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Author: user
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LOGISTICS
March 27, 2025 By user

Trade groups, businesses speak to both sides of proposed US port fees

Trade groups, businesses speak to both sides of proposed US port fees

Comments regarding proposed punitive U.S. port fees on Chinese-operated and -manufactured cargo ships continue to roll into the Office of the United States Trade Representative, which is holding hearings on the matter this week in Washington.

The fees, which can run as high as $1.5 million per ship per call, are designed to help underwrite a revival of the U.S. shipbuilding industry and fight China’s unfair trade practices.

China in 2024 for the first time assumed the top position among shipbuilding nations, claiming more than a combined half of the global operating fleet and orderbook for new vessels.

While there is general agreement that the U.S. military and merchant fleets would benefit from revitalized domestic shipyards, businesses say the fees incurred by the preponderance of Chinese-built ships in the fleets of the largest container carriers, and proposed escalating requirements that American exports be hauled on U.S.-built and -flagged vessels, would mean serious financial and logistical hardships on U.S. industry and its customers.

In public comments, Atlantic Container Line said if the port fees were implemented, it “would be forced to terminate its U.S. service, close its American offices, lay off its American staff and redeploy its ships to non-U.S. trades, because the proposed action would render us totally uncompetitive versus the other carriers in the U.S. trades.” 

Moreover, the company said U.S. manufacturers would lose their only U.S.-headquartered North Atlantic carrier — and their primary North Atlantic carrier of oversized and project cargo to Europe.

“U.S. export container rates to Europe for a carrier with a Chinese-built fleet — now averaging $500 per 40-ft. container today — would climb to around $2,500 overnight – a 500% increase – simply to cover the new service fee. U.S. import rates from Europe — now averaging around $2,500/40 ft. container —would jump to around $4,500, an 80% increase – simply to cover the new service fee.”

The company said the increases “would be impossible to absorb. The smaller carriers, it noted, bear a greater cost per cargo unit than the mega-carriers with larger ships. American manufacturers would have less choice of carriers and face significantly higher transportation costs.

“Europe supplies more industrial products to the USA than consumer products. The significantly increased costs of delivering those components would push up the price of U.S. manufactured products domestically as well as internationally.”

The Caribbean Shipping Association in its comments urged grandfathering of vessels already operating in the Caribbean. It noted that vessels operating directly between Caribbean nations and the U.S. tend to be small, and the proposed million-dollar fees are the same regardless of vessel sizes.

The Andersons (NASDAQ: ANDE), which operates 58 container loading facilities for export through nine U.S. ports and seven inland locations, commented that ocean carriers have already said they would make fewer port calls, resulting in congestion, fewer sailings, a reduction in available equipment at inland locations and increased transportation costs. It added the fees would effectively double the current prevailing per-container rate, making goods from U.S. farmers uncompetitive, and drive destination markets to find sources from other countries.

Alpha Metallurgical Resources (NYSE: AMR), the largest U.S. producer of coal for steel production, said exports to 26 countries accounted for 78% of its coal revenues in 2024. The company holds a majority ownership stake in Dominion Terminal Associates, a port in Newport News, Virginia.

AMR said the majority of the existing bulk fleet would be required to pay a fee of at least $500,000 upon entry into a U.S. port, with many qualifying for much larger levies under the proposed structure. It called the fees “prohibitive,” and said they would likely drive customers to purchase goods from non-American companies, significantly hurting AMR’s global competitiveness.

The National Association of Manufacturers in its comments supported both the proposed fees as well as the proposed restrictions related to export goods having to some degree use U.S.-flagged and -built vessels. But it also warned against port fees that would unduly burden U.S. manufacturers.

The fees “will reduce the availability of the necessary cargo capacity at U.S. ports, increase pressure on domestic infrastructure, and raise costs that may render American exports less competitive around the world,” the organization said.
The International Longshore and Warehouse Union Coast Longshore Division, which represents 22,000 dockworkers on the West Coast, said it supports the rebuilding of the domestic shipbuilding industry while addressing Chinese dominance over the maritime sector. It also urged USTR to ensure U.S.-bound cargo is not diverted as a result of these efforts. “It is imperative that any remedy includes a measure to address the diversion of cargo with a comparable fee on U.S.-bound cargo,” the union said. 

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LOGISTICS
January 10, 2025 By user

Cosco invests $110 mn to purchase terminals in Thailand

The two biggest terminal operators at Laem Chabang Port, southeast of Bangkok, which handles around 80% of Thailand’s total traffic, are TLT and HLT.

For $110 million, COSCO Shipping Ports has acquired shares in two container terminals at Thailand’s biggest port, Laem Chabang.

Through the agreement, Cosco Shipping Ports purchased 12.5% and 30% of the shares in the Hutchison Port Group-controlled Thai Laemchabang Terminal (TLT) and Hutchison Laemchabang Terminal (HLT), respectively.

It includes Berths A3, C1-C2, and D1-D3 in HLT (the latter is still being built) as well as Berth A2 in TLT. It is anticipated that the overall capacity will reach roughly 6.7 million twenty-foot equivalent (TEU) per year once it is fully operating.

The two biggest terminal operators at Laem Chabang Port, southeast of Bangkok, which handles around 80% of Thailand’s total traffic, are TLT and HLT.

With initiatives like the Thailand Eastern Economic Corridor, the Thai government actively supports the port’s growth and guarantees continuous infrastructural development.

Given that Laem Chabang Port serves as the main port of call for Cosco Shipping Ports’ two brands in Thailand, this acquisition is essential for the company.

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LOGISTICS
November 29, 2024 By user

US port cargo growth set to slow in 2025 amid economic challenges

Moody’s projections indicate that total container cargo volume at rated ports will grow by only 2% in 2025, a sharp slowdown from the 9% growth expected for 2024.

 

The slowdown is attributed to softening economic growth and weak consumer spending, despite a strong start to 2024, with cargo volumes increasing by an average of 11% in the first eight months of the year.

 

 

Risks to port operations remain significant. The incoming president’s proposed tariffs, which could range from 10% to 60% on imports, might reduce trade and lead to a decline in cargo volumes, particularly affecting ports reliant on high trade volumes.

Additionally, the possibility of a labour strike starting January 15 at East and Gulf Coast ports could disrupt operations further. Although a tentative agreement in October halted a previous work stoppage, unresolved issues related to marine terminal automation continue to pose a risk to the stability of these critical ports.

Cybersecurity remains a growing concern, with recent breaches at several ports, including the Port of Seattle, prompting Moody’s to raise the port sector’s global cyber risk profile to “high risk.” Further complicating the outlook, while Panama Canal traffic has recovered from earlier drought restrictions, future restrictions due to water levels could once again disrupt trade, particularly impacting East Coast ports.

On a more positive note, the cruise sector is expected to remain a significant revenue driver for certain ports. Bookings for 2025 and 2026 are exceeding historical levels, with higher prices compared to this year, especially benefiting Florida ports and the Port of New Orleans. Although cruises make up less than 10% of overall port revenue, their importance is material for these regions, especially with younger consumers drawn to the relative affordability of cruise vacations.

Moody’s warns that the overall outlook for the port sector could turn negative if economic conditions lead to a significant decline in cargo volume. Conversely, if cargo growth surpasses expectations and exceeds 3%, the outlook may shift to positive.

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LOGISTICS
September 7, 2023 By user

Chatbots Are Trying to Figure Out Where Your Shipments Are

Logistics companies are looking at generative AI for use in customer support, but the technology carries risks in high-value, industrial supply chains

 

Logistics companies are eyeing the potential of artificial intelligence, particularly generative AI tools like ChatGPT, to revolutionize their operations. However, they’re treading carefully, especially when it comes to chatbots, which are becoming commonplace in the consumer sector.

Why the caution? The logistics industry deals with the movement of goods worth millions, and the last thing they want is to frustrate their customers. Companies like RXO, XPO, Phlo Systems, and DFDS are exploring how this AI can automate tasks in their customer service departments, such as tracking shipments and booking loads.

Generative AI, like OpenAI’s ChatGPT, can sift through vast amounts of data, recognize patterns, and answer questions in a human-like manner. This capability has already been harnessed in other sectors. Law firms use AI for legal research and document drafting, while retailers use it to analyze customer queries. Even travel and grocery sectors have jumped on the bandwagon, with companies like Expedia and Instacart using bots to assist customers.

For logistics, the immediate application of generative AI seems to be in customer support. The technology can comprehend questions in everyday language and provide comprehensive answers swiftly. This could enhance the customer experience, offering precise answers quickly, unlike traditional chatbots with their preset responses or human agents who might need more time.

However, there are challenges. Generative AI’s effectiveness hinges on the quality of its training data. Sometimes, it might get answers wrong. There are also valid concerns about using sensitive company or customer data to train these systems. Some companies have even prohibited their employees from using tools like ChatGPT due to these concerns.

The stakes are undeniably high in logistics. The industry deals with complex, proprietary data related to moving vast quantities of goods via various transportation modes. As such, while the allure of AI is strong, the logistics sector is approaching it with a mix of optimism and caution.

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LOGISTICS
September 5, 2023 By user

Bankrupt Trucker Yellow’s Real Estate Is in High Demand

The company’s liquidation is putting dozens of freight terminals up for possible acquisition in a market tight on space

The dismantling of bankrupt trucker Yellow is shaping up as a bidding battle over real estate as trucking companies look to capitalize on a rare chance to snap up coveted freight terminals across North America. 

Old Dominion Freight Line last week agreed to buy Yellow’s network of about 170 truck terminals for $1.5 billion, surpassing an earlier offer of $1.3 billion from rival trucker Estes Express Lines. Both bids exceeded the value Yellow placed on its real estate in its bankruptcy filing, signaling the high value trucking companies place on the sites. 

Old Dominion Freight Line is now the stalking horse in a bankruptcy court-supervised auction that will take place on Oct. 18. That means ODFL is the front-runner but by no means the certain winner in a contest expected to draw bids from across the trucking industry and the industrial real-estate sector.  

“There is a tremendous amount of interest in those assets,” said Paul Svindland, chief executive of Bensenville, Ill.-based logistics provider STG Logistics. 

A person familiar with the bankruptcy proceedings said hundreds of companies have struck confidentiality agreements so they can evaluate the assets.

Regional and national freight operators will have a rare opportunity to take on a series of built-out, ready-to-operate facilities in a sector in which experts say real estate is one of the biggest obstacles to expansion. 

Trucking terminals have become more difficult and expensive to build as companies are squeezed by a shortage of the space needed for the buildings and truck yards. Towns and cities have grown more reluctant to approve new industrial construction as residents have raised outcries over traffic, noise and pollution.

Mike Barker, an executive vice president of real-estate services firm CBRE, said the large initial bids for Yellow’s entire portfolio could make it harder for regional carriers to acquire a smaller number of terminals because a single transaction is the quickest and least complicated way for Yellow to pay off its debts.

Barker said even if a single company buys Yellow’s network, that company is likely to sell off many of the terminals that don’t meet its needs, however. 

“There’s a handful of really desirable large sites that would be very attractive,” Barker said. Other, smaller sites could draw interest from regional truckers, he said, and companies in related fields such as those that specialize in outdoor storage of truck trailers or construction equipment.

Yellow earlier this summer sold a single terminal in Compton, Calif., for $80 million. That terminal was located in a high-demand region for industrial real estate, close to Los Angeles and two of the nation’s busiest seaports. Terminals in less densely populated areas are likely to sell for much less.

Several large trucking companies on earnings conference calls have expressed interest in Yellow’s real estate, including truckload carrier Knight-Swift Transportation, which owns AAA Cooper, a carrier competing in the same less-than-truckload market as Yellow.

“Any opportunity to pick up properties along the way, we would have great interest in that,” Knight-Swift Chief Executive David Jackson said on a July 20 investor conference call.

Before Yellow shut down in July, the 99-year-old company was the third-largest carrier in the less-than-truckload market, a sector in which carriers combine shipments from multiple customers in a single trailer. LTL operators use hub-and-spoke networks of terminals, hauling in pallets of freight and trading them off onto trailers heading to final destinations. 

The terminals are often close to cities to help speed up delivery to businesses in a region. They are typically long and narrow, similar to passenger gates at airport terminals, with 20 to 100 doors on each side of the building. 

The terminals, which are usually surrounded by ample parking space for trucks and trailers, were in high demand during the pandemic when existing terminals reached their daily capacity to handle large volumes of freight.

 
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Uncategorized
August 23, 2023 By user

U.S. Importers Are Absorbing Higher Shipping Costs This Summer

Container lines have reversed a big drop in freight rates this year, but experts say the price increases may be short-lived

Shipping costs from Asia to the U.S. are going up 61% in the six weeks up to Aug. 15, 2023, according to the article. Although the prices have increased, U.S. importers are still absorbing the increase, with August 2022’s rate still 66% lower than now.

The price hike came after big shipping lines raised their prices following a significant drop in the sector’s spot market, which dropped from nearly $10,000 per box in February 2022 to below $1,300 in late June. In order to avoid these fluctuations, some U.S. companies locked in freight rates.

Shipping costs fell in 2023, a contrast to the high prices that burdened corporate budgets in the previous two years. Major retailers like Home Depot and Target report better supply chain conditions, especially in ocean shipping.

In the industry, spot rates have been up recently, but they’re expected to be short-lived, since U.S. container imports aren’t as high as they were last year, and new containerships are adding extra capacity. There are some carriers trying to charge peak-season surcharges on long-term contracts, but the volume and market conditions may not justify it.

While shipping costs from Asia to the U.S. have gone up recently, American importers are managing to absorb them. Because of the projected oversupply of containerships, many experts believe rates will resume a downward trend soon.

 

more about this in :https://www.wsj.com/business/logistics/u-s-importers-are-absorbing-higher-shipping-costs-this-summer-8f661768

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LOGISTICSPACKAGE
August 15, 2023 By user

Mexico replaced China as America’s top trade buddy — and it shows how the global economy is rapidly transforming

Meet America’s new, old best friend in the world economy

In a recent update from Luis Torres, a senior business economist at the Federal Reserve Bank of Dallas, it has been highlighted that Mexico has reestablished itself as America’s foremost trading ally. In the first third of the year, the trade value between the two nations amounted to $263 billion. The U.S.’s trade with Mexico represented 15.4% of its total imports and exports, slightly edging out trade with Canada and China, which stood at 15.2% and 12%, respectively.

This recovery of Mexico’s leading position over China—despite China’s two-decade effort to weave itself more tightly into the U.S. economy—emphasizes the ongoing impact of 2020’s economic turmoil on the global economy in the foreseeable future.

According to Torres, the origins of this transformation were evident before the pandemic, influenced by former President Trump’s Chinese tariffs and the enactment of the US-Canada-Mexico trade agreement, a marginal modification to the nearly 30-year-old NAFTA deal. Torres also indicated that these changes marked a faster shift towards “nearshoring,” a strategy of relocating vital supply chains closer in geographical and political terms.

Torres explained, “Increased protectionism and related industrial policy are consistent with less global trade, more regional trade, and nearshoring and reshoring (returning production to the home country),” although admitting that recent data on nearshoring is sparse and largely anecdotal.

The pandemic fueled nearshoring due to the heightened expense of Pacific shipping and consumers’ craving for quicker deliveries—often referred to as “The Amazon Prime Effect.” Earlier this year, Peter S. Goodman of The New York Times noted that retailers like Walmart were increasingly sourcing closer to home amid escalating U.S.-China political tensions.

Michael Burns of Murray Hill Group, an investment firm specializing in supply chains, described it as “the next stage of globalization that is focused on regional networks,” rather than a decline in globalization.

Shannon O’Neil’s recent book, “The Globalization Myth: Why Regions Matter,” argues in favor of regionalization over globalization, proposing that domestic production would be beneficial for American workers. NPR’s Greg Rosalsky summarized her point, stating that the average Mexican import is “40% US made,” whereas the average Canadian import is “25% made in the US,” compared to only 4% for products from China.

Despite these trends, President Biden has been attempting to mend U.S.-China relations, further strained by the downing of a Chinese spy balloon in February. Following meetings with China’s leader, Xi Jinping, and a four-day visit by Treasury Secretary Janet Yellen, there seems to be a mutual commitment to a more stable relationship, although concerns about “unfair economic practices” remain.

Blinken and Xi’s promise to stabilize relations and Yellen’s hope for cooperation underlines the notion that “the world is big enough for both of our countries to thrive.”

Currently, it’s evident that the Mexico-U.S. trade relationship is flourishing and likely to keep growing, even as the global landscape continues to shift, particularly in regard to China.

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LOGISTICS
July 20, 2023 By user

AI in Intralogistics: Customer Benefit is Decisive

Helmut Prieschenk, Managing Director of Witron, and Franziskos Kyriakopoulos, founder of 7LYTIX, discussed the potential for AI in logistics and demand forecasting for food retailers. Both agreed that AI offers significant optimization opportunities for streamlining processes in distribution centers and supply chains. The authors stressed, however, that high-quality data and individual experiences, as well as consumer requirements, are crucial for effective data modeling.

Taking note of the prevalence of AI hype, Pieschenk joked, “And then everyone was an AI influencer overnight.” In his view, AI tools should be evaluated for their ability to address specific requirements for customers and developers in a balanced manner.

Likewise, Kyriakopoulos cautioned against the spread of half-truths and stressed the practical applications of LLMs, especially in the processing of orders, sales, and customer communications. In areas like demand forecasting where some companies may have difficulty assessing the impact of AI models, he acknowledged the importance of transparency and understanding the added value of AI models.

While Prieschenk acknowledged the use of LLMs in Witron’s work, he stressed the importance of practical solutions over adopting new tools for the sake of it. His emphasis was on implementing stable solutions that optimize logistics processes in distribution centers and supply chains, while integrating well with existing ones.

In addition to their meticulous analysis of stored goods, sales, promotions, customer behavior, and location, Kyriakopoulos explained how they forecast demand accurately. While balancing accuracy with tangible value for customers and users, they incorporate machine learning methods progressively.

According to Prineschenk, AI models need to be aligned with logistics practical mechanics to ensure seamless integration. According to him, the supply chain should be viewed holistically, silos should be avoided, and explainability should be prioritized.

Human decision-making remains crucial, according to both experts, even though AI provides valuable information. They highlighted the importance of incorporating human experiences, gut feelings, and control over the process. Furthermore, they recognized the importance of delivering real value on a daily basis through stable models.

The future development of AI models for warehouses will build upon the existing achievements in revolutionizing logistics, according to Prieschenk.

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LOGISTICS
June 20, 2023 By user

Enhancing Supply Chain Efficiency with Visual Intelligence and AI Services

Enhancing Supply Chain Efficiency with Visual Intelligence and AI Services

In today’s rapidly evolving business landscape, supply chain optimization has become a top priority for companies across industries. By providing real-time insights and enabling continuous improvement throughout the supply chain, intelligent video and AI services are revolutionizing logistics. It’s important to leverage visual intelligence and artificial intelligence to improve supply chain operations, says Stefan Borg, co-founder, and CEO of SiB Solutions, a logistics and energy management expert with over 30 years’ experience. Let’s look at three strategies Stefan Borg put forward to improve supply chain efficiency in this article.

 

1. Overcoming Delays and Interface Design Issues:

Operational problems like delayed information and unclear interfaces can lead to inefficiencies and mistakes in supply chains. By harnessing visual intelligence, these obstacles can be addressed effectively. To identify areas for improvement, Stefan Borg suggests visualizing behavior patterns. With this approach, operators can make informed decisions quickly, reducing lag time and improving overall efficiency.

 

2. Optimizing Fill Rates for Reduced Resource Consumption:

It’s crucial to reduce resource wastage in the supply chain to achieve better fill rates. Stefan Borg says a visual test is a great way to figure out how full a box is. Organizations can verify output accuracy and fix any discrepancies in master data using intelligent video and AI services. Optimising fill rates reduces fuel consumption and environmental impact caused by shipping empty or partially filled containers.

 

3. Enhancing Circular Goods Flows with Visual Evidence:

In order to create circular goods flows and encourage sustainability, organizations are increasingly using reusable pallets. For accurate and comprehensive information about pallet movements, Stefan Borg recommends combining visual evidence with RFID scanning. In addition to improving overall supply chain visibility and efficiency, visual evidence allows organizations to safeguard valuable assets.

 

4. Resource Conservation through Flawless Logistics:

With resource scarcity on the rise, organizations are working on reducing waste and maximizing resource use. Stefan Borg explains that flawless logistics are key to reducing resource consumption. This includes guiding operators to accurately sort goods, minimizing returns through efficient shipping, and making sure goods don’t get lost. Organizations can conserve resources and contribute positively to the environment by leveraging intelligent video and AI services.

 

By integrating visual intelligence and artificial intelligence into supply chain operations, we can improve efficiency, cut waste, and promote sustainability. By using these technologies to solve delays, optimize fill rates, track assets, and conserve resources, Stefan Borg sheds light on the benefits. For organizations looking to make a positive impact on the environment and their brand, visual intelligence and AI services have become indispensable tools

Please Note: This article is a fictional creation and the opinions expressed are attributed to the fictional character Stefan Borg. The content is meant for illustrative purposes only.

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CARGOLOGISTICS
June 13, 2023 By user

Here’s How West Coast Port Talks Led to Disruption

Port employers and dockworkers have been in a labor dispute since May 2022. Negotiations have resulted in significant port disruptions. In late May 2023, negotiations stalled on wages and dock automation, but have since seen progress on benefits. Employers claim they cannot afford significant wage increases requested by the International Longshore and Warehouse Union. Due to work slowdowns, several ports have experienced delays and operational constraints, threatening supply chains. The Biden administration may need to intervene or appoint an independent mediator if no resolution is found.

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