<div class="phx-topic abstract-wrapper">If you look real hard through the settling dust and wafting smoke of the last contract vote, you can</div>

If you look real hard through the settling dust and wafting smoke of the last contract vote, you can

<div>If you look real hard through the settling dust and wafting smoke of the last contract vote, you can see something happening to the West Coast longshore union:A split.It isn't new. The division in the union started appearing years ago. And it isn't surprising. Changes in the shipping industry naturally dictate some changes in the labor force that makes it function. But the split is becoming more apparent and more severe. Carried through to its conclusion, it means two unions in the future of West Coast ports.That would be a mighty change. With a few isolated exceptions, one union, the...

If you look real hard through the settling dust and wafting smoke of the last contract vote, you can see something happening to the West Coast longshore union: A split.It isn't new. The division in the union started appearing years ago. And it isn't surprising. Changes in the shipping industry naturally dictate some changes in the labor force that makes it function. But the split is becoming more apparent and more severe. Carried through to its conclusion, it means two unions in the future of West Coast ports. That would be a mighty change. With a few isolated exceptions, one union, the International Longshoremen's and Warehousemen's Union, has controlled longshore work at West Coast ports since the mid-1930s. Under the leadership of its founder, Harry Bridges, and his successor, Jimmy Herman, the union flourished and extended its reach. But when Mr. Herman retired from the top spot in 1991, simmering differences within the union began to boil. It has resulted in two acrimonious union elections and a recent contract negotiation that almost ended up on the rocks. What it comes down to is friction between breakbulk and container operations. Breakbulk work is labor-intensive, moving cargo piece by piece in slings or pallets. It's still a standard part of port work, especially in the logging ports of the Pacific Northwest. But it is being supplanted by containerization, moving cargo in standardized boxes. These operations, besides grabbing more and more traffic every year, have given rise to large containerports designed to move huge volumes of cargo between ships and railroads and trucks. The West Coast is home to five of these mega-containerport operations. The two largest are based in Southern California. And that was where David Arian had his power base in a successful contest against Randy Vekich for Jimmy Herman's throne. Mr. Vekich had support from the Pacific Northwest, giving the election a north-south flavor, even though Seattle and Tacoma account for a good chunk of container traffic. The same sort of flavor came through in the last election, when Brian McWilliams ousted Mr. Arian with the help of Pacific Northwest votes. Mr. McWilliams also had some support from around the Northern California area, a mixture of Oakland container traffic and smaller bulk and breakbulk operations. The same container vs. breakbulk, south vs. north type of split may appear again next year at election time. The main Southern California local was a vocal critic of the new longshore agreement negotiated under Mr. McWilliams. No doubt part of the opposition was a remnant of the Arian campaign. But also the new contract changes some work rules which, while reinforcing the union's control over dispatching, raised the ire of some Southern California members. The resentment will fester. And Oakland area longshoremen, who lost travel pay bonuses, are likely to have some resentment too. Whether that means throwing their support behind a Southern California candidate or pushing for a candidate of their own remains to be seen. Whoever the candidates are, it is apparent the union is becoming fractured. That's bad for members and the businesses that employ them. Unlike the East and Gulf coasts, where breakbulk issues and local work rules are negotiated port by port under an overall master agreement, the West Coast has a system where a dispute over local work rules in one port can bring the whole contract ratification process to a halt. Then, for example, stevedores and longshoremen in the Pacific Northwest can be held hostage for issues in Southern California, or booming container operations can be stalled because of disputes at tiny breakbulk ports, and so on. It's a situation that, metaphorically speaking, allows the tail to wag the dog. While the longshore union gets strength from its ability to shut down an entire coast, the recent tussle over the latest contract and the acrimony in the last two elections shows that the union is having difficulty balancing the interests of all its members. Perhaps it's time for the ILWU to think about ways of redefining its organization, so that all elements of the longshore group - north-south, breakbulk-container - can have input without jeopardizing everyone's fair deal.

A HOUSE DIVIDED

<div class="phx-topic abstract-wrapper">The new orders from the Taiwan-based carriers came as both reported lower net profit and revenues for 2025 due to softer freight rates. </div>

The new orders from the Taiwan-based carriers came as both reported lower net profit and revenues for 2025 due to softer freight rates.

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<div class="phx-topic">Two of Taiwan’s largest container lines, Yang Ming and Wan Hai, are enhancing their fleets after each opted to order six dual-fuel container ships despite both reporting lower net profit and revenues for 2025. Yang Ming, the larger of the two carriers, said Thursday it would order six 13,000-TEU LNG-fueled container ships as part of a wider strategy to replace older ships and vessels coming to the end of existing charters. The carrier said it has a “mid- to long-term goal of a 124-vessel fleet, 1.25 million TEUs in operating capacity, and a 3% to 3.5% share of the global container market by 2032.” Yang Ming said while its directors agreed to the purchase in principle, they will decide details of the order, including the shipyard and delivery schedule, “in accordance with the company’s internal regulations.” “The new generation 13,000-TEU class is highly compatible with the existing 10,000-TEU fleet and is expected to serve as the backbone of Yang Ming’s east-west services,” the carrier said in a statement. “These vessels offer optimal economies of scale and deployment flexibility across key trade lanes, including Asia to/from North America (both East and West coasts), South America, and the Mediterranean.” Separately, intra-Asia focused Wan Hai said it has ordered six dual-fuel container ships from shipyards in China. Four 6,000-TEU LNG-powered vessels have been ordered from CSSC Huangpu Wenchong Shipbuilding in a deal worth up to $328 million, the carrier said in a Taiwan stock exchange filing this week. Wan Hai said each vessel will cost between $75.2 million and $82 million. A second order covering two 9,200-TEU methanol-powered container ships has been awarded to Shanghai Waigaoqiao Shipbuilding. Each ship will cost between $102 million and $112 million, giving a potential order value of up to $224 million, Wan Hai said in separate stock exchange filing. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ef78ab1f-3609-44d0-a713-fb260bc40609"></dynamic-object></div>Wan Hai has an order backlog of 28 ships totaling 345,200 TEUs in capacity, comprising 16 8,700-TEU and 12 10,000-TEU vessels, for delivery between this year and 2030, the carrier said The new orders from Yang Ming and Wan Hai add to an already expanding backlog of container ships which totals more than 1,350 ships with a combined capacity of 11.8 million TEUs, Niels Rasmussen, chief shipping analyst at maritime industry lobby group BIMCO, said in a commentary. According to Sea-web, a sister product of the Journal of Commerce within S&amp;P Global, dual-fuel LNG ships represent just over 6.4 million TEUs of the order book, with methanol-powered vessels comprising almost 1.7 million TEUs. <h3>Lower rates hit 2025 earnings </h3>The new orders from the Taiwanese carriers came as they announced weaker financials for last year. Yang Ming said its 2025 net profit plummeted 73% to $538 million on lower freight rates, while operating revenues fell 26% to $5.2 billion. The carrier said its trans-Pacific services were affected by tariff-related factors that dampened shipment momentum, although European and intra-Asia markets remained relatively stable. “Looking ahead, trade protectionism and geopolitical crises remain persistent,” Yang Ming said. “Escalating conflicts in the Middle East and the Red Sea have had an impact on….the stability of the maritime supply chain. Complex transshipment arrangements have also increased operational challenges, placing additional pressure on port operations and increasing the risk of terminal congestion while pushing up insurance premiums and bunker costs.” Wan Hai, meanwhile, saw net profit drop 28% to $1 billion last year, while operating revenues fell 8% to $4.5 billion. The carrier is expected to provide further details when it officially releases its annual results next month. Evergreen Marine, Taiwan’s biggest container line, will announce profit and revenue figures in a Taiwan stock exchange filing on Friday. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Two of Taiwan’s largest container lines, Yang Ming and Wan Hai, are enhancing their fleets after each opted to order six dual-fuel container ships despite both reporting lower net profit and revenues for 2025. Yang Ming, the larger of the two carriers, said Thursday it would order six 13,000-TEU LNG-fueled container ships as part of a wider strategy to replace older ships and vessels coming to the end of existing charters. The carrier said it has a “mid- to long-term goal of a 124-vessel fleet, 1.25 million TEUs in operating capacity, and a 3% to 3.5% share of the global container market by 2032.” Yang Ming said while its directors agreed to the purchase in principle, they will decide details of the order, including the shipyard and delivery schedule, “in accordance with the company’s internal regulations.” “The new generation 13,000-TEU class is highly compatible with the existing 10,000-TEU fleet and is expected to serve as the backbone of Yang Ming’s east-west services,” the carrier said in a statement. “These vessels offer optimal economies of scale and deployment flexibility across key trade lanes, including Asia to/from North America (both East and West coasts), South America, and the Mediterranean.” Separately, intra-Asia focused Wan Hai said it has ordered six dual-fuel container ships from shipyards in China. Four 6,000-TEU LNG-powered vessels have been ordered from CSSC Huangpu Wenchong Shipbuilding in a deal worth up to $328 million, the carrier said in a Taiwan stock exchange filing this week. Wan Hai said each vessel will cost between $75.2 million and $82 million. A second order covering two 9,200-TEU methanol-powered container ships has been awarded to Shanghai Waigaoqiao Shipbuilding. Each ship will cost between $102 million and $112 million, giving a potential order value of up to $224 million, Wan Hai said in separate stock exchange filing. Wan Hai has an order backlog of 28 ships totaling 345,200 TEUs in capacity, comprising 16 8,700-TEU and 12 10,000-TEU vessels, for delivery between this year and 2030, the carrier said The new orders from Yang Ming and Wan Hai add to an already expanding backlog of container ships which totals more than 1,350 ships with a combined capacity of 11.8 million TEUs, Niels Rasmussen, chief shipping analyst at maritime industry lobby group BIMCO, said in a commentary. According to Sea-web, a sister product of the Journal of Commerce within S&P Global, dual-fuel LNG ships represent just over 6.4 million TEUs of the order book, with methanol-powered vessels comprising almost 1.7 million TEUs. Lower rates hit 2025 earnings The new orders from the Taiwanese carriers came as they announced weaker financials for last year. Yang Ming said its 2025 net profit plummeted 73% to $538 million on lower freight rates, while operating revenues fell 26% to $5.2 billion. The carrier said its trans-Pacific services were affected by tariff-related factors that dampened shipment momentum, although European and intra-Asia markets remained relatively stable. “Looking ahead, trade protectionism and geopolitical crises remain persistent,” Yang Ming said. “Escalating conflicts in the Middle East and the Red Sea have had an impact on….the stability of the maritime supply chain. Complex transshipment arrangements have also increased operational challenges, placing additional pressure on port operations and increasing the risk of terminal congestion while pushing up insurance premiums and bunker costs.” Wan Hai, meanwhile, saw net profit drop 28% to $1 billion last year, while operating revenues fell 8% to $4.5 billion. The carrier is expected to provide further details when it officially releases its annual results next month. Evergreen Marine, Taiwan’s biggest container line, will announce profit and revenue figures in a Taiwan stock exchange filing on Friday. Contact Keith Wallis at keithwallis@hotmail.com .

Container lines

Container Shipping News

Maritime

Yang Ming, Wan Hai boost combined order book with 12 new ships

<div class="phx-topic abstract-wrapper">Truck-air solutions are also taking off with rising interest from shippers as the Middle East war removes the popular sea-air services via Jebel Ali in the UAE as a viable option. </div>

Truck-air solutions are also taking off with rising interest from shippers as the Middle East war removes the popular sea-air services via Jebel Ali in the UAE as a viable option.

<div class="phx-topic">Major ocean carriers are offering land-based solutions for cargo going to and from the war-hit Persian Gulf, with the only ocean entry point via the Strait of Hormuz effectively closed to shipping. Maersk is delivering Gulf-bound cargo to ports in the region for onward transport by another mode. “We are using Salalah (Oman) and Khor Fakkan (UAE) for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” said Maersk CCO Karsten Kildahl. “For cargo that comes from Europe, we focus mainly on Jeddah (on the Red Sea) and are deploying trucks to take the cargo 1,500 km across the Arabian Peninsula through the desert.” Mediterranean Shipping Co. (MSC) is using its Asia-Mediterranean Dragon and Jade services to move cargo inland to the Persian Gulf via King Abdullah and Jeddah ports in Saudi Arabia. Key inland destinations in the Gulf include Damman, Riyadh, Jubail, Bahrain, Kuwait, Hamad, Jebel Ali and Abu Dhabi. CMA CGM has reopened its export bookings with immediate effect from Iraq, Kuwait, Qatar, Bahrain, Saudi Arabia and the UAE, and is deploying multimodal solutions around feeder ships and trucking. Options include carrier haulage from Iraq, Kuwait, Qatar and Bahrain via bonded landbridge to Sohar in Oman. From the UAE, solutions are CMA CGM land bridge to Sohar and trucks from Iraq, Kuwait, Qatar, Bahrain and Dammam via bonded landbridge across Saudia Arabia to Jeddah. DHL Global Forwarding launched DHL Truckair in January, which involves trucking from Asia to Uzbekistan and an onward flight to Turkey from where the goods are shipped, trucked or flown to Europe. “This isn’t a direct response to recent developments (in the Middle East), but it is an example of Asia-Europe services that utilize road freight,” the DHL spokesperson said. He noted that road freight was being used to move cargo between transport hubs in the Middle East as an alternative to air on some intra-regional routes with the Persian Gulf still largely out of bounds. In general for Asia-Europe needs, DHL Global Forwarding said customer enquiries for both road and rail solutions “have risen notably” as reliability improves and shippers look for alternatives to higher cost air freight. “To address these needs, DHL Global Forwarding is working continuously on more alternative and multimodal transport concepts that further strengthen connectivity between Asia and Europe,” a DHL spokesperson said, declining to provide volume figures. <h3>Rising demand for Asia-Europe land transport </h3>Forwarders are reporting rising demand for road and rail transport from Asia to Europe as transit times and reliability improve and cross-border procedures become more predictable. CEVA Logistics is also seeing truck-air solutions taking off with accelerating interest from shippers, particularly with the Middle East war making popular sea-air services via Jebel Ali in the United Arab Emirates unviable. “We are seeing clear and sustained growth in demand for road and multimodal freight services between Asia and Europe, driven by improving infrastructure, more predictable border procedures and shippers’ need for faster, flexible alternatives to traditional routings,” said Kelvin Tang, vice president of ground and rail for Asia Pacific at CEVA Logistics. ”In the Asia–Europe market overall, combined rail and cross‑border trucking volumes are up around 15% year on year, reflecting this shift in shipper behavior,” Tang told the Journal of Commerce. CEVA did not provide specific volume figures. Transit times for road from China to Europe are between 12 and 19 days, while rail freight transits are 10 to 25 days. Rates from Chinese terminals to European terminals are volatile and vary from week to week, influenced by demand, bottlenecks on the Poland-Belarus border, and disruption in ocean shipping. An automotive shipper based in Europe said trucking solutions out of Asia had matured and currently offered better pricing than in the past. "The main advantage is that 66 pallets can be loaded into a truck, but rail containers can hold a maximum of 44 pallets,” the source told the Journal of Commerce. “The last time I benchmarked pricing in January, the price per pallet by truck to southeast Europe was lower than by train via Russia. For central Europe the cost per pallet would probably be very similar.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Major ocean carriers are offering land-based solutions for cargo going to and from the war-hit Persian Gulf, with the only ocean entry point via the Strait of Hormuz effectively closed to shipping. Maersk is delivering Gulf-bound cargo to ports in the region for onward transport by another mode. “We are using Salalah (Oman) and Khor Fakkan (UAE) for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” said Maersk CCO Karsten Kildahl. “For cargo that comes from Europe, we focus mainly on Jeddah (on the Red Sea) and are deploying trucks to take the cargo 1,500 km across the Arabian Peninsula through the desert.” Mediterranean Shipping Co. (MSC) is using its Asia-Mediterranean Dragon and Jade services to move cargo inland to the Persian Gulf via King Abdullah and Jeddah ports in Saudi Arabia. Key inland destinations in the Gulf include Damman, Riyadh, Jubail, Bahrain, Kuwait, Hamad, Jebel Ali and Abu Dhabi. CMA CGM has reopened its export bookings with immediate effect from Iraq, Kuwait, Qatar, Bahrain, Saudi Arabia and the UAE, and is deploying multimodal solutions around feeder ships and trucking. Options include carrier haulage from Iraq, Kuwait, Qatar and Bahrain via bonded landbridge to Sohar in Oman. From the UAE, solutions are CMA CGM land bridge to Sohar and trucks from Iraq, Kuwait, Qatar, Bahrain and Dammam via bonded landbridge across Saudia Arabia to Jeddah. DHL Global Forwarding launched DHL Truckair in January, which involves trucking from Asia to Uzbekistan and an onward flight to Turkey from where the goods are shipped, trucked or flown to Europe. “This isn’t a direct response to recent developments (in the Middle East), but it is an example of Asia-Europe services that utilize road freight,” the DHL spokesperson said. He noted that road freight was being used to move cargo between transport hubs in the Middle East as an alternative to air on some intra-regional routes with the Persian Gulf still largely out of bounds. In general for Asia-Europe needs, DHL Global Forwarding said customer enquiries for both road and rail solutions “have risen notably” as reliability improves and shippers look for alternatives to higher cost air freight. “To address these needs, DHL Global Forwarding is working continuously on more alternative and multimodal transport concepts that further strengthen connectivity between Asia and Europe,” a DHL spokesperson said, declining to provide volume figures. Rising demand for Asia-Europe land transport Forwarders are reporting rising demand for road and rail transport from Asia to Europe as transit times and reliability improve and cross-border procedures become more predictable. CEVA Logistics is also seeing truck-air solutions taking off with accelerating interest from shippers, particularly with the Middle East war making popular sea-air services via Jebel Ali in the United Arab Emirates unviable. “We are seeing clear and sustained growth in demand for road and multimodal freight services between Asia and Europe, driven by improving infrastructure, more predictable border procedures and shippers’ need for faster, flexible alternatives to traditional routings,” said Kelvin Tang, vice president of ground and rail for Asia Pacific at CEVA Logistics. ”In the Asia–Europe market overall, combined rail and cross‑border trucking volumes are up around 15% year on year, reflecting this shift in shipper behavior,” Tang told the Journal of Commerce. CEVA did not provide specific volume figures. Transit times for road from China to Europe are between 12 and 19 days, while rail freight transits are 10 to 25 days. Rates from Chinese terminals to European terminals are volatile and vary from week to week, influenced by demand, bottlenecks on the Poland-Belarus border, and disruption in ocean shipping. An automotive shipper based in Europe said trucking solutions out of Asia had matured and currently offered better pricing than in the past. "The main advantage is that 66 pallets can be loaded into a truck, but rail containers can hold a maximum of 44 pallets,” the source told the Journal of Commerce. “The last time I benchmarked pricing in January, the price per pallet by truck to southeast Europe was lower than by train via Russia. For central Europe the cost per pallet would probably be very similar.” Contact Greg Knowler at greg.knowler@spglobal.com .

Surface

Air Cargo

Asia-Europe

Truckload

International rail

As war rages, multimodal demand surges on Asia-Europe landbridge

<div class="phx-topic abstract-wrapper">The agency in charge of enforcing US shipping law reminded the market that any change in ocean tariffs must come with a 30-day notice period prior to implementation so it can be reviewed.</div>

The agency in charge of enforcing US shipping law reminded the market that any change in ocean tariffs must come with a 30-day notice period prior to implementation so it can be reviewed.

<div class="phx-topic">The US Federal Maritime Commission (FMC) on Wednesday told shippers to check their ocean freight bills for any surcharges related to the war in the Middle East that have not been formally reviewed by the agency, as carriers look to recoup additional costs from rising bunker fuel prices and disrupted networks. In a statement Wednesday, the agency said it is “closely monitoring the impact the current conflict in the Middle East is having on shipping conditions through the Strait of Hormuz” and any rate adjustments ocean carriers are making in response. The FMC reminded shippers that any change in the ocean tariff must come with a 30-day notice period prior to implementation so it can be reviewed by the agency. The only exception is a “special permission” request, which can have a shorter notice period. “Shippers are encouraged to access and review their common carrier’s tariff,” the FMC said. “Ocean common carriers are responsible for ensuring that service contracts and their amendments are filed in a timely and accurate manner.” Ocean carriers began assessing war-related surcharges for any shipments to and from the Persian Gulf states on March 2, the Iran declared that any commercial ship passing through the Strait of Hormuz would be subject to attack. Within a day of that announcement, five commercial ships were attacked. While those surcharges were effective immediately for non-US trades, ocean carriers did say US trades to the Middle East would be subject to a 30-day notice period. By Monday, ocean carriers began telling customers of emergency fuel surcharges on all global trades. The closure of the Strait of Hormuz has throttled shipments of one-fifth of global oil supply and <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">resulted in fuel shortages</a> in an important bunkering region for the shipping industry. <h3>AgTC watching </h3>Speaking at the Journal of Commerce’s TPM26 event in Long Beach last week, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said the 30-day review period was necessary for the FMC to assess whether the surcharges are justified. When similar surcharges were issued in early 2024 due to the Houthi attacks against ships transiting the Red Sea, Friedmann said the FMC waived a notice period for a surcharge from one ocean carrier. However, a subsequent economic analysis questioned whether the surcharge was warranted, given the ocean carrier was also saving on Suez Canal tolls by diverting around the Cape of Good Hope. “We were pretty upset that the waiver was granted like that, so we made a stink about it,” Friedmann told the conference. “But the key was if you do the analysis, the carrier is not really losing much money. “I have contacted all the FMC commissioners already that this could be repeated,” he added. “But apparently they learned the lesson.” In August 2021, the FMC <a href="https://www.joc.com/article/fmc-orders-carriers-to-justify-us-port-congestion-surcharges-5249012">ordered eight carriers</a> to show how congestion surcharges and other fees tied to the pandemic-driven supply chain disruption met legal and regulatory requirements. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) on Wednesday told shippers to check their ocean freight bills for any surcharges related to the war in the Middle East that have not been formally reviewed by the agency, as carriers look to recoup additional costs from rising bunker fuel prices and disrupted networks. In a statement Wednesday, the agency said it is “closely monitoring the impact the current conflict in the Middle East is having on shipping conditions through the Strait of Hormuz” and any rate adjustments ocean carriers are making in response. The FMC reminded shippers that any change in the ocean tariff must come with a 30-day notice period prior to implementation so it can be reviewed by the agency. The only exception is a “special permission” request, which can have a shorter notice period. “Shippers are encouraged to access and review their common carrier’s tariff,” the FMC said. “Ocean common carriers are responsible for ensuring that service contracts and their amendments are filed in a timely and accurate manner.” Ocean carriers began assessing war-related surcharges for any shipments to and from the Persian Gulf states on March 2, the Iran declared that any commercial ship passing through the Strait of Hormuz would be subject to attack. Within a day of that announcement, five commercial ships were attacked. While those surcharges were effective immediately for non-US trades, ocean carriers did say US trades to the Middle East would be subject to a 30-day notice period. By Monday, ocean carriers began telling customers of emergency fuel surcharges on all global trades. The closure of the Strait of Hormuz has throttled shipments of one-fifth of global oil supply and resulted in fuel shortages in an important bunkering region for the shipping industry. AgTC watching Speaking at the Journal of Commerce’s TPM26 event in Long Beach last week, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said the 30-day review period was necessary for the FMC to assess whether the surcharges are justified. When similar surcharges were issued in early 2024 due to the Houthi attacks against ships transiting the Red Sea, Friedmann said the FMC waived a notice period for a surcharge from one ocean carrier. However, a subsequent economic analysis questioned whether the surcharge was warranted, given the ocean carrier was also saving on Suez Canal tolls by diverting around the Cape of Good Hope. “We were pretty upset that the waiver was granted like that, so we made a stink about it,” Friedmann told the conference. “But the key was if you do the analysis, the carrier is not really losing much money. “I have contacted all the FMC commissioners already that this could be repeated,” he added. “But apparently they learned the lesson.” In August 2021, the FMC ordered eight carriers to show how congestion surcharges and other fees tied to the pandemic-driven supply chain disruption met legal and regulatory requirements. Contact Michael Angell at michael.angell@spglobal.com .

Transport, Trade and Regulation News

FMC says ‘closely monitoring’ carrier rate moves tied to Middle East war

<div class="phx-topic abstract-wrapper">The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the Energy Information Administration, the biggest seven-day spike since the agency began releasing the data in 1994. </div>

The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the Energy Information Administration, the biggest seven-day spike since the agency began releasing the data in 1994.

<div class="phx-topic">The US trucking industry may be showing signs of coming out of a nearly four-year-long freight recession as spot rates have remained elevated, especially along the East Coast and in the Midwest, after the disruption caused by snow and ice storms in January and February. And now lending support to rates is the uncertainty tied to the war in the Middle East and the resulting surge in fuel prices. The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the US Energy Information Administration. That’s the biggest seven-day spike since the agency began releasing data in 1994, topping the previous record of a 75-cent spike in March 2022 after Russia invaded Ukraine. Diesel now sits at nearly $4.90 per gallon nationally and more than $6/gallon in California. For the shipper, it means the average fuel surcharge has risen between 15 and 20 cents per mile, causing rates on long hauls across the US to rise sharply. Shippers will notice when they receive invoices from brokers and carriers in the coming weeks. Trucking executives believe the bullish fundamentals will push contract rates higher as those deals are renegotiated. Indeed, the process has already begun, according to multiple shippers; sources have told the Journal of Commerce that brokers are refusing to handle loads on contracts signed as recently as Jan. 1 unless rates are renegotiated. “Tender rejections are up 13 to 15%,” said ITS Logistics Chief Commercial Officer Josh Allen. “That’s the first rejection. If shippers have done [requests for proposals], maybe as recently as 90 to 180 days ago, some of those contract rates are already underwater.” According to a Journal of Commerce analysis, shipper-paid spot rates nationally increased between 15% and 20% year over year in February. But rates are surging in pockets, rather than nationally. Rates between November and February jumped 52 cents per mile on loads originating in the Midwest, but only rose 10 cents for originations in the Southwest. <h3>‘Signs of disruption’ </h3>Tightening capacity is the result of both slower economic conditions causing some carriers to go bankrupt, and by the Trump administration’s crackdown on non-domiciled drivers and push for English language proficiency rules. There is also the proposed Dalilah’s law, which would prohibit states from issuing commercial driver’s licenses (CDLs) to undocumented immigrants and retroactively cancel all existing licenses to those individuals. “For the first time in roughly three years, routing guides are showing signs of disruption,” said Nolan Transportation Group President and Chief Operating Officer Drew Herpich. “Many transportation RFPs that went live this year were priced in Q3 and Q4 of last year when market conditions were significantly more stable.” Herpich added that as tender rejection rates increase, more freight is going to the second, third, or fourth contract carriers in the shipper’s routing guide or directly posted on the spot market. He also said that carriers and brokers are “becoming more disciplined” around capacity commitments, and communication with customers is becoming clearer as the weekly volume approaches or exceeds the total outlined in the contract. “Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing that supports service reliability and execution.” Allen said the so-called “waterfall” is beginning as rates need to be adjusted. “I think it’s happening everywhere,” he said. “A shipper calls and says ‘you are 12th in line from a rating perspective in the routing guide. The 11 before you have declined, would you like these opportunities at these published rates?’” At the Raymond James Investor Conference last week, truckload carrier J.B. Hunt Transport Services said the tightening capacity shows similarities to the last major regulatory crackdown in 2017. “We’ve really not had a supply market shrinkage since probably ’17 or ’18 with ELDs [electronic logging devices],” Nick Hobbs, J.B. Hunt’s president of highway services, said at the conference. “Probably the most talked about is non-domiciled drivers ... We’re also seeing driver schools shut down [CDL mills] and we’re seeing a lot of enforcement around chameleon carriers.” The term CDL mills has been coined to describe low-quality truck driving schools that prioritize high-volume, rapid training over safety, which are increasingly getting shut down by the US government. Chameleon carriers refer to trucking companies who operate with multiple company names and registration numbers, swapping one placard for another on their trucks to evade law enforcement. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

The US trucking industry may be showing signs of coming out of a nearly four-year-long freight recession as spot rates have remained elevated, especially along the East Coast and in the Midwest, after the disruption caused by snow and ice storms in January and February. And now lending support to rates is the uncertainty tied to the war in the Middle East and the resulting surge in fuel prices. The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the US Energy Information Administration. That’s the biggest seven-day spike since the agency began releasing data in 1994, topping the previous record of a 75-cent spike in March 2022 after Russia invaded Ukraine. Diesel now sits at nearly $4.90 per gallon nationally and more than $6/gallon in California. For the shipper, it means the average fuel surcharge has risen between 15 and 20 cents per mile, causing rates on long hauls across the US to rise sharply. Shippers will notice when they receive invoices from brokers and carriers in the coming weeks. Trucking executives believe the bullish fundamentals will push contract rates higher as those deals are renegotiated. Indeed, the process has already begun, according to multiple shippers; sources have told the Journal of Commerce that brokers are refusing to handle loads on contracts signed as recently as Jan. 1 unless rates are renegotiated. “Tender rejections are up 13 to 15%,” said ITS Logistics Chief Commercial Officer Josh Allen. “That’s the first rejection. If shippers have done [requests for proposals], maybe as recently as 90 to 180 days ago, some of those contract rates are already underwater.” According to a Journal of Commerce analysis, shipper-paid spot rates nationally increased between 15% and 20% year over year in February. But rates are surging in pockets, rather than nationally. Rates between November and February jumped 52 cents per mile on loads originating in the Midwest, but only rose 10 cents for originations in the Southwest. ‘Signs of disruption’ Tightening capacity is the result of both slower economic conditions causing some carriers to go bankrupt, and by the Trump administration’s crackdown on non-domiciled drivers and push for English language proficiency rules. There is also the proposed Dalilah’s law, which would prohibit states from issuing commercial driver’s licenses (CDLs) to undocumented immigrants and retroactively cancel all existing licenses to those individuals. “For the first time in roughly three years, routing guides are showing signs of disruption,” said Nolan Transportation Group President and Chief Operating Officer Drew Herpich. “Many transportation RFPs that went live this year were priced in Q3 and Q4 of last year when market conditions were significantly more stable.” Herpich added that as tender rejection rates increase, more freight is going to the second, third, or fourth contract carriers in the shipper’s routing guide or directly posted on the spot market. He also said that carriers and brokers are “becoming more disciplined” around capacity commitments, and communication with customers is becoming clearer as the weekly volume approaches or exceeds the total outlined in the contract. “Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing that supports service reliability and execution.” Allen said the so-called “waterfall” is beginning as rates need to be adjusted. “I think it’s happening everywhere,” he said. “A shipper calls and says ‘you are 12th in line from a rating perspective in the routing guide. The 11 before you have declined, would you like these opportunities at these published rates?’” At the Raymond James Investor Conference last week, truckload carrier J.B. Hunt Transport Services said the tightening capacity shows similarities to the last major regulatory crackdown in 2017. “We’ve really not had a supply market shrinkage since probably ’17 or ’18 with ELDs [electronic logging devices],” Nick Hobbs, J.B. Hunt’s president of highway services, said at the conference. “Probably the most talked about is non-domiciled drivers ... We’re also seeing driver schools shut down [CDL mills] and we’re seeing a lot of enforcement around chameleon carriers.” The term CDL mills has been coined to describe low-quality truck driving schools that prioritize high-volume, rapid training over safety, which are increasingly getting shut down by the US government. Chameleon carriers refer to trucking companies who operate with multiple company names and registration numbers, swapping one placard for another on their trucks to evade law enforcement. Contact Dan Ronan at contactdanronan@gmail.com .

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Elevated US trucking rates get new boost from diesel gains amid Middle East war 

<div class="phx-topic abstract-wrapper">Nineteen MPVs are stuck in the Persian Gulf, while bunker costs have increased by $3 to $7 per ton of cargo as a result of the Middle East war, according to one vessel operator. </div>

Nineteen MPVs are stuck in the Persian Gulf, while bunker costs have increased by $3 to $7 per ton of cargo as a result of the Middle East war, according to one vessel operator.

<div class="phx-topic">There has so far been a muted impact on the multipurpose vessel (MPV) sector from the Middle East war, although vessel operators say there is the potential for higher freight rates if the conflict is prolonged. Arthur English, CEO of Norway-headquartered MPV operator G2 Ocean, said both spot and forward freight rates are “relatively stable.” “The ongoing conflict in the Middle East has so far had limited direct impact on our operations,” he told the Journal of Commerce Wednesday. English said G2 Ocean did have one ship that was partially loaded for discharge in the region, but it decided not to go ahead with the voyage following a risk assessment and discussions with the shipper. The cargo was unloaded outside of the high-risk area that covers the Strait of Hormuz, the Persian Gulf and surrounding waters near Saudi Arabia, Kuwait, Qatar and the United Arab Emirates. “Currently, we are not accepting new bookings into the high-risk area, in line with our risk management practices,” English said. <h3>‘Severe effects’ on bunker prices, supply </h3>His views were echoed by sector analysts, including Germany-based shipbroking house Toepfer Transport and maritime consultant Drewry. Toepfer’s latest monthly MPP index showed rates continue to be rangebound despite the conflict, fluctuating in a band between $12,000 and $13,000 a day over the past year. The March index figure is $12,750, Toepfer said in its most recent report published Monday. “It remains unclear what the current escalation of the situation in the Middle East will bring, with 19 [MPV] ships currently ‘locked in’ in the Arabian Gulf and quite some severe effects on bunker prices and supply,” the report said. Overall, the outlook for 2026 remains optimistic on both the carrier and shipper sides, although some stakeholders have begun to express concerns that the situation could change in 2027,” it added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9e94cdf4-df57-437c-afda-809c33f45e0c"></dynamic-object></div> The most significant change has been to increase bunker fuel prices, operators and analysts said, who also warned of <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">possible fuel shortages going forward</a>. “Bunker prices have increased since the conflict escalated, driven by tighter availability and supply risk, particularly in Asia,” English said. “Depending on trade route, this has increased our bunker cost by approximately $3 to $7 per ton of cargo onboard, which is increasing the total cost for freight.” Marine fuel prices in Singapore, the world’s largest ship refueling hub, have more than doubled since the war started, according to a report on the conflict by the UN Council on Trade and Development. The study, published Tuesday, said prices for high and low sulfur fuel oil soared from between $400 and $450 per metric ton last month to $874 to $1,000/metric ton now. S&amp;P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Rising fuel prices and tighter supply are also expected to change “where we bunker our vessels as we adjust for availability and prices,” English said, adding freight rates could increase over time due to reduced bunker availability and longer voyages around high-risk areas if the war persists. <h3>Breakbulk volumes at risk </h3>Longer term, Drewry said the conflict could have a mixed impact on breakbulk cargo in the region. Breakbulk freight is a staple cargo for the MPV sector in the Middle East, with major export cargoes comprising petrochemicals, aluminum, steel, oil and gas equipment and fertilizers, according to Drewry senior research analyst Anurag Kumar. Imports include project cargo and heavy machinery, construction materials, and agricultural products. “Saudi Arabia, especially at Jubail, and the UAE, particularly at Jebel Ali port are major centers for project cargo and industrial shipments,” Kumar said in a commentary on the impact of the conflict. “When the conflict ends, rebuilding could lead to surge in the demand for project cargo, especially heavy machinery, oil and gas equipment, steel structures, power generation parts, and industrial materials,” he added. In the meantime, Kumar said the impact could be immense if the conflict lasts the four to five weeks predicted by US officials. It could cause “unprecedented freight volatility, taking insurance and fuel costs higher, and reducing the ability of delivering breakbulk cargoes to their destinations in the Gulf.” Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

There has so far been a muted impact on the multipurpose vessel (MPV) sector from the Middle East war, although vessel operators say there is the potential for higher freight rates if the conflict is prolonged. Arthur English, CEO of Norway-headquartered MPV operator G2 Ocean, said both spot and forward freight rates are “relatively stable.” “The ongoing conflict in the Middle East has so far had limited direct impact on our operations,” he told the Journal of Commerce Wednesday. English said G2 Ocean did have one ship that was partially loaded for discharge in the region, but it decided not to go ahead with the voyage following a risk assessment and discussions with the shipper. The cargo was unloaded outside of the high-risk area that covers the Strait of Hormuz, the Persian Gulf and surrounding waters near Saudi Arabia, Kuwait, Qatar and the United Arab Emirates. “Currently, we are not accepting new bookings into the high-risk area, in line with our risk management practices,” English said. ‘Severe effects’ on bunker prices, supply His views were echoed by sector analysts, including Germany-based shipbroking house Toepfer Transport and maritime consultant Drewry. Toepfer’s latest monthly MPP index showed rates continue to be rangebound despite the conflict, fluctuating in a band between $12,000 and $13,000 a day over the past year. The March index figure is $12,750, Toepfer said in its most recent report published Monday. “It remains unclear what the current escalation of the situation in the Middle East will bring, with 19 [MPV] ships currently ‘locked in’ in the Arabian Gulf and quite some severe effects on bunker prices and supply,” the report said. Overall, the outlook for 2026 remains optimistic on both the carrier and shipper sides, although some stakeholders have begun to express concerns that the situation could change in 2027,” it added.  The most significant change has been to increase bunker fuel prices, operators and analysts said, who also warned of possible fuel shortages going forward . “Bunker prices have increased since the conflict escalated, driven by tighter availability and supply risk, particularly in Asia,” English said. “Depending on trade route, this has increased our bunker cost by approximately $3 to $7 per ton of cargo onboard, which is increasing the total cost for freight.” Marine fuel prices in Singapore, the world’s largest ship refueling hub, have more than doubled since the war started, according to a report on the conflict by the UN Council on Trade and Development. The study, published Tuesday, said prices for high and low sulfur fuel oil soared from between $400 and $450 per metric ton last month to $874 to $1,000/metric ton now. S&P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Rising fuel prices and tighter supply are also expected to change “where we bunker our vessels as we adjust for availability and prices,” English said, adding freight rates could increase over time due to reduced bunker availability and longer voyages around high-risk areas if the war persists. Breakbulk volumes at risk Longer term, Drewry said the conflict could have a mixed impact on breakbulk cargo in the region. Breakbulk freight is a staple cargo for the MPV sector in the Middle East, with major export cargoes comprising petrochemicals, aluminum, steel, oil and gas equipment and fertilizers, according to Drewry senior research analyst Anurag Kumar. Imports include project cargo and heavy machinery, construction materials, and agricultural products. “Saudi Arabia, especially at Jubail, and the UAE, particularly at Jebel Ali port are major centers for project cargo and industrial shipments,” Kumar said in a commentary on the impact of the conflict. “When the conflict ends, rebuilding could lead to surge in the demand for project cargo, especially heavy machinery, oil and gas equipment, steel structures, power generation parts, and industrial materials,” he added. In the meantime, Kumar said the impact could be immense if the conflict lasts the four to five weeks predicted by US officials. It could cause “unprecedented freight volatility, taking insurance and fuel costs higher, and reducing the ability of delivering breakbulk cargoes to their destinations in the Gulf.” Contact Keith Wallis at keithwallis@hotmail.com .

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Muted short-term impact on MPVs from Iran conflict, but longer-term risks rising

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