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Box shipping and air freight - whither earnings when disruption passes?

The earnings driving this year's rally in container shipping and air cargo have more to do with capacity trapped in the wrong place than with how much the world is buying and shipping. Disruption, not volume growth, has become the main earnings driver. The open question is how long that lasts once the specific shocks behind it begin to fade. Container shipping's disruption began in earnest in December 2023, when Houthi attacks on commercial vessels in the Red Sea ...

Uber Freight bets on European 4PL services, as distinction with 3PL blurs

Uber Freight is stepping up investment in its European 4PL business, despite acknowledging that shippers increasingly care less about whether their logistics provider is labelled a 3PL or 4PL. The company yesterday announced plans to expand its European fourth-party logistics operation, investing in technology, operations, and staff, and adding a second location, with a new control tower and operations hub in Krakow to open next year. It has also appointed Mike Doucleff as head of Europe, affective 28 September. Uber Freight said the number of new 4PL deals it won in Europe doubled last year, and it sees further opportunities among North American customers looking to reduce the number of logistics partners they use globally. The investment comes as Uber Freight's wider business has returned to top-line growth, although it remains loss-making. Freight revenue jumped 25% year on year, to $1.58bn, in the second quarter, while the division reported a $24m operating loss. But it remains committed to the European expansion. Uber Freight is investing further resources to managed transportation and 4PL, while its overall freight division is still working towards sustainable profitability. Its first 4PL engagement, designed to span North America and Europe, is with chemicals manufacturer OXEA, covering transportation in the US, Canada, Mexico, and Europe. Uber Freight's European 4PL operation was inherited through its acquisition of Transplace, and is separate from the European freight brokerage business it sold in 2020. However, the expansion comes amid an increasingly blurred distinction between the traditional roles of 3PLs and 4PLs - something the company itself acknowledges. "We're seeing the lines blur," a spokesperson told The Loadstar. "Customers don't necessarily think about their problems as '3PL' or '4PL' - they're looking for partners that can solve more of their transportation needs and help them manage increasingly complex networks." Indeed, 30% of Uber Freight customers now use two or more of its services, up from 24% last year, while more than 80% of its large managed transportation customers have also used its capacity solutions. "The label matters less to the customer than the outcome," the spokesperson added. It marks an interesting tension in Uber Freight's strategy: its European expansion is being explicitly marketed as growth of its 4PL business, while its wider proposition increasingly combines elements traditionally associated with both 3PL and 4PL services. Just a week before announcing the European expansion, Uber Freight began promoting Gartner research entitled 3PL & 4PL: How to Combine for the Best Logistics Outsourcing Model, which, rather than presenting 3PL and 4PL as an either/or decision, examines how shippers can combine the two outsourcing models as their supply chains become more complex. That commercial blurring can, however, create legal and contractual questions. Matthew Gore, partner at law firm HFW, said there was already considerable confusion over the nature and scope of 3PL and 4PL roles. "Broadly, 3PL means acting as carrier/principal, and 4PL is acting as control tower/agent," he explained. "What also gets confusing is when the same LSP provides both services, particularly if this is done under the same contract, and with the same legal entity - flagging the neutrality/ethical walls issues we see." Mr Gore said 4PL remained predominantly the preserve of larger shippers with high volumes and complex supply chains, and these companies often retained responsibility for deciding which 3PLs received particular volumes, leaving the 4PL to manage those allocations. He also noted a wider trend towards shippers seeking to bundle logistics services, and LSPs offering them, under the same contracts. Uber Freight stressed that it did not currently operate a freight brokerage business in Europe, and that carrier and capacity decisions made through its European 4PL operation were based on customer requirements, including service, cost, performance, and network needs. But the picture is more complicated for global customers. Some European 4PL customers may also use Uber Freight brokerage or other transport services in North America. The company said customers were not required to use its own capacity as part of a 4PL relationship, and that it had "operational firewalls" to govern how sensitive customer information was accessed and used. That question could become increasingly pertinent as Uber Freight seeks to sell more services to the same customers - particularly given that more than 80% of its large managed transportation customers already also use its capacity solutions. The company's European investment is, in part, predicated on that: extending relationships with North American customers into Europe, while offering them the prospect of managing more of their global transportation through fewer logistics partners.

Liability the battleground as forwarders and airlines question new DAWB rules

Nearly three months after IATA introduced new rules governing Direct Air Waybills (DAWBs), there remains considerable confusion among airlines and freight forwarders over what has actually changed - and who is now liable when something goes wrong. Some forwarders appear unaware of the potential implications, while others believe individual airlines must choose whether to adopt the amendments. Even Air France-KLM Cargo told The Loadstar this week it was still "reviewing the revised DAWB framework and its implications for our operations". It added: "Given our B2B setup and the way our cargo is handled through forwarding partners, we are assessing how the revised provisions would apply in practice." But IATA has now clarified to The Loadstar that the amendments are already in force across its member airlines and have been since 1 July. "The revised DAWB provisions are part of the Cargo Agency Conference Resolution, so they apply to all member airlines as of the effective date, in the same way any resolution applies across the industry," it said. "This is a standing rule, not a phased rollout that individual airlines sign up to over time." So what exactly has changed - and why has it caused such a bitter dispute between IATA and forwarder association FIATA? At its simplest, the new framework gives airlines a clearer route to pursue a freight forwarder when problems arise with a DAWB shipment, rather than having to seek recourse from the underlying shipper. IATA argues that the previous arrangement contained a genuine liability gap, with forwarders able to tender cargo to airlines while acting merely as agents for an underlying shipper. "Before this change, by classifying cargo as DAWB shipments, forwarders could avoid liability and take no action to verify that the cargo they tendered had been properly prepared for shipment," IATA told The Loadstar. "This left carriers exposed to the risks posed by improperly prepared cargo, and was increasingly regarded as a threat to flight safety." Dangerous goods are at the heart of IATA's argument. If the underlying shipper presented the cargo directly, IATA said, the carrier would have the opportunity to vet that company before agreeing to carry its goods. Where the shipment comes through a forwarder under a DAWB, however, the airline may have little or no relationship with that underlying shipper. IATA, therefore, says its member airlines decided it was necessary "to proactively clarify the allocation of liability". But FIATA sees things very differently. Its director general, Dr Stéphane Graber, told The Loadstar the amendments could make a forwarder responsible to the airline as a principal, even where its actual role was solely as agent for the shipper. That could leave the forwarder exposed to claims arising from incorrect cargo information, undeclared or misdeclared dangerous goods, sanctions, customs requirements, or other regulatory failures - including information and processes controlled by the shipper rather than the forwarder. "FIATA's position is that this responsibility and liability should be with the party in effective control of the risk, processes, and information involved," Dr Graber said. "Simply transferring liability to parties that may have limited ability to control the underlying risks is unlikely to provide an adequate solution." Transport lawyers at HFW say there is substance to both sides' arguments. Partner Matthew Gore told The Loadstar IATA was right that the previous arrangement could create a contractual gap, but said FIATA was also "substantively accurate" about the effect of the amendments. Absent a separate bilateral agreement, he explained, a forwarder could now be deemed to accept the same terms, conditions, and convention-related obligations as if it were the shipper. That represents "a real and, in the applicable scenario, potentially significant expansion of the forwarder's liability to the carrier", he said. However, it does not turn the forwarder into the actual shipper, or override its agency relationship with its customer. Rather, it creates a contractual default governing the relationship between the airline and forwarder. And there is a way out. IATA's resolution allows airlines and forwarders to negotiate different bilateral terms. If they do, those arrangements can displace the default provisions. IATA stressed this point to The Loadstar: "Forwarders and airlines can thus agree different terms between themselves with regard to DAWB treatment." HFW said this meant airlines now had "a stronger basis to pursue the forwarder with whom they have a commercial relationship, rather than an unknown underlying shipper", unless the parties agreed something different. That potentially leaves the forwarder to seek recourse further up the chain if the underlying shipper was actually responsible. And that is where another area of uncertainty arises: insurance. FIATA said it was "presently unclear whether current insurance arrangements reflect such an allocation of risk and liability", warning that a claim could have significant repercussions, particularly for SME forwarders. However, Angus Galbraith, chief underwriter officer for the WCA's insurer, World Insurance, told The Loadstar most freight forwarder liability policies already covered companies acting both as agents and principals. He nevertheless advised forwarders to ensure their policies adequately covered the expanded liability. The insurer also rejected the suggestion that forwarders had no responsibility for checking cargo simply because information originated from the shipper. Forwarders already had obligations to check bookings against cargo descriptions, HS codes, and dangerous goods declarations, he said. Where a shipper deliberately concealed dangerous goods - undeclared lithium batteries, for example - the situation would be different. If an airline pursued the forwarder, its insurer would defend the claim and seek recourse against the actual shipper or beneficial cargo owner, where appropriate. The legal position is similarly nuanced. Article 10 of the Montreal Convention makes the consignor responsible for the correctness of cargo particulars and statements entered in the air waybill by it or on its behalf. Mr Gore said the new DAWB provisions did not directly contradict the convention, but created what he described as a "policy and coherence tension" between a forwarder's real-world role as an agent - potentially without control over the relevant information - and its contractual exposure to the airline as if it were the shipper. Nor, he said, did existing law necessarily support FIATA's proposition that liability must always follow "effective control". The practical protection for forwarders was therefore contractual: negotiate different terms with airlines, and obtain appropriate warranties and indemnities from their shipper customers. All this helps explain why, almost three months after implementation of the new rules, the industry is still trying to work out exactly where it stands. IATA says "all relevant stakeholders were consulted" before the changes, and insists the new arrangement provides "an equitable way to close a safety-related liability gap". FIATA disputes the adequacy of that process. It says the amendments were adopted under an expedited procedure, and that it formally invoked its right to seek a review, and also sought to postpone implementation from 1 July until 1 October to allow that review to take place. The amendments, nevertheless, became effective on 1 July. FIATA says there have so far been no known cases in which an airline has relied on the new provisions to recover damages from a forwarder. But, with the framework less than three months old, it argues that absence of claims provides little reassurance. Meanwhile, anecdotal evidence suggests some forwarders have yet to appreciate the significance of the change. Some forwarders appear unaware of the potential implications, while even published industry guidance has differed over whether application depended on individual airline implementation. One forwarder told The Loadstar that the initial industry "buzz" surrounding the amendments had largely subsided, despite continuing uncertainty over their implications. "Maybe people don't understand the risk," he said, adding that another forwarder he had spoken to had been unaware of the changes and had gone back to its legal department to establish its position. The confusion may eventually be resolved through bilateral agreements, insurance practice, and, ultimately, the first serious claim under the revised rules. But behind the technical arguments lies a much older dispute. For more than a decade, IATA and FIATA have attempted - and repeatedly failed - to redefine the balance of power between airlines and freight forwarders. The DAWB fight is simply the latest round. Timeline 2012-14: CAMP promises a reset IATA and FIATA work on the Cargo Agency Modernisation Programme, intended to replace the traditional airline-agent relationship with a principal-to-principal model and shared governance. One forwarding source describes the previous arrangement to The Loadstar as a "master-slave relationship". 2015: CASS causes a rupture FIATA objects to mandatory participation in IATA's Cargo Accounts Settlement System and argues forwarders are subject to financial rules they have little role in determining. 2017-20: The grand compromise falters Pilot programmes fail to deliver the promised global framework, as disagreements over governance and CASS persist. 2021: IFACP is abandoned IATA confirms formal efforts to establish the joint IATA-FIATA Air Cargo Programme have ceased after the parties failed to resolve a liability issue - subsequently identified as the treatment of liability under DAWBs. A new consultation system gives forwarders a greater voice, but the airline-only Cargo Agency Conference retains decision-making authority. 2024: Another CASS row Forwarders attack IATA's financial security requirements for CASS associates. FIATA president Turgut Erkeskin tells The Loadstar: "One side should not rule the other." 2026: Liability becomes the battleground The revised DAWB provisions take effect on 1 July, despite FIATA seeking a formal review and postponement. IATA says the changes close a safety and liability gap. FIATA says they expose forwarders to shipper-level liabilities for risks they may not control.