<div class="phx-topic abstract-wrapper">The Iran-driven fuel spike has created the widest intermodal cost advantage in years, but capturing it — and keeping it — requires something railroads have rarely practiced: orchestrated intermodal, writes Paul Tonsager.</div>

The Iran-driven fuel spike has created the widest intermodal cost advantage in years, but capturing it — and keeping it — requires something railroads have rarely practiced: orchestrated intermodal, writes Paul Tonsager.

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<div class="phx-topic">Gulf Coast diesel hit $5.13 per gallon for the week ending March 23 — up 30 cents in a single week and still the cheapest regional price in the country, according to government data. East Coast truckers are paying $5.48; California operators are staring at $6.87. For long-haul carriers already squeezed by two years of overcapacity and compressed margins, the Middle East conflict’s disruption to Strait of Hormuz crude flows has turned a manageable cost structure into a cash hemorrhage. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6192409_0.1.jpg"></img></div>For railroads and intermodal marketing companies (IMCs), this is the moment they have been waiting for since freight markets went soft in 2023. The fuel efficiency advantage of rail is not new. Most beneficial cargo owners (BCOs) have already run the numbers — and until now, trucking won. What is new is that the price spread has widened to the point where the math is changing answers that shippers thought were settled. That question is the gift. Namely, what railroads do with it — and what their entire partner network does with it — determines whether the next 12 months represent a lasting franchise expansion or another cycle of mode-shift freight that returns to trucks the moment diesel retreats. <h3>Sell the network, not the lane </h3>When a shipper calls because diesel just hit $5 per gallon, the instinct is to quote the lane they asked about and close the booking. That is the wrong move. A shipper under fuel pressure is not just repricing one lane — they are repricing their entire transportation wallet. Railroads and IMCs that arrive with a network proposal — (“here is your freight portfolio across high-density corridors, here is the landed cost comparison across your full book”) — will capture meaningful wallet share, not just the lane that prompted the call. The shipper asking about Chicago-to-Dallas may have 10 corridors where intermodal is now the better economic answer. Sell the lane and you win the booking. Sell the network and you win the account. <h3>Orchestrated intermodal </h3>Here is the part most railroads get wrong even when the commercial conversation goes well: The railroad cannot retain the shipper alone — and when it was talking to the shipper directly, it was a strategy call, not the day-to-day operational relationship that actually creates loyalty. To the BCO, the underlying carriers — the steamship line, the dray operator, the chassis pool — are largely unknown. The IMC is the only throat to choke. When something breaks, that call goes to the IMC. And if the IMC can’t fix it, the freight goes back to trucking. But here is the structural reality: Railroads have largely ceded the BCO relationship to their wholesale partners — the steamship lines and IMCs who hold the direct commercial connection to the cargo owner. That is not a failure; it is the model. The liner and the IMC own the loyalty, the wallet conversation, and the export opportunity as BCOs move polyethylene and other commodities into Atlantic markets. The railroad’s job is not to reclaim that relationship — it is to make its wholesale partners effective enough orchestrators that the freight stays on rail. That means investing in the partners, not competing with them. Shared visibility tools. Service commitments at the account level, not just the corridor level. Chassis and terminal performance the IMC can actually promise a BCO without hedging. Winning this window — and I borrow that term from tech, where timing a market shift is the whole game — requires the railroad to function as the backbone of orchestrated intermodal, enabling the steamship lines and IMCs who own the customer to deliver on the promise. <h3>Is your tech stack ready to orchestrate? </h3>That is the question every railroad and IMC should be asking because orchestrated intermodal is not a commercial concept; it is a technology commitment. Can you see the dray carrier’s ETA in real time, or are you still making phone calls? Is chassis pool visibility live, or a spreadsheet updated twice a day? Is terminal dwell data current enough to intervene before a shipper’s container becomes a problem? Can your systems flag new conversion accounts showing stress signals before the shipper calls their broker? Orchestration requires account-level visibility — knowing that this shipper’s container, on this lane, with this dray partner, is at risk right now. The technology exists: visibility platforms, AI-driven exception management, connected partner APIs. The question is whether a diesel spike is finally the urgency that accelerates the investment. Show up with a rate sheet but not a visibility platform and you win the booking and lose the account. Show up with both and you build something that outlasts the fuel cycle. The diesel spike hands railroads the invitation. Orchestrating the entire service chain — and the technology behind it — to deliver on it is entirely up to them. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals &amp; Switches newsletter on freight strategy at aet1998.substack.com. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>.</div>

Gulf Coast diesel hit $5.13 per gallon for the week ending March 23 — up 30 cents in a single week and still the cheapest regional price in the country, according to government data. East Coast truckers are paying $5.48; California operators are staring at $6.87. For long-haul carriers already squeezed by two years of overcapacity and compressed margins, the Middle East conflict’s disruption to Strait of Hormuz crude flows has turned a manageable cost structure into a cash hemorrhage. For railroads and intermodal marketing companies (IMCs), this is the moment they have been waiting for since freight markets went soft in 2023. The fuel efficiency advantage of rail is not new. Most beneficial cargo owners (BCOs) have already run the numbers — and until now, trucking won. What is new is that the price spread has widened to the point where the math is changing answers that shippers thought were settled. That question is the gift. Namely, what railroads do with it — and what their entire partner network does with it — determines whether the next 12 months represent a lasting franchise expansion or another cycle of mode-shift freight that returns to trucks the moment diesel retreats. Sell the network, not the lane When a shipper calls because diesel just hit $5 per gallon, the instinct is to quote the lane they asked about and close the booking. That is the wrong move. A shipper under fuel pressure is not just repricing one lane — they are repricing their entire transportation wallet. Railroads and IMCs that arrive with a network proposal — (“here is your freight portfolio across high-density corridors, here is the landed cost comparison across your full book”) — will capture meaningful wallet share, not just the lane that prompted the call. The shipper asking about Chicago-to-Dallas may have 10 corridors where intermodal is now the better economic answer. Sell the lane and you win the booking. Sell the network and you win the account. Orchestrated intermodal Here is the part most railroads get wrong even when the commercial conversation goes well: The railroad cannot retain the shipper alone — and when it was talking to the shipper directly, it was a strategy call, not the day-to-day operational relationship that actually creates loyalty. To the BCO, the underlying carriers — the steamship line, the dray operator, the chassis pool — are largely unknown. The IMC is the only throat to choke. When something breaks, that call goes to the IMC. And if the IMC can’t fix it, the freight goes back to trucking. But here is the structural reality: Railroads have largely ceded the BCO relationship to their wholesale partners — the steamship lines and IMCs who hold the direct commercial connection to the cargo owner. That is not a failure; it is the model. The liner and the IMC own the loyalty, the wallet conversation, and the export opportunity as BCOs move polyethylene and other commodities into Atlantic markets. The railroad’s job is not to reclaim that relationship — it is to make its wholesale partners effective enough orchestrators that the freight stays on rail. That means investing in the partners, not competing with them. Shared visibility tools. Service commitments at the account level, not just the corridor level. Chassis and terminal performance the IMC can actually promise a BCO without hedging. Winning this window — and I borrow that term from tech, where timing a market shift is the whole game — requires the railroad to function as the backbone of orchestrated intermodal, enabling the steamship lines and IMCs who own the customer to deliver on the promise. Is your tech stack ready to orchestrate? That is the question every railroad and IMC should be asking because orchestrated intermodal is not a commercial concept; it is a technology commitment. Can you see the dray carrier’s ETA in real time, or are you still making phone calls? Is chassis pool visibility live, or a spreadsheet updated twice a day? Is terminal dwell data current enough to intervene before a shipper’s container becomes a problem? Can your systems flag new conversion accounts showing stress signals before the shipper calls their broker? Orchestration requires account-level visibility — knowing that this shipper’s container, on this lane, with this dray partner, is at risk right now. The technology exists: visibility platforms, AI-driven exception management, connected partner APIs. The question is whether a diesel spike is finally the urgency that accelerates the investment. Show up with a rate sheet but not a visibility platform and you win the booking and lose the account. Show up with both and you build something that outlasts the fuel cycle. The diesel spike hands railroads the invitation. Orchestrating the entire service chain — and the technology behind it — to deliver on it is entirely up to them. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals & Switches newsletter on freight strategy at aet1998.substack.com. Contact him at paul.tonsager@multimodalsolutions.io .

Truckload

North-American rail

International rail

Surface

War hands railroads the ‘gift’ of higher diesel prices

<div class="phx-topic abstract-wrapper">Union Pacific for the second time in five weeks is resetting freight-all-kinds rates on key lanes for rail-owned boxes used by intermodal marketing companies.</div>

Union Pacific for the second time in five weeks is resetting freight-all-kinds rates on key lanes for rail-owned boxes used by intermodal marketing companies.

<div class="phx-topic">Union Pacific Railroad (UP) on Tuesday adjusted rates for rail-owned boxes used by intermodal marketing companies (IMCs), the second such move in the last five weeks amid a widening gap between the truckload spot market and domestic intermodal rates. The pricing adjustments, which go into effect April 1, cover freight-all-kinds (FAK) rates on nearly 30 lanes on so-called EMP boxes and UMAX boxes which interchange with Norfolk Southern and CSX, respectively. About half of the adjustments seek a rate increase, ranging from 1.6% to 14.8%, while the other half actually lower rates between 1.2% and 29%. The moves come as current truckload spot rates have soared since the start of 2026, up between 15% and 20% year over year, according to DAT Freight &amp; Analytics. UP is eyeing an opportunity to win back cargo that can flex between domestic intermodal and truckload as truckload spot rates rise. Truckload contract rates have risen by the low single digits thus far in 2026, due in part to tightening capacity from US regulatory scrutiny over non-domiciled and non-English language proficient drivers, and the lingering effects of weather disruptions from February. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9f53592f-fdc6-46d3-b392-18fdccf441fe"></dynamic-object></div>A big jump in diesel prices due to the war in the Middle East has also pushed truckload carriers to raise all-in spot rates as they attempt to recapture an unexpected operational cost, while the increased cost of diesel is captured through fuel surcharges on contract rates. Those dynamics present an opportunity for railroads to recapture volume lost to truckload as the full truckload market navigated three years of low pricing, inducing shippers to move cargo to truckload. Even before the recent jump in diesel prices, the spread between spot truckload and spot intermodal rates was widening, with the gap at 68 cents in February, according to the Journal of Commerce’s Intermodal Savings Index. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

Union Pacific Railroad (UP) on Tuesday adjusted rates for rail-owned boxes used by intermodal marketing companies (IMCs), the second such move in the last five weeks amid a widening gap between the truckload spot market and domestic intermodal rates. The pricing adjustments, which go into effect April 1, cover freight-all-kinds (FAK) rates on nearly 30 lanes on so-called EMP boxes and UMAX boxes which interchange with Norfolk Southern and CSX, respectively. About half of the adjustments seek a rate increase, ranging from 1.6% to 14.8%, while the other half actually lower rates between 1.2% and 29%. The moves come as current truckload spot rates have soared since the start of 2026, up between 15% and 20% year over year, according to DAT Freight & Analytics. UP is eyeing an opportunity to win back cargo that can flex between domestic intermodal and truckload as truckload spot rates rise. Truckload contract rates have risen by the low single digits thus far in 2026, due in part to tightening capacity from US regulatory scrutiny over non-domiciled and non-English language proficient drivers, and the lingering effects of weather disruptions from February. A big jump in diesel prices due to the war in the Middle East has also pushed truckload carriers to raise all-in spot rates as they attempt to recapture an unexpected operational cost, while the increased cost of diesel is captured through fuel surcharges on contract rates. Those dynamics present an opportunity for railroads to recapture volume lost to truckload as the full truckload market navigated three years of low pricing, inducing shippers to move cargo to truckload. Even before the recent jump in diesel prices, the spread between spot truckload and spot intermodal rates was widening, with the gap at 68 cents in February, according to the Journal of Commerce’s Intermodal Savings Index. Contact Eric Johnson at eric.johnson@spglobal.com .

Trucking News

Rail News

UP adjusts intermodal pricing to win back volume as truckload rates climb

<div class="phx-topic abstract-wrapper">Houston and New Orleans are coming off a year of growth for project cargo volumes, albeit with a drop in steel imports, and both ports anticipate a continuation of those trends.</div>

Houston and New Orleans are coming off a year of growth for project cargo volumes, albeit with a drop in steel imports, and both ports anticipate a continuation of those trends.

<div class="phx-topic">Major industrial and energy projects on the Gulf Coast are dialing up cargo activity at two of the largest US ports for breakbulk and project cargo, even as conflict in the Middle East introduces global shipping disruptions and tariff-induced market volatilities linger. The Port of New Orleans and Port Houston are coming off a year of growth for project cargo volumes, albeit with a drop in steel imports, and both ports anticipate a continuation of those trends. For New Orleans, the latest development expected to drive project cargo activity is the $3.4 billion expansion of Shintech’s chemical manufacturing complex in southeastern Louisiana, a project announced March 4. Construction is set to take place in phases, with the first phase slated for completion in 2030. Shintech is the world’s largest manufacturer of polyvinyl chloride (PVC). “With them announcing a new expansion, there’s a lot of optimism from the petrochemical sector, especially in light of the challenges in the Middle East that affect the products they’re producing on a competitive scale,” Janine Mansour, director of trade development for the Port of New Orleans, told the Journal of Commerce. Project cargo volumes at the Port of New Orleans increased 31% to 64,806 tons in 2025, with shipments originating from multiple global locations including Italy, China, India, Thailand and South Korea, according to data from the port. That growth comes after a 46% increase in project cargo volumes in 2024. Major projects producing project cargo include Venture Global’s massive CP2 LNG export facility in southwest Louisiana, UBE Corporation’s Louisiana electric vehicle battery plant outside of New Orleans that will produce key chemicals used in EV battery manufacturing, and Meta’s 4 million-square-foot data center in northeast Louisiana. Hyundai Steel also plans to build a $5.8 billion low-carbon steel mill in southeast Louisiana. Overall breakbulk volumes at the Port of New Orleans fell 22% to 958,152 tons in 2025, according to port data, because of tariff-related market uncertainty and because some steel and non-ferrous cargoes have shifted to containers, Mansour said. Breakbulk steel volumes declined 29% to 524,749 short tons in 2025, with most cargo coming from Japan, followed by South Korea and China, according to data from the port. “Steel imports have been severely hit by tariff increases to foster domestic production,” Mansour said, adding that the port last year measured an 80% year-over-year increase to 129,705 tons of bulk imports of ferro alloys and silico-alloys, both of which are used in steel manufacturing. With the declines in breakbulk cargoes, the total number of multipurpose/heavy-lift vessel (MPV/HL) calls at New Orleans fell to 163 in 2025 from 189 the previous year. The ongoing conflict in the Middle East could potentially squeeze vessel capacity for breakbulk and project cargoes worldwide, as port closures and route changes have already been tying up vessels on the container side, Mansour said. That could indirectly affect vessel movements at the Port of New Orleans. “For the carriers that are calling New Orleans, if they do have routes in the Middle East, they may have disruptions where it affects their capacity from a global fleet perspective,” she said. “But we’re not anticipating significant impacts on the breakbulk and project cargo side, and we haven’t really seen any direct impacts yet.” Mansour acknowledged that the Middle East is not a major shipping lane for breakbulk and project cargoes for the port. <h3>Cargo mix offsets steel slump for Houston </h3>With tariffs chipping away at steel imports, Port Houston is looking to cargo diversification and Gulf Coast project developments to expand cargo shipments for the nation’s largest breakbulk and project cargo gateway. Volumes of general cargo — which the port defines to include project cargo, breakbulk, and other non-containerized goods — reached 564,346 tons in January, a 27% year-over-year increase, according to Port Houston data. That growth trend is expected to continue, driven in part by a mix of projects under development in the region, port spokesperson Lisa Ashley-Daniels told the Journal of Commerce. “There are several major industrial and energy projects along the Gulf Coast that are expected to move forward between 2026 and 2028, with the potential to generate considerable breakbulk and heavy-lift cargo through Port Houston,” she said. Breakbulk steel imports at Port Houston declined 35% year over year to 213,653 tons in January, according to port data, mirroring larger trends tied to lower drilling activity, Ashley-Daniels said. For all of 2025, breakbulk steel volumes fell 8% to just under 4.2 million tons. “The decline in steel imports that Houston experienced in January is not unique to the port, but reflects broad shifts in energy markets, supply and demand drivers, regulatory environments, and trade policies, among other contributing factors,” she said. Significant activity from cargo types other than steel is driving an overall rise in general cargo volumes at the port, Ashley-Daniels said, citing quadruple-digit growth in machinery, triple-digit increases in grain, and double-digit gains in pet coke volumes and roll-on/roll-off cargo in February. “The growing diversification of breakbulk cargo beyond steel is helping to stabilize overall activity,” Ashley-Daniels said, adding that cargo activity for these commodities is expected to increase further. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

Major industrial and energy projects on the Gulf Coast are dialing up cargo activity at two of the largest US ports for breakbulk and project cargo, even as conflict in the Middle East introduces global shipping disruptions and tariff-induced market volatilities linger. The Port of New Orleans and Port Houston are coming off a year of growth for project cargo volumes, albeit with a drop in steel imports, and both ports anticipate a continuation of those trends. For New Orleans, the latest development expected to drive project cargo activity is the $3.4 billion expansion of Shintech’s chemical manufacturing complex in southeastern Louisiana, a project announced March 4. Construction is set to take place in phases, with the first phase slated for completion in 2030. Shintech is the world’s largest manufacturer of polyvinyl chloride (PVC). “With them announcing a new expansion, there’s a lot of optimism from the petrochemical sector, especially in light of the challenges in the Middle East that affect the products they’re producing on a competitive scale,” Janine Mansour, director of trade development for the Port of New Orleans, told the Journal of Commerce. Project cargo volumes at the Port of New Orleans increased 31% to 64,806 tons in 2025, with shipments originating from multiple global locations including Italy, China, India, Thailand and South Korea, according to data from the port. That growth comes after a 46% increase in project cargo volumes in 2024. Major projects producing project cargo include Venture Global’s massive CP2 LNG export facility in southwest Louisiana, UBE Corporation’s Louisiana electric vehicle battery plant outside of New Orleans that will produce key chemicals used in EV battery manufacturing, and Meta’s 4 million-square-foot data center in northeast Louisiana. Hyundai Steel also plans to build a $5.8 billion low-carbon steel mill in southeast Louisiana. Overall breakbulk volumes at the Port of New Orleans fell 22% to 958,152 tons in 2025, according to port data, because of tariff-related market uncertainty and because some steel and non-ferrous cargoes have shifted to containers, Mansour said. Breakbulk steel volumes declined 29% to 524,749 short tons in 2025, with most cargo coming from Japan, followed by South Korea and China, according to data from the port. “Steel imports have been severely hit by tariff increases to foster domestic production,” Mansour said, adding that the port last year measured an 80% year-over-year increase to 129,705 tons of bulk imports of ferro alloys and silico-alloys, both of which are used in steel manufacturing. With the declines in breakbulk cargoes, the total number of multipurpose/heavy-lift vessel (MPV/HL) calls at New Orleans fell to 163 in 2025 from 189 the previous year. The ongoing conflict in the Middle East could potentially squeeze vessel capacity for breakbulk and project cargoes worldwide, as port closures and route changes have already been tying up vessels on the container side, Mansour said. That could indirectly affect vessel movements at the Port of New Orleans. “For the carriers that are calling New Orleans, if they do have routes in the Middle East, they may have disruptions where it affects their capacity from a global fleet perspective,” she said. “But we’re not anticipating significant impacts on the breakbulk and project cargo side, and we haven’t really seen any direct impacts yet.” Mansour acknowledged that the Middle East is not a major shipping lane for breakbulk and project cargoes for the port. Cargo mix offsets steel slump for Houston With tariffs chipping away at steel imports, Port Houston is looking to cargo diversification and Gulf Coast project developments to expand cargo shipments for the nation’s largest breakbulk and project cargo gateway. Volumes of general cargo — which the port defines to include project cargo, breakbulk, and other non-containerized goods — reached 564,346 tons in January, a 27% year-over-year increase, according to Port Houston data. That growth trend is expected to continue, driven in part by a mix of projects under development in the region, port spokesperson Lisa Ashley-Daniels told the Journal of Commerce. “There are several major industrial and energy projects along the Gulf Coast that are expected to move forward between 2026 and 2028, with the potential to generate considerable breakbulk and heavy-lift cargo through Port Houston,” she said. Breakbulk steel imports at Port Houston declined 35% year over year to 213,653 tons in January, according to port data, mirroring larger trends tied to lower drilling activity, Ashley-Daniels said. For all of 2025, breakbulk steel volumes fell 8% to just under 4.2 million tons. “The decline in steel imports that Houston experienced in January is not unique to the port, but reflects broad shifts in energy markets, supply and demand drivers, regulatory environments, and trade policies, among other contributing factors,” she said. Significant activity from cargo types other than steel is driving an overall rise in general cargo volumes at the port, Ashley-Daniels said, citing quadruple-digit growth in machinery, triple-digit increases in grain, and double-digit gains in pet coke volumes and roll-on/roll-off cargo in February. “The growing diversification of breakbulk cargo beyond steel is helping to stabilize overall activity,” Ashley-Daniels said, adding that cargo activity for these commodities is expected to increase further. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Port News

Energy projects

Project cargo

Breakbulk ports

North American ports

Breakbulk News

Maritime

US Gulf breakbulk ports lean into project boom

<div class="phx-topic abstract-wrapper">The carrier alliance will shake up its Asia-Europe network in April with Busan becoming the focus of its North Asia trade and direct calls ending to ports in Japan and Taiwan.</div>

The carrier alliance will shake up its Asia-Europe network in April with Busan becoming the focus of its North Asia trade and direct calls ending to ports in Japan and Taiwan.

<div class="phx-topic">Ocean Network Express (ONE) has expanded its Asia container terminal network by acquiring a stake in Dongwon Global Terminal Busan (DGT) from South Korean conglomerate and terminal owner Dongwon Group, ONE said Tuesday. The carrier gave no details about how much it paid for what it referred to in a statement as an “indirect but meaningful share” or the size of the shareholding in the fully automated DGT. The terminal, which opened in April 2024, will have a capacity of more than 4.5 million TEUs with five mainline berths totaling 5,740 feet and one berth of 1,263 feet for feeder ships when completed around 2030. ONE previously took minority stakes in China’s Dalian Container Terminal last December and Jakarta’s New Priok Container Terminal One (NPCT1) in Indonesia in November 2024. More broadly, ONE’s move comes as container lines, supported by record profits from several years of supply chain disruption, are investing more in marine terminals to gain better control of landside operations and mitigate port congestion. ONE CEO Jeremey Nixon, speaking at the Journal of Commerce’s TPM26 conference earlier this month, said carriers are “increasingly having to come into the terminal space and taking over involvement in major gateway ports, or major hub ports, and that trend will continue to accelerate, I think, over the next 10 to 15 years.” “But the problem there is the number of terminals or ports that are available to be acquired is not that significant,” Nixon said. <h3>Premier Alliance Asia-Europe network shift </h3>ONE’s terminal move in Busan also comes ahead of a shakeup in the Premier Alliance’s Asia-Europe network in April that will see Busan become the focus of its North Asia trade, while ending direct calls at ports in Japan and Taiwan. Instead, the group, comprising ONE, HMM and Yang Ming Marine Transport, will launch four shuttle services connecting Busan with Tokyo, Nagoya and Kobe in Japan and with Kaohsiung and Taichung in Taiwan, plus Xiamen in eastern China. While CMA CGM is launching its own <a href="https://www.joc.com/article/cma-cgm-to-launch-standalone-japan-europe-express-service-in-april-6177297">direct Asia-Japan service in April</a>, it will use smaller vessels — 14 ships ranging in size from 7,000 to 10,000 TEUs — compared with 20 9,500-13,000-TEU ships previously deployed by the Premier Alliance. It is also one service while the Premier Alliance operated two direct Asia-Europe services from Japan that have now ended with the new 2026 network. The shift in focus to Busan is expected to drive a further increase in transshipment traffic through the port, which has seen transshipment make up an increasing proportion of total container volumes over the last five years, from almost 53% in 2021 to 56% last year. Transshipment volumes are also growing at a faster clip than origin and destination cargo. Busan port authority figures show transshipment cargoes increased 4.4% to 14.1 million TEUs last year out of total throughput of 24.9 million TEUs. That followed an 8.8% surge to 13.5 million TEUs in transshipment volumes in 2024. By comparison, origin and destination cargoes at Busan nudged lower last year to 10.8 million TEUs from 10.9 million TEUs in 2024. Busan has also been consistently higher on the UN Conference on Trade and Development (UNCTAD) port liner shipping connectivity index than its Japanese rival ports since at least 2008. Results for the fourth quarter of 2025 show Busan with an index ranking of 1,648 compared with Tokyo at 585 and Kobe at 555. According to UNCTAD’s methodology, the higher the ranking number, the better the connectivity. <h3>Improving transshipment cargo handling </h3>The growth in transshipment volumes comes as the Busan Port Authority is introducing a comprehensive digital port community system this year that will improve cargo handling efficiencies for transshipment cargo moving between the port’s nine terminals. Results from pilot tests last year have already shown significant productivity gains with a 90% reduction in container rehandling, up to a 50% reduction in truck waiting times and a threefold increase in load factors, Lee Eung-hyuk, the port authority’s director of international logistics, told the Journal of Commerce. Final quantitative outcomes are expected to be confirmed around 2027, he added. The digital port community system is part of a wider initiative to solidify Busan’s position as the main transshipment hub for North Asia. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Ocean Network Express (ONE) has expanded its Asia container terminal network by acquiring a stake in Dongwon Global Terminal Busan (DGT) from South Korean conglomerate and terminal owner Dongwon Group, ONE said Tuesday. The carrier gave no details about how much it paid for what it referred to in a statement as an “indirect but meaningful share” or the size of the shareholding in the fully automated DGT. The terminal, which opened in April 2024, will have a capacity of more than 4.5 million TEUs with five mainline berths totaling 5,740 feet and one berth of 1,263 feet for feeder ships when completed around 2030. ONE previously took minority stakes in China’s Dalian Container Terminal last December and Jakarta’s New Priok Container Terminal One (NPCT1) in Indonesia in November 2024. More broadly, ONE’s move comes as container lines, supported by record profits from several years of supply chain disruption, are investing more in marine terminals to gain better control of landside operations and mitigate port congestion. ONE CEO Jeremey Nixon, speaking at the Journal of Commerce’s TPM26 conference earlier this month, said carriers are “increasingly having to come into the terminal space and taking over involvement in major gateway ports, or major hub ports, and that trend will continue to accelerate, I think, over the next 10 to 15 years.” “But the problem there is the number of terminals or ports that are available to be acquired is not that significant,” Nixon said. Premier Alliance Asia-Europe network shift ONE’s terminal move in Busan also comes ahead of a shakeup in the Premier Alliance’s Asia-Europe network in April that will see Busan become the focus of its North Asia trade, while ending direct calls at ports in Japan and Taiwan. Instead, the group, comprising ONE, HMM and Yang Ming Marine Transport, will launch four shuttle services connecting Busan with Tokyo, Nagoya and Kobe in Japan and with Kaohsiung and Taichung in Taiwan, plus Xiamen in eastern China. While CMA CGM is launching its own direct Asia-Japan service in April , it will use smaller vessels — 14 ships ranging in size from 7,000 to 10,000 TEUs — compared with 20 9,500-13,000-TEU ships previously deployed by the Premier Alliance. It is also one service while the Premier Alliance operated two direct Asia-Europe services from Japan that have now ended with the new 2026 network. The shift in focus to Busan is expected to drive a further increase in transshipment traffic through the port, which has seen transshipment make up an increasing proportion of total container volumes over the last five years, from almost 53% in 2021 to 56% last year. Transshipment volumes are also growing at a faster clip than origin and destination cargo. Busan port authority figures show transshipment cargoes increased 4.4% to 14.1 million TEUs last year out of total throughput of 24.9 million TEUs. That followed an 8.8% surge to 13.5 million TEUs in transshipment volumes in 2024. By comparison, origin and destination cargoes at Busan nudged lower last year to 10.8 million TEUs from 10.9 million TEUs in 2024. Busan has also been consistently higher on the UN Conference on Trade and Development (UNCTAD) port liner shipping connectivity index than its Japanese rival ports since at least 2008. Results for the fourth quarter of 2025 show Busan with an index ranking of 1,648 compared with Tokyo at 585 and Kobe at 555. According to UNCTAD’s methodology, the higher the ranking number, the better the connectivity. Improving transshipment cargo handling The growth in transshipment volumes comes as the Busan Port Authority is introducing a comprehensive digital port community system this year that will improve cargo handling efficiencies for transshipment cargo moving between the port’s nine terminals. Results from pilot tests last year have already shown significant productivity gains with a 90% reduction in container rehandling, up to a 50% reduction in truck waiting times and a threefold increase in load factors, Lee Eung-hyuk, the port authority’s director of international logistics, told the Journal of Commerce. Final quantitative outcomes are expected to be confirmed around 2027, he added. The digital port community system is part of a wider initiative to solidify Busan’s position as the main transshipment hub for North Asia. Contact Keith Wallis at keithwallis@hotmail.com .

Container lines

Marine terminals

International ports

Container Shipping News

ONE takes stake in Busan’s Dongwon terminal ahead of Premier network shift

<div class="phx-topic abstract-wrapper">The decision means CMA CGM, Hapag-Lloyd, Maersk and Zim will be forced to wait until early April before implementing surcharges designed to recoup higher operating costs associated with the war in the Middle East. </div>

The decision means CMA CGM, Hapag-Lloyd, Maersk and Zim will be forced to wait until early April before implementing surcharges designed to recoup higher operating costs associated with the war in the Middle East.

<div class="phx-topic">The US Federal Maritime Commission (FMC) on Monday unanimously rejected separate requests from four ocean carriers to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. CMA CGM, Hapag-Lloyd, Maersk and Zim Integrated Shipping Services, as required by US shipping law, filed 30-day notices with the FMC in early March informing the agency of their intent to implement special surcharges on customers in order to <a href="https://www.joc.com/article/war-reignites-tussle-between-ocean-carriers-cargo-owners-over-fuel-surcharges-6188632">recoup the higher operating costs</a> tied to spiking fuel prices and the disruption to ships and equipment after the US and Israel launched attacks against Iran on Feb. 28. Along with the notices came requests by the carriers to waive the 30-day waiting period, which would have allowed the liners to implement the new charges immediately. Zim’s surcharge applies to all US trades, while the charges for the other three carriers apply only to their US-Middle East trade. “In my view, when a carrier seeks special permission to reduce the 30 days’ notice period for a surcharge, the carrier should demonstrate how its increased costs are: linked to the dollar amount of the proposed surcharge,” FMC Chairman Laura DiBella said in a statement. “An assertion that there are increased costs, without any data on what those costs are, how long they may last, and what steps the carrier is taking to mitigate them, is insufficient in demonstrating good cause.” DiBella recommended that carriers provide data behind the decision to levy the surcharge and specify a duration, so the fee is “reasonably related to the increased costs.” <h3>Seeking to recoup higher costs </h3>The surcharge notices filed with the FMC are just one of the ways container lines are trying to recoup the higher costs. Cargo contracted on a long-term basis rather than via freight-all-kinds rates (FAK) are subject to bunker adjustment factors reset quarterly and floating fuel surcharges that can be reset as frequently as monthly. Ocean carriers began assessing war-related surcharges for any shipments to and from the Persian Gulf states on March 2. The FMC must grant special permission for any such charges to be implemented on US trades prior to the end of a 30-day review period. The surcharges filed with the FMC by Hapag-Lloyd and Maersk pertain only to shipments between the US and Saudi Arabia, Bahrain, Iraq, Kuwait, Oman, Qatar, and the United Arab Emirates. Maersk’s surcharge specifically noted eastern Saudi Arabia. Maersk plans to charge $1,800 per TEU; $3,000 per FEU and 45-foot unit; and $3,800 for refrigerated and special containers. Hapag-Lloyd plans to levy $1,500 per dry TEU and $3,500 for reefer containers. CMA CGM said it would implement an emergency conflict surcharge on exports and imports from the Middle East and Africa at $2,000 per TEU; $3,000 per FEU; and $4,000 for reefer and special containers. Zim plans to seek a war risk surcharge of $25 per TEU and $50 per FEU on all US shipments. Zim said the war has increased the cost of running its network and operations at its headquarters in Haifa, Israel. “These increased costs include higher war-risk insurance premiums and tighter P&amp;I coverage terms; the need to delay, speed up, and/or re-route vessels and cargo; increased equipment positioning/repositioning costs resulting from changes in vessel schedules; and a loss of productivity as the result of employees having to take refuge in bomb shelters throughout the day and night, among others,” Wayne Rohde, an attorney at Cozen O’Conner representing three of the carriers, wrote to the FMC. While the carriers filed their surcharge notices separately, Maersk, Hapag-Lloyd and Zim are represented by Cozen O’Conner. The carriers each told the FMC that unless the 30-day notice period for the surcharges was waived, they would be unable to begin recovering the increased costs they are experiencing for almost a full month. <h3>Waiver requests filed in early March </h3>The various requests were filed by the carriers between March 2-5, following the beginning of the war on Feb. 28. The four requests are the only ones that have been processed by the agency so far, an FMC spokesperson told the Journal of Commerce on Monday. The FMC in mid-March told shippers to check their ocean freight bills for any surcharges related to the war in the Middle East that have not been formally reviewed by the agency. In a March 11 statement, the agency said it was “closely monitoring the impact the current conflict in the Middle East is having on shipping conditions through the Strait of Hormuz” and any rate adjustments ocean carriers are making in response. The FMC in early 2024 came under fire from shippers, including the Agriculture Transportation Coalition, after waiving for one ocean carrier the 30-day notice period for surcharges tied to vessel diversions away from the Suez Canal due to attacks by Houthi militants on commercial shipping in the Red Sea. A subsequent economic analysis questioned whether the surcharge was warranted, given the carrier was also avoiding Suez Canal tolls by diverting around the Cape of Good Hope. AgTC Executive Director Peter Friedmann praised the FMC for rejecting the carriers’ requests to waive the 30-day waiting period and criticized the lack of explanation from the liners on how the surcharges were calculated. He noted in a statement Monday that none of the requests from the carriers specified the actual costs they were accruing from the Middle East disruption. While recognizing that container lines have made efforts to understand and support US agriculture exporters, Friedmann nonetheless said AgTC was “shocked by the manner in which these requests were drafted, the disrespect shown to carriers’ customers and even to the (FMC).” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a></div>

The US Federal Maritime Commission (FMC) on Monday unanimously rejected separate requests from four ocean carriers to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. CMA CGM, Hapag-Lloyd, Maersk and Zim Integrated Shipping Services, as required by US shipping law, filed 30-day notices with the FMC in early March informing the agency of their intent to implement special surcharges on customers in order to recoup the higher operating costs tied to spiking fuel prices and the disruption to ships and equipment after the US and Israel launched attacks against Iran on Feb. 28. Along with the notices came requests by the carriers to waive the 30-day waiting period, which would have allowed the liners to implement the new charges immediately. Zim’s surcharge applies to all US trades, while the charges for the other three carriers apply only to their US-Middle East trade. “In my view, when a carrier seeks special permission to reduce the 30 days’ notice period for a surcharge, the carrier should demonstrate how its increased costs are: linked to the dollar amount of the proposed surcharge,” FMC Chairman Laura DiBella said in a statement. “An assertion that there are increased costs, without any data on what those costs are, how long they may last, and what steps the carrier is taking to mitigate them, is insufficient in demonstrating good cause.” DiBella recommended that carriers provide data behind the decision to levy the surcharge and specify a duration, so the fee is “reasonably related to the increased costs.” Seeking to recoup higher costs The surcharge notices filed with the FMC are just one of the ways container lines are trying to recoup the higher costs. Cargo contracted on a long-term basis rather than via freight-all-kinds rates (FAK) are subject to bunker adjustment factors reset quarterly and floating fuel surcharges that can be reset as frequently as monthly. Ocean carriers began assessing war-related surcharges for any shipments to and from the Persian Gulf states on March 2. The FMC must grant special permission for any such charges to be implemented on US trades prior to the end of a 30-day review period. The surcharges filed with the FMC by Hapag-Lloyd and Maersk pertain only to shipments between the US and Saudi Arabia, Bahrain, Iraq, Kuwait, Oman, Qatar, and the United Arab Emirates. Maersk’s surcharge specifically noted eastern Saudi Arabia. Maersk plans to charge $1,800 per TEU; $3,000 per FEU and 45-foot unit; and $3,800 for refrigerated and special containers. Hapag-Lloyd plans to levy $1,500 per dry TEU and $3,500 for reefer containers. CMA CGM said it would implement an emergency conflict surcharge on exports and imports from the Middle East and Africa at $2,000 per TEU; $3,000 per FEU; and $4,000 for reefer and special containers. Zim plans to seek a war risk surcharge of $25 per TEU and $50 per FEU on all US shipments. Zim said the war has increased the cost of running its network and operations at its headquarters in Haifa, Israel. “These increased costs include higher war-risk insurance premiums and tighter P&I coverage terms; the need to delay, speed up, and/or re-route vessels and cargo; increased equipment positioning/repositioning costs resulting from changes in vessel schedules; and a loss of productivity as the result of employees having to take refuge in bomb shelters throughout the day and night, among others,” Wayne Rohde, an attorney at Cozen O’Conner representing three of the carriers, wrote to the FMC. While the carriers filed their surcharge notices separately, Maersk, Hapag-Lloyd and Zim are represented by Cozen O’Conner. The carriers each told the FMC that unless the 30-day notice period for the surcharges was waived, they would be unable to begin recovering the increased costs they are experiencing for almost a full month. Waiver requests filed in early March The various requests were filed by the carriers between March 2-5, following the beginning of the war on Feb. 28. The four requests are the only ones that have been processed by the agency so far, an FMC spokesperson told the Journal of Commerce on Monday. The FMC in mid-March told shippers to check their ocean freight bills for any surcharges related to the war in the Middle East that have not been formally reviewed by the agency. In a March 11 statement, the agency said it was “closely monitoring the impact the current conflict in the Middle East is having on shipping conditions through the Strait of Hormuz” and any rate adjustments ocean carriers are making in response. The FMC in early 2024 came under fire from shippers, including the Agriculture Transportation Coalition, after waiving for one ocean carrier the 30-day notice period for surcharges tied to vessel diversions away from the Suez Canal due to attacks by Houthi militants on commercial shipping in the Red Sea. A subsequent economic analysis questioned whether the surcharge was warranted, given the carrier was also avoiding Suez Canal tolls by diverting around the Cape of Good Hope. AgTC Executive Director Peter Friedmann praised the FMC for rejecting the carriers’ requests to waive the 30-day waiting period and criticized the lack of explanation from the liners on how the surcharges were calculated. He noted in a statement Monday that none of the requests from the carriers specified the actual costs they were accruing from the Middle East disruption. While recognizing that container lines have made efforts to understand and support US agriculture exporters, Friedmann nonetheless said AgTC was “shocked by the manner in which these requests were drafted, the disrespect shown to carriers’ customers and even to the (FMC).” Contact Mark Szakonyi at  mark.szakonyi@spglobal.com

Transport, Trade and Regulation News

Supply chain

FMC rejects requests by carriers to waive waiting period for Middle East surcharges

<div class="phx-topic abstract-wrapper"> Reefer shipments into the port, while still small, have been growing faster than overall cargo, forcing port officials to deal with more long-dwelling containers. </div>

 Reefer shipments into the port, while still small, have been growing faster than overall cargo, forcing port officials to deal with more long-dwelling containers. 

<div class="phx-topic">The Port of Houston is reducing the free time given to refrigerated container imports at its marine terminals because shippers continue to leave reefer cargo past the port’s allotted grace period. The Board of Commissioners for the Port Houston Authority approved Monday a change to the terminal tariffs that will reduce the free time for a refrigerated container to four days from the current seven-day period in place for all containers. The policy change comes as reefer imports, while still a small part of the port’s business, grow faster than Houston’s dry cargo imports. The tariff change will take effect May 1. Reefer shippers will still have an additional three days of free time available if a container requires an inspection by US Customs and Border Protection or the Department of Agriculture (USDA). In asking for the tariff change, Chief Port Operations Officer Ryan Mariacher said the move would align Houston’s policies with how other ports handle refrigerated containers. “This supports the shippers that need to expedite the handling of these commodity types,” Mariacher said. “We want to be a transit facility, not a storage facility.” Mariacher did not say how long refrigerated containers are dwelling at the port. But in June 2025, <a href="https://www.joc.com/article/port-houston-implementing-reefer-dwell-fees-to-encourage-container-flow-6030417">when the port approved a higher rate of demurrage on refrigerated boxes</a>, he said some shippers had been leaving their reefer shipments at the port for a week or more. <h3>Reefer imports growing </h3>Refrigerated imports into Houston appear to have been accelerating since 2024 after <a href="https://www.joc.com/article/houston-gets-usda-approval-to-handle-cold-treated-produce-cargoes-5703146">the port secured approval from the USDA to bring in cold-treated cargo without inspection</a>. Houston last year handled 83,354 TEUs in reefer containers, up 9.7% from 2024, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Overall imports of 1.93 million TEUs grew 1.5% year over year. Most of Houston’s growth in refrigerated imports comes from its north-south services. Imports from Guatemala, which is the port’s second-largest origin for reefer shipments behind China, saw a 9% gain in 2025 to 10,913 TEUs, led largely by bananas, according to PIERS. High US prices for beef have also led to a strong uptick in the port’s inbound reefer business. Refrigerated imports from Brazil rose 71% to 8,185 TEUs during 2025, led by meat and animal proteins. Colombia saw its refrigerated meat exports to Houston grow 56% in 2025 to 6,249 TEUs, PIERS data shows. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Port of Houston is reducing the free time given to refrigerated container imports at its marine terminals because shippers continue to leave reefer cargo past the port’s allotted grace period. The Board of Commissioners for the Port Houston Authority approved Monday a change to the terminal tariffs that will reduce the free time for a refrigerated container to four days from the current seven-day period in place for all containers. The policy change comes as reefer imports, while still a small part of the port’s business, grow faster than Houston’s dry cargo imports. The tariff change will take effect May 1. Reefer shippers will still have an additional three days of free time available if a container requires an inspection by US Customs and Border Protection or the Department of Agriculture (USDA). In asking for the tariff change, Chief Port Operations Officer Ryan Mariacher said the move would align Houston’s policies with how other ports handle refrigerated containers. “This supports the shippers that need to expedite the handling of these commodity types,” Mariacher said. “We want to be a transit facility, not a storage facility.” Mariacher did not say how long refrigerated containers are dwelling at the port. But in June 2025, when the port approved a higher rate of demurrage on refrigerated boxes , he said some shippers had been leaving their reefer shipments at the port for a week or more. Reefer imports growing Refrigerated imports into Houston appear to have been accelerating since 2024 after the port secured approval from the USDA to bring in cold-treated cargo without inspection . Houston last year handled 83,354 TEUs in reefer containers, up 9.7% from 2024, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Overall imports of 1.93 million TEUs grew 1.5% year over year. Most of Houston’s growth in refrigerated imports comes from its north-south services. Imports from Guatemala, which is the port’s second-largest origin for reefer shipments behind China, saw a 9% gain in 2025 to 10,913 TEUs, led largely by bananas, according to PIERS. High US prices for beef have also led to a strong uptick in the port’s inbound reefer business. Refrigerated imports from Brazil rose 71% to 8,185 TEUs during 2025, led by meat and animal proteins. Colombia saw its refrigerated meat exports to Houston grow 56% in 2025 to 6,249 TEUs, PIERS data shows. Contact Michael Angell at michael.angell@spglobal.com .

Cool Cargo News

Houston cuts free time on reefer importers amid ongoing high dwells

<div class="phx-topic abstract-wrapper">Southern California’s traditional solutions to surging freight volumes ignore the fact that they might well have reached the limits of being effective, writes Ted Prince.</div>

Southern California’s traditional solutions to surging freight volumes ignore the fact that they might well have reached the limits of being effective, writes Ted Prince.

<div class="phx-topic">The Journal of Commerce’s TPM conference has completed another big show in Long Beach. And while most attendees were living with the lingering impacts of the Trump administration’s tariff policy, we were all faced with the added geopolitical suspense brought about by the US and Israeli strikes on Iran that commenced as TPM attendees arrived. While this drama played out, I thought back to Michelle Phillips of the Mamas and the Papas eating a banana during a 1967 performance of “California Dreamin’” on the Ed Sullivan Show. This was to protest the band being forced to lip-sync rather than perform live. Just as the protest distracted from the singing, war and tariffs effectively blocked out any consideration of how California is planning to handle current volumes, let alone a doubling by 2050. Traditionally, this has meant bemoaning California’s “socialist state” — albeit with the fourth- or fifth-largest economy in the world. There is no shortage of issues. California Air Resources Board (CARB) rules on advanced clean trucks and advanced clean fleets impact freight transportation by mandating a transition to zero-emission trucks over time. These are on top of previous diesel tractor emission and “clean” diesel truck regulations. CARB has also adopted policies to reduce emissions from marine terminals and at-berth ship emissions. In addition, the harbor drayage community continues to deal with the AB5 legislation dealing with worker classification. Much like tariffs, all of these are subject to conflicting interpretations with the federal government. And, on a global level, confusion reigns over the International Maritime Organization’s net-zero framework. But the list of greatest hits being lip-synched is much larger. Let’s roll the tape. <h3>Will projects become reality? </h3>The Port of Long Beach continues to talk up its Pier B Rail expansion. But this project doesn’t solve the problem of destination disaggregation. Assembling less-than-fully-loaded stack cars to a plethora of destinations actually cannibalizes double-stack linehaul economics. (This network scope vs. scale issue is also pertinent in the current transcontinental railroad debate.) The Port of Los Angeles has its own multi-billion-dollar long shot — Pier 500. Given its configuration, the most realistic method to handle bigger, next-generation cargo ships is to make it an adjunct to APM Terminals’ Pier 400 — and obviate the need to replicate gates, buildings and on-dock rail. Otherwise, there simply isn’t enough land short of container levitation. The Barstow International Gateway (BIG) is BNSF’s planned inland intermodal and logistics complex. It is still in the environmental review and permitting stage. I am sure that BNSF hopes it progresses better than its current Phoenix project, which is even more ambitious than BIG. BNSF’s need for BIG is no doubt driven by previous Southern California failures: passing on the Intermodal Container Transfer Facility (ICTF) and failing to garner approval for the Southern California Intermodal Gateway (SCIG). Part of BIG’s value proposition is that distribution centers will locate there because traffic will be processed using zero- and near-zero-emission cargo-handling equipment. However, getting new or upgraded electric service in the Inland Empire has proven problematic, so a clear trajectory of electrified warehouse space cannot be assumed. Further north, the Wonderful Logistics Center has a SeaCube Cold Solutions container depot already supporting local refrigerated exporters; however, the planned international rail shuttle linking Shafter to the Port of Los Angeles using BNSF is still under development. Whereas BIG is a many-to-one network, this is more complicated because traffic is not transitive and it is one-to-many. (Pesky car utilization issues again.) Also, refrigerated produce is a much more complicated rail transportation product than dry imports. Meanwhile, the Mojave Inland Port remains a proposed, private development that has not progressed beyond county-level approvals in 2022. Perhaps the issue is that there does not appear to be a sustainable desire to build distribution centers in the middle of a desert. For decades, Southern California has held itself out to be the answer to the impending freight tsunami, yet a focus on more-of-the-same traditional solutions ignores the fact that these might well have reached their limits. Otherwise, the greatest hits lip-synching will continue, and we may be reminded that “banana” can come to stand for “Build Absolutely Nothing Anywhere Near Anything.” In that case, the global supply chain will need to sing a new song. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

The Journal of Commerce’s TPM conference has completed another big show in Long Beach. And while most attendees were living with the lingering impacts of the Trump administration’s tariff policy, we were all faced with the added geopolitical suspense brought about by the US and Israeli strikes on Iran that commenced as TPM attendees arrived. While this drama played out, I thought back to Michelle Phillips of the Mamas and the Papas eating a banana during a 1967 performance of “California Dreamin’” on the Ed Sullivan Show. This was to protest the band being forced to lip-sync rather than perform live. Just as the protest distracted from the singing, war and tariffs effectively blocked out any consideration of how California is planning to handle current volumes, let alone a doubling by 2050. Traditionally, this has meant bemoaning California’s “socialist state” — albeit with the fourth- or fifth-largest economy in the world. There is no shortage of issues. California Air Resources Board (CARB) rules on advanced clean trucks and advanced clean fleets impact freight transportation by mandating a transition to zero-emission trucks over time. These are on top of previous diesel tractor emission and “clean” diesel truck regulations. CARB has also adopted policies to reduce emissions from marine terminals and at-berth ship emissions. In addition, the harbor drayage community continues to deal with the AB5 legislation dealing with worker classification. Much like tariffs, all of these are subject to conflicting interpretations with the federal government. And, on a global level, confusion reigns over the International Maritime Organization’s net-zero framework. But the list of greatest hits being lip-synched is much larger. Let’s roll the tape. Will projects become reality? The Port of Long Beach continues to talk up its Pier B Rail expansion. But this project doesn’t solve the problem of destination disaggregation. Assembling less-than-fully-loaded stack cars to a plethora of destinations actually cannibalizes double-stack linehaul economics. (This network scope vs. scale issue is also pertinent in the current transcontinental railroad debate.) The Port of Los Angeles has its own multi-billion-dollar long shot — Pier 500. Given its configuration, the most realistic method to handle bigger, next-generation cargo ships is to make it an adjunct to APM Terminals’ Pier 400 — and obviate the need to replicate gates, buildings and on-dock rail. Otherwise, there simply isn’t enough land short of container levitation. The Barstow International Gateway (BIG) is BNSF’s planned inland intermodal and logistics complex. It is still in the environmental review and permitting stage. I am sure that BNSF hopes it progresses better than its current Phoenix project, which is even more ambitious than BIG. BNSF’s need for BIG is no doubt driven by previous Southern California failures: passing on the Intermodal Container Transfer Facility (ICTF) and failing to garner approval for the Southern California Intermodal Gateway (SCIG). Part of BIG’s value proposition is that distribution centers will locate there because traffic will be processed using zero- and near-zero-emission cargo-handling equipment. However, getting new or upgraded electric service in the Inland Empire has proven problematic, so a clear trajectory of electrified warehouse space cannot be assumed. Further north, the Wonderful Logistics Center has a SeaCube Cold Solutions container depot already supporting local refrigerated exporters; however, the planned international rail shuttle linking Shafter to the Port of Los Angeles using BNSF is still under development. Whereas BIG is a many-to-one network, this is more complicated because traffic is not transitive and it is one-to-many. (Pesky car utilization issues again.) Also, refrigerated produce is a much more complicated rail transportation product than dry imports. Meanwhile, the Mojave Inland Port remains a proposed, private development that has not progressed beyond county-level approvals in 2022. Perhaps the issue is that there does not appear to be a sustainable desire to build distribution centers in the middle of a desert. For decades, Southern California has held itself out to be the answer to the impending freight tsunami, yet a focus on more-of-the-same traditional solutions ignores the fact that these might well have reached their limits. Otherwise, the greatest hits lip-synching will continue, and we may be reminded that “banana” can come to stand for “Build Absolutely Nothing Anywhere Near Anything.” In that case, the global supply chain will need to sing a new song. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

Are SoCal’s planned freight projects a matter of ‘California Dreamin’’?

<div class="phx-topic abstract-wrapper">Record fleet expansion, widening scale disparities, and lingering financial reserves have combined to create a rare window in which transformative deals among ocean carriers are both feasible and strategically rational.</div>

Record fleet expansion, widening scale disparities, and lingering financial reserves have combined to create a rare window in which transformative deals among ocean carriers are both feasible and strategically rational.

<div class="phx-topic">Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability. Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition. In my personal experience, the industry’s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically. The global container ship order book currently stands at more than 35% of the existing fleet — an unprecedented level. At the same time, the four largest carriers — Mediterranean Shipping Co., CMA CGM, Maersk and Cosco — have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL. (Industry data sources include Drewry and Clarksons Research.) Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures. True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M&amp;A offers the additional advantage of organizational synergies — streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead — that alliances cannot replicate. This raises an important question: Why is consolidation particularly relevant now? In cyclical industries such as container shipping, mergers rarely occur at market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions. That transition phase appears to be underway today. <h3>COVID-era profits provide ‘window of opportunity’ for carriers </h3>Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence. They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements. The mid-tier segment of the industry presents multiple potential merger candidates. Historically, national interests have complicated cross-border consolidation, as governments often view shipping lines as strategic assets tied to trade security and economic policy. Yet recent developments suggest that such barriers are not insurmountable. Hapag-Lloyd’s proposed acquisition of Zim demonstrates that creative structures can address national security concerns while still enabling industrial consolidation. The ability to design tailored governance or ownership arrangements may unlock additional transactions that once seemed politically impossible. Customers, too, have a stake in consolidation, perhaps more than is commonly recognized. Over time, a more consolidated industry can produce greater stability. Previous downturns, including those in 2001, 2009 and 2016, revealed how financially distressed carriers can disrupt supply chains. When shipping lines suffer sustained losses, they often resort to abrupt service cancellations, capacity withdrawals, and large-scale blank sailings. These measures create uncertainty for shippers, ports, logistics providers, and equipment lessors. Most of us vividly remember the collapse of Hanjin Shipping. Its bankruptcy triggered widespread cargo disruptions, stranded containers, port congestion and financial losses across the logistics ecosystem. Such systemic shocks underscore the broader economic value of financially stronger carriers. Consolidation, if executed in a timely manner, can reduce the likelihood of extreme distress events by improving cost structures and balance sheet resilience. <h3>‘Pivotal moment’ </h3>To reassure the skeptics, we can rest assured that competition authorities will continue to monitor market concentration carefully, and customers will demand tangible service improvements rather than promises of efficiency. Nevertheless, the strategic logic is compelling. The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational. Delaying action could mean missing that window, as market conditions tighten and financial flexibility declines. For carriers, investors and customers alike, timely consolidation offers the prospect of a more stable and sustainable industry. In a sector long defined by volatility, that outcome should be in everyone’s interest. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&amp;O Nedlloyd and the Maersk Group. Contact him at <a href="mailto:robbert@inceptionpartners.org">robbert@inceptionpartners.org</a>. </div>

Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability. Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition. In my personal experience, the industry’s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically. The global container ship order book currently stands at more than 35% of the existing fleet — an unprecedented level. At the same time, the four largest carriers — Mediterranean Shipping Co., CMA CGM, Maersk and Cosco — have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL. (Industry data sources include Drewry and Clarksons Research.) Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures. True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M&A offers the additional advantage of organizational synergies — streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead — that alliances cannot replicate. This raises an important question: Why is consolidation particularly relevant now? In cyclical industries such as container shipping, mergers rarely occur at market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions. That transition phase appears to be underway today. COVID-era profits provide ‘window of opportunity’ for carriers Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence. They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements. The mid-tier segment of the industry presents multiple potential merger candidates. Historically, national interests have complicated cross-border consolidation, as governments often view shipping lines as strategic assets tied to trade security and economic policy. Yet recent developments suggest that such barriers are not insurmountable. Hapag-Lloyd’s proposed acquisition of Zim demonstrates that creative structures can address national security concerns while still enabling industrial consolidation. The ability to design tailored governance or ownership arrangements may unlock additional transactions that once seemed politically impossible. Customers, too, have a stake in consolidation, perhaps more than is commonly recognized. Over time, a more consolidated industry can produce greater stability. Previous downturns, including those in 2001, 2009 and 2016, revealed how financially distressed carriers can disrupt supply chains. When shipping lines suffer sustained losses, they often resort to abrupt service cancellations, capacity withdrawals, and large-scale blank sailings. These measures create uncertainty for shippers, ports, logistics providers, and equipment lessors. Most of us vividly remember the collapse of Hanjin Shipping. Its bankruptcy triggered widespread cargo disruptions, stranded containers, port congestion and financial losses across the logistics ecosystem. Such systemic shocks underscore the broader economic value of financially stronger carriers. Consolidation, if executed in a timely manner, can reduce the likelihood of extreme distress events by improving cost structures and balance sheet resilience. ‘Pivotal moment’ To reassure the skeptics, we can rest assured that competition authorities will continue to monitor market concentration carefully, and customers will demand tangible service improvements rather than promises of efficiency. Nevertheless, the strategic logic is compelling. The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational. Delaying action could mean missing that window, as market conditions tighten and financial flexibility declines. For carriers, investors and customers alike, timely consolidation offers the prospect of a more stable and sustainable industry. In a sector long defined by volatility, that outcome should be in everyone’s interest. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&O Nedlloyd and the Maersk Group. Contact him at robbert@inceptionpartners.org .

In wake of Zim deal, the time for industry consolidation is now

Dry Van

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Flatbed

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Refrigerated

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DAT Freight & Analytics is an independent source of truckload pricing and business intelligence. Using an automated daily process, DAT collects invoices from nearly 1,200 transportation companies totaling more than $137 billion in freight spend annually. It verifies and updates data daily; each market rate reported in RateView Analytics requires a minimum number of submissions, so prices cannot be manipulated; and the algorithms account for outliers. [DAT](https://dat.com)

US dry-van, flatbed and refrigerated truckload spot rates (DAT)

US Truckload spot rates weekly (DAT) Gateway

<div class="phx-topic abstract-wrapper">Containers that were inbound when the war started have been plugged into reefer slots in terminals outside the Gulf, accruing mounting storage charges as cargo owners either wait for the Strait of Hormuz to reopen or start looking for new markets</div>

Containers that were inbound when the war started have been plugged into reefer slots in terminals outside the Gulf, accruing mounting storage charges as cargo owners either wait for the Strait of Hormuz to reopen or start looking for new markets

<div class="phx-topic">Düsseldorf — Cold chain shippers with containers destined for the Middle East are in a state of suspended animation with reefer boxes offloaded early at other ports in the region and no timeline on when their voyages will be able to resume through the war zone. Ocean carriers have suspended the acceptance of reefer, dangerous goods and special cargo in and out of the UAE, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia until further notice. Reefer containers that were inbound when the war started on Feb. 28 have been dropped off and plugged into reefer slots in terminals outside the Persian Gulf, accruing mounting storage charges and leaving cargo owners waiting until shipping can again pass through the Strait of Hormuz. Alternatively, cargo owners will need to start looking for new markets. One such shipper with reefers out of position is Tyson Foods. The Middle East is a major market for the global protein producer that brings in halal chicken from Brazil, but Gulf-bound reefer containers were offloaded before reaching their destination, according to Juliana Violato, Tyson’s senior manager of procurement in Europe. “In Brazil we have slowed down production because all containers that were on the water are now sitting in ports near the Gulf or in India or Singapore,” Violato told the Journal of Commerce at the Global Cold Chain Association (GCCA) Europe conference in Dusseldorf this week. “They will be there until they find a new trade lane that could be through Oman or Saudi Arabia, but we don’t know how or when because of the war,” she added. “What we do know is that the market is still there.” Thomas Eskesen, founder of cold chain industry consultants Eskesen Advisory, said the fate of frozen food shipments and perishables with a limited shelf life has been the number one issue for the global cold chain since the Middle East war began. “This has a massive cascading effect with equipment tied up and booking stops affecting carriers individually,” Eskesen told the Journal of Commerce. “Lots of cargo is being diverted via the Jeddah back door [in Saudi Arabia], but it is more difficult if dumped in India and Sri Lanka.” <h3>Land-based options under pressure </h3>The land options via Khor Fakkan and Fujairah in the UAE, Sohar in Oman and Jeddah that are being offered by ocean carriers and forwarders <a href="https://www.joc.com/article/rising-road-volume-puts-middle-east-land-based-options-under-pressure-6187755">are creaking under the heavy demand</a>. Port delays are growing fast, as are trucking bottlenecks, with one forwarder reporting a 20-mile line of trucks waiting to get into Dubai’s Jebel Ali container port. Violato said the clock was ticking as reefers could not wait forever and new markets will need to be found if Hormuz remains unpassable “in the coming weeks,” a move that would bring its own set of problems. “There will be a decision to bring back the containers [to origin] or to sell the products in different markets,” she said. “If it’s chicken breast it can be sold in Europe, and if it’s dark meat it can be sold in Africa, but if the war continues, they will need to find another destination.” Kevin Marchetti, co-founder of Lineage Logistics, said although he had no customers with reefers stuck in the region, those shippers are in a difficult position as there will need to be a different solution depending on the customer, the product and the destination. “Some of the products are pre-approved for certain markets where some traders have licenses and some don’t, so it is a really complicated issue,” Marchetti said on the sidelines of the GCCA conference. “The bigger question is that you produce goods thinking you have the end markets open and the goods will just flow, but now reefers are backing up,” he added. “There is also a limited amount of equipment and although we don’t have shortages yet, people have started to talk about it.” <h3>Holding back shipments from Europe </h3>Andrew Mates, managing director of Europe for temperature-controlled warehousing and food logistics specialist Americold, said shipments from Europe to the Middle East have been held back because of the war. “Our Dubai joint venture has reported the UAE government is being very active in redirecting cargo coming in from ports in Oman and Saudi Arabia and arranging land-based routes to keep the supply chain moving,” Mates said. “But there are trucking constraints where all of a sudden containers need to go thousands of kilometers,” he added. “The UAE government realizes that if the situation stays as it is for a few more weeks, they will simply have to get products in somehow.” While exceptions are being made for critical foodstuffs, pharma and other essential goods, <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">in a recent interview with the Journal of Commerce</a>, Maersk CCO Karsten Kildahl said that at some point “all cargo becomes urgent,” including aluminum, petrochemicals and polyethylene that are all raw materials for plastics production. Persian Gulf states import more than 90% of their goods, and while the closure of the Strait of Hormuz has long been factored into their scenario planning, a long-term closure will start to hit the shelves. Another fast-developing problem is outward-bound cargo, particularly fertilizer from the Middle East that comprises about 30% of the global market and is crucial for food production, according to Violato. “If the war takes longer, we will not have fertilizer for planting and grain production will drop,” she said. “When we impact grain, we impact animal feed and protein becomes more expensive and inflation is impossible to avoid. But again, everything depends on how long the war goes on for.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Düsseldorf — Cold chain shippers with containers destined for the Middle East are in a state of suspended animation with reefer boxes offloaded early at other ports in the region and no timeline on when their voyages will be able to resume through the war zone. Ocean carriers have suspended the acceptance of reefer, dangerous goods and special cargo in and out of the UAE, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia until further notice. Reefer containers that were inbound when the war started on Feb. 28 have been dropped off and plugged into reefer slots in terminals outside the Persian Gulf, accruing mounting storage charges and leaving cargo owners waiting until shipping can again pass through the Strait of Hormuz. Alternatively, cargo owners will need to start looking for new markets. One such shipper with reefers out of position is Tyson Foods. The Middle East is a major market for the global protein producer that brings in halal chicken from Brazil, but Gulf-bound reefer containers were offloaded before reaching their destination, according to Juliana Violato, Tyson’s senior manager of procurement in Europe. “In Brazil we have slowed down production because all containers that were on the water are now sitting in ports near the Gulf or in India or Singapore,” Violato told the Journal of Commerce at the Global Cold Chain Association (GCCA) Europe conference in Dusseldorf this week. “They will be there until they find a new trade lane that could be through Oman or Saudi Arabia, but we don’t know how or when because of the war,” she added. “What we do know is that the market is still there.” Thomas Eskesen, founder of cold chain industry consultants Eskesen Advisory, said the fate of frozen food shipments and perishables with a limited shelf life has been the number one issue for the global cold chain since the Middle East war began. “This has a massive cascading effect with equipment tied up and booking stops affecting carriers individually,” Eskesen told the Journal of Commerce. “Lots of cargo is being diverted via the Jeddah back door [in Saudi Arabia], but it is more difficult if dumped in India and Sri Lanka.” Land-based options under pressure The land options via Khor Fakkan and Fujairah in the UAE, Sohar in Oman and Jeddah that are being offered by ocean carriers and forwarders are creaking under the heavy demand . Port delays are growing fast, as are trucking bottlenecks, with one forwarder reporting a 20-mile line of trucks waiting to get into Dubai’s Jebel Ali container port. Violato said the clock was ticking as reefers could not wait forever and new markets will need to be found if Hormuz remains unpassable “in the coming weeks,” a move that would bring its own set of problems. “There will be a decision to bring back the containers [to origin] or to sell the products in different markets,” she said. “If it’s chicken breast it can be sold in Europe, and if it’s dark meat it can be sold in Africa, but if the war continues, they will need to find another destination.” Kevin Marchetti, co-founder of Lineage Logistics, said although he had no customers with reefers stuck in the region, those shippers are in a difficult position as there will need to be a different solution depending on the customer, the product and the destination. “Some of the products are pre-approved for certain markets where some traders have licenses and some don’t, so it is a really complicated issue,” Marchetti said on the sidelines of the GCCA conference. “The bigger question is that you produce goods thinking you have the end markets open and the goods will just flow, but now reefers are backing up,” he added. “There is also a limited amount of equipment and although we don’t have shortages yet, people have started to talk about it.” Holding back shipments from Europe Andrew Mates, managing director of Europe for temperature-controlled warehousing and food logistics specialist Americold, said shipments from Europe to the Middle East have been held back because of the war. “Our Dubai joint venture has reported the UAE government is being very active in redirecting cargo coming in from ports in Oman and Saudi Arabia and arranging land-based routes to keep the supply chain moving,” Mates said. “But there are trucking constraints where all of a sudden containers need to go thousands of kilometers,” he added. “The UAE government realizes that if the situation stays as it is for a few more weeks, they will simply have to get products in somehow.” While exceptions are being made for critical foodstuffs, pharma and other essential goods, in a recent interview with the Journal of Commerce, Maersk CCO Karsten Kildahl said that at some point “all cargo becomes urgent,” including aluminum, petrochemicals and polyethylene that are all raw materials for plastics production. Persian Gulf states import more than 90% of their goods, and while the closure of the Strait of Hormuz has long been factored into their scenario planning, a long-term closure will start to hit the shelves. Another fast-developing problem is outward-bound cargo, particularly fertilizer from the Middle East that comprises about 30% of the global market and is crucial for food production, according to Violato. “If the war takes longer, we will not have fertilizer for planting and grain production will drop,” she said. “When we impact grain, we impact animal feed and protein becomes more expensive and inflation is impossible to avoid. But again, everything depends on how long the war goes on for.” Contact Greg Knowler at  greg.knowler@spglobal.com . 

Forwarding

Reefer shippers play waiting game with boxes stuck outside Persian Gulf

<div class="phx-topic abstract-wrapper">Changing market dynamics offer an opportunity for motor carriers to raise rates, but also for intermodal providers to win business from cost-conscious shippers looking to shift modes.</div>

Changing market dynamics offer an opportunity for motor carriers to raise rates, but also for intermodal providers to win business from cost-conscious shippers looking to shift modes.

<div class="phx-topic">The tightening of truckload capacity and a sharp rise in diesel prices are beginning to reset surface transportation rates in the US, giving carriers renewed leverage while opening a potential growth opportunity for intermodal rail. Crackdowns on <a href="https://www.joc.com/article/impact-of-non-domiciled-cdl-enforcement-splits-us-trucking-sector-6135184">non-domiciled commercial drivers</a> and stricter English-language enforcement are constraining truckload capacity after a four-year freight recession. Meanwhile, diesel prices have surged to their highest level since late 2022 amid the war with Iran, lifting transportation costs for all and forcing shippers to reassess their budgets. It has started a cascading effect across domestic US transportation. Brokers and asset-based truckload carriers are rejecting freight and insisting on renegotiating contract rates, while shippers facing blown transportation budgets consider cheaper options such as intermodal rail. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="f7dc31b8-1e1c-4a59-907f-2391c69d4e9f"></dynamic-object></div>Early signs of that repricing are already evident. Spot truckload rates are up between 15% and 20% from a year ago, according to DAT Freight &amp; Analytics, even as freight demand remains muted amid elevated interest rates, a lackluster housing market, and mixed signals from the US industrial sector. “Not only are you seeing elevated rates across other modalities such as flatbed, but in the overall dry-van market, you’re seeing 14%, 15% tender rejections coming out of the slowest freight month of the year,” said Jared Weisfeld, chief strategy officer for RXO, a non-asset broker, speaking at the J.P. Morgan Industrials Conference on Tuesday. As recently as last year, tender rejections were at or less than 5%, according to Weisfeld. <h3>Regulatory tightening reinforces supply constraint </h3>The supply side could tighten further as new federal regulations take hold. The Federal Motor Carrier Safety Administration (FCMSA) enacted a rule earlier this week restricting non-domiciled commercial driver’s licenses (CDLs), a move the agency estimates could remove up to 194,000 drivers over five years. On Wednesday, the US House of Representatives advanced “Delilah’s Law,” which would accelerate enforcement over non-domiciled CDLs by retroactively invalidating certain licenses, rather than waiting for a non-domiciled CDL holder to interact with state licensing agencies. Despite higher rates, fleets have been cautious about adding capacity, even though stricter emissions regulations in 2027 will increase the purchase price of a new truck. “Our customers are more middle- to smaller-sized [carriers], and I think there’s still a lot of hesitation on that side to make the decisions,” said Cristina Gallo-Aquino, CFO of Ryder Systems, speaking at the J.P. Morgan event. “We are pointing it all out to them to show them how much of a price increase could be coming ... but we haven’t really seen the shift to make a decision and preorder.” <h3>Fuel surge amplifies pricing pressure </h3>Diesel prices averaged $5.07 per gallon last week, according to the US Energy Information Administration, the highest since November 2022 and adding another layer of cost pressure across the truckload market. On the spot market, where rates are often negotiated on an all-in basis, the increase is squeezing owner-operators and smaller carriers that cannot pass through fuel costs. That dynamic may cause more capacity to exit the truckload sector. In the contract market, larger asset-based carriers pass through higher fuel costs via surcharges. Since March 1, the average surcharge has risen nearly 20 cents per mile, although methodologies vary. For shippers, the result is sticker shock on invoices and a renewed focus on lower-cost alternatives such as rail. “For the intermodal space, it starts to put pressure on truck rates, which is a pretty good thing for us,” Mark George, CEO of Norfolk Southern, said at the J.P. Morgan event. “We’ve been pretty depressed [price-wise] for a while. We’d love to see some evacuation of capacity in trucking.” Intermodal providers are already prepared for that shift. Darren Field, president of intermodal at J.B. Hunt Transport Services, said the company is actively engaging with shippers looking to manage rising transportation costs. “How can we convert business from the highway back to intermodal, or to intermodal for the first time to hopefully save you a little money and prepare your budget for a year where truckload capacity and prices could get difficult for you,” Field said at the J.P. Morgan conference. “How can you hedge against the potential for a cost increase coming at your budget as a shipper by utilizing more intermodal?” But capturing that opportunity will depend on execution. Railroads must maintain service reliability even as volumes rise, a lesson of the pandemic when congestion and labor shortages left intermodal with a lingering stigma among some shippers. Service metrics suggest the industry has made progress. In a Journal of Commerce survey conducted late last year, 91.3% of respondents said they were satisfied with domestic intermodal service, up from 45.3% in the spring of 2023. Whether that improvement holds under renewed demand may determine how much freight ultimately shifts modes. Shippers, having experienced pandemic-era disruptions, are unlikely to tolerate a repeat. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The tightening of truckload capacity and a sharp rise in diesel prices are beginning to reset surface transportation rates in the US, giving carriers renewed leverage while opening a potential growth opportunity for intermodal rail. Crackdowns on non-domiciled commercial drivers and stricter English-language enforcement are constraining truckload capacity after a four-year freight recession. Meanwhile, diesel prices have surged to their highest level since late 2022 amid the war with Iran, lifting transportation costs for all and forcing shippers to reassess their budgets. It has started a cascading effect across domestic US transportation. Brokers and asset-based truckload carriers are rejecting freight and insisting on renegotiating contract rates, while shippers facing blown transportation budgets consider cheaper options such as intermodal rail. Early signs of that repricing are already evident. Spot truckload rates are up between 15% and 20% from a year ago, according to DAT Freight & Analytics, even as freight demand remains muted amid elevated interest rates, a lackluster housing market, and mixed signals from the US industrial sector. “Not only are you seeing elevated rates across other modalities such as flatbed, but in the overall dry-van market, you’re seeing 14%, 15% tender rejections coming out of the slowest freight month of the year,” said Jared Weisfeld, chief strategy officer for RXO, a non-asset broker, speaking at the J.P. Morgan Industrials Conference on Tuesday. As recently as last year, tender rejections were at or less than 5%, according to Weisfeld. Regulatory tightening reinforces supply constraint The supply side could tighten further as new federal regulations take hold. The Federal Motor Carrier Safety Administration (FCMSA) enacted a rule earlier this week restricting non-domiciled commercial driver’s licenses (CDLs), a move the agency estimates could remove up to 194,000 drivers over five years. On Wednesday, the US House of Representatives advanced “Delilah’s Law,” which would accelerate enforcement over non-domiciled CDLs by retroactively invalidating certain licenses, rather than waiting for a non-domiciled CDL holder to interact with state licensing agencies. Despite higher rates, fleets have been cautious about adding capacity, even though stricter emissions regulations in 2027 will increase the purchase price of a new truck. “Our customers are more middle- to smaller-sized [carriers], and I think there’s still a lot of hesitation on that side to make the decisions,” said Cristina Gallo-Aquino, CFO of Ryder Systems, speaking at the J.P. Morgan event. “We are pointing it all out to them to show them how much of a price increase could be coming ... but we haven’t really seen the shift to make a decision and preorder.” Fuel surge amplifies pricing pressure Diesel prices averaged $5.07 per gallon last week, according to the US Energy Information Administration, the highest since November 2022 and adding another layer of cost pressure across the truckload market. On the spot market, where rates are often negotiated on an all-in basis, the increase is squeezing owner-operators and smaller carriers that cannot pass through fuel costs. That dynamic may cause more capacity to exit the truckload sector. In the contract market, larger asset-based carriers pass through higher fuel costs via surcharges. Since March 1, the average surcharge has risen nearly 20 cents per mile, although methodologies vary. For shippers, the result is sticker shock on invoices and a renewed focus on lower-cost alternatives such as rail. “For the intermodal space, it starts to put pressure on truck rates, which is a pretty good thing for us,” Mark George, CEO of Norfolk Southern, said at the J.P. Morgan event. “We’ve been pretty depressed [price-wise] for a while. We’d love to see some evacuation of capacity in trucking.” Intermodal providers are already prepared for that shift. Darren Field, president of intermodal at J.B. Hunt Transport Services, said the company is actively engaging with shippers looking to manage rising transportation costs. “How can we convert business from the highway back to intermodal, or to intermodal for the first time to hopefully save you a little money and prepare your budget for a year where truckload capacity and prices could get difficult for you,” Field said at the J.P. Morgan conference. “How can you hedge against the potential for a cost increase coming at your budget as a shipper by utilizing more intermodal?” But capturing that opportunity will depend on execution. Railroads must maintain service reliability even as volumes rise, a lesson of the pandemic when congestion and labor shortages left intermodal with a lingering stigma among some shippers. Service metrics suggest the industry has made progress. In a Journal of Commerce survey conducted late last year, 91.3% of respondents said they were satisfied with domestic intermodal service, up from 45.3% in the spring of 2023. Whether that improvement holds under renewed demand may determine how much freight ultimately shifts modes. Shippers, having experienced pandemic-era disruptions, are unlikely to tolerate a repeat. Contact Ari Ashe at ari.ashe@spglobal.com .

Capacity cuts, fuel shocks provide openings for trucking and rail

<div class="phx-topic abstract-wrapper">The most disruptive energy shock in modern history has reawakened the debate over whether emergency fuel surcharges are a fair way for ocean carriers to recoup unexpected costs or blatant “double-dipping” that angers shippers.</div>

The most disruptive energy shock in modern history has reawakened the debate over whether emergency fuel surcharges are a fair way for ocean carriers to recoup unexpected costs or blatant “double-dipping” that angers shippers.

<div class="phx-topic">The speed and severity of the jump in global oil prices amid the war in the Middle East have reignited long-standing suspicions by cargo owners that fuel surcharges levied by ocean carriers are used as a revenue stream rather than a cost recovery mechanism. Container lines defend the fees, ranging from $30 to $300 per TEU depending on the trade lane, arguing that what is widely seen as the most significant energy shock in history has forced them to recoup costs with fees beyond the lagging quarterly bunker adjustment factor (BAF). Bunker fuel prices contribute approximately 15% to 30% of operating costs, depending on the year, according to various container line financial reports.And while the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz, according to a Vizion analysis, shippers nonetheless are retaining a cynical view of the emergency fuel surcharges. “Shipping lines always seem to manage to turn a crisis into a cash-grab,” was the blunt message from James Hookham, director of the Global Shippers Forum. “This apparent ‘double-dipping’ brings the whole sordid practice of surcharging into further disrepute.” Emergency bunker adjustment factors (EBAFs) on top of quarterly fuel price adjustments to recover costs in what is a core operational expense were acceptable for the current contract period ending March 26, said Antonios Rigalos, managing partner of shipper network ShiftX. But going forward, increased bunker costs should be recovered by the quarterly BAF review, he noted.“The BAF reviews executed for Q3 will reflect the higher bunker costs for the previous quarter [March/April/May], and an EBAF plus BAF review would create a double charging of customers,” Rigalos said. “While we understand the situation of carriers and that increased bunker costs have a big impact that somehow needs to be recovered, it needs to be carried out in a fair way and not by double charging BCOs [beneficial cargo owners] and clients.” Several carriers have announced emergency bunker fuel surcharges on top of quarterly fuel price adjustments to recover costs in what is a core operational expense, but the moves have sparked growing concern from shippers. An Asia-Europe shipper based in Hong Kong said he negotiated contracts based on the Shanghai Containerized Freight Index (SCFI) that covers both BAF and EBAF surcharges. “We adjust the bunker fuel surcharge bi-monthly and as far as we are concerned, we will fight any additional emergency fuel surcharge from the carriers,” the source said. <h3>Long hauls hit with surcharges </h3>CMA CGM this week announced an upward review of its “emergency fuel surcharge” imposed on March 16 that will increase from $150 per TEU to $265/TEU on all long-haul trade lanes. OOCL said it will impose a temporary emergency bunker surcharge (EBS) from March 23 to manage global challenges to fuel availability because the increased costs are “beyond the scope of existing fuel cost recovery and low sulfur adjustment mechanisms.” Cosco Shipping has also announced emergency bunker surcharges on various trades between Europe, South America and Africa, while Mediterranean Shipping Co. introduced a temporary emergency bunker surcharge on March 16 that varies from $30/TEU to $300/TEU depending on the trade lane. Maersk on March 10 announced it would implement an emergency bunker surcharge of $200/TEU on all long hauls “to safeguard cargo integrity and maintain the stability of our network.” “This surcharge covers the impact of fuel availability, cost and mix outside of what is covered in our fossil fuel fee [FFF],” the carrier said in a statement. “This means we are better positioned to have the necessary access to fuel and the ability to move it to necessary locations.” Maersk CCO Karsten Kildahl said the carrier was being forced to take the unprecedented step of <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia as supplies at bunkering hubs dried up</a>. Most of the emergency fuel surcharges will be reviewed by carriers every two weeks, but with the Strait of Hormuz — through which about 20% of global oil and liquefied natural gas supplies move each day — out of bounds to commercial shipping, there is little chance the EBAF will be dropped anytime soon. The speed with which the fuel surcharges were imposed by carriers made it “nigh on impossible” for shippers to recover costs from their own customers or suppliers, Hookham told the Journal of Commerce. “For smaller businesses, that cash flow hit can be fatal when payments are likely to be late due to late or non-delivery of cargo,” he said, noting that the number of surcharges being introduced made it difficult for shippers to track which ones applied to their shipments. “The US got it right when the [Federal Maritime Commission] <a href="https://www.joc.com/article/fmc-says-closely-monitoring-carrier-rate-moves-tied-to-middle-east-war-6184781">required 30-day notice periods</a> before surcharges could take effect on US services,” Hookham said. “The current surcharging behavior will only hasten demands for similar notice periods to become mandatory worldwide.” <h3>Fractured fuel links </h3>While carriers roll out their fuel surcharges to try to recover rising costs, freight tracking platform Vizion believes the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz. In a recent review of bunker surcharges, Vizion noted that average very low sulfur fuel oil (VLSFO) prices of $535 per metric ton in 2025 were down 14.4% year over year, the lowest since 2020, with BAF contributing just 10% to 20% to total freight costs. The launch of US and Israeli strikes on Iran on Feb. 28 triggered a 73% fuel price spike to $939/metric ton in under two weeks, and carriers within days responded with emergency surcharges of $60/TEU to $190/TEU, far faster than standard quarterly BAF adjustments. That shows the traditional BAF fuel-price correlation has weakened as carriers shift to emergency mechanisms to manage extreme volatility, according to Vizion. But Vizion said a deeper trend was emerging with a market fracture in progress as carriers divided into two camps: immediate risk transfer versus contract stability. Carriers such as Maersk initially absorbed the volatility to protect long-term contract relationships, although the carrier has subsequently announced an emergency fuel surcharge. A more aggressive strategy was taken by MSC and CMA CGM, with both adopting a rapid pass-through of fuel spikes to protect their margins immediately. Shippers with locked-in rates will enjoy a short-term cost advantage, but it will be a temporary relief before fuel adjustments hit. Vizion warned that over the next three to six months, shippers can expect aggressive second-quarter BAF corrections to capture the remaining fuel cost delta. Chantal McRoberts, director and head of advisory at Drewry Supply Chain Advisors, said shippers understand they will pay an increased fuel cost in the third quarter as that is part of the BAF policy that enables carriers to recover fuel costs over time. “The concern around the introduction of EBAF is the potential for double recovery,” McRoberts told the Journal of Commerce. “In practice, a shipper may pay an EBAF during Q2 to reflect higher fuel prices and then see its underlying BAF increase in Q3 as the formula catches up with those same Q2 fuel costs. At that point, the EBAF risks becoming revenue‑generating rather than purely cost‑recovering. “This is the dilemma currently facing shippers,” she added. “As a result, those operating under transparent, formula‑based BAF mechanisms are, in many cases, pushing back on EBAF charges.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The speed and severity of the jump in global oil prices amid the war in the Middle East have reignited long-standing suspicions by cargo owners that fuel surcharges levied by ocean carriers are used as a revenue stream rather than a cost recovery mechanism. Container lines defend the fees, ranging from $30 to $300 per TEU depending on the trade lane, arguing that what is widely seen as the most significant energy shock in history has forced them to recoup costs with fees beyond the lagging quarterly bunker adjustment factor (BAF). Bunker fuel prices contribute approximately 15% to 30% of operating costs, depending on the year, according to various container line financial reports. And while the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz, according to a Vizion analysis, shippers nonetheless are retaining a cynical view of the emergency fuel surcharges. “Shipping lines always seem to manage to turn a crisis into a cash-grab,” was the blunt message from James Hookham, director of the Global Shippers Forum. “This apparent ‘double-dipping’ brings the whole sordid practice of surcharging into further disrepute.” Emergency bunker adjustment factors (EBAFs) on top of quarterly fuel price adjustments to recover costs in what is a core operational expense were acceptable for the current contract period ending March 26, said Antonios Rigalos, managing partner of shipper network ShiftX. But going forward, increased bunker costs should be recovered by the quarterly BAF review, he noted. “The BAF reviews executed for Q3 will reflect the higher bunker costs for the previous quarter [March/April/May], and an EBAF plus BAF review would create a double charging of customers,” Rigalos said. “While we understand the situation of carriers and that increased bunker costs have a big impact that somehow needs to be recovered, it needs to be carried out in a fair way and not by double charging BCOs [beneficial cargo owners] and clients.” Several carriers have announced emergency bunker fuel surcharges on top of quarterly fuel price adjustments to recover costs in what is a core operational expense, but the moves have sparked growing concern from shippers. An Asia-Europe shipper based in Hong Kong said he negotiated contracts based on the Shanghai Containerized Freight Index (SCFI) that covers both BAF and EBAF surcharges. “We adjust the bunker fuel surcharge bi-monthly and as far as we are concerned, we will fight any additional emergency fuel surcharge from the carriers,” the source said. Long hauls hit with surcharges CMA CGM this week announced an upward review of its “emergency fuel surcharge” imposed on March 16 that will increase from $150 per TEU to $265/TEU on all long-haul trade lanes. OOCL said it will impose a temporary emergency bunker surcharge (EBS) from March 23 to manage global challenges to fuel availability because the increased costs are “beyond the scope of existing fuel cost recovery and low sulfur adjustment mechanisms.” Cosco Shipping has also announced emergency bunker surcharges on various trades between Europe, South America and Africa, while Mediterranean Shipping Co. introduced a temporary emergency bunker surcharge on March 16 that varies from $30/TEU to $300/TEU depending on the trade lane. Maersk on March 10 announced it would implement an emergency bunker surcharge of $200/TEU on all long hauls “to safeguard cargo integrity and maintain the stability of our network.” “This surcharge covers the impact of fuel availability, cost and mix outside of what is covered in our fossil fuel fee [FFF],” the carrier said in a statement. “This means we are better positioned to have the necessary access to fuel and the ability to move it to necessary locations.” Maersk CCO Karsten Kildahl said the carrier was being forced to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia as supplies at bunkering hubs dried up . Most of the emergency fuel surcharges will be reviewed by carriers every two weeks, but with the Strait of Hormuz — through which about 20% of global oil and liquefied natural gas supplies move each day — out of bounds to commercial shipping, there is little chance the EBAF will be dropped anytime soon. The speed with which the fuel surcharges were imposed by carriers made it “nigh on impossible” for shippers to recover costs from their own customers or suppliers, Hookham told the Journal of Commerce. “For smaller businesses, that cash flow hit can be fatal when payments are likely to be late due to late or non-delivery of cargo,” he said, noting that the number of surcharges being introduced made it difficult for shippers to track which ones applied to their shipments. “The US got it right when the [Federal Maritime Commission] required 30-day notice periods before surcharges could take effect on US services,” Hookham said. “The current surcharging behavior will only hasten demands for similar notice periods to become mandatory worldwide.” Fractured fuel links While carriers roll out their fuel surcharges to try to recover rising costs, freight tracking platform Vizion believes the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz. In a recent review of bunker surcharges, Vizion noted that average very low sulfur fuel oil (VLSFO) prices of $535 per metric ton in 2025 were down 14.4% year over year, the lowest since 2020, with BAF contributing just 10% to 20% to total freight costs. The launch of US and Israeli strikes on Iran on Feb. 28 triggered a 73% fuel price spike to $939/metric ton in under two weeks, and carriers within days responded with emergency surcharges of $60/TEU to $190/TEU, far faster than standard quarterly BAF adjustments. That shows the traditional BAF fuel-price correlation has weakened as carriers shift to emergency mechanisms to manage extreme volatility, according to Vizion. But Vizion said a deeper trend was emerging with a market fracture in progress as carriers divided into two camps: immediate risk transfer versus contract stability. Carriers such as Maersk initially absorbed the volatility to protect long-term contract relationships, although the carrier has subsequently announced an emergency fuel surcharge. A more aggressive strategy was taken by MSC and CMA CGM, with both adopting a rapid pass-through of fuel spikes to protect their margins immediately. Shippers with locked-in rates will enjoy a short-term cost advantage, but it will be a temporary relief before fuel adjustments hit. Vizion warned that over the next three to six months, shippers can expect aggressive second-quarter BAF corrections to capture the remaining fuel cost delta. Chantal McRoberts, director and head of advisory at Drewry Supply Chain Advisors, said shippers understand they will pay an increased fuel cost in the third quarter as that is part of the BAF policy that enables carriers to recover fuel costs over time. “The concern around the introduction of EBAF is the potential for double recovery,” McRoberts told the Journal of Commerce. “In practice, a shipper may pay an EBAF during Q2 to reflect higher fuel prices and then see its underlying BAF increase in Q3 as the formula catches up with those same Q2 fuel costs. At that point, the EBAF risks becoming revenue‑generating rather than purely cost‑recovering. “This is the dilemma currently facing shippers,” she added. “As a result, those operating under transparent, formula‑based BAF mechanisms are, in many cases, pushing back on EBAF charges.” Contact Greg Knowler at greg.knowler@spglobal.com .

War reignites tussle between ocean carriers, cargo owners over fuel surcharges

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<div class="phx-topic abstract-wrapper">The closure of the Strait of Hormuz has cut off a major source of global resin supply, teeing up US production to fill in some of the gap.</div>

The closure of the Strait of Hormuz has cut off a major source of global resin supply, teeing up US production to fill in some of the gap.

<div class="phx-topic">US resin exports have ticked higher as the war in the Middle East shuts off the largest source of global plastics supply. The sustainability of the export demand, though, hinges largely on the war’s duration and the capacity of North American producers to make more resin.Export container bookings for resins hit 6,191 on March 16, according to maritime visibility provider Vizion. That compares with the nearly 3,500 to 4,500 daily bookings typically made throughout all of 2026. The first week of March saw the highest number of export resin bookings, 22,653, since the last week of January. Most bookings occur during weekdays.The bookings come as Iran’s attacks on commercial shipping through the Strait of Hormuz have cut off the Middle East’s resin producers from world markets. The Middle East accounts for 15% of global polyethylene supply, the most widely traded type of resin, according to S&amp;P Global Market Intelligence. The disruption in the Gulf has already sent US polyethylene prices higher. Platts, a sister company of the Journal of Commerce within S&amp;P Global, said Thursday that US prices have tripled since Feb. 25, now hovering between $1,268 and $1,290 per metric ton, depending on the grade. “The sharp price increases reflected a fundamental shift in global supply dynamics, as the US emerged as the primary supplier of polyethylene ... following the closure of the Strait of Hormuz,” Platts said. Asia and Europe are the most affected by the disruption in Middle East resin exports, Shruthi Vangipuram, an analyst with Wood Mackenzie, told the Journal of Commerce. While both regions have their own resin production, they depend on crude oil feedstocks that have also become more expensive. “Southeast Asia, Japan, South Korea and Taiwan have been impacted the most,” she said. “Producers in the region are struggling to secure feedstock and operating rates in these countries have been severely curtailed.” Vangipuram estimates that resin plants in Asia and Europe are running at only about 70% of their production capacity due to higher prices for feedstock crude oil. In contrast, US producers are running at about 90% utilization. She said US producers can delay maintenance to keep production levels high through the second quarter, but that would still not fill the gap in global demand. “We can flex to 95%, 98% utilization, but it depends on which markets it makes sense to sell to,” Vangipuram said. <h3>Pricing arbitrage favors trans-Atlantic</h3>Export capacity from the US to Asia is ample, according to an executive of a third-party logistics provider, who estimated that backhaul utilization for most ocean carriers hovers near 50%. Spot rates for dry freight to Asia from the US Gulf, which dominates resin exports, are currently running between $500 and $700 for a standard-sized container, while shipping a 20-foot container used primarily for resins runs about 80% of that rate. Trans-Atlantic rates have also been stable, hovering near $1,100 for a 20-foot container from the US Gulf to Northern Europe, according to Xeneta. The rate for shipping a 20-foot container out of the Southeast Atlantic ports has moved higher since the start of the year, going from just over $700 to $757 this week, Xeneta said. <a href="https://www.joc.com/article/ocean-alliance-one-rework-trans-atlantic-services-remove-ships-6169751">Carriers are removing ships and port calls from trans-Atlantic services</a>, tightening up some of the capacity in that market. Outbound US cargo does not face any significant delays with bookings available about two weeks out. The real risk for shippers will be in fuel surcharges that are being applied on global trades due to the Middle East war, as well as a potential general rate increase in April. Outside of freight rates and vessel space, Vangipuram said the real driver for US exports will be the direction of local pricing. Asian prices will still need to move higher to attract more US imports. With a four- to six-week lead time for imports, Asian buyers will need to see the conflict drag out before buying from the US. Europe, which is the second-biggest market for US resins after South America, has seen its benchmark polyethylene prices rise by one-third since the end of February. Vangipuram said Europe would likely be the first market to see additional US imports thanks to the much shorter voyage time and the sharper price move. “The arbitrage works out better in the Atlantic than to Asia because of freight rates and shorter shipping times,” Vangipuram said. “We may not see the volume from the US make it into those markets that would appear to need it most.” Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US resin exports have ticked higher as the war in the Middle East shuts off the largest source of global plastics supply. The sustainability of the export demand, though, hinges largely on the war’s duration and the capacity of North American producers to make more resin. Export container bookings for resins hit 6,191 on March 16, according to maritime visibility provider Vizion. That compares with the nearly 3,500 to 4,500 daily bookings typically made throughout all of 2026. The first week of March saw the highest number of export resin bookings, 22,653, since the last week of January. Most bookings occur during weekdays. The bookings come as Iran’s attacks on commercial shipping through the Strait of Hormuz have cut off the Middle East’s resin producers from world markets. The Middle East accounts for 15% of global polyethylene supply, the most widely traded type of resin, according to S&P Global Market Intelligence. The disruption in the Gulf has already sent US polyethylene prices higher. Platts, a sister company of the Journal of Commerce within S&P Global, said Thursday that US prices have tripled since Feb. 25, now hovering between $1,268 and $1,290 per metric ton, depending on the grade. “The sharp price increases reflected a fundamental shift in global supply dynamics, as the US emerged as the primary supplier of polyethylene ... following the closure of the Strait of Hormuz,” Platts said. Asia and Europe are the most affected by the disruption in Middle East resin exports, Shruthi Vangipuram, an analyst with Wood Mackenzie, told the Journal of Commerce. While both regions have their own resin production, they depend on crude oil feedstocks that have also become more expensive. “Southeast Asia, Japan, South Korea and Taiwan have been impacted the most,” she said. “Producers in the region are struggling to secure feedstock and operating rates in these countries have been severely curtailed.” Vangipuram estimates that resin plants in Asia and Europe are running at only about 70% of their production capacity due to higher prices for feedstock crude oil. In contrast, US producers are running at about 90% utilization. She said US producers can delay maintenance to keep production levels high through the second quarter, but that would still not fill the gap in global demand. “We can flex to 95%, 98% utilization, but it depends on which markets it makes sense to sell to,” Vangipuram said. Pricing arbitrage favors trans-Atlantic Export capacity from the US to Asia is ample, according to an executive of a third-party logistics provider, who estimated that backhaul utilization for most ocean carriers hovers near 50%. Spot rates for dry freight to Asia from the US Gulf, which dominates resin exports, are currently running between $500 and $700 for a standard-sized container, while shipping a 20-foot container used primarily for resins runs about 80% of that rate. Trans-Atlantic rates have also been stable, hovering near $1,100 for a 20-foot container from the US Gulf to Northern Europe, according to Xeneta. The rate for shipping a 20-foot container out of the Southeast Atlantic ports has moved higher since the start of the year, going from just over $700 to $757 this week, Xeneta said. Carriers are removing ships and port calls from trans-Atlantic services , tightening up some of the capacity in that market. Outbound US cargo does not face any significant delays with bookings available about two weeks out. The real risk for shippers will be in fuel surcharges that are being applied on global trades due to the Middle East war, as well as a potential general rate increase in April. Outside of freight rates and vessel space, Vangipuram said the real driver for US exports will be the direction of local pricing. Asian prices will still need to move higher to attract more US imports. With a four- to six-week lead time for imports, Asian buyers will need to see the conflict drag out before buying from the US. Europe, which is the second-biggest market for US resins after South America, has seen its benchmark polyethylene prices rise by one-third since the end of February. Vangipuram said Europe would likely be the first market to see additional US imports thanks to the much shorter voyage time and the sharper price move. “The arbitrage works out better in the Atlantic than to Asia because of freight rates and shorter shipping times,” Vangipuram said. “We may not see the volume from the US make it into those markets that would appear to need it most.” Contact Michael Angell at michael.angell@spglobal.com .

Trans-Atlantic

US resin shippers look to tap new customers amid Iran war

<div class="phx-topic abstract-wrapper">China’s largest shipping company commented on current geopolitical events as it released its 2025 financial results, which saw net profits plummet 38%.</div>

China’s largest shipping company commented on current geopolitical events as it released its 2025 financial results, which saw net profits plummet 38%.

<div class="phx-topic">Geopolitical tensions, heightened by war in the Middle East, will accelerate the pace of regionalization in global trade and nearshoring this year while “amplifying the volatility of global supply chains,” Cosco Shipping said Thursday. Momentum for global economic growth is weak, and the external environment for the container shipping industry remains severe, the liner shipping and terminals group said in its 2025 results statement filed with the Shanghai stock exchange. “Looking ahead to 2026, the complexity and uncertainty of the container shipping market will further intensify,” Cosco said. More favorably for global trade, Cosco said emerging economies are showing strong growth potential, cooperation among developing countries is warming and tariff uncertainties have temporarily eased. Cosco specifically highlighted Southeast Asia and Latin America, where demand is strengthening, buoyed by the widening implementation of free trade agreements such as the Regional Comprehensive Economic Partnership in Asia. China’s biggest shipping company said the imbalance between cargo demand and fleet growth will also ease this year, with cargo volumes rising by a “low to moderate 2.5%” compared with 3.8% fleet growth, “the lowest in the past three years.” While this increase in capacity is likely to put downward pressure on freight rates, the impact could be mitigated by port congestion caused by the realignment of carrier alliance networks and the war in the Middle East, the carrier said. <h3>Net profit down 38% in 2025 </h3>Cosco saw mixed results last year, largely reflected by volatile US tariff policy, the deteriorating global economy and the crash in freight rates in the fourth quarter. Overall, net profit fell 38% to $4.3 billion last year while operating revenues slipped 6% to $30.7 billion. Cosco said net profit in the fourth quarter was the lowest of all four quarters, falling 60% to $532 million. The carrier said the worst-performing trades last year were the Asia-Europe and Mediterranean services, which saw an 18% decline in total revenues to $5.3 billion. Revenue from trans-Pacific services fell 17% to $7.7 billion, while revenue from intra-Asia routes was unchanged at $7.6 billion. Cosco saw a better performance from its terminals business, with revenue climbing 11% to $1.7 billion last year, supported by a 6% increase in total throughput to 153 million TEUs. Cosco said it would focus the development of its terminal business on emerging markets and trade lanes to reflect the growing trade between Southeast Asia and Latin America and the increasing importance of ports in areas such as North Africa and India. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Geopolitical tensions, heightened by war in the Middle East, will accelerate the pace of regionalization in global trade and nearshoring this year while “amplifying the volatility of global supply chains,” Cosco Shipping said Thursday. Momentum for global economic growth is weak, and the external environment for the container shipping industry remains severe, the liner shipping and terminals group said in its 2025 results statement filed with the Shanghai stock exchange. “Looking ahead to 2026, the complexity and uncertainty of the container shipping market will further intensify,” Cosco said. More favorably for global trade, Cosco said emerging economies are showing strong growth potential, cooperation among developing countries is warming and tariff uncertainties have temporarily eased. Cosco specifically highlighted Southeast Asia and Latin America, where demand is strengthening, buoyed by the widening implementation of free trade agreements such as the Regional Comprehensive Economic Partnership in Asia. China’s biggest shipping company said the imbalance between cargo demand and fleet growth will also ease this year, with cargo volumes rising by a “low to moderate 2.5%” compared with 3.8% fleet growth, “the lowest in the past three years.” While this increase in capacity is likely to put downward pressure on freight rates, the impact could be mitigated by port congestion caused by the realignment of carrier alliance networks and the war in the Middle East, the carrier said. Net profit down 38% in 2025 Cosco saw mixed results last year, largely reflected by volatile US tariff policy, the deteriorating global economy and the crash in freight rates in the fourth quarter. Overall, net profit fell 38% to $4.3 billion last year while operating revenues slipped 6% to $30.7 billion. Cosco said net profit in the fourth quarter was the lowest of all four quarters, falling 60% to $532 million. The carrier said the worst-performing trades last year were the Asia-Europe and Mediterranean services, which saw an 18% decline in total revenues to $5.3 billion. Revenue from trans-Pacific services fell 17% to $7.7 billion, while revenue from intra-Asia routes was unchanged at $7.6 billion. Cosco saw a better performance from its terminals business, with revenue climbing 11% to $1.7 billion last year, supported by a 6% increase in total throughput to 153 million TEUs. Cosco said it would focus the development of its terminal business on emerging markets and trade lanes to reflect the growing trade between Southeast Asia and Latin America and the increasing importance of ports in areas such as North Africa and India. Contact Keith Wallis at keithwallis@hotmail.com .

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