<div class="phx-topic abstract-wrapper">Negotiation with the African National Congress, a leading foe of the South African government, is no</div>

Negotiation with the African National Congress, a leading foe of the South African government, is no

<div>Negotiation with the African National Congress, a leading foe of the South African government, is not a one-way ticket" to an eventual Communist government in South Africa, British Foreign Secretary Sir Geoffrey Howe said.Sir Geoffrey, in New York to address the U.N. General Assembly, made his statements at a briefing with reporters. He acknowledged the existence of the Communist Party in the exiled ANC.He said his meeting in London last Saturday with ANC President Oliver Tambo left little hope that Mr. Tambo will renounce violence in the struggle against apartheid.My impression is that the ANC will not discontinue violence under...

Negotiation with the African National Congress, a leading foe of the South African government, is not a one-way ticket" to an eventual Communist government in South Africa, British Foreign Secretary Sir Geoffrey Howe said. Sir Geoffrey, in New York to address the U.N. General Assembly, made his statements at a briefing with reporters. He acknowledged the existence of the Communist Party in the exiled ANC.He said his meeting in London last Saturday with ANC President Oliver Tambo left little hope that Mr. Tambo will renounce violence in the struggle against apartheid. My impression is that the ANC will not discontinue violence under today's circumstances. One must keep impressing upon the (black) African side that violence actually will make their task more difficult rather than less difficult," Sir Geoffrey said. The foreign minister reiterated his government's view that economic sanctions are an ineffec tive means to achieve peaceful change in South Africa. The international outcry for economic sanctions against South Africa to prod that country into changing its policy of racial separation, or apartheid, has gathered momentum in the past year. The foreign minister told reporters the South African government can withstand the economic pressure brought on by sanctions and that any injury would come first to South African blacks and the front-line states of southern Africa. The South African government is capable of resistance to this kind of activity for a very long time, and sanctions would limit our room to maneuver and would damage the economies of the southern African states," he said. He cited Zimbabwe as an example of an oppressive state's ability to withstand sanctions. Prior to its capitulation to black rule, the government of Zimbabwe - then Rhodesia - withstood international sanctions for 10 years with a much weaker economy than that of South Africa, Sir Geoffrey said. The foreign minister said there are elements within South Africa's government and business community that are applying pressure to Pretoria to bring about some effective changes. But the effectiveness of these people is hampered by the continued threat of sanctions since their energies are being diverted from the task of pushing against apartheid to ward off sanctions, Sir Geoffrey said. However, he went to great pains to stress Britain's abhorrence of apartheid, adding that he is distressed that such doubts were raised during his trip to southern Africa in July. Turning to issues in the global economy, Sir Geoffrey said he is pleased with the scope of negotiations concerning agricultural reform. He said the realization is dawning on even the strongest defenders of the European Community's Common Agricultural Policy (which provides for subsidies on agricultural exports) that the need for domestic budget reforms is overwhelming. The world that the Club of Rome envisioned 25 years ago - one of famine and starvation" has not happened, he said, referring to the 1957 Treaty of Rome signed by six countries to establish the European Community. He criticized a system in which $60 billion is spent annually on agricultural subsidies throughout the world and decried the fact that half the EC's agricultural budget goes to the storage and disposal of agricultural surplus. But the difficulty of reform, he said, lies in the presence of large farming constituencies throughout Europe and the difficulty facing the world over. Sir Geoffrey rejected the notion that Britain's refusal to join the European Monetary System is in any way a stumbling block to a greater European unity. I don't believe the value of pound sterling relative to EMS has any relation to our membership in the community. There is no question of our commitment," he said. Asked when Britain will join the EMS, Sir Geoffrey said that time will come eventually.

Maritime

UK REITERATES SANCTIONS STAND

<div class="phx-topic abstract-wrapper">The decision cuts against what Schneider announced when it acquired Cowan last November, that Cowan’s brand would be retained and the company would operate as a wholly owned subsidiary.</div>

The decision cuts against what Schneider announced when it acquired Cowan last November, that Cowan’s brand would be retained and the company would operate as a wholly owned subsidiary.

Feature image

<div class="phx-topic">Schneider National is dissolving the brokerage division of Cowan Systems, a company it <a href="https://www.joc.com/article/schneider-bolsters-us-east-coast-business-by-acquiring-cowan-systems-5824223">acquired for $390 million last November</a> to expand its dedicated truckload division. Employees of Cowan Logistics, the acquired company’s brokerage unit, were informed on Tuesday at an internal meeting that Cowan would be rebranded from Oct. 1. The decision cuts against what Schneider announced at the time of the acquisition, when it indicated that Cowan’s brand would be retained and that the company would operate as a wholly owned subsidiary. “As part of our ongoing efforts to strengthen and streamline our brokerage operations, Cowan Logistics will be fully integrated into Schneider Brokerage effective Oct. 1, 2025,” Kara Leiterman, public relations manager for Wisconsin-based Schneider, told the Journal of Commerce. Leiterman said the move allows Schneider to “unify our capabilities under a single brand, expand our service offerings, and better support our customers and carrier partners.” The change is specific to the brokerage division and will not affect Cowan Systems’ trucking operations, which will continue to operate independently. A company email to employees explaining the consolidation that was viewed by the Journal of Commerce said, “it became clear there were numerous opportunities to the business and [employees] to expedite growth by combining both groups and rebranding Cowan Logistics to Schneider Brokerage.” <h3>Fate of employees unclear </h3>The absorption of Cowan’s brokerage division into Schneider’s comes amid a prolonged period of intense competition among brokers as they vie for truckload freight in a market constrained by muted demand. It’s not immediately clear how many of Cowan’s brokerage employees Schneider plans to retain. A Cowan source who did not want to be identified told the Journal of Commerce Schneider “is basically retaining key employees, trucks (and) key accounts of Cowan’s.” The source said Schneider’s intent is to eliminate redundancies within its own brokerage division, and that its employees were instructed to push off discussions with customers about the dissolution of the Cowan Logistics brand until closer to October. At the time of the acquisition, the 100-year-old, Baltimore-based Cowan provided logistics, trucking, shipping and warehousing services, with a fleet of more than 1,800 trucks and around 7,500 trailers. Schneider will take over Cowan’s motor carrier (MC) number and standard carrier alpha code (SCAC), along with any of Cowan’s retained employees, clients and contracts. Until the rebranding is complete, Cowan’s leadership will largely remain in place but will report to Ben Schuchart, senior vice president of Schneider Transportation Management, and Jim Nicholson, vice president of brokerage operations for Schneider, according to the company email. Schneider is due to release its second quarter earnings July 31. Contact Clarissa Hawes at <a href="mailto:clarissahawes@gmail.com">clarissahawes@gmail.com</a>. </div>

Schneider National is dissolving the brokerage division of Cowan Systems, a company it acquired for $390 million last November to expand its dedicated truckload division. Employees of Cowan Logistics, the acquired company’s brokerage unit, were informed on Tuesday at an internal meeting that Cowan would be rebranded from Oct. 1. The decision cuts against what Schneider announced at the time of the acquisition, when it indicated that Cowan’s brand would be retained and that the company would operate as a wholly owned subsidiary. “As part of our ongoing efforts to strengthen and streamline our brokerage operations, Cowan Logistics will be fully integrated into Schneider Brokerage effective Oct. 1, 2025,” Kara Leiterman, public relations manager for Wisconsin-based Schneider, told the Journal of Commerce. Leiterman said the move allows Schneider to “unify our capabilities under a single brand, expand our service offerings, and better support our customers and carrier partners.” The change is specific to the brokerage division and will not affect Cowan Systems’ trucking operations, which will continue to operate independently. A company email to employees explaining the consolidation that was viewed by the Journal of Commerce said, “it became clear there were numerous opportunities to the business and [employees] to expedite growth by combining both groups and rebranding Cowan Logistics to Schneider Brokerage.” Fate of employees unclear The absorption of Cowan’s brokerage division into Schneider’s comes amid a prolonged period of intense competition among brokers as they vie for truckload freight in a market constrained by muted demand. It’s not immediately clear how many of Cowan’s brokerage employees Schneider plans to retain. A Cowan source who did not want to be identified told the Journal of Commerce Schneider “is basically retaining key employees, trucks (and) key accounts of Cowan’s.” The source said Schneider’s intent is to eliminate redundancies within its own brokerage division, and that its employees were instructed to push off discussions with customers about the dissolution of the Cowan Logistics brand until closer to October. At the time of the acquisition, the 100-year-old, Baltimore-based Cowan provided logistics, trucking, shipping and warehousing services, with a fleet of more than 1,800 trucks and around 7,500 trailers. Schneider will take over Cowan’s motor carrier (MC) number and standard carrier alpha code (SCAC), along with any of Cowan’s retained employees, clients and contracts. Until the rebranding is complete, Cowan’s leadership will largely remain in place but will report to Ben Schuchart, senior vice president of Schneider Transportation Management, and Jim Nicholson, vice president of brokerage operations for Schneider, according to the company email. Schneider is due to release its second quarter earnings July 31. Contact Clarissa Hawes at clarissahawes@gmail.com .

Trucking News

Surface

Schneider National to ‘dissolve’ Cowan brokerage arm Oct. 1 in rebranding move

<div class="phx-topic abstract-wrapper">Bigger carriers have more services and transshipment hubs and are generally able to offer more efficient connecting services, though there is still room to prosper for small and midsize carriers, writes Jeremy Masters.</div>

Bigger carriers have more services and transshipment hubs and are generally able to offer more efficient connecting services, though there is still room to prosper for small and midsize carriers, writes Jeremy Masters.

<div class="phx-topic">Cross-trades served by transshipment can be of varying sizes and often feature transshipment between two deep-sea services. Some will always remain small, but others linking fast-growing developing economies with each other (or mature markets) will reach a point at which direct services become viable. This is an important opportunity for carriers, transshipment hubs and end ports to be in at the ground floor of high-charged growth. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6045854_0.1.jpg"></img></div>The following cross-trades and key lanes were selected to look at how carriers serve these emerging trades in both directions using their online schedules: US Gulf to South Africa (Houston to Durban) India to Central America (Mundra to Veracruz) South Africa to Australia (Durban to Sydney) East Coast of South America to West Africa (Santos to Abidjan) Except for Mundra to Veracruz where one carrier is offering a direct product, all the other lanes/products are transshipment. These lanes give a good idea of the significant variation we see in the top five carriers’ products and why — in these particular trades at least — some are more successful than others. These excerpts will give you a flavor: For Houston to Durban, southbound transit times as advertised varied over multiple sailings, from a low of 32 days to a high of 79 days, with northbound transit from 42 to 82 days. Transshipment in both directions was offered in the Caribbean, Europe, Asia and South America and included in some cases double transshipment. For Mundra to Veracruz, westbound transit times varied between 48 and 82 days, with eastbound from 40 to 100 days. For the transshipment products, North Europe, Mediterranean and Asian hubs were used westbound and North Europe and Mediterranean hubs for eastbound. Double transshipment also featured in some cases. There are some common themes in the above cases and other cross-trades reviewed: <h3>Unique products create positive differentiation </h3>Having a different product that directly connects core markets also allows sub-trades operating through transshipment hubs on that service to also establish product advantage. For example, CMA CGM’s and Mediterranean Shipping Co.’s (MSC) North Europe/Med/Indian Ocean/Australia service not only provides a strong product in the Med to Indian Ocean and Australia trade, but enables Southern/Eastern Africa export cargo to access a fast eastbound product over Port Louis Mauritius. A similar example is Hapag-Lloyd (with Maersk as slotter) being the only direct operator in the Brazil to South Africa and Angola market, thus giving them the driving seat in the core trade but also enabling them to open sub-markets like Argentina and Uruguay with very strong transshipment products. <h3>Where transshipment takes place is crucial </h3>The ideal transshipment point for cross-trades is one where there is minimal diversion from the most direct route. For example, the big carriers are all routing Brazil to West Africa over Europe, but MSC has an edge on eastbound transit times because it connects in Las Palmas, Spain, which slightly reduces transit time on both legs. In the US Gulf to South Africa trade, MSC also has the best product because it transships from its direct US East Coast to South Africa service at Freeport (Bahamas), whereas other carriers are transshipping in Europe, Asia or South America. <h3>How transshipment products are constructed is critical </h3>Direct products normally trump transshipment products, but rotations of connecting services are important. If carriers are able to design services allowing the first leg to hit a transshipment point early in its rotation and the second leg calls there late in its rotation, the transshipment product can have a competitive transit time. We see in the Mundra-to-Veracruz pairing that Maersk, CMA CGM and Hapag-Lloyd's transshipment transit times stack up okay versus MSC’s direct service. The most obvious overall observation is that the bigger carriers have more services and more transshipment hubs, so they are generally able to offer more efficient connecting services. Their larger fleet sizes also allow them to deploy innovative products and tweak them until they have a profitable service covering both direct and transshipment lanes. Is there hope for the midsized and smaller carriers? There are a number of niche direct products from smaller carriers in some trades and specific port pairs that the bigger guys treat solely as cross-trades. For the nimble, there is still room to prosper, but they will need to adapt again if the big guys lumber into town. Contact Jeremy Masters at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

Cross-trades served by transshipment can be of varying sizes and often feature transshipment between two deep-sea services. Some will always remain small, but others linking fast-growing developing economies with each other (or mature markets) will reach a point at which direct services become viable. This is an important opportunity for carriers, transshipment hubs and end ports to be in at the ground floor of high-charged growth. The following cross-trades and key lanes were selected to look at how carriers serve these emerging trades in both directions using their online schedules: US Gulf to South Africa (Houston to Durban) India to Central America (Mundra to Veracruz) South Africa to Australia (Durban to Sydney) East Coast of South America to West Africa (Santos to Abidjan) Except for Mundra to Veracruz where one carrier is offering a direct product, all the other lanes/products are transshipment. These lanes give a good idea of the significant variation we see in the top five carriers’ products and why — in these particular trades at least — some are more successful than others. These excerpts will give you a flavor: For Houston to Durban, southbound transit times as advertised varied over multiple sailings, from a low of 32 days to a high of 79 days, with northbound transit from 42 to 82 days. Transshipment in both directions was offered in the Caribbean, Europe, Asia and South America and included in some cases double transshipment. For Mundra to Veracruz, westbound transit times varied between 48 and 82 days, with eastbound from 40 to 100 days. For the transshipment products, North Europe, Mediterranean and Asian hubs were used westbound and North Europe and Mediterranean hubs for eastbound. Double transshipment also featured in some cases. There are some common themes in the above cases and other cross-trades reviewed: Unique products create positive differentiation Having a different product that directly connects core markets also allows sub-trades operating through transshipment hubs on that service to also establish product advantage. For example, CMA CGM’s and Mediterranean Shipping Co.’s (MSC) North Europe/Med/Indian Ocean/Australia service not only provides a strong product in the Med to Indian Ocean and Australia trade, but enables Southern/Eastern Africa export cargo to access a fast eastbound product over Port Louis Mauritius. A similar example is Hapag-Lloyd (with Maersk as slotter) being the only direct operator in the Brazil to South Africa and Angola market, thus giving them the driving seat in the core trade but also enabling them to open sub-markets like Argentina and Uruguay with very strong transshipment products. Where transshipment takes place is crucial The ideal transshipment point for cross-trades is one where there is minimal diversion from the most direct route. For example, the big carriers are all routing Brazil to West Africa over Europe, but MSC has an edge on eastbound transit times because it connects in Las Palmas, Spain, which slightly reduces transit time on both legs. In the US Gulf to South Africa trade, MSC also has the best product because it transships from its direct US East Coast to South Africa service at Freeport (Bahamas), whereas other carriers are transshipping in Europe, Asia or South America. How transshipment products are constructed is critical Direct products normally trump transshipment products, but rotations of connecting services are important. If carriers are able to design services allowing the first leg to hit a transshipment point early in its rotation and the second leg calls there late in its rotation, the transshipment product can have a competitive transit time. We see in the Mundra-to-Veracruz pairing that Maersk, CMA CGM and Hapag-Lloyd's transshipment transit times stack up okay versus MSC’s direct service. The most obvious overall observation is that the bigger carriers have more services and more transshipment hubs, so they are generally able to offer more efficient connecting services. Their larger fleet sizes also allow them to deploy innovative products and tweak them until they have a profitable service covering both direct and transshipment lanes. Is there hope for the midsized and smaller carriers? There are a number of niche direct products from smaller carriers in some trades and specific port pairs that the bigger guys treat solely as cross-trades. For the nimble, there is still room to prosper, but they will need to adapt again if the big guys lumber into town. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Container lines

High variance exists in carriers’ cross-trade products

<div class="phx-topic abstract-wrapper">US shippers have pulled forward as much cargo as they can ahead of the latest deadlines for higher US tariffs, leaving carriers little choice but to cancel more voyages. </div>

US shippers have pulled forward as much cargo as they can ahead of the latest deadlines for higher US tariffs, leaving carriers little choice but to cancel more voyages.

<div class="phx-topic">Ocean carriers have begun to reel in capacity ahead of the mid-August expiry of the 90-day pause on higher US tariffs on Chinese goods, with an increasing number of trans-Pacific container services getting blanked for the rest of July. And with most pre-higher tariff imports on the water or ready to ship, spot rates look set for further weakness through the end of summer. Some 175,000 TEUs of container capacity is set to be blanked during July, according to data from maritime intelligence provider eeSea, amounting to 11% of deployed capacity between Asia and the US West Coast. That is an uptick from the 118,500 TEUs of capacity blanked in June, which accounted for about 9% of deployed capacity. The canceled departures from Asia coincide with <a href="https://www.tradecomplianceresourcehub.com/2025/07/17/trump-2-0-tariff-tracker/">the Aug. 12 deadline for the Trump administration to impose country-specific tariffs on China</a> in the absence of a new trade deal. With an Aug. 1 deadline for trade talks with other Asian countries, demand was already drying up, with Chinese goods the last that could get on a ship and enter the US in time to avoid the higher rates. “It’s already too late to ship product from Vietnam and Southeast Asia to beat the Aug. 1 deadline,” an ocean carrier source told the Journal of Commerce. “There has been no spike in imports from Vietnam since June, when it was possible to beat the Aug. 1 deadline, so demand simply isn’t there.” Indeed, many of the services culled through July also call southern Chinese ports that serve as transshipment points for other Asian goods, or services that directly call Southeast Asia. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1c1d9578-c129-4d4e-a136-e220473bd136"></dynamic-object></div>OOCL canceled eastbound sailings on its Pacific South China Express (PSX) service for the last two weeks of July, according to Hong Kong-based logistics provider Honour Lane Shipping. The PSX service will offer an eastbound ad hoc call to Shanghai, though, during the last week of July, with only one call at the southern port of Yantian. Express services are typically the first to get blanked, with CU Lines, SeaLead and other niche carriers also canceling services through July. But the demand slowdown is also hitting big-ship services as well. CMA CGM canceled an eastbound voyage on its Columbus Jax service, which offers average weekly capacity of about 13,000 TEUs, for the last week of July. The pendulum service, which switches to US East Coast ports on its westbound voyages, also calls Malaysia’s Port Klang, Thailand’s Laem Chabang and Vietnam’s Cai Mep.Cosco Shipping canceled a July voyage on its 13,000-TEU Asia-US West Coast service, while the Premier Alliance has also canceled two July voyages on its 13,000-TEU MP2 service. <h3>Weaker second half expected</h3>While a trade deal with China or other Asian countries may be in the offing, forwarders and shippers are not hopeful that it would spark more demand. US importers have mostly frontloaded goods already and will just be dribbling in product as needed through the rest of the year, Sanjay Tejwani, chief executive of consulting firm 365 Logistics, told the Journal of Commerce. “A lot of frontloading has happened, which means that the volumes will remain soft,” Tejwani said. “August through December will be soft. Even if the tariffs were to drop back to zero, a lot of merchandise has been shipped and inventory levels are decent, why would anyone bring in more cargo?”Ocean carriers are quoting spot rates near $2,500 per standard container to the US West Coast as of July 15, hoping the step-up in blank sailings for July would tighten the market, Robert Khachatryan, chief executive of Freight Right Global Logistics, told the Journal of Commerce. But he doesn’t expect the rate level to hold, adding that he is seeing a number of voyage-specific West Coast rates near $1,700. The mid-July rates “were driven largely by a reduction in capacity,” Khachatryan said. “There is no pickup in demand.” Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged Asia-USWC rates at $1,733 per FEU as of July 16, down 2% on the week. But Drewry’s Shanghai-Los Angeles rate as of July 17 was $2,817 per FEU.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>.Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report.</div>

Ocean carriers have begun to reel in capacity ahead of the mid-August expiry of the 90-day pause on higher US tariffs on Chinese goods, with an increasing number of trans-Pacific container services getting blanked for the rest of July. And with most pre-higher tariff imports on the water or ready to ship, spot rates look set for further weakness through the end of summer. Some 175,000 TEUs of container capacity is set to be blanked during July, according to data from maritime intelligence provider eeSea, amounting to 11% of deployed capacity between Asia and the US West Coast. That is an uptick from the 118,500 TEUs of capacity blanked in June, which accounted for about 9% of deployed capacity. The canceled departures from Asia coincide with the Aug. 12 deadline for the Trump administration to impose country-specific tariffs on China in the absence of a new trade deal. With an Aug. 1 deadline for trade talks with other Asian countries, demand was already drying up, with Chinese goods the last that could get on a ship and enter the US in time to avoid the higher rates. “It’s already too late to ship product from Vietnam and Southeast Asia to beat the Aug. 1 deadline,” an ocean carrier source told the Journal of Commerce. “There has been no spike in imports from Vietnam since June, when it was possible to beat the Aug. 1 deadline, so demand simply isn’t there.” Indeed, many of the services culled through July also call southern Chinese ports that serve as transshipment points for other Asian goods, or services that directly call Southeast Asia. OOCL canceled eastbound sailings on its Pacific South China Express (PSX) service for the last two weeks of July, according to Hong Kong-based logistics provider Honour Lane Shipping. The PSX service will offer an eastbound ad hoc call to Shanghai, though, during the last week of July, with only one call at the southern port of Yantian. Express services are typically the first to get blanked, with CU Lines, SeaLead and other niche carriers also canceling services through July. But the demand slowdown is also hitting big-ship services as well. CMA CGM canceled an eastbound voyage on its Columbus Jax service, which offers average weekly capacity of about 13,000 TEUs, for the last week of July. The pendulum service, which switches to US East Coast ports on its westbound voyages, also calls Malaysia’s Port Klang, Thailand’s Laem Chabang and Vietnam’s Cai Mep. Cosco Shipping canceled a July voyage on its 13,000-TEU Asia-US West Coast service, while the Premier Alliance has also canceled two July voyages on its 13,000-TEU MP2 service. Weaker second half expected While a trade deal with China or other Asian countries may be in the offing, forwarders and shippers are not hopeful that it would spark more demand. US importers have mostly frontloaded goods already and will just be dribbling in product as needed through the rest of the year, Sanjay Tejwani, chief executive of consulting firm 365 Logistics, told the Journal of Commerce. “A lot of frontloading has happened, which means that the volumes will remain soft,” Tejwani said. “August through December will be soft. Even if the tariffs were to drop back to zero, a lot of merchandise has been shipped and inventory levels are decent, why would anyone bring in more cargo?” Ocean carriers are quoting spot rates near $2,500 per standard container to the US West Coast as of July 15, hoping the step-up in blank sailings for July would tighten the market, Robert Khachatryan, chief executive of Freight Right Global Logistics, told the Journal of Commerce. But he doesn’t expect the rate level to hold, adding that he is seeing a number of voyage-specific West Coast rates near $1,700. The mid-July rates “were driven largely by a reduction in capacity,” Khachatryan said. “There is no pickup in demand.” Platts, a sister company of the Journal of Commerce within S&P Global, pegged Asia-USWC rates at $1,733 per FEU as of July 16, down 2% on the week. But Drewry’s Shanghai-Los Angeles rate as of July 17 was $2,817 per FEU. Contact Michael Angell at michael.angell@spglobal.com . Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report.

Trans-Pacific

Looming August tariff deadline prompts carriers to pull trans-Pacific capacity

<div class="phx-topic abstract-wrapper">US retailers are, not surprisingly, importing only what is “absolutely necessary” given the frequent changes in new tariffs and tariff deadlines announced by the Trump administration, writes Lars Jensen. </div>

US retailers are, not surprisingly, importing only what is “absolutely necessary” given the frequent changes in new tariffs and tariff deadlines announced by the Trump administration, writes Lars Jensen.

<div class="phx-topic">Under normal circumstances, the peak season for goods imports from Asia to the US would be well underway. However, cargo demand developments this year on the trans-Pacific are anything but normal. Clearly, the reason for the atypical development is the rapid changes in US trade policy, which has caused significant problems for US importers as well as US exporters to China. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6045387_0.1.jpg"></img></div>A government can, of course, choose to change its trade policy with little notice. But it is worthwhile exploring how rapid changes are detrimental to the management of container shipping supply chains. Most “reciprocal” US tariffs announced on April 2 by the Trump administration almost immediately were postponed until July 9. At the same time, tariffs on China escalated to 145% from the US side and 125% on the Chinese side. These were then, mostly, put on pause from May 14. What does the hard data tell us about how shippers and carriers are managing the situation? From a demand perspective, it is interesting to take a closer look at the volume developments as measured by Container Trade Statistics (CTS), which measure cargo at the time of loading at origin. The impact on US ports will come as a delayed effect when the cargo finally arrives. For non-Chinese origins, the announced 90-day pause in April led to an assumption that US importers would attempt to frontload cargo prior to the expiry of the pause to reduce their risk — the caveat being that, despite the pause, there is still a 10% baseline tariff on all countries. Initially, the data appears to support the notion of frontloading as volumes from Europe, South America, Africa, the Indian subcontinent and Middle East all grew faster in April than in the first quarter. However, this changed in May as growth rates dropped sharply compared with April, with the Indian subcontinent and Middle East as the only exception. That implies that US importers changed their method from frontloading cargo to a wait-and-see approach, limiting their imports instead. For Asia, the impact of the tariffs on China was substantial. In April, volumes from Asia to North America declined 8% month over month; in May, they dropped 15% from April. Data for cargo loaded in June is not yet available, but we can infer what happened based on capacity and spot rate data. The tariffs on China were paused in mid-May, leading instantly to a surge in demand. This was largely demand based on cargo that had been held back in China and hence was ready to go. Prior to the pause, ocean carriers had reduced capacity on the trans-Pacific in response to the sharp decline in demand. Despite rapid efforts to reassign vessels to the Pacific, it effectively took three weeks before an actual increase in capacity was in place. This caused spot rates to surge due to high demand and low capacity. The expectation at the time was that the surge would continue as US importers would want to frontload their peak season volume prior to the Aug. 14 expiry of the 90-day US pause on the higher China tariffs. This is also what many shippers told the carriers at the time, and the carriers responded by phasing in more capacity. However, as we got into June, US importers changed their perspective and pulled back on the notion of frontloading as valid risk mitigation in the face of increasing tariff uncertainty. The surge, therefore, fizzled out once the initial excess cargo had been shipped. As a result, the spike in spot rates was short-lived, and carriers are now quickly reversing their operational planning and are in the process of withdrawing capacity from the trans-Pacific again. <h3>Importing only what is ‘absolutely necessary’ </h3>Given the frequent, and significant, announcements regarding new tariffs and tariff deadlines, combined with the clear uncertainty as to which of the stated new tariffs will actually be implemented or not, it is not surprising that US importers are mainly adopting a wait-and-see strategy, importing only what they believe to be absolutely necessary. The problem, as seen during the recent trans-Pacific spike, is that the physical supply chain simply cannot react as fast as regulations change. Even in the face of the cargo surge once the pause on Chinese tariffs was announced, it took the carriers three weeks to properly inject capacity as needed. And by then, conditions were changing again. This tells us that the short but strong spike in spot rates experienced in May/June is an event we are quite likely to experience again — just as we might experience short and sharp downturns that are then reversed. Shippers react to trade conditions, and while they cannot necessarily react as quickly as they would like to, they can certainly make day-to-day decisions related to holding back bookings or surging bookings if they have added inventory at the origin side. The carriers, however, are restricted by the sailing speeds of their vessels and cannot react as swiftly. This sets the scene for future events where supply and demand can be temporarily and severely unbalanced. Contact Lars Jensen at <a href="mailto:lars.jensen@vespucci-maritime.com">lars.jensen@vespucci-maritime.com</a>. </div>

Under normal circumstances, the peak season for goods imports from Asia to the US would be well underway. However, cargo demand developments this year on the trans-Pacific are anything but normal. Clearly, the reason for the atypical development is the rapid changes in US trade policy, which has caused significant problems for US importers as well as US exporters to China. A government can, of course, choose to change its trade policy with little notice. But it is worthwhile exploring how rapid changes are detrimental to the management of container shipping supply chains. Most “reciprocal” US tariffs announced on April 2 by the Trump administration almost immediately were postponed until July 9. At the same time, tariffs on China escalated to 145% from the US side and 125% on the Chinese side. These were then, mostly, put on pause from May 14. What does the hard data tell us about how shippers and carriers are managing the situation? From a demand perspective, it is interesting to take a closer look at the volume developments as measured by Container Trade Statistics (CTS), which measure cargo at the time of loading at origin. The impact on US ports will come as a delayed effect when the cargo finally arrives. For non-Chinese origins, the announced 90-day pause in April led to an assumption that US importers would attempt to frontload cargo prior to the expiry of the pause to reduce their risk — the caveat being that, despite the pause, there is still a 10% baseline tariff on all countries. Initially, the data appears to support the notion of frontloading as volumes from Europe, South America, Africa, the Indian subcontinent and Middle East all grew faster in April than in the first quarter. However, this changed in May as growth rates dropped sharply compared with April, with the Indian subcontinent and Middle East as the only exception. That implies that US importers changed their method from frontloading cargo to a wait-and-see approach, limiting their imports instead. For Asia, the impact of the tariffs on China was substantial. In April, volumes from Asia to North America declined 8% month over month; in May, they dropped 15% from April. Data for cargo loaded in June is not yet available, but we can infer what happened based on capacity and spot rate data. The tariffs on China were paused in mid-May, leading instantly to a surge in demand. This was largely demand based on cargo that had been held back in China and hence was ready to go. Prior to the pause, ocean carriers had reduced capacity on the trans-Pacific in response to the sharp decline in demand. Despite rapid efforts to reassign vessels to the Pacific, it effectively took three weeks before an actual increase in capacity was in place. This caused spot rates to surge due to high demand and low capacity. The expectation at the time was that the surge would continue as US importers would want to frontload their peak season volume prior to the Aug. 14 expiry of the 90-day US pause on the higher China tariffs. This is also what many shippers told the carriers at the time, and the carriers responded by phasing in more capacity. However, as we got into June, US importers changed their perspective and pulled back on the notion of frontloading as valid risk mitigation in the face of increasing tariff uncertainty. The surge, therefore, fizzled out once the initial excess cargo had been shipped. As a result, the spike in spot rates was short-lived, and carriers are now quickly reversing their operational planning and are in the process of withdrawing capacity from the trans-Pacific again. Importing only what is ‘absolutely necessary’ Given the frequent, and significant, announcements regarding new tariffs and tariff deadlines, combined with the clear uncertainty as to which of the stated new tariffs will actually be implemented or not, it is not surprising that US importers are mainly adopting a wait-and-see strategy, importing only what they believe to be absolutely necessary. The problem, as seen during the recent trans-Pacific spike, is that the physical supply chain simply cannot react as fast as regulations change. Even in the face of the cargo surge once the pause on Chinese tariffs was announced, it took the carriers three weeks to properly inject capacity as needed. And by then, conditions were changing again. This tells us that the short but strong spike in spot rates experienced in May/June is an event we are quite likely to experience again — just as we might experience short and sharp downturns that are then reversed. Shippers react to trade conditions, and while they cannot necessarily react as quickly as they would like to, they can certainly make day-to-day decisions related to holding back bookings or surging bookings if they have added inventory at the origin side. The carriers, however, are restricted by the sailing speeds of their vessels and cannot react as swiftly. This sets the scene for future events where supply and demand can be temporarily and severely unbalanced. Contact Lars Jensen at lars.jensen@vespucci-maritime.com .

Whiplash of US tariff policy forces importers into ‘wait-and-see’ mode

<div class="phx-topic abstract-wrapper">The agreement clears the way for BNSF to move cargo from Los Angeles, Long Beach and Oakland to Salt Lake City for ocean carriers CMA CGM and Mediterranean Shipping Co.</div>

The agreement clears the way for BNSF to move cargo from Los Angeles, Long Beach and Oakland to Salt Lake City for ocean carriers CMA CGM and Mediterranean Shipping Co.

<div class="phx-topic">BNSF Railway and Union Pacific Railroad (UP) have reached an agreement ending a dispute that delayed the launch of international intermodal train service between ports in California and Salt Lake City. The two railroads <a href="https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1752685668843/52671.pdf">notified the US Surface Transportation Board (STB)</a> of the deal ahead of a briefing that had been scheduled for next week to discuss details of the dispute with regulators. The meeting between the railroads and the STB has been canceled in light of the deal. The agreement clears the way for BNSF to move cargo from Los Angeles, Long Beach and Oakland to <a href="https://www.joc.com/article/bnsf-up-dispute-threatens-oakland-slc-service-triggers-stb-petition-6040399">Salt Lake City</a> for ocean carriers CMA CGM and Mediterranean Shipping Co. As part of the deal, BNSF agreed to use a southern route through Donner Pass, coming to an undisclosed financial agreement on compensation it will provide to UP. BNSF originally balked at the idea of the southern route crossing between Lake Tahoe and Reno because it said UP could charge for upgrades it made to the Donner Pass tunnel in 2009, which BNSF said would amount to tens of millions of dollars. UP owns the tracks and dispatching, but BNSF has trackage rights and provides the locomotives and railcars to operate the service. Originally, BNSF wanted to route trains to Keddie, California, then east to Salt Lake City via a northern route that would allow the company to avoid paying the fees to use the southern route through Donner Pass. BNSF argued that UP’s reluctance to agree on the northern route was rooted in a desire to recoup funds for the Donner Pass upgrades and out of retribution because MSC and CMA CGM were former UP customers that switched to BNSF last year. UP said the Salt Lake City service could not begin last week as planned because BNSF did not provide adequate notice to UP management, so it required more time on UP’s part to hire the crews and build work schedules to accommodate BNSF. BNSF is hopeful the new route will result in volume growth. On average, about 25,000 containers per year move from the ports of Los Angeles and Long Beach to Salt Lake City and about 15,000 annually from the Port of Oakland to Salt Lake City, according to Journal of Commerce estimates of data filed with the STB. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

BNSF Railway and Union Pacific Railroad (UP) have reached an agreement ending a dispute that delayed the launch of international intermodal train service between ports in California and Salt Lake City. The two railroads notified the US Surface Transportation Board (STB) of the deal ahead of a briefing that had been scheduled for next week to discuss details of the dispute with regulators. The meeting between the railroads and the STB has been canceled in light of the deal. The agreement clears the way for BNSF to move cargo from Los Angeles, Long Beach and Oakland to Salt Lake City for ocean carriers CMA CGM and Mediterranean Shipping Co. As part of the deal, BNSF agreed to use a southern route through Donner Pass, coming to an undisclosed financial agreement on compensation it will provide to UP. BNSF originally balked at the idea of the southern route crossing between Lake Tahoe and Reno because it said UP could charge for upgrades it made to the Donner Pass tunnel in 2009, which BNSF said would amount to tens of millions of dollars. UP owns the tracks and dispatching, but BNSF has trackage rights and provides the locomotives and railcars to operate the service. Originally, BNSF wanted to route trains to Keddie, California, then east to Salt Lake City via a northern route that would allow the company to avoid paying the fees to use the southern route through Donner Pass. BNSF argued that UP’s reluctance to agree on the northern route was rooted in a desire to recoup funds for the Donner Pass upgrades and out of retribution because MSC and CMA CGM were former UP customers that switched to BNSF last year. UP said the Salt Lake City service could not begin last week as planned because BNSF did not provide adequate notice to UP management, so it required more time on UP’s part to hire the crews and build work schedules to accommodate BNSF. BNSF is hopeful the new route will result in volume growth. On average, about 25,000 containers per year move from the ports of Los Angeles and Long Beach to Salt Lake City and about 15,000 annually from the Port of Oakland to Salt Lake City, according to Journal of Commerce estimates of data filed with the STB. Contact Ari Ashe at ari.ashe@spglobal.com .

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

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Shippers save money, time with automated transportation bidding tools

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

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