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<div class="phx-topic abstract-wrapper">Recent tensions involved CPKC’s opposition to the UP-NS merger, but the battle has morphed into a larger disagreement about poor service on a 300-mile stretch of track in Louisiana and Mississippi known as the Meridian Speedway. </div>

Recent tensions involved CPKC’s opposition to the UP-NS merger, but the battle has morphed into a larger disagreement about poor service on a 300-mile stretch of track in Louisiana and Mississippi known as the Meridian Speedway.

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<div class="phx-topic">Canadian Pacific Kansas City (CPKC) is escalating its dispute with rivals Union Pacific Railroad and Norfolk Southern Railway, taking aim at the two over intermodal service in the US Southeast while reiterating criticism of their proposed merger. CPKC was one of the first railroads to come out against the $85 billion deal between UP and NS, but the battle has morphed into a larger disagreement about poor service on a 300-mile stretch of track in Louisiana and Mississippi known as the <a href="https://www.joc.com/article/cpkc-pushes-back-on-ns-complaint-over-meridian-track-access-6090887">Meridian Speedway</a>. The Meridian Speedway represents the fastest way to route cargo from California to the US Southeast, but intermodal service has deteriorated significantly in 2025. CPKC owns 70% of the joint venture operating the Speedway, shuttling cargo between UP and NS in addition to its own freight in the corridor. NS, which filed a complaint to the US Surface Transportation Board on Sept. 30, alleges that more than two-thirds of the trains on Meridian in August took longer than the contractually guaranteed 13-hour transit, resulting in a 10% decline in volume as shippers like FedEx and UPS trucked shipments to avoid the delays. CPKC on Wednesday called the NS complaint a “self-serving narrative” without merit. “There was infrastructure built for 8,500-foot trains, but our predecessors at [Kansas City Southern] allowed the NS to run long trains,” CPKC CEO Keith Creel said on the company’s third-quarter earnings call. “That's what we stopped, and that's what NS and UP do not like.” UP CEO Jim Vena told the Journal of Commerce Inland Distribution Conference on Oct. 1 that he was unhappy with the restrictions implemented by CPKC. “We started running two trains because we're not leaving the customer traffic behind,” Vena said at the conference. “[CPKC was] delaying both trains. The amount of delay on the first train was excessive and then our second train sat around for 12, 16, 24 hours at times.” But Creel argued that Meridian’s rail siding — akin to a shoulder on a highway — was not built to handle the 10,000 to 12,000-foot trains routinely delivered by UP and NS. When two trains need to use the same track, the CPKC train is the one parked on the siding because it’s the only one that fits. “Our trains are taking over a one-hour delay per day to accommodate a longer train. It doesn't make any sense,” Creel said on the CPKC call. “I'm not going to subsidize NS' operation, nor am I going to subsidize UP's operation for their operational synergies at the cost of my service to my customers. I have a responsibility to protect my customers as well. [Meridian is] built to run 8,500-foot trains. That's what we're going to do.” CPKC and NS have reached a temporary truce allowing one long eastbound train per day through mid-November, when a new CPKC crew will be added and restrictions return to 8,500 feet. NS agreed to compensate CPKC for delays to its trains. The STB is closed during the government shutdown, preventing any action on the dispute. <h3>CPKC again attacks UP-NS transaction </h3>Creel on Wednesday also elaborated on why CPKC opposes the UP-NS merger, urging the STB not to rush the regulatory process. ”I know there’s an echo chamber. I read it, I hear it, I sense it,” Creel said. “I know there’s a lot of invested investors that perhaps want this to be a layup. This is not a layup.” He cautioned that UP must clear a high hurdle to get approval, calling it “a hurdle not even remotely close to being the same” as the lower one applied when Canadian Pacific acquired Kansas City Southern in 2023. Creel said the STB also remembers how UP suffered significant service failures four years ago, and if the deal was approved, UP-NS would control more than 40% of US rail traffic. Creel rejected the idea that the concerns of CPKC, a Canada-based company, will fall on deaf ears in Washington. “One-third of our employees live, work and are taxpaying [citizens] in the United States... we are undeniably wrapped in the American flag,” he said. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Canadian Pacific Kansas City (CPKC) is escalating its dispute with rivals Union Pacific Railroad and Norfolk Southern Railway, taking aim at the two over intermodal service in the US Southeast while reiterating criticism of their proposed merger. CPKC was one of the first railroads to come out against the $85 billion deal between UP and NS, but the battle has morphed into a larger disagreement about poor service on a 300-mile stretch of track in Louisiana and Mississippi known as the Meridian Speedway . The Meridian Speedway represents the fastest way to route cargo from California to the US Southeast, but intermodal service has deteriorated significantly in 2025. CPKC owns 70% of the joint venture operating the Speedway, shuttling cargo between UP and NS in addition to its own freight in the corridor. NS, which filed a complaint to the US Surface Transportation Board on Sept. 30, alleges that more than two-thirds of the trains on Meridian in August took longer than the contractually guaranteed 13-hour transit, resulting in a 10% decline in volume as shippers like FedEx and UPS trucked shipments to avoid the delays. CPKC on Wednesday called the NS complaint a “self-serving narrative” without merit. “There was infrastructure built for 8,500-foot trains, but our predecessors at [Kansas City Southern] allowed the NS to run long trains,” CPKC CEO Keith Creel said on the company’s third-quarter earnings call. “That's what we stopped, and that's what NS and UP do not like.” UP CEO Jim Vena told the Journal of Commerce Inland Distribution Conference on Oct. 1 that he was unhappy with the restrictions implemented by CPKC. “We started running two trains because we're not leaving the customer traffic behind,” Vena said at the conference. “[CPKC was] delaying both trains. The amount of delay on the first train was excessive and then our second train sat around for 12, 16, 24 hours at times.” But Creel argued that Meridian’s rail siding — akin to a shoulder on a highway — was not built to handle the 10,000 to 12,000-foot trains routinely delivered by UP and NS. When two trains need to use the same track, the CPKC train is the one parked on the siding because it’s the only one that fits. “Our trains are taking over a one-hour delay per day to accommodate a longer train. It doesn't make any sense,” Creel said on the CPKC call. “I'm not going to subsidize NS' operation, nor am I going to subsidize UP's operation for their operational synergies at the cost of my service to my customers. I have a responsibility to protect my customers as well. [Meridian is] built to run 8,500-foot trains. That's what we're going to do.” CPKC and NS have reached a temporary truce allowing one long eastbound train per day through mid-November, when a new CPKC crew will be added and restrictions return to 8,500 feet. NS agreed to compensate CPKC for delays to its trains. The STB is closed during the government shutdown, preventing any action on the dispute. CPKC again attacks UP-NS transaction Creel on Wednesday also elaborated on why CPKC opposes the UP-NS merger, urging the STB not to rush the regulatory process. ”I know there’s an echo chamber. I read it, I hear it, I sense it,” Creel said. “I know there’s a lot of invested investors that perhaps want this to be a layup. This is not a layup.” He cautioned that UP must clear a high hurdle to get approval, calling it “a hurdle not even remotely close to being the same” as the lower one applied when Canadian Pacific acquired Kansas City Southern in 2023. Creel said the STB also remembers how UP suffered significant service failures four years ago, and if the deal was approved, UP-NS would control more than 40% of US rail traffic. Creel rejected the idea that the concerns of CPKC, a Canada-based company, will fall on deaf ears in Washington. “One-third of our employees live, work and are taxpaying [citizens] in the United States... we are undeniably wrapped in the American flag,” he said. Contact Ari Ashe at ari.ashe@spglobal.com .

CPKC slams UP, NS on Meridian congestion, merger plans

<div class="phx-topic abstract-wrapper">China-based Cosco’s latest earnings came as Beijing and Washington announced a one-year pause in their reciprocal port fees as part of a broader trade framework that included a reduction in US tariffs on Chinese imports.</div>

China-based Cosco’s latest earnings came as Beijing and Washington announced a one-year pause in their reciprocal port fees as part of a broader trade framework that included a reduction in US tariffs on Chinese imports.

<div class="phx-topic">Plunging freight rates and US tariff policy led to a 56% slump in net profit for Cosco Shipping Holdings in the third quarter, the company said Thursday, as profits fell to $1.3 billion from $3 billion in the prior-year period. Revenue fell 20% to $8.2 billion between July and September, from $10.3 billion a year earlier, the container line and ports group said in a third-quarter report. “In the first three quarters of 2025, affected by the continuous spillover effects caused by (US) tariff policies, rising geopolitical uncertainties and weakening demand for global trade in goods, freight rates in the container shipping market continued to fluctuate,” Cosco said. China-based Cosco’s earnings came as <a href="https://www.joc.com/article/us-china-suspend-reciprocal-port-fees-as-part-of-wider-trade-deal-6105849">Beijing and Washington announced a one-year pause</a> in their reciprocal port fees as part of a broader trade framework that included a reduction in US tariffs on Chinese imports. For the nine months through September, Cosco said net profit fell 29% to $3.8 billion, while revenues slipped 4% to $23.6 billion. Cosco said revenue dropped on all trades except for domestic services, despite an increase in liftings on all services except the trans-Pacific. The worst affected trades were the trans-Pacific, where third-quarter revenue plunged 34% to $2 billion, and Asia-Europe, including the Mediterranean, which saw a 33% fall in revenue to $1.5 billion. Revenue from intra-Asia and Australia trades fell 14% to $1.9 billion in Q3. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a2606c91-b30c-4219-b617-9491b44b6af1"></dynamic-object></div>Cosco’s total liftings in the third quarter climbed 5% to 6.9 million TEUs, though the trans-Pacific recorded a 4% fall in container volumes to 1.2 million TEUS. Cosco saw a 3% rise in liftings on Asia-Europe/Mediterranean services to 1 million TEUs, with 2% growth on intra-Asia services to 2.3 million TEUs. Meanwhile, Cosco Shipping Ports contributed $82 million to group net profit in the third quarter and $264 million in the first nine months, up 1% and 20%, respectively, year on year. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

Plunging freight rates and US tariff policy led to a 56% slump in net profit for Cosco Shipping Holdings in the third quarter, the company said Thursday, as profits fell to $1.3 billion from $3 billion in the prior-year period. Revenue fell 20% to $8.2 billion between July and September, from $10.3 billion a year earlier, the container line and ports group said in a third-quarter report. “In the first three quarters of 2025, affected by the continuous spillover effects caused by (US) tariff policies, rising geopolitical uncertainties and weakening demand for global trade in goods, freight rates in the container shipping market continued to fluctuate,” Cosco said. China-based Cosco’s earnings came as Beijing and Washington announced a one-year pause in their reciprocal port fees as part of a broader trade framework that included a reduction in US tariffs on Chinese imports. For the nine months through September, Cosco said net profit fell 29% to $3.8 billion, while revenues slipped 4% to $23.6 billion. Cosco said revenue dropped on all trades except for domestic services, despite an increase in liftings on all services except the trans-Pacific. The worst affected trades were the trans-Pacific, where third-quarter revenue plunged 34% to $2 billion, and Asia-Europe, including the Mediterranean, which saw a 33% fall in revenue to $1.5 billion. Revenue from intra-Asia and Australia trades fell 14% to $1.9 billion in Q3. Cosco’s total liftings in the third quarter climbed 5% to 6.9 million TEUs, though the trans-Pacific recorded a 4% fall in container volumes to 1.2 million TEUS. Cosco saw a 3% rise in liftings on Asia-Europe/Mediterranean services to 1 million TEUs, with 2% growth on intra-Asia services to 2.3 million TEUs. Meanwhile, Cosco Shipping Ports contributed $82 million to group net profit in the third quarter and $264 million in the first nine months, up 1% and 20%, respectively, year on year. Contact Keith Wallis at keithwallis@hotmail.com.

Cosco cites falling freight rates, tariff woes for 56% drop in Q3 net profits

<div class="phx-topic abstract-wrapper">But there was no indication when the pause would take effect or what would happen to the port fees already paid by ship operators in the two weeks since the US and China imposed the reciprocal levies on Oct. 14.</div>

But there was no indication when the pause would take effect or what would happen to the port fees already paid by ship operators in the two weeks since the US and China imposed the reciprocal levies on Oct. 14.

<div class="phx-topic">The US and China have agreed to pause tit-for-tat port fees for one year as part of wider trade-related measures announced Thursday after talks between presidents Donald Trump and Xi Jinping in South Korea meant to deescalate tensions between the two superpowers. China’s Commerce Ministry confirmed that port levies on US-built, -controlled or -registered ships calling at Chinese ports would be suspended, while a similar measure on Chinese-built or -controlled ships will be lifted by the US. But there was no indication when the pause would take effect or what would happen to the port fees already paid by ship operators in the two weeks since the US and China imposed the reciprocal levies on Oct. 14. “Following the US suspension, China will also suspend its countermeasures against the US for one year,” the Commerce Ministry said in a statement. The ministry also confirmed that Chinese export controls imposed earlier this month on rare earths, used in automobiles, airplanes, mobile phones and other equipment, would also be suspended for a year. The US and China also agreed to expand agricultural trade, with China again ready to buy US soybeans. As part of the broad agreement, the US will “cancel the 10% so-called ‘fentanyl tariffs’ and suspend, for an additional year, the 24% reciprocal tariffs levied on Chinese goods,” the Commerce Ministry added. This will reduce the overall US tariffs on Chinese goods to 47%. The ministry said all the measures were agreed to during economic and trade talks last weekend in Kuala Lumpur, Malaysia, between delegations led by US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng. But details were only released Thursday to coincide with the Trump-Xi meeting in Gyeongju, about 43 miles from Busan, on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit. Commenting on the suspension of reciprocal port fees, Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce contributor, said ocean carriers are likely to adopt a cautious response to the fee suspensions. “Given this is a time-limited suspension it would likely see shipping lines maintain a deployment stance whereby they, to some degree, still abide by the restrictions and certainly keep a plan for vessel-reshuffling handy,” Jensen said in a LinkedIn post Thursday. “Overall, this does point to some de-escalation in the trade war between the US and China, but there is not necessarily a long-term certainty of the trade environment given that some of these agreements are one-year only,” he added. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

The US and China have agreed to pause tit-for-tat port fees for one year as part of wider trade-related measures announced Thursday after talks between presidents Donald Trump and Xi Jinping in South Korea meant to deescalate tensions between the two superpowers. China’s Commerce Ministry confirmed that port levies on US-built, -controlled or -registered ships calling at Chinese ports would be suspended, while a similar measure on Chinese-built or -controlled ships will be lifted by the US. But there was no indication when the pause would take effect or what would happen to the port fees already paid by ship operators in the two weeks since the US and China imposed the reciprocal levies on Oct. 14. “Following the US suspension, China will also suspend its countermeasures against the US for one year,” the Commerce Ministry said in a statement. The ministry also confirmed that Chinese export controls imposed earlier this month on rare earths, used in automobiles, airplanes, mobile phones and other equipment, would also be suspended for a year. The US and China also agreed to expand agricultural trade, with China again ready to buy US soybeans. As part of the broad agreement, the US will “cancel the 10% so-called ‘fentanyl tariffs’ and suspend, for an additional year, the 24% reciprocal tariffs levied on Chinese goods,” the Commerce Ministry added. This will reduce the overall US tariffs on Chinese goods to 47%. The ministry said all the measures were agreed to during economic and trade talks last weekend in Kuala Lumpur, Malaysia, between delegations led by US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng. But details were only released Thursday to coincide with the Trump-Xi meeting in Gyeongju, about 43 miles from Busan, on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit. Commenting on the suspension of reciprocal port fees, Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce contributor, said ocean carriers are likely to adopt a cautious response to the fee suspensions. “Given this is a time-limited suspension it would likely see shipping lines maintain a deployment stance whereby they, to some degree, still abide by the restrictions and certainly keep a plan for vessel-reshuffling handy,” Jensen said in a LinkedIn post Thursday. “Overall, this does point to some de-escalation in the trade war between the US and China, but there is not necessarily a long-term certainty of the trade environment given that some of these agreements are one-year only,” he added. Contact Keith Wallis at keithwallis@hotmail.com .

US, China suspend reciprocal port fees as part of wider trade deal

<div class="phx-topic abstract-wrapper">While some carriers reported a positive outlook for freight stemming from power generation and mining projects, others noted that demand for offshore wind has been dented by regulatory upheaval. </div>

While some carriers reported a positive outlook for freight stemming from power generation and mining projects, others noted that demand for offshore wind has been dented by regulatory upheaval.

<div class="phx-topic">The recent postponement of the International Maritime Organization’s (IMO’s) net-zero emissions framework has compounded ongoing market uncertainty amid unpredictable US trade and tariff policies, operators in the project cargo and multipurpose vessel (MPV) sector say. Although the One World Shipbrokers’ Market Sentiment Index (MSI) rose marginally from 53 to 53.3 in the third quarter, its first increase of 2025, the 27 MPV carriers surveyed for the benchmark indicator reported increasing uncertainty amid a strong outlook for freight demand, said Justin Archard, managing partner at One World Shipbrokers. “The combination of regulations changing frequently in the US, together with increasingly arbitrary power in policy making, means carriers are wedged between a short-term market which is sitting on its hands and hoping a full-blown trade war does not erupt, and a longer-term market that is offering increasing project cargoes,” Archard told the Journal of Commerce. And with the IMO <a href="https://www.joc.com/article/delay-in-imo-decarbonization-plans-robs-green-fuel-investors-of-certainty-6101250">delaying a full vote on the net-zero framework</a> for at least a year, thanks in large part to US opposition, shipowners and fuel suppliers lack the certainty they need to fund the transition to net-zero fuels, he added. “Rather than moving toward greater clarity, companies are finding it harder to anticipate the rules and frameworks that affect their operations,” an MPV carrier said in comments for the MSI report. “The absence of consistency and transparency continues to delay projects and decision-making, as organizations hesitate amid ongoing ambiguity.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="69dec518-45f6-4724-a701-dc94e23bec33"></dynamic-object></div>While some carriers reported a positive outlook for freight stemming from power generation and mining projects, others noted that demand for offshore wind has been dented by regulatory upheaval. “The Trump administration has pulled funding for wind projects on federal land, casting a pall over European wind project developers,” Archard said. In addition, both Denmark and Germany suspended offshore wind auctions over the summer when no bids came forward. Contact Felicity Landon at <a href="mailto:felicity@felicitylandon.com">felicity@felicitylandon.com</a>. </div>

The recent postponement of the International Maritime Organization’s (IMO’s) net-zero emissions framework has compounded ongoing market uncertainty amid unpredictable US trade and tariff policies, operators in the project cargo and multipurpose vessel (MPV) sector say. Although the One World Shipbrokers’ Market Sentiment Index (MSI) rose marginally from 53 to 53.3 in the third quarter, its first increase of 2025, the 27 MPV carriers surveyed for the benchmark indicator reported increasing uncertainty amid a strong outlook for freight demand, said Justin Archard, managing partner at One World Shipbrokers. “The combination of regulations changing frequently in the US, together with increasingly arbitrary power in policy making, means carriers are wedged between a short-term market which is sitting on its hands and hoping a full-blown trade war does not erupt, and a longer-term market that is offering increasing project cargoes,” Archard told the Journal of Commerce. And with the IMO delaying a full vote on the net-zero framework for at least a year, thanks in large part to US opposition, shipowners and fuel suppliers lack the certainty they need to fund the transition to net-zero fuels, he added. “Rather than moving toward greater clarity, companies are finding it harder to anticipate the rules and frameworks that affect their operations,” an MPV carrier said in comments for the MSI report. “The absence of consistency and transparency continues to delay projects and decision-making, as organizations hesitate amid ongoing ambiguity.” While some carriers reported a positive outlook for freight stemming from power generation and mining projects, others noted that demand for offshore wind has been dented by regulatory upheaval. “The Trump administration has pulled funding for wind projects on federal land, casting a pall over European wind project developers,” Archard said. In addition, both Denmark and Germany suspended offshore wind auctions over the summer when no bids came forward. Contact Felicity Landon at felicity@felicitylandon.com .

Rising MSI belies heightened uncertainty in multipurpose vessel sector

<div class="phx-topic abstract-wrapper">While most of the carrier’s vessels continue to be diverted around southern Africa, the backhaul rerouting of two Ocean Alliance vessels through the Suez suggests security concerns may be diminishing. </div>

While most of the carrier’s vessels continue to be diverted around southern Africa, the backhaul rerouting of two Ocean Alliance vessels through the Suez suggests security concerns may be diminishing.

<div class="phx-topic">CMA CGM appears to be testing the feasibility of a return to Red Sea transits with two of its Ocean Alliance megaships returning to Asia via the Suez Canal, the first alliance services to pass through the conflict region in two years. The 17,859-TEU CMA CGM Benjamin Franklin, deployed on the NEU4 service, has turned into the Mediterranean on its backhaul eastbound leg to Asia, analyst Linerlytica <a href="https://www.linkedin.com/company/linerlytica/posts/?feedView=all">wrote in a LinkedIn post Thursday</a>. Linerlytica noted that the 23,112-TEU CMA CGM Sorbonne, which operates on the Ocean Alliance’s NEU5 service, was also heading for the Mediterranean on its eastbound leg. Asked whether CMA CGM was testing the waters for a potential return to Red Sea and Suez Canal transits, a spokesperson said the carrier was “closely monitoring developments in the region,” but most of the group’s vessels continue to be rerouted via the Cape of Good Hope in southern Africa. “CMA CGM does not plan to resume transits through the Suez Canal on a large scale in the short term,” the spokesperson told the Journal of Commerce, adding the caveat: “unless security conditions allow it.” Houthi militants in Yemen began attacking commercial shipping in late 2023 in support of Palestinians in Gaza, forcing carriers to divert around southern Africa and adding significant time to journeys that have used up an estimated 7% of global capacity. A ceasefire between Israel and Hamas has been in effect since Oct. 9, but the situation in Gaza remains volatile. A previous ceasefire in January lasted two months before Israeli airstrikes resumed. While CMA CGM’s two alliance megaships prepare to head through the Red Sea, the carrier has also been expanding its REX2 China-Red Sea service and its wholly operated weekly Medex service connecting India and the Middle East with the Mediterranean. Ships on both services will travel through the Houthi-controlled waters. The CMA CGM spokesperson said while the carrier “hopes for a return to stability and security for all, the group’s top priority remains the safety of its seafarers, its vessels, and its customers’ cargo.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

CMA CGM appears to be testing the feasibility of a return to Red Sea transits with two of its Ocean Alliance megaships returning to Asia via the Suez Canal, the first alliance services to pass through the conflict region in two years. The 17,859-TEU CMA CGM Benjamin Franklin, deployed on the NEU4 service, has turned into the Mediterranean on its backhaul eastbound leg to Asia, analyst Linerlytica wrote in a LinkedIn post Thursday . Linerlytica noted that the 23,112-TEU CMA CGM Sorbonne, which operates on the Ocean Alliance’s NEU5 service, was also heading for the Mediterranean on its eastbound leg. Asked whether CMA CGM was testing the waters for a potential return to Red Sea and Suez Canal transits, a spokesperson said the carrier was “closely monitoring developments in the region,” but most of the group’s vessels continue to be rerouted via the Cape of Good Hope in southern Africa. “CMA CGM does not plan to resume transits through the Suez Canal on a large scale in the short term,” the spokesperson told the Journal of Commerce, adding the caveat: “unless security conditions allow it.” Houthi militants in Yemen began attacking commercial shipping in late 2023 in support of Palestinians in Gaza, forcing carriers to divert around southern Africa and adding significant time to journeys that have used up an estimated 7% of global capacity. A ceasefire between Israel and Hamas has been in effect since Oct. 9, but the situation in Gaza remains volatile. A previous ceasefire in January lasted two months before Israeli airstrikes resumed. While CMA CGM’s two alliance megaships prepare to head through the Red Sea, the carrier has also been expanding its REX2 China-Red Sea service and its wholly operated weekly Medex service connecting India and the Middle East with the Mediterranean. Ships on both services will travel through the Houthi-controlled waters. The CMA CGM spokesperson said while the carrier “hopes for a return to stability and security for all, the group’s top priority remains the safety of its seafarers, its vessels, and its customers’ cargo.” Contact Greg Knowler at greg.knowler@spglobal.com .

CMA CGM alliance megaships test Red Sea waters on return to Asia

<div class="phx-topic abstract-wrapper">But the state will pass, for now, on any proposals being pushed by port stakeholders to raise the height of the Vincent Thomas Bridge, a move that would allow bigger vessels to call at three of the port’s terminals.</div>

But the state will pass, for now, on any proposals being pushed by port stakeholders to raise the height of the Vincent Thomas Bridge, a move that would allow bigger vessels to call at three of the port’s terminals.

<div class="phx-topic">The redecking of the Vincent Thomas Bridge in Los Angeles harbor will start early next year as planned, while an effort by the port and terminal operators to raise the clearance of the span to facilitate the passage of super post-Panamax container ships is looking unlikely in the short term. The California State Transportation Agency (CalSTA) told port stakeholders over the past two weeks it is paramount that redecking work begin soon on the 63-year-old bridge before any attempt is made to raise the height of the structure, according to Mike Jacob, president of the Pacific Merchant Shipping Association (PMSA). Jacob said PMSA, which represents shipping lines and terminal operators, is onboard with the agency in this matter. “The funding is there [for the redecking],” he said. “The engineering is done. It received environmental clearance.” CalSTA, the cabinet level agency that oversees transportation-related departments, said the state has access to hundreds of millions of dollars in federal funds for the California Department of Transportation (Caltrans) to complete the necessary structural and safety repairs of the bridge. In a statement Tuesday to the Journal of Commerce regarding the possibility of raising the height of the Vincent Thomas Bridge, CalSTA said it “welcomes continued discussions to a path forward for that possibility while we work to make sure the bridge is structurally sound and safe for the motoring public in the meantime.” The Vincent Thomas Bridge, located at the entry to Los Angeles harbor, handles 53,000 vehicles a day, including about 3,400 heavy-duty trucks, according to Caltrans. Traffic disruptions are anticipated throughout the redecking project. Gene Seroka, executive director of the Port of Los Angeles, <a href="https://www.joc.com/article/la-port-wants-california-to-raise-bridge-to-accommodate-big-ships-6087396">said the current limit on vessels passing under the structure is 15,000 TEUs in capacity</a>. Increasing the clearance from 185 feet to 211 feet will allow up to 23,000-TEU vessels to reach the three terminals on the land side of the bridge: Yusen Terminals, TraPac and West Basin. There are six container terminals in total in Los Angeles. <h3>Caltrans attempting to minimize traffic disruptions </h3>The redecking project, scheduled to begin in January, will require one-directional bridge closures for nine months. <a href="https://www.joc.com/article/la-port-stakeholders-warming-to-plan-to-mitigate-impact-of-bridge-project-6013847">Full closure of the bridge will occur from November 2026 to March 2028</a>, a Caltrans representative told a meeting of the Propeller Club of Los Angeles and Long Beach in May. Caltrans has identified an alternative network of surface streets that will allow truck and vehicular traffic to move into and out of the harbor area during the lengthy bridge closure. Street upgrades are underway, and Caltrans has set up a communications network for real-time traffic updates, the agency representative said. If the state adopted the port’s plan to raise the bridge clearance by 26 feet, the total cost of the project would increase from $1.5 billion to $2.2 billion, and the bridge closure would increase from 16 months to 28 months. Seroka told the Journal of Commerce the port and terminal operators will maintain a dialogue with the state on eventually raising the height of the bridge. “While we were hopeful that we would be able to include a bridge raising component into Caltrans’ pending critical maintenance project, we’re encouraged by the strong support of the administration to quickly explore additional projects, which could include raising the bridge or building a new crossing,” Seroka said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The redecking of the Vincent Thomas Bridge in Los Angeles harbor will start early next year as planned, while an effort by the port and terminal operators to raise the clearance of the span to facilitate the passage of super post-Panamax container ships is looking unlikely in the short term. The California State Transportation Agency (CalSTA) told port stakeholders over the past two weeks it is paramount that redecking work begin soon on the 63-year-old bridge before any attempt is made to raise the height of the structure, according to Mike Jacob, president of the Pacific Merchant Shipping Association (PMSA). Jacob said PMSA, which represents shipping lines and terminal operators, is onboard with the agency in this matter. “The funding is there [for the redecking],” he said. “The engineering is done. It received environmental clearance.” CalSTA, the cabinet level agency that oversees transportation-related departments, said the state has access to hundreds of millions of dollars in federal funds for the California Department of Transportation (Caltrans) to complete the necessary structural and safety repairs of the bridge. In a statement Tuesday to the Journal of Commerce regarding the possibility of raising the height of the Vincent Thomas Bridge, CalSTA said it “welcomes continued discussions to a path forward for that possibility while we work to make sure the bridge is structurally sound and safe for the motoring public in the meantime.” The Vincent Thomas Bridge, located at the entry to Los Angeles harbor, handles 53,000 vehicles a day, including about 3,400 heavy-duty trucks, according to Caltrans. Traffic disruptions are anticipated throughout the redecking project. Gene Seroka, executive director of the Port of Los Angeles, said the current limit on vessels passing under the structure is 15,000 TEUs in capacity . Increasing the clearance from 185 feet to 211 feet will allow up to 23,000-TEU vessels to reach the three terminals on the land side of the bridge: Yusen Terminals, TraPac and West Basin. There are six container terminals in total in Los Angeles. Caltrans attempting to minimize traffic disruptions The redecking project, scheduled to begin in January, will require one-directional bridge closures for nine months. Full closure of the bridge will occur from November 2026 to March 2028 , a Caltrans representative told a meeting of the Propeller Club of Los Angeles and Long Beach in May. Caltrans has identified an alternative network of surface streets that will allow truck and vehicular traffic to move into and out of the harbor area during the lengthy bridge closure. Street upgrades are underway, and Caltrans has set up a communications network for real-time traffic updates, the agency representative said. If the state adopted the port’s plan to raise the bridge clearance by 26 feet, the total cost of the project would increase from $1.5 billion to $2.2 billion, and the bridge closure would increase from 16 months to 28 months. Seroka told the Journal of Commerce the port and terminal operators will maintain a dialogue with the state on eventually raising the height of the bridge. “While we were hopeful that we would be able to include a bridge raising component into Caltrans’ pending critical maintenance project, we’re encouraged by the strong support of the administration to quickly explore additional projects, which could include raising the bridge or building a new crossing,” Seroka said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Redecking project on Los Angeles harbor bridge to begin in early 2026

<div class="phx-topic abstract-wrapper">The LTL world of 2025 does not reward those who guess, but rather those who know — and knowing begins with visibility. </div>

The LTL world of 2025 does not reward those who guess, but rather those who know — and knowing begins with visibility.

<div class="phx-topic">The US less-than-truckload (LTL) sector stands at a critical crossroads. Faced with depressed demand, high operating costs, economic uncertainty and rising customer expectations, LTL carriers, brokers and shippers are under mounting pressure to do more with less. Efficiency, accuracy and transparency have never been more vital. Even as some aspects of LTL have modernized, persistent blind spots still drain time, revenue and customer satisfaction. Accessorial management and location visibility remain at the heart of operational performance and profitability in the LTL sector, and companies must solve these challenges to thrive in this freight environment. Accessorial charges are often treated as the fine print of freight, but their financial impact is anything but small. These additional fees, covering services such as liftgate usage, residential delivery, limited-access sites and inside delivery are frequently not accounted for until after a delivery is completed. At that point, shippers receive unexpected invoices, brokers scramble to reconcile charges, and carriers are left fielding disputes that strain valuable relationships and negatively impact their bottom line. Without an accurate, upfront method of identifying potential accessorials, companies lose control over cost predictability. This unpredictability does more than damage budgets. It undermines long-term rate negotiations and muddies performance metrics such as cost per shipment and gross margin. Billing disputes over accessorials can also slow down cash flow and stretch out time-to-payment cycles. As the logistics sector faces tighter margins and rising customer expectations, these seemingly minor charges can add up to major financial consequences. Location data is another underestimated factor that directly impacts LTL performance. While most transportation management systems (TMSs) offer basic shipment tracking, they often lack granular location insights. This includes data points such as whether a site is residential or commercial, whether there is dock access or a forklift onsite, or if the delivery site has limited hours or requires specialized entry. These details may seem minor, but their absence leads to service mismatches, re-delivery attempts, extended dwell times and more accessorial charges. For example, failing to flag a residential delivery that requires a liftgate can result in a surprise fee and an unhappy customer. A shipment bound for a military base or an airport without the right equipment or credentials can create costly delays and failed deliveries. Inaccurate or incomplete location information does more than increase costs — it erodes operational agility. <h3>Technology can ease challenges </h3>The good news is that technology now exists to solve these challenges at scale. New platforms that leverage AI, machine learning and geospatial data are transforming how logistics professionals manage LTL freight. These tools can identify potential accessorial charges before the freight is tendered, analyze delivery site characteristics in real time and deliver a unified accessorial view across all stakeholders. By automating accessorial identification during order entry and integrating precise location attributes such as limited access, loading dock availability, forklifts on site or gated entry, these platforms allow teams to move from reactive firefighting to proactive planning. With real-time alerts and API integrations that connect directly into a TMS, shippers, brokers and carriers can operate from a shared source of accessorial truth. The impact of smarter accessorial identification and location visibility delivers measurable results. Companies that have adopted these advanced solutions have reported a 75% reduction in unexpected accessorial fees, leading to cleaner invoices and faster dispute resolution. Customers have also seen improved on-time in-full (OTIF) performance, driving higher customer satisfaction and stronger service-level agreement (SLA) compliance. This shift is particularly timely in 2025, as the LTL industry grapples with economic volatility, rising operating costs and major classification changes. Freight volumes are inconsistent, carriers are prioritizing profitability over market share, and the new National Motor Freight Traffic Association density-based classification system is forcing shippers to re-evaluate how they package and price freight. In this environment, hidden costs such as accessorials and inefficiencies tied to poor location visibility can erode already thin margins. With shifting demand, cost inflation and operational headwinds, the ability to forecast costs, identify risks and plan accordingly has become a key competitive advantage. In the past, accessorial management and granular location visibility may have been viewed as optional enhancements. Today, they are essential for any company that relies on LTL shipping as a core part of its logistics strategy. When customer expectations are rising and disruptions are the new norm, having visibility into every shipment detail and every delivery site is table stakes. The LTL world of 2025 does not reward those who guess. It rewards those who know, and knowing begins with visibility. North Winship is president of Shiplify. Contact him at <a href="mailto:northw@shiplify.com">northw@shiplify.com</a>. Bart De Muynck is a strategic advisor for Drewry. Contact him at <a href="mailto:bart@bartdemuynck.com">bart@bartdemuynck.com</a>. </div>

The US less-than-truckload (LTL) sector stands at a critical crossroads. Faced with depressed demand, high operating costs, economic uncertainty and rising customer expectations, LTL carriers, brokers and shippers are under mounting pressure to do more with less. Efficiency, accuracy and transparency have never been more vital. Even as some aspects of LTL have modernized, persistent blind spots still drain time, revenue and customer satisfaction. Accessorial management and location visibility remain at the heart of operational performance and profitability in the LTL sector, and companies must solve these challenges to thrive in this freight environment. Accessorial charges are often treated as the fine print of freight, but their financial impact is anything but small. These additional fees, covering services such as liftgate usage, residential delivery, limited-access sites and inside delivery are frequently not accounted for until after a delivery is completed. At that point, shippers receive unexpected invoices, brokers scramble to reconcile charges, and carriers are left fielding disputes that strain valuable relationships and negatively impact their bottom line. Without an accurate, upfront method of identifying potential accessorials, companies lose control over cost predictability. This unpredictability does more than damage budgets. It undermines long-term rate negotiations and muddies performance metrics such as cost per shipment and gross margin. Billing disputes over accessorials can also slow down cash flow and stretch out time-to-payment cycles. As the logistics sector faces tighter margins and rising customer expectations, these seemingly minor charges can add up to major financial consequences. Location data is another underestimated factor that directly impacts LTL performance. While most transportation management systems (TMSs) offer basic shipment tracking, they often lack granular location insights. This includes data points such as whether a site is residential or commercial, whether there is dock access or a forklift onsite, or if the delivery site has limited hours or requires specialized entry. These details may seem minor, but their absence leads to service mismatches, re-delivery attempts, extended dwell times and more accessorial charges. For example, failing to flag a residential delivery that requires a liftgate can result in a surprise fee and an unhappy customer. A shipment bound for a military base or an airport without the right equipment or credentials can create costly delays and failed deliveries. Inaccurate or incomplete location information does more than increase costs — it erodes operational agility. Technology can ease challenges The good news is that technology now exists to solve these challenges at scale. New platforms that leverage AI, machine learning and geospatial data are transforming how logistics professionals manage LTL freight. These tools can identify potential accessorial charges before the freight is tendered, analyze delivery site characteristics in real time and deliver a unified accessorial view across all stakeholders. By automating accessorial identification during order entry and integrating precise location attributes such as limited access, loading dock availability, forklifts on site or gated entry, these platforms allow teams to move from reactive firefighting to proactive planning. With real-time alerts and API integrations that connect directly into a TMS, shippers, brokers and carriers can operate from a shared source of accessorial truth. The impact of smarter accessorial identification and location visibility delivers measurable results. Companies that have adopted these advanced solutions have reported a 75% reduction in unexpected accessorial fees, leading to cleaner invoices and faster dispute resolution. Customers have also seen improved on-time in-full (OTIF) performance, driving higher customer satisfaction and stronger service-level agreement (SLA) compliance. This shift is particularly timely in 2025, as the LTL industry grapples with economic volatility, rising operating costs and major classification changes. Freight volumes are inconsistent, carriers are prioritizing profitability over market share, and the new National Motor Freight Traffic Association density-based classification system is forcing shippers to re-evaluate how they package and price freight. In this environment, hidden costs such as accessorials and inefficiencies tied to poor location visibility can erode already thin margins. With shifting demand, cost inflation and operational headwinds, the ability to forecast costs, identify risks and plan accordingly has become a key competitive advantage. In the past, accessorial management and granular location visibility may have been viewed as optional enhancements. Today, they are essential for any company that relies on LTL shipping as a core part of its logistics strategy. When customer expectations are rising and disruptions are the new norm, having visibility into every shipment detail and every delivery site is table stakes. The LTL world of 2025 does not reward those who guess. It rewards those who know, and knowing begins with visibility. North Winship is president of Shiplify. Contact him at northw@shiplify.com . Bart De Muynck is a strategic advisor for Drewry. Contact him at bart@bartdemuynck.com .

Visibility transforming accessorial and location insights in LTL shipping

<div class="phx-topic abstract-wrapper">There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters. </div>

There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters.

<div class="phx-topic">The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. <h3>Pushing pause </h3>The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. <h3>Beyond parking </h3>Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. Pushing pause The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. Beyond parking Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Ocean carriers are not helpless when it comes to managing capacity

Dry Van

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Refrigerated

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

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

US Truckload spot rates weekly (DAT) Gateway

<div class="phx-topic abstract-wrapper">The early estimates coincide with prior forecasts of how much of the new port fees would fall on the two carriers, with their combined fee burden potentially reaching $2 billion in a year’s time should no changes be made to the fee structure.</div>

The early estimates coincide with prior forecasts of how much of the new port fees would fall on the two carriers, with their combined fee burden potentially reaching $2 billion in a year’s time should no changes be made to the fee structure.

<div class="phx-topic">New US port fees targeting China’s maritime industry cost Cosco Shipping and its OOCL subsidiary just over $42 million in the first week the fees were in place, according to vessel-tracking data detailing their US calls. Outside of those two carriers, the fees have largely on three Chinese-built container ships, with those costs likely totaling a few million dollars. The early estimates coincide with prior forecasts of how much of the new port fees would fall on Cosco and OOCL, with their combined fee burden potentially reaching $2 billion in a year’s time should no changes be made to the US fee structure. Vessel tracking data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global, shows that eight Cosco-operated container ships and seven operated by OOCL made a US port call in Oct. 14–20. Oct. 14 was the first day that ocean carriers would be subject to <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">the US Trade Representative’s (USTR) penalties targeting China’s maritime industry</a>. The fees, which were the result of a USTR investigation started in 2024 and concluded earlier this year, are $50 per net ton for the first US port call of a Chinese-operated ship in the first year of implementation, with the levy escalating annually through 2028. Chinese-built ships operated by other carriers face the higher of either $18 per ton or $120 per container discharged. The 15 ships operated by Cosco and OOCL during the first week of the fees, most of which are post-Panamax size, had net tonnage of 855,718, Sea-web data shows. Based on the USTR fee schedule, that would equate to $42.8 million in fees for the ships on their initial port call. The size of each fee paid varied widely. The 13,800-TEU Cosco Shipping Jasmine, which called Savannah on Oct. 14, would have incurred a $4.2 million fee based on its net tonnage. The 4,253-TEU Felixstowe, also operated by Cosco, faced a $1.2 million fee due to its smaller size. Nine of the Cosco and OOCL ships were built in South Korea, while four were built in China and one in Japan. At the first week’s run rate, Cosco and OOCL could incur $2.2 billion in US port fees during the first year. That aligns with a <a href="https://www.joc.com/article/us-port-fees-could-exceed-2b-for-cosco-oocl-hsbc-6077305">September estimate from investment bank HSBC</a>, which said the fees represent between 5% to 7% of the two carriers’ annual combined revenue. Cosco and the USTR did not respond to requests for comment. Cosco, which is the majority owner of OOCL, decried the USTR fees as a <a href="https://www.joc.com/article/cosco-slams-us-port-fees-as-other-carriers-reckon-with-potential-costs-5989606">“discriminatory decision”</a> when they were first unveiled in April. However, one month ahead of the Oct. 14 start date, Cosco said it remained committed to the US market, with <a href="https://www.joc.com/article/cosco-says-no-changes-to-us-services-as-new-port-fees-approach-6082151">no plans to charge shippers for the fee</a>. HSBC estimated the US port fee would translate to a cost for Chinese carriers of about $600 per container, while an April report from consultancy BluSpark said the fee could be $550 per container. Assuming the 15 ships that called in Oct. 14–20 were at fully loaded capacity, the fee translates to about $657 per container. <h3>Zim also faces fees </h3>Out of 160 container ships over 4,000-TEU that called the US between Oct. 14 and Oct. 20, only three not operated by Cosco or OOCL were built in China and likely subject to the fees, according to Sea-web, showing the extent to which <a href="https://www.joc.com/article/chinese-tonnage-moving-out-of-us-container-trade-ahead-of-new-fees-xeneta-6081320">other ocean carriers redeployed Chinese tonnage to avoid the fees</a>. The figure does not include two Chinese-built ships operated by CMA CGM’s US-flag subsidiary APL because <a href="https://www.joc.com/article/chinas-port-fees-forcing-gemini-to-shift-out-us-flag-ships-6097952">the USTR has exempted those ships</a>. It also does not include container/roll-on/roll-off vessels such as those operated by Atlantic Container Line, <a href="https://www.joc.com/article/acl-weighs-options-after-facing-annual-35-million-ustr-port-bill-6102368">itself facing $1.4 million in costs for each port call due to the USTR’s designation of the carrier’s vessels</a>. Zim operated all three of the Chinese-built ships calling the US, all between 5,315 and 7,000 TEU in nominal capacity. Based on the net tonnage of the three ships, Zim likely incurred fees between $450,000 and $700,000 for the first US call. While it’s unclear how many containers the ships discharged, the cost would translate to approximately $270 per loaded container. A week prior to the fees going into effect, Zim said in a customer advisory that it would not charge shippers for the fees, but it “reserves the right to reassess this position should additional cost implications or regulation evolve.” Zim did not return a request for comment. Zim operated a fourth Chinese-built ship, the 4,249-TEU Spyros V, but it’s below the 55,000 deadweight tons threshold for the USTR fees. Similarly, the China-built, 4,250-TEU Vancouver Star, operated by Hapag-Lloyd, is also below the size threshold. This article has been updated to reflect that the Spyros V and Vancouver Star are not subject to the USTR’s port fees due to their size. The SM Tianjin, is also not subject to the fees because it is operated by South Korea’s SM Lines, not China United Lines.Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com ">michael.angell@spglobal.com</a></div>

New US port fees targeting China’s maritime industry cost Cosco Shipping and its OOCL subsidiary just over $42 million in the first week the fees were in place, according to vessel-tracking data detailing their US calls. Outside of those two carriers, the fees have largely on three Chinese-built container ships, with those costs likely totaling a few million dollars. The early estimates coincide with prior forecasts of how much of the new port fees would fall on Cosco and OOCL, with their combined fee burden potentially reaching $2 billion in a year’s time should no changes be made to the US fee structure. Vessel tracking data from Sea-web, a sister company of the Journal of Commerce within S&P Global, shows that eight Cosco-operated container ships and seven operated by OOCL made a US port call in Oct. 14–20. Oct. 14 was the first day that ocean carriers would be subject to the US Trade Representative’s (USTR) penalties targeting China’s maritime industry . The fees, which were the result of a USTR investigation started in 2024 and concluded earlier this year, are $50 per net ton for the first US port call of a Chinese-operated ship in the first year of implementation, with the levy escalating annually through 2028. Chinese-built ships operated by other carriers face the higher of either $18 per ton or $120 per container discharged. The 15 ships operated by Cosco and OOCL during the first week of the fees, most of which are post-Panamax size, had net tonnage of 855,718, Sea-web data shows. Based on the USTR fee schedule, that would equate to $42.8 million in fees for the ships on their initial port call. The size of each fee paid varied widely. The 13,800-TEU Cosco Shipping Jasmine, which called Savannah on Oct. 14, would have incurred a $4.2 million fee based on its net tonnage. The 4,253-TEU Felixstowe, also operated by Cosco, faced a $1.2 million fee due to its smaller size. Nine of the Cosco and OOCL ships were built in South Korea, while four were built in China and one in Japan. At the first week’s run rate, Cosco and OOCL could incur $2.2 billion in US port fees during the first year. That aligns with a September estimate from investment bank HSBC , which said the fees represent between 5% to 7% of the two carriers’ annual combined revenue. Cosco and the USTR did not respond to requests for comment. Cosco, which is the majority owner of OOCL, decried the USTR fees as a “discriminatory decision” when they were first unveiled in April. However, one month ahead of the Oct. 14 start date, Cosco said it remained committed to the US market, with no plans to charge shippers for the fee . HSBC estimated the US port fee would translate to a cost for Chinese carriers of about $600 per container, while an April report from consultancy BluSpark said the fee could be $550 per container. Assuming the 15 ships that called in Oct. 14–20 were at fully loaded capacity, the fee translates to about $657 per container. Zim also faces fees Out of 160 container ships over 4,000-TEU that called the US between Oct. 14 and Oct. 20, only three not operated by Cosco or OOCL were built in China and likely subject to the fees, according to Sea-web, showing the extent to which other ocean carriers redeployed Chinese tonnage to avoid the fees . The figure does not include two Chinese-built ships operated by CMA CGM’s US-flag subsidiary APL because the USTR has exempted those ships . It also does not include container/roll-on/roll-off vessels such as those operated by Atlantic Container Line, itself facing $1.4 million in costs for each port call due to the USTR’s designation of the carrier’s vessels . Zim operated all three of the Chinese-built ships calling the US, all between 5,315 and 7,000 TEU in nominal capacity. Based on the net tonnage of the three ships, Zim likely incurred fees between $450,000 and $700,000 for the first US call. While it’s unclear how many containers the ships discharged, the cost would translate to approximately $270 per loaded container. A week prior to the fees going into effect, Zim said in a customer advisory that it would not charge shippers for the fees, but it “reserves the right to reassess this position should additional cost implications or regulation evolve.” Zim did not return a request for comment. Zim operated a fourth Chinese-built ship, the 4,249-TEU Spyros V, but it’s below the 55,000 deadweight tons threshold for the USTR fees. Similarly, the China-built, 4,250-TEU Vancouver Star, operated by Hapag-Lloyd, is also below the size threshold. This article has been updated to reflect that the Spyros V and Vancouver Star are not subject to the USTR’s port fees due to their size. The SM Tianjin, is also not subject to the fees because it is operated by South Korea’s SM Lines, not China United Lines. Contact Michael Angell at michael.angell@spglobal.com

Cosco, OOCL incurred over $40 million in initial US port fees

<div class="phx-topic abstract-wrapper">Slowing demand from sluggish European economies and excess ocean capacity on the Asia-Europe trade lane are frustrating liners’ attempts to raise rates.</div>

Slowing demand from sluggish European economies and excess ocean capacity on the Asia-Europe trade lane are frustrating liners’ attempts to raise rates.

<div class="phx-topic">Spot rates from Asia to North Europe and the Mediterranean remain below long-term rates despite ocean carriers withdrawing significant amounts of capacity and pushing up prices ahead of the end-of-year tender season. Carriers have stepped up efforts to stem the steadily falling spot market by blanking 213,724 TEUs of capacity on Asia-North Europe routes in October, the most withdrawn since March last year, according to eeSea. Drewry reports that carriers announced 90 blanked sailings globally this month, with 43% of those on the Asia-North Europe and Mediterranean trades. Michael Ebbe, CFO of forwarder DSV, said he expected demand to flatten out or go into “slightly negative territory” on Asia-Europe through the fourth quarter and in the run-up to the Lunar New Year holiday in February. “If you look at the latest statistics, it shows that the market is under pressure on this trade lane, and some shippers have maybe pre-loaded some cargo this year,” Ebbe told the Journal of Commerce. While cutting sailings, carriers have also raised freight-all-kinds (FAK) rates. On Oct. 15, an FAK increase added around $300 on the day, but the rate has since given back some of the gains and remains below the contract rate. Another rate increase is planned for Nov. 1, and there are indications that a mid-November increase is also in the cards. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="6e51a3c0-5772-45a7-9cf0-5d566cc75495"></dynamic-object></div>Rate benchmarking platform Xeneta shows the average spot rate for Asia-North Europe is currently at $1,978 per FEU, down 40% since Aug. 1. Average long-term rates signed in the past three months are currently at $2,168 per FEU, with Xeneta data showing the contract rate has been above the spot market since Sept. 10. “The spot-rate spike in mid-October on European-bound front hauls should be good news for carriers, but they won’t be celebrating too much because it is not enough to bring it above the long-term rates,” said Peter Sand, Xeneta’s chief analyst. “This plays into the hands of shippers, who must be considering pushing contract negotiations back into Q1 next year,” he added. “A long-term market higher than a short-term market is an extremely powerful negotiating position for shippers, so why would they lock into a new 12-month contract at those levels?” <h3>Time is on the side of shippers </h3>Sand said shippers with cargo on front hauls could benefit from signing contracts later than normal, as time would work in their favor. “Overcapacity grows bigger every day, the first quarter is [historically] low on volumes, rerouting to avoid the Houthis and the Red Sea is well-established, and the around-Africa premium is still higher than what costs can verify,” he noted. “If shippers can extend existing contracts, that could buy themselves some time, so signing in Q1 instead of December 2025 seems like a fine strategy,” Sand added. Demand this year through August has been robust, with the latest data from Container Trades Statistics (CTS) showing volume on Asia-Europe was up 7.3% in the first eight months of the year. While data for September is not yet available, forwarders have highlighted slowing demand in the fourth quarter from sluggish European economies and excess capacity on Asia-Europe. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8ec7edc-c832-4205-a8ed-f653d0f915a5"></dynamic-object></div>“There's a lot of capacity coming in with many newbuildings, and that, in combination with the lower demand, is putting pressure on the rates,” said DSV’s Ebbe. “The carriers have become more disciplined as demand slows, but if you look at the order book, they are still ordering vessels.” The order book has reached 30% of the global in-service fleet at 9.7 million TEUs, with 1.16 million TEUs of capacity comprising ships of 14,500 TEUs and above delivered so far this year, destined mostly for Asia-Europe, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Spot rates from Asia to North Europe and the Mediterranean remain below long-term rates despite ocean carriers withdrawing significant amounts of capacity and pushing up prices ahead of the end-of-year tender season. Carriers have stepped up efforts to stem the steadily falling spot market by blanking 213,724 TEUs of capacity on Asia-North Europe routes in October, the most withdrawn since March last year, according to eeSea. Drewry reports that carriers announced 90 blanked sailings globally this month, with 43% of those on the Asia-North Europe and Mediterranean trades. Michael Ebbe, CFO of forwarder DSV, said he expected demand to flatten out or go into “slightly negative territory” on Asia-Europe through the fourth quarter and in the run-up to the Lunar New Year holiday in February. “If you look at the latest statistics, it shows that the market is under pressure on this trade lane, and some shippers have maybe pre-loaded some cargo this year,” Ebbe told the Journal of Commerce. While cutting sailings, carriers have also raised freight-all-kinds (FAK) rates. On Oct. 15, an FAK increase added around $300 on the day, but the rate has since given back some of the gains and remains below the contract rate. Another rate increase is planned for Nov. 1, and there are indications that a mid-November increase is also in the cards. Rate benchmarking platform Xeneta shows the average spot rate for Asia-North Europe is currently at $1,978 per FEU, down 40% since Aug. 1. Average long-term rates signed in the past three months are currently at $2,168 per FEU, with Xeneta data showing the contract rate has been above the spot market since Sept. 10. “The spot-rate spike in mid-October on European-bound front hauls should be good news for carriers, but they won’t be celebrating too much because it is not enough to bring it above the long-term rates,” said Peter Sand, Xeneta’s chief analyst. “This plays into the hands of shippers, who must be considering pushing contract negotiations back into Q1 next year,” he added. “A long-term market higher than a short-term market is an extremely powerful negotiating position for shippers, so why would they lock into a new 12-month contract at those levels?” Time is on the side of shippers Sand said shippers with cargo on front hauls could benefit from signing contracts later than normal, as time would work in their favor. “Overcapacity grows bigger every day, the first quarter is [historically] low on volumes, rerouting to avoid the Houthis and the Red Sea is well-established, and the around-Africa premium is still higher than what costs can verify,” he noted. “If shippers can extend existing contracts, that could buy themselves some time, so signing in Q1 instead of December 2025 seems like a fine strategy,” Sand added. Demand this year through August has been robust, with the latest data from Container Trades Statistics (CTS) showing volume on Asia-Europe was up 7.3% in the first eight months of the year. While data for September is not yet available, forwarders have highlighted slowing demand in the fourth quarter from sluggish European economies and excess capacity on Asia-Europe. “There's a lot of capacity coming in with many newbuildings, and that, in combination with the lower demand, is putting pressure on the rates,” said DSV’s Ebbe. “The carriers have become more disciplined as demand slows, but if you look at the order book, they are still ordering vessels.” The order book has reached 30% of the global in-service fleet at 9.7 million TEUs, with 1.16 million TEUs of capacity comprising ships of 14,500 TEUs and above delivered so far this year, destined mostly for Asia-Europe, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe spot rates defy carrier efforts to lift prices above contract levels

<div class="phx-topic abstract-wrapper">With other low-emissions bunkers such as methanol still in short supply, vessel operators are turning to dual-fuel LNG container ships as a transitional step toward a zero-carbon future by 2050. </div>

With other low-emissions bunkers such as methanol still in short supply, vessel operators are turning to dual-fuel LNG container ships as a transitional step toward a zero-carbon future by 2050.

<div class="phx-topic">With the global shipping decarbonization agenda brought to an abrupt halt at the International Maritime Organization (IMO) in mid-October, an emerging reality is taking hold: LNG is becoming the go-to alternative fuel of choice for container lines. Increasingly, carriers are committing to LNG-fueled container ships over other alternative fuels such as methanol, seeing LNG as a viable and easily malleable step toward a zero-carbon future by 2050, as enshrined in current IMO policy. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6104141_0.1.jpg"></img></div>The number of LNG-fueled container ships on order has grown from 194 in late 2023 to 362 as of mid-October, according to S&amp;P Global Market Intelligence. What’s more, the percentage of vessels on order capable of running on LNG has grown to 40% from 23% during the same period, while the percentage of methanol-powered ships was unchanged at 15%. The 218 LNG container ships currently in operation represent 3.5% of the global container ship fleet. S&amp;P Global is the parent company of the Journal of Commerce. A senior carrier executive who asked not to be identified noted that even before the IMO <a href="https://www.joc.com/article/delay-in-imo-decarbonization-plans-robs-green-fuel-investors-of-certainty-6101250">punted on its net-zero framework</a>, LNG had already become the “mainstream marine fuel” for new vessel orders. “We could see [LNG] becoming even more significant in the current environment, because well-to-tank data is improving, methane slip will be dealt with and we see fossil but also bio and synthetic as pathways for LNG,” the executive added. Using LNG as an interim alternative fuel solves multiple problems for container lines. It can reduce absolute carbon emissions by up to 20%, according to the American Bureau of Shipping, so progress toward decarbonization can be demonstrated to customers and the public. LNG is also more widely available than methanol, the supply of which is constrained and prices stubbornly high and will likely remain so due to IMO inaction on its zero-emissions framework. Maersk, for example, cited a lack of adequate supply when it pivoted from methanol to LNG for its next round of 50 to 60 vessels. And crucially, all LNG container ships in operation and on order have dual-fuel engines, meaning they can burn either LNG or traditional bunkers. That gives carriers a high degree of flexibility in terms of which fuel a ship actually uses at any given time. Depending on price and availability, carriers can operate using LNG or traditional bunkers or a combination, something vessel operations executives say is already happening. Estimates of the amount of LNG used vary widely; some sources that spoke with the Journal of Commerce said LNG-capable ships only burn LNG 5% to 10% of the time, while others say it's closer to 50%. In other words, not only is LNG itself a transitional fuel, but LNG ships are being used as a transitional solution. Being the most consumer-facing maritime sector, container lines have long felt a need to be at the forefront of decarbonization. Through the World Shipping Council (WSC), they supported the IMO <a href="https://www.imo.org/en/mediacentre/hottopics/pages/faqs-the-imo-net-zero-framework.aspx">Net-Zero Framework</a> that was postponed for at least a year following strident opposition from the US. Patrick Verhoven, managing director of the International Association of Ports and Harbors, described the delay as a “major setback for the maritime industry.” Dual-fuel container ship and vehicle carrier orders account for 79% of the current order book, compared with 14% for the rest of the fleet, including tankers and bulk carriers, according to the WSC. With the order book dominated by the major carriers, given actual environmental regulation — in the case of the EU — and possible future requirements from the IMO, their effort to secure LNG tonnage at scale raises the bar for new entrants and smaller carriers looking to scale. LNG is more widely available than other alternative fuels such as methanol and, at least currently, is about 25% more expensive than very low-sulfur fuel oil. That, plus the ability to limit use of LNG, means carriers aren’t forced to charge customers a premium, which would undermine their competitiveness. In addition, solutions are being developed to mitigate methane emissions, which are 80 times worse for the environment than carbon dioxide, from LNG power plants. For example, a consortium including Mitsui O.S.K. Lines last year said it achieved a 93.8% reduction of methane slip from LNG-fueled vessels through catalyst and engine improvements. Still, LNG ships come with their own operational issues. The LNG tank must be cooled to -162 degrees C (-260 degrees F), and a minimum quantity must always be kept inside; otherwise, the fuel can’t be bunkered until re-cooled. Re-cooling, in turn, requires the ship to be idled for three days, with costs that can run into the hundreds of thousands of dollars, said Nils Roche, CEO of Solvens Advisory and former deputy general manager for operations at PIL. As a result, ship operators frequently use traditional bunkers as their primary fuel and LNG only at selected times. If the LNG is not used for propulsion, it’s used to run auxiliary engines that create power for electricity and air conditioning onboard the ship. Roche said restrictive contracts with LNG suppliers also complicated matters. Fuel suppliers require one month’s notice to bunker a ship with LNG, compared with just two days’ notice for conventional marine fuel, cancellation fees can run into the millions, and ships typically only have a two-to-three-day window for bunkering. “If you are not available at that point, they will go to someone else,” he said. “And you just pray that somebody else in another couple of days will not make it, and you can take their slot.” Price is naturally a big consideration. Carriers will sometimes avoid LNG bunkering to the extent possible during December, January and February, due to higher winter prices. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

With the global shipping decarbonization agenda brought to an abrupt halt at the International Maritime Organization (IMO) in mid-October, an emerging reality is taking hold: LNG is becoming the go-to alternative fuel of choice for container lines. Increasingly, carriers are committing to LNG-fueled container ships over other alternative fuels such as methanol, seeing LNG as a viable and easily malleable step toward a zero-carbon future by 2050, as enshrined in current IMO policy. The number of LNG-fueled container ships on order has grown from 194 in late 2023 to 362 as of mid-October, according to S&P Global Market Intelligence. What’s more, the percentage of vessels on order capable of running on LNG has grown to 40% from 23% during the same period, while the percentage of methanol-powered ships was unchanged at 15%. The 218 LNG container ships currently in operation represent 3.5% of the global container ship fleet. S&P Global is the parent company of the Journal of Commerce. A senior carrier executive who asked not to be identified noted that even before the IMO punted on its net-zero framework , LNG had already become the “mainstream marine fuel” for new vessel orders. “We could see [LNG] becoming even more significant in the current environment, because well-to-tank data is improving, methane slip will be dealt with and we see fossil but also bio and synthetic as pathways for LNG,” the executive added. Using LNG as an interim alternative fuel solves multiple problems for container lines. It can reduce absolute carbon emissions by up to 20%, according to the American Bureau of Shipping, so progress toward decarbonization can be demonstrated to customers and the public. LNG is also more widely available than methanol, the supply of which is constrained and prices stubbornly high and will likely remain so due to IMO inaction on its zero-emissions framework. Maersk, for example, cited a lack of adequate supply when it pivoted from methanol to LNG for its next round of 50 to 60 vessels. And crucially, all LNG container ships in operation and on order have dual-fuel engines, meaning they can burn either LNG or traditional bunkers. That gives carriers a high degree of flexibility in terms of which fuel a ship actually uses at any given time. Depending on price and availability, carriers can operate using LNG or traditional bunkers or a combination, something vessel operations executives say is already happening. Estimates of the amount of LNG used vary widely; some sources that spoke with the Journal of Commerce said LNG-capable ships only burn LNG 5% to 10% of the time, while others say it's closer to 50%. In other words, not only is LNG itself a transitional fuel, but LNG ships are being used as a transitional solution. Being the most consumer-facing maritime sector, container lines have long felt a need to be at the forefront of decarbonization. Through the World Shipping Council (WSC), they supported the IMO Net-Zero Framework that was postponed for at least a year following strident opposition from the US. Patrick Verhoven, managing director of the International Association of Ports and Harbors, described the delay as a “major setback for the maritime industry.” Dual-fuel container ship and vehicle carrier orders account for 79% of the current order book, compared with 14% for the rest of the fleet, including tankers and bulk carriers, according to the WSC. With the order book dominated by the major carriers, given actual environmental regulation — in the case of the EU — and possible future requirements from the IMO, their effort to secure LNG tonnage at scale raises the bar for new entrants and smaller carriers looking to scale. LNG is more widely available than other alternative fuels such as methanol and, at least currently, is about 25% more expensive than very low-sulfur fuel oil. That, plus the ability to limit use of LNG, means carriers aren’t forced to charge customers a premium, which would undermine their competitiveness. In addition, solutions are being developed to mitigate methane emissions, which are 80 times worse for the environment than carbon dioxide, from LNG power plants. For example, a consortium including Mitsui O.S.K. Lines last year said it achieved a 93.8% reduction of methane slip from LNG-fueled vessels through catalyst and engine improvements. Still, LNG ships come with their own operational issues. The LNG tank must be cooled to -162 degrees C (-260 degrees F), and a minimum quantity must always be kept inside; otherwise, the fuel can’t be bunkered until re-cooled. Re-cooling, in turn, requires the ship to be idled for three days, with costs that can run into the hundreds of thousands of dollars, said Nils Roche, CEO of Solvens Advisory and former deputy general manager for operations at PIL. As a result, ship operators frequently use traditional bunkers as their primary fuel and LNG only at selected times. If the LNG is not used for propulsion, it’s used to run auxiliary engines that create power for electricity and air conditioning onboard the ship. Roche said restrictive contracts with LNG suppliers also complicated matters. Fuel suppliers require one month’s notice to bunker a ship with LNG, compared with just two days’ notice for conventional marine fuel, cancellation fees can run into the millions, and ships typically only have a two-to-three-day window for bunkering. “If you are not available at that point, they will go to someone else,” he said. “And you just pray that somebody else in another couple of days will not make it, and you can take their slot.” Price is naturally a big consideration. Carriers will sometimes avoid LNG bunkering to the extent possible during December, January and February, due to higher winter prices. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

LNG increasingly alternative fuel of choice for container lines

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">Growth in spot refrigerated (reefer) truck pricing is accelerating, especially for loads originating in Florida and Mexico, amid tougher licensing and immigration enforcement. </div>

Growth in spot refrigerated (reefer) truck pricing is accelerating, especially for loads originating in Florida and Mexico, amid tougher licensing and immigration enforcement.

<div class="phx-topic">An emerging supply-demand imbalance in refrigerated (reefer) trucking is pushing more freight to the spot market and increasing upward pressure on short-term rates as the peak trucking season begins. Dual <a href="https://www.joc.com/article/industry-group-calls-for-tougher-licensing-better-training-amid-trucker-crackdown-6101323">crackdowns on immigration and licensing</a> may be tipping a scale already depressed by low demand, trucking and logistics executives told the Journal of Commerce. Average US reefer truckload spot rates, including fuel surcharges, reached $2.47 per mile in the week of Oct. 19, up 10 cents from the week of Sept. 14 and 12 cents from the same week last year, according to DAT Freight &amp; Analytics. Last year, average reefer truckload rates of $2.35 per mile in mid-October were up approximately 1 cent from September 2024 and down 5 cents from October 2023 levels. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d47d3a93-a025-4227-b19e-443d2719ea1e"></dynamic-object></div>Spot reefer rates are rising at a faster pace — and earlier than usual — from produce markets such as South and Central Florida and along the US-Mexico border, said Dean Croke, principal analyst at DAT. Demand may be rising for certain food and grocery shipments ahead of the US Thanksgiving holiday, but tractor and driver supply is shrinking faster. “I suspect what we’re about to see in the refrigerated trucking market is a significant exodus of capacity,” Croke said in an interview Monday. Reefer shipments posted on DAT load boards increased 9% sequentially last week, while trucks posted dropped 6%. “I’m not sure if it’s an exit or a diversion of capacity, or if it’s temporary or permanent, [but] we’re starting to see pockets of capacity tightness,” he added. Those “pockets” do not represent the entire US refrigerated market, however, and they may, or may not, be a precursor of future trends. “Some people will be exuberant and say the market is flipping, but it may be a blip as we head into peak season,” Croke said.Data from Truckstop.com and FTR Transportation Intelligence for the week ending October 24 show a stable spot market that tracked seasonal expectations. Refrigerated spot rates have risen four straight weeks, according to Truckstop.com, but the size of those increases has fallen steadily. ITS Logistics, a Reno, Nevada-based third-party logistics company, has noted a slight drop in truck capacity that it attributes to drivers shunning certain lanes to avoid enforcement. “When you have fewer drivers making those long hauls, it takes capacity out of the market,” said Paul Brashier, vice president of global supply chain. “It’s like an extended Roadcheck week situation,” he said, referring to the annual truck regulatory enforcement blitz organized by the Commercial Vehicle Safety Alliance. The national event typically sees capacity tighten as truck drivers take time off. <h3>Northbound and down </h3>One of the hot spots is Central and South Florida, always a tough market for backhauls because of the imbalance in southbound consumer shipments and northbound freight. Shippers are having a tougher time finding capacity for refrigerated loads from Lakeland, Florida, the largest refrigerated freight market in Florida, Croke said. Spot reefer load posts in Lakeland jumped 28% from the previous week in the week ending Oct. 19. Average outbound spot reefer rates from Lakeland have risen by 10 cents per mile in recent weeks. In the lane linking Lakeland with Atlanta, for example, the average spot rate rose from $1.58 per mile to $1.67 per mile from September through Oct. 28, according to DAT. Shippers are turning to the spot market as their regular trucking providers come up short on capacity, Croke said. He attributes the growing imbalance to licensing and immigration enforcement at truck weight and agricultural stations along Florida highways. Croke sees similar conditions in the McAllen, Texas, refrigerated market, a major border crossing point for produce from Mexico. Spot reefer loads posted in the McAllen area rose 37% sequentially last week and 42% over the past month, according to DAT. Outbound reefer spot rates from McAllen rose 7 cents last week to $2.03 per mile, 14 cents higher than a year ago. The increase was sharper in some long-haul lanes. As of Monday, the average spot reefer rate from McAllen to Fresno, California, shot up from $1.36 per mile in September to $1.71 per mile in the last seven days. Rates from McAllen to Los Angeles jumped from $1.48 per mile in September to $1.87 per mile in the last three days. Fewer drivers from California are making the long-haul to southern Texas, Croke said, which means fewer drivers available to haul loads back to California from McAllen. “Those drivers are reluctant to run to the border for fear of arrest or just fear of delay,” said Croke. A truck inspection lasting hours can throw off a driver’s delivery schedule, sometimes costing an entire leg of a multi-day trip, he said. “Carriers will say they can’t afford to lose that, and they’ll stay home or drive locally.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

An emerging supply-demand imbalance in refrigerated (reefer) trucking is pushing more freight to the spot market and increasing upward pressure on short-term rates as the peak trucking season begins. Dual crackdowns on immigration and licensing may be tipping a scale already depressed by low demand, trucking and logistics executives told the Journal of Commerce. Average US reefer truckload spot rates, including fuel surcharges, reached $2.47 per mile in the week of Oct. 19, up 10 cents from the week of Sept. 14 and 12 cents from the same week last year, according to DAT Freight & Analytics. Last year, average reefer truckload rates of $2.35 per mile in mid-October were up approximately 1 cent from September 2024 and down 5 cents from October 2023 levels. Spot reefer rates are rising at a faster pace — and earlier than usual — from produce markets such as South and Central Florida and along the US-Mexico border, said Dean Croke, principal analyst at DAT. Demand may be rising for certain food and grocery shipments ahead of the US Thanksgiving holiday, but tractor and driver supply is shrinking faster. “I suspect what we’re about to see in the refrigerated trucking market is a significant exodus of capacity,” Croke said in an interview Monday. Reefer shipments posted on DAT load boards increased 9% sequentially last week, while trucks posted dropped 6%. “I’m not sure if it’s an exit or a diversion of capacity, or if it’s temporary or permanent, [but] we’re starting to see pockets of capacity tightness,” he added. Those “pockets” do not represent the entire US refrigerated market, however, and they may, or may not, be a precursor of future trends. “Some people will be exuberant and say the market is flipping, but it may be a blip as we head into peak season,” Croke said. Data from Truckstop.com and FTR Transportation Intelligence for the week ending October 24 show a stable spot market that tracked seasonal expectations. Refrigerated spot rates have risen four straight weeks, according to Truckstop.com, but the size of those increases has fallen steadily. ITS Logistics, a Reno, Nevada-based third-party logistics company, has noted a slight drop in truck capacity that it attributes to drivers shunning certain lanes to avoid enforcement. “When you have fewer drivers making those long hauls, it takes capacity out of the market,” said Paul Brashier, vice president of global supply chain. “It’s like an extended Roadcheck week situation,” he said, referring to the annual truck regulatory enforcement blitz organized by the Commercial Vehicle Safety Alliance. The national event typically sees capacity tighten as truck drivers take time off. Northbound and down One of the hot spots is Central and South Florida, always a tough market for backhauls because of the imbalance in southbound consumer shipments and northbound freight. Shippers are having a tougher time finding capacity for refrigerated loads from Lakeland, Florida, the largest refrigerated freight market in Florida, Croke said. Spot reefer load posts in Lakeland jumped 28% from the previous week in the week ending Oct. 19. Average outbound spot reefer rates from Lakeland have risen by 10 cents per mile in recent weeks. In the lane linking Lakeland with Atlanta, for example, the average spot rate rose from $1.58 per mile to $1.67 per mile from September through Oct. 28, according to DAT. Shippers are turning to the spot market as their regular trucking providers come up short on capacity, Croke said. He attributes the growing imbalance to licensing and immigration enforcement at truck weight and agricultural stations along Florida highways. Croke sees similar conditions in the McAllen, Texas, refrigerated market, a major border crossing point for produce from Mexico. Spot reefer loads posted in the McAllen area rose 37% sequentially last week and 42% over the past month, according to DAT. Outbound reefer spot rates from McAllen rose 7 cents last week to $2.03 per mile, 14 cents higher than a year ago. The increase was sharper in some long-haul lanes. As of Monday, the average spot reefer rate from McAllen to Fresno, California, shot up from $1.36 per mile in September to $1.71 per mile in the last seven days. Rates from McAllen to Los Angeles jumped from $1.48 per mile in September to $1.87 per mile in the last three days. Fewer drivers from California are making the long-haul to southern Texas, Croke said, which means fewer drivers available to haul loads back to California from McAllen. “Those drivers are reluctant to run to the border for fear of arrest or just fear of delay,” said Croke. A truck inspection lasting hours can throw off a driver’s delivery schedule, sometimes costing an entire leg of a multi-day trip, he said. “Carriers will say they can’t afford to lose that, and they’ll stay home or drive locally.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

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