<div class="phx-topic abstract-wrapper">Q: We have a large customer with distribution facilities in Southern California that insists on charging us &amp;ldquo;commercial zone charges&amp;rdquo; even though those no longer are applicable in the Los </div>

Q: We have a large customer with distribution facilities in Southern California that insists on charging us &ldquo;commercial zone charges&rdquo; even though those no longer are applicable in the Los

<div>Q: We have a large customer with distribution facilities in Southern California that insists on charging us &amp;ldquo;commercial zone charges&amp;rdquo; even though those no longer are applicable in the Los Angeles area.I believe commercial zones were created and monitored by the old Interstate Commerce Commission, and once deregulation rolled around most of the ICC functions were discontinued. What can we use to push back on that customer that commercial zone charges in Southern California went the way of the dodo bird?A: I sympathize, but you have several things wrong, and you&amp;rsquo;re looking in the wrong direction for your solution.Although the...

Q: We have a large customer with distribution facilities in Southern California that insists on charging us &ldquo;commercial zone charges&rdquo; even though those no longer are applicable in the Los Angeles area. I believe commercial zones were created and monitored by the old Interstate Commerce Commission, and once deregulation rolled around most of the ICC functions were discontinued. What can we use to push back on that customer that commercial zone charges in Southern California went the way of the dodo bird? A: I sympathize, but you have several things wrong, and you&rsquo;re looking in the wrong direction for your solution. Although the former ICC was indeed responsible for defining commercial zones, the concept didn&rsquo;t originate there. It was, and still is, to be found in the underlying statute, where it serves the purpose of identifying what motor carrier operations are and what aren&rsquo;t to be defined as in &ldquo;interstate or foreign commerce,&rdquo; and thus subject to federal regulatory authority. See 49 U.S.C. Section 13901, which spells out that operations within the commercial zone of a metropolis are deemed to be operations within the metropolis itself, and thus federally exempt. So, commercial zones necessarily still exist, even in Southern California; Code of Federal Regulations, 49 CFR Part 372. Regarding the ICC&rsquo;s demise, the definitions didn&rsquo;t simply go up in smoke; their maintenance was originally transferred to the Federal Highway Administration and, a few years later, retransferred to the Federal Motor Carrier Safety Administration of the U.S. Department of Transportation. Granted, the FMCSA doesn&rsquo;t exactly take this responsibility very seriously. The definitions are old and outmoded and are unlikely (in the extreme!) to ever be redone. But, antiquated as they are, they remain on the books; unlike the dodo, they continue to live in this world. Now, as I said, the purpose of commercial zones was simply to establish the limits of federal jurisdiction; it had nothing to do with carrier rates or charges. It was, however, co-opted by carriers for that purpose back in the regulatory era, and in your case that practice has survived to the present day. Why would carriers assess surcharges for pickups and deliveries within a commercial zone? There are some operational reasons, mainly relating to the traffic congestion, problems with parking, etc., commonly found in crowded commercial areas. But, of course, these things don&rsquo;t begin and end abruptly with the demarcation of regulation-defined commercial zones, especially those whose borders are decades old. No, the main reason is simply because they can. In days of yore, when carriers had to justify rates before a critical ICC, this was a differential they found they could support. So they jumped on it, and additional commercial zone charges became the norm of rate-making, and shippers came to accept it. When rate regulation diminished and ultimately vanished, the acceptance remained, so why would carriers voluntarily abjure the practice? That&rsquo;s not to say, however, that you&rsquo;re entirely without recourse. It&rsquo;s just that your recourse lies not in the law but &mdash; as always these days &mdash; in the commercial marketplace. Commercial zone charges aren&rsquo;t written in stone. Carriers are under no obligation to assess them; it&rsquo;s just that neither are they under any obligation to forgo them. The whole issue is, as with any other area of carrier pricing, negotiable. So, well, negotiate. Go to the carrier or carriers in question and say you don&rsquo;t believe such charges are appropriate in the current circumstances and see what you can do to bargain them away. To be sure, that may not be an easy task. Trying to get a carrier, or indeed any vendor, to give up revenue &mdash; especially in this economic climate &mdash; isn&rsquo;t a walk in the park. And I&rsquo;m sure you&rsquo;ll get some sort of argument that the charges are &ldquo;legally required,&rdquo; which is balderdash but sounds good and deflects responsibility. Still, if you&rsquo;re persistent &mdash; you can show them this column to refute the &ldquo;legally required&rdquo; garbage &mdash; you may make headway. By playing off one carrier against another and giving or withholding traffic according to their responses, you may gradually persuade them to drop or at least reduce the add-ons. That, however, is your only avenue to the result you&rsquo;re trying to achieve, because I&rsquo;m afraid the reality is that commercial zones, outmoded though they certainly are after all these years, are still around. Only negotiation can make the extra charges carriers are assessing on service there go away. Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843- 559-1277; e-mail, BarrettTrn@aol.com . Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.

Maritime

Best Offense Is a Zone Defense

<div class="phx-topic abstract-wrapper">Despite freefalling spot rates and lackluster demand expectations for the fourth quarter, carriers have been far more conservative in blanking sailings this year.</div>

Despite freefalling spot rates and lackluster demand expectations for the fourth quarter, carriers have been far more conservative in blanking sailings this year.

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<div class="phx-topic">Asia-Europe ocean carriers face a moving target in their attempts to match rising capacity with softening demand due to slew of new vessels entering the trade lane and ongoing port congestion dragging schedule reliability to dismal levels. Despite reports of full ships from carriers, the frontloading that led to an early peak season on the Asia-Europe trade is expected to curb demand through the last quarter, with blank sailings announcements picking up ahead of China’s National Day Golden Week holiday that begins on Oct. 1. “The Asia-Europe trade lane saw peak season earlier this year, with the usual September surge already past,” C.H. Robinson noted in a September market update. “This shift in timing patterns means that September through December will likely see below-normal shipping volumes compared to historical trends.” The weakening volume will coincide with the delivery of more than 1 million TEUs in capacity that are scheduled to enter service before the end of the year. Importantly, 67% of the new vessels will have a capacity of more than 15,200 TEUs, according to Alphaliner, which means most will necessarily be deployed on the already oversupplied Asia-North Europe and Mediterranean trades. Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, noted in the firm’s Sunday Spotlight newsletter that Asia-North Europe rates are showing structural weakness. “This could imply an increasing overcapacity of ultra-large container vessels, which to a large degree have no other relevant deployment focus than the Asia-Europe trade,” he explained. “As such, this is problematic going forward, as we will see ever more of these vessels delivered.” <h3>Blank sailings below last year’s levels </h3>The carriers, for their part, are managing capacity by blanking sailings, but not at the same level as last year, said Destine Ozuygur, product marketing manager at rate benchmarking platform Xeneta. “We saw blanking announcements from Mediterranean Shipping Co. (MSC) last week and a few more, which we are currently factoring into the database,” she told the Journal of Commerce. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e408891d-d5c3-4aa2-bee2-432e034b0aaa"></dynamic-object></div>MSC announced six blank sailings on Asia–Europe loops for the last two weeks of September, ahead of China’s National Day Golden Week holiday that begins on Oct. 1, while Maersk has said it will blank four sailings in late September and early October. Ozuygur said, so far, carriers are scheduled to blank a total of 13 Asia-North Europe sailings in September and 16 in October, far short of the 25 sailings canceled in September and 39 in October last year. “We do expect to see a few more but don’t currently believe it will reach those [prior-year] levels,” she said. That relative lack of blanks has put additional downward pressure on spot rates, which have been in freefall since mid-July, as reflected by the various rate indices — Drewry’s World Container Index (WCI), Xeneta, the Shanghai Containerized Freight Index (SCFI) and Platts. Average spot rates from Asia to North Europe fell to $1,700 per FEU as of Monday, down 49.1% from the week of July 18 and 63.5% from the same week last year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Short-term Asia–Mediterranean pricing of $2,100 per FEU was down 52.3% from its summer peak in the week of June 20 and 54.7% year over year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7b12031d-6ddc-4ecd-8caa-64db04f5c585"></dynamic-object></div>C.H. Robinson wrote in its September update that there is insufficient cargo demand on Asia–Europe to support any rate hikes, with carriers choosing market share over pushing through increases. That could be a positive for shippers beyond the initial cost savings. “We’re seeing Asia-North Europe spot rates falling at an accelerated pace, while Mediterranean rates are declining more slowly, eliminating the traditional price differential between these destinations,” the forwarder noted. “This convergence means there’s no longer a significant advantage between North European and Mediterranean discharge ports based solely on rates,” C.H. Robinson added. “Greater flexibility in port selection then allows for more strategic supply-chain optimization beyond the cost of the ocean shipping itself.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="8960c109-bc04-49b6-9d7c-b812a1e49f6f"></dynamic-object></div>In tandem with the rate decline is schedule reliability that in August fell to its lowest level in years. Data from eeSea shows on-time performance on Asia-North Europe of just 17% and 16% from Asia to the Mediterranean. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Asia-Europe ocean carriers face a moving target in their attempts to match rising capacity with softening demand due to slew of new vessels entering the trade lane and ongoing port congestion dragging schedule reliability to dismal levels. Despite reports of full ships from carriers, the frontloading that led to an early peak season on the Asia-Europe trade is expected to curb demand through the last quarter, with blank sailings announcements picking up ahead of China’s National Day Golden Week holiday that begins on Oct. 1. “The Asia-Europe trade lane saw peak season earlier this year, with the usual September surge already past,” C.H. Robinson noted in a September market update. “This shift in timing patterns means that September through December will likely see below-normal shipping volumes compared to historical trends.” The weakening volume will coincide with the delivery of more than 1 million TEUs in capacity that are scheduled to enter service before the end of the year. Importantly, 67% of the new vessels will have a capacity of more than 15,200 TEUs, according to Alphaliner, which means most will necessarily be deployed on the already oversupplied Asia-North Europe and Mediterranean trades. Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, noted in the firm’s Sunday Spotlight newsletter that Asia-North Europe rates are showing structural weakness. “This could imply an increasing overcapacity of ultra-large container vessels, which to a large degree have no other relevant deployment focus than the Asia-Europe trade,” he explained. “As such, this is problematic going forward, as we will see ever more of these vessels delivered.” Blank sailings below last year’s levels The carriers, for their part, are managing capacity by blanking sailings, but not at the same level as last year, said Destine Ozuygur, product marketing manager at rate benchmarking platform Xeneta. “We saw blanking announcements from Mediterranean Shipping Co. (MSC) last week and a few more, which we are currently factoring into the database,” she told the Journal of Commerce. MSC announced six blank sailings on Asia–Europe loops for the last two weeks of September, ahead of China’s National Day Golden Week holiday that begins on Oct. 1, while Maersk has said it will blank four sailings in late September and early October. Ozuygur said, so far, carriers are scheduled to blank a total of 13 Asia-North Europe sailings in September and 16 in October, far short of the 25 sailings canceled in September and 39 in October last year. “We do expect to see a few more but don’t currently believe it will reach those [prior-year] levels,” she said. That relative lack of blanks has put additional downward pressure on spot rates, which have been in freefall since mid-July, as reflected by the various rate indices — Drewry’s World Container Index (WCI), Xeneta, the Shanghai Containerized Freight Index (SCFI) and Platts. Average spot rates from Asia to North Europe fell to $1,700 per FEU as of Monday, down 49.1% from the week of July 18 and 63.5% from the same week last year, according to Platts, a sister company of the Journal of Commerce within S&P Global. Short-term Asia–Mediterranean pricing of $2,100 per FEU was down 52.3% from its summer peak in the week of June 20 and 54.7% year over year. C.H. Robinson wrote in its September update that there is insufficient cargo demand on Asia–Europe to support any rate hikes, with carriers choosing market share over pushing through increases. That could be a positive for shippers beyond the initial cost savings. “We’re seeing Asia-North Europe spot rates falling at an accelerated pace, while Mediterranean rates are declining more slowly, eliminating the traditional price differential between these destinations,” the forwarder noted. “This convergence means there’s no longer a significant advantage between North European and Mediterranean discharge ports based solely on rates,” C.H. Robinson added. “Greater flexibility in port selection then allows for more strategic supply-chain optimization beyond the cost of the ocean shipping itself.” In tandem with the rate decline is schedule reliability that in August fell to its lowest level in years. Data from eeSea shows on-time performance on Asia-North Europe of just 17% and 16% from Asia to the Mediterranean. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Forwarding

Asia-Europe

Asia-Europe carriers face capacity managing challenge as demand slows

<div class="phx-topic abstract-wrapper">Cracks may be appearing in the LTL pricing wall, as shipment levels drop, but LTL costs remain elevated compared with pandemic-era rates.</div>

Cracks may be appearing in the LTL pricing wall, as shipment levels drop, but LTL costs remain elevated compared with pandemic-era rates.

<div class="phx-topic">Daily shipment volumes fell at some of the largest US less-than-truckload (LTL) carriers in August, as soft demand reportedly brought new pressure to bear on rates and challenged the LTL industry’s pricing discipline. Continued market softness could open more opportunities for cost savings as LTL shippers renew contracts with their carriers or at least hold price increases to a minimum. Even so, LTL carriers continue to expand as they seek new customers and additional volume and <a href="https://www.joc.com/article/ltl-carriers-expanding-us-networks-despite-low-freight-demand-6053685">build greater density</a> into their freight networks. And LTL costs <a href="https://www.joc.com/article/us-ltl-rates-still-rising-after-muted-response-to-shipment-reclassification-6063877">remain elevated</a>, even compared with pandemic-era highs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="914cdb2d-10c9-442d-8d38-5fc6e7a45eeb"></dynamic-object></div>Financial updates released last week by Old Dominion Freight Line (ODFL), XPO and Saia gave no indication that freight demand rose in August, a month when S&amp;P Global reported a surge in manufacturing output. The S&amp;P Global purchasing manager’s index (PMI) for US manufacturing rose from 49.8 in July to a reading of 53 in August, signaling expansion and inventory growth. Instead, daily shipment counts at Saia, the sixth-largest US LTL carrier ranked by revenue, dropped 2.2% year over year in August. Shipments at XPO, the fourth-largest carrier, fell 3.4%. Daily volumes at second-largest-ranked Old Dominion Freight Line (ODFL), fell 8.2% in August, reflecting “ongoing softness in the domestic economy,” ODFL said. ABF Freight System, a subsidiary of ArcBest, bucked the trend, increasing its shipment count 5% year over year in August and 1% from July, the company said Monday. <h3>Working the core </h3>Despite “continued softness” in manufacturing and housing, ABF said it succeeded in adding new core LTL business in August. “The company remains focused on onboarding new business while maintaining consistent reliability,” Arcbest said in a filing with the US Securities and Exchange Commission. Total revenue per hundredweight, a measure of pricing, surcharges and costs often called yield, was flat at ABF in August. ODFL said its revenue per day fell 4.8% from a year ago in August. However, revenue per hundredweight, excluding fuel surcharges, rose 4.5%. That’s a sign that pricing, excluding surcharges, continued to rise at ODFL. Since the Great Recession ended in 2009, LTL carriers have become known for their pricing “discipline,” and for placing more emphasis on profitability than market share. Some sources say that discipline is showing cracks as lower volume raises the cost of operating LTL networks and hammers trucking companies’ bottom lines. Some LTL carriers are becoming “super aggressive,” said Mike Regan, chief of relationship development at TranzAct Technologies, a freight audit, payment and procurement firm. “I had the CEO of an LTL company tell me ‘we’re going to price to get our trucks full, then we’ll go back to the (rates) we want,’” Regan said. Other sources, including a major logistics provider, said they are seeing more targeted price cuts in lanes and markets where LTL carriers want freight. Costing models and analytics – technology many LTL providers didn’t have 10 years ago -- are helping carriers determine where they can cut without endangering profits and margins. <h3>Adding space, chasing freight </h3>At the same time, LTL companies continue to expand their networks. Ohio-based Midwestern regional LTL provider Dayton Freight Lines on Monday said it is opening a terminal in Bedford, Pa., to provide more direct LTL coverage linking the Midwest with Pennsylvania and Maryland. Dayton partners with A. Duie Pyle in the region, and Pyle has also been expanding in Ohio. The US producer price index (PPI) for long-distance LTL trucking has shown no signs of slowing through July, the last month for which data was available. The PPI – which represents all-inclusive LTL “selling prices” paid by shippers – rose 7.3% year over year in July to 265.4, a reading 2.6% higher than its previous peak in 2022. LTL carriers are still winning increases of 2% to 3% in contract renewals or extensions, according to Satish Jindel, president of research firm SJ Consulting Group. “They’re all looking for more business,” Jindel said. Discounting “would just put pressure on their margins. It would begin to look like 2009 again” -- a time when heavy discounts during a recession led to losses for several LTL carriers. -- Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a> </div>

Daily shipment volumes fell at some of the largest US less-than-truckload (LTL) carriers in August, as soft demand reportedly brought new pressure to bear on rates and challenged the LTL industry’s pricing discipline. Continued market softness could open more opportunities for cost savings as LTL shippers renew contracts with their carriers or at least hold price increases to a minimum. Even so, LTL carriers continue to expand as they seek new customers and additional volume and build greater density into their freight networks. And LTL costs remain elevated , even compared with pandemic-era highs. Financial updates released last week by Old Dominion Freight Line (ODFL), XPO and Saia gave no indication that freight demand rose in August, a month when S&P Global reported a surge in manufacturing output. The S&P Global purchasing manager’s index (PMI) for US manufacturing rose from 49.8 in July to a reading of 53 in August, signaling expansion and inventory growth. Instead, daily shipment counts at Saia, the sixth-largest US LTL carrier ranked by revenue, dropped 2.2% year over year in August. Shipments at XPO, the fourth-largest carrier, fell 3.4%. Daily volumes at second-largest-ranked Old Dominion Freight Line (ODFL), fell 8.2% in August, reflecting “ongoing softness in the domestic economy,” ODFL said. ABF Freight System, a subsidiary of ArcBest, bucked the trend, increasing its shipment count 5% year over year in August and 1% from July, the company said Monday. Working the core Despite “continued softness” in manufacturing and housing, ABF said it succeeded in adding new core LTL business in August. “The company remains focused on onboarding new business while maintaining consistent reliability,” Arcbest said in a filing with the US Securities and Exchange Commission. Total revenue per hundredweight, a measure of pricing, surcharges and costs often called yield, was flat at ABF in August. ODFL said its revenue per day fell 4.8% from a year ago in August. However, revenue per hundredweight, excluding fuel surcharges, rose 4.5%. That’s a sign that pricing, excluding surcharges, continued to rise at ODFL. Since the Great Recession ended in 2009, LTL carriers have become known for their pricing “discipline,” and for placing more emphasis on profitability than market share. Some sources say that discipline is showing cracks as lower volume raises the cost of operating LTL networks and hammers trucking companies’ bottom lines. Some LTL carriers are becoming “super aggressive,” said Mike Regan, chief of relationship development at TranzAct Technologies, a freight audit, payment and procurement firm. “I had the CEO of an LTL company tell me ‘we’re going to price to get our trucks full, then we’ll go back to the (rates) we want,’” Regan said. Other sources, including a major logistics provider, said they are seeing more targeted price cuts in lanes and markets where LTL carriers want freight. Costing models and analytics – technology many LTL providers didn’t have 10 years ago -- are helping carriers determine where they can cut without endangering profits and margins. Adding space, chasing freight At the same time, LTL companies continue to expand their networks. Ohio-based Midwestern regional LTL provider Dayton Freight Lines on Monday said it is opening a terminal in Bedford, Pa., to provide more direct LTL coverage linking the Midwest with Pennsylvania and Maryland. Dayton partners with A. Duie Pyle in the region, and Pyle has also been expanding in Ohio. The US producer price index (PPI) for long-distance LTL trucking has shown no signs of slowing through July, the last month for which data was available. The PPI – which represents all-inclusive LTL “selling prices” paid by shippers – rose 7.3% year over year in July to 265.4, a reading 2.6% higher than its previous peak in 2022. LTL carriers are still winning increases of 2% to 3% in contract renewals or extensions, according to Satish Jindel, president of research firm SJ Consulting Group. “They’re all looking for more business,” Jindel said. Discounting “would just put pressure on their margins. It would begin to look like 2009 again” -- a time when heavy discounts during a recession led to losses for several LTL carriers. -- Contact William B. Cassidy at bill.cassidy@spglobal.com

Trucking News

Surface

Falling US LTL volumes putting pressure on margins, rates

<div class="phx-topic abstract-wrapper">The Montreal Port Authority said permits are in the works for Contrecoeur’s underwater work, while DP World has signed on to design and operate the terminal.</div>

The Montreal Port Authority said permits are in the works for Contrecoeur’s underwater work, while DP World has signed on to design and operate the terminal.

<div class="phx-topic">DP World plans to develop and operate a C$1.6 billion container terminal outside of Montreal, after the port authority took the first step in securing a development permit for the facility capable of handling post-Panamax vessels.The global terminal operator on Monday said it had signed an agreement with the Montreal Port Authority (MPA) to design Contrecoeur’s surface work, which would be finalized in the coming weeks before developing a plan for long-term operations. DP World operates the Centerm facility at the Port of Vancouver, as well as the container terminals at the ports of Prince Rupert and Saint John.“This agreement marks an important milestone in shaping the Port of Montreal’s future and reinforces Canada’s role as a gateway for global trade,” DP World’s Canadian Chief Executive Douglas Smith said in <a href="https://www.linkedin.com/posts/dougsmithadani_im-proud-to-share-that-dp-world-in-canada-activity-7370841590816329729-ZOtQ?utm_source=share&amp;utm_medium=member_ios&amp;rcm=ACoAAAEaE6wBxuCBA3GF9B8BLvf-lPuv3EJkHFE">a LinkedIn post</a>. The Contrecoeur terminal, to be built on land the MPA acquired three decades ago, would have an annual throughput capacity of 1.15 million TEUs. Thanks to its location further up the St. Lawrence River, Contrecoeur will be able to handle larger ships than the 8,000-TEU vessels that can call at Montreal.The workhorse vessels serving Montreal’s four existing containers terminals, which are operated by Montreal Gateway Terminals Partnership and Termont Montreal, range in capacity from 4,000 to 5,000 TEUs. The port authority is working with federal agencies and river pilots to start trialing the navigation of larger ships on the St. Lawrence River.The MPA said last week it submitted a permitting application to the Canadian federal agency in charge of waterways for below-surface work on the Contrecoeur marine terminal. The MPA said it expects the agency to issue a permit for the work in the coming weeks. DP World said it expects underwater work on Contrecoeur to begin next year, with surface work slated to begin in 2027 and terminal operations to begin by 2030.The application involved 10 studies over two years on the project’s impact to local fish habitats. The MPA said it plans to do extensive underwater and above-ground plantings and other remediation work to minimize the environmental impact of the Contrecoeur project.In planning since the 1980s, the Contrecoeur project faced <a href="https://www.joc.com/article/montreal-relaunches-search-process-for-contrecoeur-terminal-operator-5204826">a delay in 2023</a> after several terminal operators decided not to participate in bidding for the terminal’s concession because of the cost of the underwater work. Originally budgeted at C$1 billion, the project is now expected to cost C$1.5 billion.Since that time, the <a href="https://www.joc.com/article/montreal-port-gets-federal-funds-for-mega-terminal-after-operators-balk-at-risk-5222977">federal</a> and <a href="https://www.joc.com/article/quebec-provides-new-funding-for-proposed-montreal-terminal-citing-us-trade-tensions-5947783">provincial governments</a> have provided more funding to the project. Advancing the Contrecoeur project has become more of a priority for Canada as the country <a href="https://www.joc.com/article/carney-has-fresh-opportunity-to-galvanize-canadian-shipping-industry-6047928">looks to lessen its reliance on trade with the US</a>. In a visit to Montreal last month, Prime Minister Mark Carney said the Contrecouer project could benefit from newly passed legislation streamlining environmental rules and other regulations to speed the construction of infrastructure projects of national importance.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

DP World plans to develop and operate a C$1.6 billion container terminal outside of Montreal, after the port authority took the first step in securing a development permit for the facility capable of handling post-Panamax vessels. The global terminal operator on Monday said it had signed an agreement with the Montreal Port Authority (MPA) to design Contrecoeur’s surface work, which would be finalized in the coming weeks before developing a plan for long-term operations. DP World operates the Centerm facility at the Port of Vancouver, as well as the container terminals at the ports of Prince Rupert and Saint John. “This agreement marks an important milestone in shaping the Port of Montreal’s future and reinforces Canada’s role as a gateway for global trade,” DP World’s Canadian Chief Executive Douglas Smith said in a LinkedIn post . The Contrecoeur terminal, to be built on land the MPA acquired three decades ago, would have an annual throughput capacity of 1.15 million TEUs. Thanks to its location further up the St. Lawrence River, Contrecoeur will be able to handle larger ships than the 8,000-TEU vessels that can call at Montreal. The workhorse vessels serving Montreal’s four existing containers terminals, which are operated by Montreal Gateway Terminals Partnership and Termont Montreal, range in capacity from 4,000 to 5,000 TEUs. The port authority is working with federal agencies and river pilots to start trialing the navigation of larger ships on the St. Lawrence River. The MPA said last week it submitted a permitting application to the Canadian federal agency in charge of waterways for below-surface work on the Contrecoeur marine terminal. The MPA said it expects the agency to issue a permit for the work in the coming weeks. DP World said it expects underwater work on Contrecoeur to begin next year, with surface work slated to begin in 2027 and terminal operations to begin by 2030. The application involved 10 studies over two years on the project’s impact to local fish habitats. The MPA said it plans to do extensive underwater and above-ground plantings and other remediation work to minimize the environmental impact of the Contrecoeur project. In planning since the 1980s, the Contrecoeur project faced a delay in 2023 after several terminal operators decided not to participate in bidding for the terminal’s concession because of the cost of the underwater work. Originally budgeted at C$1 billion, the project is now expected to cost C$1.5 billion. Since that time, the federal and provincial governments have provided more funding to the project. Advancing the Contrecoeur project has become more of a priority for Canada as the country looks to lessen its reliance on trade with the US . In a visit to Montreal last month, Prime Minister Mark Carney said the Contrecouer project could benefit from newly passed legislation streamlining environmental rules and other regulations to speed the construction of infrastructure projects of national importance. Contact Michael Angell at michael.angell@spglobal.com

Container lines

North American ports

DP World to build big-ship container terminal in Montreal

<div class="phx-topic abstract-wrapper">The investment bank said non-Chinese carriers will largely avoid looming and escalating port fees, but Cosco and OOCL will be on the hook unless they adjust networks.</div>

The investment bank said non-Chinese carriers will largely avoid looming and escalating port fees, but Cosco and OOCL will be on the hook unless they adjust networks.

<div class="phx-topic">Most container lines will avoid paying new US fees on port calls next month after switching out any Chinese-built ships from their services, while Cosco Shipping and subsidiary OOCL face a $2 billion hit in the first year, unless they adjust their networks, according to a new report from investment bank HSBC.Barring a trade deal with China or last-minute delays by the Trump administration, the US Trade Representative (USTR) <a href="https://www.joc.com/article/revised-china-tonnage-tax-less-disruptive-still-costly-6005402">will begin collecting fees on Chinese-built and -operated ships</a> that call US ports from Oct. 14. The administration hasn’t given any indications of postponing or easing the tariffs, a maritime attorney with ties to the White House who asked not to be identified told the Journal of Commerce, noting that US Customs and Border Protection has already been instructed to collect the fees.The fees on Chinese-built ships start at the higher of $18 per net ton of vessel capacity or $120 per container, while ships operated by carriers based in China face a fee of $50 per net ton. Both sets of fees escalate over the next four years as part of the Trump administration’s attempt to <a href="https://www.joc.com/article/trumps-expansionist-worldview-puts-us-maritime-interests-in-spotlight-5946935">boost US shipbuilding</a> at the expense of China’s industry. For Cosco and OOCL, which handle <a href="https://www.joc.com/article/coscooocl-saw-big-gains-in-us-imports-from-asia-in-early-2025-6026695">the largest share of containerized US imports from Asia</a>, the tariffs equate roughly to $600 per FEU, according to the HSBC report.However, the industrywide impact for container shipping may be minimal, the HSBC report suggests, as just 15% of US port calls in 2024 were made by vessels built in China. Chinese-built ships account for just under 30% of the global container vessel fleet, with most ships built in Japan or South Korea.<h3>Rotating China-built ships out </h3>In the lead-up to the Oct. 14 enforcement deadline, carriers have been making moves to avoid any US calls by Chinese-built ships. The Premier Alliance, for example, <a href="https://www.joc.com/article/container-lines-begin-shifting-china-built-ships-out-of-us-loops-6069162">reconfigured a round-the-world service</a> to use Chinese ships on the Asia-Mediterranean leg and non-Chinese ships on the trans-Pacific leg. HSBC said the move will allow Premier Alliance partner Ocean Network Express to remove 10 Chinese-built ships from US service.By contrast, Maersk doesn’t expect any of its services will be affected by the new fees, nor will shippers have any added costs because of the fees, Michael Britton, North American head of ocean products, said during a Journal of Commerce webinar last week. Maersk and its Gemini Cooperation partner Hapag-Lloyd primarily use South Korean ships in their trans-Pacific services, the HBSC report noted. ”The fleet has been deployed in such a way that we’re fully compliant with the rule, and we won’t have any costs associated with this,” Britton said. “We’ve also made it very clear: we have no intention of introducing any surcharge for this.”Although it said the USTR fees will be “negligible for non-Chinese lines,” HSBC estimated that Cosco could face $1.5 billion in port fees in 2026, equivalent to about $600 per US-bound container. The fee represents about 5% of the carrier’s expected revenue during the period, the report said. OOCL could face a $654 million hit, which would account for about 7% of estimated revenue during 2026, HSBC said, adding that the cost of the port fees could result in a two-thirds decline in operating earnings for 2026. Cosco in April said the USTR fees <a href="https://www.joc.com/article/cosco-slams-us-port-fees-as-other-carriers-reckon-with-potential-costs-5989606">would distort the shipping market</a>, while OOCL on Aug. 21 told investors that <a href="https://www.joc.com/article/tariff-linked-trade-pattern-shifts-could-offset-impact-of-us-port-fees-ooil-6066902">changing trade patterns away from the US</a> would mitigate the impact. <h3>Global capacity ripples </h3>Even though the impact of the USTR fees may be limited to certain carriers, they could still affect shipping more broadly, HSBC said. The current supply glut could extend further in the future if carriers decide to keep older non-Chinese vessels in operation longer than they would have otherwise. On the other hand, carriers will also have less flexibility to rotate in new ships or add new capacity to US trade lanes if the only available vessels were built in China.Service changes may be most critical for the Ocean Alliance, which comprises Cosco, OOCL, CMA CGM and Evergreen Marine. HSBC said CMA CGM and/or Evergreen may have to provide more of the vessels operating on the alliance’s trans-Pacific services to avoid exposure to the port fees. Cosco and OOCL, meanwhile, could provide more of the tonnage going into the Ocean Alliance’s non-US trade lanes, or the group could offer transshipment options through Mexico and Canada. “The network realignment by Chinese and non-Chinese carriers could temporarily reduce services and tighten capacity,” HSBC said.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Most container lines will avoid paying new US fees on port calls next month after switching out any Chinese-built ships from their services, while Cosco Shipping and subsidiary OOCL face a $2 billion hit in the first year, unless they adjust their networks, according to a new report from investment bank HSBC. Barring a trade deal with China or last-minute delays by the Trump administration, the US Trade Representative (USTR) will begin collecting fees on Chinese-built and -operated ships that call US ports from Oct. 14. The administration hasn’t given any indications of postponing or easing the tariffs, a maritime attorney with ties to the White House who asked not to be identified told the Journal of Commerce, noting that US Customs and Border Protection has already been instructed to collect the fees. The fees on Chinese-built ships start at the higher of $18 per net ton of vessel capacity or $120 per container, while ships operated by carriers based in China face a fee of $50 per net ton. Both sets of fees escalate over the next four years as part of the Trump administration’s attempt to boost US shipbuilding at the expense of China’s industry. For Cosco and OOCL, which handle the largest share of containerized US imports from Asia , the tariffs equate roughly to $600 per FEU, according to the HSBC report. However, the industrywide impact for container shipping may be minimal, the HSBC report suggests, as just 15% of US port calls in 2024 were made by vessels built in China. Chinese-built ships account for just under 30% of the global container vessel fleet, with most ships built in Japan or South Korea. Rotating China-built ships out In the lead-up to the Oct. 14 enforcement deadline, carriers have been making moves to avoid any US calls by Chinese-built ships. The Premier Alliance, for example, reconfigured a round-the-world service to use Chinese ships on the Asia-Mediterranean leg and non-Chinese ships on the trans-Pacific leg. HSBC said the move will allow Premier Alliance partner Ocean Network Express to remove 10 Chinese-built ships from US service. By contrast, Maersk doesn’t expect any of its services will be affected by the new fees, nor will shippers have any added costs because of the fees, Michael Britton, North American head of ocean products, said during a Journal of Commerce webinar last week. Maersk and its Gemini Cooperation partner Hapag-Lloyd primarily use South Korean ships in their trans-Pacific services, the HBSC report noted. ”The fleet has been deployed in such a way that we’re fully compliant with the rule, and we won’t have any costs associated with this,” Britton said. “We’ve also made it very clear: we have no intention of introducing any surcharge for this.” Although it said the USTR fees will be “negligible for non-Chinese lines,” HSBC estimated that Cosco could face $1.5 billion in port fees in 2026, equivalent to about $600 per US-bound container. The fee represents about 5% of the carrier’s expected revenue during the period, the report said. OOCL could face a $654 million hit, which would account for about 7% of estimated revenue during 2026, HSBC said, adding that the cost of the port fees could result in a two-thirds decline in operating earnings for 2026. Cosco in April said the USTR fees would distort the shipping market , while OOCL on Aug. 21 told investors that changing trade patterns away from the US would mitigate the impact. Global capacity ripples Even though the impact of the USTR fees may be limited to certain carriers, they could still affect shipping more broadly, HSBC said. The current supply glut could extend further in the future if carriers decide to keep older non-Chinese vessels in operation longer than they would have otherwise. On the other hand, carriers will also have less flexibility to rotate in new ships or add new capacity to US trade lanes if the only available vessels were built in China. Service changes may be most critical for the Ocean Alliance, which comprises Cosco, OOCL, CMA CGM and Evergreen Marine. HSBC said CMA CGM and/or Evergreen may have to provide more of the vessels operating on the alliance’s trans-Pacific services to avoid exposure to the port fees. Cosco and OOCL, meanwhile, could provide more of the tonnage going into the Ocean Alliance’s non-US trade lanes, or the group could offer transshipment options through Mexico and Canada. “The network realignment by Chinese and non-Chinese carriers could temporarily reduce services and tighten capacity,” HSBC said. Contact Michael Angell at michael.angell@spglobal.com .

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Trans-Pacific

US port fees could exceed $2B for Cosco, OOCL: HSBC

<div class="phx-topic abstract-wrapper">The fruit shipper cites the downsides of moving perishables by breakbulk methods, criticizing the “hours of exposure to extreme heat or cold and frequent handling.” </div>

The fruit shipper cites the downsides of moving perishables by breakbulk methods, criticizing the “hours of exposure to extreme heat or cold and frequent handling.”

<div class="phx-topic">Fresh Del Monte Produce will switch from breakbulk to dedicated container shipping services for its banana and pineapple exports from the Philippines when intra-Asia carrier CNC Line upgrades its services to South Korea and Japan next week. This adds another <a href="https://www.joc.com/article/breakbulk-reefer-segment-hanging-on-in-shrinking-market-5738520">blow to breakbulk as a transport mode</a> for both fruits, which are under broader pressure from tariff reforms in both countries. The global fruit and vegetable producer confirmed the switch to CNC Line in a statement. CNC Line said the short transit times for its two revamped services is “ideal for perishables and fresh fruits,” without naming Fresh Del Monte Produce specifically. The fruit producer said the collaboration with CNC Line “marks a departure from traditional breakbulk shipping methods.”“By transitioning to dedicated container vessels, we’re not only improving cold chain reliability and minimizing damage but also creating a more agile, scalable logistics model that better serves our retail partners across Asia,” Raul Saca, Fresh Del Monte senior vice president, global logistics, said in the statement.Fresh Del Monte said fruits transported by traditional breakbulk methods “may face hours of exposure to extreme heat or cold and frequent handling,” whereas shipping in container ships “keeps fruit in consistent, temperature-controlled conditions from farm to customer.” The company said it would utilize CNC’s upgraded BMX Philippines-South Korea service that will relaunch from Davao in Mindanao on Sept. 19 with a direct sailing to Pusan and a new call at the nearby city of Masan. The backhaul will include calls at Dalian and Qingdao in northern China, Xiamen and Nansha in southern China and Manila. Fresh Del Monte will start using CNC’s expanded Japan-Philippines (JP8) service when it begins on Sept. 21. CNC said in a customer advisory that the service will be direct from Davao to Tokyo with expanded coverage with calls at three additional Japanese ports — Yokohama, Kobe and Moji. The return leg includes calls at Nansha and Shekou in southern China and Subic Bay in the Philippines. Contact Keith Wallis at <a href="keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Fresh Del Monte Produce will switch from breakbulk to dedicated container shipping services for its banana and pineapple exports from the Philippines when intra-Asia carrier CNC Line upgrades its services to South Korea and Japan next week. This adds another blow to breakbulk as a transport mode for both fruits, which are under broader pressure from tariff reforms in both countries. The global fruit and vegetable producer confirmed the switch to CNC Line in a statement. CNC Line said the short transit times for its two revamped services is “ideal for perishables and fresh fruits,” without naming Fresh Del Monte Produce specifically. The fruit producer said the collaboration with CNC Line “marks a departure from traditional breakbulk shipping methods.” “By transitioning to dedicated container vessels, we’re not only improving cold chain reliability and minimizing damage but also creating a more agile, scalable logistics model that better serves our retail partners across Asia,” Raul Saca, Fresh Del Monte senior vice president, global logistics, said in the statement. Fresh Del Monte said fruits transported by traditional breakbulk methods “may face hours of exposure to extreme heat or cold and frequent handling,” whereas shipping in container ships “keeps fruit in consistent, temperature-controlled conditions from farm to customer.” The company said it would utilize CNC’s upgraded BMX Philippines-South Korea service that will relaunch from Davao in Mindanao on Sept. 19 with a direct sailing to Pusan and a new call at the nearby city of Masan. The backhaul will include calls at Dalian and Qingdao in northern China, Xiamen and Nansha in southern China and Manila. Fresh Del Monte will start using CNC’s expanded Japan-Philippines (JP8) service when it begins on Sept. 21. CNC said in a customer advisory that the service will be direct from Davao to Tokyo with expanded coverage with calls at three additional Japanese ports — Yokohama, Kobe and Moji. The return leg includes calls at Nansha and Shekou in southern China and Subic Bay in the Philippines. Contact Keith Wallis at keithwallis@hotmail.com .

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Fresh Del Monte Produce switching from breakbulk to box transport

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

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Transform Barge Operations with Total Visibility

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

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SSA Marine Mexico: True Commitment to Sustainability

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

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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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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.

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Asia-Europe carriers face capacity managing challenge as demand slows

Falling US LTL volumes putting pressure on margins, rates

DP World to build big-ship container terminal in Montreal