<div class="phx-topic abstract-wrapper">India wants port authorities to lower rail handling charges to draw more truckloads onto intermodal trains.</div>

India wants port authorities to lower rail handling charges to draw more truckloads onto intermodal trains.

<div>India’s Ministry of Shipping said port authorities should make rail services “economically attractive,” lowering handling charges to draw more truckloads onto intermodal trains.“It is the policy of the government to increase the rail share and, accordingly, road and rail rates should be brought at par to facilitate modal shift,” a ministry official said, addressing a meeting at Jawaharlal Nehru Port Trust.In response, JNPT said it will soon seek approval from port regulator Tariff Authority for Major Ports, or TAMP, for a downward revision in rail handling charges to try to equalize the costs for shippers.“By giving such reduction in handling...

India’s Ministry of Shipping said port authorities should make rail services “economically attractive,” lowering handling charges to draw more truckloads onto intermodal trains. “It is the policy of the government to increase the rail share and, accordingly, road and rail rates should be brought at par to facilitate modal shift,” a ministry official said, addressing a meeting at Jawaharlal Nehru Port Trust. In response, JNPT said it will soon seek approval from port regulator Tariff Authority for Major Ports, or TAMP, for a downward revision in rail handling charges to try to equalize the costs for shippers. “By giving such reduction in handling charges, JNPT expects to increase the rail share to a level of 25 percent in the near future,” port officials said. For hinterland shippers, it’s currently cheaper to move freight over road than by rail, largely because of the excessive markup or profit margin that shipping lines have added to approved rail tariffs. For example, although public rail operator Container Corporation of India has a fixed rate of 52,000 Indian rupees (approximately $779) per 20-foot container from JNPT to the Tughlakabad inland depot near Delhi, container lines are charging shippers 92,000 Indian rupees for the same movement, according to port and railway officials. “Due to the high gross charges, shippers prefer to move their containers by road at a cost of around Rs. 56,000,” officials said. The ministry called on stakeholders to rework rail freight charges and ensure cost benefits are passed on to end-customers. JNPT loads the majority of containerized freight passing through India’s 12 major public ports, which together account for roughly 70 percent of the nation’s overall container trade. For the busiest port, which is crimped by inadequate landside infrastructure, a major shift of cargo away from trucks to the rails is essential to alleviate congestion and reduce container dwell times. To help facilitate the road-to-rail conversion of freight, JNPT in coordination with Concor earlier this year began allowing a rebate of 728 Indian rupees (about $11) per container on handling charges for movements from port railyards to off-site container freight stations. To speed up the processing of trains, authorities at JNPT are working toward opening a “common rail yard” for all terminals at the end of this month. An analysis of traffic statistics collected by JOC.com show roughly 80 percent of JNPT’s export and import cargo is currently carried by trucks. In fiscal year 2015 to 2016 through March, JNPT’s truckloads reached 3.6 million TEUs when the port handled a combined annual volume of 4.49 million TEUs. Intermodal rail infrastructure development is a top priority for the Prime Minister Narendra Modi's government as part of a larger scheme to upgrade port connectivity and ease growing pressure on land transport systems. To accelerate those efforts, the government has set up a separate company — Indian Port Rail Corp. — based on equity participation from major port authorities and Indian Railways. IPRCL has already been awarded contracts for 22 port-rail projects.

Rail News

India’s ports pressed to lower rail handling charges

<div class="phx-topic abstract-wrapper">Multiple carrier sources who spoke with the Journal of Commerce say refrigerated volumes from India to the US are already down by as much as 50% from the normal pattern for seafood trade.</div>

Multiple carrier sources who spoke with the Journal of Commerce say refrigerated volumes from India to the US are already down by as much as 50% from the normal pattern for seafood trade.

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<div class="phx-topic">Ocean carriers and freight forwarders out of India are reporting significant setbacks in reefer exports to the US as steep tariffs have created an increasingly unfavorable business environment. Indian perishables trades to the US primarily come from the seafood, frozen/packaged food and pharmaceutical industries. The market was initially hit by a 50% tariff effective Aug. 27, with the exception of pharmaceutical products. But the Indian drug industry has now also been targeted by US tariffs, though the full impact there is unknown in the absence of clarity. Multiple carrier sources who spoke with the Journal of Commerce agreed that India reefer volumes to the US are already down by 30% to 50% from the normal pattern for seafood export trade. Sources pegged India’s combined pre-tariff reefer trade to the US at about 750 FEUs a week. “We are seeing vulnerability in shrimp volumes....it could eventually lead to a more significant decline over time," said Bhavik Mota, Maersk’s director of regional ocean management for India, the Middle East and Africa. “The exports of goods such as pharmaceuticals are holding firm, but we will have to see which way it goes when the new tariff on pharma comes into force." Sanyukta Kulkarni, trade lane manager for the Indian subcontinent at global forwarder DSV, believes the downturn in India-US reefer volumes could become more pronounced in the coming months if there is no relief from the deep “tariff wounds.” “As a forwarder, we are starting to see the impact, but it’s not drastic at the moment as many importers have continued to fulfill their previously committed volumes with suppliers,” Kulkarni said. “Additionally, finding supply chain alternatives to match that scale will take time.” Forwarder sources explained that reefer bookings were expected to be strong between September and October as exporters typically try to rush shipments ahead of the onset of the local Hindu festival season of Diwali that involves extended holidays and factory production cutbacks and closures. <h3>Carriers adjust capacity to manage rates </h3>While reefer booking prices out of India have weakened, forwarders believe major carriers have been able to prevent a sharp fall by adjusting capacity via blank sailings and/or lower reefer plug allotments. Average freight-all-kinds (FAK) or contract rates for reefer loads from Nhava Sheva to New York now stand at $3,000 to $3,200 per FEU, a decline of up to $500 per FEU since early September, sources say. Amid the uncertainty, container lines are devising new strategies to support reefer trade out of India. Ocean Network Express (ONE) recently opened a dedicated intermodal reefer train service from Hyderabad in southern India – a hub for the Indian pharmaceutical industry – to Nhava Sheva Port in tandem with its US East Coast sailings. The US is the largest market for Indian pharmaceutical exports. And thanks to advanced reefer equipment management systems, including remote control capabilities, supply chains for that trade have dramatically consolidated on the ocean leg — 70% to 30% by air freight. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

Ocean carriers and freight forwarders out of India are reporting significant setbacks in reefer exports to the US as steep tariffs have created an increasingly unfavorable business environment. Indian perishables trades to the US primarily come from the seafood, frozen/packaged food and pharmaceutical industries. The market was initially hit by a 50% tariff effective Aug. 27, with the exception of pharmaceutical products. But the Indian drug industry has now also been targeted by US tariffs, though the full impact there is unknown in the absence of clarity. Multiple carrier sources who spoke with the Journal of Commerce agreed that India reefer volumes to the US are already down by 30% to 50% from the normal pattern for seafood export trade. Sources pegged India’s combined pre-tariff reefer trade to the US at about 750 FEUs a week. “We are seeing vulnerability in shrimp volumes....it could eventually lead to a more significant decline over time," said Bhavik Mota, Maersk’s director of regional ocean management for India, the Middle East and Africa. “The exports of goods such as pharmaceuticals are holding firm, but we will have to see which way it goes when the new tariff on pharma comes into force." Sanyukta Kulkarni, trade lane manager for the Indian subcontinent at global forwarder DSV, believes the downturn in India-US reefer volumes could become more pronounced in the coming months if there is no relief from the deep “tariff wounds.” “As a forwarder, we are starting to see the impact, but it’s not drastic at the moment as many importers have continued to fulfill their previously committed volumes with suppliers,” Kulkarni said. “Additionally, finding supply chain alternatives to match that scale will take time.” Forwarder sources explained that reefer bookings were expected to be strong between September and October as exporters typically try to rush shipments ahead of the onset of the local Hindu festival season of Diwali that involves extended holidays and factory production cutbacks and closures. Carriers adjust capacity to manage rates While reefer booking prices out of India have weakened, forwarders believe major carriers have been able to prevent a sharp fall by adjusting capacity via blank sailings and/or lower reefer plug allotments. Average freight-all-kinds (FAK) or contract rates for reefer loads from Nhava Sheva to New York now stand at $3,000 to $3,200 per FEU, a decline of up to $500 per FEU since early September, sources say. Amid the uncertainty, container lines are devising new strategies to support reefer trade out of India. Ocean Network Express (ONE) recently opened a dedicated intermodal reefer train service from Hyderabad in southern India – a hub for the Indian pharmaceutical industry – to Nhava Sheva Port in tandem with its US East Coast sailings. The US is the largest market for Indian pharmaceutical exports. And thanks to advanced reefer equipment management systems, including remote control capabilities, supply chains for that trade have dramatically consolidated on the ocean leg — 70% to 30% by air freight. Contact Bency Mathew at bencyvmathew@gmail.com.

Cool Cargo News

Maritime

Tariffs lead to sharp decline in Indian reefer exports to US: industry sources

<div class="phx-topic abstract-wrapper">As production shifts to counter the impact of US tariffs, the diversification of consumer markets will create new growth opportunities for the air freight industry, observers say.</div>

As production shifts to counter the impact of US tariffs, the diversification of consumer markets will create new growth opportunities for the air freight industry, observers say.

<div class="phx-topic">The widespread imposition of US tariffs has changed trade flows as manufacturers take a “US-plus one” approach to production, driving a diversification of air cargo trade lanes that spells good news for the industry, the head of The International Air Cargo Association says. Tiaca Director-General Glyn Hughes told an air cargo webinar hosted by rate benchmarking platform Xeneta Thursday that carriers were agile enough to respond quickly to big geographical changes in demand driven by US policy and deploy the required capacity appropriately. ”Over the last few years, we’ve heard ‘China-plus’ one from a production perspective to diversify supply chain risks, and we’re now hearing much more about ‘US-plus’ one from a consumption perspective,” Hughes said. “We will see a lot more production shifts to parts of Southeast Asia and a diversification of consumer markets under those conditions, and more areas of production and more areas of increasing consumption is really good for air cargo,” he added. The shift in air cargo trade lanes was a result of the May 2 removal by the White House of the “de minimis” exemption from duties on Chinese imports valued at under $800. Dozens of daily freighters serving the massive trans-Pacific demand for e-commerce were no longer required, forcing airlines to urgently look for new markets. But as quickly as US demand for Chinese e-commerce plummeted, giant online platforms Temu and Shein shifted their estimated billion-dollar marketing budget from the US to Europe, providing employment for the fleet of no-longer-surplus freighters. “The Chinese online platforms were able to decide, nearly overnight, instead of spending a billion dollars of advertising in the US, it was moved to Europe and we started buying, shifting (air cargo) capacity all the way from the trans-Pacific into Europe as a result,” said Niall van de Wouw, chief air freight officer at Xeneta. “It was done so effectively that the rates have remained fairly stable despite tremendous fluctuations with a massive increase in volumes into Europe and a decrease in volumes into the US. I find this astounding,” van de Wouw told the Xeneta webinar. <h3>Muted activity on trans-Pacific </h3>Global air cargo spot rates registered a fifth consecutive month of year-over-year declines in September, falling 4% to an average of $2.54 per kilogram, according to Xeneta. Much of the downward pressure came from muted activity on trans-Atlantic and trans-Pacific routes, where repeated extensions of US tariff deadlines appear to have pulled forward volumes into the summer months. While rates declined globally, average outbound Shanghai–Europe rates from May through September were flat year over year at $4.20/kg, while average Shanghai-Chicago rates for the same period were down 9% at $5.10/kg, Baltic Air Index (BAI) data showed. In a market update Friday, Cargo Facts Consulting noted that with the global de minimis repeal now in effect and the US-China 90-day tariff truce set to expire in November, demand patterns remained highly uncertain, with tactical redeployments of freighter aircraft continuing to shape capacity. <h3>US policy diverting trade </h3>Tiaca’s Hughes said the shifting of air freight capacity will not be limited to e-commerce developments as the uncertainties around doing business with the US spill over into other sectors. “We're going to see other industries saying the potential volatility of moving freight to the US market could be too fractured or too risky where all of a sudden your cargo, whether it goes by air or ocean, could be hit with a 25%, 40%, 50% tariff, which makes it uneconomic and too risky to produce and send,” Hughes told the Xeneta webinar. Cargo Facts Consulting noted in its update that global trade momentum was positive, but the composition has shifted with e-commerce and time-sensitive components gaining market share of air cargo, while discretionary consumer electronics tied to China–US flows have remained under pressure. “The policy backdrop is prompting strategies that prioritize flexibility, additional entry points and country-of-origin diversification,” Cargo Facts said. In its fourth quarter outlook, the consultancy expects continued volatility into the peak season as the US removal of the de minimis exemption collides with reduced winter airline schedules and incremental net freighter growth. “Asia–Europe should remain the relative outperformer, supported by e-commerce, postal-parcel re-routing and alternative sourcing from North and Southeast Asia,” the Cargo Facts outlook noted. “Trans-Pacific strength will depend on how quickly platforms and consolidators adapt labeling, screening and routing to the new US requirements.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

The widespread imposition of US tariffs has changed trade flows as manufacturers take a “US-plus one” approach to production, driving a diversification of air cargo trade lanes that spells good news for the industry, the head of The International Air Cargo Association says. Tiaca Director-General Glyn Hughes told an air cargo webinar hosted by rate benchmarking platform Xeneta Thursday that carriers were agile enough to respond quickly to big geographical changes in demand driven by US policy and deploy the required capacity appropriately. ”Over the last few years, we’ve heard ‘China-plus’ one from a production perspective to diversify supply chain risks, and we’re now hearing much more about ‘US-plus’ one from a consumption perspective,” Hughes said. “We will see a lot more production shifts to parts of Southeast Asia and a diversification of consumer markets under those conditions, and more areas of production and more areas of increasing consumption is really good for air cargo,” he added. The shift in air cargo trade lanes was a result of the May 2 removal by the White House of the “de minimis” exemption from duties on Chinese imports valued at under $800. Dozens of daily freighters serving the massive trans-Pacific demand for e-commerce were no longer required, forcing airlines to urgently look for new markets. But as quickly as US demand for Chinese e-commerce plummeted, giant online platforms Temu and Shein shifted their estimated billion-dollar marketing budget from the US to Europe, providing employment for the fleet of no-longer-surplus freighters. “The Chinese online platforms were able to decide, nearly overnight, instead of spending a billion dollars of advertising in the US, it was moved to Europe and we started buying, shifting (air cargo) capacity all the way from the trans-Pacific into Europe as a result,” said Niall van de Wouw, chief air freight officer at Xeneta. “It was done so effectively that the rates have remained fairly stable despite tremendous fluctuations with a massive increase in volumes into Europe and a decrease in volumes into the US. I find this astounding,” van de Wouw told the Xeneta webinar. Muted activity on trans-Pacific Global air cargo spot rates registered a fifth consecutive month of year-over-year declines in September, falling 4% to an average of $2.54 per kilogram, according to Xeneta. Much of the downward pressure came from muted activity on trans-Atlantic and trans-Pacific routes, where repeated extensions of US tariff deadlines appear to have pulled forward volumes into the summer months. While rates declined globally, average outbound Shanghai–Europe rates from May through September were flat year over year at $4.20/kg, while average Shanghai-Chicago rates for the same period were down 9% at $5.10/kg, Baltic Air Index (BAI) data showed. In a market update Friday, Cargo Facts Consulting noted that with the global de minimis repeal now in effect and the US-China 90-day tariff truce set to expire in November, demand patterns remained highly uncertain, with tactical redeployments of freighter aircraft continuing to shape capacity. US policy diverting trade Tiaca’s Hughes said the shifting of air freight capacity will not be limited to e-commerce developments as the uncertainties around doing business with the US spill over into other sectors. “We're going to see other industries saying the potential volatility of moving freight to the US market could be too fractured or too risky where all of a sudden your cargo, whether it goes by air or ocean, could be hit with a 25%, 40%, 50% tariff, which makes it uneconomic and too risky to produce and send,” Hughes told the Xeneta webinar. Cargo Facts Consulting noted in its update that global trade momentum was positive, but the composition has shifted with e-commerce and time-sensitive components gaining market share of air cargo, while discretionary consumer electronics tied to China–US flows have remained under pressure. “The policy backdrop is prompting strategies that prioritize flexibility, additional entry points and country-of-origin diversification,” Cargo Facts said. In its fourth quarter outlook, the consultancy expects continued volatility into the peak season as the US removal of the de minimis exemption collides with reduced winter airline schedules and incremental net freighter growth. “Asia–Europe should remain the relative outperformer, supported by e-commerce, postal-parcel re-routing and alternative sourcing from North and Southeast Asia,” the Cargo Facts outlook noted. “Trans-Pacific strength will depend on how quickly platforms and consolidators adapt labeling, screening and routing to the new US requirements.” Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Forwarder News

Air Cargo Carriers News

Air Cargo

Post-tariff air freight market diversifies into ‘US-plus one’ strategy: Tiaca

<div class="phx-topic abstract-wrapper">The vagueness of China’s potential retaliation against the US puts not just US-flag vessels under threat, but also any individuals and organizations accused of harming Beijing’s shipping interests.</div>

The vagueness of China’s potential retaliation against the US puts not just US-flag vessels under threat, but also any individuals and organizations accused of harming Beijing’s shipping interests.

<div class="phx-topic">Halifax — Container lines are bracing for potentially getting caught in the crossfire between China and the United States over new US port fees that will take effect in two weeks unless the White House provides concessions. While ocean carriers, aside from China-based lines, <a href="https://www.joc.com/article/chinese-tonnage-moving-out-of-us-container-trade-ahead-of-new-fees-xeneta-6081320">have made moves to avoid the new fees</a> that start Oct. 14, China’s warning of retaliatory action against the US earlier this week reinjects uncertainty on the US trades. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6090908_0.1.jpg"></img></div>China on Sunday <a href="https://www.joc.com/article/china-flexes-maritime-power-in-response-to-coming-us-port-fee-6088252">implemented changes to its shipping law</a> allowing it to levy its own special fees and restrict vessels of countries accused of targeting its shipping operations. But the amendment doesn’t specify how China would determine whether a ship is considered to originate from the offending country. Such vague language means China could target not just US-flag vessels operated by Matson, but any vessel it determines was receiving US support, executives from two container lines told the Journal of Commerce. The sources, who did not want to be identified, said they expected the Trump administration to grant concessions to China-based carriers Cosco, its subsidiary OOCL and Hong Kong-based niche carrier Hede. However, the scale of the threat to operations and the unpredictability of the White House force all ocean carriers to prepare for the worst. <h3>‘Sky is basically the limit’ for China retaliation </h3>China’s “shot across the bow” in the form of the shipping law change allows the country to also target individuals and organizations, not just container operators, Lars Jensen, maritime analyst and Journal of Commerce contributor, told an industry event in Halifax on Wednesday. “This would impact Matson dramatically, which indirectly, would impact the services between the US mainland and Hawaii, and with the vague language that they reserve the right to go after individuals or organizations, well, then the sky is basically the limit,” Jensen said at the Halifax Supply Chain Forum. Maersk and CMA CGM also operate US-flag fleets. Cosco, OOCL and Hede are subject to higher US port fees than their peers but will remain serving the Asia-US trades. A Hede representative told the Journal of Commerce that reports it was suspending its expedited service were incorrect. Cosco, <a href="https://www.joc.com/article/cosco-says-no-changes-to-us-services-as-new-port-fees-approach-6082151">which told its US customers to expect little change in its services and rates</a>, has removed 52,000 TEUs in China-built tonnage since April and currently has about 215,000 TEUs on capacity deployed on US trades, according to an analysis by benchmarking platform Xeneta. On the Asia-US trade, China-built tonnage accounts for 499,000 TEUs, or 15% of the trade. Cosco and OOCL together handle the largest share of US imports from Asia, shipping nearly 16% of laden Asia imports in August. The US Trade Representative’s port fee plan was unveiled in February, just two months after the office concluded an investigation that determined China unfairly subsidizes its shipbuilding industry. The speed of the new US port fees — in place in less than 10 months — should give the industry pause, particularly in light of the Federal Maritime Commission’s current investigation into abuse of flags of convenience. “So the question is, then, what action will the US government take? Will we see restrictions facing flag states?,” Jensen said. “We certainly don’t know. But it seems very certain that [the White House will act] at some point during 2026.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Halifax — Container lines are bracing for potentially getting caught in the crossfire between China and the United States over new US port fees that will take effect in two weeks unless the White House provides concessions. While ocean carriers, aside from China-based lines, have made moves to avoid the new fees that start Oct. 14, China’s warning of retaliatory action against the US earlier this week reinjects uncertainty on the US trades. China on Sunday implemented changes to its shipping law allowing it to levy its own special fees and restrict vessels of countries accused of targeting its shipping operations. But the amendment doesn’t specify how China would determine whether a ship is considered to originate from the offending country. Such vague language means China could target not just US-flag vessels operated by Matson, but any vessel it determines was receiving US support, executives from two container lines told the Journal of Commerce. The sources, who did not want to be identified, said they expected the Trump administration to grant concessions to China-based carriers Cosco, its subsidiary OOCL and Hong Kong-based niche carrier Hede. However, the scale of the threat to operations and the unpredictability of the White House force all ocean carriers to prepare for the worst. ‘Sky is basically the limit’ for China retaliation China’s “shot across the bow” in the form of the shipping law change allows the country to also target individuals and organizations, not just container operators, Lars Jensen, maritime analyst and Journal of Commerce contributor, told an industry event in Halifax on Wednesday. “This would impact Matson dramatically, which indirectly, would impact the services between the US mainland and Hawaii, and with the vague language that they reserve the right to go after individuals or organizations, well, then the sky is basically the limit,” Jensen said at the Halifax Supply Chain Forum. Maersk and CMA CGM also operate US-flag fleets. Cosco, OOCL and Hede are subject to higher US port fees than their peers but will remain serving the Asia-US trades. A Hede representative told the Journal of Commerce that reports it was suspending its expedited service were incorrect. Cosco, which told its US customers to expect little change in its services and rates , has removed 52,000 TEUs in China-built tonnage since April and currently has about 215,000 TEUs on capacity deployed on US trades, according to an analysis by benchmarking platform Xeneta. On the Asia-US trade, China-built tonnage accounts for 499,000 TEUs, or 15% of the trade. Cosco and OOCL together handle the largest share of US imports from Asia, shipping nearly 16% of laden Asia imports in August. The US Trade Representative’s port fee plan was unveiled in February, just two months after the office concluded an investigation that determined China unfairly subsidizes its shipbuilding industry. The speed of the new US port fees — in place in less than 10 months — should give the industry pause, particularly in light of the Federal Maritime Commission’s current investigation into abuse of flags of convenience. “So the question is, then, what action will the US government take? Will we see restrictions facing flag states?,” Jensen said. “We certainly don’t know. But it seems very certain that [the White House will act] at some point during 2026.” Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container lines

Trans-Pacific

Container Shipping News

China’s port fee warning to US puts ocean carriers on edge

<div class="phx-topic abstract-wrapper">The Class I railroad says the real entity behind the complaint is Norfolk Southern’s merger partner Union Pacific, which CPKC says has been delivering trains too long to safely operate. </div>

The Class I railroad says the real entity behind the complaint is Norfolk Southern’s merger partner Union Pacific, which CPKC says has been delivering trains too long to safely operate.

<div class="phx-topic">Canadian Pacific Kansas City (CPKC) shot down a complaint from Norfolk Southern (NS) that alleged CPKC is throttling access on a jointly owned track in the US Southeast, saying NS’ merger partner Union Pacific is ignoring the track’s safety protocols on the length of train blocks. CPKC said in a statement to the Journal of Commerce that it plans a detailed response to a filing NS made Tuesday with the US Surface Transportation Board (STB) regarding operation of <a href="https://www.joc.com/article/a-merged-cp-kcs-would-offer-new-cross-border-intermodal-growth-ramp-5250376">the Meridian Speedway</a>, a 320-mile track between Shreveport, Louisiana. and Meridian, Mississippi. The letter claimed that CPKC, <a href="https://www.joc.com/article/us-regulators-approve-cp-kcs-merger-to-form-first-us-canada-mexico-rail-5192986">the track’s majority owner and operator</a>, is failing to provide on-time service to NS, which has haulage rights on Meridian as its minority owner. It said two-thirds of CPKC trains hauling NS intermodal freight are behind schedule, pushing up to 100,000 loads to trucks. NS is asking the STB to require an action plan from CPKC that will address crew availability and how it will improve train speeds on the Meridian. “There has been a substantial deterioration in intermodal train service ... which has affected traffic to multiple intermodal customers, some of whom have diverted their traffic from rail service to trucks,” NS’ letter said. CPKC said in its statement that it is “preparing a detailed response to refute these misleading claims and representations” and that the railroad “has lived up to its commitments” that were part of the STB’s approval for Canadian Pacific’s takeover of Kansas City Southern. CPKC said it recently told Union Pacific (UP), which also ships freight on Meridian through its interchange agreements with NS, that UP’s train blocks are too long by some 2,500 feet. That length exceeds the design length for sidings on the single-track route, CPKC said. The railroad said that the shorter train lengths are outlined in Meridian’s operating agreement and benefit all customers through faster speeds and reliability, “We understand that delivering shorter trains at Shreveport requires adjustments by UP when it builds it trains out west,” CPKC said. “It is our responsibility in safely and efficiently operating the Speedway to ensure our customers’ interests are weighed and protected fairly as well, not only just what UP believes is in their best interest.” <h3>UPS, FedEx major Meridian customers </h3>Meridian is a key rail gateway to the Southeast, with UPS and FedEx both major customers for eastbound parcel traffic to Atlanta. According to one source familiar with matter, UPS has been having to truck its eastbound parcels since August due to the disruption. Speaking in Chicago Wednesday at the Journal of Commerce Inland Distribution conference, UP Chief Executive Jim Vena said <a href="https://www.joc.com/article/inland-25-ns-merger-wont-limit-access-to-other-railroads-up-ceo-6090216">Meridian was routinely handling train blocks exceeding 11,000 feet under Kansas City Southern</a>. But CPKC has now throttled those blocks down to 8,000 feet. While UP did not raise the issue with the STB because it’s not a party to Meridian’s operation, Vena said his company also addressed the matter in a letter directly to CPKC. He said UP would have more leverage in the matter due to the access it grants CPKC trains on tracks to Mexico. “They [CPKC] need to have a ‘come-to-Jesus’ moment,” Vena said. “All of a sudden you wake and then you tell me that you’re short of crews? Well, you’re short of crews because you decided not to run this 11,000-foot train that you always used to be able to run.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Canadian Pacific Kansas City (CPKC) shot down a complaint from Norfolk Southern (NS) that alleged CPKC is throttling access on a jointly owned track in the US Southeast, saying NS’ merger partner Union Pacific is ignoring the track’s safety protocols on the length of train blocks. CPKC said in a statement to the Journal of Commerce that it plans a detailed response to a filing NS made Tuesday with the US Surface Transportation Board (STB) regarding operation of the Meridian Speedway , a 320-mile track between Shreveport, Louisiana. and Meridian, Mississippi. The letter claimed that CPKC, the track’s majority owner and operator , is failing to provide on-time service to NS, which has haulage rights on Meridian as its minority owner. It said two-thirds of CPKC trains hauling NS intermodal freight are behind schedule, pushing up to 100,000 loads to trucks. NS is asking the STB to require an action plan from CPKC that will address crew availability and how it will improve train speeds on the Meridian. “There has been a substantial deterioration in intermodal train service ... which has affected traffic to multiple intermodal customers, some of whom have diverted their traffic from rail service to trucks,” NS’ letter said. CPKC said in its statement that it is “preparing a detailed response to refute these misleading claims and representations” and that the railroad “has lived up to its commitments” that were part of the STB’s approval for Canadian Pacific’s takeover of Kansas City Southern. CPKC said it recently told Union Pacific (UP), which also ships freight on Meridian through its interchange agreements with NS, that UP’s train blocks are too long by some 2,500 feet. That length exceeds the design length for sidings on the single-track route, CPKC said. The railroad said that the shorter train lengths are outlined in Meridian’s operating agreement and benefit all customers through faster speeds and reliability, “We understand that delivering shorter trains at Shreveport requires adjustments by UP when it builds it trains out west,” CPKC said. “It is our responsibility in safely and efficiently operating the Speedway to ensure our customers’ interests are weighed and protected fairly as well, not only just what UP believes is in their best interest.” UPS, FedEx major Meridian customers Meridian is a key rail gateway to the Southeast, with UPS and FedEx both major customers for eastbound parcel traffic to Atlanta. According to one source familiar with matter, UPS has been having to truck its eastbound parcels since August due to the disruption. Speaking in Chicago Wednesday at the Journal of Commerce Inland Distribution conference, UP Chief Executive Jim Vena said Meridian was routinely handling train blocks exceeding 11,000 feet under Kansas City Southern . But CPKC has now throttled those blocks down to 8,000 feet. While UP did not raise the issue with the STB because it’s not a party to Meridian’s operation, Vena said his company also addressed the matter in a letter directly to CPKC. He said UP would have more leverage in the matter due to the access it grants CPKC trains on tracks to Mexico. “They [CPKC] need to have a ‘come-to-Jesus’ moment,” Vena said. “All of a sudden you wake and then you tell me that you’re short of crews? Well, you’re short of crews because you decided not to run this 11,000-foot train that you always used to be able to run.” Contact Michael Angell at michael.angell@spglobal.com .

Intermodal providers

Surface

CPKC pushes back on NS complaint over Meridian track access

<div class="phx-topic abstract-wrapper">The large-scale effort involving the carrier’s time-charter fleet is a tacit acknowledgement of the immense challenges of the energy transition facing the maritime industry.</div>

The large-scale effort involving the carrier’s time-charter fleet is a tacit acknowledgement of the immense challenges of the energy transition facing the maritime industry.

<div class="phx-topic">Maersk on Thursday announced a 200-ship retrofit program of its time-charter fleet to reduce slot costs through improved fuel efficiency and greater carrying capacity, generating cost savings and lowering greenhouse gas emissions. The large-scale effort is a tacit acknowledgement of the immense challenges of the energy transition and the scaling up of alternative fuels necessary to meet the maritime industry’s net-zero targets. “While fuel transition is needed to reach our long-term goal of net-zero emissions by 2040, investments in existing fleet efficiency enhancement technologies is a powerful tool to gain significant emissions reductions in the short term,” Ahmed Hassan, head of asset strategy and strategic partnerships at Maersk, said in a statement. “This strong emphasis on efficiency measures can deliver tangible progress towards our 2030 goal,” Hassan added. “That goes for owned as well as chartered vessels.” More than 1,500 individual retrofit projects involving 50 different shipowners, with another 1,000 projects scheduled for 2027, are aimed at helping the carrier meet its short-term decarbonization goals. Maersk has set a target of a 35% absolute reduction in Scope 1 emissions by 2030 compared with the 2022 baseline year. Maersk did not disclose the cost of the retrofits but said the investments will be split between the carrier and the vessel owners. “Our medium- and long-term chartered fleet makes up a significant proportion of our operations as well as of our total fuel consumption,” Hassan said. “By working closely with our partners, we aim to implement solutions that not only reduce emissions but also enhance the overall competitiveness of our fleet. “Fleet renewal is often seen as new vessels replacing the old, but it is also about ensuring your existing vessels keep their competitive edge,” he added. <h3>Range of solutions rolled out </h3>The scale of Maersk’s project, which covers vessels of different sizes and configurations, requires varying retrofit tools. Many of the 200 vessels being retrofitted will have their bulbous bow replaced to reduce drag and enhance hydrodynamic efficiency, ultimately lowering fuel consumption. Other retrofit solutions include the replacement of propellers that will maximize thrust while minimizing energy loss, reducing reliance on fuel oil-fired boilers, and the installation of shaft generator systems that cut down auxiliary engine usage. Cargo-carrying capacity is also being enhanced through a range of structural and technical improvements, such as elevating the wheelhouse to improve line of sight and increase intake, raising the lashing bridges, strengthening the vessel’s deadweight capacity for deeper drafts, and upgrading both lashing systems and loading computer functionalities. “Many of these ships were designed and constructed at a time when container vessels in general were sailing at faster speeds,” Anda Cristescu, head of chartering and newbuilding at Maersk, said in the carrier’s statement. “To bring down fuel consumption, we have over the years introduced less compressed vessel schedules, but the propellers and bulbs optimized for faster speeds have been kept. There lies a big efficiency potential in replacing them,” she added. Maersk has maintained its fleet at just over 4 million TEUs for several years, a capacity it regards as “optimal.” The carrier last December made a 20-ship order totaling 300,000 TEUs with delivery scheduled for 2028, but said the new vessels will replace older tonnage. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Maersk on Thursday announced a 200-ship retrofit program of its time-charter fleet to reduce slot costs through improved fuel efficiency and greater carrying capacity, generating cost savings and lowering greenhouse gas emissions. The large-scale effort is a tacit acknowledgement of the immense challenges of the energy transition and the scaling up of alternative fuels necessary to meet the maritime industry’s net-zero targets. “While fuel transition is needed to reach our long-term goal of net-zero emissions by 2040, investments in existing fleet efficiency enhancement technologies is a powerful tool to gain significant emissions reductions in the short term,” Ahmed Hassan, head of asset strategy and strategic partnerships at Maersk, said in a statement. “This strong emphasis on efficiency measures can deliver tangible progress towards our 2030 goal,” Hassan added. “That goes for owned as well as chartered vessels.” More than 1,500 individual retrofit projects involving 50 different shipowners, with another 1,000 projects scheduled for 2027, are aimed at helping the carrier meet its short-term decarbonization goals. Maersk has set a target of a 35% absolute reduction in Scope 1 emissions by 2030 compared with the 2022 baseline year. Maersk did not disclose the cost of the retrofits but said the investments will be split between the carrier and the vessel owners. “Our medium- and long-term chartered fleet makes up a significant proportion of our operations as well as of our total fuel consumption,” Hassan said. “By working closely with our partners, we aim to implement solutions that not only reduce emissions but also enhance the overall competitiveness of our fleet. “Fleet renewal is often seen as new vessels replacing the old, but it is also about ensuring your existing vessels keep their competitive edge,” he added. Range of solutions rolled out The scale of Maersk’s project, which covers vessels of different sizes and configurations, requires varying retrofit tools. Many of the 200 vessels being retrofitted will have their bulbous bow replaced to reduce drag and enhance hydrodynamic efficiency, ultimately lowering fuel consumption. Other retrofit solutions include the replacement of propellers that will maximize thrust while minimizing energy loss, reducing reliance on fuel oil-fired boilers, and the installation of shaft generator systems that cut down auxiliary engine usage. Cargo-carrying capacity is also being enhanced through a range of structural and technical improvements, such as elevating the wheelhouse to improve line of sight and increase intake, raising the lashing bridges, strengthening the vessel’s deadweight capacity for deeper drafts, and upgrading both lashing systems and loading computer functionalities. “Many of these ships were designed and constructed at a time when container vessels in general were sailing at faster speeds,” Anda Cristescu, head of chartering and newbuilding at Maersk, said in the carrier’s statement. “To bring down fuel consumption, we have over the years introduced less compressed vessel schedules, but the propellers and bulbs optimized for faster speeds have been kept. There lies a big efficiency potential in replacing them,” she added. Maersk has maintained its fleet at just over 4 million TEUs for several years, a capacity it regards as “optimal.” The carrier last December made a 20-ship order totaling 300,000 TEUs with delivery scheduled for 2028, but said the new vessels will replace older tonnage. Contact Greg Knowler at greg.knowler@spglobal.com .

Maersk launches massive retrofit drive to boost vessel fuel efficiency

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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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