<div class="phx-topic abstract-wrapper">For years, North American shippers were warned a truck capacity crunch was coming, but that crunch never materialized. This year, with the accelerating US economy, that crunch finally arrived. That is pushing up inland supply chain costs and transport rates across the board, and shippers should not expect relief soon.</div>

For years, North American shippers were warned a truck capacity crunch was coming, but that crunch never materialized. This year, with the accelerating US economy, that crunch finally arrived. That is pushing up inland supply chain costs and transport rates across the board, and shippers should not expect relief soon.

<div><div><img></div>For years, North American shippers were warned a truck capacity crunch was coming, but that crunch never materialized. This year, with the accelerating US economy, that crunch finally arrived. Photo credit: Shutterstock.For years, North American shippers were warned a truck capacity crunch was coming, a crunch that never materialized, thanks to a stop-and-go, slow US economic recovery. After three quarters of steady economic growth, however, that crunch finally arrived this year, clenching supply chains with a vise-like grip, and shocking shippers who expected a slow first quarter.That is pushing up inland supply chain costs and transport rates across the board,...

For years, North American shippers were warned a truck capacity crunch was coming, but that crunch never materialized. This year, with the accelerating US economy, that crunch finally arrived. Photo credit: Shutterstock. For years, North American shippers were warned a truck capacity crunch was coming, a crunch that never materialized, thanks to a stop-and-go, slow US economic recovery. After three quarters of steady economic growth, however, that crunch finally arrived this year, clenching supply chains with a vise-like grip, and shocking shippers who expected a slow first quarter. That is pushing up inland supply chain costs and transport rates across the board, and shippers should not expect relief soon. These market conditions are likely to last into 2019, most experts say. In order to not be washed away by the oncoming wave, shippers will have to rigorously rethink how they ship goods, gather detailed data on their operations, and collaborate. Not since 2014 have US shippers and beneficial cargo owners seen such disruption to domestic and international containerized freight movement. And what they have seen starting in the autumn of 2017 and early 2018 makes 2014 look like “a blip compared with the environment we’re in now,” said Jeffrey Tucker, president and CEO of logistics firm Tucker Company Worldwide. Shippers ripped through trucking routing guides in January looking for space for freight. They found little relief on rails, as drayage truck capacity at either end of the tracks seemed to vanish, especially in Chicago, the largest US transportation hub. The impact of the capacity crunch rippled back to ports and ocean shipping lines, affecting plans for store-door deliveries. Tight capacity and high freight demand are propelling pricing for truckload, less-than-truckload (LTL), drayage, and intermodal rail services skyward. Dry van truckload rates across the United States were up 17 to 25 percent on average in January, according to the Trans-Logistics Group North American Truckload Rate Index. “There is no place that rates are the same or lower than a year ago,” said Charles W. “Chuck” Clowdis Jr., founder and managing director of Trans-Logistics Group. The group’s analysis of contract and spot market prices in 14,700 unique origin-and-destination-point lanes shows a surge in medium-range hauls and rates, with lanes running 450 to 550 miles, Clowdis said. Networks out of kilter Some of that was caused by e-commerce, he suspects. But the electronic logging device (ELD) mandate, imposed on truck drivers Dec. 18, also is lengthening and shortening lanes and exacerbating shortages of trucks, equipment, and drivers, throwing shipping networks out of whack. One reason capacity is tight is because it is not where shippers expect. “This may well be one of the most unpredictable and quickly changing freight environments that many of us have ever experienced,” Douglas R. Waggoner, chairman and CEO of Echo Global Logistics, said last month. “January and February are traditionally the slowest months of the year, and right now the market is not as tight as [the fourth quarter], but it’s still tight.” “This was an entirely predictable surprise,” said Mike Regan, chief relationship officer at TranzAct Technologies and advocacy chair for the National Shippers Strategic Transportation Council. Shippers knew trucking conditions, especially a shortage of qualified drivers, would likely lead to a sharp contraction in capacity if the US economy expanded faster. Click to enlarge But many shippers, lulled perhaps by the failure of a driver or capacity crisis to materialize in 2015, and the steep drop in US surface transportation rates in 2016, did not expect the market to swing so suddenly. “The reality is it’s going to get a lot worse over the next couple of months,” Regan said. “People are worried about how they’re going to move freight in April and June.” Large retailers, he said, “to a person will tell you they’re not going to run out of trucks. They’re going to pay what they need to pay to get the trucks they need to move the freight they have. The question then becomes, if large shippers are willing to pay above-market rates to guarantee capacity, what does that say about what’s coming to the small to midsize shipper?” Higher costs are inevitable, Regan said, especially for those shippers who book freight on a mostly transactional, load-to-load basis, rewarding low bidders. “If you’re a great customer, a collaborative shipper, you might see an increase of 5 percent” in truckload rates, he said. “If you’re a transactional customer, you can expect your rates to rise 15 percent or more.” Another measure of truckload pricing, the Cass Truckload Linehaul Index, dropped from 134.5 in December to 133.5 in January, but was still up 6.5 percent year over year, compared with 6.2 percent in December. The Cass Intermodal Pricing Index hit an all-time high of 141.4 in January, a 5 percent year-over-year gain and a 5.3 percent increase from December. “In just the last seven months, our pricing forecast has increased from minus 1 to 2 percent, to 6 to 8 percent, and now we have reason to believe the risk to our estimate continues to be on the upside,” said Donald Broughton, managing partner at Broughton Capital and commentator for the Cass indices. “Contract pricing should keep rates in positive territory well into 2018.” In the fourth quarter, truckload rates paid by C.H. Robinson Worldwide, the largest US freight broker, rose 15 percent year over year. The logistics provider boosted its own truckload charges to shipper customers by 14.5 percent. “We continue to be active in repricing business where appropriate across all our modes and services,” CEO John Wiehoff said Jan. 31. ELD out-of-service enforcement nears Shippers are racing the clock to find ways to lock in capacity and restrain pricing before full-fledged out-of-service enforcement of the ELD mandate begins April 1. “I’m not waiting for trucking companies to come to me, I’m going to them,” said John Janson, global logistics director at SanMar, an Issaquah, Washington-based supplier of apparel and accessories. But their options are narrower than ever before. Domestic intermodal rail traffic began 2018 with a 7.4 percent year-over-year jump in January, according to the Intermodal Association of North America, compared with a 3.7 percent expansion in January 2017. Railcar provider TTX forecasts the number of 53-foot containers will rise 4.4 percent to 309,000 by year’s end. The ability to shift more freight off the highway to rail is limited by intermodal’s reliance on drayage — which faces the same capacity constraints as over-the-road trucking and the extra burden of chassis — and rail service reliability issues. “The trains are not running on time right now,” Ron Joseph, chief operating officer at Direct ChassisLink (DCLI), said in late February. “If you’ve got them running behind, it’s hard to make projections on when to move chassis in and have them ready,” Joseph said. “If we’re planning a train arriving at a certain time and it gets delayed for some reason, if they don’t tell us that, we can’t get the right amount of chassis to the right place at the right time.” That is the US capacity problem in an intermodal nutshell. Shippers told The Journal of Commercevariable service makes it tough to shift freight off-highway to intermodal containers, especially when they face increasingly stringent delivery requirements from retail customers. “Truck plus one is fine, but when you don’t know if it’s going to be plus one or plus three, that volatility kills us,” said a shipper who requested anonymity. Click to enlarge “Shippers have two challenges: rate increases and more and more demanding delivery times,” said Ben Cubitt, senior vice president of engineering and procurement at third-party logistics (3PL) company Transplace. “They need highly capable service-oriented carriers, so they can’t offset the prices. There’s lots of discussion about how to lock in capacity, but still no resolution.” In February, some shippers said it took days to get containers out of Chicago railyards. Other midwestern markets were disrupted. DCLI shifted chassis from the East Coast to several Midwest locations in reaction to the disruption, reallocating 450 chassis from the South Atlantic and Northeast by late February, with plans to move about 1,600 chassis to the Midwest. “We continue to work with our supply chain partners to manage traffic flows and alleviate the delays,” Canadian National Railway said in a statement. “We are working to secure more driver power in the Chicago area to increase terminal fluidity, and have encouraged carters to schedule appointments at off hours such as nights and weekends,” the railroad told customers. Drivers contemplate shift Just as shippers look to expand use of intermodal rail, more drayage drivers are thinking of moving to over-the-road trucking. “I would say 50 percent of the drivers or more are considering flipping [to over-the-road] to avoid the ramps,” Susan Keldani, vice president of On Track Transportation in Illinois, told The Journal of Commerce. “Owner-operators just get fed up.” Among several factors influencing the capacity crunch, two identifiable causes stand out: the US economy and a resurgent driver shortage. “The ELD is easy to blame for all of our sins, but the root problem is not recruiting, training, and paying drivers enough,” Clowdis said. If real GDP was still growing at 2016 rates, the ELD’s arrival might have gone unnoticed. But with the slack gone from the US economy, which expanded between 2.6 and 3.2 percent over the last three quarters and is expected to continue growing at a faster pace this year, the ELD mandate adds a new layer of complexity to the transportation capacity issue. The mandate’s add-on impact may be enough to keep capacity tight when freight demand ebbs. For one, the effect of the mandate is very broad. The mandate covers more than 3 million commercial truck drivers who kept (or keep) paper logs to track their working hours. The introduction of the mandate is arguably the biggest regulatory change for US truckers since the introduction of the commercial drivers license and mandatory random drug testing in the 1980s. The main obstacle to hiring more truck drivers is money. Plenty of factors feed the driver shortage, from the demographics of an aging workforce to a tightening regulatory net, led by the ELD mandate. But pay is the axle on which all those factors turn. For proof, just look at the current wave of truckload driver pay and benefit increases and bonuses. “The driver market is really in flux,” said Lana Batts, co-president of Driver iQ, a driver screening and monitoring service. “Motor carriers are trying a lot of different things to recruit drivers. They’re all adding pay. About 50 percent are doing sign-on bonuses. I think, basically, motor carriers are optimistic they can find drivers. I don’t think they’re optimistic they can keep them.” Time, not trucks, trailers, chassis or containers, terminal doors or drivers, may be the determining factor in capacity. The biggest impact on capacity from the ELD mandate is loss of time for those drivers still behind the wheel. Less time means fewer weekly turns, which means more trucks and drivers are needed simply to haul the same number of shipments. Ken Spicer, director of transportation and carrier management at chemicals distributor Univar, saw three small motor carriers shut down in December. “It’s a shame these carriers came to us too late in the game,” Spicer said in an interview available on TranzAct Technologies’ Market Storm Center website. “We could have paved the way for them to run our dedicated lanes.” “Before the ELD mandate took effect, I thought the primary impact would be carriers leaving the marketplace,” Regan said. “That’s still a legitimate concern. But the real impact is how the ELD mandate is changing lanes and equipment utilization. We had several lanes that were one-day lanes before Dec. 18 that now are two-day lanes because carriers won’t risk log violations.” In a detailed analysis of the impact of the ELD mandate on shipping lanes, Zipline Logistics found transit times creeping up. “We’ve been able to identify the subset of lanes that will be most drastically affected,” Zipline president Andrew Lynch said, “anything between 450 and 550 miles,” the same length of haul highlighted by Clowdis’s Trans-Logistics Group. On those lanes, transit times on average rose from 1.05 transit days before Dec. 18, when the ELD mandate took effect, to 1.22 transit days after the mandate, a 16.2 percent increase. That accounts to about four additional hours of transit time, on average, enough to turn a seven-hour haul into an 11-hour trip, pushing drivers to the limit of their daily legal driving time. Tripping the time limits Truckers would likely clock out beyond the legal limit when any delays or unexpected stops come into play. That’s enough to turn a same-day trip into a next-day delivery. “That’s a pretty big impact,” Lynch said. “The cost to run the truck hasn’t changed, so these guys are just losing time.” That additional time alone translates to a 4 percent increase in freight costs, he said. That is real money to SanMar’s Janson. “We didn’t expect as big of an impact [from the ELD mandate] on five- to six-hour runs,” he said. “We would have expected it on longer hauls, but these shorter runs are well within the legal limits and have always been acceptable. Now they’re getting turned down.” When he asked truck drivers why, the answer surprised him. Although the five- to six-hour length of haul was well within the 11-hour daily driving limit, extra hours were easily racked up because of unexpected delays at pickup and delivery points and because of congestion, especially on multistop routes, Janson said. That meant drivers often found themselves short of the time needed to deliver goods and find backhauls. “In the past, I think they pushed the envelope, or maybe they fudged their logs a little bit to get home. Now they can’t do that,” Janson said. Now SanMar is looking for niche carriers that need freight “that balances their network,” he said. The apparel shipper found one such carrier that needed freight between Southern California and Phoenix, for example, and signed it up. Click to enlarge SanMar also dropped its former 3PL. “We kept getting calls from our 3PL that drivers were running out of hours. That caught the 3PL off guard. We believe the asset-based carriers provide better control over the situation,” Janson said. And SanMar is considering a modal shift as it tries to meet delivery deadlines. “Our LTL business is seeing some growth,” he said. From Zipline to Transplace to TranzAct, companies arranging shipments and processing payments for shippers can provide dozens of similar examples of supply chains thrown off-kilter by the sudden dislocation of resources. It is the shipping lines’ container matchback problem writ large and across modes throughout the inland supply chain and domestic transportation. For some shippers, “it’s getting harder to move loads over the weekend,” Cubitt said. “Carriers are putting embargoes on certain destinations based on time constraints.” They are also taking a page from the books of the parcel carriers, FedEx and UPS, and adding more accessorial surcharges and fees to recover rising costs that often are not covered by rates alone. Reports are rife that surface transportation providers, over-the-road and intermodal, are reaching into their rules tariffs for little-used accessorial charges, such as congestion fees levied in certain markets, and also refusing new business as peak-level demand in January and February limited their ability to reposition tractor-trailers and containers to meet requests. For example, intermodal marketing company Hub Group told The Journal of Commerce it charges certain customers fees that might total hundreds of dollars to move freight not covered by contracts in certain highly congested markets, including Chicago, Los Angeles, Seattle, Dallas, and Atlanta. The charges are dynamic and depend on the cost of getting equipment. Changing behavior “There are going to be times in which we will have to do unique things to provide capacity that comes with an additional cost, especially with surge capacity like the market we’re seeing today,” said Brian Meents, Hub Group senior vice president of enterprise customer solutions. The issue is being able to allocate drivers and equipment. “I personally see a shift away from using assessorials to cover your costs, to trying to drive a change in the behavior of the shipper,” said Brian Broadhurst, vice president of transportation solutions at consulting firm Spend Management Experts. Broadhurst and others see that accessorial trend starting in the parcel business and extending to LTL and truckload. Increasingly, truckers simply refuse loads. “There’s been a real drop in shipment tender acceptance,” Cubitt said. “Everything has changed in this market. Last year, if your primary carrier didn’t take a load, you could get a secondary carrier quickly. This year, you go to that secondary, and then a third carrier. On some lanes you can go to 50 carriers and not get a yes.” The tightness that gripped US supply chains in January eased somewhat in February, but “peak-like” conditions persisted in many markets during what is usually the slowest month of the year. With spring imports moving inland, the produce season on the horizon, and the April 1 deadline for full ELD enforcement coming fast, shippers are bracing for more disruption. “People are in panic mode,” Clowdis said. With more than 50 years of experience in trucking, Clowdis has seen tight markets before as economic cycles come and go, but this capacity crunch is “unprecedented,” he said. Surviving it will require long-term thinking and lasting changes from shippers as well as their transportation and logistics partners. “I’ve had a shipper tell me he’s considering creating a 160-truck private fleet to ensure he has capacity when he needs it,” Clowdis said. “I asked him, ‘Where will you get the drivers?’ He didn’t know. I asked him why he didn’t go to a dedicated operation. ‘It costs too much,’ he said. You’ll have to ask what’s really going to cost ‘too much’ if you want to keep freight moving.” “We’re no longer going to be able to push the easy button,” Janson said. He said shippers need to look at transportation less from a one-way perspective and think more holistically. “You need to look at the complete network now,” including how the shipper’s freight plans overlay and match up with truckers’ transportation network and needs. “If our business is meaningful to the carrier, that makes a difference,” he said. “A strong relationship means a lot. We have to ask, does our freight balance their network” in terms of backhauls and the forward positioning of equipment, Janson said. “It’s more than just trucking behavior that is changing,” he said. “This situation is changing a lot of things.” Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @wbcassidy_joc .Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @ariashe_joc.

Logistics Technology News

Trucking News

US shippers face unprecedented truck, intermodal cost hikes

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

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

Feature image

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

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

North-American rail

Intermodal providers

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

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

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

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

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

Container Shipping News

Port News

North American ports

Marine terminals

Maritime

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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