Carriers regain ground in seasonal freight negotiations
The latest FreightWaves Supply Chain Pricing Power Index shows that shippers' pricing power rose to 40 this week from 35 the previous week, indicating a shift in negotiating power back to carriers. Also Read: Challenges Facing Low-Cost Carriers (LCCs) Seasonal declines in freight volumes are typical for this time of year, primarily due to mid-week declines over Christmas and New Year, causing volumes to slow earlier than usual. Analysis by FreightWaves using its SONAR platform showed that the Outbound Tender Volume Index (OTVI), which tracks national freight demand, fell 5.4% month-on-month and 2.43% year-on-year. Despite the broader decline, some of the largest U.S. markets, such as Southern California and Dallas, saw slight increases in tender volumes. In contrast, markets such as Atlanta and Chicago fared poorly, with weekly volumes down 2.34% and 6.3% respectively. On the capacity side, the market is experiencing an increase in bid rejection rates - reflecting tighter conditions. The Outbound Tender Rejection Index (OTRI) surged 286…
Challenges facing low-cost carriers (LCCs)
Times have changed and airlines seem to have adapted to the daily travels of air travelers. Mainly because airlines mainly focus on providing cheap flights, more and more people are able to travel by air. Although low-cost airlines have had great success in making air travel more accessible, they face some unique challenges that adversely affect their sustainability and profitability. Also read: It’s a carrier market in chaos Cost control and service quality Fundamentally, the business model of low-cost carriers is to reduce costs by not having many additional services on board, charging baggage fees, and flying to secondary destinations. While discounts are undoubtedly passed on to consumers due to this approach, the issue of poorer quality compared to other operators needs to be addressed. This requires low-cost carriers to be thoughtful in both cost control and customer satisfaction. Over time, passenger demand increases and only a few are willing to receive sub-par service, meaning low-cost airlines are forced to…
Nuclear-powered LNG carriers: a zero-emission future
American Bureau of Shipping (ABS) has released a new report assessing the potential of advanced nuclear technology to power commercial ships, marking a breakthrough shift towards zero-emission offshore operations. Also Read: Liquefied Natural Gas: The Perfect Alternative Fuel for Your Business? Small modular reactors for offshore propulsion ABS collaborated with Herbert Engineering Company (HEC) to study the integration of a high-temperature gas-cooled reactor (HTGR) into a 145,000 cubic meter liquefied natural gas (LNG) carrier. The study delves into key design aspects such as energy management, shielding, weight distribution and hull reinforcement. The report highlights that nuclear-powered ships could enable faster transit times and eliminate the need for frequent refueling, requiring only replacement of reactors every six years. This technology offers a promising path to zero-emission operations, helping to solve one of the shipping industry’s most pressing challenges – reducing its carbon footprint. Challenges and Opportunities While HTGR technology has been proven on land, applying it offshore presents unique challenges. "This…
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