Moving containerized freight inland from US ports is a daunting task this year for US-based importers, let alone smaller overseas exporters trying to break into US markets. To help those companies find US truck capacity, Mitsui O.S.K. Lines (MOL Group) is partnering with a digital trucking marketplace, NEXT Trucking, which has a warehousing sister company, iDC Logistics.
The goal of the partnership is to help smaller Asian enterprises co-load containers bound for the United States, and deconsolidate and transload them near the ports of Long Beach and Los Angeles via iDC and NEXT Trucking. Trucks sourced on the NEXT digital platform would then deliver the goods to distribution centers (DCs) or stores throughout the United States, the companies told JOC.com.
“This is basically an end-to-end solution that can allow even small- and medium-sized vendors to ship products to the United States,” said Jeff Baumgardner, chief commercial officer at MOL Consolidation Services, a logistics subsidiary of Japan’s MOL Group. On the shipping company’s side, the partnership involves MOL Consolidation Services and MOL Logistics, he said.
The logistics companies are part of MOL Group, which merged its MOL container carrier with Japan’s other two shipping lines, “K” Line and NYK, creating Ocean Network Express (ONE) in a joint venture April 1. “Things have changed here with the liner group joining ONE,” Baumgardner said. “The focus here is logistics. We’ve spent a lot of time creating the MOL brand, and the idea is to continue to grow MOL throughout the world, and especially here in the United States with the logistics group.”
“With the MOL partnership, we’ll offer a one-stop solution from ocean to drayage to warehousing to trucking,” Lidia Yan, co-founder and CEO of NEXT Trucking said. It is a big step for the three-year-old digital trucking platform, which has focused on matching loads bound out of California with truckers looking for freight at locations and rates they prefer. “We allow truckers to dictate what loads they want; we let drivers tell us what routes they prefer.”
Inland trucking, distribution woes getting worse
The MOL Group-NEXT Trucking deal comes at a time when shipping lines, forwarders, and port marine terminals all are looking for ways to better handle the flow of containerized goods inland and get a grip on rising landside transportation costs. Maersk Line is trying to emulate global integrators such as UPS, FedEx, and DHL and become a one-stop shop for shippers.
Cosco Shipping Holdings is aggressively expanding its landside reach, and marine terminal operators in North America are extending logistics services inland. As a non-vessel operating common carrier and freight forwarder, MOL Logistics and MOL Consolidation Services see opportunity to smooth the inland leg of a container journey using NEXT’s digital platform.
“We’re facing the same difficulties as other shipping companies,” Baumgardner said. “Trucking shortages, chassis issues, infrastructure problems — and they’re going to continue to get difficult with larger volumes and mega-vessels coming in and customers requiring much tighter supply chains.” The over-the-road capacity crunch “is going to put pressure on all networks,” he said.
MOL Group’s logistics and forwarding arm is unique to date in addressing the inland truck capacity issue through a partnership with a digital technology platform providing trucking services. NEXT Trucking is one of several such technology platforms or digital trucking marketplaces evolving quickly, including Uber Freight, Convoy, and Trucker Path, among others.
NEXT, which got its start in 2015, was founded by Yan and co-founder Elton Chung to solve truck capacity problems for iDC Logistics, their logistics firm, founded in 2004. Los Angeles-based iDC specializes in international freight, offering drayage, warehousing, transloading, and transportation services. iDC handled $25 billion worth of cargo in 2017.
“The old ways of shipping freight aren't working," Chung said at the time. "It's no wonder there aren't enough truckers to do the job.” Three years later, truckers are still hard to find, in part because there is so much more freight to haul. NEXT was designed as a “trucker-centric” platform in order to attract owner-operators and small carriers seeking freight, Yan said.
“We established the company with very little capital,” she said. “In our second year we did $30 million in revenue. We’re looking for extra revenue this year.” NEXT lets truckers choose the loads, routes, and rates they want based on preferences they enter into the system, Yan said. NEXT handles payment. “We want to empower small- and medium-sized companies,” she said.
Shippers, including large importing retailers, get better visibility
Shippers, including large retailers importing goods from Asia, get better visibility from pickup to delivery and just as important, save time. “Shippers can see their loads in real time and retrieve proof of delivery documents the moment loads are delivered,” said Yan. Enterprise shippers can import shipment and delivery data directly into their transportation management systems.
The agreement with MOL Group extends NEXT’s reach in the international supply chain. MOL Consolidation Services will help small- to medium-sized companies in China and other Asian countries that do not ship full containers of freight consolidate shipments with other vendors, co-load and move them to Southern California, and then transfer freight to iDC and NEXT.
“MOL Consolidations Services is really a global freight forwarder,” Baumgardner said. “We’re working on consolidating shipments in China, shipping them to the United States by the best possible carrier, bringing them into iDC to be deconsolidated, and then sending them to the customer in the United States through NEXT trucking. It’s an end-to-end solution to ship products to the United States.”
Just as US-bound containerized goods are co-loaded in Asia, trailers headed to the same DC in the United States could share shipments from several vendors, Yan said. “We deconsolidate and transload and consolidate directly into truckload, rather than LTL [less-than-truckload],” she said. “That’s going to decrease costs for vendors.”
One of the major problems getting freight “off the coast” is scheduling truck pickups at the transload point, Baumgardner said. “This will allow the truckers to build their own schedule and keep moving. The current model isn’t that efficient. That’s been the nature of our industry, and it leads to an imbalance of equipment.” Today, “you can’t have these inefficiencies.”
MOL Group’s core business is not co-loading. “The co-loaded box is separate from the true BCO [beneficial cargo owner or importer] model, though we do consolidate loads for our customers from vendors overseas,” Baumgardner said. But the MOL-NEXT partnership could be expanded. “This is a service we plan to offer to our current retail customers,” he said.
“As we get growing in China, we’ll be able to build more boxes,” he said. “I don’t know what the future will hold, but I believe this kind of platform could grow to other areas besides the United States. China could use a trucking platform like this.”