<div class="phx-topic abstract-wrapper">After a pause in trans-Pacific service contract negotiations caused by the war in the Middle East, talks are expected to move forward now that the largest US retailer has concluded some of its agreements.</div>

After a pause in trans-Pacific service contract negotiations caused by the war in the Middle East, talks are expected to move forward now that the largest US retailer has concluded some of its agreements.

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<div class="phx-topic">Container lines that paused trans-Pacific service contract talks to assess the impact of the war in the Middle East are back at the table, and expectations are that major retailers will sign in the coming week now that Walmart has finalized its 2026–27 contracts with a half-dozen carriers. Walmart’s move opens the door for other major retailers and, in turn, smaller importers and then non-vessel operating common carriers to ink their own service contracts, which typically go into effect May 1. Despite the <a href="https://www.joc.com/article/china-india-warn-carriers-on-higher-pricing-tied-to-middle-east-conflict-6183986">unknowns in terms of length and scope of the now two-week-long Middle East war</a>, carriers say big-box retailers want to lock in vessel capacity. Walmart, <a href="">the largest US importer</a>, has wrapped up its contract discussions with its core carriers, two sources familiar with the matter told the Journal of Commerce.  Carriers, and some forwarders, are urging customers to move expeditiously in their contract negotiations, rather than allowing uncertainties in global trade to deter them. “We now have seen an unpredictable shock to the global ocean market in like four of the last six years,” a carrier executive who asked not to be named told the Journal of Commerce. “Some BCOs [beneficial cargo owners] recognized that and wanted to take risk off the table; they signed early and at higher rates than many were predicting.” The executive added that analyst forecasts of supply and demand have rarely matched reality in recent years due to that outsized volatility. Geopolitical events including diversions away from the Red Sea, unpredictable US tariff policy and even more weather events, impacting ocean reliability, have begun to shift some shippers’ thinking, he said. “Some shippers have come to realize that pushing carriers well below breakeven to save a few cents on their cost of goods is not worth the risk of a major unpredictable event happening,” the executive said. <h3>Recouping higher fuel costs </h3>While securing space remains paramount for cargo owners, rising bunker fuel prices, driven by the closure of the Strait of Hormuz, <a href="https://www.joc.com/article/fmc-says-closely-monitoring-carrier-rate-moves-tied-to-middle-east-war-6184781">is also driving contract discussions regarding bunker fuel adjustment factors</a>. Shippers are reluctant to compensate carriers for the rising operating costs tied to the Middle East on a trade lane that is not directly impacted. “The uncertainty and waiting around for clarity or resolution is not helpful to anyone,” said Kevin Parkerson, a consultant and former logistics manager at retailers. “Yes, it may impact overall capacity. Yes, it may impact fuel prices. But at this point, that shouldn’t delay the process of contracting. Everybody seems to be proceeding cautiously.” At the moment, securing capacity in the Asia-US West Coast trade is not a significant issue that would slow negotiations. “Asia to the West Coast will be fine,” a second carrier executive told the Journal of Commerce, noting that if the war in the Middle East drags on for some weeks, East Coast routings from the Indian sub-continent could be impacted by the <a href="https://www.joc.com/article/waves-of-diverted-containers-swamping-middle-east-ports-6183989">congestion that is already building at some ports in the region</a>. In the interim, most importers would be wise to secure the minimum quantity commitments in their contracts as soon as they have a handle on what their space requirements will be, a third carrier executive said. “Those BCOs who are slow-walking their negotiations to wait for better prices — it may backfire,” the executive said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Container lines that paused trans-Pacific service contract talks to assess the impact of the war in the Middle East are back at the table, and expectations are that major retailers will sign in the coming week now that Walmart has finalized its 2026–27 contracts with a half-dozen carriers. Walmart’s move opens the door for other major retailers and, in turn, smaller importers and then non-vessel operating common carriers to ink their own service contracts, which typically go into effect May 1. Despite the unknowns in terms of length and scope of the now two-week-long Middle East war , carriers say big-box retailers want to lock in vessel capacity. Walmart,  the largest US importer , has wrapped up its contract discussions with its core carriers, two sources familiar with the matter told the Journal of Commerce.   Carriers, and some forwarders, are urging customers to move expeditiously in their contract negotiations, rather than allowing uncertainties in global trade to deter them. “We now have seen an unpredictable shock to the global ocean market in like four of the last six years,” a carrier executive who asked not to be named told the Journal of Commerce. “Some BCOs [beneficial cargo owners] recognized that and wanted to take risk off the table; they signed early and at higher rates than many were predicting.” The executive added that analyst forecasts of supply and demand have rarely matched reality in recent years due to that outsized volatility. Geopolitical events including diversions away from the Red Sea, unpredictable US tariff policy and even more weather events, impacting ocean reliability, have begun to shift some shippers’ thinking, he said. “Some shippers have come to realize that pushing carriers well below breakeven to save a few cents on their cost of goods is not worth the risk of a major unpredictable event happening,” the executive said. Recouping higher fuel costs While securing space remains paramount for cargo owners, rising bunker fuel prices, driven by the closure of the Strait of Hormuz, is also driving contract discussions regarding bunker fuel adjustment factors . Shippers are reluctant to compensate carriers for the rising operating costs tied to the Middle East on a trade lane that is not directly impacted. “The uncertainty and waiting around for clarity or resolution is not helpful to anyone,” said Kevin Parkerson, a consultant and former logistics manager at retailers. “Yes, it may impact overall capacity. Yes, it may impact fuel prices. But at this point, that shouldn’t delay the process of contracting. Everybody seems to be proceeding cautiously.”  At the moment, securing capacity in the Asia-US West Coast trade is not a significant issue that would slow negotiations. “Asia to the West Coast will be fine,” a second carrier executive told the Journal of Commerce, noting that if the war in the Middle East drags on for some weeks, East Coast routings from the Indian sub-continent could be impacted by the congestion that is already building at some ports in the region . In the interim, most importers would be wise to secure the minimum quantity commitments in their contracts as soon as they have a handle on what their space requirements will be, a third carrier executive said. “Those BCOs who are slow-walking their negotiations to wait for better prices — it may backfire,” the executive said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

Trans-Pacific

Container Shipping News

Maritime

Trans-Pacific contract talks accelerating after Walmart signs

<div class="phx-topic abstract-wrapper">The Meridian Speedway dispute is important because it’s one of the primary routes where a combined Union Pacific-Norfolk Southern railroad would look to take market share from truckload. </div>

The Meridian Speedway dispute is important because it’s one of the primary routes where a combined Union Pacific-Norfolk Southern railroad would look to take market share from truckload.

<div class="phx-topic">The US Surface Transportation Board (STB) will not intervene in a dispute over the Meridian Speedway, a critical intermodal route connecting the West Coast to the US Southeast where three railroads must team up to execute service. The unanimous ruling, issued Friday, culminates more than six months of arguing between Union Pacific Railroad, Norfolk Southern Railway, and Canadian Pacific Kansas City. The dispute boiled over last summer when FedEx and UPS trucked cargo around the stretch of track to bypass the disruptions. The two parcel giants lean on the railroads to move parcels across the US and impose stringent requirements for on-time performance in their service agreements. The Meridian Speedway, a nearly 300-mile stretch between Louisiana and Mississippi, is a joint venture in which CPKC controls 70% and Norfolk Southern controls the remaining 30%. CPKC oversees dispatching and operations. The Meridian Speedway slashes more than three days between Los Angeles and Atlanta compared with going through Memphis. The dispute centers around CPKC’s decision to restrict train lengths to 8,500 feet, while UP and NS prefer trains that are 11,000 feet long. UP argues the restriction forces them to break up the containers into two different blocks, and CPKC provides substandard service on the second train. CPKC counters that most of the sidings — akin to the shoulder of a highway — are not long enough to handle an 11,000-foot train. When there is a conflict between two trains, the CPKC train is often the one stopped for hours at a time to let the 11,000-foot UP train pass. In an unanimous decision, though, the STB decided not to intervene. “As CPKC notes, the increased dwell of UP’s ‘second train’ could also be attributable to an agreement between CPKC and [Norfolk Southern] that the second train would be scheduled to depart four hours and forty minutes after the first,” STB wrote in the ruling. “Given these facts, there are not sufficient indicia that the conditions the Board imposed in the CP/KCS merger approval are implicated by the increased dwell at UP’s Hollywood Yard.” NS filed a complaint last October but eventually reached an agreement with CPKC and dropped the cast. Last month, however, UP filed a new complaint, citing increased dwell times for the containers going on the second train. UP asked the board to launch an investigation. The Meridian Speedway is a lynchpin to the pending UP-NS transaction before regulators, a route identified as critical to converting more than 1.17 million truckloads to intermodal over three years. However, UP’s application also called for running 11,000-foot trains, the very length that is at the heart of the dispute. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The US Surface Transportation Board (STB) will not intervene in a dispute over the Meridian Speedway, a critical intermodal route connecting the West Coast to the US Southeast where three railroads must team up to execute service. The unanimous ruling, issued Friday, culminates more than six months of arguing between Union Pacific Railroad, Norfolk Southern Railway, and Canadian Pacific Kansas City. The dispute boiled over last summer when FedEx and UPS trucked cargo around the stretch of track to bypass the disruptions. The two parcel giants lean on the railroads to move parcels across the US and impose stringent requirements for on-time performance in their service agreements. The Meridian Speedway, a nearly 300-mile stretch between Louisiana and Mississippi, is a joint venture in which CPKC controls 70% and Norfolk Southern controls the remaining 30%. CPKC oversees dispatching and operations. The Meridian Speedway slashes more than three days between Los Angeles and Atlanta compared with going through Memphis. The dispute centers around CPKC’s decision to restrict train lengths to 8,500 feet, while UP and NS prefer trains that are 11,000 feet long. UP argues the restriction forces them to break up the containers into two different blocks, and CPKC provides substandard service on the second train. CPKC counters that most of the sidings — akin to the shoulder of a highway — are not long enough to handle an 11,000-foot train. When there is a conflict between two trains, the CPKC train is often the one stopped for hours at a time to let the 11,000-foot UP train pass. In an unanimous decision, though, the STB decided not to intervene. “As CPKC notes, the increased dwell of UP’s ‘second train’ could also be attributable to an agreement between CPKC and [Norfolk Southern] that the second train would be scheduled to depart four hours and forty minutes after the first,” STB wrote in the ruling. “Given these facts, there are not sufficient indicia that the conditions the Board imposed in the CP/KCS merger approval are implicated by the increased dwell at UP’s Hollywood Yard.” NS filed a complaint last October but eventually reached an agreement with CPKC and dropped the cast. Last month, however, UP filed a new complaint, citing increased dwell times for the containers going on the second train. UP asked the board to launch an investigation. The Meridian Speedway is a lynchpin to the pending UP-NS transaction before regulators, a route identified as critical to converting more than 1.17 million truckloads to intermodal over three years. However, UP’s application also called for running 11,000-foot trains, the very length that is at the heart of the dispute. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Transport, Trade and Regulation News

North-American rail

Intermodal providers

Surface

STB declines to intervene on Meridian Speedway dispute

<div class="phx-topic abstract-wrapper">The UP-NS merger and ONE’s Seaspan stake look like separate deals in separate industries, but they are the same move, writes Paul Tonsager. </div>

The UP-NS merger and ONE’s Seaspan stake look like separate deals in separate industries, but they are the same move, writes Paul Tonsager.

<div class="phx-topic">Two consequential infrastructure transactions are moving simultaneously through their respective regulatory processes, in separate industries, with a single and critical purpose: Secure assets and expand infrastructure. In rail, Union Pacific (UP) and Norfolk Southern (NS) are advancing a proposed $85 billion merger that would unite UP’s western network with NS’ eastern footprint into a single system spanning 43 states. The Surface Transportation Board (STB) rejected the initial application in January as incomplete; the carriers have committed to refiling by April 30, 2026. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6186769_0.1.jpg"></img></div>In ocean, Ocean Network Express <a href="https://www.joc.com/article/one-boosts-ownership-stake-in-seaspan-parent-poseidon-6184045">has agreed to increase its ownership stake in Poseidon Corp.</a> — parent company of Seaspan Corporation, the world’s largest independent containership lessor — to 48.9%. ONE is a Singapore-based joint venture of three Japanese shipping conglomerates; Poseidon is incorporated in the Marshall Islands and tax-resident in the United Kingdom. The regulatory approvals cited in the announcement almost certainly refer to Japan’s competition authority and possibly the EU — not the United States, which has no STB equivalent for ocean shipping. That gap is part of the story. Also in ocean: Hapag-Lloyd, Germany’s largest carrier, <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">has agreed to acquire ZIM Integrated Shipping Services in a deal valued at approximately $4.2 billion</a>, a transaction that would create a combined fleet exceeding 4.8 million TEUs. Hapag-Lloyd is one of Seaspan’s charter customers, along with MSC, Maersk, CMA CGM, Cosco, Evergreen and ONE. The world’s seven largest container lines all rent tonnage from the platform that ONE is moving to control. That fact has not appeared in any headline covering this transaction. The surface details differ. The underlying logic is identical: the dominant players in each mode are moving to consolidate control of the infrastructure layer that competitors depend on. The difference is that one transaction faces a rigorous, public, multi-year regulatory process. The other faces comparatively limited scrutiny from any authority with real enforcement power over the US freight market. <h3>The network versus the tonnage platform </h3>In rail, the infrastructure being consolidated is the network itself. A UP-NS combination would create a single operator controlling track, terminals and dispatch authority across the full breadth of the country. For shippers benefiting from UP-NS interchange competition on transcontinental lanes, the merger eliminates a competitive option that cannot be recreated once it closes. In ocean, the infrastructure being consolidated is the tonnage platform. Seaspan owns 241 vessels with more than 2.5 million TEUs of capacity and charters them to virtually every major container line. ONE, approaching half-ownership of Seaspan’s parent, is not acquiring a competitor’s ships. It is acquiring a structural position in the platform that determines which carrier gets what vessel, at what charter rate, on what timeline. The rail analog is TTX Company, the carrier-owned flatcar cooperative whose shareholders — BNSF, UP, NS among them — own the equipment pool that their competitors must also rent. ONE’s Seaspan stake is the TTX play, extended to the vessel market. <h3>The 48.9% question </h3>ONE’s ownership threshold is a deliberate structural choice. Crossing 50% would likely require consolidation of Poseidon’s debt-heavy balance sheet onto ONE’s financial statements and would reframe the transaction — from a minority investment to a control acquisition of the dominant vessel-leasing platform — in ways that invite harder antitrust scrutiny in Japan and the EU. At 48.9%, ONE secures board influence and fleet planning access without pulling those triggers. The equity is entirely private — Atlas Corp., Seaspan’s parent company, was delisted in 2023. The primary seller was Fairfax Financial Holdings, run by Prem Watsa, which sold a 23.2% stake but retains approximately 22.1% of Poseidon. Watsa is choosing his partner, not his exit. Any future move toward majority control runs through him and the remaining insiders — on their timeline, at their price. <h3>What shippers are actually facing </h3>Considered individually, neither the UP-NS combination nor the ONE-Seaspan stake is disqualifying. Considered together — alongside Hapag-Lloyd’s pending acquisition of ZIM — they describe a synchronized compression of freight infrastructure across two modes simultaneously. Shippers with rail exposure on transcontinental lanes face a market in which UP and NS no longer compete at interchange. Shippers dependent on ocean capacity face a market in which the largest vessel lessor is approaching control by one of its own customers. For manufacturers, retailers and agricultural exporters moving product across both modes — which describes most significant US freight — the implications compound. The STB’s <a href="https://www.joc.com/article/industry-stakeholders-dont-see-regulators-rubber-stamping-up-ns-deal-6181218">rejection of the UP-NS application</a> signals that rigorous competitive impact analysis is required before major rail transactions proceed. No equivalent process exists for the ONE-Seaspan transaction in the United States. The Federal Maritime Commission has limited authority over foreign vessel ownership structures. The transaction will be decided in Tokyo, Brussels and Hamilton — not Washington. Two modes. Two mechanisms. One direction. The infrastructure consolidation story of 2026 is not being told as a single story. It should be. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals &amp; Switches. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

Two consequential infrastructure transactions are moving simultaneously through their respective regulatory processes, in separate industries, with a single and critical purpose: Secure assets and expand infrastructure. In rail, Union Pacific (UP) and Norfolk Southern (NS) are advancing a proposed $85 billion merger that would unite UP’s western network with NS’ eastern footprint into a single system spanning 43 states. The Surface Transportation Board (STB) rejected the initial application in January as incomplete; the carriers have committed to refiling by April 30, 2026. In ocean, Ocean Network Express has agreed to increase its ownership stake in Poseidon Corp. — parent company of Seaspan Corporation, the world’s largest independent containership lessor — to 48.9%. ONE is a Singapore-based joint venture of three Japanese shipping conglomerates; Poseidon is incorporated in the Marshall Islands and tax-resident in the United Kingdom. The regulatory approvals cited in the announcement almost certainly refer to Japan’s competition authority and possibly the EU — not the United States, which has no STB equivalent for ocean shipping. That gap is part of the story. Also in ocean: Hapag-Lloyd, Germany’s largest carrier, has agreed to acquire ZIM Integrated Shipping Services in a deal valued at approximately $4.2 billion , a transaction that would create a combined fleet exceeding 4.8 million TEUs. Hapag-Lloyd is one of Seaspan’s charter customers, along with MSC, Maersk, CMA CGM, Cosco, Evergreen and ONE. The world’s seven largest container lines all rent tonnage from the platform that ONE is moving to control. That fact has not appeared in any headline covering this transaction. The surface details differ. The underlying logic is identical: the dominant players in each mode are moving to consolidate control of the infrastructure layer that competitors depend on. The difference is that one transaction faces a rigorous, public, multi-year regulatory process. The other faces comparatively limited scrutiny from any authority with real enforcement power over the US freight market. The network versus the tonnage platform In rail, the infrastructure being consolidated is the network itself. A UP-NS combination would create a single operator controlling track, terminals and dispatch authority across the full breadth of the country. For shippers benefiting from UP-NS interchange competition on transcontinental lanes, the merger eliminates a competitive option that cannot be recreated once it closes. In ocean, the infrastructure being consolidated is the tonnage platform. Seaspan owns 241 vessels with more than 2.5 million TEUs of capacity and charters them to virtually every major container line. ONE, approaching half-ownership of Seaspan’s parent, is not acquiring a competitor’s ships. It is acquiring a structural position in the platform that determines which carrier gets what vessel, at what charter rate, on what timeline. The rail analog is TTX Company, the carrier-owned flatcar cooperative whose shareholders — BNSF, UP, NS among them — own the equipment pool that their competitors must also rent. ONE’s Seaspan stake is the TTX play, extended to the vessel market. The 48.9% question ONE’s ownership threshold is a deliberate structural choice. Crossing 50% would likely require consolidation of Poseidon’s debt-heavy balance sheet onto ONE’s financial statements and would reframe the transaction — from a minority investment to a control acquisition of the dominant vessel-leasing platform — in ways that invite harder antitrust scrutiny in Japan and the EU. At 48.9%, ONE secures board influence and fleet planning access without pulling those triggers. The equity is entirely private — Atlas Corp., Seaspan’s parent company, was delisted in 2023. The primary seller was Fairfax Financial Holdings, run by Prem Watsa, which sold a 23.2% stake but retains approximately 22.1% of Poseidon. Watsa is choosing his partner, not his exit. Any future move toward majority control runs through him and the remaining insiders — on their timeline, at their price. What shippers are actually facing Considered individually, neither the UP-NS combination nor the ONE-Seaspan stake is disqualifying. Considered together — alongside Hapag-Lloyd’s pending acquisition of ZIM — they describe a synchronized compression of freight infrastructure across two modes simultaneously. Shippers with rail exposure on transcontinental lanes face a market in which UP and NS no longer compete at interchange. Shippers dependent on ocean capacity face a market in which the largest vessel lessor is approaching control by one of its own customers. For manufacturers, retailers and agricultural exporters moving product across both modes — which describes most significant US freight — the implications compound. The STB’s rejection of the UP-NS application signals that rigorous competitive impact analysis is required before major rail transactions proceed. No equivalent process exists for the ONE-Seaspan transaction in the United States. The Federal Maritime Commission has limited authority over foreign vessel ownership structures. The transaction will be decided in Tokyo, Brussels and Hamilton — not Washington. Two modes. Two mechanisms. One direction. The infrastructure consolidation story of 2026 is not being told as a single story. It should be. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals & Switches. Contact him at paul.tonsager@multimodalsolutions.io .

Container lines

Rail and ocean carriers consolidating shipping infrastructure: analyst

<div class="phx-topic abstract-wrapper">An estimated 30% of Asia-Europe air cargo capacity is routed via the Middle East, and with options through the region severely constrained by the US-Iran war, a rush for Asia-Europe air cargo capacity is pushing up prices. </div>

An estimated 30% of Asia-Europe air cargo capacity is routed via the Middle East, and with options through the region severely constrained by the US-Iran war, a rush for Asia-Europe air cargo capacity is pushing up prices.

<div class="phx-topic">Shippers of Asia-Europe air cargo are being hit with a double whammy of rapidly rising freight rates and soaring fuel surcharges as Middle East cargo gets rerouted, China picks up production after Lunar New Year and jet fuel prices double. An estimated 30% of Asia-Europe air cargo is routed via the Middle East, and with options through the region severely constrained by the ongoing US-Iran war, a rush for Asia-Europe air cargo capacity is pushing up rates with hefty fuel surcharges rolled out on top. Niall van de Wouw, air freight officer at rate benchmarking platform Xeneta, said dynamic load factors on the Asia-Europe trade lane rose to 86% last week, up from 80% in the week prior. “That makes it overall a very tight market that will require some creativity to find spare capacity,” he said, but he warned that solutions will come at a price. Ray Zedov, an analyst at Rotate, said some forwarders were employing the creative and costly option of moving cargo from Asia to Europe in the bellies of passenger planes via North America, which was a clear indication there was not enough direct Asia-Europe capacity available. “This routing via North America will be quite expensive given that trans-Pacific carriers were already full on the eastbound routes prior to the war,” he said. While data from Freightos shows spot rates on China-Europe are up about 13% compared with last week, the rates from South Asia to Europe have increased 82% since before the war started. The Baltic Air Index had Singapore outbound rates up 47.6% last week compared with the previous week as Middle East airspace closures drove diversions from Gulf hubs to Asian gateways, tightening capacity. Judah Levine, head of research at Freightos, said rates climbed sharply following the outbreak of war and the airspace closures, but in the last few days prices have leveled off on many lanes. “That may reflect some capacity recovery by Emirates, as well as Etihad, or the addition of direct Asia-Europe capacity by European airlines and carriers from the Far East,” he said. Several freighter operators and integrators have repositioned capacity to serve growing demand on Asia-Europe markets, but a protracted regional conflict could see rates climb even higher. “If this continues, we will see increases of 100% to 200% on the short-term market,” Van de Wouw noted. “In fact, I am picking up anecdotal evidence that this is already happening in selected markets.” <h3>Limited flight availability via Middle East </h3>The war is entering its third week and flights from international carriers remain suspended to the region’s busiest airports of Abu Dhabi, Amman, Bahrain, Doha, Dubai and Tel Aviv. UAE carriers Emirates and Etihad are operating limited flights to the regional hubs of Dubai and Abu Dhabi, and Qatar Cargo, the region’s largest air freight carrier, is not flying in or out of its home base of Doha where Qatari airspace remains closed. Qatar Cargo is the largest air freight operator in the Gulf with a 5.9% share of global capacity, Emirates Skycargo second with 4.9% and Etihad holding a 1.5% share of global capacity, data from air cargo analyst Rotate shows. Total capacity to and from the Middle Eastern airports affected by the US-Iran war is down 90% compared with normal pre-war levels. South Asian origins in particular are heavily dependent on capacity via the Gulf, said Frederic Horst, managing director for Australia-based Trade and Transport Group. He told the Journal of Commerce that 35% of all Indian freight traffic and 46% of cargo traffic from Pakistan and Bangladesh were routed via the Persian Gulf. Kathy Liu, vice president of global sales and marketing at Dimerco Express Group, said with limited opportunity to ship via the main Gulf airports, the market was looking for direct flights from Asia into Europe or services that fly via Asian hubs. “As factories re-open after Chinese New Year, we will see cargo using Middle East carriers in the past moving to Asian hubs including Hong Kong, Taiwan, Singapore, South Korea and Japan,” she told the Journal of Commerce. “That will impact on the first leg of capacity from origins into those hubs and that will squeeze capacity for intra-Asia and trans-Pacific eastbound,” she added. <h3>Fuel surcharges on the rise </h3>Airlines are reviewing their fuel surcharges weekly instead of every month as the war-driven spike in prices piles additional cost on top of what is already a significant portion of a carrier’s expenses. Cathay Pacific’s cargo fuel surcharge will increase from HK$3.20 ($0.41)/kg on March 19 to HK$12.9 ($1.65)/kg from March 20. Lufthansa Cargo raised its air freight surcharge from €0.85 ($0.97)/kg to €1.20 ($1.27)/kg, effective March 16, while IAG Cargo has hedged more than 60% of its fuel for 2026 and has not announced any new fuel surcharge. Jet fuel typically accounts for 20% to 30% of an airline’s total cost base, and with international carriers forced to fly longer distances to avoid Middle East conflict zones with reduced payloads, those costs are mounting fast. “Airspace restrictions or routing adjustments may require airlines to operate longer flight paths between global hubs, increasing fuel demand at a time when supply conditions are already tight,” global forwarder Logfret said in a market update. “This combination of supply constraints and operational adjustments has intensified cost pressures across both passenger and cargo aviation sectors.” Maersk told customers in an advisory Friday that its fuel surcharges will be reviewed on a weekly basis and adjusted in line with developments in aviation fuel prices, based on established market indexes. For contract renewals where no fuel surcharge mechanism is in place, Maersk has proposed that 15% of the rate is allocated to fuel. “At the same time, the evolving situation is placing pressure on global air freight capacity and routing options,” Maersk noted. “As a result, Maersk Air Freight will apply a transit disruption surcharge in respect of the additional costs associated with securing capacity, rerouting shipments and maintaining service continuity on affected operations.” <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">Demand is also growing for multimodal alternatives</a>, with road freight being used to move cargo from Asia to Europe and between transport hubs in the Middle East as an alternative to air. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Shippers of Asia-Europe air cargo are being hit with a double whammy of rapidly rising freight rates and soaring fuel surcharges as Middle East cargo gets rerouted, China picks up production after Lunar New Year and jet fuel prices double. An estimated 30% of Asia-Europe air cargo is routed via the Middle East, and with options through the region severely constrained by the ongoing US-Iran war, a rush for Asia-Europe air cargo capacity is pushing up rates with hefty fuel surcharges rolled out on top. Niall van de Wouw, air freight officer at rate benchmarking platform Xeneta, said dynamic load factors on the Asia-Europe trade lane rose to 86% last week, up from 80% in the week prior. “That makes it overall a very tight market that will require some creativity to find spare capacity,” he said, but he warned that solutions will come at a price. Ray Zedov, an analyst at Rotate, said some forwarders were employing the creative and costly option of moving cargo from Asia to Europe in the bellies of passenger planes via North America, which was a clear indication there was not enough direct Asia-Europe capacity available. “This routing via North America will be quite expensive given that trans-Pacific carriers were already full on the eastbound routes prior to the war,” he said. While data from Freightos shows spot rates on China-Europe are up about 13% compared with last week, the rates from South Asia to Europe have increased 82% since before the war started. The Baltic Air Index had Singapore outbound rates up 47.6% last week compared with the previous week as Middle East airspace closures drove diversions from Gulf hubs to Asian gateways, tightening capacity. Judah Levine, head of research at Freightos, said rates climbed sharply following the outbreak of war and the airspace closures, but in the last few days prices have leveled off on many lanes. “That may reflect some capacity recovery by Emirates, as well as Etihad, or the addition of direct Asia-Europe capacity by European airlines and carriers from the Far East,” he said. Several freighter operators and integrators have repositioned capacity to serve growing demand on Asia-Europe markets, but a protracted regional conflict could see rates climb even higher. “If this continues, we will see increases of 100% to 200% on the short-term market,” Van de Wouw noted. “In fact, I am picking up anecdotal evidence that this is already happening in selected markets.” Limited flight availability via Middle East The war is entering its third week and flights from international carriers remain suspended to the region’s busiest airports of Abu Dhabi, Amman, Bahrain, Doha, Dubai and Tel Aviv. UAE carriers Emirates and Etihad are operating limited flights to the regional hubs of Dubai and Abu Dhabi, and Qatar Cargo, the region’s largest air freight carrier, is not flying in or out of its home base of Doha where Qatari airspace remains closed. Qatar Cargo is the largest air freight operator in the Gulf with a 5.9% share of global capacity, Emirates Skycargo second with 4.9% and Etihad holding a 1.5% share of global capacity, data from air cargo analyst Rotate shows. Total capacity to and from the Middle Eastern airports affected by the US-Iran war is down 90% compared with normal pre-war levels. South Asian origins in particular are heavily dependent on capacity via the Gulf, said Frederic Horst, managing director for Australia-based Trade and Transport Group. He told the Journal of Commerce that 35% of all Indian freight traffic and 46% of cargo traffic from Pakistan and Bangladesh were routed via the Persian Gulf. Kathy Liu, vice president of global sales and marketing at Dimerco Express Group, said with limited opportunity to ship via the main Gulf airports, the market was looking for direct flights from Asia into Europe or services that fly via Asian hubs. “As factories re-open after Chinese New Year, we will see cargo using Middle East carriers in the past moving to Asian hubs including Hong Kong, Taiwan, Singapore, South Korea and Japan,” she told the Journal of Commerce. “That will impact on the first leg of capacity from origins into those hubs and that will squeeze capacity for intra-Asia and trans-Pacific eastbound,” she added. Fuel surcharges on the rise Airlines are reviewing their fuel surcharges weekly instead of every month as the war-driven spike in prices piles additional cost on top of what is already a significant portion of a carrier’s expenses. Cathay Pacific’s cargo fuel surcharge will increase from HK$3.20 ($0.41)/kg on March 19 to HK$12.9 ($1.65)/kg from March 20. Lufthansa Cargo raised its air freight surcharge from €0.85 ($0.97)/kg to €1.20 ($1.27)/kg, effective March 16, while IAG Cargo has hedged more than 60% of its fuel for 2026 and has not announced any new fuel surcharge. Jet fuel typically accounts for 20% to 30% of an airline’s total cost base, and with international carriers forced to fly longer distances to avoid Middle East conflict zones with reduced payloads, those costs are mounting fast. “Airspace restrictions or routing adjustments may require airlines to operate longer flight paths between global hubs, increasing fuel demand at a time when supply conditions are already tight,” global forwarder Logfret said in a market update. “This combination of supply constraints and operational adjustments has intensified cost pressures across both passenger and cargo aviation sectors.” Maersk told customers in an advisory Friday that its fuel surcharges will be reviewed on a weekly basis and adjusted in line with developments in aviation fuel prices, based on established market indexes. For contract renewals where no fuel surcharge mechanism is in place, Maersk has proposed that 15% of the rate is allocated to fuel. “At the same time, the evolving situation is placing pressure on global air freight capacity and routing options,” Maersk noted. “As a result, Maersk Air Freight will apply a transit disruption surcharge in respect of the additional costs associated with securing capacity, rerouting shipments and maintaining service continuity on affected operations.” Demand is also growing for multimodal alternatives , with road freight being used to move cargo from Asia to Europe and between transport hubs in the Middle East as an alternative to air. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Carriers News

Asia-Europe

Air Cargo

Asia-Europe air cargo space tightens as rates, fuel surcharges soar

<div class="phx-topic abstract-wrapper">While the logistical hurdles of sending cargo to the region are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices.</div>

While the logistical hurdles of sending cargo to the region are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices.

<div class="phx-topic">US exporters are scrambling to locate containers they have shipped to the Middle East but were subsequently dropped off at unknown ports after ocean carriers were forced to halt almost all services due to the war with Iran. While the logistical hurdles for Middle East cargo are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices. Mediterranean Shipping Co. invoked an “end of voyage” clause this week on exports into Jebel Ali in Dubai, allowing the carrier to discharge containers at the next available port on the ship’s rotation, forwarders tell the Journal of Commerce. The end-of-voyage clause also includes an $800 surcharge. Stephen Zambo, president of third-party logistics provider AGL Group, said he has about 70 containers on the water with MSC destined for the Middle East. He is now figuring out where the next port of call will be for those boxes and bracing his customers for more costs and delays due to the redirections. Along with those containers, AGL has three containers on the ONE Majesty that was attacked in the Strait of Hormuz on Wednesday. Although the vessel suffered some damage, Zambo was told the ship would continue its original voyage. “We’re having to figure out each day what’s going on and what we need to do,” Zambo said. “It’s like it’s been over the last two years with tariffs and other crises, sort of wait-and-see how things play out and act accordingly.” MSC handles about half the container volumes from the US to the Middle East each year, which amounts to about 290,000 TEUs, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Maersk and CMA CGM are the second- and third-busiest carriers on that trade lane. Tim Avanzato, director of global logistics for paper and plastic products maker Lanca Sales, told the Journal of Commerce there’s little risk of that US export cargo backing up at ports, as most of it can be sold to other markets. However, the shutdown of the Strait of Hormuz and the resulting surge in oil prices is concerning because that raises the cost of the products that Lanca Sales distributes. Water and hygiene services company Ecolab imposed a 10% to 14% energy surcharge on its products on Wednesday due to crude oil futures rising to over $100 per barrel. “The Mideast situation is more of an inconvenience at this point,” Avanzato said. “But the fallout if this goes on for weeks? It’s a catastrophe.” Zambo said there are other markets that US exporters can tap. But some products such as certain softwoods are milled specifically for Middle East markets. “The lumber producers are now trying to figure out what to do with the product they have,” he said. Higher oil prices have also resulted in escalating fuel surcharges for all trades. Zambo said he has been in discussions about shipping trans-Atlantic cargo into the US, but carriers have been unwilling to commit to rates due to the surge in fuel prices. <h3>Reviewing new routes </h3>The director of global logistics for a Houston-based chemicals company told the Journal of Commerce he is expecting his iso-tanks onboard MSC vessels destined for Jebel Ali to land in India now due to the end-of-voyage clause. He is now looking at new routes outside of the Middle East’s main port. CMA CGM, which last week suspended all Middle East bookings, on Wednesday reopened bookings for alternative ports such as the UAE’s Khor Fakkan or Oman’s Sohar port, which sit outside of the Strait of Hormuz. CMA CGM is also offering service to Saudi Arabia’s Red Sea port of Jeddah <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">and trucking cargo from there</a>. But Jeddah would also involve transiting the Red Sea, which raises the risk of a potential attack by Iran-aligned Houthi rebels. The source said the regional risk is such that MSC has also suspended bookings into Israel’s Haifa, leaving Zim Integrated Shipping Services as the only carrier to service that port. MSC’s suspension of Haifa service could not be independently confirmed. “The Red Sea is a mess,” the executive said. “I have no confidence it will get there.” He added that he’s looking to move containers to Egypt’s Port Said, a transshipment hub outside of the immediate warzone at the northern end of the Suez Canal on the Mediterranean Sea. Outside of servicing his customers, the source said his main concern now is how the oil price spike will play out for the economy. The cost of intermediate chemicals from the Middle East, including ammonia and cyclo-hexane, has jumped, resulting in further cost pressures for his own company’s products. “Fuel costs are going to kill everybody,” he said. “That’s the wildcard.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US exporters are scrambling to locate containers they have shipped to the Middle East but were subsequently dropped off at unknown ports after ocean carriers were forced to halt almost all services due to the war with Iran. While the logistical hurdles for Middle East cargo are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices. Mediterranean Shipping Co. invoked an “end of voyage” clause this week on exports into Jebel Ali in Dubai, allowing the carrier to discharge containers at the next available port on the ship’s rotation, forwarders tell the Journal of Commerce. The end-of-voyage clause also includes an $800 surcharge. Stephen Zambo, president of third-party logistics provider AGL Group, said he has about 70 containers on the water with MSC destined for the Middle East. He is now figuring out where the next port of call will be for those boxes and bracing his customers for more costs and delays due to the redirections. Along with those containers, AGL has three containers on the ONE Majesty that was attacked in the Strait of Hormuz on Wednesday. Although the vessel suffered some damage, Zambo was told the ship would continue its original voyage. “We’re having to figure out each day what’s going on and what we need to do,” Zambo said. “It’s like it’s been over the last two years with tariffs and other crises, sort of wait-and-see how things play out and act accordingly.” MSC handles about half the container volumes from the US to the Middle East each year, which amounts to about 290,000 TEUs, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Maersk and CMA CGM are the second- and third-busiest carriers on that trade lane. Tim Avanzato, director of global logistics for paper and plastic products maker Lanca Sales, told the Journal of Commerce there’s little risk of that US export cargo backing up at ports, as most of it can be sold to other markets. However, the shutdown of the Strait of Hormuz and the resulting surge in oil prices is concerning because that raises the cost of the products that Lanca Sales distributes. Water and hygiene services company Ecolab imposed a 10% to 14% energy surcharge on its products on Wednesday due to crude oil futures rising to over $100 per barrel. “The Mideast situation is more of an inconvenience at this point,” Avanzato said. “But the fallout if this goes on for weeks? It’s a catastrophe.” Zambo said there are other markets that US exporters can tap. But some products such as certain softwoods are milled specifically for Middle East markets. “The lumber producers are now trying to figure out what to do with the product they have,” he said. Higher oil prices have also resulted in escalating fuel surcharges for all trades. Zambo said he has been in discussions about shipping trans-Atlantic cargo into the US, but carriers have been unwilling to commit to rates due to the surge in fuel prices. Reviewing new routes The director of global logistics for a Houston-based chemicals company told the Journal of Commerce he is expecting his iso-tanks onboard MSC vessels destined for Jebel Ali to land in India now due to the end-of-voyage clause. He is now looking at new routes outside of the Middle East’s main port. CMA CGM, which last week suspended all Middle East bookings, on Wednesday reopened bookings for alternative ports such as the UAE’s Khor Fakkan or Oman’s Sohar port, which sit outside of the Strait of Hormuz. CMA CGM is also offering service to Saudi Arabia’s Red Sea port of Jeddah and trucking cargo from there . But Jeddah would also involve transiting the Red Sea, which raises the risk of a potential attack by Iran-aligned Houthi rebels. The source said the regional risk is such that MSC has also suspended bookings into Israel’s Haifa, leaving Zim Integrated Shipping Services as the only carrier to service that port. MSC’s suspension of Haifa service could not be independently confirmed. “The Red Sea is a mess,” the executive said. “I have no confidence it will get there.” He added that he’s looking to move containers to Egypt’s Port Said, a transshipment hub outside of the immediate warzone at the northern end of the Suez Canal on the Mediterranean Sea. Outside of servicing his customers, the source said his main concern now is how the oil price spike will play out for the economy. The cost of intermediate chemicals from the Middle East, including ammonia and cyclo-hexane, has jumped, resulting in further cost pressures for his own company’s products. “Fuel costs are going to kill everybody,” he said. “That’s the wildcard.” Contact Michael Angell at michael.angell@spglobal.com .

Trans-Atlantic

US exports to Middle East in limbo amid war zone service disruptions

<div class="phx-topic abstract-wrapper">Container shipping has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity, attendees at TPM26 were told. </div>

Container shipping has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity, attendees at TPM26 were told.

<div class="phx-topic">A slide presented at TPM26 on March 2 by Maersk’s global head of ocean product said it all. The slide showed just two lines: heavy volatility in volumes over a period of time, and more or less flat vessel utilization over the same time period. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6185926_0.1.jpg"></img></div>The conclusion: Consistent vessel utilization levels in the face of much more volatile volumes point to effective capacity management by carriers. “With very volatile demand, we actually see a utilization which is quite stable,” said the Maersk executive, Johan Sigsgaard. “And of course, the balance between the two is the deployment adjustments that are made on a week-to-week basis, either in the form of ship size adjustments or in the form of [blank sailings].” In other words, as of 2026, the carrier industry has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity. Many others have noticed what amounts to a fundamental shift from the pre-COVID state of the industry and a likely long-term reality of the market going forward. The new reality is that the industry can no longer be understood in terms of supply and demand on paper, and must consider multiple forms of brakes on capacity. “We see this very clearly in the market on a day-to-day basis,” said Serkan Kavas, executive vice president for imports at MTS Logistics in New York, who attended TPM26. “Since the COVID cargo surge ended, carriers have become much more disciplined in managing capacity through blank sailings and vessel deployment to maintain rate levels. “With excess supply still present, capacity management will remain one of the most important tools carriers rely on over the next few years, regardless of how volatile the macro environment is,” he added. <h3>‘Growing relevance’ of capacity post-COVID </h3>Carriers took their first steps toward capacity management at scale during the 2008–09 financial crisis when they laid up about 10% of global tonnage, according to industry analyst Lars Jensen. At the same time, they jointly agreed to engage in systemwide slow steaming in response to a 10% drop in global volumes. Blank sailings began as a regular carrier tactic around 2013. Capacity was further removed due to a series of macro shocks that began in 2020, including COVID-19, the attacks on shipping in the Red Sea, the Panama Canal drought, and most recently the war with Iran. Growing systemic port congestion is another factor pulling more capacity off the market. All that means is that despite a record order book amounting to about 35% of the existing fleet, which has caused several financial analysts to be downbeat on carrier stocks, the downside risks for carriers are much less severe and more manageable than prior to COVID due to the growing relevance of the capacity side of the equation. The industry is experiencing an “illusion of a normal down cycle,” Flexport’s global head of ocean, Trine Nielsen, told TPM26 on March 2. “We do have the macro volatility layer, as we call it, and I think just the past week and a half [of the Middle East war and Supreme Court tariff ruling] ... is the perfect proof of how quickly the world changes.” Nielsen added: “We do have what we call micro volatility, and we see this becoming more and more frequent. One aspect is the capacity management, dealing with blank sailings, dealing with [cargo] rollings, equipment issues that, of course, are becoming even more difficult considering the macro environment that we’re in.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

A slide presented at TPM26 on March 2 by Maersk’s global head of ocean product said it all. The slide showed just two lines: heavy volatility in volumes over a period of time, and more or less flat vessel utilization over the same time period. The conclusion: Consistent vessel utilization levels in the face of much more volatile volumes point to effective capacity management by carriers. “With very volatile demand, we actually see a utilization which is quite stable,” said the Maersk executive, Johan Sigsgaard. “And of course, the balance between the two is the deployment adjustments that are made on a week-to-week basis, either in the form of ship size adjustments or in the form of [blank sailings].” In other words, as of 2026, the carrier industry has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity. Many others have noticed what amounts to a fundamental shift from the pre-COVID state of the industry and a likely long-term reality of the market going forward. The new reality is that the industry can no longer be understood in terms of supply and demand on paper, and must consider multiple forms of brakes on capacity. “We see this very clearly in the market on a day-to-day basis,” said Serkan Kavas, executive vice president for imports at MTS Logistics in New York, who attended TPM26. “Since the COVID cargo surge ended, carriers have become much more disciplined in managing capacity through blank sailings and vessel deployment to maintain rate levels. “With excess supply still present, capacity management will remain one of the most important tools carriers rely on over the next few years, regardless of how volatile the macro environment is,” he added. ‘Growing relevance’ of capacity post-COVID Carriers took their first steps toward capacity management at scale during the 2008–09 financial crisis when they laid up about 10% of global tonnage, according to industry analyst Lars Jensen. At the same time, they jointly agreed to engage in systemwide slow steaming in response to a 10% drop in global volumes. Blank sailings began as a regular carrier tactic around 2013. Capacity was further removed due to a series of macro shocks that began in 2020, including COVID-19, the attacks on shipping in the Red Sea, the Panama Canal drought, and most recently the war with Iran. Growing systemic port congestion is another factor pulling more capacity off the market. All that means is that despite a record order book amounting to about 35% of the existing fleet, which has caused several financial analysts to be downbeat on carrier stocks, the downside risks for carriers are much less severe and more manageable than prior to COVID due to the growing relevance of the capacity side of the equation. The industry is experiencing an “illusion of a normal down cycle,” Flexport’s global head of ocean, Trine Nielsen, told TPM26 on March 2. “We do have the macro volatility layer, as we call it, and I think just the past week and a half [of the Middle East war and Supreme Court tariff ruling] ... is the perfect proof of how quickly the world changes.” Nielsen added: “We do have what we call micro volatility, and we see this becoming more and more frequent. One aspect is the capacity management, dealing with blank sailings, dealing with [cargo] rollings, equipment issues that, of course, are becoming even more difficult considering the macro environment that we’re in.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Ocean carriers employ effective capacity management despite market volatility

<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 .

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

Singapore

Port Klang

Colombo

Portcast reports on port congestion by processing and analyzing rich automatic identification system (AIS) data to determine vessels’ behavior and speed on the way to a given destination port and generate a congestion index for each port. The congestion tracker includes ships that do not have estimated times of arrival or are waiting at anchorage and uses multiple human-monitored data sources to make corrections around outliers. [Portcast](https://portcast.io/solutions/port-congestion-tracker)

South Asia port harbor performance (Portcast)

Southeast Asia harbor congestion number of vessels waiting (Portcast) Gateway

<div class="phx-topic abstract-wrapper">The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the Energy Information Administration, the biggest seven-day spike since the agency began releasing the data in 1994. </div>

The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the Energy Information Administration, the biggest seven-day spike since the agency began releasing the data in 1994.

<div class="phx-topic">The US trucking industry may be showing signs of coming out of a nearly four-year-long freight recession as spot rates have remained elevated, especially along the East Coast and in the Midwest, after the disruption caused by snow and ice storms in January and February. And now lending support to rates is the uncertainty tied to the war in the Middle East and the resulting surge in fuel prices. The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the US Energy Information Administration. That’s the biggest seven-day spike since the agency began releasing data in 1994, topping the previous record of a 75-cent spike in March 2022 after Russia invaded Ukraine. Diesel now sits at nearly $4.90 per gallon nationally and more than $6/gallon in California. For the shipper, it means the average fuel surcharge has risen between 15 and 20 cents per mile, causing rates on long hauls across the US to rise sharply. Shippers will notice when they receive invoices from brokers and carriers in the coming weeks. Trucking executives believe the bullish fundamentals will push contract rates higher as those deals are renegotiated. Indeed, the process has already begun, according to multiple shippers; sources have told the Journal of Commerce that brokers are refusing to handle loads on contracts signed as recently as Jan. 1 unless rates are renegotiated. “Tender rejections are up 13 to 15%,” said ITS Logistics Chief Commercial Officer Josh Allen. “That’s the first rejection. If shippers have done [requests for proposals], maybe as recently as 90 to 180 days ago, some of those contract rates are already underwater.” According to a Journal of Commerce analysis, shipper-paid spot rates nationally increased between 15% and 20% year over year in February. But rates are surging in pockets, rather than nationally. Rates between November and February jumped 52 cents per mile on loads originating in the Midwest, but only rose 10 cents for originations in the Southwest. <h3>‘Signs of disruption’ </h3>Tightening capacity is the result of both slower economic conditions causing some carriers to go bankrupt, and by the Trump administration’s crackdown on non-domiciled drivers and push for English language proficiency rules. There is also the proposed Dalilah’s law, which would prohibit states from issuing commercial driver’s licenses (CDLs) to undocumented immigrants and retroactively cancel all existing licenses to those individuals. “For the first time in roughly three years, routing guides are showing signs of disruption,” said Nolan Transportation Group President and Chief Operating Officer Drew Herpich. “Many transportation RFPs that went live this year were priced in Q3 and Q4 of last year when market conditions were significantly more stable.” Herpich added that as tender rejection rates increase, more freight is going to the second, third, or fourth contract carriers in the shipper’s routing guide or directly posted on the spot market. He also said that carriers and brokers are “becoming more disciplined” around capacity commitments, and communication with customers is becoming clearer as the weekly volume approaches or exceeds the total outlined in the contract. “Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing that supports service reliability and execution.” Allen said the so-called “waterfall” is beginning as rates need to be adjusted. “I think it’s happening everywhere,” he said. “A shipper calls and says ‘you are 12th in line from a rating perspective in the routing guide. The 11 before you have declined, would you like these opportunities at these published rates?’” At the Raymond James Investor Conference last week, truckload carrier J.B. Hunt Transport Services said the tightening capacity shows similarities to the last major regulatory crackdown in 2017. “We’ve really not had a supply market shrinkage since probably ’17 or ’18 with ELDs [electronic logging devices],” Nick Hobbs, J.B. Hunt’s president of highway services, said at the conference. “Probably the most talked about is non-domiciled drivers ... We’re also seeing driver schools shut down [CDL mills] and we’re seeing a lot of enforcement around chameleon carriers.” The term CDL mills has been coined to describe low-quality truck driving schools that prioritize high-volume, rapid training over safety, which are increasingly getting shut down by the US government. Chameleon carriers refer to trucking companies who operate with multiple company names and registration numbers, swapping one placard for another on their trucks to evade law enforcement. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

The US trucking industry may be showing signs of coming out of a nearly four-year-long freight recession as spot rates have remained elevated, especially along the East Coast and in the Midwest, after the disruption caused by snow and ice storms in January and February. And now lending support to rates is the uncertainty tied to the war in the Middle East and the resulting surge in fuel prices. The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the US Energy Information Administration. That’s the biggest seven-day spike since the agency began releasing data in 1994, topping the previous record of a 75-cent spike in March 2022 after Russia invaded Ukraine. Diesel now sits at nearly $4.90 per gallon nationally and more than $6/gallon in California. For the shipper, it means the average fuel surcharge has risen between 15 and 20 cents per mile, causing rates on long hauls across the US to rise sharply. Shippers will notice when they receive invoices from brokers and carriers in the coming weeks. Trucking executives believe the bullish fundamentals will push contract rates higher as those deals are renegotiated. Indeed, the process has already begun, according to multiple shippers; sources have told the Journal of Commerce that brokers are refusing to handle loads on contracts signed as recently as Jan. 1 unless rates are renegotiated. “Tender rejections are up 13 to 15%,” said ITS Logistics Chief Commercial Officer Josh Allen. “That’s the first rejection. If shippers have done [requests for proposals], maybe as recently as 90 to 180 days ago, some of those contract rates are already underwater.” According to a Journal of Commerce analysis, shipper-paid spot rates nationally increased between 15% and 20% year over year in February. But rates are surging in pockets, rather than nationally. Rates between November and February jumped 52 cents per mile on loads originating in the Midwest, but only rose 10 cents for originations in the Southwest. ‘Signs of disruption’ Tightening capacity is the result of both slower economic conditions causing some carriers to go bankrupt, and by the Trump administration’s crackdown on non-domiciled drivers and push for English language proficiency rules. There is also the proposed Dalilah’s law, which would prohibit states from issuing commercial driver’s licenses (CDLs) to undocumented immigrants and retroactively cancel all existing licenses to those individuals. “For the first time in roughly three years, routing guides are showing signs of disruption,” said Nolan Transportation Group President and Chief Operating Officer Drew Herpich. “Many transportation RFPs that went live this year were priced in Q3 and Q4 of last year when market conditions were significantly more stable.” Herpich added that as tender rejection rates increase, more freight is going to the second, third, or fourth contract carriers in the shipper’s routing guide or directly posted on the spot market. He also said that carriers and brokers are “becoming more disciplined” around capacity commitments, and communication with customers is becoming clearer as the weekly volume approaches or exceeds the total outlined in the contract. “Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing that supports service reliability and execution.” Allen said the so-called “waterfall” is beginning as rates need to be adjusted. “I think it’s happening everywhere,” he said. “A shipper calls and says ‘you are 12th in line from a rating perspective in the routing guide. The 11 before you have declined, would you like these opportunities at these published rates?’” At the Raymond James Investor Conference last week, truckload carrier J.B. Hunt Transport Services said the tightening capacity shows similarities to the last major regulatory crackdown in 2017. “We’ve really not had a supply market shrinkage since probably ’17 or ’18 with ELDs [electronic logging devices],” Nick Hobbs, J.B. Hunt’s president of highway services, said at the conference. “Probably the most talked about is non-domiciled drivers ... We’re also seeing driver schools shut down [CDL mills] and we’re seeing a lot of enforcement around chameleon carriers.” The term CDL mills has been coined to describe low-quality truck driving schools that prioritize high-volume, rapid training over safety, which are increasingly getting shut down by the US government. Chameleon carriers refer to trucking companies who operate with multiple company names and registration numbers, swapping one placard for another on their trucks to evade law enforcement. Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Elevated US trucking rates get new boost from diesel gains amid Middle East war 

<div class="phx-topic abstract-wrapper">With the flow of waterborne oil suspended in the Strait of Hormuz, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil orders. </div>

With the flow of waterborne oil suspended in the Strait of Hormuz, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil orders.

<div class="phx-topic">The disruption to oil exports through the Strait of Hormuz is forcing Maersk to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia, the carrier’s chief commercial officer said Wednesday. Karsten Kildahl told the Journal of Commerce in an interview that in the past two days, several of Maersk’s bunker suppliers in key areas in the Middle East and Asia have been unable to refuel the carrier’s vessels. “We’ve had to start moving oil around ourselves because we don’t have enough supplies where we need them,” Kildahl said. “In Asia, nearly half of their supplies come from the Gulf area, so some of the vessels leaving the US and Europe are filled with as much oil as we possibly can, and then we transport the fuel to other vessels we connect with in Asia.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. More than 10 ships have been attacked since the war started, and soaring war risk insurance is keeping most commercial shipping out of the region, including oil tankers. With the flow of waterborne oil suspended, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil fuel orders, Kildahl said. “Salalah is one of our main bunker ports in the Gulf, but we’ve not been able to bunker there for the past two days, so we need to transfer bunkers from one place to another,” he said. “The main concern right now is how do we safeguard the supply of oil?” <h3>Tanker chartering not an option </h3>Chartering a tanker to transport oil to where it is needed was not an option, Kildahl said, with available vessels in short supply. “In the short term, we have started bunkering in less efficient locations with a higher cost and more difficult logistics behind it, and over time we will have to significantly beef this up if [the war drags on],” he warned. “That is where you will have the risk of a larger impact, much more than the 7% of world cargo flow that goes in and out of the Gulf.” Oil prices, meanwhile, have rocketed higher. S&amp;P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Carriers have responded by rolling out “emergency” surcharges. Maersk on Tuesday announced a global emergency bunker surcharge of $400 per FEU, joining Hapag-Lloyd, CMA CGM and Mediterranean Shipping Co. in implementing similar fuel surcharges. Kildahl said the ship-to-ship transfers, moving oil from the US and Europe to Asia, and changing fuel supply patterns was creating additional expenses for the carrier, on top of rising bunker prices. With the Persian Gulf out of bounds, congestion is growing at other ports in the region with carriers looking to discharge cargo that had already departed Asia when booking suspensions were announced on March 1. Most of the carriers are prioritizing urgent cargo, such as food and pharmaceuticals, but Kildahl said at some point “other cargo will become urgent,” such as aluminum and petrochemicals and polyethylene that are raw materials for plastics production. “Those products can’t float out right now realistically, and so is that a problem tomorrow? No, it’s not,” he said. “It’s not a problem next week either, but at some point, it will be.” <h3>‘End-of-voyage’ disruptions </h3>For general and non-urgent cargo, MSC, CMA CGM and Yang Ming are among the carriers that have declared “end-of-voyage” for Persian Gulf-bound containers already onboard vessels. That cargo status means the carriers are unable to fulfill obligations on a bill of lading, and when the containers are offloaded at a port, they become the responsibility of the cargo owner. Kildahl said Maersk has about 40,000 TEUs that are shipped in and out of the Persian Gulf every week, and that bookings have been suspended to avoid diverted volume collapsing terminals in the region. But instead of declaring end-of-voyage, Maersk has taken a different approach, offering shippers three options: Keeping the cargo in temporary storage, having it returned to the port of departure, or delivering it to another destination for onward transport by another mode. “We are using Salalah and Khor Fakkan for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” Kildahl said. “For cargo that comes from Europe, we focus mainly on Jeddah and are deploying trucks to take the cargo across the Arabian Peninsula through the desert. “We don’t think it is a fantastic solution for any customer to get an end-of-voyage declaration,” he added. “If the customer doesn’t want any of the options, we may be forced into an end-of-voyage declaration, but I doubt we will come to that.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The disruption to oil exports through the Strait of Hormuz is forcing Maersk to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia, the carrier’s chief commercial officer said Wednesday. Karsten Kildahl told the Journal of Commerce in an interview that in the past two days, several of Maersk’s bunker suppliers in key areas in the Middle East and Asia have been unable to refuel the carrier’s vessels. “We’ve had to start moving oil around ourselves because we don’t have enough supplies where we need them,” Kildahl said. “In Asia, nearly half of their supplies come from the Gulf area, so some of the vessels leaving the US and Europe are filled with as much oil as we possibly can, and then we transport the fuel to other vessels we connect with in Asia.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. More than 10 ships have been attacked since the war started, and soaring war risk insurance is keeping most commercial shipping out of the region, including oil tankers. With the flow of waterborne oil suspended, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil fuel orders, Kildahl said. “Salalah is one of our main bunker ports in the Gulf, but we’ve not been able to bunker there for the past two days, so we need to transfer bunkers from one place to another,” he said. “The main concern right now is how do we safeguard the supply of oil?” Tanker chartering not an option Chartering a tanker to transport oil to where it is needed was not an option, Kildahl said, with available vessels in short supply. “In the short term, we have started bunkering in less efficient locations with a higher cost and more difficult logistics behind it, and over time we will have to significantly beef this up if [the war drags on],” he warned. “That is where you will have the risk of a larger impact, much more than the 7% of world cargo flow that goes in and out of the Gulf.” Oil prices, meanwhile, have rocketed higher. S&P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Carriers have responded by rolling out “emergency” surcharges. Maersk on Tuesday announced a global emergency bunker surcharge of $400 per FEU, joining Hapag-Lloyd, CMA CGM and Mediterranean Shipping Co. in implementing similar fuel surcharges. Kildahl said the ship-to-ship transfers, moving oil from the US and Europe to Asia, and changing fuel supply patterns was creating additional expenses for the carrier, on top of rising bunker prices. With the Persian Gulf out of bounds, congestion is growing at other ports in the region with carriers looking to discharge cargo that had already departed Asia when booking suspensions were announced on March 1. Most of the carriers are prioritizing urgent cargo, such as food and pharmaceuticals, but Kildahl said at some point “other cargo will become urgent,” such as aluminum and petrochemicals and polyethylene that are raw materials for plastics production. “Those products can’t float out right now realistically, and so is that a problem tomorrow? No, it’s not,” he said. “It’s not a problem next week either, but at some point, it will be.” ‘End-of-voyage’ disruptions For general and non-urgent cargo, MSC, CMA CGM and Yang Ming are among the carriers that have declared “end-of-voyage” for Persian Gulf-bound containers already onboard vessels. That cargo status means the carriers are unable to fulfill obligations on a bill of lading, and when the containers are offloaded at a port, they become the responsibility of the cargo owner. Kildahl said Maersk has about 40,000 TEUs that are shipped in and out of the Persian Gulf every week, and that bookings have been suspended to avoid diverted volume collapsing terminals in the region. But instead of declaring end-of-voyage, Maersk has taken a different approach, offering shippers three options: Keeping the cargo in temporary storage, having it returned to the port of departure, or delivering it to another destination for onward transport by another mode. “We are using Salalah and Khor Fakkan for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” Kildahl said. “For cargo that comes from Europe, we focus mainly on Jeddah and are deploying trucks to take the cargo across the Arabian Peninsula through the desert. “We don’t think it is a fantastic solution for any customer to get an end-of-voyage declaration,” he added. “If the customer doesn’t want any of the options, we may be forced into an end-of-voyage declaration, but I doubt we will come to that.” Contact Greg Knowler at greg.knowler@spglobal.com .

Maersk forced to ship fuel from US, Europe as Asia bunkers start to run dry

<div class="phx-topic abstract-wrapper">Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.</div>

Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.

<div class="phx-topic">Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. <h3>Containers trapped inside Persian Gulf </h3>The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” <h3>Rates, volatility on the rise </h3>Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. Containers trapped inside Persian Gulf The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” Rates, volatility on the rise Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at greg.knowler@spglobal.com .

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<div class="phx-topic abstract-wrapper">The agency in charge of enforcing US shipping law reminded the market that any change in ocean tariffs must come with a 30-day notice period prior to implementation so it can be reviewed.</div>

The agency in charge of enforcing US shipping law reminded the market that any change in ocean tariffs must come with a 30-day notice period prior to implementation so it can be reviewed.

<div class="phx-topic">The US Federal Maritime Commission (FMC) on Wednesday told shippers to check their ocean freight bills for any surcharges related to the war in the Middle East that have not been formally reviewed by the agency, as carriers look to recoup additional costs from rising bunker fuel prices and disrupted networks. In a statement Wednesday, the agency said it is “closely monitoring the impact the current conflict in the Middle East is having on shipping conditions through the Strait of Hormuz” and any rate adjustments ocean carriers are making in response. The FMC reminded shippers that any change in the ocean tariff must come with a 30-day notice period prior to implementation so it can be reviewed by the agency. The only exception is a “special permission” request, which can have a shorter notice period. “Shippers are encouraged to access and review their common carrier’s tariff,” the FMC said. “Ocean common carriers are responsible for ensuring that service contracts and their amendments are filed in a timely and accurate manner.” Ocean carriers began assessing war-related surcharges for any shipments to and from the Persian Gulf states on March 2, the Iran declared that any commercial ship passing through the Strait of Hormuz would be subject to attack. Within a day of that announcement, five commercial ships were attacked. While those surcharges were effective immediately for non-US trades, ocean carriers did say US trades to the Middle East would be subject to a 30-day notice period. By Monday, ocean carriers began telling customers of emergency fuel surcharges on all global trades. The closure of the Strait of Hormuz has throttled shipments of one-fifth of global oil supply and <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">resulted in fuel shortages</a> in an important bunkering region for the shipping industry. <h3>AgTC watching </h3>Speaking at the Journal of Commerce’s TPM26 event in Long Beach last week, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said the 30-day review period was necessary for the FMC to assess whether the surcharges are justified. When similar surcharges were issued in early 2024 due to the Houthi attacks against ships transiting the Red Sea, Friedmann said the FMC waived a notice period for a surcharge from one ocean carrier. However, a subsequent economic analysis questioned whether the surcharge was warranted, given the ocean carrier was also saving on Suez Canal tolls by diverting around the Cape of Good Hope. “We were pretty upset that the waiver was granted like that, so we made a stink about it,” Friedmann told the conference. “But the key was if you do the analysis, the carrier is not really losing much money. “I have contacted all the FMC commissioners already that this could be repeated,” he added. “But apparently they learned the lesson.” In August 2021, the FMC <a href="https://www.joc.com/article/fmc-orders-carriers-to-justify-us-port-congestion-surcharges-5249012">ordered eight carriers</a> to show how congestion surcharges and other fees tied to the pandemic-driven supply chain disruption met legal and regulatory requirements. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) on Wednesday told shippers to check their ocean freight bills for any surcharges related to the war in the Middle East that have not been formally reviewed by the agency, as carriers look to recoup additional costs from rising bunker fuel prices and disrupted networks. In a statement Wednesday, the agency said it is “closely monitoring the impact the current conflict in the Middle East is having on shipping conditions through the Strait of Hormuz” and any rate adjustments ocean carriers are making in response. The FMC reminded shippers that any change in the ocean tariff must come with a 30-day notice period prior to implementation so it can be reviewed by the agency. The only exception is a “special permission” request, which can have a shorter notice period. “Shippers are encouraged to access and review their common carrier’s tariff,” the FMC said. “Ocean common carriers are responsible for ensuring that service contracts and their amendments are filed in a timely and accurate manner.” Ocean carriers began assessing war-related surcharges for any shipments to and from the Persian Gulf states on March 2, the Iran declared that any commercial ship passing through the Strait of Hormuz would be subject to attack. Within a day of that announcement, five commercial ships were attacked. While those surcharges were effective immediately for non-US trades, ocean carriers did say US trades to the Middle East would be subject to a 30-day notice period. By Monday, ocean carriers began telling customers of emergency fuel surcharges on all global trades. The closure of the Strait of Hormuz has throttled shipments of one-fifth of global oil supply and resulted in fuel shortages in an important bunkering region for the shipping industry. AgTC watching Speaking at the Journal of Commerce’s TPM26 event in Long Beach last week, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said the 30-day review period was necessary for the FMC to assess whether the surcharges are justified. When similar surcharges were issued in early 2024 due to the Houthi attacks against ships transiting the Red Sea, Friedmann said the FMC waived a notice period for a surcharge from one ocean carrier. However, a subsequent economic analysis questioned whether the surcharge was warranted, given the ocean carrier was also saving on Suez Canal tolls by diverting around the Cape of Good Hope. “We were pretty upset that the waiver was granted like that, so we made a stink about it,” Friedmann told the conference. “But the key was if you do the analysis, the carrier is not really losing much money. “I have contacted all the FMC commissioners already that this could be repeated,” he added. “But apparently they learned the lesson.” In August 2021, the FMC ordered eight carriers to show how congestion surcharges and other fees tied to the pandemic-driven supply chain disruption met legal and regulatory requirements. Contact Michael Angell at michael.angell@spglobal.com .

FMC says ‘closely monitoring’ carrier rate moves tied to Middle East war

<div class="phx-topic abstract-wrapper">All major long-haul liners are seeking temporary supply chain asylum at Indian docks to offload boxes that departed China and Southeast Asia in recent days, according to market sources in India.</div>

All major long-haul liners are seeking temporary supply chain asylum at Indian docks to offload boxes that departed China and Southeast Asia in recent days, according to market sources in India.

<div class="phx-topic">An estimated 100,000 TEUs of Far East-originated cargo that has become stranded en route to the Middle East is set to land across Indian ports as ocean carriers divert from the war zone, market sources in India say. All major long-haul liners are seeking temporary supply chain asylum at Indian docks to offload containers that departed ports in China and Southeast Asia in recent days, according to local industry sources who spoke with the Journal of Commerce. Representatives from Maersk, CMA CGM, Hapag-Lloyd, Ocean Network Express, and Cosco Shipping are already in discussions with authorities at the Indian West Coast ports of Nhava Sheva, Mundra, Pipavav and Kandla to strike yard space deals for the storage of diverted loads, the sources said. With a planned rerouting count of approximately 40,000 TEUs, Maersk is also considering Gangavaram Port on India’s southern East Coast as an additional discharge point, the sources added. Maersk could not be reached for comment. Carriers at Nhava Sheva are primarily engaging with PSA International’s flagship Bharat Mumbai Container Terminals (BMCT), which now has measurable spare cargo-handling space following the 2025 terminal expansions that doubled annual throughput capacity to 4.8 million TEUs. BMCT has already handled a few ships diverted to Nhava Sheva to drop boxes, including Hapag-Lloyd’s 24,000-TEU Damietta Express, while terminal berthing data updated Thursday points to a lineup of nine ad-hoc calls through March 19. The terminal can stack up to 25,000 TEUs on dock, with capacity for 3,000 reefer plug-ins for refrigerated cargo, without causing major operational pressure on the quayside, sources noted. Port and customs authorities in Nhava Sheva are collaborating to identify and allocate dedicated extra yard space off the dock in line with recent government directives to ease Middle East supply chain pain points. Mediterranean Shipping Co. is already a significant regional transshipment player at Mundra and Vizhinjam in the south, riding on its strategic partnerships with Adani Ports, and there are no indications the carrier will stop using those ports to handle stranded cargo. <h3>India-Middle East rates jump </h3>Evacuating diverted containers is complicated in the current scenario, carrier sources agree, but they are betting on alternative shuttle connections to Sohar in Oman and Khor Fakkan and Fujairah in the United Arab Emirates to keep clearing boxes out in parallel, with final transit legs <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">handled by road wherever feasible</a>. While space is not guaranteed, forwarder sources have reported wild swings in spot pricing for Nhava Sheva-Middle East bookings: up to $2,500 per TEU and $3,500 per FEU for Sohar and $2,000 per TEU and $3,000 per FEU for Khor Fakkan. That’s from as low as $50 to $75 per FEU for bookings to Jebel Ali last month. “Our strategy is to prioritize refrigerated containers for onward connectivity,” a Nhava Sheva-based operations executive at a European carrier said. “We are working on a combination of regional options to handle affected cargo,” an executive with an Asia-based carrier said. However, no one is certain how efficiently those plans will play out in such a fluid environment. Terminals across major Indian ports are operating at normal speed at the moment, except for slightly longer waiting times reported at Nhava Sheva due to bunching of vessels. But trade experts warn of port congestion risks if a large influx of diverted containers arrives within a few days as they believe there will be a scramble at yards/terminal gates to connect or reconnect boxes on to ships when normal ocean service patterns return. Another regional factor pushing carriers onto the Indian coast is the space crunch at Sri Lanka’s Colombo Port to hold ad-hoc volumes. Local sources speaking with the Journal of Commerce have reported high yard occupancy levels across Colombo terminals due to a steady surge in traditional transshipment volumes. Colombo handled 604,173 TEUs of transshipments in January, up from 589,134 TEUs in December, industry data shows. “With ongoing schedule disruptions, there has been a bump in container dwells,” said a Colombo terminal executive who didn’t want to be identified. “So, we are turning away Middle East cargo callers at the moment.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

An estimated 100,000 TEUs of Far East-originated cargo that has become stranded en route to the Middle East is set to land across Indian ports as ocean carriers divert from the war zone, market sources in India say. All major long-haul liners are seeking temporary supply chain asylum at Indian docks to offload containers that departed ports in China and Southeast Asia in recent days, according to local industry sources who spoke with the Journal of Commerce. Representatives from Maersk, CMA CGM, Hapag-Lloyd, Ocean Network Express, and Cosco Shipping are already in discussions with authorities at the Indian West Coast ports of Nhava Sheva, Mundra, Pipavav and Kandla to strike yard space deals for the storage of diverted loads, the sources said. With a planned rerouting count of approximately 40,000 TEUs, Maersk is also considering Gangavaram Port on India’s southern East Coast as an additional discharge point, the sources added. Maersk could not be reached for comment. Carriers at Nhava Sheva are primarily engaging with PSA International’s flagship Bharat Mumbai Container Terminals (BMCT), which now has measurable spare cargo-handling space following the 2025 terminal expansions that doubled annual throughput capacity to 4.8 million TEUs. BMCT has already handled a few ships diverted to Nhava Sheva to drop boxes, including Hapag-Lloyd’s 24,000-TEU Damietta Express, while terminal berthing data updated Thursday points to a lineup of nine ad-hoc calls through March 19. The terminal can stack up to 25,000 TEUs on dock, with capacity for 3,000 reefer plug-ins for refrigerated cargo, without causing major operational pressure on the quayside, sources noted. Port and customs authorities in Nhava Sheva are collaborating to identify and allocate dedicated extra yard space off the dock in line with recent government directives to ease Middle East supply chain pain points. Mediterranean Shipping Co. is already a significant regional transshipment player at Mundra and Vizhinjam in the south, riding on its strategic partnerships with Adani Ports, and there are no indications the carrier will stop using those ports to handle stranded cargo. India-Middle East rates jump Evacuating diverted containers is complicated in the current scenario, carrier sources agree, but they are betting on alternative shuttle connections to Sohar in Oman and Khor Fakkan and Fujairah in the United Arab Emirates to keep clearing boxes out in parallel, with final transit legs handled by road wherever feasible . While space is not guaranteed, forwarder sources have reported wild swings in spot pricing for Nhava Sheva-Middle East bookings: up to $2,500 per TEU and $3,500 per FEU for Sohar and $2,000 per TEU and $3,000 per FEU for Khor Fakkan. That’s from as low as $50 to $75 per FEU for bookings to Jebel Ali last month. “Our strategy is to prioritize refrigerated containers for onward connectivity,” a Nhava Sheva-based operations executive at a European carrier said. “We are working on a combination of regional options to handle affected cargo,” an executive with an Asia-based carrier said. However, no one is certain how efficiently those plans will play out in such a fluid environment. Terminals across major Indian ports are operating at normal speed at the moment, except for slightly longer waiting times reported at Nhava Sheva due to bunching of vessels. But trade experts warn of port congestion risks if a large influx of diverted containers arrives within a few days as they believe there will be a scramble at yards/terminal gates to connect or reconnect boxes on to ships when normal ocean service patterns return. Another regional factor pushing carriers onto the Indian coast is the space crunch at Sri Lanka’s Colombo Port to hold ad-hoc volumes. Local sources speaking with the Journal of Commerce have reported high yard occupancy levels across Colombo terminals due to a steady surge in traditional transshipment volumes. Colombo handled 604,173 TEUs of transshipments in January, up from 589,134 TEUs in December, industry data shows. “With ongoing schedule disruptions, there has been a bump in container dwells,” said a Colombo terminal executive who didn’t want to be identified. “So, we are turning away Middle East cargo callers at the moment.” Contact Bency Mathew at bencyvmathew@gmail.com .

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