<div class="phx-topic abstract-wrapper">The port’s Cast and Racine terminals remained open to vessels during the five-month strike by clerical staff, which began last September.</div>

The port’s Cast and Racine terminals remained open to vessels during the five-month strike by clerical staff, which began last September.

Feature image

<div class="phx-topic">Montreal Gateway Terminals (MGT) has signed a new collective bargaining agreement with its unionized clerical workers, ending a five-month strike at the port’s largest terminal operator. MGT on Monday confirmed in a statement to the Journal of Commerce that it signed a new contract with Local 4317 of the Canadian Union of Public Employees (CUPE), without offering further details about the agreement. CUPE could not be reached for comment. Last September, 32 transportation agents from Local 4317 filed a strike notice with MGT, which owns the Cast and Racine terminals. The previous four-year contract with the local expired at the end of 2024. An update from Kuehne + Nagel said the new contract would cover a term of eight years and that a “smooth transition to regular operations, including the gradual reinstatement of standard 17-hour truck gate service,” was expected. CUPE last year said Local 4317 went on strike after mediation and conciliation talks had failed. A source familiar with the matter said the clerical jobs were handled by management during the strike, which allowed vessel operations to continue. CUPE said in a statement last year that the union and MGT failed to come to terms on “minimum operating requirements” under a new contract. The previous collective bargaining agreement called for MGT to have a certain number of transportation agents at the terminals, even during holidays and weekends and even if no vessel operations occurred. It was not clear what staffing levels MGT will be required to maintain under the new contract. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Montreal Gateway Terminals (MGT) has signed a new collective bargaining agreement with its unionized clerical workers, ending a five-month strike at the port’s largest terminal operator. MGT on Monday confirmed in a statement to the Journal of Commerce that it signed a new contract with Local 4317 of the Canadian Union of Public Employees (CUPE), without offering further details about the agreement. CUPE could not be reached for comment. Last September, 32 transportation agents from Local 4317 filed a strike notice with MGT, which owns the Cast and Racine terminals. The previous four-year contract with the local expired at the end of 2024. An update from Kuehne + Nagel said the new contract would cover a term of eight years and that a “smooth transition to regular operations, including the gradual reinstatement of standard 17-hour truck gate service,” was expected. CUPE last year said Local 4317 went on strike after mediation and conciliation talks had failed. A source familiar with the matter said the clerical jobs were handled by management during the strike, which allowed vessel operations to continue. CUPE said in a statement last year that the union and MGT failed to come to terms on “minimum operating requirements” under a new contract. The previous collective bargaining agreement called for MGT to have a certain number of transportation agents at the terminals, even during holidays and weekends and even if no vessel operations occurred. It was not clear what staffing levels MGT will be required to maintain under the new contract. Contact Michael Angell at michael.angell@spglobal.com .

Port News

North American ports

Longshore labor

Maritime

Montreal terminal operator signs deal with striking office workers

<div class="phx-topic abstract-wrapper">Under the US Customs and Border Protection’s proposal, shippers will not have to sue the administration for refunds of the IEEPA tariffs and will receive the monies owed as a single payment.</div>

Under the US Customs and Border Protection’s proposal, shippers will not have to sue the administration for refunds of the IEEPA tariffs and will receive the monies owed as a single payment.

<div class="phx-topic">US Customs and Border Protection (CBP) will need 45 days to set up the process for importers to begin receiving refunds for tariffs charged under the International Emergency Economic Powers Act (IEEPA). But those shippers will not have to sue the administration for relief, according to a declaration filed with US Court of International Trade (CIT). “This new process will require minimal submission from importers,” CBP said in the filing, made Friday. “It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations and allowing for a review period for CBP to resolve any discrepancies with the importer and to confirm no other outstanding enforcement issues or no revenue is owed.” CIT earlier in the week ordered CBP to immediately refund the estimated $166 billion in IEEPA tariffs paid by shippers before the US Supreme Court <a href="https://www.joc.com/article/us-supreme-court-rules-against-trump-in-critical-ieepa-tariff-case-6173568">ruled President Donald Trump did not have the authority to impose them</a>. Refund payments will also include interest, which would cost the US government an additional $23 million for each day that passes prior to payment, according to an estimate from the CATO Institute. However, because “existing administrative procedures and technology are not well-suited to a task of this scale,” it would have taken more than 4 million hours for agency workers to manually examine shipment documentation to determine refund amounts, CBP said in the filing. Crucially, the process being set up by CBP “would spare the hundreds of thousands of small businesses who are owed refunds from having to litigate to obtain them,” Neil Bradley, executive vice president and chief policy officer of the US Chamber of Commerce, said in a statement Friday. As of March 4, more than 2,000 importers had already filed lawsuits with CIT seeking refunds since the Feb. 20 Supreme Court ruling. Shippers would receive the refund as a single payment, regardless of how many shipments or different cargoes they imported, according to the filing. CBP estimates there are more than 330,000 importers eligible for refunds on more than 53 million customs entries. Contact Benjamin Meyer at <a href="mailto:benjamin.meyer@spglobal.com">benjamin.meyer@spglobal.com</a>.</div>

US Customs and Border Protection (CBP) will need 45 days to set up the process for importers to begin receiving refunds for tariffs charged under the International Emergency Economic Powers Act (IEEPA). But those shippers will not have to sue the administration for relief, according to a declaration filed with US Court of International Trade (CIT). “This new process will require minimal submission from importers,” CBP said in the filing, made Friday. “It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations and allowing for a review period for CBP to resolve any discrepancies with the importer and to confirm no other outstanding enforcement issues or no revenue is owed.” CIT earlier in the week ordered CBP to immediately refund the estimated $166 billion in IEEPA tariffs paid by shippers before the US Supreme Court ruled President Donald Trump did not have the authority to impose them . Refund payments will also include interest, which would cost the US government an additional $23 million for each day that passes prior to payment, according to an estimate from the CATO Institute. However, because “existing administrative procedures and technology are not well-suited to a task of this scale,” it would have taken more than 4 million hours for agency workers to manually examine shipment documentation to determine refund amounts, CBP said in the filing. Crucially, the process being set up by CBP “would spare the hundreds of thousands of small businesses who are owed refunds from having to litigate to obtain them,” Neil Bradley, executive vice president and chief policy officer of the US Chamber of Commerce, said in a statement Friday. As of March 4, more than 2,000 importers had already filed lawsuits with CIT seeking refunds since the Feb. 20 Supreme Court ruling. Shippers would receive the refund as a single payment, regardless of how many shipments or different cargoes they imported, according to the filing. CBP estimates there are more than 330,000 importers eligible for refunds on more than 53 million customs entries. Contact Benjamin Meyer at benjamin.meyer@spglobal.com .

Transport, Trade and Regulation News

Supply chain

Container Shipping News

CBP lays out initial tariff refund plan that requires ‘minimal’ work from importers

<div class="phx-topic abstract-wrapper">Data generated within logistics software vendors is part of a web of information that helps shippers weigh service levels and inventory carrying costs against rate levels. </div>

Data generated within logistics software vendors is part of a web of information that helps shippers weigh service levels and inventory carrying costs against rate levels.

<div class="phx-topic">Importers beset by the imposition of now-overturned US tariffs are being asked by their companies to deliver supply chain cost savings that might offset the burden of those tariffs, and technology providers are lining up to help. That help can come in many forms, but principally in helping shippers benchmark ocean freight rate savings versus performance, weighing rate levels versus inventory carrying costs, and in helping establish capacity for new sourcing regions. Fabio Brocca, chief product officer at freight rate benchmarking analytics provider Xeneta, noted that the difference in transit time between the fastest and slowest carriers moving from China to the US West Coast is 13 days, but the price difference between the highest and lowest cost carrier is 10%. “So is 10% of your cost worth 13 days of transit time?,” Brocca said at the Journal of Commerce’s TPM26 conference in Long Beach last week. “That’s a decision for you to make. It’s impossible to predict what will happen next. The bigger problem is lack of transparency in data. You make procurement decisions that cost you millions of dollars.” Speaking during a conference session about how technology and data can facilitate cost cuts in international transportation, Brocca said shippers need tools that help them understand what a good short-term and long-term rate is, and what service levels align to those rates across hundreds of lanes, and often with carriers they’ve never worked with before. “We’ve seen shippers use our platform by picking up a phone and renegotiating a lane where [their price is outside the market rate],” he said. “But they also use it to see what the difference is between service level and cost.” <h3>Increased volatility </h3>The impetus for incorporating technology — whether rate benchmarking, visibility, or route planning and execution — has increased after years of intense volatility that have now become the norm, said Vizion CEO Kyle Henderson. “You have little gray swanlets popping up every day,” Henderson said during the TPM26 session, noting that highly regional or local impacts to supply chains are intermingled with large-scale events that impact all or most supply chains. “You can see them now because you have visibility and data, but there are more fires to deal with because you can see them, and they are all of different size and intensity,” he said. “It’s changed the mindset of our customers who need to be designing not only with reliability in mind but also with operations that can be responsive and with data backing up what they decided to do.” Henderson asserted that volatility is increasing exponentially, beyond just a function of more freight volume being moved, and that shippers who focus solely on reducing transportation costs are doomed to fall victim to an environment that is getting “more complex and less secure.” “We’ve all been living in a predictability bubble,” he said. “We’ve all been focused on reducing costs, but if you had to make a bet, would you choose the world is going to get less complex and more safe?” As example, Henderson noted the case of an apparel customer of Vizion, which provides visibility and business intelligence to shippers and third-party logistics providers, The apparel shipper wanted to do a performance evaluation of carriers it currently works with alongside those it hasn’t used before. The company ended up choosing a carrier that cut out two weeks in its total delivery time. “For this shipper, the rate wasn’t really the key consideration, because it was a comparable rate, but the inventory carrying cost was far more important,” Henderson said. He added that it can be tough for people in operational or procurement roles at importers to see the bigger picture of their cost structure “where they’re saving on their individual line item, but that might spike someone else’s line item.” <h3>Holistic view </h3>Martin Hubert, CEO of multimodal execution and planning software FreightGate, said companies with a formal head of supply chain are often better at weighing the various costs of transportation and sourcing than those where operations and procurement report into a finance department. Hubert said importers need to think holistically about the challenges they are currently facing, connecting routing decisions to sourcing decisions to figure out total landed cost but retaining flexibility after initial plans have been made. “What would happen if I source from this country or this country and then reevaluate it right before you make the booking, so you don’t get blindsided by some recent event or new tariff somebody invented?” he told TPM26. “The ability to have desk-level people being able to evaluate routing decisions is very important to not leaving money on the table.” While solutions providers are understandably focused on where artificial intelligence fits into the cost saving equation, Brocca said it has to be used in tandem with people and the knowledge they have that can’t be accessed by an AI model. “Our job as solutions providers is to simplify our customers’ lives,” he said. “AI is great at helping you prioritize certain initiatives and quantify this thing here versus this thing here. But the person ultimately needs to be making the decision.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Importers beset by the imposition of now-overturned US tariffs are being asked by their companies to deliver supply chain cost savings that might offset the burden of those tariffs, and technology providers are lining up to help. That help can come in many forms, but principally in helping shippers benchmark ocean freight rate savings versus performance, weighing rate levels versus inventory carrying costs, and in helping establish capacity for new sourcing regions. Fabio Brocca, chief product officer at freight rate benchmarking analytics provider Xeneta, noted that the difference in transit time between the fastest and slowest carriers moving from China to the US West Coast is 13 days, but the price difference between the highest and lowest cost carrier is 10%. “So is 10% of your cost worth 13 days of transit time?,” Brocca said at the Journal of Commerce’s TPM26 conference in Long Beach last week. “That’s a decision for you to make. It’s impossible to predict what will happen next. The bigger problem is lack of transparency in data. You make procurement decisions that cost you millions of dollars.” Speaking during a conference session about how technology and data can facilitate cost cuts in international transportation, Brocca said shippers need tools that help them understand what a good short-term and long-term rate is, and what service levels align to those rates across hundreds of lanes, and often with carriers they’ve never worked with before. “We’ve seen shippers use our platform by picking up a phone and renegotiating a lane where [their price is outside the market rate],” he said. “But they also use it to see what the difference is between service level and cost.” Increased volatility The impetus for incorporating technology — whether rate benchmarking, visibility, or route planning and execution — has increased after years of intense volatility that have now become the norm, said Vizion CEO Kyle Henderson. “You have little gray swanlets popping up every day,” Henderson said during the TPM26 session, noting that highly regional or local impacts to supply chains are intermingled with large-scale events that impact all or most supply chains. “You can see them now because you have visibility and data, but there are more fires to deal with because you can see them, and they are all of different size and intensity,” he said. “It’s changed the mindset of our customers who need to be designing not only with reliability in mind but also with operations that can be responsive and with data backing up what they decided to do.” Henderson asserted that volatility is increasing exponentially, beyond just a function of more freight volume being moved, and that shippers who focus solely on reducing transportation costs are doomed to fall victim to an environment that is getting “more complex and less secure.” “We’ve all been living in a predictability bubble,” he said. “We’ve all been focused on reducing costs, but if you had to make a bet, would you choose the world is going to get less complex and more safe?” As example, Henderson noted the case of an apparel customer of Vizion, which provides visibility and business intelligence to shippers and third-party logistics providers, The apparel shipper wanted to do a performance evaluation of carriers it currently works with alongside those it hasn’t used before. The company ended up choosing a carrier that cut out two weeks in its total delivery time. “For this shipper, the rate wasn’t really the key consideration, because it was a comparable rate, but the inventory carrying cost was far more important,” Henderson said. He added that it can be tough for people in operational or procurement roles at importers to see the bigger picture of their cost structure “where they’re saving on their individual line item, but that might spike someone else’s line item.” Holistic view Martin Hubert, CEO of multimodal execution and planning software FreightGate, said companies with a formal head of supply chain are often better at weighing the various costs of transportation and sourcing than those where operations and procurement report into a finance department. Hubert said importers need to think holistically about the challenges they are currently facing, connecting routing decisions to sourcing decisions to figure out total landed cost but retaining flexibility after initial plans have been made. “What would happen if I source from this country or this country and then reevaluate it right before you make the booking, so you don’t get blindsided by some recent event or new tariff somebody invented?” he told TPM26. “The ability to have desk-level people being able to evaluate routing decisions is very important to not leaving money on the table.” While solutions providers are understandably focused on where artificial intelligence fits into the cost saving equation, Brocca said it has to be used in tandem with people and the knowledge they have that can’t be accessed by an AI model. “Our job as solutions providers is to simplify our customers’ lives,” he said. “AI is great at helping you prioritize certain initiatives and quantify this thing here versus this thing here. But the person ultimately needs to be making the decision.” Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Tech vendors ready themselves to help importers wage cost reduction war

<div class="phx-topic abstract-wrapper">The Israel-based carrier said the volume declines were led by its cross-Suez and trans-Atlantic services, which dropped 13% and 10%, respectively, from 2024.</div>

The Israel-based carrier said the volume declines were led by its cross-Suez and trans-Atlantic services, which dropped 13% and 10%, respectively, from 2024.

<div class="phx-topic">Zim Integrated Shipping Services saw its container volumes in 2025 drop for the first time in two years, but managed to beat Wall Street estimates for its fourth-quarter earnings. The Israel-based ocean carrier said Monday it ended 2025 handling total volumes of 3.6 million TEUs, a 2.3% year-over-year drop and its first full-year decline since 2023. The declines were largely led by Zim’s cross-Suez and trans-Atlantic services, which dropped 13% and 10%, respectively, from 2024. Trans-Pacific business, which accounts for 43% of Zim’s volumes, fell 1.6%. The company’s intra-Asia and Latin America business were the standouts in 2025, posting gains of 4% and 2%, respectively. The average freight rate Zim saw during the fourth quarter was $1,333 per FEU, down 29% from a year earlier. Despite the drop, Zim reported fourth-quarter earnings of 32 cents per share, well above the consensus analyst estimate of a 52-cents-per-share loss, according to S&amp;P Global Capital IQ, a sister company of the Journal of Commerce. Fourth-quarter revenue of $1.48 billion came in about $50 million below analysts’ estimates. Zim, <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">which is being acquired by Hapag-Lloyd</a>, said it would not provide guidance for 2026 nor host a conference call due to the pending acquisition. But Chief Executive Eli Glickman said in the carrier’s earnings statement that Zim expects “continued pressure on freight rates.” During 2025, Zim signed long-term charter agreements for 36 newbuild container ships with capacities between 3,000 TEUs and 12,000 TEUs. The newbuilds will provide a total of 250,000 TEUs in additional capacity, with the first deliveries expected in the second half of 2026. The carrier said it ended 2025 with a total of 115 container ships of 707,000 TEUs in total capacity. It expects 13 of those ships to roll off their charters this year, and another 17 in 2027. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Zim Integrated Shipping Services saw its container volumes in 2025 drop for the first time in two years, but managed to beat Wall Street estimates for its fourth-quarter earnings. The Israel-based ocean carrier said Monday it ended 2025 handling total volumes of 3.6 million TEUs, a 2.3% year-over-year drop and its first full-year decline since 2023. The declines were largely led by Zim’s cross-Suez and trans-Atlantic services, which dropped 13% and 10%, respectively, from 2024. Trans-Pacific business, which accounts for 43% of Zim’s volumes, fell 1.6%. The company’s intra-Asia and Latin America business were the standouts in 2025, posting gains of 4% and 2%, respectively. The average freight rate Zim saw during the fourth quarter was $1,333 per FEU, down 29% from a year earlier. Despite the drop, Zim reported fourth-quarter earnings of 32 cents per share, well above the consensus analyst estimate of a 52-cents-per-share loss, according to S&P Global Capital IQ, a sister company of the Journal of Commerce. Fourth-quarter revenue of $1.48 billion came in about $50 million below analysts’ estimates. Zim, which is being acquired by Hapag-Lloyd , said it would not provide guidance for 2026 nor host a conference call due to the pending acquisition. But Chief Executive Eli Glickman said in the carrier’s earnings statement that Zim expects “continued pressure on freight rates.” During 2025, Zim signed long-term charter agreements for 36 newbuild container ships with capacities between 3,000 TEUs and 12,000 TEUs. The newbuilds will provide a total of 250,000 TEUs in additional capacity, with the first deliveries expected in the second half of 2026. The carrier said it ended 2025 with a total of 115 container ships of 707,000 TEUs in total capacity. It expects 13 of those ships to roll off their charters this year, and another 17 in 2027. Contact Michael Angell at michael.angell@spglobal.com .

Container lines

Zim’s fourth-quarter earnings beat estimates despite drop in rates, volume

<div class="phx-topic abstract-wrapper">Hutchison-owned Panama Ports Company had its 28-year concession to manage and operate the Balboa and Cristóbal terminals nullified by Panama’s Supreme Court on Jan 29. </div>

Hutchison-owned Panama Ports Company had its 28-year concession to manage and operate the Balboa and Cristóbal terminals nullified by Panama’s Supreme Court on Jan 29.

<div class="phx-topic">Panama Ports Company (PPC) is seeking more than $2 billion in damages in its international arbitration claim against Panama after the government canceled its long-held operating concession and seized control of the Balboa and Cristóbal marine terminals last month. PPC, a subsidiary of Hong Kong-headquartered conglomerate CK Hutchison Holdings, said it is also taking legal action to recover property, equipment and documents removed when <a href="https://www.joc.com/article/maersk-msc-units-begin-interim-management-of-panama-canal-terminals-6175167">the government took control of the terminals on Feb. 23</a>. Action is being taken against both the Panamanian government and the Panama Maritime Authority (PMA). The details of the arbitration claim were announced in a PPC statement Friday relayed by Hutchison, which has a 90% stake in PPC. The Panama company had its 28-year concession to manage and operate the Balboa and Cristóbal terminals nullified by Panama’s Supreme Court on Jan 29. <h3>Operations returning to normal </h3>Separately, the PMA confirmed operations at the terminals are returning to normal after Maersk’s APM Terminals and Mediterranean Shipping Co.’s Terminal Investments Limited (TiL) were appointed temporary operators of Balboa and Cristóbal, respectively. Both assignments are due to last 18 months. Minister for Canal Affairs José Ramón Icaza said new operating systems were online and being tested, while Balboa is accepting export cargo, empty containers and rolling stock. Icaza said about 526 former PPC staff out of a total workforce of 1,200 at both terminals had been replaced, over 200 at Balboa and 326 at Cristóbal. The government had also reached new agreements with two out of four labor unions at the ports. Hutchison’s operation of the two ports through PPC had been the focus of a highly charged geopolitical spat between the Trump administration and China for more than a year. That was highlighted again during President Donald Trump’s Shield of Americas summit on Saturday in Miami with 12 Latin American leaders, including Panama President José Raúl Mulino. Trump said the US would “not allow hostile foreign influence to establish itself in this hemisphere, and that includes the Panama Canal.” Closer commercial relationships with US companies were highlighted in a separate meeting Saturday between Mulino and US Secretary of State Marco Rubio. “US companies will begin to have greater participation in bidding processes in Panama in this new era of relations with the United States,” Rubio said, without specifically mentioning the awarding of new terminal concessions for Balboa and Cristóbal. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Panama Ports Company (PPC) is seeking more than $2 billion in damages in its international arbitration claim against Panama after the government canceled its long-held operating concession and seized control of the Balboa and Cristóbal marine terminals last month. PPC, a subsidiary of Hong Kong-headquartered conglomerate CK Hutchison Holdings, said it is also taking legal action to recover property, equipment and documents removed when the government took control of the terminals on Feb. 23 . Action is being taken against both the Panamanian government and the Panama Maritime Authority (PMA). The details of the arbitration claim were announced in a PPC statement Friday relayed by Hutchison, which has a 90% stake in PPC. The Panama company had its 28-year concession to manage and operate the Balboa and Cristóbal terminals nullified by Panama’s Supreme Court on Jan 29. Operations returning to normal Separately, the PMA confirmed operations at the terminals are returning to normal after Maersk’s APM Terminals and Mediterranean Shipping Co.’s Terminal Investments Limited (TiL) were appointed temporary operators of Balboa and Cristóbal, respectively. Both assignments are due to last 18 months. Minister for Canal Affairs José Ramón Icaza said new operating systems were online and being tested, while Balboa is accepting export cargo, empty containers and rolling stock. Icaza said about 526 former PPC staff out of a total workforce of 1,200 at both terminals had been replaced, over 200 at Balboa and 326 at Cristóbal. The government had also reached new agreements with two out of four labor unions at the ports. Hutchison’s operation of the two ports through PPC had been the focus of a highly charged geopolitical spat between the Trump administration and China for more than a year. That was highlighted again during President Donald Trump’s Shield of Americas summit on Saturday in Miami with 12 Latin American leaders, including Panama President José Raúl Mulino. Trump said the US would “not allow hostile foreign influence to establish itself in this hemisphere, and that includes the Panama Canal.” Closer commercial relationships with US companies were highlighted in a separate meeting Saturday between Mulino and US Secretary of State Marco Rubio. “US companies will begin to have greater participation in bidding processes in Panama in this new era of relations with the United States,” Rubio said, without specifically mentioning the awarding of new terminal concessions for Balboa and Cristóbal. Contact Keith Wallis at keithwallis@hotmail.com .

International ports

Hutchison seeks $2 billion in damages from Panama after terminal deal canceled

<div class="phx-topic abstract-wrapper">The newly delivered 13,000-TEU CMA CGM Osmium was refueled with 3,643 tons of biomethanol over the weekend as part of an alternative fuel partnership with the world’s largest container port.</div>

The newly delivered 13,000-TEU CMA CGM Osmium was refueled with 3,643 tons of biomethanol over the weekend as part of an alternative fuel partnership with the world’s largest container port.

<div class="phx-topic">CMA CGM completed its first ever biomethanol bunkering operation over the weekend at Shanghai’s Yangshan terminal, setting a record for the largest biomethanol bunkering move at a Chinese port. The newly delivered 13,000-TEU CMA CGM Osmium was refueled with 3,643 tons of biomethanol from supplier Shanghai Electric Group, CMA CGM said in a statement Monday. “The completion of China’s largest single biomethanol bunkering operation with CMA CGM marks a significant leap in Shanghai Port’s biomethanol bunkering capacity,” Luo Wenbin, managing director of SIPG Energy, part of the Shanghai International Port Group (SIPG), said in the statement. The Marseilles-based carrier is preparing to operate about 200 dual-fuel container vessels by 2031, all capable of running on low-carbon energy such as bio- and e-liquified natural gas as well as bio- and e-methanol. Farid Trad, vice president of group energy transition at CMA CGM, said the bunkering of Osmium marked “a defining moment in [the carrier’s] decarbonization journey.” “Together with SIPG Energy, we are demonstrating that cleaner, low-carbon shipping is no longer an aspiration, but a reality,” Trad said in the statement. Shanghai Port is developing its position as a global sustainable energy bunkering hub, and CMA CGM’s long-standing collaboration with partners SIPG Energy and Shanghai Electric Group include a long-term LNG bunkering partnership with SIPG and the framework agreement on long-term biomethanol supply. Biomethanol is a low-carbon fuel produced from renewable or waste-based biomass that can offer lifecycle greenhouse gas emission reductions of more than 65% compared with conventional marine fuels. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="2251ddd4-2c3e-4c58-a3f0-f1cd0ba3b088"></dynamic-object></div>Despite uncertainties caused by the International Maritime Organization’s decision last October <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">to delay the adoption of its net-zero framework</a> for a year, the container shipping industry has continued to invest heavily in dual-fuel vessels and bunkering infrastructure. Data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global, shows that 6.44 million TEUs of capacity for LNG dual-fuel ships are currently on order, compared with 1.6 million TEUs of methanol-capable vessels. Industry coalition SEA-LNG estimated in a recent report that investment in LNG dual-fuel vessels and associated fuel supply chains over the past 10 years has amounted to more than $150 billion. A large portion of that is going into the supply side, with fuel availability at scale crucial for the global shipping industry. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

CMA CGM completed its first ever biomethanol bunkering operation over the weekend at Shanghai’s Yangshan terminal, setting a record for the largest biomethanol bunkering move at a Chinese port. The newly delivered 13,000-TEU CMA CGM Osmium was refueled with 3,643 tons of biomethanol from supplier Shanghai Electric Group, CMA CGM said in a statement Monday. “The completion of China’s largest single biomethanol bunkering operation with CMA CGM marks a significant leap in Shanghai Port’s biomethanol bunkering capacity,” Luo Wenbin, managing director of SIPG Energy, part of the Shanghai International Port Group (SIPG), said in the statement. The Marseilles-based carrier is preparing to operate about 200 dual-fuel container vessels by 2031, all capable of running on low-carbon energy such as bio- and e-liquified natural gas as well as bio- and e-methanol. Farid Trad, vice president of group energy transition at CMA CGM, said the bunkering of Osmium marked “a defining moment in [the carrier’s] decarbonization journey.” “Together with SIPG Energy, we are demonstrating that cleaner, low-carbon shipping is no longer an aspiration, but a reality,” Trad said in the statement. Shanghai Port is developing its position as a global sustainable energy bunkering hub, and CMA CGM’s long-standing collaboration with partners SIPG Energy and Shanghai Electric Group include a long-term LNG bunkering partnership with SIPG and the framework agreement on long-term biomethanol supply. Biomethanol is a low-carbon fuel produced from renewable or waste-based biomass that can offer lifecycle greenhouse gas emission reductions of more than 65% compared with conventional marine fuels. Despite uncertainties caused by the International Maritime Organization’s decision last October to delay the adoption of its net-zero framework for a year, the container shipping industry has continued to invest heavily in dual-fuel vessels and bunkering infrastructure. Data from Sea-web, a sister company of the Journal of Commerce within S&P Global, shows that 6.44 million TEUs of capacity for LNG dual-fuel ships are currently on order, compared with 1.6 million TEUs of methanol-capable vessels. Industry coalition SEA-LNG estimated in a recent report that investment in LNG dual-fuel vessels and associated fuel supply chains over the past 10 years has amounted to more than $150 billion. A large portion of that is going into the supply side, with fuel availability at scale crucial for the global shipping industry. Contact Greg Knowler at greg.knowler@spglobal.com .

CMA CGM sets Chinese volume record with Shanghai biomethanol bunkering

<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

<div class="phx-topic abstract-wrapper">That means minimizing drayage without degrading transit, requiring disaggregating volume from larger hubs into smaller ones. </div>

That means minimizing drayage without degrading transit, requiring disaggregating volume from larger hubs into smaller ones.

<div class="phx-topic">With their proposed merger, Union Pacific and Norfolk Southern have channeled President Abraham Lincoln’s vision for a united transcontinental railroad. Under the tag line “The Great Connection,” they have put forth a vision of a single, integrated rail freight network. Recently, one of their executives touted the benefit from an envisioned “non-stop” service between Los Angeles and northern New Jersey that could be accomplished without needing to change trains in Chicago. This is indeed a powerful service vision. His remarks got me thinking about how airline marketing and flights have become somewhat muddled in their application of terms and performance. For example, many people confuse “non-stop” and “direct.” The former is a single flight that goes from origin to destination without any scheduled stops. One takeoff and one landing. The latter may have one flight number from origin to destination, but may include scheduled stops. Also, passengers may stay on board or change planes. Today, most of the intermodal train network is designed as non-stop at its core. Trains between major hubs run intact without pickups or setouts — although the tenets of precision scheduled railroading (PSR) may look to fill out trains enroute to achieve operating economies. While this works for many intermodal point pairs, it is not comprehensive. A connecting trip requires changing aircraft at an intermediate airport. There are separate flight segments with a layover; you usually change gates and, sometimes, terminals. In rare cases, you may actually need to change airports (e.g., a domestic leg at LaGuardia connecting to an overseas flight at JFK). This is the model for most transcontinental intermodal traffic today and what the UP-NS merger seeks to eliminate. A through flight is one where you stay on the same aircraft across one or more intermediate stops, or the airline provides through-checked baggage and a single itinerary even if you change planes. This is how intermodal efficiently expands scope today. For example, a train may run from Chicago to Harrisburg on one “flight” with the traffic for Philadelphia run as another train from Harrisburg. There are also flights marketed by one airline but operated by another; your ticket may show the marketing airline’s flight number while a partner operates the plane. For example, BNSF offers direct service into CSX facilities in Atlanta and Northwest Ohio. <h3>‘Closest to the pin’ </h3>UP and CSX have a hybrid case of non-stop, connecting code shares. Traffic to Springfield, Mass., is loaded on cars in Los Angeles for non-stop service to Chicago. There the cars are delivered intact to CSX Bedford Park, where they are incorporated into another non-stop train. Of course, in cases of operational trauma, the units may be grounded in Chicago and cross-towned like most traffic. All of this is standard for asset-based, network-operating businesses. There are often competing network economies of scale (larger trains) and scope (more destinations to achieve higher volumes). This is the crux of the “hub-and-spoke” network that so many passenger airlines have implemented. They have a centralized structure: a few hubs connect to many peripheral spokes — which generally do not connect directly to each other. Plane density is achieved, lowering per-unit costs with improved asset utilization. This allows better network reach. Service is enabled between many origin-destination pairs with fewer links than full point-to-point connections. A hub with 10 spokes supports 110 lanes with only 10 spokes. In intermodal, these hubs are at the end points of railroad networks. They offer predictable, scheduled flows with regular, repeatable routes along the spokes. It is scalable because it is easy to add nodes without redesigning the whole network. This is the challenge for intermodal. To compete with trucking, the goal is to seamlessly provide service that looks like trucking but offers economics. That means being “closest to the pin” so as to minimize drayage without degrading transit. This requires disaggregating volume from larger hubs into smaller ones. Not Los Angeles to Croxton rail yard in Jersey City, but LA to ramps beyond immediate North Jersey: i.e., Albany, Allentown, Bethlehem and Philadelphia. And, in the other direction, Croxton to LA, West Colton, and Las Vegas. The ideal outcome would be the ability to connect all of those points in a seamless method in both directions; however, that is probably a future undertaking. For now, we will hopefully keep flying to expanded intermodal networks and service scope. 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>

With their proposed merger, Union Pacific and Norfolk Southern have channeled President Abraham Lincoln’s vision for a united transcontinental railroad. Under the tag line “The Great Connection,” they have put forth a vision of a single, integrated rail freight network. Recently, one of their executives touted the benefit from an envisioned “non-stop” service between Los Angeles and northern New Jersey that could be accomplished without needing to change trains in Chicago. This is indeed a powerful service vision. His remarks got me thinking about how airline marketing and flights have become somewhat muddled in their application of terms and performance. For example, many people confuse “non-stop” and “direct.” The former is a single flight that goes from origin to destination without any scheduled stops. One takeoff and one landing. The latter may have one flight number from origin to destination, but may include scheduled stops. Also, passengers may stay on board or change planes. Today, most of the intermodal train network is designed as non-stop at its core. Trains between major hubs run intact without pickups or setouts — although the tenets of precision scheduled railroading (PSR) may look to fill out trains enroute to achieve operating economies. While this works for many intermodal point pairs, it is not comprehensive. A connecting trip requires changing aircraft at an intermediate airport. There are separate flight segments with a layover; you usually change gates and, sometimes, terminals. In rare cases, you may actually need to change airports (e.g., a domestic leg at LaGuardia connecting to an overseas flight at JFK). This is the model for most transcontinental intermodal traffic today and what the UP-NS merger seeks to eliminate. A through flight is one where you stay on the same aircraft across one or more intermediate stops, or the airline provides through-checked baggage and a single itinerary even if you change planes. This is how intermodal efficiently expands scope today. For example, a train may run from Chicago to Harrisburg on one “flight” with the traffic for Philadelphia run as another train from Harrisburg. There are also flights marketed by one airline but operated by another; your ticket may show the marketing airline’s flight number while a partner operates the plane. For example, BNSF offers direct service into CSX facilities in Atlanta and Northwest Ohio. ‘Closest to the pin’ UP and CSX have a hybrid case of non-stop, connecting code shares. Traffic to Springfield, Mass., is loaded on cars in Los Angeles for non-stop service to Chicago. There the cars are delivered intact to CSX Bedford Park, where they are incorporated into another non-stop train. Of course, in cases of operational trauma, the units may be grounded in Chicago and cross-towned like most traffic. All of this is standard for asset-based, network-operating businesses. There are often competing network economies of scale (larger trains) and scope (more destinations to achieve higher volumes). This is the crux of the “hub-and-spoke” network that so many passenger airlines have implemented. They have a centralized structure: a few hubs connect to many peripheral spokes — which generally do not connect directly to each other. Plane density is achieved, lowering per-unit costs with improved asset utilization. This allows better network reach. Service is enabled between many origin-destination pairs with fewer links than full point-to-point connections. A hub with 10 spokes supports 110 lanes with only 10 spokes. In intermodal, these hubs are at the end points of railroad networks. They offer predictable, scheduled flows with regular, repeatable routes along the spokes. It is scalable because it is easy to add nodes without redesigning the whole network. This is the challenge for intermodal. To compete with trucking, the goal is to seamlessly provide service that looks like trucking but offers economics. That means being “closest to the pin” so as to minimize drayage without degrading transit. This requires disaggregating volume from larger hubs into smaller ones. Not Los Angeles to Croxton rail yard in Jersey City, but LA to ramps beyond immediate North Jersey: i.e., Albany, Allentown, Bethlehem and Philadelphia. And, in the other direction, Croxton to LA, West Colton, and Las Vegas. The ideal outcome would be the ability to connect all of those points in a seamless method in both directions; however, that is probably a future undertaking. For now, we will hopefully keep flying to expanded intermodal networks and service scope. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

North-American rail

Surface

Intermodal needs ‘closest to the pin’ strategy to compete with trucking

Year-over-year % change

PIERS containerized US import and export volumes is the transportation industry’s largest US waterborne trade data set, covering all US ports. Every day, the PIERS team processes an average of about 60,000 bills of lading filed with US Customs and Border Protection (CBP) and integrates this transactional trade data with standardized company details. PIERS contains US trade data going back to 2003. [PIERS](https://www.spglobal.com/marketintelligence/en/mi/products/piers.html)

Asia to US container volumes (PIERS)

PIERS Total US imports from Asia (Monthly) (year-over-year change) Gateway

<div class="phx-topic abstract-wrapper">Stefan Paul said almost 20% of global air freight capacity from the belly hold of passenger aircraft and via freighter aircraft charters has been cut from the market because Middle East airports are closed or flights have been otherwise canceled. </div>

Stefan Paul said almost 20% of global air freight capacity from the belly hold of passenger aircraft and via freighter aircraft charters has been cut from the market because Middle East airports are closed or flights have been otherwise canceled.

<div class="phx-topic">Air cargo originating in Asia and bound for the US and Europe will begin to stack up at airports in Asia within days because a significant amount of the capacity needed to move the freight has been grounded by the widening Middle East conflict, the CEO of forwarder Kuehne + Nagel said Tuesday. The backlogs are expected to be particularly acute at air freight hubs in China and Southeast Asia, K+N CEO Stefan Paul said during his company’s fourth-quarter online results briefing. “By the end of the week [or] beginning of next week, we’ll see most probably certain backlogs arising in Southeast Asia and in China for the European and US marketplace,” Paul said. He said about 18% of global air freight capacity from the belly hold of passenger aircraft and via freighter aircraft charters has been cut from the market because Middle East airports, including the huge regional hub in Dubai, are closed or flights have been otherwise canceled. He said the forwarder would help exporters as much as it could by chartering additional capacity to fly directly “from the various origins into the destinations.” Paul also said the mismatch in cargo demand and supply was similar to the COVID-19 pandemic, when there was a surge in demand for air freight due to port and other disruptions caused by lockdowns and related restrictions. He expected the Middle East crisis to benefit the air freight market via higher rates more so than the ocean sector due to the urgency in fulfilling demand. Kuehne + Nagel was already seeing a continuing rebound in air freight volumes in January and February that started in the fourth quarter. “I’m quite confident we’ll see the same pattern in terms of air freight growth,” Paul said. <h3>Profits down, job cuts accelerate </h3>The forwarder saw air cargo volumes in the fourth quarter climb 6% year over year to 595,000 tons, while full-year volumes grew 7% to 2.2 million tons. Paul said K+N is seeing strong demand from aerospace, pharma and semiconductor-related industries, including AI-focused hyperscalers such as Amazon AWS and Google Cloud. Demand from the automotive industry has also recovered in the first two months of 2026 after it declined last year, he said. But K+N’s net profit in 2025 fell 26% to $1.1 billion, while turnover was unchanged at $31 billion. The figures included $156 million in one-off costs, of which 90% was due to staff redundancies and related costs. The company said more than 2,000 employees will be laid off by the end of this year, up from the 1,000 to 1,500 staff that were originally targeted when the cost-cutting program was unveiled in the fourth quarter. K+N this year will target small and medium-sized enterprises in China to boost ocean freight volumes that were unchanged in 2025 at 4.3 million TEUs, Paul said. The company is also chasing acquisitions, including “smaller bolt-ons and higher-quality businesses,” CFO Markus Blanka-Graff said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Air cargo originating in Asia and bound for the US and Europe will begin to stack up at airports in Asia within days because a significant amount of the capacity needed to move the freight has been grounded by the widening Middle East conflict, the CEO of forwarder Kuehne + Nagel said Tuesday. The backlogs are expected to be particularly acute at air freight hubs in China and Southeast Asia, K+N CEO Stefan Paul said during his company’s fourth-quarter online results briefing. “By the end of the week [or] beginning of next week, we’ll see most probably certain backlogs arising in Southeast Asia and in China for the European and US marketplace,” Paul said. He said about 18% of global air freight capacity from the belly hold of passenger aircraft and via freighter aircraft charters has been cut from the market because Middle East airports, including the huge regional hub in Dubai, are closed or flights have been otherwise canceled. He said the forwarder would help exporters as much as it could by chartering additional capacity to fly directly “from the various origins into the destinations.” Paul also said the mismatch in cargo demand and supply was similar to the COVID-19 pandemic, when there was a surge in demand for air freight due to port and other disruptions caused by lockdowns and related restrictions. He expected the Middle East crisis to benefit the air freight market via higher rates more so than the ocean sector due to the urgency in fulfilling demand. Kuehne + Nagel was already seeing a continuing rebound in air freight volumes in January and February that started in the fourth quarter. “I’m quite confident we’ll see the same pattern in terms of air freight growth,” Paul said. Profits down, job cuts accelerate The forwarder saw air cargo volumes in the fourth quarter climb 6% year over year to 595,000 tons, while full-year volumes grew 7% to 2.2 million tons. Paul said K+N is seeing strong demand from aerospace, pharma and semiconductor-related industries, including AI-focused hyperscalers such as Amazon AWS and Google Cloud. Demand from the automotive industry has also recovered in the first two months of 2026 after it declined last year, he said. But K+N’s net profit in 2025 fell 26% to $1.1 billion, while turnover was unchanged at $31 billion. The figures included $156 million in one-off costs, of which 90% was due to staff redundancies and related costs. The company said more than 2,000 employees will be laid off by the end of this year, up from the 1,000 to 1,500 staff that were originally targeted when the cost-cutting program was unveiled in the fourth quarter. K+N this year will target small and medium-sized enterprises in China to boost ocean freight volumes that were unchanged in 2025 at 4.3 million TEUs, Paul said. The company is also chasing acquisitions, including “smaller bolt-ons and higher-quality businesses,” CFO Markus Blanka-Graff said. Contact Keith Wallis at keithwallis@hotmail.com .

Air Cargo Carriers News

Asia-Europe

Trans-Pacific

Air Cargo

Air freight backlog set to gridlock Asia airports amid Middle East conflict: K+N CEO

<div class="phx-topic abstract-wrapper">An expert on Yemen told TPM26 the leadership of the Tehran-backed militant group appears to be split on how best to respond to the attacks on Iran that began over the weekend. </div>

An expert on Yemen told TPM26 the leadership of the Tehran-backed militant group appears to be split on how best to respond to the attacks on Iran that began over the weekend.

<div class="phx-topic">Long Beach, California — The next 48 to 72 hours are critical as to how Houthi militants operating in Yemen will react to the US/Israeli bombardment of Iran, specifically what the Tehran-backed rebels may do to once again disrupt shipping in the Red Sea and Suez Canal. That’s the assessment of a veteran security analyst speaking to attendees Monday at the Journal of Commerce’s TPM26 conference. Geopolitical expert Hisham Al-Omeisy is a senior Yemen advisor at the European Institute for Peace. He says the leadership of the Houthis appears to be split on how best to respond to the attacks on Iran that began Saturday. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177003_0.1.jpg"></img></div>“A lot of people were waiting for them to act, and now that the attacks are ongoing in Iran, they’ve stayed relatively on the fence,” al-Omeisy said. He explained that with the huge US military buildup in the Middle East, if the Houthis were to resume their attacks against commercial shipping in the Red Sea, it would be, in his words, “a suicide mission.” “Houthi leadership, I’ve been talking to people there from Yemen for the past couple of days, and there is a bit of an internal fight where the hardliners are basically trigger happy,” al-Omeisy said. “The hardliners are pushing for action.” Cooler heads within the militants believe that taking military action now would prompt a response from the US and Israel that could degrade the Houthis military capability. But al-Omeisy said his sources have told him that to save face, there could be a limited military response from the Houthis. “There are massive protests in Hutu-controlled areas from their base, demanding blood, demanding reaction, especially since part of the Houthi bravado, their rhetoric, you know the slogan, the ‘death to America, death to Israel,’” he said. “People are asking, ‘why aren’t you doing something?’” Al-Omeisy says the longer the conflict goes without action by the Houthis, they risk losing their legitimacy. “We are really holding our breath, waiting for the Houthi reaction,” he said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy and costly diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale. <h3>Paying protection money </h3>Al-Omeisy said the Houthis have made side deals with some shipping companies who essentially pay protection money to get their ships through the waters, something considered a cost of doing business in that part of the world. “I’m not at liberty to say who, where and when, but there have been payments, and I can’t fault them for that,” he said. “People are being pragmatic. They’ve been cutting their own deals, realizing that’s the best way out for certain amounts [of money] that you’ve just secured the safety of your crews, your ships.” That means for the Houthis, it’s a matter of more than just political power; the threat of their attacks has become a profit center. “The Houthis are insistent on those attacks, because it’s an income. They’re making a lot of money from it,” al-Omeisy told TPM26. “And you have to remember, it’s not just a dogma, it’s not just a political incentive. There’s also financial incentive.” Appearing on the same conference panel, Robbert van Trooijen, a veteran shipping consultant and executive director of Inception Holdings, noted the financial windfall of the Houthis’ business. “Piracy, regretfully, is still a very lucrative line of business,” he said. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

Long Beach, California — The next 48 to 72 hours are critical as to how Houthi militants operating in Yemen will react to the US/Israeli bombardment of Iran, specifically what the Tehran-backed rebels may do to once again disrupt shipping in the Red Sea and Suez Canal. That’s the assessment of a veteran security analyst speaking to attendees Monday at the Journal of Commerce’s TPM26 conference. Geopolitical expert Hisham Al-Omeisy is a senior Yemen advisor at the European Institute for Peace. He says the leadership of the Houthis appears to be split on how best to respond to the attacks on Iran that began Saturday. “A lot of people were waiting for them to act, and now that the attacks are ongoing in Iran, they’ve stayed relatively on the fence,” al-Omeisy said. He explained that with the huge US military buildup in the Middle East, if the Houthis were to resume their attacks against commercial shipping in the Red Sea, it would be, in his words, “a suicide mission.” “Houthi leadership, I’ve been talking to people there from Yemen for the past couple of days, and there is a bit of an internal fight where the hardliners are basically trigger happy,” al-Omeisy said. “The hardliners are pushing for action.” Cooler heads within the militants believe that taking military action now would prompt a response from the US and Israel that could degrade the Houthis military capability. But al-Omeisy said his sources have told him that to save face, there could be a limited military response from the Houthis. “There are massive protests in Hutu-controlled areas from their base, demanding blood, demanding reaction, especially since part of the Houthi bravado, their rhetoric, you know the slogan, the ‘death to America, death to Israel,’” he said. “People are asking, ‘why aren’t you doing something?’” Al-Omeisy says the longer the conflict goes without action by the Houthis, they risk losing their legitimacy. “We are really holding our breath, waiting for the Houthi reaction,” he said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy and costly diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale. Paying protection money Al-Omeisy said the Houthis have made side deals with some shipping companies who essentially pay protection money to get their ships through the waters, something considered a cost of doing business in that part of the world. “I’m not at liberty to say who, where and when, but there have been payments, and I can’t fault them for that,” he said. “People are being pragmatic. They’ve been cutting their own deals, realizing that’s the best way out for certain amounts [of money] that you’ve just secured the safety of your crews, your ships.” That means for the Houthis, it’s a matter of more than just political power; the threat of their attacks has become a profit center. “The Houthis are insistent on those attacks, because it’s an income. They’re making a lot of money from it,” al-Omeisy told TPM26. “And you have to remember, it’s not just a dogma, it’s not just a political incentive. There’s also financial incentive.” Appearing on the same conference panel, Robbert van Trooijen, a veteran shipping consultant and executive director of Inception Holdings, noted the financial windfall of the Houthis’ business. “Piracy, regretfully, is still a very lucrative line of business,” he said. Contact Dan Ronan at contactdanronan@gmail.com .

TPM26: Shipping waits for Houthi reaction to US/Israeli attacks on Iran

<div class="phx-topic abstract-wrapper">With on-time performance close to the 90% target, Hapag-Lloyd has begun to remove the additional capacity initially built into the network to ensure 90% reliability, Rolf Habben Jansen told the TPM26 conference. </div>

With on-time performance close to the 90% target, Hapag-Lloyd has begun to remove the additional capacity initially built into the network to ensure 90% reliability, Rolf Habben Jansen told the TPM26 conference.

<div class="phx-topic">Long Beach, California — Gemini Cooperation’s steadily improving schedule reliability has enabled Hapag-Lloyd to take buffer capacity out of the network while maintaining reliable transit times, CEO Rolf Habben Jansen said Tuesday. The additional capacity was built into schedules when Gemini launched in February 2025 because partners Hapag-Lloyd and Maersk wanted to ensure 90% on-time arrivals “no matter what,” Habben Jansen told the Journal of Commerce’s TPM26 conference. “If you look at the product that we’re now launching in 2026 you will see that we have already taken some buffer capacity out here and there, and we will continue to do that because we want to be reliable, but we also want to have competitive transit times,” he said. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177003_0.1.jpg"></img></div>“You need to find a competitive transit time, very high predictability and low variability,” Habben Jansen added. “If you do that, it allows our customers to say, ‘okay, if I put the most valuable stuff on that service I can take out a week of inventory ... It may only be a week of inventory, but a week is a lot.” Data from Sea-Intelligence Maritime Analysis for December and January shows that Gemini had a global schedule reliability of 89.5%, despite congestion challenges at European and Asian ports and severe winter weather. Chelsea Morris, vice president of global inbound transportation at Dollar General, said the discount retailer still needed to pressure-test the reliability in its supply chain, but the trends were positive. “We’ve already seen a demonstrable dip in the standard deviation associated with our cargo,” she told the conference. “When we determine how much product we need in the pipeline, that’s lead times. How much safety stock we need is variability. Anytime you can remove that variability, you don’t need that extra inventory.” <h3>Reliability on ‘a massive scale’ </h3>Morris said that although Gemini was the most reliable alliance, on-time performance was improving across the industry. “What’s really special about what is being done is that it is being done on a massive scale,” she added. “Often when working with carrier partners, it’s singular and it’s directional, but what we’re doing here is really making a difference for the entire industry. It means that we’re not flowing wasteful product through the supply chain that can then bottleneck and cause a lot of issues for all our customers.” Rebecca Ziebarth, vice president of global trade management at Ashley Furniture, agreed that more reliability in ocean schedules improved inventory management. “We want to be able to reduce how much we’re carrying and make sure that we can keep those costs in check, and being able to have the option to direct those raw materials to our manufacturing facility is a huge benefit,” she said. With Gemini’s schedule reliability remaining close to its 90% stated target since its launch early last year, Habben Jansen on Tuesday repeated a view he first expressed at TPM25 last year. “Our objective is to create more value for customers, and I’m firmly convinced that if you create value for the customer, then in the end, you will find a way to share it,” he said. “Whether and how that is then reflected, and how that comes about in the relationship, remains to be seen, but for sure, if we are consistent and always on time, for a lot of customers that has real value,” he added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4abe02d4-ed18-461a-ac0b-87ef52e3192b"></dynamic-object></div>Still, global ocean reliability has been on a steady decline since last October, according to data from eeSea, falling from 36.6% then to 25.4% in February. Oscar de Bok, CEO of DHL Global Forwarding, agreed that consistent delivery of better services would, over time, translate into better pricing for service providers. “In the end, customers will pay for value that you create,” he told the conference. “If you can benefit by $1,000, then you will probably be willing to pay $100 more in order to get $900 for yourself. Once it has proven itself, then the value is visible and a customer will not want to lose it.” Contact Greg Knowler at <a href="https://www.joc.com/article/greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Long Beach, California — Gemini Cooperation’s steadily improving schedule reliability has enabled Hapag-Lloyd to take buffer capacity out of the network while maintaining reliable transit times, CEO Rolf Habben Jansen said Tuesday. The additional capacity was built into schedules when Gemini launched in February 2025 because partners Hapag-Lloyd and Maersk wanted to ensure 90% on-time arrivals “no matter what,” Habben Jansen told the Journal of Commerce’s TPM26 conference. “If you look at the product that we’re now launching in 2026 you will see that we have already taken some buffer capacity out here and there, and we will continue to do that because we want to be reliable, but we also want to have competitive transit times,” he said. “You need to find a competitive transit time, very high predictability and low variability,” Habben Jansen added. “If you do that, it allows our customers to say, ‘okay, if I put the most valuable stuff on that service I can take out a week of inventory ... It may only be a week of inventory, but a week is a lot.” Data from Sea-Intelligence Maritime Analysis for December and January shows that Gemini had a global schedule reliability of 89.5%, despite congestion challenges at European and Asian ports and severe winter weather. Chelsea Morris, vice president of global inbound transportation at Dollar General, said the discount retailer still needed to pressure-test the reliability in its supply chain, but the trends were positive. “We’ve already seen a demonstrable dip in the standard deviation associated with our cargo,” she told the conference. “When we determine how much product we need in the pipeline, that’s lead times. How much safety stock we need is variability. Anytime you can remove that variability, you don’t need that extra inventory.” Reliability on ‘a massive scale’ Morris said that although Gemini was the most reliable alliance, on-time performance was improving across the industry. “What’s really special about what is being done is that it is being done on a massive scale,” she added. “Often when working with carrier partners, it’s singular and it’s directional, but what we’re doing here is really making a difference for the entire industry. It means that we’re not flowing wasteful product through the supply chain that can then bottleneck and cause a lot of issues for all our customers.” Rebecca Ziebarth, vice president of global trade management at Ashley Furniture, agreed that more reliability in ocean schedules improved inventory management. “We want to be able to reduce how much we’re carrying and make sure that we can keep those costs in check, and being able to have the option to direct those raw materials to our manufacturing facility is a huge benefit,” she said. With Gemini’s schedule reliability remaining close to its 90% stated target since its launch early last year, Habben Jansen on Tuesday repeated a view he first expressed at TPM25 last year. “Our objective is to create more value for customers, and I’m firmly convinced that if you create value for the customer, then in the end, you will find a way to share it,” he said. “Whether and how that is then reflected, and how that comes about in the relationship, remains to be seen, but for sure, if we are consistent and always on time, for a lot of customers that has real value,” he added. Still, global ocean reliability has been on a steady decline since last October, according to data from eeSea, falling from 36.6% then to 25.4% in February. Oscar de Bok, CEO of DHL Global Forwarding, agreed that consistent delivery of better services would, over time, translate into better pricing for service providers. “In the end, customers will pay for value that you create,” he told the conference. “If you can benefit by $1,000, then you will probably be willing to pay $100 more in order to get $900 for yourself. Once it has proven itself, then the value is visible and a customer will not want to lose it.” Contact Greg Knowler at greg.knowler@spglobal.com .

TPM26: Buffer capacity being taken out of Gemini network: Hapag-Lloyd CEO

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<div class="phx-topic abstract-wrapper">Three ocean carriers told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the hostilities would last.</div>

Three ocean carriers told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the hostilities would last.

<div class="phx-topic">Long Beach, California — Container lines are pausing or slowing annual trans-Pacific service contract negotiations as they assess the impact the war in the Middle East will have on their cost structures and how much functional capacity they can offer. Ocean carriers and US importers had already been <a href="Trans-Pacific carriers, importers slow-walking service contract negotiations | Journal of Commerce">slow-walking negotiations</a> for the 2026–27 service year, but the war — which has tied up between 2% and 10% of global container tonnage, according to various estimates — is preventing them from finalizing agreements. Executives from three ocean carriers who asked not to be identified told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the war would last. Their approach isn’t uniform across the industry, however; other carriers say they are ready to finalize contracts despite the uncertainty. Similar to how Houthi attacks that began in late 2023 spurred major carriers to route away from the Red Sea and Suez Canal and divert around southern Africa, the disruption and dislocation of equipment caused by the war in the Middle East will ripple through ocean networks, including the trans-Pacific trade, forwarders and ocean carriers warn. But the impact of the war on the global shipping system will be less pronounced than the Suez diversions, according to container shipping analyst Lars Jensen.<h3>War ‘adds to cost profile’</h3>The war “adds to our cost profile. We have to think about ‘what is our cost to execute this?’” Michael Britton, Maersk’s head of ocean products for North America, told the Journal of Commerce Wednesday. “There’s a global effect pretty immediately, which is the impact on [bunker] fuel price.” While high oil prices will be reflected in a bunker adjustment factor — albeit with a lag of a couple months — the impact of the war on Maersk’s global network is unclear, said Britton. The war, now in its fifth day, has expanded geographically, stretching as far west as Cyprus, where an Iranian drone was shot down on Monday. “The longer it goes, the wider it becomes, because we end up with ships which are not coming back to their original loading ports, and then we try to plug the holes with additional ships,” Britton said. “Part of it will come down to whether we continue to accept bookings.” The timeline for contract negotiations is also being held up because some of the top retailers, including Walmart, have yet to finalize contracts before the Journal of Commerce’s TPM Conference in Long Beach, as they typically do, according to two carrier executives. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. Most contracts for the new service year begin on May 1. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Long Beach, California — Container lines are pausing or slowing annual trans-Pacific service contract negotiations as they assess the impact the war in the Middle East will have on their cost structures and how much functional capacity they can offer. Ocean carriers and US importers had already been slow-walking negotiations for the 2026–27 service year, but the war — which has tied up between 2% and 10% of global container tonnage, according to various estimates — is preventing them from finalizing agreements. Executives from three ocean carriers who asked not to be identified told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the war would last. Their approach isn’t uniform across the industry, however; other carriers say they are ready to finalize contracts despite the uncertainty. Similar to how Houthi attacks that began in late 2023 spurred major carriers to route away from the Red Sea and Suez Canal and divert around southern Africa, the disruption and dislocation of equipment caused by the war in the Middle East will ripple through ocean networks, including the trans-Pacific trade, forwarders and ocean carriers warn. But the impact of the war on the global shipping system will be less pronounced than the Suez diversions, according to container shipping analyst Lars Jensen. War ‘adds to cost profile’ The war “adds to our cost profile. We have to think about ‘what is our cost to execute this?’” Michael Britton, Maersk’s head of ocean products for North America, told the Journal of Commerce Wednesday. “There’s a global effect pretty immediately, which is the impact on [bunker] fuel price.” While high oil prices will be reflected in a bunker adjustment factor — albeit with a lag of a couple months — the impact of the war on Maersk’s global network is unclear, said Britton. The war, now in its fifth day, has expanded geographically, stretching as far west as Cyprus, where an Iranian drone was shot down on Monday. “The longer it goes, the wider it becomes, because we end up with ships which are not coming back to their original loading ports, and then we try to plug the holes with additional ships,” Britton said. “Part of it will come down to whether we continue to accept bookings.” The timeline for contract negotiations is also being held up because some of the top retailers, including Walmart, have yet to finalize contracts before the Journal of Commerce’s TPM Conference in Long Beach, as they typically do, according to two carrier executives. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. Most contracts for the new service year begin on May 1. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Middle East war slows trans-Pacific service contract talks further

<div class="phx-topic abstract-wrapper">As the war launched by the US and Israel against Iran extends into its third day, about 10% of the global container shipping fleet remains stranded inside the Persian Gulf or held up outside.</div>

As the war launched by the US and Israel against Iran extends into its third day, about 10% of the global container shipping fleet remains stranded inside the Persian Gulf or held up outside.

<div class="phx-topic">Long Beach, California — The container shipping supply chain is bracing for the ripple effects of the war launched by the US and Israel against Iran that will be felt across global trade lanes, industry executives said Monday. As the regional conflict extends into its third day, about 10% of the global container shipping fleet remains stranded inside the Persian Gulf or held up outside the critical waterway, according to Jeremy Nixon, CEO of Ocean Network Express (ONE). “Most of the carriers, including ONE, have had to stop all bookings to the Middle East, and it is a significant trade,” Nixon told the Journal of Commerce’s TPM26 conference. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177002_0.1.jpg"></img></div>“All of that cargo is going to start backing up into the hubs and into the key locations in Europe and Asia,” he added. “Those vessels that have cargo for the Middle East will need to turn around and try to take some of that cargo off in places like Colombo, Fujairah and Singapore, and the hubs are going to lose some of their fluidity.” Triene Nielsen, vice president of ocean/global at forwarder Flexport, said when a ship fails to meet its normal schedule, the ripple effects can be felt across the network, with carriers trying to prioritize equipment and the movement of empty containers. “Those ripples are not going to come tomorrow, but they might come three, four or eight weeks from now,” she told the conference. “Even if this is mainly a Middle East situation, the equipment issues will be felt on the other trade lanes.” Johan Sigsgaard, executive vice president of Maersk, said just dealing with the containers already on the water was going to be a major challenge as the ships and equipment would effectively be suspended. “What we have seen from the last couple of years when these kinds of problems occur is that the same equipment and the same ships are being used worldwide,” Sigsgaard said. “Many of the hubs today touch many trades, particularly the big ones, so depending on how long this goes on for, it will affect more trades than just the Middle East.” <h3>Seafarers stranded in Persian Gulf </h3>Maersk on Sunday said it had suspended all vessel crossings in the Strait of Hormuz, which is effectively closed due to threats from Iran to attack ships transiting the waterway. Nixon also highlighted the human element, with about 40,000 seafarers impacted by the conflict that has trapped 350 ships inside the Persian Gulf and another 350 outside. “Those seafarers will be very concerned,” he said. “Five tankers were attacked in the last 24 hours, one of them at anchor off Oman, and crew have been killed.” The International Transport Workers’ Federation (ITF) and the Joint Negotiating Group (JNG) on Monday designated the Strait of Hormuz and surrounding waters a “high risk area” that requires carriers to provide enhanced protection measures for seafarers operating in or near the affected waters. Contact Greg Knowler at <a href="greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Long Beach, California — The container shipping supply chain is bracing for the ripple effects of the war launched by the US and Israel against Iran that will be felt across global trade lanes, industry executives said Monday. As the regional conflict extends into its third day, about 10% of the global container shipping fleet remains stranded inside the Persian Gulf or held up outside the critical waterway, according to Jeremy Nixon, CEO of Ocean Network Express (ONE). “Most of the carriers, including ONE, have had to stop all bookings to the Middle East, and it is a significant trade,” Nixon told the Journal of Commerce’s TPM26 conference. “All of that cargo is going to start backing up into the hubs and into the key locations in Europe and Asia,” he added. “Those vessels that have cargo for the Middle East will need to turn around and try to take some of that cargo off in places like Colombo, Fujairah and Singapore, and the hubs are going to lose some of their fluidity.” Triene Nielsen, vice president of ocean/global at forwarder Flexport, said when a ship fails to meet its normal schedule, the ripple effects can be felt across the network, with carriers trying to prioritize equipment and the movement of empty containers. “Those ripples are not going to come tomorrow, but they might come three, four or eight weeks from now,” she told the conference. “Even if this is mainly a Middle East situation, the equipment issues will be felt on the other trade lanes.” Johan Sigsgaard, executive vice president of Maersk, said just dealing with the containers already on the water was going to be a major challenge as the ships and equipment would effectively be suspended. “What we have seen from the last couple of years when these kinds of problems occur is that the same equipment and the same ships are being used worldwide,” Sigsgaard said. “Many of the hubs today touch many trades, particularly the big ones, so depending on how long this goes on for, it will affect more trades than just the Middle East.” Seafarers stranded in Persian Gulf Maersk on Sunday said it had suspended all vessel crossings in the Strait of Hormuz, which is effectively closed due to threats from Iran to attack ships transiting the waterway. Nixon also highlighted the human element, with about 40,000 seafarers impacted by the conflict that has trapped 350 ships inside the Persian Gulf and another 350 outside. “Those seafarers will be very concerned,” he said. “Five tankers were attacked in the last 24 hours, one of them at anchor off Oman, and crew have been killed.” The International Transport Workers’ Federation (ITF) and the Joint Negotiating Group (JNG) on Monday designated the Strait of Hormuz and surrounding waters a “high risk area” that requires carriers to provide enhanced protection measures for seafarers operating in or near the affected waters. Contact Greg Knowler at greg.knowler@spglobal.com .

TPM26: Middle East conflict to ripple across global trade lanes: industry experts

<div class="phx-topic abstract-wrapper">While reefer trade is at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have put a stop to all Middle East shipments until further notice. </div>

While reefer trade is at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have put a stop to all Middle East shipments until further notice.

<div class="phx-topic">Supply chains between India and the Middle East have come to a standstill following the en masse suspension of services and cargo acceptance by ocean carriers serving the trade corridor amid the military conflict between Iran and the US and Israel. The economic implications of the developing crisis are enormous for India as it is the second-largest trading partner for the United Arab Emirates (UAE). The two sides in 2022 signed a comprehensive trade pact aimed at pushing non-oil bilateral trade to $100 billion by 2030. While reefer trade is seen to be at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have already put a stop to all kinds of Middle East shipments until further notice. “Effective immediately, we are suspending all new bookings between the Indian Subcontinent [India, Pakistan, Bangladesh and Sri Lanka] and the Upper Gulf markets of the UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia [Dammam and Jubail only],” Maersk said in an operational update. Mediterranean Shipping Co., Hapag-Lloyd and Ocean Network Express (ONE) have also halted all Middle East bookings. “For cargo currently in transit or planned shipments, we are closely assessing the situation voyage by voyage,” Singapore-based ONE said. Concurrently, lead mainline carriers on the trade lane have announced hefty war risk or emergency surcharges — ranging between $1,500 and $3,000 per standard container. Maersk is the latest operator to have issued that advisory, slapping an “emergency freight increase” levy for the region of $1,800 per TEU, $3,000 per FEU, and $3,800 for reefer boxes. <h3>Exports ‘piling up’ on Indian docks </h3>Meanwhile, the abrupt cargo flow stoppage and service disruptions have left many Indian docks facing a buildup of containers, with the accumulation expected to aggravate as planned export containers continue to gate in. “Cargo booked for Middle East destinations is piling up across Indian ports,” Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told the Journal of Commerce. “If the crisis is not resolved quickly, it’s going to cause congestion troubles.” The disruptive impact on Indian exports goes beyond the Middle East regional trade. India’s seasonal grape shipments to Europe, which were picking up, now face longer or unpredictable transits due to vessel diversions around southern Africa for westbound services that recently resumed, and then halted, Red Sea/Suez Canal transits. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Supply chains between India and the Middle East have come to a standstill following the en masse suspension of services and cargo acceptance by ocean carriers serving the trade corridor amid the military conflict between Iran and the US and Israel. The economic implications of the developing crisis are enormous for India as it is the second-largest trading partner for the United Arab Emirates (UAE). The two sides in 2022 signed a comprehensive trade pact aimed at pushing non-oil bilateral trade to $100 billion by 2030. While reefer trade is seen to be at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have already put a stop to all kinds of Middle East shipments until further notice. “Effective immediately, we are suspending all new bookings between the Indian Subcontinent [India, Pakistan, Bangladesh and Sri Lanka] and the Upper Gulf markets of the UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia [Dammam and Jubail only],” Maersk said in an operational update. Mediterranean Shipping Co., Hapag-Lloyd and Ocean Network Express (ONE) have also halted all Middle East bookings. “For cargo currently in transit or planned shipments, we are closely assessing the situation voyage by voyage,” Singapore-based ONE said. Concurrently, lead mainline carriers on the trade lane have announced hefty war risk or emergency surcharges — ranging between $1,500 and $3,000 per standard container. Maersk is the latest operator to have issued that advisory, slapping an “emergency freight increase” levy for the region of $1,800 per TEU, $3,000 per FEU, and $3,800 for reefer boxes. Exports ‘piling up’ on Indian docks Meanwhile, the abrupt cargo flow stoppage and service disruptions have left many Indian docks facing a buildup of containers, with the accumulation expected to aggravate as planned export containers continue to gate in. “Cargo booked for Middle East destinations is piling up across Indian ports,” Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told the Journal of Commerce. “If the crisis is not resolved quickly, it’s going to cause congestion troubles.” The disruptive impact on Indian exports goes beyond the Middle East regional trade. India’s seasonal grape shipments to Europe, which were picking up, now face longer or unpredictable transits due to vessel diversions around southern Africa for westbound services that recently resumed, and then halted, Red Sea/Suez Canal transits. Contact Bency Mathew at bencyvmathew@gmail.com .

Carriers pause India-Middle East cargo bookings amid Persian Gulf port chaos 

<div class="phx-topic abstract-wrapper">While of concern to shippers and ocean carriers, the global impact of the war in the Middle East on container flows will be less severe than COVID-19 disruptions and Red Sea diversions, Lars Jensen told TPM26.</div>

While of concern to shippers and ocean carriers, the global impact of the war in the Middle East on container flows will be less severe than COVID-19 disruptions and Red Sea diversions, Lars Jensen told TPM26.

<div class="phx-topic">Long Beach, California — The war in the Middle East that has effectively shut the Persian Gulf and Strait of Hormuz is a problem for container shipping, but not on the scale of other recent disruptions the sector has faced. That was the closing message of the Journal of Commerce’s TPM 26 conference, delivered by industry analyst and CEO of Vespucci Maritime Lars Jensen. “This is going to sound weird. Globally, strictly on container shipping, it’s a problem, but it’s not a major problem,” Jensen told conference attendees. “It’s definitely not pandemic-scale.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177005_0.1.jpg"></img></div>When Houthi militants in Yemen began <a href="https://www.joc.com/article/red-sea-diversions-could-last-for-months-until-attack-risk-ends-drewry-5225718">their attacks on shipping in the Red Sea two years ago</a>, container ships serving the Asia-Europe, Asia-Mediterranean and Asia-US East Coast trade lanes were forced to make lengthy and costly diversions around the southern tip of Africa. The current danger zone in the Middle East is much more limited. “In this case, it is ... ‘only’ the cargo in the Gulf. So from a global perspective, yes there will be an impact,” Jensen said. “It will contract capacity some, but it’s not a major disaster for the countries in the Gulf.” Looking at the volume of containers destined for the Strait of Hormuz, either on board vessels already or at least booked within the next 90 days to head toward the Gulf, approximately 2 million TEUs will be impacted, he said. A significant portion of that total will be offloaded at ports around the Strait of Hormuz. The war, meanwhile, has put to rest the assumption importers had entering 2026 that container traffic from Asia bound for Europe and the US East Coast would return to the Suez Canal in the second half of this year, thereby reducing carriers’ leverage in pricing. “The baseline outlook for 2026 now has to include the assumption that the deviations around Africa will continue this year, and therefore materially strengthen the supply and demand balance,” Jensen said. As for when container ships will contemplate returning to the Suez Canal, he said that discussion has been kicked down the road for at least another six months. “So realistically, we are probably looking at least six months into the future before anybody is going to start contemplating doing this again, and that is if we stop the war basically today,” Jensen said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023, when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing the diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale in recent months. <h3>Rising oil prices, congestion are a concern </h3>In the short term, oil prices, and therefore bunker fuel prices, will increase, which will impact container shipping costs. And that means ocean carriers will respond with increased fuel surcharges. “On account of the Middle East, the carriers will go gangbusters in terms of implementing as many and as high surcharges as humanly possible, and not just on trades to and from the Gulf, [but] everywhere,” Jensen said. “They will be called emergency fuel surcharges, emergency conflict surcharges, and whatever nice names, but they will be a reality. The only question is, how high will it go and how long will it last.” Even cargo owners who are shipping only from Asia to the US West Coast will feel an impact from events in the Middle East in terms of surcharges and disrupted operations in the form of knock-on congestion. “You’re going to get all of these congestion effects in Asia that [are] going to impact everything and everyone, so you’re going to see these surcharges also on the Pacific,” Jensen said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Long Beach, California — The war in the Middle East that has effectively shut the Persian Gulf and Strait of Hormuz is a problem for container shipping, but not on the scale of other recent disruptions the sector has faced. That was the closing message of the Journal of Commerce’s TPM 26 conference, delivered by industry analyst and CEO of Vespucci Maritime Lars Jensen. “This is going to sound weird. Globally, strictly on container shipping, it’s a problem, but it’s not a major problem,” Jensen told conference attendees. “It’s definitely not pandemic-scale.” When Houthi militants in Yemen began their attacks on shipping in the Red Sea two years ago , container ships serving the Asia-Europe, Asia-Mediterranean and Asia-US East Coast trade lanes were forced to make lengthy and costly diversions around the southern tip of Africa. The current danger zone in the Middle East is much more limited. “In this case, it is ... ‘only’ the cargo in the Gulf. So from a global perspective, yes there will be an impact,” Jensen said. “It will contract capacity some, but it’s not a major disaster for the countries in the Gulf.” Looking at the volume of containers destined for the Strait of Hormuz, either on board vessels already or at least booked within the next 90 days to head toward the Gulf, approximately 2 million TEUs will be impacted, he said. A significant portion of that total will be offloaded at ports around the Strait of Hormuz. The war, meanwhile, has put to rest the assumption importers had entering 2026 that container traffic from Asia bound for Europe and the US East Coast would return to the Suez Canal in the second half of this year, thereby reducing carriers’ leverage in pricing. “The baseline outlook for 2026 now has to include the assumption that the deviations around Africa will continue this year, and therefore materially strengthen the supply and demand balance,” Jensen said. As for when container ships will contemplate returning to the Suez Canal, he said that discussion has been kicked down the road for at least another six months. “So realistically, we are probably looking at least six months into the future before anybody is going to start contemplating doing this again, and that is if we stop the war basically today,” Jensen said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023, when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing the diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale in recent months. Rising oil prices, congestion are a concern In the short term, oil prices, and therefore bunker fuel prices, will increase, which will impact container shipping costs. And that means ocean carriers will respond with increased fuel surcharges. “On account of the Middle East, the carriers will go gangbusters in terms of implementing as many and as high surcharges as humanly possible, and not just on trades to and from the Gulf, [but] everywhere,” Jensen said. “They will be called emergency fuel surcharges, emergency conflict surcharges, and whatever nice names, but they will be a reality. The only question is, how high will it go and how long will it last.” Even cargo owners who are shipping only from Asia to the US West Coast will feel an impact from events in the Middle East in terms of surcharges and disrupted operations in the form of knock-on congestion. “You’re going to get all of these congestion effects in Asia that [are] going to impact everything and everyone, so you’re going to see these surcharges also on the Pacific,” Jensen said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

TPM26: War a problem for container shipping, but not ‘pandemic-scale’: analyst

<div class="phx-topic abstract-wrapper">Ryan Petersen said his company went into “code red” last year in transitioning to AI, with the technology’s first benefits seen in customs compliance and auditing.</div>

Ryan Petersen said his company went into “code red” last year in transitioning to AI, with the technology’s first benefits seen in customs compliance and auditing.

<div class="phx-topic">Long Beach, California — Flexport CEO Ryan Petersen said Tuesday recent advances in artificial intelligence AI can remove more of the friction involved in shipping, potentially shaving 10% off the back-office cost of ocean freight and allowing logistics companies to easily scale without adding employees. Speaking at the Journal of Commerce’s TPM26 conference, Petersen said Flexport went into “code red” and began a more urgent transition to using AI tools in its processes last November due to the better models and new capabilities available in the market. He said the company plans to use AI to “vibe code” half of its internal applications rather than using traditional programming tools. “I think the ability to build AI right now is phenomenal,” Petersen said. “You can just talk to Claude [AI] in English and get an application out in 30 minutes. So, there’s a huge amount of this that’s possible now that wasn’t possible even 90 days ago.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177003_0.1.jpg"></img></div>AI has been especially helpful in Flexport’s customs business, he said, allowing the company to update its internal systems to reflect 53 changes to US Customs code last year to reflect the multiple changes to tariff and trade codes. Petersen said the adoption of AI has reduced the error rate on Flexport’s customs declarations to almost zero. The company also used AI to build its recently released “tariff simulator” to double check customs duties and other fees. And he said the tool has been able to identify some $4 billion in overcharges on customs documents. “We are now able to do customs for some of the biggest companies in the world because our customs technology stack is really differentiated for very large enterprises,” Petersen said. “We can put things on autopilot with a very high degree of compliance accuracy.” <h3>Using AI to optimize ocean freight </h3>In its forwarding business, Flexport used AI to build an application for optimizing ocean freight by assigning shipments based on the lowest contract rate, sailing schedules, and vessel arrival dates. Many other forwarders are applying AI to ocean freight, which Petersen said is a “simple problem.” He said the real benefits of AI come from handling the industry’s complex problems, such as customs updates and optimizing less-than-container load and consolidated shipments. “We want to be more about how do you bring AI to either do better, more compliant customs keeping track of all the tariff changes or freight consolidation, so being able to have an AI algorithm that takes freight and does Tetris inside the container,” Petersen said. AI is solving the problem of how a logistics company can serve more customers and markets without increasing headcount. Citing the example of DSV’s 2024 acquisition of Schenker that doubled its headcount to 150,000, Petersen said an organization that size can introduce more complexity into logistics that AI can eliminate. “I think you’re going to see a really rapid ability to lower costs in logistics,” he said. “Our estimate is that a shipper can save about 10% on the price of shipping a container [compared with] the white-collar transactional labor to coordinate the shipments.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Long Beach, California — Flexport CEO Ryan Petersen said Tuesday recent advances in artificial intelligence AI can remove more of the friction involved in shipping, potentially shaving 10% off the back-office cost of ocean freight and allowing logistics companies to easily scale without adding employees. Speaking at the Journal of Commerce’s TPM26 conference, Petersen said Flexport went into “code red” and began a more urgent transition to using AI tools in its processes last November due to the better models and new capabilities available in the market. He said the company plans to use AI to “vibe code” half of its internal applications rather than using traditional programming tools. “I think the ability to build AI right now is phenomenal,” Petersen said. “You can just talk to Claude [AI] in English and get an application out in 30 minutes. So, there’s a huge amount of this that’s possible now that wasn’t possible even 90 days ago.” AI has been especially helpful in Flexport’s customs business, he said, allowing the company to update its internal systems to reflect 53 changes to US Customs code last year to reflect the multiple changes to tariff and trade codes. Petersen said the adoption of AI has reduced the error rate on Flexport’s customs declarations to almost zero. The company also used AI to build its recently released “tariff simulator” to double check customs duties and other fees. And he said the tool has been able to identify some $4 billion in overcharges on customs documents. “We are now able to do customs for some of the biggest companies in the world because our customs technology stack is really differentiated for very large enterprises,” Petersen said. “We can put things on autopilot with a very high degree of compliance accuracy.” Using AI to optimize ocean freight In its forwarding business, Flexport used AI to build an application for optimizing ocean freight by assigning shipments based on the lowest contract rate, sailing schedules, and vessel arrival dates. Many other forwarders are applying AI to ocean freight, which Petersen said is a “simple problem.” He said the real benefits of AI come from handling the industry’s complex problems, such as customs updates and optimizing less-than-container load and consolidated shipments. “We want to be more about how do you bring AI to either do better, more compliant customs keeping track of all the tariff changes or freight consolidation, so being able to have an AI algorithm that takes freight and does Tetris inside the container,” Petersen said. AI is solving the problem of how a logistics company can serve more customers and markets without increasing headcount. Citing the example of DSV’s 2024 acquisition of Schenker that doubled its headcount to 150,000, Petersen said an organization that size can introduce more complexity into logistics that AI can eliminate. “I think you’re going to see a really rapid ability to lower costs in logistics,” he said. “Our estimate is that a shipper can save about 10% on the price of shipping a container [compared with] the white-collar transactional labor to coordinate the shipments.” Contact Michael Angell at michael.angell@spglobal.com .

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