<div class="phx-topic abstract-wrapper">Electronic logging of truck driver hours will run smack into congestion and delays at ports and rail yards, forcing changes to drayage operations and threatening higher costs.</div>

Electronic logging of truck driver hours will run smack into congestion and delays at ports and rail yards, forcing changes to drayage operations and threatening higher costs.

<div>Shippers already concerned by the potential for rising US truckload and intermodal pricing this year have another front to worry about — drayage.The electronic logging mandate for commercial truck drivers that takes effect in December is expected to drive up drayage costs, as available driver hours collide with mounting delays at US ports and rail yards. Those delays are costly now, but they could become even more costly after Dec. 18, when the mandate takes effect. Everyone from motor carrier executives to drivers worries the rule will have a big, unexpected impact on drayage.Shippers moving international and domestic intermodal containers...

Shippers already concerned by the potential for rising US truckload and intermodal pricing this year have another front to worry about — drayage. The electronic logging mandate for commercial truck drivers that takes effect in December is expected to drive up drayage costs, as available driver hours collide with mounting delays at US ports and rail yards. Those delays are costly now, but they could become even more costly after Dec. 18, when the mandate takes effect. Everyone from motor carrier executives to drivers worries the rule will have a big, unexpected impact on drayage. Shippers moving international and domestic intermodal containers should be worried, too, as the final rule mandating the use of electronic logging devices or ELDs in place of paper logs could cut into drayage capacity in more than one way, pushing up rates. The ELD requirement will compound current problems drayage operators face when searching for chassis, or waiting at terminal gates. ELDs and tighter regulatory enforcement of driver hours rules will run smack into terminal congestion made worse by the "bunching" of containers accompanying port calls by larger and larger ships. “Those delays could be the difference between a $100 and a $400 rate,” Jason Hilsenbeck, president of Drayage.com and LoadMatch, an intermodal directory and container matching service based in the Chicago area, said. “A lot depends on how ELDs are enforced.” As in the over-the-road truckload sector, an unknown number of drayage drivers are expected to hang up their keys and seek other driving work if the unyielding precision of an ELD means they are unable to “squeeze out” the turns they need. The ELD requirement won’t just affect the habitual scofflaws who run hot and long because it’s the only way they know how to make money. With an ELD, there’s no flexibility for truckers running 15 minutes over their daily 11-hour driving limit thanks to unexpected delays. Those drivers may simply not be able to do the number of turns at port terminals or rail yards they’re accustomed to handling each day. That may make it harder for them to stay in business, create demand for additional capacity, and raise costs for shippers. Transloading a response More drayage operators may be forced to divide driver pools between local shuttle and long-haul operations to ensure they can get a container to its destination. And there will be fresh impetus to address long-term port congestion problems. The advent of the ELD-era could accelerate a trend toward container transloading closer to the ports, a trend already noted in Southern California, where freight is flowing to domestic intermodal containers and 53-foot trailers. “All these inefficiencies that have developed in this intermodal supply chain are going to come back and bite the industry in the tail because drivers won’t have the effective hours they need to do their runs,” Ken Kellaway, CEO of nationwide dray carrier RoadOne IntermodaLogistics, said. Why won’t those drivers have the hours they need? Because those hours will be measured with greater precision, and recorded digitally. Drivers won’t be able to break the 11-hour driving/14-hour on-duty time rule and conceal violations in “fake” paper log books. There’s a reason many drivers refer to paper logs as “comic books.” The overall number of high-volume hours-of-service violations by truck drivers declined in fiscal year 2016, dropping 13.7 percent, but violations issued to drivers for falsifying logs rose 9.6 percent to 36,818. “There are a number of small operators who could wash out of the market, that’s the first impact,” said Tom Connery, president of New England Motor Freight (NEMF), a less-than-truckload (LTL) carrier with a growing drayage business at the Port of New York and New Jersey. “Will smaller drayage companies meet the mandate? Are they going to invest in ELDs?” Connery asked. “I don’t think anybody can say with certainty how much of a percentage of the drayage industry is going to feel the impact, but it’s definitely going to be there.” “We have guys that say, ‘I can’t make money with ELDs, and those guys have sold their trucks,” Rob Moshvin, Northeeast regional manager at ContainerPort Group in Newark, New Jersey, said. “We have terminated drivers, and they have gone elsewhere, if they refuse to go ELD.” In the heartland intermodal hub of Chicago, container haulers have plenty of questions. “Drayage drivers are asking whether they need to log delays at terminals as on-duty time,” Hilsenbeck said. The answer, according to those familiar with the rules, is yes, they do. Those hours waiting outside the gates or waiting for a container to be loaded onto a chassis could push drivers planning longer runs over the hours of service (HOS) limits, he said. Drivers that currently pencil in “off-duty” time while waiting won’t be able to do that with an ELD. Estimates vary widely as to how much container-hauling capacity will be lost either to drivers leaving drayage or to a reduction in productivity. “When I said we could lose up to 15 percent of drayage capacity at a port conference, people thought I was out of my mind,” Kellaway said. “Certainly there are a lot of people who aren’t complying with the HOS rules,” he said. The ELD mandate won’t change the rules under which drivers do their jobs, but it will enhance the ability of authorities to see what is happening, and enforce the rules, Edisson Villacis, an independent drayage operator in the Port of New York and New Jersey, said. “It is changing because before no one was looking,” said Villacis, who runs the Port Driver Facebook page for dray truckers working the New York and New Jersey terminals. “Now everybody can look. There is no way to hide. That is how it is going to change.” He said about 85 percent of the drayage truckers he knows will adopt ELDs, but added that trucking companies will likely create two classes of drivers: those who drive without logs under what’s known as the shorthaul HOS exemption, and those who keep logs. Depending on the market, some dray operators will work under the federal short-haul exemption that allows them to avoid logging daily and weekly on- and off-duty time. Those drivers operate within a 100 air- or nautical-mile radius of their starting location, for up to 12 hours a day. Increasingly, those drivers are likely to shuttle containers from a port terminal or rail yard to a nearby depot. From that point, the container and chassis would be picked up by a long-haul driver currently using a logbook or ELD for delivery outside the 100 air-mile radius. That will make it more difficult for both drivers to make money, because the payment for taking a box will be divided between the two — the one who goes to the port and collects or drops off the container, and the second driver who picks it up, does the long distance and drops it off. “What does that mean? It will drive costs up dramatically,” Kellaway said. “You now have two drivers handling what used to be done by one, and there is an inefficiency that eats up capacity.” Despite the inefficiency, and higher costs, this type of solution will become more common if roads, rail yards, and ports become more congested and volumes remain unpredictable. Tight importer and retail delivery windows will clash with more precise management of driver hours. At Fox Intermodal, a Kenilworth, New Jersey, trucking company, Safety Manager Percy Smith said the impact of the ELD would be “minor” once the carrier adjusts to the situation, but would require changes. Changes almost always spell higher drayage costs for importers. “When a driver gets stuck for three to four hours inside the pier, there is a chance he will run out of hours on the road,” Smith said. To avoid that situation, Fox can charge customers to pre-pull containers, Smith said. “However, it becomes difficult to pre-pull when we are busy.” Hilsenbeck sees this happening in the Chicago area. “I know one drayage operator who runs containers out of Chicago to Detroit using a drop lot in southwest Michigan,” he said. “The shuttle driver takes the box from Chicago to the drop lot, and the road driver picks it up.” That’s become necessary, Hilsenbeck said, because “you can’t count on running to Detroit and back in one day. I think next year at this time, dray rates for cities in the 70 to 90 mile range from the loading point and any distance that’s four to five hours away will be affected,” he said. Hours-of-service gray zones The Los Angeles-Long Beach port complex generates more than 30,000 truck moves each day, most to warehouses and rail yards within a 60-mile radius of the harbor. However, farther-out markets such as Las Vegas, San Diego, and Fresno generate an increasing number of hauls. Shorthaul drayage truckers will be exempt from the ELD requirement if they are within that 100 air-mile radius of their headquarters, driving from Long Beach to Ontario, California, and other warehouse sites in Southern California’s Inland Empire, and back, for instance. However, importers are building distribution centers (DCs) in Phoenix and in Henderson, Nevada. More and more import containers from the ports of Los Angeles and Long Beach are being shipped directly to those more far-flung DCs for deconsolidation and transloading. Fred Johring, president of Southern California drayage carrier Golden State Express and chairman of the Harbor Trucking Association, said many drivers like to vary their routine, remaining local on some days but opting for longer “get out of town” trips other days. Those truckers will have to decide by December if they want to drive locally, or if they should buy ELDs in case they want to take longer assignments, Johring said. Drivers who make fewer than eight trips requiring a log in 30 days will still be able to use paper logs. With ELDs, delays take on an added dimension. Truckers at the ports of Seattle and Tacoma may serve destinations farther than 100 miles away, such as the agricultural region of central Washington, Jim Tutton, vice president of the Washington Trucking Association, said. However, even if the drayage trip is shorter than 100 air-miles, an unexpected event such as an excessive wait time at a Northwest Seaport Alliance marine terminal or snow delays in the Cascade Mountains could cause a driver to exceed the daily driving limit, Tutton said. The proliferation of distribution facilities, especially e-commerce fulfillment centers, on the rim of the 100 air-mile radius from many ports means short-haul exemption drivers increasingly have trouble keeping within the 12-hour start-to-finish time limit. “If you go to eastern Pennsylvania, the number of DCs that have popped up to service the Northeast market has grown dramatically,” said NEMF’s Connery. “Go to Cranberry, New Jersey. Newburgh, New York, has big DCs that get a lot of cans,” he said. “In some cases, it’s going to be hard to hit these areas [from the Port of New York and New Jersey],” he said. Runs to outlying DCs might look good on paper, but throw in a delay at the port or a customer, an accident that slows traffic, and hours can run out quickly." “There are a lot more containers being drayed locally,” in the Northeast, Connery said. “That’s grown dramatically over the past five years, largely driven by the advent of online retail, by people who want to stock product close to the customer and offer next-day delivery.” Connery sees increased demand for deconsolidating containers at the port and moving freight inland by tractor-trailer, even within the 100 air-mile zone. “Transloading is definitely getting hotter, especially for companies putting up DCs around population centers,” he said. “They don’t want to have to return the cans to New York from Pennsylvania or Ohio,” said Connery. Those “cans” are almost always empty, he said. “We’re transloading for customers as far away as Maine who used to dray containers all the way up to Maine from New Jersey.” It makes more sense for a retailer with a DC in Newburgh, for example, about 75 miles from Elizabeth, New Jersey, to transload near Newark than pay to move empty containers back down to the port, Connery said. Otherwise, “the importer is paying for a round trip.” NEMF is unusual, for an LTL company, in that it’s based right at the docks in Port Elizabeth. “We have a 110-door facility in the port,” he said. “We pick up a can around the corner, strip it, load the freight into a 53-foot LTL or truckload trailer, and move it on the next part of its journey.” As driver hours come under greater scrutiny in the ELD era, drayage carriers will have to significantly step up how they dispatch drivers and manage their assets in motion. “They’ll have to do what they should be doing, using technology to optimize the movement of freight and better utilize their assets,” said Satish Jindel, president of transportation research firm SJ Consulting Group. Other types of carriers face the same problem, he said. Productivity upsides? The device some drivers view as the problem is also the potential solution. The ELD, when tied to a fleet management system, will feed dispatchers precise truck locations, estimated times of arrival, and hours remaining to drivers. The result over time: improved utilization. RoadOne decided to provide its drivers, employees and owner-operators, with more than a digital log. “We developed an entire driver communications portal,” Kellaway said. RoadOne drivers can complete pre-trip vehicle inspections, log their miles, and accept and decline loads via the portal. That’s attractive to the driver, Kellaway said. Employee drivers are required to use the device and portal. For owner-operators, who make up about 75 percent of RoadOne’s drivers, it’s an option. That’s important to avoid running into worker classification issues, Kellaway said. “We give them incentive to use it.” All of that data helps RoadOne provide more detail on inbound shipments to customers, Kellaway pointed out. Even if shippers wind up paying higher drayage rates, they’ll get better service, with the type of visibility they demand in other segments of the supply chain. Kellaway believes the ELD mandate also may give ports, rail operators, drayage carriers, and shippers more incentive to finally come to grips with decades-old problems. “It’s important we get more fluidity getting into and out of the terminals,” he said. “We’re all operating in heavily congested areas with high traffic volumes. We have to be cognizant of lengths of haul. You may have to realign and optimize your network. The biggest challenge we run up against is the availability of chassis,” he said. If those problems aren’t addressed, and drayage rates don’t rise, good luck keeping drivers in the dray cab seat, he said. "If the rates don’t get adjusted, we’ll lose these drivers. They’ll go to other sectors of trucking.” Many “final-mile” drivers “can make more money than drayage drivers,” he said, without hours-of-service restrictions. “This will be one more nail in the coffin.” Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @wbcassidy_joc. Contact Hugh R. Morley at hugh.morley@ihsmarkit.com and follow him on Twitter: @HughRMorley_JOC. Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.

Drayage

ELDs signal higher US drayage costs for BCOs ahead

<div class="phx-topic abstract-wrapper">But other Class I railroads will likely be vocal in their opposition to any deal and look to rally support from shippers to block the move, setting the stage for a contentious regulatory battle. </div>

But other Class I railroads will likely be vocal in their opposition to any deal and look to rally support from shippers to block the move, setting the stage for a contentious regulatory battle.

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<div class="phx-topic">Union Pacific (UP) is in preliminary discussions to acquire Norfolk Southern (NS), according to <a href="https://www.wsj.com/business/deals/railroad-operator-union-pacific-exploring-deal-for-norfolk-southern-1d06e822?mod=Searchresults_pos2&amp;page=1">The Wall Street Journal</a>, in what could become the largest freight rail merger in American history. If a deal happens, it would create the first coast-to-coast US rail network and mark a dramatic shift in the structure of US freight railroads. The transaction, which would create a mega-railroad valued at $200 billion, would far exceed the $31 billion merger between Canadian Pacific and Kansas City Southern <a href="https://www.joc.com/article/us-regulators-approve-cp-kcs-merger-to-form-first-us-canada-mexico-rail-5192986">completed in 2023</a>. However, UP and NS bring different freight portfolios to the table, and any proposed deal is expected to draw intense scrutiny from regulators. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6046006_0.1.jpg"></img></div>Other Class I railroads BNSF Railway, CSX Transportation and Canadian Pacific Kansas City (CPKC) will likely be vocal in their opposition to any deal and look to rally support from shippers to block the move, setting the stage for a contentious regulatory battle. UP and NS share a common commitment to the principles of precision scheduled railroading (PSR), an operations philosophy that emphasizes efficiency, asset utilization and cost control. But some in the analyst community have speculated that CSX could be a potential target of UP. UP might also see more upside acquiring NS, which has underperformed CSX for several years financially and operationally. But from a freight mix perspective, UP more closely resembles CSX. Since 2018, non-intermodal cargo has accounted for 53.8% of CSX’s volume, nearly identical to Union Pacific’s 55%, according to the Association of American Railroads (AAR). Non-intermodal accounts for just 43.4% of Norfolk Southern volume, with the majority being containerized freight. UP CEO Jim Vena has been critical of intermodal at times because it doesn’t generate the high margins of commodities such as agricultural products, petrochemicals, plastics and construction materials. “In the intermodal piece, I don’t know. I like the industrial and the bulk business,” Vena said last month at the Wells Fargo Industrials &amp; Materials Conference. “I think the railroads have made some real strategically impactful decisions on how they handle intermodal that are not helpful.” After a brief interjection from his chief financial officer, Vena added, “I didn’t say I didn’t love [intermodal customers].” UP’s CEO is a protégé of the late E. Hunter Harrison, the creator of precision scheduled railroading. PSR practitioners measure operating ratios — i.e. the percentage of revenue that is absorbed by expenses. Lower operating ratios mean more revenue flows to the bottom line, driving profits. “We have long believed that the larger carload footprint, better chemicals, autos, and export ag connectivity makes CSX a better target from a freight flow perspective,” David Vernon, an industry analyst with investment bank Bernstein Societe Generale, wrote in a note published Friday. “While the potential synergy value of a UP and CSX combination is slightly greater, it’s not that much greater.” <h3>Intermodal implications would be profound </h3>If it were approved, a transcontinental US freight railroad would cause a significant reshuffling of the domestic and international intermodal markets. Ocean carriers, for example, often sign long-term contracts for inland rail services. If a carrier currently uses BNSF on the West Coast and Norfolk Southern on the East Coast for international business, the fate of those contracts in a post-merger landscape would be uncertain. The implications for domestic intermodal would be even messier. Hub Group, Swift Intermodal and parcel giant UPS are already customers of Union Pacific and Norfolk Southern, but Schneider National and STG Logistics are locked into multi-year deals with CSX in the eastern US. The shakeup could be substantial for non-asset brokers, also known as intermodal marketing companies (IMCs). Union Pacific controls the EMP and UMAX 53-foot container pools, which are shared with CSX, NS, and Canadian National. A UP-NS merger could limit or eliminate CSX’s access to those pools, potentially impacting significant volumes of freight. “While intermodal channel partners would need to adapt, single line trans-con service would likely be more competitive to the highway and accelerate share shifts,” Bernstein’s Vernon noted. The largest unknown would involve J.B. Hunt Transport Services, the largest US intermodal provider. J.B. Hunt exclusively partners with BNSF in the West and relies heavily on NS in the East, although it does put a portion of business on CSX. J.B. Hunt is unlikely to sever ties with BNSF because their relationship spans nearly four decades and includes joint Quantum service offerings in the US and Mexico. J.B. Hunt has also been critical of the PSR model employed by UP and CPKC. While J.B. Hunt could shift its East Coast operations to CSX, a combined Union Pacific-Norfolk Southern could wield unprecedented pricing power, potentially creating the first company with enough leverage to compete with J.B. Hunt on pricing negotiations with shippers. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Union Pacific (UP) is in preliminary discussions to acquire Norfolk Southern (NS), according to The Wall Street Journal , in what could become the largest freight rail merger in American history. If a deal happens, it would create the first coast-to-coast US rail network and mark a dramatic shift in the structure of US freight railroads. The transaction, which would create a mega-railroad valued at $200 billion, would far exceed the $31 billion merger between Canadian Pacific and Kansas City Southern completed in 2023 . However, UP and NS bring different freight portfolios to the table, and any proposed deal is expected to draw intense scrutiny from regulators. Other Class I railroads BNSF Railway, CSX Transportation and Canadian Pacific Kansas City (CPKC) will likely be vocal in their opposition to any deal and look to rally support from shippers to block the move, setting the stage for a contentious regulatory battle. UP and NS share a common commitment to the principles of precision scheduled railroading (PSR), an operations philosophy that emphasizes efficiency, asset utilization and cost control. But some in the analyst community have speculated that CSX could be a potential target of UP. UP might also see more upside acquiring NS, which has underperformed CSX for several years financially and operationally. But from a freight mix perspective, UP more closely resembles CSX. Since 2018, non-intermodal cargo has accounted for 53.8% of CSX’s volume, nearly identical to Union Pacific’s 55%, according to the Association of American Railroads (AAR). Non-intermodal accounts for just 43.4% of Norfolk Southern volume, with the majority being containerized freight. UP CEO Jim Vena has been critical of intermodal at times because it doesn’t generate the high margins of commodities such as agricultural products, petrochemicals, plastics and construction materials. “In the intermodal piece, I don’t know. I like the industrial and the bulk business,” Vena said last month at the Wells Fargo Industrials & Materials Conference. “I think the railroads have made some real strategically impactful decisions on how they handle intermodal that are not helpful.” After a brief interjection from his chief financial officer, Vena added, “I didn’t say I didn’t love [intermodal customers].” UP’s CEO is a protégé of the late E. Hunter Harrison, the creator of precision scheduled railroading. PSR practitioners measure operating ratios — i.e. the percentage of revenue that is absorbed by expenses. Lower operating ratios mean more revenue flows to the bottom line, driving profits. “We have long believed that the larger carload footprint, better chemicals, autos, and export ag connectivity makes CSX a better target from a freight flow perspective,” David Vernon, an industry analyst with investment bank Bernstein Societe Generale, wrote in a note published Friday. “While the potential synergy value of a UP and CSX combination is slightly greater, it’s not that much greater.” Intermodal implications would be profound If it were approved, a transcontinental US freight railroad would cause a significant reshuffling of the domestic and international intermodal markets. Ocean carriers, for example, often sign long-term contracts for inland rail services. If a carrier currently uses BNSF on the West Coast and Norfolk Southern on the East Coast for international business, the fate of those contracts in a post-merger landscape would be uncertain. The implications for domestic intermodal would be even messier. Hub Group, Swift Intermodal and parcel giant UPS are already customers of Union Pacific and Norfolk Southern, but Schneider National and STG Logistics are locked into multi-year deals with CSX in the eastern US. The shakeup could be substantial for non-asset brokers, also known as intermodal marketing companies (IMCs). Union Pacific controls the EMP and UMAX 53-foot container pools, which are shared with CSX, NS, and Canadian National. A UP-NS merger could limit or eliminate CSX’s access to those pools, potentially impacting significant volumes of freight. “While intermodal channel partners would need to adapt, single line trans-con service would likely be more competitive to the highway and accelerate share shifts,” Bernstein’s Vernon noted. The largest unknown would involve J.B. Hunt Transport Services, the largest US intermodal provider. J.B. Hunt exclusively partners with BNSF in the West and relies heavily on NS in the East, although it does put a portion of business on CSX. J.B. Hunt is unlikely to sever ties with BNSF because their relationship spans nearly four decades and includes joint Quantum service offerings in the US and Mexico. J.B. Hunt has also been critical of the PSR model employed by UP and CPKC. While J.B. Hunt could shift its East Coast operations to CSX, a combined Union Pacific-Norfolk Southern could wield unprecedented pricing power, potentially creating the first company with enough leverage to compete with J.B. Hunt on pricing negotiations with shippers. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Intermodal providers

Surface

Potential UP-NS tie-up would cause major shift in US intermodal market

<div class="phx-topic abstract-wrapper">MSC’s orders at two Chinese shipyards continue the carrier’s long association with Chinese shipbuilders, with the liner seemingly undeterred by US proposals to levy hefty port fees on Chinese-built ships. </div>

MSC’s orders at two Chinese shipyards continue the carrier’s long association with Chinese shipbuilders, with the liner seemingly undeterred by US proposals to levy hefty port fees on Chinese-built ships.

<div class="phx-topic">Three container lines, including Mediterranean Shipping Co. and Taiwan’s Yang Ming, are spending close to $4 billion on a raft of new ships to be built by Chinese and South Korean shipyards, carriers and shipyards have confirmed. The largest deals, which shipbrokers estimate at more than $1.7 billion combined, have been awarded by MSC for six 22,000-TEU liquefied natural gas-powered vessels. Four will be built by Shanghai Waigaoqiao Shipbuilding (SWS) and two by Hengli Heavy Industry in Dalian, China. The world’s largest container line has also upsized six LNG-fueled container ships ordered from SWS last year from 19,000 TEUs to 22,000 TEUs, the shipyard said. MSC’s orders at the two Chinese shipyards continue the carrier’s long association with Chinese shipbuilders, with the liner seemingly undeterred <a href="https://www.joc.com/article/revised-china-tonnage-tax-less-disruptive-still-costly-6005402">by US proposals to levy hefty port fees on Chinese-built ships</a>. They also take to about 30 the number of ships ordered by MSC at Chinese yards in the past year and increase MSC’s order backlog to 135 vessels totaling more than 2.3 million TEUs, according to the latest Alphaliner figures. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e01ed4f0-6075-42bf-a2f7-a63be815f7e0"></dynamic-object></div>Meanwhile, Yang Ming said it ordered seven 15,000-TEU dual-fuel container ships at a cost of up to $1.5 billion from South Korean shipyard Hanwha Ocean as part of its fleet renewal and expansion plan. The latest ships “will replace aging vessels and advance Yang Ming’s strategic development” when they are delivered in 2028 and 2029, the carrier said in a statement Thursday. The cost of each ship is between $194.8 million and $218.7 million, Yang Ming said in a filing to the Taiwan stock exchange. The vessels will be deployed on east-west routes alongside five LNG dual-fuel container ships ordered earlier and due for delivery beginning next year, the carrier said in its statement. Yang Ming said the LNG-fueled ships will achieve a 20% reduction in greenhouse gas emissions compared with traditional fuel. Continuing the ordering spree, South Korean intra-Asia operator Sinokor Merchant Marine has contracted Hyundai Heavy Industries to build four 13,000-TEU scrubber-fitted container ships at a total cost of $610 million for delivery between January and June 2028. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Three container lines, including Mediterranean Shipping Co. and Taiwan’s Yang Ming, are spending close to $4 billion on a raft of new ships to be built by Chinese and South Korean shipyards, carriers and shipyards have confirmed. The largest deals, which shipbrokers estimate at more than $1.7 billion combined, have been awarded by MSC for six 22,000-TEU liquefied natural gas-powered vessels. Four will be built by Shanghai Waigaoqiao Shipbuilding (SWS) and two by Hengli Heavy Industry in Dalian, China. The world’s largest container line has also upsized six LNG-fueled container ships ordered from SWS last year from 19,000 TEUs to 22,000 TEUs, the shipyard said. MSC’s orders at the two Chinese shipyards continue the carrier’s long association with Chinese shipbuilders, with the liner seemingly undeterred by US proposals to levy hefty port fees on Chinese-built ships . They also take to about 30 the number of ships ordered by MSC at Chinese yards in the past year and increase MSC’s order backlog to 135 vessels totaling more than 2.3 million TEUs, according to the latest Alphaliner figures. Meanwhile, Yang Ming said it ordered seven 15,000-TEU dual-fuel container ships at a cost of up to $1.5 billion from South Korean shipyard Hanwha Ocean as part of its fleet renewal and expansion plan. The latest ships “will replace aging vessels and advance Yang Ming’s strategic development” when they are delivered in 2028 and 2029, the carrier said in a statement Thursday. The cost of each ship is between $194.8 million and $218.7 million, Yang Ming said in a filing to the Taiwan stock exchange. The vessels will be deployed on east-west routes alongside five LNG dual-fuel container ships ordered earlier and due for delivery beginning next year, the carrier said in its statement. Yang Ming said the LNG-fueled ships will achieve a 20% reduction in greenhouse gas emissions compared with traditional fuel. Continuing the ordering spree, South Korean intra-Asia operator Sinokor Merchant Marine has contracted Hyundai Heavy Industries to build four 13,000-TEU scrubber-fitted container ships at a total cost of $610 million for delivery between January and June 2028. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Container lines

Maritime

MSC, Yang Ming lead nearly $4 billion ordering spree for new vessels

<div class="phx-topic abstract-wrapper">US drayage truckers say costs and competition have been on the rise since the pandemic, while at the same time their pricing power is under downward pressure. </div>

US drayage truckers say costs and competition have been on the rise since the pandemic, while at the same time their pricing power is under downward pressure.

<div class="phx-topic">Drayage providers across the US say their survival is under increasing threat amid rising cost pressures driven by new competition, including technology-enabled platforms. To stay in business, operators are more often turning to mergers or acquisitions to bolster their companies in a bid to hold off competitors, market players told the Journal of Commerce. Drayage truckers say their costs have been rising since COVID-19, while at the same time their pricing power is under downward pressure. “We are in a situation where new entrants, brokers and AI [artificial intelligence] are in competition with us,” said Matt Schrap, CEO of the West Coast-based Harbor Trucking Association (HTA). “The lowest price wins.” Ken Kellaway, cofounder, chairman and president of RoadOne IntermodaLogistics, which has drayage operations across the country, said a price difference of as little as $50 among competitors will win the business. “The cost pressures are the largest I have seen in my career,” Kellaway said. Last week’s announcement <a href="https://www.ajot.com/insights/full/ai-gsc-shutdown-shocks-port-of-oakland-maritime-community">by Oakland-based drayage provider GSC Enterprises that it was shutting down its operations</a> has traditional operators wondering who is next. “It’s surprising that others haven’t fallen yet,” said Robert Loya, chief operating officer at TGS Logistics. <h3>Technology threat </h3>Traditional drayage companies in Los Angeles and Long Beach, many of whom have been operating for decades in the largest US port complex, are seeing market share erode as their contract-based customers seek lower prices from brokers, some of whom use tech-enabled platforms that allow freight interests to book freight directly with their competitors, Schrap said. RoadOne, based in the Northeast, sees the technology marketplace as the latest threat because it allows brokers to increase market share without investing in trucks, facilities or equipment. “Technology platforms position themselves as tech providers, but they’re really just brokers,” he said. “They’re taking market share as fast as they can. This is not sustainable [for traditional drayage providers].” But Michael Kroul, CEO of the truck broker KTI, said technology platforms are useful in that they help brokers see where the pricing market is in each region and where the freight opportunities are. He emphasized, though, that most brokers do not use the platforms as a tool to force rates lower at the expense of traditional drayage operators. “It’s not brokers who are causing rates to go down,” he said. “We’re not the lowest rate out there.” Kroul said the pricing pressure is due to the excess capacity that came into the drayage market during the post- COVID-19 boom when cargo volumes surged. “Everyone came into the market with COVID and many of them did not leave,” he said. Because drayage capacity exceeds demand, prices continue to trend lower while operating costs over the past three years have risen. “We see what costs operators are operating at, and it’s a tragedy,” Kroul said. Operating costs in California are rising faster than in many regions due to environmental rules that require the use of cleaner fuels, with the <a href="https://www.joc.com/article/new-clean-truck-rule-puts-california-dray-capacity-on-chopping-block-5221564">ultimate goal being to phase out the sale of diesel trucks by 2035</a>. New truck sales by then must be zero-emission heavy-duty trucks. Drayage operators are also affected by <a href="https://www.joc.com/article/la-lb-port-interests-spar-with-agency-over-emissions-rule-under-development-5223229">“indirect source rules”</a> under which drayage operators serving the ports and warehouses must contribute to overall reductions in emissions at those locations. “California’s drayage truckers continue to be subject to the most stringent environmental rules of any state in the country,” the California Trucking Association said in a statement. “A prolonged, challenging rate downturn combined with a crushing, unpredictable regulatory environment is endangering our members’ ability to keep cargo flowing at some of the nation’s largest and most important port complexes.” <h3>Smaller companies in danger </h3>In today’s drayage environment, both in California and nationally, smaller drayage companies are being bought out by operators with “larger bankrolls,” TGS Logistics’ Loya said. “The bigger ones are going to get bigger and the smaller ones are going to go away,” he said. “Those companies with fewer than 50 trucks are struggling.” Kellaway said brutal price competition in the industry is the root problem in drayage, and, unfortunately, bankruptcies may be the result. “If bankruptcies accelerate, then maybe customers will start to take note,” he said. Added HTA’s Schrap: “This race to the [pricing] bottom has to end.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Drayage providers across the US say their survival is under increasing threat amid rising cost pressures driven by new competition, including technology-enabled platforms. To stay in business, operators are more often turning to mergers or acquisitions to bolster their companies in a bid to hold off competitors, market players told the Journal of Commerce. Drayage truckers say their costs have been rising since COVID-19, while at the same time their pricing power is under downward pressure. “We are in a situation where new entrants, brokers and AI [artificial intelligence] are in competition with us,” said Matt Schrap, CEO of the West Coast-based Harbor Trucking Association (HTA). “The lowest price wins.” Ken Kellaway, cofounder, chairman and president of RoadOne IntermodaLogistics, which has drayage operations across the country, said a price difference of as little as $50 among competitors will win the business. “The cost pressures are the largest I have seen in my career,” Kellaway said. Last week’s announcement by Oakland-based drayage provider GSC Enterprises that it was shutting down its operations has traditional operators wondering who is next. “It’s surprising that others haven’t fallen yet,” said Robert Loya, chief operating officer at TGS Logistics. Technology threat Traditional drayage companies in Los Angeles and Long Beach, many of whom have been operating for decades in the largest US port complex, are seeing market share erode as their contract-based customers seek lower prices from brokers, some of whom use tech-enabled platforms that allow freight interests to book freight directly with their competitors, Schrap said. RoadOne, based in the Northeast, sees the technology marketplace as the latest threat because it allows brokers to increase market share without investing in trucks, facilities or equipment. “Technology platforms position themselves as tech providers, but they’re really just brokers,” he said. “They’re taking market share as fast as they can. This is not sustainable [for traditional drayage providers].” But Michael Kroul, CEO of the truck broker KTI, said technology platforms are useful in that they help brokers see where the pricing market is in each region and where the freight opportunities are. He emphasized, though, that most brokers do not use the platforms as a tool to force rates lower at the expense of traditional drayage operators. “It’s not brokers who are causing rates to go down,” he said. “We’re not the lowest rate out there.” Kroul said the pricing pressure is due to the excess capacity that came into the drayage market during the post- COVID-19 boom when cargo volumes surged. “Everyone came into the market with COVID and many of them did not leave,” he said. Because drayage capacity exceeds demand, prices continue to trend lower while operating costs over the past three years have risen. “We see what costs operators are operating at, and it’s a tragedy,” Kroul said. Operating costs in California are rising faster than in many regions due to environmental rules that require the use of cleaner fuels, with the ultimate goal being to phase out the sale of diesel trucks by 2035 . New truck sales by then must be zero-emission heavy-duty trucks. Drayage operators are also affected by “indirect source rules” under which drayage operators serving the ports and warehouses must contribute to overall reductions in emissions at those locations. “California’s drayage truckers continue to be subject to the most stringent environmental rules of any state in the country,” the California Trucking Association said in a statement. “A prolonged, challenging rate downturn combined with a crushing, unpredictable regulatory environment is endangering our members’ ability to keep cargo flowing at some of the nation’s largest and most important port complexes.” Smaller companies in danger In today’s drayage environment, both in California and nationally, smaller drayage companies are being bought out by operators with “larger bankrolls,” TGS Logistics’ Loya said. “The bigger ones are going to get bigger and the smaller ones are going to go away,” he said. “Those companies with fewer than 50 trucks are struggling.” Kellaway said brutal price competition in the industry is the root problem in drayage, and, unfortunately, bankruptcies may be the result. “If bankruptcies accelerate, then maybe customers will start to take note,” he said. Added HTA’s Schrap: “This race to the [pricing] bottom has to end.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Trucking News

Port News

Drayage stakeholders say industry under threat from falling rates, increased costs

<div class="phx-topic abstract-wrapper">The decision cuts against what Schneider announced when it acquired Cowan last November, that Cowan’s brand would be retained and the company would operate as a wholly owned subsidiary.</div>

The decision cuts against what Schneider announced when it acquired Cowan last November, that Cowan’s brand would be retained and the company would operate as a wholly owned subsidiary.

<div class="phx-topic">Schneider National is dissolving the brokerage division of Cowan Systems, a company it <a href="https://www.joc.com/article/schneider-bolsters-us-east-coast-business-by-acquiring-cowan-systems-5824223">acquired for $390 million last November</a> to expand its dedicated truckload division. Employees of Cowan Logistics, the acquired company’s brokerage unit, were informed on Tuesday at an internal meeting that Cowan would be rebranded from Oct. 1. The decision cuts against what Schneider announced at the time of the acquisition, when it indicated that Cowan’s brand would be retained and that the company would operate as a wholly owned subsidiary. “As part of our ongoing efforts to strengthen and streamline our brokerage operations, Cowan Logistics will be fully integrated into Schneider Brokerage effective Oct. 1, 2025,” a spokesperson for Wisconsin-based Schneider told the Journal of Commerce. The spokesperson said the move allows Schneider to “unify our capabilities under a single brand, expand our service offerings, and better support our customers and carrier partners.” The change is specific to the brokerage division and will not affect Cowan Systems’ trucking operations, which will continue to operate independently. A company email to employees explaining the consolidation that was viewed by the Journal of Commerce said, “it became clear there were numerous opportunities to the business and [employees] to expedite growth by combining both groups and rebranding Cowan Logistics to Schneider Brokerage.” <h3>Fate of employees unclear </h3>The absorption of Cowan’s brokerage division into Schneider’s comes amid a prolonged period of intense competition among brokers as they vie for truckload freight in a market constrained by muted demand. It’s not immediately clear how many of Cowan’s brokerage employees Schneider plans to retain. A Cowan source who did not want to be identified told the Journal of Commerce Schneider “is basically retaining key employees, trucks [and] key accounts of Cowan’s.” The source said Schneider’s intent is to eliminate redundancies within its own brokerage division, and that its employees were instructed to push off discussions with customers about the dissolution of the Cowan Logistics brand until closer to October. At the time of the acquisition, the 100-year-old, Baltimore-based Cowan provided logistics, trucking, shipping and warehousing services, with a fleet of more than 1,800 trucks and about 7,500 trailers. Schneider will take over Cowan’s motor carrier (MC) number and standard carrier alpha code (SCAC), along with any of Cowan’s retained employees, clients and contracts. Until the rebranding is complete, Cowan’s leadership will largely remain in place but will report to Ben Schuchart, senior vice president of Schneider Transportation Management, and Jim Nicholson, vice president of brokerage operations for Schneider, according to the company email. Schneider is due to release its second-quarter earnings July 31. Contact Clarissa Hawes at <a href="mailto:clarissahawes@gmail.com">clarissahawes@gmail.com</a>. </div>

Schneider National is dissolving the brokerage division of Cowan Systems, a company it acquired for $390 million last November to expand its dedicated truckload division. Employees of Cowan Logistics, the acquired company’s brokerage unit, were informed on Tuesday at an internal meeting that Cowan would be rebranded from Oct. 1. The decision cuts against what Schneider announced at the time of the acquisition, when it indicated that Cowan’s brand would be retained and that the company would operate as a wholly owned subsidiary. “As part of our ongoing efforts to strengthen and streamline our brokerage operations, Cowan Logistics will be fully integrated into Schneider Brokerage effective Oct. 1, 2025,” a spokesperson for Wisconsin-based Schneider told the Journal of Commerce. The spokesperson said the move allows Schneider to “unify our capabilities under a single brand, expand our service offerings, and better support our customers and carrier partners.” The change is specific to the brokerage division and will not affect Cowan Systems’ trucking operations, which will continue to operate independently. A company email to employees explaining the consolidation that was viewed by the Journal of Commerce said, “it became clear there were numerous opportunities to the business and [employees] to expedite growth by combining both groups and rebranding Cowan Logistics to Schneider Brokerage.” Fate of employees unclear The absorption of Cowan’s brokerage division into Schneider’s comes amid a prolonged period of intense competition among brokers as they vie for truckload freight in a market constrained by muted demand. It’s not immediately clear how many of Cowan’s brokerage employees Schneider plans to retain. A Cowan source who did not want to be identified told the Journal of Commerce Schneider “is basically retaining key employees, trucks [and] key accounts of Cowan’s.” The source said Schneider’s intent is to eliminate redundancies within its own brokerage division, and that its employees were instructed to push off discussions with customers about the dissolution of the Cowan Logistics brand until closer to October. At the time of the acquisition, the 100-year-old, Baltimore-based Cowan provided logistics, trucking, shipping and warehousing services, with a fleet of more than 1,800 trucks and about 7,500 trailers. Schneider will take over Cowan’s motor carrier (MC) number and standard carrier alpha code (SCAC), along with any of Cowan’s retained employees, clients and contracts. Until the rebranding is complete, Cowan’s leadership will largely remain in place but will report to Ben Schuchart, senior vice president of Schneider Transportation Management, and Jim Nicholson, vice president of brokerage operations for Schneider, according to the company email. Schneider is due to release its second-quarter earnings July 31. Contact Clarissa Hawes at clarissahawes@gmail.com .

Schneider National to ‘dissolve’ Cowan brokerage arm Oct. 1 in rebranding move

<div class="phx-topic abstract-wrapper">Bigger carriers have more services and transshipment hubs and are generally able to offer more efficient connecting services, although there is still room to prosper for small and midsize carriers, writes Jeremy Masters.</div>

Bigger carriers have more services and transshipment hubs and are generally able to offer more efficient connecting services, although there is still room to prosper for small and midsize carriers, writes Jeremy Masters.

<div class="phx-topic">Cross-trades served by transshipment can be of varying sizes and often feature transshipment between two deep-sea services. Some will always remain small, but others linking fast-growing developing economies with each other (or mature markets) will reach a point at which direct services become viable. This is an important opportunity for carriers, transshipment hubs and end ports to be at the ground floor of high-charged growth. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6045854_0.1.jpg"></img></div>The following cross-trades and key lanes were selected to look at how carriers serve these emerging trades in both directions using their online schedules: US Gulf to South Africa (Houston to Durban) India to Central America (Mundra to Veracruz) South Africa to Australia (Durban to Sydney) East Coast of South America to West Africa (Santos to Abidjan) Except for Mundra to Veracruz, where one carrier is offering a direct product, all the other lanes/products are transshipment. These lanes give a good idea of the significant variation we see in the top five carriers’ products and why — in these particular trades at least — some are more successful than others. These excerpts will give you a flavor: For Houston to Durban, southbound transit times as advertised varied over multiple sailings, from a low of 32 days to a high of 79 days, with northbound transit from 42 to 82 days. Transshipment in both directions was offered in the Caribbean, Europe, Asia and South America and included, in some cases, double transshipment. For Mundra to Veracruz, westbound transit times varied between 48 and 82 days, with eastbound from 40 to 100 days. For the transshipment products, North Europe, Mediterranean and Asian hubs were used westbound and North Europe and Mediterranean hubs for eastbound. Double transshipment also featured in some cases. There are some common themes in the above cases and other cross-trades reviewed: <h3>Unique products create positive differentiation </h3>Having a different product that directly connects core markets also allows sub-trades operating through transshipment hubs on that service to also establish product advantage. For example, CMA CGM’s and Mediterranean Shipping Co.’s North Europe/Med/Indian Ocean/Australia service not only provides a strong product in the Med to Indian Ocean and Australia trade, but enables Southern/Eastern Africa export cargo to access a fast eastbound product over Port Louis Mauritius. A similar example is Hapag-Lloyd (with Maersk as slotter) being the only direct operator in the Brazil to South Africa and Angola market, thus giving them the driving seat in the core trade but also enabling them to open sub-markets such as Argentina and Uruguay with very strong transshipment products. <h3>Where transshipment takes place is crucial </h3>The ideal transshipment point for cross-trades is one where there is minimal diversion from the most direct route. For example, the big carriers are all routing Brazil to West Africa over Europe, but MSC has an edge on eastbound transit times because it connects in Las Palmas, Spain, which slightly reduces transit time on both legs. In the US Gulf to South Africa trade, MSC also has the best product because it transships from its direct US East Coast to South Africa service at Freeport (Bahamas), whereas other carriers are transshipping in Europe, Asia or South America. <h3>How transshipment products are constructed is critical </h3>Direct products normally trump transshipment products, but rotations of connecting services are important. If carriers are able to design services allowing the first leg to hit a transshipment point early in its rotation and the second leg calls there late in its rotation, the transshipment product can have a competitive transit time. We see in the Mundra-to-Veracruz pairing that Maersk, CMA CGM and Hapag-Lloyd’s transshipment transit times stack up okay versus MSC’s direct service. The most obvious overall observation is that the bigger carriers have more services and more transshipment hubs, so they are generally able to offer more efficient connecting services. Their larger fleet sizes also allow them to deploy innovative products and tweak them until they have a profitable service covering both direct and transshipment lanes. Is there hope for the midsized and smaller carriers? There are a number of niche direct products from smaller carriers in some trades and specific port pairs that the bigger guys treat solely as cross-trades. For the nimble, there is still room to prosper, but they will need to adapt again if the big guys lumber into town. Contact Jeremy Masters at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

Cross-trades served by transshipment can be of varying sizes and often feature transshipment between two deep-sea services. Some will always remain small, but others linking fast-growing developing economies with each other (or mature markets) will reach a point at which direct services become viable. This is an important opportunity for carriers, transshipment hubs and end ports to be at the ground floor of high-charged growth. The following cross-trades and key lanes were selected to look at how carriers serve these emerging trades in both directions using their online schedules: US Gulf to South Africa (Houston to Durban) India to Central America (Mundra to Veracruz) South Africa to Australia (Durban to Sydney) East Coast of South America to West Africa (Santos to Abidjan) Except for Mundra to Veracruz, where one carrier is offering a direct product, all the other lanes/products are transshipment. These lanes give a good idea of the significant variation we see in the top five carriers’ products and why — in these particular trades at least — some are more successful than others. These excerpts will give you a flavor: For Houston to Durban, southbound transit times as advertised varied over multiple sailings, from a low of 32 days to a high of 79 days, with northbound transit from 42 to 82 days. Transshipment in both directions was offered in the Caribbean, Europe, Asia and South America and included, in some cases, double transshipment. For Mundra to Veracruz, westbound transit times varied between 48 and 82 days, with eastbound from 40 to 100 days. For the transshipment products, North Europe, Mediterranean and Asian hubs were used westbound and North Europe and Mediterranean hubs for eastbound. Double transshipment also featured in some cases. There are some common themes in the above cases and other cross-trades reviewed: Unique products create positive differentiation Having a different product that directly connects core markets also allows sub-trades operating through transshipment hubs on that service to also establish product advantage. For example, CMA CGM’s and Mediterranean Shipping Co.’s North Europe/Med/Indian Ocean/Australia service not only provides a strong product in the Med to Indian Ocean and Australia trade, but enables Southern/Eastern Africa export cargo to access a fast eastbound product over Port Louis Mauritius. A similar example is Hapag-Lloyd (with Maersk as slotter) being the only direct operator in the Brazil to South Africa and Angola market, thus giving them the driving seat in the core trade but also enabling them to open sub-markets such as Argentina and Uruguay with very strong transshipment products. Where transshipment takes place is crucial The ideal transshipment point for cross-trades is one where there is minimal diversion from the most direct route. For example, the big carriers are all routing Brazil to West Africa over Europe, but MSC has an edge on eastbound transit times because it connects in Las Palmas, Spain, which slightly reduces transit time on both legs. In the US Gulf to South Africa trade, MSC also has the best product because it transships from its direct US East Coast to South Africa service at Freeport (Bahamas), whereas other carriers are transshipping in Europe, Asia or South America. How transshipment products are constructed is critical Direct products normally trump transshipment products, but rotations of connecting services are important. If carriers are able to design services allowing the first leg to hit a transshipment point early in its rotation and the second leg calls there late in its rotation, the transshipment product can have a competitive transit time. We see in the Mundra-to-Veracruz pairing that Maersk, CMA CGM and Hapag-Lloyd’s transshipment transit times stack up okay versus MSC’s direct service. The most obvious overall observation is that the bigger carriers have more services and more transshipment hubs, so they are generally able to offer more efficient connecting services. Their larger fleet sizes also allow them to deploy innovative products and tweak them until they have a profitable service covering both direct and transshipment lanes. Is there hope for the midsized and smaller carriers? There are a number of niche direct products from smaller carriers in some trades and specific port pairs that the bigger guys treat solely as cross-trades. For the nimble, there is still room to prosper, but they will need to adapt again if the big guys lumber into town. Contact Jeremy Masters at jeremy@shippingmastershk.com .

High variance exists in carriers’ cross-trade products

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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The latest port news from the Journal of Commerce spans the globe from North Carolina and Florida to Shanghai and Singapore. Port news includes port automation, terminal construction projects, the future of decarbonization and net-zero shipping, dredging, port hinterland connectivity, labor, disruption, port congestion and cargo flow.

Port infrastructure

Breakbulk ports

North American ports

Marine terminals

International ports

Longshore labor

Stay informed on port news worldwide with Journal of Commerce. From decarbonization to labor updates, get insights on global developments.

Port News | Journal of Commerce

The Journal of Commerce is the industry’s source for maritime news and analysis about ocean container shipping, logistics, supply chains, global shipping ports, shipping technology solutions and end-to-end connectivity. Coverage tracks the movement of containerized cargo — from origin to destination — handled by marine terminals in the US and abroad, depots, container ports, container lines, drayage, consignees and shippers, forwarders, non-vessel operating common carriers (NVOs) and off-dock warehousing providers, as well as pricing, capacity, volume and reliability on the trans-Pacific, Asia–Europe, North America–Caribbean, Central and South American and intra-Asia trades.

Discover comprehensive trucking news and trends with Journal of Commerce - from trucking LTL to regulation and trucking supply and demand.

Breakbulk News shipping | Journal of Commerce

Breakbulk News

Container shipping news and analysis of ocean container shipping, logistics, supply chains, technology and end-to-end connectivity.

Container Shipping News | Journal of Commerce

News and analysis of ocean containerized cargo movement, logistics, supply chains, technology, and end-to-end connectivity. Maritime news and analysis of containerized ocean cargo movement, breakbulk and roll-on and roll-off shipping from origin to destination.

Latest News

More News & Analysis

Potential UP-NS tie-up would cause major shift in US intermodal market

MSC, Yang Ming lead nearly $4 billion ordering spree for new vessels

Drayage stakeholders say industry under threat from falling rates, increased costs