<div class="phx-topic abstract-wrapper">OOCL confirmed Tuesday that it has been using low sulfur fuel in Hong Kong since the beginning of the year as part of the Fair Winds Charter, a voluntary shipping industry initiative.
 
</div>

OOCL confirmed Tuesday that it has been using low sulfur fuel in Hong Kong since the beginning of the year as part of the Fair Winds Charter, a voluntary shipping industry initiative.

<div>OOCL confirmed Tuesday that it has been using low sulfur fuel in Hong Kong since the beginning of the year as part of the Fair Winds Charter, a voluntary shipping industry initiative. OOCL vessels switched to using fuel with 0.5 percent or less sulfur content in their auxiliary engines while at berth in Hong Kong starting Jan. 1, 2010. The Fair Winds Charter initiative has been facilitated by the Hong Kong Liner Shipping Association, Hong Kong Shipowners Association, and Civic Exchange (a Hong Kong-based independent think tank). By The Numbers: <a>U.S. Container Trade With Mainland China</a>. “As a Hong Kong-based...

OOCL confirmed Tuesday that it has been using low sulfur fuel in Hong Kong since the beginning of the year as part of the Fair Winds Charter, a voluntary shipping industry initiative. OOCL vessels switched to using fuel with 0.5 percent or less sulfur content in their auxiliary engines while at berth in Hong Kong starting Jan. 1, 2010. The Fair Winds Charter initiative has been facilitated by the Hong Kong Liner Shipping Association, Hong Kong Shipowners Association, and Civic Exchange (a Hong Kong-based independent think tank). By The Numbers: U.S. Container Trade With Mainland China . “As a Hong Kong-based container shipping company, we believe this voluntary initiative conveys our absolute dedication and commitment to cleaning up the air in Hong Kong,” said OOCL Director of Corporate Planning, Stephen Ng. “With some 1,000 vessel calls in Hong Kong every year, we estimate this action will lower harmful sulfur emissions by more than 80 percent,” Ng said. Ng said OOCL customers can take advantage of environmentally-friendly services as a way of meeting their sustainable supply chain commitments. OOCL said the voluntary Fair Winds Charter is the latest in a string of environmental initiatives it has taken in 2010. OOCL’s parent company Orient Overseas (International) Ltd was admitted as a constituent member of the Hang Seng Corporate Sustainability Index in July 2010, and OOCL launched its Carbon Calculator in April 2010. OOCL said it also participates in various voluntary initiatives in North America, including 100 percent compliance with both the Port of Long Beach Green Flag Voluntary Speed Reduction Program and the Port of Los Angeles Vessel Speed Reduction program. Since 2008, OOCL also voluntarily slow steams and avoids the migration paths of the North Atlantic Right Whales. -- Contact Peter T. Leach at pleach@joc.com .

Maritime

Container lines

Forwarding

OOCL Using Low-Sulfur Fuel in Hong Kong

<div class="phx-topic abstract-wrapper">TRAC Intermodal, DCLI and FlexiVan Leasing began unstacking chassis shortly after the Trump administration last month announced a 90-day pause on the 145% tariffs on Chinese imports.</div>

TRAC Intermodal, DCLI and FlexiVan Leasing began unstacking chassis shortly after the Trump administration last month announced a 90-day pause on the 145% tariffs on Chinese imports.

Feature image

<div class="phx-topic">As an expected wave of imports from China begins arriving at US ports in the coming weeks, the country’s three largest marine chassis providers say they are pulling idle equipment from storage, inspecting and repairing units, and repositioning chassis to key inland hubs to avoid a repeat of the shortages seen during the pandemic. TRAC Intermodal, DCLI and FlexiVan Leasing, the US’ top three lessors by fleet size, respectively, began unstacking chassis shortly after the Trump administration last month announced a 90-day pause on the 145% tariffs on Chinese imports. TRAC owns more than 200,000 marine chassis, while DCLI has about 140,000 units and FlexiVan about 120,000. None of the companies disclosed the number of chassis they’ve taken out of long-term storage, but each said the total is in the “tens of thousands.” “Our current utilization, our working fleet, is rather soft,” said Val Noel, chief operating officer of TRAC. “But we think this could be a little bit like a tsunami, and we want to have extra capacity to make sure we don’t have any service disruptions.” TRAC will focus on repairing and positioning chassis in Chicago, Dallas and Memphis. Noel said chassis placed into Memphis can be redeployed to Kansas City, St. Louis and Omaha, if necessary, while chassis in Chicago can be redirected to the Ohio Valley. DCLI began unstacking equipment in Southern California days after the tariff pause announcement and has since expanded the process to inland locations including Chicago, Dallas and Memphis. “We have safety stocks in place in key markets and are working with our vendors to ensure we have the repair capacity necessary to respond to this demand,” said Mike O’Malley, DCLI’s senior vice president of government and public relations. FlexiVan, which is exiting the Southern California’s Pool of Pools, has focused on ensuring chassis availability for its core partner, Ocean Network Express (ONE). “[We are] working continuously to get pool chassis into a ready to use condition and fleeted into our private pool for ONE and other customers,” Flexi said in a statement to the Journal of Commerce. FlexiVan in late April opened its new private chassis pool serving the ports of Los Angeles and Long Beach, with FlexiVan Pool “designed to enhance our service capabilities for carriers and customers.” <h3>Getting repairs done now </h3>The chassis providers emphasized that pulling equipment out of long-term storage is not a one-day process. Units stacked for months, sometimes years, must undergo full inspections and safety checks, and in many cases minor repairs before they are roadworthy. It can take several weeks to check lighting systems, brake lines, tires and structural components that can rust, corrode or suffer other weather-related fatigue. Technicians must also be available in sufficient numbers, and often work overtime, to meet repair deadlines. DCLI said it’s better prepared than during the pandemic because it did not significantly scale back repair operations with repair vendors when the market softened. DCLI said it learned how important it is to keep mechanics working even as volumes soften because widespread layoffs require rehiring and training later, which makes it difficult to complete repairs before a cargo surge. As a result, DCLI believes it can quickly inspect, repair and certify idle chassis without having to rebuild labor capacity from scratch. <h3>Communication is key </h3>Knowing when and where to deploy repaired units is crucial to prevent equipment shortages. Chassis providers rely on cargo forecasts from ocean carriers, railroads and shippers, and data from the US Department of Transportation’s Freight Logistics Optimization Works (FLOW) initiative to position chassis ahead of surges. Under normal conditions, imports going to secondary cities like Cincinnati, Columbus or St. Louis can be part of a block within a larger train to Chicago or Kansas City. During a surge, however, those cities may receive dedicated trains with double or triple the usual number of containers, flooding local terminals and straining chassis availability. “That’s one of the things that has beaten us in the past,” Noel acknowledged. “Normally a city might get a 3,000-foot block of containers, and during a surge it’s a 10,000-foot train. Both of our western roads (BNSF Railway and Union Pacific Railroad) have been super in partnering with us, letting us know what’s coming so we can be prepared.” The landscape has also changed in recent years in ways that may increase supply chain resiliency. More trucking companies and cargo owners now operate private chassis fleets, reducing their reliance on shared pool equipment. Railroads have also adjusted terminal operations, placing more import containers into grounded stacks, allowing cargo owners to retrieve loads using their own equipment and easing pressure on the public pools managed by DCLI, TRAC, and FlexiVan. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

As an expected wave of imports from China begins arriving at US ports in the coming weeks, the country’s three largest marine chassis providers say they are pulling idle equipment from storage, inspecting and repairing units, and repositioning chassis to key inland hubs to avoid a repeat of the shortages seen during the pandemic. TRAC Intermodal, DCLI and FlexiVan Leasing, the US’ top three lessors by fleet size, respectively, began unstacking chassis shortly after the Trump administration last month announced a 90-day pause on the 145% tariffs on Chinese imports. TRAC owns more than 200,000 marine chassis, while DCLI has about 140,000 units and FlexiVan about 120,000. None of the companies disclosed the number of chassis they’ve taken out of long-term storage, but each said the total is in the “tens of thousands.” “Our current utilization, our working fleet, is rather soft,” said Val Noel, chief operating officer of TRAC. “But we think this could be a little bit like a tsunami, and we want to have extra capacity to make sure we don’t have any service disruptions.” TRAC will focus on repairing and positioning chassis in Chicago, Dallas and Memphis. Noel said chassis placed into Memphis can be redeployed to Kansas City, St. Louis and Omaha, if necessary, while chassis in Chicago can be redirected to the Ohio Valley. DCLI began unstacking equipment in Southern California days after the tariff pause announcement and has since expanded the process to inland locations including Chicago, Dallas and Memphis. “We have safety stocks in place in key markets and are working with our vendors to ensure we have the repair capacity necessary to respond to this demand,” said Mike O’Malley, DCLI’s senior vice president of government and public relations. FlexiVan, which is exiting the Southern California’s Pool of Pools, has focused on ensuring chassis availability for its core partner, Ocean Network Express (ONE). “[We are] working continuously to get pool chassis into a ready to use condition and fleeted into our private pool for ONE and other customers,” Flexi said in a statement to the Journal of Commerce. FlexiVan in late April opened its new private chassis pool serving the ports of Los Angeles and Long Beach, with FlexiVan Pool “designed to enhance our service capabilities for carriers and customers.” Getting repairs done now The chassis providers emphasized that pulling equipment out of long-term storage is not a one-day process. Units stacked for months, sometimes years, must undergo full inspections and safety checks, and in many cases minor repairs before they are roadworthy. It can take several weeks to check lighting systems, brake lines, tires and structural components that can rust, corrode or suffer other weather-related fatigue. Technicians must also be available in sufficient numbers, and often work overtime, to meet repair deadlines. DCLI said it’s better prepared than during the pandemic because it did not significantly scale back repair operations with repair vendors when the market softened. DCLI said it learned how important it is to keep mechanics working even as volumes soften because widespread layoffs require rehiring and training later, which makes it difficult to complete repairs before a cargo surge. As a result, DCLI believes it can quickly inspect, repair and certify idle chassis without having to rebuild labor capacity from scratch. Communication is key Knowing when and where to deploy repaired units is crucial to prevent equipment shortages. Chassis providers rely on cargo forecasts from ocean carriers, railroads and shippers, and data from the US Department of Transportation’s Freight Logistics Optimization Works (FLOW) initiative to position chassis ahead of surges. Under normal conditions, imports going to secondary cities like Cincinnati, Columbus or St. Louis can be part of a block within a larger train to Chicago or Kansas City. During a surge, however, those cities may receive dedicated trains with double or triple the usual number of containers, flooding local terminals and straining chassis availability. “That’s one of the things that has beaten us in the past,” Noel acknowledged. “Normally a city might get a 3,000-foot block of containers, and during a surge it’s a 10,000-foot train. Both of our western roads (BNSF Railway and Union Pacific Railroad) have been super in partnering with us, letting us know what’s coming so we can be prepared.” The landscape has also changed in recent years in ways that may increase supply chain resiliency. More trucking companies and cargo owners now operate private chassis fleets, reducing their reliance on shared pool equipment. Railroads have also adjusted terminal operations, placing more import containers into grounded stacks, allowing cargo owners to retrieve loads using their own equipment and easing pressure on the public pools managed by DCLI, TRAC, and FlexiVan. Contact Ari Ashe at ari.ashe@spglobal.com

North American ports

Drayage

US chassis providers getting equipment ready for US import surge

<div class="phx-topic abstract-wrapper">Demand from Cargado’s freight broker customers to add US-Canada carriers to its vetted network led the company to move to the northern border. </div>

Demand from Cargado’s freight broker customers to add US-Canada carriers to its vetted network led the company to move to the northern border.

<div class="phx-topic">Cross-border load board provider Cargado on Monday said it has expanded into Canada to complement its existing marketplace for US-Mexico truckload freight. The expansion, driven by demand from its freight broker customers, gives brokers access to Cargado’s network of vetted cross-border carriers that operate between the US and Mexico. Cargado’s customers include eight of the top 10 US freight brokers and more than half of the top 100. “Canadian expansion was a highly requested feature among our customers,” Cargado CEO Matt Silver said in a statement. The company also released a new rate benchmarking feature Monday, Cargado Market Rates, that allows brokers to see current and historical lane-level pricing data to inform their quoting activity to shippers. The benchmarking tool is based on more than 35,000 historical bids and freight matches between brokers and carriers, Cargado Chief Technology Officer Rylan Hawkins said in the statement. Cargado is connected to more than 200 brokers and 900 carriers. Founded in April 2024 as a cross-border load board specialist, Cargado in April <a href="https://www.joc.com/article/mexico-potential-leads-investors-to-back-cross-border-load-board-5978223">landed a $12 million funding round</a> from investors to build out its invite-only product addressing the fast-growing US-Mexico freight market. The company has raised a total of $22 million from investors including LGVP, Conversion Capital, Assembly Ventures and RyderVentures. Silver previously <a href="https://www.joc.com/article/arrive-logistics-moves-into-cross-border-freight-with-forager-acquisition-5225326">sold the cross-border broker he founded</a>, Forager, to Arrive Logistics in 2022. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Cross-border load board provider Cargado on Monday said it has expanded into Canada to complement its existing marketplace for US-Mexico truckload freight. The expansion, driven by demand from its freight broker customers, gives brokers access to Cargado’s network of vetted cross-border carriers that operate between the US and Mexico. Cargado’s customers include eight of the top 10 US freight brokers and more than half of the top 100. “Canadian expansion was a highly requested feature among our customers,” Cargado CEO Matt Silver said in a statement. The company also released a new rate benchmarking feature Monday, Cargado Market Rates, that allows brokers to see current and historical lane-level pricing data to inform their quoting activity to shippers. The benchmarking tool is based on more than 35,000 historical bids and freight matches between brokers and carriers, Cargado Chief Technology Officer Rylan Hawkins said in the statement. Cargado is connected to more than 200 brokers and 900 carriers. Founded in April 2024 as a cross-border load board specialist, Cargado in April landed a $12 million funding round from investors to build out its invite-only product addressing the fast-growing US-Mexico freight market. The company has raised a total of $22 million from investors including LGVP, Conversion Capital, Assembly Ventures and RyderVentures. Silver previously sold the cross-border broker he founded , Forager, to Arrive Logistics in 2022. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Cross-border truckload marketplace expands into Canada

<div class="phx-topic abstract-wrapper">Because the West Coast’s share is higher for China-originating freight than any other region, any move away from China by importers can be expected to negatively affect the USWC’s share of inbound cargo, writes Larry Gross. </div>

Because the West Coast’s share is higher for China-originating freight than any other region, any move away from China by importers can be expected to negatively affect the USWC’s share of inbound cargo, writes Larry Gross.

<div class="phx-topic">The Trump administration seems to be heading toward a tariff future that will result in different tariff levels for different nations. If achieved and maintained, in the long run, this will result in shifts of origin for imported products toward those countries that end up with lower tariff levels. In the near term, this trend is already underway regarding imports from China. It seems reasonable to assume, given the escalating trade and political tensions between China and the US, that most, if not all, importers for China are scrambling for alternative sources. These changes will have differing impacts depending on which US coast is involved. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6021504_0.1.jpg"></img></div>I used S&amp;P Global PIERS data to try and gauge the impact of the China freeze-out. Of the loaded TEUs arriving in the US in 2024, over 41% originated in mainland China. Therefore, a dramatic slowdown in these volumes is very significant. Meanwhile, shipments from other origins such as other Asian nations are surging, given the 90-day reprieve that has been granted by President Donald Trump. Importers will try to crowd as much of this freight through the keyhole as they can. Approximately 32% of 2024 import TEUs came in from other Asian nations, including India. The surge in traffic from these origins will help cushion the blow from the China slowdown, but only to a limited effect. The US West Coast (USWC) will feel these changes more acutely than the East or Gulf coasts. Over 57% of the USWC import TEUs in 2024 arrived from China, while they composed “only” 25% of the East Coast’s volume, with the Gulf Coast in between at 35%. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0464227f-7536-453b-84e2-d47a98ac6675"></dynamic-object></div>There is another way to look at the situation, which is to divvy up the US import volume originating in each global region by coast of arrival. This can help us gauge the potential impact of such shifts in origin. Once again, we’ll use PIERS data to provide the picture. However, as we look at these numbers, keep in mind that in 2024, USWC share was artificially boosted by cargo diversions away from the East Coast due to labor unrest. Therefore, some share loss will be inevitable even without changes in origin shipping points. In 2024, unsurprisingly, the USWC was the dominant recipient of China-originating cargo, accounting for 65% of the 2024 TEUs, followed by the East Coast at 27% and the Gulf Coast at 8%. It is reasonable to expect that some of the China volume will move to new originations in Southeast Asia. USWC share of Southeast Asia originations was 55% in 2024, 10 points lower than China. In other words, for every 100 TEUs of China-originating freight that migrates to, say, Vietnam, the USWC loses 10 inbound TEUs, the USGC loses six, and the USEC gains 16. The situation is even more extreme if the origin migrates to India. The USEC received 86% of the 2024 TEUs originating on the Indian subcontinent. Because the USWC share is higher for China-originating freight than any other region, even including the other nations of Northeast Asia (i.e. Japan, Taiwan and South Korea), literally any move away from China can be expected to negatively affect the USWC’s share of inbound cargo. What this potentially means for the USWC is that those ports are staring down what might be a triple-barreled threat: <ol><li>Overall lower trade volumes due to the trade war </li><li>Loss of share as imports that were diverted in 2024 due to both the East Coast labor uncertainty and the Red Sea/Suez Canal closure start to return to their previous East/Gulf coast routings </li><li>Additional loss of share due to migration of imports away from China toward other origin regions that are less favorable to the USWC </li></ol>In other words, when it comes to US ports, the trade war will result in winners and losers. Or perhaps more accurately, bigger losers and smaller losers. Contact Larry Gross at <a href="mailto:lgross@intermodalindepth.com">lgross@intermodalindepth.com</a>. </div>

The Trump administration seems to be heading toward a tariff future that will result in different tariff levels for different nations. If achieved and maintained, in the long run, this will result in shifts of origin for imported products toward those countries that end up with lower tariff levels. In the near term, this trend is already underway regarding imports from China. It seems reasonable to assume, given the escalating trade and political tensions between China and the US, that most, if not all, importers for China are scrambling for alternative sources. These changes will have differing impacts depending on which US coast is involved. I used S&P Global PIERS data to try and gauge the impact of the China freeze-out. Of the loaded TEUs arriving in the US in 2024, over 41% originated in mainland China. Therefore, a dramatic slowdown in these volumes is very significant. Meanwhile, shipments from other origins such as other Asian nations are surging, given the 90-day reprieve that has been granted by President Donald Trump. Importers will try to crowd as much of this freight through the keyhole as they can. Approximately 32% of 2024 import TEUs came in from other Asian nations, including India. The surge in traffic from these origins will help cushion the blow from the China slowdown, but only to a limited effect. The US West Coast (USWC) will feel these changes more acutely than the East or Gulf coasts. Over 57% of the USWC import TEUs in 2024 arrived from China, while they composed “only” 25% of the East Coast’s volume, with the Gulf Coast in between at 35%. There is another way to look at the situation, which is to divvy up the US import volume originating in each global region by coast of arrival. This can help us gauge the potential impact of such shifts in origin. Once again, we’ll use PIERS data to provide the picture. However, as we look at these numbers, keep in mind that in 2024, USWC share was artificially boosted by cargo diversions away from the East Coast due to labor unrest. Therefore, some share loss will be inevitable even without changes in origin shipping points. In 2024, unsurprisingly, the USWC was the dominant recipient of China-originating cargo, accounting for 65% of the 2024 TEUs, followed by the East Coast at 27% and the Gulf Coast at 8%. It is reasonable to expect that some of the China volume will move to new originations in Southeast Asia. USWC share of Southeast Asia originations was 55% in 2024, 10 points lower than China. In other words, for every 100 TEUs of China-originating freight that migrates to, say, Vietnam, the USWC loses 10 inbound TEUs, the USGC loses six, and the USEC gains 16. The situation is even more extreme if the origin migrates to India. The USEC received 86% of the 2024 TEUs originating on the Indian subcontinent. Because the USWC share is higher for China-originating freight than any other region, even including the other nations of Northeast Asia (i.e. Japan, Taiwan and South Korea), literally any move away from China can be expected to negatively affect the USWC’s share of inbound cargo. What this potentially means for the USWC is that those ports are staring down what might be a triple-barreled threat: Overall lower trade volumes due to the trade war Loss of share as imports that were diverted in 2024 due to both the East Coast labor uncertainty and the Red Sea/Suez Canal closure start to return to their previous East/Gulf coast routings Additional loss of share due to migration of imports away from China toward other origin regions that are less favorable to the USWC In other words, when it comes to US ports, the trade war will result in winners and losers. Or perhaps more accurately, bigger losers and smaller losers. Contact Larry Gross at lgross@intermodalindepth.com .

Cargo origin will determine trade war winners and losers among US coasts

<div class="phx-topic abstract-wrapper">The change at the top of the freight-matching platform comes as the truckload sector enters the fourth year of a freight downturn that began in 2022. </div>

The change at the top of the freight-matching platform comes as the truckload sector enters the fourth year of a freight downturn that began in 2022.

<div class="phx-topic">Scott Moscrip, an entrepreneur who founded digital freight-matching platform Truckstop in his basement in 1995, is returning as interim CEO following the departure of three-year CEO Kendra Tucker. No reason was given for Tucker’s departure. Moscrip will lead a “strategic realignment” of Truckstop, the company said in a statement Thursday, with an emphasis on customer-focused innovation. Idaho-based Truckstop, one of the largest US spot market load-board operators and a technology provider, has begun a search for a permanent CEO. Moscrip retained an ownership stake in Truckstop when the company was acquired by ICONIQ Capital in 2019. The change at the top of the freight-matching platform comes as the truckload sector enters the fourth year of a freight downturn that began in 2022, putting enormous pressure on the small trucking firms that are Truckstop’s core customers. “We continue to be laser-focused on serving our customers through existing products and new innovations,” Truckstop told the Journal of Commerce in an email Friday. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Scott Moscrip, an entrepreneur who founded digital freight-matching platform Truckstop in his basement in 1995, is returning as interim CEO following the departure of three-year CEO Kendra Tucker. No reason was given for Tucker’s departure. Moscrip will lead a “strategic realignment” of Truckstop, the company said in a statement Thursday, with an emphasis on customer-focused innovation. Idaho-based Truckstop, one of the largest US spot market load-board operators and a technology provider, has begun a search for a permanent CEO. Moscrip retained an ownership stake in Truckstop when the company was acquired by ICONIQ Capital in 2019. The change at the top of the freight-matching platform comes as the truckload sector enters the fourth year of a freight downturn that began in 2022, putting enormous pressure on the small trucking firms that are Truckstop’s core customers. “We continue to be laser-focused on serving our customers through existing products and new innovations,” Truckstop told the Journal of Commerce in an email Friday. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Truckload

Surface

Truckstop begins ‘strategic realignment,’ names founder as interim CEO

<div class="phx-topic abstract-wrapper">The group that oversees maritime contracts said the complex nature of the USTR’s new port fees needs to be made clear through a standard clause in shipping contracts. </div>

The group that oversees maritime contracts said the complex nature of the USTR’s new port fees needs to be made clear through a standard clause in shipping contracts.

<div class="phx-topic">The standard-setting body for maritime contracts is looking to establish how ocean carriers will charge shippers for the pending US port fees on Chinese ships and carriers, a move that will “significantly raise” shipping costs, the group warned. BIMCO said in a statement Thursday it has started development of a standard industry clause that would “address contractual uncertainties” arising from the United States Trade Representative’s (USTR’s) tariffs against China’s maritime industry. <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">Released in April</a>, the fees on Chinese-built ships and operators go into effect Oct. 14. With the enforcement date coming in five months, BIMCO said it’s making a standard clause for the USTR fee “a priority,” with legal and commercial experts assigned to weigh in on what a standard clause would look like. “When implemented, the measures will significantly raise the cost of seaborne trade to and from the United States,” BIMCO Chief Executive David Loosley said. “Additionally, the actions present complex contractual challenges for the shipping industry.” While the port fee will apply across all maritime trades into the US, container shipping poses more of a challenge due to having multiple port calls, the rotation of vessels into services, the mix of vessels stemming from alliance structures and the differing methodologies for assessing fees. <h3>No way to entirely avoid fees </h3>Container shipping advisory Bluspark Global said in an April report that ocean carriers will look to mitigate the fee by using non-Chinese ships in their US services or restructure alliance networks so Chinese carriers will no longer serve US ports. But those moves will not be entirely cost-free either, it added. “Carriers will strategize to minimize how often and where they incur these fees, but they will also ensure they recover the costs from customers,” Bluspark said. We may see some shifts in network design, but the fundamental impacts — higher costs that will be passed on — remain.” As laid out in April, the USTR will charge a fee based on the net tonnage of a Chinese-operated ship upon first arrival at a US port, up to five times per year, with the fee escalating over five years. Chinese-built ships, however, can face either the escalating net tonnage fee or a fee based on the number of containers carried on a voyage, whichever is higher. Bluspark laid out those different fee scenarios on Chinese ships. A 10,000-TEU ship would be about 60,000 net tons and have capacity for about 5,000 standard dry containers. Under the net tonnage fee — which starts at $18 in 2025 — the ship would face a $1.08 million fee on its first port call. But the 2025 container rate of $120 would yield a port fee of $600,000, Bluspark said. Bluspark said shippers should ask carriers to justify any surcharges relative to the actual fees they incur. “Keep a close eye on carrier announcements in late 2025 and beyond,” it said. “When a carrier implements a [USTR] surcharge, scrutinize the level and mechanism.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The standard-setting body for maritime contracts is looking to establish how ocean carriers will charge shippers for the pending US port fees on Chinese ships and carriers, a move that will “significantly raise” shipping costs, the group warned. BIMCO said in a statement Thursday it has started development of a standard industry clause that would “address contractual uncertainties” arising from the United States Trade Representative’s (USTR’s) tariffs against China’s maritime industry. Released in April , the fees on Chinese-built ships and operators go into effect Oct. 14. With the enforcement date coming in five months, BIMCO said it’s making a standard clause for the USTR fee “a priority,” with legal and commercial experts assigned to weigh in on what a standard clause would look like. “When implemented, the measures will significantly raise the cost of seaborne trade to and from the United States,” BIMCO Chief Executive David Loosley said. “Additionally, the actions present complex contractual challenges for the shipping industry.” While the port fee will apply across all maritime trades into the US, container shipping poses more of a challenge due to having multiple port calls, the rotation of vessels into services, the mix of vessels stemming from alliance structures and the differing methodologies for assessing fees. No way to entirely avoid fees Container shipping advisory Bluspark Global said in an April report that ocean carriers will look to mitigate the fee by using non-Chinese ships in their US services or restructure alliance networks so Chinese carriers will no longer serve US ports. But those moves will not be entirely cost-free either, it added. “Carriers will strategize to minimize how often and where they incur these fees, but they will also ensure they recover the costs from customers,” Bluspark said. We may see some shifts in network design, but the fundamental impacts — higher costs that will be passed on — remain.” As laid out in April, the USTR will charge a fee based on the net tonnage of a Chinese-operated ship upon first arrival at a US port, up to five times per year, with the fee escalating over five years. Chinese-built ships, however, can face either the escalating net tonnage fee or a fee based on the number of containers carried on a voyage, whichever is higher. Bluspark laid out those different fee scenarios on Chinese ships. A 10,000-TEU ship would be about 60,000 net tons and have capacity for about 5,000 standard dry containers. Under the net tonnage fee — which starts at $18 in 2025 — the ship would face a $1.08 million fee on its first port call. But the 2025 container rate of $120 would yield a port fee of $600,000, Bluspark said. Bluspark said shippers should ask carriers to justify any surcharges relative to the actual fees they incur. “Keep a close eye on carrier announcements in late 2025 and beyond,” it said. “When a carrier implements a [USTR] surcharge, scrutinize the level and mechanism.” Contact Michael Angell at michael.angell@spglobal.com .

Transport, Trade and Regulation News

Container Shipping News

BIMCO looks to set contract standard for charging USTR port fees

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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