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<div class="phx-topic abstract-wrapper">Developers expect vacancy rates to drop as shippers that had been paralyzed by US tariff uncertainty set more long-term plans in motion.</div>

Developers expect vacancy rates to drop as shippers that had been paralyzed by US tariff uncertainty set more long-term plans in motion.

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<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Demand from third-party logistics providers (3PLs) is fueling continued growth in US warehousing and fulfillment space, despite relatively high national vacancy rates and depressed freight volumes. In the longer term, the big opportunity for industrial real estate developers is in data center development, which will continue to drive construction for several years. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135206_0.1.jpg"></img></div>A look back: After years of rampant construction, many of the warehousing projects that were launched during the COVID-19 pandemic came online in 2025, creating more capacity and raising vacancy rates. The national US industrial vacancy rate rose to 7.6% in the third quarter from 6.8% in the same 2024 period, exceeding the pre-pandemic average of 7.1%, according to real estate services firm Jones Lang LaSalle’s (JLL’s) latest US Industrial Market Dynamics report. Waves of US imports frontloaded ahead of higher tariffs — and the changing distribution needs created by those tariffs — helped fill some of that space. And certain sectors, such as bonded warehousing, saw especially high demand due to the tariff uncertainty. At the same time, demand for newer, larger, more sophisticated facilities with technology, especially AI, built into their design continued to grow. “More than 41% of our addressable population are now using our proprietary AI tools daily, up from 35% earlier this year,” JLL CEO Christian Ulbrich said during a Nov. 5 earnings call. US leasing volume totaled 146.2 million square feet in the third quarter, the highest since the first quarter of 2024, while the US development pipeline increased to 246.8 million square feet, the first increase in 12 quarters, JLL said in the report. A look ahead: Developers expect vacancy rates to drop as shippers that had been paralyzed by US tariff uncertainty set more long-term plans in motion. E-commerce trends that helped launch the pandemic-era warehousing boom are still in place, and 3PLs are looking for new, multi-use facilities for their shipper clients. But AI data centers are likely to steal the limelight in the industrial construction market. “Inevitably, it’s going to be a big build cycle over the next five years, maybe longer,” Robert E. Sulentic, CEO of CBRE, said during an October earnings call. “We expect data centers to be around 10% of our earnings this year, and more next year.” Although they employ relatively few people once completed, data centers require large amounts of land and energy. Those developments will compete with logistics warehousing, which also requires increasing amounts of land. Even as companies absorb projects begun two or three years ago, they are still adding facilities to their networks to build greater density and position their operations even closer to customers. Buildings that were once basically empty “shells” are now filled with robots and conveyor systems, Sulentic said. The next inflection: The logistics warehousing market didn’t tighten as expected in 2025, and developers are cagey about when a real resurgence may take place. The fact that shippers and their logistics partners are becoming desensitized to “short-term noise,” as Prologis executives put it, about tariffs bodes well for demand. “Overall, they need to make these long-term decisions and can no longer be held back,” CFO Timothy Arndt said during the developer’s third-quarter earnings call. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Demand from third-party logistics providers (3PLs) is fueling continued growth in US warehousing and fulfillment space, despite relatively high national vacancy rates and depressed freight volumes. In the longer term, the big opportunity for industrial real estate developers is in data center development, which will continue to drive construction for several years. A look back: After years of rampant construction, many of the warehousing projects that were launched during the COVID-19 pandemic came online in 2025, creating more capacity and raising vacancy rates. The national US industrial vacancy rate rose to 7.6% in the third quarter from 6.8% in the same 2024 period, exceeding the pre-pandemic average of 7.1%, according to real estate services firm Jones Lang LaSalle’s (JLL’s) latest US Industrial Market Dynamics report. Waves of US imports frontloaded ahead of higher tariffs — and the changing distribution needs created by those tariffs — helped fill some of that space. And certain sectors, such as bonded warehousing, saw especially high demand due to the tariff uncertainty. At the same time, demand for newer, larger, more sophisticated facilities with technology, especially AI, built into their design continued to grow. “More than 41% of our addressable population are now using our proprietary AI tools daily, up from 35% earlier this year,” JLL CEO Christian Ulbrich said during a Nov. 5 earnings call. US leasing volume totaled 146.2 million square feet in the third quarter, the highest since the first quarter of 2024, while the US development pipeline increased to 246.8 million square feet, the first increase in 12 quarters, JLL said in the report. A look ahead: Developers expect vacancy rates to drop as shippers that had been paralyzed by US tariff uncertainty set more long-term plans in motion. E-commerce trends that helped launch the pandemic-era warehousing boom are still in place, and 3PLs are looking for new, multi-use facilities for their shipper clients. But AI data centers are likely to steal the limelight in the industrial construction market. “Inevitably, it’s going to be a big build cycle over the next five years, maybe longer,” Robert E. Sulentic, CEO of CBRE, said during an October earnings call. “We expect data centers to be around 10% of our earnings this year, and more next year.” Although they employ relatively few people once completed, data centers require large amounts of land and energy. Those developments will compete with logistics warehousing, which also requires increasing amounts of land. Even as companies absorb projects begun two or three years ago, they are still adding facilities to their networks to build greater density and position their operations even closer to customers. Buildings that were once basically empty “shells” are now filled with robots and conveyor systems, Sulentic said. The next inflection: The logistics warehousing market didn’t tighten as expected in 2025, and developers are cagey about when a real resurgence may take place. The fact that shippers and their logistics partners are becoming desensitized to “short-term noise,” as Prologis executives put it, about tariffs bodes well for demand. “Overall, they need to make these long-term decisions and can no longer be held back,” CFO Timothy Arndt said during the developer’s third-quarter earnings call. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Warehousing vacancies hit new peak, but larger facilities still needed

<div class="phx-topic abstract-wrapper">Airlines will continue to adjust capacity to account for shifts in volume, but the volatility of US trade policy and continued demand growth fueled by the AI boom will make this more difficult.</div>

Airlines will continue to adjust capacity to account for shifts in volume, but the volatility of US trade policy and continued demand growth fueled by the AI boom will make this more difficult.

<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Continued growth in demand for AI components and cross-border e-commerce goods out of Asia will strain air cargo capacity during peak volume periods in 2026. The construction of massive AI data centers around the world will require huge volumes of semiconductors and other high-tech products, and the need for rapid delivery will continue to drive Asian e-commerce shipments to the air. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135206_0.1.jpg"></img></div>A look back: China’s main e-commerce platforms — Shein, Temu and TikTok — dominated trans-Pacific air cargo in 2024, and that continued into 2025. But when the Trump administration eliminated the so-called de minimis exemption for products made in China — which allowed goods valued under $800 to enter the country without paying tariffs — more than 2 million daily e-commerce shipments from China began stacking up at US airports. After briefly restoring the exemption while US Customs and Border Protection devised an appropriate inspection and duty collection system, the administration eliminated it for good on May 2. As a result, China-US air freight traffic plummeted, but those losses were largely offset by increased volumes from Southeast Asia to the US, as well as from Asia to Latin America and Europe. And even as airlines shifted freighters to those other trade routes, China’s air cargo exports began to recover in the fourth quarter. A look ahead: Airlines will continue to adjust capacity to account for shifts in volume, but the volatility of US trade policy and continued demand growth fueled by the AI boom will make this more difficult. Semiconductors to support strategically located AI data centers will boost air freight volumes, particularly from Taiwan, the largest global semiconductor supplier, and Vietnam, which is increasing its own semiconductor manufacturing capabilities. Those volumes will add to existing e-commerce demand, with online shopping now firmly entrenched in the global consumer system, keeping freighters full on the major trades out of Asia. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ae1f9fa5-ad71-4401-bf34-f607e9979a4d"></dynamic-object></div>The next inflection: In the longer term, new freighters coming online and increased belly space in passenger aircraft could cause available space to outstrip air cargo volumes. Although the excess capacity will not be uniform across all trade lanes, any supply-demand imbalance and resulting pressure on profitability will influence airlines’ approach to the market. They could, for example, become more selective with fixed-rate contracts, preferring shorter and more flexible deals that prioritize yields over volume. At the same time, forwarders will be competing fiercely for market share on the major trades out of Asia, putting further downward pressure on rates. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Continued growth in demand for AI components and cross-border e-commerce goods out of Asia will strain air cargo capacity during peak volume periods in 2026. The construction of massive AI data centers around the world will require huge volumes of semiconductors and other high-tech products, and the need for rapid delivery will continue to drive Asian e-commerce shipments to the air. A look back: China’s main e-commerce platforms — Shein, Temu and TikTok — dominated trans-Pacific air cargo in 2024, and that continued into 2025. But when the Trump administration eliminated the so-called de minimis exemption for products made in China — which allowed goods valued under $800 to enter the country without paying tariffs — more than 2 million daily e-commerce shipments from China began stacking up at US airports. After briefly restoring the exemption while US Customs and Border Protection devised an appropriate inspection and duty collection system, the administration eliminated it for good on May 2. As a result, China-US air freight traffic plummeted, but those losses were largely offset by increased volumes from Southeast Asia to the US, as well as from Asia to Latin America and Europe. And even as airlines shifted freighters to those other trade routes, China’s air cargo exports began to recover in the fourth quarter. A look ahead: Airlines will continue to adjust capacity to account for shifts in volume, but the volatility of US trade policy and continued demand growth fueled by the AI boom will make this more difficult. Semiconductors to support strategically located AI data centers will boost air freight volumes, particularly from Taiwan, the largest global semiconductor supplier, and Vietnam, which is increasing its own semiconductor manufacturing capabilities. Those volumes will add to existing e-commerce demand, with online shopping now firmly entrenched in the global consumer system, keeping freighters full on the major trades out of Asia. The next inflection: In the longer term, new freighters coming online and increased belly space in passenger aircraft could cause available space to outstrip air cargo volumes. Although the excess capacity will not be uniform across all trade lanes, any supply-demand imbalance and resulting pressure on profitability will influence airlines’ approach to the market. They could, for example, become more selective with fixed-rate contracts, preferring shorter and more flexible deals that prioritize yields over volume. At the same time, forwarders will be competing fiercely for market share on the major trades out of Asia, putting further downward pressure on rates. Contact Greg Knowler at greg.knowler@spglobal.com .

E-commerce, AI demand to keep ex-Asia air freight under pressure

<div class="phx-topic abstract-wrapper">While container trade between the South Pacific and USEC was flat prior to 2021, it has shown growth since then, albeit from a small base. </div>

While container trade between the South Pacific and USEC was flat prior to 2021, it has shown growth since then, albeit from a small base.

<div class="phx-topic">CMA CGM is launching a new service between the South Pacific and the US East Coast through its new space charter agreement with Maersk. The new service will offer transshipment options for CMA CGM’s standalone trans-Atlantic service to and from Oceania. The carrier said in a statement Tuesday that its new KEA service will begin with the early February departure of the 3,752-TEU Spirit of Melbourne from Sydney, with a South Pacific rotation that includes Melbourne and New Zealand’s Port Chalmers and Tauranga. KEA’s Americas calls include the Panamanian transshipment ports of Balboa and Manzanillo, along with Cartagena in Colombia. KEA will also call Philadelphia and Charleston, with CMA CGM marketing KEA as a “dedicated and fast service for fresh fruits and frozen food from Oceania to the US East Coast.” CMA CGM and Maersk this month filed a space charter agreement with the Federal Maritime Commission for trade between the US East Coast and the South Pacific on <a href="https://www.joc.com/article/maersk-to-resume-panama-canal-transits-on-oc1-service-as-vessel-restrictions-ease-5225404">Maersk’s OC-1 service</a>. The agreement calls for CMA CGM to purchase 350 TEUs, or 4,900 metric tons of space, including 100 reefer plugs, on each roundtrip sailing. CMA CGM said the Maersk-operated KEA service will complement CMA CGM’s existing Panama Direct Line from the South Pacific, with full US East Coast port coverage and transshipment options to ports in Northern Europe. <h3>USEC imports from Oceania growing </h3>While container trade between the South Pacific and US East Coast was flat prior to 2021, it has shown growth since then, albeit from a small base. Between 2021 and 2024, Oceania import volumes to the US East Coast grew at an annual average rate of 5.8%, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global, reaching 108,198 TEUs last year. Year to date through November 2025, Oceania imports to the US East Coast have grown 9%, PIERS data shows. Thanks to its dominance in the refrigerated produce trade, Philadelphia has captured almost two-thirds of that market. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

CMA CGM is launching a new service between the South Pacific and the US East Coast through its new space charter agreement with Maersk. The new service will offer transshipment options for CMA CGM’s standalone trans-Atlantic service to and from Oceania. The carrier said in a statement Tuesday that its new KEA service will begin with the early February departure of the 3,752-TEU Spirit of Melbourne from Sydney, with a South Pacific rotation that includes Melbourne and New Zealand’s Port Chalmers and Tauranga. KEA’s Americas calls include the Panamanian transshipment ports of Balboa and Manzanillo, along with Cartagena in Colombia. KEA will also call Philadelphia and Charleston, with CMA CGM marketing KEA as a “dedicated and fast service for fresh fruits and frozen food from Oceania to the US East Coast.” CMA CGM and Maersk this month filed a space charter agreement with the Federal Maritime Commission for trade between the US East Coast and the South Pacific on Maersk’s OC-1 service . The agreement calls for CMA CGM to purchase 350 TEUs, or 4,900 metric tons of space, including 100 reefer plugs, on each roundtrip sailing. CMA CGM said the Maersk-operated KEA service will complement CMA CGM’s existing Panama Direct Line from the South Pacific, with full US East Coast port coverage and transshipment options to ports in Northern Europe. USEC imports from Oceania growing While container trade between the South Pacific and US East Coast was flat prior to 2021, it has shown growth since then, albeit from a small base. Between 2021 and 2024, Oceania import volumes to the US East Coast grew at an annual average rate of 5.8%, according to PIERS, a sister product of the Journal of Commerce within S&P Global, reaching 108,198 TEUs last year. Year to date through November 2025, Oceania imports to the US East Coast have grown 9%, PIERS data shows. Thanks to its dominance in the refrigerated produce trade, Philadelphia has captured almost two-thirds of that market. Contact Michael Angell at michael.angell@spglobal.com .

CMA CGM’s Oceania-US East Coast service to kick off in February

<div class="phx-topic abstract-wrapper">The fee — generally in the range of $200 per TEU and $450 per FEU — was introduced by the carrier in January 2024 following the industry-wide rerouting of vessels via the Cape of Good Hope in southern Africa.</div>

The fee — generally in the range of $200 per TEU and $450 per FEU — was introduced by the carrier in January 2024 following the industry-wide rerouting of vessels via the Cape of Good Hope in southern Africa.

<div class="phx-topic">The measured return to the Red Sea/Suez Canal that Maersk signaled with the <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.joc.com%2Farticle%2Fmaersk-takes-significant-step-toward-return-to-red-sea-transits-6138361&amp;data=05%7C02%7Civan.klos%40spglobal.com%7C4ad5df2715c64edce6ce08de479deeaf%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C639026940817212672%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=P55mf7Gh505VzMNu6iiHFQU9Ms8Sbw4npPyAK8sy1Nw%3D&amp;reserved=0">recent MECL service sailing from India to the US East Coast</a> seems to have set the stage for the end of emergency surcharges on the route charged by the carrier. Maersk extended Indian customers a waiver of its “transit disruption surcharge” (TDS) on cargo moved on the Singapore-flagged Maersk Sebarok, which departed Nhava Sheva in India on Dec. 12 and sailed through the Bab al-Mandeb Strait Dec. 18, local forwarder sources told the Journal of Commerce. The TDS — generally in the range of $200 per TEU and $450 per FEU across westbound trades — was introduced by Maersk in January 2024 following the industry-wide rerouting of vessels via the Cape of Good Hope in southern Africa as attacks against commercial shipping by Houthi militants in Yemen heated up. Maersk didn’t respond to a request for comment on the matter. But forwarder sources explained that the TDS add-on has usually been applied on Maersk’s Indian contract customers, while large global accounts typically negotiate volume-based special rate deals. “We have not noticed so-called disruption surcharges from other major carriers,” said a Mumbai-based forwarding executive who didn’t want to be identified. Sources at CMA CGM in India said the carrier did not seek additional disruption surcharges for bookings on its “Indamex” India-USEC service. The TDS waiver is an indication that a Red Sea/Suez schedule operation for the 6,500-TEU Sebarok had been known to Maersk’s major clients in advance, given the context of <a href="https://www.joc.com/article/hapag-lloyd-india-shippers-resist-prospect-of-suez-return-in-short-term-6137557">hotly-debated cargo insurance implications</a>. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56199e2b-5df4-468f-a149-b18ae7c32e51"></dynamic-object></div>Riding on capacity and schedule enhancements implemented on the MECL in February, Maersk has been able to regain a significant portion of Indian customer support it lost to competitors over the past decade on the India-US trade lane, industry data obtained by the Journal of Commerce suggests. To put that in perspective, Maersk handled approximately 231,000 TEUs out of the 1.3 million TEUs shipped from India to the US this year through November, commanding nearly 18% of the market. Meanwhile, schedule disruptions on the India-USEC trade persist, market updates indicate. Sources have reported four blank sailings through January across the networks operated by CMA CGM (Indamex), Mediterranean Shipping Co. (Indus) and Ocean Network Express (WIN). Additionally, Maersk has told Indian customers the MECL vessel for Week 4, the Maersk Hartford, will omit Mundra and Pipavav on the Indian leg, which normally features a rotation of Jebel Ali, Mundra, Pipavav, Nhava Sheva, Salalah, Newark, Charleston, Savannah, Houston, Norfolk, Newark, Tangier and Salalah. “Ocean cargo ex-Mundra/Pipavav will be transshipped on the extra-loader Ren Jian 26 to connect the Maersk Hartford in Salalah,” the carrier said. Rates on the India-USEC trade have slipped from $1,440 per FEU earlier this month to $1,300 as of Monday, according to data from Platts, a sister company of the Journal of Commerce within S&amp;P Global. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

The measured return to the Red Sea/Suez Canal that Maersk signaled with the recent MECL service sailing from India to the US East Coast seems to have set the stage for the end of emergency surcharges on the route charged by the carrier. Maersk extended Indian customers a waiver of its “transit disruption surcharge” (TDS) on cargo moved on the Singapore-flagged Maersk Sebarok, which departed Nhava Sheva in India on Dec. 12 and sailed through the Bab al-Mandeb Strait Dec. 18, local forwarder sources told the Journal of Commerce. The TDS — generally in the range of $200 per TEU and $450 per FEU across westbound trades — was introduced by Maersk in January 2024 following the industry-wide rerouting of vessels via the Cape of Good Hope in southern Africa as attacks against commercial shipping by Houthi militants in Yemen heated up. Maersk didn’t respond to a request for comment on the matter. But forwarder sources explained that the TDS add-on has usually been applied on Maersk’s Indian contract customers, while large global accounts typically negotiate volume-based special rate deals. “We have not noticed so-called disruption surcharges from other major carriers,” said a Mumbai-based forwarding executive who didn’t want to be identified. Sources at CMA CGM in India said the carrier did not seek additional disruption surcharges for bookings on its “Indamex” India-USEC service. The TDS waiver is an indication that a Red Sea/Suez schedule operation for the 6,500-TEU Sebarok had been known to Maersk’s major clients in advance, given the context of hotly-debated cargo insurance implications . Riding on capacity and schedule enhancements implemented on the MECL in February, Maersk has been able to regain a significant portion of Indian customer support it lost to competitors over the past decade on the India-US trade lane, industry data obtained by the Journal of Commerce suggests. To put that in perspective, Maersk handled approximately 231,000 TEUs out of the 1.3 million TEUs shipped from India to the US this year through November, commanding nearly 18% of the market. Meanwhile, schedule disruptions on the India-USEC trade persist, market updates indicate. Sources have reported four blank sailings through January across the networks operated by CMA CGM (Indamex), Mediterranean Shipping Co. (Indus) and Ocean Network Express (WIN). Additionally, Maersk has told Indian customers the MECL vessel for Week 4, the Maersk Hartford, will omit Mundra and Pipavav on the Indian leg, which normally features a rotation of Jebel Ali, Mundra, Pipavav, Nhava Sheva, Salalah, Newark, Charleston, Savannah, Houston, Norfolk, Newark, Tangier and Salalah. “Ocean cargo ex-Mundra/Pipavav will be transshipped on the extra-loader Ren Jian 26 to connect the Maersk Hartford in Salalah,” the carrier said. Rates on the India-USEC trade have slipped from $1,440 per FEU earlier this month to $1,300 as of Monday, according to data from Platts, a sister company of the Journal of Commerce within S&P Global. Contact Bency Mathew at bencyvmathew@gmail.com .

Maersk waives ‘disruption surcharge’ for Red Sea sailing on India-USEC trade

<div class="phx-topic abstract-wrapper">The strength of holiday retail sales in the final month of 2025 and inventory levels approaching the Lunar New Year factory shutdowns in February will be the major factors determining the extent of pricing power in trans-Pacific contract talks. </div>

The strength of holiday retail sales in the final month of 2025 and inventory levels approaching the Lunar New Year factory shutdowns in February will be the major factors determining the extent of pricing power in trans-Pacific contract talks.

<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135206_0.1.jpg"></img></div>The big picture: A weakening US economy, depressed imports due to continued tariff uncertainty and plummeting spot rates in late 2025 will weigh heavily in favor of shippers during trans-Pacific service contract negotiations this spring. A look back: Midsize importers and their core carriers last spring signed 2025–26 service contracts with rates of about $2,000 per FEU from Asia to the US West Coast and $3,000 per FEU to the East Coast. Market conditions in the Asia-US trade in late 2024 and early 2025 — when the largest retailers typically begin their contract negotiations — were markedly different than today. Fueled by frontloading of seasonal merchandise to get ahead of higher tariffs threatened by the Trump administration, monthly US imports from Asia were increasing by an average of approximately 15% year over year, according to data from PIERS, a Journal of Commerce sister product within S&amp;P Global. Average spot rates from Asia to the US West Coast eclipsed $5,000 per FEU in January, according to Platts, also part of S&amp;P Global. In the environment of surging spot rates and tight vessel space, and with importers anticipating continued strength in imports in 2025 and prioritizing locking in guarantees of vessel space through their minimum quantity commitments (MQCs), carriers generally had the upper hand in pricing negotiations. The fixed rates in service contracts are normally lower than the spot rates for much of the year, but most carriers aim to fill at least half of their vessel space via MQCs from their largest customers. Service contract rates paid by midsize and smaller importers and by forwarders are generally several hundred dollars per FEU higher than those paid by the largest retailers. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="2b46cea3-3ad9-4793-8381-ca1cdffe6797"></dynamic-object></div>A look ahead: Rates in 2026–27 service contracts, most of which will run from May 1, 2026, through April 30, 2027, will most likely be lower than in the previous contract, but how much lower remains to be seen. Outside of a brief fillip in June that coincided with a spike in spot rates, average pricing from Asia to the US West Coast in long-term contracts followed a downward trajectory all year, according to rate benchmarking platform Xeneta. Rising inflation, growing unemployment, weak consumer sentiment and persistent tariff uncertainty point to continued declines in US freight demand. And with vessel space abundant, importers will likely hold off on signing service contracts for as long as they can. Inventory replenishment after the Lunar New Year holiday in Asia, which begins Feb. 17, could boost volumes and help carriers keep spot rates from collapsing. But new, larger vessels that will be deployed in the trans-Pacific and the possibility of a return to the Suez Canal could add effective capacity to the trade, giving importers additional leverage in contract rate talks. The next inflection: The strength of holiday retail sales in the final month of 2025 and inventory levels approaching the Lunar New Year factory shutdowns in February will be the major factors determining pricing power in trans-Pacific contract talks. If replenishment demand and spring volumes cause vessel space to tighten, importers could again prioritize MQCs rather than extracting the lowest possible price. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: A weakening US economy, depressed imports due to continued tariff uncertainty and plummeting spot rates in late 2025 will weigh heavily in favor of shippers during trans-Pacific service contract negotiations this spring. A look back: Midsize importers and their core carriers last spring signed 2025–26 service contracts with rates of about $2,000 per FEU from Asia to the US West Coast and $3,000 per FEU to the East Coast. Market conditions in the Asia-US trade in late 2024 and early 2025 — when the largest retailers typically begin their contract negotiations — were markedly different than today. Fueled by frontloading of seasonal merchandise to get ahead of higher tariffs threatened by the Trump administration, monthly US imports from Asia were increasing by an average of approximately 15% year over year, according to data from PIERS, a Journal of Commerce sister product within S&P Global. Average spot rates from Asia to the US West Coast eclipsed $5,000 per FEU in January, according to Platts, also part of S&P Global. In the environment of surging spot rates and tight vessel space, and with importers anticipating continued strength in imports in 2025 and prioritizing locking in guarantees of vessel space through their minimum quantity commitments (MQCs), carriers generally had the upper hand in pricing negotiations. The fixed rates in service contracts are normally lower than the spot rates for much of the year, but most carriers aim to fill at least half of their vessel space via MQCs from their largest customers. Service contract rates paid by midsize and smaller importers and by forwarders are generally several hundred dollars per FEU higher than those paid by the largest retailers. A look ahead: Rates in 2026–27 service contracts, most of which will run from May 1, 2026, through April 30, 2027, will most likely be lower than in the previous contract, but how much lower remains to be seen. Outside of a brief fillip in June that coincided with a spike in spot rates, average pricing from Asia to the US West Coast in long-term contracts followed a downward trajectory all year, according to rate benchmarking platform Xeneta. Rising inflation, growing unemployment, weak consumer sentiment and persistent tariff uncertainty point to continued declines in US freight demand. And with vessel space abundant, importers will likely hold off on signing service contracts for as long as they can. Inventory replenishment after the Lunar New Year holiday in Asia, which begins Feb. 17, could boost volumes and help carriers keep spot rates from collapsing. But new, larger vessels that will be deployed in the trans-Pacific and the possibility of a return to the Suez Canal could add effective capacity to the trade, giving importers additional leverage in contract rate talks. The next inflection: The strength of holiday retail sales in the final month of 2025 and inventory levels approaching the Lunar New Year factory shutdowns in February will be the major factors determining pricing power in trans-Pacific contract talks. If replenishment demand and spring volumes cause vessel space to tighten, importers could again prioritize MQCs rather than extracting the lowest possible price. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Shippers to regain leverage in trans-Pacific contract negotiations

<div class="phx-topic abstract-wrapper">Those factors will lift volumes, but true organic expansion depends on a recovery in the truckload market. </div>

Those factors will lift volumes, but true organic expansion depends on a recovery in the truckload market.

<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135205_0.1.jpg"></img></div>The big picture: The defining storyline of 2026 for North American intermodal rail will be how federal regulators respond to the proposed merger of Union Pacific Railroad (UP) and Norfolk Southern Railway (NS). The deal has already pushed competing railroads to launch new intermodal lanes and accelerate transit times, ripple effects that could set the stage for measurable volume gains, even without a spike in demand. A look back: The proposed $85 billion UP-NS transaction would create the first single-line transcontinental US railroad. And before regulators even had a chance to assess the potential competitive effects of the deal, the July 29 announcement triggered similar moves from the other US Class I railroads. Just three weeks later, BNSF Railway and CSX Transportation unveiled new “coast-to-coast” long-haul lanes — including Los Angeles-Charlotte, North Carolina; Los Angeles-Jacksonville, Florida; and Phoenix–Atlanta — along with faster transit times on nine additional routes between Los Angeles and the Ohio Valley and US Northeast. The UP-NS deal also resulted in a leadership shakeup at CSX, where the board fired CEO Joe Hinrichs amid pressure from an activist investor who demanded the eastern railroad pursue its own merger with BNSF, Canadian National Railway or Canadian Pacific Kansas City. UP and NS launched their first joint intermodal service, a route that connects the US West Coast, Mexico and Texas with Louisville in October. During contract bid season, UP captured meaningful market share from its West Coast competitor, BNSF, boosting volumes for Hub Group and Schneider National and dragging J.B. Hunt’s shipment counts lower. It was a year of posturing, positioning and railroads racing not to be left behind. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="61898d91-8751-4681-a545-1f386dd7ac78"></dynamic-object></div>A look ahead: Domestic intermodal could see further growth this year — total 53-foot volumes rose 3.5% year over year through October, according to the Intermodal Association of North America (IANA) — thanks to the new lanes and improved transit times railroads introduced in 2025, rather than a macroeconomic catalyst driving demand. Most shippers that spoke with the Journal of Commerce believe rates in early first-quarter intermodal contracts will be mostly flat compared with the previous year, with some increases on outbound lanes from the West Coast, particularly Southern California. After losing market share to its competitors, J.B. Hunt could become more aggressive in its pricing, especially during peak season. And as J.B. Hunt shifts freight onto BNSF-CSX joint services, Hub Group and Swift Intermodal will compete for new slots on NS trains. Additional BNSF-CSX single-line opportunities to the Northeast will become available when double-stacking service through Baltimore begins in the spring. If this prompts J.B. Hunt to shift more of its volumes to CSX, it will create even more opportunities for Hub Group and Swift. The US Surface Transportation Board (STB) likely won’t issue its final decision on the UP-NS transaction until 2027, but one former board member thinks regulators are “leaning more toward approval.” Citing President Donald Trump’s influence and the political alignment of the current board — with a third Republican pending Senate confirmation and just one Democrat — Daniel Elliott III, who served two nonconsecutive terms as STB chairman between 2009 and 2017, said it will be “very difficult” for members to vote against the merger if the administration continues to support it publicly. The next inflection: New lanes and faster service will lift volumes, but true organic expansion depends on a recovery in the truckload market. Some shippers only increase their use of intermodal rail when they are struggling to secure over-the-road capacity, which remains abundant. Until US manufacturing output and other major sources of surface freight such as new home construction improve and truckload capacity tightens, intermodal volumes and rates will grow only modestly. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: The defining storyline of 2026 for North American intermodal rail will be how federal regulators respond to the proposed merger of Union Pacific Railroad (UP) and Norfolk Southern Railway (NS). The deal has already pushed competing railroads to launch new intermodal lanes and accelerate transit times, ripple effects that could set the stage for measurable volume gains, even without a spike in demand. A look back: The proposed $85 billion UP-NS transaction would create the first single-line transcontinental US railroad. And before regulators even had a chance to assess the potential competitive effects of the deal, the July 29 announcement triggered similar moves from the other US Class I railroads. Just three weeks later, BNSF Railway and CSX Transportation unveiled new “coast-to-coast” long-haul lanes — including Los Angeles-Charlotte, North Carolina; Los Angeles-Jacksonville, Florida; and Phoenix–Atlanta — along with faster transit times on nine additional routes between Los Angeles and the Ohio Valley and US Northeast. The UP-NS deal also resulted in a leadership shakeup at CSX, where the board fired CEO Joe Hinrichs amid pressure from an activist investor who demanded the eastern railroad pursue its own merger with BNSF, Canadian National Railway or Canadian Pacific Kansas City. UP and NS launched their first joint intermodal service, a route that connects the US West Coast, Mexico and Texas with Louisville in October. During contract bid season, UP captured meaningful market share from its West Coast competitor, BNSF, boosting volumes for Hub Group and Schneider National and dragging J.B. Hunt’s shipment counts lower. It was a year of posturing, positioning and railroads racing not to be left behind. A look ahead: Domestic intermodal could see further growth this year — total 53-foot volumes rose 3.5% year over year through October, according to the Intermodal Association of North America (IANA) — thanks to the new lanes and improved transit times railroads introduced in 2025, rather than a macroeconomic catalyst driving demand. Most shippers that spoke with the Journal of Commerce believe rates in early first-quarter intermodal contracts will be mostly flat compared with the previous year, with some increases on outbound lanes from the West Coast, particularly Southern California. After losing market share to its competitors, J.B. Hunt could become more aggressive in its pricing, especially during peak season. And as J.B. Hunt shifts freight onto BNSF-CSX joint services, Hub Group and Swift Intermodal will compete for new slots on NS trains. Additional BNSF-CSX single-line opportunities to the Northeast will become available when double-stacking service through Baltimore begins in the spring. If this prompts J.B. Hunt to shift more of its volumes to CSX, it will create even more opportunities for Hub Group and Swift. The US Surface Transportation Board (STB) likely won’t issue its final decision on the UP-NS transaction until 2027, but one former board member thinks regulators are “leaning more toward approval.” Citing President Donald Trump’s influence and the political alignment of the current board — with a third Republican pending Senate confirmation and just one Democrat — Daniel Elliott III, who served two nonconsecutive terms as STB chairman between 2009 and 2017, said it will be “very difficult” for members to vote against the merger if the administration continues to support it publicly. The next inflection: New lanes and faster service will lift volumes, but true organic expansion depends on a recovery in the truckload market. Some shippers only increase their use of intermodal rail when they are struggling to secure over-the-road capacity, which remains abundant. Until US manufacturing output and other major sources of surface freight such as new home construction improve and truckload capacity tightens, intermodal volumes and rates will grow only modestly. Contact Ari Ashe at ari.ashe@spglobal.com .

Domestic intermodal to benefit from new lanes, faster service in 2026

<div class="phx-topic abstract-wrapper">While there is little doubt that heightened regulatory enforcement has played some role in affecting dry-van truckload capacity in the fourth quarter of 2025, efforts to attribute the sharp rise in spot prices this month to regulatory enforcement are premature, writes Jason Miller. </div>

While there is little doubt that heightened regulatory enforcement has played some role in affecting dry-van truckload capacity in the fourth quarter of 2025, efforts to attribute the sharp rise in spot prices this month to regulatory enforcement are premature, writes Jason Miller.

<div class="phx-topic">As we enter 2026, questions swirl about dry-van truckload capacity, especially following the sharp rise in dry-van truckload spot rates in December coupled with extensive discourse about heightened regulatory enforcement. By my estimate, adjusting for fuel prices, dry-van truckload spot rates were up 9% year over year this month and posted the best single-month increase in over five years. While we will need to wait until February to fully understand if this rate increase was simply a super-seasonal spike, this analysis on dry-van truckload capacity and demand dynamics in 2025 provides a sense of likely market behavior in 2026. Beginning with supply, administrative records data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages show a substantial exodus of dry-van truckload capacity since early 2023, with an estimated capacity decline of 7.5% as of June 2025 (the most recently available data). Capacity exit was particularly pronounced during 2024 and continued unabated through June 2025. My estimate places June 2025 payrolls down 2.7% from the prior year. Crucially, this is before heightened regulatory and immigration enforcement could play a significant role. As such, efforts to attribute the sharp rise in dry-van truckload spot prices this month to regulatory enforcement are premature. While there is little doubt that heightened regulatory enforcement has played some role in affecting capacity in the fourth quarter of 2025, especially among <a href="https://www.nytimes.com/2025/12/21/business/sikhs-truckers-trump-crackdown.html">immigrant drivers</a>, much of the tightening we saw this month may simply be due to lower supply amid a market-driven exit. Combining this payroll data with dynamics observed for separate nonemployer data — which captures leased owner-operators and for-hire owner-operators — my sense is dry van truckload payrolls have fallen to the levels we saw in 2017. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b62cb6b6-bbe2-4084-b568-3eb5e249d70e"></dynamic-object></div>Turning to demand, quarterly aggregates of the seasonally adjusted trucking ton-mile index show the third quarter of 2025’s year-over-year ton-mile growth was 0.8%. This represents a slow rate of demand growth compared with what we have observed in prior expansionary pricing cycles. For example, the third quarter of 2017 saw ton-miles of demand increase 2.4% from the third quarter of 2016, with the caveat that output was constrained by Hurricane Harvey’s landfall. The fourth quarter of 2017 saw ton-miles of demand increase 3.7% from fourth-quarter 2016 levels. Demand then grew at a 3% to 3.7% year-over-year basis for the first quarter of 2018 through the third quarter of 2018. Demand growth slowed in the fourth quarter of 2018 before dropping significantly in 2019, a year recognized as a freight recession. Industrial production data for the fourth quarter of 2025 suggests that year-over-year growth in ton-miles of demand was likely less than the third quarter of 2025’s 0.8% figure. Combined with ongoing weakness in manufacturing demand as captured by multiple regional manufacturing surveys from Federal Reserve Banks, ongoing weakness in <a href="https://www.dallasfed.org/research/surveys/des/2025/2504">oil and gas activity</a>, and continued soft activity in <a href="https://fred.stlouisfed.org/graph/?g=1PwqO">single-family housing</a> as well as <a href="https://fred.stlouisfed.org/graph/?g=1Pwru">multifamily housing</a>, growth in freight demand in 2026 is likely to remain low compared with what is normally observed during expansionary pricing environments. <h3>Expectations for 2026 </h3>What does this mean for pricing and capacity in 2026? As firms do not expand capacity in response to transient <a href="https://academic.oup.com/ej/article/131/634/598/5873665">increases in demand or prices</a>, dry-van carriers will likely want to observe how spot rates evolve over the next few months. Over the past few years, fuel-adjusted dry-van truckload spot rates in January have remained at or even slightly above levels observed in the prior December. This dynamic held in December 2023 to January 2024 and December 2024 to January 2025. As such, the first thing I will look for is whether spot rates drop in January, but the more significant test is February. If dry-van truckload spot rates hold at current levels in January and February, this is likely to signal to carriers that more supply is needed. This will cause some firms to take action to add capacity, such as ordering more equipment. Historically, year-over-year changes in spot truckload rates are the best predictor of year-over-year changes in <a href="https://doi.org/10.5325/transportationj.61.2.0151">new Class 8 truck orders</a>, suggesting market participants should closely watch where first-quarter 2026 new Class 8 orders land. My sense is carriers acting in the first quarter to add capacity would put more capacity on the road by late third-quarter and early fourth-quarter 2026. Given my expectation that demand growth in 2026 will be slow, this suggests even if an expansionary pricing cycle were to occur in 2026 due primarily to a contraction in supply, these conditions will be shorter-lived and feature smaller price increases on a percentage basis than what occurred during the 2017–18 and 2020–22 expansionary cycles. Jason Miller is an associate professor of logistics at Michigan State University. Contact him at <a href="mailto:mill2831@broad.msu.edu">mill2831@broad.msu.edu</a>. </div>

As we enter 2026, questions swirl about dry-van truckload capacity, especially following the sharp rise in dry-van truckload spot rates in December coupled with extensive discourse about heightened regulatory enforcement. By my estimate, adjusting for fuel prices, dry-van truckload spot rates were up 9% year over year this month and posted the best single-month increase in over five years. While we will need to wait until February to fully understand if this rate increase was simply a super-seasonal spike, this analysis on dry-van truckload capacity and demand dynamics in 2025 provides a sense of likely market behavior in 2026. Beginning with supply, administrative records data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages show a substantial exodus of dry-van truckload capacity since early 2023, with an estimated capacity decline of 7.5% as of June 2025 (the most recently available data). Capacity exit was particularly pronounced during 2024 and continued unabated through June 2025. My estimate places June 2025 payrolls down 2.7% from the prior year. Crucially, this is before heightened regulatory and immigration enforcement could play a significant role. As such, efforts to attribute the sharp rise in dry-van truckload spot prices this month to regulatory enforcement are premature. While there is little doubt that heightened regulatory enforcement has played some role in affecting capacity in the fourth quarter of 2025, especially among immigrant drivers , much of the tightening we saw this month may simply be due to lower supply amid a market-driven exit. Combining this payroll data with dynamics observed for separate nonemployer data — which captures leased owner-operators and for-hire owner-operators — my sense is dry van truckload payrolls have fallen to the levels we saw in 2017. Turning to demand, quarterly aggregates of the seasonally adjusted trucking ton-mile index show the third quarter of 2025’s year-over-year ton-mile growth was 0.8%. This represents a slow rate of demand growth compared with what we have observed in prior expansionary pricing cycles. For example, the third quarter of 2017 saw ton-miles of demand increase 2.4% from the third quarter of 2016, with the caveat that output was constrained by Hurricane Harvey’s landfall. The fourth quarter of 2017 saw ton-miles of demand increase 3.7% from fourth-quarter 2016 levels. Demand then grew at a 3% to 3.7% year-over-year basis for the first quarter of 2018 through the third quarter of 2018. Demand growth slowed in the fourth quarter of 2018 before dropping significantly in 2019, a year recognized as a freight recession. Industrial production data for the fourth quarter of 2025 suggests that year-over-year growth in ton-miles of demand was likely less than the third quarter of 2025’s 0.8% figure. Combined with ongoing weakness in manufacturing demand as captured by multiple regional manufacturing surveys from Federal Reserve Banks, ongoing weakness in oil and gas activity , and continued soft activity in single-family housing as well as multifamily housing , growth in freight demand in 2026 is likely to remain low compared with what is normally observed during expansionary pricing environments. Expectations for 2026 What does this mean for pricing and capacity in 2026? As firms do not expand capacity in response to transient increases in demand or prices , dry-van carriers will likely want to observe how spot rates evolve over the next few months. Over the past few years, fuel-adjusted dry-van truckload spot rates in January have remained at or even slightly above levels observed in the prior December. This dynamic held in December 2023 to January 2024 and December 2024 to January 2025. As such, the first thing I will look for is whether spot rates drop in January, but the more significant test is February. If dry-van truckload spot rates hold at current levels in January and February, this is likely to signal to carriers that more supply is needed. This will cause some firms to take action to add capacity, such as ordering more equipment. Historically, year-over-year changes in spot truckload rates are the best predictor of year-over-year changes in new Class 8 truck orders , suggesting market participants should closely watch where first-quarter 2026 new Class 8 orders land. My sense is carriers acting in the first quarter to add capacity would put more capacity on the road by late third-quarter and early fourth-quarter 2026. Given my expectation that demand growth in 2026 will be slow, this suggests even if an expansionary pricing cycle were to occur in 2026 due primarily to a contraction in supply, these conditions will be shorter-lived and feature smaller price increases on a percentage basis than what occurred during the 2017–18 and 2020–22 expansionary cycles. Jason Miller is an associate professor of logistics at Michigan State University. Contact him at mill2831@broad.msu.edu .

Separating myth from reality in dry-van truckload capacity

<div class="phx-topic abstract-wrapper">If gaps in strategy are visible to informed observers, they will be obvious to the STB, competitors conducting discovery, and shippers evaluating claimed benefits.</div>

If gaps in strategy are visible to informed observers, they will be obvious to the STB, competitors conducting discovery, and shippers evaluating claimed benefits.

<div class="phx-topic">The Union Pacific (UP)-Norfolk Southern (NS) <a href="https://www.joc.com/article/up-in-merger-filing-vows-to-convert-millions-of-loads-to-intermodal-annually-6138380">merger filing</a> delivered a compelling strategic vision for North America’s first transcontinental railroad. Can that vision withstand the US Surface Transportation Board’s (STB’s) operational scrutiny? I support the strategic direction. Network fluidity matters more than geography. Single-line service beats interchange friction. But high-level assertions — 2 million trucks diverted, $1 billion in synergies — must give way to operational specificity during STB’s review. If gaps are visible to informed observers, they will be obvious to the STB, competitors conducting discovery, and shippers evaluating claimed benefits. <h3>Truck diversion requires pricing discipline </h3>Truck diversion sits at the center of the public interest case. The constraint isn’t visibility — it’s pricing authority. Rail organizations centralize pricing to protect margins. That works poorly for winning truck traffic, where conversion often requires pricing at truck parity initially. Lane-level freight analytics now provide intelligence on truck-dense corridors. The question is whether UP-NS will push pricing authority closer to customers or maintain centralized control that rejects opportunities even when incremental economics are positive. <h3>TTX ownership raises competitive questions </h3>Post-merger, a single entity will control approximately 40% of TTX Company, which operates North America’s largest pooled equipment fleet. TTX preserves competitive neutrality — each railroad accesses the same equipment at the same rates. When one party gains disproportionate ownership, incentives change. UP committed to reducing its stake to not greater than 50%, addressing ownership concentration but leaving governance and allocation questions unresolved. BNSF and CSX depend on TTX access. Preferential allocation will generate STB-imposed conditions. <h3>Port gateway competition will intensify </h3>Single-line transcontinental service will change port gateway economics. Routing becomes discretionary rather than fixed by interchange patterns. Ports compete on performance — dwell time, chassis availability, terminal velocity — not geographic proximity. This benefits high-performing ports on transcontinental lanes while exposing underperforming gateways. A container at Los Angeles-Long Beach bound for Ohio no longer requires a UP-to-NS interchange in Chicago. But only if the LA terminal delivers consistent turn times and equipment access. Gulf ports gain optionality. Southern California faces pressure to improve. For secondary East Coast ports, the shift toward performance-based routing represents an opportunity rather than a threat — provided they leverage their relative flexibility to deliver superior asset fluidity and tighter rail coordination. <h3>Container repositioning economics change </h3>Transcontinental service transforms empty container repositioning. Today’s import-export imbalances require costly empty moves across railroads with different commercial incentives. A unified network can optimize repositioning system-wide. Containers arriving in LA can reposition to southern export markets through single-line moves. This improves equipment utilization and reduces empty miles — but only if commercial incentives align with operational optimization. The question is whether UP-NS will price repositioning to maximize container turns or protect lane-specific margins. <h3>Regulatory framework demands enhanced competition </h3>This is the first Class I merger under the STB’s 2001 standards, which require mergers to affirmatively enhance competition — not merely avoid reducing it. UP-NS must demonstrate that the combined network creates competitive options that didn’t previously exist. The STB must also consider whether approving UP-NS makes BNSF-CSX consolidation inevitable. UP-NS requested an accelerated 345-day review. CSX objected and pushed for the full 485-day period. The timing decision signals how seriously the STB takes enhanced competition requirements. <h3>What the STB must ask </h3>If I were sitting on the STB, I would require specific answers: Identify the top 50 truck-to-rail conversion lanes with corridor-level economics, origin-destination pairs, truck versus rail rates, transit times and conversion timelines. Not aggregated projections — specific commitments. Describe the pricing authority structure. Who can price truck-competitive moves at truck parity? If pricing remains centralized for margin protection, explain how that enables rather than inhibits conversion. Provide TTX governance proposals that preserve competitive neutrality. How will equipment allocation transparency prevent self-preferencing when one entity controls 40% ownership? Identify which ports gain and lose volume under optimized transcontinental routing. What performance criteria determine gateway selection? Explain how container repositioning economics change. Will empty moves be priced to optimize system utilization or protect lane-specific margins? <h3>Execution determines outcomes </h3>UP’s filing establishes strategic direction. The STB process will force operational specificity. Discovery, testimony and cross-examination will test whether truck diversion claims rest on corridor-level economics, whether TTX governance preserves competitive neutrality and whether claimed synergies create value or redistribute it. My support for this merger depends on seeing genuine specificity emerge — not strategic ambiguity preserved through vague assurances. The direction is sound. The proof must follow. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals &amp; Switches. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

The Union Pacific (UP)-Norfolk Southern (NS) merger filing delivered a compelling strategic vision for North America’s first transcontinental railroad. Can that vision withstand the US Surface Transportation Board’s (STB’s) operational scrutiny? I support the strategic direction. Network fluidity matters more than geography. Single-line service beats interchange friction. But high-level assertions — 2 million trucks diverted, $1 billion in synergies — must give way to operational specificity during STB’s review. If gaps are visible to informed observers, they will be obvious to the STB, competitors conducting discovery, and shippers evaluating claimed benefits. Truck diversion requires pricing discipline Truck diversion sits at the center of the public interest case. The constraint isn’t visibility — it’s pricing authority. Rail organizations centralize pricing to protect margins. That works poorly for winning truck traffic, where conversion often requires pricing at truck parity initially. Lane-level freight analytics now provide intelligence on truck-dense corridors. The question is whether UP-NS will push pricing authority closer to customers or maintain centralized control that rejects opportunities even when incremental economics are positive. TTX ownership raises competitive questions Post-merger, a single entity will control approximately 40% of TTX Company, which operates North America’s largest pooled equipment fleet. TTX preserves competitive neutrality — each railroad accesses the same equipment at the same rates. When one party gains disproportionate ownership, incentives change. UP committed to reducing its stake to not greater than 50%, addressing ownership concentration but leaving governance and allocation questions unresolved. BNSF and CSX depend on TTX access. Preferential allocation will generate STB-imposed conditions. Port gateway competition will intensify Single-line transcontinental service will change port gateway economics. Routing becomes discretionary rather than fixed by interchange patterns. Ports compete on performance — dwell time, chassis availability, terminal velocity — not geographic proximity. This benefits high-performing ports on transcontinental lanes while exposing underperforming gateways. A container at Los Angeles-Long Beach bound for Ohio no longer requires a UP-to-NS interchange in Chicago. But only if the LA terminal delivers consistent turn times and equipment access. Gulf ports gain optionality. Southern California faces pressure to improve. For secondary East Coast ports, the shift toward performance-based routing represents an opportunity rather than a threat — provided they leverage their relative flexibility to deliver superior asset fluidity and tighter rail coordination. Container repositioning economics change Transcontinental service transforms empty container repositioning. Today’s import-export imbalances require costly empty moves across railroads with different commercial incentives. A unified network can optimize repositioning system-wide. Containers arriving in LA can reposition to southern export markets through single-line moves. This improves equipment utilization and reduces empty miles — but only if commercial incentives align with operational optimization. The question is whether UP-NS will price repositioning to maximize container turns or protect lane-specific margins. Regulatory framework demands enhanced competition This is the first Class I merger under the STB’s 2001 standards, which require mergers to affirmatively enhance competition — not merely avoid reducing it. UP-NS must demonstrate that the combined network creates competitive options that didn’t previously exist. The STB must also consider whether approving UP-NS makes BNSF-CSX consolidation inevitable. UP-NS requested an accelerated 345-day review. CSX objected and pushed for the full 485-day period. The timing decision signals how seriously the STB takes enhanced competition requirements. What the STB must ask If I were sitting on the STB, I would require specific answers: Identify the top 50 truck-to-rail conversion lanes with corridor-level economics, origin-destination pairs, truck versus rail rates, transit times and conversion timelines. Not aggregated projections — specific commitments. Describe the pricing authority structure. Who can price truck-competitive moves at truck parity? If pricing remains centralized for margin protection, explain how that enables rather than inhibits conversion. Provide TTX governance proposals that preserve competitive neutrality. How will equipment allocation transparency prevent self-preferencing when one entity controls 40% ownership? Identify which ports gain and lose volume under optimized transcontinental routing. What performance criteria determine gateway selection? Explain how container repositioning economics change. Will empty moves be priced to optimize system utilization or protect lane-specific margins? Execution determines outcomes UP’s filing establishes strategic direction. The STB process will force operational specificity. Discovery, testimony and cross-examination will test whether truck diversion claims rest on corridor-level economics, whether TTX governance preserves competitive neutrality and whether claimed synergies create value or redistribute it. My support for this merger depends on seeing genuine specificity emerge — not strategic ambiguity preserved through vague assurances. The direction is sound. The proof must follow. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals & Switches. Contact him at paul.tonsager@multimodalsolutions.io .

Strategic vision of UP-NS merger must meet operational reality

 Actual capacity

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Planned capacity

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eeSea collects and centralizes liner network data from dozens of public sources including carriers’ vessel tracking portals, long-term schedules, customer advisories, port and terminal operator schedules, and pilot schedules. These disparate datasets are continually inspected, cleaned, and carefully structured. eeSea synthesizes this refined public data with AIS positions from a third-party provider and its datasets spanning schedule reliability, transit times, trade capacity evolution, and 60-day vessel forecasts. Capacity is measured based on the last load port in Europe. [eeSea](https://www.eesea.com)

North Europe to US East and Gulf coasts container capacity (eeSea)

Northern Europe to US East and Gulf Coasts Container Capacity and Deployment (eeSea) Gateway

<div class="phx-topic abstract-wrapper">The carrier is now including calls at Malta, Port Said (Egypt) and Beirut on the weekly Medex itinerary, replacing Valencia and Barcelona in Spain and For-sur-Mer in France.</div>

The carrier is now including calls at Malta, Port Said (Egypt) and Beirut on the weekly Medex itinerary, replacing Valencia and Barcelona in Spain and For-sur-Mer in France.

<div class="phx-topic">CMA CGM has reorganized the port rotation of its India-Middle East-West Mediterranean “Medex” service that it switched over <a href="https://www.joc.com/article/cma-cgm-unveils-plans-for-suez-return-on-india-mediterranean-service-6012039">to a Red Sea schedule in June</a>. The carrier is now including calls at Malta, Port Said (Egypt) and Beirut on the weekly Medex itinerary, replacing Valencia and Barcelona in Spain and For-sur-Mer in France. “As part of this enhancement, the overall rotation duration will be reduced from 70 days to 63 days..,” CMA CGM (India) said in a customer advisory. “This optimization will enable more frequent sailings and enhanced capacity through additional departures, thereby offering greater flexibility and improved connectivity.” The carrier said it will continue to serve the three dropped ports of call via transshipment. The full updated rotation is Abu Dhabi, Jebel Ali, Mundra, Nhava Sheva, Colombo, Jeddah, Port Said, Piraeus, Malta, Genoa, Beirut, Port Said, Jeddah and back to Abu Dhabi. For Indian loads, the changes are due to begin with the CMA CGM Pelleas that has an estimated time of arrival of Jan. 7 in Mundra. The revised rotation allows the carrier to run the string with nine vessels, compared with the 10 ships it needed to deploy previously. Cosco Shipping has a slot charter deal with CMA CGM on the Medex, with space allotments pegged at approximately 1,000 TEUs out of India per week. India-Mediterranean trades have been the target of a new crop of opportunistic regional carriers over the past year, especially multiple Turkish lines and some others backed by non-vessel-operating common carriers. The new entrants have caused serious market share setbacks for traditional mainline heavyweights, particularly CMA CGM. <h3>Spot rates fall on capacity boost </h3>With the Medex’s enhanced capacity, signs of a downward correction in rates are emerging. Sources have reported a sharp drop in spot rates for loads from Nhava Sheva to Port Said for late-January CMA CGM sailings — down to $2,350 per TEU and $2,300 per FEU, from $3,250 and $2,800, respectively, quoted for early-January sailings. On a broader note, the Medex rotation reset comes as CMA CGM is set to resume Suez Canal transits for its India-US East Coast “Indamex” loop from next month, although it is believed that the carrier still needs to position two more vessels in India to offer a weekly rotation under the normal itinerary. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM has reorganized the port rotation of its India-Middle East-West Mediterranean “Medex” service that it switched over to a Red Sea schedule in June . The carrier is now including calls at Malta, Port Said (Egypt) and Beirut on the weekly Medex itinerary, replacing Valencia and Barcelona in Spain and For-sur-Mer in France. “As part of this enhancement, the overall rotation duration will be reduced from 70 days to 63 days..,” CMA CGM (India) said in a customer advisory. “This optimization will enable more frequent sailings and enhanced capacity through additional departures, thereby offering greater flexibility and improved connectivity.” The carrier said it will continue to serve the three dropped ports of call via transshipment. The full updated rotation is Abu Dhabi, Jebel Ali, Mundra, Nhava Sheva, Colombo, Jeddah, Port Said, Piraeus, Malta, Genoa, Beirut, Port Said, Jeddah and back to Abu Dhabi. For Indian loads, the changes are due to begin with the CMA CGM Pelleas that has an estimated time of arrival of Jan. 7 in Mundra. The revised rotation allows the carrier to run the string with nine vessels, compared with the 10 ships it needed to deploy previously. Cosco Shipping has a slot charter deal with CMA CGM on the Medex, with space allotments pegged at approximately 1,000 TEUs out of India per week. India-Mediterranean trades have been the target of a new crop of opportunistic regional carriers over the past year, especially multiple Turkish lines and some others backed by non-vessel-operating common carriers. The new entrants have caused serious market share setbacks for traditional mainline heavyweights, particularly CMA CGM. Spot rates fall on capacity boost With the Medex’s enhanced capacity, signs of a downward correction in rates are emerging. Sources have reported a sharp drop in spot rates for loads from Nhava Sheva to Port Said for late-January CMA CGM sailings — down to $2,350 per TEU and $2,300 per FEU, from $3,250 and $2,800, respectively, quoted for early-January sailings. On a broader note, the Medex rotation reset comes as CMA CGM is set to resume Suez Canal transits for its India-US East Coast “Indamex” loop from next month, although it is believed that the carrier still needs to position two more vessels in India to offer a weekly rotation under the normal itinerary. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM reworks India-Med loop rotation to streamline Red Sea operations

<div class="phx-topic abstract-wrapper">Current anti-trust protections “have enabled foreign-owned shipping lines to exert disproportionate control over pricing and service levels” in Australia’s maritime industry, the head of a leading shipper group in the country says. </div>

Current anti-trust protections “have enabled foreign-owned shipping lines to exert disproportionate control over pricing and service levels” in Australia’s maritime industry, the head of a leading shipper group in the country says.

<div class="phx-topic">Shipper groups in Australia will urge the abolition of ocean carrier anti-trust immunity and the implementation of legal controls on port and related fees in their submission to a government inquiry into productivity within the country’s maritime and logistics sectors. While groups are still drafting their filing, Paul Zalai, director of the Freight &amp; Trade Alliance (FTA), said the focus will be on the two most contentious issues facing shippers in Australia. “The FTA and the Australian Peak Shippers Association [ASPA] consider both the end of anti-trust immunity and the introduction of a mandatory port-related fees code central to improving productivity, resilience and competitiveness in Australia’s freight supply chains,” Zalai told the Journal of Commerce. Current anti-trust protections “have enabled foreign-owned shipping lines to exert disproportionate control over pricing and service levels, stifling competition, raising costs, and undermining supply chain resilience in our trade-dependent economy,” Zalai said. On the matter of landside fees, Zalai said terminal and container park operators should charge their direct shipping line customers, who can then decide whether to absorb the fees or recover the costs from importers, exporters and freight forwarders. “But under current arrangements, stevedores and container parks impose incontestable landside fees directly on road and rail transport operators, bypassing normal commercial negotiation and distorting market dynamics,” he said. The FTA and ASPA, which together represent more than 550 businesses and trade bodies, were invited to make submissions just before Christmas by a Senate select committee set up to investigate productivity in Australian industry. Filings are due by Feb. 20, with a report scheduled for release by Sept. 30. Explaining the rationale for the probe, the Senate said that “global and domestic freight disruptions continue to destabilize the supply chain, leading to congestion, delays and higher costs.” Among the issues the Senate committee will consider are whether harmonized freight and logistics regulations would better support Australia’s economy; how disrupted freight supply chains have impacted Australia’s infrastructure resilience; and how fit-for-purpose freight infrastructure can encourage productivity growth. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Shipper groups in Australia will urge the abolition of ocean carrier anti-trust immunity and the implementation of legal controls on port and related fees in their submission to a government inquiry into productivity within the country’s maritime and logistics sectors. While groups are still drafting their filing, Paul Zalai, director of the Freight & Trade Alliance (FTA), said the focus will be on the two most contentious issues facing shippers in Australia. “The FTA and the Australian Peak Shippers Association [ASPA] consider both the end of anti-trust immunity and the introduction of a mandatory port-related fees code central to improving productivity, resilience and competitiveness in Australia’s freight supply chains,” Zalai told the Journal of Commerce. Current anti-trust protections “have enabled foreign-owned shipping lines to exert disproportionate control over pricing and service levels, stifling competition, raising costs, and undermining supply chain resilience in our trade-dependent economy,” Zalai said. On the matter of landside fees, Zalai said terminal and container park operators should charge their direct shipping line customers, who can then decide whether to absorb the fees or recover the costs from importers, exporters and freight forwarders. “But under current arrangements, stevedores and container parks impose incontestable landside fees directly on road and rail transport operators, bypassing normal commercial negotiation and distorting market dynamics,” he said. The FTA and ASPA, which together represent more than 550 businesses and trade bodies, were invited to make submissions just before Christmas by a Senate select committee set up to investigate productivity in Australian industry. Filings are due by Feb. 20, with a report scheduled for release by Sept. 30. Explaining the rationale for the probe, the Senate said that “global and domestic freight disruptions continue to destabilize the supply chain, leading to congestion, delays and higher costs.” Among the issues the Senate committee will consider are whether harmonized freight and logistics regulations would better support Australia’s economy; how disrupted freight supply chains have impacted Australia’s infrastructure resilience; and how fit-for-purpose freight infrastructure can encourage productivity growth. Contact Keith Wallis at keithwallis@hotmail.com .

Australian shippers call for end to ocean carrier anti-trust immunity

<div class="phx-topic abstract-wrapper">Hapag-Lloyd’s investment in the Aracruz terminal project in Brazil is part of a plan announced by CEO Rolf Habben Jansen last March to expand the carrier’s ports network to more than 30 terminals by 2030.</div>

Hapag-Lloyd’s investment in the Aracruz terminal project in Brazil is part of a plan announced by CEO Rolf Habben Jansen last March to expand the carrier’s ports network to more than 30 terminals by 2030.

<div class="phx-topic">Hapag-Lloyd and Ocean Network Express (ONE) are expanding their container terminal portfolios with separate deals for facilities in Brazil and China, the carriers announced Tuesday. In Brazil, Hanseatic Global Terminals, Hapag-Lloyd’s ports division, has signed a joint venture agreement with the Imetame Group to take a 50% stake in Imetame Logística Porto (ILP), which focuses on container terminal operations. Under the deal, Hanseatic and Imetame will build and operate the 1.2 million-TEU capacity Hanseatic Global Terminals Aracruz container terminal at Aracruz in Brazil’s Espírito Santo state, about 310 miles north of Rio de Janeiro. The two companies declined to disclose the cost of the project, although local sources estimated the terminal would cost $486 million to build. The facility, with 2,461 feet of quay and water depth of 56 feet, is expected to start operations in mid-2028 and handle breakbulk in addition to containerized cargo. “Latin America is a key strategic market for Hanseatic Global Terminals and Hapag-Lloyd,” Dheeraj Bhatia, Hanseatic Global Terminals CEO, said in a statement. “Our joint venture with the Imetame Group and the development of a new transshipment hub and gateway port on Brazil’s east coast strengthens our terminal portfolio while addressing capacity constraints in a growth region.” Operations at some of Brazil’s existing ports, including Santos and Navegantes, are often disrupted due to bad weather, congestion and port construction work, according to advisories published by Hapag-Lloyd and forwarder Kuehne + Nagel. The investment in the Aracruz terminal project is part of a Hapag-Lloyd plan announced by CEO Rolf Habben Jansen last March to expand its ports network to more than 30 terminals by 2030. <h3>ONE extends terminal holdings </h3>Meanwhile, ONE has bolstered its container terminals portfolio after signing a deal to take a minority stake in Dalian Container Terminal (DCT) in northern China, the Singapore-headquartered carrier said. ONE did not disclose how large its interest will be, but the Dalian deal will add to its network that includes stakes in terminals in Los Angeles, Oakland, Rotterdam and Singapore. “This acquisition of a minority stake aligns with our strategy of ensuring access at key regional ports,” Hiroki Tsujii, global chief officer of ONE’s product and network division, said in a statement. “The ownership stake allows us to collaborate with DCT and contribute to its continued infrastructure development and green terminal initiatives.” DCT is one of the biggest container terminals in the region, with 14 container berths, a total quay length of 14,400 feet, and annual handling capacity of 6.6 million TEUs. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Hapag-Lloyd and Ocean Network Express (ONE) are expanding their container terminal portfolios with separate deals for facilities in Brazil and China, the carriers announced Tuesday. In Brazil, Hanseatic Global Terminals, Hapag-Lloyd’s ports division, has signed a joint venture agreement with the Imetame Group to take a 50% stake in Imetame Logística Porto (ILP), which focuses on container terminal operations. Under the deal, Hanseatic and Imetame will build and operate the 1.2 million-TEU capacity Hanseatic Global Terminals Aracruz container terminal at Aracruz in Brazil’s Espírito Santo state, about 310 miles north of Rio de Janeiro. The two companies declined to disclose the cost of the project, although local sources estimated the terminal would cost $486 million to build. The facility, with 2,461 feet of quay and water depth of 56 feet, is expected to start operations in mid-2028 and handle breakbulk in addition to containerized cargo. “Latin America is a key strategic market for Hanseatic Global Terminals and Hapag-Lloyd,” Dheeraj Bhatia, Hanseatic Global Terminals CEO, said in a statement. “Our joint venture with the Imetame Group and the development of a new transshipment hub and gateway port on Brazil’s east coast strengthens our terminal portfolio while addressing capacity constraints in a growth region.” Operations at some of Brazil’s existing ports, including Santos and Navegantes, are often disrupted due to bad weather, congestion and port construction work, according to advisories published by Hapag-Lloyd and forwarder Kuehne + Nagel. The investment in the Aracruz terminal project is part of a Hapag-Lloyd plan announced by CEO Rolf Habben Jansen last March to expand its ports network to more than 30 terminals by 2030. ONE extends terminal holdings Meanwhile, ONE has bolstered its container terminals portfolio after signing a deal to take a minority stake in Dalian Container Terminal (DCT) in northern China, the Singapore-headquartered carrier said. ONE did not disclose how large its interest will be, but the Dalian deal will add to its network that includes stakes in terminals in Los Angeles, Oakland, Rotterdam and Singapore. “This acquisition of a minority stake aligns with our strategy of ensuring access at key regional ports,” Hiroki Tsujii, global chief officer of ONE’s product and network division, said in a statement. “The ownership stake allows us to collaborate with DCT and contribute to its continued infrastructure development and green terminal initiatives.” DCT is one of the biggest container terminals in the region, with 14 container berths, a total quay length of 14,400 feet, and annual handling capacity of 6.6 million TEUs. Contact Keith Wallis at keithwallis@hotmail.com .

Hapag-Lloyd, ONE expand terminal networks with deals in Brazil, China

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Electronic Data Interchange (EDI) has long been the backbone of global commerce, quietly facilitating trillions in transactions. Yet, despite its critical role, traditional EDI has remained notoriously complex, labor-intensive, viewed as antique, and costly. Companies have historically grappled with cumbersome mapping processes, intricate partner-specific logic, and extended onboarding timelines. Now, as industries increasingly adopt agile digital frameworks, the limitations of conventional EDI solutions have become glaringly apparent. Enter Mosaic, an innovative solution unveiled by Orderful, which promises to radically streamline and modernize EDI integration through artificial intelligence. Orderful, already recognized for simplifying supply chain data exchanges, has now introduced Mosaic as the first AI-enriched EDI integration product that completely removes traditional mapping processes. At its core, Mosaic represents a fundamental shift from legacy EDI protocols, replacing archaic, code-heavy formats such as X12 and EDIFACT with modern, easy to use JSON inputs oriented around system-of-record concepts. This alone significantly lowers the barrier to integration, allowing teams accustomed to modern SaaS API development to seamlessly adopt EDI workflows. Mosaic's AI-powered engine ingests and interprets trading partner requirements as well as millions of actual transactions to build reliable, reuseable, self-healing integration which translating data into partner-specific formats without manual intervention. Such automated adaptability is unprecedented in the EDI landscape and promises a marked reduction in implementation timelines, from what once took months or even years, down to mere weeks. Erik Kiser, founder and CEO of Orderful, understands firsthand the pain points of traditional EDI. Having built integrations himself early in his career, Kiser founded Orderful specifically to address the persistent challenges that frustrate businesses across the supply chain. "Nobody has been more frustrated by EDI than I have," Kiser notes candidly. "Those experiences are precisely why Orderful and now Mosaic exist." Mosaic further distinguishes itself by embedding real-time validation and debugging, streamlining error resolution from lengthy processes into rapid, straightforward fixes. Developers, traditionally burdened by the complexities of partner-specific requirements and intricate coding standards, now gain an intuitive, self-service environment. This reduction in complexity not only accelerates implementation but also reduces operational overhead, offering critical advantages in today’s fast-paced business environment. Brian Roberts, general partner at Andreessen Horowitz and Orderful board member, underscores Mosaic's industry impact: "Mosaic has taken one of the most entrenched bottlenecks in enterprise technology, EDI mapping, and replaced it with an AI-native product that adapts automatically. It’s exactly the type of innovation the industry has been missing." While Mosaic initially supports the complete Order-to-Cash lifecycle, covering purchase orders, acknowledgments, shipping notices, and invoices, the platform is designed for continuous growth and expansion. Orderful sees Mosaic not merely as a product but as a foundational architecture poised to support a broader range of data flows and integrations, aligning perfectly with the scalable requirements of global businesses. “The underlying unified data model not only lets us act as the universal connector, but also enables us to build product once that applies to all partners. This includes EDI functionality like order splitting and consolidation, but also unlocks powerful analytics and insights for our customers to help them grow their business,” said Will Benish, principal product manager at Orderful. Security and reliability are integral to Mosaic’s infrastructure, evidenced by SOC 2 Type II compliance and OAuth 2.0 integration. Additionally, the platform guarantees robust performance, boasting sub-second transaction speeds and immediate access to an extensive network of over 10,000 trading partners. For businesses already utilizing Orderful, Mosaic offers a seamless upgrade pathway, allowing organizations to embrace the future of EDI without disrupting their current trading partner relationships. New clients will find Mosaic’s approach refreshingly modern, providing immediate gains in speed, ease of integration, and scalability. Mosaic represents more than just an incremental improvement; it's a visionary leap forward in how enterprises manage and leverage supply chain data. As businesses grapple with increasingly complex global supply networks, Orderful’s Mosaic emerges as a timely and essential tool, providing clarity, agility, and unprecedented simplicity. Mosaic elevates EDI, providing businesses with a streamlined and efficient pathway to rapidly integrate, adapt, and scale in today's dynamic market. “Mosaic wouldn’t have been possible to build even three years ago. The work our team has put in has been extraordinary, combining cutting edge AI techniques with our deep experience with EDI and our rich library of trading partner guidelines and requirements,” said Benish. To learn more about how Mosaic can transform your EDI capabilities and streamline your integration processes or request a demonstration at <a href="https://www.orderful.com/product/mosaic" rel="noreferrer" class="joc_admin__link">www.orderful.com/product/mosaic</a>.

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From 1940s Roots to AI-Driven Future: Reinventing EDI for Today's Supply Chains

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