<div class="phx-topic abstract-wrapper">The infrastructure fund that owns the Port of New York and New Jersey’s largest marine terminal is not looking to divest as it seeks to extend the term of its lease, according to people familiar with the talks.</div>

The infrastructure fund that owns the Port of New York and New Jersey’s largest marine terminal is not looking to divest as it seeks to extend the term of its lease, according to people familiar with the talks.

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<div class="phx-topic">Infrastructure investor Macquarie is looking to keep its majority stake in one of largest marine terminals on the US East Coast despite rumors of a sale that would coincide with a new lease at the Port of New York and New Jersey. Macquarie, though, faces millions in new costs under a new lease as the port seeks to offload wharf and berth maintenance onto its tenants. Macquarie Infrastructure Partners, <a href="https://www.joc.com/article/deutsche-bank-to-sell-maher-terminals-at-port-of-ny-nj-5230328">which bought New Jersey’s Maher Terminals in 2016 through its MIP III fund</a>, is negotiating with the Port Authority of the New York and New Jersey (PANYNJ) for a new lease, according to people familiar with the talks. Japanese shipping line NYK acquired a 20% stake in Maher from MIP III shortly after the initial acquisition, leaving Macquarie with a majority 80% stake. Macquarie’s current lease for Maher doesn’t expire until 2030. But talks on a renewal started earlier this year under the expectation that MIP III would have to sell Maher as part of a capital return to its investors after the fund’s initial 10-year time horizon, sources said. Nailing down a new lease, which could be up to 30 years, was considered necessary before a potential buyer would consider acquiring a long-term asset such as the marine terminal, they added. In 2023, <a href="https://www.joc.com/article/ssa-marine-looks-to-expand-into-new-us-ports-with-deal-for-ceres-5221078">MIP III sold one of its portfolio companies</a>, Ceres Terminals, to Carrix, which is the parent company of terminal operator SSA Marine and has financial backing from the infrastructure fund of private equity investor Blackstone. However, investors in MIP III, which is a 2013 vintage fund, have agreed to extend the fund’s time horizon for another 10 years, according to a person familiar with the fund’s operations. MIP III’s extended time horizon means there are no plans — at least in the near term — for a sale of Maher, the source said. MIP III’s extension also delays an informal deadline of mid-2025 that the PANYNJ sought for lease negotiations, although a lease extension is likely to be agreed on later this year. Macquarie and the PANYNJ declined to comment on lease negotiations. <h3>Rising maintenance costs </h3>Since the purchase of Maher, Macquarie has doubled down on US terminal assets, particularly on the US West Coast. In 2019, it bought the Long Beach Container Terminal from OOCL for $1.78 billion and a year later acquired Long Beach’s ITS terminal for an undisclosed sum. In 2023, it purchased significant ownership stakes in TraPac’s Los Angeles and Oakland terminals and in Yusen Terminals. At 450 acres and almost 2 million container lifts per year, Maher is Macquarie’s largest single terminal asset and the largest privately operated terminal on the US East Coast. Maher has served as the primary East Coast hub for carriers in the Ocean Alliance. One of those carriers, CMA CGM, has moved more of its vessel calls to <a href="https://www.joc.com/article/cma-cgm-adds-terminal-assets-in-new-yorknew-jersey-5217593">the two NY-NJ marine terminals that it bought in 2022</a>. However, CMA CGM’s terminals do not have the capacity to also handle other Ocean Alliance carriers, including Cosco Shipping, OOCL and Evergreen Marine. CMA CGM’s New Jersey terminal will have more space once a throughput agreement with carriers in the Premier Alliance expires in 2027. Even then, Maher would need to handle some Ocean Alliance vessels, people familiar with the matter say. In addition to Ocean Alliance, Maher handles independent services from Zim and other carriers. It also serves as swing capacity for Maersk and Mediterranean Shipping Co. <a href="https://www.joc.com/article/new-cranes-put-ny-nj-port-on-track-to-handle-more-ultra-large-ships-by-2025-5226275">amid ongoing capital projects at the two terminals that serve those carriers</a>. Maher’s talks with the PANYNJ come amid the bi-state agency’s focus on shifting costs for maintaining the port’s wharves and berths to terminal operators. While marine terminals have typically only been responsible for everything from the ground up, CMA CGM and APM Terminals, which signed a new lease in March, agreed to terms requiring them to cover costs of wharf and berth maintenance. Damage from a worm called a marine borer has rendered some of the pylons supporting the NY-NJ piers down to the diameter of a “<a href="https://www.northjersey.com/story/news/transportation/2023/12/08/tiny-shipworms-ravaging-wood-pilings-of-nj-ny-wharves-port-authority-newark-bay/71813583007/">toothpick</a>,” PANYNJ Port Director Bethann Rooney told local press. The additional maintenance responsibility on the part of tenants is lengthening Maher’s lease talks due to the costs involved. Repairing damaged wharves and other maintenance could add $20 million to a terminal operator’s annual costs under a long-term lease. The alternative is spending up to $250 million to fully replace a damaged berth. With each terminal having three or four big-ship berths, a terminal operator could face up to $1 billion in replacement costs. Moreover, any berth replacement would reduce capacity at the port, requiring terminals to coordinate such projects as they occur. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Infrastructure investor Macquarie is looking to keep its majority stake in one of largest marine terminals on the US East Coast despite rumors of a sale that would coincide with a new lease at the Port of New York and New Jersey. Macquarie, though, faces millions in new costs under a new lease as the port seeks to offload wharf and berth maintenance onto its tenants. Macquarie Infrastructure Partners, which bought New Jersey’s Maher Terminals in 2016 through its MIP III fund , is negotiating with the Port Authority of the New York and New Jersey (PANYNJ) for a new lease, according to people familiar with the talks. Japanese shipping line NYK acquired a 20% stake in Maher from MIP III shortly after the initial acquisition, leaving Macquarie with a majority 80% stake. Macquarie’s current lease for Maher doesn’t expire until 2030. But talks on a renewal started earlier this year under the expectation that MIP III would have to sell Maher as part of a capital return to its investors after the fund’s initial 10-year time horizon, sources said. Nailing down a new lease, which could be up to 30 years, was considered necessary before a potential buyer would consider acquiring a long-term asset such as the marine terminal, they added. In 2023, MIP III sold one of its portfolio companies , Ceres Terminals, to Carrix, which is the parent company of terminal operator SSA Marine and has financial backing from the infrastructure fund of private equity investor Blackstone. However, investors in MIP III, which is a 2013 vintage fund, have agreed to extend the fund’s time horizon for another 10 years, according to a person familiar with the fund’s operations. MIP III’s extended time horizon means there are no plans — at least in the near term — for a sale of Maher, the source said. MIP III’s extension also delays an informal deadline of mid-2025 that the PANYNJ sought for lease negotiations, although a lease extension is likely to be agreed on later this year. Macquarie and the PANYNJ declined to comment on lease negotiations. Rising maintenance costs Since the purchase of Maher, Macquarie has doubled down on US terminal assets, particularly on the US West Coast. In 2019, it bought the Long Beach Container Terminal from OOCL for $1.78 billion and a year later acquired Long Beach’s ITS terminal for an undisclosed sum. In 2023, it purchased significant ownership stakes in TraPac’s Los Angeles and Oakland terminals and in Yusen Terminals. At 450 acres and almost 2 million container lifts per year, Maher is Macquarie’s largest single terminal asset and the largest privately operated terminal on the US East Coast. Maher has served as the primary East Coast hub for carriers in the Ocean Alliance. One of those carriers, CMA CGM, has moved more of its vessel calls to the two NY-NJ marine terminals that it bought in 2022 . However, CMA CGM’s terminals do not have the capacity to also handle other Ocean Alliance carriers, including Cosco Shipping, OOCL and Evergreen Marine. CMA CGM’s New Jersey terminal will have more space once a throughput agreement with carriers in the Premier Alliance expires in 2027. Even then, Maher would need to handle some Ocean Alliance vessels, people familiar with the matter say. In addition to Ocean Alliance, Maher handles independent services from Zim and other carriers. It also serves as swing capacity for Maersk and Mediterranean Shipping Co. amid ongoing capital projects at the two terminals that serve those carriers . Maher’s talks with the PANYNJ come amid the bi-state agency’s focus on shifting costs for maintaining the port’s wharves and berths to terminal operators. While marine terminals have typically only been responsible for everything from the ground up, CMA CGM and APM Terminals, which signed a new lease in March, agreed to terms requiring them to cover costs of wharf and berth maintenance. Damage from a worm called a marine borer has rendered some of the pylons supporting the NY-NJ piers down to the diameter of a “ toothpick ,” PANYNJ Port Director Bethann Rooney told local press. The additional maintenance responsibility on the part of tenants is lengthening Maher’s lease talks due to the costs involved. Repairing damaged wharves and other maintenance could add $20 million to a terminal operator’s annual costs under a long-term lease. The alternative is spending up to $250 million to fully replace a damaged berth. With each terminal having three or four big-ship berths, a terminal operator could face up to $1 billion in replacement costs. Moreover, any berth replacement would reduce capacity at the port, requiring terminals to coordinate such projects as they occur. Contact Michael Angell at michael.angell@spglobal.com .

Maritime

North American ports

Port News

Macquarie looks to keep hold on NY-NJ terminal amid lease talks

<div class="phx-topic abstract-wrapper">The investigation centers on terminal service agreements that may have required container lines to commit to route a share of their cargo through Port Houston. </div>

The investigation centers on terminal service agreements that may have required container lines to commit to route a share of their cargo through Port Houston.

<div class="phx-topic">The US Federal Maritime Commission (FMC) has launched an investigation into service agreements between Port Houston and major container lines that may require some carriers to deliver a percentage of loaded containers through the largest port along the US Gulf Coast. The agency, in a filing made Friday, ordered the port and carriers to provide information and data relating to what conditions caused carriers to agree to or refuse to sign terminal service agreements with Port Houston. The FMC’s Bureau of Enforcement, Investigations and Compliance (BEIC) wants to know about previous agreements, including language on cargo commitments and details on penalties levied in instances when carriers failed to meet those obligations. The FMC also wants to determine if there were any “unreasonable, unfair, unjust, or discriminatory behaviors” related to the agreements. The agency is seeking to understand the impact the agreements had on the competitiveness and reliability of the US Gulf shipping system and whether there were any “unfair and deceptive practices” related to the agreements, according to the filing. The ocean carriers mentioned in the filing include CMA CGM, Evergreen Line, Hapag-Lloyd, Maersk Line, Mediterranean Shipping Co., Ocean Network Express (ONE) and Zim Integrated Shipping Services. The FMC said it may seek information from other ocean carriers, port authorities and other related entities. The filing didn’t specify if the percentage of loaded containers required within service agreements referred to the carriers’ Gulf networks specifically or US networks overall. Terminal service agreements generally have minimal throughput requirements in which carriers are rewarded or penalized if they exceed or fail to meet cargo obligations. Port Houston operates the Barbours Cut and the Bayport container terminals. Houston is the fifth-busiest US container port and handled approximately 71% of laden volumes moving through the Gulf region last year, according to data from PIERS, a sister company of the Journal of Commerce. Port Houston wasn’t immediately available for comment. Contact Mark Szakonyi at <a href="https://www.joc.com/article/mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) has launched an investigation into service agreements between Port Houston and major container lines that may require some carriers to deliver a percentage of loaded containers through the largest port along the US Gulf Coast. The agency, in a filing made Friday, ordered the port and carriers to provide information and data relating to what conditions caused carriers to agree to or refuse to sign terminal service agreements with Port Houston. The FMC’s Bureau of Enforcement, Investigations and Compliance (BEIC) wants to know about previous agreements, including language on cargo commitments and details on penalties levied in instances when carriers failed to meet those obligations. The FMC also wants to determine if there were any “unreasonable, unfair, unjust, or discriminatory behaviors” related to the agreements. The agency is seeking to understand the impact the agreements had on the competitiveness and reliability of the US Gulf shipping system and whether there were any “unfair and deceptive practices” related to the agreements, according to the filing. The ocean carriers mentioned in the filing include CMA CGM, Evergreen Line, Hapag-Lloyd, Maersk Line, Mediterranean Shipping Co., Ocean Network Express (ONE) and Zim Integrated Shipping Services. The FMC said it may seek information from other ocean carriers, port authorities and other related entities. The filing didn’t specify if the percentage of loaded containers required within service agreements referred to the carriers’ Gulf networks specifically or US networks overall. Terminal service agreements generally have minimal throughput requirements in which carriers are rewarded or penalized if they exceed or fail to meet cargo obligations. Port Houston operates the Barbours Cut and the Bayport container terminals. Houston is the fifth-busiest US container port and handled approximately 71% of laden volumes moving through the Gulf region last year, according to data from PIERS, a sister company of the Journal of Commerce. Port Houston wasn’t immediately available for comment. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container Shipping News

Container lines

FMC probing service agreements between Port Houston, ocean carriers

<div class="phx-topic abstract-wrapper">The surcharges, which took effect Sunday, apply to select customers who exceed their peak-season allotment of containers out of the region. </div>

The surcharges, which took effect Sunday, apply to select customers who exceed their peak-season allotment of containers out of the region.

<div class="phx-topic">J.B. Hunt Transport Services, the largest US provider of domestic intermodal shipping, began assessing peak-season surcharges of up to $1,500 per container this week in Southern California. The surcharges, which took effect Sunday, apply to select customers who exceed their peak-season allotment of containers out of Southern California. The affected customers are companies whose freight volumes peak ahead of the holiday shopping season, indicating the surcharges are aimed at only some shippers. Spencer Frazier, executive vice president of sales and marketing for J.B. Hunt, said the surcharges are necessary for the company to remain agile and resilient enough to support shippers during busy times. “As [federal] trade policy negotiations continue, we are anticipating continued volatility and increasing demand from our customers,” Frazier told the Journal of Commerce in a statement. “To prepare and position capacity, we are engaging in customer discussions about anticipated peak season surcharges in July.” Still, a half-dozen shippers who spoke with the Journal of Commerce about the surcharges expressed frustration, questioning whether J.B. Hunt incurs $1,500 in costs to reposition empty containers to Southern California. They also pointed to tepid intermodal volume data published by the Association of American Railroads (AAR) and the US Surface Transportation Board (STB). “Starting a peak [surcharge] on July 13 is crazy and then they have it ending in December, even though J.B. Hunt told me it doesn’t expect peak [season] to last that long,” said one of the shippers, who did not want to be identified. “We tried to go back and negotiate. They said, ‘Look, if you’re going to give the freight to somebody else, that’s fine.’ I feel like J.B. Hunt rates were very cheap during the bids earlier this year and perhaps now they’re trying to make up for it.” The surcharges are not applied universally, but only after loads surpass a shipper’s weekly allotment. For example, if a shipper typically moves 100 containers out of Southern California via BNSF Railway per week, J.B. Hunt may allocate 120 containers as the peak-season allowance. BNSF is J.B. Hunt’s exclusive partner in the western US. The surcharge would apply only to shipments above the peak season threshold. This marks the <a href="https://www.joc.com/article/import-surge-pushing-los-angeles-outbound-spot-truck-rates-higher-5724894">second consecutive year</a> that J.B. Hunt has imposed surcharges exceeding $1,000 on customers who ramp up shipping between July and October. Last year, the company said the fees were necessary to manage market volatility while maintaining service standards, a rationale that likely underlies the latest surcharges. <h3>BNSF volume not spiking in recent weeks </h3>BNSF’s total intermodal volumes declined year over year for seven consecutive weeks from May through late June, but rose 5% for the week ended July 4, according to STB data. Data from RailState, which tracks volume in Southern California, shows BNSF’s volume gains came from international intermodal, while domestic intermodal volumes remained muted. It’s unlikely that volumes in the upcoming peak season will exceed that of a year ago across all North American Class I railroads, according to a Journal of Commerce analysis of data from the Intermodal Association of North America (IANA). Meanwhile, ocean carriers have backed away from proposed spot rate increases, which matters because volumes moving through the ports of Los Angeles and Long Beach feed both international and domestic intermodal flows in Southern California. Spot market ocean rates to the West Coast have <a href="https://www.joc.com/article/container-lines-cutting-trans-pacific-capacity-overhang-6040426">declined steadily</a> since peaking in early June, due in part to soft demand. Many retailers accelerated shipments to avoid possible tariff increases under the Trump administration. J.B. Hunt’s decision to implement a peak season surcharge could push its competitors, such as Hub Group, Schneider National, STG Logistics and Swift Intermodal, to impose similar, if smaller, surcharges. Union Pacific Railroad may also implement a small surcharge for using rail-owned equipment in Southern California, if only to prevent too much volume shifting from J.B. Hunt and BNSF to UP. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

J.B. Hunt Transport Services, the largest US provider of domestic intermodal shipping, began assessing peak-season surcharges of up to $1,500 per container this week in Southern California. The surcharges, which took effect Sunday, apply to select customers who exceed their peak-season allotment of containers out of Southern California. The affected customers are companies whose freight volumes peak ahead of the holiday shopping season, indicating the surcharges are aimed at only some shippers. Spencer Frazier, executive vice president of sales and marketing for J.B. Hunt, said the surcharges are necessary for the company to remain agile and resilient enough to support shippers during busy times. “As [federal] trade policy negotiations continue, we are anticipating continued volatility and increasing demand from our customers,” Frazier told the Journal of Commerce in a statement. “To prepare and position capacity, we are engaging in customer discussions about anticipated peak season surcharges in July.” Still, a half-dozen shippers who spoke with the Journal of Commerce about the surcharges expressed frustration, questioning whether J.B. Hunt incurs $1,500 in costs to reposition empty containers to Southern California. They also pointed to tepid intermodal volume data published by the Association of American Railroads (AAR) and the US Surface Transportation Board (STB). “Starting a peak [surcharge] on July 13 is crazy and then they have it ending in December, even though J.B. Hunt told me it doesn’t expect peak [season] to last that long,” said one of the shippers, who did not want to be identified. “We tried to go back and negotiate. They said, ‘Look, if you’re going to give the freight to somebody else, that’s fine.’ I feel like J.B. Hunt rates were very cheap during the bids earlier this year and perhaps now they’re trying to make up for it.” The surcharges are not applied universally, but only after loads surpass a shipper’s weekly allotment. For example, if a shipper typically moves 100 containers out of Southern California via BNSF Railway per week, J.B. Hunt may allocate 120 containers as the peak-season allowance. BNSF is J.B. Hunt’s exclusive partner in the western US. The surcharge would apply only to shipments above the peak season threshold. This marks the second consecutive year that J.B. Hunt has imposed surcharges exceeding $1,000 on customers who ramp up shipping between July and October. Last year, the company said the fees were necessary to manage market volatility while maintaining service standards, a rationale that likely underlies the latest surcharges. BNSF volume not spiking in recent weeks BNSF’s total intermodal volumes declined year over year for seven consecutive weeks from May through late June, but rose 5% for the week ended July 4, according to STB data. Data from RailState, which tracks volume in Southern California, shows BNSF’s volume gains came from international intermodal, while domestic intermodal volumes remained muted. It’s unlikely that volumes in the upcoming peak season will exceed that of a year ago across all North American Class I railroads, according to a Journal of Commerce analysis of data from the Intermodal Association of North America (IANA). Meanwhile, ocean carriers have backed away from proposed spot rate increases, which matters because volumes moving through the ports of Los Angeles and Long Beach feed both international and domestic intermodal flows in Southern California. Spot market ocean rates to the West Coast have declined steadily since peaking in early June, due in part to soft demand. Many retailers accelerated shipments to avoid possible tariff increases under the Trump administration. J.B. Hunt’s decision to implement a peak season surcharge could push its competitors, such as Hub Group, Schneider National, STG Logistics and Swift Intermodal, to impose similar, if smaller, surcharges. Union Pacific Railroad may also implement a small surcharge for using rail-owned equipment in Southern California, if only to prevent too much volume shifting from J.B. Hunt and BNSF to UP. Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Rail News

Surface

J.B. Hunt hits some shippers with big surcharges in Southern California

<div class="phx-topic abstract-wrapper">But the longer voyages are also seeing container shipping companies cutting the average fuel intensity per TEU mile and ensuring vessels are sailing full. </div>

But the longer voyages are also seeing container shipping companies cutting the average fuel intensity per TEU mile and ensuring vessels are sailing full.

<div class="phx-topic">Container traffic diversions around southern Africa to avoid attacks in the Red Sea drove up emissions in early 2025 by nearly one-fifth compared with a year earlier. But while ocean carriers have improved their fuel burning and ship utilization, recent attacks in the Red Sea have killed any hopes of a return to more fuel-efficient transits via the Suez Canal this year. Greenhouse gas emissions (GHG) in the first quarter rose 19.38% year over year to just under 60 million tons, according to VesselBot, a sustainable supply chain platform. In 2024, emissions jumped 45% on container trades tied to Europe compared with 2023, according to European Union data. The southern Africa route for the Asia-Europe trade has been in operation since Houthi militants began targeting commercial shipping in late 2023. It is a 30% longer route than using the Suez Canal and adds 10-12 days to transits, absorbing up to 10% of global container shipping capacity and keeping rates elevated. “In an era with high focus on reductions of carbon emissions, the impact of the Red Sea crisis on specifically container shipping has been an increase in emissions matching the total annual emissions of Cambodia,” Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, wrote in his Sunday Spotlight. “The responsibility for this substantial increase in carbon emissions is solely to be placed on the Houthis. The consequence of their actions has been to more than negate years of effort by the container lines to reduce the carbon emissions for container shipping,” he added. Houthi militant attacks last week on two vessels within three days, leaving four seafarers dead and 11 unaccounted for, killed off <a href="https://www.joc.com/article/new-houthi-attacks-likely-kill-hopes-of-shipping-returning-to-red-sea-this-year-6040923">any prospect of major ocean carriers returning to Suez Canal</a> transits in 2025. <h3>Greater efficiency </h3>But as emissions from container shipping increase, carriers sailing around Africa are optimizing voyage efficiency by reducing speed and the average emission intensity and ensuring vessels are sailing full, according to the VesselBot report. Better environmental performance per unit of cargo transported could be seen in the first-quarter average emissions intensity of 206.93 grams of well-to-wake CO2 per TEU-kilometer compared with 231.55 in the first three months of last year. VesselBot also found ship utilization in the first quarter for vessels using the round-Africa route was higher than 80% as more cargo was transported on fewer ships. The rise in shipping emissions will find its way into the pockets of European cargo owners as regulators phase in the <a href="https://www.joc.com/article/european-parliament-approves-shipping-ets-but-stakeholders-wary-5202492">EU Emissions Trading System (ETS)</a> and the <a href="https://www.joc.com/article/container-carriers-to-shoulder-bulk-of-europe-fuel-intensity-rule-5192246">FuelEU Maritime regulation</a>. The ETS tax on carrier emissions on voyages beginning or ending in the EU this year is at 40% and will increase to 70% from Jan. 1, 2026, with 100% of emissions charged in 2027. Also from Jan. 1, the new FuelEU Maritime regulation will set limits on the yearly average GHG intensity of the energy used by ships that call at European ports. These limits will gradually decrease over time, starting with a 2% reduction by 2025 and reaching an 80% reduction by 2050. Customer advisories show carriers plan to “simplify the process” by merging compliance with the EU ETS and FuelEU regulations into one fuel surcharge, but this move has not gone down well with shippers. There has been little transparency when carriers pass this cost to customers, James Hookham, director of the Global Shippers’ Forum, told the Journal of Commerce. “Shippers quite reasonably ask why they are paying a regulatory penalty as well as the difference in operating costs for the new technology. Frustration over the lines’ lack of engagement with customers will make building this confidence and unity of purpose a tough job.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Container traffic diversions around southern Africa to avoid attacks in the Red Sea drove up emissions in early 2025 by nearly one-fifth compared with a year earlier. But while ocean carriers have improved their fuel burning and ship utilization, recent attacks in the Red Sea have killed any hopes of a return to more fuel-efficient transits via the Suez Canal this year. Greenhouse gas emissions (GHG) in the first quarter rose 19.38% year over year to just under 60 million tons, according to VesselBot, a sustainable supply chain platform. In 2024, emissions jumped 45% on container trades tied to Europe compared with 2023, according to European Union data. The southern Africa route for the Asia-Europe trade has been in operation since Houthi militants began targeting commercial shipping in late 2023. It is a 30% longer route than using the Suez Canal and adds 10-12 days to transits, absorbing up to 10% of global container shipping capacity and keeping rates elevated. “In an era with high focus on reductions of carbon emissions, the impact of the Red Sea crisis on specifically container shipping has been an increase in emissions matching the total annual emissions of Cambodia,” Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, wrote in his Sunday Spotlight. “The responsibility for this substantial increase in carbon emissions is solely to be placed on the Houthis. The consequence of their actions has been to more than negate years of effort by the container lines to reduce the carbon emissions for container shipping,” he added. Houthi militant attacks last week on two vessels within three days, leaving four seafarers dead and 11 unaccounted for, killed off any prospect of major ocean carriers returning to Suez Canal transits in 2025. Greater efficiency But as emissions from container shipping increase, carriers sailing around Africa are optimizing voyage efficiency by reducing speed and the average emission intensity and ensuring vessels are sailing full, according to the VesselBot report. Better environmental performance per unit of cargo transported could be seen in the first-quarter average emissions intensity of 206.93 grams of well-to-wake CO2 per TEU-kilometer compared with 231.55 in the first three months of last year. VesselBot also found ship utilization in the first quarter for vessels using the round-Africa route was higher than 80% as more cargo was transported on fewer ships. The rise in shipping emissions will find its way into the pockets of European cargo owners as regulators phase in the EU Emissions Trading System (ETS) and the FuelEU Maritime regulation . The ETS tax on carrier emissions on voyages beginning or ending in the EU this year is at 40% and will increase to 70% from Jan. 1, 2026, with 100% of emissions charged in 2027. Also from Jan. 1, the new FuelEU Maritime regulation will set limits on the yearly average GHG intensity of the energy used by ships that call at European ports. These limits will gradually decrease over time, starting with a 2% reduction by 2025 and reaching an 80% reduction by 2050. Customer advisories show carriers plan to “simplify the process” by merging compliance with the EU ETS and FuelEU regulations into one fuel surcharge, but this move has not gone down well with shippers. There has been little transparency when carriers pass this cost to customers, James Hookham, director of the Global Shippers’ Forum, told the Journal of Commerce. “Shippers quite reasonably ask why they are paying a regulatory penalty as well as the difference in operating costs for the new technology. Frustration over the lines’ lack of engagement with customers will make building this confidence and unity of purpose a tough job.” Contact Greg Knowler at greg.knowler@spglobal.com .

Transport, Trade and Regulation News

Asia-Europe

Africa diversions drive sharp rise in ocean carrier emissions

<div class="phx-topic abstract-wrapper">The journey time, about two to three days better than typical industry metrics, comes despite congestion in other parts of partner CPKC’s network.</div>

The journey time, about two to three days better than typical industry metrics, comes despite congestion in other parts of partner CPKC’s network.

<div class="phx-topic">Schneider National said Friday its flagship Mexico Midwest Express (MMX) intermodal service with partner Canadian Pacific Kansas City (CPKC) is continuing to deliver strong results in 2025, offering faster transit times and higher on-time reliability than many cross-border alternatives despite congestion in other parts of CPKC’s network. The MMX service, launched two years ago, connects inland Mexican cities such as Monterrey and San Luis Potosí with Chicago via a single-line rail route. The service bypasses traditional interchange delays at the border, with two spans over the Laredo bridge and switching yards on each side of the border to handle crew changes. While Schneider did not disclose current shipment totals due to its quiet period ahead of the release of its second-quarter earnings, the company said MMX performance metrics through the first half of 2025 were strong, with average transit times of four days and a cargo theft rate of less than 0.02%. Schneider also said the on-time performance of MMX remains above 95%. The typical transit time from Monterrey to Chicago is about six or seven days. “Decreasing shipping time by even a few days matters to our customers because the faster products can get on the shelves, the faster those items can land in the hands of consumers,” Michael Baumgardt, Schneider’s senior vice president of intermodal, said in a statement. The Intermodal Association of North America (IANA) reported that railroads hauled a combined 86,000-plus domestic containers this year through May 31, a 21% increase compared with the same period a year earlier. Railroads hauled nearly 60,000 domestic containers to the Midwest during the same period, up 9% from a year earlier. Schneider is currently the only intermodal provider offering a true single-line cross-border solution from Mexico to the Midwest, eliminating any chance of delays caused by an interchange between two railroads. Schneider said service on the MMX has not deteriorated much since CPKC’s <a href="https://www.joc.com/article/cpkc-acknowledges-service-woes-to-us-regulators-vows-remediation-6030412">messy IT transition</a> in May that affected service in Texas, Louisiana, and Mississippi. The exception is that some shippers have experienced lengthy delays moving cargo from Laredo to Chicago because the container dwell inside the Laredo yard is up 122% since early May compared with a year ago. Schneider rivals <a href="https://www.joc.com/article/jb-hunt-launching-quantum-de-mexico-for-time-sensitive-cross-border-freight-6014579">J.B. Hunt Transport Services</a> and <a href="https://www.joc.com/article/hub-group-boosts-cross-border-business-in-jv-with-mexican-dray-carrier-5745355">Hub Group</a> have also ramped up investments in cross-border intermodal in recent months, introducing new services and partnerships aimed at capturing a growing share of freight moving between the US and Mexico. Union Pacific Railroad completed a pilot program this spring to speed up the handoff between Mexican and US crews by doing it inside UP’s Eagle Pass terminal rather than on the middle of the International Railway Bridge. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Schneider National said Friday its flagship Mexico Midwest Express (MMX) intermodal service with partner Canadian Pacific Kansas City (CPKC) is continuing to deliver strong results in 2025, offering faster transit times and higher on-time reliability than many cross-border alternatives despite congestion in other parts of CPKC’s network. The MMX service, launched two years ago, connects inland Mexican cities such as Monterrey and San Luis Potosí with Chicago via a single-line rail route. The service bypasses traditional interchange delays at the border, with two spans over the Laredo bridge and switching yards on each side of the border to handle crew changes. While Schneider did not disclose current shipment totals due to its quiet period ahead of the release of its second-quarter earnings, the company said MMX performance metrics through the first half of 2025 were strong, with average transit times of four days and a cargo theft rate of less than 0.02%. Schneider also said the on-time performance of MMX remains above 95%. The typical transit time from Monterrey to Chicago is about six or seven days. “Decreasing shipping time by even a few days matters to our customers because the faster products can get on the shelves, the faster those items can land in the hands of consumers,” Michael Baumgardt, Schneider’s senior vice president of intermodal, said in a statement. The Intermodal Association of North America (IANA) reported that railroads hauled a combined 86,000-plus domestic containers this year through May 31, a 21% increase compared with the same period a year earlier. Railroads hauled nearly 60,000 domestic containers to the Midwest during the same period, up 9% from a year earlier. Schneider is currently the only intermodal provider offering a true single-line cross-border solution from Mexico to the Midwest, eliminating any chance of delays caused by an interchange between two railroads. Schneider said service on the MMX has not deteriorated much since CPKC’s messy IT transition in May that affected service in Texas, Louisiana, and Mississippi. The exception is that some shippers have experienced lengthy delays moving cargo from Laredo to Chicago because the container dwell inside the Laredo yard is up 122% since early May compared with a year ago. Schneider rivals J.B. Hunt Transport Services and Hub Group have also ramped up investments in cross-border intermodal in recent months, introducing new services and partnerships aimed at capturing a growing share of freight moving between the US and Mexico. Union Pacific Railroad completed a pilot program this spring to speed up the handoff between Mexican and US crews by doing it inside UP’s Eagle Pass terminal rather than on the middle of the International Railway Bridge. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Schneider says MMX service delivering four-day Mexico-Chicago transit time

<div class="phx-topic abstract-wrapper">The project, due to begin Monday, will also improve truck access by upgrading the gate infrastructure and boost efficiency through the replacement of an outdated terminal operating system.</div>

The project, due to begin Monday, will also improve truck access by upgrading the gate infrastructure and boost efficiency through the replacement of an outdated terminal operating system.

<div class="phx-topic">The International Transportation Service (ITS) terminal in Long Beach will begin a $365 million upgrade on Monday that will increase its container capacity by about 50% and enable it to work two 18,000-TEU ships simultaneously. The work involves filling in a 19-acre slip at the terminal to make the property usable. Scheduled for completion in about three and a half years, the project will also improve truck access by upgrading the gate infrastructure and boost efficiency through the replacement of an outdated terminal operating system (TOS) with a new TOS, ITS CEO Kim Holtermand told the Journal of Commerce. “Our tech is quite old. It’s time to upgrade it,” Holtermand said. ITS is, in effect, two separate terminals separated by the slip, which hinders operational efficiency, Holtermand said. Filling in the slip will increase the terminal’s size to 277 acres and create a more efficient square-shaped facility. With a total of 3,500 linear feet of berth, ITS will be able to handle two super-post-Panamax container ships, or one 18,000-TEU vessel and two smaller ships simultaneously, he said. “It will be a large efficient facility with big [super post-Panamax] cranes and improved infrastructure,” Holtermand said. ITS’ annual throughput capacity will increase by about 50% to 1.5 million container moves, or 2.6 million TEUs, he said. <h3>Gate improvements expected to boost efficiency </h3>Included in the project will be a reconfiguration of the terminal’s gate complex and a new TOS that will streamline truck access and egress. Trucks calling at ITS in June had an average turn time of 71 minutes; the average turn time for the Long Beach-Los Angeles port complex in June was 62 minutes, according to the Harbor Trucking Association. ITS will also continue its efforts to electrify all its cargo-handling equipment by 2030 to meet the deadline set in the joint Los Angeles-Long Beach <a href="https://www.joc.com/article/la-lb-port-significantly-cuts-emissions-but-tougher-challenges-await-5742585">Clean Air Action Plan</a>, Holtermand said. The equipment will continue to be operated by dockworkers, he added. Noel Hacegaba, COO at the Port of Long Beach, said the ITS expansion project is the latest example of how the port and its stakeholders are not only growing, but growing green. Another project that will accomplish the port’s environmental goals is the <a href="https://www.joc.com/article/southern-california-ports-ready-to-defend-green-initiatives-from-trump-white-house-5927353">Pier B on-dock railyard</a> that will eliminate hundreds of truck trips each day by loading inland point intermodal (IPI) containers directly onto trains rather than trucking them to near-dock railyards, Hacegaba said. Construction of the Pier B facility continues to advance, he said, with completion expected in 2032. On-dock moves account for about 27% of Long Beach’s IPI volume; completion of the Pier B facility will raise that to about 35%, Hacegaba said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The International Transportation Service (ITS) terminal in Long Beach will begin a $365 million upgrade on Monday that will increase its container capacity by about 50% and enable it to work two 18,000-TEU ships simultaneously. The work involves filling in a 19-acre slip at the terminal to make the property usable. Scheduled for completion in about three and a half years, the project will also improve truck access by upgrading the gate infrastructure and boost efficiency through the replacement of an outdated terminal operating system (TOS) with a new TOS, ITS CEO Kim Holtermand told the Journal of Commerce. “Our tech is quite old. It’s time to upgrade it,” Holtermand said. ITS is, in effect, two separate terminals separated by the slip, which hinders operational efficiency, Holtermand said. Filling in the slip will increase the terminal’s size to 277 acres and create a more efficient square-shaped facility. With a total of 3,500 linear feet of berth, ITS will be able to handle two super-post-Panamax container ships, or one 18,000-TEU vessel and two smaller ships simultaneously, he said. “It will be a large efficient facility with big [super post-Panamax] cranes and improved infrastructure,” Holtermand said. ITS’ annual throughput capacity will increase by about 50% to 1.5 million container moves, or 2.6 million TEUs, he said. Gate improvements expected to boost efficiency Included in the project will be a reconfiguration of the terminal’s gate complex and a new TOS that will streamline truck access and egress. Trucks calling at ITS in June had an average turn time of 71 minutes; the average turn time for the Long Beach-Los Angeles port complex in June was 62 minutes, according to the Harbor Trucking Association. ITS will also continue its efforts to electrify all its cargo-handling equipment by 2030 to meet the deadline set in the joint Los Angeles-Long Beach Clean Air Action Plan , Holtermand said. The equipment will continue to be operated by dockworkers, he added. Noel Hacegaba, COO at the Port of Long Beach, said the ITS expansion project is the latest example of how the port and its stakeholders are not only growing, but growing green. Another project that will accomplish the port’s environmental goals is the Pier B on-dock railyard that will eliminate hundreds of truck trips each day by loading inland point intermodal (IPI) containers directly onto trains rather than trucking them to near-dock railyards, Hacegaba said. Construction of the Pier B facility continues to advance, he said, with completion expected in 2032. On-dock moves account for about 27% of Long Beach’s IPI volume; completion of the Pier B facility will raise that to about 35%, Hacegaba said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Marine terminals

Long Beach ITS terminal upgrade to boost capacity by about 50%

<div class="phx-topic abstract-wrapper">The win for the trucking company at the Texas Supreme Court sets a powerful precedent that narrows the scope of liability in vehicular negligence cases, especially those involving unpredictable, high-impact crashes.</div>

The win for the trucking company at the Texas Supreme Court sets a powerful precedent that narrows the scope of liability in vehicular negligence cases, especially those involving unpredictable, high-impact crashes.

<div class="phx-topic">Shippers operating private trucking fleets will be buoyed by a June 27 decision by the Supreme Court of Texas, which overturned a nearly $100 million 2023 jury verdict in Werner Enterprises, Inc. v. Blake. The court held that the trucking company’s driver, although possibly negligent in how he operated his vehicle on icy roads, was not the proximate cause of a tragic cross-median crash that killed one child and left another permanently paralyzed. The case holds implications for truckload carriers, from large for-hire carriers such as Werner to smaller operators, but also for shippers operating their own private fleets who will be impacted by the precedent set by the court’s decision. That makes it more than merely a procedural victory for Werner Enterprises. It sets a powerful precedent that narrows the scope of liability in vehicular negligence cases, especially those involving unpredictable, high-impact crashes. <h3>Boundaries for shippers </h3>For private fleet operators and shippers with dedicated transportation assets, the implications are significant — and potentially transformative. The ruling offers clarity and potentially limits exposure in high-dollar catastrophic loss cases — particularly those involving third-party drivers who are the true proximate causes of an accident. Previously, plaintiffs’ attorneys have advanced theories of negligent training, hiring, or dispatch to hook employers into liability, even where their driver was not principally at fault. But the Werner decision sharply limits those derivative theories unless the employee’s conduct itself meets the substantial-factor threshold of proximate cause. This limitation matters in an era of rising “nuclear verdicts,” so-called liability verdicts that exceed $10 million, and increasingly aggressive plaintiff strategies in transportation litigation. It restores a degree of predictability to fleet liability by anchoring it in clearly demonstrable causation. <h3>The legal crux: proximate cause </h3>The court’s opinion turned on a technical yet crucial doctrine: proximate cause. Texas law requires that to hold someone liable for negligence, their actions must be a “substantial factor” in causing the injury — not just part of a chain of events. The accident occurred in December 2014, near Odessa, Texas, when an F-350 pickup truck, traveling too fast for the icy conditions, lost control, crossed a 42-foot grassy median, and collided head-on with a Werner 18-wheeler operated by Shiraz Ali, a driver in training. The collision killed seven-year-old Zackery Blake and severely injured his siblings and mother. A Texas jury found Werner and Ali liable, apportioning 70% of the responsibility to Werner and 14% of the responsibility to Ali and awarding $100 million in damages. Werner appealed, arguing that the plaintiffs failed to prove Ali’s driving was a proximate cause of the crash. The Texas Supreme Court ruled that his conduct was not a substantial factor in causing the injuries. The sole proximate cause, according to the opinion, was the F-350’s sudden loss of control. Crucially, the court emphasized that even if Ali’s speed “furnished the condition that made the injuries possible,” it was not enough for liability. The decision pivots on the idea that legal responsibility requires more than being in the wrong place at the wrong time. <h3>Victory for the principle of foreseeability </h3>The ruling clarifies a principle that private fleet operators have long sought courts to recognize: when another driver acts unpredictably and causes an accident, it is unfair — and legally unsound — to hold a fleet operator liable simply because their truck happened to be involved. The decision rebukes the lower court’s expansive view of foreseeability. While a collision might have been possible, the court held, it was not reasonably foreseeable that an out-of-control vehicle would cross a wide median and strike Ali’s truck before he had time to react. It was “a tragic happenstance of place and time,” the opinion declared, “but not a happenstance for which Ali or his employer can reasonably be held responsible.” <h3>A word of caution </h3>While this ruling is a win for carriers and shippers, it also underscores the importance of robust documentation and clear protocols. The Supreme Court of Texas accepted that Werner’s training may have been imperfect. But because the crash wasn’t proximately caused by that training — or by Ali’s conduct — it didn’t matter. Private fleets should take note: This ruling doesn’t absolve companies from preparing their drivers for adverse conditions or documenting compliance with safety protocols. But it does provide a legal firewall when accidents occur beyond their control. Matthew Leffler is a transportation attorney, adjunct professor of law at Michigan State University College of Law, and the host of the Armchair Attorney® Podcast. Contact him at <a href="mailto:matthew@armchairattorney.com">matthew@armchairattorney.com</a>.</div>

Shippers operating private trucking fleets will be buoyed by a June 27 decision by the Supreme Court of Texas, which overturned a nearly $100 million 2023 jury verdict in Werner Enterprises, Inc. v. Blake. The court held that the trucking company’s driver, although possibly negligent in how he operated his vehicle on icy roads, was not the proximate cause of a tragic cross-median crash that killed one child and left another permanently paralyzed. The case holds implications for truckload carriers, from large for-hire carriers such as Werner to smaller operators, but also for shippers operating their own private fleets who will be impacted by the precedent set by the court’s decision. That makes it more than merely a procedural victory for Werner Enterprises. It sets a powerful precedent that narrows the scope of liability in vehicular negligence cases, especially those involving unpredictable, high-impact crashes. Boundaries for shippers For private fleet operators and shippers with dedicated transportation assets, the implications are significant — and potentially transformative. The ruling offers clarity and potentially limits exposure in high-dollar catastrophic loss cases — particularly those involving third-party drivers who are the true proximate causes of an accident. Previously, plaintiffs’ attorneys have advanced theories of negligent training, hiring, or dispatch to hook employers into liability, even where their driver was not principally at fault. But the Werner decision sharply limits those derivative theories unless the employee’s conduct itself meets the substantial-factor threshold of proximate cause. This limitation matters in an era of rising “nuclear verdicts,” so-called liability verdicts that exceed $10 million, and increasingly aggressive plaintiff strategies in transportation litigation. It restores a degree of predictability to fleet liability by anchoring it in clearly demonstrable causation. The legal crux: proximate cause The court’s opinion turned on a technical yet crucial doctrine: proximate cause. Texas law requires that to hold someone liable for negligence, their actions must be a “substantial factor” in causing the injury — not just part of a chain of events. The accident occurred in December 2014, near Odessa, Texas, when an F-350 pickup truck, traveling too fast for the icy conditions, lost control, crossed a 42-foot grassy median, and collided head-on with a Werner 18-wheeler operated by Shiraz Ali, a driver in training. The collision killed seven-year-old Zackery Blake and severely injured his siblings and mother. A Texas jury found Werner and Ali liable, apportioning 70% of the responsibility to Werner and 14% of the responsibility to Ali and awarding $100 million in damages. Werner appealed, arguing that the plaintiffs failed to prove Ali’s driving was a proximate cause of the crash. The Texas Supreme Court ruled that his conduct was not a substantial factor in causing the injuries. The sole proximate cause, according to the opinion, was the F-350’s sudden loss of control. Crucially, the court emphasized that even if Ali’s speed “furnished the condition that made the injuries possible,” it was not enough for liability. The decision pivots on the idea that legal responsibility requires more than being in the wrong place at the wrong time. Victory for the principle of foreseeability The ruling clarifies a principle that private fleet operators have long sought courts to recognize: when another driver acts unpredictably and causes an accident, it is unfair — and legally unsound — to hold a fleet operator liable simply because their truck happened to be involved. The decision rebukes the lower court’s expansive view of foreseeability. While a collision might have been possible, the court held, it was not reasonably foreseeable that an out-of-control vehicle would cross a wide median and strike Ali’s truck before he had time to react. It was “a tragic happenstance of place and time,” the opinion declared, “but not a happenstance for which Ali or his employer can reasonably be held responsible.” A word of caution While this ruling is a win for carriers and shippers, it also underscores the importance of robust documentation and clear protocols. The Supreme Court of Texas accepted that Werner’s training may have been imperfect. But because the crash wasn’t proximately caused by that training — or by Ali’s conduct — it didn’t matter. Private fleets should take note: This ruling doesn’t absolve companies from preparing their drivers for adverse conditions or documenting compliance with safety protocols. But it does provide a legal firewall when accidents occur beyond their control. Matthew Leffler is a transportation attorney, adjunct professor of law at Michigan State University College of Law, and the host of the Armchair Attorney® Podcast. Contact him at matthew@armchairattorney.com .

Truckload

Werner victory in long-running court case has broad implications for truckload carriers

<div class="phx-topic abstract-wrapper">The shipping industry needs a fundamentally new, collaborative approach to build true resilience. </div>

The shipping industry needs a fundamentally new, collaborative approach to build true resilience.

<div class="phx-topic">The early 2020s have reshaped the context for international supply chains. The COVID-19 pandemic, geopolitical tensions, and ongoing adverse events have exposed the sector’s complexities, underscoring the need for greater supply chain resilience. Visibility is a prerequisite for effective supply chain and carbon footprint management. In a world where blocs are driving apart and uncertainty is sky high, incremental improvements and isolated digital tools are no longer sufficient. The industry needs a fundamentally new, collaborative approach to build true resilience. Several high-profile digital supply chain initiatives have failed to deliver a lasting impact. The most prominent example, TradeLens, was discontinued despite strong backing and considerable investment. Its centralized model struggled to achieve broad industry support, ultimately faltering because it could not build the trust required to make such industry-wide solutions economically viable. Other platforms, such as Project44 and FourKites, have made significant strides in transport visibility. Yet, their traction remains limited. A common thread running through shortcomings is a lack of trust, insufficient perceived value, and governance models that do not serve the actors or the sector. Technology can only solve the challenges facing supply chains and logistics when it is <a href="https://unctad.org/news/transport-newsletter-article-no-96-fourth-quarter-2022">underpinned by collaboration</a> and trust. <h3>A different way forward </h3>The <a href="https://encoded-592c9deb-987b-4562-aa3c-9fa3d37d83e9.uri/http%3a%2f%2fwww.virtualwatchtower.org)">Virtual Watch Tower</a> (VWT) was conceived as a direct response to these challenges. It is not just another platform, but a neutral, industry-driven public good. Designed by and for the supply chain community, VWT’s mission is to create a digital infrastructure that links existing tools and platforms, enabling secure, selective, and trustworthy sharing of primary data to close gaps. What sets VWT apart is its governance and inclusivity. Rather than being controlled by a single actor or a small group, it is stewarded by neutral stakeholders and, in the future, a trustee-led foundation, ensuring neutrality and legitimacy. At VWT, shippers and logistics providers co-create solutions, ensuring that the digital infrastructure addresses real-world needs. At the heart of VWT’s approach is VWTnet, powered by <a href="http://www.twin.org">TWIN</a> — the Trade Worldwide Information Network. TWIN is a public-good digital data architecture and federated backbone that enables actors to share primary data on their own terms securely. New data gathering mechanisms will help the VWT members to fill current data gaps. This architecture has already demonstrated its value in the real world. The organic growth of VWT, expanding shipment by shipment and actor by actor, is a testament to the power of network effects when trust and interoperability are embedded in the system’s fabric. The VWT vision is that disruptions can be managed collaboratively. When a disruption occurs, whether it is a port strike or a climate-induced delay, all relevant parties involved in the shipments are informed in real time. Recovery plans can be coordinated rather than improvised, and operational flows can bemanaged with far greater agility. Equally transformative is VWT’s approach to emissions tracking. By leveraging primary operational data, VWT will enable shipment-specific emissions calculations, turning sustainability from a retrospective report into an actionable planning and management tool. Shippers can optimize routes for both speed and carbon impact, and authorities can align incentives with verified, real-time data. Emission performance becomes a differentiator, not a compliance afterthought. VWT’s work on these use cases has begun, and the first minimum viable product is scheduled to be launched in 2026. <h3>Building from ground up </h3>Perhaps the most significant differentiator of the community-driven VWT is not technical, but institutional. Drawing on lessons from failed efforts, VWT will be built from the ground up with a two-tier governance model: strategic oversight by a trustee-led foundation, and technical co-evolution by a global network of providers. This structure ensures legitimacy, trust, and adaptability, qualities that have attracted both private and public sector interest. Open forums, transparent decision-making, and participatory rule-setting have fostered a sense of belonging and ownership across the community. As a result, VWT is a movement — one that is evolving through continuous dialogue and shared stewardship among ecosystem actors. By early 2025, VWT surpassed 50 member organizations, with hundreds of shipments monitored, ready for an emerging ecosystem of services operating on top of VWTnet. The journey from concept to infrastructure has been propelled by relentless awareness-building, turning VWT from an idea and research project into a reference point for digital trade transformation. The next challenge is to institutionalize these gains, embedding VWT’s principles and protocols into the fabric of trade. This means maintaining open standards, transparent governance, and economic viability, especially for smaller actors. The ambition is to scale trust, sustain value, and drive adoption in a traditionally conservative industry. Wolfgang Lehmacher, who formerly served as a director at the World Economic Forum, holds many roles, including as a CEO emeritus of GeoPost Intercontinental and as an advisory board member of The Logistics and Supply Chain. He can be reached at <a href="mailto:w.lehmacher@gmail.com">w.lehmacher@gmail.com</a>. Mikael Lind is an adjunct professor of maritime informatics at Chalmers and Research Institutes of Sweden (RISE). He is co-editor of the first two books on maritime informatics and is co-editor of the book <a href="http://www.maritime-decarbonization.org/">Maritime Decarbonization</a>. He can be reached at <a href="mailto:Mikael.Lind@ri.se">Mikael.Lind@ri.se</a>. </div>

The early 2020s have reshaped the context for international supply chains. The COVID-19 pandemic, geopolitical tensions, and ongoing adverse events have exposed the sector’s complexities, underscoring the need for greater supply chain resilience. Visibility is a prerequisite for effective supply chain and carbon footprint management. In a world where blocs are driving apart and uncertainty is sky high, incremental improvements and isolated digital tools are no longer sufficient. The industry needs a fundamentally new, collaborative approach to build true resilience. Several high-profile digital supply chain initiatives have failed to deliver a lasting impact. The most prominent example, TradeLens, was discontinued despite strong backing and considerable investment. Its centralized model struggled to achieve broad industry support, ultimately faltering because it could not build the trust required to make such industry-wide solutions economically viable. Other platforms, such as Project44 and FourKites, have made significant strides in transport visibility. Yet, their traction remains limited. A common thread running through shortcomings is a lack of trust, insufficient perceived value, and governance models that do not serve the actors or the sector. Technology can only solve the challenges facing supply chains and logistics when it is underpinned by collaboration and trust. A different way forward The Virtual Watch Tower (VWT) was conceived as a direct response to these challenges. It is not just another platform, but a neutral, industry-driven public good. Designed by and for the supply chain community, VWT’s mission is to create a digital infrastructure that links existing tools and platforms, enabling secure, selective, and trustworthy sharing of primary data to close gaps. What sets VWT apart is its governance and inclusivity. Rather than being controlled by a single actor or a small group, it is stewarded by neutral stakeholders and, in the future, a trustee-led foundation, ensuring neutrality and legitimacy. At VWT, shippers and logistics providers co-create solutions, ensuring that the digital infrastructure addresses real-world needs. At the heart of VWT’s approach is VWTnet, powered by TWIN — the Trade Worldwide Information Network. TWIN is a public-good digital data architecture and federated backbone that enables actors to share primary data on their own terms securely. New data gathering mechanisms will help the VWT members to fill current data gaps. This architecture has already demonstrated its value in the real world. The organic growth of VWT, expanding shipment by shipment and actor by actor, is a testament to the power of network effects when trust and interoperability are embedded in the system’s fabric. The VWT vision is that disruptions can be managed collaboratively. When a disruption occurs, whether it is a port strike or a climate-induced delay, all relevant parties involved in the shipments are informed in real time. Recovery plans can be coordinated rather than improvised, and operational flows can bemanaged with far greater agility. Equally transformative is VWT’s approach to emissions tracking. By leveraging primary operational data, VWT will enable shipment-specific emissions calculations, turning sustainability from a retrospective report into an actionable planning and management tool. Shippers can optimize routes for both speed and carbon impact, and authorities can align incentives with verified, real-time data. Emission performance becomes a differentiator, not a compliance afterthought. VWT’s work on these use cases has begun, and the first minimum viable product is scheduled to be launched in 2026. Building from ground up Perhaps the most significant differentiator of the community-driven VWT is not technical, but institutional. Drawing on lessons from failed efforts, VWT will be built from the ground up with a two-tier governance model: strategic oversight by a trustee-led foundation, and technical co-evolution by a global network of providers. This structure ensures legitimacy, trust, and adaptability, qualities that have attracted both private and public sector interest. Open forums, transparent decision-making, and participatory rule-setting have fostered a sense of belonging and ownership across the community. As a result, VWT is a movement — one that is evolving through continuous dialogue and shared stewardship among ecosystem actors. By early 2025, VWT surpassed 50 member organizations, with hundreds of shipments monitored, ready for an emerging ecosystem of services operating on top of VWTnet. The journey from concept to infrastructure has been propelled by relentless awareness-building, turning VWT from an idea and research project into a reference point for digital trade transformation. The next challenge is to institutionalize these gains, embedding VWT’s principles and protocols into the fabric of trade. This means maintaining open standards, transparent governance, and economic viability, especially for smaller actors. The ambition is to scale trust, sustain value, and drive adoption in a traditionally conservative industry. Wolfgang Lehmacher, who formerly served as a director at the World Economic Forum, holds many roles, including as a CEO emeritus of GeoPost Intercontinental and as an advisory board member of The Logistics and Supply Chain. He can be reached at w.lehmacher@gmail.com . Mikael Lind is an adjunct professor of maritime informatics at Chalmers and Research Institutes of Sweden (RISE). He is co-editor of the first two books on maritime informatics and is co-editor of the book Maritime Decarbonization . He can be reached at Mikael.Lind@ri.se .

Supply chain

Logistics Technology News

Creating a digital platform for all

Notes: Average rail performance represents years 2017 to 2019 and 2023.

Average rail performance

Average rail performance: {valueY.formatNumber('#.##')}

Pandemic-era congestion (2020-2022)

Pandemic congestion: {valueY.formatNumber('#.##')}

Current Year

Current year: {valueY.formatNumber('#.##')}

Intermodal train cars holding refers to how many trains with containers or trailers are stopped outside of a designated terminal or crew change point due to a disruption to normal operations. The total in the chart is the rolling four-week average total of the US-based Class I railroads: BNSF Railway, CSX Transportation, Norfolk Southern and Union Pacific Railroad. Average rail performance is defined as the weekly performance prior to and after the pandemic-related freight surge. Pandemic-era congestion is the worst result for each week from 2020 through 2022. [STB](https://www.stb.gov/reports-data/rail-service-data/)

US intermodal trains held (STB)

US intermodal train holdings Gateway

<div class="phx-topic abstract-wrapper">The gathering will be closely watched by ocean carriers, shippers and container terminal operators in the US and Europe for signs that global unions are developing a coordinated cross-border “solidarity strike” strategy.</div>

The gathering will be closely watched by ocean carriers, shippers and container terminal operators in the US and Europe for signs that global unions are developing a coordinated cross-border “solidarity strike” strategy.

<div class="phx-topic">Dockworker trade unions from around the world will come together in Lisbon on Nov. 5 to confront “the threat of automation” facing ports and workers in the maritime industry. Described as “a call to action,” the gathering will be closely watched by ocean carriers, shippers and container terminal operators in the US and Europe for signs that global unions are developing a coordinated cross-border capability. Organized by the International Longshoremen’s Association (ILA) and coordinated by the International Dockworkers Council (IDC), the “People Over Profit: Anti-Automation Conference” will examine the future of labor in the maritime and port sector. “The event will bring together trade unions from around the world to confront the threat of automation driven by economic interests that prioritize profit over human employment,” the IDC said in a statement Friday. “This conference represents a unique opportunity to strengthen the defense of decent jobs, occupational safety and collective rights at a decisive moment for the future of maritime and port labor,” it added. The conference intends to develop a shared roadmap and a strategic plan to halt “the unregulated advance of these technological processes,” the IDC said. Coordinated cross-border “solidarity strikes” have yet to be seen among dockworker unions. Dutch union FNV Havens in February called on workers in terminals around Europe to refuse to handle ships diverted from Rotterdam’s Hutchison Ports’ Delta II terminal in solidarity with its striking dockers, but there were no reports of ships being refused service. <h3>Lightning rod for strike action </h3>Global container terminal operators have been accelerating moves to automate operations using fast-developing AI and 5G technology to handle increasing volumes of cargo while also facing a shortage of labor. Port automation and new technology have become a lightning rod for union action in the US. Last October, the ILA led <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">a three-day strike at terminals across the US East and Gulf coasts</a> over wages and concerns around automation. The following month, talks between the ILA and the United States Maritime Alliance (USMX) on a new master contract broke down again due to the union’s concerns about <a href="https://www.joc.com/article/ila-targets-rail-mounted-gantry-cranes-amid-impasse-in-port-labor-talks-5874742">the use of semi-automated rail-mounted gantry cranes (RMGs)</a> at marine terminals. ILA President Harold Daggett said in a separate statement about the Lisbon conference that he was “proud to see this alliance of maritime workers come together in solidarity and strength.” “The automation agenda is creeping into every corner of our economy, from transportation to retail to logistics, and it threatens not only our jobs but the very fabric of our communities,” Daggett said. Automation is not as much of a hot button issue in Europe. Several ports are implementing different levels of automation, from semi- to fully automated terminals deploying automated guided vehicles, automated stacking cranes and remotely operated ship-to-shore cranes. Europe’s busiest container port of Antwerp-Bruges is investing heavily in automation, and while this was raising concerns with dockworker unions, Luc Arnouts, vice president of international relations and networks at the port, said deploying the technology was about being competitive. “If I need eight people on a gang to do a job, then I do some automation I can do the job with four,” Arnouts said. “But you still need to put the eight men there so four will be sitting here in the corner, earning their money but not doing anything. “We feel that discussions [over automation] have become more mature with the unions understanding that keeping the eight people there will, in the end, lead to zero people working at that spot,” he added. Arnouts said there was a widespread shortage of labor “all over the place,” which would offset the loss of jobs caused by automation. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Dockworker trade unions from around the world will come together in Lisbon on Nov. 5 to confront “the threat of automation” facing ports and workers in the maritime industry. Described as “a call to action,” the gathering will be closely watched by ocean carriers, shippers and container terminal operators in the US and Europe for signs that global unions are developing a coordinated cross-border capability. Organized by the International Longshoremen’s Association (ILA) and coordinated by the International Dockworkers Council (IDC), the “People Over Profit: Anti-Automation Conference” will examine the future of labor in the maritime and port sector. “The event will bring together trade unions from around the world to confront the threat of automation driven by economic interests that prioritize profit over human employment,” the IDC said in a statement Friday. “This conference represents a unique opportunity to strengthen the defense of decent jobs, occupational safety and collective rights at a decisive moment for the future of maritime and port labor,” it added. The conference intends to develop a shared roadmap and a strategic plan to halt “the unregulated advance of these technological processes,” the IDC said. Coordinated cross-border “solidarity strikes” have yet to be seen among dockworker unions. Dutch union FNV Havens in February called on workers in terminals around Europe to refuse to handle ships diverted from Rotterdam’s Hutchison Ports’ Delta II terminal in solidarity with its striking dockers, but there were no reports of ships being refused service. Lightning rod for strike action Global container terminal operators have been accelerating moves to automate operations using fast-developing AI and 5G technology to handle increasing volumes of cargo while also facing a shortage of labor. Port automation and new technology have become a lightning rod for union action in the US. Last October, the ILA led a three-day strike at terminals across the US East and Gulf coasts over wages and concerns around automation. The following month, talks between the ILA and the United States Maritime Alliance (USMX) on a new master contract broke down again due to the union’s concerns about the use of semi-automated rail-mounted gantry cranes (RMGs) at marine terminals. ILA President Harold Daggett said in a separate statement about the Lisbon conference that he was “proud to see this alliance of maritime workers come together in solidarity and strength.” “The automation agenda is creeping into every corner of our economy, from transportation to retail to logistics, and it threatens not only our jobs but the very fabric of our communities,” Daggett said. Automation is not as much of a hot button issue in Europe. Several ports are implementing different levels of automation, from semi- to fully automated terminals deploying automated guided vehicles, automated stacking cranes and remotely operated ship-to-shore cranes. Europe’s busiest container port of Antwerp-Bruges is investing heavily in automation, and while this was raising concerns with dockworker unions, Luc Arnouts, vice president of international relations and networks at the port, said deploying the technology was about being competitive. “If I need eight people on a gang to do a job, then I do some automation I can do the job with four,” Arnouts said. “But you still need to put the eight men there so four will be sitting here in the corner, earning their money but not doing anything. “We feel that discussions [over automation] have become more mature with the unions understanding that keeping the eight people there will, in the end, lead to zero people working at that spot,” he added. Arnouts said there was a widespread shortage of labor “all over the place,” which would offset the loss of jobs caused by automation. Contact Greg Knowler at greg.knowler@spglobal.com .

Longshore labor

Global dockworker unions plan Lisbon gathering for anti-automation ‘call to action’

<div class="phx-topic abstract-wrapper">The uncertainty centers on what the White House considers transshipment and how US Customs and Border Protection officials would regulate goods moving from China to the US via Vietnam.</div>

The uncertainty centers on what the White House considers transshipment and how US Customs and Border Protection officials would regulate goods moving from China to the US via Vietnam.

<div class="phx-topic">How the Trump administration defines and regulates transshipment in the aftermath of a proposed trade deal with Vietnam will have major implications for the top Asia sourcing alternative to China. While President Donald Trump’s announcement on July 2 clarified new tariff levels of 20% on imports from Vietnam, his statements on applying a 40% tariff on goods that originate in China but are transshipped via Vietnam have confused some in the US trade community. The uncertainty centers on what Trump considers transshipment and how US Customs officials would crack down on violations. At issue is the extent to which goods with a Vietnam country of origin designation are actually just disguised China-origin goods. Most importers define transshipment as the process of a container connecting from the port of origin to the port of destination via a third port. But the Trump administration appears to be attaching a trade compliance element to transshipment that draws considerations such as country-of-origin determination, minimum local content, and substantial transformation, trade experts told the Journal of Commerce. “On the face of it, the transshipment tariff makes no sense,” said Robert Khachatryan, CEO of Southern California-based forwarder Freight Right Global Logistics, noting that the 40% rate is still lower than US tariffs of 55% on imports sent directly from China. “Which is why I think the language in the announcement is referring to something else.” <h3>Minimum input requirement </h3>One possibility is that the administration will deem that a minimum requirement of inputs into the shipped goods must come from Vietnam, said Paul Diedrich, compliance officer at Virginia-based forwarder Ardent Global Logistics. “While this hasn’t been clearly defined, it would make logical sense,” he said. The White House, the US Trade Representative (USTR), and US Customs and Border Protection (CBP) have yet to clarify how they define transshipment. Even CBP officials are struggling to understand what the new approach means for their monitoring and inspections and await text of the agreement rather than just the announced framework, said a trade compliance officer at a major forwarder who did not want to be identified. “We don’t know if there’s going to be a regional content component,” the source said. “Let’s say 100% of the product is manufactured in Vietnam, but 100% of the components come from China. Is that going to qualify for the agreement? In the framework, they’ve agreed to the level of the tariff, but not to the content. The short answer is no one has a clue how this is going to turn out.” <h3>Tariff games </h3>The source said it’s clear that the intention of the proposed deal with Vietnam is to disincentivize goods being manufactured in China and then moved across the land border to Vietnam to get a lower tariff treatment. It may end up being less costly to source in China and pay higher tariffs depending on the freight rate differential from China. “The framework adds scrutiny for goods with ambiguous or Chinese-origin inputs that most brands wouldn’t have visibility into without access to a product network connecting them with suppliers, regulators and customers,” Amy Morgan, head of trade compliance at supply chain software provider Altana AI, wrote in a blog Monday about the Vietnam tariffs. “Brands relying on Vietnam as a final assembly point for Chinese-made components may face 40% duties if they can’t substantiate that Vietnam is the country of origin.” Khachatryan said he expects the 40% tariff would apply to “Chinese components that undergo a substantial transformation and would hitherto be treated as Vietnamese-origin imports. “This is also evidenced by a sudden increase in export inspections in Vietnam where Vietnamese customs are reportedly scrutinizing ‘Made in Vietnam’ claims,” he added. How much of this transshipment is behind the rise of US imports from Vietnam is unclear. But the direction of trade, reflecting the conventional thinking that Vietnam was generally the best hedge against dependence on China sourcing, is clear. Imports from Vietnam a decade ago accounted for 3.9% of all US oceangoing laden imports; it was 9.9% in 2024, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. On Monday, Trump made a similar threat against South Korea, warning that Chinese goods “transshipped” through South Korea would be subject to additional tariffs beyond the 25% level announced this week. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

How the Trump administration defines and regulates transshipment in the aftermath of a proposed trade deal with Vietnam will have major implications for the top Asia sourcing alternative to China. While President Donald Trump’s announcement on July 2 clarified new tariff levels of 20% on imports from Vietnam, his statements on applying a 40% tariff on goods that originate in China but are transshipped via Vietnam have confused some in the US trade community. The uncertainty centers on what Trump considers transshipment and how US Customs officials would crack down on violations. At issue is the extent to which goods with a Vietnam country of origin designation are actually just disguised China-origin goods. Most importers define transshipment as the process of a container connecting from the port of origin to the port of destination via a third port. But the Trump administration appears to be attaching a trade compliance element to transshipment that draws considerations such as country-of-origin determination, minimum local content, and substantial transformation, trade experts told the Journal of Commerce. “On the face of it, the transshipment tariff makes no sense,” said Robert Khachatryan, CEO of Southern California-based forwarder Freight Right Global Logistics, noting that the 40% rate is still lower than US tariffs of 55% on imports sent directly from China. “Which is why I think the language in the announcement is referring to something else.” Minimum input requirement One possibility is that the administration will deem that a minimum requirement of inputs into the shipped goods must come from Vietnam, said Paul Diedrich, compliance officer at Virginia-based forwarder Ardent Global Logistics. “While this hasn’t been clearly defined, it would make logical sense,” he said. The White House, the US Trade Representative (USTR), and US Customs and Border Protection (CBP) have yet to clarify how they define transshipment. Even CBP officials are struggling to understand what the new approach means for their monitoring and inspections and await text of the agreement rather than just the announced framework, said a trade compliance officer at a major forwarder who did not want to be identified. “We don’t know if there’s going to be a regional content component,” the source said. “Let’s say 100% of the product is manufactured in Vietnam, but 100% of the components come from China. Is that going to qualify for the agreement? In the framework, they’ve agreed to the level of the tariff, but not to the content. The short answer is no one has a clue how this is going to turn out.” Tariff games The source said it’s clear that the intention of the proposed deal with Vietnam is to disincentivize goods being manufactured in China and then moved across the land border to Vietnam to get a lower tariff treatment. It may end up being less costly to source in China and pay higher tariffs depending on the freight rate differential from China. “The framework adds scrutiny for goods with ambiguous or Chinese-origin inputs that most brands wouldn’t have visibility into without access to a product network connecting them with suppliers, regulators and customers,” Amy Morgan, head of trade compliance at supply chain software provider Altana AI, wrote in a blog Monday about the Vietnam tariffs. “Brands relying on Vietnam as a final assembly point for Chinese-made components may face 40% duties if they can’t substantiate that Vietnam is the country of origin.” Khachatryan said he expects the 40% tariff would apply to “Chinese components that undergo a substantial transformation and would hitherto be treated as Vietnamese-origin imports. “This is also evidenced by a sudden increase in export inspections in Vietnam where Vietnamese customs are reportedly scrutinizing ‘Made in Vietnam’ claims,” he added. How much of this transshipment is behind the rise of US imports from Vietnam is unclear. But the direction of trade, reflecting the conventional thinking that Vietnam was generally the best hedge against dependence on China sourcing, is clear. Imports from Vietnam a decade ago accounted for 3.9% of all US oceangoing laden imports; it was 9.9% in 2024, according to PIERS, a sister company of the Journal of Commerce within S&P Global. On Monday, Trump made a similar threat against South Korea, warning that Chinese goods “transshipped” through South Korea would be subject to additional tariffs beyond the 25% level announced this week. Contact Eric Johnson at eric.johnson@spglobal.com .

Trump’s Vietnam ‘transshipment’ tariff puzzles US trade community

<div class="phx-topic abstract-wrapper">With two attacks on commercial vessels in recent days, including one that killed three mariners, any thought that the risk in the Red Sea was easing to the point the Suez route might be restored in the near future has vanished.</div>

With two attacks on commercial vessels in recent days, including one that killed three mariners, any thought that the risk in the Red Sea was easing to the point the Suez route might be restored in the near future has vanished.

<div class="phx-topic">With no attacks on shipping off the Yemeni coast since December — that is, until two strikes over the past three days — a feeling was taking hold among some ocean carriers that the threat posed by Houthi militants was greatly diminished. And as the threat diminished it would become more difficult for carriers to justify the diversions around southern Africa, which for the past 18 months have absorbed an estimated 10% of global capacity, extending transit times and putting carriers in a stronger position to absorb an influx of new capacity. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6040921_0.1.jpg"></img></div>Now with two attacks in recent days, including one that killed three mariners, any thought that the risk was easing to the point the Suez route might be reopened in the near future has vanished. “The dynamic in the Red Sea has changed materially as compared to expectations roughly a month ago in which there had been a growing view that Red Sea transits would start to pick up following the US-Houthi agreement and the long period in which merchant ships had not been attacked,” Jefferies wrote on July 8. While the Houthi militia may have held fire for several months, the restraint should not be taken as a sign the group’s ability to strike is diminished. Although such a conclusion could be inferred from military setbacks experienced across the network of Iran-backed militia and states such as Syria, in reality, the Houthis remain a lethal force, as they showed this week, analysts say. “The most recent Houthi attacks … allow them to demonstrate that, unlike Iran and its other proxy groups in the region, they remain undeterred by the threat of US or Israeli military confrontation,” Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global Market Intelligence, told the Journal of Commerce Wednesday. Israel and the US have upped their strikes on rebels in Yemen in recent months. But without troops on the ground to uproot the rebels, Kennedy has been saying for more than a year that it would be extremely difficult to eliminate the group as a danger to shipping through aerial military action alone. “Houthi missile attack capabilities are highly decentralized across the territory they control,” Kennedy said. “These are unlikely to be fully replenished to levels in place prior to US-led and Israeli airstrikes, but seizures of weapons shipments in the Red Sea and the Houthis’ own industrial manufacturing capacity suggest that they will have been able to partially rebuild weapons stockpiles.” Kennedy added that the original spark for Houthi attacks on shipping — Israeli operations in Gaza — remains a core rationale for their strikes. “It is highly likely that attack attempts on vessels will continue while Israeli military operations in Gaza are ongoing,” he said. The result is an extended timeline, quite possibly into 2026, for any large-scale return to Suez routings. “With the developments over the past few days there is not much chance of a reversal back to a Suez routing for the major container lines in the short to medium term,” shipping analyst and Journal of Commerce contributor Lars Jensen wrote on LinkedIn this week. Added Kennedy: “We expect that Houthi attack activity will continue through 2025 at least.” <h3>Ongoing disruption post-COVID </h3>For ocean carriers who didn’t create the crisis and yet are largely immune from criticism for continuing the longer routings around Africa to protect their crews, ships and cargo, the crisis is part of a larger narrative of ongoing post-COVID-19 disruption, alongside basic supply and demand, underpinning market dynamics. Carriers face intense profit pressures over the next few years, with Drewry last month saying it expects industry operating profit to fall to $20 billion this year, down from over $50 billion in 2024. But the pressure would be much greater without the absorption of capacity due to the Red Sea attacks and resultant diversions. Maersk in May ruled out a return to normal Suez routings this year despite US President Donald Trump on May 6 saying the Houthis “have capitulated” and agreed to stop attacks on commercial shipping in the region. But as the new attacks clearly showed, the Houthis were just lying low, meaning the status quo of limited container ship transits through the Suez remains as entrenched as ever. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

With no attacks on shipping off the Yemeni coast since December — that is, until two strikes over the past three days — a feeling was taking hold among some ocean carriers that the threat posed by Houthi militants was greatly diminished. And as the threat diminished it would become more difficult for carriers to justify the diversions around southern Africa, which for the past 18 months have absorbed an estimated 10% of global capacity, extending transit times and putting carriers in a stronger position to absorb an influx of new capacity. Now with two attacks in recent days, including one that killed three mariners, any thought that the risk was easing to the point the Suez route might be reopened in the near future has vanished. “The dynamic in the Red Sea has changed materially as compared to expectations roughly a month ago in which there had been a growing view that Red Sea transits would start to pick up following the US-Houthi agreement and the long period in which merchant ships had not been attacked,” Jefferies wrote on July 8. While the Houthi militia may have held fire for several months, the restraint should not be taken as a sign the group’s ability to strike is diminished. Although such a conclusion could be inferred from military setbacks experienced across the network of Iran-backed militia and states such as Syria, in reality, the Houthis remain a lethal force, as they showed this week, analysts say. “The most recent Houthi attacks … allow them to demonstrate that, unlike Iran and its other proxy groups in the region, they remain undeterred by the threat of US or Israeli military confrontation,” Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligence, told the Journal of Commerce Wednesday. Israel and the US have upped their strikes on rebels in Yemen in recent months. But without troops on the ground to uproot the rebels, Kennedy has been saying for more than a year that it would be extremely difficult to eliminate the group as a danger to shipping through aerial military action alone. “Houthi missile attack capabilities are highly decentralized across the territory they control,” Kennedy said. “These are unlikely to be fully replenished to levels in place prior to US-led and Israeli airstrikes, but seizures of weapons shipments in the Red Sea and the Houthis’ own industrial manufacturing capacity suggest that they will have been able to partially rebuild weapons stockpiles.” Kennedy added that the original spark for Houthi attacks on shipping — Israeli operations in Gaza — remains a core rationale for their strikes. “It is highly likely that attack attempts on vessels will continue while Israeli military operations in Gaza are ongoing,” he said. The result is an extended timeline, quite possibly into 2026, for any large-scale return to Suez routings. “With the developments over the past few days there is not much chance of a reversal back to a Suez routing for the major container lines in the short to medium term,” shipping analyst and Journal of Commerce contributor Lars Jensen wrote on LinkedIn this week. Added Kennedy: “We expect that Houthi attack activity will continue through 2025 at least.” Ongoing disruption post-COVID For ocean carriers who didn’t create the crisis and yet are largely immune from criticism for continuing the longer routings around Africa to protect their crews, ships and cargo, the crisis is part of a larger narrative of ongoing post-COVID-19 disruption, alongside basic supply and demand, underpinning market dynamics. Carriers face intense profit pressures over the next few years, with Drewry last month saying it expects industry operating profit to fall to $20 billion this year, down from over $50 billion in 2024. But the pressure would be much greater without the absorption of capacity due to the Red Sea attacks and resultant diversions. Maersk in May ruled out a return to normal Suez routings this year despite US President Donald Trump on May 6 saying the Houthis “have capitulated” and agreed to stop attacks on commercial shipping in the region. But as the new attacks clearly showed, the Houthis were just lying low, meaning the status quo of limited container ship transits through the Suez remains as entrenched as ever. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

New Houthi attacks likely kill hopes of shipping returning to Red Sea this year

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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Quarterly Intelligence

<div class="phx-topic abstract-wrapper">In the latest course correction in the US’ busiest trade lane, carriers are set to deploy less tonnage in August as spot rates fall and retail import forecasts weaken. </div>

In the latest course correction in the US’ busiest trade lane, carriers are set to deploy less tonnage in August as spot rates fall and retail import forecasts weaken.

<div class="phx-topic">Container lines are pulling back on the deployment of tonnage from Asia to the US in August in the latest course correction linked to stop-and-start import demand amid tariff uncertainty. Container lines in August are planning to deploy 6.2% less tonnage from Asia to the US West Coast than in July, equating to 98,000 TEUs of capacity, according to a June 30 analysis of eeSea data. Capacity is measured based on the last load port in Asia. Comparatively, ocean capacity from Asia to US East and Gulf coasts will be trimmed just 1.7%.Mediterranean Shipping Co. this week suspended its Pearl service to Long Beach, with the last sailing out of Xiamen on July 13, according to Kuehne + Nagel’s SeaExplorer tool. Container lines can also blank sailings — removing ships from services or skipping ports — to further calibrate capacity to weakening demand.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0d272fa5-b752-4ec3-a342-964ef1a2b1f3"></dynamic-object></div>The rate of blanking compared with deployed capacity in May reached 26%, equating to 262,000 TEUs, as carriers adjusted networks, according to eeSea. In June, the rate was 9.5%. <h3>Tariff whiplash </h3>Carriers began pushing capacity back into the trade in May in anticipation of a surge of imports from China, driven by an early peak season caused in large part by the 90-day reprieve on higher US tariffs. Just a month earlier, US importers canceled China bookings after President Donald Trump on April 9 imposed 145% tariffs. In response, ocean carriers blanked sailings and suspended services, although Trump soon reversed course. Now carriers face an expanding capacity overhang amid downbeat retail import forecasts and the surge in US imports linked to the initial tariff reprieve in its last gasp. The tentative agreement with China to bring US tariffs to 55% hasn’t had much impact on importers’ peak season ordering, thanks to more than eight months of frontloading shipments and a narrow window for getting goods in before the year-end shopping season. While US retailers <a href="https://www.joc.com/article/pause-on-tariffs-prompts-us-retailers-to-upgrade-summer-import-forecast-6022230">upgraded their import forecast</a> slightly in early June, their volume expectations still lag the same period in 2024. US imports are expected to reach 2.13 million TEUs this month, down from 2.32 million TEUs a year ago, according to the Global Port Tracker. Retailers plan to bring in 14.7% less volume, equating to 331,000 TEUs of capacity, next month compared with August 2024. US laden imports from Asia have been falling since September, with the exception of a short-lived recovery in April, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. In September, inbound volumes hit 1.79 million TEUs, falling to 1.4 million TEUs by May. Container spot rates from Asia to the US, a barometer of how capacity is matching up to demand, have been falling for a month, according to various indexes. For example, container spot rates from Shanghai to the US West Coast last week were less than half the price a month ago, at $2,089 per FEU, according to the Shanghai Containerized Freight Index. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com ">mark.szakonyi@spglobal.com</a>. </div>

Container lines are pulling back on the deployment of tonnage from Asia to the US in August in the latest course correction linked to stop-and-start import demand amid tariff uncertainty. Container lines in August are planning to deploy 6.2% less tonnage from Asia to the US West Coast than in July, equating to 98,000 TEUs of capacity, according to a June 30 analysis of eeSea data. Capacity is measured based on the last load port in Asia. Comparatively, ocean capacity from Asia to US East and Gulf coasts will be trimmed just 1.7%. Mediterranean Shipping Co. this week suspended its Pearl service to Long Beach, with the last sailing out of Xiamen on July 13, according to Kuehne + Nagel’s SeaExplorer tool. Container lines can also blank sailings — removing ships from services or skipping ports — to further calibrate capacity to weakening demand. The rate of blanking compared with deployed capacity in May reached 26%, equating to 262,000 TEUs, as carriers adjusted networks, according to eeSea. In June, the rate was 9.5%. Tariff whiplash Carriers began pushing capacity back into the trade in May in anticipation of a surge of imports from China, driven by an early peak season caused in large part by the 90-day reprieve on higher US tariffs. Just a month earlier, US importers canceled China bookings after President Donald Trump on April 9 imposed 145% tariffs. In response, ocean carriers blanked sailings and suspended services, although Trump soon reversed course. Now carriers face an expanding capacity overhang amid downbeat retail import forecasts and the surge in US imports linked to the initial tariff reprieve in its last gasp. The tentative agreement with China to bring US tariffs to 55% hasn’t had much impact on importers’ peak season ordering, thanks to more than eight months of frontloading shipments and a narrow window for getting goods in before the year-end shopping season. While US retailers upgraded their import forecast slightly in early June, their volume expectations still lag the same period in 2024. US imports are expected to reach 2.13 million TEUs this month, down from 2.32 million TEUs a year ago, according to the Global Port Tracker. Retailers plan to bring in 14.7% less volume, equating to 331,000 TEUs of capacity, next month compared with August 2024. US laden imports from Asia have been falling since September, with the exception of a short-lived recovery in April, according to PIERS, a sister product of the Journal of Commerce within S&P Global. In September, inbound volumes hit 1.79 million TEUs, falling to 1.4 million TEUs by May. Container spot rates from Asia to the US, a barometer of how capacity is matching up to demand, have been falling for a month, according to various indexes. For example, container spot rates from Shanghai to the US West Coast last week were less than half the price a month ago, at $2,089 per FEU, according to the Shanghai Containerized Freight Index. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Trans-Pacific

Container lines cutting trans-Pacific capacity overhang

<div class="phx-topic abstract-wrapper">But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation and Hackett Associates said in their latest Global Port Tracker.</div>

But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation and Hackett Associates said in their latest Global Port Tracker.

<div class="phx-topic">US imports in July are expected to hit their highest level in at least the past 18 months and their peak for 2025, driven by the Aug. 1 extension granted by the Trump administration before the implementation of so-called reciprocal tariffs on a host of US trading partners, a major retail group said Wednesday. But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation (NRF) and Hackett Associates said in their latest Global Port Tracker (GPT). “The tariff situation remains highly fluid and retailers are working hard to stock up for the holiday season before the various tariffs that have been announced and paused actually take effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “Retailers have brought in as much merchandise as possible ahead of the reciprocal tariffs taking effect...” The White House’s unexpected extension of a 90-day pause in new tariffs that were due to take effect July 9 caused the NRF and Hackett to upgrade their import projections for July through October compared with June’s GPT. And while Gold said the brief extension was “greatly appreciated” by retailers, he chided the Trump administration for the seeming whiplash nature of its tariff policy. “...Uncertainty over tariffs makes it increasingly difficult for retailers to plan, especially small businesses that have no capacity to absorb tariffs,” he said. “...It is vital for the administration to finalize negotiations with our trading partners and provide stability and certainty for US retailers.” <h3>Big bump in July forecast </h3>The GPT’s updated forecast calls for 2.36 million TEUs in US imports in July, up almost 11% from the June GPT and surpassing the 2.32 million TEUs brought in during July 2024. July is the only month in the second half of 2025 forecast to see year-over-year increases, so far. In August, retailers expect US imports to reach 2.08 million TEUs, up 5% from the forecast made in June but more than 10% under the 2.32 million TEUs imported in August 2024. September import projections were upgraded to 1.82 million TEUs — up 2.2% from the projection made last month but nearly 20% below year-ago levels. October’s import forecast increased by just half a percent to 1.81 million TEUs, 19.1% below volumes from October 2024. In its initial forecast for November, the GPT pegs imports at 1.7 million TEUs, down 16.2% year over year. Amid the forecasts for significant year-over-year import declines for the second half of 2025, Hackett Associates founder Ben Hackett pointed to supply chain uncertainty exacerbated by shifting tariff policies. “The global supply chain functions best in a trade environment that is smooth and predictable,” he said. “Instead, it has been forced to contend with erratic policies and geopolitical volatility.” The latest GPT projects June’s import volumes will come in at 2.06 million TEUs, up about 2.5% from the forecast made last month. Meanwhile, May’s actual volume of 1.95 million TEUs was about 2% higher than projected in the prior GPT. As volumes in the trans-Pacific look to retract beyond July, carriers have responded with reductions to capacity, with plans to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, according to maritime intelligence provider eeSea. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

US imports in July are expected to hit their highest level in at least the past 18 months and their peak for 2025, driven by the Aug. 1 extension granted by the Trump administration before the implementation of so-called reciprocal tariffs on a host of US trading partners, a major retail group said Wednesday. But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation (NRF) and Hackett Associates said in their latest Global Port Tracker (GPT). “The tariff situation remains highly fluid and retailers are working hard to stock up for the holiday season before the various tariffs that have been announced and paused actually take effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “Retailers have brought in as much merchandise as possible ahead of the reciprocal tariffs taking effect...” The White House’s unexpected extension of a 90-day pause in new tariffs that were due to take effect July 9 caused the NRF and Hackett to upgrade their import projections for July through October compared with June’s GPT. And while Gold said the brief extension was “greatly appreciated” by retailers, he chided the Trump administration for the seeming whiplash nature of its tariff policy. “...Uncertainty over tariffs makes it increasingly difficult for retailers to plan, especially small businesses that have no capacity to absorb tariffs,” he said. “...It is vital for the administration to finalize negotiations with our trading partners and provide stability and certainty for US retailers.” Big bump in July forecast The GPT’s updated forecast calls for 2.36 million TEUs in US imports in July, up almost 11% from the June GPT and surpassing the 2.32 million TEUs brought in during July 2024. July is the only month in the second half of 2025 forecast to see year-over-year increases, so far. In August, retailers expect US imports to reach 2.08 million TEUs, up 5% from the forecast made in June but more than 10% under the 2.32 million TEUs imported in August 2024. September import projections were upgraded to 1.82 million TEUs — up 2.2% from the projection made last month but nearly 20% below year-ago levels. October’s import forecast increased by just half a percent to 1.81 million TEUs, 19.1% below volumes from October 2024. In its initial forecast for November, the GPT pegs imports at 1.7 million TEUs, down 16.2% year over year. Amid the forecasts for significant year-over-year import declines for the second half of 2025, Hackett Associates founder Ben Hackett pointed to supply chain uncertainty exacerbated by shifting tariff policies. “The global supply chain functions best in a trade environment that is smooth and predictable,” he said. “Instead, it has been forced to contend with erratic policies and geopolitical volatility.” The latest GPT projects June’s import volumes will come in at 2.06 million TEUs, up about 2.5% from the forecast made last month. Meanwhile, May’s actual volume of 1.95 million TEUs was about 2% higher than projected in the prior GPT. As volumes in the trans-Pacific look to retract beyond July, carriers have responded with reductions to capacity, with plans to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, according to maritime intelligence provider eeSea. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at laura.robb@spglobal.com .

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