<div class="phx-topic abstract-wrapper">If trucking rates remain elevated into the spring, carriers will likely move to push prices higher on new and existing contracts in the second half of the year.</div>

If trucking rates remain elevated into the spring, carriers will likely move to push prices higher on new and existing contracts in the second half of the year.

Feature image

<div class="phx-topic">US trucking executives are beginning to feel better about the state of the freight economy, hoping tighter capacity will lead to higher rates and, ultimately, an end to the long freight recession. The increasingly upbeat mood comes as spot dry-van rates, as compiled by DAT Freight and Analytics, remain elevated compared with a year ago, even after the disruptive winter weather of January subsided. The average rate, excluding fuel, on DAT’s top 50 US lanes has hovered near $2.30 per mile this month, up 18% to 20% compared with the same period a year ago. Adam Miller, CEO of Knight-Swift Transportation, told the Journal of Commerce that the market is balanced between carriers and shippers. He noted that the reaction to the winter storms and frigid temperatures last month were in stark contrast to January 2025, when a similar snowstorm had zero impact on spot market rates. “It kind of feels like a little bit of Goldilocks right now,” Miller said. “Inflation seems to be under control. I think it’s positioning for demand to see some life because it’s been relatively muted. While capacity continues to exit, I think that puts the supply-demand relationship in a much better position [for trucking companies].” The snow and ice from the heavy winter storm that blanketed a large portion of the US in late January are melting, and trucks that were sidelined are now back in business. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="f7dc31b8-1e1c-4a59-907f-2391c69d4e9f"></dynamic-object></div>Trucking executives say there is a feeling that the next two or three weeks will indicate whether this is really the beginning of the end of the three-year freight recession, something that could determine if trucking companies can push contract rate increases on shippers in the coming months. “The farther we can get from storms, if we continue to see that strength, then it’s going to feel a little bit different this year than the last few years,” Brad Hicks, president of Dedicated Contract Services at J.B. Hunt, said Tuesday at Barclays’ Annual Industrial Select Conference in Miami. “We have had a lot of disruptions from winter weather. We’ve had a lot of customer meetings over the last several weeks, and I would say it should be no surprise that no customer is raising their hands saying, ‘can’t wait to pay you more.’” <h3>Gain in Cass Index for January </h3>The Cass Freight Index suggests the changes taking place in the truckload market might be more than a weather disruption. The Cass Truckload Linehaul Index, a measurement of rates, rose 3.2% year over year in January. “This index is mostly comprised of contract rates, and anecdotally we hear about more shippers initiating one-year bids, suggesting movement in the cycle beyond just weather effects,” Tim Denoyer, author of the Cass Freight Index, wrote Tuesday. The 3.2% hike is consistent with what carrier Werner Enterprises is seeing. “Low to mid-single digits on our contract renewals would be really the starting point there,” Chris Neal, Werner’s senior vice president of pricing, said at the Citi Global Industrial Tech &amp; Mobility Conference Tuesday. "We’ve had some good success already early in the year with some of those renewals.” Werner CEO Derek Leathers admitted while the winter weather played a role, the recovery is also supply-driven <a href="https://www.joc.com/article/usdot-releases-interim-final-rule-on-non-domiciled-cdl-holders-6169023">as the federal government cracks down on non-domiciled commercial drivers’ licenses</a> and English language proficiency of truckers in the US. “You’re finally starting to see a cleansing of some of the capacity out there that needed to be addressed,” Leathers said at the Citi Global conference. “It’s been mostly supply-driven up until now, and with some signs now of a little bit of demand spark coupled with that, it puts us in a pretty optimistic position.” Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>.</div>

US trucking executives are beginning to feel better about the state of the freight economy, hoping tighter capacity will lead to higher rates and, ultimately, an end to the long freight recession. The increasingly upbeat mood comes as spot dry-van rates, as compiled by DAT Freight and Analytics, remain elevated compared with a year ago, even after the disruptive winter weather of January subsided. The average rate, excluding fuel, on DAT’s top 50 US lanes has hovered near $2.30 per mile this month, up 18% to 20% compared with the same period a year ago. Adam Miller, CEO of Knight-Swift Transportation, told the Journal of Commerce that the market is balanced between carriers and shippers. He noted that the reaction to the winter storms and frigid temperatures last month were in stark contrast to January 2025, when a similar snowstorm had zero impact on spot market rates. “It kind of feels like a little bit of Goldilocks right now,” Miller said. “Inflation seems to be under control. I think it’s positioning for demand to see some life because it’s been relatively muted. While capacity continues to exit, I think that puts the supply-demand relationship in a much better position [for trucking companies].” The snow and ice from the heavy winter storm that blanketed a large portion of the US in late January are melting, and trucks that were sidelined are now back in business. Trucking executives say there is a feeling that the next two or three weeks will indicate whether this is really the beginning of the end of the three-year freight recession, something that could determine if trucking companies can push contract rate increases on shippers in the coming months. “The farther we can get from storms, if we continue to see that strength, then it’s going to feel a little bit different this year than the last few years,” Brad Hicks, president of Dedicated Contract Services at J.B. Hunt, said Tuesday at Barclays’ Annual Industrial Select Conference in Miami. “We have had a lot of disruptions from winter weather. We’ve had a lot of customer meetings over the last several weeks, and I would say it should be no surprise that no customer is raising their hands saying, ‘can’t wait to pay you more.’” Gain in Cass Index for January The Cass Freight Index suggests the changes taking place in the truckload market might be more than a weather disruption. The Cass Truckload Linehaul Index, a measurement of rates, rose 3.2% year over year in January. “This index is mostly comprised of contract rates, and anecdotally we hear about more shippers initiating one-year bids, suggesting movement in the cycle beyond just weather effects,” Tim Denoyer, author of the Cass Freight Index, wrote Tuesday. The 3.2% hike is consistent with what carrier Werner Enterprises is seeing. “Low to mid-single digits on our contract renewals would be really the starting point there,” Chris Neal, Werner’s senior vice president of pricing, said at the Citi Global Industrial Tech & Mobility Conference Tuesday. "We’ve had some good success already early in the year with some of those renewals.” Werner CEO Derek Leathers admitted while the winter weather played a role, the recovery is also supply-driven as the federal government cracks down on non-domiciled commercial drivers’ licenses and English language proficiency of truckers in the US. “You’re finally starting to see a cleansing of some of the capacity out there that needed to be addressed,” Leathers said at the Citi Global conference. “It’s been mostly supply-driven up until now, and with some signs now of a little bit of demand spark coupled with that, it puts us in a pretty optimistic position.” Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Truckload

Surface

Trucking executives buoyed by market signals as winter exit nears

<div class="phx-topic abstract-wrapper">CEO Rodolphe Saadé said the deal deepened a strategic partnership between the carrier and India that has existed for almost 40 years, adding the liner would also expand its engagement in container manufacturing and ship recycling.</div>

CEO Rodolphe Saadé said the deal deepened a strategic partnership between the carrier and India that has existed for almost 40 years, adding the liner would also expand its engagement in container manufacturing and ship recycling.

<div class="phx-topic">CMA CGM has signed a deal with India’s Cochin Shipyard Limited for six dual-fuel liquefied natural gas-powered ships of 1,700-TEU capacity, the carrier announced Wednesday. The order was made during a visit to New Delhi by CMA CGM executives that included a pledge to add another 1,500 seafarer recruits to the 1,000 already employed by CMA Ships in the country. CMA CGM CEO Rodolphe Saadé said the deal deepened a strategic partnership between the carrier and India that has existed for almost 40 years, noting CMA CGM would also expand its engagement in container manufacturing and ship recycling. “This is fully aligned with Prime Minister Modi’s Maritime Vision 2047 to position India as a major maritime nation,” Saadé said. “As corridors such as India-Middle East-Europe Economic Corridor (IMEC) develop ... CMA CGM stands ready to contribute to this new phase of global trade.” In partnership with technology and digital consultant Capgemini, CMA CGM has also established a dedicated research and development (R&amp;D) hub in India, positioning the country as a key global center for innovation within the group. The India R&amp;D hub is involved in developing next-generation digital and AI-enabled solutions that support CMA CGM’s worldwide operations. New Delhi in recent years has invested heavily in freight infrastructure modernization through public-private partnerships and pushed digital logistics solutions along with sweeping policy reforms to ease trade processes. Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>.   </div>

CMA CGM has signed a deal with India’s Cochin Shipyard Limited for six dual-fuel liquefied natural gas-powered ships of 1,700-TEU capacity, the carrier announced Wednesday. The order was made during a visit to New Delhi by CMA CGM executives that included a pledge to add another 1,500 seafarer recruits to the 1,000 already employed by CMA Ships in the country. CMA CGM CEO Rodolphe Saadé said the deal deepened a strategic partnership between the carrier and India that has existed for almost 40 years, noting CMA CGM would also expand its engagement in container manufacturing and ship recycling. “This is fully aligned with Prime Minister Modi’s Maritime Vision 2047 to position India as a major maritime nation,” Saadé said. “As corridors such as India-Middle East-Europe Economic Corridor (IMEC) develop ... CMA CGM stands ready to contribute to this new phase of global trade.” In partnership with technology and digital consultant Capgemini, CMA CGM has also established a dedicated research and development (R&D) hub in India, positioning the country as a key global center for innovation within the group. The India R&D hub is involved in developing next-generation digital and AI-enabled solutions that support CMA CGM’s worldwide operations. New Delhi in recent years has invested heavily in freight infrastructure modernization through public-private partnerships and pushed digital logistics solutions along with sweeping policy reforms to ease trade processes. Contact Greg Knowler at  greg.knowler@spglobal.com .   

Container lines

Maritime

CMA CGM inks order for six dual-fuel LNG ships with India yard

<div class="phx-topic abstract-wrapper">The success of container lines in keeping vessel utilization high by removing functional capacity weakens the network and ups volatility in ocean reliability.</div>

The success of container lines in keeping vessel utilization high by removing functional capacity weakens the network and ups volatility in ocean reliability.

<div class="phx-topic">The high level of port-to-port ocean reliability the Gemini Cooperation has delivered since its launch a year ago is pressuring other carriers and alliances to up their game. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6172263_0.1.jpg"></img></div>Yet the obstacles for ocean carriers to remain profitable are only expanding as liners cycle deeper into overcapacity in the coming years. To protect their profitability, container lines have become better at managing short-term demand and supply and removing functional capacity. Their success in keeping utilization high, paradoxically, weakens the network, said Trine Nielsen, vice president of ocean/global at forwarder Flexport.“As ‘micro-events’ [e.g., localized port congestion, labor strikes] are expected to increase due to shifting trade patterns and introducing more mega-ships, we expect network instability to rise,” she said. “In fact, as more capacity enters the market, we anticipate even further instability because we should expect more aggressive capacity management actions by carriers to protect their profitability.” Facing congestion at Asia load centers such as Shanghai or Ningbo, ocean carriers may have the vessel omit the port entirely to not throw off the rest of their schedule. In some cases, vessels “swap” calls with one vessel covering Shanghai rather than Ningbo, and vice versa, Nielsen said. “While this maximizes asset utilization and prevents a vessel backlog, it triggers blank sailings and forces customers to deal with rolled cargo and unpredictable transit times,” she said. <h3>Obstacles to reliability ratchet up </h3>Port productivity globally is worsening, with S&amp;P Global’s Container Port Performance Index falling from a reading of 38 in 2020 to zero in 2024. The number of tropical storms has increased in recent years, and the intensity and unpredictability of cyclones has increased in the last decade, said Craig West, CEO/Europe at forecasting company Weathernews. “Volatility is not confined to extreme events. Conditions in the Central Atlantic have recently been practically impassable, with persistent weather patterns across the Bay of Biscay and English Channel leaving vessels drifting for multiple days,” West told the Journal of Commerce. “There is no headline-grabbing storm in these situations, yet the commercial damage to uptime and schedule reliability is significant.” Optimistically, the volatility from an overall shambolic network offers increased incentives for ocean carriers to improve their reliability, allowing them to stand out more in a volatile, oft-commoditized market and gain higher and more stable pricing in return. After launching in February 2025, Gemini members Maersk and Hapag-Lloyd are making the case that their joint network’s better than 90% reliability is giving customers enough certainty to reduce their inventories by two weeks. Vessels operated within the alliance hit 81% reliability in 2025, according to online benchmarking platform Xeneta’s eeSea data. Global ocean reliability for the entire industry has been falling since July, notching a reading of 25.4% thus far in February, according to eeSea. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4abe02d4-ed18-461a-ac0b-87ef52e3192b"></dynamic-object></div>“Shippers are also telling us that one of their priorities for 2026 is service reliability,” said Kelly Buckley, deputy director of ocean procurement at Drewry Supply Chain advisors. “Gemini has really raised the profile of that topic, and we can expect shippers to assess much more carefully on-time performance and lead times as part of their [trans-Pacific service contracting] tender process this year.” <h3>Finding reliability in service contracts </h3>The last few years of shipping disruptions due to the pandemic, Suez Canal diversions, and then tariffs left small and medium-size shippers with little time to focus on reliability as they tried to keep their business afloat, Buckley said. Mounting overcapacity gives these shippers more leverage in service contract negotiations and allows them, she said, to “actually start to take a step back and ask questions without fear of the fact that your cargo then may not make it on the vessel the next week.” Transparency on schedule changes remains an issue, Buckley said. Shippers still struggle to keep up with nearly last-minute blank notice announcements, and she said some Drewry customers learned after that fact that their cargo was routed through the Suez Canal via the perilous waters of the Red Sea. Meanwhile, although transit time reliability is critical for Sanmar’s new product launches and deliveries from new vendors, it’s only one element of service, said John Janson, global logistics director at the apparel shipper. “Normally, transit reliability is not as important to us if it is within a reasonable timeframe,” he said. “Having the equipment and space is more critical as our origins are counting on being able to load as most do not have storage.” Janson noted that ocean carriers allowed Sanmar — the US’ 79th-largest importer, according to the Journal of Commerce’s 2024 rankings — to exceed forecast volumes for emergencies and guaranteed that shipments would beat tariffs deadlines, saving the company hundreds of thousands of dollars. “No surprise, the folks that stepped up were the ones where we have made the most serious investment in relationships,” he said. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

The high level of port-to-port ocean reliability the Gemini Cooperation has delivered since its launch a year ago is pressuring other carriers and alliances to up their game. Yet the obstacles for ocean carriers to remain profitable are only expanding as liners cycle deeper into overcapacity in the coming years. To protect their profitability, container lines have become better at managing short-term demand and supply and removing functional capacity. Their success in keeping utilization high, paradoxically, weakens the network, said Trine Nielsen, vice president of ocean/global at forwarder Flexport. “As ‘micro-events’ [e.g., localized port congestion, labor strikes] are expected to increase due to shifting trade patterns and introducing more mega-ships, we expect network instability to rise,” she said. “In fact, as more capacity enters the market, we anticipate even further instability because we should expect more aggressive capacity management actions by carriers to protect their profitability.” Facing congestion at Asia load centers such as Shanghai or Ningbo, ocean carriers may have the vessel omit the port entirely to not throw off the rest of their schedule. In some cases, vessels “swap” calls with one vessel covering Shanghai rather than Ningbo, and vice versa, Nielsen said. “While this maximizes asset utilization and prevents a vessel backlog, it triggers blank sailings and forces customers to deal with rolled cargo and unpredictable transit times,” she said. Obstacles to reliability ratchet up Port productivity globally is worsening, with S&P Global’s Container Port Performance Index falling from a reading of 38 in 2020 to zero in 2024. The number of tropical storms has increased in recent years, and the intensity and unpredictability of cyclones has increased in the last decade, said Craig West, CEO/Europe at forecasting company Weathernews. “Volatility is not confined to extreme events. Conditions in the Central Atlantic have recently been practically impassable, with persistent weather patterns across the Bay of Biscay and English Channel leaving vessels drifting for multiple days,” West told the Journal of Commerce. “There is no headline-grabbing storm in these situations, yet the commercial damage to uptime and schedule reliability is significant.” Optimistically, the volatility from an overall shambolic network offers increased incentives for ocean carriers to improve their reliability, allowing them to stand out more in a volatile, oft-commoditized market and gain higher and more stable pricing in return. After launching in February 2025, Gemini members Maersk and Hapag-Lloyd are making the case that their joint network’s better than 90% reliability is giving customers enough certainty to reduce their inventories by two weeks. Vessels operated within the alliance hit 81% reliability in 2025, according to online benchmarking platform Xeneta’s eeSea data. Global ocean reliability for the entire industry has been falling since July, notching a reading of 25.4% thus far in February, according to eeSea. “Shippers are also telling us that one of their priorities for 2026 is service reliability,” said Kelly Buckley, deputy director of ocean procurement at Drewry Supply Chain advisors. “Gemini has really raised the profile of that topic, and we can expect shippers to assess much more carefully on-time performance and lead times as part of their [trans-Pacific service contracting] tender process this year.” Finding reliability in service contracts The last few years of shipping disruptions due to the pandemic, Suez Canal diversions, and then tariffs left small and medium-size shippers with little time to focus on reliability as they tried to keep their business afloat, Buckley said. Mounting overcapacity gives these shippers more leverage in service contract negotiations and allows them, she said, to “actually start to take a step back and ask questions without fear of the fact that your cargo then may not make it on the vessel the next week.” Transparency on schedule changes remains an issue, Buckley said. Shippers still struggle to keep up with nearly last-minute blank notice announcements, and she said some Drewry customers learned after that fact that their cargo was routed through the Suez Canal via the perilous waters of the Red Sea. Meanwhile, although transit time reliability is critical for Sanmar’s new product launches and deliveries from new vendors, it’s only one element of service, said John Janson, global logistics director at the apparel shipper. “Normally, transit reliability is not as important to us if it is within a reasonable timeframe,” he said. “Having the equipment and space is more critical as our origins are counting on being able to load as most do not have storage.” Janson noted that ocean carriers allowed Sanmar — the US’ 79th-largest importer, according to the Journal of Commerce’s 2024 rankings — to exceed forecast volumes for emergencies and guaranteed that shipments would beat tariffs deadlines, saving the company hundreds of thousands of dollars. “No surprise, the folks that stepped up were the ones where we have made the most serious investment in relationships,” he said. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Trans-Atlantic

Asia-Europe

Trans-Pacific

Container Shipping News

Greater capacity control needs hinder ocean reliability efforts

<div class="phx-topic abstract-wrapper">As volumes of new energy generation and storage technologies increase, shippers expect more documentation, transparency and greater control over risk, according to project forwarders and carriers.</div>

As volumes of new energy generation and storage technologies increase, shippers expect more documentation, transparency and greater control over risk, according to project forwarders and carriers.

<div class="phx-topic">A nascent boom in the transport of new power-related technologies such as large scale battery energy storage system (BESS) units is placing a higher compliance burden on project logistics professionals, from dangerous goods regulations and port processes to biosecurity and onsite safety requirements. Regulators and government authorities are restricting approval pathways, and shippers expect more documentation, more transparency, and greater control over risk, Colin Charnock, group CEO of forwarder Trans Global Projects (TGP), told the Journal of Commerce. “The power sector’s longstanding high expectations are not only continuing but intensifying,” Charnock said. “Logistics providers must operate with deeper technical expertise, stronger quality governance and more structured execution models. “Capacity planning, specialized equipment availability and cross-border regulatory alignment will all become more challenging as demand increases, particularly for remote-area deliveries, renewable energy projects and next-generation storage systems,” he added. And although it may be supercharged, <a href="https://www.joc.com/article/lumpy-project-cargo-demand-to-lead-to-two-tier-mpv-market-6164866">the power drive isn’t likely to be steady or uniform</a>, according to a spokesperson for Chipolbrok who did not want to be identified. The heavy-lift and multipurpose vessel (MPV) operator has seen a “remarkable decline” in oil and gas development <a href="https://www.joc.com/article/reversal-in-us-clean-energy-investment-signals-shift-in-project-cargo-momentum-6169519">outside the US</a>, with traditional power plant equipment volumes now “significantly exceeded” by demand from renewable energy and infrastructure projects, the spokesperson said. Earlier this year, Chipolbrok announced an order for up to 10 60,800-deadweight-ton MPVs that will increase its fleet to more than 40 vessels. The ships, the first of which is scheduled for delivery in November 2027, will be capable of carrying containerized energy storage systems, battery packs and electrical charging equipment, as well as other power-related project cargoes such as wind farm components. Demand is also uneven among geographical regions, the spokesperson said, adding that Chipolbrok is “focusing heavily on developments in the Arab world and the Indian subcontinent.” The situation in Central Europe, however, remains “somewhat unclear,” he said, as infrastructure projects have been overshadowed by military buildup and the war in Ukraine, even though there is a significant need for development there. Investors, developers and logistics providers must also deal with sudden policy upheavals, such as the Trump administration’s decision to cancel five major US offshore wind projects in late 2025. A January court ruling allowed construction to resume on all five sites — Coastal Virginia Offshore Wind-Commercial, Empire Wind 1, Revolution Wind, Sunrise Wind, and Vineyard Wind 1 — but the administration plans to appeal that decision, US Secretary of the Interior Doug Burgum said <a href="https://www.youtube.com/watch?v=JHSzhcphfkc">in an interview with Bloomberg Television.</a><h3>An ‘evolving’ environment </h3>Charnock said the global transition toward lower- and zero-carbon energy sources has further accelerated freight demand from the power generation and storage sector, but noted that TGP’s current cargo pipeline “spans every major segment of the sector: hydrogen, wind, nuclear, traditional generation and emerging technologies.” Although the logistics provider’s approach to transporting renewable power project cargoes does not differ fundamentally from moving conventional energy freight, the variety of equipment is increasing and each technology brings its own regulatory and operational challenges, he said. “Many of the core components, such as transformers, cables and control systems, are identical across both conventional and renewable applications,” Charnock said. “What differs is the regulatory framework around each technology, the sequencing of deliveries and in some cases the level of scrutiny from authorities and investors.” Charnock cited a recent delivery of 48 lithium BESS units from China to a remote site in Western Australia, the region’s first approved lithium battery import, as an example of the more stringent safety, compliance and risk management environment around new power technologies. Operationally, the move involved breakbulk ocean transport, specialized handling equipment and a challenging 90-km final leg across a dirt road. It also required “extensive compliance work,” he said, including a two year consultation process to secure port approval under new International Maritime Organization (IMO) regulations, strict dangerous goods procedures, high pressure cleaning, and detailed biosecurity and customs controls. <h3>‘Elevated safety protocol’ </h3>Jack Zhou, general manager at MPV operator AAL Shipping, said transporting IMO-classified cargo such as BESS units “requires elevated security documentation and safety protocol.” For starters, all AAL vessels hold a Document of Compliance for the Carriage of Dangerous Goods, which includes tailored onboard contingency plans covering spillage, fire and other emergency scenarios involving BESS units. “To further enhance the safety of the vessel and monitor the internal temperature of the BESS units, AAL has invested in flammable-gas detectors, temperature and humidity monitoring systems, portable thermal cameras and high-capacity submersible pumps,” Zhou told the Journal of Commerce. “Crews undergo specific drills prior to each shipment and vessels are equipped with toxic-gas protective gear.” Strict loading controls overseen by the vessel’s Officer of the Watch ensure all dangerous goods signals are displayed and that no “hot work,” such as welding the D-rings used for lashing, is carried out after BESS units are loaded onboard. Weather routing experts help the in-house performance optimization team plan voyage routes to minimize vessel motion. During transit, the crew performs regular inspections and activates immediate countermeasures if any irregularities are found. “As BESS technology scales and unit sizes grow, AAL expects regulations to further evolve,” Zhou added. Contact Felicity Landon at <a href="mailto:felicity@felicitylandon.com">felicity@felicitylandon.com</a>.</div>

A nascent boom in the transport of new power-related technologies such as large scale battery energy storage system (BESS) units is placing a higher compliance burden on project logistics professionals, from dangerous goods regulations and port processes to biosecurity and onsite safety requirements. Regulators and government authorities are restricting approval pathways, and shippers expect more documentation, more transparency, and greater control over risk, Colin Charnock, group CEO of forwarder Trans Global Projects (TGP), told the Journal of Commerce. “The power sector’s longstanding high expectations are not only continuing but intensifying,” Charnock said. “Logistics providers must operate with deeper technical expertise, stronger quality governance and more structured execution models. “Capacity planning, specialized equipment availability and cross-border regulatory alignment will all become more challenging as demand increases, particularly for remote-area deliveries, renewable energy projects and next-generation storage systems,” he added. And although it may be supercharged, the power drive isn’t likely to be steady or uniform , according to a spokesperson for Chipolbrok who did not want to be identified. The heavy-lift and multipurpose vessel (MPV) operator has seen a “remarkable decline” in oil and gas development outside the US , with traditional power plant equipment volumes now “significantly exceeded” by demand from renewable energy and infrastructure projects, the spokesperson said. Earlier this year, Chipolbrok announced an order for up to 10 60,800-deadweight-ton MPVs that will increase its fleet to more than 40 vessels. The ships, the first of which is scheduled for delivery in November 2027, will be capable of carrying containerized energy storage systems, battery packs and electrical charging equipment, as well as other power-related project cargoes such as wind farm components. Demand is also uneven among geographical regions, the spokesperson said, adding that Chipolbrok is “focusing heavily on developments in the Arab world and the Indian subcontinent.” The situation in Central Europe, however, remains “somewhat unclear,” he said, as infrastructure projects have been overshadowed by military buildup and the war in Ukraine, even though there is a significant need for development there. Investors, developers and logistics providers must also deal with sudden policy upheavals, such as the Trump administration’s decision to cancel five major US offshore wind projects in late 2025. A January court ruling allowed construction to resume on all five sites — Coastal Virginia Offshore Wind-Commercial, Empire Wind 1, Revolution Wind, Sunrise Wind, and Vineyard Wind 1 — but the administration plans to appeal that decision, US Secretary of the Interior Doug Burgum said in an interview with Bloomberg Television. An ‘evolving’ environment Charnock said the global transition toward lower- and zero-carbon energy sources has further accelerated freight demand from the power generation and storage sector, but noted that TGP’s current cargo pipeline “spans every major segment of the sector: hydrogen, wind, nuclear, traditional generation and emerging technologies.” Although the logistics provider’s approach to transporting renewable power project cargoes does not differ fundamentally from moving conventional energy freight, the variety of equipment is increasing and each technology brings its own regulatory and operational challenges, he said. “Many of the core components, such as transformers, cables and control systems, are identical across both conventional and renewable applications,” Charnock said. “What differs is the regulatory framework around each technology, the sequencing of deliveries and in some cases the level of scrutiny from authorities and investors.” Charnock cited a recent delivery of 48 lithium BESS units from China to a remote site in Western Australia, the region’s first approved lithium battery import, as an example of the more stringent safety, compliance and risk management environment around new power technologies. Operationally, the move involved breakbulk ocean transport, specialized handling equipment and a challenging 90-km final leg across a dirt road. It also required “extensive compliance work,” he said, including a two year consultation process to secure port approval under new International Maritime Organization (IMO) regulations, strict dangerous goods procedures, high pressure cleaning, and detailed biosecurity and customs controls. ‘Elevated safety protocol’ Jack Zhou, general manager at MPV operator AAL Shipping, said transporting IMO-classified cargo such as BESS units “requires elevated security documentation and safety protocol.” For starters, all AAL vessels hold a Document of Compliance for the Carriage of Dangerous Goods, which includes tailored onboard contingency plans covering spillage, fire and other emergency scenarios involving BESS units. “To further enhance the safety of the vessel and monitor the internal temperature of the BESS units, AAL has invested in flammable-gas detectors, temperature and humidity monitoring systems, portable thermal cameras and high-capacity submersible pumps,” Zhou told the Journal of Commerce. “Crews undergo specific drills prior to each shipment and vessels are equipped with toxic-gas protective gear.” Strict loading controls overseen by the vessel’s Officer of the Watch ensure all dangerous goods signals are displayed and that no “hot work,” such as welding the D-rings used for lashing, is carried out after BESS units are loaded onboard. Weather routing experts help the in-house performance optimization team plan voyage routes to minimize vessel motion. During transit, the crew performs regular inspections and activates immediate countermeasures if any irregularities are found. “As BESS technology scales and unit sizes grow, AAL expects regulations to further evolve,” Zhou added. Contact Felicity Landon at felicity@felicitylandon.com .

Breakbulk carriers

Energy projects

Heavy-haul transport

Project cargo

Breakbulk News

Growing energy cargo demand brings higher compliance burden

<div class="phx-topic abstract-wrapper">China export forecasts could top 8 million vehicles this year, providing a steady flow of cargo for the expected 8% increase in the global ro/ro fleet.</div>

China export forecasts could top 8 million vehicles this year, providing a steady flow of cargo for the expected 8% increase in the global ro/ro fleet.

<div class="phx-topic">Surging vehicle exports from China to developing markets will offset looming fears of overcapacity in the vehicle carrier market, the head of one of the roll-on/roll-off sector’s biggest operators said. Lasse Kristoffersen, president and CEO of Wallenius Wilhelmsen, predicted the growth in vehicle exports, especially from China, will match the influx of new vehicle carrier capacity this year based on manufacturers’ sales forecasts. He said China’s top seven manufacturers, including BYD, Geely, Chery and Nio, planned to ship an extra 2.3 million vehicles to overseas markets this year on top of official total vehicle exports of 5.9 million units. That followed a 24% rise in China’s vehicle exports to 6.9 million last year, up from 5 million in the year prior, Kristoffersen said during a results briefing last week. Kristoffersen noted the peak in pure car and truck carrier (PCTC) deliveries last year with 75 ships totaling 600,000 car equivalent units (CEU) joining the global fleet. A further 67 vessels are set for delivery this year, adding to the current fleet of 899 ships, according to figures from maritime consultant AXS Marine and British shipbroking house Clarksons.   This year’s new vessel deliveries equate to an 8% rise in total fleet capacity to 5.3 million CEUs this year, adding to the 13% increase last year. “This extra export volume more or less matches the extra capacity coming out of shipyards,” Kristoffersen said during the briefing. “That’s why we believe China will surprise on the upside.” Both Mitsui OSK Lines and “K” Line, in earnings statements last week, said they expected “solid demand” for vehicle exports to continue this year. <h3>Focus on emerging markets </h3>Kristoffersen said China’s vehicle export boom is being driven by a surge in exports to emerging markets including Latin America, where volumes are expected to grow 40% this year, and the Middle East, where 14% growth is expected. These developing markets call for longer two-month voyages, which reduces the impact of the influx of new shipping capacity, he said. Kristoffersen was commenting after several analysts, including Clarksons and AXS Marine, recently warned that the vehicle carrier market faces overcapacity, falling freight rates and lackluster demand growth on the back of limited scrapping. “While Chinese car and vehicle exports continue to record strong [volumes], the expansion of the PCTC fleet has become increasingly disproportionate to underlying market fundamentals, “ASX RoRo said in its February market report. “While Chinese vehicle exports continue to expand and are unlikely to slow materially, this growth largely reflects a shift in production and export patterns rather than a meaningful increase in global vehicle demand,” the report added. China’s vehicle exports continue to outpace Japan, which it overtook as the world’s biggest vehicle exporter in 2023. Japan and South Korea have both seen vehicle exports fall by almost 2% over the last two years, while Western manufacturers saw a steeper decline of between 4% and 10% in exports to Asia last year. “Unless demolition activity picks up more decisively, utilization and earnings are likely to come under pressure,” the AXS RoRo report said. Clarksons was slightly more upbeat, saying while one-year vessel charter rates had fallen 63% at the end of last year from “exceptional highs” in 2024, carriers generally continue to report “healthy earnings as cargo continues to be moved under contracts renegotiated at higher levels.” Highlighting the potential for vessel scrapping, Mitsui OSK Lines said in an earnings report this month that 29%, or 239 vehicle carriers, of the existing fleet of 819 ships is over 20 years old, while 18% is more than 26 years old. Kristoffersen said the decline in rates, from $115,000 per day for a 6,500-CEU ship in the first half of 2024 to almost $45,000 per day last month, has also opened opportunities to charter ships at more realistic levels for ad hoc spot vehicle and high-and-heavy cargoes. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Surging vehicle exports from China to developing markets will offset looming fears of overcapacity in the vehicle carrier market, the head of one of the roll-on/roll-off sector’s biggest operators said. Lasse Kristoffersen, president and CEO of Wallenius Wilhelmsen, predicted the growth in vehicle exports, especially from China, will match the influx of new vehicle carrier capacity this year based on manufacturers’ sales forecasts. He said China’s top seven manufacturers, including BYD, Geely, Chery and Nio, planned to ship an extra 2.3 million vehicles to overseas markets this year on top of official total vehicle exports of 5.9 million units. That followed a 24% rise in China’s vehicle exports to 6.9 million last year, up from 5 million in the year prior, Kristoffersen said during a results briefing last week. Kristoffersen noted the peak in pure car and truck carrier (PCTC) deliveries last year with 75 ships totaling 600,000 car equivalent units (CEU) joining the global fleet. A further 67 vessels are set for delivery this year, adding to the current fleet of 899 ships, according to figures from maritime consultant AXS Marine and British shipbroking house Clarksons.   This year’s new vessel deliveries equate to an 8% rise in total fleet capacity to 5.3 million CEUs this year, adding to the 13% increase last year. “This extra export volume more or less matches the extra capacity coming out of shipyards,” Kristoffersen said during the briefing. “That’s why we believe China will surprise on the upside.” Both Mitsui OSK Lines and “K” Line, in earnings statements last week, said they expected “solid demand” for vehicle exports to continue this year. Focus on emerging markets Kristoffersen said China’s vehicle export boom is being driven by a surge in exports to emerging markets including Latin America, where volumes are expected to grow 40% this year, and the Middle East, where 14% growth is expected. These developing markets call for longer two-month voyages, which reduces the impact of the influx of new shipping capacity, he said. Kristoffersen was commenting after several analysts, including Clarksons and AXS Marine, recently warned that the vehicle carrier market faces overcapacity, falling freight rates and lackluster demand growth on the back of limited scrapping. “While Chinese car and vehicle exports continue to record strong [volumes], the expansion of the PCTC fleet has become increasingly disproportionate to underlying market fundamentals, “ASX RoRo said in its February market report. “While Chinese vehicle exports continue to expand and are unlikely to slow materially, this growth largely reflects a shift in production and export patterns rather than a meaningful increase in global vehicle demand,” the report added. China’s vehicle exports continue to outpace Japan, which it overtook as the world’s biggest vehicle exporter in 2023. Japan and South Korea have both seen vehicle exports fall by almost 2% over the last two years, while Western manufacturers saw a steeper decline of between 4% and 10% in exports to Asia last year. “Unless demolition activity picks up more decisively, utilization and earnings are likely to come under pressure,” the AXS RoRo report said. Clarksons was slightly more upbeat, saying while one-year vessel charter rates had fallen 63% at the end of last year from “exceptional highs” in 2024, carriers generally continue to report “healthy earnings as cargo continues to be moved under contracts renegotiated at higher levels.” Highlighting the potential for vessel scrapping, Mitsui OSK Lines said in an earnings report this month that 29%, or 239 vehicle carriers, of the existing fleet of 819 ships is over 20 years old, while 18% is more than 26 years old. Kristoffersen said the decline in rates, from $115,000 per day for a 6,500-CEU ship in the first half of 2024 to almost $45,000 per day last month, has also opened opportunities to charter ships at more realistic levels for ad hoc spot vehicle and high-and-heavy cargoes. Contact Keith Wallis at keithwallis@hotmail.com .

Ro/ro cargo

Surging China auto exports to counter carrier overcapacity fears: Wilhelmsen CEO

<div class="phx-topic abstract-wrapper">The increase in volume that would result across the trans-Atlantic and trans-Pacific corridors was particularly welcome, according to Hapag-Lloyd’s CEO.</div>

The increase in volume that would result across the trans-Atlantic and trans-Pacific corridors was particularly welcome, according to Hapag-Lloyd’s CEO.

<div class="phx-topic">Hapag-Lloyd’s $4.2 billion acquisition of Zim Integrated Shipping Services that was announced Monday will significantly improve the Hamburg-based carrier’s position on several major trade lanes. While cementing the buyer’s position <a href="https://www.joc.com/article/hapag-lloyds-plan-to-acquire-zim-would-deepen-shipping-oligopoly-6170073">as the world’s fifth-largest container shipping company</a>, the takeover will grow Hapag-Lloyd’s volume share on the trans-Atlantic from 24% to 27%, on the trans-Pacific from 7% to 12%, in Asia from 9% to 11%, on Asia-Latin America from 11% to 14%, and from 2% to 7% on the intra-Europe trade, according to data from Container Trades Statistics (CTS) cited by Hapag-Lloyd. Hapag-Lloyd CEO Rolf Habben Jansen highlighted as particularly welcome the increase in volume that would result across the trans-Atlantic and trans-Pacific corridors. “When we look for a minute at the trade portfolios on the Atlantic and trans-Pacific, if we joined forces we would really get into very strong position,” he told reporters during an online briefing Monday shortly after signing the Zim deal in Tel Aviv. A 27% market share on the trans-Atlantic would put Hapag-Lloyd in second place behind Mediterranean Shipping Co. at 29%, according to the CTS figures cited by Hapag-Lloyd. According to PIERS, a sister company of the Journal of Commerce within S&amp;P Global, Hapag-Lloyd had a market share of 19.6% on the trans-Atlantic in January, behind MSC’s 22.6%. But Hapag-Lloyd held the top position throughout the fourth quarter of 2025 with a share that exceeded 25% in October and December. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ce24ca8a-5149-4e8e-a00a-5743e4d2abba"></dynamic-object></div>On the trans-Pacific, the addition of Zim would put Hapag-Lloyd level with Ocean Network Express in third position behind MSC at 13%, according to CTS. Habben Jansen said the Asia-Latin America trade has long been a corridor he has wanted to expand. In 2023, Hapag-Lloyd strengthened its position with the acquisition of SM SAAM terminal business while growing dedicated service networks on the trade lane. “Zim has done really well on Asia-Latin America in the last couple of years and this would allow us to get closer to the 15%, 16% [volume share] that we’ve always aspired to,” Habben Jansen told reporters. MSC holds the largest market share on the trade at 21%. <h3>Intra-Europe share ‘too small’ </h3>The Zim volume added on the intra-Europe trade would put Hapag-Lloyd level with Cosco Shipping at 7%, although considering it is a home market for the Hamburg-based carrier, Habben Jansen indicated there is still room to grow. “Intra-Europe for Hapag-Lloyd is too small in my view,” he said. “We would like to get to a market share of around 10%, and this would help us make a good step in that direction.” The Zim deal is expected to be completed by the end of the year, subject to approval of the Israeli carrier’s shareholders and regulatory approval in several jurisdictions. The acquisition comes as container shipping moves into a supply-driven downcycle, with the declining market sharply illustrated in Hapag-Lloyd’s preliminary results for 2025 <a href="https://www.joc.com/article/fourth-quarter-rate-slump-drags-down-hapag-lloyds-2025-financials-6166755">that included a steep drop in profitability</a>. Zim’s earnings have yet to be announced. Hapag-Lloyd’s estimated 2025 revenue for the combined entity would be $28 billion, a $1.1 billion drop from 2024. In earnings before interest and taxes, the $5.3 billion reported in 2024 by both carriers is expected to plummet to $2 billion should Zim hit the higher end of its 2025 forecast. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Hapag-Lloyd’s $4.2 billion acquisition of Zim Integrated Shipping Services that was announced Monday will significantly improve the Hamburg-based carrier’s position on several major trade lanes. While cementing the buyer’s position as the world’s fifth-largest container shipping company , the takeover will grow Hapag-Lloyd’s volume share on the trans-Atlantic from 24% to 27%, on the trans-Pacific from 7% to 12%, in Asia from 9% to 11%, on Asia-Latin America from 11% to 14%, and from 2% to 7% on the intra-Europe trade, according to data from Container Trades Statistics (CTS) cited by Hapag-Lloyd. Hapag-Lloyd CEO Rolf Habben Jansen highlighted as particularly welcome the increase in volume that would result across the trans-Atlantic and trans-Pacific corridors. “When we look for a minute at the trade portfolios on the Atlantic and trans-Pacific, if we joined forces we would really get into very strong position,” he told reporters during an online briefing Monday shortly after signing the Zim deal in Tel Aviv. A 27% market share on the trans-Atlantic would put Hapag-Lloyd in second place behind Mediterranean Shipping Co. at 29%, according to the CTS figures cited by Hapag-Lloyd. According to PIERS, a sister company of the Journal of Commerce within S&P Global, Hapag-Lloyd had a market share of 19.6% on the trans-Atlantic in January, behind MSC’s 22.6%. But Hapag-Lloyd held the top position throughout the fourth quarter of 2025 with a share that exceeded 25% in October and December. On the trans-Pacific, the addition of Zim would put Hapag-Lloyd level with Ocean Network Express in third position behind MSC at 13%, according to CTS. Habben Jansen said the Asia-Latin America trade has long been a corridor he has wanted to expand. In 2023, Hapag-Lloyd strengthened its position with the acquisition of SM SAAM terminal business while growing dedicated service networks on the trade lane. “Zim has done really well on Asia-Latin America in the last couple of years and this would allow us to get closer to the 15%, 16% [volume share] that we’ve always aspired to,” Habben Jansen told reporters. MSC holds the largest market share on the trade at 21%. Intra-Europe share ‘too small’ The Zim volume added on the intra-Europe trade would put Hapag-Lloyd level with Cosco Shipping at 7%, although considering it is a home market for the Hamburg-based carrier, Habben Jansen indicated there is still room to grow. “Intra-Europe for Hapag-Lloyd is too small in my view,” he said. “We would like to get to a market share of around 10%, and this would help us make a good step in that direction.” The Zim deal is expected to be completed by the end of the year, subject to approval of the Israeli carrier’s shareholders and regulatory approval in several jurisdictions. The acquisition comes as container shipping moves into a supply-driven downcycle, with the declining market sharply illustrated in Hapag-Lloyd’s preliminary results for 2025 that included a steep drop in profitability . Zim’s earnings have yet to be announced. Hapag-Lloyd’s estimated 2025 revenue for the combined entity would be $28 billion, a $1.1 billion drop from 2024. In earnings before interest and taxes, the $5.3 billion reported in 2024 by both carriers is expected to plummet to $2 billion should Zim hit the higher end of its 2025 forecast. Contact Greg Knowler at greg.knowler@spglobal.com .

Zim deal to strengthen Hapag-Lloyd’s market share across key trade lanes

<div class="phx-topic abstract-wrapper">The current market situation is favorable for BCOs, and the temptation will be great to drive down base rates because of internal cost pressures, writes John McCauley.</div>

The current market situation is favorable for BCOs, and the temptation will be great to drive down base rates because of internal cost pressures, writes John McCauley.

<div class="phx-topic">At this time of year, many have reflected on 2025 and made resolutions for 2026. I have adjusted this to make no resolutions, but a few predictions that, in most cases, I hope will not materialize. In addition, I want to give some advice to beneficial cargo owners (BCOs), many of whom are in various stages of negotiations for 2026–27 service contracts. Starting with the predictions, let’s consider some supply, capacity, and demand issues. <h3>Capacity </h3>I expect Red Sea transits will resume, but very slowly and primarily for East Med cargo and for the India sub-continent to the East Coast of the US. Asia-Europe transits will only resume if insurance premiums disappear. The Houthis are still present and will be volatile and unreliable, so they remain the wild card for this prediction. At best, Asia-Europe, if Suez passage resumes, would take six months to stabilize. The US port fees for Chinese-built and -owned vessels will be a non-event. However, for carriers, the sword of Damocles is hanging over this one, so don’t expect any major service reshuffles. Sadly, service reliability levels will stay stable at a horrible 60%, notwithstanding the herculean efforts of Gemini to drag the industry up. Most carriers won’t care enough to do something about it. Expect significant trucking and drayage disruption in the US. Bankruptcies will rise as seasonality gets more unpredictable. Driver shortages will get worse. The consequences will be price volatility, both up and down, with significant backlogs adding to detention and demurrage bills. Berthing and landside restrictions will continue to hinder moving larger vessels to north-south trades as few terminals are deep-sea; they are river or bay, at best, and are often hemmed in by towns and cities and tidal-constrained. <h3>Demand </h3>Many BCOs are under high internal pressure to contribute to reductions in overall supply chain costs as margins become thinner through higher input costs (somewhat largely driven by tariffs), downstream price squeezing, and weaker demand. Container freight downward trends will be an obvious target. Keep an eye on US credit card debt and defaults, which will rise significantly by the third quarter at the latest, thus further softening demand. Macro level indicators will prey on demand. US inflation will remain stubbornly near at least 2.5% to 3% while unemployment will remain at about 4.5% as immigration net deficits offset layoffs. Job creation will stagnate. Depending on the GDP trend, expect a high likelihood of stagflation toward the end of the fourth quarter (subject to the reliability of US government data). China will continue manufacturing export expansion and increase its proportion of global trade. <h3>Recommendation </h3>What does this mean for upcoming service contract negotiations? With the expectation of vessel oversupply continuing through the year, BCOs will push to the limit to reduce base rates. They will face several dilemmas, including how to get rid of unmerited and unjustifiable surcharges and which carriers to choose from in alliances and vessel-sharing agreements. Overall, the market situation is favorable for BCOs. The temptation to drive down base rates will be great because of internal cost pressures and/or wanting to make up for some years of carrier supply strength. This should be tempered with a caveat that many BCOs have been burnt in the past for being too empathetic to carriers’ financial difficulties. If I were in the shoes of a medium-size BCO of 30,000 TEUs and above, I would select a mix that would aim for base rates around the Xeneta/NYSHEX forecast average index levels, even if offered lower rates than those levels. It is important to keep in with Mediterranean Shipping Co. even if you don’t use them today. I would use index-linked contracts today and continue to do so with a maximum of 50% to leave yourself some volume for fixed rates and some spot prices. Of that remaining volume, I would leave about 25% for spot as the downside risk is still relatively low. Finally, the market situation should allow for BCOs to get into their contracts the exclusion of any non-explainable (by the carrier) and justifiable (judged and accepted by the BCO) surcharges. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>.</div>

At this time of year, many have reflected on 2025 and made resolutions for 2026. I have adjusted this to make no resolutions, but a few predictions that, in most cases, I hope will not materialize. In addition, I want to give some advice to beneficial cargo owners (BCOs), many of whom are in various stages of negotiations for 2026–27 service contracts. Starting with the predictions, let’s consider some supply, capacity, and demand issues. Capacity I expect Red Sea transits will resume, but very slowly and primarily for East Med cargo and for the India sub-continent to the East Coast of the US. Asia-Europe transits will only resume if insurance premiums disappear. The Houthis are still present and will be volatile and unreliable, so they remain the wild card for this prediction. At best, Asia-Europe, if Suez passage resumes, would take six months to stabilize. The US port fees for Chinese-built and -owned vessels will be a non-event. However, for carriers, the sword of Damocles is hanging over this one, so don’t expect any major service reshuffles. Sadly, service reliability levels will stay stable at a horrible 60%, notwithstanding the herculean efforts of Gemini to drag the industry up. Most carriers won’t care enough to do something about it. Expect significant trucking and drayage disruption in the US. Bankruptcies will rise as seasonality gets more unpredictable. Driver shortages will get worse. The consequences will be price volatility, both up and down, with significant backlogs adding to detention and demurrage bills. Berthing and landside restrictions will continue to hinder moving larger vessels to north-south trades as few terminals are deep-sea; they are river or bay, at best, and are often hemmed in by towns and cities and tidal-constrained. Demand Many BCOs are under high internal pressure to contribute to reductions in overall supply chain costs as margins become thinner through higher input costs (somewhat largely driven by tariffs), downstream price squeezing, and weaker demand. Container freight downward trends will be an obvious target. Keep an eye on US credit card debt and defaults, which will rise significantly by the third quarter at the latest, thus further softening demand. Macro level indicators will prey on demand. US inflation will remain stubbornly near at least 2.5% to 3% while unemployment will remain at about 4.5% as immigration net deficits offset layoffs. Job creation will stagnate. Depending on the GDP trend, expect a high likelihood of stagflation toward the end of the fourth quarter (subject to the reliability of US government data). China will continue manufacturing export expansion and increase its proportion of global trade. Recommendation What does this mean for upcoming service contract negotiations? With the expectation of vessel oversupply continuing through the year, BCOs will push to the limit to reduce base rates. They will face several dilemmas, including how to get rid of unmerited and unjustifiable surcharges and which carriers to choose from in alliances and vessel-sharing agreements. Overall, the market situation is favorable for BCOs. The temptation to drive down base rates will be great because of internal cost pressures and/or wanting to make up for some years of carrier supply strength. This should be tempered with a caveat that many BCOs have been burnt in the past for being too empathetic to carriers’ financial difficulties. If I were in the shoes of a medium-size BCO of 30,000 TEUs and above, I would select a mix that would aim for base rates around the Xeneta/NYSHEX forecast average index levels, even if offered lower rates than those levels. It is important to keep in with Mediterranean Shipping Co. even if you don’t use them today. I would use index-linked contracts today and continue to do so with a maximum of 50% to leave yourself some volume for fixed rates and some spot prices. Of that remaining volume, I would leave about 25% for spot as the downside risk is still relatively low. Finally, the market situation should allow for BCOs to get into their contracts the exclusion of any non-explainable (by the carrier) and justifiable (judged and accepted by the BCO) surcharges. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

A few market predictions and some advice for BCOs as contract season heats up

<div class="phx-topic abstract-wrapper">There are a lot of theories explaining the current freight recession, but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components, writes Ted Prince.</div>

There are a lot of theories explaining the current freight recession, but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components, writes Ted Prince.

<div class="phx-topic">In 1948, Gerald Hern, sports editor of the Boston Post, composed a brief poem describing the Boston Braves’ pitching en route to the 1948 National League pennant: First we’ll use Spahn then we’ll use Sain Then an off day, followed by rain Back will come Spahn, followed by Sain And followed, we hope, by two days of rain Warren Spahn and Johnny Sain were responsible for 39 of the Braves’ 91 victories that year. However, it was common to have a one-two punch at the top of a team’s pitching rotation. Intermodal has a similar duality: international and domestic — primarily dry 40- and 53-foot containers, respectively. While intermodal has a plethora of markets and equipment, the two segments have been carrying the industry for decades to constant new heights. They are also closely correlated in that a great deal of the domestic market is import cargo that was transloaded on the West Coast for movement inland. Hern’s work comes to mind when thinking about intermodal’s performance in 2025 and its prospects for 2026. Unlike the hoped-for two days of good rain, the industry has endured four years of painful rain since the halcyon volumes of 2021, the “good old days” of the COVID-19 pandemic. There are a lot of theories explaining the current freight “recession,” but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components. As a result, intermodal has frequently found itself as a surface freight alternative that is slower and more expensive than trucking. And while there were some green shoots in 2024, the industry has been hoping for a second-half recovery — that has failed to materialize — in each of the past three years. The same seems true for 2026. <h3>Supply and demand drivers </h3>As we look forward, we need to consider supply and demand drivers. “Affordability” has taken the place of prominence in our political lexicon. As the costs of food and housing rise, discretionary income for other consumer products has shriveled and reduced demand. The same goes for increasing credit card, car, and student loan debt. Regardless of mortgage rates, there are long-term limitations on housing starts. This can further reduce consumer demand because so many purchases — e.g., furniture, home, electronics, etc. — are often associated with new homes. And although seven-year car loans have become more common, I don’t believe 50-year home mortgages will have the same penetration. With demand problematic, intermodal success will probably rely on supply changes. Many contend that the demand during the early days of COVID-19 created excess capacity that the truck market is still trying to absorb. However, it is unclear whether there was really an increase in overall capacity, or just realignment as many truckers decided to go out on their own. Regardless, there were a number of carriers that acquired capacity at historically high prices and must keep operating to just make their payments. The normal culling of unprofitable capacity was precluded by this inability to exit the market, ensuring a never-ending supply of zombie truckers. This capacity is getting older and more expensive to operate. Nevertheless, there is a feeling (or hope?) that 2026 will finally see marginal carriers leave the market and rate stability restored. <h3>Enhanced regulatory oversight </h3>The environmental green benefits of intermodal are not a priority for the current administration, so economic green will be paramount. Most likely that would come from increased regulatory oversight. Enhanced enforcement on non-domiciled commercial driver’s licenses is reducing driver supply. And there is still the unknown of hacked electronic logging devices allowing for illegal hours of service. What is unclear is whether these initiatives will impact truckload and drayage carriers equally, or whether one segment will suffer disproportionate opprobrium. If it is the former, intermodal will be advantaged; however, if it is the latter, maybe not. The former would be a rising tide that would raise all intermodal ships, whereas the latter could see the further ascendance of bimodal operations with integrated drayage overseen by robust safety regimens. In an attempt to increase demand, we can expect major players to assume prominent roles. Railroads and bimodals will seek to deploy equipment that has been stored for years. Ocean carriers will continue to consider their inland options. Finally, ports may become more involved as they explore inland options to attract more discretionary cargo. There are no historical comparisons for the last five years. It is unclear when the market will turn, but when it does, the recovery will follow Ernest Hemingway’s description: “Gradually, then suddenly.” We can then hope for the sun also to rise on intermodal. 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>

In 1948, Gerald Hern, sports editor of the Boston Post, composed a brief poem describing the Boston Braves’ pitching en route to the 1948 National League pennant: First we’ll use Spahn then we’ll use Sain Then an off day, followed by rain Back will come Spahn, followed by Sain And followed, we hope, by two days of rain Warren Spahn and Johnny Sain were responsible for 39 of the Braves’ 91 victories that year. However, it was common to have a one-two punch at the top of a team’s pitching rotation. Intermodal has a similar duality: international and domestic — primarily dry 40- and 53-foot containers, respectively. While intermodal has a plethora of markets and equipment, the two segments have been carrying the industry for decades to constant new heights. They are also closely correlated in that a great deal of the domestic market is import cargo that was transloaded on the West Coast for movement inland. Hern’s work comes to mind when thinking about intermodal’s performance in 2025 and its prospects for 2026. Unlike the hoped-for two days of good rain, the industry has endured four years of painful rain since the halcyon volumes of 2021, the “good old days” of the COVID-19 pandemic. There are a lot of theories explaining the current freight “recession,” but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components. As a result, intermodal has frequently found itself as a surface freight alternative that is slower and more expensive than trucking. And while there were some green shoots in 2024, the industry has been hoping for a second-half recovery — that has failed to materialize — in each of the past three years. The same seems true for 2026. Supply and demand drivers As we look forward, we need to consider supply and demand drivers. “Affordability” has taken the place of prominence in our political lexicon. As the costs of food and housing rise, discretionary income for other consumer products has shriveled and reduced demand. The same goes for increasing credit card, car, and student loan debt. Regardless of mortgage rates, there are long-term limitations on housing starts. This can further reduce consumer demand because so many purchases — e.g., furniture, home, electronics, etc. — are often associated with new homes. And although seven-year car loans have become more common, I don’t believe 50-year home mortgages will have the same penetration. With demand problematic, intermodal success will probably rely on supply changes. Many contend that the demand during the early days of COVID-19 created excess capacity that the truck market is still trying to absorb. However, it is unclear whether there was really an increase in overall capacity, or just realignment as many truckers decided to go out on their own. Regardless, there were a number of carriers that acquired capacity at historically high prices and must keep operating to just make their payments. The normal culling of unprofitable capacity was precluded by this inability to exit the market, ensuring a never-ending supply of zombie truckers. This capacity is getting older and more expensive to operate. Nevertheless, there is a feeling (or hope?) that 2026 will finally see marginal carriers leave the market and rate stability restored. Enhanced regulatory oversight The environmental green benefits of intermodal are not a priority for the current administration, so economic green will be paramount. Most likely that would come from increased regulatory oversight. Enhanced enforcement on non-domiciled commercial driver’s licenses is reducing driver supply. And there is still the unknown of hacked electronic logging devices allowing for illegal hours of service. What is unclear is whether these initiatives will impact truckload and drayage carriers equally, or whether one segment will suffer disproportionate opprobrium. If it is the former, intermodal will be advantaged; however, if it is the latter, maybe not. The former would be a rising tide that would raise all intermodal ships, whereas the latter could see the further ascendance of bimodal operations with integrated drayage overseen by robust safety regimens. In an attempt to increase demand, we can expect major players to assume prominent roles. Railroads and bimodals will seek to deploy equipment that has been stored for years. Ocean carriers will continue to consider their inland options. Finally, ports may become more involved as they explore inland options to attract more discretionary cargo. There are no historical comparisons for the last five years. It is unclear when the market will turn, but when it does, the recovery will follow Ernest Hemingway’s description: “Gradually, then suddenly.” We can then hope for the sun also to rise on intermodal. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

North-American rail

Intermodal providers

Supply chain

Pace of freight market recovery a matter of ‘gradually, then suddenly’

China to US

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<div class="phx-topic abstract-wrapper">The carrier reported a steep drop in profitability as declining rates combined with higher costs of rerouting ships around southern Africa and startup expenses for the Gemini network.</div>

The carrier reported a steep drop in profitability as declining rates combined with higher costs of rerouting ships around southern Africa and startup expenses for the Gemini network.

<div class="phx-topic">A solid increase in Hapag-Lloyd’s Gemini Cooperation-driven volume last year and cost savings across the new network were not enough to offset a sharply correcting market in 2025, the carrier said Monday. Hapag-Lloyd reported a steep drop in profitability for the year as declining rates combined with the higher costs of rerouting ships around southern Africa and startup expenses for the Gemini network to weigh on its 2025 results. Hapag-Lloyd launched the Gemini network with partner Maersk in February 2025. “Robust growth in global trade and the new Gemini network led to an 8% increase in the transport volume to 13.5 million TEUs,” Hapag-Lloyd said in a statement on its preliminary 2025 results. The carrier provided no after-tax figures; its full annual report with a 2026 outlook will be unveiled March 26. Even as demand rose, it was mirrored by a drop in average rates that were down 8% year over year at $1,376 per TEU. That led to full-year revenue falling 1.9% to $21.1 billion and earnings before interest, taxes, amortization and depreciation (EBITDA) declining 28% to $3.6 billion. While earnings before interest and taxes (EBIT) were down 60% at $1.1 billion, they was at the higher end of the profitability forecast Hapag-Lloyd gave the market following the announcement of its nine-month results last November. <h3>Gemini savings kicking in </h3>The results showed that much of the 2025 financial damage occurred in the fourth quarter, similar to <a href="https://www.joc.com/article/gemini-benefits-face-looming-challenge-from-oversupplied-market-maersk-ceo-6164887">the full-year earnings of Maersk</a> and <a href="https://www.joc.com/article/frontloading-drags-one-to-a-loss-in-its-fiscal-third-quarter-6161263">the fiscal third-quarter results of Ocean Network Express</a>. Hapag-Lloyd’s fourth-quarter volume was up 6% year over year, but revenue fell 7.4% to $5 billion, EBITDA dropped 42% to $800 million and EBIT for the quarter was down 75% at $200 million. “On the other hand, Gemini-related cost savings started kicking in during the second half of 2025 and will be fully realized in 2026,” the carrier said. Hapag-Lloyd’s savings to be generated by Gemini are expected to be between $350 million and $400 million, which is approximately 40% of a total $1 billion in savings the carrier expects to have in place by the end of this year as part of an aggressive cost-savings program across its overall network. Hapag-Lloyd did not provide financials for its Hanseatic Global Terminals division, but it is a key part of the Gemini network. Maersk and Hapag-Lloyd control most of their terminal network, which gives the carriers greater berth access and handling productivity than common user facilities, especially in the congested hubs of Europe. That access saw Maersk reporting a record performance in its terminals division in 2025. Maritime consultant Drewry has upgraded its financial year 2025 profit forecast from $20 billion to $32 billion following “better than expected” third-quarter results from carriers and raised the outlook for 2026 from a $10 billion loss to a $1 billion profit. Contact Greg Knowler at <a href="https://www.joc.com/article/frontloading-drags-one-to-a-loss-in-its-fiscal-third-quarter-6161263">greg.knowler@spglobal.com</a>. </div>

A solid increase in Hapag-Lloyd’s Gemini Cooperation-driven volume last year and cost savings across the new network were not enough to offset a sharply correcting market in 2025, the carrier said Monday. Hapag-Lloyd reported a steep drop in profitability for the year as declining rates combined with the higher costs of rerouting ships around southern Africa and startup expenses for the Gemini network to weigh on its 2025 results. Hapag-Lloyd launched the Gemini network with partner Maersk in February 2025. “Robust growth in global trade and the new Gemini network led to an 8% increase in the transport volume to 13.5 million TEUs,” Hapag-Lloyd said in a statement on its preliminary 2025 results. The carrier provided no after-tax figures; its full annual report with a 2026 outlook will be unveiled March 26. Even as demand rose, it was mirrored by a drop in average rates that were down 8% year over year at $1,376 per TEU. That led to full-year revenue falling 1.9% to $21.1 billion and earnings before interest, taxes, amortization and depreciation (EBITDA) declining 28% to $3.6 billion. While earnings before interest and taxes (EBIT) were down 60% at $1.1 billion, they was at the higher end of the profitability forecast Hapag-Lloyd gave the market following the announcement of its nine-month results last November. Gemini savings kicking in The results showed that much of the 2025 financial damage occurred in the fourth quarter, similar to the full-year earnings of Maersk and the fiscal third-quarter results of Ocean Network Express . Hapag-Lloyd’s fourth-quarter volume was up 6% year over year, but revenue fell 7.4% to $5 billion, EBITDA dropped 42% to $800 million and EBIT for the quarter was down 75% at $200 million. “On the other hand, Gemini-related cost savings started kicking in during the second half of 2025 and will be fully realized in 2026,” the carrier said. Hapag-Lloyd’s savings to be generated by Gemini are expected to be between $350 million and $400 million, which is approximately 40% of a total $1 billion in savings the carrier expects to have in place by the end of this year as part of an aggressive cost-savings program across its overall network. Hapag-Lloyd did not provide financials for its Hanseatic Global Terminals division, but it is a key part of the Gemini network. Maersk and Hapag-Lloyd control most of their terminal network, which gives the carriers greater berth access and handling productivity than common user facilities, especially in the congested hubs of Europe. That access saw Maersk reporting a record performance in its terminals division in 2025. Maritime consultant Drewry has upgraded its financial year 2025 profit forecast from $20 billion to $32 billion following “better than expected” third-quarter results from carriers and raised the outlook for 2026 from a $10 billion loss to a $1 billion profit. Contact Greg Knowler at greg.knowler@spglobal.com .

Fourth-quarter rate slump drags down Hapag-Lloyd’s 2025 financials

<div class="phx-topic abstract-wrapper">The likely sale this year of the Port of New York and New Jersey’s largest marine terminal portends possible changes to how it will be operated in the long run. </div>

The likely sale this year of the Port of New York and New Jersey’s largest marine terminal portends possible changes to how it will be operated in the long run.

<div class="phx-topic">The potential sale of Maher Terminal at the Port of New York and New Jersey will require a buyer to navigate stricter lease terms, billions in new costs, and decisions on how to grow capacity and service its customers, all portending further changes in container handling at the port. A source told the Journal of Commerce that marine terminal operators including DP World, PSA International, SSA Marine, and Terminal Investment Limited have inquired about a potential acquisition of Maher from private equity firm Macquarie Infrastructure Partners. Maher, the largest container terminal at NY-NJ, could fetch $3 billion, according to the Wall Street Journal. The sale of Maher, which could be announced later this year, comes after the Macquarie fund that owns Maher negotiated <a href="https://www.joc.com/article/macquarie-seals-deal-for-new-maher-lease-at-nynj-through-2063-6137751">a new 33-year lease with the Port Authority of New York and New Jersey that starts in 2030</a>. The potential buyers have also contacted the Port Authority, the source said, because the agency would have to sign off on any deal. The new lease means Maher’s buyer faces a variable monthly rent that is based solely on container volume, the source said, rather than the previous lease’s largely fixed-cost base rent. In addition, the new operator will have to share with the Port Authority a greater portion of its “excess revenue,” which generally comes from the demurrage it charges on containers. Outside of the direct rental costs, Maher’s buyer could face at least $3 billion in capital and maintenance costs under the new lease, the source said. <h3>Capacity upgrades</h3>A big chunk of that will be the cost of berth maintenance and repairs that the Port Authority has begun shifting over to tenants under the new leases. Maher, with four berths capable of handling super-post-Panamax ships, faces an estimated $2 billion in such repairs.The new lease also requires Maher to add “demand-induced” capacity as part of the port’s overall plan to double capacity by 2050, Port Director Beth Rooney said after the lease’s December signing. Maher, which can currently handle just over 3 million TEUs, could double its capacity through densification, she said. Densification, though, will require the buyer to rethink signature features of the terminal that have made it preferred among ocean carriers, shippers and motor carriers. The densification process could cost another $1 billion. Maher currently uses a fleet of over 200 straddle carriers to sort containers and bring them to trucks waiting at a parking spot, what the facility bills as a “concierge service,” according to shippers. Maher has won multiple awards from local motor carriers and ocean carriers for its service levels. Densifying the facility would mean gradually rolling out a smaller fleet of gantry cranes, either on rubber tires or rail mounted, for handling higher and wider container stacks. The process would require that yard space within Maher be closed on a rotating basis while the underlying concrete is reinforced and container stacks are remade for the larger machines. It’s not clear how the switch to gantry crane operations will affect service times for trucks, although it would likely mean fewer loading spaces. An equipment change at the terminal will also trigger a clause in the contract with the International Longshoremen’s Association (ILA) over implementing new technology, requiring negotiations with the union. Along with larger yard equipment, a new buyer for Maher will face decisions on how it optimizes space. Maher has a massive truck gate with some 30 inbound lanes and 20 outbound lanes. The large gate complex allows Maher to handle trucks without requiring appointments, a free-flow operation that allows truckers to quickly enter the facility. But the gate complex also occupies about a quarter of its land, making it a potential target for reclamation to container yard space. A smaller gate, though, might require Maher to rethink the free-flow model. Maher will also have to share more of its daily operational data under the new lease terms, which require the terminal to provide data about key metrics and other measures. The data sharing will “enable the Port Authority and its terminal operators to better collaborate on port efficiency initiatives,” the agency said in a statement to the Journal of Commerce.Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The potential sale of Maher Terminal at the Port of New York and New Jersey will require a buyer to navigate stricter lease terms, billions in new costs, and decisions on how to grow capacity and service its customers, all portending further changes in container handling at the port. A source told the Journal of Commerce that marine terminal operators including DP World, PSA International, SSA Marine, and Terminal Investment Limited have inquired about a potential acquisition of Maher from private equity firm Macquarie Infrastructure Partners. Maher, the largest container terminal at NY-NJ, could fetch $3 billion, according to the Wall Street Journal. The sale of Maher, which could be announced later this year, comes after the Macquarie fund that owns Maher negotiated a new 33-year lease with the Port Authority of New York and New Jersey that starts in 2030 . The potential buyers have also contacted the Port Authority, the source said, because the agency would have to sign off on any deal. The new lease means Maher’s buyer faces a variable monthly rent that is based solely on container volume, the source said, rather than the previous lease’s largely fixed-cost base rent. In addition, the new operator will have to share with the Port Authority a greater portion of its “excess revenue,” which generally comes from the demurrage it charges on containers. Outside of the direct rental costs, Maher’s buyer could face at least $3 billion in capital and maintenance costs under the new lease, the source said. Capacity upgrades A big chunk of that will be the cost of berth maintenance and repairs that the Port Authority has begun shifting over to tenants under the new leases. Maher, with four berths capable of handling super-post-Panamax ships, faces an estimated $2 billion in such repairs. The new lease also requires Maher to add “demand-induced” capacity as part of the port’s overall plan to double capacity by 2050, Port Director Beth Rooney said after the lease’s December signing. Maher, which can currently handle just over 3 million TEUs, could double its capacity through densification, she said. Densification, though, will require the buyer to rethink signature features of the terminal that have made it preferred among ocean carriers, shippers and motor carriers. The densification process could cost another $1 billion. Maher currently uses a fleet of over 200 straddle carriers to sort containers and bring them to trucks waiting at a parking spot, what the facility bills as a “concierge service,” according to shippers. Maher has won multiple awards from local motor carriers and ocean carriers for its service levels. Densifying the facility would mean gradually rolling out a smaller fleet of gantry cranes, either on rubber tires or rail mounted, for handling higher and wider container stacks. The process would require that yard space within Maher be closed on a rotating basis while the underlying concrete is reinforced and container stacks are remade for the larger machines. It’s not clear how the switch to gantry crane operations will affect service times for trucks, although it would likely mean fewer loading spaces. An equipment change at the terminal will also trigger a clause in the contract with the International Longshoremen’s Association (ILA) over implementing new technology, requiring negotiations with the union. Along with larger yard equipment, a new buyer for Maher will face decisions on how it optimizes space. Maher has a massive truck gate with some 30 inbound lanes and 20 outbound lanes. The large gate complex allows Maher to handle trucks without requiring appointments, a free-flow operation that allows truckers to quickly enter the facility. But the gate complex also occupies about a quarter of its land, making it a potential target for reclamation to container yard space. A smaller gate, though, might require Maher to rethink the free-flow model. Maher will also have to share more of its daily operational data under the new lease terms, which require the terminal to provide data about key metrics and other measures. The data sharing will “enable the Port Authority and its terminal operators to better collaborate on port efficiency initiatives,” the agency said in a statement to the Journal of Commerce.Contact Michael Angell at michael.angell@spglobal.com .

Marine terminals

Longshore labor

North American ports

Maher’s next buyer faces billions in upgrades, decisions on capacity

<div class="phx-topic abstract-wrapper">While linehaul performance has largely returned to normal for US Class I railroads, delays and bottlenecks triggered by the severe winter storm two weeks ago have now moved downstream to terminals in Chicago, Cincinnati and Memphis.</div>

While linehaul performance has largely returned to normal for US Class I railroads, delays and bottlenecks triggered by the severe winter storm two weeks ago have now moved downstream to terminals in Chicago, Cincinnati and Memphis.

<div class="phx-topic">Rail terminals at key inland hubs have become congested with containers two weeks after a severe winter storm slammed a large portion of the US, slowing both the handoff of import boxes to trucks and the start of export moves. While port-to-rail service and linehaul performance have largely returned to normal for US Class I railroads, the delays and bottlenecks triggered by the storm have now moved downstream to terminals in Chicago, Cincinnati and Memphis. “We’ve had drivers spending up to five hours just in line, consistently missing deliveries and having containers going into [demurrage],” said one Chicago-based trucker who asked not to be identified. “The customers refuse to pay and are getting frustrated. Drivers are getting frustrated.” Truckers say the terminal delays are eroding productivity and adding costs, particularly as railroads assess fees during extended container dwell times. For drayage providers, profitability depends on delivering cargo, making hours-long delays inside terminals costly. Frustration has been directed at BNSF Railway, Norfolk Southern Railway (NS) and Union Pacific Railroad (UP). Slowdowns are common during frigid temperatures because heavy equipment such as overhead cranes and hostler vehicles can malfunction. Outdoor terminal crews also must battle the harsh conditions. In Memphis, drivers have raised concerns after UP began stacking ocean containers inside the terminal on Feb. 4 because of a chassis shortage, according to a UP advisory circulated to drivers and shared with the Journal of Commerce. A UP spokesperson declined to confirm the advisory’s authenticity, although two independent sources provided copies to the Journal of Commerce. “Union Pacific does not own chassis and works closely with customers and their carriers to ensure availability,” the UP spokesperson said in a statement to the Journal of Commerce. “Following the unprecedented storm, Union Pacific recovered exceptionally well and maintained a fluid rail network.” Truckers object to UP’s decision, prompted by the post-storm conditions, to charge a fee to lift containers out of stacks. The so-called “flip fee” traditionally applies when transferring a container from a perfectly usable pool chassis to a trucker’s privately owned chassis. Other North American Class I railroads do not assess a fee in similar circumstances, and major US ports similarly do not charge simply to lift a container from a stack onto a truck. Cargo owners are not covering the cost, so UP’s decision is a financial hit for truckers, provoking angry e-mails from truckers that were shared with the Journal of Commerce. Data from technology provider E-Dray shows that the average time to unload an ocean container and make it available at UP’s Memphis terminal has increased from less than one (0.7) day before the storm to 2.9 days as of this week. <h3>Frustrations with BNSF, Norfolk Southern </h3>Drivers report similar frustrations at BNSF’s Memphis and Logistics Park Chicago terminals, where E-Dray data shows container availability times have doubled from approximately one day to two days in both locations. The delays are not driven by chassis shortages, but by extended waits for crane availability. “Turn times at both facilities are about 30%, or 20 minutes longer,” Jon Gabriel, BNSF’s group vice president of consumer products, told the Journal of Commerce. “We expect that turn times [will] return back to normal at both facilities next week, likely Memphis a little sooner.” In Chicago, drivers have also voiced concerns about Norfolk Southern terminals, although E-Dray data shows no material deterioration in terminal efficiency metrics there. Norfolk Southern, however, acknowledged congestion in Cincinnati. “We are taking proactive steps to improve the driver experience, reduce dwell, and maintain service reliability,” NS wrote in a Feb. 3 advisory posted online. “Our focus is on restoring smooth terminal flow and improving the driver experience as quickly as possible.” Congestion also remains elevated in Louisville, where a disruption that began more than a month ago persists. <h3>Linehaul performance rebounds </h3>Moving containers into major inland hubs is no longer an issue for the railroads. BNSF’s transit times between Floyd, Mississippi, and Plaines, Illinois, nearly doubled to 19 hours in the immediate aftermath of the storm, but had fallen back to about 10 hours as of Feb. 5, according to rail visibility provider RailState. UP’s transit times between Edwardsville, Kansas, and Mazonia, Illinois, spiked to nearly 80 hours after the storm before declining to approximately 35 hours this week, RailState data showed. NS’ transit times between Mishawaka, Indiana, and East Palestine, Ohio, jumped about 50% during the storm but have since returned to historical norms. (The RailState data used in this report was the 75th percentile of transit times, as calculated by RailState, to better capture “outlier” instances created by the storm.) Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Rail terminals at key inland hubs have become congested with containers two weeks after a severe winter storm slammed a large portion of the US, slowing both the handoff of import boxes to trucks and the start of export moves. While port-to-rail service and linehaul performance have largely returned to normal for US Class I railroads, the delays and bottlenecks triggered by the storm have now moved downstream to terminals in Chicago, Cincinnati and Memphis. “We’ve had drivers spending up to five hours just in line, consistently missing deliveries and having containers going into [demurrage],” said one Chicago-based trucker who asked not to be identified. “The customers refuse to pay and are getting frustrated. Drivers are getting frustrated.” Truckers say the terminal delays are eroding productivity and adding costs, particularly as railroads assess fees during extended container dwell times. For drayage providers, profitability depends on delivering cargo, making hours-long delays inside terminals costly. Frustration has been directed at BNSF Railway, Norfolk Southern Railway (NS) and Union Pacific Railroad (UP). Slowdowns are common during frigid temperatures because heavy equipment such as overhead cranes and hostler vehicles can malfunction. Outdoor terminal crews also must battle the harsh conditions. In Memphis, drivers have raised concerns after UP began stacking ocean containers inside the terminal on Feb. 4 because of a chassis shortage, according to a UP advisory circulated to drivers and shared with the Journal of Commerce. A UP spokesperson declined to confirm the advisory’s authenticity, although two independent sources provided copies to the Journal of Commerce. “Union Pacific does not own chassis and works closely with customers and their carriers to ensure availability,” the UP spokesperson said in a statement to the Journal of Commerce. “Following the unprecedented storm, Union Pacific recovered exceptionally well and maintained a fluid rail network.” Truckers object to UP’s decision, prompted by the post-storm conditions, to charge a fee to lift containers out of stacks. The so-called “flip fee” traditionally applies when transferring a container from a perfectly usable pool chassis to a trucker’s privately owned chassis. Other North American Class I railroads do not assess a fee in similar circumstances, and major US ports similarly do not charge simply to lift a container from a stack onto a truck. Cargo owners are not covering the cost, so UP’s decision is a financial hit for truckers, provoking angry e-mails from truckers that were shared with the Journal of Commerce. Data from technology provider E-Dray shows that the average time to unload an ocean container and make it available at UP’s Memphis terminal has increased from less than one (0.7) day before the storm to 2.9 days as of this week. Frustrations with BNSF, Norfolk Southern Drivers report similar frustrations at BNSF’s Memphis and Logistics Park Chicago terminals, where E-Dray data shows container availability times have doubled from approximately one day to two days in both locations. The delays are not driven by chassis shortages, but by extended waits for crane availability. “Turn times at both facilities are about 30%, or 20 minutes longer,” Jon Gabriel, BNSF’s group vice president of consumer products, told the Journal of Commerce. “We expect that turn times [will] return back to normal at both facilities next week, likely Memphis a little sooner.” In Chicago, drivers have also voiced concerns about Norfolk Southern terminals, although E-Dray data shows no material deterioration in terminal efficiency metrics there. Norfolk Southern, however, acknowledged congestion in Cincinnati. “We are taking proactive steps to improve the driver experience, reduce dwell, and maintain service reliability,” NS wrote in a Feb. 3 advisory posted online. “Our focus is on restoring smooth terminal flow and improving the driver experience as quickly as possible.” Congestion also remains elevated in Louisville, where a disruption that began more than a month ago persists. Linehaul performance rebounds Moving containers into major inland hubs is no longer an issue for the railroads. BNSF’s transit times between Floyd, Mississippi, and Plaines, Illinois, nearly doubled to 19 hours in the immediate aftermath of the storm, but had fallen back to about 10 hours as of Feb. 5, according to rail visibility provider RailState. UP’s transit times between Edwardsville, Kansas, and Mazonia, Illinois, spiked to nearly 80 hours after the storm before declining to approximately 35 hours this week, RailState data showed. NS’ transit times between Mishawaka, Indiana, and East Palestine, Ohio, jumped about 50% during the storm but have since returned to historical norms. (The RailState data used in this report was the 75th percentile of transit times, as calculated by RailState, to better capture “outlier” instances created by the storm.) Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Key inland rail terminals battle post-storm congestion, driver complaints

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<div class="phx-topic abstract-wrapper">The wide-ranging plan includes proposals to tax foreign-built ships calling US ports, rebuild domestic shipbuilding capacity, and eliminate “burdensome regulations” through a series of deregulatory measures. </div>

The wide-ranging plan includes proposals to tax foreign-built ships calling US ports, rebuild domestic shipbuilding capacity, and eliminate “burdensome regulations” through a series of deregulatory measures.

<div class="phx-topic">The Trump administration Friday unveiled a wide-ranging blueprint for revitalizing the US maritime sector, the financial cornerstone of which would be a Maritime Security Trust Fund (MSTF) that would be fed in large part by taxing foreign-owned vessels calling US ports. “America’s Maritime Action Plan” includes a “universal infrastructure or security fee” that would be imposed on all foreign-built commercial vessels. The fee would be assessed based on the weight of the imported tonnage carried on the vessel. The action plan also includes a separate fee on imports arriving via land. While no specific figures were proposed, the plan to tax cargo tonnage imported by foreign-built ships did offer two scenarios: A fee of 1 cent per kilogram would generate about $66 billion over 10 years, while a fee of 25 cents per kg would yield close to $1.5 trillion. It’s unclear how the estimates were calculated. “As foreign-built vessels benefit from US market access, this policy ensures they contribute to the long-term revitalization of America’s maritime capabilities,” the plan said. The proposal echoes the tit-for-tat tariffs the US and China intended to impose on each other’s tonnage <a href="https://www.joc.com/article/year-long-pause-on-us-port-fees-targeting-china-vessels-to-start-nov-10-6108431">until a one-year suspension was enacted last November</a> as part of a <a href="https://www.joc.com/article/trade-deal-could-boost-short-term-china-imports-but-uncertainty-lingers-6106809">broader trade deal between Washington and Beijing</a>. The action plan also includes proposals to rebuild domestic shipbuilding capacity, strengthen the maritime industrial base, increase the fleet of US-built and -flagged commercial vessels working international trades, and eliminate “burdensome regulations” through a series of deregulatory measures. “For decades, the nation’s strategic position and shipbuilding industrial capacity have weakened due to a lack of strategic focus, cumbersome government procurement processes and a lack of strategic support for construction of commercial vessels in domestic shipyards,” the plan’s introduction stated. The action plan is an extension of an executive order issued by President Donald Trump last April calling for the restoration of American maritime dominance. The 40-page plan offers several concrete proposals, including the creation of the MSTF that would be fed by new revenue streams. “By securing stable, long-term funding, the MSTF would ensure consistent support for investments in shipbuilding, fleet expansion, industrial base resilience, and maritime workforce development,” the plan said. “Authorized expenditures would include programs identified as helpful for the promotion, growth and strengthening of the domestic maritime sector.” The MSTF would help fund the revitalization of US shipbuilding capacity, which is “the cornerstone of the administration’s strategy to restore America’s maritime strength and self-sufficiency,” according to the plan, which noted only eight shipyards exist in the country that can build vessels greater than 400 feet in length. The plan calls for investment that would fund upgrades to commercial shipyards in order to add and modernize drydocks, heavy-lift and gantry cranes, panel lines, and automated handling systems “to support higher‑rate production and large hull handling.” <h3>Land port tax </h3>A separate proposed funding mechanism, the Land Port Maintenance Tax, would be an equivalent to the existing Harbor Maintenance Tax for marine ports. The plan proposes a “modest tax” on merchandise entering the US via land of 0.125% of the value of the goods. “Funds collected under this tax will be deposited into the newly established Land Port Maintenance Trust Fund (LPMTF), which will support the planning, design, construction, maintenance and improvement of land port infrastructure,” according to the plan. The action plan also proposes the creation of a Strategic Commercial Fleet (SCF) that would consist of US-built vessels working international trades. The SCF would “provide the depth and redundancy required to sustain military logistics around the globe and ensure the continuous flow of goods to the US economy,” the plan said. “Vessels in the SCF would receive financial support for both construction and operation, leveling the playing field between the US and subsidized foreign competition.” Many of the proposals included in the maritime action plan require Congressional approval, so the Trump administration said it is compiling a legislative package that will be sent to Congress after the publication of Trump’s fiscal year 2027 budget request. Presidents typically send annual budget requests to Congress in February, although the timeline can be delayed. “The Trump administration urges Congress to enact this package in tandem with existing legislative vehicles, ensuring the US maritime industry is equipped to meet the demands of global competition, national defense and economic growth,” the plan said. Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>.</div>

The Trump administration Friday unveiled a wide-ranging blueprint for revitalizing the US maritime sector, the financial cornerstone of which would be a Maritime Security Trust Fund (MSTF) that would be fed in large part by taxing foreign-owned vessels calling US ports. “America’s Maritime Action Plan” includes a “universal infrastructure or security fee” that would be imposed on all foreign-built commercial vessels. The fee would be assessed based on the weight of the imported tonnage carried on the vessel. The action plan also includes a separate fee on imports arriving via land. While no specific figures were proposed, the plan to tax cargo tonnage imported by foreign-built ships did offer two scenarios: A fee of 1 cent per kilogram would generate about $66 billion over 10 years, while a fee of 25 cents per kg would yield close to $1.5 trillion. It’s unclear how the estimates were calculated.  “As foreign-built vessels benefit from US market access, this policy ensures they contribute to the long-term revitalization of America’s maritime capabilities,” the plan said. The proposal echoes the tit-for-tat tariffs the US and China intended to impose on each other’s tonnage until a one-year suspension was enacted last November as part of a broader trade deal between Washington and Beijing . The action plan also includes proposals to rebuild domestic shipbuilding capacity, strengthen the maritime industrial base, increase the fleet of US-built and -flagged commercial vessels working international trades, and eliminate “burdensome regulations” through a series of deregulatory measures. “For decades, the nation’s strategic position and shipbuilding industrial capacity have weakened due to a lack of strategic focus, cumbersome government procurement processes and a lack of strategic support for construction of commercial vessels in domestic shipyards,” the plan’s introduction stated. The action plan is an extension of an executive order issued by President Donald Trump last April calling for the restoration of American maritime dominance. The 40-page plan offers several concrete proposals, including the creation of the MSTF that would be fed by new revenue streams. “By securing stable, long-term funding, the MSTF would ensure consistent support for investments in shipbuilding, fleet expansion, industrial base resilience, and maritime workforce development,” the plan said. “Authorized expenditures would include programs identified as helpful for the promotion, growth and strengthening of the domestic maritime sector.” The MSTF would help fund the revitalization of US shipbuilding capacity, which is “the cornerstone of the administration’s strategy to restore America’s maritime strength and self-sufficiency,” according to the plan, which noted only eight shipyards exist in the country that can build vessels greater than 400 feet in length. The plan calls for investment that would fund upgrades to commercial shipyards in order to add and modernize drydocks, heavy-lift and gantry cranes, panel lines, and automated handling systems “to support higher‑rate production and large hull handling.” Land port tax A separate proposed funding mechanism, the Land Port Maintenance Tax, would be an equivalent to the existing Harbor Maintenance Tax for marine ports. The plan proposes a “modest tax” on merchandise entering the US via land of 0.125% of the value of the goods. “Funds collected under this tax will be deposited into the newly established Land Port Maintenance Trust Fund (LPMTF), which will support the planning, design, construction, maintenance and improvement of land port infrastructure,” according to the plan. The action plan also proposes the creation of a Strategic Commercial Fleet (SCF) that would consist of US-built vessels working international trades. The SCF would “provide the depth and redundancy required to sustain military logistics around the globe and ensure the continuous flow of goods to the US economy,” the plan said. “Vessels in the SCF would receive financial support for both construction and operation, leveling the playing field between the US and subsidized foreign competition.” Many of the proposals included in the maritime action plan require Congressional approval, so the Trump administration said it is compiling a legislative package that will be sent to Congress after the publication of Trump’s fiscal year 2027 budget request. Presidents typically send annual budget requests to Congress in February, although the timeline can be delayed. “The Trump administration urges Congress to enact this package in tandem with existing legislative vehicles, ensuring the US maritime industry is equipped to meet the demands of global competition, national defense and economic growth,” the plan said. Contact Kevin Saville at kevin.saville2@spglobal.com .

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Trump administration unveils US maritime revitalization ‘action plan’

<div class="phx-topic abstract-wrapper">The acquisition, if approved, would solidify the Hamburg-based ocean carrier among the five largest container lines by capacity.</div>

The acquisition, if approved, would solidify the Hamburg-based ocean carrier among the five largest container lines by capacity.

<div class="phx-topic">Hapag-Lloyd’s plan to acquire Zim Integrated Shipping Services for more than $3.5 billion, pending regulatory approval, will solidify the Hamburg-based carrier among the five largest container lines by capacity, deepening the industry oligopoly. The negotiations, as reported by Israeli media and confirmed by Hapag-Lloyd, would retain Jersualem’s golden share by allowing Hapag-Lloyd to take over international operations, but leaving control of domestic operation to Israel-based private equity group FIMI. The acquisition would boost Hapag-Lloyd’s existing fleet, including chartered ships, by 704,000 TEUs, bringing its total fleet capacity to more than 3 million TEUs, according to maritime analyst Alphaliner. Aside from the tonnage an acquisition of the 10th largest ocean carrier would bring, Hapag-Lloyd’s focus on container shipping versus end-to-end logistics mirrors that of Zim, which prides itself in its agility compared to larger carriers. Hapag-Lloyd on Sunday said its board “was in advance negotiations regarding a potential acquisition of all shares in its Israeli competitor Zim Integrated Shipping Services Ltd.” The deal, which <a href="https://www.calcalistech.com/ctechnews/article/synasqadwg">has been in the works for six months</a>, according to the Israel financial newspaper Calcalist, resolves government constraints on foreign ownership requiring a set amount of ships to be Israel-owned. <h3>Fewer options for east-west services</h3>The deal would further advance consolidation in an industry that has gone from more than 20 major east-west ocean carriers over 25 years ago to just 10. The top five carriers control 64.5% of global capacity while the top 10 control 84.1%, according to Alphaliner. As recently as 2013, the top 10 lines controlled just over 60% while in 1996 the top 10 carriers controlled 48%, analyst Lars Jensen wrote in “Liner Shipping 2025.”“The liner shipping industry has seen a persistent drive towards consolidation for more than 30 years,” Jensen wrote.The deal also underscores the obstacles to expansion in the current era. Shipyards are full, charter rates remain high, and the top carriers control a greater share of the second-hand market, limiting carriers’ ability to expand organically. Carriers remain flush with cash following a string of profitable years that began with the pandemic, meaning the financial duress that triggered many prior mergers is not present currently. Yet the advantages stemming from scale are undeniable. Despite the potential for three to four years of overcapacity that took a noticeable toll on freight rates and carrier profits in the second half of 2025, the ability of carriers to influence capacity and benefit from external capacity shocks, many believe, leaves them in a more favorable long-term position compared to the 30 years pre-COVID. “A key lesson learned over the last five years is that disruption can be highly profitable for carriers,” <a href="From Tailwind to Headwind: The Changing Dynamics of Maritime Shipping | The Supply Chain Xchange">analyst John McCown wrote in January</a>. Hapag-Lloyd has long been a big part of the consolidation trend in the industry. In 2005, it acquired Canadian carrier CP Ships which itself had absorbed Mexican carrier TMM. In 2014, Hapag-Lloyd acquired Chilean carrier CSAV, and in 2017 it acquired United Arab Shipping Company. Hapag-Lloyd acquired Africa carrier NileDutch and Deutsche Afrika-Linien (DAL) in 2021 and in 2022, respectively.In structuring the Zim sale to satisfy Israel government security concerns, the deal harkens back to the late 1990s sale of APL to Singapore-based Neptune Orient Lines, under which the US government required APL’s US-flag ships to be operated by an American vessel operations entity.Contact Mark Szakonyi <a href="at mark.szakonyi@spglobal.com">at mark.szakonyi@spglobal.com</a>.</div>

Hapag-Lloyd’s plan to acquire Zim Integrated Shipping Services for more than $3.5 billion, pending regulatory approval, will solidify the Hamburg-based carrier among the five largest container lines by capacity, deepening the industry oligopoly. The negotiations, as reported by Israeli media and confirmed by Hapag-Lloyd, would retain Jersualem’s golden share by allowing Hapag-Lloyd to take over international operations, but leaving control of domestic operation to Israel-based private equity group FIMI. The acquisition would boost Hapag-Lloyd’s existing fleet, including chartered ships, by 704,000 TEUs, bringing its total fleet capacity to more than 3 million TEUs, according to maritime analyst Alphaliner. Aside from the tonnage an acquisition of the 10th largest ocean carrier would bring, Hapag-Lloyd’s focus on container shipping versus end-to-end logistics mirrors that of Zim, which prides itself in its agility compared to larger carriers. Hapag-Lloyd on Sunday said its board “was in advance negotiations regarding a potential acquisition of all shares in its Israeli competitor Zim Integrated Shipping Services Ltd.” The deal, which has been in the works for six months , according to the Israel financial newspaper Calcalist, resolves government constraints on foreign ownership requiring a set amount of ships to be Israel-owned. Fewer options for east-west services The deal would further advance consolidation in an industry that has gone from more than 20 major east-west ocean carriers over 25 years ago to just 10. The top five carriers control 64.5% of global capacity while the top 10 control 84.1%, according to Alphaliner. As recently as 2013, the top 10 lines controlled just over 60% while in 1996 the top 10 carriers controlled 48%, analyst Lars Jensen wrote in “Liner Shipping 2025.” “The liner shipping industry has seen a persistent drive towards consolidation for more than 30 years,” Jensen wrote. The deal also underscores the obstacles to expansion in the current era. Shipyards are full, charter rates remain high, and the top carriers control a greater share of the second-hand market, limiting carriers’ ability to expand organically. Carriers remain flush with cash following a string of profitable years that began with the pandemic, meaning the financial duress that triggered many prior mergers is not present currently. Yet the advantages stemming from scale are undeniable. Despite the potential for three to four years of overcapacity that took a noticeable toll on freight rates and carrier profits in the second half of 2025, the ability of carriers to influence capacity and benefit from external capacity shocks, many believe, leaves them in a more favorable long-term position compared to the 30 years pre-COVID. “A key lesson learned over the last five years is that disruption can be highly profitable for carriers,” analyst John McCown wrote in January . Hapag-Lloyd has long been a big part of the consolidation trend in the industry. In 2005, it acquired Canadian carrier CP Ships which itself had absorbed Mexican carrier TMM. In 2014, Hapag-Lloyd acquired Chilean carrier CSAV, and in 2017 it acquired United Arab Shipping Company. Hapag-Lloyd acquired Africa carrier NileDutch and Deutsche Afrika-Linien (DAL) in 2021 and in 2022, respectively. In structuring the Zim sale to satisfy Israel government security concerns, the deal harkens back to the late 1990s sale of APL to Singapore-based Neptune Orient Lines, under which the US government required APL’s US-flag ships to be operated by an American vessel operations entity. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Hapag-Lloyd’s plan to acquire Zim would deepen shipping oligopoly

<div class="phx-topic abstract-wrapper">The acquisition is expected to be completed this year, and will strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while bringing up to $500 million in synergies, Hapag-Lloyd's CEO said. </div>

The acquisition is expected to be completed this year, and will strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while bringing up to $500 million in synergies, Hapag-Lloyd's CEO said.

<div class="phx-topic">Hapag-Lloyd inked a $4.2 billion deal Monday to acquire 100% of Zim Integrated Shipping Services, cementing the buyer’s position <a href="https://www.joc.com/article/hapag-lloyds-plan-to-acquire-zim-would-deepen-shipping-oligopoly-6170073">as the world’s fifth-largest container shipping company</a> with a fleet of over 400 vessels, a slot capacity of over 3 million TEUs, and an annual transport volume of more than 18 million TEUs. Financing the transaction from cash reserves and a $2.5 billion bridging fund, Hapag-Lloyd will take over the international operations of Zim but leave control of domestic operations to Israel-based private equity group FIMI Opportunity Funds. The deal is expected to be completed by the end of the year, subject to approval of Zim shareholders and regulatory approval in several jurisdictions. Hapag-Lloyd CEO Rolf Habben Jansen said the acquisition of the 10th largest ocean carrier would strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while generating significant synergies. “We expect to see about $300 million to $500 million in synergies, mainly in network and procurement,” Habben Jansen told reporters during an online briefing shortly after signing the deal in Tel Aviv, noting that the synergies would bring down slot costs by an estimated $25 per TEU. “We know how to create those synergies, as we have done so in previous transactions,” he added. Zim will be the sixth carrier Hapag-Lloyd has taken over following previous deals for cpships (2005), CSAV (2014), UASC (2017), NileDutch (2021), and DAL (2022). <h3>‘A fair price’ </h3>Asked whether the $4.2 billion acquisition cost was too high, Habben Jansen said he believed it was “a fair price.” ”It was certainly not a low price that we paid, but we believe that it’s an excellent asset, and as such, I think the premium is justified,” he said. Analysts at investment bank J.P. Morgan were not convinced by the takeover premium, calling the price offered “a significant premium to forward expectations.” An analyst note said this was likely a reflection of the competitive nature of the tender and efforts by strategic players to increase market share in a highly competitive market dynamic where players without a large order book were disadvantaged. J.P. Morgan expects Zim’s earnings before interest, taxes, amortization and depreciation (EBITDA) margin for 2025 to be 30%, compared to 20% in 2023 and 11% in 2019, leaving “material downside potential as the container shipping cycle turns.” “This we expect will likely limit the value creation potential for Hapag-Lloyd in the coming years,” the bank said, although it noted that Hapag-Lloyd appeared less concerned over near-term dynamics, “despite a more challenging multi-year period ahead.” The international element of Zim’s capacity that Hapag-Lloyd will acquire is chartered, thus increasing the chartered portion of Hapag-Lloyd's fleet from its current 39% to 52%. Habben Jansen said there were benefits to holding chartered tonnage in a down cycle, but conceded that the level would be too high. “Dependent on how good or not so good the market is, you have a lot more flexibility in adjusting your cost base than if you do not have a large chunk of chartered tonnage,” he told reporters. “Having said that, I think if this transaction is completed, then the percentage of chartered tonnage that we would have is probably a bit on the high side,” he added. “So over time, one should expect that we then bring that down.” Only Ocean Network Express and Yang Ming have charter ratios above 50%, with other top 10 carriers below 40%. In the case of Evergreen and HMM, it is as low as 30% and 18%, respectively, Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce contributor, noted in a LinkedIn post. “This can prove to be a competitive advantage as the market is heading towards a cyclical downturn where the ability to tactically reduce the size of the operated fleet by redelivering charter vessels can be an important element of maintaining a high utilization and low unit cost,” Jensen wrote Monday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Hapag-Lloyd inked a $4.2 billion deal Monday to acquire 100% of Zim Integrated Shipping Services, cementing the buyer’s position as the world’s fifth-largest container shipping company with a fleet of over 400 vessels, a slot capacity of over 3 million TEUs, and an annual transport volume of more than 18 million TEUs. Financing the transaction from cash reserves and a $2.5 billion bridging fund, Hapag-Lloyd will take over the international operations of Zim but leave control of domestic operations to Israel-based private equity group FIMI Opportunity Funds. The deal is expected to be completed by the end of the year, subject to approval of Zim shareholders and regulatory approval in several jurisdictions. Hapag-Lloyd CEO Rolf Habben Jansen said the acquisition of the 10th largest ocean carrier would strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while generating significant synergies. “We expect to see about $300 million to $500 million in synergies, mainly in network and procurement,” Habben Jansen told reporters during an online briefing shortly after signing the deal in Tel Aviv, noting that the synergies would bring down slot costs by an estimated $25 per TEU. “We know how to create those synergies, as we have done so in previous transactions,” he added. Zim will be the sixth carrier Hapag-Lloyd has taken over following previous deals for cpships (2005), CSAV (2014), UASC (2017), NileDutch (2021), and DAL (2022). ‘A fair price’ Asked whether the $4.2 billion acquisition cost was too high, Habben Jansen said he believed it was “a fair price.” ”It was certainly not a low price that we paid, but we believe that it’s an excellent asset, and as such, I think the premium is justified,” he said. Analysts at investment bank J.P. Morgan were not convinced by the takeover premium, calling the price offered “a significant premium to forward expectations.” An analyst note said this was likely a reflection of the competitive nature of the tender and efforts by strategic players to increase market share in a highly competitive market dynamic where players without a large order book were disadvantaged. J.P. Morgan expects Zim’s earnings before interest, taxes, amortization and depreciation (EBITDA) margin for 2025 to be 30%, compared to 20% in 2023 and 11% in 2019, leaving “material downside potential as the container shipping cycle turns.” “This we expect will likely limit the value creation potential for Hapag-Lloyd in the coming years,” the bank said, although it noted that Hapag-Lloyd appeared less concerned over near-term dynamics, “despite a more challenging multi-year period ahead.” The international element of Zim’s capacity that Hapag-Lloyd will acquire is chartered, thus increasing the chartered portion of Hapag-Lloyd's fleet from its current 39% to 52%. Habben Jansen said there were benefits to holding chartered tonnage in a down cycle, but conceded that the level would be too high. “Dependent on how good or not so good the market is, you have a lot more flexibility in adjusting your cost base than if you do not have a large chunk of chartered tonnage,” he told reporters. “Having said that, I think if this transaction is completed, then the percentage of chartered tonnage that we would have is probably a bit on the high side,” he added. “So over time, one should expect that we then bring that down.” Only Ocean Network Express and Yang Ming have charter ratios above 50%, with other top 10 carriers below 40%. In the case of Evergreen and HMM, it is as low as 30% and 18%, respectively, Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce contributor, noted in a LinkedIn post. “This can prove to be a competitive advantage as the market is heading towards a cyclical downturn where the ability to tactically reduce the size of the operated fleet by redelivering charter vessels can be an important element of maintaining a high utilization and low unit cost,” Jensen wrote Monday. Contact Greg Knowler at greg.knowler@spglobal.com.

Hapag-Lloyd bolsters fleet with $4.2 billion deal to acquire Zim

<div class="phx-topic abstract-wrapper">La Caisse, a major infrastructure fund and co-investor with DP World, said it wants clarity from the ports operator about Sultan Ahmed Bin Sulayem’s relationship with the convicted sex trafficker after messages between the two men became public this week.</div>

La Caisse, a major infrastructure fund and co-investor with DP World, said it wants clarity from the ports operator about Sultan Ahmed Bin Sulayem’s relationship with the convicted sex trafficker after messages between the two men became public this week.

<div class="phx-topic">A Quebec-based pension fund has put future investments with DP World on hold until the ports operator clarifies the relationship its chief executive had with deceased sex offender Jeffrey Epstein. The pause could slow development of Canada’s next big container terminal. La Caisse, which has C$496 billion in assets under management, said in a statement to the Journal of Commerce Wednesday it is waiting to hear from DP World about what steps it is taking in regards to its Chairman and Chief Executive Sultan Ahmed Bin Sulayem after messages between him and Epstein were released by US Congressional representatives this week as part of a probe into Epstein’s ties to rich and powerful men across the globe. Some of <a href="https://www.ft.com/content/c813601e-e8cb-4eb9-b1de-6ca504bb689f">the messages between Sulayem and Epstein</a> were sexual in nature. La Caisse, which has invested in DP World port projects across the world, said that until it hears from DP World, it is “pausing additional capital deployment alongside the company.” “It is important to distinguish the company, DP World, from the individual, who is the focus of the current situation,” La Caisse said. “On that point, we have made it clear to the company that we expect it to shed light on the situation and take the necessary actions.” According to local media, La Caisse had been slated to provide over C$100 million toward the development of Quebec’s Contrecoeur terminal, which is estimated to cost about C$1.6 billion and <a href="https://www.joc.com/article/dp-world-to-build-big-ship-container-terminal-in-montreal-6077326">would be operated by DP World</a>. La Caisse said no final decision on financing Contrecoeur has been made. In 2020, DP World and La Caisse acquired the Fraser Surrey terminal at the Port of Vancouver. That was followed by La Caisse investing up to $5 billion in 2022 in DP World’s Jebel Ali port in Dubai, along with a nearby free trade zone and industrial park. Montreal Port Authority (MPA) Chief Executive Julie Gascon said in a statement to the Journal of Commerce that it’s not yet clear whether La Caisse’s pause would affect Contrecoeur’s expected 2030 opening date. The MPA, which is responsible for <a href="https://www.joc.com/article/quebec-provides-new-funding-for-proposed-montreal-terminal-citing-us-trade-tensions-5947783">the separate government-backed financing of dredging and other below-water work at the site</a>, is also waiting to hear from DP World about how it will respond to La Caisse. Gascon said, however, that development of Contrecoeur is a national priority for Prime Minister Mark Carney, <a href="https://www.joc.com/article/canada-looks-for-new-container-gateways-for-decoupling-from-us-6122714">who is looking to grow Canada’s non-US international trade</a>. Contrecoeur will be needed to serve the country’s eastern half as the Port of Montreal will likely be at capacity by the next decade. “My concern is that as soon as we start signing more services, then we’re full,” Gascon said. “So, I can’t come in late with Contrecoeur. It’s 2026, and it’s going to be delivered in 2030, so we need to be on time.” <h3>DP World expanded in US </h3>Dubai-based DP World, the fourth-largest ports operator globally by volume, is Canada’s largest terminal company, operating the Fraser Surrey, Centerm and Nanaimo facilities in Vancouver; the Prince Rupert terminal, and the Port of Saint John container terminal. In the US, DP World has a limited presence in non-marine logistics. Last year, it acquired Unique Logistics International, a North Carolina-based contract logistics provider, and bought Michigan-based warehousing and logistics operator Syncreon in 2021. But DP World is also looking to expand in the US, with the company reported to be one of the potential suitors for the Maher terminal at the Port of New York and New Jersey. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.  </div>

A Quebec-based pension fund has put future investments with DP World on hold until the ports operator clarifies the relationship its chief executive had with deceased sex offender Jeffrey Epstein. The pause could slow development of Canada’s next big container terminal. La Caisse, which has C$496 billion in assets under management, said in a statement to the Journal of Commerce Wednesday it is waiting to hear from DP World about what steps it is taking in regards to its Chairman and Chief Executive Sultan Ahmed Bin Sulayem after messages between him and Epstein were released by US Congressional representatives this week as part of a probe into Epstein’s ties to rich and powerful men across the globe. Some of the messages between Sulayem and Epstein were sexual in nature. La Caisse, which has invested in DP World port projects across the world, said that until it hears from DP World, it is “pausing additional capital deployment alongside the company.” “It is important to distinguish the company, DP World, from the individual, who is the focus of the current situation,” La Caisse said. “On that point, we have made it clear to the company that we expect it to shed light on the situation and take the necessary actions.” According to local media, La Caisse had been slated to provide over C$100 million toward the development of Quebec’s Contrecoeur terminal, which is estimated to cost about C$1.6 billion and would be operated by DP World . La Caisse said no final decision on financing Contrecoeur has been made. In 2020, DP World and La Caisse acquired the Fraser Surrey terminal at the Port of Vancouver. That was followed by La Caisse investing up to $5 billion in 2022 in DP World’s Jebel Ali port in Dubai, along with a nearby free trade zone and industrial park. Montreal Port Authority (MPA) Chief Executive Julie Gascon said in a statement to the Journal of Commerce that it’s not yet clear whether La Caisse’s pause would affect Contrecoeur’s expected 2030 opening date. The MPA, which is responsible for the separate government-backed financing of dredging and other below-water work at the site , is also waiting to hear from DP World about how it will respond to La Caisse. Gascon said, however, that development of Contrecoeur is a national priority for Prime Minister Mark Carney, who is looking to grow Canada’s non-US international trade . Contrecoeur will be needed to serve the country’s eastern half as the Port of Montreal will likely be at capacity by the next decade. “My concern is that as soon as we start signing more services, then we’re full,” Gascon said. “So, I can’t come in late with Contrecoeur. It’s 2026, and it’s going to be delivered in 2030, so we need to be on time.” DP World expanded in US Dubai-based DP World, the fourth-largest ports operator globally by volume, is Canada’s largest terminal company, operating the Fraser Surrey, Centerm and Nanaimo facilities in Vancouver; the Prince Rupert terminal, and the Port of Saint John container terminal. In the US, DP World has a limited presence in non-marine logistics. Last year, it acquired Unique Logistics International, a North Carolina-based contract logistics provider, and bought Michigan-based warehousing and logistics operator Syncreon in 2021. But DP World is also looking to expand in the US, with the company reported to be one of the potential suitors for the Maher terminal at the Port of New York and New Jersey. Contact Michael Angell at michael.angell@spglobal.com . 

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