<div class="phx-topic abstract-wrapper">It's a U.S.-U.S.S.R. joint venture of a different sort, one set up to assist in the creation of othe</div>

It's a U.S.-U.S.S.R. joint venture of a different sort, one set up to assist in the creation of othe

<div>It's a U.S.-U.S.S.R. joint venture of a different sort, one set up to assist in the creation of other joint ventures.Arnold &amp; Porter, Washington's largest law firm, announced Tuesday that its consulting affiliate, Apco Associates, has agreed in principle to set up a joint venture with the Soviet consulting cooperative, Infeks.Infeks was established six months ago and is affiliated with the Soviet Union's Ministry of Foreign Economic Relations.Margery Kraus, president of Apco, described the new venture, which will be finalized next week, as a one-stop shopping service for companies interesting in doing business within the Soviet Union.She noted that for...

It's a U.S.-U.S.S.R. joint venture of a different sort, one set up to assist in the creation of other joint ventures. Arnold & Porter, Washington's largest law firm, announced Tuesday that its consulting affiliate, Apco Associates, has agreed in principle to set up a joint venture with the Soviet consulting cooperative, Infeks.Infeks was established six months ago and is affiliated with the Soviet Union's Ministry of Foreign Economic Relations. Margery Kraus, president of Apco, described the new venture, which will be finalized next week, as a one-stop shopping service for companies interesting in doing business within the Soviet Union. She noted that for the past four years Apco has provided various consulting services, including market research, location of businesses and arranging meetings for various businesses throughout the world. Under the new venture, Ms. Kraus said, Apco and Infeks will extend those types of services to U.S. and Western companies looking to enter the Soviet market. That will involve a three-pronged approach involving feasibility assessments; assisting in the structuring, negotiating and signing of agreements; and continuing help after a deal is put together. On the latter point, Ms. Kraus said the venture will open an office in Moscow next month that will provide on-site ability to follow through with critical support services such as translation and contract reviews with internal Soviet economic structures. Speaking through a telephone hookup, Infeks President Vladimir Gusinsky said the collaboration will enable us to maximize our capabilities. Already we can see that this will bridge traditional gaps between East-West relations. James Jones, managing director of the law firm, remarked that to date there have been 10 international joint venture agreements between U.S. and Soviet concerns. We believe Apco's joint venture with Infeks will significantly increase this number in coming months, he continued. Mr. Jones said initial discussions have yielded solid interest from U.S. businesses and Soviet enterprises. Ms. Kraus declined to identify any of those businesses, but described them as a variety ofdifferent companies ranging from some in the Fortune 500 to much smaller companies. She estimated that next year Apco and Infeks will help 10 to 15 companies enter into joint agreements to do business in the Soviet Union. Randy Bregman, Apco's director for Soviet and East European services, asserted that the Soviet Union's most immediate priority is for food processing at all levels, from agricultural production to the final packaging and marketing. Other areas of opportunity for U.S. businesses include telecommunications, tourism, medical equipment and pollution controls, said Mr. Bregman.

US-SOVIET JOINT VENTURE SET UP TO ASSIST SIMILAR ENDEAVORS

<div class="phx-topic abstract-wrapper">Following a July volume surge as US importers built inventory ahead of the sweeping US tariff rollout on Aug. 7, freighter airlines must now right-size capacity to match new demand levels. </div>

Following a July volume surge as US importers built inventory ahead of the sweeping US tariff rollout on Aug. 7, freighter airlines must now right-size capacity to match new demand levels.

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<div class="phx-topic">The chaotic trans-Pacific trading environment is testing the ability of air cargo airlines to quickly shift capacity between trade corridors in support of rapid changes in Asian export volume. Following a volume surge in July as US importers built up inventory ahead of the sweeping rollout of tariffs on US trading partners Aug. 7, freighter airlines now face the challenge of right-sizing capacity to match new demand levels. C.H. Robinson wrote in a market update this week that international air freight markets were experiencing widespread capacity rationalization. “The fundamental challenge has been one of timing: With new demand in July, carriers increased capacity, but importers completed inventory building earlier than expected, leaving airlines with excess capacity they must now remove to maintain profitability,” the forwarder noted. C.H. Robinson said Asian carriers were particularly affected as the traditional peak season for electronics and consumer goods shipments to US and European markets has been disrupted by the frontloading cycle, forcing airlines to reassess capacity allocation across their networks. “Airlines had reduced flights and reallocated aircraft, expecting lower cargo demand after July 9 when higher US reciprocal tariffs were originally scheduled to take effect,” the forwarder wrote. “But when trade deal deadlines for most countries were pushed to Aug. 1 and China received a separate extension to Aug. (14) for negotiations, carriers found themselves with mismatched capacity,” it added. Contrary to the usual seasonal summer lull, July saw an unexpected 5% increase in global air cargo volume following a modest 1% gain in June, according to rate benchmarking platform Xeneta. The boost appeared to be driven in part by tariff-related frontloading, mode shift and persistent uncertainty, prompting businesses to expedite shipments, noted Niall van der Wouw, chief air freight analyst at Xeneta. The robust rise in volume helped lift the dynamic load factor, which Xeneta data shows has returned to last year’s 58% level. <h3>‘Piggybacking on the chaos’ </h3>“Air cargo is piggybacking on the chaos being caused by tariffs,” van der Wouw said in a market update this week. “While the growth in July will come as a pleasant surprise to many, this growth is not a consequence of increased trade. It is a sign of the creative ways companies are trying to circumvent the higher costs of tariffs.” Despite the increase in demand, air freight rates along the trans-Pacific corridor weakened markedly in July. Xeneta data shows spot rates from Southeast Asia to North America declined 16% year over year to $4.87 per kilogram as earlier capacity constraints eased. Rates from Northeast Asia to North America remained relatively flat at $4.81/kg, buoyed by robust demand out of Taiwan where spot rates climbed 9% year over year to $6.85/kg amid a surging appetite for AI and semiconductors. Rates out of China, however, told a different story. Spot rates to the US declined 11% to $4.26 /kg, weighed down by the US elimination of duty-free access for low-value imports from China and Hong Kong, heightened tariffs and market uncertainty. Still, e-commerce continues to be one of the main drivers of global demand for air cargo, despite the US de minimis ban. For context, e-commerce shipments accounted for more than 50% of trans-Pacific air freight shipments last year. Cathay Pacific CEO and executive director Lam Siu Por told analysts during the carrier’s first-half earnings call this week that more than half of the shipments handled in the world’s busiest air cargo hub of Hong Kong during the first months of the year were believed to be e-commerce. ”It’s very hard to tell which shipment is e-commerce or which one is traditional cargo, but e-commerce definitely makes up a good proportion of our export out of Hong Kong nowadays,” Lam said. “Some people say it’s probably close to half, if not more.” Data from air freight analyst Rotate shows China’s e-commerce exports to the US fell 44% in July year over year, even as e-commerce exports to all other countries recorded robust growth of nearly 50%. Xeneta data for June shows China-to-Europe e-commerce volumes rose 90% year over year, supported by a shift in capacity from the tariff-hit trans-Pacific trade lane. <h3>De minimis ban extended to all US trading partners </h3>The current challenge for air cargo operators is to assess the impact of President Donald Trump’s executive order last week extending the US’ de minimis ban to all its trading partners from Aug. 29. Under the “De Minimis Executive Order,” all goods that are shipped through the international postal network are subject to a tariff equal to the effective reciprocal tariff rate applicable to the country of origin of the product: a flat rate of $80 per item for countries with an effective reciprocal tariff rate of less than 16%, $160 per item for countries with a tariff rate between 16% and 25%, or $200 per item for countries with a tariff rate above 25%. “The latest executive order that extends the suspension of de minimis exemptions to affect all points of origin will add complexity to international trade in e-commerce, which typically would fall below the previously established $800 limit,” Glyn Hughes, director-general of The International Air Cargo Association (Tiaca), told the Journal of Commerce. Hughes said market calculations assessed that more than 1.2 billion shipments fell under the US’ de minimis limit during 2024. He added that the operational implementation of duties to all low-value shipments previously exempted would add additional cost and complexity. “We can expect demand to suffer, and markets will continue to shift,” Hughes said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The chaotic trans-Pacific trading environment is testing the ability of air cargo airlines to quickly shift capacity between trade corridors in support of rapid changes in Asian export volume. Following a volume surge in July as US importers built up inventory ahead of the sweeping rollout of tariffs on US trading partners Aug. 7, freighter airlines now face the challenge of right-sizing capacity to match new demand levels. C.H. Robinson wrote in a market update this week that international air freight markets were experiencing widespread capacity rationalization. “The fundamental challenge has been one of timing: With new demand in July, carriers increased capacity, but importers completed inventory building earlier than expected, leaving airlines with excess capacity they must now remove to maintain profitability,” the forwarder noted. C.H. Robinson said Asian carriers were particularly affected as the traditional peak season for electronics and consumer goods shipments to US and European markets has been disrupted by the frontloading cycle, forcing airlines to reassess capacity allocation across their networks. “Airlines had reduced flights and reallocated aircraft, expecting lower cargo demand after July 9 when higher US reciprocal tariffs were originally scheduled to take effect,” the forwarder wrote. “But when trade deal deadlines for most countries were pushed to Aug. 1 and China received a separate extension to Aug. (14) for negotiations, carriers found themselves with mismatched capacity,” it added. Contrary to the usual seasonal summer lull, July saw an unexpected 5% increase in global air cargo volume following a modest 1% gain in June, according to rate benchmarking platform Xeneta. The boost appeared to be driven in part by tariff-related frontloading, mode shift and persistent uncertainty, prompting businesses to expedite shipments, noted Niall van der Wouw, chief air freight analyst at Xeneta. The robust rise in volume helped lift the dynamic load factor, which Xeneta data shows has returned to last year’s 58% level. ‘Piggybacking on the chaos’ “Air cargo is piggybacking on the chaos being caused by tariffs,” van der Wouw said in a market update this week. “While the growth in July will come as a pleasant surprise to many, this growth is not a consequence of increased trade. It is a sign of the creative ways companies are trying to circumvent the higher costs of tariffs.” Despite the increase in demand, air freight rates along the trans-Pacific corridor weakened markedly in July. Xeneta data shows spot rates from Southeast Asia to North America declined 16% year over year to $4.87 per kilogram as earlier capacity constraints eased. Rates from Northeast Asia to North America remained relatively flat at $4.81/kg, buoyed by robust demand out of Taiwan where spot rates climbed 9% year over year to $6.85/kg amid a surging appetite for AI and semiconductors. Rates out of China, however, told a different story. Spot rates to the US declined 11% to $4.26 /kg, weighed down by the US elimination of duty-free access for low-value imports from China and Hong Kong, heightened tariffs and market uncertainty. Still, e-commerce continues to be one of the main drivers of global demand for air cargo, despite the US de minimis ban. For context, e-commerce shipments accounted for more than 50% of trans-Pacific air freight shipments last year. Cathay Pacific CEO and executive director Lam Siu Por told analysts during the carrier’s first-half earnings call this week that more than half of the shipments handled in the world’s busiest air cargo hub of Hong Kong during the first months of the year were believed to be e-commerce. ”It’s very hard to tell which shipment is e-commerce or which one is traditional cargo, but e-commerce definitely makes up a good proportion of our export out of Hong Kong nowadays,” Lam said. “Some people say it’s probably close to half, if not more.” Data from air freight analyst Rotate shows China’s e-commerce exports to the US fell 44% in July year over year, even as e-commerce exports to all other countries recorded robust growth of nearly 50%. Xeneta data for June shows China-to-Europe e-commerce volumes rose 90% year over year, supported by a shift in capacity from the tariff-hit trans-Pacific trade lane. De minimis ban extended to all US trading partners The current challenge for air cargo operators is to assess the impact of President Donald Trump’s executive order last week extending the US’ de minimis ban to all its trading partners from Aug. 29. Under the “De Minimis Executive Order,” all goods that are shipped through the international postal network are subject to a tariff equal to the effective reciprocal tariff rate applicable to the country of origin of the product: a flat rate of $80 per item for countries with an effective reciprocal tariff rate of less than 16%, $160 per item for countries with a tariff rate between 16% and 25%, or $200 per item for countries with a tariff rate above 25%. “The latest executive order that extends the suspension of de minimis exemptions to affect all points of origin will add complexity to international trade in e-commerce, which typically would fall below the previously established $800 limit,” Glyn Hughes, director-general of The International Air Cargo Association (Tiaca), told the Journal of Commerce. Hughes said market calculations assessed that more than 1.2 billion shipments fell under the US’ de minimis limit during 2024. He added that the operational implementation of duties to all low-value shipments previously exempted would add additional cost and complexity. “We can expect demand to suffer, and markets will continue to shift,” Hughes said. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Carriers News

Trans-Pacific

Air Cargo

Air cargo carriers face capacity challenge as tariff frontloading ends

<div class="phx-topic abstract-wrapper">But standing in the way of accelerated margin improvement is the volatile North American market to which the carrier is heavily exposed in logistics. </div>

But standing in the way of accelerated margin improvement is the volatile North American market to which the carrier is heavily exposed in logistics.

<div class="phx-topic">The slowly improving profit margins of the logistics and services division that underpin Maersk’s integrated end-to-end strategy continue to frustrate CEO Vincent Clerc. But the chief executive vowed that the division’s target operating profit margin of “above 6%” will be reached by the end of the year. “The message here is clear ... we are progressing, but we are not satisfied with where we are,” Clerc told analysts on the carrier’s second-quarter earnings call Thursday. Although second-quarter earnings before interest and taxes (EBIT) of $175 million in the logistics and services segment were up 23% year over year, the EBIT margin grew sequentially by just 0.7% to 4.8%, still short of Maersk’s 6% target. “I look at being above 6% as an important proxy for having a business that is humming and that is ready to integrate businesses and realize significant cost synergies and cost savings,” Clerc said. “So that’s why we’re going to stay put until we’re there.” Maersk launched its integrated strategy in 2017 and has been trying to pull in a greater share of shipper-direct volume with the aim of providing end-to-end control of customers’ cargo. It is a model that has <a href="https://www.joc.com/article/tpm24-industry-veteran-sees-little-value-in-ocean-carriers-integrating-logistics-services-5241059">drawn criticism from global forwarders</a> who regard their asset-light approach as better-suited to the complexities of global trade. Second-quarter revenue of $3.6 billion in the logistics business was up 5.2% compared with the first quarter, while gross profit was up 6.4% at $1.2 billion. Although the segment was trending in the right direction, “from a pace perspective, I would wish for more pace,” Clerc said. It is a sentiment the Maersk executive has expressed regularly following quarterly results. But standing in the way of accelerated margin improvement is the volatile North American market to which Maersk is heavily exposed in logistics. North America is the carrier’s single-largest region for logistics and where second-quarter revenue was down 8% year over year. <h3>Push for diversified logistics portfolio </h3>Analysts point out that a slowdown in US demand in the second half will make it difficult for Maersk to improve revenue in its logistics segment and increase the EBIT margin. “Over the past few quarters, Maersk’s focus has moved to improving the margin rather than growing revenue in its logistics business,” the transportation analyst for a global bank told the Journal of Commerce. “Exiting warehouse leases where possible and getting rid of ultra-low paying customers is essentially driving margins at the moment.” Jeff Wong, an analyst at CFRA Research, said for logistics and services margins to meaningfully improve on a sustained basis, stronger volumes would be required. ”While high disruption continues to drive a need for more enhanced solutions and services, it’s also being offset by the ongoing uncertainty, which is suppressing overall activity and volumes,” he said. “I think the 6% target is a stretch for the full year, but could be attainable in Q4, where we should see higher activity during the holiday season,” he added. Still, Clerc remains convinced that having a more diversified portfolio in logistics, from a geographical, vertical and product perspective, makes sense for Maersk considering the supply chain challenges faced by its customers. He said customers were headed into a more fragmented world and a supply chain in need of significant retooling and reengineering to meet changing trade flows. “It means that for the next decade, I’m actually quite optimistic for what the current direction of travel means because it will open a lot of opportunities for us, and we’re going to need that to expand the footprint that we have,” Clerc said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The slowly improving profit margins of the logistics and services division that underpin Maersk’s integrated end-to-end strategy continue to frustrate CEO Vincent Clerc. But the chief executive vowed that the division’s target operating profit margin of “above 6%” will be reached by the end of the year. “The message here is clear ... we are progressing, but we are not satisfied with where we are,” Clerc told analysts on the carrier’s second-quarter earnings call Thursday. Although second-quarter earnings before interest and taxes (EBIT) of $175 million in the logistics and services segment were up 23% year over year, the EBIT margin grew sequentially by just 0.7% to 4.8%, still short of Maersk’s 6% target. “I look at being above 6% as an important proxy for having a business that is humming and that is ready to integrate businesses and realize significant cost synergies and cost savings,” Clerc said. “So that’s why we’re going to stay put until we’re there.” Maersk launched its integrated strategy in 2017 and has been trying to pull in a greater share of shipper-direct volume with the aim of providing end-to-end control of customers’ cargo. It is a model that has drawn criticism from global forwarders who regard their asset-light approach as better-suited to the complexities of global trade. Second-quarter revenue of $3.6 billion in the logistics business was up 5.2% compared with the first quarter, while gross profit was up 6.4% at $1.2 billion. Although the segment was trending in the right direction, “from a pace perspective, I would wish for more pace,” Clerc said. It is a sentiment the Maersk executive has expressed regularly following quarterly results. But standing in the way of accelerated margin improvement is the volatile North American market to which Maersk is heavily exposed in logistics. North America is the carrier’s single-largest region for logistics and where second-quarter revenue was down 8% year over year. Push for diversified logistics portfolio Analysts point out that a slowdown in US demand in the second half will make it difficult for Maersk to improve revenue in its logistics segment and increase the EBIT margin. “Over the past few quarters, Maersk’s focus has moved to improving the margin rather than growing revenue in its logistics business,” the transportation analyst for a global bank told the Journal of Commerce. “Exiting warehouse leases where possible and getting rid of ultra-low paying customers is essentially driving margins at the moment.” Jeff Wong, an analyst at CFRA Research, said for logistics and services margins to meaningfully improve on a sustained basis, stronger volumes would be required. ”While high disruption continues to drive a need for more enhanced solutions and services, it’s also being offset by the ongoing uncertainty, which is suppressing overall activity and volumes,” he said. “I think the 6% target is a stretch for the full year, but could be attainable in Q4, where we should see higher activity during the holiday season,” he added. Still, Clerc remains convinced that having a more diversified portfolio in logistics, from a geographical, vertical and product perspective, makes sense for Maersk considering the supply chain challenges faced by its customers. He said customers were headed into a more fragmented world and a supply chain in need of significant retooling and reengineering to meet changing trade flows. “It means that for the next decade, I’m actually quite optimistic for what the current direction of travel means because it will open a lot of opportunities for us, and we’re going to need that to expand the footprint that we have,” Clerc said. Contact Greg Knowler at greg.knowler@spglobal.com .

Maritime

Container lines

Maersk CEO vows to reach logistics profit margin target by year-end

<div class="phx-topic abstract-wrapper">The new rule, a second attempt at requiring the so-called ABC test for workers in the state, has drawn opposition from multiple groups, with port trucking among the affected industries.</div>

The new rule, a second attempt at requiring the so-called ABC test for workers in the state, has drawn opposition from multiple groups, with port trucking among the affected industries.

<div class="phx-topic">A second attempt at requiring New Jersey employers to test whether their workers are employees or independent contractors is again raising concerns about the impact on port truckers. This time, though, legislators are readily joining with drayage carriers to question potential economic harm under the proposal. The New Jersey Department of Labor and Workforce Development finished a 90-day comment period on Wednesday over a proposed rule that would require use of the so-called “ABC” test for determining whether a worker is a full-time employee or an independent contractor.The ABC test, which looks at factors such as the kind of work, how it’s done and who supervises it, undergirds <a href="https://www.joc.com/article/trucker-classification-effort-ripe-for-national-expansion-5197032">California’s AB5 law</a> passed in 2019. AB5 imposed a higher hurdle on the state’s trucking industry for using independent owner-operators as drivers. That same year, <a href="https://www.joc.com/article/njs-classification-bill-dead-for-now-but-will-return-senator-5196905">New Jersey’s legislature failed to pass a similar law</a> codifying use of the ABC test. However, the state Labor Department proposed in May adding a rule that would require using the ABC test, saying the rule was necessary due to recent court cases of misclassification. The Labor Department did not say how many comments it received about the rule. But one group — Save Independent Work — said it received 18,000 comments for submission opposing the rule. New Jersey has about 1.7 million independent contractors. As with the earlier attempted legislation, the Labor Department’s proposed rule drew opposition from the state’s drayage carriers, which rely on about 8,300 independent contractor drivers at the Port of New York and New Jersey. Lisa Yakomin, president of the Association of Bi-State Motor Carriers, said during public testimony in Trenton in June the rule would “paralyze the regional supply chain.” “Previous attempts to enshrine the Labor Department’s narrow application of the ABC test have been soundly rejected by the state legislature,” Yakomin said during her testimony. “This new rulemaking ignores that opposition and bypasses the authority of our state’s elected legislative representatives.” Other port stakeholders joined to oppose the new rule, including the Shipping Association of New York and New Jersey and the Maritime Association of the Port of New York and New Jersey (MAPONYNJ), which said disrupting the business model for port truckers would hurt supply chains.“Rather than protecting independent contractors, the proposal would effectively eliminate their ability to operate,” MAPONYNJ said in its comments. The proposed rule did draw support from the groups aligned with labor unions, such as the Economic Policy Institute and Human Rights Watch, which highlighted how delivery and rideshare drivers in Texas only earn about $5 per hour due to being classified as independent contractors. <h3>No timeline for decision</h3>The decision to adopt the rule rests largely with Robert Asaro-Angelo, the state’s labor commissioner and an appointee of New Jersey Gov. Phil Murphy, a Democrat.There is no timeline for when Asaro-Angelo must decide on whether to implement the rule. Bi-State’s Yakomin told the Journal of Commerce a decision on the rule is an overhang for port truckers as the outgoing Murphy administration may try to push it through during a lame duck session“If Asaro-Angelo wants to move forward, there’s nothing we can do,” Yakomin said. “It would take some legislation to roll back some of the test.”However, Yakomin said that this second attempt at implementing the ABC test has drawn more opposition from other New Jersey legislators, especially Democratic legislators who have typically been friendlier to unions and other labor groups. State Sen. Angela McKnight, a Democrat representing the area around the marine terminal in Bayonne, said in a letter to the Labor Department this month the proposed rule “could have serious unintended economic consequences” at the NY-NJ port and could “push drivers to relocate to less restrictive states.” Democratic State Sen. John Burzichelli, who took over the seat vacated by the senator who sponsored the original ABC legislation in 2019, also said in comments about the rule that he’s heard from constituents that the rule would be “detrimental.”“It’s great to see how many legislators have expressed concerns about the rule,” Yakomin said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

A second attempt at requiring New Jersey employers to test whether their workers are employees or independent contractors is again raising concerns about the impact on port truckers. This time, though, legislators are readily joining with drayage carriers to question potential economic harm under the proposal. The New Jersey Department of Labor and Workforce Development finished a 90-day comment period on Wednesday over a proposed rule that would require use of the so-called “ABC” test for determining whether a worker is a full-time employee or an independent contractor. The ABC test, which looks at factors such as the kind of work, how it’s done and who supervises it, undergirds California’s AB5 law passed in 2019. AB5 imposed a higher hurdle on the state’s trucking industry for using independent owner-operators as drivers. That same year, New Jersey’s legislature failed to pass a similar law codifying use of the ABC test. However, the state Labor Department proposed in May adding a rule that would require using the ABC test, saying the rule was necessary due to recent court cases of misclassification. The Labor Department did not say how many comments it received about the rule. But one group — Save Independent Work — said it received 18,000 comments for submission opposing the rule. New Jersey has about 1.7 million independent contractors. As with the earlier attempted legislation, the Labor Department’s proposed rule drew opposition from the state’s drayage carriers, which rely on about 8,300 independent contractor drivers at the Port of New York and New Jersey. Lisa Yakomin, president of the Association of Bi-State Motor Carriers, said during public testimony in Trenton in June the rule would “paralyze the regional supply chain.” “Previous attempts to enshrine the Labor Department’s narrow application of the ABC test have been soundly rejected by the state legislature,” Yakomin said during her testimony. “This new rulemaking ignores that opposition and bypasses the authority of our state’s elected legislative representatives.” Other port stakeholders joined to oppose the new rule, including the Shipping Association of New York and New Jersey and the Maritime Association of the Port of New York and New Jersey (MAPONYNJ), which said disrupting the business model for port truckers would hurt supply chains. “Rather than protecting independent contractors, the proposal would effectively eliminate their ability to operate,” MAPONYNJ said in its comments. The proposed rule did draw support from the groups aligned with labor unions, such as the Economic Policy Institute and Human Rights Watch, which highlighted how delivery and rideshare drivers in Texas only earn about $5 per hour due to being classified as independent contractors. No timeline for decision The decision to adopt the rule rests largely with Robert Asaro-Angelo, the state’s labor commissioner and an appointee of New Jersey Gov. Phil Murphy, a Democrat. There is no timeline for when Asaro-Angelo must decide on whether to implement the rule. Bi-State’s Yakomin told the Journal of Commerce a decision on the rule is an overhang for port truckers as the outgoing Murphy administration may try to push it through during a lame duck session “If Asaro-Angelo wants to move forward, there’s nothing we can do,” Yakomin said. “It would take some legislation to roll back some of the test.” However, Yakomin said that this second attempt at implementing the ABC test has drawn more opposition from other New Jersey legislators, especially Democratic legislators who have typically been friendlier to unions and other labor groups. State Sen. Angela McKnight, a Democrat representing the area around the marine terminal in Bayonne, said in a letter to the Labor Department this month the proposed rule “could have serious unintended economic consequences” at the NY-NJ port and could “push drivers to relocate to less restrictive states.” Democratic State Sen. John Burzichelli, who took over the seat vacated by the senator who sponsored the original ABC legislation in 2019, also said in comments about the rule that he’s heard from constituents that the rule would be “detrimental.” “It’s great to see how many legislators have expressed concerns about the rule,” Yakomin said. Contact Michael Angell at michael.angell@spglobal.com .

Drayage

North American ports

Trucking labor

New Jersey’s proposed worker classification rule hangs over port truckers

<div class="phx-topic abstract-wrapper">Shippers stand to benefit on lanes where both western US railroads are vying for market share. </div>

Shippers stand to benefit on lanes where both western US railroads are vying for market share.

<div class="phx-topic">Western US railroads BNSF Railway and Union Pacific Railroad (UP) are adding new intermodal services and expanding capacity in key domestic corridors as part of a broader effort to capture freight that might otherwise move on trucks. UP on Thursday announced an expedited intermodal service between Southern California’s Inland Empire and its Global 2 terminal in Chicago, set to begin Sept. 3. The train will operate five days per week and is designed to be 20% faster than existing lanes in a bid to attract time-sensitive freight now moving over the road, UP said. The announcement followed the formal opening of Union Pacific’s new intermodal terminal in Kansas City, which held a ribbon-cutting ceremony on Wednesday. The facility began operating in mid-July and now handles both international and domestic trains from Southern California. UP has introduced several other services in recent months, including a second train between Seattle and Chicago that began operating July 26 and a train linking Memphis and Dallas that launched in the spring. “We’re committed to capturing the over-the-road traffic and see it as a long-term growth engine for us,” Kenny Rocker, UP’s vice president of marketing and sales, told the Journal of Commerce. “You’ve seen the commitment to our intermodal business at a broad level with these investments.” BNSF, meanwhile, has also expanded its service offerings, introducing a new international intermodal lane linking Salt Lake City with ports in Northern and Southern California. Its 43-acre terminal in Salt Lake City opened July 31 after six months of development and is intended to serve importers and exporters seeking alternatives to long-haul drayage. “Our Salt Lake City service boosts competition, it speaks to our growth mindset and strengthens Utah’s role in the global supply chain,” Jon Gabriel, BNSF’s group vice president of consumer products, told the Journal of Commerce. “It’s part of our shared vision of a more connected, sustainable, cost-efficient future for moving freight.” BNSF also launched an expedited train on July 10 between Los Angeles and Houston and is exploring further expansion. While Union Pacific seeks <a href="https://www.joc.com/article/up-looks-to-create-first-coast-to-coast-railroad-with-85-billion-ns-deal-6052288">regulatory approval</a> to acquire Norfolk Southern Railway (NS), rival BNSF is working to strengthen its partnership with CSX Transportation. BNSF and CSX already operate expedited services from Southern California to Georgia, New Jersey and Ohio. While there are crew changes, there’s no work involved loading or unloading boxes, meaning the services operate largely like a single-line railroad. <h3>Competition gives shippers more options </h3>Shippers, meanwhile, stand to benefit on lanes where both railroads are vying for market share. BNSF has long held a transit-time advantage from Los Angeles to Chicago, Los Angeles to Kansas City and Seattle to Chicago; UP aims to close those gaps with its new service offerings. Conversely, BNSF is targeting corridors such as Los Angeles to Houston, where UP currently has faster service. Each must convince shippers who are already committed to intermodal why their railroad is the best option. UP has targeted cost-sensitive shippers in Kansas City by shifting origin points away from Long Beach. The new Los Angeles-to-Kansas City train departs from City of Industry, avoiding the Alameda Corridor surcharges — $62 per TEU and $81 per domestic container — that made UP’s pricing less competitive in prior years. The new Los Angeles-to-Chicago service will originate in the Inland Empire, located within Southern California’s densest concentration of warehouses. While BNSF already serves the Inland Empire via its San Bernardino terminal, UP’s expansion gives shippers in the region another option for direct service to the Midwest. The Memphis-to-Dallas train is designed in part to support eastern railroads looking to move freight from the Northeast to Dallas via Memphis, and to reposition empty containers in Memphis heading to Mexico. UP said most laden cargo will not originate in Memphis, and most empty containers will travel beyond Dallas. Meanwhile, BNSF wants not only to close the transit time gap to Houston, but also to the US Southeast, where an existing UP-NS joint service over the Meridian Speedway is the fastest option to cities such as Atlanta, Charlotte and Jacksonville. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Western US railroads BNSF Railway and Union Pacific Railroad (UP) are adding new intermodal services and expanding capacity in key domestic corridors as part of a broader effort to capture freight that might otherwise move on trucks. UP on Thursday announced an expedited intermodal service between Southern California’s Inland Empire and its Global 2 terminal in Chicago, set to begin Sept. 3. The train will operate five days per week and is designed to be 20% faster than existing lanes in a bid to attract time-sensitive freight now moving over the road, UP said. The announcement followed the formal opening of Union Pacific’s new intermodal terminal in Kansas City, which held a ribbon-cutting ceremony on Wednesday. The facility began operating in mid-July and now handles both international and domestic trains from Southern California. UP has introduced several other services in recent months, including a second train between Seattle and Chicago that began operating July 26 and a train linking Memphis and Dallas that launched in the spring. “We’re committed to capturing the over-the-road traffic and see it as a long-term growth engine for us,” Kenny Rocker, UP’s vice president of marketing and sales, told the Journal of Commerce. “You’ve seen the commitment to our intermodal business at a broad level with these investments.” BNSF, meanwhile, has also expanded its service offerings, introducing a new international intermodal lane linking Salt Lake City with ports in Northern and Southern California. Its 43-acre terminal in Salt Lake City opened July 31 after six months of development and is intended to serve importers and exporters seeking alternatives to long-haul drayage. “Our Salt Lake City service boosts competition, it speaks to our growth mindset and strengthens Utah’s role in the global supply chain,” Jon Gabriel, BNSF’s group vice president of consumer products, told the Journal of Commerce. “It’s part of our shared vision of a more connected, sustainable, cost-efficient future for moving freight.” BNSF also launched an expedited train on July 10 between Los Angeles and Houston and is exploring further expansion. While Union Pacific seeks regulatory approval to acquire Norfolk Southern Railway (NS), rival BNSF is working to strengthen its partnership with CSX Transportation. BNSF and CSX already operate expedited services from Southern California to Georgia, New Jersey and Ohio. While there are crew changes, there’s no work involved loading or unloading boxes, meaning the services operate largely like a single-line railroad. Competition gives shippers more options Shippers, meanwhile, stand to benefit on lanes where both railroads are vying for market share. BNSF has long held a transit-time advantage from Los Angeles to Chicago, Los Angeles to Kansas City and Seattle to Chicago; UP aims to close those gaps with its new service offerings. Conversely, BNSF is targeting corridors such as Los Angeles to Houston, where UP currently has faster service. Each must convince shippers who are already committed to intermodal why their railroad is the best option. UP has targeted cost-sensitive shippers in Kansas City by shifting origin points away from Long Beach. The new Los Angeles-to-Kansas City train departs from City of Industry, avoiding the Alameda Corridor surcharges — $62 per TEU and $81 per domestic container — that made UP’s pricing less competitive in prior years. The new Los Angeles-to-Chicago service will originate in the Inland Empire, located within Southern California’s densest concentration of warehouses. While BNSF already serves the Inland Empire via its San Bernardino terminal, UP’s expansion gives shippers in the region another option for direct service to the Midwest. The Memphis-to-Dallas train is designed in part to support eastern railroads looking to move freight from the Northeast to Dallas via Memphis, and to reposition empty containers in Memphis heading to Mexico. UP said most laden cargo will not originate in Memphis, and most empty containers will travel beyond Dallas. Meanwhile, BNSF wants not only to close the transit time gap to Houston, but also to the US Southeast, where an existing UP-NS joint service over the Meridian Speedway is the fastest option to cities such as Atlanta, Charlotte and Jacksonville. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Intermodal providers

New and faster intermodal services put BNSF, UP on hunt for truck freight

<div class="phx-topic abstract-wrapper">Globalization is accelerating on the back of the commercial success of Chinese companies that are taking market share on the global stage, according to the Maersk CEO. </div>

Globalization is accelerating on the back of the commercial success of Chinese companies that are taking market share on the global stage, according to the Maersk CEO.

<div class="phx-topic">The rapid expansion of Chinese brands across a range of industrial and consumer verticals is changing the fabric of global trade and shaping up as a new driver of demand for container shipping, according to Maersk CEO Vincent Clerc. Clerc told analysts during a first-half earnings call Thursday that up until 2021, demand was mostly in line with consumption and anything that could be offshored by Western businesses “was already being offshored.” “Now we’re seeing a different phase ... China gaining market share on the world stage, not by producing stuff for Western companies, but by having its own companies going global,” Clerc said, pointing to electric vehicles, solar panels, wind turbines, chemicals, mobile phones and electronics. “I think the fabric of global trade is changing,” he added. “If you just look at the numbers, what we’ve seen in the last two and a half years is an acceleration of globalization on the back of huge commercial success from Chinese companies that are taking market share on the global stage.” Maersk certainly saw a decoupling from the North American market in its first-half demand where the contraction in US imports was more than offset by strong growth in imports into Europe, Latin America, Western and Central Asia, and Africa. <h3>‘Sluggish US market’ </h3>Trans-Pacific demand will be further influenced by sweeping new tariffs from the US that took effect Thursday, with taxes on most of its trading partners ranging from 10% to 50%. Clerc said there would be “a continued, sluggish US market” for the rest of the year, with China remaining the engine behind stronger demand growth. “The question is whether we are in a process of rebalancing global trade, where the US basically goes a certain way with a tariff regime and China continues to gain market share,” he said. “If they [China] do that on the back of the industrial successes that they’re having, this could carry stronger market growth than anticipated for a few years.” While Clerc said the expansion of Chinese brands around the world was creating long-term demand, it could run into protectionism issues in various sectors if a country or a trading bloc’s industrial base felt threatened. “But what I know is that as long as the market works the way that the market works, there is a new driver in container demand that is adding a lot of upside potential to what we’re doing, which is moving those goods,” he said. “And this is not something that is well-factored in the scenario models going forward.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The rapid expansion of Chinese brands across a range of industrial and consumer verticals is changing the fabric of global trade and shaping up as a new driver of demand for container shipping, according to Maersk CEO Vincent Clerc. Clerc told analysts during a first-half earnings call Thursday that up until 2021, demand was mostly in line with consumption and anything that could be offshored by Western businesses “was already being offshored.” “Now we’re seeing a different phase ... China gaining market share on the world stage, not by producing stuff for Western companies, but by having its own companies going global,” Clerc said, pointing to electric vehicles, solar panels, wind turbines, chemicals, mobile phones and electronics. “I think the fabric of global trade is changing,” he added. “If you just look at the numbers, what we’ve seen in the last two and a half years is an acceleration of globalization on the back of huge commercial success from Chinese companies that are taking market share on the global stage.” Maersk certainly saw a decoupling from the North American market in its first-half demand where the contraction in US imports was more than offset by strong growth in imports into Europe, Latin America, Western and Central Asia, and Africa. ‘Sluggish US market’ Trans-Pacific demand will be further influenced by sweeping new tariffs from the US that took effect Thursday, with taxes on most of its trading partners ranging from 10% to 50%. Clerc said there would be “a continued, sluggish US market” for the rest of the year, with China remaining the engine behind stronger demand growth. “The question is whether we are in a process of rebalancing global trade, where the US basically goes a certain way with a tariff regime and China continues to gain market share,” he said. “If they [China] do that on the back of the industrial successes that they’re having, this could carry stronger market growth than anticipated for a few years.” While Clerc said the expansion of Chinese brands around the world was creating long-term demand, it could run into protectionism issues in various sectors if a country or a trading bloc’s industrial base felt threatened. “But what I know is that as long as the market works the way that the market works, there is a new driver in container demand that is adding a lot of upside potential to what we’re doing, which is moving those goods,” he said. “And this is not something that is well-factored in the scenario models going forward.” Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Chinese brand expansion changing ‘fabric’ of global trade: Clerc

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At SSA Marine Mexico, we firmly believe that business development must go hand in hand with social and environmental well-being. Our vision is not solely focused on operating efficiently, but also on creating a meaningful and positive impact in the communities where we are present. Since 1995, we have reaffirmed this commitment through tangible actions that reflect our core values of responsibility, solidarity, and sustainability. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584535914_Photo%201.jpg" alt="" class="joc_admin__inline-image-inherit"> A Year of Major Achievements Over the past year, we allocated more than $107,000 USD to the implementation of 60 social and environmental projects, positively impacting over 7,800 people across various regions of Mexico. Each initiative was designed with a holistic approach, addressing key areas that contribute to long-term community development. Education: Laying the Foundation for the Future Education is one of the most powerful tools to promote social mobility and equitable development. At SSA Marine Mexico, we support academic initiatives that inspire and empower the next generation of leaders. One of our most impactful partnerships was with the University of Colima, where we sponsored the “Reto Camp” program. This initiative encourages university students to develop innovative solutions in the fields of sustainability, logistics, and port operations, offering them mentorship, tools, and real-world challenges to solve. In addition, we donated microscopes, school supplies, and educational materials to institutions in underserved communities, helping to improve the learning environment and provide students with the resources they need to succeed. Health and Sports: Promoting Wellness We believe that healthy communities are strong communities. We have supported several local sporting events and provided direct assistance to talented athletes, enabling them to pursue their passions and represent their regions with pride. Beyond sports, we also strengthened our collaboration with critical emergency response organizations such as the Mexican Red Cross and Civil Protection. Our contributions helped enhance their readiness and capabilities in times of crisis, ensuring better outcomes for those affected by emergencies. Supporting Vulnerable Groups: Reaching Those Who Need It Most A core part of our social responsibility efforts is directed toward supporting vulnerable populations. We have contributed to a range of initiatives focused on children, migrants, and at-risk families. These efforts included donations to orphanages and shelters, as well as support for the National Institute of Migration and grassroots organizations dedicated to protecting and empowering people facing adversity. By standing with those in need, we reinforce our commitment to inclusion and social justice, values that are central to our identity as a responsible company. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584944645_Photo%202.png" alt="" class="joc_admin__inline-image-inherit">Culture: Strengthening Community Identity Cultural identity is a key element in building resilient and united communities. At SSA Marine Mexico, we actively participate in the organization and sponsorship of cultural events that celebrate local traditions and foster civic pride. Working alongside port authorities and municipal governments, we helped bring music, art, and heritage to the forefront, creating spaces for community engagement and intercultural dialogue. Environment: Investing in the Planet Our commitment to sustainability goes beyond operations—it’s a philosophy that drives every decision we make. We have partnered with environmental institutions to carry out reforestation campaigns, beach cleanups, and conservation efforts. In collaboration with the Institute for the Environment, we supported initiatives aimed at decarbonization, biodiversity protection, and environmental education. By involving our employees and local volunteers in these actions, we also foster a culture of environmental stewardship throughout our organization and our surrounding communities. Innovation for a Sustainable Future Sustainability is not just about doing good—it’s also about doing things better. In 2024, we invested $22 million USD in the acquisition of 11 state-of-the-art E-RTG cranes. These electric rubber-tired gantry cranes represent a significant technological advancement in port equipment. Seven of them are already operating on clean electric energy, resulting in a reduction of nearly 4,000 tons of CO₂ emissions and improving operational efficiency by 7%. The remaining four cranes are fully compatible with future electrification, underscoring our long-term strategy to modernize our operations in an environmentally responsible way. This investment is part of a broader innovation roadmap that includes digitalization, automation, and cleaner energy sources—all designed to ensure that our ports continue to grow without compromising the health of our planet. Building a Better Tomorrow, Together At SSA Marine Mexico, we understand that sustainability is a shared and ongoing responsibility. True impact requires collaboration across sectors, long-term vision, and unwavering commitment. That is why we continue to work hand-in-hand with local authorities, non-profit organizations, universities, and our own employees to create solutions that are both scalable and sustainable. Our journey is far from over. In the years ahead, we will continue to deepen our community engagement, explore cleaner technologies, and strengthen the social fabric of the regions where we operate. Each initiative, no matter the size, is a step toward building a future where business success goes hand-in-hand with human and environmental prosperity. We are proud of what we have achieved in 2024, but we are even more excited about what lies ahead. SSA Marine Mexico — Moving the World, Caring for People and Planet. LINK: https://www.ssamarine.mx/

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