<div class="phx-topic abstract-wrapper">Canada’s trucking industry is consolidating from the top down, with the largest less-than-truckload players buying smaller competitors to gain territory and build density as the Canadian economy grows.</div>

Canada’s trucking industry is consolidating from the top down, with the largest less-than-truckload players buying smaller competitors to gain territory and build density as the Canadian economy grows.

<div>Canada’s trucking industry is consolidating from the top down, with the largest less-than-truckload players buying smaller competitors to gain territory and build density as the Canadian economy grows.Manitoulin Transport made its second acquisition within three months this week, purchasing the LTL and truckload operations of Westcan Freight Systems in Edmonton, Alberta. The acquisition extends the Ontario-based carrier’s LTL coverage in Canada’s energy-rich Western provinces and mineral-rich Northwest Territories."We continue to expand in Canada's west due to its buoyant economy and our desire to round out our offerings in the region," Don Goodwill, president of Manitoulin Transport, said in a statement....

Canada’s trucking industry is consolidating from the top down, with the largest less-than-truckload players buying smaller competitors to gain territory and build density as the Canadian economy grows. Manitoulin Transport made its second acquisition within three months this week, purchasing the LTL and truckload operations of Westcan Freight Systems in Edmonton, Alberta. The acquisition extends the Ontario-based carrier’s LTL coverage in Canada’s energy-rich Western provinces and mineral-rich Northwest Territories. "We continue to expand in Canada's west due to its buoyant economy and our desire to round out our offerings in the region," Don Goodwill, president of Manitoulin Transport, said in a statement. The Westcan acquisition builds out Manitoulin’s LTL, flatbed and refrigerated services in the West and will allow for increased trip frequency “to the north," Goodwill said. The sale does not include the liquid and dry bulk trucking and construction businesses of the RTL Westcan Group, known as Westcan Bulk Transport and RTL Construction. The Edmonton, Alberta company, founded in 1964, was acquired by Ohio-based Kenan Advantage Group, one of the largest bulk trucking operators in North America, in 2013. Manitoulin Transport has been working its way west from Ontario through acquisitions and organic expansion. The Gore Bay, Ontario, company, which had about $435 million in revenue in 2013, according to SJ Consulting Group, is the 17th largest LTL carrier in North America and the second largest LTL operator in Canada, following TransForce. Both Manitoulin and Montreal-based TransForce are buying up smaller competitors. Most significantly, the two companies battled last fall over Vitran Express Canada after Vitran sold its U.S. operations to Central Transport International. TransForce won that bidding war . TransForce increased revenue by $1 billion from 2009 through 2013, largely through acquisition, building a $2.9 billion trucking holding company with 60 operating carriers across several transportation sectors, including truckload, LTL, parcel and logistics. TransForce had about $619 million in LTL revenue before the Vitran buyout, according to SJ Consulting. When it comes to buyouts, Manitoulin has been no slouch either. Westcan is its eighth acquisition in two years. In July, Manitoulin Transport gained full coverage in Manitoba by acquiring Jomac Transport , which provides daily overnight service between Winnipeg and northern communities. Last year, Manitoulin purchased Smooth Freight in Manitoba, and Matco Transportation Systems in Alberta. “We said a few years ago that we were committed to rounding out our services and reach in western Canada, and we made good on that commitment,” Gord Smith, CEO of Manitoulin Group, said in a statement in July. The carrier’s network of 60 Canadian terminals stretches from Vancouver, British Columbia in the West to Moncton, New Brunswick in the East and North to the Yukon and Northwest Territories. The company also has 250 service centers and partner carriers in the U.S. The acquisitions build density for Manitoulin and TransForce and help the carriers take advantage of a strengthening economy and strong energy sector. Canada’s gross domestic product increased 3.1 percent year-over-year in the second quarter, with “notable increases” in wholesale and resale trade, as well as transportation, according to Statistics Canada. Canadian exports of goods and service rose 4.2 percent, the largest increase since the 2011 third quarter, with goods exports up 4.4 percent in the second quarter. Imports were up 2.7 percent, the largest increase in the inbound flow of goods to Canada since 2010. In July, the latest month for which data are available, Canadian goods exports increased 1.4 percent to $45. billion, led by motor vehicles and components. Imports dropped 0.3 percent to $43 billion, though imports of motor vehicles and parts increased, Statistics Canada said. Canadian export growth is slated to rise to 4.7 percent this year and 7.7 percent in 2015, as global and particularly U.S. demand builds, non-energy shipments rise, and the Canadian dollar weakens, a Royal Bank of Canada economist said during a recent JOC.com webinar . That bodes well for trucking companies such as Manitoulin and TransForce, which have strong cross-border trucking operations moving freight between Canada and the U.S. Contact William B. Cassidy at wcassidy@joc.com and follow him on Twitter: @wbcassidy_joc

Canadian truckers consolidate as economy improves, trade grows

<div class="phx-topic abstract-wrapper">Wallenius Wilhelmsen, the world’s largest car carrier operator, said its vessels make between 300 and 350 voyages a year to the US, potentially generating annual voyage fees of about $300 million.</div>

Wallenius Wilhelmsen, the world’s largest car carrier operator, said its vessels make between 300 and 350 voyages a year to the US, potentially generating annual voyage fees of about $300 million.

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<div class="phx-topic">Car carriers face bills into the hundreds of millions to meet the cost of the United States Trade Representative’s (USTR’s) proposal to impose levies on non-US-built ships entering the US beginning Oct. 16, shipping executives said. Wallenius Wilhelmsen, the world’s largest car carrier operator with 128 ships, said its vessels make between 300 and 350 voyages a year to the US, potentially generating annual voyage fees of about $300 million, it said last week. Rival Norwegian operator Höegh Autoliners estimated its own potential voyage fee exposure at between $60 million and $70 million a year. Other roll-on/roll-off (ro/ro) operators facing hefty voyage fee bills include Japan’s three largest carriers — NYK Line, MOL and “K” Line — according to port call data from maritime consultancy Esgian, as well as Glovis, which is affiliated with South Korea’s Hyundai Motor Group, Unlike other sectors, including container shipping and multipurpose vessels, where voyage fees only target China-built or -operated vessels, Lasse Kristoffersen, Wallenius Wilhelmsen CEO, said an anomaly in the USTR proposal meant that all foreign-built ro/ro vessels are liable for voyage fees. He expected the voyage fees to be passed on to the carrier’s customers, similar to the way charges related to the European Union’s emissions trading scheme are paid by shippers. Under current plans, the USTR proposal will levy voyage fees of $150 per car equivalent unit on car carriers from mid-October. Speaking during a first-quarter results presentation on April 25, Höegh Autoliners CEO Andreas Enger estimated it would cost carriers between $1 million and $1.35 million per voyage for each non-US built ro/ro vessel entering US waters. <h3>Addressing ‘unintended’ consequences </h3>Commenting on what he thought was an unintended decision by the USTR, Wilhelmsen’s Kristoffersen told a first quarter analysts briefing May 8 the company is in contact with “the US government to see how that can be adjusted.” Wallenius has strong links with the US government through its US-flag ro/ro subsidiary American Roll-on Roll-off Carrier (ARC), which handles military and diplomatic-related shipments of equipment, vehicles and household belongings. Total revenues from its government business were $107 million in the first quarter, down 3% quarter over quarter. Enger said Höegh Autoliners would also talk to US authorities about the way voyage fees are charged. He said the carrier also plans to talk to customers over the next six months before voyage fees are implemented to mitigate the impact. If these are unsuccessful, “we can take the full hit if necessary,” Enger said during the results briefing. He and Kristoffersen said while voyage fees and tariffs on vehicle imports to the US could significantly impact the vehicle carrier trade, there have been limited repercussions on the companies so far. Kristoffersen said the 25% tariff imposed on US vehicle imports from April 3 will add thousands of dollars to the $48,500 price of an average car. But he pointed out that of 16.2 million cars sold in the US last year, about 8.8 million were US-built. Consequently, there is “no way the US can replace imported volumes with domestic volumes,” he said. Kristoffersen said S&amp;P Global estimated US vehicle tariffs would reduce imports by 300,000 vehicles this year to 3.4 million, with a further 15% reduction next year to 3.2 million from a pre-tariff forecast of 3.8 million vehicles. S&amp;P Global is the parent company of the Journal of Commerce. <h3>Underlying strength in volumes </h3>Despite the threat of US tariffs, Wilhelmsen and Höegh are continuing to see strong cargo volumes, buoyed by forward multi-year cargo transportation contracts, which, for Höegh, accounted for 82% of capacity in the first quarter. While “tariffs have increased market uncertainty” Wilhelmsen “was sold out in shipping” in the first quarter, although there was “weaker activity in logistics,” Kristoffersen said during the results briefing. Höegh CFO Espen Stubberud agreed, saying the carrier “was absolutely sold out from Asia” with more cargo than it could carry in the first quarter, although there were lower volumes on the Atlantic. Stubberud said Höegh chartered two car carriers, one in January and the other in April, for nine to 12 months to meet the short-term need for extra capacity while taking advantage of lower vessel charter rates. Rates fell to about $40,000 to $60,000 per day depending on the size of ship in the first quarter from a peak of $90,000-$115,000 per day in January 2024, data from shipbroker Clarksons showed. But high-and-heavy volumes are continuing to flounder partly due to a lack of spot capacity and lackluster global demand for heavy equipment, including construction and mining equipment. Wilhelmsen’s Kristoffersen said the carrier’s high-and-heavy volumes were down 36% year over year in the first quarter without giving actual figures. Wilhelmsen and Höegh do not see any pickup in high-and-heavy volumes until the end of this year or next year, they said. Both carriers posted strong results in the first quarter, which Wilhelmsen’s Kristoffersen expected to continue for the rest of this year. Wilhelmsen saw net profit increase 22% to $246 million in the first quarter, while revenues climbed 3% to $1.3 billion. Höegh reported first-quarter net profit of $155 million, up 35% from the first quarter last year, although the result was buoyed by a $41 million gain from the sale of the ro/ro vessel Höegh New York. Total revenues edged up slightly to $329 million. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Car carriers face bills into the hundreds of millions to meet the cost of the United States Trade Representative’s (USTR’s) proposal to impose levies on non-US-built ships entering the US beginning Oct. 16, shipping executives said. Wallenius Wilhelmsen, the world’s largest car carrier operator with 128 ships, said its vessels make between 300 and 350 voyages a year to the US, potentially generating annual voyage fees of about $300 million, it said last week. Rival Norwegian operator Höegh Autoliners estimated its own potential voyage fee exposure at between $60 million and $70 million a year. Other roll-on/roll-off (ro/ro) operators facing hefty voyage fee bills include Japan’s three largest carriers — NYK Line, MOL and “K” Line — according to port call data from maritime consultancy Esgian, as well as Glovis, which is affiliated with South Korea’s Hyundai Motor Group, Unlike other sectors, including container shipping and multipurpose vessels, where voyage fees only target China-built or -operated vessels, Lasse Kristoffersen, Wallenius Wilhelmsen CEO, said an anomaly in the USTR proposal meant that all foreign-built ro/ro vessels are liable for voyage fees. He expected the voyage fees to be passed on to the carrier’s customers, similar to the way charges related to the European Union’s emissions trading scheme are paid by shippers. Under current plans, the USTR proposal will levy voyage fees of $150 per car equivalent unit on car carriers from mid-October. Speaking during a first-quarter results presentation on April 25, Höegh Autoliners CEO Andreas Enger estimated it would cost carriers between $1 million and $1.35 million per voyage for each non-US built ro/ro vessel entering US waters. Addressing ‘unintended’ consequences Commenting on what he thought was an unintended decision by the USTR, Wilhelmsen’s Kristoffersen told a first quarter analysts briefing May 8 the company is in contact with “the US government to see how that can be adjusted.” Wallenius has strong links with the US government through its US-flag ro/ro subsidiary American Roll-on Roll-off Carrier (ARC), which handles military and diplomatic-related shipments of equipment, vehicles and household belongings. Total revenues from its government business were $107 million in the first quarter, down 3% quarter over quarter. Enger said Höegh Autoliners would also talk to US authorities about the way voyage fees are charged. He said the carrier also plans to talk to customers over the next six months before voyage fees are implemented to mitigate the impact. If these are unsuccessful, “we can take the full hit if necessary,” Enger said during the results briefing. He and Kristoffersen said while voyage fees and tariffs on vehicle imports to the US could significantly impact the vehicle carrier trade, there have been limited repercussions on the companies so far. Kristoffersen said the 25% tariff imposed on US vehicle imports from April 3 will add thousands of dollars to the $48,500 price of an average car. But he pointed out that of 16.2 million cars sold in the US last year, about 8.8 million were US-built. Consequently, there is “no way the US can replace imported volumes with domestic volumes,” he said. Kristoffersen said S&P Global estimated US vehicle tariffs would reduce imports by 300,000 vehicles this year to 3.4 million, with a further 15% reduction next year to 3.2 million from a pre-tariff forecast of 3.8 million vehicles. S&P Global is the parent company of the Journal of Commerce. Underlying strength in volumes Despite the threat of US tariffs, Wilhelmsen and Höegh are continuing to see strong cargo volumes, buoyed by forward multi-year cargo transportation contracts, which, for Höegh, accounted for 82% of capacity in the first quarter. While “tariffs have increased market uncertainty” Wilhelmsen “was sold out in shipping” in the first quarter, although there was “weaker activity in logistics,” Kristoffersen said during the results briefing. Höegh CFO Espen Stubberud agreed, saying the carrier “was absolutely sold out from Asia” with more cargo than it could carry in the first quarter, although there were lower volumes on the Atlantic. Stubberud said Höegh chartered two car carriers, one in January and the other in April, for nine to 12 months to meet the short-term need for extra capacity while taking advantage of lower vessel charter rates. Rates fell to about $40,000 to $60,000 per day depending on the size of ship in the first quarter from a peak of $90,000-$115,000 per day in January 2024, data from shipbroker Clarksons showed. But high-and-heavy volumes are continuing to flounder partly due to a lack of spot capacity and lackluster global demand for heavy equipment, including construction and mining equipment. Wilhelmsen’s Kristoffersen said the carrier’s high-and-heavy volumes were down 36% year over year in the first quarter without giving actual figures. Wilhelmsen and Höegh do not see any pickup in high-and-heavy volumes until the end of this year or next year, they said. Both carriers posted strong results in the first quarter, which Wilhelmsen’s Kristoffersen expected to continue for the rest of this year. Wilhelmsen saw net profit increase 22% to $246 million in the first quarter, while revenues climbed 3% to $1.3 billion. Höegh reported first-quarter net profit of $155 million, up 35% from the first quarter last year, although the result was buoyed by a $41 million gain from the sale of the ro/ro vessel Höegh New York. Total revenues edged up slightly to $329 million. Contact Keith Wallis at keithwallis@hotmail.com .

Maritime

Breakbulk News

Ro/ro cargo

Multimillion-dollar price tag awaits car carriers as US ship fees loom

<div class="phx-topic abstract-wrapper">The investment will increase the Port of Caucedo’s capacity by 24% while expanding an adjacent Free Trade Zone, the terminal operator said. </div>

The investment will increase the Port of Caucedo’s capacity by 24% while expanding an adjacent Free Trade Zone, the terminal operator said.

<div class="phx-topic">Marine terminal operator DP World is investing $760 million to increase cargo capacity at the Port of Caucedo in the Dominican Republic by 24% and significantly expand the port’s adjacent Free Trade Zone (FTZ). Under a memorandum of understanding announced Friday, DP World will invest $380 million for new port equipment, cranes, surveillance systems and other infrastructure upgrades. The other half of the funds will go toward FTZ infrastructure such as buildings, roads and utilities, the terminal operator said in a statement. The investment will increase Caucedo’s capacity to 3.1 million TEUs from 2.5 million TEUs. “By boosting capacity and enabling nearshoring opportunities, we will transform Caucedo into the most advanced logistics hub in the Caribbean, not only strengthening supply chain resilience across the Americas but also creating a powerful engine for economic growth and job creation in the Dominican Republic,” said Sultan Ahmed bin Sulayem, DP World’s chairman and group CEO. The multi-phase expansion will unlock 225 hectares of development-ready land for the port’s FTZ and is expected to attract $3.9 billion in foreign investment, DP World said, adding the investment will position the Dominican Republic as a rising nearshoring and trade hub for the Americas. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Marine terminal operator DP World is investing $760 million to increase cargo capacity at the Port of Caucedo in the Dominican Republic by 24% and significantly expand the port’s adjacent Free Trade Zone (FTZ). Under a memorandum of understanding announced Friday, DP World will invest $380 million for new port equipment, cranes, surveillance systems and other infrastructure upgrades. The other half of the funds will go toward FTZ infrastructure such as buildings, roads and utilities, the terminal operator said in a statement. The investment will increase Caucedo’s capacity to 3.1 million TEUs from 2.5 million TEUs. “By boosting capacity and enabling nearshoring opportunities, we will transform Caucedo into the most advanced logistics hub in the Caribbean, not only strengthening supply chain resilience across the Americas but also creating a powerful engine for economic growth and job creation in the Dominican Republic,” said Sultan Ahmed bin Sulayem, DP World’s chairman and group CEO. The multi-phase expansion will unlock 225 hectares of development-ready land for the port’s FTZ and is expected to attract $3.9 billion in foreign investment, DP World said, adding the investment will position the Dominican Republic as a rising nearshoring and trade hub for the Americas. Contact Laura Robb at laura.robb@spglobal.com . 

Supply chain

Port News

Port infrastructure

International ports

DP World plans $760 million investment in the Dominican Republic

<div class="phx-topic abstract-wrapper">Much of the volume that has been locked up over the past month will come flooding back into the market after Washington and Beijing agreed to significantly slash their respective tariffs for 90 days. </div>

Much of the volume that has been locked up over the past month will come flooding back into the market after Washington and Beijing agreed to significantly slash their respective tariffs for 90 days.

<div class="phx-topic">The eastbound trans-Pacific will likely face insufficient ocean capacity to handle a surge of unlocked shipments from China to the US following the preliminary trade deal announced Monday, resulting in higher spot rates, surcharges and shortages of vessel space and equipment in the coming weeks, forwarders warned. “It’s clear it will be a mad rush to get capacity,” Jason Cook, managing director at Ardent Global Logistics, said. “Customers were already prebooking Friday and [early Monday]. Every day will count this week towards getting the booking plan and anticipated allocations with carriers.” Nerijus Poskus, Flexport’s head of ocean procurement, said: “I think we’re going to have a very significant peak season.” With just over a month having elapsed since the Trump administration slapped 145% tariffs on Beijing, a significant backlog of goods has built up in China, reflected in volumes dropping about 30% in recent weeks, according to Hapag-Lloyd and others. “For the first three weeks of May, 34% of capacity in the trans-Pacific has been taken out through blank sailings and service removals,” Poskus said. Now, much of that volume will come flooding back into the market with the US and China agreeing during weekend talks in Geneva to slash their respective tariffs for 90 days while negotiations continue. The 145% US tariffs will be cut to 30%, while China’s reciprocal 125% tariff on US goods will be lowered to 10%. Those levels are clearly low enough to unleash much of the pent-up demand building over the past month. Indeed, container bookings for imports from China appear to have been strengthening even before the tariff announcement. Bookings jumped 29% last week compared with the week prior, according to maritime visibility provider Vizion and data and analytics company Dun &amp; Bradstreet “Currently, ships are sailing 85% to 90% full, yet there is a huge backlog and that backlog at some point needs to be shipped,” Poskus said. “So if demand increases more than 10% — and it will — and if carriers put back 10% of capacity, we are at 100%. In other words, full. No space. And carriers have to add capacity such as extra loaders in order for importers to have space.” A space crunch will rapidly develop on the trans-Pacific, as the ships needed to replenish capacity aren’t immediately available, Poskus said. “The issue is a lot of these ships have been deployed on other trade lanes — intra-Asia, Asia to Latin America, etc. They are not just sitting and waiting, so shifting back capacity to the [trans-Pacific] will be not as easy as it seems and will take time,” he said. “There is maybe a ship or two that can be deployed back right away but as for the market as a whole, it will take more than four weeks for any meaningful capacity to be injected back into the TP [trans-Pacific].” Ocean rapidly withdrew capacity and redeployed it to multiple other trade lanes including Asia-Europe, DHL Global Forwarding told customers in its most recent Ocean Freight Market Update. The forwarder warned of “significant equipment and capacity constraints that could lead to increasing rates” in the aftermath of a deal between the US and China. Patrick Fay, CEO and co-founder of forwarder BOC International, said China bookings began surging on Sunday when the US signaled that a deal had been reached even before the specifics on tariff cuts were disclosed. “It is going to take a while to get these blank sailings canceled,” he said. “It will be very tight the next three weeks.” <h3>Port capacity could be overwhelmed </h3>Even before Monday’s announcement, others agreed that a volume surge would develop quickly after any trade deal reached between China and the US. “If a de-escalation was to happen, it is not unlikely that there would be a catch-up effect where, at some point, the situation resolves itself, and then you see a much stronger demand coming out of China,” Maersk CEO Vincent Clerc said on the company’s May 8 earning call. And any surge will potentially overwhelm US port capacity given that, as carrier executives told the recent Georgia Foreign Trade Conference, the system has no greater ability to absorb surge volumes than it did back in 2020. “Right now ... volumes are down [30%-40%] and if that goes up, the sheer surge will test the system and disruption cannot be avoided,” said Charles van der Steene, president of Maersk North America. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Other issues will further complicate the post-deal market, empty containers among them, Poskus said. “Carriers have repositioned a lot of empty containers to SE Asia, dropping the empties in Vietnam versus China or not taking them back at all yet,” he said. “That means for at least some carriers in some locations, not the whole market, but ... certain places will start to face empty equipment shortages. “As carriers cancel or reduce capacity, that means empties are not able to be returned to Asia at the same pace as when they were brought into the US a few months earlier,” Poskus added. The result will likely be a classic squeeze lasting several weeks, reminiscent of the aftermath of the post-financial crisis restocking surge the market experienced in early 2010. Spot rates, which currently are hovering near $2,400 to the US West Coast, could surge to multiple times that, while peak season surcharges (PSSs) will be likely be quickly imposed on fixed rate contracts. “If space gets very tight, premium products will be the easiest way to secure additional capacity,” Poskus said. “If your volume is 20 containers a week and you need 25, for the five extra you may need to pay spot market prices plus, possibly, a premium.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

The eastbound trans-Pacific will likely face insufficient ocean capacity to handle a surge of unlocked shipments from China to the US following the preliminary trade deal announced Monday, resulting in higher spot rates, surcharges and shortages of vessel space and equipment in the coming weeks, forwarders warned. “It’s clear it will be a mad rush to get capacity,” Jason Cook, managing director at Ardent Global Logistics, said. “Customers were already prebooking Friday and [early Monday]. Every day will count this week towards getting the booking plan and anticipated allocations with carriers.” Nerijus Poskus, Flexport’s head of ocean procurement, said: “I think we’re going to have a very significant peak season.” With just over a month having elapsed since the Trump administration slapped 145% tariffs on Beijing, a significant backlog of goods has built up in China, reflected in volumes dropping about 30% in recent weeks, according to Hapag-Lloyd and others. “For the first three weeks of May, 34% of capacity in the trans-Pacific has been taken out through blank sailings and service removals,” Poskus said. Now, much of that volume will come flooding back into the market with the US and China agreeing during weekend talks in Geneva to slash their respective tariffs for 90 days while negotiations continue. The 145% US tariffs will be cut to 30%, while China’s reciprocal 125% tariff on US goods will be lowered to 10%. Those levels are clearly low enough to unleash much of the pent-up demand building over the past month. Indeed, container bookings for imports from China appear to have been strengthening even before the tariff announcement. Bookings jumped 29% last week compared with the week prior, according to maritime visibility provider Vizion and data and analytics company Dun & Bradstreet “Currently, ships are sailing 85% to 90% full, yet there is a huge backlog and that backlog at some point needs to be shipped,” Poskus said. “So if demand increases more than 10% — and it will — and if carriers put back 10% of capacity, we are at 100%. In other words, full. No space. And carriers have to add capacity such as extra loaders in order for importers to have space.” A space crunch will rapidly develop on the trans-Pacific, as the ships needed to replenish capacity aren’t immediately available, Poskus said. “The issue is a lot of these ships have been deployed on other trade lanes — intra-Asia, Asia to Latin America, etc. They are not just sitting and waiting, so shifting back capacity to the [trans-Pacific] will be not as easy as it seems and will take time,” he said. “There is maybe a ship or two that can be deployed back right away but as for the market as a whole, it will take more than four weeks for any meaningful capacity to be injected back into the TP [trans-Pacific].” Ocean rapidly withdrew capacity and redeployed it to multiple other trade lanes including Asia-Europe, DHL Global Forwarding told customers in its most recent Ocean Freight Market Update. The forwarder warned of “significant equipment and capacity constraints that could lead to increasing rates” in the aftermath of a deal between the US and China. Patrick Fay, CEO and co-founder of forwarder BOC International, said China bookings began surging on Sunday when the US signaled that a deal had been reached even before the specifics on tariff cuts were disclosed. “It is going to take a while to get these blank sailings canceled,” he said. “It will be very tight the next three weeks.” Port capacity could be overwhelmed Even before Monday’s announcement, others agreed that a volume surge would develop quickly after any trade deal reached between China and the US. “If a de-escalation was to happen, it is not unlikely that there would be a catch-up effect where, at some point, the situation resolves itself, and then you see a much stronger demand coming out of China,” Maersk CEO Vincent Clerc said on the company’s May 8 earning call. And any surge will potentially overwhelm US port capacity given that, as carrier executives told the recent Georgia Foreign Trade Conference, the system has no greater ability to absorb surge volumes than it did back in 2020. “Right now ... volumes are down [30%-40%] and if that goes up, the sheer surge will test the system and disruption cannot be avoided,” said Charles van der Steene, president of Maersk North America. Other issues will further complicate the post-deal market, empty containers among them, Poskus said. “Carriers have repositioned a lot of empty containers to SE Asia, dropping the empties in Vietnam versus China or not taking them back at all yet,” he said. “That means for at least some carriers in some locations, not the whole market, but ... certain places will start to face empty equipment shortages. “As carriers cancel or reduce capacity, that means empties are not able to be returned to Asia at the same pace as when they were brought into the US a few months earlier,” Poskus added. The result will likely be a classic squeeze lasting several weeks, reminiscent of the aftermath of the post-financial crisis restocking surge the market experienced in early 2010. Spot rates, which currently are hovering near $2,400 to the US West Coast, could surge to multiple times that, while peak season surcharges (PSSs) will be likely be quickly imposed on fixed rate contracts. “If space gets very tight, premium products will be the easiest way to secure additional capacity,” Poskus said. “If your volume is 20 containers a week and you need 25, for the five extra you may need to pay spot market prices plus, possibly, a premium.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Transport, Trade and Regulation News

Container Shipping News

Capacity crunch beckons on eastbound trans-Pacific after US-China deal

<div class="phx-topic abstract-wrapper">Despite a ceasefire announced over the weekend between India and Pakistan, the combined impact of the recent tensions and enhanced port security protocols has left container supply chains out of India’s west coast corridor in a state of flux.</div>

Despite a ceasefire announced over the weekend between India and Pakistan, the combined impact of the recent tensions and enhanced port security protocols has left container supply chains out of India’s west coast corridor in a state of flux.

<div class="phx-topic">The military conflict between India and Pakistan that sent shudders through maritime stakeholders across South Asia last week is seeing a thaw, at least for now, following a tentative ceasefire announced by both sides over the weekend. But the combined <a href="https://www.joc.com/article/indias-ban-on-pakistan-cargo-raises-disruption-risk-5997588">impact of recent tensions and enhanced port security protocols</a> has left container supply chains out of India’s hotly sought-after west coast corridor in a state of flux. Mundra Port, the country’s busiest freight handler, is working to fix operational chaos after it was forced to suspend vessel dockings multiple times due to the high security risk environment that involved electrical blackouts during night hours over the past week. “Mundra terminals are now berthing vessels on a first-in, first-out basis instead of on fixed window slots,” an operations executive at a European carrier who didn’t want to be identified told the Journal of Commerce. “The residual port congestion is expected to take some days to get any better.” Mundra port owner Adani Ports (APSEZ), in a trade notice on Friday, urged its terminal users to plan for anticipated delays, adding it was “evaluating the situation under the guidance of civil administration.” Additionally, Mundra’s busiest container terminal, Adani International Container Terminal (AICTPL), a joint venture between APSEZ and Mediterranean Shipping Co., had a scheduled 12-hour suspension of inter-terminal container (ITT) movements on Friday for gate infrastructure upgrades, amplifying supply chain woes. ITT operations are typically critical to transshipment cargo handling, which MSC has significantly expanded out of Mundra for its regional trade interests. <h3>Bypassing Mundra </h3>Sensing long berthing delays, major carriers on Indian trades are already bypassing Mundra to keep their schedules in line. Maersk has told customers it will skip Mundra on its MECL service between West India and North America until further notice. The weekly MECL in February included a stop at Mundra in a service shakeup to boost Indian loading capacity. Local shipping sources told the Journal of Commerce the carrier will instead roll MECL Indian export bookings over to its Mawingu Express service for relays over to Salalah Port in Oman, a key Maersk hub for the region. MECL India imports will be rerouted to APM Terminals Pipavav, another West India gateway, using the capacity on its Mawingu and/or FI3 Northeast Asia trade services. Other known current week westbound sailings skipping Mundra calls include the Houston Express and Baltimore Express, both operated by Hapag-Lloyd on the India-Europe trade (IOS) as part of the Gemini Cooperation network, known as the ME1 for Maersk. Meanwhile, <a href="https://www.joc.com/article/cma-cgm-levies-emergency-surcharges-on-pakistani-trade-amid-india-tensions-6001112">more carriers have hit Pakistan shippers with contingency surcharges</a> to recoup extra costs. Hapag-Lloyd will levy an add-on of $500 per container on Pakistani exports to Europe and Africa, and $300 per box on the reverse leg, beginning May 21. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

The military conflict between India and Pakistan that sent shudders through maritime stakeholders across South Asia last week is seeing a thaw, at least for now, following a tentative ceasefire announced by both sides over the weekend. But the combined impact of recent tensions and enhanced port security protocols has left container supply chains out of India’s hotly sought-after west coast corridor in a state of flux. Mundra Port, the country’s busiest freight handler, is working to fix operational chaos after it was forced to suspend vessel dockings multiple times due to the high security risk environment that involved electrical blackouts during night hours over the past week. “Mundra terminals are now berthing vessels on a first-in, first-out basis instead of on fixed window slots,” an operations executive at a European carrier who didn’t want to be identified told the Journal of Commerce. “The residual port congestion is expected to take some days to get any better.” Mundra port owner Adani Ports (APSEZ), in a trade notice on Friday, urged its terminal users to plan for anticipated delays, adding it was “evaluating the situation under the guidance of civil administration.” Additionally, Mundra’s busiest container terminal, Adani International Container Terminal (AICTPL), a joint venture between APSEZ and Mediterranean Shipping Co., had a scheduled 12-hour suspension of inter-terminal container (ITT) movements on Friday for gate infrastructure upgrades, amplifying supply chain woes. ITT operations are typically critical to transshipment cargo handling, which MSC has significantly expanded out of Mundra for its regional trade interests. Bypassing Mundra Sensing long berthing delays, major carriers on Indian trades are already bypassing Mundra to keep their schedules in line. Maersk has told customers it will skip Mundra on its MECL service between West India and North America until further notice. The weekly MECL in February included a stop at Mundra in a service shakeup to boost Indian loading capacity. Local shipping sources told the Journal of Commerce the carrier will instead roll MECL Indian export bookings over to its Mawingu Express service for relays over to Salalah Port in Oman, a key Maersk hub for the region. MECL India imports will be rerouted to APM Terminals Pipavav, another West India gateway, using the capacity on its Mawingu and/or FI3 Northeast Asia trade services. Other known current week westbound sailings skipping Mundra calls include the Houston Express and Baltimore Express, both operated by Hapag-Lloyd on the India-Europe trade (IOS) as part of the Gemini Cooperation network, known as the ME1 for Maersk. Meanwhile, more carriers have hit Pakistan shippers with contingency surcharges to recoup extra costs. Hapag-Lloyd will levy an add-on of $500 per container on Pakistani exports to Europe and Africa, and $300 per box on the reverse leg, beginning May 21. Contact Bency Mathew at bencyvmathew@gmail.com .

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West India container trade facing delays, vessel skips after regional tensions

<div class="phx-topic abstract-wrapper">A request for industry comment on trucking regulations that could be modified or ended generated 896 responses in one month, with electronic logging devices and hours of service rules at the top of the list.</div>

A request for industry comment on trucking regulations that could be modified or ended generated 896 responses in one month, with electronic logging devices and hours of service rules at the top of the list.

<div class="phx-topic">If the Trump administration wants to deregulate trucking, it will find no lack of suggestions where to start. Comments on a Department of Transportation (DOT) request for information on rules that could or should be modified or replaced drew 896 comments in one month from industry organizations, state transportation officials, businesses and individuals. The comment period closed this week, and the list of regulations the respondents want amended or eliminated is long. Many of those responding were independent truckers. In particular, they targeted proposed mandates that would require speed limiting devices on truck engines and automatic emergency brakes (AEB) in heavy trucks, truck driver hours of service (HOS) rules, the electronic logging device (ELD) mandate and more. Those proposals and rules have been controversial since their inception. The current HOS rules and the ELD mandate were issued during the first Trump administration. It may be easier for regulators to drop or postpone pending regulations, such as a proposed requirement that trucks be equipped with speed limiters, than to rewrite existing rules such as the ELD mandate and HOS regulations. Many of the requests regarding those rules echo debates with prior administrations. Proposals that would mandate speed limiters were issued in 2016 under the Obama administration and then under the Biden White House in 2022. That last proposal remains active but has not advanced to a final rulemaking. The ELD mandate, implemented in late 2017, reshaped trucking, making it much more difficult to evade HOS limits. Many comments from truck drivers simply suggested some variant of ending the use of electronic logs and going back to paper logs. The request for information and the flood of responses are part of the Trump administration’s effort to identify and cut rules it considers unconstitutional, unlawful, unauthorized and unnecessarily burdensome. But respondents also called for new regulation that would help deter cargo crime and fraud. The National Association of Small Trucking Companies (NASTC) called for a permanent freight fraud enforcement task force with the DOT Office of the Inspector General. “This task force should be solely tasked with enforcing laws against fraud in transportation by investigating incidents and developing cases to bring to the Department of Justice,” the NASTC said in its comments. The organization also wants the Federal Motor Carrier Safety Administration to “diligently maintain” its National Consumer Complaint Database to fight fraud cases. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

If the Trump administration wants to deregulate trucking, it will find no lack of suggestions where to start. Comments on a Department of Transportation (DOT) request for information on rules that could or should be modified or replaced drew 896 comments in one month from industry organizations, state transportation officials, businesses and individuals. The comment period closed this week, and the list of regulations the respondents want amended or eliminated is long. Many of those responding were independent truckers. In particular, they targeted proposed mandates that would require speed limiting devices on truck engines and automatic emergency brakes (AEB) in heavy trucks, truck driver hours of service (HOS) rules, the electronic logging device (ELD) mandate and more. Those proposals and rules have been controversial since their inception. The current HOS rules and the ELD mandate were issued during the first Trump administration. It may be easier for regulators to drop or postpone pending regulations, such as a proposed requirement that trucks be equipped with speed limiters, than to rewrite existing rules such as the ELD mandate and HOS regulations. Many of the requests regarding those rules echo debates with prior administrations. Proposals that would mandate speed limiters were issued in 2016 under the Obama administration and then under the Biden White House in 2022. That last proposal remains active but has not advanced to a final rulemaking. The ELD mandate, implemented in late 2017, reshaped trucking, making it much more difficult to evade HOS limits. Many comments from truck drivers simply suggested some variant of ending the use of electronic logs and going back to paper logs. The request for information and the flood of responses are part of the Trump administration’s effort to identify and cut rules it considers unconstitutional, unlawful, unauthorized and unnecessarily burdensome. But respondents also called for new regulation that would help deter cargo crime and fraud. The National Association of Small Trucking Companies (NASTC) called for a permanent freight fraud enforcement task force with the DOT Office of the Inspector General. “This task force should be solely tasked with enforcing laws against fraud in transportation by investigating incidents and developing cases to bring to the Department of Justice,” the NASTC said in its comments. The organization also wants the Federal Motor Carrier Safety Administration to “diligently maintain” its National Consumer Complaint Database to fight fraud cases. Contact William B. Cassidy at bill.cassidy@spglobal.com .

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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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