<div class="phx-topic abstract-wrapper">Experienced exporters know that their three best allies are their customers, their bank, and their f</div>

Experienced exporters know that their three best allies are their customers, their bank, and their f

<div>Experienced exporters know that their three best allies are their customers, their bank, and their forwarder. Since each exporter finds its own customers, this leaves us with banks and forwarders. This column will profile the ideal bank, and the next will do the same for forwarders.The first qualification for a bank providing international trade services is that it have an international presence. This means a network of overseas correspondents and account relationships. Banks use their overseas correspondents to help their exporting customers provide credit information on prospective buyers and handle documentary collections.Your overseas customer will want to use his or...

Experienced exporters know that their three best allies are their customers, their bank, and their forwarder. Since each exporter finds its own customers, this leaves us with banks and forwarders. This column will profile the ideal bank, and the next will do the same for forwarders. The first qualification for a bank providing international trade services is that it have an international presence. This means a network of overseas correspondents and account relationships. Banks use their overseas correspondents to help their exporting customers provide credit information on prospective buyers and handle documentary collections.Your overseas customer will want to use his or her bank just as much as you want to use yours. This works best when both banks are mutually correspondent. The more overseas correspondents your bank has, the greater the chances this will happen. This can be particularly useful with letters of credit (L/Cs), since opening (customers') banks must route their L/Cs through correspondents for authentication. Chances of having the L/C advised through your bank increase when it is correspondent with the opening bank. The second qualification is personnel experienced in foreign trade. Most banks offering international trade services have operations personnel who handle L/Cs, documentary collections, and incoming and outgoing foreign payments. Most banks can provide foreign exchange services, and the larger ones have their own resident foreign exchange traders. RISK EVALUATION TAKES PLACE AT QUOTATION STAGE Experienced international bankers help their exporting customers evaluate commercial and country credit risk at the quotation stage, so offers can be structured accordingly. Country risk changes, and savvy bankers network with others so they can get up-to-date information. Some banks even subscribe to foreign-risk evaluation services. Operations people can keep their customers out of trouble with letter of credit compliance. They can even help their customers find banks willing to confirm unconfirmed L/Cs. (Hint: U.S. branches of foreign banks are U.S. banks.) All of these services should be available to a greater or lesser extent at any bank offering international trade services. However, as I mentioned in the last column, the lack of export trade financing is a problem faced by many small and midsized exporting firms. Banks with lenders who both understand and are willing to work with export receivables provide an invaluable service. Those that have international officers with lending authority are truly gems. The third qualification follows from the second: a knowledge of non-bank financing assistance. This includes export credit insurance, the Export-Import Bank, the Small Business Administration and whatever state and even municipal export financing programs exist. Now for some heroics. Remember, I said we were describing the ideal bank. Bankers with non-banking foreign trade experience can be exceptionally valuable. They can go beyond purely financial considerations in helping their customers construct deals. For example, even a basic knowledge of Incoterms would enable a banker to alert his or her customer to the documentary implications and risk passage implicit in each term of sale. Bankers familiar with the different levels of marine cargo insurance coverage can recommend adequate protection. Since banks are supposed to be screening their own transactions in compliance with the Treasury Department's Specially Designated Nationals List, it shouldn't take much for them to alert their customers to do the same. Customers whose exports are growing might appreciate hearing about Foreign Sales Corporations. Bankers who see their new-to-export customers struggling might recommend a good basic seminar. Since bankers see letter-of-credit presentations, they often get to know which area forwarders are more conscientious than others. Guiding their customers accordingly on a discrete and strictly off-the-record basis could be very useful, provided it is strictly objective. BANKING SYSTEM OFFERS GOOD LEADS FOR EXPORTERS Proactive bankers can also help their exporting customers by asking their correspondents to introduce any of their customers who might be interested in a relationship. Trade leads generated through the banking system are usually very good, as bankers will seldom provide an introduction for less than reputable customers. None of these heroics is rocket science. Most simply represent the wisdom that experienced bankers accumulate over the years. Bankers see a lot: L/Cs, their many and varied discrepancies; documents; credit reports; even shifts in the fortunes of nations. The problem is they often forget that what is obvious to them may be a revelation to their exporting customers. International bankers who realize this and act accordingly do their customers a real service. They are also tremendous assets for their own institutions. Local foreign trade communities usually have good jungle telegraphs. More than one prize account has been landed by the bank with an outstanding level of international service. After all, foreign trade is the great ''unknown'' to much of the U.S. business world.

Transport, Trade and Regulation News

EXPORT ABCS - FRANK REYNOLDS \ EXPORTERS NEED BANKS WITH NETWORKS OVERSEAS TO SUCCEED GLOBALLY

<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.

Feature image

<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 .

Trucking News

Truckload

Surface

Truckers send Trump administration long list of rules to rewrite or kill

<div class="phx-topic abstract-wrapper">The US’ second-largest intermodal carrier has not yet felt the effects of US tariffs on China but notes the delay in impact between the ports and the rails could take a few weeks.</div>

The US’ second-largest intermodal carrier has not yet felt the effects of US tariffs on China but notes the delay in impact between the ports and the rails could take a few weeks.

<div class="phx-topic">Hub Group, the US’ second-largest intermodal carrier, is warning that a drop in domestic intermodal volumes linked to US tariffs on China could emerge on the West Coast between mid-May and the end of June. Approximately a quarter of Hub Group’s West Coast business is tied to US imports, and about 30% of that originates in China, the company said during its first-quarter earnings call Thursday evening. The intermodal carrier laid out three potential outcomes based on how shippers respond to the evolving trade environment. “At the high end of the range is a short West Coast slowdown of China imports and strong bounce back of demand in the West Coast leading to a surge of volume in the back half of the year,” Hub Group CEO Phil Yeager said on the call. “The low end of the range would be an extended slowdown in China imports or the weakening of consumer spending.” Yeager said the more likely occurrence is a middle-ground scenario in which intermodal volumes decline modestly in the second half of the year without peak season surcharges. Last year, some shippers faced <a href="https://www.joc.com/article/up-joins-peers-in-assessing-peak-season-surcharges-for-southern-california-5709819">peak surcharges</a> when they exceeded their contractual allotments out of Southern California. A year of flat rates Hub Group’s intermodal volume rose 8% year over year in the first quarter, but revenue per load dropped 12%. One likely reason for the revenue decline is that Hub Group has taken a more aggressive pricing position than competitor Schneider National, according to several shippers the Journal of Commerce has spoken with. Another factor is the mix of freight. While Hub Group’s local East Coast volume rose 13% year over year, its transcontinental freight originating on the West Coast declined 1%. Shorter hauls on the East Coast naturally generate less revenue per load than longer intermodal routes from Southern California to inland markets such as Atlanta, Chicago, Dallas, or Memphis. Hub Group said intermodal contract rates remained flat, echoing the data in the Journal of Commerce’s <a href="https://www.joc.com/resources/special-reports/intermodal-savings-index">Intermodal Savings Index</a>. Hub Group does not anticipate any changes through the end of the year. “In the initial onset of bid season, carriers were trying to push truckload rates up … what we’ve seen now in the second portion is more truckload competition [due to geopolitical trade tensions],” Yeager said. “In the second quarter, 38% of our business is getting bid out. I would say it’s been a little bit more aggressive, which is leading us to say we think flattish on pricing for the full year.” Yeager also said Hub Group does not plan to purchase additional containers in 2025; as much as 25% of the company’s containers are currently stacked and out of service. While the company does not disclose its total fleet size, independent estimates suggest Hub Group has idled about 10,000 containers nationwide. Those estimates come from Jason Hilsenbeck, the founder of drayage platform Loadmatch.com, which tracks domestic container fleet sizes across the US. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Hub Group, the US’ second-largest intermodal carrier, is warning that a drop in domestic intermodal volumes linked to US tariffs on China could emerge on the West Coast between mid-May and the end of June. Approximately a quarter of Hub Group’s West Coast business is tied to US imports, and about 30% of that originates in China, the company said during its first-quarter earnings call Thursday evening. The intermodal carrier laid out three potential outcomes based on how shippers respond to the evolving trade environment. “At the high end of the range is a short West Coast slowdown of China imports and strong bounce back of demand in the West Coast leading to a surge of volume in the back half of the year,” Hub Group CEO Phil Yeager said on the call. “The low end of the range would be an extended slowdown in China imports or the weakening of consumer spending.” Yeager said the more likely occurrence is a middle-ground scenario in which intermodal volumes decline modestly in the second half of the year without peak season surcharges. Last year, some shippers faced peak surcharges when they exceeded their contractual allotments out of Southern California. A year of flat rates Hub Group’s intermodal volume rose 8% year over year in the first quarter, but revenue per load dropped 12%. One likely reason for the revenue decline is that Hub Group has taken a more aggressive pricing position than competitor Schneider National, according to several shippers the Journal of Commerce has spoken with. Another factor is the mix of freight. While Hub Group’s local East Coast volume rose 13% year over year, its transcontinental freight originating on the West Coast declined 1%. Shorter hauls on the East Coast naturally generate less revenue per load than longer intermodal routes from Southern California to inland markets such as Atlanta, Chicago, Dallas, or Memphis. Hub Group said intermodal contract rates remained flat, echoing the data in the Journal of Commerce’s Intermodal Savings Index . Hub Group does not anticipate any changes through the end of the year. “In the initial onset of bid season, carriers were trying to push truckload rates up … what we’ve seen now in the second portion is more truckload competition [due to geopolitical trade tensions],” Yeager said. “In the second quarter, 38% of our business is getting bid out. I would say it’s been a little bit more aggressive, which is leading us to say we think flattish on pricing for the full year.” Yeager also said Hub Group does not plan to purchase additional containers in 2025; as much as 25% of the company’s containers are currently stacked and out of service. While the company does not disclose its total fleet size, independent estimates suggest Hub Group has idled about 10,000 containers nationwide. Those estimates come from Jason Hilsenbeck, the founder of drayage platform Loadmatch.com, which tracks domestic container fleet sizes across the US. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Drop in USWC domestic intermodal volumes could come soon: Hub Group

<div class="phx-topic abstract-wrapper">The National Retail Federation also warned the negative growth will accelerate, with imports through the summer expected to be at least 20% lower than the corresponding month last year. </div>

The National Retail Federation also warned the negative growth will accelerate, with imports through the summer expected to be at least 20% lower than the corresponding month last year. 

<div class="phx-topic">US imports this month will see their first year-over-year decline in more than a year and a half as the “true impact” of the Trump administration’s tariffs come to fruition, a major retail group said Friday. The National Retail Federation (NRF) also warned the negative growth will accelerate, with imports from June through September expected to be at least 20% lower than the corresponding month last year.  “We are starting to see the true impact of President Trump’s tariffs on the supply chain,” Jonathan Gold, NRF’s vice president for Supply Chain and Customs Policy, said in the group’s newly released Global Port Tracker (GPT) published with Hackett Associates. Gold said the US tariffs will result in “higher costs for businesses as well as reduced cargo volumes.”  “In the end, these tariffs will affect consumers in the form of higher prices and less availability on store shelves,” he said.  That less availability will begin in May, with projected imports of 1.81 million TEUs down almost 13% from May 2024 and the first year-over-year drop in imports in 19 months, according to the GPT. Imports for June through September are projected to see year-over-year declines of 20.2%, 23.4%, 21.5% and 21.2%, respectively. Expected June imports of 1.71 million TEUs would be the lowest for any month since March 2023, the GPT said. Tariff impacts Tariffs implemented by President Donald Trump in April “come at the most important time in the buying process” for retailers, said Gold, adding that many retailers are being forced to delay or cancel orders — with small retailers being especially impacted. With a pre-tariff rush of imports that appears to have largely ended in January, the ratio of US retail inventories to sales, a barometer of inventory balance, was unchanged in February, at 1.31, according to US Census Bureau data. Amid US importers increasingly canceling or suspending orders, ocean carriers are making capacity adjustments in the form of <a href="https://www.joc.com/article/msc-suspends-two-us-services-rejigs-others-as-tariffs-hit-chinese-imports-6000649">suspended services</a> and blanked sailings. “Container carriers are indeed dropping voyages and consolidating cargo and service to ensure that their vessels are as full as possible and to maintain economies of scale as demand declines,” said Ben Hackett, founder of Hackett Associates.  While carriers have begun to suspend services on the trans-Pacific, Hackett added that reports of a “broken” supply chain and ships “making U-turns in mid-voyage” because of the tariffs are “very far from the truth and the reality on the ground.” The GPT expects 12.13 million TEUs in US imports for the first half of 2025, up just 0.3% on the year and a significant downgrade from the 5.7% growth that was forecast before tariffs were implemented. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="">Laura.Robb@spglobal.com</a>.  </div>

US imports this month will see their first year-over-year decline in more than a year and a half as the “true impact” of the Trump administration’s tariffs come to fruition, a major retail group said Friday. The National Retail Federation (NRF) also warned the negative growth will accelerate, with imports from June through September expected to be at least 20% lower than the corresponding month last year.  “We are starting to see the true impact of President Trump’s tariffs on the supply chain,” Jonathan Gold, NRF’s vice president for Supply Chain and Customs Policy, said in the group’s newly released Global Port Tracker (GPT) published with Hackett Associates. Gold said the US tariffs will result in “higher costs for businesses as well as reduced cargo volumes.”  “In the end, these tariffs will affect consumers in the form of higher prices and less availability on store shelves,” he said.  That less availability will begin in May, with projected imports of 1.81 million TEUs down almost 13% from May 2024 and the first year-over-year drop in imports in 19 months, according to the GPT. Imports for June through September are projected to see year-over-year declines of 20.2%, 23.4%, 21.5% and 21.2%, respectively. Expected June imports of 1.71 million TEUs would be the lowest for any month since March 2023, the GPT said. Tariff impacts Tariffs implemented by President Donald Trump in April “come at the most important time in the buying process” for retailers, said Gold, adding that many retailers are being forced to delay or cancel orders — with small retailers being especially impacted. With a pre-tariff rush of imports that appears to have largely ended in January, the ratio of US retail inventories to sales, a barometer of inventory balance, was unchanged in February, at 1.31, according to US Census Bureau data. Amid US importers increasingly canceling or suspending orders, ocean carriers are making capacity adjustments in the form of suspended services and blanked sailings. “Container carriers are indeed dropping voyages and consolidating cargo and service to ensure that their vessels are as full as possible and to maintain economies of scale as demand declines,” said Ben Hackett, founder of Hackett Associates.  While carriers have begun to suspend services on the trans-Pacific, Hackett added that reports of a “broken” supply chain and ships “making U-turns in mid-voyage” because of the tariffs are “very far from the truth and the reality on the ground.” The GPT expects 12.13 million TEUs in US imports for the first half of 2025, up just 0.3% on the year and a significant downgrade from the 5.7% growth that was forecast before tariffs were implemented. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at Laura.Robb@spglobal.com . 

Maritime

Container lines

Trans-Atlantic

Forwarding

Trans-Pacific

Container Shipping News

US retailers project first year-over-year import cut in 19 months as tariffs bite

<div class="phx-topic abstract-wrapper">Trade disputes cast a pall over US manufacturing and trucking as exports and imports drop, PMI surveys show. </div>

Trade disputes cast a pall over US manufacturing and trucking as exports and imports drop, PMI surveys show.

<div class="phx-topic">A weakening outlook for US manufacturing combined with slowing imports is raising prospects of a further drop in already-soft truck freight demand. Two US manufacturing Purchasing Managers’ Indexes (PMIs) indicated either mild contraction or incremental expansion in April. The weakening in US manufacturing comes as imports and exports drop amid uncertainty over US trade policy. That has immediate implications for truck tonnage, as both truckload and less-than-truckload (LTL) are highly dependent on industrial freight. In total, 59% of for-hire truck tonnage in the US is sourced from domestic manufacturing plants, according to the US Census Bureau Commodity Flow Survey. Truck volumes have dropped year over year on a monthly basis since March 2023, according to the Cass Freight Shipments Index. In March, the shipments index — which also includes some rail and parcel data — was down 5.3% from a year earlier. The US manufacturing PMI from the Institute of Supply Management (ISM) dropped 0.3 percentage points in April to 48.7, the second month of contraction for the PMI. “Demand and output weakened while input strengthened further, conditions that are not considered positive for economic growth,” Timothy R. Fiore, chair of the ISM business survey committee, said when releasing the ISM PMI report early this month. In contrast, the S&amp;P Global US manufacturing PMI was flat at 50.2, just above the breaking point between contraction and expansion. It has been above 50 for four months. “Manufacturing continued to flat-line in April amid worrying downside risks to the outlook and sharply rising costs,” Chris Williamson, chief business economist for S&amp;P Global Market Intelligence, said in a statement at the start of the month. S&amp;P Global is the parent company of the Journal of Commerce. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56be088e-5b54-4d09-add3-f841e65711ec"></dynamic-object></div>A PMI reading below 50 indicates contraction in manufacturing. Both the ISM and S&amp;P Global PMIs rose above 50 in the first two months of the year after a long period of contraction. The ISM PMI had been below 50 for 24 of the previous 25 months. S&amp;P Global’s read on manufacturing was slightly more positive, but volatile, over the long term. Its PMI had been above 50 during the first half of 2024 and in contraction during the second half of the year. <h3>Declining metrics </h3>As the US economy slows, with early estimates of gross domestic product growth turning negative in the first quarter, signs of the supply chain impact are becoming clearer. Despite lower demand, average lead times for manufacturing orders lengthened for a seventh consecutive month, according to S&amp;P Global. The ISM Supplier Deliveries Index showed a continued slowing of deliveries to manufacturers in April. S&amp;P Global noted a reduction in purchases by manufacturers adding to their stocks. That may reflect lower orders and additions of inputs manufactured overseas as high tariffs on China took effect in April. “Supply disruptions and cost concerns, again linked to tariffs, were widely noted,” S&amp;P Global said in its April PMI report. One of the few bright spots for US manufacturers was a gain in new sales from customers switching from imports to goods produced in US-based factories, Williamson said. However, “any such sales increase was countered by worries over tariff-related disruptions to supply chains and lost export sales,” he said. The US Federal Reserve System also found the US economy struggling to gain traction in April. “Uncertainty around international trade policy was pervasive,” the Fed said in its Beige Book economic report for the month, released in early May. Just five of the 12 Federal Reserve districts covered by the report saw slight growth in economic activity, while three districts saw little change and four reported slight to modest declines. “Manufacturing was mixed, but two-thirds of districts said activity was little changed or had declined” from the previous month, the Fed said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

A weakening outlook for US manufacturing combined with slowing imports is raising prospects of a further drop in already-soft truck freight demand. Two US manufacturing Purchasing Managers’ Indexes (PMIs) indicated either mild contraction or incremental expansion in April. The weakening in US manufacturing comes as imports and exports drop amid uncertainty over US trade policy. That has immediate implications for truck tonnage, as both truckload and less-than-truckload (LTL) are highly dependent on industrial freight. In total, 59% of for-hire truck tonnage in the US is sourced from domestic manufacturing plants, according to the US Census Bureau Commodity Flow Survey. Truck volumes have dropped year over year on a monthly basis since March 2023, according to the Cass Freight Shipments Index. In March, the shipments index — which also includes some rail and parcel data — was down 5.3% from a year earlier. The US manufacturing PMI from the Institute of Supply Management (ISM) dropped 0.3 percentage points in April to 48.7, the second month of contraction for the PMI. “Demand and output weakened while input strengthened further, conditions that are not considered positive for economic growth,” Timothy R. Fiore, chair of the ISM business survey committee, said when releasing the ISM PMI report early this month. In contrast, the S&P Global US manufacturing PMI was flat at 50.2, just above the breaking point between contraction and expansion. It has been above 50 for four months. “Manufacturing continued to flat-line in April amid worrying downside risks to the outlook and sharply rising costs,” Chris Williamson, chief business economist for S&P Global Market Intelligence, said in a statement at the start of the month. S&P Global is the parent company of the Journal of Commerce. A PMI reading below 50 indicates contraction in manufacturing. Both the ISM and S&P Global PMIs rose above 50 in the first two months of the year after a long period of contraction. The ISM PMI had been below 50 for 24 of the previous 25 months. S&P Global’s read on manufacturing was slightly more positive, but volatile, over the long term. Its PMI had been above 50 during the first half of 2024 and in contraction during the second half of the year. Declining metrics As the US economy slows, with early estimates of gross domestic product growth turning negative in the first quarter, signs of the supply chain impact are becoming clearer. Despite lower demand, average lead times for manufacturing orders lengthened for a seventh consecutive month, according to S&P Global. The ISM Supplier Deliveries Index showed a continued slowing of deliveries to manufacturers in April. S&P Global noted a reduction in purchases by manufacturers adding to their stocks. That may reflect lower orders and additions of inputs manufactured overseas as high tariffs on China took effect in April. “Supply disruptions and cost concerns, again linked to tariffs, were widely noted,” S&P Global said in its April PMI report. One of the few bright spots for US manufacturers was a gain in new sales from customers switching from imports to goods produced in US-based factories, Williamson said. However, “any such sales increase was countered by worries over tariff-related disruptions to supply chains and lost export sales,” he said. The US Federal Reserve System also found the US economy struggling to gain traction in April. “Uncertainty around international trade policy was pervasive,” the Fed said in its Beige Book economic report for the month, released in early May. Just five of the 12 Federal Reserve districts covered by the report saw slight growth in economic activity, while three districts saw little change and four reported slight to modest declines. “Manufacturing was mixed, but two-thirds of districts said activity was little changed or had declined” from the previous month, the Fed said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Supply chain

Manufacturing malaise clouds outlook for US industrial freight

<div class="phx-topic abstract-wrapper">There remains no guarantee of safety for ships, crew and cargo passing through the waterway, which means it would likely be out of bounds for the rest of the year, says CEO Vincent Clerc.</div>

There remains no guarantee of safety for ships, crew and cargo passing through the waterway, which means it would likely be out of bounds for the rest of the year, says CEO Vincent Clerc.

<div class="phx-topic">Maersk has ruled out a return to Red Sea transits this year despite an assertion from US President Donald Trump this week that Houthi militants in Yemen “have capitulated” and agreed to stop attacks on commercial shipping in the region. CEO Vincent Clerc told analysts on a first-quarter earnings call Thursday that it would not be responsible to return to the Red Sea and Suez Canal when there were no guarantees over the safety of crew, ships and cargo. That means Maersk vessels will continue to divert around southern Africa. “If the US will stop bombing (the Houthi), that's good,” Clerc said. “Whether this means there is not only safety today, but safety for the foreseeable future for us sending our colleagues, our assets and our customers’ cargo through the Red Sea again, we're pretty far from that threshold.” Trump on Tuesday said <a href="https://www.joc.com/article/apparent-houthi-ceasefire-raises-container-shipping-overcapacity-risk-5999930">the Houthi had “capitulated”</a> and that the US would suspend its aerial strikes on militant positions in Yemen. “They just don't want to fight,” Trump told reporters. “We will honor that, and we will stop the bombings. But, more importantly, we will take their word. They say they will not be blowing up ships anymore and that's what the purpose of what we were doing." Ocean carriers have been forced to divert around the Cape of Good Hope for the past 18 months to avoid missile and drone attacks launched by the Houthi from southern Yemen. The militants have said the attacks were a show of solidarity for Gaza amid the Israel-Hamas war. A Houthi official told Reuters the US and Houthis had agreed to "no longer target each other," but that attacks on Israel would continue. However, a Houthi media statement issued late Wednesday, just a day after the Trump ceasefire announcement, claimed the militants had conducted an attack against the US aircraft carrier Harry S. Truman and its support vessels. <h3>Red Sea return ‘not responsible’ </h3>Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global Market Intelligence, said the US-Houthi ceasefire announcement represented “a pragmatic, limited de-escalation rather than a pathway toward comprehensive peace.” “The Houthis are likely to use any relative pause in US bombing to rearm and rebuild infrastructure that has been targeted over the course of the existing campaign that began on March 15,” Kennedy said in a customer brief this week. “Houthi targeting and identification of vessels it accuses of supporting Israel has previously, in our view, been inconsistent and based on incomplete information, maintaining severe risks for shipping in transit due to misidentification,” he added. An Israel-Hamas ceasefire and the Houthis’ pledge to not attack commercial vessels was announced in January, but did not provide enough certainty to most container lines to restart their Suez Canal sailings. Clerc said the strong link between Houthi attacks and the Gaza war, which he said was worsening, and the lack of any formal structure to this week’s US-Houthi ceasefire claim by the White House, rendered the chances of a return of shipping to the Red Sea this year "very, very low.” “Going through something as complex, costly and hard to reverse as a complete redeployment of our shipping networks back through the Red Sea based on news of a deal whose contour we don't understand, whose terms we don't understand, and which has been breached already, I think is really not responsible,” he said. The carrier’s Gemini Cooperation partner Hapag-Lloyd said its position on sailing through the Red Sea also remained unchanged following the comments by Trump. “There is not much we can say at this point other than that we will continue to closely monitor and analyze the latest developments and their impact on the security situation in the Red Sea,” Hapag-Lloyd spokesperson Tim Seifert told the Journal of Commerce. “Otherwise, the following applies unchanged: We will return to the Red Sea when it is safe to do so.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Maersk has ruled out a return to Red Sea transits this year despite an assertion from US President Donald Trump this week that Houthi militants in Yemen “have capitulated” and agreed to stop attacks on commercial shipping in the region. CEO Vincent Clerc told analysts on a first-quarter earnings call Thursday that it would not be responsible to return to the Red Sea and Suez Canal when there were no guarantees over the safety of crew, ships and cargo. That means Maersk vessels will continue to divert around southern Africa. “If the US will stop bombing (the Houthi), that's good,” Clerc said. “Whether this means there is not only safety today, but safety for the foreseeable future for us sending our colleagues, our assets and our customers’ cargo through the Red Sea again, we're pretty far from that threshold.” Trump on Tuesday said the Houthi had “capitulated” and that the US would suspend its aerial strikes on militant positions in Yemen. “They just don't want to fight,” Trump told reporters. “We will honor that, and we will stop the bombings. But, more importantly, we will take their word. They say they will not be blowing up ships anymore and that's what the purpose of what we were doing." Ocean carriers have been forced to divert around the Cape of Good Hope for the past 18 months to avoid missile and drone attacks launched by the Houthi from southern Yemen. The militants have said the attacks were a show of solidarity for Gaza amid the Israel-Hamas war. A Houthi official told Reuters the US and Houthis had agreed to "no longer target each other," but that attacks on Israel would continue. However, a Houthi media statement issued late Wednesday, just a day after the Trump ceasefire announcement, claimed the militants had conducted an attack against the US aircraft carrier Harry S. Truman and its support vessels. Red Sea return ‘not responsible’ Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligence, said the US-Houthi ceasefire announcement represented “a pragmatic, limited de-escalation rather than a pathway toward comprehensive peace.” “The Houthis are likely to use any relative pause in US bombing to rearm and rebuild infrastructure that has been targeted over the course of the existing campaign that began on March 15,” Kennedy said in a customer brief this week. “Houthi targeting and identification of vessels it accuses of supporting Israel has previously, in our view, been inconsistent and based on incomplete information, maintaining severe risks for shipping in transit due to misidentification,” he added. An Israel-Hamas ceasefire and the Houthis’ pledge to not attack commercial vessels was announced in January, but did not provide enough certainty to most container lines to restart their Suez Canal sailings. Clerc said the strong link between Houthi attacks and the Gaza war, which he said was worsening, and the lack of any formal structure to this week’s US-Houthi ceasefire claim by the White House, rendered the chances of a return of shipping to the Red Sea this year "very, very low.” “Going through something as complex, costly and hard to reverse as a complete redeployment of our shipping networks back through the Red Sea based on news of a deal whose contour we don't understand, whose terms we don't understand, and which has been breached already, I think is really not responsible,” he said. The carrier’s Gemini Cooperation partner Hapag-Lloyd said its position on sailing through the Red Sea also remained unchanged following the comments by Trump. “There is not much we can say at this point other than that we will continue to closely monitor and analyze the latest developments and their impact on the security situation in the Red Sea,” Hapag-Lloyd spokesperson Tim Seifert told the Journal of Commerce. “Otherwise, the following applies unchanged: We will return to the Red Sea when it is safe to do so.” Contact Greg Knowler at greg.knowler@spglobal.com .

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US-Houthi ceasefire claim not sufficient for carrier return to Red Sea: Maersk

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

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Shippers save money, time with automated transportation bidding tools

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

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