DC Velocity - June 2019

newsworthy

CONTAINER IMPORTS AT U.S. SEAPORTS ROSE SHARPLY IN APRIL and were expected to continue that trend in May, as retailers and manufacturers reacted to the Trump administration’s latest round of tariffs on Chinese goods.

U.S. companies pay any tariffs on imported freight, often passing on that cost to consumers in the form of higher prices. When confronted with the prospect of new or higher tariffs, retailers tend to stock up on goods before the new policies kick in, the National Retail Federation (NRF) said.

The same pattern played out in December, when the last round of tariffs loomed, and the latest numbers show that importers have kept their foot on the gas pedal ever since.

The Port of Los Angeles said that it had handled 736,466 twenty-foot equivalent units (TEUs) in April, up 4. 4 percent compared with last April and marking the busiest April in its 112-year history. And April was no fluke; for the first four months of 2019, the port’s volumes have increased 4. 5 percent over the same period last year.

“With three-plus years of record throughput, we are focused on partnering with our stakeholders to refine operations for even greater efficiencies,” Port of Los Angeles Executive Director Gene Seroka said in a release. “Despite heightened uncertainty in global trade, we continue to invest and prepare our infrastructure and services to provide the best value for our customers.” The high-water mark is significant because of the sheer bulk of freight flowing through the port. The Port of Los Angeles facilitated $284 billion in trade during 2017, making it North America’s leading seaport by both container volume and cargo value. However, smaller ports showed similar patterns. The South Carolina Ports Authority (SCPA) reported that it had moved 204,621 TEUs across its Wando Welch and North Charleston container terminals in April, a 4.2-percent increase over April 2018 volumes.

In a bid to build a cloud-based portal for end-to-end supply chain planning, software vendor E2open LLC will acquire the global trade management (GTM) software provider Amber Road for $425 million and take it private, Austin, Texas-based E2open said.

East Rutherford, N.J.-based Amber Road has been losing money in recent quarters, most recently reporting a $3.3 million net loss for the first quarter of 2019—though that was an improvement from the $5.4 million net loss it posted for the same period last year. The company collected revenues of $21.1 million in its most recent quarter, up slightly from the $20.1 million it reported for the first quarter of 2018. In contrast, privately held E2open has been on an acquisition spree, buying both the ocean shipping network provider Inttra and the transportation management system (TMS) provider Cloud Logistics in 2018, and four other firms since 2016.

The two parties expect their transaction to close before the end of the third quarter of fiscal year 2019, pending customary closing conditions and approval by antitrust regulators. Upon that closing, Amber Road will become a privately held company, no longer trading its stock, E2open said.

Combining the two firms’ software portfolios will allow customers to operate their entire end-to-end supply chain—from sourcing to manufacturing to trade management to logistics and distribution to omnichannel operations— from one place in the cloud, according to E2open.