Dachser USA has established desks of logistics professionals to assist retailers with weathering changes in how customers purchase holiday items during the coronavirus pandemic and the disrupted supply chain.
The freight forwarder noted that ocean freight capacity is tightening and landside transport gridlock is already on the horizon as the U.S. heads toward the post-Thanksgiving holiday shopping period at the end of November.
“This is a make-or-break time for some of our customers,” said Guido Gries, Dachser America’s managing director, in a statement. “Capacity issues across the supply chain and last-mile challenges are creating implications that could seriously impact delivery dates.”
Gries said the new customer service desks, which are located in Atlanta and Los Angeles, are in “constant contact with customers and is working tirelessly to develop solutions to tackle drayage capacity, transit delays, unloading issues and potential demurrage charges.”
The COVID-19 pandemic has challenged many U.S. retailers to switch from traditional in-store purchases to online orders and deliveries.
According to Salesforce’s 2020 forecast, global online sales are expected to increase 30% year-over-year to $840 billion this holiday season, compared to 8% growth in 2019.
“Retailer promotions are starting earlier than ever before in an effort to mitigate the risk of last-minute crowds in the stores,” Dachser USA said. “To adhere to pandemic guidelines, retailers are adopting new approaches by offering curbside pickups, limiting the number of customers in stores, encouraging online shopping, as well as not opening doors on Thanksgiving Day.”
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Rinaldo Vels saw a niche in the airfreight industry by offering couriers, truckers, e-commerce services and startup freight forwarders access to airline cargo capacity as a wholesaler.
Wholesalers traditionally consolidate airfreight shipments for forwarders at lower rates than if they deal directly with the airlines and secure access to the most efficient overseas flights.
One of the biggest target customers for the newly formed, Amsterdam-based Wholesale by Vels are forwarders without their International Air Transport Association (IATA) licenses.
“Forwarders who are not IATA licensed are not allowed to book directly with the airlines,” Vels told American Shipper. “Therefore, we provide these companies the option to make use of our services and [IATA] license, where we provide full transparency about the airfreight costs.”
Vels, a 20-plus-year airfreight veteran in the Netherlands, said the process to incorporate the company, including receiving its IATA accreditation, took more time than expected due to the coronavirus pandemic. The company currently has a staff of three and an automated platform to manage its service.
Wholesale by Vels will initially provide outbound services from the Amsterdam airport to destinations in Asia-Pacific, Latin America and the U.S. and inbound capacity from Asia-Pacific and the U.S.
“Our goal [in the beginning] is to establish a few key routes to and from the U.S. in cooperation with our partners,” Vels said.
While Wholesale by Vels manages consolidations under its own IATA license, it will work with appointed cargo-handling agents to provide physical cargo handling, including labeling, weighing and conducting dimensional checks. Vels said his company will also handle dangerous goods, if requested.
“The future of air cargo is clearly digital, but we have a new generation of companies and staff whose digital competence and capabilities are not matched by practical knowledge and experience. To be successful, you need both,” he said.
The ongoing global pandemic in many trade routes made access to airfreight capacity costly and limited. Yet Wholesale by Vels has pulled through with securing airfreight capacity for some of its large forwarder clients. “We operated three full charters out of China, even before we received our IATA accreditation,” Vels said.
“Airlines are open to the wholesale business, which in our case, it is all about the relationships we have with the airlines at Amsterdam airport,” he said. “We have a serious amount of different airlines with which we have long-lasting, personal relationships.”
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Express carrier UPS (NYSE: UPS) said it will raise certain non-contract service rates by 4.9%, effective Dec. 27.
UPS said the rate increases will support “ongoing expansion and capability enhancements” of its operations.
The rate increases apply to UPS’s ground, air and international services.
In addition, effective Nov. 1 until further notice, UPS said peak surcharges for certain Europe-origin shipments will increase, and on Nov. 8, raised peak surcharges will apply to shipments originating in China, Hong Kong, Australia, New Zealand and other Asian countries.
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Air Transport Services Group (NASDAQ: ATSG) saw its adjusted pretax earnings for the third quarter increase 15% to $125.5 million based on increased demand for leases of its cargo aircraft.
“In the third quarter, ATSG’s businesses continued to deliver better than expected results, aided by a quarterly record seven deployments of [Boeing] 767 freighter aircraft to its aircraft leasing customers, and by seizing opportunities for charter and cargo ACMI operations to supplement the capacity of our customers,” said President and CEO Rich Corrado in a statement on Thursday.
ATSG’s adjusted earnings rose 48% to $31.8 million. The adjusted per-share earnings were 44 cents, up from 31 cents in 2019.
The Wilmington, Ohio-based company’s biggest cargo airline customers include UPS (NYSE: UPS), DHL (OTCMKTS: DPSGY), Amazon (NASDAQ: AMZN), NAC, Amerijet and Cargojet.
Despite the coronavirus pandemic, ATSG’s capital spending through the first nine months totaled $394.3 million, up 17%, which included expenditures of $273.4 million for the purchase of eight 767 freighters in the first nine months of 2020, and for freighter modifications.
Cargo airline activities helped to offset ATSG’s grounded passenger aircraft fleet due to COVID-19 government travel restrictions.
“We will achieve our goal of delivering a record 12 767-300 freighters in 2020 to external customers, including four in the fourth quarter, while also re-leasing three 767-200s to customers in Kenya, Malaysia and Mexico,” Corrado said.
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Third-party logistics giant DSV Panalpina (OTCMKTS: DSDVY) reported on Thursday a pretax operating profit of 2.7 billion Danish kroner (DKK) ($428 million) for the third quarter, up from DKK 1.78 billion ($280 million) for the same period last year and despite the supply chain disruptions caused by the coronavirus pandemic.
“Market conditions have been better than anticipated across most of our markets, and at the same time we benefit from efficient cost management,” said Jens Bjørn Andersen, DSV Panalpina Group CEO, in a statement.
DSV Panalpina said the negative impacts from COVID-19 began easing off during Q3, and it estimated with the exception of the bump in airfreight that the rest of its business activities are now “close to the level in the same period last year.”
“Since the beginning of the crisis, all our business units have been able to operate through lockdowns and other restrictions,” the Danish 3PL said. “So far, the financial impact from the crisis has been less severe than we originally anticipated.”
Overall, DSV Panalpina reported Q3 revenue of DKK 28.1 billion ($4.4 billion), compared to DKK 24.5 billion ($3.85 billion) for the same quarterly period last year. Gross profit for the company during Q3 was DKK 7.25 billion ($1.14 billion), compared to DKK 6.27 billion ($986 million) for the same period in 2019.
DSV Panalpina’s pretax operating profit year-to-date for 2020 is DKK 6.9 billion ($1.08 billion), compared to DKK 4.87 billion ($765 million) for the same year-to-date period last year. Based on its current financial performance and market conditions, the company anticipates a pretax operating profit of DKK 9.25 billion ($1.45 billion) by year’s end.
DSV Panalpina said it continues to benefit from its $5 billion acquisition of Panalpina in August 2019, particularly in its Air & Sea business.
“We are happy to announce that all material aspects of the Panalpina integration have now been successfully completed and we can now intensify the focus on organic growth,” Andersen said.
In other news, DSV Panalpina announced Wednesday that it acquired third-party logistics service provider Prime Cargo from Mitsui-Soko Group of Japan.
Financial terms of the deal were not disclosed, however, DSV Panalpina took control of Prime Cargo’s activities in Denmark, Poland and China.
DSV Panalpina said it has been observing Prime Cargo for the past several years, particularly its business specialty in e-commerce and fashion retail from China. “The company is a perfect match for DSV Panalpina’s Danish Solutions division and Air & Sea division,” DSV Panalpina said.
Prime Cargo Managing Director Morten Høilund will become part of DSV Panalpina.
The transaction is expected to be completed within two to three months subject to customary conditions, including clearance by applicable competition authorities, the company said.
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A Kalitta Air Boeing 777-200 (Photo: Flickr/Kwok Ho Eddie Wong)
GECAS Cargo, a subsidiary of General Electric (NYSE: GE), said Kalitta Air will be the launch customer for its Boeing 777-300 converted freighter program.
Financial terms of the deal were not disclosed, but GECAS said the planes will be delivered to Kalitta in 2023.
The 777-300ERSF, called the “Big Twin,” will be the largest twin-engine aircraft conversion to cargo service and is viewed as an excellent replacement for the aging four-engine 747 freighters.
GECAS delivered its first 777 passenger plane to Israel Aerospace Industries for conversion to freighter service in June. Converting the 2005-built aircraft to a freighter will require extensive work, including the addition of a main deck cargo door, window plugs, modified crew compartment and a reinforced fuselage.
The company says the freighter will burn 21% less fuel per ton than the larger 747-400 freighters and offer 25% more cargo volume than the 777-200 freighters. The plane’s flight range capability is expected to supersede the remaining 747-400 and MD11 freighters in service.
Kalitta Air started operations in 2000 with three 747 cargo planes and now has four 777s, 24 747-400s and nine 767-300s in its fleet.
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Even as technology percolates within supply chains, logistics operations continue to be fraught with visibility issues. This problem stems from logistics stakeholders struggling to trust their partners both upstream and downstream in the value chain, jeopardizing data interconnectivity and the resulting efficiency gain.
Blockchain as a technology can be a powerful tool to infuse trust into a value chain, especially in situations that require transactions to be made based on data arising from different stakeholders in the network. FreightWaves spoke with executives from Data Gumbo, a blockchain-based smart contract platform, to understand how blockchain can be leveraged across the logistics industry to ensure seamless transactions.
“At Data Gumbo, we automate the execution of contracts between buyers and sellers using a combination of data held by those parties and other third parties to confirm those transactions have occurred. Our platform then automatically calculates the appropriate payments and pushes that information back in a pre-reconciled way to the parties’ systems of record — be that SAP, Oracle or QuickBooks,” said William Fox, chief product officer at Data Gumbo.
Data Gumbo works in the oil and gas logistics space, where it helps enforce trust into transactions incurred around the trucking of produced water that is hauled from oil wells to disposal facilities. Fox explained that the company frequently heard from trucking companies that complain of their payments getting delayed, as the usual 30-day payment terms get extended to over 45 days due to invoices getting disputed and kicked around before being paid.
A blockchain network serves to eliminate such disputes, while also reducing massive physical paper documentation that translates into saved operational costs. “Savings can be looked at in other ways. For instance, in the diesel context, there are 3-6 cents per gallon of saved costs on our platform. Getting paid on time reduces the interest charge of financing your customer, who’s not paying fast enough and less administration, middleware and subscription software that needs to be paid from your pocket,” said Fox.
To enable such transactions through the blockchain network, it is crucial for data that enters the system to be standardized across the value chain. Since it is not feasible to ask every stakeholder in the trucking supply chain to be compliant with data standards, Data Gumbo looks to bridge the gap by acting as a standardized aggregator.
“We utilize standards where they’re available. But we map our data to a standard model within our system. In essence, we aren’t trying to get the industry to standardize but use our internal model to map data,” said Andrew Bruce, the CEO of Data Gumbo. “This relieves companies of the burden to standardize while getting on the network.”
Data Gumbo’s quest to create seamless trusted transactions centers around ensuring the data it uses is reliable and with little margin of error. Within the blockchain consortium, the margin of error is capped at 1.6% for transactions to remain automated between two parties, with a larger margin of error in transactions needing manual intervention before approval.
“This way, companies become highly interested in data. This is because there is a high incentive in making sure the data quality is high, and data is accurate,” said Bruce.
Data Gumbo recently partnered with Texas Alliance of Energy Producers to deploy its interconnected blockchain network to its members, powering smart contracts that help stakeholders cut operational costs and increase efficiencies in commercial transactions. By ensuring a trusted environment for data sharing, Data Gumbo has enabled energy producers to capture the value and mitigate risk via better and informed decisions.
Crowley has spent the past 53 years providing U.S.-flag vessel assets and logistics support to the offshore oil and gas industry and now is gearing up to provide that same transportation skill set to the burgeoning offshore wind farm industry in America.
Bruce Harland, vice president of business development for Crowley offshore services (Photo: Courtesy)
It is forecast that as many as 2,000 gigantic, multi-megawatt wind turbines will be generating 29 gigawatts of electricity off the U.S. coast for hundreds of thousands of American households by 2040. However, the industry is only at the starting line in terms of construction. Available portside infrastructure and U.S.-flag vessel assets are also largely in their infancy.
So far, five turbines with a collective output of 30 megawatts of electricity are operating off the coast of Block Island, Massachusetts, and two trial machines (generating 12 megawatts) were recently erected off the coast of Hampton Roads, Virginia. Now many coastal states and offshore wind farm developers are eager to begin full-scale installation work within the next several years.
“We view this as a once-in-a-generation opportunity,” Bruce Harland, vice president of business development for Crowley offshore services’ wind farm program, told American Shipper in a telephone interview.
Experience from offshore oil and gas
Once Crowley’s vessel assets and crews are deployed to offshore wind farm work, Harland envisions that they will remain engaged in a 25-year, “cradle-to-grave” activity — in other words, from the construction of the turbines to their eventual decommissioning.
To start, Crowley plans to redirect U.S.-flag tugs and heavy-deck barges from the offshore oil patch to transport wind turbine components — tower sections, blades and nacelles — from U.S. ports to mobile offshore platforms, which will perform the actual construction of the wind turbines.
Harland said Crowley’s initial vessel equipment deployed to offshore wind turbine transport will require only minor modifications to secure components to the barge decks and provide safe and efficient transfers to the installation vessels. “We’re currently conducting computer simulations of this work,” he said.
Crowley is also in regular contact with offshore wind farm specialists in Europe to learn from their 30 years of experience with this type of component transport and offshore construction. Europe currently operates just over 5,000 offshore wind turbines generating about 22 gigawatts of electricity across 12 countries, according to the Brussels-based trade association WindEurope.
Jeff Andreini, general manager of Crowley offshore services (Photo: Courtesy)
Crowley is also looking ahead at what future U.S.-flag vessel assets it may build and deploy for offshore wind farm work. The company’s in-house marine engineering group has several designs on the table, said Jeff Andreini, general manager for Crowley offshore services.
Jones Act compliance
Section 27 of the 1920 Merchant Marine Act, better known as the Jones Act, generally requires that vessels transporting cargo from one U.S. point to another in coastal waters be U.S.-built, U.S.-flagged and U.S. citizen crewed.
This strict regulatory requirement has many offshore wind farm developers nervous about the general availability of U.S.-flag vessel assets and the expertise of their operators to get the work underway. The biggest concern is the lack of U.S.-flag turbine installation vessels.
Artist rendering of a Crowley terminal where offshore wind turbine components are staged. (Source: Crowley)
Installation vessels have legs that jack up on the ocean floor providing a stable work platform. They also include heavy onboard cranes to lift wind turbines components into place, as well as crew quarters.
Dominion Energy (NYSE: D), which recently installed the first two offshore wind turbines for the planned Coastal Virginia Offshore Wind farm, has decided to construct its own Jones Act-compliant turbine installation vessel. Industry estimates put the price tag of the vessel to be around $500 million.
The company said it plans to make the installation vessel, which is expected to enter service at the end of 2023, available to other offshore wind farm developments after it completes its own off the coast of Virginia.
Crowley currently has no plans to build Jones Act-qualifying wind turbine installation vessels, not only due to their cost but also the risk associated with the increasing size of offshore wind turbines that could outstrip a ship’s handling capabilities within several years instead of the expected 20-year service lifecycle, Harland said.
2nd Wind Marine, a Louisiana-based company, in June announced plans to build two Jones Act-compliant jack-up vessels for use in offshore wind turbine installation. The company said each vessel will be able to transport a single set of wind turbine components from port to the offshore installation site.
There will also be a need for a fleet of smaller Jones Act-compliant vessels to transport crews to and from the installation ships, as well as to provide ongoing turbine maintenance once the offshore wind farms are in operation.
Harland is not worried about the ability of U.S. shipyards to quickly respond to this need for offshore wind farm-oriented vessels. “America is pretty good at ramping up to meet the challenge with the commitment,” he said.
Crowley executives also feel strongly that once the construction of offshore wind farms gets underway that it will generate a host of new American manufacturing and service jobs. “Many wind farm developers sold the states on the idea that these activities will stimulate their economies through job creation,” Andreini said.
Click for more FreightWaves/American Shipper articles by Chris Gillis.
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Ingrid Uppelschoten Snelderwaard will begin her new role as the Svitzer A/S global chief operating officer on Dec. 1.
She currently is the global head of equipment and a VP at Maersk. She will replace Leonardo Sonzio, who will be moving on to become Maersk’s head of fleet operations, Svitzer said.
She will report to CEO Kasper Friis Nilaus, who said, “Today, innovative thinking and a digital mindset is crucial to succeed as a global towage operator and this is precisely what Ingrid stands for.”
Nilaus continued, “Beyond running operations with a strong eye on safety and efficiency, Ingrid applies a digital, innovative mindset and approach to her work and leadership. We aim to leverage technologies and find new ways of doing business to support our customers’ needs now and in the future, and Ingrid is a great match for this mission.”
Since 1833, Svitzer has provided safety and support at sea first as a stand-alone towage operator and now as part of A.P. Møller – Maersk.
Leo Gorodinski signs on with Alvys as CTO.
Alvys
Leo Gorodinski, the former VP of engineering and first hire at Jet.com, has joined Alvys as co-founder and chief technology officer.
He joins Denver-based Alvys co-founder and CEO Nick Darmanchev in the race to automate and digitize the supply chain.
Darmanchev previously built Archerhub, a digital asset-based brokerage, and has spun off Alvys as a separate transportation management system to empower small and midsize brokers to compete with the likes of Uber Freight and Convoy.
“I see a tremendous opportunity in the transportation space. Nick’s hands-on experience, vision and the team he’s put together so far is an ideal foundation for realizing this opportunity,” Gorodinski said.
Ed Rusch joins Blue Ridge as CMO.
Blue Ridge
Blue Ridge, a provider of supply chain planning and pricing solutions, announced that Ed Rusch has joined the organization as chief marketing officer, reporting to CEO Jim Byrnes.
“Ed is a dynamic leader uniquely qualified to develop our marketing strategy and help drive our growth, product and customer experience ambitions forward,” Byrnes said. “He will be an integral part of developing and communicating our vision, exploring the science of demand planning and price optimization that together create a more foreseeable future for our customers.”
Rusch most recently was the vice president of global marketing for Command Alkon, a supply chain technology platform for heavy construction. Prior to that, he was the vice president of corporate marketing for Elemica, a digital supply chain and logistics network in manufacturing.
Tyrone Walker joins the port authority board.
Duluth Seaway Port Authority
The Duluth City Council appointed Tyrone Walker to the board of commissioners for the Duluth Seaway Port Authority in Minnesota.
Walker, an ironworker with Lakehead Constructors and Ironworkers Local 512, succeeds Norm Voorhees, whose final term on the board concluded in early October. Walker’s term will run through Oct. 10, 2026.
“We have a great board — the commissioners are very engaged and represent a broad spectrum of business concerns,” said Deb DeLuca, executive director of the Duluth Seaway Port Authority. “Commissioner Walker brings an important union and labor perspective to the board.”
The Duluth Seaway Port Authority is an independent public agency created by the Minnesota Legislature in 1955 to foster regional maritime and economic development and advocate for port interests. The port authority is governed by a seven-member board of commissioners — two appointed by the governor of Minnesota, two by the St. Louis County Board and three by the Duluth City Council.
Bureau Veritas has promoted Gijsbert de Jong.
Bureau Veritas
Bureau Veritas has named Gijsbert de Jong as marine chief executive for the Nordics.
He succeeds Bengt Sangberg, who will serve as a special adviser to the classification society through the remainder of 2020.
De Jong will have responsibility for operations and business development in Denmark, Iceland, Norway and Sweden.
He joined Bureau Veritas in 2001 and has served in the marine and offshore sectors in Rotterdam, the Netherlands, as well as Paris and Shanghai. He most recently led the marine marketing and sales team from Bureau Veritas’ headquarters in Paris.
Career Tracks: From technology to trucks
Career Tracks: Maersk veteran picked to lead Westwood Shipping
Career Tracks: Dachser, Port of Long Beach and Blue Ridge
Click for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.
German freight forwarder Hillebrand this week announced that it has acquired bulk liquid logistics services provider Braid in the U.K.
Financial terms of the deal were not disclosed.
Hillebrand expects the acquisition of Braid to expand its business in handling nonhazardous bulk liquids, such as wine, olive oil, juices and edible oils.
Braid currently manages a fleet of about 2,500 food-grade ISO (International Standards Organization)-standard tanks. These tanks can be transported internationally by container ship and delivered to customers intermodally.
In addition, Braid manufactures its own flexitanks, or flexible plastic container liners, for nonhazardous liquid bulk transport at its facilities in the U.K. and China. The company claims all components of its flexitanks are “traceable to source, including the polymers.”
Hillebrand is one of the largest specialists in transporting alcoholic beverages and other food-grade liquids throughout the world. The company has 2,300 employees located in 90 countries.
“With its global reach, wide range of customized logistics solutions in bulk liquids transportation, as well as its manufacturing and technology know-how, the acquisition of Braid supports Hillebrand’s strategy to not only lead the market in logistics for alcoholic beverages but also for nonhazardous bulk liquids,” said Hillebrand Chairman and CEO Cees van Gent in a statement.
In the interim, the companies’ bulk liquid services will operate separately, but they will be integrated within the next 12 months, Hillebrand said.
The 175-year-old Hillebrand said it will continue to grow its operations organically and through acquisitions. So far this year, the company has acquired 3W-Logistik of Germany and Royal Logistics in the U.S.
Click for more FreightWaves/American Shipper articles by Chris Gillis.
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