14% last year to 240.6 million tons, surpassing the previous record of 218.5 million tons set in 2021. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="80e7aa34-41b8-4bd7-b5ac-58f5337eebb6"></dynamic-object></div>The rising emissions, combined with a lack of financial will among investors, was placing shipping under increasing pressure as it strives to meet the IMO’s 2030 and 2050 emissions-cutting targets, according to a second report, this one from the Environmental Defense Fund (EDF) and Lloyd's Register Maritime Decarbonization Hub titled Navigating the Net-Zero Transition. "Without strong action, emissions from maritime shipping are projected to rise, putting the sector far off track to transition away from fossil fuels by 2050,” said Guillaume Morauw, sustainable finance senior policy analyst at the Environmental Defense Fund and co-author of the report. Despite a technological renaissance in the past decade that has enabled vessels to slash emissions and be powered by carbon-neutral fuels, the production of such fuels at scale and at affordable prices has yet to materialise, the Net-Zero report found. A third report from energy technology firm Accelleron was also published Tuesday, calling on shipping to join forces with other industries and pool demand for carbon-neutral fuels. <h3>Stakes high as carbon emissions rise </h3>Even though more than $100 billion has been invested in maritime decarbonization, carbon emissions have continued to rise, widening the gap to the International Maritime Organization’s approaching targets. “The stakes are high as we strive to meet shipping’s 2030 emissions reduction target,” said Daniel Bischofberger, CEO at Accelleron, noting success hinges on the implementation of energy-saving technologies and improving fuel efficiency. That, however, was just the first step on the pathway to decarbonization, he added. “The bigger challenge is developing carbon-neutral fuels, which are critical not only for the decarbonization of maritime but for sectors contributing over 70% of global emissions,” Bischofberger said. “Solving this will require unprecedented cross-industry collaboration and a shared commitment to accelerating fuel development and adoption.” Achieving cross-nation collaboration is the immediate challenge facing the IMO as member states prepare for October’s Marine Environment Protection Committee (MEPC) meeting in London from Oct. 14-17 where the “Net-Zero Framework” for reducing greenhouse gas (GHG) emissions from international shipping will be formally adopted. The primary item on the agenda is the adoption of amendments to Annex VI of the MARPOL Convention that includes the proposed net-zero framework, agreed in principle by a majority of IMO members in April in line with the 2023 GHG Strategy. There are two main parts to the framework: a global fuel standard requiring ships to gradually increase the proportion of zero-emission fuel used, and a pricing mechanism for carbon emissions. But the moves to put a price on shipping emissions have faced <a href="https://www.joc.com/article/us-rejection-of-imo-net-zero-framework-wont-change-outcome-bimco-6062545">escalating pushback</a> from Washington, with the US delegation <a href="https://www.joc.com/article/us-pulls-out-of-imo-climate-talks-threatens-retaliation-for-emissions-fees-5980359">walking out of the MEPC meeting in April</a> in protest over the decarbonization talks. The Trump administration recently <a href="https://www.joc.com/article/us-steps-up-attempts-to-derail-imos-net-zero-ambitions-6076148">stepped up efforts to derail the IMO’s net-zero ambitions</a> with threats to impose port duties, tariffs and even visa refusals on IMO member states that voted in support of the proposal. Should the US be successful in preventing the rollout of the net-zero framework, it would leave the EU’s Emissions Trading System (ETS) and FuelEU Maritime as the largest regional emissions-curbing regulations currently in effect. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

The shipping sector is not on course to meet its 2030 interim climate targets or 2050 net-zero ambitions because weak demand signals and stalled financing are delaying the transition to sustainable fuels and negatively affecting future supply, new decarbonization research reports say. The reports, published Tuesday to coincide with London International Shipping Week, noted that although progress is being made towards decarbonization in shipping, there are growing concerns the sector responsible for at least 3% of global emissions is falling behind in efforts to reduce its carbon footprint. Domagoj Baresic, senior research fellow at the London-based UCL Energy Institute, said technology readiness was no longer a limiting factor with the expansion of fuel supply initiatives and pilot projects across multiple regions, but demand and finance have not kept pace. “Unless all these levers move together, the 2030 tipping point will remain out of reach and supply developments could also stall,” Baresic wrote in the Progress Towards Shipping’s 2030 breakthrough – 2025 edition. The report is a joint effort by the UCL Energy Institute, the Global Maritime Forum’s Getting to Zero Coalition and the Race to Zero, a global non-governmental campaign led by the Climate High-Level Champions. “This underscores the importance of treating this transition as a systems challenge, not just a fuel challenge,” Baresic added. The report warned that demand was off track, with current estimates predicting a significant shortfall in vessels capable of sailing on scalable zero-emission fuels. Unless demand was significantly ramped up, the current order book would only deliver around 37% of the fuel demand needed to achieve the 2030 target. On the equally critical financial side, despite early progress in scalable zero-emission fuels investment, momentum has stalled, with funding continuing to flow disproportionately toward conventional fossil-fueled vessels. Stronger policy signals would be essential to unlocking more private capital, Baresic’s report stated. Lack of alternative fuel availability Dual-fuel ships capable of running on methanol or liquefied natural gas (LNG) comprised 70% of the total 1.7 million TEUs of vessel capacity ordered in 2024, according to data from Sea-web, a sister product of the Journal of Commerce within S&P Global. But even among vessels designed for alternative fuels, the lack of availability means many still rely on conventional fossil fuels for a significant portion of their operation. Data from rate benchmarking platform Xeneta and shipping analyst Marine Benchmark shows carrier emissions reached a record high in 2024, driven up by the vessel diversions around southern Africa. Global container emissions increased 14% last year to 240.6 million tons, surpassing the previous record of 218.5 million tons set in 2021. The rising emissions, combined with a lack of financial will among investors, was placing shipping under increasing pressure as it strives to meet the IMO’s 2030 and 2050 emissions-cutting targets, according to a second report, this one from the Environmental Defense Fund (EDF) and Lloyd's Register Maritime Decarbonization Hub titled Navigating the Net-Zero Transition. "Without strong action, emissions from maritime shipping are projected to rise, putting the sector far off track to transition away from fossil fuels by 2050,” said Guillaume Morauw, sustainable finance senior policy analyst at the Environmental Defense Fund and co-author of the report. Despite a technological renaissance in the past decade that has enabled vessels to slash emissions and be powered by carbon-neutral fuels, the production of such fuels at scale and at affordable prices has yet to materialise, the Net-Zero report found. A third report from energy technology firm Accelleron was also published Tuesday, calling on shipping to join forces with other industries and pool demand for carbon-neutral fuels. Stakes high as carbon emissions rise Even though more than $100 billion has been invested in maritime decarbonization, carbon emissions have continued to rise, widening the gap to the International Maritime Organization’s approaching targets. “The stakes are high as we strive to meet shipping’s 2030 emissions reduction target,” said Daniel Bischofberger, CEO at Accelleron, noting success hinges on the implementation of energy-saving technologies and improving fuel efficiency. That, however, was just the first step on the pathway to decarbonization, he added. “The bigger challenge is developing carbon-neutral fuels, which are critical not only for the decarbonization of maritime but for sectors contributing over 70% of global emissions,” Bischofberger said. “Solving this will require unprecedented cross-industry collaboration and a shared commitment to accelerating fuel development and adoption.” Achieving cross-nation collaboration is the immediate challenge facing the IMO as member states prepare for October’s Marine Environment Protection Committee (MEPC) meeting in London from Oct. 14-17 where the “Net-Zero Framework” for reducing greenhouse gas (GHG) emissions from international shipping will be formally adopted. The primary item on the agenda is the adoption of amendments to Annex VI of the MARPOL Convention that includes the proposed net-zero framework, agreed in principle by a majority of IMO members in April in line with the 2023 GHG Strategy. There are two main parts to the framework: a global fuel standard requiring ships to gradually increase the proportion of zero-emission fuel used, and a pricing mechanism for carbon emissions. But the moves to put a price on shipping emissions have faced escalating pushback from Washington, with the US delegation walking out of the MEPC meeting in April in protest over the decarbonization talks. The Trump administration recently stepped up efforts to derail the IMO’s net-zero ambitions with threats to impose port duties, tariffs and even visa refusals on IMO member states that voted in support of the proposal. Should the US be successful in preventing the rollout of the net-zero framework, it would leave the EU’s Emissions Trading System (ETS) and FuelEU Maritime as the largest regional emissions-curbing regulations currently in effect. Contact Greg Knowler at greg.knowler@spglobal.com.

Container Shipping News

Transport, Trade and Regulation News

Shipping decarbonization stalled by weak demand, investment shortfall: reports

<div class="phx-topic abstract-wrapper">The bump in spot rates that was driven by the Sept. 1 GRI and blanked sailings in the eastbound trans-Pacific appears to be over, with rates this week headed lower, according to forwarders.</div>

The bump in spot rates that was driven by the Sept. 1 GRI and blanked sailings in the eastbound trans-Pacific appears to be over, with rates this week headed lower, according to forwarders.

<div class="phx-topic">Container lines had stemmed a month-long decline in container spot rates on the eastbound trans-Pacific, but forecast volume declines and modest blanking announcements are testing the foundation of the new bottom. The bump in spot rates that was driven by the convergence of a Sept. 1 general rate increase (GRI) and <a href="https://www.joc.com/article/gemini-suspends-seasonal-trans-pacific-service-6078582">blanked sailings in the eastbound trans-Pacific</a> appears to be over, and rates this week are headed lower, according to forwarders. “The Sept. 1 GRI raised rates a few hundred dollars, but we can say now that rates are back to pre-Sept. 1 levels,” James Caradonna, executive vice president of the forwarder M&amp;R Spedag Group, told the Journal of Commerce Monday. That was echoed by Chris Sur, executive vice president for ocean freight contract logistics at forwarder Unique Logistics International. “The Sept. 1 GRI certainly was successful,” Sur said. “It increased rates for a couple of weeks, but now it’s kind of going back to pre-Sept. 1 levels.” Container spot rates have ticked up in recent weeks, as measured by Drewry, the Shanghai Shipping Exchange and Platts, a Journal of Commerce sister company within S&amp;P Global. The spot rate from Asia to the West Coast as of Monday was $2,500 per FEU, up $200 on the week, while the East Coast spot rate of $3,600 per FEU was up $300 week over week, according to Platts. An industry consultant who formerly managed logistics for two national retailers said bookings from Asia ticked up in early September in advance of the Oct. 1 <a href="https://www.joc.com/article/ocean-market-in-trans-pacific-arrives-at-spot-pricing-tipping-point-6073669">Golden Week holidays in Asia</a>, which most carriers were able to leverage for rate increases of several hundred dollars. “But really, a lot of [the rate gain] was due to blank sailings,” the source said. Another factor, the consultant said, was that falling spot rates in August were approaching the long-term fixed rates customers had signed for in their 2025–26 service contracts, and carriers were determined to prevent further rate erosion. “[Carriers] don’t want spot rates to drop below contract rates,” the source said. A carrier executive said even though US import volumes leading up to Golden Week this year are lower than usual, carriers are achieving their objective of keeping spot/FAK rates from collapsing so October blankings can catch up to the market. “Even at $1,800-$1,900 [to the West Coast], this is certainly better than the $1,500-$1,600 in August,” the carrier source said. Because there is no backlog of cargo built up in Asia, rates this week are already falling lower — to $1,700-$1,800 per FEU to the West Coast and about $2,700 per FEU to the East Coast, another forwarder said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d0dc514b-60a6-4b10-862a-081c37b36db2"></dynamic-object></div>Most carriers also offer so-called bullet or voyage-specific rates that undercut their listed rates by about $200-$300 per FEU, said Robert Khachatryan, CEO of the forwarder FreightRight Global Logistics. “All carriers have ships to fill,” he said. “They post a rate, but go to the market [with] a voyage-specific rate.” <h3>Managing capacity </h3>Meanwhile, carriers have been blanking sailings for weeks, and more cancellations are scheduled. Carriers are blanking 10% of capacity to the West Coast in September and are scheduled to blank 9.65% of capacity in October, according to the maritime intelligence provider eeSea. Liners blanked 12.8% of capacity to the East Coast in September and are scheduled to blank 19.9% of capacity in October, according to eeSea. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Container lines had stemmed a month-long decline in container spot rates on the eastbound trans-Pacific, but forecast volume declines and modest blanking announcements are testing the foundation of the new bottom. The bump in spot rates that was driven by the convergence of a Sept. 1 general rate increase (GRI) and blanked sailings in the eastbound trans-Pacific appears to be over, and rates this week are headed lower, according to forwarders. “The Sept. 1 GRI raised rates a few hundred dollars, but we can say now that rates are back to pre-Sept. 1 levels,” James Caradonna, executive vice president of the forwarder M&R Spedag Group, told the Journal of Commerce Monday. That was echoed by Chris Sur, executive vice president for ocean freight contract logistics at forwarder Unique Logistics International. “The Sept. 1 GRI certainly was successful,” Sur said. “It increased rates for a couple of weeks, but now it’s kind of going back to pre-Sept. 1 levels.” Container spot rates have ticked up in recent weeks, as measured by Drewry, the Shanghai Shipping Exchange and Platts, a Journal of Commerce sister company within S&P Global. The spot rate from Asia to the West Coast as of Monday was $2,500 per FEU, up $200 on the week, while the East Coast spot rate of $3,600 per FEU was up $300 week over week, according to Platts. An industry consultant who formerly managed logistics for two national retailers said bookings from Asia ticked up in early September in advance of the Oct. 1 Golden Week holidays in Asia , which most carriers were able to leverage for rate increases of several hundred dollars. “But really, a lot of [the rate gain] was due to blank sailings,” the source said. Another factor, the consultant said, was that falling spot rates in August were approaching the long-term fixed rates customers had signed for in their 2025–26 service contracts, and carriers were determined to prevent further rate erosion. “[Carriers] don’t want spot rates to drop below contract rates,” the source said. A carrier executive said even though US import volumes leading up to Golden Week this year are lower than usual, carriers are achieving their objective of keeping spot/FAK rates from collapsing so October blankings can catch up to the market. “Even at $1,800-$1,900 [to the West Coast], this is certainly better than the $1,500-$1,600 in August,” the carrier source said. Because there is no backlog of cargo built up in Asia, rates this week are already falling lower — to $1,700-$1,800 per FEU to the West Coast and about $2,700 per FEU to the East Coast, another forwarder said. Most carriers also offer so-called bullet or voyage-specific rates that undercut their listed rates by about $200-$300 per FEU, said Robert Khachatryan, CEO of the forwarder FreightRight Global Logistics. “All carriers have ships to fill,” he said. “They post a rate, but go to the market [with] a voyage-specific rate.” Managing capacity Meanwhile, carriers have been blanking sailings for weeks, and more cancellations are scheduled. Carriers are blanking 10% of capacity to the West Coast in September and are scheduled to blank 9.65% of capacity in October, according to the maritime intelligence provider eeSea. Liners blanked 12.8% of capacity to the East Coast in September and are scheduled to blank 19.9% of capacity in October, according to eeSea. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Port News

Trans-Pacific

North American ports

Pre-Golden Week rate hike beginning to fade on trans-Pacific

<div class="phx-topic abstract-wrapper">The potential merger partners plan to replace drayage trucking legs with direct rail service as Class I railroads join to redraw North America’s intermodal map. </div>

The potential merger partners plan to replace drayage trucking legs with direct rail service as Class I railroads join to redraw North America’s intermodal map.

<div class="phx-topic">Union Pacific (UP) and Norfolk Southern (NS) said Monday they will launch a new domestic intermodal rail service linking Louisville, Kentucky — a major Midwest intermodal rail and parcel hub — with ports in Southern California, the Pacific Northwest and Gulf Coast. The joint service comes as railroads <a href="https://www.joc.com/article/new-and-faster-intermodal-services-put-bnsf-up-on-hunt-for-truck-freight-6059482">redraw intermodal maps</a> in response to UP’s proposed <a href="https://www.joc.com/article/up-looks-to-create-first-coast-to-coast-railroad-with-85-billion-ns-deal-6052288">$85 billion acquisition</a> of NS, which would create the first transcontinental US railroad. The combined railroads would have about 50,000 miles of track and access to 100 ports. The new UP-NS service, expected to begin in October, will connect Louisville with markets on the West and Gulf coasts by interchanging containers between UP and NS in Kansas City, where UP opened its new larger Kansas City Intermodal Terminal (KCIT) in August. The goal, as in other joint services, is to eliminate long drayage hauls at the end of a rail move. For instance, the service would circumvent the need to dray containers from Chicago, in the case of UP, or Cincinnati, for NS, to Louisville. Canadian National Railway and CSX Transportation last week said they are planning a new international intermodal service from <a href="https://www.joc.com/article/cn-csx-joint-service-to-connect-west-canada-and-nashville-6077903">Canada’s west coast into Nashville, Tennessee</a>, expanding shipper options outside of the US Southeast. In August, CSX announced plans to develop international intermodal routes with BNSF Railway from <a href="https://www.joc.com/article/bnsf-csx-unveil-new-joint-intermodal-lanes-in-aftermath-of-up-ns-merger-6067789">the West Coast to the Southeast</a>. That service would replace an approximately 200-mile truck trip for international containers from Memphis to Nashville. <h3>A new springboard </h3>The UP-NS service could be a major test for UP’s <a href="https://www.joc.com/article/ups-kc-terminal-will-change-approach-on-ocean-cargo-6013727">Kansas City terminal</a>. If KCIT can handle the traffic, it could be the springboard for transcontinental services to central Pennsylvania and New York-New Jersey routed through Kansas City instead of Chicago. KCIT would serve as an important relief valve for Chicago, which has been at the epicenter of intermodal congestion for decades. KCIT would connect Louisville with Los Angeles; Lathrop, California; Seattle; Portland, Oregon; Salt Lake City; and Houston. “This is a growth area for our customers, so we are stepping up with service to help them reach untapped markets with a more reliable, sustainable alternative to trucking,” Ed Elkins, chief commercial officer at NS, said in a statement. NS is modifying its terminal footprint in Louisville to expand truck parking and help the railroad track truck capacity at the terminal. The Louisville facility has been more focused on international containers than domestic intermodal service. The largest origin points for intermodal freight arriving in Louisville are the Port of Virginia, with about 35,000 loads per year, and Los Angeles-Long Beach, at 15,000 to 20,000 loads, according to a Journal of Commerce analysis of data from the US Surface Transportation Board. Contact William B. Cassidy at <a href="mailto://bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.Senior Editor Ari Ashe contributed to this report. </div>

Union Pacific (UP) and Norfolk Southern (NS) said Monday they will launch a new domestic intermodal rail service linking Louisville, Kentucky — a major Midwest intermodal rail and parcel hub — with ports in Southern California, the Pacific Northwest and Gulf Coast. The joint service comes as railroads redraw intermodal maps in response to UP’s proposed $85 billion acquisition of NS, which would create the first transcontinental US railroad. The combined railroads would have about 50,000 miles of track and access to 100 ports. The new UP-NS service, expected to begin in October, will connect Louisville with markets on the West and Gulf coasts by interchanging containers between UP and NS in Kansas City, where UP opened its new larger Kansas City Intermodal Terminal (KCIT) in August. The goal, as in other joint services, is to eliminate long drayage hauls at the end of a rail move. For instance, the service would circumvent the need to dray containers from Chicago, in the case of UP, or Cincinnati, for NS, to Louisville. Canadian National Railway and CSX Transportation last week said they are planning a new international intermodal service from Canada’s west coast into Nashville, Tennessee , expanding shipper options outside of the US Southeast. In August, CSX announced plans to develop international intermodal routes with BNSF Railway from the West Coast to the Southeast . That service would replace an approximately 200-mile truck trip for international containers from Memphis to Nashville. A new springboard The UP-NS service could be a major test for UP’s Kansas City terminal . If KCIT can handle the traffic, it could be the springboard for transcontinental services to central Pennsylvania and New York-New Jersey routed through Kansas City instead of Chicago. KCIT would serve as an important relief valve for Chicago, which has been at the epicenter of intermodal congestion for decades. KCIT would connect Louisville with Los Angeles; Lathrop, California; Seattle; Portland, Oregon; Salt Lake City; and Houston. “This is a growth area for our customers, so we are stepping up with service to help them reach untapped markets with a more reliable, sustainable alternative to trucking,” Ed Elkins, chief commercial officer at NS, said in a statement. NS is modifying its terminal footprint in Louisville to expand truck parking and help the railroad track truck capacity at the terminal. The Louisville facility has been more focused on international containers than domestic intermodal service. The largest origin points for intermodal freight arriving in Louisville are the Port of Virginia, with about 35,000 loads per year, and Los Angeles-Long Beach, at 15,000 to 20,000 loads, according to a Journal of Commerce analysis of data from the US Surface Transportation Board. Contact William B. Cassidy at bill.cassidy@spglobal.com .Senior Editor Ari Ashe contributed to this report.

Rail News

North-American rail

Intermodal providers

Surface

UP-NS joint intermodal service to link West Coast with Louisville in Midwest

<div class="phx-topic abstract-wrapper">Cosco said the joint venture will be responsible for developing a multifunctional logistics park involving the construction of high-specification warehouses, cold chain storage, and consolidation and distribution facilities.</div>

Cosco said the joint venture will be responsible for developing a multifunctional logistics park involving the construction of high-specification warehouses, cold chain storage, and consolidation and distribution facilities.

<div class="phx-topic">Cosco Shipping and Shenzhen Port Group said Monday they have teamed up to develop a high-end logistics park in Shenzhen's Yantian port district as part of a wider plan to develop and expand Cosco's digital supply chain business. The move is the first time the two state-controlled companies have launched a joint development. It is also believed to be only the second time Cosco has linked with a state port company to develop logistics facilities after it signed a deal four years ago with Shanghai International Port Group, controlled by the Shanghai municipal government, to focus on terminal investment and operations. The latest development, announced by Cosco Shipping in a Hong Kong stock exchange filing, also marks a further step in the company’s diversifying away from being a pure container line and port company into an asset-heavy logistics operation. Under the plan, Cosco Shipping said it will form a joint venture known as Shenzhen Cosco Shipping Smart Supply Chain Company with Shenzhen Port Logistics Group, an affiliate of Shenzhen Port Group. Cosco will have a 67% stake in the venture. Cosco said the joint venture will be responsible for developing a multifunctional logistics park involving the construction of high-specification warehouses, cold chain storage, and consolidation and distribution facilities. No details of the size of the logistics park or the overall cost have been released, but Cosco said the joint venture will “serve as a collecting and distributing hub for cargo in Yantian Port and (the) surrounding area.” Cosco said the project will strengthen its “strategic presence in the Pearl River Delta region and serve as key infrastructure for scaling its digital supply chain business.” The focus on southern China comes as the company has previously concentrated on expanding its logistics operations in Southeast Asia. Cosco Shipping International (Singapore) started work last December on the six-acre second phase of its Jurong Island logistics hub in Singapore, containing 673,000 square feet of warehousing that will more than double the hub’s capacity. The same company has also acquired logistics companies in Malaysia. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

Cosco Shipping and Shenzhen Port Group said Monday they have teamed up to develop a high-end logistics park in Shenzhen's Yantian port district as part of a wider plan to develop and expand Cosco's digital supply chain business. The move is the first time the two state-controlled companies have launched a joint development. It is also believed to be only the second time Cosco has linked with a state port company to develop logistics facilities after it signed a deal four years ago with Shanghai International Port Group, controlled by the Shanghai municipal government, to focus on terminal investment and operations. The latest development, announced by Cosco Shipping in a Hong Kong stock exchange filing, also marks a further step in the company’s diversifying away from being a pure container line and port company into an asset-heavy logistics operation. Under the plan, Cosco Shipping said it will form a joint venture known as Shenzhen Cosco Shipping Smart Supply Chain Company with Shenzhen Port Logistics Group, an affiliate of Shenzhen Port Group. Cosco will have a 67% stake in the venture. Cosco said the joint venture will be responsible for developing a multifunctional logistics park involving the construction of high-specification warehouses, cold chain storage, and consolidation and distribution facilities. No details of the size of the logistics park or the overall cost have been released, but Cosco said the joint venture will “serve as a collecting and distributing hub for cargo in Yantian Port and (the) surrounding area.” Cosco said the project will strengthen its “strategic presence in the Pearl River Delta region and serve as key infrastructure for scaling its digital supply chain business.” The focus on southern China comes as the company has previously concentrated on expanding its logistics operations in Southeast Asia. Cosco Shipping International (Singapore) started work last December on the six-acre second phase of its Jurong Island logistics hub in Singapore, containing 673,000 square feet of warehousing that will more than double the hub’s capacity. The same company has also acquired logistics companies in Malaysia. Contact Keith Wallis at keithwallis@hotmail.com.

International ports

Port infrastructure

Cosco Shipping to develop high-end logistics hub in Yantian with Shenzhen Port

Use code GTW695 at checkout and save $800 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Arm your team with the most trusted information portal for the international container shipping industry.

Group Subscriptions - Wide Box

Get into a group subscription today

Use code ESSW30 at checkout to save 30% on a Silver or Silver Plus annual subscription! 

Subscribe Now - FT/Anonymous to S/SP - Wide Box

END OF SUMMER SALE EXTENDED

Use code ESSW595 at checkout to save $900 on first year of a Gold subscription and 20% on a TPM26 registration!

Upgrade Subscription - S/SP to Gold - Wide Box

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Use code ESSGW995 at checkout to save $500 on first year of a Gold subscription and 20% on a TPM26 registration!

Subscribe Now - FT/Anonymous to Gold - Wide Box

In today’s competitive logistical landscape, efficiency is an absolute necessity for smooth operations. Yet, in the barge sector, many operators still rely on fragmented systems, delayed updates, and manual tracking methods that slow decision-making and increase operational risk. OpenTug’s new eBook, How Enhanced Visibility Transforms Barge Operations, reveals how unified, real-time data can become your competitive advantage leading to improved voyage management and more actionable insights. Drawing on industry best practices and real-world examples, it explores how operational transparency empowers teams to: ●	Reduce delays with accurate ETAs and proactive scheduling decisions ●	Improve asset utilization by identifying underused equipment and optimizing cargos ●	Strengthen safety and compliance through consistent, accessible documentation and reporting ●	Boost customer satisfaction with transparent status updates and faster response time You’ll learn how visibility can connect every part of your operation into a single, actionable view. The ability to see and act on real-time information transforms the way you plan, execute, and deliver. From managing a small regional fleet to running a large, national operation, this eBook will help you understand the measurable benefits of enhanced visibility and how technology like BargeOS is transforming the way barge logistics is managed. Get your copy today and see how clear insights lead to stronger performance, smarter decisions, and more profitable operations. <a href="https://9315820.fs1.hubspotusercontent-na1.net/hubfs/9315820/eBook/Nav-theFuture-AJW-08.19.25.pdf" rel="noreferrer" class="joc_admin__link">Click here</a><span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-16_9 joc_admin__inline-image-position-left joc_admin__inline-image-size-small" data-figure-size="small" data-figure-position="left" data-figure-aspect-ratio="16:9"><img src="/content-assets/1756152344211_Opentug%20logo.png" alt="" class="joc_admin__inline-image-inherit">

Opentug11.png

Transform Barge Operations with Total Visibility

At SSA Marine Mexico, we firmly believe that business development must go hand in hand with social and environmental well-being. Our vision is not solely focused on operating efficiently, but also on creating a meaningful and positive impact in the communities where we are present. Since 1995, we have reaffirmed this commitment through tangible actions that reflect our core values of responsibility, solidarity, and sustainability. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584535914_Photo%201.jpg" alt="" class="joc_admin__inline-image-inherit"> A Year of Major Achievements Over the past year, we allocated more than $107,000 USD to the implementation of 60 social and environmental projects, positively impacting over 7,800 people across various regions of Mexico. Each initiative was designed with a holistic approach, addressing key areas that contribute to long-term community development. Education: Laying the Foundation for the Future Education is one of the most powerful tools to promote social mobility and equitable development. At SSA Marine Mexico, we support academic initiatives that inspire and empower the next generation of leaders. One of our most impactful partnerships was with the University of Colima, where we sponsored the “Reto Camp” program. This initiative encourages university students to develop innovative solutions in the fields of sustainability, logistics, and port operations, offering them mentorship, tools, and real-world challenges to solve. In addition, we donated microscopes, school supplies, and educational materials to institutions in underserved communities, helping to improve the learning environment and provide students with the resources they need to succeed. Health and Sports: Promoting Wellness We believe that healthy communities are strong communities. We have supported several local sporting events and provided direct assistance to talented athletes, enabling them to pursue their passions and represent their regions with pride. Beyond sports, we also strengthened our collaboration with critical emergency response organizations such as the Mexican Red Cross and Civil Protection. Our contributions helped enhance their readiness and capabilities in times of crisis, ensuring better outcomes for those affected by emergencies. Supporting Vulnerable Groups: Reaching Those Who Need It Most A core part of our social responsibility efforts is directed toward supporting vulnerable populations. We have contributed to a range of initiatives focused on children, migrants, and at-risk families. These efforts included donations to orphanages and shelters, as well as support for the National Institute of Migration and grassroots organizations dedicated to protecting and empowering people facing adversity. By standing with those in need, we reinforce our commitment to inclusion and social justice, values that are central to our identity as a responsible company. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584944645_Photo%202.png" alt="" class="joc_admin__inline-image-inherit">Culture: Strengthening Community Identity Cultural identity is a key element in building resilient and united communities. At SSA Marine Mexico, we actively participate in the organization and sponsorship of cultural events that celebrate local traditions and foster civic pride. Working alongside port authorities and municipal governments, we helped bring music, art, and heritage to the forefront, creating spaces for community engagement and intercultural dialogue. Environment: Investing in the Planet Our commitment to sustainability goes beyond operations—it’s a philosophy that drives every decision we make. We have partnered with environmental institutions to carry out reforestation campaigns, beach cleanups, and conservation efforts. In collaboration with the Institute for the Environment, we supported initiatives aimed at decarbonization, biodiversity protection, and environmental education. By involving our employees and local volunteers in these actions, we also foster a culture of environmental stewardship throughout our organization and our surrounding communities. Innovation for a Sustainable Future Sustainability is not just about doing good—it’s also about doing things better. In 2024, we invested $22 million USD in the acquisition of 11 state-of-the-art E-RTG cranes. These electric rubber-tired gantry cranes represent a significant technological advancement in port equipment. Seven of them are already operating on clean electric energy, resulting in a reduction of nearly 4,000 tons of CO₂ emissions and improving operational efficiency by 7%. The remaining four cranes are fully compatible with future electrification, underscoring our long-term strategy to modernize our operations in an environmentally responsible way. This investment is part of a broader innovation roadmap that includes digitalization, automation, and cleaner energy sources—all designed to ensure that our ports continue to grow without compromising the health of our planet. Building a Better Tomorrow, Together At SSA Marine Mexico, we understand that sustainability is a shared and ongoing responsibility. True impact requires collaboration across sectors, long-term vision, and unwavering commitment. That is why we continue to work hand-in-hand with local authorities, non-profit organizations, universities, and our own employees to create solutions that are both scalable and sustainable. Our journey is far from over. In the years ahead, we will continue to deepen our community engagement, explore cleaner technologies, and strengthen the social fabric of the regions where we operate. Each initiative, no matter the size, is a step toward building a future where business success goes hand-in-hand with human and environmental prosperity. We are proud of what we have achieved in 2024, but we are even more excited about what lies ahead. SSA Marine Mexico — Moving the World, Caring for People and Planet. LINK: <a href="https://www.ssamarine.mx/" rel="noreferrer" class="joc_admin__link">https://www.ssamarine.mx/</a>

Photo 2.png

SSA Marine Mexico: True Commitment to Sustainability

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

SMC3rates_shutterstock_5247046.jpg

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>

SMC3rates_shutterstock_5247046 (1).jpg

Filling the Supply Chain Education Gap with LTL Education Courses

START A FREE TRIAL: Access Journal of Commerce content for 30 days

Free Trial - Offer Box

Free Trial

END OF SUMMER SALE EXTENDED: Use code ESSW30 to save 30% on first year of a Silver or Silver Plus annual subscription!


Subscribe Now - FT/Anonymous to S/SP - Offer Box

SUBSCRIBE AND SAVE

GET INTO A GROUP SUBSCRIPTION: Arm your team with unlimited Journal of Commerce content

Group Subscriptions - Offer Box

Group Subscriptions

UPGRADE TO GOLD AND SAVE: Use code GTW695 at checkout and save $800 on first year of a Gold subscription!

Upgrade Subscription

END OF SUMMER SALE EXTENDED: Use code ESSW595 at checkout to save $900 on first year of a Gold subscription and 20% on TPM26! 

Upgrade Subscription - S/SP to Gold - Offer Box

END OF SUMMER SALE EXTENDED: Use code ESSW995 to save $500 on an annual Gold subscription and 20% on a TPM26 registration!

Subscribe Now - FT/Anonymous to Gold - Offer Box

A must-attend conference for shippers & logistics providers moving goods inland

Inland Conference - Rectangle Box

Attend Inland25

Monthly publication providing an editorial deep dive into global supply chain news

Journal of Commerce Magazine - Rectangle Box

Journal of Commerce Magazine

A premium access index of savings using domestic intermodal vs. OTR 

ISI Report - Rectangle Box

Intermodal Savings Index

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

An extensive dashboard of charts organized by trade lane, mode, and topic

Gateway - Rectangle Box

Gateway

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

Explore today’s cutting-edge global logistics technology news and analysis by the Journal of Commerce. Coverage includes logistics technology startups, logistics technology solutions, venture capital, management and impact, freight forwarder technology and the latest supply chain and logistics technology.

Our logistics technology news include logistics technology startups, solutions, and the impact of technology on logistics and supply chain management.

Logistics Technology News | Journal of Commerce

The Journal of Commerce’s supply chain news and analysis impacting the management of end-to-end supply chains reports on supply chain strategies, cargo visibility, inventory trends, sourcing, customs certification and contract logistics. Supply chain news coverage also delves into refrigerated shipping advancements and management of inventory status, regulatory updates and government funding projects.

Stay informed with the latest regulation news and trade updates. Explore comprehensive transportation news and trade regulations today.

Transport, Trade and Regulation News | Journal of Commerce

A thorough cool cargoes news by Journal of Commerce. Learn about the latest trends in refrigerated cargo transportation, weight capacity, technology, and more.

Cool Cargo News | Journal of Commerce

Cool Cargo News

Journal of Commerce keeps you informed on the latest last mile news with comprehensive coverage of carriers, logistics, and last mile transportation solutions.

Last Mile News | Journal of Commerce

Last Mile News

Discover the latest industrial real estate news and trends. Covering projects, real estate supply chain, logistics, pricing, cross dock facilities, and more.

Industrial Real Estate News | Journal of Commerce

Industrial Real Estate News

Stay updated on supply chain strategies, cargo visibility, inventory trends and more with our comprehensive supply chain news and analysis.

Latest News

More News & Analysis

Moving beyond the ‘waste’ inherent in ‘essential’ container shipping

Shipping decarbonization stalled by weak demand, investment shortfall: reports

Pre-Golden Week rate hike beginning to fade on trans-Pacific