<div class="phx-topic abstract-wrapper">New research from software vendor Altana found that some of the declining China-US trade flows last year morphed into complex, multi-leg supply chains routed through Mexico to qualify for USMCA treatment and thus avoid billions in tariffs. </div>

New research from software vendor Altana found that some of the declining China-US trade flows last year morphed into complex, multi-leg supply chains routed through Mexico to qualify for USMCA treatment and thus avoid billions in tariffs.

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<div class="phx-topic">Increased trade volumes from China to Mexico via intermediary Asian nations last year demonstrated a new path for US-bound goods that were able to avoid steep tariffs — an estimated $40 billion — on imports from China, according to a report from global trade software vendor Altana. The company, in a report released Thursday, said that shipment-level supply chain data from its platform, plus a survey of 91 US trade professionals that include former lawmakers and customs officials, found that some of the declining trade flows from China to the US in 2025 morphed into more complex, multi-leg supply chains routed through Mexico in order to qualify under the United States-Mexico-Canada Agreement (USMCA). Altana’s report contends that activity is illegal under current US customs rules — and that the US has lost approximately $40 billion in tariff revenue from goods that passed through Mexico and Canada under the USMCA treaty without going through a substantial transformation. “As US tariff laws became more robust, the flow of global trade shifted, with China-to-US trade contracting and trade that involved intermediary channels that fed into the USMCA market all growing,” Altana said. While China-US direct trade from January through October 2025 fell 28% to $276.5 billion compared with the same period in 2024, trade from Vietnam to Mexico rose 46% to $18.1 billion, according to data from UN Comtrade, which tracks annual global trade flows. The data also showed that trade rose 19% from Thailand to Mexico in the same period, and by 13% from Malaysia to Mexico. Direct Mexico to US imports, meanwhile, rose 6% to $450.5 billion. The Altana report suggests that these trade spikes used existing transshipment pathways, meaning the tariffs didn’t immediately induce “new, capital-intensive supply chain relationships,” but rather rerouted goods “being pumped through established networks of suppliers, facilities and actors.” To wit, Altana said transactions observed in its network on those “pre-existing transshipment routes that end in the USMCA bloc” rose 76% year over year through the first 10 months of 2025. “The estimated dollar value of shipments demonstrating patterns consistent with illegal transshipment rose sharply throughout 2025, accelerating at each major tariff escalation,” the report said. <h3>Scrutinizing transshipment </h3>The Trump administration, in the wake of assessing tariffs on dozens of US trading partners throughout 2025, said US Customs and Border Protection would be scrutinizing the shipment of goods that utilized intermediate countries of origin with lower duty rates to evade higher tariffs on the actual countries of origin. In January and February 2025, Altana said it identified $2.2 billion per month of what it called “suspected transshipment-linked trade entering the US.” By December, that number had reached $31.5 billion. The Trump administration’s so-called liberation day tariffs were rolled out in early April. “The trajectory is telling,” the report said. “As tariff complexity increased throughout 2025, so did the non-compliant rerouting of goods that were subject to tariffs.” Ultimately, the alleged non-compliance activity is related to what trade professionals call transformation, the idea that goods stopping in intermediary markets undergo enough of a change to impact country or origin determination, thus allowing those goods to use preferential trade agreements. The Altana report identified vehicles, machinery and electronics as the three sectors most represented in these transshipment paths. “A Chinese-origin vehicle subject to a 152% duty can be rerouted through a Mexico facility and potentially enter the United States at USMCA preferential rates, if it qualifies under rules of origin,” the report said. “At question is whether meaningful transformation occurred at the Mexican stop, and whether these known transshipment facilities will accurately record regional value content and other, upstream component-level information necessary to calculate and apply complex tariff rates and origin rules.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Increased trade volumes from China to Mexico via intermediary Asian nations last year demonstrated a new path for US-bound goods that were able to avoid steep tariffs — an estimated $40 billion — on imports from China, according to a report from global trade software vendor Altana. The company, in a report released Thursday, said that shipment-level supply chain data from its platform, plus a survey of 91 US trade professionals that include former lawmakers and customs officials, found that some of the declining trade flows from China to the US in 2025 morphed into more complex, multi-leg supply chains routed through Mexico in order to qualify under the United States-Mexico-Canada Agreement (USMCA). Altana’s report contends that activity is illegal under current US customs rules — and that the US has lost approximately $40 billion in tariff revenue from goods that passed through Mexico and Canada under the USMCA treaty without going through a substantial transformation. “As US tariff laws became more robust, the flow of global trade shifted, with China-to-US trade contracting and trade that involved intermediary channels that fed into the USMCA market all growing,” Altana said. While China-US direct trade from January through October 2025 fell 28% to $276.5 billion compared with the same period in 2024, trade from Vietnam to Mexico rose 46% to $18.1 billion, according to data from UN Comtrade, which tracks annual global trade flows. The data also showed that trade rose 19% from Thailand to Mexico in the same period, and by 13% from Malaysia to Mexico. Direct Mexico to US imports, meanwhile, rose 6% to $450.5 billion. The Altana report suggests that these trade spikes used existing transshipment pathways, meaning the tariffs didn’t immediately induce “new, capital-intensive supply chain relationships,” but rather rerouted goods “being pumped through established networks of suppliers, facilities and actors.” To wit, Altana said transactions observed in its network on those “pre-existing transshipment routes that end in the USMCA bloc” rose 76% year over year through the first 10 months of 2025. “The estimated dollar value of shipments demonstrating patterns consistent with illegal transshipment rose sharply throughout 2025, accelerating at each major tariff escalation,” the report said. Scrutinizing transshipment The Trump administration, in the wake of assessing tariffs on dozens of US trading partners throughout 2025, said US Customs and Border Protection would be scrutinizing the shipment of goods that utilized intermediate countries of origin with lower duty rates to evade higher tariffs on the actual countries of origin. In January and February 2025, Altana said it identified $2.2 billion per month of what it called “suspected transshipment-linked trade entering the US.” By December, that number had reached $31.5 billion. The Trump administration’s so-called liberation day tariffs were rolled out in early April. “The trajectory is telling,” the report said. “As tariff complexity increased throughout 2025, so did the non-compliant rerouting of goods that were subject to tariffs.” Ultimately, the alleged non-compliance activity is related to what trade professionals call transformation, the idea that goods stopping in intermediary markets undergo enough of a change to impact country or origin determination, thus allowing those goods to use preferential trade agreements. The Altana report identified vehicles, machinery and electronics as the three sectors most represented in these transshipment paths. “A Chinese-origin vehicle subject to a 152% duty can be rerouted through a Mexico facility and potentially enter the United States at USMCA preferential rates, if it qualifies under rules of origin,” the report said. “At question is whether meaningful transformation occurred at the Mexican stop, and whether these known transshipment facilities will accurately record regional value content and other, upstream component-level information necessary to calculate and apply complex tariff rates and origin rules.” Contact Eric Johnson at eric.johnson@spglobal.com .

Transport, Trade and Regulation News

Supply chain

Tariff escalation led to enforcement gaps in Mexico rerouted goods: report

<div class="phx-topic abstract-wrapper">The Iran conflict, which began late in the first quarter, had little impact on the forwarder’s first-quarter business, accounting for just a 1.5% decline in ocean freight volumes.</div>

The Iran conflict, which began late in the first quarter, had little impact on the forwarder’s first-quarter business, accounting for just a 1.5% decline in ocean freight volumes.

<div class="phx-topic">Kuehne + Nagel is redoubling its efforts to develop new ocean business, while also taking steps to protect its air freight operations in Asia to offset the impact of the war in the Middle East, company executives said Friday. Those steps include expanding K+N’s prepaid ocean freight logistics options in China and refueling aircraft in China to overcome potential jet fuel shortages in Southeast Asia, the forwarder’s CEO Stefan Paul said during a first-quarter results webinar. Paul said there are a lot of new China-based manufacturing and trading companies asking K+N for help in exporting products via ocean freight. The company recently increased its dedicated sales force in the Shenzhen area where a lot of those companies are located. “We are confident from what we have seen in the last couple of weeks in terms of business gains that we can offset [the Middle East disruption] with China prepaid additional volume coming in from new and existing customers...,” Paul said. On air freight, he explained that countries such as Indonesia, Vietnam and Thailand don’t have buffer stocks of jet fuel beyond the end of May due to oil shortages caused by the Iran war and closure of the Strait of Hormuz. But, “China has significantly more reserves [of jet fuel],” Paul said. Consequently, K+N’s Southeast Asia charter cargo flights are refueled in China before returning to the region, while longer-haul services are also making refueling stops in China, he added. Paul said he doesn’t see specific jet fuel shortages now, but the situation could worsen the longer Hormuz remains shut. K+N’s CEO also said the 16% to 18% drop in air freight capacity seen immediately after the Iran conflict started on Feb. 28 as flights were grounded due to airport closures and air space restrictions had eased to “single digits,” without specifying a figure. <h3>Q1 revenue, profit decline </h3>Paul was commenting after Kuehne + Nagel reported a 12% year-over-year decline in first-quarter net profit to $316 million, partly due to a 7% foreign exchange hit. Revenue also fell 12% to $7.1 billion. He said the outlook for the second quarter was “stable.” The Middle East conflict, which began late in the first quarter, had little impact on the forwarder’s first-quarter business, accounting for just a 1.5% decline in ocean freight volumes. That mostly accounted for the 2% year-over-year fall in overall volumes, to 1 million TEUs, seen in the first quarter. Revenue from sea logistics dropped 25% to $2.4 billion, while gross profit fell 22% to $572 million. The decline was mainly due to customers frontloading cargo last year ahead of the US’ broad implementation of tariffs in April 2025, Paul said. Air logistics volumes were flat at 516,000 metric tons as the forwarder was more selective in the cargo mix, targeting higher yield freight such as semiconductors, the CEO said. Revenue for the business was largely unchanged at $2 billion, while gross profit fell 7% to $518 million. K+N saw a more upbeat result from both its road and contract logistics divisions. Paul said the signs of a recovery in road logistics seen in the fourth quarter continued in the first quarter, buoyed by land bridge services in the Middle East amid the war. K+N CFO Markus Blanka-Graff said “market share gains” in the US and Europe in the last six weeks also supported the upbeat result in road logistics, with a 4% increase in revenues to $1.2 billion and a 2% gain in gross profit to $432 million. Revenue in the contract logistics division was flat at $1.5 billion, but gross profit rose 3% to $1.2 billion. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Kuehne + Nagel is redoubling its efforts to develop new ocean business, while also taking steps to protect its air freight operations in Asia to offset the impact of the war in the Middle East, company executives said Friday. Those steps include expanding K+N’s prepaid ocean freight logistics options in China and refueling aircraft in China to overcome potential jet fuel shortages in Southeast Asia, the forwarder’s CEO Stefan Paul said during a first-quarter results webinar. Paul said there are a lot of new China-based manufacturing and trading companies asking K+N for help in exporting products via ocean freight. The company recently increased its dedicated sales force in the Shenzhen area where a lot of those companies are located. “We are confident from what we have seen in the last couple of weeks in terms of business gains that we can offset [the Middle East disruption] with China prepaid additional volume coming in from new and existing customers...,” Paul said. On air freight, he explained that countries such as Indonesia, Vietnam and Thailand don’t have buffer stocks of jet fuel beyond the end of May due to oil shortages caused by the Iran war and closure of the Strait of Hormuz. But, “China has significantly more reserves [of jet fuel],” Paul said. Consequently, K+N’s Southeast Asia charter cargo flights are refueled in China before returning to the region, while longer-haul services are also making refueling stops in China, he added. Paul said he doesn’t see specific jet fuel shortages now, but the situation could worsen the longer Hormuz remains shut. K+N’s CEO also said the 16% to 18% drop in air freight capacity seen immediately after the Iran conflict started on Feb. 28 as flights were grounded due to airport closures and air space restrictions had eased to “single digits,” without specifying a figure. Q1 revenue, profit decline Paul was commenting after Kuehne + Nagel reported a 12% year-over-year decline in first-quarter net profit to $316 million, partly due to a 7% foreign exchange hit. Revenue also fell 12% to $7.1 billion. He said the outlook for the second quarter was “stable.” The Middle East conflict, which began late in the first quarter, had little impact on the forwarder’s first-quarter business, accounting for just a 1.5% decline in ocean freight volumes. That mostly accounted for the 2% year-over-year fall in overall volumes, to 1 million TEUs, seen in the first quarter. Revenue from sea logistics dropped 25% to $2.4 billion, while gross profit fell 22% to $572 million. The decline was mainly due to customers frontloading cargo last year ahead of the US’ broad implementation of tariffs in April 2025, Paul said. Air logistics volumes were flat at 516,000 metric tons as the forwarder was more selective in the cargo mix, targeting higher yield freight such as semiconductors, the CEO said. Revenue for the business was largely unchanged at $2 billion, while gross profit fell 7% to $518 million. K+N saw a more upbeat result from both its road and contract logistics divisions. Paul said the signs of a recovery in road logistics seen in the fourth quarter continued in the first quarter, buoyed by land bridge services in the Middle East amid the war. K+N CFO Markus Blanka-Graff said “market share gains” in the US and Europe in the last six weeks also supported the upbeat result in road logistics, with a 4% increase in revenues to $1.2 billion and a 2% gain in gross profit to $432 million. Revenue in the contract logistics division was flat at $1.5 billion, but gross profit rose 3% to $1.2 billion. Contact Keith Wallis at keithwallis@hotmail.com .

Maritime

Air Cargo Forwarder News

Forwarding

Asia-Europe

Air Cargo

K+N develops new ocean markets, air freight measures to offset war impact

<div class="phx-topic abstract-wrapper">The Port of Quebec received clearance from Canada’s customs authority to handle and inspect international containers, part of the country’s long-term pivot away from trade with the US.</div>

The Port of Quebec received clearance from Canada’s customs authority to handle and inspect international containers, part of the country’s long-term pivot away from trade with the US.

<div class="phx-topic">Canada’s customs agency has granted the Port of Quebec preliminary authority to handle international marine containers, prompting terminal operator QSL to move forward with plans to build out the port’s container handling capacity. Minister Joël Lightbound, the federal government’s chief liaison to Quebec, announced Friday that the Canada Border Services Agency (CBSA) designated the port along the St. Lawrence River in Quebec City as a first port of arrival for receiving international marine containers. CBSA is now working with the Quebec Port Authority and QSL on permitting and building a container inspection facility, which are requirements for the final certification as a customs exam site. QSL will also have to present the business case to CBSA for customs exams. Once the certification is final, CBSA will deploy officers and container inspection equipment. Lightbound said in a statement the CBSA certification for Quebec was part of the broader trade initiatives undertaken by Prime Minister Mark Carney as he looks to pivot the country’s trade dependence away from the US. The Canadian federal government has set aside some C$5 billion in its budget for developing port, rail and other supply-chain infrastructure. The Trump administration’s tariffs have affected more than one-third of Canada’s exports, according to consultancy BCG. The two countries are currently engaged in talks about relief on specific tariffs, ahead of what could possibly be a renegotiation of the US-Mexico-Canada free trade agreement later this year. “What we are announcing today is a decisive milestone that aligns with all the efforts our government is making to diversify our trade relationships, become internationally competitive, and remove barriers to Canada’s prosperity,” Lightbound said. “[The port] will become a strategic hub that will contribute even more to the economic vitality and dynamism of Quebec City, Quebec, and Canada.” The 3,700-TEU MSC Nahara called the Quebec port on Feb. 17 on a voyage from Le Havre, France — the only container ship in the past 12 months to call the port. <h3>‘Defining step’ </h3>With the CBSA certification in hand, QSL said in a separate statement Friday it will submit plans to the Quebec Port Authority for developing a 200,000-TEU terminal at its Beauport facility on the St. Lawrence. Beauport does have gantry cranes but primarily handles bulk cargo. The site also has a railhead for Canadian National Railway. The CBSA customs certification “represents a defining step in the development of the Quebec City container terminal project,” QSL said, adding that Beauport’s 49-foot depth will allow it to handle container ships on international services. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Canada’s customs agency has granted the Port of Quebec preliminary authority to handle international marine containers, prompting terminal operator QSL to move forward with plans to build out the port’s container handling capacity. Minister Joël Lightbound, the federal government’s chief liaison to Quebec, announced Friday that the Canada Border Services Agency (CBSA) designated the port along the St. Lawrence River in Quebec City as a first port of arrival for receiving international marine containers. CBSA is now working with the Quebec Port Authority and QSL on permitting and building a container inspection facility, which are requirements for the final certification as a customs exam site. QSL will also have to present the business case to CBSA for customs exams. Once the certification is final, CBSA will deploy officers and container inspection equipment. Lightbound said in a statement the CBSA certification for Quebec was part of the broader trade initiatives undertaken by Prime Minister Mark Carney as he looks to pivot the country’s trade dependence away from the US. The Canadian federal government has set aside some C$5 billion in its budget for developing port, rail and other supply-chain infrastructure. The Trump administration’s tariffs have affected more than one-third of Canada’s exports, according to consultancy BCG. The two countries are currently engaged in talks about relief on specific tariffs, ahead of what could possibly be a renegotiation of the US-Mexico-Canada free trade agreement later this year. “What we are announcing today is a decisive milestone that aligns with all the efforts our government is making to diversify our trade relationships, become internationally competitive, and remove barriers to Canada’s prosperity,” Lightbound said. “[The port] will become a strategic hub that will contribute even more to the economic vitality and dynamism of Quebec City, Quebec, and Canada.” The 3,700-TEU MSC Nahara called the Quebec port on Feb. 17 on a voyage from Le Havre, France — the only container ship in the past 12 months to call the port. ‘Defining step’ With the CBSA certification in hand, QSL said in a separate statement Friday it will submit plans to the Quebec Port Authority for developing a 200,000-TEU terminal at its Beauport facility on the St. Lawrence. Beauport does have gantry cranes but primarily handles bulk cargo. The site also has a railhead for Canadian National Railway. The CBSA customs certification “represents a defining step in the development of the Quebec City container terminal project,” QSL said, adding that Beauport’s 49-foot depth will allow it to handle container ships on international services. Contact Michael Angell at michael.angell@spglobal.com .

Port News

Port infrastructure

North American ports

Marine terminals

Customs designation triggers QSL terminal project in Quebec City

<div class="phx-topic abstract-wrapper">A “clean-up effort” against unsafe and illegal trucking firms is cutting enough capacity to spur even bigger rate hikes, the company’s CEO says.</div>

A “clean-up effort” against unsafe and illegal trucking firms is cutting enough capacity to spur even bigger rate hikes, the company’s CEO says.

<div class="phx-topic">Shippers should expect more aggressive second-quarter rate increases from truckload providers as soaring fuel prices and a federal crackdown on illegal trucking shrink available capacity, executives at one of the largest US trucking companies say. CEO Adam Miller said Knight-Swift Transportation is planning rate increases ranging from the high single-digits to low double-digits as the company, which reported $7.5 billion in revenue in 2025, enters bid season and smaller carriers continue to exit the truckload market. Knight-Swift believes the federal government’s crackdown against illegally operating companies and non-domiciled drivers cut into capacity significantly in the first quarter and now that contraction will show up in higher rates in the second quarter. “The ongoing efforts of the [Federal Motor Carrier Administration] and the [Department of Transportation] to prevent and revoke invalidly issued CDLs [commercial driver’s licenses], shut down non-compliant CDL schools, and address our service abuses are in the early stages and are already having an impact on the market,” Miller said during Knight-Swift's earnings call this week. “This cleanup effort should, in our view, have an outsized impact on not just the one-way truckload market, but on the lowest priced capacity in this market,” he added, saying that enough capacity is being removed that “even small changes can cause disruption.” “While the pricing environment is improving, we are still seeing carrier failures, as the damage done over a prolonged downcycle is not quickly recovered, especially with the cash flow crunch brought on by the recent fuel spike,” Miller said. <h3>Signs of recovery </h3>The optimism at Knight-Swift comes as other trucking metrics show steady improvement. The American Trucking Associations’ (ATA’s) for-hire, contract freight Truck Tonnage Index increased 0.3% in March, following a 2.9% increase in February. The index is up 3% compared with the same period a year ago. “While March wasn’t particularly strong sequentially, it was the largest year-over-year increase since October 2022,” said ATA Chief Economist Bob Costello. “The first quarter of 2026 was also the best performance since the third quarter of 2017 when considering both sequential and year-over-year results.” However, the most recent data from DAT Freight &amp; Analytics shows “the recent rate recovery stems from a shrinking carrier base [capacity attrition] rather than increased demand,” the company said in its April 18 weekly report. DAT spot rates are up 25% to 30% year over year. “It certainly feels like the setup is there for those in the industry to get back to rates that put our industry in a position where the good quality, compliant carriers have the ability to make enough margin to invest in their businesses, invest in drivers, invest in safety and invest in good quality equipment,” said Miller. “Our ability to get rates is driven largely by capacity reduction versus demand,” he added. “If we start to see demand pick up in conjunction with these early efforts, we could find ourselves in a much more favorable position from a carrier standpoint.” However, rate increases in the less-than-truckload (LTL) sector may be less. “Our LTL business has been growing and does not have the same cycle as truckload,” Miller said. “On LTL renewals, we are getting mid-single-digits right now.” Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

Shippers should expect more aggressive second-quarter rate increases from truckload providers as soaring fuel prices and a federal crackdown on illegal trucking shrink available capacity, executives at one of the largest US trucking companies say. CEO Adam Miller said Knight-Swift Transportation is planning rate increases ranging from the high single-digits to low double-digits as the company, which reported $7.5 billion in revenue in 2025, enters bid season and smaller carriers continue to exit the truckload market. Knight-Swift believes the federal government’s crackdown against illegally operating companies and non-domiciled drivers cut into capacity significantly in the first quarter and now that contraction will show up in higher rates in the second quarter. “The ongoing efforts of the [Federal Motor Carrier Administration] and the [Department of Transportation] to prevent and revoke invalidly issued CDLs [commercial driver’s licenses], shut down non-compliant CDL schools, and address our service abuses are in the early stages and are already having an impact on the market,” Miller said during Knight-Swift's earnings call this week. “This cleanup effort should, in our view, have an outsized impact on not just the one-way truckload market, but on the lowest priced capacity in this market,” he added, saying that enough capacity is being removed that “even small changes can cause disruption.” “While the pricing environment is improving, we are still seeing carrier failures, as the damage done over a prolonged downcycle is not quickly recovered, especially with the cash flow crunch brought on by the recent fuel spike,” Miller said. Signs of recovery The optimism at Knight-Swift comes as other trucking metrics show steady improvement. The American Trucking Associations’ (ATA’s) for-hire, contract freight Truck Tonnage Index increased 0.3% in March, following a 2.9% increase in February. The index is up 3% compared with the same period a year ago. “While March wasn’t particularly strong sequentially, it was the largest year-over-year increase since October 2022,” said ATA Chief Economist Bob Costello. “The first quarter of 2026 was also the best performance since the third quarter of 2017 when considering both sequential and year-over-year results.” However, the most recent data from DAT Freight & Analytics shows “the recent rate recovery stems from a shrinking carrier base [capacity attrition] rather than increased demand,” the company said in its April 18 weekly report. DAT spot rates are up 25% to 30% year over year. “It certainly feels like the setup is there for those in the industry to get back to rates that put our industry in a position where the good quality, compliant carriers have the ability to make enough margin to invest in their businesses, invest in drivers, invest in safety and invest in good quality equipment,” said Miller. “Our ability to get rates is driven largely by capacity reduction versus demand,” he added. “If we start to see demand pick up in conjunction with these early efforts, we could find ourselves in a much more favorable position from a carrier standpoint.” However, rate increases in the less-than-truckload (LTL) sector may be less. “Our LTL business has been growing and does not have the same cycle as truckload,” Miller said. “On LTL renewals, we are getting mid-single-digits right now.” Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Truck brokers

Surface

US truckload rate hikes to grow more aggressive: Knight-Swift

<div class="phx-topic abstract-wrapper">The current pipeline of newbuilding programs for ultra-large container vessels vastly outstrips the construction of new berths intended to receive them, meaning we are literally building a fleet for which there may soon be no room at the inn, writes Robbert van Trooijen.</div>

The current pipeline of newbuilding programs for ultra-large container vessels vastly outstrips the construction of new berths intended to receive them, meaning we are literally building a fleet for which there may soon be no room at the inn, writes Robbert van Trooijen.

<div class="phx-topic">In his recent work, Chokepoints: American Power in the Age of Economic Warfare, Edward Fishman argues that while great powers once rose by controlling geographic straits like the Bosphorus, modern power relies on different, often digital, levers. Today we are reminded that even in the Digital Age, physical chokepoints such as the Strait of Hormuz can still disrupt supply chains to such an extent that they threaten global recession. But as we look toward a post-2026 horizon — assuming current geopolitical fires are eventually extinguished — a more systemic bottleneck looms: the stagnation of global port infrastructure. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6209409_0.1.jpg"></img></div>The math of global trade is currently heading toward a collision course. Available ocean terminal capacity at major gateways and hubs is reaching a saturation point. While the industry has leaned heavily on efficiency gains and automation to squeeze more “moves per hour” out of existing footprints, there is a lack of new physical capacity being added to the global map. We see a flurry of merger and acquisition activity — such as the planned sale of assets such as Hutchison Port Holdings — but shifting ownership of an existing facility in itself does nothing to accommodate the actual growth of global trade. The strongest evidence of this disconnect lies in the shipyards. The current pipeline of newbuilding programs for ultra-large container vessels vastly outstrips the construction of new berths intended to receive them. We are, quite literally, building a fleet for which there may soon be no room at the inn. <h3>Protecting margins — at the expense of cargo flow </h3>The hesitation to build is certainly not due to a lack of profitability. The investment case for terminal infrastructure is, in fact, staggering. APM Terminals, a subsidiary of Danish conglomerate A.P. Moller Maersk, reported a return on invested capital (ROIC) of no less than 16.1% in the 2025 fourth quarter, a figure that outperforms almost every other sub-sector in the maritime industry. So, why the inertia? There is no simple answer, but part of the answer lies in a classic “incumbent’s dilemma.” While new capacity would benefit the global economy by increasing competitiveness, it would also — at least temporarily — dilute the high returns currently enjoyed by existing operators. In some markets, bottlenecks are not just a nuisance; they are lucrative. This creates a perverse incentive for incumbents to lobby against greenfield projects, effectively protecting their margins at the expense of trade fluidity. The investment gap is most visible in the Southern Hemisphere. As industry analyst Lars Jensen highlighted at TPM26 in Long Beach in early March, demographic shifts identify Latin America and Africa as the next great trade frontiers. Yet, these are the very regions where the pushback against “carrier-owned” terminals is loudest. Local players often lobby against the participation of ocean carriers, arguing that vertical integration is anti-competitive. This is an understandable yet somewhat protectionist stance. It is the ocean carriers who possess the most direct incentive to drive capacity growth — they are the ones who need the berths to keep their growing fleet of vessels moving. The “dominance” argument falls flat when compared with the alternative: a stagnant, expensive status quo maintained by local (family-owned) oligopolies. <h3>The need to act now </h3>Any legitimate anti-competitive concerns can be easily mitigated through clear, enforceable neutrality clauses within concession agreements. These clauses ensure that while a carrier may own the terminal, it remains an open-access utility for the broader market. The construction of a greenfield site takes three to five years. If we do not break ground today, the “landside chokepoint” of 2028 and beyond could very well make today’s Red Sea/Strait of Hormuz disruptions look like a minor logistical hiccup. To secure the future of global trade, we must look past the protectionist rhetoric of local incumbents and embrace the capital and operational drive of carrier-terminal combinations. The returns are there and the demand is there. But the berths are not. It is time for a virtuous cycle to take over the industry. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&amp;O Nedlloyd and the Maersk Group. Contact him at <a href="mailto:robbert@inceptionpartners.org">robbert@inceptionpartners.org</a>. </div>

In his recent work, Chokepoints: American Power in the Age of Economic Warfare, Edward Fishman argues that while great powers once rose by controlling geographic straits like the Bosphorus, modern power relies on different, often digital, levers. Today we are reminded that even in the Digital Age, physical chokepoints such as the Strait of Hormuz can still disrupt supply chains to such an extent that they threaten global recession. But as we look toward a post-2026 horizon — assuming current geopolitical fires are eventually extinguished — a more systemic bottleneck looms: the stagnation of global port infrastructure. The math of global trade is currently heading toward a collision course. Available ocean terminal capacity at major gateways and hubs is reaching a saturation point. While the industry has leaned heavily on efficiency gains and automation to squeeze more “moves per hour” out of existing footprints, there is a lack of new physical capacity being added to the global map. We see a flurry of merger and acquisition activity — such as the planned sale of assets such as Hutchison Port Holdings — but shifting ownership of an existing facility in itself does nothing to accommodate the actual growth of global trade. The strongest evidence of this disconnect lies in the shipyards. The current pipeline of newbuilding programs for ultra-large container vessels vastly outstrips the construction of new berths intended to receive them. We are, quite literally, building a fleet for which there may soon be no room at the inn. Protecting margins — at the expense of cargo flow The hesitation to build is certainly not due to a lack of profitability. The investment case for terminal infrastructure is, in fact, staggering. APM Terminals, a subsidiary of Danish conglomerate A.P. Moller Maersk, reported a return on invested capital (ROIC) of no less than 16.1% in the 2025 fourth quarter, a figure that outperforms almost every other sub-sector in the maritime industry. So, why the inertia? There is no simple answer, but part of the answer lies in a classic “incumbent’s dilemma.” While new capacity would benefit the global economy by increasing competitiveness, it would also — at least temporarily — dilute the high returns currently enjoyed by existing operators. In some markets, bottlenecks are not just a nuisance; they are lucrative. This creates a perverse incentive for incumbents to lobby against greenfield projects, effectively protecting their margins at the expense of trade fluidity. The investment gap is most visible in the Southern Hemisphere. As industry analyst Lars Jensen highlighted at TPM26 in Long Beach in early March, demographic shifts identify Latin America and Africa as the next great trade frontiers. Yet, these are the very regions where the pushback against “carrier-owned” terminals is loudest. Local players often lobby against the participation of ocean carriers, arguing that vertical integration is anti-competitive. This is an understandable yet somewhat protectionist stance. It is the ocean carriers who possess the most direct incentive to drive capacity growth — they are the ones who need the berths to keep their growing fleet of vessels moving. The “dominance” argument falls flat when compared with the alternative: a stagnant, expensive status quo maintained by local (family-owned) oligopolies. The need to act now Any legitimate anti-competitive concerns can be easily mitigated through clear, enforceable neutrality clauses within concession agreements. These clauses ensure that while a carrier may own the terminal, it remains an open-access utility for the broader market. The construction of a greenfield site takes three to five years. If we do not break ground today, the “landside chokepoint” of 2028 and beyond could very well make today’s Red Sea/Strait of Hormuz disruptions look like a minor logistical hiccup. To secure the future of global trade, we must look past the protectionist rhetoric of local incumbents and embrace the capital and operational drive of carrier-terminal combinations. The returns are there and the demand is there. But the berths are not. It is time for a virtuous cycle to take over the industry. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&O Nedlloyd and the Maersk Group. Contact him at robbert@inceptionpartners.org .

Landside infrastructure is container shipping’s next great chokepoint

<div class="phx-topic abstract-wrapper">While there have been some schedule changes for multipurpose vessels, reliability is still sufficient only because the shock hasn’t gotten through the system yet — and conditions will likely worsen from there, conference attendees were told.</div>

While there have been some schedule changes for multipurpose vessels, reliability is still sufficient only because the shock hasn’t gotten through the system yet — and conditions will likely worsen from there, conference attendees were told.

<div class="phx-topic">New Orleans —The war-induced disruption to energy markets is a significant financial shock that the project cargo industry didn’t plan for — and the worst is likely yet to come, experts speaking at the Journal of Commerce’s Breakbulk and Project Cargo Conference 2026 said this week. Christian Ohlrich, global director of logistics at energy storage manufacturer Fluence Energy, said his “major concern” is of “drastic” financial impacts for shippers with projects already underway. While there have been some schedule changes for multipurpose vessels, reliability is still there, but only because the shock “just hasn’t gotten through the system yet,” Ohlrich said. “I would expect the schedule to start seeing some effects in the fall and then get worse,” he said. To counter this, Fluence is trying to pre-order as many project supplies as financially possible. “We’re pre-buying, we’re storing, and we’re preparing,” said Ohlrich. Amy Groeschel, director and head of energy spending at S&amp;P Global Energy, had a stark warning for project cargo shippers: “It’s gonna get worse before it gets better.” <h3>AI driver highlighted </h3>Looking beyond the current conflict with Iran, Groeschel flagged the impact of AI as a huge project cargo driver, not only for renewable power, but also for batteries and storage. “Our newest forecast really presents a very positive spin for renewable power and where that’s coming from,” she said. “Even in the face of this conflict, we might see this change even more next year, as countries go back to the thought of energy security and making different policy choices in order to create more stable power supplies.” Corrie Henry, regional director for logistics and trade compliance at engineering, procurement and construction (EPC) company Worley, said he expected to see EPCs “hedge their bets” on LNG and oil, adding renewables when speed and politics demand it. “My bet is going to be on a multi-energy buildout,” Henry told Breakbulk26. While she agreed with a multi-fuel transition future, Groeschel warned that the outlook could be “messy” and in “fits and starts.” “There is a mismatch of project cycle and the need for energy,” she said. “Those quick to deploy technologies, like in renewable power in some places, are appropriate and are incentivized by the government. “And so that’s where you’re going to see those big build outs,” which will drive project cargo demand, she added. Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>. </div>

New Orleans —The war-induced disruption to energy markets is a significant financial shock that the project cargo industry didn’t plan for — and the worst is likely yet to come, experts speaking at the Journal of Commerce’s Breakbulk and Project Cargo Conference 2026 said this week. Christian Ohlrich, global director of logistics at energy storage manufacturer Fluence Energy, said his “major concern” is of “drastic” financial impacts for shippers with projects already underway. While there have been some schedule changes for multipurpose vessels, reliability is still there, but only because the shock “just hasn’t gotten through the system yet,” Ohlrich said. “I would expect the schedule to start seeing some effects in the fall and then get worse,” he said. To counter this, Fluence is trying to pre-order as many project supplies as financially possible. “We’re pre-buying, we’re storing, and we’re preparing,” said Ohlrich. Amy Groeschel, director and head of energy spending at S&P Global Energy, had a stark warning for project cargo shippers: “It’s gonna get worse before it gets better.” AI driver highlighted Looking beyond the current conflict with Iran, Groeschel flagged the impact of AI as a huge project cargo driver, not only for renewable power, but also for batteries and storage. “Our newest forecast really presents a very positive spin for renewable power and where that’s coming from,” she said. “Even in the face of this conflict, we might see this change even more next year, as countries go back to the thought of energy security and making different policy choices in order to create more stable power supplies.” Corrie Henry, regional director for logistics and trade compliance at engineering, procurement and construction (EPC) company Worley, said he expected to see EPCs “hedge their bets” on LNG and oil, adding renewables when speed and politics demand it. “My bet is going to be on a multi-energy buildout,” Henry told Breakbulk26. While she agreed with a multi-fuel transition future, Groeschel warned that the outlook could be “messy” and in “fits and starts.” “There is a mismatch of project cycle and the need for energy,” she said. “Those quick to deploy technologies, like in renewable power in some places, are appropriate and are incentivized by the government. “And so that’s where you’re going to see those big build outs,” which will drive project cargo demand, she added. Contact Carly Fields at carly.fields@spglobal.com .

Energy projects

Project cargo

Breakbulk News

Breakbulk26: War-related financial, schedule shocks ahead for energy projects

<div class="phx-topic abstract-wrapper">After more than two decades of inconsistent federal enforcement, corrective actions are now arriving, raising hopes for a safer trucking industry and the general public it serves. </div>

After more than two decades of inconsistent federal enforcement, corrective actions are now arriving, raising hopes for a safer trucking industry and the general public it serves.

<div class="phx-topic">I’ve watched the Federal Motor Carrier Safety Administration (FMCSA) struggle to fulfill its most critical responsibility: ensuring safer roads. This is not a casual observation; it is a conclusion drawn from over 20 years of experience with the data, policies and the consequences that arise from them. The April 12 60 Minutes segment on trucking fraud is a direct consequence of the FMCSA’s failure to listen, engage, or understand the safety risks associated with the industry it is supposed to regulate. This is just one of many examples that underscores its shortcomings. In 2004, the FMCSA announced its flagship safety initiative, CSA 2010. The premise was straightforward: Use data to identify unsafe carriers and reduce crashes. It did not achieve its intended goals. And its failure was not quiet. It was public, repeated and consequential. More than two decades later, the industry still lacks a reliable, trusted framework to identify and avoid unsafe motor carriers. That outcome is extraordinary given the time, funding and regulatory focus dedicated to the effort. CSA is the most visible example, but not the only one. The program relied on data that could not reliably predict crash risk, yet it was promoted as though it could. Investigations by the Department of Transportation Inspector General and the Government Accountability Office confirmed that key elements were not statistically valid for their intended use, prompting Congressional intervention. This is not refinement, but systemic failure. More broadly, it reflects a pattern: initiatives launched with hope, but without a solid grounding in how safety actually operates in the real world. <h3>A disconnect from the real world </h3>As a member of the FMCSA’s Carrier Safety and Accountability Subcommittee, I saw firsthand how far decision-making had drifted from operational reality. Too often, the FMCSA treated the industry as an adversary rather than a partner. The people responsible for selecting carriers, managing risk and ensuring safe freight movement every day were not meaningfully included. At one point, I renamed my working folder for the CSA Subcommittee meetings to “FMCSA Lies.” This name reflected my frustration with senior-level FMCSA staff who defended positions that contradicted data, real-world situations, and basic common sense. They also seemed unwilling to listen to reason. Meanwhile, the private sector adapted. In 2007, I founded QualifiedCarriers.com to provide actionable safety intelligence to the shipping community on motor carriers. It was later acquired by Highway. The market built what it needed because the FMCSA would not. The problem has been compounded by a focus on issues with little direct impact on safety outcomes. Examining the economics of broker-carrier relationships — such as pricing structures — does not prevent accidents, remove unsafe drivers, or improve training and enforcement. Safety is operational. It comes down to who is behind the wheel, how they were trained, and whether standards are enforced consistently across jurisdictions. Anything else is a distraction. <h3>A turning point </h3>For the first time in 22 years, there are signs that the FMCSA is refocusing on what matters. Under Transportation Secretary Sean Duffy and FMCSA Administrator Derek Barrs, the agency has begun taking steps that directly affect safety outcomes. In a short period, the FMCSA has shut down deficient commercial drivers’ license (CDL) schools, eliminating pipelines of underqualified drivers; actively enforced English language proficiency rules; begun cooperating with federal law enforcement on fraud, including risks tied to foreign-controlled dispatch operations; and started evaluating prior CDL issuances from substandard programs. The agency is also engaging directly with industry at major events, including the Mid-America Trucking Show and the Truckload Carriers Association annual meeting. At the Truckload Carriers Association meeting in March, Barrs received a standing ovation — not because enforcement is easier, but because it is finally becoming more meaningful. He may be the first FMCSA leader since Annette Sandberg to fully grasp that safety is an operational discipline grounded in qualification, enforcement and measurable outcomes. To the professionals inside the FMCSA: you now have leadership aligned with real-world safety. Support it, build on it and do not revert to frameworks that have already failed. To industry leaders — carriers, brokers, shippers and associations: engage constructively. Demand rigor, share data and hold the agency accountable while reinforcing what works. The path forward is not complicated. Put qualified drivers on the road, remove unqualified ones, enforce standards consistently, and use data that reflects reality. Do that, and safety improves. But we should be clear-eyed about the cost of delay. After more than two decades of inconsistent enforcement, corrective actions are now arriving all at once — tightening standards, removing capacity and straining the system. Had these steps been taken steadily over time, the disruption would be far less — and lives would almost certainly have been saved. For 22 years, the FMCSA drifted. Now it has a chance to lead and an obligation not to waste it again.Jeff Tucker is chairman of the National Industrial Transportation League’s Highway Committee. Contact him at <a href="mailto:jeff.tucker@tuckerco.com">jeff.tucker@tuckerco.com</a>. </div>

I’ve watched the Federal Motor Carrier Safety Administration (FMCSA) struggle to fulfill its most critical responsibility: ensuring safer roads. This is not a casual observation; it is a conclusion drawn from over 20 years of experience with the data, policies and the consequences that arise from them. The April 12 60 Minutes segment on trucking fraud is a direct consequence of the FMCSA’s failure to listen, engage, or understand the safety risks associated with the industry it is supposed to regulate. This is just one of many examples that underscores its shortcomings. In 2004, the FMCSA announced its flagship safety initiative, CSA 2010. The premise was straightforward: Use data to identify unsafe carriers and reduce crashes. It did not achieve its intended goals. And its failure was not quiet. It was public, repeated and consequential. More than two decades later, the industry still lacks a reliable, trusted framework to identify and avoid unsafe motor carriers. That outcome is extraordinary given the time, funding and regulatory focus dedicated to the effort. CSA is the most visible example, but not the only one. The program relied on data that could not reliably predict crash risk, yet it was promoted as though it could. Investigations by the Department of Transportation Inspector General and the Government Accountability Office confirmed that key elements were not statistically valid for their intended use, prompting Congressional intervention. This is not refinement, but systemic failure. More broadly, it reflects a pattern: initiatives launched with hope, but without a solid grounding in how safety actually operates in the real world. A disconnect from the real world As a member of the FMCSA’s Carrier Safety and Accountability Subcommittee, I saw firsthand how far decision-making had drifted from operational reality. Too often, the FMCSA treated the industry as an adversary rather than a partner. The people responsible for selecting carriers, managing risk and ensuring safe freight movement every day were not meaningfully included. At one point, I renamed my working folder for the CSA Subcommittee meetings to “FMCSA Lies.” This name reflected my frustration with senior-level FMCSA staff who defended positions that contradicted data, real-world situations, and basic common sense. They also seemed unwilling to listen to reason. Meanwhile, the private sector adapted. In 2007, I founded QualifiedCarriers.com to provide actionable safety intelligence to the shipping community on motor carriers. It was later acquired by Highway. The market built what it needed because the FMCSA would not. The problem has been compounded by a focus on issues with little direct impact on safety outcomes. Examining the economics of broker-carrier relationships — such as pricing structures — does not prevent accidents, remove unsafe drivers, or improve training and enforcement. Safety is operational. It comes down to who is behind the wheel, how they were trained, and whether standards are enforced consistently across jurisdictions. Anything else is a distraction. A turning point For the first time in 22 years, there are signs that the FMCSA is refocusing on what matters. Under Transportation Secretary Sean Duffy and FMCSA Administrator Derek Barrs, the agency has begun taking steps that directly affect safety outcomes. In a short period, the FMCSA has shut down deficient commercial drivers’ license (CDL) schools, eliminating pipelines of underqualified drivers; actively enforced English language proficiency rules; begun cooperating with federal law enforcement on fraud, including risks tied to foreign-controlled dispatch operations; and started evaluating prior CDL issuances from substandard programs. The agency is also engaging directly with industry at major events, including the Mid-America Trucking Show and the Truckload Carriers Association annual meeting. At the Truckload Carriers Association meeting in March, Barrs received a standing ovation — not because enforcement is easier, but because it is finally becoming more meaningful. He may be the first FMCSA leader since Annette Sandberg to fully grasp that safety is an operational discipline grounded in qualification, enforcement and measurable outcomes. To the professionals inside the FMCSA: you now have leadership aligned with real-world safety. Support it, build on it and do not revert to frameworks that have already failed. To industry leaders — carriers, brokers, shippers and associations: engage constructively. Demand rigor, share data and hold the agency accountable while reinforcing what works. The path forward is not complicated. Put qualified drivers on the road, remove unqualified ones, enforce standards consistently, and use data that reflects reality. Do that, and safety improves. But we should be clear-eyed about the cost of delay. After more than two decades of inconsistent enforcement, corrective actions are now arriving all at once — tightening standards, removing capacity and straining the system. Had these steps been taken steadily over time, the disruption would be far less — and lives would almost certainly have been saved. For 22 years, the FMCSA drifted. Now it has a chance to lead and an obligation not to waste it again. Jeff Tucker is chairman of the National Industrial Transportation League’s Highway Committee. Contact him at jeff.tucker@tuckerco.com .

Truckload

Trucking labor

How FMCSA missed the mark on safety — and how it can get it right

<div class="phx-topic abstract-wrapper">GLP-1 weight loss drugs are the most visible example of a force reshaping freight that supply chains weren’t built to detect, writes Paul Tonsager. </div>

GLP-1 weight loss drugs are the most visible example of a force reshaping freight that supply chains weren’t built to detect, writes Paul Tonsager.

<div class="phx-topic">Plus-size apparel is contracting. The numbers are in the earnings calls — store closures accelerating, revenues declining, and CEOs attributing the cause directly to GLP-1 weight loss medications. Approximately 25% of customers at major plus-size retailers are actively losing weight and deferring purchases until they reach their goal size. For freight operators, the translation is straightforward: fewer container bookings out of Bangladesh, softening elastane import volumes from South Korea and China, rising return flows through apparel distribution centers, and athleisure volume shifting to different origins, different factories, different lanes. That’s the GLP-1 story in freight terms. But the more important question isn’t what GLP-1 does to one commodity flow. It’s what GLP-1 represents — and whether the industry is paying attention to the category it belongs to. <h3>A different kind of demand shift </h3>Supply chains are inference machines. They watch what moved last season and build a model of what will move next. Carrier contracts, network design, capacity commitments, inventory positioning — all of them are calibrated to demand cycles that move in human decision-time. A trend emerges. Shippers respond. Freight adjusts. That’s the model. GLP-1 doesn’t fit the model. The consumer isn’t choosing differently based on preference. Their body is changing on a pharmaceutical timeline with no seasonal pattern and no historical precedent in any demand planning system. The signal isn’t coming from the market. It’s coming from a lab. That’s the category: structural demand shifts originating outside the market. And GLP-1 is not the only one in play. <h3>The pattern repeating </h3>The electric vehicle transition is doing to auto parts freight what GLP-1 is doing to apparel — but slower and at far larger scale. An internal combustion vehicle contains approximately 30,000 parts. An EV eliminates approximately 10,000 of them. Transmissions, exhaust systems, fuel injectors — the freight lanes serving these components are in structural decline. The lanes serving battery materials — lithium, cobalt, copper — are being built in real time, often on entirely different corridors with different modal requirements. Carriers and third-party logistics providers (3PLs) who built capacity around internal combustion engine component flows are holding assets against a demand base that is shrinking by design. Food and beverage may be the next GLP-1 impact larger than apparel. If 23% of US households are on these medications — up four points in a single year, according to Circana — and consuming meaningfully fewer calories, the freight infrastructure built around the old consumption baseline is exposed. Bulk grain movements, refrigerated less-than-truckload networks, warehouse footprint, replenishment frequency — all sized to a caloric demand curve that is quietly bending downward. The volume impact hasn’t fully materialized. It will. Remote work ran the same playbook earlier this decade. Office-bound freight flows — commercial furniture, facilities supplies, workplace technology, food service — didn’t disappear. They redistributed to suburbs and residential addresses in patterns that no demand planning model had anticipated. Last-mile density assumptions broke. The signal came from a public health event, not a consumer preference survey. <h3>What the industry is missing </h3>The common thread isn’t the specific force — pharmaceutical, technological, epidemiological. It’s the origin. These signals don’t come from the market. They come from labs, legislatures and external shocks. Freight networks optimized to read market signals — booking velocity, tender acceptance, seasonal lift — are structurally late to detect them. GLP-1 is the most legible example yet because it has a drug name, a measurable penetration curve, and identifiable freight consequences already showing up in origin mix and return volumes. That clarity is unusual. Most structural demand shifts are harder to see until capacity is misaligned, contracts don’t match the freight, and the repositioning cost is already real. The operators who outperform in the next decade won’t necessarily be the ones who move the most freight. They’ll be the ones who developed the capability to read demand signals that don’t originate in the market — and built network flexibility before the curve arrived. GLP-1 is the canary. The question is whether the industry treats it as a one-time anomaly or as a preview of the operating environment it now lives in. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals &amp; Switches newsletter on freight strategy at aet1998.substack.com. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

Plus-size apparel is contracting. The numbers are in the earnings calls — store closures accelerating, revenues declining, and CEOs attributing the cause directly to GLP-1 weight loss medications. Approximately 25% of customers at major plus-size retailers are actively losing weight and deferring purchases until they reach their goal size. For freight operators, the translation is straightforward: fewer container bookings out of Bangladesh, softening elastane import volumes from South Korea and China, rising return flows through apparel distribution centers, and athleisure volume shifting to different origins, different factories, different lanes. That’s the GLP-1 story in freight terms. But the more important question isn’t what GLP-1 does to one commodity flow. It’s what GLP-1 represents — and whether the industry is paying attention to the category it belongs to. A different kind of demand shift Supply chains are inference machines. They watch what moved last season and build a model of what will move next. Carrier contracts, network design, capacity commitments, inventory positioning — all of them are calibrated to demand cycles that move in human decision-time. A trend emerges. Shippers respond. Freight adjusts. That’s the model. GLP-1 doesn’t fit the model. The consumer isn’t choosing differently based on preference. Their body is changing on a pharmaceutical timeline with no seasonal pattern and no historical precedent in any demand planning system. The signal isn’t coming from the market. It’s coming from a lab. That’s the category: structural demand shifts originating outside the market. And GLP-1 is not the only one in play. The pattern repeating The electric vehicle transition is doing to auto parts freight what GLP-1 is doing to apparel — but slower and at far larger scale. An internal combustion vehicle contains approximately 30,000 parts. An EV eliminates approximately 10,000 of them. Transmissions, exhaust systems, fuel injectors — the freight lanes serving these components are in structural decline. The lanes serving battery materials — lithium, cobalt, copper — are being built in real time, often on entirely different corridors with different modal requirements. Carriers and third-party logistics providers (3PLs) who built capacity around internal combustion engine component flows are holding assets against a demand base that is shrinking by design. Food and beverage may be the next GLP-1 impact larger than apparel. If 23% of US households are on these medications — up four points in a single year, according to Circana — and consuming meaningfully fewer calories, the freight infrastructure built around the old consumption baseline is exposed. Bulk grain movements, refrigerated less-than-truckload networks, warehouse footprint, replenishment frequency — all sized to a caloric demand curve that is quietly bending downward. The volume impact hasn’t fully materialized. It will. Remote work ran the same playbook earlier this decade. Office-bound freight flows — commercial furniture, facilities supplies, workplace technology, food service — didn’t disappear. They redistributed to suburbs and residential addresses in patterns that no demand planning model had anticipated. Last-mile density assumptions broke. The signal came from a public health event, not a consumer preference survey. What the industry is missing The common thread isn’t the specific force — pharmaceutical, technological, epidemiological. It’s the origin. These signals don’t come from the market. They come from labs, legislatures and external shocks. Freight networks optimized to read market signals — booking velocity, tender acceptance, seasonal lift — are structurally late to detect them. GLP-1 is the most legible example yet because it has a drug name, a measurable penetration curve, and identifiable freight consequences already showing up in origin mix and return volumes. That clarity is unusual. Most structural demand shifts are harder to see until capacity is misaligned, contracts don’t match the freight, and the repositioning cost is already real. The operators who outperform in the next decade won’t necessarily be the ones who move the most freight. They’ll be the ones who developed the capability to read demand signals that don’t originate in the market — and built network flexibility before the curve arrived. GLP-1 is the canary. The question is whether the industry treats it as a one-time anomaly or as a preview of the operating environment it now lives in. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals & Switches newsletter on freight strategy at aet1998.substack.com. Contact him at paul.tonsager@multimodalsolutions.io .

Trans-Pacific

Container lines

When the demand signal comes from outside the market

TL PPI

{valueY} 
Y-o-Y: {bls_tl_ppi_year_over_year_change.formatNumber('#.0%')}

Producer Price Indices (PPIs) measure the average change over time in selling prices, including surcharges and other costs, that domestic producers — in this case, truckload carriers — receive for their output — i.e., transportation services. The truckload PPI reflects the dominant role that contract carriage plays in the truckload market, as opposed to transactional rates, which makes up a small portion of industry pricing and PPI data. [BLS](https://www.bls.gov/)

US long-haul truckload producer price index (BLS)

US BLS Long-haul truckload producer price index (PPI) Gateway

<div class="phx-topic abstract-wrapper">The varied strategies employed by ocean carriers to manage war-driven volatility in bunker fuel prices are delaying the completion of some 2026–27 service contract negotiations as the key May 1 date looms.</div>

The varied strategies employed by ocean carriers to manage war-driven volatility in bunker fuel prices are delaying the completion of some 2026–27 service contract negotiations as the key May 1 date looms.

<div class="phx-topic">Small to midsize customers say ocean carriers’ handling of bunker fuel surcharges is complicating the timely completion of their 2026–27 trans-Pacific service contracts due to difficulty in comparing how the liners approach the surcharges. While most annual service contracts on the eastbound trans-Pacific typically start May 1, the carrier customers say any delay could force them to ship under costlier spot/freight-all-kinds (FAK) rates until the annual service agreements are signed. Customers, both beneficial cargo owners (BCOs) and forwarders, say that some carriers want them to agree to open-ended emergency bunker surcharges with no exit clause stipulating when the surcharges will end. “There is no real indicator as to when this is going to go away and how it is going to go away,” a forwarder who did not want to be identified told the Journal of Commerce. Bunker surcharges have become a hot-button issue since the war in the Middle East sent oil prices soaring in early March. The traditional bunker adjustment factor (BAF) found in most service contracts is being changed by some carriers from a quarterly to a monthly reset. More recently, some carriers are also levying emergency fuel surcharges on top of the BAFs. A carrier executive said that while some customers may feel carriers are attempting to force them to accept emergency surcharges or are unilaterally changing the BAF to a monthly reset, he believes there is a growing willingness by liners and their customers to reach a mutually acceptable remedy. “There is a mounting effort by most parties to meet in the middle on the level of surcharges,” the executive said. <h3>Emergency bunker surcharges could increase </h3>In his April newsletter, Jon Monroe, who serves as an adviser to forwarders, said emergency bunker surcharges (EBS) are likely to remain a key wildcard in the trans-Pac for months to come, and they could add significantly to shippers’ costs. “EBS levels are expected to fluctuate significantly,” Monroe said. “In the near term, the EBS could range from $200 to $600 per FEU, with the potential for spikes beyond that if fuel prices surge further. As a result, total landed freight costs may be far less predictable than the base contract rates suggest.” Bunker fuel prices essentially doubled in key global hubs at the start of the war, and although prices have eased a bit in some locations, they are still well above where they were before the conflict. And with no end in sight to the closure of the Strait of Hormuz that has effectively blocked the daily transit of 20% of the world’s oil supplies, the specter of <a href="https://www.joc.com/article/bunker-fuel-shortages-loom-after-us-counter-blocks-strait-of-hormuz-6204678">bunker fuel shortages loom</a>, something that would add further upward pressure on prices. When bunker fuel prices are stable, the traditional BAF quarterly reset works fine for both carriers and their customers, said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. But with some carriers now adjusting bunker prices monthly while adding seemingly open-ended emergency bunker surcharges to the equation, importers and forwarders are at an obvious disadvantage, Shames said “If the surcharge goes up, it should be able to come down when bunkers come down. It’s gotten very confusing,” she said. The more frequent changes in BAFs and EBSs now make it more difficult for forwarders to price their services to their clients in a timely manner, said Ben Coleman, president of forwarder Teampower Logistics. “You just have to accept that [carriers] will adjust their rates downward if bunker costs come down,” Coleman said. “Our main concern is that we want to remain competitive.” In the past, there was always a way to navigate through surcharges, said John Pace, senior manager for global logistics at Revelyst, an importer of outdoor gear. “You would circumvent those carriers that were penalizing you with higher costs,” Pace said. “But in this particular case, it seems to be widespread among most carriers. There doesn’t seem to be a strategy that allows you to navigate through this.” <h3>Different carriers, different approaches </h3>A trade director at a consumer products company that imports about 6,000 containers per year said his service contract talks are bogged down by the different approaches carriers are taking to surcharges and how they impact base rates. For example, the source said one major carrier is asking for a $300 emergency fuel surcharge on top of the regular BAF that applies on base rates. But the carrier has not made clear under what circumstances it will remove the fuel surcharge or how it was calculated, he said. Meanwhile, a second major liner is passing along fuel expenses on its carrier haulage moves through an “inland fuel surcharge,” the source said. The carrier provides a formula, albeit one he says is complicated, about how it is calculating the new fee. The second carrier is also presenting shippers with a choice on how their BAF will be calculated, either on a trailing three-month or one-month basis. So, shippers themselves can take the bet on whether they want to ride out fuel volatility for a longer period or benefit from a quick dip in oil prices. “It’s gotten really complicated with all these extra fuel costs,” the trade director said. “We were in line to get a good base rate reduction, but now that’s all hidden by the surcharges.” A national importer of home furnishings who is in his third round of service contract negotiations said importers must be diligent and persistent in talks with carriers to protect against unwanted surcharges. “We pushed back on the emergency bunker surcharges, and we did so successfully,” the source said. <h3>Contract extensions possible </h3>With less than two weeks left before most 2025–26 service contracts end and most 2026–27 contracts take effect, some importers are asking carriers to extend their current contracts at least until mid-May while negotiations on new deals continue. But that’s something that must be done on a carrier-by-carrier basis because not all liners are willing to extend the existing contracts, forwarders say. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56cdc0fc-22a5-4ef9-9e3e-11f96f369c70"></dynamic-object></div>If a carrier refuses to extend the existing contract temporarily, importers will have to pay the current spot rate, which was $2,700 per FEU to the West Coast and $3,700 per FEU as of April 21, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Most midsize importers are currently paying in the range of $1,700 to $1,850 to the West Coast per their 2025–26 service contracts. “[Some] carriers are extending [existing contract] rates until mid-May,” Monroe said. An industry consultant who formerly served in logistics roles at big-box retailers said most of the larger retailers have finalized their 2026–27 service contracts or are ready to do so. However, smaller importers say they are meeting resistance from some carriers for escape clauses from emergency fuel surcharges. “The smaller ones, they don’t have any leverage,” the consultant said. “They’re at the mercy of the carriers.” Contact Bill Mongelluzzo at <a href="bill.mongelluzzo@spglobal.com ">bill.mongelluzzo@spglobal.com</a>.  Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Small to midsize customers say ocean carriers’ handling of bunker fuel surcharges is complicating the timely completion of their 2026–27 trans-Pacific service contracts due to difficulty in comparing how the liners approach the surcharges. While most annual service contracts on the eastbound trans-Pacific typically start May 1, the carrier customers say any delay could force them to ship under costlier spot/freight-all-kinds (FAK) rates until the annual service agreements are signed. Customers, both beneficial cargo owners (BCOs) and forwarders, say that some carriers want them to agree to open-ended emergency bunker surcharges with no exit clause stipulating when the surcharges will end. “There is no real indicator as to when this is going to go away and how it is going to go away,” a forwarder who did not want to be identified told the Journal of Commerce. Bunker surcharges have become a hot-button issue since the war in the Middle East sent oil prices soaring in early March. The traditional bunker adjustment factor (BAF) found in most service contracts is being changed by some carriers from a quarterly to a monthly reset. More recently, some carriers are also levying emergency fuel surcharges on top of the BAFs. A carrier executive said that while some customers may feel carriers are attempting to force them to accept emergency surcharges or are unilaterally changing the BAF to a monthly reset, he believes there is a growing willingness by liners and their customers to reach a mutually acceptable remedy. “There is a mounting effort by most parties to meet in the middle on the level of surcharges,” the executive said. Emergency bunker surcharges could increase In his April newsletter, Jon Monroe, who serves as an adviser to forwarders, said emergency bunker surcharges (EBS) are likely to remain a key wildcard in the trans-Pac for months to come, and they could add significantly to shippers’ costs. “EBS levels are expected to fluctuate significantly,” Monroe said. “In the near term, the EBS could range from $200 to $600 per FEU, with the potential for spikes beyond that if fuel prices surge further. As a result, total landed freight costs may be far less predictable than the base contract rates suggest.” Bunker fuel prices essentially doubled in key global hubs at the start of the war, and although prices have eased a bit in some locations, they are still well above where they were before the conflict. And with no end in sight to the closure of the Strait of Hormuz that has effectively blocked the daily transit of 20% of the world’s oil supplies, the specter of bunker fuel shortages loom , something that would add further upward pressure on prices. When bunker fuel prices are stable, the traditional BAF quarterly reset works fine for both carriers and their customers, said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. But with some carriers now adjusting bunker prices monthly while adding seemingly open-ended emergency bunker surcharges to the equation, importers and forwarders are at an obvious disadvantage, Shames said “If the surcharge goes up, it should be able to come down when bunkers come down. It’s gotten very confusing,” she said. The more frequent changes in BAFs and EBSs now make it more difficult for forwarders to price their services to their clients in a timely manner, said Ben Coleman, president of forwarder Teampower Logistics. “You just have to accept that [carriers] will adjust their rates downward if bunker costs come down,” Coleman said. “Our main concern is that we want to remain competitive.” In the past, there was always a way to navigate through surcharges, said John Pace, senior manager for global logistics at Revelyst, an importer of outdoor gear. “You would circumvent those carriers that were penalizing you with higher costs,” Pace said. “But in this particular case, it seems to be widespread among most carriers. There doesn’t seem to be a strategy that allows you to navigate through this.” Different carriers, different approaches A trade director at a consumer products company that imports about 6,000 containers per year said his service contract talks are bogged down by the different approaches carriers are taking to surcharges and how they impact base rates. For example, the source said one major carrier is asking for a $300 emergency fuel surcharge on top of the regular BAF that applies on base rates. But the carrier has not made clear under what circumstances it will remove the fuel surcharge or how it was calculated, he said. Meanwhile, a second major liner is passing along fuel expenses on its carrier haulage moves through an “inland fuel surcharge,” the source said. The carrier provides a formula, albeit one he says is complicated, about how it is calculating the new fee. The second carrier is also presenting shippers with a choice on how their BAF will be calculated, either on a trailing three-month or one-month basis. So, shippers themselves can take the bet on whether they want to ride out fuel volatility for a longer period or benefit from a quick dip in oil prices. “It’s gotten really complicated with all these extra fuel costs,” the trade director said. “We were in line to get a good base rate reduction, but now that’s all hidden by the surcharges.” A national importer of home furnishings who is in his third round of service contract negotiations said importers must be diligent and persistent in talks with carriers to protect against unwanted surcharges. “We pushed back on the emergency bunker surcharges, and we did so successfully,” the source said. Contract extensions possible With less than two weeks left before most 2025–26 service contracts end and most 2026–27 contracts take effect, some importers are asking carriers to extend their current contracts at least until mid-May while negotiations on new deals continue. But that’s something that must be done on a carrier-by-carrier basis because not all liners are willing to extend the existing contracts, forwarders say. If a carrier refuses to extend the existing contract temporarily, importers will have to pay the current spot rate, which was $2,700 per FEU to the West Coast and $3,700 per FEU as of April 21, according to Platts, a sister company of the Journal of Commerce within S&P Global. Most midsize importers are currently paying in the range of $1,700 to $1,850 to the West Coast per their 2025–26 service contracts. “[Some] carriers are extending [existing contract] rates until mid-May,” Monroe said. An industry consultant who formerly served in logistics roles at big-box retailers said most of the larger retailers have finalized their 2026–27 service contracts or are ready to do so. However, smaller importers say they are meeting resistance from some carriers for escape clauses from emergency fuel surcharges. “The smaller ones, they don’t have any leverage,” the consultant said. “They’re at the mercy of the carriers.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .  Contact Michael Angell at michael.angell@spglobal.com .

Container Shipping News

Carriers’ handling of fuel surcharges agitates small, midsize trans-Pac shippers

<div class="phx-topic abstract-wrapper">The terminal operator and port authority will enter a one-year exclusivity period to explore jointly developing and operating the proposed mega terminal that would increase Vancouver’s capacity by 50%. </div>

The terminal operator and port authority will enter a one-year exclusivity period to explore jointly developing and operating the proposed mega terminal that would increase Vancouver’s capacity by 50%.

<div class="phx-topic">Global Container Terminals (GCT) and the Vancouver Fraser Port Authority (VFPA) will explore the possibility of jointly developing and operating the port’s proposed mega terminal, they announced Tuesday. GCT will also pull its request to develop a new berth at its main Vancouver terminal. GCT and the VFPA said in a joint statement they’ve signed a memorandum of understanding (MOU) for studying the development of the Roberts Bank Terminal 2. The MOU will allow the parties to work exclusively over a one-year period “to share information and negotiate in good faith” toward a final development agreement, they said. First scoped out in 2013, Roberts Bank 2 would provide an additional 2.4 million TEUs of capacity to Vancouver, which, by some estimates, would near full capacity by the 2030s. Vancouver has nominal capacity of 5 million TEUs currently. The project, for which the VFPA would fund the below-water work, <a href="https://www.joc.com/article/planned-vancouver-mega-container-terminal-wins-environmental-clearance-5217090">received environmental approval back in 2023 after a lengthy review</a>. The MOU also marks the official end of <a href="https://www.joc.com/article/vancouver-capacity-needs-spark-conflict-among-port-tenant-5223507">GCT’s own plan to expand Vancouver’s capacity</a> by adding a fourth berth to its Deltaport terminal. GCT had pitched the fourth berth that would add 2 million TEUs of capacity to Vancouver as a faster option than building a new terminal. However, GCT said that as part of the Roberts Bank MOU with the port authority, it has permanently withdrawn its application for developing the berth. “Increasing container capacity is essential to meeting future demand, improving supply chain resilience, and maintaining Canada’s global competitiveness,” the joint statement said. “The MOU reflects a shared commitment to strengthen Canada’s trade infrastructure by exploring opportunities for partnership to deliver RBT2 in a coordinated, efficient, and commercially viable manner.” The move by GCT and the VFPA to advance the terminal project comes amid Canada’s broader push to diversify its trade away from the US. <a href="https://www.joc.com/article/canada-looks-for-new-container-gateways-for-decoupling-from-us-6122714">Canada’s government has pledged that billions in funds</a> will be made available to trade-related infrastructure projects over the coming years. In the country’s east, the Port of Montreal has started land grading and below-water work on <a href="https://www.joc.com/article/dp-world-to-build-big-ship-container-terminal-in-montreal-6077326">its planned Contrecoeur container terminal</a>, which DP World is slated to co-develop and operate. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Global Container Terminals (GCT) and the Vancouver Fraser Port Authority (VFPA) will explore the possibility of jointly developing and operating the port’s proposed mega terminal, they announced Tuesday. GCT will also pull its request to develop a new berth at its main Vancouver terminal. GCT and the VFPA said in a joint statement they’ve signed a memorandum of understanding (MOU) for studying the development of the Roberts Bank Terminal 2. The MOU will allow the parties to work exclusively over a one-year period “to share information and negotiate in good faith” toward a final development agreement, they said. First scoped out in 2013, Roberts Bank 2 would provide an additional 2.4 million TEUs of capacity to Vancouver, which, by some estimates, would near full capacity by the 2030s. Vancouver has nominal capacity of 5 million TEUs currently. The project, for which the VFPA would fund the below-water work, received environmental approval back in 2023 after a lengthy review . The MOU also marks the official end of GCT’s own plan to expand Vancouver’s capacity by adding a fourth berth to its Deltaport terminal. GCT had pitched the fourth berth that would add 2 million TEUs of capacity to Vancouver as a faster option than building a new terminal. However, GCT said that as part of the Roberts Bank MOU with the port authority, it has permanently withdrawn its application for developing the berth. “Increasing container capacity is essential to meeting future demand, improving supply chain resilience, and maintaining Canada’s global competitiveness,” the joint statement said. “The MOU reflects a shared commitment to strengthen Canada’s trade infrastructure by exploring opportunities for partnership to deliver RBT2 in a coordinated, efficient, and commercially viable manner.” The move by GCT and the VFPA to advance the terminal project comes amid Canada’s broader push to diversify its trade away from the US. Canada’s government has pledged that billions in funds will be made available to trade-related infrastructure projects over the coming years. In the country’s east, the Port of Montreal has started land grading and below-water work on its planned Contrecoeur container terminal , which DP World is slated to co-develop and operate. Contact Michael Angell at michael.angell@spglobal.com .

GCT, Vancouver port to jointly study Roberts Bank terminal project

<div class="phx-topic abstract-wrapper">The possibility can’t be ruled out that carrier-controlled port operations will commence in the next few years at Charleston and Savannah, where the state-operated model has prevailed for decades.</div>

The possibility can’t be ruled out that carrier-controlled port operations will commence in the next few years at Charleston and Savannah, where the state-operated model has prevailed for decades.

<div class="phx-topic">Cargo routed through East Coast ports, including in the Southeast, will likely move increasingly through carrier-controlled terminals, the result of a long-term transformation of the regional port industry now in full swing. The possibility can’t be ruled out, for example, that carrier-controlled port operations will commence in the next few years at Charleston and Savannah, where the state-operated model has prevailed for decades. Meanwhile, Maher Terminals, the largest terminal at the Port of New York and New Jersey, <a href="https://www.joc.com/article/mahers-next-buyer-faces-billions-in-upgrades-decisions-on-capacity-6165792">is being prepped for sale</a> by Macquarie Infrastructure Partners with a possible price tag of $4 billion to $5 billion, according to one source, a sum within reach for terminal-hungry carriers flush with cash after a six-year run of profitability since the pandemic. A more favorable climate for expansion of carrier-controlled terminals along the East Coast stems from three main changes: deep-pocketed carriers aggressively pursuing terminal deals; favorable lease terms achieved by the Port of New York and New Jersey at multiple terminals, which is inspiring other East Coast ports to consider similar deals; and clarity around the dockworker union gaining jobs at new terminals once they are opened. That means the Savannah Container Terminal being developed across the river from the Georgia Ports Authority’s (GPA’s) sprawling Garden City Terminal as a newly opened facility is guaranteed to be manned by workers represented by the International Longshoremen’s Association (ILA) under the current collective bargaining agreement. Because the state cannot, by law, employ unionized dockworkers directly, the facility may be leased out to a third-party operator, possibly one aligned to an ocean carrier. It also means the Hugh Leatherman terminal at Charleston, <a href="https://www.joc.com/article/sc-ports-strikes-deal-with-ila-to-fully-open-leatherman-marine-terminal-5192280">where the port waged an unsuccessful legal battle to keep the ILA out</a>, could fall into the hands of a carrier under a lease process being considered by the port. In Baltimore, Mediterranean Shipping Co.’s Terminal Investment Limited (TiL) is a partner in a project to develop Sparrows Point, a former industrial site, into a 165-acre terminal. <h3>Terminals mean stable, profitable assets </h3>Ultimately, carrier investment in East Coast terminals will expand capacity in a region that has seen little of it while providing shippers in certain cases with the potential for improved service stemming from carriers’ direct control over their facilities. For carriers, controlling terminals means investing in typically stable and profitable assets made more attractive by their own volumes, as well as priority berthing and cargo handling rates. Carriers directing ships and volumes to their own facilities put the ports where they are located at an advantage versus those ports where carriers are just customers. The natural strategic alignment between carriers and terminals is why carrier-controlled facilities go back years. At New York-New Jersey, such operations go back to the origins of container shipping in the late 1950s. Maersk has been a terminal operator at the port since the 1970s, while OOCL controlled Howland Hook on Staten Island from 1995 to 2006. In pursuing terminal deals, carriers are hardly dissuaded by a 62% pay increase achieved by dockworkers <a href="https://www.joc.com/article/ila-ratifies-new-six-year-deal-with-higher-entry-pay-automation-protection-5951338">in the last contract ratified in early 2025</a>, nor their inability in the US market to collect terminal handling charges to offset what many carriers say are the highest longshore costs in the world. <h3>Southeast ports noticing recent NY-NJ success </h3>Recent deals at NY-NJ that have been favorable to the port have caught the attention of ports in the Southeast. The 2023 sale of Global Container Terminals’ <a href="https://www.joc.com/article/cma-cgm-closes-deal-for-two-new-york-new-jersey-marine-terminals-5226315">Bayonne and Howland Hook terminals to CMA CGM</a>, which outbid other carriers including Hapag-Lloyd, was noteworthy because it committed the world’s third-largest carrier to infrastructure improvements, normally the responsibility of the port, while CMA CGM also agreed to share detention and demurrage revenues with the port authority. Macquarie in December of last year <a href="https://www.joc.com/article/macquarie-seals-deal-for-new-maher-lease-at-nynj-through-2063-6137751">renewed its lease for Maher terminals through 2063</a>, agreeing to terms that include responsibility for upkeep of its wharves and berths, while committing to increase capacity at the largest East Coast port by volume. That lease renewal will set the stage for a formal sale process now getting underway, according to multiple sources. While NY-NJ is in a strong negotiating position due to the lack of efficient alternatives to serve the large and wealthy New York metropolitan region, how much leverage other ports will have is an open question. For example, allowing an independent or carrier-controlled terminal operator free reign to compete for cargo could undermine states’ common user ports, yet curtailing their activities within lease terms could make those leases less attractive, sources tell JOC.com. For NY-NJ, the lease terms demanded in return for approving the CMA-CGM purchase stem from the 2000 effort by what was then called Maersk Sealand to bid out its East Coast hub operations, which ultimately secured a favorable lease at New York-New Jersey. According to one source, the controversial move by the carrier led to below-market lease rates that the port was determined to reverse in recent lease negotiations and sale approvals. Such insistence by the port <a href="https://www.stattimes.com/news/apm-terminals-to-retain-full-ownership-of-port-elizabeth-facility">led to the 2014 collapse of a deal by APM Terminals</a> to sell a stake in its Elizabeth terminal to Brookfield, an infrastructure investor. At Savannah, GPA President and CEO Griff Lynch said in an interview that the port authority is hoping to secure a permit for Savannah Container Terminal this year, with construction slated to begin a few years later in advance of the facility going online sometime in the early 2030s, depending on an assessment of demand. Lynch said the port is exploring a “partnership” approach whereby the GPA becomes a landlord, leasing the terminal to a third-party terminal operator, not an operator closely aligned to the port similar to the approach at the Port of Virginia, where the port owns the terminal operator, Virginia International Terminals. There would be less concern about the possibility of a third-party operator aggressively competing with Garden City, he said, if the overall result is more cargo, jobs and economic development opportunity for the state of Georgia. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Cargo routed through East Coast ports, including in the Southeast, will likely move increasingly through carrier-controlled terminals, the result of a long-term transformation of the regional port industry now in full swing. The possibility can’t be ruled out, for example, that carrier-controlled port operations will commence in the next few years at Charleston and Savannah, where the state-operated model has prevailed for decades. Meanwhile, Maher Terminals, the largest terminal at the Port of New York and New Jersey, is being prepped for sale by Macquarie Infrastructure Partners with a possible price tag of $4 billion to $5 billion, according to one source, a sum within reach for terminal-hungry carriers flush with cash after a six-year run of profitability since the pandemic. A more favorable climate for expansion of carrier-controlled terminals along the East Coast stems from three main changes: deep-pocketed carriers aggressively pursuing terminal deals; favorable lease terms achieved by the Port of New York and New Jersey at multiple terminals, which is inspiring other East Coast ports to consider similar deals; and clarity around the dockworker union gaining jobs at new terminals once they are opened. That means the Savannah Container Terminal being developed across the river from the Georgia Ports Authority’s (GPA’s) sprawling Garden City Terminal as a newly opened facility is guaranteed to be manned by workers represented by the International Longshoremen’s Association (ILA) under the current collective bargaining agreement. Because the state cannot, by law, employ unionized dockworkers directly, the facility may be leased out to a third-party operator, possibly one aligned to an ocean carrier. It also means the Hugh Leatherman terminal at Charleston, where the port waged an unsuccessful legal battle to keep the ILA out , could fall into the hands of a carrier under a lease process being considered by the port. In Baltimore, Mediterranean Shipping Co.’s Terminal Investment Limited (TiL) is a partner in a project to develop Sparrows Point, a former industrial site, into a 165-acre terminal. Terminals mean stable, profitable assets Ultimately, carrier investment in East Coast terminals will expand capacity in a region that has seen little of it while providing shippers in certain cases with the potential for improved service stemming from carriers’ direct control over their facilities. For carriers, controlling terminals means investing in typically stable and profitable assets made more attractive by their own volumes, as well as priority berthing and cargo handling rates. Carriers directing ships and volumes to their own facilities put the ports where they are located at an advantage versus those ports where carriers are just customers. The natural strategic alignment between carriers and terminals is why carrier-controlled facilities go back years. At New York-New Jersey, such operations go back to the origins of container shipping in the late 1950s. Maersk has been a terminal operator at the port since the 1970s, while OOCL controlled Howland Hook on Staten Island from 1995 to 2006. In pursuing terminal deals, carriers are hardly dissuaded by a 62% pay increase achieved by dockworkers in the last contract ratified in early 2025 , nor their inability in the US market to collect terminal handling charges to offset what many carriers say are the highest longshore costs in the world. Southeast ports noticing recent NY-NJ success Recent deals at NY-NJ that have been favorable to the port have caught the attention of ports in the Southeast. The 2023 sale of Global Container Terminals’ Bayonne and Howland Hook terminals to CMA CGM , which outbid other carriers including Hapag-Lloyd, was noteworthy because it committed the world’s third-largest carrier to infrastructure improvements, normally the responsibility of the port, while CMA CGM also agreed to share detention and demurrage revenues with the port authority. Macquarie in December of last year renewed its lease for Maher terminals through 2063 , agreeing to terms that include responsibility for upkeep of its wharves and berths, while committing to increase capacity at the largest East Coast port by volume. That lease renewal will set the stage for a formal sale process now getting underway, according to multiple sources. While NY-NJ is in a strong negotiating position due to the lack of efficient alternatives to serve the large and wealthy New York metropolitan region, how much leverage other ports will have is an open question. For example, allowing an independent or carrier-controlled terminal operator free reign to compete for cargo could undermine states’ common user ports, yet curtailing their activities within lease terms could make those leases less attractive, sources tell JOC.com. For NY-NJ, the lease terms demanded in return for approving the CMA-CGM purchase stem from the 2000 effort by what was then called Maersk Sealand to bid out its East Coast hub operations, which ultimately secured a favorable lease at New York-New Jersey. According to one source, the controversial move by the carrier led to below-market lease rates that the port was determined to reverse in recent lease negotiations and sale approvals. Such insistence by the port led to the 2014 collapse of a deal by APM Terminals to sell a stake in its Elizabeth terminal to Brookfield, an infrastructure investor. At Savannah, GPA President and CEO Griff Lynch said in an interview that the port authority is hoping to secure a permit for Savannah Container Terminal this year, with construction slated to begin a few years later in advance of the facility going online sometime in the early 2030s, depending on an assessment of demand. Lynch said the port is exploring a “partnership” approach whereby the GPA becomes a landlord, leasing the terminal to a third-party terminal operator, not an operator closely aligned to the port similar to the approach at the Port of Virginia, where the port owns the terminal operator, Virginia International Terminals. There would be less concern about the possibility of a third-party operator aggressively competing with Garden City, he said, if the overall result is more cargo, jobs and economic development opportunity for the state of Georgia. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

More carrier-controlled terminal operations could be coming to the East Coast

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Quarterly Intelligence

<div class="phx-topic abstract-wrapper">The ocean carrier said switching up Asia and US East Coast rotations on three trans-Pacific services will provide more reliability and consistency. </div>

The ocean carrier said switching up Asia and US East Coast rotations on three trans-Pacific services will provide more reliability and consistency.

<div class="phx-topic">Mediterranean Shipping Co. is reworking its trans-Pacific network starting next month to offer more reliable, direct China services into US Northeast and Southeast ports, while providing coastwide direct service from Southeast Asia. MSC said in a Thursday customer advisory that it is changing some port calls on its three main East Coast services to “enhance service reliability and schedule stability.” The new networks consolidate some China calls and will change some calls to Florida ports. MSC’s Empire Service will drop a Qingdao call, with the service now only calling Shanghai, Ningbo and Busan on the front haul. Empire’s US rotation will drop the ports of Jacksonville and Miami in favor of calls to Norfolk and Port Everglades on the backhaul. The service’s new rotation will commence with the scheduled May 27 departure of the 6,178-TEU MSC Leo VI from Shanghai. The carrier said Empire would be “less exposed to port congestion risks” due to the rotation change. Qingdao will be added to MSC’s Amberjack service into the US Southeast. However, MSC will no longer provide direct service from Yantian and Xiamen but instead focus the service on northeast Asia ports. The service will also replace a call to Norfolk with a call to Jacksonville. MSC said the Amberjack changes would improve transit times and network stability. The new rotation goes into effect with the service’s estimated May 20 departure from Qingdao. MSC also said it would rework its Emerald service from Southeast Asia to drop a call to Taiwan’s Kaohsiung in favor of Xiamen, providing a direct service from that port into the largest US East Coast ports. The new rotation is expected to take effect with the May 18 departure from Singapore of the 7,000-TEU Zim Topaz. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Mediterranean Shipping Co. is reworking its trans-Pacific network starting next month to offer more reliable, direct China services into US Northeast and Southeast ports, while providing coastwide direct service from Southeast Asia. MSC said in a Thursday customer advisory that it is changing some port calls on its three main East Coast services to “enhance service reliability and schedule stability.” The new networks consolidate some China calls and will change some calls to Florida ports. MSC’s Empire Service will drop a Qingdao call, with the service now only calling Shanghai, Ningbo and Busan on the front haul. Empire’s US rotation will drop the ports of Jacksonville and Miami in favor of calls to Norfolk and Port Everglades on the backhaul. The service’s new rotation will commence with the scheduled May 27 departure of the 6,178-TEU MSC Leo VI from Shanghai. The carrier said Empire would be “less exposed to port congestion risks” due to the rotation change. Qingdao will be added to MSC’s Amberjack service into the US Southeast. However, MSC will no longer provide direct service from Yantian and Xiamen but instead focus the service on northeast Asia ports. The service will also replace a call to Norfolk with a call to Jacksonville. MSC said the Amberjack changes would improve transit times and network stability. The new rotation goes into effect with the service’s estimated May 20 departure from Qingdao. MSC also said it would rework its Emerald service from Southeast Asia to drop a call to Taiwan’s Kaohsiung in favor of Xiamen, providing a direct service from that port into the largest US East Coast ports. The new rotation is expected to take effect with the May 18 departure from Singapore of the 7,000-TEU Zim Topaz. Contact Michael Angell at michael.angell@spglobal.com .

MSC revamps Asia-USEC network

<div class="phx-topic abstract-wrapper">The Port Authority of New York and New Jersey is revising the excess empty container fee in place since 2023 as off-dock depots become the focal point of trucker ire.</div>

The Port Authority of New York and New Jersey is revising the excess empty container fee in place since 2023 as off-dock depots become the focal point of trucker ire.

<div class="phx-topic">The Port of New York and New Jersey is expanding the fee it charges ocean carriers for long-dwelling empty containers to include off-dock depots outside of the port, a move that comes as port truckers face increasingly long and frequent delays when returning empties. But trucking interests question whether the now three-year-old fee will ever effectively address the port’s bouts of empties congestion, which impacts shippers downstream through delayed container returns and detention costs. In an April 1 email, the Port Authority of New York and New Jersey (PANYNJ) notified ocean carriers and other stakeholders about the revised marine tariff that will go into effect May 1. One of biggest changes to the tariff is in the “container imbalance fee,” which <a href="https://www.joc.com/article/ny-nj-readies-revised-fee-plan-for-long-dwelling-empties-5194202">the port first instituted in 2023</a> to incentivize ocean carriers to remove <a href="https://www.joc.com/article/carriers-need-to-sweep-up-ny-nj-empties-fmcs-maffei-5204204">the pandemic-era backlog of empty containers</a> at NY-NJ. Along with new language that says ocean carriers must “proactively and regularly manage” their empty container inventories, the revised tariff also references empties lingering at “nearby depots” along with marine terminals on PANYNJ property. The PANYNJ said the container imbalance fee always considered empty containers at off-port depots, even if not explicitly stated in the original tariff. Port Director Bethann Rooney said in a statement the revised tariff reinforces the imbalance fee program, which also has a new formula for calculating the excess empties that face the $100-per-container fee. “The container imbalance fee is a key tool, helping reduce congestion caused by excess empty containers,” Rooney said. “This ... update strengthens the programs with clearer terms and greater accountability, ensuring our port remains one of the most reliable and fluid gateways in the country.” <h3>Hundreds of trucks turned away </h3>The trouble for truckers, though, is reliability and fluidity just outside of the port. APM Terminals contracted with one off-dock facility, Port Newark Depot (PND), in February 2025 to handle the empties from Maersk and Hapag-Lloyd as they started services under the Gemini Cooperation alliance. APM said in a statement the off-dock empty yard “helps preserve on-terminal space for full cargo moves and reduces gate congestion ... while giving truckers the flexibility to pick up empties for export and return them off-terminal when appointments are constrained.” However, Port Newark Depot also faces bouts of congestion and delays that have been frustrating truckers. “The on-street backups waiting to enter the depot have remained significant,” the Association of Bi-State Motor Carriers said in its April newsletter, “Desperate truckers often line up several hours before the depot opens, contributing to the backups and causing traffic delays.” While sporadic, Bi-State President Lisa Yakomin said motor carriers have reported that drivers face four- and five-hour wait times to get into Port Newark Depot, putting truckers at risk of running out of service hours. Yakomin said Port Newark Depot is trying to manage the truck queues with a few relief measures, including signs showing the waiting times, adding another container handling machine, and providing return instructions to drivers the day prior. But the sheer volume of empties can still overwhelm the 12-acre facility. Yakomin said a three-mile-long line of approximately 500 trucks was turned away from returning empties on April 10 because Port Newark Depot was full by late afternoon. “APM chronically runs out of appointments for returning empties, so PND is taking the overflow,” Yakomin said. “But if the marine terminal can’t handle it, how can a single depot? Expecting one depot to absorb the empties is unrealistic.” To address the overflow, APM said in a notice last week to truckers that an additional PND lot will be open for receiving Maersk and Hapag-Lloyd empties. The additional four-acre site can handle between 1,600 and 2,000 empty containers. Port truckers have also been directed to a recently opened 35-acre site, World Wide Depot, for returning empty containers belonging to Zim Integrated Shipping Services. That site is on the same plot of land as PND. But Yakomin said more off-dock space for empties will just mean more off-dock congestion. The issue is being exacerbated by instances of truckers receiving conflicting empty return information from an ocean carrier and a marine terminal, she said, adding to motor carrier costs by sending truckers on dry runs. “The more room you give the ocean carriers to dump their empties and let them languish, they will use it,” Yakomin said. <h3>Next step could be FMC </h3>The PANYNJ said in its statement that “while [the current imbalance fee] has been largely effective, some congestion has taken place if and when ocean carriers allow containers to accumulate to a critical point.” To avoid that, the PANYNJ said the new tariff shortens the evaluation period for determining excess empties from one year to six months. However, Yakomin said it is not clear if that represents any improvement, given the previous tariff referenced a quarterly period for assessing excess empties. Despite the previous tariff being in effect since 2023, the port still has bouts of empty congestion, Yakomin said. “The ocean carriers need to be held accountable for not removing their empties in a timely manner,” she said. As for updating the imbalance fee program, “that’s a little too late.” Yakomin said the next recourse is through the US Federal Maritime Commission, which might have leverage into the issue due to <a href="https://www.joc.com/article/stakeholders-sorting-out-per-diem-bills-under-new-fmc-rules-5192186">the billing questions raised by empty returns</a>. She said it is not clear whether ocean carriers are charging shippers detention on an empty container that had a return location but was full. Inconsistent empty return instructions would also appear to violate FMC rules on providing accurate billing information. Moreover, motor carriers still face being shut out of marine terminals for unpaid detention bills, Yakomin added, a further violation of FMC billing rules. “We would like the FMC to take a look at incorrect billing, but also more clearly define accessibility for an empty return location,” she said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Port of New York and New Jersey is expanding the fee it charges ocean carriers for long-dwelling empty containers to include off-dock depots outside of the port, a move that comes as port truckers face increasingly long and frequent delays when returning empties. But trucking interests question whether the now three-year-old fee will ever effectively address the port’s bouts of empties congestion, which impacts shippers downstream through delayed container returns and detention costs. In an April 1 email, the Port Authority of New York and New Jersey (PANYNJ) notified ocean carriers and other stakeholders about the revised marine tariff that will go into effect May 1. One of biggest changes to the tariff is in the “container imbalance fee,” which the port first instituted in 2023 to incentivize ocean carriers to remove the pandemic-era backlog of empty containers at NY-NJ. Along with new language that says ocean carriers must “proactively and regularly manage” their empty container inventories, the revised tariff also references empties lingering at “nearby depots” along with marine terminals on PANYNJ property. The PANYNJ said the container imbalance fee always considered empty containers at off-port depots, even if not explicitly stated in the original tariff. Port Director Bethann Rooney said in a statement the revised tariff reinforces the imbalance fee program, which also has a new formula for calculating the excess empties that face the $100-per-container fee. “The container imbalance fee is a key tool, helping reduce congestion caused by excess empty containers,” Rooney said. “This ... update strengthens the programs with clearer terms and greater accountability, ensuring our port remains one of the most reliable and fluid gateways in the country.” Hundreds of trucks turned away The trouble for truckers, though, is reliability and fluidity just outside of the port. APM Terminals contracted with one off-dock facility, Port Newark Depot (PND), in February 2025 to handle the empties from Maersk and Hapag-Lloyd as they started services under the Gemini Cooperation alliance. APM said in a statement the off-dock empty yard “helps preserve on-terminal space for full cargo moves and reduces gate congestion ... while giving truckers the flexibility to pick up empties for export and return them off-terminal when appointments are constrained.” However, Port Newark Depot also faces bouts of congestion and delays that have been frustrating truckers. “The on-street backups waiting to enter the depot have remained significant,” the Association of Bi-State Motor Carriers said in its April newsletter, “Desperate truckers often line up several hours before the depot opens, contributing to the backups and causing traffic delays.” While sporadic, Bi-State President Lisa Yakomin said motor carriers have reported that drivers face four- and five-hour wait times to get into Port Newark Depot, putting truckers at risk of running out of service hours. Yakomin said Port Newark Depot is trying to manage the truck queues with a few relief measures, including signs showing the waiting times, adding another container handling machine, and providing return instructions to drivers the day prior. But the sheer volume of empties can still overwhelm the 12-acre facility. Yakomin said a three-mile-long line of approximately 500 trucks was turned away from returning empties on April 10 because Port Newark Depot was full by late afternoon. “APM chronically runs out of appointments for returning empties, so PND is taking the overflow,” Yakomin said. “But if the marine terminal can’t handle it, how can a single depot? Expecting one depot to absorb the empties is unrealistic.” To address the overflow, APM said in a notice last week to truckers that an additional PND lot will be open for receiving Maersk and Hapag-Lloyd empties. The additional four-acre site can handle between 1,600 and 2,000 empty containers. Port truckers have also been directed to a recently opened 35-acre site, World Wide Depot, for returning empty containers belonging to Zim Integrated Shipping Services. That site is on the same plot of land as PND. But Yakomin said more off-dock space for empties will just mean more off-dock congestion. The issue is being exacerbated by instances of truckers receiving conflicting empty return information from an ocean carrier and a marine terminal, she said, adding to motor carrier costs by sending truckers on dry runs. “The more room you give the ocean carriers to dump their empties and let them languish, they will use it,” Yakomin said. Next step could be FMC The PANYNJ said in its statement that “while [the current imbalance fee] has been largely effective, some congestion has taken place if and when ocean carriers allow containers to accumulate to a critical point.” To avoid that, the PANYNJ said the new tariff shortens the evaluation period for determining excess empties from one year to six months. However, Yakomin said it is not clear if that represents any improvement, given the previous tariff referenced a quarterly period for assessing excess empties. Despite the previous tariff being in effect since 2023, the port still has bouts of empty congestion, Yakomin said. “The ocean carriers need to be held accountable for not removing their empties in a timely manner,” she said. As for updating the imbalance fee program, “that’s a little too late.” Yakomin said the next recourse is through the US Federal Maritime Commission, which might have leverage into the issue due to the billing questions raised by empty returns . She said it is not clear whether ocean carriers are charging shippers detention on an empty container that had a return location but was full. Inconsistent empty return instructions would also appear to violate FMC rules on providing accurate billing information. Moreover, motor carriers still face being shut out of marine terminals for unpaid detention bills, Yakomin added, a further violation of FMC billing rules. “We would like the FMC to take a look at incorrect billing, but also more clearly define accessibility for an empty return location,” she said. Contact Michael Angell at michael.angell@spglobal.com .

NY-NJ updating port tariff to combat rising backlog of empty boxes

<div class="phx-topic abstract-wrapper">The less-than-truckload market is stabilizing, with opportunities for higher prices and profits in the second quarter, but the long-term outlook is still clouded by tariffs and geopolitical conflict.</div>

The less-than-truckload market is stabilizing, with opportunities for higher prices and profits in the second quarter, but the long-term outlook is still clouded by tariffs and geopolitical conflict.

<div class="phx-topic">Fast-rising fuel costs and a long-awaited uptick in demand are pushing less-than-truckload (LTL) pricing toward record highs, adding to shipper supply chain costs. Even if fuel costs drop in coming weeks, shippers shouldn’t expect LTL rates to follow. Both the TD Cowen/AFS LTL Freight Index and the US long-haul LTL producer price index (PPI) last week jumped to record highs, with no sign of decline ahead. Anecdotal reports show daily shipment counts turning north after a long decline in 2024 and 2025. The LTL PPI rose 1.8% in March from February after climbing 0.8% month over month in February and 1.3% in January. On an annualized basis, the PPI rose 7.2% in March, compared with 5.3% and 5.2% year-over-year gains in February and January, respectively. The PPI is a measure of all-inclusive “selling prices,” and fuel surcharges certainly contributed to March’s gain. But LTL costs and rates have remained elevated since 2022, with carrier yield management balancing reduced volumes, according to AFS Logistics.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="8afcfdff-15ff-4ec3-8c50-af1aba47062e"></dynamic-object></div>Although the TD Cowen/AFS LTL Freight Index dropped slightly from the fourth quarter to the first quarter, the index rose year over year and is expected to climb to a new four-year high of 68.4% in the second quarter. “The LTL carriers are in a very unique position — their buckets are being filled from both ends,” said Andy Dyer, CEO of AFS, a third-party freight management company. Those “ends” are the truckload and parcel markets, both of which have seen substantial rate hikes, Dyer said. That’s pushing more freight to the LTL sector. Shippers are “managing the freight, not just paying the freight,” he said. That means they’re more willing to deconsolidate truckload shipments and consolidate parcel moves, and LTL rates that looked high last year now seem more reasonable. <h3>Persistent uncertainty </h3>It’s not clear if the increase in LTL demand will be long-lasting or short-term, or whether it signals a stronger industrial revival or tariff-related inventory reshuffling. For now, the LTL outlook — for providers — is brighter. At regional carrier Pitt Ohio, “bill count is picking up and now revenue is, too,” said Geoff Muessig, the company’s chief marketing officer. In the Northeast, the year got off to an “uneven start,” as successive winter storms swept the region, he said. In February, the Pittsburgh-based carrier saw better results, and demand got stronger in March through the start of the second quarter, Muessig said. “April’s bill count is solid,” he said. “Our same-store sales [shipments with existing customers] are rising. It’s a pleasant place to be.” The change is not a return to the heady years of 2021 through 2023, when post-COVID-19 demand and disruption from <a href="https://www.joc.com/article/ongoing-yellow-terminal-auction-seen-reshaping-a-smaller-us-ltl-sector-5200878">the failure of LTL provider Yellow</a> sent pricing up by double-digit percentages. But it’s a respite from the freight doldrums of 2023 to 2025. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="92fdaed8-3fc0-4c2e-930f-c63d25bb8976"></dynamic-object></div>An industrial uptick benefiting Pitt Ohio shows in Manufacturing Purchasing Managers’ Indexes (PMIs) from the Institute of Supply Management (ISM) and S&amp;P Global. The ISM PMI rose 0.3 percentage point to 52.7% in March, the third month for the PMI above the 50% no-change mark. ISM’s new order index remained positive but dropped from 55.8% in February to 53.5% last month. ISM’s production index was 55.1%. The S&amp;P Global US Manufacturing PMI has been above 50% since last August, and higher output and new orders pushed it up 0.7 percentage point to 52.3% in March. That gradual industrial expansion is putting more freight in LTL trailers. XPO and Saia, the US’ fourth- and sixth-largest LTL providers, respectively, both reported an annualized gain in daily shipments in February. Full first-quarter data will be available later this month. Daily shipment counts at FedEx Freight, the largest US LTL provider in terms of revenue, have fallen 14% since 2023 and dropped 5.7% year over year in the quarter that ended Feb. 28. But the company expects volume to grow again in the midterm. “There are absolutely GDP [gross domestic product] and PMI correlations, and as the market goes, we’ll feel that impact,” CFO Marshall W. Witt said during an <a href="https://www.joc.com/article/fedex-freight-plans-diversification-as-spin-off-date-approaches-6201281">April 8 investor day presentation</a> to Wall Street analysts. Carriers are vying more for profit than revenue or pure market share. “Profitable growth is now our North Star,” Witt said. “It aligns our decision-making in our organization around profitability rather than just revenue in isolation.” But they’re also looking for new sources of freight, beyond traditional industrial LTL shippers. LTL providers such as FedEx Freight are adjusting their freight mix, said AFS’ Dyer. “We’re seeing some mix changes in the stuff we’re handing to the LTLs,” he said. <h3>‘Not time to add capacity’ </h3>How long current volume trends will continue is an open question. The LTL market has improved, “but it’s a combination of truckload capacity coming out plus the fuel prices,” said Satish Jindel, president of SJ Consulting Group. “LTL carriers should be looking at this as a perfect time to ask how they can use the various forms of technology available right now, including AI [artificial intelligence], to handle more freight with the same physical network,” Jindel said. “It’s not a time to add capacity.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="16105334-c54a-4d51-9403-6d5bac8369c4"></dynamic-object></div>There are signs that higher LTL volume comes from inventory rebalancing, not new demand, said Keith Prather, managing director of Armada Corporate Intelligence. The US-Israel conflict with Iran may squeeze already lean inventories, putting pressure on supply chains and inbound freight, both globally and domestically, Prather said. “I’m not calling for a global supply chain crisis, but I do think stock-outs and some scrambling will take place over the next few quarters,” he said. The closure of the Strait of Hormuz “killed everything way upstream,” Prather said. “All of a sudden, you get inventories that are too lean.” That could spur demand but also crimp production and shipments. “Q2 has the potential to be robust, but do we pay for it in Q3?” he said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Fast-rising fuel costs and a long-awaited uptick in demand are pushing less-than-truckload (LTL) pricing toward record highs, adding to shipper supply chain costs. Even if fuel costs drop in coming weeks, shippers shouldn’t expect LTL rates to follow. Both the TD Cowen/AFS LTL Freight Index and the US long-haul LTL producer price index (PPI) last week jumped to record highs, with no sign of decline ahead. Anecdotal reports show daily shipment counts turning north after a long decline in 2024 and 2025. The LTL PPI rose 1.8% in March from February after climbing 0.8% month over month in February and 1.3% in January. On an annualized basis, the PPI rose 7.2% in March, compared with 5.3% and 5.2% year-over-year gains in February and January, respectively. The PPI is a measure of all-inclusive “selling prices,” and fuel surcharges certainly contributed to March’s gain. But LTL costs and rates have remained elevated since 2022, with carrier yield management balancing reduced volumes, according to AFS Logistics. Although the TD Cowen/AFS LTL Freight Index dropped slightly from the fourth quarter to the first quarter, the index rose year over year and is expected to climb to a new four-year high of 68.4% in the second quarter. “The LTL carriers are in a very unique position — their buckets are being filled from both ends,” said Andy Dyer, CEO of AFS, a third-party freight management company. Those “ends” are the truckload and parcel markets, both of which have seen substantial rate hikes, Dyer said. That’s pushing more freight to the LTL sector. Shippers are “managing the freight, not just paying the freight,” he said. That means they’re more willing to deconsolidate truckload shipments and consolidate parcel moves, and LTL rates that looked high last year now seem more reasonable. Persistent uncertainty It’s not clear if the increase in LTL demand will be long-lasting or short-term, or whether it signals a stronger industrial revival or tariff-related inventory reshuffling. For now, the LTL outlook — for providers — is brighter. At regional carrier Pitt Ohio, “bill count is picking up and now revenue is, too,” said Geoff Muessig, the company’s chief marketing officer. In the Northeast, the year got off to an “uneven start,” as successive winter storms swept the region, he said. In February, the Pittsburgh-based carrier saw better results, and demand got stronger in March through the start of the second quarter, Muessig said. “April’s bill count is solid,” he said. “Our same-store sales [shipments with existing customers] are rising. It’s a pleasant place to be.” The change is not a return to the heady years of 2021 through 2023, when post-COVID-19 demand and disruption from the failure of LTL provider Yellow sent pricing up by double-digit percentages. But it’s a respite from the freight doldrums of 2023 to 2025. An industrial uptick benefiting Pitt Ohio shows in Manufacturing Purchasing Managers’ Indexes (PMIs) from the Institute of Supply Management (ISM) and S&P Global. The ISM PMI rose 0.3 percentage point to 52.7% in March, the third month for the PMI above the 50% no-change mark. ISM’s new order index remained positive but dropped from 55.8% in February to 53.5% last month. ISM’s production index was 55.1%. The S&P Global US Manufacturing PMI has been above 50% since last August, and higher output and new orders pushed it up 0.7 percentage point to 52.3% in March. That gradual industrial expansion is putting more freight in LTL trailers. XPO and Saia, the US’ fourth- and sixth-largest LTL providers, respectively, both reported an annualized gain in daily shipments in February. Full first-quarter data will be available later this month. Daily shipment counts at FedEx Freight, the largest US LTL provider in terms of revenue, have fallen 14% since 2023 and dropped 5.7% year over year in the quarter that ended Feb. 28. But the company expects volume to grow again in the midterm. “There are absolutely GDP [gross domestic product] and PMI correlations, and as the market goes, we’ll feel that impact,” CFO Marshall W. Witt said during an April 8 investor day presentation to Wall Street analysts. Carriers are vying more for profit than revenue or pure market share. “Profitable growth is now our North Star,” Witt said. “It aligns our decision-making in our organization around profitability rather than just revenue in isolation.” But they’re also looking for new sources of freight, beyond traditional industrial LTL shippers. LTL providers such as FedEx Freight are adjusting their freight mix, said AFS’ Dyer. “We’re seeing some mix changes in the stuff we’re handing to the LTLs,” he said. ‘Not time to add capacity’ How long current volume trends will continue is an open question. The LTL market has improved, “but it’s a combination of truckload capacity coming out plus the fuel prices,” said Satish Jindel, president of SJ Consulting Group. “LTL carriers should be looking at this as a perfect time to ask how they can use the various forms of technology available right now, including AI [artificial intelligence], to handle more freight with the same physical network,” Jindel said. “It’s not a time to add capacity.” There are signs that higher LTL volume comes from inventory rebalancing, not new demand, said Keith Prather, managing director of Armada Corporate Intelligence. The US-Israel conflict with Iran may squeeze already lean inventories, putting pressure on supply chains and inbound freight, both globally and domestically, Prather said. “I’m not calling for a global supply chain crisis, but I do think stock-outs and some scrambling will take place over the next few quarters,” he said. The closure of the Strait of Hormuz “killed everything way upstream,” Prather said. “All of a sudden, you get inventories that are too lean.” That could spur demand but also crimp production and shipments. “Q2 has the potential to be robust, but do we pay for it in Q3?” he said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

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