<div class="phx-topic abstract-wrapper">Gov. Gavin Newsom has until Sunday to sign or veto a bill that ocean carriers and terminal operators say would derail current and future attempts to automate cargo-handling operations in the name of reducing stress on the state’s power grid. </div>

Gov. Gavin Newsom has until Sunday to sign or veto a bill that ocean carriers and terminal operators say would derail current and future attempts to automate cargo-handling operations in the name of reducing stress on the state’s power grid.

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<div class="phx-topic">Whether or not ports in California can continue to automate seemingly hinges on whether Gov. Gavin Newsom signs legislation that would, in effect, render the equipment unusable. SB 34 is a state bill that would ban current and future automated or remotely operated technology used at California ports from plugging into the state’s power grid. The legislation, which is supported primarily by dockworkers, has already been approved by both houses of the California Legislature and awaits action by Newsom, who has until Sunday to sign or veto the bill. But terminal operators and shipping lines say the bill would undermine the billions of dollars already invested in marine terminal automation and likely threaten future investment in cargo-handling efficiency. Mike Jacob, president of the Pacific Merchant Shipping Association (PMSA), which represents terminal operators and container lines that call at West Coast ports, told the Journal of Commerce Wednesday the bill’s supporters are pitching it as an environmental effort to reduce demand on the power grid, when in reality it is intended to block any automation that labor interests see as threatening to dockworker jobs. “This is ILWU’s priority bill,” Jacob said of the International Longshore and Warehouse Union. Jacob also said the bill is vague and its language is so expansive that it could impact present and future funding from local, state and federal sources for port-related equipment, including charging infrastructure for zero-emission cargo-handling equipment and battery-electric trucks. Long Beach Container Terminal and TraPac in Los Angeles are the West Coast’s only fully automated container terminals. The APM terminal in Los Angeles is partially automated. So far, more than $2 billion has been invested in developing automated facilities, zero-emission cargo handling equipment and charging infrastructure in Southern California. The ports of Los Angeles and Long Beach did not respond to requests for comment. <h3>Bill ‘undermines’ labor agreement </h3>The Pacific Maritime Association (PMA), which represents terminal operators and shipping lines in negotiating coastwide labor contracts with the ILWU, emphasized in a Sept. 18 letter to Newsom that SB 34 “directly undermines the collective bargaining agreement between PMA and the ILWU.” PMA noted that dating back to the 2008 coastwide contract, the labor agreements “explicitly permitted automation in exchange for steep wage hikes, $100,000 pensions and fully employer-paid healthcare.” “...Any proposed changes should be addressed through the collective bargaining process, not through legislation that circumvents the contract,” PMA said. The presidents of ILWU Locals 13, 63 and 94 in Southern California recently distributed an “Urgent: Call to Action” flyer to union membership to publicly push labor’s support for SB 34 and to urge Newsom to sign the bill. “Protect good union jobs, strengthen our ports, keep California competitive,” the flyer read. An ILWU spokesman said Wednesday union leaders were not available for comment. SB 34 also comes at an inopportune time in that the ports and port stakeholders in Southern California last month reached an agreement with the South Coast Air Quality Management District (AQMD) to work cooperatively in the coming months to develop a plan to further reduce port-related emissions. The agreement would replace the <a href="https://www.joc.com/article/la-lb-likely-to-work-with-regulator-on-emissions-cutting-plan-for-ports-6084550">port Indirect Source Rule (ISR)</a> that the AQMD had originally proposed. Meanwhile, Jacob said it is difficult to gauge Newsom’s position on SB 34. “There’s still no clear indication as to where it is going,” Jacob said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Whether or not ports in California can continue to automate seemingly hinges on whether Gov. Gavin Newsom signs legislation that would, in effect, render the equipment unusable. SB 34 is a state bill that would ban current and future automated or remotely operated technology used at California ports from plugging into the state’s power grid. The legislation, which is supported primarily by dockworkers, has already been approved by both houses of the California Legislature and awaits action by Newsom, who has until Sunday to sign or veto the bill. But terminal operators and shipping lines say the bill would undermine the billions of dollars already invested in marine terminal automation and likely threaten future investment in cargo-handling efficiency. Mike Jacob, president of the Pacific Merchant Shipping Association (PMSA), which represents terminal operators and container lines that call at West Coast ports, told the Journal of Commerce Wednesday the bill’s supporters are pitching it as an environmental effort to reduce demand on the power grid, when in reality it is intended to block any automation that labor interests see as threatening to dockworker jobs. “This is ILWU’s priority bill,” Jacob said of the International Longshore and Warehouse Union. Jacob also said the bill is vague and its language is so expansive that it could impact present and future funding from local, state and federal sources for port-related equipment, including charging infrastructure for zero-emission cargo-handling equipment and battery-electric trucks. Long Beach Container Terminal and TraPac in Los Angeles are the West Coast’s only fully automated container terminals. The APM terminal in Los Angeles is partially automated. So far, more than $2 billion has been invested in developing automated facilities, zero-emission cargo handling equipment and charging infrastructure in Southern California. The ports of Los Angeles and Long Beach did not respond to requests for comment. Bill ‘undermines’ labor agreement The Pacific Maritime Association (PMA), which represents terminal operators and shipping lines in negotiating coastwide labor contracts with the ILWU, emphasized in a Sept. 18 letter to Newsom that SB 34 “directly undermines the collective bargaining agreement between PMA and the ILWU.” PMA noted that dating back to the 2008 coastwide contract, the labor agreements “explicitly permitted automation in exchange for steep wage hikes, $100,000 pensions and fully employer-paid healthcare.” “...Any proposed changes should be addressed through the collective bargaining process, not through legislation that circumvents the contract,” PMA said. The presidents of ILWU Locals 13, 63 and 94 in Southern California recently distributed an “Urgent: Call to Action” flyer to union membership to publicly push labor’s support for SB 34 and to urge Newsom to sign the bill. “Protect good union jobs, strengthen our ports, keep California competitive,” the flyer read. An ILWU spokesman said Wednesday union leaders were not available for comment. SB 34 also comes at an inopportune time in that the ports and port stakeholders in Southern California last month reached an agreement with the South Coast Air Quality Management District (AQMD) to work cooperatively in the coming months to develop a plan to further reduce port-related emissions. The agreement would replace the port Indirect Source Rule (ISR) that the AQMD had originally proposed. Meanwhile, Jacob said it is difficult to gauge Newsom’s position on SB 34. “There’s still no clear indication as to where it is going,” Jacob said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port News

North American ports

Longshore labor

Maritime

Fate of future automation at California ports in governor’s hands

<div class="phx-topic abstract-wrapper">The average monthly year-over-year decline in imports from October through February is almost 16%, according to the latest Global Port Tracker.</div>

The average monthly year-over-year decline in imports from October through February is almost 16%, according to the latest Global Port Tracker.

<div class="phx-topic">Monthly US containerized imports will slide below 2 million TEUs and be at a year-over-year deficit at least through February due to an early peak season driven by tariff frontloading and as importers contend with new tariffs yet to come, a major retail group said Wednesday. The average monthly year-over-year decline in imports from October through February is significant — almost 16%, the National Retail Federation (NRF) and Hackett Associates revealed in their latest Global Port Tracker (GPT). “This year’s peak season has come and gone, largely due to retailers frontloading imports ahead of reciprocal tariffs taking effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “New sectoral tariffs continue to be announced, but most retailers are well-stocked for the holiday season and doing as much as they can to shield their customers from the costs of tariffs for as long as they can.” The latest GPT forecasts sub-2 million TEUs in imports for at least the next five months: October (1.97 million TEUs), November (1.75 million TEUs), December (1.72 million TEUs), January (1.87 million TEUs) and February (1.77 million TEUs). October would be the first month since June to see imports below 2 million TEUs. The monthly projections for the fourth quarter are up about 1% from the forecasts made in September’s GPT. In September, US import volumes — which have not yet been finalized — are projected to reach 2.12 million TEUs, unmoved from <a href="https://www.joc.com/article/us-retailers-upgrade-import-forecast-but-still-expect-q4-decline-6077875">forecasts made last month</a> but down 6.6% compared with last year. August US import volumes came in at 2.32 million TEUs, unchanged from last year but up 1.7% from projections made last month. Full-year imports are forecast at 24.79 million TEUs, down 2.9% from 2024. “Many large companies preemptively imported goods to build up inventories, but as those stockpiles are depleted, the full inflationary impact of the tariffs will become apparent,” Hackett Associates founder Ben Hackett said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="16bac55d-49bc-45ea-8386-312c19837f9b"></dynamic-object></div>From January through July, US retailers have kept only about 1.3 months of inventory on hand, according to the US Census Bureau. “Ongoing volatility in US tariff policy is creating significant economic uncertainty, with trade volumes expected to see unpredictable shifts over the next four to six months,” Hackett said. As tariff uncertainty stifles US demand, August imports from China were down 4.8% month over month and 11% on the year, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. And as imports drop, Chinese producers are turning to customers in other countries to buy their products, said Jon Monroe, who serves as an adviser to forwarders. “They’re pivoting elsewhere,” Monroe told the Journal of Commerce. The Global Port Tracker covers the ports of Los Angeles/Long Beach, Oakland, and Seattle and Tacoma on the West Coast; New York/New Jersey, the Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  Senior Editor Bill Mongelluzzo contributed to this report. </div>

Monthly US containerized imports will slide below 2 million TEUs and be at a year-over-year deficit at least through February due to an early peak season driven by tariff frontloading and as importers contend with new tariffs yet to come, a major retail group said Wednesday. The average monthly year-over-year decline in imports from October through February is significant — almost 16%, the National Retail Federation (NRF) and Hackett Associates revealed in their latest Global Port Tracker (GPT). “This year’s peak season has come and gone, largely due to retailers frontloading imports ahead of reciprocal tariffs taking effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “New sectoral tariffs continue to be announced, but most retailers are well-stocked for the holiday season and doing as much as they can to shield their customers from the costs of tariffs for as long as they can.” The latest GPT forecasts sub-2 million TEUs in imports for at least the next five months: October (1.97 million TEUs), November (1.75 million TEUs), December (1.72 million TEUs), January (1.87 million TEUs) and February (1.77 million TEUs). October would be the first month since June to see imports below 2 million TEUs. The monthly projections for the fourth quarter are up about 1% from the forecasts made in September’s GPT. In September, US import volumes — which have not yet been finalized — are projected to reach 2.12 million TEUs, unmoved from forecasts made last month but down 6.6% compared with last year. August US import volumes came in at 2.32 million TEUs, unchanged from last year but up 1.7% from projections made last month. Full-year imports are forecast at 24.79 million TEUs, down 2.9% from 2024. “Many large companies preemptively imported goods to build up inventories, but as those stockpiles are depleted, the full inflationary impact of the tariffs will become apparent,” Hackett Associates founder Ben Hackett said. From January through July, US retailers have kept only about 1.3 months of inventory on hand, according to the US Census Bureau. “Ongoing volatility in US tariff policy is creating significant economic uncertainty, with trade volumes expected to see unpredictable shifts over the next four to six months,” Hackett said. As tariff uncertainty stifles US demand, August imports from China were down 4.8% month over month and 11% on the year, according to PIERS, a Journal of Commerce sister product within S&P Global. And as imports drop, Chinese producers are turning to customers in other countries to buy their products, said Jon Monroe, who serves as an adviser to forwarders. “They’re pivoting elsewhere,” Monroe told the Journal of Commerce. The Global Port Tracker covers the ports of Los Angeles/Long Beach, Oakland, and Seattle and Tacoma on the West Coast; New York/New Jersey, the Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast. Contact Laura Robb at laura.robb@spglobal.com .  Senior Editor Bill Mongelluzzo contributed to this report.

Tariff uncertainty to keep lid on US import growth until spring: retailers

<div class="phx-topic abstract-wrapper">The fresh disruptions come as the Asia-Europe trade lane continues to present shippers with the worst schedule reliability among the major ocean corridors. </div>

The fresh disruptions come as the Asia-Europe trade lane continues to present shippers with the worst schedule reliability among the major ocean corridors.

<div class="phx-topic">Rotterdam and Antwerp are facing increasing congestion this week as strike action from auxiliary companies significantly disrupts container handling operations at Europe’s two busiest ports. Flemish pilotage services have only been working during office hours since Monday in a dispute over recent federal pension reforms, severely disrupting vessel arrivals and departures in the Belgian hubs of Antwerp and Zeebrugge. In Rotterdam, container lashing companies embarked on a two-day strike on Wednesday in a dispute over working conditions and wages. The strike is affecting all major terminals in Rotterdam: APM Terminals Maasvlakte II, Hutchinson Ports Delta II, ECT Delta and Rotterdam World Gateway. A Maersk advisory said the suspension of services was significantly impacting operations, given that lashing is critical to the safe securing and release of containers onboard vessels. Kuehne + Nagel echoed Maersk’s concerns in an advisory of its own, warning that in addition to the impact on container vessel handling, the 48-hour strike at Rotterdam will significantly disrupt inland container transport operations. “These developments place further strain on the port, which was already significantly affected by last weekend’s storm-related closures,” Kuehne + Nagel noted. The strikes add further pain to the overall Asia-Europe trade lane that continues to present shippers with the worst schedule reliability among the major ocean corridors. On-time performance recorded in September was 23%, according to industry analyst Xeneta. While the performance is a slight improvement on the 17% reliability seen in August, persistent port congestion across the main North Europe gateways is a factor keeping schedule reliability at dismal levels. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="cce7dbee-2611-492e-9c9e-325c0aa7d3fe"></dynamic-object></div>Destine Ozuygur, product marketing manager at Xeneta, noted that port congestion and operational hurdles were major contributing factors to the poor on-time performance, but if they were to disappear overnight it would still not resolve poor reliability issues on Asia-Europe. “Longer transits and ensuing injection of larger-capacity vessels is the defining factor here,” Ozuygur told the Journal of Commerce. “Port issues or tricky alliance handovers do serve to exacerbate those underlying problems, but they wouldn’t help reliability recover if resolved.” <h3>Gemini reliability showing signs of ‘wear’ </h3>The poor Asia-Europe schedule reliability is also taking a toll on the Gemini Cooperation between Maersk and Hapag-Lloyd. Although the alliance continues to lead Xeneta’s global reliability tables, Gemini is showing shows signs of wear on Asia-Europe, closing September with 81% of on-time arrivals. Gemini was launched in February <a href="https://www.joc.com/article/tpm25-gemini-hitting-90-reliability-target-as-new-network-rolls-out-habben-jansen-5955794">on the premise of delivering 90%-plus schedule reliability</a> to the market. Ozuygur said none of the other alliances came close to matching Gemini’s performance across any trade, but how long Gemini could hold out under these conditions remained unclear. “Asia-Europe [poor reliability] affecting all alliances and carriers negatively shows us that there are some factors even a remodeled hub-and-spoke can’t effectively outmaneuver,” she said. “While their clever model doesn’t make [Gemini] impervious to these negative reliability factors, it’s more likely that they would hit a limit of wear and maintain that, still significantly above the other alliances,” Ozuygur added. The Premier Alliance has continued to decline against its global second-quarter average of 26%, closing the third quarter with 21% on-time performance, Xeneta data shows. Ocean Alliance fell to 24% globally in the third quarter, the worst on-time performance of the longstanding alliance since its 27% average in the fourth quarter of 2022. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Rotterdam and Antwerp are facing increasing congestion this week as strike action from auxiliary companies significantly disrupts container handling operations at Europe’s two busiest ports. Flemish pilotage services have only been working during office hours since Monday in a dispute over recent federal pension reforms, severely disrupting vessel arrivals and departures in the Belgian hubs of Antwerp and Zeebrugge. In Rotterdam, container lashing companies embarked on a two-day strike on Wednesday in a dispute over working conditions and wages. The strike is affecting all major terminals in Rotterdam: APM Terminals Maasvlakte II, Hutchinson Ports Delta II, ECT Delta and Rotterdam World Gateway. A Maersk advisory said the suspension of services was significantly impacting operations, given that lashing is critical to the safe securing and release of containers onboard vessels. Kuehne + Nagel echoed Maersk’s concerns in an advisory of its own, warning that in addition to the impact on container vessel handling, the 48-hour strike at Rotterdam will significantly disrupt inland container transport operations. “These developments place further strain on the port, which was already significantly affected by last weekend’s storm-related closures,” Kuehne + Nagel noted. The strikes add further pain to the overall Asia-Europe trade lane that continues to present shippers with the worst schedule reliability among the major ocean corridors. On-time performance recorded in September was 23%, according to industry analyst Xeneta. While the performance is a slight improvement on the 17% reliability seen in August, persistent port congestion across the main North Europe gateways is a factor keeping schedule reliability at dismal levels. Destine Ozuygur, product marketing manager at Xeneta, noted that port congestion and operational hurdles were major contributing factors to the poor on-time performance, but if they were to disappear overnight it would still not resolve poor reliability issues on Asia-Europe. “Longer transits and ensuing injection of larger-capacity vessels is the defining factor here,” Ozuygur told the Journal of Commerce. “Port issues or tricky alliance handovers do serve to exacerbate those underlying problems, but they wouldn’t help reliability recover if resolved.” Gemini reliability showing signs of ‘wear’ The poor Asia-Europe schedule reliability is also taking a toll on the Gemini Cooperation between Maersk and Hapag-Lloyd. Although the alliance continues to lead Xeneta’s global reliability tables, Gemini is showing shows signs of wear on Asia-Europe, closing September with 81% of on-time arrivals. Gemini was launched in February on the premise of delivering 90%-plus schedule reliability to the market. Ozuygur said none of the other alliances came close to matching Gemini’s performance across any trade, but how long Gemini could hold out under these conditions remained unclear. “Asia-Europe [poor reliability] affecting all alliances and carriers negatively shows us that there are some factors even a remodeled hub-and-spoke can’t effectively outmaneuver,” she said. “While their clever model doesn’t make [Gemini] impervious to these negative reliability factors, it’s more likely that they would hit a limit of wear and maintain that, still significantly above the other alliances,” Ozuygur added. The Premier Alliance has continued to decline against its global second-quarter average of 26%, closing the third quarter with 21% on-time performance, Xeneta data shows. Ocean Alliance fell to 24% globally in the third quarter, the worst on-time performance of the longstanding alliance since its 27% average in the fourth quarter of 2022. Contact Greg Knowler at greg.knowler@spglobal.com .

International ports

Strike action piles new bottlenecks on Europe’s two busiest ports

<div class="phx-topic abstract-wrapper">The US Supreme Court has agreed to hear the case, and without a clear ruling from the court, brokers, shippers and manufacturers will face ongoing uncertainty, potentially weakening the national economy, writes trucking expert Matthew Leffler.</div>

The US Supreme Court has agreed to hear the case, and without a clear ruling from the court, brokers, shippers and manufacturers will face ongoing uncertainty, potentially weakening the national economy, writes trucking expert Matthew Leffler.

<div class="phx-topic">The case of Montgomery v Caribe Transport II, LLC holds significant implications for the transportation and logistics industry, particularly for large shippers and manufacturers. The US Supreme Court on Oct. 3 granted certiorari — meaning it has agreed to hear the case — for the first time on the issue of broker liability. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6094010_0.1.jpg"></img></div>This legal dispute centers on the Federal Aviation Administration Authorization Act (FAAAA), a law designed to streamline trucking regulations across state lines. A key issue has emerged regarding the interpretation of the FAAAA’s safety exception, creating uncertainty that could disrupt the supply chain. <h3>Background of the case </h3>In 2018, Shawn Montgomery was stopped on the side of the road in Illinois in his tractor-trailer, when Yosniel Varela-Mojena, driving a tractor-trailer for the motor carrier Caribe Transport II, LLC, veered off the roadway and collided with Montgomery’s vehicle, causing severe injuries. The shipment was arranged by C.H. Robinson, which had hired Caribe to handle the transport. Montgomery sued Varela-Mojena, Caribe, and Robinson alleging negligent hiring of the carrier and driver, as well as vicarious liability for their actions under state tort law. The district court granted summary judgment to Robinson on these claims and the 7th Circuit affirmed in January 2025, citing FAAAA. FAAAA was enacted to preempt a patchwork of state laws and ensure a uniform regulatory framework for interstate trucking. However, a disagreement has arisen over the “safety exception,” which allows states to regulate motor vehicle safety. The question is whether this exception extends to freight brokers, intermediaries who arrange transportation but do not operate vehicles. The 6th and 9th Circuits have ruled that state tort claims, such as negligent hiring of motor carriers, can proceed against brokers. In contrast, the 7th and 11th Circuits have determined that such claims are preempted. <h3>Impact on large shippers and manufacturers </h3>Large shippers and manufacturers, such as those in the retail and automotive industries, depend on brokers to connect their goods to the trucking network. If brokers face varying liabilities depending on the location of a truck accident, it can potentially lead to increased costs or service disruptions for large companies. And with over 95% of motor carriers operating 10 trucks or fewer, those relying on brokers may face challenges. To mitigate the challenges posed by liability, brokers would likely need to make significant changes, many of which would drive costs up for consumers and shippers alike. For example, brokers may increase their fees to cover the added risk and potential legal costs, which would raise transportation expenses for shippers who rely on them to move billions of tons of freight annually, potentially impacting profit margins. Brokers might also become more cautious, preferring to work only with well-established carriers, reducing competition and limiting the pool of available truckers, which could lead to delays in delivery schedules critical for manufacturers and retailers. Finally, the uncertainty and potential for lawsuits could discourage smaller brokers from operating, shrinking the network of intermediaries and forcing shippers to seek alternative, possibly less efficient, logistics solutions. <h3>The US Chamber takes issue </h3>In an amicus brief in the case of Total Quality Logistics, LLC v. Robert Cox,a similar suit to Montgomery, the US Chamber of Commerce, along with the National Retail Federation, argued that freight brokers should not be held liable for tort claims related to the safety of motor carriers they hire. The organizations argued that existing federal and state regulations, not lawsuits against brokers, are the right way to keep the nation’s roads safe. The Chamber pointed out that brokers lack reliable tools, such as the Compliance, Safety, Accountability (CSA) system, to properly screen carriers because it was designed for law enforcement, not brokers, and has data issues that make it hard to compare carriers effectively. The Chamber also warned that allowing these lawsuits could disrupt the transportation of goods, raise prices and hurt manufacturers, retailers and consumers, urging the Supreme Court to resolve the issue to protect the economy. <h3>Supreme Court intervention </h3>With a lack of uniformity threatening FAAAA’s original goal of fostering a stable, competitive trucking industry, it is little surprise that the US Supreme Court would grant certiorari. As emphasized by the Transportation Intermediaries Association as well as the Chamber, without a clear ruling, brokers, shippers and manufacturers will face ongoing uncertainty, potentially weakening the national economy. Looking ahead, this might be the most conservative Supreme Court in 100 years. Perhaps tellingly, this Supreme Court granted certiorari in Montgomery, where the broker won, and not Cox, where the broker lost. Does this bode well for brokers? Time will tell. But despite ever-increasing liability, trucking remains the dominant mode of freight transportation in the US. Measured by weight, trucks transport 72.6% of the country’s freight. The future of brokerage is at stake, and for now, all eyes look to the Supreme Court. Matthew Leffler is a trucking industry expert and an adjunct professor of law at Michigan State University College of Law. Contact him at <a href="mailto:matthew@armchairattorney.com">matthew@armchairattorney.com</a>. </div>

The case of Montgomery v Caribe Transport II, LLC holds significant implications for the transportation and logistics industry, particularly for large shippers and manufacturers. The US Supreme Court on Oct. 3 granted certiorari — meaning it has agreed to hear the case — for the first time on the issue of broker liability. This legal dispute centers on the Federal Aviation Administration Authorization Act (FAAAA), a law designed to streamline trucking regulations across state lines. A key issue has emerged regarding the interpretation of the FAAAA’s safety exception, creating uncertainty that could disrupt the supply chain. Background of the case In 2018, Shawn Montgomery was stopped on the side of the road in Illinois in his tractor-trailer, when Yosniel Varela-Mojena, driving a tractor-trailer for the motor carrier Caribe Transport II, LLC, veered off the roadway and collided with Montgomery’s vehicle, causing severe injuries. The shipment was arranged by C.H. Robinson, which had hired Caribe to handle the transport. Montgomery sued Varela-Mojena, Caribe, and Robinson alleging negligent hiring of the carrier and driver, as well as vicarious liability for their actions under state tort law. The district court granted summary judgment to Robinson on these claims and the 7th Circuit affirmed in January 2025, citing FAAAA. FAAAA was enacted to preempt a patchwork of state laws and ensure a uniform regulatory framework for interstate trucking. However, a disagreement has arisen over the “safety exception,” which allows states to regulate motor vehicle safety. The question is whether this exception extends to freight brokers, intermediaries who arrange transportation but do not operate vehicles. The 6th and 9th Circuits have ruled that state tort claims, such as negligent hiring of motor carriers, can proceed against brokers. In contrast, the 7th and 11th Circuits have determined that such claims are preempted. Impact on large shippers and manufacturers Large shippers and manufacturers, such as those in the retail and automotive industries, depend on brokers to connect their goods to the trucking network. If brokers face varying liabilities depending on the location of a truck accident, it can potentially lead to increased costs or service disruptions for large companies. And with over 95% of motor carriers operating 10 trucks or fewer, those relying on brokers may face challenges. To mitigate the challenges posed by liability, brokers would likely need to make significant changes, many of which would drive costs up for consumers and shippers alike. For example, brokers may increase their fees to cover the added risk and potential legal costs, which would raise transportation expenses for shippers who rely on them to move billions of tons of freight annually, potentially impacting profit margins. Brokers might also become more cautious, preferring to work only with well-established carriers, reducing competition and limiting the pool of available truckers, which could lead to delays in delivery schedules critical for manufacturers and retailers. Finally, the uncertainty and potential for lawsuits could discourage smaller brokers from operating, shrinking the network of intermediaries and forcing shippers to seek alternative, possibly less efficient, logistics solutions. The US Chamber takes issue In an amicus brief in the case of Total Quality Logistics, LLC v. Robert Cox,a similar suit to Montgomery, the US Chamber of Commerce, along with the National Retail Federation, argued that freight brokers should not be held liable for tort claims related to the safety of motor carriers they hire. The organizations argued that existing federal and state regulations, not lawsuits against brokers, are the right way to keep the nation’s roads safe. The Chamber pointed out that brokers lack reliable tools, such as the Compliance, Safety, Accountability (CSA) system, to properly screen carriers because it was designed for law enforcement, not brokers, and has data issues that make it hard to compare carriers effectively. The Chamber also warned that allowing these lawsuits could disrupt the transportation of goods, raise prices and hurt manufacturers, retailers and consumers, urging the Supreme Court to resolve the issue to protect the economy. Supreme Court intervention With a lack of uniformity threatening FAAAA’s original goal of fostering a stable, competitive trucking industry, it is little surprise that the US Supreme Court would grant certiorari. As emphasized by the Transportation Intermediaries Association as well as the Chamber, without a clear ruling, brokers, shippers and manufacturers will face ongoing uncertainty, potentially weakening the national economy. Looking ahead, this might be the most conservative Supreme Court in 100 years. Perhaps tellingly, this Supreme Court granted certiorari in Montgomery, where the broker won, and not Cox, where the broker lost. Does this bode well for brokers? Time will tell. But despite ever-increasing liability, trucking remains the dominant mode of freight transportation in the US. Measured by weight, trucks transport 72.6% of the country’s freight. The future of brokerage is at stake, and for now, all eyes look to the Supreme Court. Matthew Leffler is a trucking industry expert and an adjunct professor of law at Michigan State University College of Law. Contact him at matthew@armchairattorney.com .

Trucking News

Transport, Trade and Regulation News

Surface

Broker liability in the spotlight in ‘Montgomery v Caribe Transport’

<div class="phx-topic abstract-wrapper">Rail authorities have had to restrict or suspend train services into India’s busiest gateway multiple times in recent weeks in an attempt to clear the backlog of import containers trapped in port yards. </div>

Rail authorities have had to restrict or suspend train services into India’s busiest gateway multiple times in recent weeks in an attempt to clear the backlog of import containers trapped in port yards.

<div class="phx-topic">Indian container industry stakeholders continue to search for relief from the landside congestion that has roiled Mundra Port, the country’s busiest gateway, over the last few months. Mundra’s operational strains seem to have gone beyond a temporary or seasonal mismatch between supply and demand, sources indicate. Rail authorities have had to restrict or suspend train services into Mundra multiple times in recent weeks in an attempt to clear the backlog of import containers trapped in port yards while streamlining export-laden train queues. A two-day embargo on handling trains to Mundra through Oct. 7 was the latest disruption. “Since June, we have experienced nearly a dozen cases of on-and-off rail restrictions for Mundra,” said a private train operator who didn’t want to be identified. Container carriers have reiterated concerns over lingering landside delays at Mundra affecting cargo flows in and out of the port. “This [restriction] is currently affecting the timely placement of export trains and delaying the evacuation of import containers,” Maersk told customers in an advisory. “We are closely monitoring the situation and are in constant coordination with Indian Railways to expedite train movements and ensure timely placement at the port at the earliest opportunity.” DP World, which holds the oldest terminal operating concession at Mundra, also issued a similar trade advisory. But Sunil Vaswani, executive director of the Container Shipping Lines Association (India), explained that recent intermodal train suspensions have in large part been prompted by authorities adjusting the placement of locomotive engines in terms of demand. “More than the flow of export trains into Mundra, it was the movement of fresh trains from the inland container depots (ICDs) that were impacted,” Vaswani told the Journal of Commerce. <h3>Port is ‘overstretched’ </h3>Mundra, which is Adani Ports’ flagship port entity, features 10 rail-sidings, handling 25 trains for import clearance a day on average. Industry sources believe the port needs to consistently dispatch at least 30 trains each day for better yard inventory management. “Mundra is overstretched and container dwells there will keep lengthening until new rail capacity is added,” said a second rail company executive. “It is often found that the port has a long pipeline of 60 to 70 inbound trains, congesting out-gates.” Mundra’s upcoming capacity expansion plans include the 1.8 million-TEU “CT5” terminal project with phase 1 operations targeted to begin in late 2026. The port handled 4.2 million TEUs during the first half of its fiscal year through September, relatively flat year over year, data shows. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Indian container industry stakeholders continue to search for relief from the landside congestion that has roiled Mundra Port, the country’s busiest gateway, over the last few months. Mundra’s operational strains seem to have gone beyond a temporary or seasonal mismatch between supply and demand, sources indicate. Rail authorities have had to restrict or suspend train services into Mundra multiple times in recent weeks in an attempt to clear the backlog of import containers trapped in port yards while streamlining export-laden train queues. A two-day embargo on handling trains to Mundra through Oct. 7 was the latest disruption. “Since June, we have experienced nearly a dozen cases of on-and-off rail restrictions for Mundra,” said a private train operator who didn’t want to be identified. Container carriers have reiterated concerns over lingering landside delays at Mundra affecting cargo flows in and out of the port. “This [restriction] is currently affecting the timely placement of export trains and delaying the evacuation of import containers,” Maersk told customers in an advisory. “We are closely monitoring the situation and are in constant coordination with Indian Railways to expedite train movements and ensure timely placement at the port at the earliest opportunity.” DP World, which holds the oldest terminal operating concession at Mundra, also issued a similar trade advisory. But Sunil Vaswani, executive director of the Container Shipping Lines Association (India), explained that recent intermodal train suspensions have in large part been prompted by authorities adjusting the placement of locomotive engines in terms of demand. “More than the flow of export trains into Mundra, it was the movement of fresh trains from the inland container depots (ICDs) that were impacted,” Vaswani told the Journal of Commerce. Port is ‘overstretched’ Mundra, which is Adani Ports’ flagship port entity, features 10 rail-sidings, handling 25 trains for import clearance a day on average. Industry sources believe the port needs to consistently dispatch at least 30 trains each day for better yard inventory management. “Mundra is overstretched and container dwells there will keep lengthening until new rail capacity is added,” said a second rail company executive. “It is often found that the port has a long pipeline of 60 to 70 inbound trains, congesting out-gates.” Mundra’s upcoming capacity expansion plans include the 1.8 million-TEU “CT5” terminal project with phase 1 operations targeted to begin in late 2026. The port handled 4.2 million TEUs during the first half of its fiscal year through September, relatively flat year over year, data shows. Contact Bency Mathew at bencyvmathew@gmail.com .

North India trade flows tested by rail embargoes at congested Mundra Port

<div class="phx-topic abstract-wrapper">Shaun Stevenson, who guided development of Prince Rupert’s Fairview Container Terminal and the port’s intermodal services to Chicago and eastern Canada, is leaving at year’s end after 28 years with the port, including the last seven as CEO. </div>

Shaun Stevenson, who guided development of Prince Rupert’s Fairview Container Terminal and the port’s intermodal services to Chicago and eastern Canada, is leaving at year’s end after 28 years with the port, including the last seven as CEO.

<div class="phx-topic">Shaun Stevenson is ending a 28-year tenure at the Prince Rupert Port Authority, where as CEO and president for the last seven years he oversaw major infrastructure projects and guided the port through post-pandemic challenges. Stevenson is retiring at year’s end, the port authority announced Monday, adding it will initiate a comprehensive search for a new CEO. He was instrumental in the development of the port’s Fairview Container Terminal, which opened in 2007, and in developing and diversifying the port’s cargo base. “I am proud of what we have accomplished together with our partners, including over $3 billion in transformative trade development currently underway at the gateway,” Stevenson said in a statement. Stevenson guided Prince Rupert’s efforts to develop import and export <a href="https://www.joc.com/article/prince-rupert-promoting-transload-operations-to-improve-logistics-efficiency-5937532">transloading facilities to diversify the port’s cargo base</a>, as well as construction of a <a href="https://www.joc.com/article/aro-2020-canadian-ports-preparing-for-strong-cargo-growth-5223107">second berth at Fairview</a> and expansion of the railyard to increase intermodal capacity. “Under Shaun’s leadership we’ve experienced unprecedented growth and diversification at the Port of Prince Rupert,” said Peter Lantin, chairman of the Prince Rupert Port Authority Board of Directors. Since it attracted the first Cosco Shipping service in 2007, Prince Rupert steadily grew its volumes until container lines began dropping calls during the pandemic in a bid to restore ocean reliability. The port has yet to fully recover those lost volumes. A British Columbia <a href="https://www.joc.com/article/bc-ports-to-reopen-but-longshore-union-plans-challenge-to-back-to-work-order-5810473">port strike in 2024</a> hurt the reputation of the gateway that is used for US-bound cargo to Chicago. Prince Rupert is a key trans-Pacific gateway for Canada and the US, with Canadian National’s intermodal services to Chicago and Canadian load centers in the eastern half of the country. The port handled 404,225 laden TEUs year to date through August, up 5% from 383,458 TEUs during the same period last year, according to the port’s website, but down 44.7% compared with the first eight months of 2020. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Shaun Stevenson is ending a 28-year tenure at the Prince Rupert Port Authority, where as CEO and president for the last seven years he oversaw major infrastructure projects and guided the port through post-pandemic challenges. Stevenson is retiring at year’s end, the port authority announced Monday, adding it will initiate a comprehensive search for a new CEO. He was instrumental in the development of the port’s Fairview Container Terminal, which opened in 2007, and in developing and diversifying the port’s cargo base. “I am proud of what we have accomplished together with our partners, including over $3 billion in transformative trade development currently underway at the gateway,” Stevenson said in a statement. Stevenson guided Prince Rupert’s efforts to develop import and export transloading facilities to diversify the port’s cargo base , as well as construction of a second berth at Fairview and expansion of the railyard to increase intermodal capacity. “Under Shaun’s leadership we’ve experienced unprecedented growth and diversification at the Port of Prince Rupert,” said Peter Lantin, chairman of the Prince Rupert Port Authority Board of Directors. Since it attracted the first Cosco Shipping service in 2007, Prince Rupert steadily grew its volumes until container lines began dropping calls during the pandemic in a bid to restore ocean reliability. The port has yet to fully recover those lost volumes. A British Columbia port strike in 2024 hurt the reputation of the gateway that is used for US-bound cargo to Chicago. Prince Rupert is a key trans-Pacific gateway for Canada and the US, with Canadian National’s intermodal services to Chicago and Canadian load centers in the eastern half of the country. The port handled 404,225 laden TEUs year to date through August, up 5% from 383,458 TEUs during the same period last year, according to the port’s website, but down 44.7% compared with the first eight months of 2020. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Prince Rupert searching for new CEO after Stevenson announces retirement

<div class="phx-topic abstract-wrapper">The LTL world of 2025 does not reward those who guess, but rather those who know — and knowing begins with visibility. </div>

The LTL world of 2025 does not reward those who guess, but rather those who know — and knowing begins with visibility.

<div class="phx-topic">The US less-than-truckload (LTL) sector stands at a critical crossroads. Faced with depressed demand, high operating costs, economic uncertainty and rising customer expectations, LTL carriers, brokers and shippers are under mounting pressure to do more with less. Efficiency, accuracy and transparency have never been more vital. Even as some aspects of LTL have modernized, persistent blind spots still drain time, revenue and customer satisfaction. Accessorial management and location visibility remain at the heart of operational performance and profitability in the LTL sector, and companies must solve these challenges to thrive in this freight environment. Accessorial charges are often treated as the fine print of freight, but their financial impact is anything but small. These additional fees, covering services such as liftgate usage, residential delivery, limited-access sites and inside delivery are frequently not accounted for until after a delivery is completed. At that point, shippers receive unexpected invoices, brokers scramble to reconcile charges, and carriers are left fielding disputes that strain valuable relationships and negatively impact their bottom line. Without an accurate, upfront method of identifying potential accessorials, companies lose control over cost predictability. This unpredictability does more than damage budgets. It undermines long-term rate negotiations and muddies performance metrics such as cost per shipment and gross margin. Billing disputes over accessorials can also slow down cash flow and stretch out time-to-payment cycles. As the logistics sector faces tighter margins and rising customer expectations, these seemingly minor charges can add up to major financial consequences. Location data is another underestimated factor that directly impacts LTL performance. While most transportation management systems (TMSs) offer basic shipment tracking, they often lack granular location insights. This includes data points such as whether a site is residential or commercial, whether there is dock access or a forklift onsite, or if the delivery site has limited hours or requires specialized entry. These details may seem minor, but their absence leads to service mismatches, re-delivery attempts, extended dwell times and more accessorial charges. For example, failing to flag a residential delivery that requires a liftgate can result in a surprise fee and an unhappy customer. A shipment bound for a military base or an airport without the right equipment or credentials can create costly delays and failed deliveries. Inaccurate or incomplete location information does more than increase costs — it erodes operational agility. <h3>Technology can ease challenges </h3>The good news is that technology now exists to solve these challenges at scale. New platforms that leverage AI, machine learning and geospatial data are transforming how logistics professionals manage LTL freight. These tools can identify potential accessorial charges before the freight is tendered, analyze delivery site characteristics in real time and deliver a unified accessorial view across all stakeholders. By automating accessorial identification during order entry and integrating precise location attributes such as limited access, loading dock availability, forklifts on site or gated entry, these platforms allow teams to move from reactive firefighting to proactive planning. With real-time alerts and API integrations that connect directly into a TMS, shippers, brokers and carriers can operate from a shared source of accessorial truth. The impact of smarter accessorial identification and location visibility delivers measurable results. Companies that have adopted these advanced solutions have reported a 75% reduction in unexpected accessorial fees, leading to cleaner invoices and faster dispute resolution. Customers have also seen improved on-time in-full (OTIF) performance, driving higher customer satisfaction and stronger service-level agreement (SLA) compliance. This shift is particularly timely in 2025, as the LTL industry grapples with economic volatility, rising operating costs and major classification changes. Freight volumes are inconsistent, carriers are prioritizing profitability over market share, and the new National Motor Freight Traffic Association density-based classification system is forcing shippers to re-evaluate how they package and price freight. In this environment, hidden costs such as accessorials and inefficiencies tied to poor location visibility can erode already thin margins. With shifting demand, cost inflation and operational headwinds, the ability to forecast costs, identify risks and plan accordingly has become a key competitive advantage. In the past, accessorial management and granular location visibility may have been viewed as optional enhancements. Today, they are essential for any company that relies on LTL shipping as a core part of its logistics strategy. When customer expectations are rising and disruptions are the new norm, having visibility into every shipment detail and every delivery site is table stakes. The LTL world of 2025 does not reward those who guess. It rewards those who know, and knowing begins with visibility. North Winship is president of Shiplify. Contact him at <a href="mailto:northw@shiplify.com">northw@shiplify.com</a>. Bart De Muynck is a strategic advisor for Drewry. Contact him at <a href="mailto:bart@bartdemuynck.com">bart@bartdemuynck.com</a>. </div>

The US less-than-truckload (LTL) sector stands at a critical crossroads. Faced with depressed demand, high operating costs, economic uncertainty and rising customer expectations, LTL carriers, brokers and shippers are under mounting pressure to do more with less. Efficiency, accuracy and transparency have never been more vital. Even as some aspects of LTL have modernized, persistent blind spots still drain time, revenue and customer satisfaction. Accessorial management and location visibility remain at the heart of operational performance and profitability in the LTL sector, and companies must solve these challenges to thrive in this freight environment. Accessorial charges are often treated as the fine print of freight, but their financial impact is anything but small. These additional fees, covering services such as liftgate usage, residential delivery, limited-access sites and inside delivery are frequently not accounted for until after a delivery is completed. At that point, shippers receive unexpected invoices, brokers scramble to reconcile charges, and carriers are left fielding disputes that strain valuable relationships and negatively impact their bottom line. Without an accurate, upfront method of identifying potential accessorials, companies lose control over cost predictability. This unpredictability does more than damage budgets. It undermines long-term rate negotiations and muddies performance metrics such as cost per shipment and gross margin. Billing disputes over accessorials can also slow down cash flow and stretch out time-to-payment cycles. As the logistics sector faces tighter margins and rising customer expectations, these seemingly minor charges can add up to major financial consequences. Location data is another underestimated factor that directly impacts LTL performance. While most transportation management systems (TMSs) offer basic shipment tracking, they often lack granular location insights. This includes data points such as whether a site is residential or commercial, whether there is dock access or a forklift onsite, or if the delivery site has limited hours or requires specialized entry. These details may seem minor, but their absence leads to service mismatches, re-delivery attempts, extended dwell times and more accessorial charges. For example, failing to flag a residential delivery that requires a liftgate can result in a surprise fee and an unhappy customer. A shipment bound for a military base or an airport without the right equipment or credentials can create costly delays and failed deliveries. Inaccurate or incomplete location information does more than increase costs — it erodes operational agility. Technology can ease challenges The good news is that technology now exists to solve these challenges at scale. New platforms that leverage AI, machine learning and geospatial data are transforming how logistics professionals manage LTL freight. These tools can identify potential accessorial charges before the freight is tendered, analyze delivery site characteristics in real time and deliver a unified accessorial view across all stakeholders. By automating accessorial identification during order entry and integrating precise location attributes such as limited access, loading dock availability, forklifts on site or gated entry, these platforms allow teams to move from reactive firefighting to proactive planning. With real-time alerts and API integrations that connect directly into a TMS, shippers, brokers and carriers can operate from a shared source of accessorial truth. The impact of smarter accessorial identification and location visibility delivers measurable results. Companies that have adopted these advanced solutions have reported a 75% reduction in unexpected accessorial fees, leading to cleaner invoices and faster dispute resolution. Customers have also seen improved on-time in-full (OTIF) performance, driving higher customer satisfaction and stronger service-level agreement (SLA) compliance. This shift is particularly timely in 2025, as the LTL industry grapples with economic volatility, rising operating costs and major classification changes. Freight volumes are inconsistent, carriers are prioritizing profitability over market share, and the new National Motor Freight Traffic Association density-based classification system is forcing shippers to re-evaluate how they package and price freight. In this environment, hidden costs such as accessorials and inefficiencies tied to poor location visibility can erode already thin margins. With shifting demand, cost inflation and operational headwinds, the ability to forecast costs, identify risks and plan accordingly has become a key competitive advantage. In the past, accessorial management and granular location visibility may have been viewed as optional enhancements. Today, they are essential for any company that relies on LTL shipping as a core part of its logistics strategy. When customer expectations are rising and disruptions are the new norm, having visibility into every shipment detail and every delivery site is table stakes. The LTL world of 2025 does not reward those who guess. It rewards those who know, and knowing begins with visibility. North Winship is president of Shiplify. Contact him at northw@shiplify.com . Bart De Muynck is a strategic advisor for Drewry. Contact him at bart@bartdemuynck.com .

Visibility transforming accessorial and location insights in LTL shipping

<div class="phx-topic abstract-wrapper">There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters. </div>

There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters.

<div class="phx-topic">The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. <h3>Pushing pause </h3>The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. <h3>Beyond parking </h3>Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. Pushing pause The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. Beyond parking Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Container lines

Ocean carriers are not helpless when it comes to managing capacity

Shanghai to Melbourne

{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {percet_year_Melbourne.formatNumber("##.#%")}

The Shanghai Shipping Exchange’s (SSE) Shanghai Containerized Freight Index (SCFI) reflects spot rates and associated seaborne charges for containerized exports from Shanghai. The SCFI includes indices of freight rates in 13 individual shipping routes and a composite index, using Oct. 16, 2009, as the base period (Oct. 16, 2009 = 1,000). [SSE](https://en.sse.net.cn/indices/scfinew.jsp)

Shanghai to Melbourne container spot rates (SSE)

Shanghai to Melbourne Container Spot Rates (SCFI-Weekly) Gateway

<div class="phx-topic abstract-wrapper">But if current rate competition doesn’t possess the edge it did in prior years, the question is why and whether that matters if the overall effect is to substantially lower rates for shippers in a down market, writes Peter Tirschwell. </div>

But if current rate competition doesn’t possess the edge it did in prior years, the question is why and whether that matters if the overall effect is to substantially lower rates for shippers in a down market, writes Peter Tirschwell.

<div class="phx-topic">Does the recent rate plunge in the eastbound trans-Pacific — with trade from Asia to the US West Coast down 28% since mid-September after having fallen 66% since June amid a deepening sense of gloom among carriers — qualify as a “rate war?” Before answering, it might help to define “rate war” in a container shipping context. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6093418_0.1.jpg"></img></div>Although the term has surfaced in recent weeks to describe rates in the vicinity of loss-making for carriers, it was more common in the 1990s. Back then, it described not just downward rate adjustments by carriers to reflect realities of supply and demand, but predatory moves by one carrier on another’s book of business, a result of animosity and carriers’ single-minded focused on market share. Many believe that the market has moved on from those days. While it’s as price competitive as ever despite significant consolidation, animosity among carriers has subsided over the years despite well-known rivalries, particularly among family-owned European carriers. For example, it would be unusual for a carrier CEO to make remarks today similar to this one from Nils Smedegaard Anderson of Maersk during the Great Recession in 2009, as reported by American Shipper: “We will not allow anyone to take market share from us by systematically undercutting our prices. If it comes down to that we’re ready to fight it out on prices.” “If a rate war is to be defined as 1) lowering the rate to below break-even level and 2) that is with the intent to harm another player with the potential goal of forcing consolidation, then I agree that today’s situation is not a rate war,” said Nils Roche, former deputy general manager for operations at PIL who wrote about the topic <a href="https://www.linkedin.com/pulse/y25m9-war-new-normal-nils-roche-7nrjc/">in his newsletter</a>. “Carriers no longer follow the traditional path of predatory pricing,” said Jon Monroe, the veteran carrier, non-vessel-operating common carrier and technology executive. “I believe the carriers have too much at stake to play the oldest games of predatory pricing. That does not mean they won’t drop their rates for more business.” For some, that is the point — it doesn’t matter what you call it when rates are headed south amid overcapacity and evaporating volumes, and the mantra from on high is “My ship must be full, do as you must,” as Roche said. But if current rate competition lacks the edge it did in prior years, the question is why and whether it matters if the overall effect is to substantially lower rates for shippers in a down market. <h3>Recent carrier experiences are more shared than divergent </h3>The atmosphere among carriers has changed in part due to recent experience, which is more shared than divergent. On one hand, carriers are going their separate ways in acquisitions and business models, pursuing more holistic relationships with shippers covering a range of logistics services. But having said that, the accumulation of record profits during COVID-19 and the subsequent discovery after years of self-doubt that making money is within their reach, solidified a shared view among carriers that actions contrary to the interests of their customers — such as blank sailings, slow steaming at scale or imposing multi-thousand-dollar rate increases at the first sign of market tightness — are no longer regrettable, but desirable in pursuit of profits that for decades had been elusive. One factor that could accrue to shippers’ benefit is in some ways the best of both worlds: a free and transparent market in freight rates occurring in parallel with efforts by several carriers to build deeper partnerships with shippers that in a down market they will struggle to be fully compensated for. The first half-year of the Gemini alliance of Maersk and Hapag-Lloyd largely delivered the very high on-time reliability initially promised, but they are struggling so far to translate that into premium pricing. “I don’t think customers have experienced this long enough that they’re ready to entertain such a discussion, but it is something that is going to come,” Maersk CEO Vincent Clerc told investors on Aug. 7. In other words, as the market deteriorates in the fall of 2025, Gemini is mirroring earlier carrier struggles to translate reliability into profitability, similar to Daily Maersk launched in 2011 or APL maintaining high schedule reliability in the trans-Pacific. Until the market rebounds, they may have to settle for stickiness in regard to customer relationships and cargo on their ships, but not pricing. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Does the recent rate plunge in the eastbound trans-Pacific — with trade from Asia to the US West Coast down 28% since mid-September after having fallen 66% since June amid a deepening sense of gloom among carriers — qualify as a “rate war?” Before answering, it might help to define “rate war” in a container shipping context. Although the term has surfaced in recent weeks to describe rates in the vicinity of loss-making for carriers, it was more common in the 1990s. Back then, it described not just downward rate adjustments by carriers to reflect realities of supply and demand, but predatory moves by one carrier on another’s book of business, a result of animosity and carriers’ single-minded focused on market share. Many believe that the market has moved on from those days. While it’s as price competitive as ever despite significant consolidation, animosity among carriers has subsided over the years despite well-known rivalries, particularly among family-owned European carriers. For example, it would be unusual for a carrier CEO to make remarks today similar to this one from Nils Smedegaard Anderson of Maersk during the Great Recession in 2009, as reported by American Shipper: “We will not allow anyone to take market share from us by systematically undercutting our prices. If it comes down to that we’re ready to fight it out on prices.” “If a rate war is to be defined as 1) lowering the rate to below break-even level and 2) that is with the intent to harm another player with the potential goal of forcing consolidation, then I agree that today’s situation is not a rate war,” said Nils Roche, former deputy general manager for operations at PIL who wrote about the topic in his newsletter . “Carriers no longer follow the traditional path of predatory pricing,” said Jon Monroe, the veteran carrier, non-vessel-operating common carrier and technology executive. “I believe the carriers have too much at stake to play the oldest games of predatory pricing. That does not mean they won’t drop their rates for more business.” For some, that is the point — it doesn’t matter what you call it when rates are headed south amid overcapacity and evaporating volumes, and the mantra from on high is “My ship must be full, do as you must,” as Roche said. But if current rate competition lacks the edge it did in prior years, the question is why and whether it matters if the overall effect is to substantially lower rates for shippers in a down market. Recent carrier experiences are more shared than divergent The atmosphere among carriers has changed in part due to recent experience, which is more shared than divergent. On one hand, carriers are going their separate ways in acquisitions and business models, pursuing more holistic relationships with shippers covering a range of logistics services. But having said that, the accumulation of record profits during COVID-19 and the subsequent discovery after years of self-doubt that making money is within their reach, solidified a shared view among carriers that actions contrary to the interests of their customers — such as blank sailings, slow steaming at scale or imposing multi-thousand-dollar rate increases at the first sign of market tightness — are no longer regrettable, but desirable in pursuit of profits that for decades had been elusive. One factor that could accrue to shippers’ benefit is in some ways the best of both worlds: a free and transparent market in freight rates occurring in parallel with efforts by several carriers to build deeper partnerships with shippers that in a down market they will struggle to be fully compensated for. The first half-year of the Gemini alliance of Maersk and Hapag-Lloyd largely delivered the very high on-time reliability initially promised, but they are struggling so far to translate that into premium pricing. “I don’t think customers have experienced this long enough that they’re ready to entertain such a discussion, but it is something that is going to come,” Maersk CEO Vincent Clerc told investors on Aug. 7. In other words, as the market deteriorates in the fall of 2025, Gemini is mirroring earlier carrier struggles to translate reliability into profitability, similar to Daily Maersk launched in 2011 or APL maintaining high schedule reliability in the trans-Pacific. Until the market rebounds, they may have to settle for stickiness in regard to customer relationships and cargo on their ships, but not pricing. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Trans-Pacific

Container Shipping News

Current trans-Pacific price plunge lacks the echoes of prior ‘rate wars’

<div class="phx-topic abstract-wrapper">Shippers and their forwarders will soon be launching long-term contract tenders for 2026 as the spot market — which heavily influences the contract market — slides closer to pre-Red Sea attack levels. </div>

Shippers and their forwarders will soon be launching long-term contract tenders for 2026 as the spot market — which heavily influences the contract market — slides closer to pre-Red Sea attack levels.

<div class="phx-topic">Asia-Europe ocean carriers are under mounting pressure to raise rate levels on the westbound trade, while shippers can expect aggressive capacity management action by carriers as the annual contract negotiation season draws closer, forwarders on the trade lane say. Shippers and their forwarders will soon be launching long-term contract tenders for 2026 as the spot market — which heavily influences the contract market — slides closer to pre-Red Sea attack levels. Helge Neumann-Lezius, global head of full container load (FCL) at Hellmann Worldwide Logistics, said “loads of tenders” will go out in the next two months, with the expectation that long-term rates will come down for the next season. “There is already a rate war [on Asia-Europe], and I think the only part that helped the industry not end up in a race to the bottom is that we have very few tenders out,” Neumann-Lezius told the Journal of Commerce. “A lot of people are counting on that, which means tenders will start to be launched, some of them with the pressure of their companies being in difficult situations,” he added. “That is the context behind the new tender launches — the companies themselves are having a difficult time, and their volumes will be more unpredictable.” Asia-North Europe spot rates are at $1,300 per FEU, down 57% year over year, while Asia-Mediterranean rates of $1,600 are down 53.5%, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. The spot market has plummeted since reaching $3,340/FEU in July on Asia-North Europe and $4,660/FEU on Asia-Mediterranean in June. Average long-term rates for China to North Europe signed in the last three months were at $3,582/FEU as of Monday, down 56% compared with the same time last year, data from industry analyst Xeneta shows. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="73f31d19-63a1-4d2b-950b-193943809ae3"></dynamic-object></div>Still, with no guarantee that rates will continue to decline through the fourth quarter, Sanjay Tejwani, CEO of consulting firm 365 Logistics, warned shippers to expect aggressive capacity and rate-managing action from carriers in October and early November in the run-up to contract talks. “We have seen the push by carriers to implement rate increases — the next one is mid-October — and there will be some additional ad hoc blank sailings on top of the 17% blanks already announced,” he said. Hapag-Lloyd and Mediterranean Shipping Co. will be setting Asia-North Europe freight-all-kinds (FAK) rates at between $2,400/FEU and $2,660/FEU as of Oct. 15, with Asia-Mediterranean rates between $3,500/FEU and $4,600/FEU. Capacity removed through blank sailings in October has reached 195,116 TEUs, up from 109,000 TEUs in September, Xeneta data shows. But deployed capacity is up from 988,600 TEUs in September to just shy of 1.2 million TEUs in October. That number drops sharply in November to 1 million TEUs, with blank sailings announced for the month standing at 108,720 TEUs thus far. “It’s extremely important for carriers to manage capacity and supply versus demand in this quarter, otherwise they are doomed in terms of the contracting season for next year,” Tejwani said. <h3>Annual contracts ‘not all about rates’ </h3>Just how the negotiating environment will shape up remains uncertain, with carriers facing a widening capacity overhang and demand undermined by weak European economies. Drewry Supply Chain Advisors noted in a market update this week that as inflationary pressures on freight rates stemming from Red Sea disruptions, frontloading and tariff-related issues begin to ease, shippers are likely to negotiate more favorable contract rates and improved terms with carriers and forwarders for 2026. But the contract talks should not only be about rates, warned Chantal McRoberts, director of Drewry Supply Chain Advisors. “Other than the prospect of lower contract rates for shippers, the other important aspect of bid strategy for 2026 contracts is risk management and resilience,” she said. Drewry is advising its shipper customers to review their carrier contract language to include longer payment terms, more service quality commitments and clauses to control surcharges such as detention and demurrage. In some cases, Drewry is also recommending that shippers include a clause where a rate review is triggered if market prices collapse. Tejwani told the Journal of Commerce that if cargo owners wanted to avoid having their contracts torn up should the tide turn, they would sign annual rates above loss-making levels for the oversupplied carriers. “Some carriers may blink first and sign deals at very low rates, but the minute you have a rush coming in, those contracts are not going to be worth the paper they’re written on, and I think a lot of shippers realize this,” he said. “If shippers really want to have a smooth supply chain for all of 2026 and access to capacity when the crunch comes, those smart shippers will agree to reasonable rate levels and not push carriers for the last single dollar,” Tejwani added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Asia-Europe ocean carriers are under mounting pressure to raise rate levels on the westbound trade, while shippers can expect aggressive capacity management action by carriers as the annual contract negotiation season draws closer, forwarders on the trade lane say. Shippers and their forwarders will soon be launching long-term contract tenders for 2026 as the spot market — which heavily influences the contract market — slides closer to pre-Red Sea attack levels. Helge Neumann-Lezius, global head of full container load (FCL) at Hellmann Worldwide Logistics, said “loads of tenders” will go out in the next two months, with the expectation that long-term rates will come down for the next season. “There is already a rate war [on Asia-Europe], and I think the only part that helped the industry not end up in a race to the bottom is that we have very few tenders out,” Neumann-Lezius told the Journal of Commerce. “A lot of people are counting on that, which means tenders will start to be launched, some of them with the pressure of their companies being in difficult situations,” he added. “That is the context behind the new tender launches — the companies themselves are having a difficult time, and their volumes will be more unpredictable.” Asia-North Europe spot rates are at $1,300 per FEU, down 57% year over year, while Asia-Mediterranean rates of $1,600 are down 53.5%, according to Platts, a sister company of the Journal of Commerce within S&P Global. The spot market has plummeted since reaching $3,340/FEU in July on Asia-North Europe and $4,660/FEU on Asia-Mediterranean in June. Average long-term rates for China to North Europe signed in the last three months were at $3,582/FEU as of Monday, down 56% compared with the same time last year, data from industry analyst Xeneta shows. Still, with no guarantee that rates will continue to decline through the fourth quarter, Sanjay Tejwani, CEO of consulting firm 365 Logistics, warned shippers to expect aggressive capacity and rate-managing action from carriers in October and early November in the run-up to contract talks. “We have seen the push by carriers to implement rate increases — the next one is mid-October — and there will be some additional ad hoc blank sailings on top of the 17% blanks already announced,” he said. Hapag-Lloyd and Mediterranean Shipping Co. will be setting Asia-North Europe freight-all-kinds (FAK) rates at between $2,400/FEU and $2,660/FEU as of Oct. 15, with Asia-Mediterranean rates between $3,500/FEU and $4,600/FEU. Capacity removed through blank sailings in October has reached 195,116 TEUs, up from 109,000 TEUs in September, Xeneta data shows. But deployed capacity is up from 988,600 TEUs in September to just shy of 1.2 million TEUs in October. That number drops sharply in November to 1 million TEUs, with blank sailings announced for the month standing at 108,720 TEUs thus far. “It’s extremely important for carriers to manage capacity and supply versus demand in this quarter, otherwise they are doomed in terms of the contracting season for next year,” Tejwani said. Annual contracts ‘not all about rates’ Just how the negotiating environment will shape up remains uncertain, with carriers facing a widening capacity overhang and demand undermined by weak European economies. Drewry Supply Chain Advisors noted in a market update this week that as inflationary pressures on freight rates stemming from Red Sea disruptions, frontloading and tariff-related issues begin to ease, shippers are likely to negotiate more favorable contract rates and improved terms with carriers and forwarders for 2026. But the contract talks should not only be about rates, warned Chantal McRoberts, director of Drewry Supply Chain Advisors. “Other than the prospect of lower contract rates for shippers, the other important aspect of bid strategy for 2026 contracts is risk management and resilience,” she said. Drewry is advising its shipper customers to review their carrier contract language to include longer payment terms, more service quality commitments and clauses to control surcharges such as detention and demurrage. In some cases, Drewry is also recommending that shippers include a clause where a rate review is triggered if market prices collapse. Tejwani told the Journal of Commerce that if cargo owners wanted to avoid having their contracts torn up should the tide turn, they would sign annual rates above loss-making levels for the oversupplied carriers. “Some carriers may blink first and sign deals at very low rates, but the minute you have a rush coming in, those contracts are not going to be worth the paper they’re written on, and I think a lot of shippers realize this,” he said. “If shippers really want to have a smooth supply chain for all of 2026 and access to capacity when the crunch comes, those smart shippers will agree to reasonable rate levels and not push carriers for the last single dollar,” Tejwani added. Contact Greg Knowler at greg.knowler@spglobal.com .

Forwarding

Asia-Europe

Contract season looms for ocean carriers facing Asia-Europe rate slump

<div class="phx-topic abstract-wrapper">The onus of calculating new US port fees that kick in next week falls on ocean carriers. </div>

The onus of calculating new US port fees that kick in next week falls on ocean carriers.

<div class="phx-topic">The United States is moving forward with a plan to collect port fees, putting the onus on ocean carriers to calculate and setting the stage for a showdown with China, which is teeing up its own retaliatory actions. The US Customs and Border Protection in a notice issued Friday, directed ocean carriers to determine any China-built tonnage calling US ports and pay new fees starting Oct. 14. China-based operators face harsher fees than their counterparts, spurring Beijing last week to prepare its own retaliatory “special fees” for ships that are tied to actors hurting Chinese interests. The vagueness of the criteria China could use to determine ties to the United States has expanded the risk of other ocean carriers getting caught in the crossfire beyond the obvious targets: US-flag vessel operators. A change to Chinese shipping law that took effect Sept. 29 allows China to go as far as blocking vessels from its ports. The US Maritime Administration has been in a long-running disagreement with China’s Ministry of Transport, accusing Chinese ports of giving unfavorable treatment to US-owned vessels. Both countries agreed to a level playing field through the US-China Bilateral Maritime Agreement, which took effect in 1998. The US federal register notice doesn’t detail how US Customs and Border Protection (CBP) would enforce the new port fee. The shipping industry largely failed to convince the USTR to again water down the Section 301 tariffs underpinning the port fees, although LNG-vessel shipowners and operators were exempted. The shipping industry successfully lobbied to ease the planned USTR port fee, with the agency releasing <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">a less-severe plan in mid-April</a>. Container lines <a href="https://www.joc.com/article/chinese-tonnage-moving-out-of-us-container-trade-ahead-of-new-fees-xeneta-6081320">have made moves to avoid the new fees</a>. A week prior to Oct. 14, there were 647,000 TEUs of China-built capacity, equating to 13% of the tonnage on the trade between Asia and North America, according to rate benchmarking provider Xeneta. On the trans-Atlantic, which includes some Canada-only calls, there were 81,000 TEUs of capacity or 8.6% of deployed capacity. There’s more than 118,00 TEUs of China-built tonnage from vessels that are smaller than 4,000 TEUs and deployed on US services but are excluded from the new port fee. But Cosco Shipping, its subsidiary OOCL, and Hede can’t avoid them and are the primary targets of the US response to what it sees as unfair subsidies to Chinese shipbuilding. Cosco and OOCL, which handle most US laden imports from China, have pledged to continue operating in the US trades. China has stayed largely silent on the planned US port fees since they were proposed in late February, acting by changing its shipping law just two weeks before planned implementation. Chinese shipowners were quick last week to back the change to the Regulations of the People’s Republic on International Ocean Shipping, which China modeled on the US Shipping Act approximately 20 years ago. “This is of great significance for promoting the establishment of a fair and equal international maritime transportation governance system, facilitating the smooth flow of global trade, and safeguarding the security and resilience of industrial and supply chains,” the China Shipowners’ Association said in a Sept. 30 statement. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

The United States is moving forward with a plan to collect port fees, putting the onus on ocean carriers to calculate and setting the stage for a showdown with China, which is teeing up its own retaliatory actions. The US Customs and Border Protection in a notice issued Friday, directed ocean carriers to determine any China-built tonnage calling US ports and pay new fees starting Oct. 14. China-based operators face harsher fees than their counterparts, spurring Beijing last week to prepare its own retaliatory “special fees” for ships that are tied to actors hurting Chinese interests. The vagueness of the criteria China could use to determine ties to the United States has expanded the risk of other ocean carriers getting caught in the crossfire beyond the obvious targets: US-flag vessel operators. A change to Chinese shipping law that took effect Sept. 29 allows China to go as far as blocking vessels from its ports. The US Maritime Administration has been in a long-running disagreement with China’s Ministry of Transport, accusing Chinese ports of giving unfavorable treatment to US-owned vessels. Both countries agreed to a level playing field through the US-China Bilateral Maritime Agreement, which took effect in 1998. The US federal register notice doesn’t detail how US Customs and Border Protection (CBP) would enforce the new port fee. The shipping industry largely failed to convince the USTR to again water down the Section 301 tariffs underpinning the port fees, although LNG-vessel shipowners and operators were exempted. The shipping industry successfully lobbied to ease the planned USTR port fee, with the agency releasing a less-severe plan in mid-April . Container lines have made moves to avoid the new fees . A week prior to Oct. 14, there were 647,000 TEUs of China-built capacity, equating to 13% of the tonnage on the trade between Asia and North America, according to rate benchmarking provider Xeneta. On the trans-Atlantic, which includes some Canada-only calls, there were 81,000 TEUs of capacity or 8.6% of deployed capacity. There’s more than 118,00 TEUs of China-built tonnage from vessels that are smaller than 4,000 TEUs and deployed on US services but are excluded from the new port fee. But Cosco Shipping, its subsidiary OOCL, and Hede can’t avoid them and are the primary targets of the US response to what it sees as unfair subsidies to Chinese shipbuilding. Cosco and OOCL, which handle most US laden imports from China, have pledged to continue operating in the US trades. China has stayed largely silent on the planned US port fees since they were proposed in late February, acting by changing its shipping law just two weeks before planned implementation. Chinese shipowners were quick last week to back the change to the Regulations of the People’s Republic on International Ocean Shipping, which China modeled on the US Shipping Act approximately 20 years ago. “This is of great significance for promoting the establishment of a fair and equal international maritime transportation governance system, facilitating the smooth flow of global trade, and safeguarding the security and resilience of industrial and supply chains,” the China Shipowners’ Association said in a Sept. 30 statement. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

US presses forward on port fees despite China’s warning

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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<div class="phx-topic abstract-wrapper">The Class I railroad says the real entity behind the complaint is Norfolk Southern’s merger partner Union Pacific, which CPKC says has been delivering trains too long to safely operate. </div>

The Class I railroad says the real entity behind the complaint is Norfolk Southern’s merger partner Union Pacific, which CPKC says has been delivering trains too long to safely operate.

<div class="phx-topic">Canadian Pacific Kansas City (CPKC) shot down a complaint from Norfolk Southern (NS) that alleged CPKC is throttling access on a jointly owned track in the US Southeast, saying NS’ merger partner Union Pacific is ignoring the track’s safety protocols on the length of train blocks. CPKC said in a statement to the Journal of Commerce that it plans a detailed response to a filing NS made Tuesday with the US Surface Transportation Board (STB) regarding operation of <a href="https://www.joc.com/article/a-merged-cp-kcs-would-offer-new-cross-border-intermodal-growth-ramp-5250376">the Meridian Speedway</a>, a 320-mile track between Shreveport, Louisiana. and Meridian, Mississippi. The letter claimed that CPKC, <a href="https://www.joc.com/article/us-regulators-approve-cp-kcs-merger-to-form-first-us-canada-mexico-rail-5192986">the track’s majority owner and operator</a>, is failing to provide on-time service to NS, which has haulage rights on Meridian as its minority owner. It said two-thirds of CPKC trains hauling NS intermodal freight are behind schedule, pushing up to 100,000 loads to trucks. NS is asking the STB to require an action plan from CPKC that will address crew availability and how it will improve train speeds on the Meridian. “There has been a substantial deterioration in intermodal train service ... which has affected traffic to multiple intermodal customers, some of whom have diverted their traffic from rail service to trucks,” NS’ letter said. CPKC said in its statement that it is “preparing a detailed response to refute these misleading claims and representations” and that the railroad “has lived up to its commitments” that were part of the STB’s approval for Canadian Pacific’s takeover of Kansas City Southern. CPKC said it recently told Union Pacific (UP), which also ships freight on Meridian through its interchange agreements with NS, that UP’s train blocks are too long by some 2,500 feet. That length exceeds the design length for sidings on the single-track route, CPKC said. The railroad said that the shorter train lengths are outlined in Meridian’s operating agreement and benefit all customers through faster speeds and reliability, “We understand that delivering shorter trains at Shreveport requires adjustments by UP when it builds it trains out west,” CPKC said. “It is our responsibility in safely and efficiently operating the Speedway to ensure our customers’ interests are weighed and protected fairly as well, not only just what UP believes is in their best interest.” <h3>UPS, FedEx major Meridian customers </h3>Meridian is a key rail gateway to the Southeast, with UPS and FedEx both major customers for eastbound parcel traffic to Atlanta. According to one source familiar with matter, UPS has been having to truck its eastbound parcels since August due to the disruption. Speaking in Chicago Wednesday at the Journal of Commerce Inland Distribution conference, UP Chief Executive Jim Vena said <a href="https://www.joc.com/article/inland-25-ns-merger-wont-limit-access-to-other-railroads-up-ceo-6090216">Meridian was routinely handling train blocks exceeding 11,000 feet under Kansas City Southern</a>. But CPKC has now throttled those blocks down to 8,000 feet. While UP did not raise the issue with the STB because it’s not a party to Meridian’s operation, Vena said his company also addressed the matter in a letter directly to CPKC. He said UP would have more leverage in the matter due to the access it grants CPKC trains on tracks to Mexico. “They [CPKC] need to have a ‘come-to-Jesus’ moment,” Vena said. “All of a sudden you wake and then you tell me that you’re short of crews? Well, you’re short of crews because you decided not to run this 11,000-foot train that you always used to be able to run.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Canadian Pacific Kansas City (CPKC) shot down a complaint from Norfolk Southern (NS) that alleged CPKC is throttling access on a jointly owned track in the US Southeast, saying NS’ merger partner Union Pacific is ignoring the track’s safety protocols on the length of train blocks. CPKC said in a statement to the Journal of Commerce that it plans a detailed response to a filing NS made Tuesday with the US Surface Transportation Board (STB) regarding operation of the Meridian Speedway , a 320-mile track between Shreveport, Louisiana. and Meridian, Mississippi. The letter claimed that CPKC, the track’s majority owner and operator , is failing to provide on-time service to NS, which has haulage rights on Meridian as its minority owner. It said two-thirds of CPKC trains hauling NS intermodal freight are behind schedule, pushing up to 100,000 loads to trucks. NS is asking the STB to require an action plan from CPKC that will address crew availability and how it will improve train speeds on the Meridian. “There has been a substantial deterioration in intermodal train service ... which has affected traffic to multiple intermodal customers, some of whom have diverted their traffic from rail service to trucks,” NS’ letter said. CPKC said in its statement that it is “preparing a detailed response to refute these misleading claims and representations” and that the railroad “has lived up to its commitments” that were part of the STB’s approval for Canadian Pacific’s takeover of Kansas City Southern. CPKC said it recently told Union Pacific (UP), which also ships freight on Meridian through its interchange agreements with NS, that UP’s train blocks are too long by some 2,500 feet. That length exceeds the design length for sidings on the single-track route, CPKC said. The railroad said that the shorter train lengths are outlined in Meridian’s operating agreement and benefit all customers through faster speeds and reliability, “We understand that delivering shorter trains at Shreveport requires adjustments by UP when it builds it trains out west,” CPKC said. “It is our responsibility in safely and efficiently operating the Speedway to ensure our customers’ interests are weighed and protected fairly as well, not only just what UP believes is in their best interest.” UPS, FedEx major Meridian customers Meridian is a key rail gateway to the Southeast, with UPS and FedEx both major customers for eastbound parcel traffic to Atlanta. According to one source familiar with matter, UPS has been having to truck its eastbound parcels since August due to the disruption. Speaking in Chicago Wednesday at the Journal of Commerce Inland Distribution conference, UP Chief Executive Jim Vena said Meridian was routinely handling train blocks exceeding 11,000 feet under Kansas City Southern . But CPKC has now throttled those blocks down to 8,000 feet. While UP did not raise the issue with the STB because it’s not a party to Meridian’s operation, Vena said his company also addressed the matter in a letter directly to CPKC. He said UP would have more leverage in the matter due to the access it grants CPKC trains on tracks to Mexico. “They [CPKC] need to have a ‘come-to-Jesus’ moment,” Vena said. “All of a sudden you wake and then you tell me that you’re short of crews? Well, you’re short of crews because you decided not to run this 11,000-foot train that you always used to be able to run.” Contact Michael Angell at michael.angell@spglobal.com .

Rail News

Intermodal providers

CPKC pushes back on NS complaint over Meridian track access

<div class="phx-topic abstract-wrapper">A regulation change that went into effect over the weekend allows Beijing to penalize and block vessels from countries that it accuses of targeting its own shipping activities. </div>

A regulation change that went into effect over the weekend allows Beijing to penalize and block vessels from countries that it accuses of targeting its own shipping activities.

<div class="phx-topic">China has amended its maritime regulations to allow it to penalize and restrict vessels of countries accused of targeting its shipping operations, flexing its power and raising the stakes just two weeks before a US tax on Chinese operators and shipbuilding takes effect. China Premier Li Qiang has signed into law an amendment that took effect Sunday, laying the groundwork for China to block not just vessels, but also data, information and other maritime services of other countries it wishes to target, according to an order from China’s State Council seen by the Journal of Commerce. The amendment keeps the door open for conciliation through treaties and agreements, which comes as the Trump administration seeks to negotiate a larger trade deal with China. The move by Beijing comes ahead of the Oct. 14 date when US Customs and Border Protection will begin collecting special taxes on ships calling US ports that are operated by China-based companies or were built in China. The US has accused China of unfairly subsidizing its shipbuilding industry to establish global maritime dominance and is leveling the sharpest taxes on Cosco Shipping and its OOCL subsidiary. Container lines not based in China <a href="https://www.joc.com/article/chinese-tonnage-moving-out-of-us-container-trade-ahead-of-new-fees-xeneta-6081320">have shifted China-built ships out of US services</a> and replaced them with vessels from South Korea and elsewhere to avoid the new fees. Major carriers including <a href="https://www.joc.com/article/msc-ready-for-us-port-fees-after-network-changes-ceo-6079762">Maersk and Mediterranean Shipping Co.</a> have said in recent weeks they won’t need to levy a surcharge to recoup costs from the new fee. Cosco and OOCL, which together handle the largest share of US imports from Asia, have signaled they will continue to operate in the US trades. The port fees, <a href="https://www.joc.com/article/us-port-fees-could-exceed-2b-for-cosco-oocl-hsbc-6077305">estimated by investment bank HSBC to cost the two Chinese carriers at least $2 billion in the first year</a>, will rise incrementally over the next four years. The US Trade Representative (USTR) is expected in the coming week to release an FAQ regarding the so-called Section 301 investigation into China’s maritime activities and respond to requests for clarifications and changes on the US new tax, according to one person close to the matter. The investigation targets Chinese-built chassis, container equipment and cranes, some of which are being <a href="https://www.joc.com/article/freeport-pays-crane-tariffs-to-avoid-ustr-fee-risk-6087337">received by US ports this month before the Oct. 14 deadline</a>. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

China has amended its maritime regulations to allow it to penalize and restrict vessels of countries accused of targeting its shipping operations, flexing its power and raising the stakes just two weeks before a US tax on Chinese operators and shipbuilding takes effect. China Premier Li Qiang has signed into law an amendment that took effect Sunday, laying the groundwork for China to block not just vessels, but also data, information and other maritime services of other countries it wishes to target, according to an order from China’s State Council seen by the Journal of Commerce. The amendment keeps the door open for conciliation through treaties and agreements, which comes as the Trump administration seeks to negotiate a larger trade deal with China. The move by Beijing comes ahead of the Oct. 14 date when US Customs and Border Protection will begin collecting special taxes on ships calling US ports that are operated by China-based companies or were built in China. The US has accused China of unfairly subsidizing its shipbuilding industry to establish global maritime dominance and is leveling the sharpest taxes on Cosco Shipping and its OOCL subsidiary. Container lines not based in China have shifted China-built ships out of US services and replaced them with vessels from South Korea and elsewhere to avoid the new fees. Major carriers including Maersk and Mediterranean Shipping Co. have said in recent weeks they won’t need to levy a surcharge to recoup costs from the new fee. Cosco and OOCL, which together handle the largest share of US imports from Asia, have signaled they will continue to operate in the US trades. The port fees, estimated by investment bank HSBC to cost the two Chinese carriers at least $2 billion in the first year , will rise incrementally over the next four years. The US Trade Representative (USTR) is expected in the coming week to release an FAQ regarding the so-called Section 301 investigation into China’s maritime activities and respond to requests for clarifications and changes on the US new tax, according to one person close to the matter. The investigation targets Chinese-built chassis, container equipment and cranes, some of which are being received by US ports this month before the Oct. 14 deadline . Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Supply chain

China flexes maritime power in response to coming US port fee

<div class="phx-topic abstract-wrapper">A string of storms in September has roiled vessel schedules and terminal operations throughout the region.</div>

A string of storms in September has roiled vessel schedules and terminal operations throughout the region.

<div class="phx-topic">Ocean carriers are warning of skipped port calls, rerouted cargo and vessel delays on a raft of trans-Pacific and Asia-Europe and Asia-Mediterranean sailings over the next two weeks in the aftermath of the recent typhoons that have hit China. The threat of widespread disruption comes on the eve of China’s National Day holiday that starts Wednesday and is expected to last 10 days. <a href="https://www.joc.com/article/south-china-supply-chains-brace-for-years-strongest-typhoon-6084358">Typhoon Ragasa closed ports in southern China and Taiwan for three days last week</a>, Tropical Storm Mitag affected the Philippines and southeast China in mid-September and Typhoon Tapah struck the same region in early September. Hapag-Lloyd said its Gemini Cooperation services with partner Maersk are among those affected by the string of tropical cyclones. The most severely impacted are Gemini’s Pacific Southwest services, WC1 and WC3, with Nansha omitted this week on the trans-Pacific eastbound sailing by Gerd Maersk. Hapag-Lloyd said cargo will be rolled to the next WC1 voyage. Shanghai will also be omitted this week and next week on Gemini’s WC3 service to recover schedule reliability from delays caused by the typhoons, Hapag-Lloyd said. Sailings affected are those by GSL Lydia this week, with cargo transferred to the WC2 and US2 services, and by Norwalk next week, with cargo shifted to the US2 service operated by Kandla Express and US1 served by CCNI Algol. The delays follow call omissions last week at Yantian by the Gunvor Maersk due to Typhoon Ragasa. Hapag-Lloyd said cargo for Nansha has been discharged in both Vung Tau in Vietnam and Yantian, and will be carried back the Guangzhou international gateway port in three subsequent sailings. The carrier said the Dortmund Express operating Gemini’s Asia-US East Coast 1 service was late berthing at Yantian last Friday due to Ragasa after having already omitted Nansha on the same service due to Typhoon Tapah. Ocean Network Express (ONE) also highlighted delays of up to seven days on its Asia-Mediterranean MS1 and MD2 services due to the storms in the South China Sea. ONE confirmed a four-day delay by ACX Pearl operating its Japan-Straits-Malaysia service due to the disruption at Hong Kong and at Keelung in Taiwan. The carrier also said vessels are being delayed due to Typhoon Neoguri, which affected Japan and South Korea last week. CMA CGM also warned of vessel delays following port closures at Manila and Subic due to Typhoon Bualoi, which hit the Philippines over the weekend. Delays are also likely at Haiphong after Bualoi made landfall in northern Vietnam Monday, killing at least 30 people and causing extensive flooding. <h3>Congested ports gradually recovering </h3>Ports in south China are gradually recovering from the impact of Ragasa, with Hong Kong back to normal operations, but some Shenzhen terminals are still heavily congested. “The backlog [at Hong Kong and DaChan Bay] caused by Typhoon Ragasa has already been cleared,” a spokesperson for Hong Kong’s Modern Terminals told the Journal of Commerce Tuesday. A senior executive at a Hong Kong-based forwarder said Shenzhen’s western terminals, including Shekou and Chiwan, are still heavily congested. “The terminals will remain open during the extended National Day holiday and with factories closed for the holiday, this should provide [the terminals] with some respite to clear the backlog of cargo,” the executive told the Journal of Commerce Tuesday. Hapag-Lloyd said Shekou is still experiencing berthing delays of four to five days, with a five- to seven-day wait at Yantian. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Ocean carriers are warning of skipped port calls, rerouted cargo and vessel delays on a raft of trans-Pacific and Asia-Europe and Asia-Mediterranean sailings over the next two weeks in the aftermath of the recent typhoons that have hit China. The threat of widespread disruption comes on the eve of China’s National Day holiday that starts Wednesday and is expected to last 10 days. Typhoon Ragasa closed ports in southern China and Taiwan for three days last week , Tropical Storm Mitag affected the Philippines and southeast China in mid-September and Typhoon Tapah struck the same region in early September. Hapag-Lloyd said its Gemini Cooperation services with partner Maersk are among those affected by the string of tropical cyclones. The most severely impacted are Gemini’s Pacific Southwest services, WC1 and WC3, with Nansha omitted this week on the trans-Pacific eastbound sailing by Gerd Maersk. Hapag-Lloyd said cargo will be rolled to the next WC1 voyage. Shanghai will also be omitted this week and next week on Gemini’s WC3 service to recover schedule reliability from delays caused by the typhoons, Hapag-Lloyd said. Sailings affected are those by GSL Lydia this week, with cargo transferred to the WC2 and US2 services, and by Norwalk next week, with cargo shifted to the US2 service operated by Kandla Express and US1 served by CCNI Algol. The delays follow call omissions last week at Yantian by the Gunvor Maersk due to Typhoon Ragasa. Hapag-Lloyd said cargo for Nansha has been discharged in both Vung Tau in Vietnam and Yantian, and will be carried back the Guangzhou international gateway port in three subsequent sailings. The carrier said the Dortmund Express operating Gemini’s Asia-US East Coast 1 service was late berthing at Yantian last Friday due to Ragasa after having already omitted Nansha on the same service due to Typhoon Tapah. Ocean Network Express (ONE) also highlighted delays of up to seven days on its Asia-Mediterranean MS1 and MD2 services due to the storms in the South China Sea. ONE confirmed a four-day delay by ACX Pearl operating its Japan-Straits-Malaysia service due to the disruption at Hong Kong and at Keelung in Taiwan. The carrier also said vessels are being delayed due to Typhoon Neoguri, which affected Japan and South Korea last week. CMA CGM also warned of vessel delays following port closures at Manila and Subic due to Typhoon Bualoi, which hit the Philippines over the weekend. Delays are also likely at Haiphong after Bualoi made landfall in northern Vietnam Monday, killing at least 30 people and causing extensive flooding. Congested ports gradually recovering Ports in south China are gradually recovering from the impact of Ragasa, with Hong Kong back to normal operations, but some Shenzhen terminals are still heavily congested. “The backlog [at Hong Kong and DaChan Bay] caused by Typhoon Ragasa has already been cleared,” a spokesperson for Hong Kong’s Modern Terminals told the Journal of Commerce Tuesday. A senior executive at a Hong Kong-based forwarder said Shenzhen’s western terminals, including Shekou and Chiwan, are still heavily congested. “The terminals will remain open during the extended National Day holiday and with factories closed for the holiday, this should provide [the terminals] with some respite to clear the backlog of cargo,” the executive told the Journal of Commerce Tuesday. Hapag-Lloyd said Shekou is still experiencing berthing delays of four to five days, with a five- to seven-day wait at Yantian. Contact Keith Wallis at keithwallis@hotmail.com .

Marine terminals

Hapag-Lloyd, ONE warn of skipped calls, vessel delays due to Asian typhoons

<div class="phx-topic abstract-wrapper">But Union Pacific’s Jim Vena says the cooperation agreements that rival railroads are making to compete with a combined UP-NS don’t yield the same benefits as a merger. </div>

But Union Pacific’s Jim Vena says the cooperation agreements that rival railroads are making to compete with a combined UP-NS don’t yield the same benefits as a merger.

<div class="phx-topic">Chicago — Shippers will still have easy access to other rail networks should Union Pacific’s (UP’s) merger with Norfolk Southern (NS) be completed, according to UP CEO Jim Vena. But Vena, speaking Tuesday at the Journal of Commerce’s Inland Distribution Conference, said such interline partnerships between railroads fail to deliver the same efficiencies as a merger, citing problems that NS is having in a track access agreement with Canadian Pacific Kansas City (CPKC). Vena said he’s confident UP can maintain <a href="https://www.joc.com/article/shippers-logistics-providers-satisfied-with-h1-rail-performance-6063203">its current high satisfaction with intermodal shippers</a> once its merger with NS is approved. While UP’s average 20-hour dwell time for railcars is among the lowest in the industry, Vena said that dwell could drop even further through a coast-to-coast network with NS. He expects overall transit times on many routes will fall by 24 to 48 hours once the merger is approved. “There’s going to be 1,000 truck moves today in Chicago that are going to move containers from our railroad to another one,” Vena told Inland ‘25. “That rubber-tire interchange is gone when you ship on the new Union Pacific. We won’t be stopping the train. We’re going to give you service right through to the end location.” In addition to avoiding interchange delays, a merged rail network will also be able to spread its volumes through more terminals and potentially avoid the congestion issues that periodically hit Chicago. Smaller hubs such as Kansas City can offer faster crew changes, while <a href="https://www.joc.com/article/up-ns-joint-intermodal-service-to-link-west-coast-with-louisville-in-midwest-6080692">opening new destinations such as Louisville</a>. “If that’s the fastest route, we’re going through Chicago,” Vena said. “If the best way is to go through Kansas City and head to the northeast, then we’ll go that way.” UP already offers a coast-to-coast intermodal service through its EMP shared container service with NS and UMAX shared container service with CSX Transportation. Even while a combined UP-NS will have that same service, Vena said his railroad will still offer shippers the option of using UMAX if they choose. “We want to keep the UMAX program,” he said. “There are certain things that are going to be better with the combined UP-NS. But if the customer says I want that service with the CSX and UMAX, that’s what we’ll do.” During a separate panel, CSX Vice President Andrew Johnson said the carrier also remains committed to the UMAX program, citing a recently weekly volume record for UMAX shipments. He said the steel-wheel interchange with CSX in Chicago eliminates hundreds of truck trips. “We are committed to growing the UMAX product regardless of what happens with this merger,” Johnson said. “We will have a rail box product that we’re not walking away from.” <h3>Vena not happy with CPKC-linked NS delays in Southeast </h3>Even with a coast-to-coast network, Vena said there are regions where a combined UP-NS will still need to cooperate with other railroads to reach certain destinations, especially in the Southeast. Vena said UP will steer shippers to the fastest option, even if it involves other railroads. “If freight is headed to Florida, the fastest way and the quickest route is with CSX connecting through New Orleans,” he said. “We’ll make sure we give that option to shippers.” However, Vena said that type of cooperation is not being reciprocated by others. NS shipments to the Southeast market are facing delays on a 320-mile track segment through Mississippi and Louisiana that NS owns with CPKC known as the Meridian Speedway. Vena said CPKC, the track’s majority owner, is currently only allowing 8,000-foot trains to operate on the tracks, rather than the 11,000-foot trains allowed on the tracks under its previous owner, pre-merger Kansas City Southern. The Southeast service is primarily used by large parcel shippers FedEx and UPS to reach Atlanta. Vena said NS runs two trains instead of one to ensure those shipments will not be delayed. While the track access is NS’ problem until the merger is completed, Vena said he sent a letter to CPKC questioning why the limits are in place. And on Tuesday, Norfolk Southern filed a complaint with the Surface Transportation Board (STB), alleging that CPKC is violating commitments it made to regulators when it acquired Kansas City Southern in 2023. “We ran trains for a long time with no major headaches until you get the combination of CP and Kansas City and for some reason, they decided that they couldn’t run an 11,000-foot train even though that’s the commitment they made to the STB,” Vena said. “I’m not happy with it and hopefully they wake up and change their mind and go back to operating the trains the way they were supposed to.” Vena said the track access issue shows the difficulties that railroads have had in executing cooperation agreements. While <a href="https://www.joc.com/article/bnsf-csx-unveil-new-joint-intermodal-lanes-in-aftermath-of-up-ns-merger-6067789">other railroads</a> are marketing new intermodal services through cooperation agreements, Vena said those deals will still be plagued by the different processes and operations of separate railroads. “Those cooperation agreements have never worked out,” he said. CSX’s Johnson, whose company is adding <a href="https://www.joc.com/article/cn-csx-joint-service-to-connect-west-canada-and-nashville-6077903">other intermodal lanes to compete with UP-NS</a>, defended cooperation agreements as an efficient, viable way to link two railroads. “Despite what you heard earlier this morning, interline partnerships do work, they’ve worked for a long, long time, and they will continue to work with whatever happens with this merger,” he said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Chicago — Shippers will still have easy access to other rail networks should Union Pacific’s (UP’s) merger with Norfolk Southern (NS) be completed, according to UP CEO Jim Vena. But Vena, speaking Tuesday at the Journal of Commerce’s Inland Distribution Conference, said such interline partnerships between railroads fail to deliver the same efficiencies as a merger, citing problems that NS is having in a track access agreement with Canadian Pacific Kansas City (CPKC). Vena said he’s confident UP can maintain its current high satisfaction with intermodal shippers once its merger with NS is approved. While UP’s average 20-hour dwell time for railcars is among the lowest in the industry, Vena said that dwell could drop even further through a coast-to-coast network with NS. He expects overall transit times on many routes will fall by 24 to 48 hours once the merger is approved. “There’s going to be 1,000 truck moves today in Chicago that are going to move containers from our railroad to another one,” Vena told Inland ‘25. “That rubber-tire interchange is gone when you ship on the new Union Pacific. We won’t be stopping the train. We’re going to give you service right through to the end location.” In addition to avoiding interchange delays, a merged rail network will also be able to spread its volumes through more terminals and potentially avoid the congestion issues that periodically hit Chicago. Smaller hubs such as Kansas City can offer faster crew changes, while opening new destinations such as Louisville . “If that’s the fastest route, we’re going through Chicago,” Vena said. “If the best way is to go through Kansas City and head to the northeast, then we’ll go that way.” UP already offers a coast-to-coast intermodal service through its EMP shared container service with NS and UMAX shared container service with CSX Transportation. Even while a combined UP-NS will have that same service, Vena said his railroad will still offer shippers the option of using UMAX if they choose. “We want to keep the UMAX program,” he said. “There are certain things that are going to be better with the combined UP-NS. But if the customer says I want that service with the CSX and UMAX, that’s what we’ll do.” During a separate panel, CSX Vice President Andrew Johnson said the carrier also remains committed to the UMAX program, citing a recently weekly volume record for UMAX shipments. He said the steel-wheel interchange with CSX in Chicago eliminates hundreds of truck trips. “We are committed to growing the UMAX product regardless of what happens with this merger,” Johnson said. “We will have a rail box product that we’re not walking away from.” Vena not happy with CPKC-linked NS delays in Southeast Even with a coast-to-coast network, Vena said there are regions where a combined UP-NS will still need to cooperate with other railroads to reach certain destinations, especially in the Southeast. Vena said UP will steer shippers to the fastest option, even if it involves other railroads. “If freight is headed to Florida, the fastest way and the quickest route is with CSX connecting through New Orleans,” he said. “We’ll make sure we give that option to shippers.” However, Vena said that type of cooperation is not being reciprocated by others. NS shipments to the Southeast market are facing delays on a 320-mile track segment through Mississippi and Louisiana that NS owns with CPKC known as the Meridian Speedway. Vena said CPKC, the track’s majority owner, is currently only allowing 8,000-foot trains to operate on the tracks, rather than the 11,000-foot trains allowed on the tracks under its previous owner, pre-merger Kansas City Southern. The Southeast service is primarily used by large parcel shippers FedEx and UPS to reach Atlanta. Vena said NS runs two trains instead of one to ensure those shipments will not be delayed. While the track access is NS’ problem until the merger is completed, Vena said he sent a letter to CPKC questioning why the limits are in place. And on Tuesday, Norfolk Southern filed a complaint with the Surface Transportation Board (STB), alleging that CPKC is violating commitments it made to regulators when it acquired Kansas City Southern in 2023. “We ran trains for a long time with no major headaches until you get the combination of CP and Kansas City and for some reason, they decided that they couldn’t run an 11,000-foot train even though that’s the commitment they made to the STB,” Vena said. “I’m not happy with it and hopefully they wake up and change their mind and go back to operating the trains the way they were supposed to.” Vena said the track access issue shows the difficulties that railroads have had in executing cooperation agreements. While other railroads are marketing new intermodal services through cooperation agreements, Vena said those deals will still be plagued by the different processes and operations of separate railroads. “Those cooperation agreements have never worked out,” he said. CSX’s Johnson, whose company is adding other intermodal lanes to compete with UP-NS , defended cooperation agreements as an efficient, viable way to link two railroads. “Despite what you heard earlier this morning, interline partnerships do work, they’ve worked for a long, long time, and they will continue to work with whatever happens with this merger,” he said. Contact Michael Angell at michael.angell@spglobal.com .

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