Greg Knowler is Senior Europe Editor at the Journal of Commerce, based in the London. His coverage spans transportation and logistics issues in Europe and the Asia-Pacific for JOC.com and the Journal of Commerce's biweekly magazine, chairs the annual Container Trade Europe Conference in Hamburg, and co-chairs TPM Asia in Shenzhen, China, both organized by Journal of Commerce Events. After 11 years as a reporter and editor for several daily newspapers in Durban, South Africa, he moved to Hong Kong in 2000 to join the South China Morning Post sports department before becoming editor of Cargonews Asia, a regional logistics magazine. He joined the Journal of Commerce in 2014. A South African native, he moderates at industry conferences and shipper round tables while bringing context to the news coverage and analysis crucial for shippers in Europe and the Asia-Pacific.

<div class="phx-topic abstract-wrapper">This would be the fourth attempt at an IPO from Zim since 2008, but the carrier will go to the market this time riding a wave of record profits for the company.</div>

This would be the fourth attempt at an IPO from Zim since 2008, but the carrier will go to the market this time riding a wave of record profits for the company.

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<div class="phx-topic">Zim Integrated Shipping Services, riding high on expectations of record profits for 2020, has released its prospectus ahead of an initial public offering (IPO) planned for late January on the New York Stock Exchange.The prospectus, released last week, values the Haifa-headquartered carrier at $1.5 billion, with 320,000 TEU of capacity and a global network of 66 weekly lines. Zim hopes to raise up to $100 million in the IPO.This is the fourth attempt at an IPO from the carrier since 2008 after “<a href="https://www.joc.com/maritime-news/container-lines/zim-integrated-shipping-services/zim-seen-new-ipo-bid_20170720.html">weak market conditions and a poor earnings record</a>” scuppered past efforts in 2008, 2011, and 2016, according to maritime analyst Alphaliner.But Zim is in a very different financial place compared with a few years ago. The carrier was mired in $7 billion of debt after the global financial crisis in 2009, but has since steadily improved its profitability and posted a record quarterly profit in the third quarter of 2020.Zim capitalized on investments in digitalization to help customers, a surge of Asia exports, and stronger pricing to report a <a href="https://www.joc.com/maritime-news/container-lines/zim-integrated-shipping-services/zim-launch-new-expedited-services-after-record-profit_20201118.html">third quarter 2020 net profit of $144.4 million</a>. The company is expecting an even better result in the fourth quarter, and a record 2020 full-year result.The Israeli carrier has also capitalized on the demand for expedited shipping services for air cargo shippers following the travel bans to limit the spread of the coronavirus disease 2019 (COVID-19) that <a href="https://www.joc.com/air-cargo/air-cargo-capacity-drying-non-emergency-shipments_20200324.html">grounded most of the world’s long-haul passenger fleet</a>. Zim started a Tampa-Mexico shuttle service in December, with the weekly service connecting to Altamira and allowing shippers to avoid delays at ports of entry on the US-Mexico border. That followed the launch in September of an expedited service from China to Australia after five years out of that trade, and a re-entering of the Asia-US West Coast trade in June with an expedited service to Los Angeles.Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

Maritime

Zim readies for latest IPO attempt amid record profits

<div class="phx-topic abstract-wrapper">Shippers on Asia-Europe ocean trades can expect elevated rate levels and limited vessel space well into the first quarter as demand and restocking fills all available capacity.</div>

Shippers on Asia-Europe ocean trades can expect elevated rate levels and limited vessel space well into the first quarter as demand and restocking fills all available capacity.

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<div class="phx-topic">Equipment shortages, strong demand, and soaring rates on Asia-Europe continued through the festive period, with forwarders and carriers seeing little sign of easing market conditions ahead of Chinese New Year (CNY) in February.Spot rates from China to North Europe reached $4,091 per TEU on Dec. 31, according to last week’s reading of the Shanghai Containerized Freight Index (SCFI), an incredible 264 percent increase year over year. China-Mediterranean rates followed the same path, with the $4,286 per TEU rate up 261 percent compared to the same week last year. Data from Xeneta, a freight rate benchmarking and market analytics platform, shows Asia-Europe spot rates rising almost vertically since the end of October, from $1,164 to a Jan. 2 price of $4,191 per TEU.While the indices reflect the aggregated rates being paid on the trade, shippers are reporting some eye-popping quotes on Asia-Europe from forwarders. A shipper told JOC.com that a forwarder last week offered Asia-North Europe rates, valid for a week, of $13,000 to $16,000 per FEU. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5255555_1.0.PNG"></img><a href="https://www.joc.com/s3/files/%2Fsites%2Fdefault%2Ffiles%2Fu283871%2F1_Jan%204%20Asia-EU%20ocean%20SCFI.PNG">Click to enlarge</a>.</div>“I know the lane is incredibly tight with less relief than others, but these prices are crazy,” the shipper said.China’s spring festival to celebrate the Lunar New Year begins Feb. 12, and factories traditionally close for up to three weeks after that. But mixed reports are emerging this year from manufacturers in China that factories will either remain open to service backlogs of orders, or close for longer.This uncertainty is not making capacity management by carriers any easier. In its Sunday Spotlight newsletter, Sea-Intelligence Maritime Analysis said carriers have so far only announced seven blank sailings on Asia-Europe over the three-week Chinese New Year period from the end of January. Carriers have announced a total of 6 to 13 percent of capacity will be blanked compared with 40 percent of capacity last January.The analyst noted that carriers typically announced blank sailings six to eight weeks before Chinese New Year, and that “the clock is ticking.” However, there might be a reason behind the carrier silence.A spokesman for Maersk said although visibility on demand this year remained limited, the current freight buying patterns and the equipment and vessel availability issue would be temporary.The carrier expects demand to "normalize" during the first half and anticipates blanking fewer sailings around Chinese New Year to rebalance its container flows. Replenished stocks in US and Europe markets and the vaccine roll out "will also mitigate the situation," the spokesman said.<h2>‘No sign of weakening demand’</h2>But sustained and heavy demand will keep container rates elevated well into the first quarter, according to Dominique von Orelli, executive vice president and head of global ocean freight at DHL Global Forwarding. He said Monday that the “extremely strong demand” was showing no signs of weakening. “During Chinese New Year it will calm down a bit, but the surge will likely also go into March and the second quarter,” von Orelli said, adding that any surplus volume above the agreed minimum quantity commitments (MQCs) “comes with a price tag.”An executive for a Europe-based logistics provider who did not want to be identified told JOC.com in late December that rates would rise through January and remain high until at least the end of the first quarter. “If you go into a retail store in Germany and try to buy a running jacket, or go to IKEA and try to buy a bed, or chairs from a home furnishing store, they will give you lead times of 12 weeks or more because everything is being sold out,” he said. “Most companies are trying to restock, but they are at the same time continuing to face strong demand, so they are struggling to get inventories up to levels where they can service customers,” the source added. “It will take some time to balance this out, which is why we don’t see demand leveling off until March or April.”This view was shared by Hapag-Lloyd CEO Rolf Habben Jansen. “Two months ago, I would have said that [high] demand would last until Chinese New Year and then volumes would decline,” he said in a late December market update. “Today, I have to say that we will probably have to deal with very high transport volumes for some time to come,” he added. “After all, there were not only bottlenecks in the logistics chain, but also in production. There is still a lot of catching up to do there, too. I'm afraid it will be a while before the bottlenecks are resolved. Chinese New Year will bring relief for two or three weeks. But not everything will have caught up by then.”Accompanying the high demand on Asia-Europe since the third-quarter peak season has been an acute shortage of empty containers in China, and the Europe logistics executive said tight equipment availability would remain a severe problem into the second quarter. “By then we will hopefully see an easing of the dire pandemic situation and a greater availability of work forces in warehouses and terminals in Europe and other destinations that will allow the faster turnaround of equipment,” he said.Contact Greg Knowler at <a href="mailto:greg.knowler@ihsmarkit.com">greg.knowler@ihsmarkit.com</a> and follow him on Twitter: <a href="https://twitter.com/greg_knowler">@greg_knowler</a>.</div>

No relief from high rates, tight capacity on Asia-Europe trade

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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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Zim readies for latest IPO attempt amid record profits

No relief from high rates, tight capacity on Asia-Europe trade