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ajot.com May 25 - june 21, 2020

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American Journal of Transportation

2

Iron giant paints rosy 2020 demand picture Miner BHP Group hangs its hat on China’s reopening

By Peter Buxbaum, AJOT Prices for iron ore and steel have both held fairly steady for the last couple of weeks, both having recovered from an April dip.

This situation stands in contrast to the longerterm trend. In mid-May, iron prices stood at slightly above their February levels, while steel had fallen off 12.5%, continuing a longer pattern in which steel producers have been squeezed while the big iron ore miners have profited.

Earlier this year, officials at BHP Group, one of four big iron ore extractors, celebrated their company’s 2019 success, but cautioned that the spread of COVID-19 could depress iron ore demand projections for 2020 if the fallout extended beyond March.

Here we are in May, with little if any abatement in the disease’s spread, yet the same company recently announced it had produced 3% more iron ore in the nine months ending March 31, 2020, and 7% more in the most recent quarter. In contrast to other publicly-traded companies in these uncertain times, many of which have pulled back their guidance for 2020 and beyond, BHP has held firm with its expectation that its 2020 iron ore production will hold steady with last year’s.

What accounts for BHP’s rosy outlook? It’s been widely reported of late that China is making strides towards reopening its economy, and particularly industrial production, including steel. The New York Times recently reported that Chinese “factories…are humming again, and even the air pollution is coming back.” Industrial plants in the United States are also planning to reopen.

to be counting on China’s resurgence to fuel continued demand for iron ore. A recent company report noted that “industrial activity in China is showing signs of early recovery, aided by supportive credit and fiscal policy.” BHP sees steel production outside China narrowing by double digits in 2020 as long as steelmakers in Europe, the Americas, India, and Japan remain shut down. But that situation may also be changing.

“While demand in China (ROSY – continued on page 4)

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breakbulk quarterly

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China’s Domestic Production S&P Global Platts recently reported that Chinese domestic steel production, which had fallen to under 190 million tons per annum (Mtpa) in February 2020, has since recovered to around 202 Mtpa. That’s still lower than the December 2019 figure of 211 Mtpa, but it shows improvement. Production in China of pig iron, an intermediate product made by smelting iron ore, is up 1.7% this year over last. Port outflows, according to the report, were 10% higher year-on-year from March through mid-April.

All this explains why iron ore prices have “been resilient to the COVID-19 shock so far.”

BHP Group appears

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4 (ROSY – continued from page 2) has strengthened in recent weeks,” Chief Executive Officer Mike Henry said, in a recent call with analysts and journalists, “we expect other major economies, including the U.S., Europe, and India, to contract sharply in the June

demand, after increasing by 2.35% year on year in March and falling 27% year on year over January and February.

Even with steel imports into China rising by 26.5% on the year in March, China’s net steel exports were down 1.64% on the year for that month, and down 21.33% on

Steel Imports by Ocean Carrier in MT Oldendorff Carriers

440,886.97

609,417.45

Western Bulk Carriers AS

276,990.53

638,113.29

Pan Ocean Co Ltd

195,076.07

173,055.83

Sk Shipping Co Ltd

133,493.43

335,583.58

Toko Line

115,925.97

150,713.39

Clipper Steel Services Ltd

107,770.60

209,875.66

China Navigation Co Pte Ltd

62,368.07

-

Wagenborg Shipping BV

46,975.31

356,093.74

Saga Welco AS

39,313.13

45,560.60

Federal Atlantic Lakes Line

30,006.98

-

Others

5,123,099.25

5,390,584.54

Total

6,571,906.31

7,908,998.08

Source: Descartes-Datamyne

2020 quarter.”

But, Henry added, “The situation remains fluid.”

Indeed. Data and anecdotal information paint a murky picture for iron and steel this year. S&P Global Platts projects that China’s finished steel exports will drop sharply in May and June thanks to weak international

the year during the first quarter of 2020.

These numbers point to the fact that Chinese domestic demand recovered somewhat beginning in early March, when the country reported it had largely contained the virus. However, since the virus has spread around the world, export demand has

been hit hard, leading to projections for weak May and June sales. That weakness may also be partially based on the assessment that Chinese steel has lost its price edge to competitors in Russia, Japan, and South Korea. On the other hand, if Chinese domestic demand continues to grow, which is by no means certain, steel imports into China could be boosted in the coming months.

Optimism in US

News out of the United States provides some cause for optimism for iron ore producers like BHP but also reasons for hedging. Automakers Ford and General Motors, both major consumers of steel, were both set to reopen most of their production facilities on May 18.

Ford announced it would be working two, rather than three, shifts and recalling 12,000 auto workers. All of Ford’s North American production facilities have been closed since mid-March due to the COVID-19 pandemic.

The heavy equipment manufacturer CNH Industrial, manufacturer of Case and New Holland agricultural and construction equipment, (ROSY – continued on page 5)

ajot.com

Steel Imports by Country in MT Country of Origin Brazil

Q1 2020

Q1 2019

1,993,652.84

1,972,614.69

Canada

696,386.15

408,084.93

Japan

688,094.98

391,059.75

Russia

416,814.66

454,345.16

Trinidad & Tobago

345,575.29

412,694.77

Switzerland

319,472.76

676,629.03

South Korea

291,247.70

283,294.20

Mexico

254,009.03

227,775.91

Romania

218,446.26

46,130.35

Turkey

142,694.14

162,967.75

Others

1,205,512.50

2,873,401.54

Total

6,571,906.31

7,908,998.08

Source: Descartes-Datamyne

US Steel Imports by Port in MT U.S. Port

Q1 2020

Q1 2019

1,222,851.99

1,348,093.76

New Orleans, LA

973,404.61

1,062,919.90

Gramercy, LA

935,296.48

680,998.44

Corpus Christi, TX

585,006.92

105,768.00

Brownsville TX

454,226.29

246,205.81

Charleston, SC

438,769.04

460,300.82

Philadelphia, PA

319,271.85

620,871.30

Freeport, TX

249,193.84

91,933.52

Houston, TX

232,915.29

917,527.20

Vancouver, WA

172,750.37

328,639.76

Others

988,219.63

2,045,739.57

6,571,906.31

7,908,998.08

Mobile, AL

Total

Source: Descartes-Datamyne

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breakbulk quarterly

A distressed aluminum industry gets government help

By Peter Buxbaum, AJOT Aluminum prices have cratered since late February, falling by over 50% during that interval. Suppressed demand thanks to COVID-19 closedowns are certainly one reason.

Another reason might be that China is dumping its excess aluminum onto global markets. The domestic U.S. industry has complained that Chinese aluminum has been entering the country through third parties to evade the Trump administration’s Section 232 tariffs, and the United States Department of Commerce has issued proposed rules to combat that phenomenon.

Industrial users of aluminum, such as the auto industry, have seen their businesses fade in the face of the pandemic. Early 2020 forecasts called for more than 16 million cars to be sold in the U.S. Now the industry is saying they will sell no more than 12 million. As a result, Aludyne Inc., a global producer of aluminum chassis headquartered in Michigan, is letting go of 250 employees at locations in Michigan and Georgia.

Alcoa Corp. recently announced it would be shuttering its smelter in Ferndale, Washington, and laying off 700 workers. The aluminum giant says it’s trimming nearly half of its global smelting capacity.

The Commerce Department’s proposed rules would require importers to identify aluminum shipments’ original country of origin. The concern is that some Chinese aluminum is being sent to countries not subject to U.S. duties, where it’s melted and relabeled before being shipped to the U.S. “The current system is a threat to the health of domestic aluminum manufacturers as the entire aluminum value chain is responding to the unprecedented impact of the COVID-19 pandemic,” said Lauren Wilk, an Aluminum Association vice president.

“There is a level of gamesmanship happening.”

This isn’t the first time the U.S. has seen fit to investigate the origins of metals.

In March 2019, U.S. Customs found some importers transshipped aluminum door thresholds from China through Vietnam with false declarations of origin and without depositing antidumping or countervailing duties.

Last July, Commerce slapped duties on some steel imports from Vietnam for circumventing antidumping and countervailing tariffs against corrosion-resistant (CORE) and cold-rolled steel (CRS)

from South Korea and Taiwan.

In 2017, Commerce hit other CORE and CRS imports from

Vietnam with punitive tariffs, (DISTRESSED – continued on page 7)

Aluminum Imports by Ocean Carrier in MT Ocean Carrier Q1 2020 Q1 2019 Wagenborg Shipping BV 51,235.31 283,840.99 Atlantic Ro-Ro Carriers Inc 50,976.50 3,189.31 G Two (G2) Ocean US Ltd 43,465.80 55,155.41 Spliethoff Transport BV 20,752.00 43,457.28 Macs Maritime Carrier Shipping 17,684.30 32,725.58 Clipper Steel Services Ltd 15,018.60 587.05 China Navigation Co Pte Ltd, 13,480.48 Saga Welco AS 10,283.90 1,669.21 MSC-Mediterranean Shipping Co. 1,106.94 294.46 Atlantic Container Line AB 346.06 142.35 Others 78,899.34 22,534.49 Total 303,249.23 443,596.13 Source: Descartes-Datamyne

(ROSY – continued from page 4) closed its plants in North America on March 30 but has since also announced plans to reopen.

The shutdown of North American industry, not surprisingly, has depressed steel demand, as a result of which, nearly seven million tons per year of flat-rolled steel production have been idled. This year’s automobile sales projections in the U.S. are down over 30% since the beginning of 2020. Demand for aluminum, and its prices, has also been crushed. (See sidebar.)

ArcelorMittal and U.S. Steel reported collectively losing $1.5 billion in the first quarter. U.S. Steel announced that it plans on laying off several thousand employees nationwide. Nucor Corp., the biggest U.S. steelmaker, announced it would cut pay in lieu of laying off employees.

Whether or not U.S.

5 industry opens and remains open, U.S. Steel will be cutting its capital spending this year by 14 percent, as a result of which, completion of several of the company’s strategic projects will be delayed. These actions, according to U.S. Steel President and CEO David B. Burritt, “make us stronger and enable us to weather the current situation.”

The reopening of industrial plants will have positive impact on steel demand and increased demand will influence requirements for iron ore, justifying BHP’s optimistic outlook. But the longer-term impact of the reopening of the U.S. economy is far from clear, as it may lead to new disease outbreaks and the eventual re-closure of production facilities. It remains to be seen whether BHP Group’s positive posture on iron ore demand comes about.

6

American Journal of Transportation

ajot.com

Dow explores sale of its ports, storage and rail businesses

Multipurpose and heavylift shipping to stagnate on coronavirus impacts Drewry’s latest forecast for multipurpose and heavylift (MPV/HL) shipping confirms that if the coronavirus (COVID-19) outbreak is contained by 4Q20, the expected demand growth for breakbulk and project cargo will stay positive but remain very weak.

However, there are a number of caveats to this outlook and in its latest Multipurpose Shipping Forecaster report, Drewry presents three different scenarios, depending on how the virus outbreak and the global economy develops over 2Q20. These range from the fairly benign best case, where the global economy picks up in 2H20 and with it dry cargo demand, to a negative scenario where COVID-19 is not contained over 2020, leading to a global recession. The base case scenario is seen as most likely.

Base-case Forecast

Drewry’s base case scenario starts with the caveat that a global economic recovery will not begin until 4Q20.

Any recovery that had been anticipated for 2Q20 and 3Q20 is now expected to be delayed as some of the pent-up demand will have vanished due to both the longevity of the crisis and the oil market crash. The two events (COVID-19 plus the price of crude oil dropping below $30/bbl) have resulted in predictions of wide scale unemployment and company bankruptcies, which when occurring together reduce investment and the collective purchasing power of the world’s population.

The other key driver for the MPV/HL sector is the competition effect and the continued encroachment by container and bulk carriers into the breakbulk and project cargo space.

Drewry expects a U-shaped recovery in container demand over 2021 under our base-case scenario. However, this will be tempered with continued oversupply issues in this sector, resulting in little weakening of the market share taken by the container lines. It is also the

case that once the switch has been made to containerisation, shippers and receivers are (STAGNATE – continued on page 7)

Dow Inc. is exploring the sale of its ports on the U.S. Gulf Coast and six railway hubs as it refocuses on chemicals, according to people with knowledge of the matter.

The company has tapped a financial adviser to solicit prospective suitors, said one of the people, who requested anonymity because the talks are private. A representative for Midland, Michigan-based Dow declined comment.

The potential divestitures echo moves across the industry to focus on manufacturing chemicals efficiently while hiving off responsibility for running the ground infrastructure, from power supplies to transportation. Macquarie Infrastructure & Real Assets last year paid Bayer AG and Lanxess AG more than $3.5 billion to take over their chemical park operations, gaining a steady income from long-term service and supply contracts with the companies on site.

Dow’s marine and storage operations, known as its Mars unit, includes 136 chemical and liquid hyrdocarbon tanks with 200 million gallons (760 million liters) of capac-

ity, as well as 11 marine docks, according to one of the people. The terminals—including ones in Freeport, Texas, and St. Charles and Plaquemine in Louisiana—are located near railway lines operated by Union Pacific Corp.

Open land and unused tank capacity may also be included in a transaction, the person said.

More than 70% of Mars revenue last year came from Dow, and the company would seek a 25-year contract with the buyer for marine and terminal services, one of the people said.

The business also has third-party customers, most which have a minimum of 15 years remaining on their leases.

For the potential rail divestiture, Dow wants a similar long-term partner for infrastructure critical to its manufacturing operations at six sites in North America, another person briefed on the matter said. The plants in Baton Rouge and New Orleans, Louisiana; in Houston and Corpus Christi, Texas; and in Alberta, Canada, at Calgary and Edmonton, represent the bulk of Dow’s olefins and poly(EXPLORES – continued on page 7)

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breakbulk quarterly

may 25 - june 21, 2020 (STAGNATE – continued from page 6) reluctant to revert due to the initial investment costs. It is therefore our expectation that market share is unlikely to revert back to MPV/HL vessels but the pace of loss of that share will be slower.

As a result, Drewry expects MPV/HL cargo demand growth to stagnate in the two years to 2021, growing at an average annual rate of just 0.3%.

High-case scenario

The best-case scenario has, in our opinion, the least likelihood of becoming reality. However – for the sake of completeness – it proposes a modest but positive GDP growth forecast for 2020. It expects container demand to be weaker in 2020 but nevertheless to show positive growth compared to 2019. Meanwhile, bulk demand is hardly expected to slow over the summer months and will show steady growth over the year.

This low probability, high demand scenario suggests that although the MPV/HL market share is unlikely to be regained, the encroachment by the competing sectors is significantly reduced so that it does not worsen over the period. This leads to more buoyant demand growth for the MPV sector over the forecast period.

US Imports of Aluminum in MT

US Aluminum Imports by Port in MT U.S. Port

Q1 2020

7

Q1 2019

Country of Origin

Q1 2020

Q1 2019

Baltimore, MD

94,813.25

199,204.96

Canada

94,284.86

32,966.52

New Orleans, LA

79,355.03

132,629.28

United Kingdom

49,113.76

221,933.97

Brownsville, TX

22,282.16

24,238.74

Argentina

43,458.89

50,633.25

Port Manatee, FL

18,885.60

22,140.39

South Africa

21,738.02

11,063.74

Philadelphia, PA

14,880.08

5,742.31

Houston, TX

14,797.65

19,997.18

Galveston, TX

13,491.62

0.12

Port Arthur, TX

12,728.19

Mobile, AL Los Angeles, CA OTHERS Total

Norway

20,752.00

16,529.52

Spain

13,480.78

0.29

Netherlands

12,285.97

237.97

16,482.94

India

10,675.31

1.45

11,867.26

12,010.62

Brazil

10,266.99

3,039.47

10,305.46

1,789.60

Qatar

6,432.78

-

9,842.93

9,359.99

Others

20,759.87

107,189.95

303,249.23

443,596.13

303,249.23

443,596.13

Total

Source-Descartes-Datamyne

(DISTRESSED – continued from page 5) finding that they actually originated in China.

In the current brouhaha, it’s thought that Chinese aluminum is entering the U.S. through Mexico. Under the

new North American trade deal, the U.S., Canada and Mexico agreed to stop diversion of shipments from other nations to dodge tariffs.

In December, Canada’s aluminum association complained that Mexico was

Source: Descartes-Datamyne

acting as China’s North American backyard “to dispose of the products of its overcapacity.” The Instituto Mexicano del Aluminio has said it is helping the U.S. stop unfair trade practices, and that China accounts for less than 1% of

Mexico’s primary and semifinished imports.

But the new U.S. rules will take months to get on the books, much less enforce, too late to provide immediate help to a U.S. industry suffering from a pandemic depression.

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Low-case scenario

For the low-case scenario, which we have to say has an increasing likelihood of reality, we have anticipated a global economic recession over 2020. Large scale unemployment and business casualties lead to increasing uncertainty across global markets and a prolonged downturn in freight rates in the dry cargo sector.

For the MPV/HL segment this is compounded by weak oil prices, which remain at below $30/bbl for the foreseeable future. Demand for this sector is further squeezed by the container and bulk carriers and market share drops further. This leads to a negative demand outlook for MPV/HL vessels.

(EXPLORES – continued from page 6) ethlene production capacity.

Dow has accounted for more than 75% of its rail business’s revenue, which had a compound annual growth rate of about 7% over the last three years, the person said.

The company has offered to sign a 25-year agreement with potential suitors. Other existing contracts have roughly 12 years remaining, on average.

The company, led by Chief Executive Officer James Fitterling, has seen its stock tumble 42% this year, compared with a 12% drop for the S&P 500 Index.

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8

American Journal of Transportation

ajot.com

Bulk shipping ‘at the very bottom’ as carrier earnings plunge

AAL Melbourne recently loaded two cranes and their components weighing just over 1,800 mt in total in Taicang for onward transport to Jebel Ali.

AAL delivers 1,800mt of giant jib cranes to Dubai The AAL Melbourne recently loaded two cranes and their components weighing just over 1,800 mt in total in Taicang, for onward transport to Jebel Ali. The 42m high main modules towered over the 31,000 dwt megasize vessel and, lit up in the evening, took-on an imposing resemblance to two Martian tripods from H.G. Wells War of the Worlds.

Manufactured in China by global supplier of heavy lifting and handling equipment, Nantong Rainbow Heavy Machineries Co. ltd., the two ‘jib cranes’ were loaded by the mega-size A-Class HL MPV, the AAL Melbourne in Taicang. They were then discharged in Jebel Ali, for deployment at the DP World’s Shipyard in Dubai – the largest facility of its kind in the Middle East, which handles an approximate 350 vessels a year, mostly ultra and very large crude carriers.

Jack Zhou, General Manager of AAL China – the office responsible for booking the cargo – said, ‘The crane components comprised just under 20 big units, the largest of which weighed over 550mt and measuring 115m long. Some we loaded from the wharf and others from a floating barge. They were stowed both in under-deck holds and on the weather deck. Added to this, we received unexpected last minute instructions and changes from the charterer, but were able to safely complete loading to a very tight and unmovable loading deadline.’

Nicola Pacifico, head of AAL Transport Engineering – the function responsible for planning the loading, stowage and discharge operations – explained, ‘Even with a vessel providing 40,000cbm stowage capacity, space was extremely tight on this project. The two main structures had to be secured on specially laid rails. One of these came to within 20 cm of our own ship’s crane. This is very close, as decks are rarely even and such tolerances are unusual. If at any point we thought they might touch we would have had to discharge the structure, move the rails and reload again.’

He added, ‘This is the type

of situation where engineering precision resonates most. Had we not planned so carefully for the potential risks involved and matched these perfectly against the capabilities of the vessel and skill of the crew, the safety and timing of the entire operation could have been compromised.”

Vessels carrying dry bulk commodities are struggling to make a profit because of the double hit of lower seasonal demand for cargoes and the Covid-19 pandemic that’s wrecking trade and industrial activity worldwide.

“We’re really at the very bottom for dry bulk,” William Fairclough, managing director of Wah Kwong Maritime Transport Holdings Ltd., one of Hong Kong’s largest independent ship owners, said in an interview.

Shipments out of Brazil, one of the dry bulk market’s main shippers, continue to be low, and global supply chains are being upended by the virus, he said. “The entire dry bulk carrier sector’s earnings are basically nothing.”

The Baltic Exchange Capesize Index, a measure of freight rates for bulk cargoes from coal-to-iron ore, has tumbled this year, with a short rebound in April petering out. The Baltic Dry Index, a broader gauge of vessel demand, plunged last week to the lowest since 2016.

The virus is an additional blow to a market already in pain. The early months of the year are seasonally weak, and there were fewer iron

ore cargoes from Brazil and Australia due to weather disruptions. Last year, a dam disaster at iron ore producer Vale SA lowered exports.

“We are now in uncharted territory because it’s impossible to understand, or to gauge, when various lockdowns measures are going to be lifted in different countries, or the impact of a potential second-wave of infection,” said Fairclough. For bulk shipping rates to see a sustained recovery, the India market needs to return, and higher iron-ore volumes from Brazil to China also are needed, he said.

Bulk shipping accounts for about 40% of the company’s revenue, with the balance coming from the tanker market, which has seen a big surge. Both sectors tend to move in opposite directions, which safeguards the company’s earnings. Wah Kwong currently owns 19 vessels with an additional five vessels under construction across bulk carriers and crude oil sectors.

Fairclough expects a gradual improvement for rates in the second-half after a wave of government stimulus packages and and as economic and industrial activity in China recovers.

may 25 - june 21, 2020

breakbulk quarterly

9

BBC Chartering launches Port of Redwood City’s Zortman says new Caribbean Service imports are down but construction demand BBC Chartering brings reliability and flexibility to the Caribbean Sea with a new service sailing twice a month from the port of Houston to Cartagena, Point Lisas, and Georgetown. We can call many other Caribbean ports on an inducement basis.

“Clients are looking for a financially strong and dependable ocean carrier in the

Caribbean market”, according to Per Petersen, President of BBC Chartering USA. “We have customers all over the world who trust us to perform on a global basis, and now we can offer them regular service to the Caribbean.”

BBC is committing to long-term growth in the Caribbean with regular service to key ports.

Cruz seeks to end dependence on China for rare earth metals Senator Ted Cruz said he plans to introduce legislation that aims to end U.S. reliance on China for rare earth elements used in the manufacturing of products including consumer electronics, electric vehicles and fighter planes.

The bill is part of a push in Congress to shift supply chains, particularly in industries critical for national defense, away from China and back toward the U.S. “Much like the Chinese Communist Party has threatened to cut off the U.S. from life-saving medicines made in China, the Chinese Communist Party could also cut off our access to these materials, significantly threatening U.S. national security,” Cruz, a Texas Republican, said in a statement. “The Ore Act will help ensure China never has that opportunity by establishing a rare earth elements and critical minerals supply chain in the U.S.” The bill would create tax incentives for companies to buy rare earth elements within the U.S. It would also require the Defense Department to do so, and would provide money for pilot programs to expand the American rare earths industry.

The legislation is among a number of proposals to strike back at China—whom many Republicans, including President Donald Trump, fault for not acting sooner to prevent the spread of the coronavirus. which led to more than 280,000 deaths worldwide and more than 80,000 in the U.S. Cruz and other Republicans have already introduced measures to reduce U.S. dependency on China for drugs and other medical equipment. They have also sponsored legislation to let U.S. citizens sue China over harm caused by the virus and have called for banning live wildlife markets where the virus may have originated.

China provided 71% of the global rare earth elements produced in 2018 and was the top supplier to the U.S. that year,

according to the Congressional Research Service. Some members of Congress have been pushing for years for the U.S. to reduce its reliance on China for the elements, particularly after trade restrictions in 2010 that (DEPENDENCE – continued on page 11)

remains strong

By Stas Margananis, AJOT The Port of Redwood City, California which imports sand and aggregates for the Silicon Valley construction industry, reports that tonnages for 2020 are down compared to 2019, but the lifting of Covid-19 restrictions on construction by the State of California could alleviate the downturn.

Kristine Zortman, executive director, Port of Redwood City told AJOT: “By comparison, we are about 15-20% lower than the same period last year, however as the cargo is still coming into the Port we will see if those numbers improve now that all construction is allowed in the State. Some construction was halted during the stay-at-home orders but now that the State has lifted restrictions we expect an uptick.”

Importing Sand and Aggregates In April 2020, the Port reported 5 vessel arrivals generating a monthly tonnage total of 139,095. The cumulative fiscal year tonnage for 2020 is 1,845,153 metric tons.

The prime imports are sand and aggregates

from Canada that are used by batch plants and ready mix to produce concrete for construction.

Zortman says major projects like the Facebook expansion and other Silicon Valley expansions have been major consumers of concrete but these projects, “may now be subject to change and we don’t know what those changes are.”

She said “There is a latent impact that we expect to see in the next couple of months.”

However, “the good news is that public infrastructure projects have continued” She cited: • The California Department of Transportation freeway “express lane project continues.”

• Local cities’ “contacts and infrastructure projects are continuing.”

• The Silicon Valley Water District continues “its operations.”

• The impact to the Port is that “we are running two budgets for the fiscal year. The first budget is at current levels while the second one projects a 30% reduction.”

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American Journal of Transportation

10

ajot.com

Federal Marine Terminals implements Octopi by Navis TOS at Port Manatee

The Jumbo Javelin is a dynamic positioned heavy lift crane vessel operated by Jumbo..

Jumbo Javelin upgrades power generation with Alewijnse switchboards Jumbo has called on Alewijnse Marine to fabricate and install two switchboard panels for its heavy lift crane vessel Jumbo Javelin. Alewijnse Marine will engineer, supervise, test and commission the cabling and electrical installation activities during the conversion. The switchboards will manage the additional power provided by six containerized temporary generator sets, which Jumbo has installed to increase the vessel’s capacity for an upcoming contract.

The Jumbo Javelin is a dynamic positioned heavy lift crane vessel operated by heavy lift shipping and offshore installation contractor Jumbo. The 144m-long vessel is typically mobilised for offshore installation contracts, providing dynamically positioned (DP) heavy lift services with its two 900-tonne mast cranes.

Fully Redundant Power

Preparing for an upcoming contract that will require increased power requirements, Jumbo has equipped the Jumbo Javelin with six additional containerised generator sets. These will supply power to the vessel’s bow thrusters and offshore equipment during DP operations. The Alewijnse Marine switchboards will manage this increased power supply. Jumbo will remove the six generators at the end of the project.

“Our switchboards will make it possible for the Jumbo Javelin to have a fully separated power supply for the two bow thrusters,” says Pieter Vosselman, Account Manager Alewijnse Marine. “In the existing set-up, there will not be enough power available for the temporary set up. This upgraded configuration will give Jumbo the extra capacity and reliability to take on this project.”

Alewijnse Marine will ensure the complete integration of the new switchboards into the Jumbo Javelin’s existing systems. Furthermore, the company will install the switchboards in such a way to allow the ship’s electrical systems to return to their previous settings after the removal of the temporary generators. This will be achieved through modifications to the PMS and PLC control systems. The switchboards will remain in position, giving Jumbo the option to increase the vessel’s power capacity again in the future.

“We worked on the Jumbo Javelin when it was being built,” continues Pieter Vosselman. “It is nice to

be back on board with this project – giving this great vessel the flexibility to take on similar jobs in the future.”

Octopi, part of Navis and Cargotec Corporation, the provider of operational technologies and services that unlock greater performance and efficiency for leading organizations throughout the global shipping industry, announced that they have gone live with Octopi by Navis at Federal Marine Terminals Inc., Port Manatee. The stevedoring company implemented Octopi as part of its larger strategy for enhanced operational efficiency.

Located in Florida, Port Manatee is the closest U.S. deepwater seaport to the Panama Canal and handles more than 10 million tons of cargo each year including bulk, breakbulk, container and general cargo. As a tenant of the Port, FMT implementing Octopi at Port Manatee will provide visibility into its operations to keep its customers and FMT employees informed in real-time and will aid in its business goals of increased quality,

efficiency and productivity. Due to the dedication of both the Octopi and FMT teams, the implementation was completed ahead of schedule and was able to be put into practice sooner.

“At Federal Marine Terminals, we have made it a priority to improve our performance to better support our customers’ changing business needs,” said Chris Dugas VP of Operations.

“We selected the Octopi software because it is user friendly and gave us the ability to have real-time data sharing for all of our stakeholders, giving us a competitive edge. To date, we have already seen great results and have gotten positive feedback from our employees using it.”

“Providing end-to-end visibility through our software lets us give insights into terminal operations to help our customers track cargo and allow their teams to make more informed decisions on the ground,” said Martin Bardi, VP Global Sales, Octopi.

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may 25 - june 21, 2020

breakbulk quarterly

11

Expanding to meet business needs and growing New Jersey’s economy

An excavator unloads Vulcan Materials Company’s first rail shipment of bulk aggregate to Port Freeport’s Parcel 14.

Port Freeport receives first rail shipment from Vulcan Materials Port Freeport has announced the arrival of the first rail shipment from Vulcan Materials Company to Port Freeport’s Parcel 14 multi-modal industrial park, a 250-acre site adjacent to State Highway 36. Union Pacific, a long-term partner of Port Freeport, delivered 95 gondola railcars loaded with aggregate limestone rock from Medina County, Texas.

“Port Freeport is excited to welcome the first shipments of aggregate from Vulcan Materials Company’s Medina Quarry to the new rail-served industrial park,” said Jason Miura, Director of Business and Economic Development for Port Freeport. “The Port continues to advance its service offerings that support our customers and economic growth in the region.”

In partnership with Port Freeport, Vulcan Materials Company will develop an aggregate distribution facility on Parcel 14, adjacent to the future Freeport Industrial Park. The facility will allow Vulcan to offer a wider variety of construction materials to their customers in Brazoria County and the region.

“We are very excited about this new chapter in our partnership with Port Freeport. Having rail access, in combination with our existing shipyard, allows us to better supply our customers and diversify our product line in the Coastal Texas Market,” said Shelley Wright, Vice President and General Manager for Vulcan Materials Company. “The Port has always been a creative, solutions-oriented partner and we look forward to working with them to grow our ship and rail presence in Freeport in the years to come.”

Vulcan Materials Company is the nation’s largest producer of construction aggregates—primarily crushed stone, sand and gravel—and a major producer of aggregate-based construction materials, including asphalt and ready-mixed concrete. Port Freeport and Vulcan have

(DEPENDENCE – continued from page 9) sent prices spiking around the world.

The U.S. was once a major producer of rare earth elements—which are relatively abundant but difficult to extract— until China became a major low-cost producer in the mid-1980s, according to the CRS. Cruz and others in Congress have argued that Chinese state subsidies allowed that industry to flourish, killing off American competition.

The bill is called the Onshoring Rare Earths Act.

shared a mutually beneficial relationship since 2002 when the Port Commission approved the assignment of a Lease Agreement with Transit Mix Concrete and Materials Company to Vulcan Materials Company.

Andy Saporito took the helm of the South Jersey Port Corporation (SJPC) and brought with him nearly 40 years of experience. He’s jumped right into ensuring the Port can serve business needs with top-notch facilities and creating a team that can execute the Port’s mission of job creation and economic development. His vision is to develop a growth strategy that leverages relationships with stakeholders, the Port’s team, and current and recently expanded facilities.

“All SJPC employees play a critical role in the everyday operations and success of the Port by driving customer satisfaction” said Saporito. “It’s the team on the docks, in the warehouses, in the offices, and in transit sheds who deliver 24/7, 365 days a year– in all sorts of weather– with a commitment to our customers, tenants, and partners.”

The Port recently announced key additions to its executive team. Kevin

Duffy is the new Chief Operating Officer responsible for overall management of the operations of the terminals, warehouse, vessels and security.

Kevin has 34 years of experience in marine terminal operations, having most recently worked at APM in Elizabeth, New Jersey.

Brendan Dugan - the new Director Business Development – is a 40-year veteran of the maritime industry who has held senior level positions with Port America and Port of Tacoma, will head up efforts to add to the 4 million tons of cargo the Port handles.

Jonathan Atwood joined the team as Chief of Staff and External Affairs, responsible for facilitating decisions of the executive team, implementing a centralized human resource function and developing a more formal system of processes and procedures. He was the Chief of Staff for New Jersey’s First Legislative District, where he managed three offices across two counties.

American Journal of Transportation

12

ajot.com

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Crowley tugs towing the platform from Los Angeles Harbor

Crowley tugs work together to load LP Odyssey launch platform for offshore ship transfer Five Crowley tugboats recently worked together to load the LP Odyssey, a self-propelled, semi-submersible mobile spacecraft launch platform, onto a heavy-lift ship for Barber Moss Ship Management on behalf of Sea Launch/S7 Space. In less than 48 hours, Crowley tugs Master, Leader, Admiral, Veteran and Scout were successfully mobilized for this unique job, complied with customer and regulatory requirements, and began towing the platform from Los Angeles Harbor to an outside anchorage near Long Beach.

Once at anchorage, the 436-foot long by 220-foot wide platform, which called the Port of Long Beach home for more than 20 years, was to be floated onto the Xin Guang Hua heavy transport ship for final transport to the eastern coast of Russia, just south of Port of Vladivostok. Unfortunately, weather conditions and resulting sea swells at anchorage delayed the final set down of the platform onto the ship.

The Crowley tugs continued on stand by while authorities and Crowley’s operations team developed an alternative solution. Shortly thereafter, it was determined that the best course

of action was to move the platform and heavy-lift ship back inside the harbor break water to a suitable depth of water for the operation. In close coordination with local authorities and the U.S. Coast Guard, Crowley’s operations team formulated a plan for a loading window that would minimize interruptions to other port traffic in the busiest port in the United States.

Two days after the initial attempt, the heavy-lift vessel was staged inside the break water under a Crowley tug escort, while the other four Crowley tugs positioned the LP Odyssey over the heavy-lift vessel, and the customer’s operations team de-ballasted and fastened the LP Odyssey for transport.

Crowley’s Master, Leader, Admiral, and Scout are 105-foot, U.S.flagged, Harbor Class tractor tugs.

They feature Voith Schneider, twincycloidal propulsion and a hydrofoilshaped skeg that provides for greatly improved steering, control and seakeeping ability when the vessel runs at high speeds in the skeg-first direction. In addition, the unique hydrodynamics of the hull result in increased tons of steering and braking force, which are available to assist or control a vessel at higher speeds.

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United Heavy Lift appoints Intermarine as commercial agent United Heavy Lift (UHL), a leader in effective, innovative, and tailor-made heavylift transport solutions continues to expand its global commercial network by appointing Intermarine as its exclusive commercial agent in North America.

“Two successful players in the heavylift market are aligning their goals,” said United Heavy Lift CEO, Lars Bonnesen. “Together we are stronger and together we will move forward.”

Dear Shippers,

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Intermarine, a leading provider of ocean freight services to the oil and gas, mining, power, and infrastructure industries, will promote the commercial maritime business of UHL for cargoes controlled in North America.

Together, Intermarine and UHL will provide customers with the quality service, performance, and reliability for which each company has a longstanding reputation.

“We are excited to represent UHL commercially, leveraging our strong network and expertise in the region,” said Intermarine CEO, Richard Seeg.

“We are confident that this relationship will benefit our mutual customers with an even wider scope of services and cargo logistics solutions.”

Intermarine Director of Chartering, Rene Pedersen will lead the commercial efforts with a focus on multi-purpose and heavylift tonnage, including UHL’s newly acquired fleet of nine F900 Ecolift vessels. Pedersen has nearly 20 years of chartering and logistics experience, including many years working alongside UHL’s Bonnesen.

Rene Pedersen, Director of Chartering

may 25 - june 21, 2020

NOrth America’s TRANSPORTATION & LOGISTICS newspaper

For Baltimore’s Tradepoint Atlantic versatility is key

13

ma ry lan d Po r t s 2 0 2 0

Tradepoint Atlantic has embarked on one of the most ambitious industrial transformations in the U.S. as it converts 3,300acres of a former steel mill into a logistics cluster. And the key to making it all work is the versatility of the site.

By George Lauriat, AJOT Tradepoint Atlantic in Baltimore is one the most remarkable port projects in the United States. And it only takes a quick look at Tradepoint Atlantic’s map of recent developments to illustrate the point.

In July of 2019, Orsted U.S Offshore, the U.S. arm of the Danish wind power developer, agreed to build a staging area for the development of Orsted’s Skipjack Wind Farm located 19.5 miles off the Maryland Coast. On the map of Tradepoint Atlantic’s site is a little rectangular slice with Orsted’s name – but Orsted’s little sliver on the map is a whopping 45 acres in size – it is just simply lost in the amazing 3,300 acres that TPA is developing.

Coming to terms with the scale of the Tradepoint Atlantic endeavor illuminates both the promise and challenge of the former Bethlehem Steel site. On one hand having 3,300 acres of waterfront property in the Port of Baltimore - or for that matter any East Coast port – is astounding good fortune, but the challenge is balancing that good fortune against the socioeconomic factors that go into building a sustainable logistics enterprise.

And at its heart TPA is a highly diverse and versatile logistics hub.

For example, near the Orsted location there are piers and bulkheads being refurbished. Kerry Doyle, a Managing Director who co-heads the real estate development [along with co-MD Marc Salotti] in an interview with the AJOT said, “Infrastructure speaks to the versatility long-term… And that infrastructure, that upgrade [includes] the 2200 linear feet of bulkhead, as well as the 30-acre apron adjacent to that bulkhead and it is wrapping up in the next 30 days. [When] completely finished that’ll allow us to do a whole host of things. One, we’ll be able to drop a stern ramp anywhere along that 2,200 linear feet to offload auto carriers.”

Land and Sea

The importance of the ability to handle ro-ro and breakbulk ships is essential to the clients investing in the facility. For Orsted the access to the bulkhead allows them to have ample space for handling nacelles and oversized turbine components for their wind power projects both offshore and onshore. And for a client like Volkswagen, which has a 115acre processing facility, the access for ro-ro ships is critical.

As Kerry noted, “We’re nearing completion on the 115-acre Volkswagen import and processing facility where they’ll be doing … their fit and finish manufacturing and importing upwards of 150,000 automobiles on an annual basis. And they’re going to call this sort of their East Coast hub… which makes a lot of sense and makes it one of the reasons why they’re willing to do that. Because operationally, it makes more sense cost-wise given their network and having the rail that hits more inland destinations with

these cars from the East Coast.”

Kerry is expecting the first imports of vehicles to begin around the end of June or early July. Interestingly another 75-acres lies unoccupied next to the Volkswagen site and begs the question whether the German automaker might expand.

“And we’re actively working on trying to get somebody else or them [Volkswagen] to expand,” Kerry said of the adjacent site.

Tradepoint’s short rail system, Tradepoint Rail (TPR), with 70-miles of track winding through the TPA, connects with Class rail providers (VERSATILITY – continued on page 14)

MSC and ACL container vessels lined up along Seagirt Terminal at the Port of Baltimore.

RUKERT + BALTIMORE A WINNING COMBINATION

Rukert Terminals Corporation is the premier privately-owned marine terminal on the U.S. East Coast. Strategically located in the Port of Baltimore, we are proud to call the closest East Coast port to the Midwest and its manufacturing centers home.

Rukert has specialized in handling dry bulk, break-bulk and project cargo, since 1921. Services include stevedoring, warehousing, and transfer to and from vessel, rail or truck. Our longevity can be attributed to our formula for success: hire dedicated employees, work hard, and reinvest the profits in the business have made.

For more information contact Rukert Terminals Corporation at: 410.276.1013 or visit rukert.com

American Journal of Transportation

14

The Port of Baltimore – Open for business and looking to expand The Port of Baltimore like every other port in the world has been hurt by the COVID-19 pandemic but nevertheless the Port’s open for business and looking to expand.

By George Lauriat, AJOT

ajot.com

(VERSATILITY – continued from page 13) CSX and Norfolk Southern.

While the rail is an obvious attraction for clients like Volkswagen moving vehicles or Orsted moving oversized wind turbine parts to onshore wind farm sites, it is of equal importance to companies like Amazon, Under Armour, Home Depot, Atlantic Forest Products and Fedex – giving these companies a significant alternative to trucking and valuable reach into the hinterland.

Far from the facilities in the Port of Balticasts outdated. more out at the York Spit in Chesapeake Bay, But the Port is still open, still handling crews contracted to the U.S. Army Corps of cargo and still moving forward with critical Engineers, Baltimore District projects that will position it are busy with maintenance for expansion in the postdredging of the aptly named COVID-19 world.

York Spit Channel. The Richard Scher, DirecTPA and Breakbulk channel is being dredged to a tor of Communications for depth of 51 feet and is one of the Maryland Port AuthorPart of the versatility of six channels associated with ity (MPA) wrote in answer the TPA is, in this era of conthe Port of Baltimore being to AJOT inquiries of the situtainerized cargo, it has the dredged – and in a way, this ation and the Port, “The Port ability to handle bulk and dredging is part of business of Baltimore has remained breakbulk. Besides Orsted, as usual in this most unusual open for business for all cargo the site has a number of of times. operations since the onset of other clients who move bulk The Port of Baltimore is the current COVID-19 panand breakbulk. For example, arguably the most diverse port demic. Ports America ChesaHome Depot and Atlanon the U.S. East Coast and in peake continues to adjust the tic Forest Products move 2019 had a banner year hanoperating hours of the Seagirt lumber. Access World, a subRichard Scher, Director of dling a record 43.6 million Marine Terminal. They have sidiary of the international tons of international cargo, Communications, MD Port Authority also closed Seagirt six times in commodity firm Glencore, with containers totals up, ro-ro healthy [ninth the last two months. These changes have been handles aluminum, steel and straight year the port ranked number one in the due to lower international container volumes. sacks of rubber and has a U.S. in vehicles handled] and bulk and breakEven when the truck gates are closed, ships are 740,000 sq./ft warehouse to bulk figures holding their own - and going into still being worked. Our other public marine terprotect the products from the 2020 this year looked like it might be even minals have continued to operate regular hours elements. There is also Cap bigger than 2019. Then the pandemic hit. for delivery and receipt of cargo.”

Rock and Perdue, which both Like every other port in the world, the Although the Port of Baltimore has seen import organic grain to their COVID-19 crisis has cut into the Port of Balterminal closures, the damage to cargo totals onsite warehouses to be distimore’s numbers as blank sailing and other has not been as severe as might be expected tributed through their East ai158618800811_BaltiMORE.pdf 1 4/6/2020 11:46:51 AM (OPEN – continued Ceres_AJOT_2016_Layout on page 15) factors have rendered earlier optimistic foreCoast 1 networks to Page various 5/6/20 6:43 PM 1

farms as feed material or to crush plants to produce vegetable oil.

But TPA feels there is room to grow the bulk businesses.

As Kerry noted, “I’d say one of our primary initiatives as we move forward is we feel like we’ve made a fair amount of headway in putting the infrastructure in place for offshore wind, break bulk, roll on-roll off cargo. We really need to optimize our ability to handle bulk material. And it’s going to be focused on the finger pier and conveying systems and storage systems to efficiently move bulk commodities through our site.”

Of course, the entire TPA enterprise has been pushing forward in the midst of the COVID-19 crisis which has put tremendous stress on logistics services around the world. But the TPA’s been able to continue to move forward developing the site despite the pandemic.

Marc Salotti, Co-MD of TPA, explained, “We’ve actually been very fortunate, particularly with our partners in Baltimore County and state of Maryland here.

We’ve had a lot of success continuing to drive projects forward throughout all of this (VERSATILITY – continued on page 15)

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may 25 - june 21, 2020 (OPEN – continued from page 14) during such a severe downturn. As Scher remarked, “this has been an extremely difficult time for the maritime shipping industry. The entire international supply chain has been impacted. Many ports around the U.S. are experiencing lower cargo volumes, and we [Port of Baltimore] are no different. However, our numbers so far have been better than some other ports, particularly West Coast ports. Through March, our general cargo was down 5.2%, autos were down 13.2%, and containers were down 7%. We expect to be down for the second quarter, followed by a gradual flattening in the third quarter and improvement in the

fourth quarter.”

Perhaps more importantly with an eye to the future, key projects are still moving forward. Among them is the dredging to a 50-foot depth alongside at the Seagirt Terminals, which handles nearly all the Port’s box traffic. The dredging will enable the terminal to handle the mega-boxships and is part of the $32.7 million project to construct a second 50-foot deep berth at the terminal – a project that could open in a hopefully post-pandemic early 2021.

And the terminal expansion works in tandem with the long awaited and much anticipated Howard Tunnel reconfiguration. Back in March of 2019, Maryland Governor

Port of Baltimore export by ocean carrier in TEUs Ocean Carrier

Q1 2020

Q1 2019

Mediterranean Shipping Co.

15,130

16,212

Maersk Line

11,776

9,525

Evergreen Line

10,468

7,524

Hamburg Sud

6,348

5,372

Hapag Lloyd AG

2,790

2,740

Safmarine Container Lines

1,790

896

Grimaldi Deep Sea SPA

1,687

1,450

Atlantic Container Line AB

1,624

1,423

CMA-CGM

1,336

952

COSCO

1,327

1,341

Others

2,588

3,098

56,863

50,533

Total

15

ma ry l a nd Po r t s

Source: Descartes-Datamyne

Larry Hogan’s administration submitted an application for a federal grant in March to assist with the project. The application sought $228 million from the federal government. In turn, the state would spend $147 million and CSX Corp., which owns the railroad tracks, would contribute $91 million. The importance of the tunnel project is hard to overestimate as Scher notes, “The second, 50-foot deep berth at Seagirt and the Howard Street Tunnel projects are still moving forward. We’re very excited about both. The new deep berth will allow us to handle two supersized ships simultaneously. We’re already one of the only ports on the East Coast able to handle big ships. The tunnel is a huge game changer for us. It will get us over a longtime hurdle, the lack of double stack rail. This will grow our containers by 100,000 annually, generate thousands of new jobs, and allow us to be more competitive with our container competitors.”

While the Port of Baltimore, and indeed ports around the world, will likely see the numbers posted in 2020 lower than in recent years, the expansion programs now being put into place in Port may well lead to a more robust recovery… and perhaps some new records for the Port of Baltimore.

(VERSATILITY – continued from page 14) uncertainty whereas some of our neighboring jurisdictions haven’t been quite as fortunate. We’re finding that contractors are excited to keep going and keep working so we’ve been able to actually accelerate on a couple of fronts, particularly as it pertains to preparing land for the next set of distribution centers and warehouses that are

coming through.”

The TPA’s already become a major job-producer and an economic engine for the area. According to Aaron Tomarchio, Senior VP of Corporate Affairs for the TPA, the facility “right now, has about 8,000 permanent jobs … and we’re closing in on the 10,000 jobs that were projected to be on the site. And we think we may at some point exceed that.”

American Journal of Transportation

16

China trade and COVID-19: A one-two punch hitting US hardwood producers

Agriculture Transportation 2020

Phase I deal offers some hope, but it is hanging by a thread.

By Peter Buxbaum, AJOT The trade conflict with China has hit the United States hardwood sector hard and the coronavirus pandemic has made matters that much worse. The Phase I U.S.-China trade deal, inked in January, included potential benefits for United States hardwood lumber exports, but it’s unclear to what extent the domestic industry will benefit from the accord.

The U.S. hardwood lumber industry relies heavily on exports for its economic health. Over the last ten years, China has become the U.S. hardwood sector’s largest foreign customer, taking about 25% of all boards produced

by U.S. hardwood sawmills.

Beginning in early 2018, the Trump administration began three rounds of tariff hikes on $250 billion worth of imports from China, and the Chinese responded with retaliatory tariffs on $110 billion of U.S. products including hardwood and softwood lumber and logs. Chinese tariffs increased to 25% for oak and 20% for cherry and ash.

Softwoods were not spared, with tariffs on Southern pine lumber exports to China doubling to 20%.

Rip Cut: Trade War and Hardwoods

No Bleed

Half Page 8”x 10”

AJOT

purchases of an additional $75 billion worth of manufactured goods, which includes hardwood lumber.

The domestic industry was notably silent about the merits of the trade deal, probably for good reason, although one Republican congressman, who represents hardwood producers in Pennsylvania, was effusive.

“The Phase One China Trade Deal is a huge win for the nation’s manufacturing industry and will be particularly (PUNCH – continued on page 17)

In. Out. On to, what s next.

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In. Out. On to What’s Next

The U.S.-China trade war devastated the domestic hardwood industry. The industry saw a 45% drop in U.S. hardwood exports to China in the first three months of 2019. U.S. hardwood exports to China fell by 40% for the whole of 2019, yielding losses to hardwood exporters of $153 million per quarter and leading many U.S. hardwood sawmills to cut production.

Industry representatives wanted hardwoods to be included in the U.S. Department of Agriculture’s 2019 farm relief package. But, while dairy and soybean farmers received federal aid, hardwood producers didn’t.

The coronavirus pandemic only made matters worse, as China sharply reduced forest products imports in early 2020.

During January and February, the import value of logs, lumber, pulp and wood chips were down 26% from 2018 and 14% from 2019, according to the Wood Resource Quarterly.

In January 2020, the U.S. and China signed the first phase of a trade deal, under which China agreed to buy an additional $200 billion of U.S. goods over 2017 levels within two years. That total called for

ajot.com

Welcome to done.

Welcome to what you need, when you need it.

North Carolina Ports is more than the port with the fastest turn times on the East Coast. It’s also the port with exceptional service, unique logistical solutions, and expanded offerings, like three neo-Panamax cranes, improved intermodal rail service and expanded refrigerated container capacity. We’re never done finding better ways to help you discover the power of DONE. Learn how NC Ports delivers the world—faster.

800.213.4430 // NCPorts.com

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Agriculture Transportation

may 25 - june 21, 2020

US Lumber Imports in TEUs

Country of Origin

Q1 2020

Q1 2019

Brazil

5,485

7,488

Germany

3,179

2,902

New Zealand

2,353

2,143

Uruguay

1,442

1,206

China

1,314

1,479

United Arab Emirates

959

1,149

Czech Republic

877

486

Austria

800

982

Chile

792

1,756

Latvia

698

168

Others

5,050

6,393

22,949

26,153

Total

Source: Descartes-Datamyne

(PUNCH – continued from page 16) beneficial to Pennsylvania hardwood producers,” said Rep. Fred Keller, who represents the state’ 12th congressional district, in a statement.

The congressman’s enthusiasm may well be misplaced.

Annex 6.1 of the agreement mentions seven specific categories of manufactured goods included in the agreement— but not forest products. The eighth line item in that section, dubbed “other manufactured goods,” sports a footnote that mentions hardwood lumber.

As with other categories of goods covered under the agreement, there is no mechanism in the agreement for enforcing specific buying levels so it’s unclear how the U.S. could ensure the buying levels spelled out. The mention of hardwood lumber in a footnote indicates that category does not assume a high priority for either party. In any event, even full, goodfaith compliance with the agreement doesn’t mean China has to buy any U.S. hardwood at all. The $75 million in manufactured goods could be satisfied elsewhere.

Tariff Exclusions

On the bright side, China issued two tariff exclusion lists for certain U.S. products in February. List I includes seven hardwood products, including oak logs and lumber, cherry lumber, and ash lumber. That’s good news for the industry as far as it goes. But exclusion from tariffs doesn’t equate to purchase orders.

Meanwhile, the pandemic has strained relations between the U.S. and China to the point that President Donald Trump threatened to pull out of the trade deal. Trump and others have politicized the pandemic by trying to blame China for the outbreak and its spread to the U.S. Even Trump’s vaunted personal relationship with Chinese President Xi Jinping appears to be going down the drain.

A group of Republican senators introduced a bill called the COVID-19 Accountability Act, which would authorize the president to impose sanctions on China if it does

not provide a full account of the events leading up to the outbreak of the virus. The political fallout is leading some to question whether China is willing and able to go forward with the deal.

In early May, U.S. Trea-

sury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer spoke to Chinese Vice Premier Liu to discuss various issues, including implementation of the Phase I trade deal. Both sides “agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner,” according to a statement from the Office of the U.S. Trade Representative. A statement by China’s Ministry of Commerce also said both countries are working toward implementing the trade deal.

But Trump threw cold water on those prospects when he told Fox News, “If they don’t buy, we’ll terminate the deal. Very simple.”

The president even downplayed the benefits from the trade deal with China, tweeting that it won’t be enough to make up for the economic

17

Lumber Imports by Port in TEUs U.S. Port

Houston, TX

Q1 2020

Q1 2019

4,008

4,615

Charleston, SC

3,112

3,101

New York/New Jersey

2,108

2,341

Baltimore, MD

1,925

2,126

Norfolk, VA

1,801

1,951

Savannah, GA

1,740

1,547

Seattle, WA

1,534

2,036

New Orleans, LA

1,435

1,052

Oakland, CA

948

1,144

Mobile, AL

922

677

3,416

5,563

22,949

26,153

Others Total

Source: Descartes-Datamyne

damage caused by the coronavirus, which he called “the plague from China.”

Unfortunately for the U.S. hardwood sector, there is no other domestic or international market that can make up for the loss of significant

volume from China’s market.

And if that market suffers further because of the pandemic, hardwood sales will likely be curtailed further. Plants may shut down or continue to scale (PUNCH – continued on page 18)

18

American Journal of Transportation

ajot.com

US Lumber Imports by Ocean Carrier in TEUs

Chinese buyers have purchased more than 20 cargoes, or over 1 million MT, of American soybeans in recent weeks.

China steps up US soybean buying with million-ton purchase

China is stepping up purchases of soybeans from the U.S. as Brazilian sales start to wane and the Asian nation seeks to meet its pledges under the trade deal with Washington, according to people familiar with the matter.

State-run buyers have purchased more than 20 cargoes, or over 1 million metric tons, of American soybeans recently, said the people, who asked not to be identified because the information is private. The beans were bought using tariff waivers previously issued, the people said.

Top trade negotiators from both nations spoke by phone and pledged to create favorable conditions for implementation of the bilateral trade deal and cooperate on the economy and public health, according to a statement from the Chinese Ministry of Commerce. President Donald Trump later said he’s struggling with Beijing in the wake of the global coronavirus pandemic.

In another sign the phaseone trade deal could be on shaky ground, the Global Times, a communist party publication, reported that China may weigh voiding the agreement after U.S. criticism of the country’s handling of the coronavirus triggered anger among trade insiders. A suggestion to negotiate a new deal to tilt the balance more toward the Chinese side has also been floated, the hardline tabloid said.

China pledged to buy $36.5 billion in American agricultural goods, but the pandemic that is thought to have originated in the city of Wuhan has delayed the pace of purchases. While the nation has picked up a wide range of commodities from sorghum to wheat to corn and pork, sales of soybeans, the poster child for the trade war, have now started to accelerate.

Most of the purchases in the past two weeks were for loading at ports in the Gulf of Mexico, the people said.

While some were for shipment from the current crop, others were for later in the fall when the new U.S. har-

vest starts.

Crop giant Archer-Daniels-Midland Co. said this month it was encouraged

by China’s purchases so far.

The Chicago-based company

expects the Asian nation to buy 30 million to 35 million tons of American soybeans this year, Chief Financial Officer Ray Young said in a call with analysts on April 30.

Ocean Carrier MSC-Mediterranean Shipping Co. Hamburg Sud Hapag Lloyd AG Maersk Line Ocean Network Express CMA-CGM Evergreen Line Orient Overseas Container Line Ltd COSCO Shipping Lines Co. Seaboard Marine Ltd Others Totals

Q1 2020 7696 4133 3038 2247 1789 1002 689 512 323 241 1279 22949

Q1 2019 9289 5641 3347 1996 1465 722 715 490 293 261 1934 26153

Source: Descartes-Datamyne

(PUNCH – continued from page 17) back production. Once that capacity is lost, it’s not clear when if ever it may come back.

The China trade deal offered a glimmer of hope to the industry, but the pandemic got in the way. The

damage caused by COVID19 jeopardizes the economic growth the industry relies on to generate sales. And if U.S.China relations are allowed to deteriorate behind a pandemic blame game, it could jeopardize the future of the agreement altogether.

may 25 - june 21, 2020

Agriculture Transportation

19

The world has too much wheat Despite scenes of panic buying at grocery stores and worries about key suppliers’ restrictions on wheat exports in recent months, the world is swimming in the grain.

Although major shippers from Russia to Romania moved to limit exports to protect domestic supplies amid the health crisis—with some measures still in place— there hasn’t been a major impact on trade and supplies should keep rising. With large harvests looming in many nations, global wheat stockpiles are expected to hit a record this year and climb even higher in 2021.

While there’s a risk that any adverse weather could change that, immediate concerns about grain shortages on the back of lockdowns proved short-lived. Supply chains have remained intact, export curbs have been loose enough to keep sales flowing, and countries that imposed curbs realized their own supplies were ample. Plus, the pandemic is pummeling global grain demand.

“There hasn’t been a great deal of supply disruption,” said • James Bolesworth, director of CRM AgriCommodities in • England. “What we saw in the wheat market was very similar • to what we saw on the retail level with the likes of loo roll: There was a clear element of panic” before it became apparent that it would be “business as usual,” he said.

After prices spiked in late March as consumers hoarded wheat products like flour and nations like Russia, Romania and Kazakhstan moved to curb exports, the market has since largely shrugged off worries about a supply crunch. Benchmark futures have slumped to near the lowest since October.

That’s largely because focus has turned to big crops in key growers from Russia to Canada. Worldwide output should rise 0.5% to a record for the upcoming season, U.S. government data show.

That will help inventories climb 5% to 310.1 million tons, equal to about five months’ of global demand.

“It looks like it’s going to be another bumper season” for wheat supply, said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “We shouldn’t be worried.”

Wheat’s also being weighed down as the virus outbreak curbs grain consumption. As well as lost business from restaurants, shuttered ethanol plants have reduced demand for grains to make biofuel, while closed meat plants mean less animal feed is needed.

With extra supplies of crops like corn, that’s adding to the pressure on wheat.

Still, with several weeks left before many harvests start,

there’s a supply risk that governments have no control over: the weather. For example, recent dryness has threatened yields in the Black Sea area and western Europe, while drought in North Africa will increase the region’s need for imports.

In the southern hemisphere, countries like Argentina are only just planting crops.

The U.S. government expects reserves among the world’s top eight shippers to rise just “slightly” from the 2019-20 season, a six-year low.

Any major weather impact on crops could also prompt key suppliers to extend or resume export restrictions, especially if the coronavirus crisis persists. Russia, which has a history of disrupting the wheat market through restrictions or taxes, has said it’ll (WHEAT – continued on page 20)

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Vessel piled with sugar queuing at the Port of Santos, Brazil.

Sugar ships queuing in Brazil signal bounce in commodity demand In Brazil, the world’s top sugar producer, the queue for ships to export the commodity is lengthening in a bullish sign that the biggest supplies ever linked to the expiration of a futures contract are bound for consumers around the world.

The queue of vessels loading or expected to take the raw material at Santos, Brazil’s biggest port, increased 50% since the expiration of the May raw-sugar contract on ICE Futures U.S. on April 30, according to data from shipping agency Williams. The number of ships climbed to 35 for handling 1.6 million metric tons of sugar to countries including Iraq, Bangladesh, Yemen, Morocco, China and Nigeria.

The premium of refined sugar over the unprocessed raw commodity rose to the highest since 2013, often a bullish signal. Last week, the outlook was murky after Singapore-based Wilmar International Ltd. and China’s Cofco International Ltd., which usually supply consuming markets, combined to deliver a record 2.26 million tons from Brazil against the ICE contract.

Most-active futures have dropped 20% this year as the coronavirus pandemic upended the global economy.

When the buyer nominates a vessel quickly, it typically “shows there is demand at the final destination, or at least he wants it to look like there is,” and prices tend to respond, Arnaldo

Correa, a partner at Archer Consulting in Sao Paulo, said in a report.

The refined premium is boosting demand for raw sugar, said Michael McDougall, managing director at Paragon Global Markets in New York. The drop in production in Thailand and India’s muted prospects for exports mean South America is driving supplies, he said.

“This will make Brazil’s ability to perform very important” as mills face financial woes from the recent price slump and crash in cane-based biofuel demand, he said. The real’s slump against the dollar makes exports in the greenback more appealing, he said.

(WHEAT – continued from page 19) consider using quotas past the end of this season.

Even so, curbing sales from one region may allow other shippers to fill the gap if there’s enough supply.

Despite an expected smaller crop this year, recent rains in the EU’s top wheat shipper France have helped to relieve parched fields, according to lobby group France Export Cereales.

“We always say that June makes the harvest,” said Philippe Heusele, the group’s president. Restrictions elsewhere this year “showed to our clients that our supply is really reliable,” he said.

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Barley blow to Australian farmers after China slap

China’s imposed anti-dumping duties on Australian barley could wipe more than half a billion dollars in value off the industry, according to a farmers group, as the levy is condemned by the government.

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decision China’s made is justified or defensible in accordance with antidumping practices,” Trade Minister Simon Birmingham told ABC Radio.

Birmingham said he would consider the best pathway forward and whether this takes the shape of an appeal to the World Trade Organization—an action urged by Tony Mahar, National Farmers’ Federation chief executive officer.

China, which is the biggest buyer of Australia’s barley, will slap an anti-dumping duty of 73.6% and an anti-subsidy duty of 6.9% on the commodity, according to a statement from the Ministry of Commerce. The announcement comes as tensions between the two countries simmer, with Australia calling for a probe into the origins of the coronavirus in recent weeks.

“We will probably be losing well over half a billion dollars at least in value. The trade between the two countries at its peak has been around A$2 billion. It’s a major loss to the economy, it’s a major loss to rural communities, ” Andrew Weidemann, Grain Producers Australia chairman told Sky News.

“It is within their power to remove these duties at any time during the five-year timeframe and we would hope they do decide to do that,” Birmingham said.

Agriculture Transportation

may 25 - june 21, 2020

Overweight shipping containers causing controversy

By Robert L. Wallack, AJOT The weights of international shipping containers crossing national, ocean and state boundaries are pushing the limits of safety in order to reach volume cost-efficiencies and emission reductions. Abiding by the ocean container weight regulations for verified gross mass (VGM) is the responsibility of shippers as required by the IMO, SOLAS amended and effective since July 1, 2016. Blurring the overweight ocean container issue is the different state, county and city permit regulations wherein some states allow overweight dedicated corridors near seaports. A web-based solution is in the works by Kansas based Oversize.io to address the lack of harmonization among state permits and overweight ocean containers.

The International Maritime Organization (IMO) based in London, England issued guidelines for the verified gross mass (VGM) of a container carrying cargo in 2014 from their Maritime Safety Committee. These guidelines stem from the amendment of the 1972 International Convention for the Safety of Life at Sea (SOLAS).

The stipulation is that packed containers gross mass is verified prior to stowage aboard ships. This requirement is to ensure the safety of the ship, the safety of workers both aboard ships and ashore, the safety of cargo and overall safety at sea.

The salient issue for the ocean carrier, port terminals and truckers is that the shipper is responsible for weighing the containers and for the documentation. The SOLAS amendment provides that there are two methods shippers may use to determine the container weight once the container packing process has taken place, according to the IMO SOLAS and World Shipping Council official documents. Method 1 requires weighing the container after it has been packed, or Method 2 requires weighing all the cargo and contents of the container and adding these weights to the container’s tare weight as indicated on the door end of the container. Estimating weight is not permitted. The carrier does not need to be a “verifier” of the shipper’s weight verification.

Further to SOLAS, Chapter VI, regulation 2 is that “shipper means a legal entity or person named on the bill of lading (BOL) or seaway bill or equivalent multimodal transport document (e.g. ‘through’ bill of lading).”

The shipper is also responsible for ensuring that VGM is communicated in the shipping documents sufficiently in advance to be used by the ship’s master and the terminal representative in the preparation of the ship stowage plan. The container cannot be loaded unless the VGM of the packed container is conveyed.

The weights of the imported containers are based on “national legislation” and are causing some problems in the United States ports.

Weston LeBar is Executive Director of the Harbor Trucking Association, a coalition of intermodal carriers serv-

ing America’s West Coast ports of Los Angeles, Long Beach, Oakland, Seattle and Tacoma. He explained to the American Journal of Transportation in a recent telephone interview that “we operate on the bill of lading and that the weights on the bills of lading are not accurate.”

The container terminals assume the weights are legal and checks of weights by the California Highway Patrol show weights are not the same as the bills of lading and “the truckers become liable,” he said.

The United States Coast Guard (USCG) cannot help when it comes to (CONTROVERSY – continued on page 22)

21

China trade expert says US farm deal hinges on tensions easing

China is still willing to meet its American farm purchase commitments as long as the U.S. creates a friendly atmosphere for more imports to take place, a Chinese agricultural expert said.

A slump in U.S. corn prices to a decade low was a good chance for China to buy millions of tons of the grain, but the world’s second-largest consumer held back on purchases because relations between the two nations have soured, said Li Qiang, chief analyst with Shanghai JC Intelligence Co. Tensions between the U.S. and China deteriorated after President Donald Trump blamed China for misleading the world about the scale and risk of the coronavirus outbreak, and threatened more tariffs as punishment.

That’s called into question the survival of the phase-one trade deal, with the pace of purchases by China already slow due to disruptions from the virus.

“China has the ability to complete the $40 billion purchases, but such purchases have to be based on a friendly atmosphere,” Li said during an industry conference held online.

Li is one of the Asian nation’s most influential agricultural advisers and an expert on the U.S.-China trade war. His comments affirm concerns that the dispute about China’s handling of the virus is already spilling over into trade flows, and that the phase-one trade deal is at risk.

While top tier representatives from Beijing and Washington last week pledged to create favorable conditions for the implementation of the phase-one deal, Trump said he’s struggling with Beijing in the wake of the coronavirus pandemic. China has also hit back, with it’s foreign ministry accusing some U.S. officials of trying “to shift their own responsibility for their poor handling of the epidemic to others.”

22 (CONTROVERSY – continued from page 21) overweight import containers. “Our charge is to make sure that the United States is in compliance with SOLAS and that the correct weights of export containers are provided to the vessel for vessel stability and stack weight purposes,” said Jim Bull, Office of Port and Facility Compliance, USCG in a recent e-mail reply to the AJOT. For the purposes of determining the VGM of a container, any equipment currently being used to comply with Federal or State laws, including the Intermodal Safe Container Transportation Act and the container weight requirements in 29 CFR 1918.85(b), are acceptable for the purpose of complying with SOLAS, according to the Marine Safety Information Bulletin document provided by Jim Bull. The responsibility of the overweight container for imports to the United States is with the enforcement of the rules with their “Contracting Governments.”

“We don’t scale unless there is a reason for us to scale which is very rare. The bill of lading is the legal document. So, we go by the weight that is on that document,” said Harbor Trucking Association member, Jason Farina, vice president of Sales and Marketing, Heavy Weight Transport, Inc. of Long Beach, California in a recent interview with AJOT. Similar remarks are from another member of HTA. “A bigger issue is that there are truckers that are picking up heavy containers on standard tandem chassis and draying, the overweight containers to destinations outside the overweight corridor,” said Vice President Farina. These overweight corridors are located throughout the United States. The objective is to aid truck carriers to use designated city streets near city port areas for safety and congestion reasons.

One example is the City of Los Angeles, City of Long Beach and State of California with the Department of Public Works approved a measure that allows permits to be granted for overweight container loads in the Port area. The permits allow the gross vehicles to be at 95,000 pounds weight of the truck, chassis, container and contents/43,130 kilograms (with proper equipment). By comparison, the maximum allowable gross vehicle weight on a 20-foot container is 80,000 pounds if loaded on a 20-foot intermodal chassis and a 40-foot container is 90,000 pounds if loaded on a 40-foot intermodal chassis. However, permits for weights over 80,000 pounds vary by states, cities and counties. For the sake of uniformity, “there is a

American Journal of Transportation need to get agreement of all seaports in the United States where all the overweight corridors are. In Los Angeles and Long Beach, a five-mile route can have three different permits,” said LeBar. On October 2, 2019, the City of Los Angeles and City of Long Beach Department of Public Works provided a map of the official list of streets within the overweight corridor.

Trucks are responsible to review the map which identify the proper agency responsible for that highway. The agency will issue the overweight permit. If the truck route passes through multiple city jurisdictions on the map, then permits (Overweight Vehicle Special Permit) will be required from each jurisdiction. Cargo weight guidelines are based on the 20-foot or 40-foot chassis types: standard steamship chassis,

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tri-axle slider chassis or triaxle slider chassis with 4-axle tractor, according to the Port of Los Angeles website.

Troy Deocharran of OEC Group in New York does freight forwarding container shipments of dense cargo for the United States and China trades of flooring and building supplies. There is no consistency in the United States for overweight container permits. “California ports have the shortest transit times from China to the U.S.A. and some importers have warehouses all over the U.S.A. For 100,000 pounds of flooring to Savannah, Georgia some states have permits for 90,000 pounds and some for 84,000 pounds and is very inconsistent with no easy way to know of the overweight permits,” said Deocharran in a recent telephone (CONTROVERSY – continued on page 27)

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may 25 - june 21, 2020

SMC3 helps truckers stay ahead in the era of COVID-19 COVID-19 pandemic has totally reshaped supply and demand for LTL trucking in the US. SMC3’s software has helped shippers and carriers cope with the pandemics’ supply chain complexities.

When the supply chain’s stressed, it pays to have a solid platform.

Descartes System Group’s logistics platform supports a wide range of businesses that in good times customers expect to perform well and in times of stress on the supply chain…even better.

By Matt Miller, AJOT Customers of logistics technology provider SMC3 are scrambling for help like never before. SMC3 specializes in assisting less than truckload (LTL) shippers and carriers with software designed to make their work more efficient. LTL logistics is complicated in the best of times. With the Covid-19 pandemic, that complexity has intensified exponentially.

“Market dynamics are changing so fast, and they’re so unpredictable,” said Brian Thompson, SMC3’s chief commercial officer, in a Zoom call. “Supply and demand have never changed faster.”

that continuing to accelerate,” he said.

SMC3 is on this year’s list of American Journal of Transportation’s 50 IoS Market Innovators.

Based in Atlanta, SMC3 offers a variety of software that arm transportation management systems with enhanced capabilities.

These functions include everything from pricing analytics, scheduling pickups and tracking shipments, to documents retrieval, invoice (AHEAD – continued on page 31)

23

By Matt Miller, AJOT Swiftly shifting from a logistics flow based on order to one that can react to uncertainties and unpredictabilities is critical for those up and down the supply chain in our Covid-battered world. The Descartes Systems Group Inc. provides technology it believes can aid shippers and logistics providers in making this leap into this great unknown.

“The customers that are on our platform have been able to quickly pivot from the kind of orderly model to a reactive one where everything’s changed,” said Ken Wood, Descartes’ EVP product management, in a Zoom call, from his home-office in Fort Myers, Florida.

It’s the unusual, the extraordinary, the disruptive and just the stresses on the supply chain that make technology such as that pro-

vided by Descartes so necessary. Suddenly, a logistics provider must deal with new customers, perhaps different kinds of goods, establish new transport lanes and pickup and delivery routes, and all in a matter of days.

Wood cited food services, with their huge climate-controlled warehouses and fleets of reefer trucks. Schools are closed, as are restaurants. But supermarkets are going gangbusters and can’t stock food quickly enough. “We’ve seen shifts between restaurant supply and grocery wholesale for some of our food service customers,” said Wood, who concluded: “If you’re a logistics system and are flexible, you can quickly onboard new customers, new deliveries and generate new route plans and (STRESSED – continued on page 28)

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The impact of the pandemic has completely upended supply chains, thrown demand for many goods completely out of whack and complicated transportation and delivery immensely. This unprecedented shift has underscored the need by shippers, carriers and 3PLs alike to be extraordinarily agile. Some of the changes now taking place will most likely continue postpandemic. Like much of life, LTL-related logistics must deal with “the new normal.”

Technology is the Key for SMC3

Technology is key to staying on top of this transformation. “The pandemic necessitates the need to really leverage new technologies.

Everybody out there is looking for an answer for how to help them do their jobs more efficiently,” Thompson said, adding: “Especially as the economy starts opening up again, the pressures that they felt a month ago are just going to increase.”

To respond to these rapidly changing dynamics, there’s an ever-greater need for instant visibility, for more data and information flowing from carriers to shippers and 3PLs, said Thompson. “I see

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TOP 50

TECH INNOVATORS

2020 COMPANY INDEX 3GTMS Alpega Group Amazon Blue Yonder BluJay Solutions Ltd Blume Global cargo.one CargoSmart Ltd Convoy Coyote Logistics Champ Cargosystems Chain.IO Cheetah Software Systems Descartes Systems Group Digital Container Shipping Association Dray Alliance E2open EBE Technologies, Inc Emerge Freight Investor Services Freightos Genscape GoShip.com IBM Kontainers KeepTruckin Kuebix, LLC llamasoft Inc Logisuite Corporation Manhattan Associates MercuryGate International, Inc. ModusLink Corp.

Navis, LLC Odyssey Logistics & Technology Oracle Orbcomm PayCargo Platform Science project44, Inc. Quincus Railinc SAP SE SMC³ StormGeo SunTek Systems, Inc. Tideworks Technology Transporeon GmbH TrueCommerce, Inc. WiseTech Global ZeBox

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which are more of an “incubator” for supply chain ap- Coyote Logistics 2006 Headquarters: Chicago, IL plicable technology than the practitioner. Many of the Founded: Category: 3PL CEO: Jonathan Sisler Company Type: Subsidiary of UPS companies offer a wide range of solutions like Des- URL: www.coyote.com Innovation: CoyoteGo Digital Freight cartes or Wisetech Global products that can impact In 2015 UPS acquired Coyote Logistics, a 3PL specializing with a strong core in fleet management. Since then the company has transitioned from being a freight broker to virtually every facet of the supply chain. a global logistics provider. A pillar of Coyote’s business model is to make technology But the common denominator between all 50 com- accessible to shippers and carriers in a scalable manner. In February 2020, Coyote Logistics, a leading global third-party logistics (3PL) provider, announced the expansion of panies large and small, established and startups is its CoyoteGO® digital freight platform. The CoyoteGO digital freight platform, accessible at go.coyote.com from desktop and mobile devices, now includes new, easy-to-use quote innovation. and ship tools. These tools provide shippers with on-demand access to a marketplace of more than 70,000 vetted carriers.

/•/ 3GTMS

Founded: 2013 Category: Transportation Management System URL: www.3gtms.com Innovation 3G-TM

Champ Cargosystems Headquarters: Shelton, CT Founder/CEO: Mitch Wesley Company Type: Private

As the name implies 3GTMS transportation management system – 3G-TM – is a comprehensive multi-mode TMS for mid to large 3PLS, shippers, brokers, forwarders and other non-asset based transportation companies. In February 2020 3GTMS acquired Pacejet, a provider of enterprise cloud-based, multi-carrier shipping software. In 2019, Sumeru Equity Partners (“SEP”) invested in 3GTMS and the investment in Pacejet and its innovative cloud-based global shipping software will extend the 3G-TM platform to access more market channels.

Alpega Group

Founded: 2014 Category: TMS URL: www.alpegagroup.com Innovation: TMS cloud based-software

Headquarters: Vienna, Austria CEO: Todd DeLaughter Company Type: Private

Alpega TMS is a cloud-based software solution that connects manufacturers to a broad network of logistics providers. The Alpega Group is a leading global logistics software company offering end-to-end solutions that cover all transportation needs, including Transport Management Systems (TMS) and Freight Exchanges. The TMS software solutions – inet, Transwide and TAS – connect companies to a broad network of logistics providers and digitize their complex supply chain management. These systems provide live visibility of incoming and outgoing logistics and seamlessly link truck drivers and logistics providers with shippers. The four freight exchanges – Teleroute, Wtransnet, Bursa and 123cargo – serve as marketplaces for matching spot shipments and capacities.

TenderEasy, for its part, allows shippers to easily send e-tenders to the carrier community.

Amazon

Founded: 1994 Category: Cloud Computing URL: www.amazon.com Innovation: Moving cloud computing into logistics

Headquarters: Seattle, WA CEO: Jeff Bezos Company Type: Public Company

Amazon’s influence has been profound by virtue of establishing e-commerce as mainstream retailing. Amazon kick-started the cloud revolution in August 2006, when it launched its Elastic Compute Cloud through its Cloud computing specific subsidiary Amazon Web Services (AWS). AWS has gone from an internal computing service to a giant – in the 1st quarter of 2020 it posted $10.2 bn in net sales. A major element of the Amazon strategy was being a “technology” company first rather than a retailer. In 2002 the company launched AWS which rented out “space” and internet processing services.

This established the idea that companies need not own their computing resources – making cloud computing a business tool.

Blue Yonder

Founded: 1985 Category: Supply Chain solutions URL: www.blueyonder.com Innovation: Supply chain management

Headquarters: Scottsdale, AZ CEO: Girish Rishi Company Type: Private

Blue Yonder’s roots begin with JDA Software which opened in 1985. After a number of changes over the years, in 2018 JDA acquired Blue Yonder GmbH and in 2020 renamed itself Blue Yonder, Inc. Blue Yonder is a little different than most in the space as the starting point for the supply chain solution lies with the manufacturer or retailer with logistic provider as part of the overall platform – a fulfillment platform. The “control tower” approach is part of the company’s modernization of the supply chain.

BluJay Solutions Ltd

Founded: 1972 Category: Supply Chain Software URL: www.blujaysolutions.com Innovation: BluJay Global Trade Network

Headquarters: Manchester, UK CEO: Andrew Kirkwood Company Type: Private Company

In 2017 Kewill and LeanLogistics rebranded as BluJay Solutions. Kewill had bought LeanLogistics in May of 2016. With the rebranding, the company unveiled the BluJay Global Trade Network which integrated supply chain execution and global trade management into one network of logistics applications, analytics and online services, creating the largest network of its kind. In April, BluJay entered into a partnership agreement with Uber Freight. The agreement will enable the TMS application to “tap into Uber Freight’s pricing insights” and network of 50,000 carriers. More than $18 bn in freight moves through BluJays TMS platform with approximately $3 bn managed as Logistics as a Service (LaaS).

Blume Global

Founded: 1993 Category: Supply Chain Platform URL: www.blumeglobal.com Innovation: Blume Digital Platform

Headquarters: Pleasanton, CA CEO: Pervinder Johar Company Type: Private Company

Blume Global was founded in 1993 as REZ and changed its name to Blume Global in Sept. 2018. Blume Global established itself as a niche platform for rail and road services with a variety of clients including IMCs and draymen. The platform has expanded into the global supply chain with a suite of tools to support all their tracking, inventory and financial management. In March of 2019 Apollo Global Management acquired Blume Global Inc. (and Direct ChassisLink Inc.) from EQT Infrastructure. In 2020 Blume Global announced it is partnering OL USA on its new customer platform, OL MOVE. With OL Move the system will deliver end-to-end visibility through Blume Visibility.

cargo.one

Founded: 2017 Headquarters: Berlin, Germany Founders: Moritz Claussen, Oliver T. Neumann and Mike Rötgers Category: Air Freight Booking URL: www.cargo.one Company Type: Private Company Innovation: Platform for booking and marketing air freight The German startup’s SaaS platform offers booking and marketing air freight. cargo.one focuses on offering and booking dynamic spot rates, making it the first platform of its kind.

IATA air freight forwarders can search, compare and book these spot rates on the cargo. one platform in real time and receive immediate booking confirmation. Partner airlines gain access to a cost-effective, data-driven and fully digital distribution channel. cargo. one recently received $3.2 million in financing led by Creandum and Point Nine Capital with the participation of Lufthansa Cargo.

CargoSmart Ltd Founded: 2000

Headquarters: Shatin, NT, Hong Kong

Founded: 2004 Category: Air Freight IT systems URL: www.champ.aero Innovation: Air Cargo Platform

Headquarters: Luxembourg CEO: Arnaud Lambert Company Type: Private Company (subsidiary)

Champ Cargosystems was founded by Cargolux (one of the best-known air freighter companies in the world) and in 2005 merged (49%/51%) with the Cargo Division of SITA a specialist in air transport communication and information technology solutions. In 2011, Champ Cargosystems acquired Traxon Europe, a specialist provider of electronic communications to the air cargo industry. Champ Cargosystems now is one of the largest air cargo industry’s integration platforms. It is now a hosting company for companies in the air freight sector.

Chain.IO

Founded: 2016 Category: Software Services URL: www.chain.io Innovation: Chain.io Platform

Headquarters: Philadelphia, PA CEO: Brian Glick Company Type: Private Company

Startup Chain.io is part of a new wave of cloud based providers that offer connectivity throughout the supply chain. In 2017 they released their cloud based “Chain.io Platform.”

The software platform allows shippers and logistics service providers (LSPs) to share data from many sources over a single portal by using open application programming, enabling clients to develop a one-time connection to the platform and instantly be connected to other partners in the supply chain, as opposed to building a number of one-onone software integrations with each partner. In March 2020 Chain.io announced it was supporting the Digital Container Shipping Association (DCSA) open standard for Track and Trace. By announcing support for the DCSA Track and Trace standard, Chain.io is creating an opportunity for freight forwarders and shippers to begin direct API based carrier communications directly into their existing TMS solutions.

Cheetah Software Systems

Founded: 1987 Headquarters: Westlake Village, CA Category: Software Services CEO: Robert M. Darroll Company Type: Private Company URL: www.cheetah.com Innovation: Logistics Operations Optimization Platform (LOOP), Founded in 1987 by CEO Robert Darroll, Cheetah Software Systems offer realtime logistics and dispatch solutions for delivery, less-than-truckload (LTL), courier and fleet operations in the U.S. Logistics Operations Optimization Platform plans, dynamically manages, adapts and optimizes fleets and drivers, resulting in companies using less trucks, driving fewer miles and making more on-time deliveries. It is the only operations solution that not only plans delivery routes, but also predicts extremely accurate arrival times as it adapts, live and automatically, to changing operational conditions.

Descartes Systems Group

Founded: 1981 Headquarters: Waterloo, Canada Category: Logistics Tech Company CEO: Edward J. Ryan URL: www.descartes.com Company Type: Public Company NASDAQ DSGX | TSX DSG Innovation: Global Logistics Network (GLN) Formed during the dot com boom, Descartes is one of the pioneers in SaaS for logistics.

In keeping with their M&A strategy, Descartes has acquired Peoplevox, BestTransport, STEPcom and CORE Transport Technologies in the last 12 months. The strength of the Descartes system is the Global Logistics Network (GLN), a cloud-based logistics messaging system, which connects more than 13,000 clients. Each year, the GLN carries more than 4.5 billion messages and manages more than 30 million shipping routes. (See Matt Miller article pg X)

Digital Container Shipping Association

Founded: 2019 Headquarters: Amsterdam, The Netherlands Category: Association CEO: Thomas Bagge Company Type: Neutral and non-profit association URL: www.dcsa.org Innovation: Focus on standardization for technical interfaces and data across entire value chain Founded in 2019 by MSC, Hapag Lloyd AG, A.P. Moller-Maersk and ONE with the purpose of driving standardization, digitalization and interoperability in the container shipping industry. DCSA’s first priority has been to focus on standards for technical interfaces and data to create an industry blueprint for processes. Recently, it published the release of 1.2 track and trace interface standards.

Dray Alliance

Founded: 2017 Category: Apps URL www.drayalliance.com Innovation: Digitalization of short port moves

Headquarters: Long Beach, CA CEO: Steve Wen Company Type: Private

Dray Alliance is a venture-backed company on a mission to transform the trucking and logistics industry, starting with drayage. The technology simplifies the antiquated process of moving containers across short distances, with focus on port and rail moves. The company has built mobile apps for both the shipper and carrier to simplify everything from tracking to payments.

E2open

Founded: 2000 Category: Software Solutions URL: www.e2open.com Innovation: Cloud-based, on-demand software

Headquarters: Austin, TX CEO: Michael Farlekas Company Type: Public Company

E2open is a leading provider of cloud-based, on-demand software solutions enabling enterprises to procure, manufacture, sell and distribute products more efficiently through collaborative planning and execution across global trading networks. E2open since being bought by Insight Venture Partners in 2015, has been aggressive in acquiring other digital assets. The three main business groups Avantida, Cloud Logistics and INTTRA. Avanttida came out of the INTTRA acquisition and offers transportation planning on ocean services. Cloud Logistics offers a TMS while INTTRA began as an ocean carrier portal and evolved into a platform for ocean carrier services.

EBE Technologies, Inc

Founded: 1973 Category: Business process management apps URL: www.ebe-inc.com Innovation: SHIPS Navigator

Headquarters: East Moline, IL CEO: Robert H. Shellman Company Type: Private Company

EBE Technologies’ business is developing transportation-specific workflow and business process management applications for the transportation industry. EBE’s apps work in the areas of billing, settlements and accounts payable; recruiting, onboarding, safety, risk and training; carrier management, fleet maintenance and mobile and data capture. Recently the company announced SHIPS Navigator, an artificial intelligence (AI) engine for process and content management. SHIPS Navigator operates as middleware between EBE workflow and process management solutions and enterprise transportation systems.

Category: Portal CEO: Steve Shui Editor’s Note: URL: CargoSmart.ai Company Type: Subsidary of OOCL The 2020 list of 50 Logistics Tech Innovators includes Innovation: Global Shipping Business Network (GSBN) 2000 CargoSmart was formed by OOCL as an alternative portal to Maersk’s Inttra pora mixture of both startups and industry standard-bear- In tal. Over the years, CargoSmart services evolved to cloud based management software Emerge ocean shipping for parties throughout the supply chain. In 2018 CargoSmart was the ers. Most of the companies in the list are privately held for Headquarters: Scottsdale, AZ IT portion in the launch of the Global Shipping Business Network (GSBN) of CMA CGM, Founded: 2017 CEO: Michael Leto but there are notable exceptions like Amazon, SAP, COSCO Shipping Lines, Evergreen Marine, OOCL, and Yang Ming; terminal operators Category: Software URL: www.emergetms.com Company type: Private Company DP World, Hutchison Ports, PSA International Pte Ltd, and Shanghai International Port.

Oracle and IBM which are mainstays of many tech In April, CargoSmart announced that it conducted a pilot project with COSCO, SIPG, Innovation: Emerge Private Freight Marketplace Tesla, Inc. (Tesla) for a new application for cargo release. It is among the first pilot Private marketplace connecting shippers to direct carrier rates, reducing operational stock portfolios. Some like Railinc, which serves the and projects with an ocean carrier conducting a real-time exchange of shipment data with a costs and helping to improve service on everything from quote to delivery. The Emerge Private Freight Marketplace is designed to reduce freight spend by providing complete rail industry as a for profit subsidiary of the American terminal operator through blockchain. supply chain visibility, real-time carrier performance analytics and a suite of tools to accelAssociation of Railroads, or SMC3 which is dedicated Convoy erate productivity and decrease labor costs. Recently the company closed a $20 million 2015 Headquarters: Seattle, WA Series A financing deal led by NewRoad Capital Partners, a growth equity capital firm to LTL trucking offering data solutions, or the Digital Founded: based in Rogers, Arkansas. The round of financing also includes Greycroft and 9Yards Category: Load and Trucking Match CEO: Dan Lewis Company Type: Private Company Capital among other investors.

Container Shipping Association, launched in 2019 URL: www.convoy.com Innovation: Mobile app for matching loads to trucks with the backing of ocean carriers such as Maersk, Convoy is almost better known for the investors like Generation Investment Management, Freight Investor Services 2002 Headquarters: London, UK MSC, Hapag Lloyd and ONE to push for digital stan- T. Rowe Price Associates, Inc., Greylock Partners, Y Combinator, CapitalG, Lone Pine Founded: Category: Market info platform CEO: John Banaszkiewicz Capital, Cascade Investment (the private investment vehicle of Bill Gates), U2’s Bono Company Type: Private dardization. There are a number of others like Navis, and The Edge, Salesforce.com CEO Marc Benioff, former Starbucks President Howard URL www.freightinvestorservices.com Innovation: Dry Bulk Freight Derivatives Behar, Code.org founders Hadi and Ali Partovi, Jeff Bezos via Bezos Expeditions and a subsidiary of Cargotec or Tidewater Technology, former U.S Senator Bill Bradley than the product. But the idea is a big one – building a FIS started as platform for dry bulk freight derivatives and has become a platform for part of the Carrix, that are highly specialized - in their digital freight network of shippers and truckers and through a mobile app match loads, tracking international freight movements and pricing. Besides the indexes posted by FIS creating greater efficiencies and lower costs for shippers and carriers alike and as by the group issues numerous market reports and provides technical market analysis of cases in ocean terminal software solutions. And there product reduce empty miles and improve everyone’s carbon footprint. Basically, making different size bulkship movements. [Supramax, Capsize and Panamax]. The company shipping a smartphone friendly business. has also added a “live app” for real time info for mobile devices. are a few organizations in this year’s list like ZeBox

to p 5 0 l o g i sti c s tech i n n o vato rs

may 25 - june 21, 2020 Freightos

Founded: 2012 Category: Supply Chain Management URL: www.freightos.com Innovation: Freightos Marketplace

Headquarters: Hong Kong Founder/CEO: Zvi Schreiber Company Type: Private

Freightos was designed around the concept that the freight rate structure – especially for ocean carriage – isn’t working for the BCOs and in turn the rest of the logistics providers in the supply chain. The solution is to create a “Freightos Marketplace”. To that end, Freightos has gathered the world’s largest global database of multimodal freight rates, providing industry transparency with the Freightos International Freight Index. The main tools in the suite are Freightos AcceleRate™ and Freightos WebCargo™ which provide power rate management, automated pricing, and online freight sales for over 1,000 logistics service providers and carriers.

Genscape

Founded: 1999 Category: Market analysis URL: www.genscape.com Innovation: VesselTracker

Headquarters: Boston, MA CEO: John Ecker Company Type: subsidiary of Verisk

Genscape is a leading global provider of real-time data and intelligence for commodity and energy markets. The company operates the world’s largest private network of infield monitors and has added satellite reconnaissance, artificial intelligence, and maritime freight tracking to its data acquisition capabilities. In 2019 the company was acquired by Verisk [NASDAQ VRSK] and now operates under the Wood Mackenzie business.

Among the company’s many data products is an app VesselTracker which as the name implies tracks vessel movements and WindcastIQ which tracks wind power developments.

GoShip.com

ModusLink Corp.

SAP SE

In February 2018 ModusLink Corporation became a 100% subsidiary of Steel Connect (a holding company publicly listed as NASDAQ STCN. ModusLink became the umbrella organization for both ModusLink and newly acquired IWCO. ModusLink, the legacy company, provides digital and physical supply chain solutions across a diverse range of industries, including consumer electronics, telecommunications, computing and storage, software and content, consumer packaged goods, medical devices, retail and luxury and connected devices.

SAP is another of the industry’s true legacy companies. It’s the world leader in enterprise application software. An amazing 77% of the world’s transaction revenue touches an SAP system. In 2019 SAP released a series of updates to enterprise resource planning (ERP) software platform. It will make it easier to customize apps and to add artificial intelligence (AI) and robotics to logistics processes. It will also help automate business processes with more accurate prediction. Recently SAP announced it entered a strategic partnership with GEA, a Dusseldorf, Germany-based technology company. The partnership will focus on implementing a global ERP system based on SAP S/4HANA, with which GEA plans to capture the full potential of the intelligent use of data within a company.

Founded: 1994 (year public) Category: Supply Chain Management services CEO: John Whitenack Headquarters: Waltham, MA URL: www.ModusLink.com Company Type: 100% subsidiary Steel Connect, Inc. Innovation: Digital Commerce & Reverse Logistics

Navis, LLC

Founded: 1998 Category: TOS URL: www.Navis.com Innovation: Navis Smart

Headquarters: San Francisco, CA President: Benoit de la Tour Company Type: Private (subsidiary of Cargotec)

San Francisco-based Navis is a prototype for independent suppliers of terminal software.

Navis 4 is their well-known TOS platform. Now one of the largest providers of TOS in the world, the company’s new offering, ‘Navis Smart,’ provides new ways for container terminals and carriers alike to capture and process the abundance of available industry data to optimize planning, visibility and asset utilization. Navis Smart is a layer of technology that will enable and connect Navis solutions, applications and data from the ocean carrier and terminal side of the portfolio. Navis has expanded out with the recent acquisitions of NZ-based Jade Logistics’ Master Terminal Software for mixed cargo and Australia-based Biarri Rail, a scheduling software for railroads.

Odyssey Logistics & Technology

Headquarters: Pittsburgh, PA Director, Product: Ramesh Chalapalli Company Type: Private

Founded: 2002 Headquarters: Danbury, CT Category: Logistics platform CEO: Robert H. Shellman URL: www.odysseylogistics.com Company Type: Private Company (parent Jordan Co.) Innovation: Door-to-Done

GoShip.com is an online freight shipping service offering “self-service” shipping via its online platform, eliminating the need for freight brokers. GoShip.com has partnered with thousands of pre-qualified trucking companies and can off instant truckload freight quotes and truckload shipping options.

Odyssey Logistics & Technology Corp is a global logistics solutions provider with freight network exceeding $3B. Odyssey’s strength is taking verticals like metals, food and chemicals and integrating them into the Odyssey Global Logistics Platform. Odyssey was bought by Jordan Co. (an equity investment firm) in 2017. Odyssey acquired AFF in 2018, a transport specialist in the Alaska market. Odyssey operates in all modes with TL/ LTL trucking, containership, rail, air, and bulk transport. Odyssey’s WIN (Web Integrated Network) offers a scalable technology solution for the network. In January Odyssey announced the acquisition of California-based RPM Consolidated Services, Inc. (RPM).

RPM specializes in domestic offshore freight forwarding between the US mainland and Hawaii, Puerto Rico, The Virgin Islands, Caribbean Islands, Alaska and Guam.

Founded: 2017 Category: Online trucking URL: www.goship.com Innovation: On Demand Shipping Platform

IBM

Founded: 1911 Category: Software Solutions URL: www.ibm.com Innovation: TradeLens

Headquarters: Armonk, NY CEO: Ginni Rometty Company Type: Public Company NYSE IBM

IBM is the legacy company when it comes to the digital age. IBM has developed many software products for supply chain management – some employing Artificial Intelligence.

With AI capabilities, supply chain software can actually “learn” an ever-fluctuating production flow and can anticipate the need for changes. IBM products include: IBM Order Management, IBM Supply Chain Business Network and IBM Supply Chain Insights which has AI capabilities. In 2018 IBM and Maersk jointly developed TradeLens to apply blockchain to the world’s global supply chain. TradeLens is a blockchain-enabled shipping solution designed to promote more efficient and secure global trade.

Kontainers

Founded: 2014 Category: SaaS URL www.kontainers.com Innovation: SaaS module suite

Headquarters: Newcastle, UK CEO: Graham Parker Company Type: Private

Kontainers is an Enterprise SaaS company with offices in Newcastle, Dublin, New York and Shanghai. Kontainers provide a suite of own branded e-commerce platforms for all size carriers and freight forwarders. The suite consists of 12 modules that can be added to existing systems or work as an end-to-end transportation management system. In May 2020 Kontainers, an e-commerce software provider for freight brands, and Portrix Logisitics Software, a rate management solutions provider, announced a partnership that combines Kontainers digital, client-facing freight execution platform and PLS’s rate management solutions.

KeepTruckin

Founded: 2013 Category: Electronic Payments URL: www.keeptruckin.com Innovation: Integrated fleet management system

Headquarters: San Francisco, CA Co-founder/CEO: Shoaib Makani Company Type: Private

KeepTruckin is the leader in IoT fleet management technology. KeepTruckin’s hardware and cloud-based software help companies improve the safety and efficiency of their operations. With one platform that spans asset management, video safety, Electronic Logging Device (ELD) compliance, and dispatch, KeepTruckin provides an integrated fleet management system that scales to meet the needs of 60,000 customers, from small trucking companies to Fortune 500 enterprises.

Kuebix, LLC

Founded: 2008 Category: Cloud-based TMS URL: www.kuebix.com Innovation: Kuebix TMS

Headquarters: Maynard, MA CEO: Robert G. Painter [CEO Trimble] Company Type: Public Company NASDAQ TRMB

The Kuebix TMS is suited for smaller companies and/or less complex supply chains, but can be scaled up for the largest and most complex supply chains. Kuebix is “democratizing” the rating, booking and tracking of freight with its free TMS, Kuebix Shipper. More complex supply chains choose from a wide array of Premier Applications and Integrations to configure the ideal solution. With Kuebix, companies only pay for what they need. Kuebix is a true cloud-based system and Premier Applications and Integrations are readily available. Additionally, Kuebix offers a Managed Service Programs to businesses looking to partially or fully outsource transportation management. In January 2020 Trimble, a multimodal provider of supply chain solution, acquired Kuebix.

llamasoft Inc

Founded: 1998 Category: Supply Chain Solutions URL: www.llamasoft.com Innovation: llama.ai. platform

Headquarters: Ann Arbor, MI CEO: Razaj Gauvau Company Type: Private Company

One of llamasoft’s taglines is “Better decisions start with data and math” which could be the company’s directive. At the heart of the company is their llama.ai. The AI-powered enterprise decision platform designed to develop the decision-making process through supply chain. One of the more interesting aspects of llamasoft is their ability to develop a “digital twin” to analyze the supply chain end to end. This enables a company to research and explore various options in the supply chain without subjecting the supply chain to risk.

Although the company hasn’t done much M&A, in 2015 it acquired Barloworld and in 2019 Opex Analytics, which operates under its own brand.

Logisuite Corporation

Founded: 2000 Headquarters: Doral, FL Category: Software Solutions CEO: Heider Santander URL: www.logisuite.com Company Type: Private Company Innovation: Develops real time based logistics software within the means of clients A leading provider of comprehensive and user-friendly logistics software solutions. Provides software for companies of all sizes within the Logistic and Transportation Industry.

Offers a complete portfolio of solutions including Inventory Control, Supply-Chain Management, Third-Party Logistics (3PL), Freight Forwarding Software, Ocean Import, Air Import, Domestics Freight, Pickup & Delivery, Purchase Order Management and more.

The Operations Software is fully integrated with Logisuite Financials, a complete accounting system designed for this specific industry.

Manhattan Associates

Founded: 1990 Headquarters: Atlanta, GA Category: Cloud based supply-chain software CEO: Eddie Capel URL: www.manh.com Company Type: Public Company: NASDAQ MANH Innovation: Omnichannel Supply Chain Solutions Manhattan Associates is one of the veteran companies in the digital supply chain space.

Manhattan has worked on closing the gap between digital selling and brick-and-mortar selling. The concept is to unite information across the enterprise, converging front-end sales with back-end supply chain execution. The merging of WMS with inventory control and e-commerce puts the company at the forefront of an evolving new class of omnichannel cloud-based solutions.

MercuryGate International, Inc. Founded: 2000 Category: Saas TMS provider URL: www.mercurygate.com Innovation: DEM integration

Headquarters: Cary, NC CEO: Joe Juliano Company Type: Private Company

MercuryGate is an independent provider of SaaS-based Transportation Management System (TMS) solutions for shippers, 3PLs, freight forwarders, brokers, and carriers.

In May MercuryGate announced a partnership and technology integration with Convey Inc., the leading provider of Delivery Experience Management (DEM) software. The partnership integrates Convey’s Delivery Experience Management technology into MercuryGate’s TMS solutions to allow shippers to launch DEM programs that provide complete visibility through the last mile of delivery. In August of 2018 Summit Partners, a global investment company, bought MercuryGate.

25

Oracle

Founded: 1977 Headquarters: Redwood Shores, CA Category: Cloud-based Software Solution CEO: Lawrence J. Ellison URL: www.oracle.com Company Type: Public Company NYSE ORCL Innovation: Oracle SCM Cloud With capabilities that incorporate product development, vital material sourcing, outsourced manufacturing, integrated logistics, omnichannel fulfillment, and incorporated demand and supply planning, Oracle SCM Cloud is the most far-reaching SCM suite in the cloud. Oracle SCM Cloud has transformed inventory network operations to address the difficulties of the demand-driven marketplace. The end-to-end platform of excellence is ranked as a leader in multiple segments and recognized as a dedicated partner to hundreds of companies preparing for their future. In 2020 Oracle announced it was partnering with Uber Freight integrating it with Oracle Transportation Management Cloud for real time pricing information.

Orbcomm

Founded: 1993 Headquarters: Rochelle Park, NJ Category: IoT Solutions CEO: Marc J. Eisenberg URL: www.orbcomm.com Company Type: Public Company NASDAQ: ORBC Innovation: multi-network connectivity The company offers network connectivity, devices, device management, and Web reporting applications that are designed to track, monitor, control, and enhance security for various assets, such as trailers, trucks, rail cars, sea containers, power generators, fluid tanks, marine vessels, diesel or electric powered generators, oil and gas wells, pipeline monitoring equipment, irrigation control systems, and utility meters in transportation and supply chain, heavy equipment, fixed asset monitoring, and maritime industries, as well as for governments. The services both hardware and software fall under the M2M (Machine to Machine) and IoT.

PayCargo

Founded: 2008 Headquarters: Coral Gables, FL Category: Electronic Payments CEO: Lionel van der Walt URL: www.paycargo.com Company Type: Private Innovation: PayCargo - financial platform for moving money PayCargo’s online solution is designed to help move cargo quicker and reduce payment costs. The company has over 2,500 vendors in the network including major ocean carriers such as Hapag Lloyd and Hamburg Sud; air cargo providers like Air France, LAN Cargo, Swissport, Air General, and Total Air; and hundreds of terminals and CFS stations. Over 1,000 of these vendors release the cargo within an hour after receiving the “Payment Approval” alert from PayCargo. All other vendors release cargo no later than the next morning.

Platform Science

Founded: 2014 Category: Fleet Management platform URL: www.platformscience.com Innovation: Out-of-the-box solution integrating telematics

Headquarters: La Jolla, CA CEO: Jack Kennedy Company Type: Private

Platform Science has integrated both trucking telematics with a fleet management platform. The combination enables the trucking company to monitor compliance, safety and productivity guidelines. Platform Science is a developer of platforms for on-vehicle mobile applications offering advanced fleet management software solutions which enables customers to purchase and utilize third party telematics solutions and connectivity services directly from their trucks without aftermarket hardware installation.

The company works with truck builders and hardware developers like Daimler and Bendix to develop and integrate this with the platform and supporting apps. In 2020 they announced the partnership with Daimler, developer of a leading platform for on-vehicle mobile applications.

project44, Inc.

Founded: 2014 Category: Cloud based visibility platform URL: www.project44.com Innovation: Advanced Supply Chain Visibility

Headquarters: Chicago, IL CEO: Jett McCandless Company Type: Private Company

Leveraging the power of the cloud-based project44 platform, organizations are able to increase operational efficiencies, reduce costs, improve shipping performance, and deliver an exceptional Amazon-like experience to their customers. Over 25,000 unique carriers have tracked shipments in the system and project 44 is connected to 92% of all ELD/ telematics devices. project44 has also established partnerships and out-of-box integrations with 57 TMS vendors. project44 supports all transportation modes and shipping types, including Parcel, Final-Mile, Less-than-Truckload, Volume Less-than-Truckload, Truckload, Rail, Intermodal, and Ocean. In March 2020, project 44 announced the release of ocean to rail intermodal visibility which will provide customers with the ability to receive real-time geo-location based tracking on intermodal shipments an important step forward in end-to-end supply chain digitalization.

Quincus

Founded: 2014 Category: Supply Chain Solutions URL: www.quincus.com Innovation: Supply Chain Optimization

Headquarters: Singapore, SG Co-Founder CEO: Jonathan Savoir Company Type: Private

Quincus’ skill set enables the company to customize supply chain solutions, both large and small. This ranges from tweaking existing operations or overhauling an entire system. The main product lines include Quincus Ground, Quincus Port, Quincus Trade and Quincus Technology.

Railinc

Founded: 1999 Headquarters: Cary, NC Category: Railroad IT CEO: E. Allen West URL: www.railinc.com Company Type: For-Profit Subsidiary of AAR Innovation: Asset Health Strategic Initiative (AHSI) Railinc has established itself as the “glue” which ties diverse elements of the rail freight supply chain through its RailSight Suite of Applications. Railinc delivers more than 9 million messages each day over the EDI network. Railinc’s Clear Path™ System helps railroads plan the movement of trains through the Chicago Terminal, the busiest rail gateway in North America. Clear Path is part of the ongoing Gateway Operations Services program, which focuses on enabling the exchange of timely, accurate, and actionable information to support the Chicago Integrated Rail Operations Center.

Founded: 1972 Category: Software URL: www.sap.com Innovation: Partnership with GEA

SMC³

Founded: 1935 Headquarters: Peachtree City, GA URL: www.smc3.com Innovation: SMC³ Platform

Headquarters: Walldorf, Germany CEO: Christian Klein Company Type: Public company NYSE SAP

Category: Association CEO: Jack E. Middleton Company Type: Private company

SMC³ is a legacy company in logistics. SMC³ began as a trucking rate setting organization and has evolved into a state-of-the-art logistics platform. SMC³ translates pricing and transit detail into data-centric solutions. The SMC³ Platform empowers 3PLs and shippers to navigate the LTL sector. The SMC³ Platform is the underlying LTL fuel for transportation management systems and the single integration point for all carrier rate, transit and service info. It optimizes the complete LTL shipment lifecycle, the SMC³ Platform includes Analytical APIs RateWare® XL and CarrierConnect® XL with carrier-integrated Execution and Visibility LTL APIs. (See Matt Miller story pgX)

StormGeo

Founded: 1997 Category: TMS URL: www.stormgeo.com Innovation: Customizing online weather

Headquarters: Bergen, Norway CEO: Soren Andersen Company Type: Private

The StormGeo platform combines deep domain expertise with cutting-edge data science to enable better business decisions in weather-sensitive operations. This covers the range from onshore, offshore, in the air, or at sea. StormGeo’s seven forecast centers around the world are available 24/7 to give customers the support they need, when they need it most.

The company has been aggressive in adding other companies to the group. Since 2011 StormGeo has acquired Dubai-based weather forecasting company, Met Consultancy FZ LLC, Houston-based company, ImpactWeather Inc, Applied Weather Technology, Inc. (AWT), headquartered in Silicon Valley, California, Nena, a leading analysis house delivering energy market insights, Nautisk, a supplier of maritime charts to the merchant marine and acquired 51% of Grupo Climatempo, a company supplying meteorological services in Brazil.

SunTek Systems, Inc. Founded: 1994 Category: Software Solutions URL: www.sunteckscm.com Innovation: iLogisys

Headquarters: Irvine, CA CEO: Frederick Beckett Company Type: Private Company

Suntek Systems Inc. is a logistics software company offering management software solutions to logistics solution providers such as freight forwarder, NVOCC, customs house broker. Sunteck uses its own flexible supply chain platform to handle complicated logistics process from order to delivery. Suntek has been developing Logistics Management Software solution since 1994. Companies of any size benefit from logistics management software solutions. The flag ship solution, iLogisys, enables customers and trading partners to control their extensive supply chain visibility and enhance the overall performance.

Tideworks Technology

Founded: 1999 Headquarters: Seattle, WA President: Thomas J. Rucker URL: www.tideworks.com Category: SaaS provider of TOS Company Type: Private Company (A Carrix Company) Innovation: TOS Tideworks Technology is a provider of Terminal Operating Software (TOS). The terminal software provider is part of the Carrix group of companies that also includes SSA Marine and Rail Management Services. While Tidework is largely known for creating TOS software, it has evolved from a small IT provider to a global software development company.

In November of 2019 Tideworks announced it was establishing an intermodal division and in January 2020 Freightliner and Pentalver, subsidiaries of Genesee & Wyoming Inc. (G&W) and the UK’s largest intermodal rail freight provider and leading container logistics supplier, have selected Tideworks as its intermodal solutions provider for their UK rail and container terminal network.

Transporeon GmbH

Founded: 2000 Headquarters: Ulm, Germany Category: Cloud-based logistics platform CEO: Stephan Sieber Company Type: Private Company URL: www.transporeon.com Innovation: TRANSPOREON, TICONTRACT, MERCAREON Transporeon is a cloud-based logistics platform, linking manufacturers, retailers, and wholesalers with logistics service providers via a global network. The SaaS based logistics platforms include TRANSPOREON for transportation management; TICONTRACT for e-sourcing, procurement, and freight bill auditing; and MERCAREON for retail specific dock scheduling. The group digitizes the entire logistics supply chain, providing softwareas-a-service (SaaS) solutions across the logistics lifecycle for transportation procurement and supplier sourcing, shipment execution and load assignment, centralized management of global freight rates, dock scheduling and real-time visibility. In 2019 Transporeon expanded its service offering and entered a strategic partnership with Sixfold , a provider of real-time shipment tracking. Additonally, Private investment company Hg, one of Europe’s most experienced software and growth investors, invested in Transporeon Group.

TrueCommerce, Inc.

Founded: 1995 Category: EDI URL: www.truecommerce.com Innovation: TrueCommerce Foundry

Headquarters: Cranberry Township, PA CEO: Michael Cornell Company Type: Private Company

TrueCommerce Inc. has developed a niche in the market – solutions for small and midsized companies – through its EDI (electronic data exchange) solutions. The umbrella for TrueCommerce is called the TrueCommerce Foundry. The TrueCommerce Foundry’s aim is to integrate commerce and supply chain solutions. TrueCommerce Foundry integrates all of the elements along with connected applications like multi-carrier shipping, business analytics and a suite of tools that manage key components such as orders, inventory, drop-ship vendors and product information. TrueCommerce’s Global Commerce Network includes over 92,000 pre-connected retailers, distributors and logistics service providers.

WiseTech Global

Founded: 1994 Category: SaaS logistics services URL: www.wisetechglobal.com Innovation: CargoWise One

Headquarters: Sydney, Australia Founder/CEO: Richard White Company Type: Public company ASX WTC

WiseTech Global is an innovative global developer of cloud-based software solutions for the international and domestic logistics firms. WiseTech’s main product, CargoWise One, provides a comprehensive end-to-end logistics solution, and forms an integral and scalable link in the global supply chain. In 2020 the company added Swiss-based Studio Informatica (SISA) to a growing list of acquisitions. The group now includes CargoWise One, ABM Data Systems, ACO Informatica, BorderWise, Bysoft, Cargoguide, CargoIT, CargoSphere, CMS Transport Systems, Containerchain, CustomsMatters, DataFreight, Depot Systems, EasyLog, Fenix, Forward, Intris, LSP Solutions, Microlistics, Multi Consult, Pierbridge, Prolink, Ready Korea, SaaS Transportation, SmartFreight, Softcargo, Softship, Systema, Taric, Trinium Technologies, Ulukom, Xware, zsoft, and znet Group.

ZeBox

Founded: 2018 Headquarters: Marseille, France Category: Tech Incubator CEO: Matthieu Somekh Company Type: Private URL: www.ze-box.io Innovation: Tech Incubator for transport logistics and mobility Founded in 2018 by Rodolphe Saadé, Chairman and CEO of CMA CGM, ZeBox is an incubator for the transport logistics and mobility sectors. The concept behind ZeBox was to encourage entrepreneurship and innovation while providing a portal to international commerce. Among the key corporate partners for CMA CGM were BNP Paribas, Ernst & Young, and the freight forwarders Centrimex and CMA CGM subsidiary CEVA Logistics.

ZeBox is dedicated to the development of vertical technologies including Artificial Intelligence, Robotics, Cybersecurity, Blockchain, Augmented Reality and IoT. The focus is mainly on transport, logistics and mobility but also on industry 4.0 in general. Among the startups are ASD, Border Bee, Transpare and Wing.

American Journal of Transportation

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ajot.com

ACL AJOT_SailSchedule_2020_ACL 2/27/20 9:33 AM Page 1

Regulatory saga escalates on proposed Port of Vancouver container project

By Leo Ryan, AJOT A regulatory saga that for several years has plagued a major container terminal project proposed by the Vancouver Fraser Port Authority (VFPA) is showing no signs of abating, and a final decision by the Canadian federal government has been delayed until November in light of the circumstances surrounding COVID-19.

Not only are there substantial environmental issues, but the Port of Vancouver stirred considerable controversy by blocking last year an alternative proposal from its biggest tenant, GCT Global Container Terminals.

This prompted GCT, which operates the Deltaport and Vanterm terminals, to file a legal challenge with a federal court that has still not rendered its judgment.

In a report released in late March, a three-member Federal Review Panel assessing the Roberts Bank Terminal 2 project (RBT2) at Delta since 2016 acknowledged its potential competitive benefits for Canadian marine shipping markets and regional employment. But it also underscored “significant adverse” effects on the nearby wetlands, fish habitat and migratory birds as well as on the quality of life of local populations and cultural heritage of Indigenous groups.

Providing capacity for an additional 2.4 million TEUs annually by 2025 to meet anticipated demand, it would require the conversion of 177 hectares of intertidal and subtidal habitat on Roberts Bank to build a new three-berth terminal, expand an existing causeway and enlarge an existing tug basin. It would be located immediately adjacent to Tsawwassen First Nation lands.

Among the findings, the report said a proposed offsetting plan for aquatic species, covering 29 hectares, would be insufficient to compensate for the reduction in productivity associated with project-induced habitat loss of 177 hectares at Roberts Bank.

The report made 71 recommendations to mitigate impacts on wetlands, aquatic species and other sectors, including the development of a marine mammal management plan and the establishment of an Indigenous advisory committee.

The report further declares: “The Project would result in a residual adverse effect on daytime and nighttime visual resources and on outdoor recreation as well as a significant cumulative effect” during both construction and operations.

Reacting to the 627-page report, the VFPA asserted that “the project and marine shipping associated with the project will not have any adverse effects to the environment that cannot be mitigated.

We are eagerly awaiting the next steps in the environmental assessment, which includes a decision from the Government of Canada on whether the project can proceed.”

For his part, GCT President Doron Grosman subsequently responded that RBT2 would be a massive undertaking compared with the Deltaport 4 phasedin approach to expanding its existing facility. GCT’s budget ranges between $1 billion to $1.6 billion compared with the port authority’s cost estimate of over $3 billion for RBT2.

“British Columbia will need container port capacity that appropriately responds to the needs of exporters, consumers and the ocean shipping industry,” Grosman said. “The Deltaport berth 4 expansion is the only project that is nimble enough to do this – it is incremental, privately funded and environmentally less damaging.”

GCT officials have also argued that the VFPA’s RBT2 is based on forecasts from a decade ago that do not take into consideration significant market changes in the past few years.

According to the GCT, its studies suggest that Canada’s west coast will not run out of capacity until 2030-2035 at the earliest.

GCT further contests the validity of the target set by the VFPA that no single operator should control more than twothirds of total capacity in order to maintain a competitive market.

Such a competition clause is not to be found in the Canada Marine Act, GCT maintains.

Meanwhile, in an emailed reply to questions, the Impact Assessment Agency of Canada indicated that on April 3 Jonathan Wilkinson, the federal Minister of Environment and Climate Change, extended the time limit by 90 days for the issuance of a final decision due to the COVID-19 pandemic. “If the project is authorized to proceed, the Minister will issue a Decision Statement including conditions related to the project, which would become legally binding on the proponent, no later than November 22, 2020.”

It added that the extension “will ensure that the Impact Assessment Agency of Canada has sufficient time to engage the public and consult Indigenous (SAGA – continued on page 27)

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SeaIntelligence’s Jensen: container market recovery looks likelier in 2021… maybe

By Stas Margananis, AJOT “There are few signs of a possible recovery until the Covid-19 crisis is well behind us and the earliest that I see this is in early 2021,” says Lars Jensen, CEO, Copenhagen-based SeaIntelligence Consulting. “Even so, we are already seeing a second wave of Covid cases in Asia … and so that date could go out much further. This means that carriers will continue to reduce the number of sailings and the longer this lasts the more this will become problematic for the Ports,” Jensen added.

Jensen told AJOT that there are three projections for recovery: • The V Shape: “This assumes that the pandemic concerns have disappeared by July and that shippers are confident enough to order their Christmas supplies with big volumes starting to show up in August, September, etc. This appears to be very optimistic because we are already seeing a second wave of Covid cases in Asia. “ • The U Shape: “This assumes a recovery in early 2021 in which accelerated orders occur before Chinese New Year and there is a ramp up in container volumes.“ • The Third Option: “The third option is that we don’t see a recovery in either period and we are in uncharted waters.”

Ports Paying a Price for Accommodating Mega-container Ships

Jensen, who has been critical of the decision by ocean carriers to heavily invest in 18,000 TEU ships and larger says ports and terminals who upgraded to accommodate the mega-container ships are now paying the price with higher debt at a time of economic recession. There are currently between 150-200 of these vessels either sailing or soon to be delivered to their owners: “The terminals have been forced for the last 4-5 years to buy cranes and other upgrades in order to handle larger container vessels. This was done in the anticipation of 18,000 TEU vessels arriving at their ports. In some cases, they have arrived once in a blue moon, but the price the carriers demand for admission to their services is this investment. The result is higher debt and now a global uncertainty

due to the Covid-virus and the resulting recession.

On top of this there are 150-200 very large container vessels that are sailing or soon to be delivered. Those ships have to go somewhere.

The decision to build 18,000 TEU and bigger ships is to reduce the per container rate of transport. For this, the bigger ships do very well.”

Higher Transshipment Costs

However, bigger ships are limited to a smaller number of ports, built to accommodate them. So, shippers are forced to pay more money for trucking and feeder shipping to get containers to their final destination: “The problem is that you now require more transshipment costs such as, additional feederships and more trucking. For example, if I had two sailings per week of a 10,000 TEU ship and I now replace that with one sailing of a 20,000 TEU ship you have doubled the need for trucking on one day but eliminated it for the second sailing. So now you have to maintain a supply of trucking that has less days to work. At the same time your warehouses get more containers in a shorter space of time …In Europe and Asia, you increase the need for feederships to deliver containers to smaller ports that cannot handle the bigger ships. So, the carriers’ unit costs go down but the costs to the ports, truckers, warehouses and ultimately to the shippers go up.”

Is 14,000 TEU Optimum Size?

Jensen has argued for years that the optimum size vessel for most ports is around 14,000 TEUS: “A smaller 14,000 TEU ship gives you more flexibility to serve more ports at a lower cost to the supply chain, shippers and the ports. The shipper is going to be less likely to pay the ocean freight rate when using the bigger ship results in higher transshipment and supply chain costs.”

Carriers, more invested in 14,000 TEU vessels, will have an advantage in being able to serve more markets: “.. if I have a service between Shanghai and Los Angeles/Long Beach I can use a 20,000 TEU ship because all three ports have the capability of handling those vessels. The problem (RECOVERY – continued on page 27)

Maritime Section

may 25 - june 21, 2020

27

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Inland Port Greer, SC

SC Ports welcomes American solar module maker to SC

S.C. Ports Authority has announced that First Solar, Inc., America’s largest solar manufacturer, has selected Greenville, S.C., for its new distribution hub on the East Coast.

Headquartered in Arizona, First Solar operates the Western Hemisphere’s largest photovoltaic (PV) module manufacturing footprint in Northwest Ohio, as well as factories in Malaysia and Vietnam.

The company plans to open a 450,000-square-foot distribution hub in Greenville — its first in the Southeast — to warehouse and stage deliveries for its customers in the United States.

“As America’s solar company, First Solar is proud to power communities, innovation and prosperity with our solar module technology,” said Bart Verbeke, First Solar’s Senior Manager of Global Logistics. “Our investment in this distribution hub will help enable our commitments to deliver modules where they’re needed when they’re needed, thanks to the connectivity that S.C. Ports is able to offer.”

First Solar will benefit from both the Port of Charleston’s access to international markets, such as Vietnam, and its overnight rail connection from the Port of Charleston to Inland Port Greer, S.C. Ports’ inland operation in Upstate South Carolina.

First Solar anticipates bringing up to 7,000 containers per year through the Port of Charleston, beginning in late May. Upon arrival at Inland Port

Greer, cargo will be transported to First Solar’s nearby distribution hub in Greenville.

“We are thrilled to announce First Solar’s decision to invest in South Carolina, and we extend a warm welcome to them as a customer of S.C. Ports,” S.C. Ports Authority President and CEO Jim Newsome said. “S.C. Ports offers access to global markets, efficiently run terminals and railsupported inland ports to meet our customers’ needs. We look forward to supporting First Solar’s efforts to deliver American-designed solar modules to their customers in the United States.”

The facility sits near Inland Port Greer, which is located along Interstate 85 in Upstate South Carolina between Atlanta and Charlotte. Inland Port Greer extends the Port of Charleston’s reach 212 miles inland by providing overnight rail service via Norfolk Southern. The inland terminal reaches 90 million consumers within a 500-mile radius, which can be reached in a one-day truck trip.

S.C. Ports Authority opened Inland Port Greer in 2013 with BMW Manufacturing Co. as its launch customer. The inland operation has seen consistent growth since then as more companies use it to move cargo overseas and to handle imports for a quickly growing Southeast population. Inland Port Greer handled a record 157,000 rail moves in calendar year 2019, up 29% year-over-year.

(CONTROVERSY – continued from page 22) interview with AJOT. Some cargo is defined as divisible load to be broken down to get to under 80,000 pounds maximum weight. His frustration extends not just between states, but within states. “Illinois has state permit, city permit and county permit or three permits to move containers.” Permits are a source of revenue for governments which are used for road maintenance and repairs caused by overweight cargoes.

A possible solution to the overweight shipping container controversy is from Oversize.io platform. “We currently have the first part of a solution ready to go. It’s a maximum axle weight calculator that can apply the federal bridge formula to any load under 80,000 pounds. This is important as over 80,000 pounds each state dictates its own rules, regulations, and pricing,” said Drew Jahnke, founder and director of sales of Oversize.io. The calculator also has an interactive map that can determine the maximum permitted weight on non-divisible loads throughout the United States. This will be available as a mobile application in the next couple of weeks.

customs brokers & freight forwarders

www.jfmoran.com : 800.944.1041

(RECOVERY – continued from page 26) is that I might eliminate stopping in Xiamen (located along the Southern Chinese coast) and my competitor might offer that stop…We also see that the actual number of sailings provides more flexibility with the smaller vessels.”

Avoiding the Suez Canal

As a result of lower fuel costs, some carriers sailing between Asia and Northern Europe are sailing around the Southern coast of Africa to avoid paying $500,000 to $750,000 in fees to transit the Suez Canal: “In an echo of 2016, we are seeing the impact of lower oil prices and one of the impacts had been on some carriers going between Asia and Northern Europe bypassing the Suez Canal. The Suez Canal charges $500-$700,000 per passage. The passage around Africa is cheaper with the lower fuel costs to sail to Northern Europe from Asia even though the distance is greater and the fuel consumption is higher.

The lower oil prices now make this voyage more economical. In addition, as a result of the recession, importers can afford an additional week in sailing time because the demand is not high enough to pay for faster deliveries.”

The Suez Canal authority has offered a 5% discount on ships transiting between Asia and northern Europe, he says but that may not be enough: “as we see more carriers are opting to take the African route.”

According to Jensen, “The Suez Canal Authorities now trying to “strike back” against the competition from low oil prices.

(SAGA – continued from page 26) groups on the potential environmental assessment conditions that the proponent must comply with, should the project be authorized to proceed.”

Whichever way one looks at it, the jury remains out. Barring some sort of “diplomatic” solution between the contending visions of the GCT and the VFPA, the odds appear to be lengthening against the RBT2 project in its current form. Moreover, spiraling costs and the short-to-medium term impact of COVID-19 could soon be determining factors.

American Journal of Transportation

28

Port of Oakland gets new service to Asia, includes Saudi Arabia A sprawling vessel service begins this week with 18 megaships linking the Port of Oakland to Asia, including Saudi Arabia. A highlight of the new service: the first-ever direct link between Oakland and the Middle East.

The Port said that Japan’s ONE line would operate the new weekly service called the Far East-Pacific 2. The first ship in the service, the ONE Aquila, should arrive at Oakland International Container Terminal May 7.

Each of the ships in the service has capacity to carry 14,000 20-foot containers, the Port said. That places them among the largest container vessels calling at U.S. ports.

“Naturally we’re encouraged by this development,” said Port of Oakland Maritime Director John Driscoll. “The size of the ships means extra cargo capacity coming to Oakland and the Port rotation extends Oakland’s reach in global markets.”

The service reaches nine ports in Singapore, Thailand, Vietnam, Japan, Hong Kong, China, the U.S. and Saudi Arabia.

Stops at Saudi Arabia’s Jeddah port would be Oakland’s first direct connection to the Middle East. Until now, ships from the Arab

world transferred Oakland-bound cargo to other vessels at intermediate ports.

Two services already calling Oakland were consolidated by ONE into the Far East-Pacific 2, the Port said. For that reason, the Port declined to project the impact of the new service on cargo volume. The Port said that larger ships could result in more Oakland freight over time. Adding new port calls such as Jeddah could help as well, the Port added.

The Port said it expected cargo mix on the new service to be evenly divided between imports and exports. California farm goods exported to overseas markets should be a prominent part of the mix, the Port added.

The Far East-Pacific 2 eastbound port rotation: Jeddah, Saudi Arabia; Singapore; Laem Chabang, Thailand; Cai Mep, Vietnam; Hong Kong; Yantian, China; Long Beach; Oakland The Far East-Pacific 2 westbound port rotation: Oakland; Yokohama, Japan; Hong Kong; Laem Chabang, Thailand; Cai Mep, Vietnam; Singapore; before heading to Rotterdam, Hamburg, Antwerp and Southampton on the European portion of its rotation.

The Evergreen Arkadia calling at the Port’s Napoleon Avenue Container Terminal.

Evergreen initiates new weekly service from Port NOLA

Evergreen Shipping launched a new weekly container service to and from the Caribbean and the Port of New Orleans (Port NOLA) on April 29, 2020, with the Evergreen Arkadia calling at the Port’s Napoleon Avenue Container Terminal.

Port NOLA President and CEO Brandy D. Christian said the new service further strengthens New Orleans’ direct connectivity and offers additional options.

“We are thrilled to welcome Evergreen’s new service to the Port and for the opportunity to provide our shippers with increased global connectivity through Evergreen’s extensive network of services in Panama,” said Christian.

The addition of Evergreen’s independent CAJ service adds to their current offerings in and out of New Orleans on the Oceans Alliance Asia and North Europe services. The new service will be handled by terminal operator Ports America at the Napoleon Avenue Container Terminal. The direct ports of call will be Manzanillo, Colon, Kingston and Port Au Prince with connections to/ from Asia, West Coast South America and the Caribbean.

The additional capacity will support Port NOLA’s growing export business for commodities such as resin, poultry, forestry and agricultural products. The Port

saw 13% loaded import TEU growth last year. This service will also further support Port NOLA’s import growth from overseas markets.

Port NOLA’s container volumes remain strong despite COVID-19 impacts, with loaded container volumes trending positively to date through the 2020 fiscal year. The addition of the Evergreen service continues to promote this trajectory and expands upon Port NOLA’s direct weekly container service count that now increases to 13.

“The addition of the Evergreen service at this time underscores confidence in Port NOLA’s and our terminal operators’ ability to move cargo throughout the COVID-19 global pandemic challenges, keeping the health and safety of our frontline employees top of mind,” said Christian.

Evergreen Shipping Agency (America) Corp. is the North America general agent for Evergreen Line, one of the world’s leading ocean carrier. Serving the international ocean logistics needs of U.S. importers and exporters since 1974.

Evergreen Shipping Agency (America) Corp. offers shippers one of the largest intermodal networks in the U.S., including worldwide ocean shipping and inland transportation services.

(STRESSED – continued from page 23) execution plans.”

Take Capital Logistics, a temperature-controlled 3PL based in White Plains, NY. After the onset of Covid-19, Capital Logistics assisted with reefer shipping and storage at a Westchester, NY nonprofit that is attempting to link shuttered restaurants with those in need of cooked food, particularly in the hospitality industry.

Capital Logistics deployed a Descartes technology, already integrated with third-party services, to help map out and service this new venture. Because the technology is cloud based, Capital employees now working from home could tap the technology with ease, according to Greg Ackner, Capital’s vice president.

The Descartes technology tool “has given us the ability to quickly adapt to the new working environment,” Ackner said.

Extend this out. “If you’re Capital Logistics and, all of the sudden, everything changes in terms of your normal supply patterns, you’re doing business on lanes and with partners and parties you weren’t doing business with before.

The customers you used to visit are not the ones you’re visiting now,” Wood explained. “Yet, visibility, span of control, quality of service, all still needs to hold.”

ajot.com scanning and tracking for global air carriers and ground handlers.

“There‘s a finite number of people in the world to really understand in detail some of the elements of global logistics,” said Wood. “The talent, the technology and the customers and the revenue and the talent all have to go hand in hand in order to be successful. What we‘re looking for in an acquisition is a good combination in that regard, that adds something to our portfolio that we didn‘t have before and brings us something that is appealing to

Descartes’ Eclectic Clientele

Descartes’ clientele encompass a wide range of the industry. They include bigname shippers like Home Depot, CVS and Coca-Cola; ocean carriers Maersk, CGM CMA and Hapag-Lloyd; trucking firms Con-way, Schneider and Estes; airlines British Airways, American and Delta; and diversified logistics companies such as DHL, Panalpina and C. H. Robinson.

Descartes is based in Waterloo, Ontario, although its operations are global. While definitions of a 5PL vary, Descartes is a prime example of one, which “constructs, organizes, and implements logistics solutions and technologies on behalf of multiple clients.”

Descartes is on AJOT’s list of Top 50 IoS Market Innovators.

While it started as a software solutions provider in direct store delivery and final mile logistics, the company’s offerings now span the world of logistics, with clientele spread across the entire universe of transportation and logistics providers.

It has technologies aimed at transportation management, routing and compliance. Descartes systems focus on global trade, cargo security, e-commerce shipping and fulfillment. Some technology systems are specific to one particular task, while others have elements that traverse and link these various players.

“Making it easier to transact across those spheres is the core of our whole strategy,” said Wood, who hastens to add: “That doesn’t mean you have a monolithic technology platform that you try and stick everybody across all of that diversity of roles in the supply chain. They have touch points and crossovers that need to be optimized to fulfill their function.”

Being able to provide such a wide array of technology not only allows Descartes to attract a variety of businesses, but also enables it to service companies with multiple functions, say, a shipper with its own fleet and outside transport.

Descartes also ranks among the biggest such logistics technology providers around. For the fiscal year ended January 31, 2020, the company registered $326 million in revenue, an 18% jump over a year earlier.

Part of this growth is through an aggressive acquisition strategy. Descartes has acquired 11 companies in the past three years. These include large and small, near and far. For example, a year back, Descartes acquired trade compliance software provider Visual Compliance for approximately $250 million, then, a few weeks later, paid $21 million for Core Transport Technologies NZ, a New Zealand-based technology provider that specializes in

Ken Wood, Descartes’ EVP product management our customer base.”

This strategy will continue, Wood said, with a target of three to four companies purchased a year.

E-Commerce

Descartes has most recently beefed up e-commerce-related technology. This is aimed at B to C e-commerce fulfillment, shipping, connectivity and omnichannel logistics. Covid has obviously boosted this trade. Retailers who only marginally engaged in online businesses before have found themselves struggling even more than others, as their supply chains were geared to physical stores.

“Everybody is re-evaluating those strategies right now as they see more e-commerce balance coming in versus retail fulfillment,” Wood said.

Wood, for one, believes the current supply chain disruption will have longlasting effects long after the pandemic retreats. One change, he believes, will come with a more rapid digitization of the freight forwarding process, something the industry has been toying with, but not yet fully embraced. That kind of business, Wood explained, is historically scaled by adding people to manage the increased volume.

However, with the current crisis, two things have happened: First, normal flows have collapsed. Second, in many instances, fewer people have been forced to handle these rapid changes in business and business patterns. Efficiency becomes paramount.

Part of embracing digitization “is really about breaking the scalability connection between managing freight and [the number of] people in these 3PL, 4PL type businesses,” said Wood.

The current disruption “is accelerating that process,” Wood said. “‘I‘ve got to get more efficient. I‘ve got less freight.

Some of its higher priority freight. I can‘t keep throwing the same number of people at it,’” he said of his customers.

3PLs, 4PLs are all thinking more now about automating systems, Wood believes. “‘Let’s accelerate the plans around things like quoting, booking, tracking, settling, and get people out of that process as much as possible or make the people I have more efficient so they can handle it,’” he said.

“Even if Covid gets under control, this accelerates that process because people’s

may 25 - june 21, 2020

29

NOrth America’s TRANSPORTATION & LOGISTICS newspaper

Air Cargo NEWS Air Cargo NEWS

American Airlines continues its pioneering history with expanded cargo operations American Airlines has expanded its cargo schedule in May to provide 140 weekly flights to 15 cities in Asia Pacific, Europe and the Caribbean, up from 80 flights last week. New destinations include daily flights between Dallas-Fort Worth (DFW) and Hong Kong (HKG); and weekly flights from DFW and Beijing (PEK); DFW Chicago (ORD) and Paris (CDG); ORD and London Heathrow (LHR); Philadelphia (PHL) and Rome (FCO); PHL and San Juan (SJU), and PHL and Zurich (ZRH).

For more than 75 years, cargo flights have played a significant role in the history of American Airlines. And now in the face of a global pandemic, cargo flights are once again placing cargo in the history books for American.

“Why we fly hasn’t changed, but out of necessity how we care for people on life’s journey has had to change. Cargoonly fights have allowed us to transport medical equipment, communications and technology tools, pharmaceuticals and food supplies,” said Rick Elieson, President of Cargo and Vice President of International Operations. “Air cargo is uniquely positioned to connect the world at a time when barriers and distance threaten to separate us. I’m immensely proud of our teams and business partners who have come together to make these flights possible,” said Elieson.

The airline’s early roots can be traced

back to flying cargo, when a Douglas DC-3 loaded with more than 6,000 pounds of fresh spinach, fresh flowers, airplane parts and apparel flew the first scheduled air cargo flight from Burbank, California (BUR) to New York (LGA) on Oct. 15, 1944. American was also the first airline with dedicated cargo terminals.

After growing into a passenger airline, American returned to freighter operations in October 1974 with six Boeing 747s. With 176,000 pounds of cargo capacity, the freighter flew a wide range of cargo from a printing press to fresh produce in its first year.

American flew the freighters for 10 years before the capacity of newer widebody aircraft (at the time the DC-10 and the Boeing 767) allowed American to load freight containers on passenger aircraft, moving the carrier away from a dedicated freighter fleet. The freighters were sold, with one purchased by NASA and converted to piggyback the space shuttle.

American is a key player in the 35% of world trade that moves by air cargo, carrying 2 billion pounds of goods annually in the bellies of its passenger aircraft. And now more than ever before, air cargo plays a significant role in connecting the world with critical goods — transporting fresh produce, shipping temperature-controlled drug trials for coronavirus (COVID-19) and filling aircraft full of PPE.

Air travel demand and the cargo impact

By Keith Nehring, senior product development manager at C.H. Robinson

American Airlines Cargo at Hong Kong International Airport

A weekly staple in our house is bananas and most weeks buying bananas is uneventful. As the primary grocery shopper in my family, I typically look for bananas transitioning from green to yellow. Maybe they won’t taste great today, but within a day they should be ready to eat and we’ll have most of the week before the brown spots start to form.

Occasionally I will be forced to choose between bananas that are either too green or too ripe. I know the ripe bananas may only take a day or two to develop those dreaded brown spots – making them inedible for my young children – but I tend to choose those over the bananas I consider too green.

This is a pretty good comparison for how it feels to give air freight market updates lately.Providing these updates is one of my responsibilities at C.H. Robinson and normally a straightforward task.

Over the past few months, however, I feel like I’m buying a banana that is too ripe. In the days following a new market update that I’ve created, I’m looking for

brown spots.

With that in mind, let us examine some of the mid to long-term impacts of COVID-19 on the air freight market.

Many shippers and forwarders are wondering when we might return to a “normal” market condition and there are many factors that will come in to play. One of the most significant is demand for travel.

Capacity Impact

Each lane is different, but passenger flights make up a large portion of air freight capacity globally. As demand for air travel steadily increased over the years, airlines have responded with more passenger aircraft to support this demand. This additional equipment increased cargo capacity, even in years where demand for air cargo did not increase at a corresponding level.

With cargo capacity (supply) increasing faster than demand, many airlines operating both passenger and freighter aircraft reconsidered their need for freighters. Some airlines got out of the freighter aircraft market (IMPACT – continued on page 31)

American Journal of Transportation

30

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I ntermodal & Logistics News Transporting HAZMAT materials in today’s COVID-19 world

By David Cahn, Elemica Today, COVID-19 test sites are setting up all across the US and other countries in parking lots of all kinds of businesses. Pharmacies, including Walmart and Walgreens, are creating drive-up testing sites as well. However, the test samples collected will be handled and shipped by people that may be transporting infectious substances for the first time. These shippers need to ensure the test samples are handled appropriately and shipped to comply with transport regulations.

Infectious substances are classified as Dangerous Goods and therefore certain packaging and shipping regulations must be strictly followed. The Coronavirus is classified in Category B in the US, which means “they are not generally capable of causing permanent disability or life-threatening or fatal disease in otherwise healthy humans. Category B biological substances are relatively easy to transport in a compliant manner.” The World Health Organization classifies COVID-19 samples as Category A, which means they are life-threatening and governed by stricter regulations.

If the samples are shipped in Category B, they don’t require a Shippers Declaration for Dangerous Goods to be created, and there is no hazmat surcharge. Private or contract carriers must follow certain requirements for shipping these goods, such as making sure the test samples are shipped frozen or between 2-8 Degrees C. If samples are shipped via standard carriers like UPS, shipping requirements are stricter, and workers must be trained specifically to handle these shipments.

US DOT Agencies regulate the surface transportation of hazardous materials, but with COVID19 some of their regulations are eased. The Pipeline and Hazardous Materials Safety Administration (PHMSA), Federal Motor Carrier Safety Administration (FMCSA), and the Federal Railroad Administration (FRA) have waived many restrictions for training, hours of service requirements, and commercial drivers’ licenses (CDL). However, the Transportation Security Administration (TSA) requires applicants for CDLs to have a background

check every five years if the applicant is going to be driving hazardous materials.

What do transporters need to do today to ship hazardous materials/dangerous goods?

Hazardous materials shipments must be accompanied by clear documentation that includes the bill of lading, hazardous waste manifests, and a description of the material being transported. This description consists of the weight and quantity of the materials along with a description of the packaging.

Shipments of dangerous goods must include emergency response information on the shipping document. This information details procedures that need to happen should an incident occur. Description of how to prevent fires and what to do in case of a leak are often included on this documentation.

Transporters of dangerous goods need to use technology that provides visibility into shipments while in transit so that shippers will know where their products are at all times. Having visibility of orders across channels, partners, regions, and systems and across the entire lifecycle of the order from entry through proof-of-delivery helps to ensure that the shipment is safe and being transported correctly.

Alerts can be created if an issue in the shipment arises and customers can be informed. Having visibility of a shipment in transit can alert customers in real-time to where their orders are at all times.

If the supply chains of all parties involved are connected, communication and collaboration can be heightened between carriers, shippers, manufacturers, and others connected to the network.

Information is gathered from transactions across the network, throughout the shipment process, and from those connected. It can be shared, analyzed, and measured for performance and continuous improvement initiatives.

During these trying times, it is crucial that viral samples are shipped to testing labs without delay.

However, shippers must be aware of and comply with the regulations set forth by the CDC and government agencies to ensure safe transport – for the samples and for the people who carry them.

Retailers ask appeals court to overturn California worker classification law affecting trucker drivers The National Retail Federation asked a federal appeals court to overturn a recently passed California worker classification law, saying the measure makes it harder for companies to contract with independent truck drivers by narrowing the circumstances under which an individual can work as a contractor rather than an employee.

“The court’s decision will have a significant impact on retailers’ ability to deliver merchandise to their stores and distribution centers across the country,” NRF Vice President for Government Relations and Workforce Development Lizzy Simmons said. “Owneroperators play an important role in maintaining a nimble supply chain. This law narrows opportunities for independent truckers, reducing flexibility in delivery and upending the retail supply chain.”

NRF, the Retail Litigation Center and the U.S. Chamber of Commerce filed a friendof-the-court brief in the U.S. Court of Appeals for the 9th Circuit. The case was brought by the California Trucking Association and challenges the application of Assembly Bill 5, which took effect in January, to motor carriers.

The sweeping new law codifies and expands a 2018 California Supreme Court ruling that established the state’s “ABC test,” which sets strict criteria that must be met for a worker to be classified as an independent contractor. There are about 70,000 independent truckers based in California, including many who work at ports where the bulk of imported merchandise enters the United States and others who drive beyond the state’s borders.

The brief argues that AB

5 violates the Federal Aviation Administration Authorization Act, a 1994 federal law that expressly preempts any state law or regulation related to the “price, route or service” of motor carriers and was intended to prevent a patchwork of state regulations that could undermine federal deregulation of interstate trucking.

“California Assembly Bill 5 frustrates Congress’s aims by prohibiting motor carriers from hiring the independent owneroperators they have historically relied on to transport property in American commerce, with drastic impacts on carriers’ prices, routes and services,” the brief said. “AB 5 will impose an impossible choice between violating the law, backed by potential criminal penalties, and incurring unrecoverable costs from the forced restructuring of business operations.

DHL and REEF Technology launch pilot for ecofriendly cargo bikes for deliveries DHL Express is partnering with REEF Technology, the largest operator of parking, mobility, and logistics hubs in North America, to pilot the use of four new low-power electric-assist e-Cargo Cycles for deliveries across Miami. The three-wheeled cycles are equipped with accompanying cargo container and are capable of pulling up to 400 pounds or 60 cubic feet in volume.

The two companies are bringing the environmentally friendly e-Cargo Cycles to Miami as part of the DHL GoGreen strategy to reduce its carbon footprint.

The short-term goal of DHL is to implement clean pickup and delivery solutions for 70% of its operations by 2025. Each e-Cargo Cycle deployed enables DHL to take one conventional delivery van off the road, reducing road traffic, noise and pollution while still providing fast efficient deliveries for customers.

REEF’s mission is to build the ecosystem that connects the world to your block. By leveraging the power of proximity, REEF is reimagining parking facilities by creating last-block mobility and logistical hubs that serve the needs of cities, residents and businesses. REEF manages the hubs that will serve as the home base for the e-Cargo Cycles that DHL is using during this pilot. REEF’s technologydriven infrastructure provides congestion-reducing buffering zones and environmentallyconscious parking, micro-fulfillment and delivery solutions to enable the frictionless movement of goods and services “We are excited to partner with DHL and the City of Miami to shape the future of

last-block delivery,” said REEF Technology CEO Ari Ojalvo.

“We appreciate Commissioner Manolo Reyes and his leadership on this issue from the outset and are grateful to Mayor Suarez, Ken Russell the District 2 Commissioner, the Downtown Development Authority, as well as the Miami Parking Authority for leading the way to make freight deliveries safer and more sustainable for the entire community. “We are thrilled to be leveraging the REEF ecosystem and deploy these new environmentally-friendly vehicles not only to support our emissionsreduction efforts, but also significantly reduce the challenges associated with urban business deliveries, improving safety, productivity and costs,” said DHL Express U.S. CEO Greg Hewitt. “They reinforce our own ongoing program to minimize our environmental footprint and support the city government’s efforts to promote sustainable city living.”

“This partnership between the City of Miami, the Downtown Development Authority, Miami Parking Authority, REEF Technology and DHL is an example of how both public and private entities can work together to realize innovative and environmental solutions that benefit the citizens of Miami,” said City Commissioner Manolo Reyes.

“I’m proud to have sponsored many of the City of Miami’s mobility ventures,” said Commission Vice Chair Ken Russell, whose district includes downtown Miami. “This is another excellent partner in our efforts to balance the needs of residents and businesses in our urban core.”

An environmentally friendly e-Cargo cycle travels along the road in Miami, FL

may 25 - june 21, 2020 (IMPACT – continued from page 29) altogether, while others chose to let aging cargo aircraft retire without replacing them.

As a result, when the demand for passenger travel plummeted in the wake of the COVID-19 pandemic, a dramatic reduction in cargo capacity followed. As more countries issued various “stayat-home” measures, air cargo demand fell, but not to the same level as capacity. This has resulted in congestion and increased rates globally with some lanes more affected than others.

Compared to 2019, we can expect decreased demand for air freight indefinitely. At this point, however, capacity has dropped more than cargo demand. Air rates have accordingly increased around the world. As social distancing measures ease, globally, demand for all modes of cargo transportation should increase from the current low levels. At what point, will capacity catch up with demand?

Airline Strategy

As previously mentioned, many airlines have shifted their focus towards passengers in recent years. It seems very likely, at least for the remainder of this year, that focus will change. We have seen the efforts of passenger airlines to use a portion of their fleet for cargo alone. Air Canada may be the most aggressive in this strategy, going so far as to remove the seats from some aircraft to load cargo on the passenger deck.

This initiative and additional capacity is welcome and appreciated during this taxing time, but that doesn’t change the fact that this additional capacity is less cost effective. Even when seats are removed or cartons are being loaded in the seats and overhead bins of the passenger deck, they are loaded and unloaded by hand through the passenger entry door. Because of this the capacity available will only be accessible for certain types of cargo and take more time. These inefficiencies add to the cost of operations and ultimately need to be passed through to the shippers.

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NOrth America’s TRANSPORTATION & LOGISTICS newspaper (AHEAD – continued from page 23) auditing and transit data.

SMC3 doesn’t offer a transportation management system per se, but through its platform better empowers a TMS by supplying additional features.

Perhaps most importantly, the system provides much greater connectivity and visibility throughout the transit cycle.

It allows, for example, recognition of a carrier’s PRO number across platforms so that shippers can easily track when a truck will arrive on a dock.

“Our technology helps level the playing field for shippers and carriers, makes the shippers more knowledgeable, puts more information at their fingertips in a very, very cost effective way, and helps carriers and shippers act more as partners through the process,” said Thompson.

Customers are shippers and carriers, as well as 3PLs, which, Thompson said, tend to invest in technology more heavily and are often first adopters.

SMC3 works with more than 100 technology-provider “partners,” which enables the company to roll out new technologies much faster, he said.

“That speed, that adoption rate is very quick, versus if every individual shipper out there tried to adopt every new piece of technology, it would be a slow crawl,” said Thompson.

Originally, SMC3 was called Southern Motor Carriers Rate Committee. It was founded in the 1930s and served as an organization that compiled and published tariffs for Florida truckers. The organization began to fashion rates-related software for LTL shippers in 1998. Czar Lite, which gives shippers the ability to select carriers based transport rates, still exists.

Czar Lite works, Thompson said, because carriers trust SMC3 with their data and believe that SMC3 offers an unbiased, neutral presentation of the rates.

In 2005, Southern Motor Carriers unveiled BidSense, a bid procurement application.

This allows shippers the ability

to evaluate carriers. Two years later, the company changed its name to SMC3. In 2016, the company unveiled its SMC3 platform, which, through application programming interface, or API, enables Web-based services to shippers and carriers alike. “We’ve really broadened our offerings to support the entire LTL shipment lifecycle,” said Thompson.

According to Thompson, this helps carriers as well as shippers. For example, he said, an LTL shipment is usually more complicated than a full truck-

load shipment, if, only because it often involves more than one carrier. So, carriers can use the SMC3 platform to have more information about each other’s movements.

SMC3 Products Aimed at Carriers

The company has products aimed specially at carriers. One is a “cost intelligence system,” which “enables carriers to identify the profitability at the shipment customer or even the lane level,” said Thompson, adding that about 65% of all LTL ship-

ATA welcomes new HOS rule The American Trucking Association thanked the Trump Administration for issuing a newly updated hours-of-service rule aimed at providing professional drivers more flexibility, without sacrificing safety.

“This rule is the result of a two-year, data-driven process and it will result in needed flexibility for America’s professional truck drivers while maintaining the safety of our roads,” said ATA President and CEO Chris Spear. “We appreciate the time and attention President Trump, Secretary Chao and Administrator Mullen have paid to our industry and to this regulation, which, while maintaining the core limitations on drivers’ work and rest cycles, makes smart changes to portions of the rules.”

The new final rule makes the following changes to the hours-of-service regulations: • Brings the short-haul on-duty period in line with the rest of the industry, while increasing the air-mile radius of short-haul trucking to 150 air miles; • Allows drivers, under certain adverse driving conditions, to extend their driving window by up to two hours; • Changes the requirement drivers take a 30-minute rest period within the first eight hours of coming on duty, to after 8 consecutive hours of driving time have elapsed, and allows the

break to be taken as on-duty, not driving; • Makes modifications to the split sleeper berth provisions of the rule allowing greater flexibility for how a driver splits their sleeper berth time.

“No rule will satisfy everyone, even within our industry, but this one – crafted with a tremendous amount of input and data – is a good example of how by working with stakeholders on all sides, government can craft a rule that simultaneously benefits the industry, specifically drivers, and maintains highway safety,” said ATA Chairman Randy Guillot, president of Triple G Express Inc., New Orleans. “The agency should be commended for their efforts and we appreciate their willingness to listen throughout this process.”

“ATA has been engaged in this rulemaking process from the beginning and we are thrilled to see a final rule come to fruition,” said Dan Horvath, ATA vice president of safety policy. “Through numerous Agency meetings and discussions with ATA’s Safety Policy Committee, we have been engaged with FMCSA since this proposal was first introduced.

While the final rule does not include all of our comments, we will continue to work with Agency to ensure that HOS regulations are consistent with ATA’s commitment to safety.”

ments are costed using this system. “Carriers have to have their fingers on the pulse of the market and know which way it’s going to go,” said Thompson. “They don’t have the luxury of hauling freight that’s not profitable.”

Thompson believes that SMC3 technology “levels the playing field” between shippers and carriers, but also allows them to act more as partners and operate more cost effectively. “It saves time. It saves frustration,” he said.

The current supply chain crisis and the upending of normal transport flows may well have a lasting effect on the way carriers establish rates and price their business, Thompson believes. In the past, he said, pricing has been contractual. If a carrier wanted to change the rate for a particular lane, it was subject to individual negotiation.

Thompson offered the following illustration: Normally, March and April mark peak production time for auto manufacturing. Trucks traveling from, say, Ohio to Florida would travel full, whereas they are relatively empty on the backhaul.

Rates reflect this. But this year, auto manufacturers shut down in March and April. “It threw “LTL networks completely out of whack,” Thompson said.

But carriers couldn’t adjust rates downward to attract other kinds of business from Ohio.

Nor could they adjust rates upwards for current customers who ship far less.

“I see the carriers needing to price more dynamically and transactionally instead of in the past, where everything’s been very contractual,” he said. “It’s the ability to respond to those kind of swings in dynamics” that handcuffs carriers. “Our technology will help shippers, 3PLs and carriers all get access and visibility to the data and information that they need to make the decisions when they need to make it, so they can adjust quickly. We want them to be as responsive as possible. And to do that, you need the information and you need the analytics.”

Final Thoughts

It is likely demand for domestic air travel will recover more quickly than international. The International Air Transportation Association (IATA) recently projected that roughly 50% of the decline in passenger demand for international travel will recover by the fourth quarter of 2020. Without the belly capacity supported by high yield passengers, the air freight market appears unlikely to return to “normal” anytime soon and it is clear the air freight landscape has changed for the foreseeable future.As the market remains volatile, C.H. Robinson can provide alternative modes of transportation that can mitigate the challenges we expect with the air market. Our international footprint, local expertise, and global suite of service offerings allow us to evolve with the changing market and deliver value to our customers. The new “normal” will not be defined for some time, but C.H. Robinson will continue to provide value generating solutions to our customers in this dynamic market.

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