<div class="phx-topic abstract-wrapper">“The best laid schemes of mice and men Go often awry, And leave us nothing but grief and pain.”</div>

“The best laid schemes of mice and men Go often awry, And leave us nothing but grief and pain.”

<div>“The best laid schemes of mice and men Go often awry, And leave us nothing but grief and pain.”The poem by Scottish poet Robert Burns is an apt epitaph for the sudden disruptions of carefully timed supply chains wrought by Hurricane Sandy on Oct. 29, which closed East Coast ports from Virginia to New York.Virginia, Baltimore and Philadelphia were able to reopen by Halloween, but the Port of New York and New Jersey, the third-largest U.S. container port, was hit by devastating damage, flooding and power outages that was expected to keep the port closed until at least...

“The best laid schemes of mice and men Go often awry, And leave us nothing but grief and pain.” The poem by Scottish poet Robert Burns is an apt epitaph for the sudden disruptions of carefully timed supply chains wrought by Hurricane Sandy on Oct. 29, which closed East Coast ports from Virginia to New York. Virginia, Baltimore and Philadelphia were able to reopen by Halloween, but the Port of New York and New Jersey, the third-largest U.S. container port, was hit by devastating damage, flooding and power outages that was expected to keep the port closed until at least through last weekend. “It looked like a little kid’s Erector set that was tipped upside-down,” said Jim Devine, president and CEO of Global Terminals, which includes Global Terminal in Jersey City and New York Container Terminal on Staten Island. “This is as bad devastation as you can possibly imagine short of an explosion.” Shippers and freight forwarders were left scratching their heads, wondering where their containers were, because inbound ships were already being diverted to the Port of Virginia. Retail importers worried the late arrival of consumer products would hurt peak-season sales that depend on the timely arrival of Asian-made products. And container line employees who might be able to tell importers and exporters where and when their cargoes might arrive were shut out of their offices by power outages in northern New Jersey, where most of their offices are clustered. Forwarders on Long Island also were hamstrung by power outages. Telephone service was spotty; importers couldn’t find out whether their containers were on ships anchored off New York or being diverted to other ports in the Northeast that had reopened. “We won’t find out until next week if there are carriers that say, ‘We’re not hanging around New York,’ ” said Geoffrey Giovanetti, managing director of the Wine and Spirits Shippers Association. It’s a scenario that’s becoming all too familiar to harried logistics executives, who saw their supply chains broken last year by the tsunami and nuclear disaster in Japan and the floods in Thailand. The closing of New York-New Jersey terminals wasn’t that bad, because the delays would be temporary. But even temporary delays could be devastating to retailers who were left without consumer products they had advertised as being on their stores’ shelves this week. Importers with fresh produce in reefers were particularly vulnerable because lengthy delays could spoil the food. “The longer the port is closed, the worse it is for perishables,” said John Martin, principal of port consultant Martin Associates. “We’ve seen this a couple of times before, but this one hits closer to home,” said Greg Kefer, vice president of corporate marketing at GT Nexus, the software company that enables carriers and shippers to interact on a cloud-based communications platform. “It’s events like this that are going to put the supply chain on the front burner because most shippers don’t have visibility in real-time as to who’s got what where.” Contact Peter T. Leach at pleach@joc.com and follow him at twitter.com/petertleach .

Sandy’s Supply Chain Wrath

<div class="phx-topic abstract-wrapper">The services, which include land bridge options to circumvent the still-effectively closed Strait of Hormuz, appear to be an acknowledgement by the liners that Hormuz will remain a no-go zone for the foreseeable future.</div>

The services, which include land bridge options to circumvent the still-effectively closed Strait of Hormuz, appear to be an acknowledgement by the liners that Hormuz will remain a no-go zone for the foreseeable future.

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<div class="phx-topic">Hapag-Lloyd and Mediterranean Shipping Co. (MSC) have become among the first ocean carriers to restore seaborne cargo links to the upper Persian Gulf that have been largely severed since early March due to the war in the Middle East. The services, which include land bridge options to circumvent the still-effectively closed Strait of Hormuz, appear to be an acknowledgement by the liners that Hormuz will remain a no-go zone for the foreseeable future. Hostilities <a href="https://www.nytimes.com/live/2026/05/04/world/iran-hormuz-ships-navy">that flared there Monday</a> demonstrate that reality. Hapag and MSC have announced separate services in the last three days that use third-party feeder vessels to connect ports such as Dubai’s Jebel Ali, Damman in Saudi Arabia and Shuwaikh in Kuwait. It has allowed Hapag-Lloyd to resume cargo bookings for the upper Gulf, the carrier said in an advisory Monday, while MSC is using feeders to help launch an express service connecting Europe, the Red Sea and Middle East, it said over the weekend. The carriers join CMA CGM, <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">which has been using feeder vessels since March</a> as part of a wider multimodal service network it launched in the region after lifting a brief halt in cargo bookings. But Maersk said in an advisory Monday it would continue to suspend bookings for dry, reefer and in-gauge cargo to and from the UAE (except for Khor Fakkan), Iraq, Kuwait, Qatar, Saudi Arabia, and Bahrain. <h3>‘Subject to transit safety conditions’ </h3>Hapag-Lloyd said dry cargo, reefer and in-gauge special freight containers are the only freight being accepted under its booking resumption. The carrier said the feeder services will operate between Sharjah and other key ports in the UAE, as well as Kuwait, Saudi Arabia, Qatar, and Iraq. A bonded trucking service will connect Sharjah with Khor Fakkan on the Gulf of Oman, which has shipping services linking with Mundra and Nhava Sheva in India and Salalah in Oman, Hapag-Lloyd said. The lead time for the bonded road transport between Sharjah and Khor Fakkan is about five days, Hapag-Lloyd said in its advisory. The carrier halted all bookings for the upper Gulf region on March 4, shortly after the US and Israel launched their attacks on Iran on Feb. 28. Highlighting the ongoing security risk to shipping services in the Gulf, Hapag indicated the feeder services will operate on a semi-ad hoc basis. ”Feeder rotations do not operate on a fixed weekly schedule and remain subject to transit safety conditions in the region,” the carrier said in its advisory. MSC, meanwhile, confirmed it will use a similar feeder network in the upper Persian Gulf as part of a new Europe-Red Sea-Middle East express service beginning May 10. The service will connect Jebel Ali, Abu Dhabi, Kuwait and Iraq’s Umm Qasr with Damman, from where cargo will be trucked across Saudi Arabia to connect with the Red Sea port of King Abdullah. MSC said the express service is being launched “in response to the growing demand (for) services from Europe to the Red Sea and to the challenging scenario in the Middle East.” The first sailing is scheduled from Antwerp on May 10. The full mainline eastbound rotation is Gdansk, Klaipeda, Bremerhaven, Antwerp, Valencia, Barcelona, Gioia Tauro, Abu Kir, King Abdullah, Jeddah, and Aqaba. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Hapag-Lloyd and Mediterranean Shipping Co. (MSC) have become among the first ocean carriers to restore seaborne cargo links to the upper Persian Gulf that have been largely severed since early March due to the war in the Middle East. The services, which include land bridge options to circumvent the still-effectively closed Strait of Hormuz, appear to be an acknowledgement by the liners that Hormuz will remain a no-go zone for the foreseeable future. Hostilities that flared there Monday demonstrate that reality. Hapag and MSC have announced separate services in the last three days that use third-party feeder vessels to connect ports such as Dubai’s Jebel Ali, Damman in Saudi Arabia and Shuwaikh in Kuwait. It has allowed Hapag-Lloyd to resume cargo bookings for the upper Gulf, the carrier said in an advisory Monday, while MSC is using feeders to help launch an express service connecting Europe, the Red Sea and Middle East, it said over the weekend. The carriers join CMA CGM, which has been using feeder vessels since March as part of a wider multimodal service network it launched in the region after lifting a brief halt in cargo bookings. But Maersk said in an advisory Monday it would continue to suspend bookings for dry, reefer and in-gauge cargo to and from the UAE (except for Khor Fakkan), Iraq, Kuwait, Qatar, Saudi Arabia, and Bahrain. ‘Subject to transit safety conditions’ Hapag-Lloyd said dry cargo, reefer and in-gauge special freight containers are the only freight being accepted under its booking resumption. The carrier said the feeder services will operate between Sharjah and other key ports in the UAE, as well as Kuwait, Saudi Arabia, Qatar, and Iraq. A bonded trucking service will connect Sharjah with Khor Fakkan on the Gulf of Oman, which has shipping services linking with Mundra and Nhava Sheva in India and Salalah in Oman, Hapag-Lloyd said. The lead time for the bonded road transport between Sharjah and Khor Fakkan is about five days, Hapag-Lloyd said in its advisory. The carrier halted all bookings for the upper Gulf region on March 4, shortly after the US and Israel launched their attacks on Iran on Feb. 28. Highlighting the ongoing security risk to shipping services in the Gulf, Hapag indicated the feeder services will operate on a semi-ad hoc basis. ”Feeder rotations do not operate on a fixed weekly schedule and remain subject to transit safety conditions in the region,” the carrier said in its advisory. MSC, meanwhile, confirmed it will use a similar feeder network in the upper Persian Gulf as part of a new Europe-Red Sea-Middle East express service beginning May 10. The service will connect Jebel Ali, Abu Dhabi, Kuwait and Iraq’s Umm Qasr with Damman, from where cargo will be trucked across Saudi Arabia to connect with the Red Sea port of King Abdullah. MSC said the express service is being launched “in response to the growing demand (for) services from Europe to the Red Sea and to the challenging scenario in the Middle East.” The first sailing is scheduled from Antwerp on May 10. The full mainline eastbound rotation is Gdansk, Klaipeda, Bremerhaven, Antwerp, Valencia, Barcelona, Gioia Tauro, Abu Kir, King Abdullah, Jeddah, and Aqaba. Contact Keith Wallis at keithwallis@hotmail.com .

Container lines

Container Shipping News

Maritime

Hapag-Lloyd, MSC to use feeders to restore upper Persian Gulf cargo links

<div class="phx-topic abstract-wrapper">The move coincides with plans by XCTG to develop new berths, upgrade existing berths, and develop a multimodal smart logistics center.</div>

The move coincides with plans by XCTG to develop new berths, upgrade existing berths, and develop a multimodal smart logistics center.

<div class="phx-topic">PSA International, the world's largest container terminal operator, has expanded its portfolio in China after agreeing to pay $388 million for a 30% stake in Xiamen Container Terminal Group Co. (XCTG) in Fujian province. The move coincides with plans by XCTG to develop new berths, upgrade existing berths, and develop a multimodal smart logistics center. The Singapore-headquartered port operator is acquiring its stake through subsidiary PSA Amoy from XCTG's parent, Xiamen Port Development Co., after the latter invited public bids for the investment. The deal also includes an increase in PSA’s stake in the Xiamen Port Intermodal Logistics Hub. XCTG comprises eight container terminals with a combined annual capacity of 20 million TEUs, although the company actually handled 12.5 million TEUs last year, a 2% increase over the prior year. Expansion projects there include the construction of five new berths, including in Xiamen’s Gulei Port North, Hai'an, and Haicang port areas, Shenzhen-listed Xiamen Port Development Co. said in regulatory filing. Other plans include new warehouse projects and the expansion of shore-power facilities at existing berths. PSA’s investment, which still has to be approved by regulatory agencies in China, was confirmed in separate statements late last week by PSA and Xiamen Port Development. It also comes about two months after Chinese regulators approved the $1.1 billion acquisition by Xiamen Port Development of a 70% stake in XCTG from Xiamen International Port Co. PSA, which handled a total of 105 million TEUs last year, also operates six other container terminals in China including Dalian, Guangzhou, Tianjin, and Lianyungang near Shanghai. “This partnership reflects the strong alignment between Xiamen Port Group and PSA in supporting the Silk Road maritime strategy and enhancing Fujian’s role in international trade and shipping," Xiamen Port Group chairman Cai Li Qun said in a statement announcing the deal. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

PSA International, the world's largest container terminal operator, has expanded its portfolio in China after agreeing to pay $388 million for a 30% stake in Xiamen Container Terminal Group Co. (XCTG) in Fujian province. The move coincides with plans by XCTG to develop new berths, upgrade existing berths, and develop a multimodal smart logistics center. The Singapore-headquartered port operator is acquiring its stake through subsidiary PSA Amoy from XCTG's parent, Xiamen Port Development Co., after the latter invited public bids for the investment. The deal also includes an increase in PSA’s stake in the Xiamen Port Intermodal Logistics Hub. XCTG comprises eight container terminals with a combined annual capacity of 20 million TEUs, although the company actually handled 12.5 million TEUs last year, a 2% increase over the prior year. Expansion projects there include the construction of five new berths, including in Xiamen’s Gulei Port North, Hai'an, and Haicang port areas, Shenzhen-listed Xiamen Port Development Co. said in regulatory filing. Other plans include new warehouse projects and the expansion of shore-power facilities at existing berths. PSA’s investment, which still has to be approved by regulatory agencies in China, was confirmed in separate statements late last week by PSA and Xiamen Port Development. It also comes about two months after Chinese regulators approved the $1.1 billion acquisition by Xiamen Port Development of a 70% stake in XCTG from Xiamen International Port Co. PSA, which handled a total of 105 million TEUs last year, also operates six other container terminals in China including Dalian, Guangzhou, Tianjin, and Lianyungang near Shanghai. “This partnership reflects the strong alignment between Xiamen Port Group and PSA in supporting the Silk Road maritime strategy and enhancing Fujian’s role in international trade and shipping," Xiamen Port Group chairman Cai Li Qun said in a statement announcing the deal. Contact Keith Wallis at keithwallis@hotmail.com .

Port News

Port infrastructure

Marine terminals

International ports

Singapore's PSA invests $388 million in Xiamen's XCTG port group

<div class="phx-topic abstract-wrapper">Linde has adopted a “guarded” outlook for the rest of 2026 as Air Liquide looks to a “rebound effect” in the US for an uplift. Linde has adopted a “guarded” outlook for the rest of 2026 as Air Liquide looks to a “rebound effect” in the US for an uplift. </div>

Linde has adopted a “guarded” outlook for the rest of 2026 as Air Liquide looks to a “rebound effect” in the US for an uplift. Linde has adopted a “guarded” outlook for the rest of 2026 as Air Liquide looks to a “rebound effect” in the US for an uplift.

<div class="phx-topic">Against a backdrop of economic uncertainties, the two largest global industrial gas suppliers are riding on record-high project backlogs while looking to gains from the North American market. In their latest earnings statements, suppliers Linde and Air Liquide highlighted key project wins in the electronics sector while maintaining a cautious tone amid industrial disruptions related to the war in the Middle East. Considered bellwether companies for industrial market trends, Linde and Air Liquide are key shippers of breakbulk and project cargo such as gas storage tanks and heavy equipment for large industrial projects. They supply to industries including manufacturing, chemicals and steel production. With global economic conditions in flux and continued weakness in traditional industrial markets across Europe, the Middle East and Africa, Linde — the world’s largest industrial gas supplier — is taking a “guarded” outlook on its performance for the remainder of the year while posting a record project backlog of nearly $10 billion. The backlog represents industrial gas and engineering project contracts that have been awarded but not yet started. First-quarter project orders grew 24% to $640 million. In his remarks during Linde’s May 1 first-quarter earnings call, CEO Sanjiv Lambda described the 2025 economic environment as a “study in contrast” that set the stage for a challenging backdrop for the industrial sectors the US-German company serves. “On one hand, exuberant investment in AI and digital infrastructure drove unprecedented activity,” he said. “On the other hand, traditional industrial markets like manufacturing, metals, chemicals and energy faced continued retrenchment.” Of the company’s $10 billion backlog, 71% of projects are from the Americas, with 64% in the chemicals sector and 66% qualifying as clean energy. “The US, and I've said this over and over again, proves to be a really resilient market,” Lambda said. “Sales are up across almost every end market.” The company expects $2.5 billion to $3 billion of its projects to start in 2026. Not included in the $10 billion backlog is over $500 million in industrial gas infrastructure projects to supply rocket fuel to the commercial space sector. <h3>Air Liquide readies steel, chip projects </h3>French industrial gas supplier Air Liquide is preparing to deliver two major industrial projects in the US and Asia as the company’s project backlog reached an all-time high of $6.5 billion in the first quarter, up 23% from a year ago. The backlog includes nearly 75 projects globally, balanced between the large industry and electronics sectors. “These are tangible, high-quality projects currently under construction that will fuel our profitable growth as they come online,” CEO François Jackow said during the company’s April 28 first-quarter earnings call. Among its first-quarter project wins, Air Liquide will invest over $350 million in pipeline infrastructure for a low-carbon steel mill Hyundai Steel and POSCO Group are building in Louisiana. The $5.8 billion plant is set for completion by 2029. “This project is a perfect illustration of the industrial reshoring trend currently revitalizing the US market,” Jackow said. The company will also invest $234 million to build two ultra-high purity carrier gas units for a global semiconductor chip manufacturer. In the second quarter, Air Liquide subsidiary Airgas provided industrial gas equipment and infrastructure to support the Artemis II moon mission. The conflict in the Middle East introduced challenges related to global helium sourcing in the first quarter, as helium is used in Air Liquide’s two key growth markets — healthcare and electronics. Disruptions to the world’s largest liquefied natural gas production facility in Qatar has resulted in a global helium shortage. While Jackow declined to speculate on opportunities that could arise from the conflict, he said structural shifts resulting from the situation could lead to “positive outcomes.” “Air Liquide is uniquely positioned to capture regional shifts in industrial demand, as we have a global footprint,” he said. “Also, we could expect a rebound effect in the US, where lower energy costs and manufacturing policy are attracting global industrial production.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

Against a backdrop of economic uncertainties, the two largest global industrial gas suppliers are riding on record-high project backlogs while looking to gains from the North American market. In their latest earnings statements, suppliers Linde and Air Liquide highlighted key project wins in the electronics sector while maintaining a cautious tone amid industrial disruptions related to the war in the Middle East. Considered bellwether companies for industrial market trends, Linde and Air Liquide are key shippers of breakbulk and project cargo such as gas storage tanks and heavy equipment for large industrial projects. They supply to industries including manufacturing, chemicals and steel production. With global economic conditions in flux and continued weakness in traditional industrial markets across Europe, the Middle East and Africa, Linde — the world’s largest industrial gas supplier — is taking a “guarded” outlook on its performance for the remainder of the year while posting a record project backlog of nearly $10 billion. The backlog represents industrial gas and engineering project contracts that have been awarded but not yet started. First-quarter project orders grew 24% to $640 million. In his remarks during Linde’s May 1 first-quarter earnings call, CEO Sanjiv Lambda described the 2025 economic environment as a “study in contrast” that set the stage for a challenging backdrop for the industrial sectors the US-German company serves. “On one hand, exuberant investment in AI and digital infrastructure drove unprecedented activity,” he said. “On the other hand, traditional industrial markets like manufacturing, metals, chemicals and energy faced continued retrenchment.” Of the company’s $10 billion backlog, 71% of projects are from the Americas, with 64% in the chemicals sector and 66% qualifying as clean energy. “The US, and I've said this over and over again, proves to be a really resilient market,” Lambda said. “Sales are up across almost every end market.” The company expects $2.5 billion to $3 billion of its projects to start in 2026. Not included in the $10 billion backlog is over $500 million in industrial gas infrastructure projects to supply rocket fuel to the commercial space sector. Air Liquide readies steel, chip projects French industrial gas supplier Air Liquide is preparing to deliver two major industrial projects in the US and Asia as the company’s project backlog reached an all-time high of $6.5 billion in the first quarter, up 23% from a year ago. The backlog includes nearly 75 projects globally, balanced between the large industry and electronics sectors. “These are tangible, high-quality projects currently under construction that will fuel our profitable growth as they come online,” CEO François Jackow said during the company’s April 28 first-quarter earnings call. Among its first-quarter project wins, Air Liquide will invest over $350 million in pipeline infrastructure for a low-carbon steel mill Hyundai Steel and POSCO Group are building in Louisiana. The $5.8 billion plant is set for completion by 2029. “This project is a perfect illustration of the industrial reshoring trend currently revitalizing the US market,” Jackow said. The company will also invest $234 million to build two ultra-high purity carrier gas units for a global semiconductor chip manufacturer. In the second quarter, Air Liquide subsidiary Airgas provided industrial gas equipment and infrastructure to support the Artemis II moon mission. The conflict in the Middle East introduced challenges related to global helium sourcing in the first quarter, as helium is used in Air Liquide’s two key growth markets — healthcare and electronics. Disruptions to the world’s largest liquefied natural gas production facility in Qatar has resulted in a global helium shortage. While Jackow declined to speculate on opportunities that could arise from the conflict, he said structural shifts resulting from the situation could lead to “positive outcomes.” “Air Liquide is uniquely positioned to capture regional shifts in industrial demand, as we have a global footprint,” he said. “Also, we could expect a rebound effect in the US, where lower energy costs and manufacturing policy are attracting global industrial production.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Breakbulk carriers

Project cargo

Breakbulk News

US market helps drive record project backlogs for industrial gas suppliers

<div class="phx-topic abstract-wrapper">Executives say the jump in trucking rates is being driven less by increased volumes and more by higher operating costs and tightening capacity, creating a more fragile recovery. </div>

Executives say the jump in trucking rates is being driven less by increased volumes and more by higher operating costs and tightening capacity, creating a more fragile recovery.

<div class="phx-topic">If wood shipping pallets are a reliable leading indicator of freight demand, the recent surge in US trucking rates may be signaling something other than a true market rebound. Industry executives say the rise in rates is being driven less by increased freight volumes and more by higher operating costs — particularly diesel — combined with tightening capacity. That dynamic is creating a more fragile recovery, even as companies express cautious optimism about the second half of 2026. “There’s a lot of uncertainty right now,” said Brent McClendon, president and CEO of Woodpack Global, an international trade association representing pallet manufacturers in 43 countries. “Demand remains inconsistent. When you’re connected to 90% of the goods that move, some sectors are strong while others are not.” That uneven demand profile has become a defining feature of the current freight cycle. Segments tied to government and defense spending are performing well, while other areas — particularly discretionary consumer goods — remain soft. The result is a fragmented market that lacks the broad-based strength typically seen in the early stages of a freight recovery. “Members supplying military-related firms are doing very well,” McClendon said. “Other parts of the economy are much more sluggish. January and February looked stronger, but March and April were weaker. It’s that ‘fits and starts’ pattern — that uncertainty — that has everyone uncomfortable.” At the same time, cost pressures are reshaping behavior across the supply chain. <h3>Reuse, then restock </h3>At Pennsylvania-based pallet manufacturer TMF Corp., production has declined as customers extend the life of existing pallets to conserve cash and manage higher transportation and materials costs. “Companies are doing what I would do — use every pallet until it’s no longer usable,” said TMF founder and President Tom Fitzgerald. “Pallets are getting beat up more quickly, in part because some manufacturers are using thinner wood to control costs.” TMF produced about 20,000 pallets a week at its peak. That figure has fallen to roughly 15,000, Fitzgerald said — a drop of about 25% that reflects both weaker demand and changing customer behavior. The reuse trend, while practical in the short term, has contributed to a tightening of available pallet supply, setting the stage for potential restocking later this year if freight volumes stabilize or increase. Some early signs of that shift are emerging. Packaging Corp. of America President Thomas Hassfurther told analysts on a recent earnings call that volumes are beginning to recover after a weak first quarter, which is typically the slowest period of the year. “The first quarter is by far the weakest in terms of volume, and then it accelerates through the year,” Hassfurther said. “The good news is it has returned in the second quarter as forecast, giving us flexibility to improve operational efficiency.” <h3>Spot rates still rising </h3>Still, freight market data suggests that the current rate environment is being driven primarily by supply-side constraints rather than a demand surge. DAT Freight &amp; Analytics reported that trucking rates continued to climb through April as capacity tightened and fuel prices rose. In some parts of the country, diesel is more than $2 per gallon higher than a year ago, significantly increasing carriers’ cost base. Excluding fuel surcharges, national dry-van spot rates are 25% higher year over year at a base rate of $2.00 per mile, and 23% above the five-year average. Refrigerated, or reefer, rates sans surcharges have climbed 22% to $2.36 per mile. In produce-growing regions, rates are up 10% year over year to $3.84 per mile before surcharges due to tighter truck availability tied to seasonal demand and limited capacity. Flatbed rates have also surged, reaching $2.69 per mile before surcharges, just 5 cents below the all-time high, after seven consecutive weeks of increases. Rates in that segment are 27% higher than a year ago, reflecting strong demand tied to construction, energy, and industrial activity.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7c4fec07-a5cb-4a65-a29e-d9274d1b9816"></dynamic-object></div>The combination of rising fuel costs and constrained capacity is forcing pricing adjustments across the packaging and materials sector. Crackdowns on <a href="https://www.joc.com/article/impact-of-non-domiciled-cdl-enforcement-splits-us-trucking-sector-6135184">non-domiciled commercial drivers</a> and stricter English-language enforcement are constraining truckload capacity after a four-year freight recession. Packaging Corp. of America plans to implement price increases in 2026 in response to higher raw material and transportation costs. “We have room for further improvement and will continue these efforts through the second and third quarters,” Hassfurther said. “Containerboard prices are up a net $50 per ton since the beginning of the year, and we are working with customers to implement increases.” <h3>Transitional phase </h3>Executives say key end markets remain relatively stable, providing a foundation for cautious optimism. Consumer products, food and beverage shipments have held steady, and there are early signs of strengthening demand tied to residential construction and home improvement — sectors that are particularly sensitive to interest rates and broader economic confidence. “The consumer has been very resilient,” said Packaging Corp. of America CEO Mark Kowlzan. “Our customer base feels good about their business going forward, and tax refunds will provide an additional boost in the second half of the year.” Macroeconomic data also points to modest improvement. US gross domestic product grew at a 2% rate in the second quarter, up from 0.5% growth at the end of 2025. While not indicative of a strong expansion, the increase suggests the economy is stabilizing after a period of slower growth. For the pallet and container sector, that stabilization could translate into increased demand for packaging materials, particularly if retailers and manufacturers begin rebuilding inventories that were drawn down during the recent period of cost control and demand uncertainty. Still, industry leaders caution that significant risks remain. Trade policy, interest rates, war-driven fuel costs and broader business confidence all continue to influence freight demand and pricing dynamics. Any disruption in those areas could quickly alter the trajectory of the recovery. “The industry is cautiously optimistic,” McClendon said. “There are a lot of moving parts — tariffs, policy, diesel prices — but overall, the fundamentals look solid.” For now, the pallet and container sector appears to be navigating a transitional phase, one in which rising costs are driving rates higher even as underlying demand remains uneven. Whether that environment evolves into a sustained freight recovery in the second half of 2026 will depend largely on whether demand begins to catch up with the cost-driven pricing pressures already moving through the supply chain. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

If wood shipping pallets are a reliable leading indicator of freight demand, the recent surge in US trucking rates may be signaling something other than a true market rebound. Industry executives say the rise in rates is being driven less by increased freight volumes and more by higher operating costs — particularly diesel — combined with tightening capacity. That dynamic is creating a more fragile recovery, even as companies express cautious optimism about the second half of 2026. “There’s a lot of uncertainty right now,” said Brent McClendon, president and CEO of Woodpack Global, an international trade association representing pallet manufacturers in 43 countries. “Demand remains inconsistent. When you’re connected to 90% of the goods that move, some sectors are strong while others are not.” That uneven demand profile has become a defining feature of the current freight cycle. Segments tied to government and defense spending are performing well, while other areas — particularly discretionary consumer goods — remain soft. The result is a fragmented market that lacks the broad-based strength typically seen in the early stages of a freight recovery. “Members supplying military-related firms are doing very well,” McClendon said. “Other parts of the economy are much more sluggish. January and February looked stronger, but March and April were weaker. It’s that ‘fits and starts’ pattern — that uncertainty — that has everyone uncomfortable.” At the same time, cost pressures are reshaping behavior across the supply chain. Reuse, then restock At Pennsylvania-based pallet manufacturer TMF Corp., production has declined as customers extend the life of existing pallets to conserve cash and manage higher transportation and materials costs. “Companies are doing what I would do — use every pallet until it’s no longer usable,” said TMF founder and President Tom Fitzgerald. “Pallets are getting beat up more quickly, in part because some manufacturers are using thinner wood to control costs.” TMF produced about 20,000 pallets a week at its peak. That figure has fallen to roughly 15,000, Fitzgerald said — a drop of about 25% that reflects both weaker demand and changing customer behavior. The reuse trend, while practical in the short term, has contributed to a tightening of available pallet supply, setting the stage for potential restocking later this year if freight volumes stabilize or increase. Some early signs of that shift are emerging. Packaging Corp. of America President Thomas Hassfurther told analysts on a recent earnings call that volumes are beginning to recover after a weak first quarter, which is typically the slowest period of the year. “The first quarter is by far the weakest in terms of volume, and then it accelerates through the year,” Hassfurther said. “The good news is it has returned in the second quarter as forecast, giving us flexibility to improve operational efficiency.” Spot rates still rising Still, freight market data suggests that the current rate environment is being driven primarily by supply-side constraints rather than a demand surge. DAT Freight & Analytics reported that trucking rates continued to climb through April as capacity tightened and fuel prices rose. In some parts of the country, diesel is more than $2 per gallon higher than a year ago, significantly increasing carriers’ cost base. Excluding fuel surcharges, national dry-van spot rates are 25% higher year over year at a base rate of $2.00 per mile, and 23% above the five-year average. Refrigerated, or reefer, rates sans surcharges have climbed 22% to $2.36 per mile. In produce-growing regions, rates are up 10% year over year to $3.84 per mile before surcharges due to tighter truck availability tied to seasonal demand and limited capacity. Flatbed rates have also surged, reaching $2.69 per mile before surcharges, just 5 cents below the all-time high, after seven consecutive weeks of increases. Rates in that segment are 27% higher than a year ago, reflecting strong demand tied to construction, energy, and industrial activity. The combination of rising fuel costs and constrained capacity is forcing pricing adjustments across the packaging and materials sector. Crackdowns on non-domiciled commercial drivers and stricter English-language enforcement are constraining truckload capacity after a four-year freight recession. Packaging Corp. of America plans to implement price increases in 2026 in response to higher raw material and transportation costs. “We have room for further improvement and will continue these efforts through the second and third quarters,” Hassfurther said. “Containerboard prices are up a net $50 per ton since the beginning of the year, and we are working with customers to implement increases.” Transitional phase Executives say key end markets remain relatively stable, providing a foundation for cautious optimism. Consumer products, food and beverage shipments have held steady, and there are early signs of strengthening demand tied to residential construction and home improvement — sectors that are particularly sensitive to interest rates and broader economic confidence. “The consumer has been very resilient,” said Packaging Corp. of America CEO Mark Kowlzan. “Our customer base feels good about their business going forward, and tax refunds will provide an additional boost in the second half of the year.” Macroeconomic data also points to modest improvement. US gross domestic product grew at a 2% rate in the second quarter, up from 0.5% growth at the end of 2025. While not indicative of a strong expansion, the increase suggests the economy is stabilizing after a period of slower growth. For the pallet and container sector, that stabilization could translate into increased demand for packaging materials, particularly if retailers and manufacturers begin rebuilding inventories that were drawn down during the recent period of cost control and demand uncertainty. Still, industry leaders caution that significant risks remain. Trade policy, interest rates, war-driven fuel costs and broader business confidence all continue to influence freight demand and pricing dynamics. Any disruption in those areas could quickly alter the trajectory of the recovery. “The industry is cautiously optimistic,” McClendon said. “There are a lot of moving parts — tariffs, policy, diesel prices — but overall, the fundamentals look solid.” For now, the pallet and container sector appears to be navigating a transitional phase, one in which rising costs are driving rates higher even as underlying demand remains uneven. Whether that environment evolves into a sustained freight recovery in the second half of 2026 will depend largely on whether demand begins to catch up with the cost-driven pricing pressures already moving through the supply chain. Contact Dan Ronan at contactdanronan@gmail.com .

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Shipping pallet, packaging sectors wade through ‘uncertainty’ in US freight demand

<div class="phx-topic abstract-wrapper">The closure of the Strait of Hormuz only serves to highlight that companies proactively investing in adopting alternative shipping fuels now will be far better off when the next disruption hits, writes Michael Lerner. </div>

The closure of the Strait of Hormuz only serves to highlight that companies proactively investing in adopting alternative shipping fuels now will be far better off when the next disruption hits, writes Michael Lerner.

<div class="phx-topic">Bunker fuel prices have surged 70% since the start of the war in the Middle East and the blockade of the Strait of Hormuz. At present, the global average price for very low sulfur fuel oil (VLSFO) is over <a href="https://urldefense.com/v3/__https:/shipandbunker.com/prices/av/global/av-glb-global-average-bunker-price__;!!DEyr4sPAfcQg!Sie7eoWVctWwupvhkkxfvMLeGOmG0tR2h3MD4BfybxOOb7_m5TV4zfs8wzGrUp_KahTIOUSYa_Agyepill1I$">$930/metric ton</a>, up from $540/mt in early February. Meanwhile, the regulation of maritime greenhouse gas (GHG) emissions is evolving. Both trends favor low-carbon alternative shipping fuels, prompting shipping companies to re-evaluate investment decisions. The International Maritime Organization’s (IMO’s) Marine Environment Protection Committee <a href="https://www.joc.com/article/fmcs-dibella-brings-anti-net-zero-message-to-imo-london-meeting-6210952">just wrapped up a round of meetings</a> on its proposed Net-Zero Framework (NZF), which would be a major, globally applicable step forward for decarbonizing shipping. But it’s unclear if the NZF will be watered down, or adopted in any form. Escalating penalties for noncompliance might get removed, leaving only voluntary measures. The vote to authorize NZF might get delayed again, <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">as it was last October amid pressure from the US and Saudi Arabia</a>. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6213889_0.1.jpg"></img></div>But whatever happens with the NZF, the impetus for decarbonizing shipping is strong, and getting stronger. About a fifth of global oil and gas supply ordinally passes through the Strait of Hormuz. Closing it spiked prices of conventional fuels that 99% of ships use — mainly fossil oil and liquefied natural gas — and demonstrated their vulnerability to supply disruptions. The risk of price volatility and further shocks is ongoing. This is a wake-up call for shipping companies, changing their calculus for adopting  low-carbon alternative fuels. Those fuels cost more than conventional ones, but are becoming more attractive all the time. For one thing, many alternative fuels can be made locally from organic wastes, so they don’t have to pass through Hormuz. For another, European Union maritime emissions regulations (FuelEU Maritime and the EU Emissions Trading System) are helping shrink the price premium for them, as each year, penalties on fossil fuels tighten while alternative fuel production rises. Already, certain alternative fuels on certain routes, for example bioLNG on intra-EU voyages, are at parity or even cheaper than conventional fuels. This affects shipping companies worldwide, including in the US. EU regulations apply to 100% of maritime emissions within EU territorial waters, and 50% of emissions for vessels transiting between an EU port and a non-EU port (for example Marseilles-New York). That means shipping companies servicing EU-US routes will need clean fuel sources in the US, which are growing, although not nearly as fast as in Europe. <h3> Can US legislation drive change? </h3>Current US policy is not conducive for producing or using alternative fuels. But <a href="https://urldefense.com/v3/__https:/www.ricketts.senate.gov/news/press-releases/ricketts-klobuchar-introduce-renewable-fuel-for-ocean-going-vessels-act/__;!!DEyr4sPAfcQg!Sie7eoWVctWwupvhkkxfvMLeGOmG0tR2h3MD4BfybxOOb7_m5TV4zfs8wzGrUp_KahTIOUSYa_AgyWi7Tba1$">bipartisan bills</a> introduced in both houses of Congress aim to change that by making biofuels eligible for the Renewable Fuel Standard (RFS) when used in oceangoing vessels (they’re already eligible when used as road or aviation fuels). This would accelerate US production and use of bioLNG (which requires new dual-fuel engines) as well as renewable diesel and biodiesel (“drop-in” fuels that work in conventional engines). Whether or not those bills become law, US clean maritime fuel producers are also aiming to sell to the European market and working to get their fuels qualified under EU regulations. So are international shipping associations. If they succeed, it would boost US clean fuel production — and energy security — for the European market. The potential for slashing maritime emissions is gigantic. A <a href="https://urldefense.com/v3/__https:/energy-vision.org/pdf/TheFutureOfShipping-EnergyVision.pdf__;!!DEyr4sPAfcQg!Sie7eoWVctWwupvhkkxfvMLeGOmG0tR2h3MD4BfybxOOb7_m5TV4zfs8wzGrUp_KahTIOUSYa_AgybNYDbPM$">new report</a> by the nonprofit Energy Vision finds that alternative low-carbon fuels derived from food waste or manure — including bioLNG, biomethanol, or green ammonia — have carbon-negative lifecycle emissions, i.e., less than net-zero, because more greenhouse gas is captured during production than is released when the fuel is burned. When these fuels are derived from landfill gas or wastewater, they do emit some GHG over their lifecycle, but only a third to half the emissions of heavy fuel oil or fossil LNG. The added cost of using alternative low-carbon fuel is a surprisingly small percentage of the cost of products shipped. Energy Vision calculated that using alternative fuel to ship a container across the Pacific would cost an extra 12 cents per pair of sneakers or less than a cent per smartphone or toothpaste tube — and that’s for a “next-gen” e-fuel (made with renewable electricity and captured CO2) using a high-end cost estimate. The extra cost of existing alternative fuels such as bioLNG is even lower. However regulatory regimes evolve in the near future, the writing is on the wall. As vessels age out, shipping companies must decide what to replace them with. Each alternative maritime fuel comes with its own advantages and disadvantages, but the basic choice comes down to this: continue to bear growing regulatory costs and price volatility of fossil fuels, or invest now in vessels that will have far lower GHG emissions and commodity price risk over their 30-year lifespans. Companies that proactively invest in adopting alternative shipping fuels now will be far better off when the next shock hits. Michael Lerner is Director of Research and Publications at the non-profit organization <a href="https://urldefense.com/v3/__http:/energy-vision.org/__;!!DEyr4sPAfcQg!Sie7eoWVctWwupvhkkxfvMLeGOmG0tR2h3MD4BfybxOOb7_m5TV4zfs8wzGrUp_KahTIOUSYa_AgyZz5b4dX$">Energy Vision</a>. Contact him at <a href="mailto:lerner@energy-vision.org">lerner@energy-vision.org</a>. </div>

Bunker fuel prices have surged 70% since the start of the war in the Middle East and the blockade of the Strait of Hormuz. At present, the global average price for very low sulfur fuel oil (VLSFO) is over $930/metric ton , up from $540/mt in early February. Meanwhile, the regulation of maritime greenhouse gas (GHG) emissions is evolving. Both trends favor low-carbon alternative shipping fuels, prompting shipping companies to re-evaluate investment decisions. The International Maritime Organization’s (IMO’s) Marine Environment Protection Committee just wrapped up a round of meetings on its proposed Net-Zero Framework (NZF), which would be a major, globally applicable step forward for decarbonizing shipping. But it’s unclear if the NZF will be watered down, or adopted in any form. Escalating penalties for noncompliance might get removed, leaving only voluntary measures. The vote to authorize NZF might get delayed again, as it was last October amid pressure from the US and Saudi Arabia . But whatever happens with the NZF, the impetus for decarbonizing shipping is strong, and getting stronger. About a fifth of global oil and gas supply ordinally passes through the Strait of Hormuz. Closing it spiked prices of conventional fuels that 99% of ships use — mainly fossil oil and liquefied natural gas — and demonstrated their vulnerability to supply disruptions. The risk of price volatility and further shocks is ongoing. This is a wake-up call for shipping companies, changing their calculus for adopting  low-carbon alternative fuels. Those fuels cost more than conventional ones, but are becoming more attractive all the time. For one thing, many alternative fuels can be made locally from organic wastes, so they don’t have to pass through Hormuz. For another, European Union maritime emissions regulations (FuelEU Maritime and the EU Emissions Trading System) are helping shrink the price premium for them, as each year, penalties on fossil fuels tighten while alternative fuel production rises. Already, certain alternative fuels on certain routes, for example bioLNG on intra-EU voyages, are at parity or even cheaper than conventional fuels. This affects shipping companies worldwide, including in the US. EU regulations apply to 100% of maritime emissions within EU territorial waters, and 50% of emissions for vessels transiting between an EU port and a non-EU port (for example Marseilles-New York). That means shipping companies servicing EU-US routes will need clean fuel sources in the US, which are growing, although not nearly as fast as in Europe.  Can US legislation drive change? Current US policy is not conducive for producing or using alternative fuels. But bipartisan bills introduced in both houses of Congress aim to change that by making biofuels eligible for the Renewable Fuel Standard (RFS) when used in oceangoing vessels (they’re already eligible when used as road or aviation fuels). This would accelerate US production and use of bioLNG (which requires new dual-fuel engines) as well as renewable diesel and biodiesel (“drop-in” fuels that work in conventional engines). Whether or not those bills become law, US clean maritime fuel producers are also aiming to sell to the European market and working to get their fuels qualified under EU regulations. So are international shipping associations. If they succeed, it would boost US clean fuel production — and energy security — for the European market. The potential for slashing maritime emissions is gigantic. A new report by the nonprofit Energy Vision finds that alternative low-carbon fuels derived from food waste or manure — including bioLNG, biomethanol, or green ammonia — have carbon-negative lifecycle emissions, i.e., less than net-zero, because more greenhouse gas is captured during production than is released when the fuel is burned. When these fuels are derived from landfill gas or wastewater, they do emit some GHG over their lifecycle, but only a third to half the emissions of heavy fuel oil or fossil LNG. The added cost of using alternative low-carbon fuel is a surprisingly small percentage of the cost of products shipped. Energy Vision calculated that using alternative fuel to ship a container across the Pacific would cost an extra 12 cents per pair of sneakers or less than a cent per smartphone or toothpaste tube — and that’s for a “next-gen” e-fuel (made with renewable electricity and captured CO2) using a high-end cost estimate. The extra cost of existing alternative fuels such as bioLNG is even lower. However regulatory regimes evolve in the near future, the writing is on the wall. As vessels age out, shipping companies must decide what to replace them with. Each alternative maritime fuel comes with its own advantages and disadvantages, but the basic choice comes down to this: continue to bear growing regulatory costs and price volatility of fossil fuels, or invest now in vessels that will have far lower GHG emissions and commodity price risk over their 30-year lifespans. Companies that proactively invest in adopting alternative shipping fuels now will be far better off when the next shock hits. Michael Lerner is Director of Research and Publications at the non-profit organization  Energy Vision . Contact him at  lerner@energy-vision.org .

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