<div class="phx-topic abstract-wrapper">The customs agency will prioritize unliquidated entries in the first phase of the refund process that was instigated by the February Supreme Court decision to invalidate tariffs on most US trading partners.</div>

The customs agency will prioritize unliquidated entries in the first phase of the refund process that was instigated by the February Supreme Court decision to invalidate tariffs on most US trading partners.

Feature image

<div class="phx-topic">Refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA) will start April 20 under a phased rollout, according to US Customs and Border Protection (CBP). The <a href="https://www.joc.com/article/cbp-lays-out-initial-tariff-refund-plan-that-requires-minimal-work-from-importers-6183418">refund process</a>, which will come as welcome news to importers, is being managed through a new tool, called Consolidated Administration and Processing of Entries (CAPE), that is being built within CBP’s Automated Commercial Environment Secure Data Portal (ACE Portal). The <a href="https://www.joc.com/article/us-supreme-court-rules-against-trump-in-critical-ieepa-tariff-case-6173568">US Supreme Court ruled on Feb. 20</a> that the Trump administration improperly used IEEPA to justify widespread tariffs the US slapped on virtually all of its trading partners beginning in the spring of 2025. That decision shifted details on the refund process to the US Court of International Trade, which instructed CBP to avoid delaying refunds to US importers that had collectively paid more than $150 billion in IEEPA tariffs. The first phase of the refund process prioritizes so-called unliquidated entries and liquidated entries that are fewer than 80 days old. A liquidated entry means CBP has completed the final assessment of duties, taxes and fees, making the entry legal and closed. CBP has said that the refund process will take up to 45 days once a CAPE declaration has been filed, but the agency has issued no formal timeline for when refunds might actually land in the accounts of importers. To apply for IEEPA tariff refunds, importers must either have an ACE portal account or an automated clearing house (ACH) account so they can receive the refunds. Customs experts have advised importers to set up both to avoid delays in the refund process. If a customs broker or other third party is authorized by an importer to act as a notify party on a customs entry, and if the broker is set up to receive refunds electronically, that party can receive refunds via ACH on behalf of an importer. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA) will start April 20 under a phased rollout, according to US Customs and Border Protection (CBP). The refund process , which will come as welcome news to importers, is being managed through a new tool, called Consolidated Administration and Processing of Entries (CAPE), that is being built within CBP’s Automated Commercial Environment Secure Data Portal (ACE Portal). The US Supreme Court ruled on Feb. 20 that the Trump administration improperly used IEEPA to justify widespread tariffs the US slapped on virtually all of its trading partners beginning in the spring of 2025. That decision shifted details on the refund process to the US Court of International Trade, which instructed CBP to avoid delaying refunds to US importers that had collectively paid more than $150 billion in IEEPA tariffs. The first phase of the refund process prioritizes so-called unliquidated entries and liquidated entries that are fewer than 80 days old. A liquidated entry means CBP has completed the final assessment of duties, taxes and fees, making the entry legal and closed. CBP has said that the refund process will take up to 45 days once a CAPE declaration has been filed, but the agency has issued no formal timeline for when refunds might actually land in the accounts of importers. To apply for IEEPA tariff refunds, importers must either have an ACE portal account or an automated clearing house (ACH) account so they can receive the refunds. Customs experts have advised importers to set up both to avoid delays in the refund process. If a customs broker or other third party is authorized by an importer to act as a notify party on a customs entry, and if the broker is set up to receive refunds electronically, that party can receive refunds via ACH on behalf of an importer. Contact Eric Johnson at eric.johnson@spglobal.com .

Transport, Trade and Regulation News

Supply chain

First wave of IEEPA refunds to US importers to start April 20: CBP

<div class="phx-topic abstract-wrapper">The doubling in bunker fuel prices in some key hubs since the war in the Middle East began six weeks ago is focusing industry attention on energy costs as supply scarcity worsens.</div>

The doubling in bunker fuel prices in some key hubs since the war in the Middle East began six weeks ago is focusing industry attention on energy costs as supply scarcity worsens.

<div class="phx-topic">Elevated energy prices due to the war in Iran are complicating, and in some cases slowing, some annual trans-Pacific service contract negotiations between container lines and US importers as emergency fees push up container spot rates. Bunker fuel prices, which doubled in many key hubs in the days after the war in the Middle East began disrupting oil supply six weeks ago, have focused shippers’ attention on how the higher carrier operating costs will be passed onto them via bunker adjustment factors (BAFs) and emergency bunker fuel surcharges. Container lines can give few assurances on the limits to the higher costs their customers face as shipowners scramble to secure fuel supplies for May and June amid worsening scarcity. Still, there is little concern that the increased attention on the fuel component of freight rates will derail finalizing 2026–27 service contracts, which typically go in effect May 1. The last time attention to fuel — which is generally treated as a simple pass-through cost within contracts — complicated contract talks was in 2019, ahead of impending low-sulfur regulations. This year, the impact of the war has helped carriers secure higher rates than last year, even when fuel was excluded, two container line executives said. Unlike in past years when negotiated contract rates slipped in early March, one of the carrier executives noted his pricing power increased as the impact of the war widened. The war began on Feb. 28. But increased annual costs from labor, port tariffs and landside transport make most of the contract rate gains a wash compared with rate levels secured last year, the two executives said. Container spot rates, as measured by various indexes, have been rising steadily since late February and early March before ascending even higher in early April. Emergency fuel surcharges began taking effect in the first week of April, following a 30-day review by maritime regulators. The cost to ship an FEU from Shanghai to Los Angeles hit $2,910 in the week ending April 9, a $900 increase from six weeks prior, according to Drewry’s World Container Index. <h3>Higher pass-on costs </h3>Container lines have imperfect means to recoup higher fuel costs and the additional costs accrued through disruption. BAFs can lag up to 90 days, hampering carriers’ cash flow in the meantime. US maritime regulators have prevented carriers from immediately implementing emergency surcharges, <a href="https://www.joc.com/article/fmc-again-rejects-maersk-petition-to-waive-notice-period-for-emergency-fuel-surcharge-6199261">forcing them to adhere to the 30-day notice period</a>, as required by US shipping law. The war has had minimal direct impact on container shipping, affecting just 1% to 2% of the total global capacity that typically transits the Strait of Hormuz. But the growing scarcity of bunker fuel in Asia has forced some ships to alter routings to refuel at alternative hubs, thus burning more fuel and accruing higher operating costs, a third carrier executive said. The rejection by Chinese authorities of emergency bunker fuel surcharges has further complicated efforts by carriers to recoup higher costs from exporters in China. The severity of emergency surcharges varies by carrier, but all are easily in the hundreds of dollars to ship an FEU from Asia to the US West Coast. US importers shipping contracted cargo can also be subject to emergency bunker fuel surcharges even if language within their contract restricts such fees. That is prompting discussions during contract negotiations about just how much exposure cargo owners face from future fees. Shippers and forwarders are also trying to resist attempts by some carriers to calculate BAFs on a monthly rather than quarterly basis. “I can’t mask my frustration about this. The fuel charge in the contract becomes nothing more than a glorified [freight-all-kinds] rate,” a forwarder told the Journal of Commerce. “It nullifies our ability to get longer-term rates for purposes of stability and visibility.” <h3>War volatility outstrips BAF </h3>A fourth carrier executive explained that the BAF was a “pre-war mechanism” that worked well when bunker fuel prices were relatively stable. But the recent surge in oil prices since March is adding literally <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">millions of dollars a week to carriers’ costs</a>. “When oil prices come back down — whenever that is — I don’t think anyone thinks that the price [of bunker fuel] will stay like this,” the carrier source said. “The rate will go back down to the pre-war rate.” The second-quarter BAF shouldn’t be too onerous for most shippers since it will mostly reflect the far less volatile January and February fuel prices, said Jason Cook, chief executive of Ardent Global Logistics. A sustained period of higher fuel prices through March and into the second quarter, however, will mean much higher BAF charges are coming in the third quarter. Shippers may try to frontload third-quarter cargo throughout May and June to avoid paying the higher BAF, he said. “For the second quarter, the BAF should be pretty mild,” Cook said. “It won’t really show up until the third quarter.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. Senior editors Michael Angell and Bill Mongelluzzo contributed to this report. </div>

Elevated energy prices due to the war in Iran are complicating, and in some cases slowing, some annual trans-Pacific service contract negotiations between container lines and US importers as emergency fees push up container spot rates. Bunker fuel prices, which doubled in many key hubs in the days after the war in the Middle East began disrupting oil supply six weeks ago, have focused shippers’ attention on how the higher carrier operating costs will be passed onto them via bunker adjustment factors (BAFs) and emergency bunker fuel surcharges. Container lines can give few assurances on the limits to the higher costs their customers face as shipowners scramble to secure fuel supplies for May and June amid worsening scarcity. Still, there is little concern that the increased attention on the fuel component of freight rates will derail finalizing 2026–27 service contracts, which typically go in effect May 1. The last time attention to fuel — which is generally treated as a simple pass-through cost within contracts — complicated contract talks was in 2019, ahead of impending low-sulfur regulations. This year, the impact of the war has helped carriers secure higher rates than last year, even when fuel was excluded, two container line executives said. Unlike in past years when negotiated contract rates slipped in early March, one of the carrier executives noted his pricing power increased as the impact of the war widened. The war began on Feb. 28. But increased annual costs from labor, port tariffs and landside transport make most of the contract rate gains a wash compared with rate levels secured last year, the two executives said. Container spot rates, as measured by various indexes, have been rising steadily since late February and early March before ascending even higher in early April. Emergency fuel surcharges began taking effect in the first week of April, following a 30-day review by maritime regulators. The cost to ship an FEU from Shanghai to Los Angeles hit $2,910 in the week ending April 9, a $900 increase from six weeks prior, according to Drewry’s World Container Index. Higher pass-on costs Container lines have imperfect means to recoup higher fuel costs and the additional costs accrued through disruption. BAFs can lag up to 90 days, hampering carriers’ cash flow in the meantime. US maritime regulators have prevented carriers from immediately implementing emergency surcharges, forcing them to adhere to the 30-day notice period , as required by US shipping law. The war has had minimal direct impact on container shipping, affecting just 1% to 2% of the total global capacity that typically transits the Strait of Hormuz. But the growing scarcity of bunker fuel in Asia has forced some ships to alter routings to refuel at alternative hubs, thus burning more fuel and accruing higher operating costs, a third carrier executive said. The rejection by Chinese authorities of emergency bunker fuel surcharges has further complicated efforts by carriers to recoup higher costs from exporters in China. The severity of emergency surcharges varies by carrier, but all are easily in the hundreds of dollars to ship an FEU from Asia to the US West Coast. US importers shipping contracted cargo can also be subject to emergency bunker fuel surcharges even if language within their contract restricts such fees. That is prompting discussions during contract negotiations about just how much exposure cargo owners face from future fees. Shippers and forwarders are also trying to resist attempts by some carriers to calculate BAFs on a monthly rather than quarterly basis. “I can’t mask my frustration about this. The fuel charge in the contract becomes nothing more than a glorified [freight-all-kinds] rate,” a forwarder told the Journal of Commerce. “It nullifies our ability to get longer-term rates for purposes of stability and visibility.” War volatility outstrips BAF A fourth carrier executive explained that the BAF was a “pre-war mechanism” that worked well when bunker fuel prices were relatively stable. But the recent surge in oil prices since March is adding literally millions of dollars a week to carriers’ costs . “When oil prices come back down — whenever that is — I don’t think anyone thinks that the price [of bunker fuel] will stay like this,” the carrier source said. “The rate will go back down to the pre-war rate.” The second-quarter BAF shouldn’t be too onerous for most shippers since it will mostly reflect the far less volatile January and February fuel prices, said Jason Cook, chief executive of Ardent Global Logistics. A sustained period of higher fuel prices through March and into the second quarter, however, will mean much higher BAF charges are coming in the third quarter. Shippers may try to frontload third-quarter cargo throughout May and June to avoid paying the higher BAF, he said. “For the second quarter, the BAF should be pretty mild,” Cook said. “It won’t really show up until the third quarter.” Contact Mark Szakonyi at  mark.szakonyi@spglobal.com . Senior editors Michael Angell and Bill Mongelluzzo contributed to this report.

Maritime

Container lines

Forwarding

Asia-Europe

Trans-Pacific

Container Shipping News

War-driven fuel costs add new twist to trans-Pacific service contract talks

<div class="phx-topic abstract-wrapper">While the $4.2 billion transaction still requires approvals from the Israeli government, it points to an appetite for consolidation among carriers despite the lack of financial distress that accompanied earlier merger eras. </div>

While the $4.2 billion transaction still requires approvals from the Israeli government, it points to an appetite for consolidation among carriers despite the lack of financial distress that accompanied earlier merger eras.

<div class="phx-topic">Could another round of container shipping consolidation be approaching? Hapag-Lloyd’s planned $4.2 billion acquisition of Zim Integrated Shipping Services, announced in February, shows a growing appetite among carriers for scale, including through consolidation, despite the lack of financial hardship that drove earlier rounds of industry mergers and aquisitions. The risk of falling behind is acute. No. 1 carrier Mediterranean Shipping Co., at 21.6% of the global fleet by capacity following a massive expansion since the pandemic, is now more than three times the size of No. 5 Hapag-Lloyd and No. 6 Ocean Network Express (ONE), according to Alphaliner rankings. MSC has accounted for 33.6% of total container carrier fleet growth since 2000, according to the analyst. As a result, midsize carriers — even those firmly within the top 10 — are realizing the urgency of building scale to remain competitive with the top carriers, pursuing that goal by aggressively acquiring tonnage and potentially considering the possibility of once unthinkable M&amp;A. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6202639_0.1.jpg"></img></div>“With post-COVID and the outsized profits from that time period, you are seeing carriers focus on a ‘core’ or ‘integrator’ strategy, but in both cases, scale is still key,” Brian Nemeth, global co-leader of logistics and transportation at Alix Partners, told the Journal of Commerce. A “core” strategy would be a focus on ocean shipping and terminals while “integrator” refers to end-to-end activities including origin consolidation, warehousing, last-mile and visibility. With fewer large carriers remaining — the top 10 control more than 85% percent of the fleet today versus 48% in 1996, according to analyst Lars Jensen — merger opportunities are harder to find, although any further deals would continue a longstanding industry trend. “The liner shipping industry has seen a persistent drive towards consolidation for more than 30 years,” Jensen wrote in his book Liner Shipping 2025, published in 2017. While the Zim deal still requires approvals from the Israeli government, the fact Hapag-Lloyd was able to overcome national security and other obstacles in signing the merger agreement shows that deals some might have regarded as impossible may in fact be within reach. “I was somewhat surprised that Zim would do a deal like Hapag, for many reasons including cultural differences, but also from the point of view of Israeli national security,” consultant and former senior Maersk executive Robbert van Trooijen told the Journal of Commerce. “The fact they found a solution to this, assuming [the deal closes], they have proven there are solutions to be found,” he said. <h3>The vulnerability of midsize carriers </h3>For example, would Japan ever allow Ocean Network Express (ONE), which consolidated its three largest ocean carriers in 2017, to be merged into a larger combined carrier? As important as the trade-dependent nation views shipping, some believe ONE is sub-scale in the current environment, a point that could apply to several other Asian carriers. A deal to privatize South Korea’s HMM <a href="https://www.joc.com/article/hmms-48-billion-share-sale-is-scrapped-over-management-control-issue-5215009">collapsed in 2024</a> but could one day be revived. “Assume in the next three to five years the industry, which has an unprecedented order book of 35% of the global existing fleet, enters a downturn,” van Trooijen said. “There must be a moment where the 1-2 million TEU players start asking themselves, ‘where do we see ourselves 10 years from now?’” The record 35% order book as a percentage of the existing fleet by itself illustrates top carriers’ aggressive pursuit of scale. As of December, the top 10 carriers controlled 79% of the order book, although the actual figure is likely near 85% when expected long-term charters are figured in, according to Alphaliner chief analyst Jan Tiedemann. Under its “2030 Strategy” unveiled in 2024, ONE aims to increase its capacity to 3 million TEUs, a 42% increase from its current fleet size. In March, <a href="https://www.joc.com/article/one-boosts-ownership-stake-in-seaspan-parent-poseidon-6184045">it increased its stake to 48.9% in the parent company of Seaspan</a>, the largest non-operating owner of container ships. HMM in its own 2030 strategy plan also aims to double its fleet size. Increasing the vulnerability of midsize carriers is the possibility the alliances they participate in break up, leaving them at the mercy of larger carriers to expand market coverage beyond what their own fleet capacity can provide. “Hapag-Lloyd leaving its prior alliance to join up with Maersk shows you can’t always depend on stable alliances,” van Trooijen said, observing an emerging disconnect between smaller carriers’ aggressive vessel orders in pursuit of scale and their underlying commercial ability to fill the ships. “In other words [in the event their alliance breaks up], the smaller players run the risk of being left out in the cold where they have big ships but don’t have scale to support that,” he added. “That could very well happen.” <h3>Carriers in good position to withstand downturn </h3>That is further reason why the Hapag/Zim deal, coming at a time when carriers remain flush with cash from the pandemic and thus, according to some, are well-prepared to weather any downturn associated with the high order book, may represent a turning point. “When we look at the industry and when we look at this downturn which we are talking about, I think the industry is very well-prepared,” S&amp;P Global analyst Rahul Kapoor told TPM26 in March. Indeed, according to Alix Partners, the Hapag/Zim deal was announced amid a strong financial phase for the industry, a change from the prior consolidation wave culminating in 2016 and 2017 when the industry was on much shakier ground financially, illustrated by the Hanjin bankruptcy in August 2016. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="6f095f56-8498-498c-b802-0e167eafd666"></dynamic-object></div>For the container shipping industry, Alix’s “Altman Z” score, which measures the likelihood of bankruptcy (the lower the number, the greater the risk), was 1.19 in 2016. That was the year of the Hanjin bankruptcy, the Cosco/China Shipping merger, CMA CGM’s acquisition of APL, Maersk announcing plans to buy Hamburg Sud, and key milestones in the Hapag-Lloyd/United Arab Shipping merger that was finalized in 2017. By 2025, it was more than twice as high, indicating much greater financial health, the Alix data shows. Van Trooijen believes there exists a window for carriers to engage in consolidation deals while they are financially robust in order to address the structural inequities before they become increasingly apparent As he <a href="https://www.joc.com/article/in-wake-of-zim-deal-the-time-for-industry-consolidation-is-now-6179297">wrote on JOC.com recently</a>: “The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Could another round of container shipping consolidation be approaching? Hapag-Lloyd’s planned $4.2 billion acquisition of Zim Integrated Shipping Services, announced in February, shows a growing appetite among carriers for scale, including through consolidation, despite the lack of financial hardship that drove earlier rounds of industry mergers and aquisitions. The risk of falling behind is acute. No. 1 carrier Mediterranean Shipping Co., at 21.6% of the global fleet by capacity following a massive expansion since the pandemic, is now more than three times the size of No. 5 Hapag-Lloyd and No. 6 Ocean Network Express (ONE), according to Alphaliner rankings. MSC has accounted for 33.6% of total container carrier fleet growth since 2000, according to the analyst. As a result, midsize carriers — even those firmly within the top 10 — are realizing the urgency of building scale to remain competitive with the top carriers, pursuing that goal by aggressively acquiring tonnage and potentially considering the possibility of once unthinkable M&A. “With post-COVID and the outsized profits from that time period, you are seeing carriers focus on a ‘core’ or ‘integrator’ strategy, but in both cases, scale is still key,” Brian Nemeth, global co-leader of logistics and transportation at Alix Partners, told the Journal of Commerce. A “core” strategy would be a focus on ocean shipping and terminals while “integrator” refers to end-to-end activities including origin consolidation, warehousing, last-mile and visibility. With fewer large carriers remaining — the top 10 control more than 85% percent of the fleet today versus 48% in 1996, according to analyst Lars Jensen — merger opportunities are harder to find, although any further deals would continue a longstanding industry trend. “The liner shipping industry has seen a persistent drive towards consolidation for more than 30 years,” Jensen wrote in his book Liner Shipping 2025, published in 2017. While the Zim deal still requires approvals from the Israeli government, the fact Hapag-Lloyd was able to overcome national security and other obstacles in signing the merger agreement shows that deals some might have regarded as impossible may in fact be within reach. “I was somewhat surprised that Zim would do a deal like Hapag, for many reasons including cultural differences, but also from the point of view of Israeli national security,” consultant and former senior Maersk executive Robbert van Trooijen told the Journal of Commerce. “The fact they found a solution to this, assuming [the deal closes], they have proven there are solutions to be found,” he said. The vulnerability of midsize carriers For example, would Japan ever allow Ocean Network Express (ONE), which consolidated its three largest ocean carriers in 2017, to be merged into a larger combined carrier? As important as the trade-dependent nation views shipping, some believe ONE is sub-scale in the current environment, a point that could apply to several other Asian carriers. A deal to privatize South Korea’s HMM collapsed in 2024 but could one day be revived. “Assume in the next three to five years the industry, which has an unprecedented order book of 35% of the global existing fleet, enters a downturn,” van Trooijen said. “There must be a moment where the 1-2 million TEU players start asking themselves, ‘where do we see ourselves 10 years from now?’” The record 35% order book as a percentage of the existing fleet by itself illustrates top carriers’ aggressive pursuit of scale. As of December, the top 10 carriers controlled 79% of the order book, although the actual figure is likely near 85% when expected long-term charters are figured in, according to Alphaliner chief analyst Jan Tiedemann. Under its “2030 Strategy” unveiled in 2024, ONE aims to increase its capacity to 3 million TEUs, a 42% increase from its current fleet size. In March, it increased its stake to 48.9% in the parent company of Seaspan , the largest non-operating owner of container ships. HMM in its own 2030 strategy plan also aims to double its fleet size. Increasing the vulnerability of midsize carriers is the possibility the alliances they participate in break up, leaving them at the mercy of larger carriers to expand market coverage beyond what their own fleet capacity can provide. “Hapag-Lloyd leaving its prior alliance to join up with Maersk shows you can’t always depend on stable alliances,” van Trooijen said, observing an emerging disconnect between smaller carriers’ aggressive vessel orders in pursuit of scale and their underlying commercial ability to fill the ships. “In other words [in the event their alliance breaks up], the smaller players run the risk of being left out in the cold where they have big ships but don’t have scale to support that,” he added. “That could very well happen.” Carriers in good position to withstand downturn That is further reason why the Hapag/Zim deal, coming at a time when carriers remain flush with cash from the pandemic and thus, according to some, are well-prepared to weather any downturn associated with the high order book, may represent a turning point. “When we look at the industry and when we look at this downturn which we are talking about, I think the industry is very well-prepared,” S&P Global analyst Rahul Kapoor told TPM26 in March. Indeed, according to Alix Partners, the Hapag/Zim deal was announced amid a strong financial phase for the industry, a change from the prior consolidation wave culminating in 2016 and 2017 when the industry was on much shakier ground financially, illustrated by the Hanjin bankruptcy in August 2016. For the container shipping industry, Alix’s “Altman Z” score, which measures the likelihood of bankruptcy (the lower the number, the greater the risk), was 1.19 in 2016. That was the year of the Hanjin bankruptcy, the Cosco/China Shipping merger, CMA CGM’s acquisition of APL, Maersk announcing plans to buy Hamburg Sud, and key milestones in the Hapag-Lloyd/United Arab Shipping merger that was finalized in 2017. By 2025, it was more than twice as high, indicating much greater financial health, the Alix data shows. Van Trooijen believes there exists a window for carriers to engage in consolidation deals while they are financially robust in order to address the structural inequities before they become increasingly apparent As he wrote on JOC.com recently : “The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Hapag-Zim deal could ignite another merger wave in container shipping

<div class="phx-topic abstract-wrapper">Prices have more than doubled since the war started, and with fuel comprising almost 30% of operating expenses, the Hong Kong-based carrier has been forced to reduce capacity.</div>

Prices have more than doubled since the war started, and with fuel comprising almost 30% of operating expenses, the Hong Kong-based carrier has been forced to reduce capacity.

<div class="phx-topic">Cathay Pacific became the latest carrier to announce flight cuts and hikes in fuel surcharges in response to sky-high jet fuel prices that threaten to erase profitability on some routes. The Hong Kong-based airline, one of the world’s largest cargo carriers, will reduce capacity by at least 2% from mid-May to the end of June, joining United Airlines, Air India, Air New Zealand, Delta Airlines, and Vietnam Airways in trimming services to reduce fuel costs that typically comprise almost 30% of an airline’s operating cost. The price of jet fuel has surged since the Middle East war began on Feb. 28. According to the International Air Transport Association (IATA), the average jet fuel price in Asia and Oceania in the week ending April 10 was $217.34 per barrel, increasing from $99.40/b in the week ending Feb. 27. “In the past month, we have pursued every suitable means to keep our flights operating as normal ... this includes adjusting the fuel surcharges in an attempt to mitigate the surge in jet fuel prices,” Cathay Pacific said in a statement Saturday. “Despite our best efforts, the measures we have taken to mitigate the heightened fuel costs have not been enough.” The Cathay Pacific cuts will involve regional flights and some to Australia, South Asia and South Africa. The carrier has also extended the suspension of flights to Dubai and Riyadh until June 30 “in view of the ongoing situation in the Middle East.” Asia sources most of its jet fuel supply from the Persian Gulf, and airports in the region have been particularly hard hit by the closure of the Strait of Hormuz. Supply shortages have caused Vietnam Airlines to cancel 20% of its flights, while Korean Air said it has tightened internal cost-cutting measures and moved into “emergency management mode.” <h3>Fuel surcharges shoot higher </h3>Cost pressures on airlines are being amplified by sharp increases in pricing components across specific routes, according to consultancy Drewry. Fuel surcharges from Singapore to London jumped by as much as 290% in March compared with the previous month, while security surcharges rose 44% month over month on shipments from Dubai and Abu Dhabi to Amsterdam. A similar trend is emerging on India-Europe routes, where March all-in rates from Mumbai and Delhi to Madrid rose by an average of 27% in March, with a 21% surge in fuel surcharges. “The air freight market has been dealt a two-fold blow of reduced effective available capacity and increased fuel costs,” said Philip Damas, head of Drewry’s logistics practice. “About one-half of the international airfreight routes monitored by Drewry have witnessed a month-over-month price increase of 20% or greater in March 2026.” About 30% of Asia-Europe air cargo was typically routed through Middle East hubs before the war began, mostly via Dubai and Abu Dhabi in the UAE and Doha in Qatar. Carriers based in those airports are among the world’s largest air freight operators — Qatar Airways is the world’s number three air cargo carrier, Emirates Skycargo is fourth, and Etihad is number 17. A significant volume of air freight also flows through Bahrain and Kuwait. Frederic Horst, managing director of Sydney-based Trade and Transport Group, said Kuwait and Bahrain would usually see about 300 and 240 flights a day, respectively, but in the last month the average has been two a day. “Overall, the main Gulf-facing airports are handling about 32% to 35% of their usual flights,” he said. “UAE airports are higher at about 34% to 38% and flight activity is primarily driven by home-base carriers.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Cathay Pacific became the latest carrier to announce flight cuts and hikes in fuel surcharges in response to sky-high jet fuel prices that threaten to erase profitability on some routes. The Hong Kong-based airline, one of the world’s largest cargo carriers, will reduce capacity by at least 2% from mid-May to the end of June, joining United Airlines, Air India, Air New Zealand, Delta Airlines, and Vietnam Airways in trimming services to reduce fuel costs that typically comprise almost 30% of an airline’s operating cost. The price of jet fuel has surged since the Middle East war began on Feb. 28. According to the International Air Transport Association (IATA), the average jet fuel price in Asia and Oceania in the week ending April 10 was $217.34 per barrel, increasing from $99.40/b in the week ending Feb. 27. “In the past month, we have pursued every suitable means to keep our flights operating as normal ... this includes adjusting the fuel surcharges in an attempt to mitigate the surge in jet fuel prices,” Cathay Pacific said in a statement Saturday. “Despite our best efforts, the measures we have taken to mitigate the heightened fuel costs have not been enough.” The Cathay Pacific cuts will involve regional flights and some to Australia, South Asia and South Africa. The carrier has also extended the suspension of flights to Dubai and Riyadh until June 30 “in view of the ongoing situation in the Middle East.” Asia sources most of its jet fuel supply from the Persian Gulf, and airports in the region have been particularly hard hit by the closure of the Strait of Hormuz. Supply shortages have caused Vietnam Airlines to cancel 20% of its flights, while Korean Air said it has tightened internal cost-cutting measures and moved into “emergency management mode.” Fuel surcharges shoot higher Cost pressures on airlines are being amplified by sharp increases in pricing components across specific routes, according to consultancy Drewry. Fuel surcharges from Singapore to London jumped by as much as 290% in March compared with the previous month, while security surcharges rose 44% month over month on shipments from Dubai and Abu Dhabi to Amsterdam. A similar trend is emerging on India-Europe routes, where March all-in rates from Mumbai and Delhi to Madrid rose by an average of 27% in March, with a 21% surge in fuel surcharges. “The air freight market has been dealt a two-fold blow of reduced effective available capacity and increased fuel costs,” said Philip Damas, head of Drewry’s logistics practice. “About one-half of the international airfreight routes monitored by Drewry have witnessed a month-over-month price increase of 20% or greater in March 2026.” About 30% of Asia-Europe air cargo was typically routed through Middle East hubs before the war began, mostly via Dubai and Abu Dhabi in the UAE and Doha in Qatar. Carriers based in those airports are among the world’s largest air freight operators — Qatar Airways is the world’s number three air cargo carrier, Emirates Skycargo is fourth, and Etihad is number 17. A significant volume of air freight also flows through Bahrain and Kuwait. Frederic Horst, managing director of Sydney-based Trade and Transport Group, said Kuwait and Bahrain would usually see about 300 and 240 flights a day, respectively, but in the last month the average has been two a day. “Overall, the main Gulf-facing airports are handling about 32% to 35% of their usual flights,” he said. “UAE airports are higher at about 34% to 38% and flight activity is primarily driven by home-base carriers.” Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Carriers News

Air Cargo

Cathay Pacific cuts flights as soaring jet fuel prices hit operating costs

<div class="phx-topic abstract-wrapper">The railroads say they plan to file an updated merger application on April 30, addressing many of the complaints that caused regulators to deem their original application “incomplete.”</div>

The railroads say they plan to file an updated merger application on April 30, addressing many of the complaints that caused regulators to deem their original application “incomplete.”

<div class="phx-topic">Newport, Rhode Island — Union Pacific Railroad (UP) and Norfolk Southern Railway (NS) say an updated merger application they plan to file with US regulators on April 30 will include revised forecasts on truck-to-rail conversions, clearer explanations of key proposals, and specific changes aimed at addressing critics of the deal. Executives from the two railroads, speaking Thursday at the North East Association of Rail Shippers (NEARS) Conference, said they’ve received traffic data from competitors BNSF Railway, Canadian National, Canadian Pacific Kansas City and CSX Transportation through a reciprocal discovery process. The data was not included in the original merger application that was <a href="https://www.joc.com/article/stb-rejects-up-ns-merger-application-as-incomplete-6154074">deemed “incomplete” by the US Surface Transportation Board (STB) in mid-January</a>. UP and NS believe the revised filing will convince regulators that combining the rail networks to create the US’ first transcontinental railroad would enhance competition and pull traffic off US highways. “We’ve now gone back, we’ve redone that work with 100% of the carload [volume] files from all the railroads,” Todd Rynaski, UP’s senior vice president of strategy, said at the NEARS event. “All of that work landed us about at the same spot, although [with a] little bit of shift between intermodal and carload [forecasts]. We feel very confident in the initial thesis.” In the original application, UP and NS forecast 2 million overall conversions to rail, including 1.17 million truckload conversions to intermodal. <h3>‘Committed Gateway Pricing’ </h3>Mike McClellan, chief strategy officer for NS, said the updated filing will better explain what the railroads call “Committed Gateway Pricing.” The program would give CSX Transportation and BNSF preset rates for traffic moving over a combined UP-NS network, allowing those railroads to quote a single end-to-end price more quickly to shippers. It would apply only to manifest carload freight, not intermodal. The railroads say the aim is to generate instant rate quotes and make rail more competitive with trucking. “We're going to spend a lot more time, really one-on-one, with the participating railroads and the shippers, especially, to make sure that they fully understand what it is, how it works, and the benefits,” McClellan said at the conference. “That was probably the most misunderstood part of the [original] application.” <h3>Addressing St. Louis </h3>UP and NS also said the revised application will clarify their plans for the Terminal Railroad Association (TRRA) of St. Louis, the switching railroad jointly owned by five of the six North American Class I railroads that helps move freight through the city. Instead of each railroad managing its own traffic in St. Louis, the TRRA receives railcars and then organizes trains to cross the Mississippi River and handoff to other Class I railroads. The arrangement is intended to keep traffic flowing safely and in an orderly fashion through a major interchange location. Under the proposed transaction, Union Pacific would inherit Norfolk Southern’s stake and gain a majority of seats on the TRRA board of directors. CSX has argued that Union Pacific could use that position to influence access and pricing across the river. The STB agreed that the issue raised significant enough competitive concerns to classify the TRRA stake proposal as a “major transaction” and that the original application understated the competitive risks in St. Louis. “We do not intend to ever control the TRRA, and we’ve got that outlined explicitly in the revised application,” Rynaski said. <h3>Meridian Speedway solution requires cash </h3>Although the STB declined to <a href="https://www.joc.com/article/stb-declines-to-intervene-on-meridian-speedway-dispute-6187000">intercede in a dispute over the Meridian Speedway</a>, there is a growing understanding that the issue must be resolved for the merger transaction to yield the rewards detailed in the application. The dispute centers around a 300-mile stretch of track between Shreveport, Louisiana, and Meridian, Mississippi, that is critical for UP and NS to connect Southern California to the US Southeast. Canadian Pacific Kansas City (CPKC), which operates the Meridian joint venture with Norfolk Southern, has enforced an 8,500-foot train length limit based on siding capacity, rejecting efforts by UP and NS to run 11,000-foot trains. CPKC owns a majority stake in the joint venture, so it dictates the rules. UP has complained that containers take too long to cross the Meridian Speedway because of the restrictions. The original application, however, envisioned 11,000-foot trains moving between the West Coast and Atlanta, Charlotte and Jacksonville despite CPKC’s current restriction. McClellan described Norfolk Southern’s relationship with CPKC as “wobbly,” but said he expects UP, NS, and CPKC to reach a solution on Meridian, likely by extending several sidings along the route to handle longer trains. “Over time, I’m sure, we’ll have a very constructive conversation with [CPKC] to put money in the ground to make these issues go away,” he said. Contact Ari Ashe at <a href="ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Newport, Rhode Island — Union Pacific Railroad (UP) and Norfolk Southern Railway (NS) say an updated merger application they plan to file with US regulators on April 30 will include revised forecasts on truck-to-rail conversions, clearer explanations of key proposals, and specific changes aimed at addressing critics of the deal. Executives from the two railroads, speaking Thursday at the North East Association of Rail Shippers (NEARS) Conference, said they’ve received traffic data from competitors BNSF Railway, Canadian National, Canadian Pacific Kansas City and CSX Transportation through a reciprocal discovery process. The data was not included in the original merger application that was deemed “incomplete” by the US Surface Transportation Board (STB) in mid-January . UP and NS believe the revised filing will convince regulators that combining the rail networks to create the US’ first transcontinental railroad would enhance competition and pull traffic off US highways. “We’ve now gone back, we’ve redone that work with 100% of the carload [volume] files from all the railroads,” Todd Rynaski, UP’s senior vice president of strategy, said at the NEARS event. “All of that work landed us about at the same spot, although [with a] little bit of shift between intermodal and carload [forecasts]. We feel very confident in the initial thesis.” In the original application, UP and NS forecast 2 million overall conversions to rail, including 1.17 million truckload conversions to intermodal. ‘Committed Gateway Pricing’ Mike McClellan, chief strategy officer for NS, said the updated filing will better explain what the railroads call “Committed Gateway Pricing.” The program would give CSX Transportation and BNSF preset rates for traffic moving over a combined UP-NS network, allowing those railroads to quote a single end-to-end price more quickly to shippers. It would apply only to manifest carload freight, not intermodal. The railroads say the aim is to generate instant rate quotes and make rail more competitive with trucking. “We're going to spend a lot more time, really one-on-one, with the participating railroads and the shippers, especially, to make sure that they fully understand what it is, how it works, and the benefits,” McClellan said at the conference. “That was probably the most misunderstood part of the [original] application.” Addressing St. Louis UP and NS also said the revised application will clarify their plans for the Terminal Railroad Association (TRRA) of St. Louis, the switching railroad jointly owned by five of the six North American Class I railroads that helps move freight through the city. Instead of each railroad managing its own traffic in St. Louis, the TRRA receives railcars and then organizes trains to cross the Mississippi River and handoff to other Class I railroads. The arrangement is intended to keep traffic flowing safely and in an orderly fashion through a major interchange location. Under the proposed transaction, Union Pacific would inherit Norfolk Southern’s stake and gain a majority of seats on the TRRA board of directors. CSX has argued that Union Pacific could use that position to influence access and pricing across the river. The STB agreed that the issue raised significant enough competitive concerns to classify the TRRA stake proposal as a “major transaction” and that the original application understated the competitive risks in St. Louis. “We do not intend to ever control the TRRA, and we’ve got that outlined explicitly in the revised application,” Rynaski said. Meridian Speedway solution requires cash Although the STB declined to intercede in a dispute over the Meridian Speedway , there is a growing understanding that the issue must be resolved for the merger transaction to yield the rewards detailed in the application. The dispute centers around a 300-mile stretch of track between Shreveport, Louisiana, and Meridian, Mississippi, that is critical for UP and NS to connect Southern California to the US Southeast. Canadian Pacific Kansas City (CPKC), which operates the Meridian joint venture with Norfolk Southern, has enforced an 8,500-foot train length limit based on siding capacity, rejecting efforts by UP and NS to run 11,000-foot trains. CPKC owns a majority stake in the joint venture, so it dictates the rules. UP has complained that containers take too long to cross the Meridian Speedway because of the restrictions. The original application, however, envisioned 11,000-foot trains moving between the West Coast and Atlanta, Charlotte and Jacksonville despite CPKC’s current restriction. McClellan described Norfolk Southern’s relationship with CPKC as “wobbly,” but said he expects UP, NS, and CPKC to reach a solution on Meridian, likely by extending several sidings along the route to handle longer trains. “Over time, I’m sure, we’ll have a very constructive conversation with [CPKC] to put money in the ground to make these issues go away,” he said. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Surface

North-American rail

Intermodal providers

Revised UP-NS merger application will address deficiencies, critics concerns

<div class="phx-topic abstract-wrapper">As if the Strait of Hormuz and Red Sea haven’t caused enough concern for commercial shipping, Lars Jensen warns of the potential for weather-related disruptions once again at the canal by year-end. </div>

As if the Strait of Hormuz and Red Sea haven’t caused enough concern for commercial shipping, Lars Jensen warns of the potential for weather-related disruptions once again at the canal by year-end.

<div class="phx-topic">The entire shipping industry, and most certainly shippers needing to get cargo moved, is yearning for some semblance of stability and predictability to return. If this is the message you are seeking, you should not read further. While all eyes are on the Strait of Hormuz as well as the Red Sea crisis and their inevitable domino effects, it is prudent to look deeper into another potential issue: the Panama Canal. No, not from the geopolitical perspective where Panama is presently squeezed between US and Chinese interests. That is an uncertainty unto itself. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6202588_0.1.jpg"></img></div>The US National Oceanic and Atmospheric Administration (NOAA) issues a monthly outlook for the El Niño/La Niña weather phenomenon. These are shifting weather patterns occurring in the Pacific, and among the many effects driven by the weather pattern is an impact on rainfall in Panama. When we have the El Niño pattern, this can lead to reduced rainfall in Panama, which in turn impacts the water level in Lake Gatun in central Panama. This is the water basin used to operate the locks in the Panama Canal. If the water level drops too far, it leads to restrictions on vessels being able to transit the Panama Canal. The water level in Lake Gatun generally varies between 85 and 88 feet. The latest El Niño was in 2023–24, and it was categorized as “strong.” This led to Lake Gatun water levels dropping to 79.2 feet, which was the third-lowest recorded since 1965, when measurements began. As many might remember from two years ago, this resulted in significant capacity restrictions on shipping through the Panama Canal. We saw a “weak” El Niño in 2018–20. (Note that “weak,” “strong,” etc. are the official designations placed on each El Niño by NOAA depending on intensity). Here we also saw Lake Gatun drop below 80 feet, although for a considerably shorter period than in 2023–24. The one before that was a “very strong” El Niño in 2015–16 that had water levels drop almost to 78 feet, the lowest level ever recorded. There were five “weak” or “moderate” El Niño periods from 1999 to 2015, all with limited impact on the canal water level. Prior to that, 1997–98 was a “very strong” El Niño, leading to water levels dropping to 78.5 feet, the second-lowest ever recorded. The historical data is quite clear. A “strong” or “very strong” El Niño tends to result in a significant decline in Lake Gatun water levels. A weaker El Niño might at times do that, but usually not. <h3>Shippers should begin planning </h3>On Thursday, the outlook from NOAA noted a 61% chance of El Niño emerging this May–July and persisting at least until the end of 2026. NOAA also predicted a 51% chance by year-end that it will be either “strong” or “very strong,” with equal risk between the two. This means that based on the current weather models, there is essentially a 50/50 risk that by the end of the year we will have an El Niño pattern of a magnitude that historically has a high likelihood of significantly reducing the water levels in Lake Gatun. And with this comes the risk of renewed, albeit temporary, capacity restrictions through the canal. Weather and climate forecasts are, by nature, probabilistic, and no one can give a certain prediction. Instead, shippers depending on cargo flows through the Panama Canal might at this time contemplate whether this 50/50 risk should be ignored, be used as a reason for planning contingency measures or be used to look at possible changes to the current supply chain setup. Lars Jensen is CEO and partner at Vespucci Maritime. Contact him at <a href="mailto:lars.jensen@vespucci-maritime.com">lars.jensen@vespucci-maritime.com</a>. </div>

The entire shipping industry, and most certainly shippers needing to get cargo moved, is yearning for some semblance of stability and predictability to return. If this is the message you are seeking, you should not read further. While all eyes are on the Strait of Hormuz as well as the Red Sea crisis and their inevitable domino effects, it is prudent to look deeper into another potential issue: the Panama Canal. No, not from the geopolitical perspective where Panama is presently squeezed between US and Chinese interests. That is an uncertainty unto itself. The US National Oceanic and Atmospheric Administration (NOAA) issues a monthly outlook for the El Niño/La Niña weather phenomenon. These are shifting weather patterns occurring in the Pacific, and among the many effects driven by the weather pattern is an impact on rainfall in Panama. When we have the El Niño pattern, this can lead to reduced rainfall in Panama, which in turn impacts the water level in Lake Gatun in central Panama. This is the water basin used to operate the locks in the Panama Canal. If the water level drops too far, it leads to restrictions on vessels being able to transit the Panama Canal. The water level in Lake Gatun generally varies between 85 and 88 feet. The latest El Niño was in 2023–24, and it was categorized as “strong.” This led to Lake Gatun water levels dropping to 79.2 feet, which was the third-lowest recorded since 1965, when measurements began. As many might remember from two years ago, this resulted in significant capacity restrictions on shipping through the Panama Canal. We saw a “weak” El Niño in 2018–20. (Note that “weak,” “strong,” etc. are the official designations placed on each El Niño by NOAA depending on intensity). Here we also saw Lake Gatun drop below 80 feet, although for a considerably shorter period than in 2023–24. The one before that was a “very strong” El Niño in 2015–16 that had water levels drop almost to 78 feet, the lowest level ever recorded. There were five “weak” or “moderate” El Niño periods from 1999 to 2015, all with limited impact on the canal water level. Prior to that, 1997–98 was a “very strong” El Niño, leading to water levels dropping to 78.5 feet, the second-lowest ever recorded. The historical data is quite clear. A “strong” or “very strong” El Niño tends to result in a significant decline in Lake Gatun water levels. A weaker El Niño might at times do that, but usually not. Shippers should begin planning On Thursday, the outlook from NOAA noted a 61% chance of El Niño emerging this May–July and persisting at least until the end of 2026. NOAA also predicted a 51% chance by year-end that it will be either “strong” or “very strong,” with equal risk between the two. This means that based on the current weather models, there is essentially a 50/50 risk that by the end of the year we will have an El Niño pattern of a magnitude that historically has a high likelihood of significantly reducing the water levels in Lake Gatun. And with this comes the risk of renewed, albeit temporary, capacity restrictions through the canal. Weather and climate forecasts are, by nature, probabilistic, and no one can give a certain prediction. Instead, shippers depending on cargo flows through the Panama Canal might at this time contemplate whether this 50/50 risk should be ignored, be used as a reason for planning contingency measures or be used to look at possible changes to the current supply chain setup. Lars Jensen is CEO and partner at Vespucci Maritime. Contact him at lars.jensen@vespucci-maritime.com .

El Niño forecast suggests risk of low water levels along Panama Canal

<div class="phx-topic abstract-wrapper">GLP-1 weight loss drugs are the most visible example of a force reshaping freight that supply chains weren’t built to detect, writes Paul Tonsager. </div>

GLP-1 weight loss drugs are the most visible example of a force reshaping freight that supply chains weren’t built to detect, writes Paul Tonsager.

<div class="phx-topic">Plus-size apparel is contracting. The numbers are in the earnings calls — store closures accelerating, revenues declining, and CEOs attributing the cause directly to GLP-1 weight loss medications. Approximately 25% of customers at major plus-size retailers are actively losing weight and deferring purchases until they reach their goal size. For freight operators, the translation is straightforward: fewer container bookings out of Bangladesh, softening elastane import volumes from South Korea and China, rising return flows through apparel distribution centers, and athleisure volume shifting to different origins, different factories, different lanes. That’s the GLP-1 story in freight terms. But the more important question isn’t what GLP-1 does to one commodity flow. It’s what GLP-1 represents — and whether the industry is paying attention to the category it belongs to. <h3>A different kind of demand shift </h3>Supply chains are inference machines. They watch what moved last season and build a model of what will move next. Carrier contracts, network design, capacity commitments, inventory positioning — all of them are calibrated to demand cycles that move in human decision-time. A trend emerges. Shippers respond. Freight adjusts. That’s the model. GLP-1 doesn’t fit the model. The consumer isn’t choosing differently based on preference. Their body is changing on a pharmaceutical timeline with no seasonal pattern and no historical precedent in any demand planning system. The signal isn’t coming from the market. It’s coming from a lab. That’s the category: structural demand shifts originating outside the market. And GLP-1 is not the only one in play. <h3>The pattern repeating </h3>The electric vehicle transition is doing to auto parts freight what GLP-1 is doing to apparel — but slower and at far larger scale. An internal combustion vehicle contains approximately 30,000 parts. An EV eliminates approximately 10,000 of them. Transmissions, exhaust systems, fuel injectors — the freight lanes serving these components are in structural decline. The lanes serving battery materials — lithium, cobalt, copper — are being built in real time, often on entirely different corridors with different modal requirements. Carriers and third-party logistics providers (3PLs) who built capacity around internal combustion engine component flows are holding assets against a demand base that is shrinking by design. Food and beverage may be the next GLP-1 impact larger than apparel. If 23% of US households are on these medications — up four points in a single year, according to Circana — and consuming meaningfully fewer calories, the freight infrastructure built around the old consumption baseline is exposed. Bulk grain movements, refrigerated less-than-truckload networks, warehouse footprint, replenishment frequency — all sized to a caloric demand curve that is quietly bending downward. The volume impact hasn’t fully materialized. It will. Remote work ran the same playbook earlier this decade. Office-bound freight flows — commercial furniture, facilities supplies, workplace technology, food service — didn’t disappear. They redistributed to suburbs and residential addresses in patterns that no demand planning model had anticipated. Last-mile density assumptions broke. The signal came from a public health event, not a consumer preference survey. <h3>What the industry is missing </h3>The common thread isn’t the specific force — pharmaceutical, technological, epidemiological. It’s the origin. These signals don’t come from the market. They come from labs, legislatures and external shocks. Freight networks optimized to read market signals — booking velocity, tender acceptance, seasonal lift — are structurally late to detect them. GLP-1 is the most legible example yet because it has a drug name, a measurable penetration curve, and identifiable freight consequences already showing up in origin mix and return volumes. That clarity is unusual. Most structural demand shifts are harder to see until capacity is misaligned, contracts don’t match the freight, and the repositioning cost is already real. The operators who outperform in the next decade won’t necessarily be the ones who move the most freight. They’ll be the ones who developed the capability to read demand signals that don’t originate in the market — and built network flexibility before the curve arrived. GLP-1 is the canary. The question is whether the industry treats it as a one-time anomaly or as a preview of the operating environment it now lives in. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals &amp; Switches newsletter on freight strategy at aet1998.substack.com. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

Plus-size apparel is contracting. The numbers are in the earnings calls — store closures accelerating, revenues declining, and CEOs attributing the cause directly to GLP-1 weight loss medications. Approximately 25% of customers at major plus-size retailers are actively losing weight and deferring purchases until they reach their goal size. For freight operators, the translation is straightforward: fewer container bookings out of Bangladesh, softening elastane import volumes from South Korea and China, rising return flows through apparel distribution centers, and athleisure volume shifting to different origins, different factories, different lanes. That’s the GLP-1 story in freight terms. But the more important question isn’t what GLP-1 does to one commodity flow. It’s what GLP-1 represents — and whether the industry is paying attention to the category it belongs to. A different kind of demand shift Supply chains are inference machines. They watch what moved last season and build a model of what will move next. Carrier contracts, network design, capacity commitments, inventory positioning — all of them are calibrated to demand cycles that move in human decision-time. A trend emerges. Shippers respond. Freight adjusts. That’s the model. GLP-1 doesn’t fit the model. The consumer isn’t choosing differently based on preference. Their body is changing on a pharmaceutical timeline with no seasonal pattern and no historical precedent in any demand planning system. The signal isn’t coming from the market. It’s coming from a lab. That’s the category: structural demand shifts originating outside the market. And GLP-1 is not the only one in play. The pattern repeating The electric vehicle transition is doing to auto parts freight what GLP-1 is doing to apparel — but slower and at far larger scale. An internal combustion vehicle contains approximately 30,000 parts. An EV eliminates approximately 10,000 of them. Transmissions, exhaust systems, fuel injectors — the freight lanes serving these components are in structural decline. The lanes serving battery materials — lithium, cobalt, copper — are being built in real time, often on entirely different corridors with different modal requirements. Carriers and third-party logistics providers (3PLs) who built capacity around internal combustion engine component flows are holding assets against a demand base that is shrinking by design. Food and beverage may be the next GLP-1 impact larger than apparel. If 23% of US households are on these medications — up four points in a single year, according to Circana — and consuming meaningfully fewer calories, the freight infrastructure built around the old consumption baseline is exposed. Bulk grain movements, refrigerated less-than-truckload networks, warehouse footprint, replenishment frequency — all sized to a caloric demand curve that is quietly bending downward. The volume impact hasn’t fully materialized. It will. Remote work ran the same playbook earlier this decade. Office-bound freight flows — commercial furniture, facilities supplies, workplace technology, food service — didn’t disappear. They redistributed to suburbs and residential addresses in patterns that no demand planning model had anticipated. Last-mile density assumptions broke. The signal came from a public health event, not a consumer preference survey. What the industry is missing The common thread isn’t the specific force — pharmaceutical, technological, epidemiological. It’s the origin. These signals don’t come from the market. They come from labs, legislatures and external shocks. Freight networks optimized to read market signals — booking velocity, tender acceptance, seasonal lift — are structurally late to detect them. GLP-1 is the most legible example yet because it has a drug name, a measurable penetration curve, and identifiable freight consequences already showing up in origin mix and return volumes. That clarity is unusual. Most structural demand shifts are harder to see until capacity is misaligned, contracts don’t match the freight, and the repositioning cost is already real. The operators who outperform in the next decade won’t necessarily be the ones who move the most freight. They’ll be the ones who developed the capability to read demand signals that don’t originate in the market — and built network flexibility before the curve arrived. GLP-1 is the canary. The question is whether the industry treats it as a one-time anomaly or as a preview of the operating environment it now lives in. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals & Switches newsletter on freight strategy at aet1998.substack.com. Contact him at paul.tonsager@multimodalsolutions.io .

When the demand signal comes from outside the market

<div class="phx-topic abstract-wrapper">Southern California’s traditional solutions to surging freight volumes ignore the fact that they might well have reached the limits of being effective, writes Ted Prince.</div>

Southern California’s traditional solutions to surging freight volumes ignore the fact that they might well have reached the limits of being effective, writes Ted Prince.

<div class="phx-topic">The Journal of Commerce’s TPM conference has completed another big show in Long Beach. And while most attendees were living with the lingering impacts of the Trump administration’s tariff policy, we were all faced with the added geopolitical suspense brought about by the US and Israeli strikes on Iran that commenced as TPM attendees arrived. While this drama played out, I thought back to Michelle Phillips of the Mamas and the Papas eating a banana during a 1967 performance of “California Dreamin’” on the Ed Sullivan Show. This was to protest the band being forced to lip-sync rather than perform live. Just as the protest distracted from the singing, war and tariffs effectively blocked out any consideration of how California is planning to handle current volumes, let alone a doubling by 2050. Traditionally, this has meant bemoaning California’s “socialist state” — albeit with the fourth- or fifth-largest economy in the world. There is no shortage of issues. California Air Resources Board (CARB) rules on advanced clean trucks and advanced clean fleets impact freight transportation by mandating a transition to zero-emission trucks over time. These are on top of previous diesel tractor emission and “clean” diesel truck regulations. CARB has also adopted policies to reduce emissions from marine terminals and at-berth ship emissions. In addition, the harbor drayage community continues to deal with the AB5 legislation dealing with worker classification. Much like tariffs, all of these are subject to conflicting interpretations with the federal government. And, on a global level, confusion reigns over the International Maritime Organization’s net-zero framework. But the list of greatest hits being lip-synched is much larger. Let’s roll the tape. <h3>Will projects become reality? </h3>The Port of Long Beach continues to talk up its Pier B Rail expansion. But this project doesn’t solve the problem of destination disaggregation. Assembling less-than-fully-loaded stack cars to a plethora of destinations actually cannibalizes double-stack linehaul economics. (This network scope vs. scale issue is also pertinent in the current transcontinental railroad debate.) The Port of Los Angeles has its own multi-billion-dollar long shot — Pier 500. Given its configuration, the most realistic method to handle bigger, next-generation cargo ships is to make it an adjunct to APM Terminals’ Pier 400 — and obviate the need to replicate gates, buildings and on-dock rail. Otherwise, there simply isn’t enough land short of container levitation. The Barstow International Gateway (BIG) is BNSF’s planned inland intermodal and logistics complex. It is still in the environmental review and permitting stage. I am sure that BNSF hopes it progresses better than its current Phoenix project, which is even more ambitious than BIG. BNSF’s need for BIG is no doubt driven by previous Southern California failures: passing on the Intermodal Container Transfer Facility (ICTF) and failing to garner approval for the Southern California Intermodal Gateway (SCIG). Part of BIG’s value proposition is that distribution centers will locate there because traffic will be processed using zero- and near-zero-emission cargo-handling equipment. However, getting new or upgraded electric service in the Inland Empire has proven problematic, so a clear trajectory of electrified warehouse space cannot be assumed. Further north, the Wonderful Logistics Center has a SeaCube Cold Solutions container depot already supporting local refrigerated exporters; however, the planned international rail shuttle linking Shafter to the Port of Los Angeles using BNSF is still under development. Whereas BIG is a many-to-one network, this is more complicated because traffic is not transitive and it is one-to-many. (Pesky car utilization issues again.) Also, refrigerated produce is a much more complicated rail transportation product than dry imports. Meanwhile, the Mojave Inland Port remains a proposed, private development that has not progressed beyond county-level approvals in 2022. Perhaps the issue is that there does not appear to be a sustainable desire to build distribution centers in the middle of a desert. For decades, Southern California has held itself out to be the answer to the impending freight tsunami, yet a focus on more-of-the-same traditional solutions ignores the fact that these might well have reached their limits. Otherwise, the greatest hits lip-synching will continue, and we may be reminded that “banana” can come to stand for “Build Absolutely Nothing Anywhere Near Anything.” In that case, the global supply chain will need to sing a new song. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

The Journal of Commerce’s TPM conference has completed another big show in Long Beach. And while most attendees were living with the lingering impacts of the Trump administration’s tariff policy, we were all faced with the added geopolitical suspense brought about by the US and Israeli strikes on Iran that commenced as TPM attendees arrived. While this drama played out, I thought back to Michelle Phillips of the Mamas and the Papas eating a banana during a 1967 performance of “California Dreamin’” on the Ed Sullivan Show. This was to protest the band being forced to lip-sync rather than perform live. Just as the protest distracted from the singing, war and tariffs effectively blocked out any consideration of how California is planning to handle current volumes, let alone a doubling by 2050. Traditionally, this has meant bemoaning California’s “socialist state” — albeit with the fourth- or fifth-largest economy in the world. There is no shortage of issues. California Air Resources Board (CARB) rules on advanced clean trucks and advanced clean fleets impact freight transportation by mandating a transition to zero-emission trucks over time. These are on top of previous diesel tractor emission and “clean” diesel truck regulations. CARB has also adopted policies to reduce emissions from marine terminals and at-berth ship emissions. In addition, the harbor drayage community continues to deal with the AB5 legislation dealing with worker classification. Much like tariffs, all of these are subject to conflicting interpretations with the federal government. And, on a global level, confusion reigns over the International Maritime Organization’s net-zero framework. But the list of greatest hits being lip-synched is much larger. Let’s roll the tape. Will projects become reality? The Port of Long Beach continues to talk up its Pier B Rail expansion. But this project doesn’t solve the problem of destination disaggregation. Assembling less-than-fully-loaded stack cars to a plethora of destinations actually cannibalizes double-stack linehaul economics. (This network scope vs. scale issue is also pertinent in the current transcontinental railroad debate.) The Port of Los Angeles has its own multi-billion-dollar long shot — Pier 500. Given its configuration, the most realistic method to handle bigger, next-generation cargo ships is to make it an adjunct to APM Terminals’ Pier 400 — and obviate the need to replicate gates, buildings and on-dock rail. Otherwise, there simply isn’t enough land short of container levitation. The Barstow International Gateway (BIG) is BNSF’s planned inland intermodal and logistics complex. It is still in the environmental review and permitting stage. I am sure that BNSF hopes it progresses better than its current Phoenix project, which is even more ambitious than BIG. BNSF’s need for BIG is no doubt driven by previous Southern California failures: passing on the Intermodal Container Transfer Facility (ICTF) and failing to garner approval for the Southern California Intermodal Gateway (SCIG). Part of BIG’s value proposition is that distribution centers will locate there because traffic will be processed using zero- and near-zero-emission cargo-handling equipment. However, getting new or upgraded electric service in the Inland Empire has proven problematic, so a clear trajectory of electrified warehouse space cannot be assumed. Further north, the Wonderful Logistics Center has a SeaCube Cold Solutions container depot already supporting local refrigerated exporters; however, the planned international rail shuttle linking Shafter to the Port of Los Angeles using BNSF is still under development. Whereas BIG is a many-to-one network, this is more complicated because traffic is not transitive and it is one-to-many. (Pesky car utilization issues again.) Also, refrigerated produce is a much more complicated rail transportation product than dry imports. Meanwhile, the Mojave Inland Port remains a proposed, private development that has not progressed beyond county-level approvals in 2022. Perhaps the issue is that there does not appear to be a sustainable desire to build distribution centers in the middle of a desert. For decades, Southern California has held itself out to be the answer to the impending freight tsunami, yet a focus on more-of-the-same traditional solutions ignores the fact that these might well have reached their limits. Otherwise, the greatest hits lip-synching will continue, and we may be reminded that “banana” can come to stand for “Build Absolutely Nothing Anywhere Near Anything.” In that case, the global supply chain will need to sing a new song. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

Are SoCal’s planned freight projects a matter of ‘California Dreamin’’?

Spot Truckload Shipper Rates

Spot Intermodal Shipper Rates

 Intermodal ${valueY.formatNumber('#.##')}

The Journal of Commerce Intermodal Savings Indices (ISIs) measure the average differential between rates for US domestic intermodal rail and truckload service — both spot and contract — across 120 lanes by sending estimates to third-party logistics providers (3PLs) and shippers to review. The estimates include margins and fuel but exclude accessorial charges such as detention, demurrage (storage fees), excessive per diem, lumper fees and other fees. ISI data partners include DAT Freight & Analytics, the International Association of North America (IANA), InTek Freight and Logistics, Loadsmart, and Sunset Transport.

US shipper truckload and domestic intermodal spot rates (JOC)

JOC ISI Spot Market Rates Gateway

<div class="phx-topic abstract-wrapper">It has become difficult, if not impossible, for Los Angeles-Long Beach terminals wishing to automate to gain the necessary approvals from port commissions, despite the terminals’ right to automate being guaranteed since 2008. </div>

It has become difficult, if not impossible, for Los Angeles-Long Beach terminals wishing to automate to gain the necessary approvals from port commissions, despite the terminals’ right to automate being guaranteed since 2008.

<div class="phx-topic">An article of faith for nearly two decades — that marine terminals along the US West Coast have the right to automate and thereby increase capacity despite limited port land to physically expand — is under threat in Southern California. It has become difficult, if not impossible, for terminals wishing to automate to gain the necessary approvals from port commissions to proceed. This is despite the terminals’ right to automate being guaranteed since 2008 in the collective bargaining agreement between the International Longshore and Warehouse Union (ILWU) and employers represented by the Pacific Maritime Association (PMA). <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6199901_0.1.jpg"></img></div>The result of this hesitance means the largest port gateway in North America being denied the easiest route to capacity expansion to mitigate bottlenecks that for years have bogged down flow during periods of surge demand. “It doesn’t matter what is in the contract or who has negotiated what,” said a knowledgeable observer of longshore labor in Southern California. “The ports are not going to agree to any redevelopment that supports automation and goes against the will of the ILWU.” The long-term consequences are limits on effective capacity able to handle US container flows, increasing the potential for bottlenecks and delays given limited new terminal acreage coming online. The roadblocks come despite the known benefits of automation. During the COVID-19 disruptions, throughput at existing automated terminals at the ports of Los Angeles and Long Beach was 44% higher than at nonautomated terminals, <a href="https://www.pmanet.org/fact-sheets/technology-automation/">according to a recent study cited</a> by the PMA. Also, longshore employment rose faster than at nonautomated terminals, countering the union’s argument that automation is a job killer. “Technological advancement, including automation, is essential to maintaining the competitiveness, efficiency and long-term viability of West Coast ports,” the PMA said in a statement to the Journal of Commerce late last week. <h3>The need to work ‘hand-in-hand’ with the union </h3>Illustrations of the snail’s pace at which automation is proceeding can be seen in two scenarios in Southern California where terminals aspire to automate. At TTI, the largest terminal at the Port of Long Beach, a manning agreement was struck three years ago with the ILWU Southern California local, sources said. The deal was meant to allow automation to proceed at the former Hanjin terminal, now owned by Terminal Investment Limited (TiL), the terminal arm of Mediterranean Shipping Co. (MSC). But despite concessions to the union that would undermine the financial case for automation by increasing labor costs, there is no sign of automation being announced to allow MSC to increase throughput, let alone being approved by the Long Beach Board of Harbor Commissioners. Similarly, at the Pier 300 Fenix terminal at Los Angeles owned by CMA CGM, no application has been filed to automate, according to the port. This is despite the terminal allowing construction to proceed on a rail project in return for what it hoped, sources said, would be the port’s support to automate a new berth slated for a long-vacant lot next to the existing terminal. The knowledgeable observer of Southern California longshore labor said TTI and Fenix might be far enough along to eventually implement automation, but “anything beyond that, you are not going to see it unless something changes politically.” The unofficial view at the two ports, based on numerous interviews, is that for automation to proceed, a terminal must come to the port commission hand-in-hand with the union. The precedent, sources said, is Long Beach Container Terminal, which secured the union’s approval to engage in a multiyear automation project completed in 2021. It is now widely regarded as the most efficient facility in the harbor. “Technology is moving fast, but it cannot leave the workforce behind,” Port of Los Angeles Executive Director Gene Seroka told the Journal of Commerce. “There is a way to combine both, an employer and the union coming together with politicians to find a way forward.” Without ILWU sign-off, the ports risk — and wish to avoid — a repeat of the headline-grabbing union protests that disrupted meetings of the Los Angeles Board of Harbor Commissioners in 2019, when it was considering a construction permit necessary for automation at APM Terminals’ Pier 400 facility. That clash, over what in prior years would have been a routine construction permit to be signed off by the port commission, signaled a new phase wherein the union would seek to slow or stop automation by going outside the collective bargaining agreement. “This all started with Pier 400 and APMT,” said one management source. The union’s views over automation had hardened since 2008, in parallel with the emergence of new labor-saving technology like AI and, more recently, a global anti-automation crusade led by International Longshoremen’s Association President Harold Daggett. The risk of negative publicity for the ports, and the opportunity for the union to grab a global megaphone, is heighted due to the 2028 Summer Olympics in Los Angeles — set to begin two weeks after the current West Coast longshore contract expires on July 1, 2028. The ports also wish to avoid a labor showdown that could lead to further market share loss to the East and Gulf coasts. The ILWU declined to comment. <h3>The legislative route </h3>It isn’t just influence at the port commissions, moreover, where dockworkers are trying to thwart automation. In recent years, the PMA has found itself fighting off efforts by the union to undermine automation through legislation in Sacramento. Employers prevailed last October, for example, when Gov. Gavin Newsom vetoed a bill that would have banned current and future automated or remotely operated technology at California ports from plugging into the state’s power grid, in effect killing automation. “Efforts to use the political process to block or delay automation have not succeeded and will not alter the terms of the collective bargaining agreement, which explicitly allows for automation at port terminals,” the PMA said in its statement. The PMA now carefully scrutinizes all proposed legislation for possible new restrictions on automation inserted by ILWU lobbyists. Union efforts to thwart automation, whether at the state or port level, raise the question of whether in doing so it is in violation of the contract. According to the PMA website, the contract states, “There shall be no interference by the union with the employers’ right to operate efficiently and to change methods of work to utilize labor-saving devices.” To this point, some argue the labor activity is merely individual union members engaging in First Amendment-protected speech. But others point to apparently official union views, including “profound disappointment” at the Newsom veto <a href="https://ilwu13.com/wp-content/uploads/2025/10/10-13-25-ILWU-President-Olvera-Jr-letter-to-Gov.-Newsom-re-SB-34-Veto.pdf">expressed in a toughly worded letter</a> by ILWU International President Robert Olvera Jr. The union’s assertive anti-automation stance raises the possibility it will seek to roll back terminals’ automation rights during negotiations for the next coastwide contract. “I do believe that ILWU will take a run at further restricting automation on the USWC,” said a second knowledgeable source. “They are actively seeking to control automation today through other means including licensing, permitting and trying to use legislation to restrict the use of green electricity.” Other sources believe the PMA will never negotiate away its automation rights, while others believe the ILWU has already effectively won the issue. Said the first informed source: “The union can move on to other topics. They have their playbook, so they don’t need to renegotiate automation.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

An article of faith for nearly two decades — that marine terminals along the US West Coast have the right to automate and thereby increase capacity despite limited port land to physically expand — is under threat in Southern California. It has become difficult, if not impossible, for terminals wishing to automate to gain the necessary approvals from port commissions to proceed. This is despite the terminals’ right to automate being guaranteed since 2008 in the collective bargaining agreement between the International Longshore and Warehouse Union (ILWU) and employers represented by the Pacific Maritime Association (PMA). The result of this hesitance means the largest port gateway in North America being denied the easiest route to capacity expansion to mitigate bottlenecks that for years have bogged down flow during periods of surge demand. “It doesn’t matter what is in the contract or who has negotiated what,” said a knowledgeable observer of longshore labor in Southern California. “The ports are not going to agree to any redevelopment that supports automation and goes against the will of the ILWU.” The long-term consequences are limits on effective capacity able to handle US container flows, increasing the potential for bottlenecks and delays given limited new terminal acreage coming online. The roadblocks come despite the known benefits of automation. During the COVID-19 disruptions, throughput at existing automated terminals at the ports of Los Angeles and Long Beach was 44% higher than at nonautomated terminals, according to a recent study cited by the PMA. Also, longshore employment rose faster than at nonautomated terminals, countering the union’s argument that automation is a job killer. “Technological advancement, including automation, is essential to maintaining the competitiveness, efficiency and long-term viability of West Coast ports,” the PMA said in a statement to the Journal of Commerce late last week. The need to work ‘hand-in-hand’ with the union Illustrations of the snail’s pace at which automation is proceeding can be seen in two scenarios in Southern California where terminals aspire to automate. At TTI, the largest terminal at the Port of Long Beach, a manning agreement was struck three years ago with the ILWU Southern California local, sources said. The deal was meant to allow automation to proceed at the former Hanjin terminal, now owned by Terminal Investment Limited (TiL), the terminal arm of Mediterranean Shipping Co. (MSC). But despite concessions to the union that would undermine the financial case for automation by increasing labor costs, there is no sign of automation being announced to allow MSC to increase throughput, let alone being approved by the Long Beach Board of Harbor Commissioners. Similarly, at the Pier 300 Fenix terminal at Los Angeles owned by CMA CGM, no application has been filed to automate, according to the port. This is despite the terminal allowing construction to proceed on a rail project in return for what it hoped, sources said, would be the port’s support to automate a new berth slated for a long-vacant lot next to the existing terminal. The knowledgeable observer of Southern California longshore labor said TTI and Fenix might be far enough along to eventually implement automation, but “anything beyond that, you are not going to see it unless something changes politically.” The unofficial view at the two ports, based on numerous interviews, is that for automation to proceed, a terminal must come to the port commission hand-in-hand with the union. The precedent, sources said, is Long Beach Container Terminal, which secured the union’s approval to engage in a multiyear automation project completed in 2021. It is now widely regarded as the most efficient facility in the harbor. “Technology is moving fast, but it cannot leave the workforce behind,” Port of Los Angeles Executive Director Gene Seroka told the Journal of Commerce. “There is a way to combine both, an employer and the union coming together with politicians to find a way forward.” Without ILWU sign-off, the ports risk — and wish to avoid — a repeat of the headline-grabbing union protests that disrupted meetings of the Los Angeles Board of Harbor Commissioners in 2019, when it was considering a construction permit necessary for automation at APM Terminals’ Pier 400 facility. That clash, over what in prior years would have been a routine construction permit to be signed off by the port commission, signaled a new phase wherein the union would seek to slow or stop automation by going outside the collective bargaining agreement. “This all started with Pier 400 and APMT,” said one management source. The union’s views over automation had hardened since 2008, in parallel with the emergence of new labor-saving technology like AI and, more recently, a global anti-automation crusade led by International Longshoremen’s Association President Harold Daggett. The risk of negative publicity for the ports, and the opportunity for the union to grab a global megaphone, is heighted due to the 2028 Summer Olympics in Los Angeles — set to begin two weeks after the current West Coast longshore contract expires on July 1, 2028. The ports also wish to avoid a labor showdown that could lead to further market share loss to the East and Gulf coasts. The ILWU declined to comment. The legislative route It isn’t just influence at the port commissions, moreover, where dockworkers are trying to thwart automation. In recent years, the PMA has found itself fighting off efforts by the union to undermine automation through legislation in Sacramento. Employers prevailed last October, for example, when Gov. Gavin Newsom vetoed a bill that would have banned current and future automated or remotely operated technology at California ports from plugging into the state’s power grid, in effect killing automation. “Efforts to use the political process to block or delay automation have not succeeded and will not alter the terms of the collective bargaining agreement, which explicitly allows for automation at port terminals,” the PMA said in its statement. The PMA now carefully scrutinizes all proposed legislation for possible new restrictions on automation inserted by ILWU lobbyists. Union efforts to thwart automation, whether at the state or port level, raise the question of whether in doing so it is in violation of the contract. According to the PMA website, the contract states, “There shall be no interference by the union with the employers’ right to operate efficiently and to change methods of work to utilize labor-saving devices.” To this point, some argue the labor activity is merely individual union members engaging in First Amendment-protected speech. But others point to apparently official union views, including “profound disappointment” at the Newsom veto expressed in a toughly worded letter by ILWU International President Robert Olvera Jr. The union’s assertive anti-automation stance raises the possibility it will seek to roll back terminals’ automation rights during negotiations for the next coastwide contract. “I do believe that ILWU will take a run at further restricting automation on the USWC,” said a second knowledgeable source. “They are actively seeking to control automation today through other means including licensing, permitting and trying to use legislation to restrict the use of green electricity.” Other sources believe the PMA will never negotiate away its automation rights, while others believe the ILWU has already effectively won the issue. Said the first informed source: “The union can move on to other topics. They have their playbook, so they don’t need to renegotiate automation.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Port News

Marine terminals

Longshore labor

Hesitation from port authorities slows automation in Southern California

<div class="phx-topic abstract-wrapper">The state was largely insulated from the volatility seen in the Midwest and Northeast over the winter because it did not face the same prolonged cold and snowstorms. </div>

The state was largely insulated from the volatility seen in the Midwest and Northeast over the winter because it did not face the same prolonged cold and snowstorms.

<div class="phx-topic">The war with Iran has pushed up diesel prices and driven spot truckload rates sharply higher in California, the one major freight market that had largely avoided the winter pricing pressure seen in the Midwest and Northeast. California has been the clearest holdout in a truckload market that has shown signs of tightening after a prolonged freight recession. Outbound dry-van spot rates from Illinois climbed 55 cents per mile between Dec. 1 and Feb. 28 while rates from New York rose 49 cents due to snowstorms and frigid temperatures during that period, according to a Journal of Commerce analysis of trucking data covering more than 4,000 lanes from DAT Freight &amp; Analytics, Loadsmart, Sunset Transportation, and a survey of other brokers and shippers. By contrast, California outbound rates rose only 11 cents in the same three months. California was largely insulated from the volatility seen in the Midwest and Northeast because it did not face the same prolonged cold and snowstorms. That enabled some shippers to believe rates would ease when the winter weather ended, something that went by the boards once the war with Iran began on the last day of February. Since then, average US diesel prices have climbed approximately $1.50 per gallon through the first month of the conflict, according to the US Energy Information Administration. In a state that already has some of the nation’s highest fuel costs because of taxes and specialized environmental fuel rules, the increase quickly changed California’s pricing picture. The state’s average diesel price jumped $2.23 during the first month of the war, to $7.22/gal, according to the EIA. At the same time, California canceled 13,000 non-domiciled commercial driver’s licenses last month. The higher diesel prices and tighter capacity caused spot truckload rates in the state to jump 18 cents in March from February, according to the Journal of Commerce analysis, while national rates rose approximately the same amount. The latest figures from DAT Freight &amp; Analytics show spot rates climbing across all major equipment types as capacity tightens and fuel costs increase. The national average dry-van linehaul spot rate reached $2.04 per mile last week, up 12 cents over two weeks and 24% higher year over year. Refrigerated rates averaged $2.43 per mile, up 53 cents from a year ago, while flatbed rates rose to $2.55 per mile — the highest in four years. “The trucking industry is doing quite well,” Avery Vise, vice president of trucking at FTR Intelligence, said in an interview on SiriusXM’s Channel 146. “A lot of these fuel costs have been recovered. It’s a cash flow problem for some carriers, but capacity is driving this. It is steadily declining and has been since 2022 and 2023. Capacity is very tight. I think we can declare the freight rate recession is over.” While midsize and large carriers can pass through higher diesel costs to customers via fuel surcharges, which have risen approximately 25 to 30 cents per mile since March 1, smaller owner-operators and port drayage drivers often negotiate all-in rates that include fuel. That means a sudden jolt in rates intensifies short-term cash-flow pressure. Robert Loya, president of the West Coast-based Harbor Trucking Association, said port drayage operators are often waiting weeks to recover those costs. “It’s insane,” Loya said. “Especially if you are doing ocean carrier business, you are looking at 45 days minimum before you are paid. With beneficial cargo owners, some may pay you in two or three weeks, but at the end of the day you are still carrying those costs.” Despite the pressure, Loya said he has not seen fleets or independent operators pull capacity off the road — an indication that underlying freight demand remains firm enough to sustain operations. On the demand side, manufacturing is showing early signs of recovery that could support additional freight volumes. The Institute for Supply Management’s Manufacturing Purchasing Managers Index registered 52.7 in March, marking a third consecutive month of expansion. Whether the current shift develops into a sustained recovery will depend on the consistency of freight demand in the months ahead. <h3>Pushing freight to intermodal</h3>Three intermodal providers, who asked not to be identified, said they have seen a resurgence in shippers investigating the rail option amid the strength in truckload. A western US asset-based intermodal provider said the inquiries have picked up in recent weeks. “It isn’t necessarily desperation. The shippers are contacting us after not hearing them for a few years to ask about rates on certain lanes or asking what lanes might work [on intermodal] that they hadn’t thought of before,” the president of the carrier said. “Shippers are offering us freight starting as soon as next week.” A non-asset-based intermodal marketing company (IMC) based in the Northeast said its business last month was double that of March 2025. The owner of the IMC agreed the conversations did not feel like shippers were desperate, just inquisitive. “We haven’t received many customers who are converting from truckload,” the source said. “They’re using other intermodal providers who have struggled with the business, and they turn to us.” One Midwest-based truckload and intermodal broker told the Journal of Commerce that many of its long-term existing customers are shifting their freight from truckload to rail. Domestic intermodal data for March has not been released yet by the Intermodal Association of North America. J.B. Hunt Transport Services, the largest US intermodal provider, will hold a call with industry analysts after reporting earnings on April 15. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The war with Iran has pushed up diesel prices and driven spot truckload rates sharply higher in California, the one major freight market that had largely avoided the winter pricing pressure seen in the Midwest and Northeast. California has been the clearest holdout in a truckload market that has shown signs of tightening after a prolonged freight recession. Outbound dry-van spot rates from Illinois climbed 55 cents per mile between Dec. 1 and Feb. 28 while rates from New York rose 49 cents due to snowstorms and frigid temperatures during that period, according to a Journal of Commerce analysis of trucking data covering more than 4,000 lanes from DAT Freight & Analytics, Loadsmart, Sunset Transportation, and a survey of other brokers and shippers. By contrast, California outbound rates rose only 11 cents in the same three months. California was largely insulated from the volatility seen in the Midwest and Northeast because it did not face the same prolonged cold and snowstorms. That enabled some shippers to believe rates would ease when the winter weather ended, something that went by the boards once the war with Iran began on the last day of February. Since then, average US diesel prices have climbed approximately $1.50 per gallon through the first month of the conflict, according to the US Energy Information Administration. In a state that already has some of the nation’s highest fuel costs because of taxes and specialized environmental fuel rules, the increase quickly changed California’s pricing picture. The state’s average diesel price jumped $2.23 during the first month of the war, to $7.22/gal, according to the EIA. At the same time, California canceled 13,000 non-domiciled commercial driver’s licenses last month. The higher diesel prices and tighter capacity caused spot truckload rates in the state to jump 18 cents in March from February, according to the Journal of Commerce analysis, while national rates rose approximately the same amount. The latest figures from DAT Freight & Analytics show spot rates climbing across all major equipment types as capacity tightens and fuel costs increase. The national average dry-van linehaul spot rate reached $2.04 per mile last week, up 12 cents over two weeks and 24% higher year over year. Refrigerated rates averaged $2.43 per mile, up 53 cents from a year ago, while flatbed rates rose to $2.55 per mile — the highest in four years. “The trucking industry is doing quite well,” Avery Vise, vice president of trucking at FTR Intelligence, said in an interview on SiriusXM’s Channel 146. “A lot of these fuel costs have been recovered. It’s a cash flow problem for some carriers, but capacity is driving this. It is steadily declining and has been since 2022 and 2023. Capacity is very tight. I think we can declare the freight rate recession is over.” While midsize and large carriers can pass through higher diesel costs to customers via fuel surcharges, which have risen approximately 25 to 30 cents per mile since March 1, smaller owner-operators and port drayage drivers often negotiate all-in rates that include fuel. That means a sudden jolt in rates intensifies short-term cash-flow pressure. Robert Loya, president of the West Coast-based Harbor Trucking Association, said port drayage operators are often waiting weeks to recover those costs. “It’s insane,” Loya said. “Especially if you are doing ocean carrier business, you are looking at 45 days minimum before you are paid. With beneficial cargo owners, some may pay you in two or three weeks, but at the end of the day you are still carrying those costs.” Despite the pressure, Loya said he has not seen fleets or independent operators pull capacity off the road — an indication that underlying freight demand remains firm enough to sustain operations. On the demand side, manufacturing is showing early signs of recovery that could support additional freight volumes. The Institute for Supply Management’s Manufacturing Purchasing Managers Index registered 52.7 in March, marking a third consecutive month of expansion. Whether the current shift develops into a sustained recovery will depend on the consistency of freight demand in the months ahead. Pushing freight to intermodal Three intermodal providers, who asked not to be identified, said they have seen a resurgence in shippers investigating the rail option amid the strength in truckload. A western US asset-based intermodal provider said the inquiries have picked up in recent weeks. “It isn’t necessarily desperation. The shippers are contacting us after not hearing them for a few years to ask about rates on certain lanes or asking what lanes might work [on intermodal] that they hadn’t thought of before,” the president of the carrier said. “Shippers are offering us freight starting as soon as next week.” A non-asset-based intermodal marketing company (IMC) based in the Northeast said its business last month was double that of March 2025. The owner of the IMC agreed the conversations did not feel like shippers were desperate, just inquisitive. “We haven’t received many customers who are converting from truckload,” the source said. “They’re using other intermodal providers who have struggled with the business, and they turn to us.” One Midwest-based truckload and intermodal broker told the Journal of Commerce that many of its long-term existing customers are shifting their freight from truckload to rail. Domestic intermodal data for March has not been released yet by the Intermodal Association of North America. J.B. Hunt Transport Services, the largest US intermodal provider, will hold a call with industry analysts after reporting earnings on April 15. Contact Dan Ronan at contactdanronan@gmail.com . Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Truckload

California truckload rates rise as fuel spikes, capacity cuts tighten market

<div class="phx-topic abstract-wrapper">Earnings calls across home builders and home improvement and furniture retailers show an uneven market where consumers are choosing smaller maintenance and repair projects and delaying large discretionary purchases.</div>

Earnings calls across home builders and home improvement and furniture retailers show an uneven market where consumers are choosing smaller maintenance and repair projects and delaying large discretionary purchases.

<div class="phx-topic">(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) US imports of household goods declined slightly in 2025, a pause driven by a weak housing market, persistent inflation, and affordability concerns weighing on the demand for furniture, appliances, and home furnishings. Earnings calls across home builders and home improvement and furniture retailers show an uneven market where consumers are choosing smaller maintenance and repair projects and delaying large discretionary purchases. Imports of household goods fell 1.3% last year to 5.3 million TEUs, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. The compound annual growth rate was 3.4% in the last five years, but it has been a volatile and rocky road. Imports jumped 25% year over year in 2021 during the pandemic, then declined 5.8% in 2022 and 16.1% in 2023, before jumping 21.2% in 2024. Volume was approximately flat year over year at the ports of Los Angeles, Long Beach, New York and New Jersey, and Savannah. China remained the largest origin for US household goods imports, but its share fell to 49.9% last year from 55.4% in 2024 amid the tariff conflict and move for alternative sourcing. Vietnam increased its share to 23.9%, up from 20.3% the prior year. <h3>Industry fundamentals are weak </h3>The data points to a sector struggling with underlying housing fundamentals. Industrial production of household appliances fell 8.5% year over year in February, according to the US Federal Reserve. The biggest culprit is a continued imbalance between homebuyers and home inventory. “A typical home sale generates about $134,000 in economic activity, and a part of that is tied to furniture, appliances, and home-related goods,” Nadia Evangelou, principal economist for the National Association of Realtors (NAR), told the Journal of Commerce. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e18618ef-aa21-4767-bb0a-eea49b17ddf2"></dynamic-object></div>However, existing home sales dropped 1.4% year over year in February, while housing inventory grew 4.9% during the same period, according to NAR. New home construction, or “housing starts,” rose 9.2% year over year in January, according to the US Census Bureau, meaning there is even more inventory coming. “It’s very hard to predict how housing will play out,” Wayfair CEO Niraj Shah said during the company’s fourth-quarter earnings call. “Every quarter that goes by, the percentage of mortgages that get refinanced at the current rates keeps ticking up, but it’s a relatively slow process.” Jason Miller, an associate professor of supply chain management at Michigan State University, told the Journal of Commerce that this uncertainty is not good for freight volume. “The current ‘slow burn’ suggests at best a stabilization of freight volumes at lower levels than 2017-2019 for these types of goods, such as appliances,” Miller said. “It isn’t pointing towards a slow recovery.” <h3>Remodeling vs. repairs </h3>The Joint Center for Housing Studies at Harvard University forecasts just 1.6% growth in US remodeling spending later this year. Because that figure is nominal and not adjusted for inflation — currently about 2.5% to 3% — it effectively signals a decline in actual renovation activity. Dr. Rachel Bogardus Drew, director of the Remodeling Futures Program at Harvard, said people who are moving spend more on renovations than those staying in their existing homes. “People who have recently moved spend 50% more in the first year on home renovation than a similar homeowner who has not moved,” she told the Journal of Commerce. “Sometimes there’s upgrading that needs to be done, or they just want to remake the home to meet their needs or their tastes. So, a slowdown in existing home sales can cause a break on some remodeling activity.” For people remaining in their current homes, Drew said the tendency is to forego huge remodeling projects in favor of less expensive maintenance and repair work. That is consistent with commentary from home improvement retailers. “Consumers are still cautious about discretionary big-ticket purchases,” Brandon Sink, CFO for Lowe’s Companies, said on a February earnings call. “We forecast the home improvement market to be roughly flat this year.” Home construction companies such as D.R. Horton and Lennar can also drive demand for household goods like sofas and appliances, but mortgage rates hurt them as much as they hurt Home Depot and Lowe’s. “Mortgage interest rates, which showed some early signs of easing towards the end of last year, have remained stubbornly over 6%, hovering around 6.2% to 6.4%,” Stewart Miller, Lennar’s executive chairman, said on a March earnings call. “Affordability remains the central challenge facing our buyers. Consumer confidence, while not collapsing, continues to be tested by a range of uncertainties.” <h3>Outlook tied to housing recovery </h3>The outlook for household goods imports remains tied to the housing market. Harvard’s Drew said there is no silver bullet, but many things that can trigger a housing recovery. “Interest rates go down, then people start to think, ‘It’s a little more affordable now for me to look at moving, or to take out the funds to do renovations on my existing house, to tap that home equity,’” she said. “But the same thing could happen if house prices were to soften ... or if labor costs went down, or if it was cheaper to buy that sofa. Any one of these levers could kick start more activity, and all of them operating together is ideal.” NAR’s Evangelou said existing home sales should improve through the year, which will gradually increase demand for household goods, but it will also be a slow process that might drag into 2027. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) US imports of household goods declined slightly in 2025, a pause driven by a weak housing market, persistent inflation, and affordability concerns weighing on the demand for furniture, appliances, and home furnishings. Earnings calls across home builders and home improvement and furniture retailers show an uneven market where consumers are choosing smaller maintenance and repair projects and delaying large discretionary purchases. Imports of household goods fell 1.3% last year to 5.3 million TEUs, according to PIERS, a sister product of the Journal of Commerce within S&P Global. The compound annual growth rate was 3.4% in the last five years, but it has been a volatile and rocky road. Imports jumped 25% year over year in 2021 during the pandemic, then declined 5.8% in 2022 and 16.1% in 2023, before jumping 21.2% in 2024. Volume was approximately flat year over year at the ports of Los Angeles, Long Beach, New York and New Jersey, and Savannah. China remained the largest origin for US household goods imports, but its share fell to 49.9% last year from 55.4% in 2024 amid the tariff conflict and move for alternative sourcing. Vietnam increased its share to 23.9%, up from 20.3% the prior year. Industry fundamentals are weak The data points to a sector struggling with underlying housing fundamentals. Industrial production of household appliances fell 8.5% year over year in February, according to the US Federal Reserve. The biggest culprit is a continued imbalance between homebuyers and home inventory. “A typical home sale generates about $134,000 in economic activity, and a part of that is tied to furniture, appliances, and home-related goods,” Nadia Evangelou, principal economist for the National Association of Realtors (NAR), told the Journal of Commerce. However, existing home sales dropped 1.4% year over year in February, while housing inventory grew 4.9% during the same period, according to NAR. New home construction, or “housing starts,” rose 9.2% year over year in January, according to the US Census Bureau, meaning there is even more inventory coming. “It’s very hard to predict how housing will play out,” Wayfair CEO Niraj Shah said during the company’s fourth-quarter earnings call. “Every quarter that goes by, the percentage of mortgages that get refinanced at the current rates keeps ticking up, but it’s a relatively slow process.” Jason Miller, an associate professor of supply chain management at Michigan State University, told the Journal of Commerce that this uncertainty is not good for freight volume. “The current ‘slow burn’ suggests at best a stabilization of freight volumes at lower levels than 2017-2019 for these types of goods, such as appliances,” Miller said. “It isn’t pointing towards a slow recovery.” Remodeling vs. repairs The Joint Center for Housing Studies at Harvard University forecasts just 1.6% growth in US remodeling spending later this year. Because that figure is nominal and not adjusted for inflation — currently about 2.5% to 3% — it effectively signals a decline in actual renovation activity. Dr. Rachel Bogardus Drew, director of the Remodeling Futures Program at Harvard, said people who are moving spend more on renovations than those staying in their existing homes. “People who have recently moved spend 50% more in the first year on home renovation than a similar homeowner who has not moved,” she told the Journal of Commerce. “Sometimes there’s upgrading that needs to be done, or they just want to remake the home to meet their needs or their tastes. So, a slowdown in existing home sales can cause a break on some remodeling activity.” For people remaining in their current homes, Drew said the tendency is to forego huge remodeling projects in favor of less expensive maintenance and repair work. That is consistent with commentary from home improvement retailers. “Consumers are still cautious about discretionary big-ticket purchases,” Brandon Sink, CFO for Lowe’s Companies, said on a February earnings call. “We forecast the home improvement market to be roughly flat this year.” Home construction companies such as D.R. Horton and Lennar can also drive demand for household goods like sofas and appliances, but mortgage rates hurt them as much as they hurt Home Depot and Lowe’s. “Mortgage interest rates, which showed some early signs of easing towards the end of last year, have remained stubbornly over 6%, hovering around 6.2% to 6.4%,” Stewart Miller, Lennar’s executive chairman, said on a March earnings call. “Affordability remains the central challenge facing our buyers. Consumer confidence, while not collapsing, continues to be tested by a range of uncertainties.” Outlook tied to housing recovery The outlook for household goods imports remains tied to the housing market. Harvard’s Drew said there is no silver bullet, but many things that can trigger a housing recovery. “Interest rates go down, then people start to think, ‘It’s a little more affordable now for me to look at moving, or to take out the funds to do renovations on my existing house, to tap that home equity,’” she said. “But the same thing could happen if house prices were to soften ... or if labor costs went down, or if it was cheaper to buy that sofa. Any one of these levers could kick start more activity, and all of them operating together is ideal.” NAR’s Evangelou said existing home sales should improve through the year, which will gradually increase demand for household goods, but it will also be a slow process that might drag into 2027. Contact Ari Ashe at ari.ashe@spglobal.com .

US household goods imports flatten as housing weakness weighs on demand

Use code GTT26W at checkout and save $900 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Arm your team with the most trusted information portal for the international container shipping industry.

Group Subscriptions - Wide Box

Get into a group subscription today

Use code SSFTW30 at checkout to save 30% on a Silver or Silver Plus annual subscription! 

Subscribe Now - FT to S/SP - Wide Box

SPRING SALE!

Use code GW595 and upgrade to Gold for just $595! Valid for first year of subscription.

Upgrade Subscription - S/SP to Gold - Wide Box

SAVE $900 ON A GOLD SUBSCRIPTION

Use code SSLW30 at checkout and save 30% on an annual Silver or Silver Plus subscription!

Subscribe Now - Anonymous to S/SP - Wide Box

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Use code SSGFTW895 at checkout to save $600 on first year of a Gold subscription!

Subscribe Now - FT to Gold - Wide Box

Use code SSLW895 at checkout and save $600 on first year of a Gold subscription!

Subscribe Now - Anonymous to Gold - Wide Box

SPRING SALE: Use code SSFTW30 to save 30% on first year of a Silver or Silver Plus annual subscription!


Subscribe Now - FT to S/SP - Offer Box

Subscribe and Save

GET INTO A GROUP SUBSCRIPTION: Arm your team with unlimited Journal of Commerce content

Group Subscriptions - Offer Box

Group Subscriptions

SPRING SALE: Use code SSLW30 at checkout and save 30% on an annual Silver or Silver Plus subscription!

Subscribe Now - Anonymous to S/SP - Offer Box

SUBSCRIBE TODAY

UPGRADE TO GOLD AND SAVE: Use code GTT26W at checkout and save $900 on first year of a Gold subscription!

Upgrade Subscription

SPRING SALE: Use code SSLW895 at checkout and save $600 on an annual Gold subscription!

Subscribe Now - Anonymous to Gold - Offer Box

SAVE $900 ON A GOLD SUBSCRIPTION: Use code GW595 and upgrade to Gold for just $595! Valid on first year of subscription.

Upgrade Subscription - S/SP to Gold - Offer Box

SPRING SALE: Use code SSGFTW895 and save $600 on the first year of a Gold subscription!

Subscribe Now - FT to Gold - Offer Box

SUBSCRIBE AND SAVE

Monthly publication providing an editorial deep dive into global supply chain news

Journal of Commerce Magazine - Rectangle Box

Journal of Commerce Magazine

A premium access index of savings using domestic intermodal vs. OTR 

ISI Report - Rectangle Box

Intermodal Savings Index

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

An extensive dashboard of charts organized by trade lane, mode, and topic

Gateway - Rectangle Box

Gateway

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

The only editorially independent conference for the breakbulk & project cargo industry

Breakbulk Conference - Rectangle Box

Attend Breakbulk26

<div class="phx-topic abstract-wrapper">As part of the deal, Iran said it would allow shipping to resume through the strait with vessel passages coordinated by the Iranian military, but it has not yet issued any technical details.</div>

As part of the deal, Iran said it would allow shipping to resume through the strait with vessel passages coordinated by the Iranian military, but it has not yet issued any technical details.

<div class="phx-topic">The shipping industry is awaiting details from the US and Iran on how to transit the Strait of Hormuz safely following a narrow two-week ceasefire window agreed to Wednesday between Washington and Tehran. As part of the deal, Iran said it would allow shipping to resume through the strait with vessel passages coordinated by the Iranian military, but it has not yet issued any technical details. Complicating matters is that Iran has proposed a toll system for Hormuz passage, with Tehran suggesting it would charge vessels $2 million for transiting and split the fee with neighboring Oman. And underscoring the sensitivity around transits, a container ship near the strait received a message Wednesday from the Iranian navy warning that operators needed permission from authorities or vessels would be targeted and attacked, according to a source close to the matter who didn’t want to be identified. “In the next couple of days, we will have to see what really happens and how many of the ships can go in and out, and then we’ll have to stay close to that situation to judge what’s going to happen after those 14 days,” Hapag-Lloyd CEO Rolf Habben Jansen told customers in a briefing Wednesday. As negotiations between the US and Iran get underway, the top priority from ocean carriers is to remove an estimated 170 container ships representing 450,000 TEUs, or about 1.5% of global capacity, that have been stuck in the Persian Gulf since the Middle East conflict began on Feb. 28. Hapag-Lloyd has six ships comprising a total of 25,000 TEUs in the Gulf. But the two-week window is too short and too uncertain for carriers to make long-term plans for reestablishing disrupted Middle East networks, Habben Jansen noted. “Hopefully it remains open, and then we can start looking at how quickly we can return to the Persian Gulf,” he said. “How that will go over the upcoming couple of weeks depends on how stable it is, but you should assume that it will still take six to eight weeks or so until we get back to a more normal situation. “Maybe on the back of that, we will also see the Red Sea open up again, but first priority is now clearly with the strait,” he added. <h3>Iran issues 10-point plan </h3>Whether the ceasefire will result in a lasting peace settlement remains highly uncertain. In agreeing to the ceasefire, Iran also issued an ambitious 10-point plan in a statement to its National Security Council that includes an end to US military presence in the region, cessation of war by the US “on all fronts” in the Middle East, Iranian control over the Strait of Hormuz, the lifting of all primary and secondary sanctions, and compensation for reconstruction from war damages. Bimco chief shipping analyst Niels Rasmussen said if it was considered safe to pass through the Strait of Hormuz, ships trapped within the Persian Gulf will want to leave as soon as possible. “They will load cargoes prior to leaving but only if loading does not jeopardize the chance of leaving within the two weeks,” Rasmussen said in a statement from the shipping association Wednesday. “Unless the two-week window is quickly lengthened, I doubt there will be a large influx of ships into the Persian Gulf,” he said. “Partly because many ships have already sailed to other regions and partly because they do not want to risk being trapped after the two-week window closes.” Any rush to sail through the Strait of Hormuz without prior coordination with the US and Iran “would entail heightened risk and would not be advisable,” said Jakob Larsen, Bimco’s chief safety and security officer. An uncoordinated exit would present navigational risks from collisions and groundings in the narrow waterway, while the potential lack of communication within the depleted Iranian military and political system presents other problems, he noted. “Iran has announced that they want to be in control of transits in the strait,” Larsen said in the Bimco statement. “However, Iran’s military command structure has been severely impacted by attacks in recent weeks which could lead to misunderstandings between the Iranian authorities approving transits and the Iranian military formations that control the weapons. “Such misunderstandings could potentially lead to unintended targeting and attacks on ships approved for transit,” he added. <h3>Reestablishing oil flows ‘will take months’ </h3>News of the ceasefire saw oil prices falling by 13% on Wednesday, although they remain more than 30% above pre-conflict levels. About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the conflict began. Still, even if the ceasefire holds and shipping resumes through Hormuz, it will take months to reestablish disrupted oil and gas production in the Persian Gulf, according to Tristan Abbey, an administrator at the US Energy Information Administration (EIA). “Just as we had never before seen the strait close, we’ve never seen it reopen ... what exactly that looks like remains to be seen,” Abbey said in an EIA market forecast released Tuesday before the ceasefire announcement. “Full restoration of flows will take months. Our modeling indicates that fuel prices will continue to rise until these variables resolve." The EIA forecast noted that limited oil flows through the Strait of Hormuz caused oil storage to fill quickly in countries that relied on the waterway for exports. As a result, the EIA estimated that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain collectively shut in 7.5 million b/d of crude oil production in March, with production shut-ins to rise to 9.1 million b/d in April. The EIA outlook assumes the conflict will not persist past April, and that traffic through the Strait of Hormuz will gradually resume. Under those assumptions, the agency expects production shut-ins will fall to 6.7 million b/d in May and return close to pre-conflict levels in late 2026. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

The shipping industry is awaiting details from the US and Iran on how to transit the Strait of Hormuz safely following a narrow two-week ceasefire window agreed to Wednesday between Washington and Tehran. As part of the deal, Iran said it would allow shipping to resume through the strait with vessel passages coordinated by the Iranian military, but it has not yet issued any technical details. Complicating matters is that Iran has proposed a toll system for Hormuz passage, with Tehran suggesting it would charge vessels $2 million for transiting and split the fee with neighboring Oman. And underscoring the sensitivity around transits, a container ship near the strait received a message Wednesday from the Iranian navy warning that operators needed permission from authorities or vessels would be targeted and attacked, according to a source close to the matter who didn’t want to be identified. “In the next couple of days, we will have to see what really happens and how many of the ships can go in and out, and then we’ll have to stay close to that situation to judge what’s going to happen after those 14 days,” Hapag-Lloyd CEO Rolf Habben Jansen told customers in a briefing Wednesday. As negotiations between the US and Iran get underway, the top priority from ocean carriers is to remove an estimated 170 container ships representing 450,000 TEUs, or about 1.5% of global capacity, that have been stuck in the Persian Gulf since the Middle East conflict began on Feb. 28. Hapag-Lloyd has six ships comprising a total of 25,000 TEUs in the Gulf. But the two-week window is too short and too uncertain for carriers to make long-term plans for reestablishing disrupted Middle East networks, Habben Jansen noted. “Hopefully it remains open, and then we can start looking at how quickly we can return to the Persian Gulf,” he said. “How that will go over the upcoming couple of weeks depends on how stable it is, but you should assume that it will still take six to eight weeks or so until we get back to a more normal situation. “Maybe on the back of that, we will also see the Red Sea open up again, but first priority is now clearly with the strait,” he added. Iran issues 10-point plan Whether the ceasefire will result in a lasting peace settlement remains highly uncertain. In agreeing to the ceasefire, Iran also issued an ambitious 10-point plan in a statement to its National Security Council that includes an end to US military presence in the region, cessation of war by the US “on all fronts” in the Middle East, Iranian control over the Strait of Hormuz, the lifting of all primary and secondary sanctions, and compensation for reconstruction from war damages. Bimco chief shipping analyst Niels Rasmussen said if it was considered safe to pass through the Strait of Hormuz, ships trapped within the Persian Gulf will want to leave as soon as possible. “They will load cargoes prior to leaving but only if loading does not jeopardize the chance of leaving within the two weeks,” Rasmussen said in a statement from the shipping association Wednesday. “Unless the two-week window is quickly lengthened, I doubt there will be a large influx of ships into the Persian Gulf,” he said. “Partly because many ships have already sailed to other regions and partly because they do not want to risk being trapped after the two-week window closes.” Any rush to sail through the Strait of Hormuz without prior coordination with the US and Iran “would entail heightened risk and would not be advisable,” said Jakob Larsen, Bimco’s chief safety and security officer. An uncoordinated exit would present navigational risks from collisions and groundings in the narrow waterway, while the potential lack of communication within the depleted Iranian military and political system presents other problems, he noted. “Iran has announced that they want to be in control of transits in the strait,” Larsen said in the Bimco statement. “However, Iran’s military command structure has been severely impacted by attacks in recent weeks which could lead to misunderstandings between the Iranian authorities approving transits and the Iranian military formations that control the weapons. “Such misunderstandings could potentially lead to unintended targeting and attacks on ships approved for transit,” he added. Reestablishing oil flows ‘will take months’ News of the ceasefire saw oil prices falling by 13% on Wednesday, although they remain more than 30% above pre-conflict levels. About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the conflict began. Still, even if the ceasefire holds and shipping resumes through Hormuz, it will take months to reestablish disrupted oil and gas production in the Persian Gulf, according to Tristan Abbey, an administrator at the US Energy Information Administration (EIA). “Just as we had never before seen the strait close, we’ve never seen it reopen ... what exactly that looks like remains to be seen,” Abbey said in an EIA market forecast released Tuesday before the ceasefire announcement. “Full restoration of flows will take months. Our modeling indicates that fuel prices will continue to rise until these variables resolve." The EIA forecast noted that limited oil flows through the Strait of Hormuz caused oil storage to fill quickly in countries that relied on the waterway for exports. As a result, the EIA estimated that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain collectively shut in 7.5 million b/d of crude oil production in March, with production shut-ins to rise to 9.1 million b/d in April. The EIA outlook assumes the conflict will not persist past April, and that traffic through the Strait of Hormuz will gradually resume. Under those assumptions, the agency expects production shut-ins will fall to 6.7 million b/d in May and return close to pre-conflict levels in late 2026. Contact Greg Knowler at greg.knowler@spglobal.com .

Ocean carriers wait for clarity on safe Hormuz passage after US-Iran ceasefire

<div class="phx-topic abstract-wrapper">Most of the increases represent a significant premium on current pricing levels, but it remains to be seen how sticky the aspirational rates will be with cargo markets also under pressure from high energy prices. </div>

Most of the increases represent a significant premium on current pricing levels, but it remains to be seen how sticky the aspirational rates will be with cargo markets also under pressure from high energy prices.

<div class="phx-topic">Ocean carriers have unveiled a raft of rate increases and emergency fuel surcharges on multiple trade lanes as high bunker prices push up operating costs across shipping networks. Most of the increases represent a significant premium on current pricing levels, but it remains to be seen how sticky the aspirational rates will be with cargo markets also under pressure from high energy prices. Carriers have been pushing general rate increases (GRIs) on Asia-US trade lanes to lift prices on the trans-Pacific. As of April 9, Asia-US East Coast rates of $3,525/FEU were up 20% compared with levels before the April 1 GRIs, with Asia-West Coast up 24% at $2,525/FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Mediterranean Shipping Co. will increase its Asia-North America emergency fuel surcharge (EFS) on May 1, with the Asia-North America West Coast EFS rising 70% to $467/FEU and the East Coast levy up 50% at $644/FEU. On Asia-North Europe, rates eased this week despite Maersk announcing freight-all-kinds (FAK) prices that set higher rate levels ranging from $3,500 to $3,900/FEU depending on destination ports. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates unchanged this week near $2,854/FEU. Other upcoming increases announced this week include CMA CGM planning an April 16 FAK rate of $4,300/FEU from Northwest India and Pakistan to North Europe, the Mediterranean and North Africa, more than 70% higher than the current rate, while Hapag-Lloyd will be adding $1,000/FEU on the Indian Subcontinent, Pakistan and Middle East to the US and Canada. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d915cdd3-263b-4835-b993-5efb9468dc03"></dynamic-object></div>Hapag-Lloyd’s EFS of $160/TEU, in effect since mid-March on routes not regulated by the US Federal Maritime Commission (FMC), was implemented on US trades this week. The FMC requires <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">a 30-day notice period from carriers</a> before they can implement rate increases and surcharges on US routes. Ocean Network Express on April 2 implemented an inland fuel surcharge for carrier haulage in Latin America and across all non-FMC regulated trade routes and services and will extend that to FMC-regulated routes on May 2. “The evolving security situation in the Middle East continues to pose significant challenges, affecting logistics operations and customer supply chains,” ONE said in its surcharge announcement this week. “Many refineries are also operating at reduced capacity, limiting export volumes and causing substantial disruptions in global fuel supply chains,” the carrier added. <h3>Shipping reluctant to pass through Hormuz </h3>The Strait of Hormuz that links the Persian Gulf with the Gulf of Oman is a key energy transport route with about 20% of the world’s oil and gas supplies passing through the waterway. It has been effectively closed since the war started on Feb. 28, and despite <a href="https://www.joc.com/article/ocean-carriers-wait-for-clarity-on-safe-hormuz-passage-after-us-iran-ceasefire-6201132">the two-week US-Iran ceasefire agreed to earlier this week</a>, shipping remains reluctant to pass through the strait until safety can be guaranteed. Jan Christensen, senior director of fuel purchasing at Hapag-Lloyd, highlighted the impact high prices and supply disruptions from the Hormuz blockade were having on bunkering operations. “Higher crude oil prices directly translate into higher bunker prices, which are the fuel costs for our vessels,” Christensen said in a recent interview. “Fuel is one of the largest cost components in container shipping, so these developments have a significant financial impact for all carriers. When oil prices move sharply upward, bunker costs follow very quickly, which increases operational expenses across the entire fleet.” <a href="https://www.joc.com/article/singapore-bunker-supply-continues-to-run-down-as-middle-east-war-drags-on-6198359">Fuel availability continues to tighten</a>, particularly in the Asian bunkering hubs in Singapore and South Korea. “Some suppliers are already signaling that they cannot fully guarantee contracted volumes, and it’s becoming increasingly difficult to secure bunker contracts for April and May,” Christensen said. <h3>Lingering Europe port congestion </h3>On top of the rising fuel costs, carriers are also facing delays when calling at gateway ports in North Europe and the Mediterranean. Yard density is high, with the lingering effects of severe storms in early March continuing to be felt. Kuehne + Nagel’s visibility tool SeaExplorer noted “heavily disrupted operations” at Antwerp, Hamburg and Felixstowe, with seven-day average vessel wait times of more than two days. “It’s been reported that yard density has reached over 75% at ports like Antwerp, Hamburg, and Rotterdam in the past few weeks and much of that was due to the berthing delays from storms in February and early March and their lingering impacts,” said Destine Ozuygur, senior market analyst at Xeneta. Another challenge for shippers on the Asia-North Europe trade lane is on-time performance. While schedule reliability in March of 32% into Northern Europe was a significant improvement on the 18% in February and 22% in January, Ozuygur noted it was barely above the average 29% on-time performance through 2025. “Any gains we’ve seen on this trade have been short-lived over the past 12 months,” she said, adding that only in March and May of last year did schedule reliability ever pass 40%. From a deployed capacity perspective, the Asia-Mediterranean trade lane has seen an 8% increase from April to May, with carriers adding 69,000 TEUs to the corridor to serve rerouted Persian Gulf cargo, Xeneta data shows. Planned capacity on Asia-Mediterranean routes of 844,862 TEUs in April is an increase of 25% compared with March and will jump to 913,285 TEUs in May. “The Far East-Med is being used to route Gulf Cooperation Council-bound cargo through Jeddah, King Abdullah and Mersin,” Ozuygur said. “The challenges that could potentially bring to other Mediterranean ports if this becomes a long-term routing option that gains favor over Khor Fakkan, Mundra, Nhava Sheva, etc. is one worth noting.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers have unveiled a raft of rate increases and emergency fuel surcharges on multiple trade lanes as high bunker prices push up operating costs across shipping networks. Most of the increases represent a significant premium on current pricing levels, but it remains to be seen how sticky the aspirational rates will be with cargo markets also under pressure from high energy prices. Carriers have been pushing general rate increases (GRIs) on Asia-US trade lanes to lift prices on the trans-Pacific. As of April 9, Asia-US East Coast rates of $3,525/FEU were up 20% compared with levels before the April 1 GRIs, with Asia-West Coast up 24% at $2,525/FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global. Mediterranean Shipping Co. will increase its Asia-North America emergency fuel surcharge (EFS) on May 1, with the Asia-North America West Coast EFS rising 70% to $467/FEU and the East Coast levy up 50% at $644/FEU. On Asia-North Europe, rates eased this week despite Maersk announcing freight-all-kinds (FAK) prices that set higher rate levels ranging from $3,500 to $3,900/FEU depending on destination ports. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates unchanged this week near $2,854/FEU. Other upcoming increases announced this week include CMA CGM planning an April 16 FAK rate of $4,300/FEU from Northwest India and Pakistan to North Europe, the Mediterranean and North Africa, more than 70% higher than the current rate, while Hapag-Lloyd will be adding $1,000/FEU on the Indian Subcontinent, Pakistan and Middle East to the US and Canada. Hapag-Lloyd’s EFS of $160/TEU, in effect since mid-March on routes not regulated by the US Federal Maritime Commission (FMC), was implemented on US trades this week. The FMC requires a 30-day notice period from carriers before they can implement rate increases and surcharges on US routes. Ocean Network Express on April 2 implemented an inland fuel surcharge for carrier haulage in Latin America and across all non-FMC regulated trade routes and services and will extend that to FMC-regulated routes on May 2. “The evolving security situation in the Middle East continues to pose significant challenges, affecting logistics operations and customer supply chains,” ONE said in its surcharge announcement this week. “Many refineries are also operating at reduced capacity, limiting export volumes and causing substantial disruptions in global fuel supply chains,” the carrier added. Shipping reluctant to pass through Hormuz The Strait of Hormuz that links the Persian Gulf with the Gulf of Oman is a key energy transport route with about 20% of the world’s oil and gas supplies passing through the waterway. It has been effectively closed since the war started on Feb. 28, and despite the two-week US-Iran ceasefire agreed to earlier this week , shipping remains reluctant to pass through the strait until safety can be guaranteed. Jan Christensen, senior director of fuel purchasing at Hapag-Lloyd, highlighted the impact high prices and supply disruptions from the Hormuz blockade were having on bunkering operations. “Higher crude oil prices directly translate into higher bunker prices, which are the fuel costs for our vessels,” Christensen said in a recent interview. “Fuel is one of the largest cost components in container shipping, so these developments have a significant financial impact for all carriers. When oil prices move sharply upward, bunker costs follow very quickly, which increases operational expenses across the entire fleet.” Fuel availability continues to tighten , particularly in the Asian bunkering hubs in Singapore and South Korea. “Some suppliers are already signaling that they cannot fully guarantee contracted volumes, and it’s becoming increasingly difficult to secure bunker contracts for April and May,” Christensen said. Lingering Europe port congestion On top of the rising fuel costs, carriers are also facing delays when calling at gateway ports in North Europe and the Mediterranean. Yard density is high, with the lingering effects of severe storms in early March continuing to be felt. Kuehne + Nagel’s visibility tool SeaExplorer noted “heavily disrupted operations” at Antwerp, Hamburg and Felixstowe, with seven-day average vessel wait times of more than two days. “It’s been reported that yard density has reached over 75% at ports like Antwerp, Hamburg, and Rotterdam in the past few weeks and much of that was due to the berthing delays from storms in February and early March and their lingering impacts,” said Destine Ozuygur, senior market analyst at Xeneta. Another challenge for shippers on the Asia-North Europe trade lane is on-time performance. While schedule reliability in March of 32% into Northern Europe was a significant improvement on the 18% in February and 22% in January, Ozuygur noted it was barely above the average 29% on-time performance through 2025. “Any gains we’ve seen on this trade have been short-lived over the past 12 months,” she said, adding that only in March and May of last year did schedule reliability ever pass 40%. From a deployed capacity perspective, the Asia-Mediterranean trade lane has seen an 8% increase from April to May, with carriers adding 69,000 TEUs to the corridor to serve rerouted Persian Gulf cargo, Xeneta data shows. Planned capacity on Asia-Mediterranean routes of 844,862 TEUs in April is an increase of 25% compared with March and will jump to 913,285 TEUs in May. “The Far East-Med is being used to route Gulf Cooperation Council-bound cargo through Jeddah, King Abdullah and Mersin,” Ozuygur said. “The challenges that could potentially bring to other Mediterranean ports if this becomes a long-term routing option that gains favor over Khor Fakkan, Mundra, Nhava Sheva, etc. is one worth noting.” Contact Greg Knowler at greg.knowler@spglobal.com .

Cost-hit ocean carriers roll out series of rate increases, fuel surcharges

<div class="phx-topic abstract-wrapper">The ocean carrier said it would no longer call Oakland on one of its trans-Pacific services, with another service into the Pacific Northwest dropping a Vietnam call.</div>

The ocean carrier said it would no longer call Oakland on one of its trans-Pacific services, with another service into the Pacific Northwest dropping a Vietnam call.

<div class="phx-topic">Mediterranean Shipping Co. (MSC) is reducing the number of West Coast port calls it makes on one of its trans-Pacific services and changing its Asian port rotations in a bid to improve schedule reliability and service consistency. MSC said in a customer advisory late last week that its Orient service from China would no longer call Oakland, effective as of the April 30 departure of the 8,827-TEU MSC Naomi from Qingdao. MSC said it made the change so “the service will be less exposed to port congestion risks, allowing for improved schedule reliability and more consistent on-time arrivals.” Amid last year’s tariff turmoil, Oakland saw an 8.6% drop in imports from China in 2025, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global, close to the overall 8.1% drop for all inbound volumes from China to West Coast ports. Although not in MSC’s advisory, the Orient service, whose only West Coast call will be the carrier’s Long Beach terminal, has also effectively dropped Portland, Oregon, as a regular call, even though the port was listed on the rotation in earlier Orient service brochures. MSC, <a href="https://www.joc.com/article/msc-restores-trans-pacific-liberty-service-with-new-call-at-philadelphia-5703074">which has offered intermittent service to Portland since the pandemic</a>, last called Portland with a post-Panamax container ship in May 2025, according to Sea-web, a sister company of the Journal of Commerce. The carrier, meanwhile, is adding Vietnam’s Haiphong as a regular call to its Sentosa service from Southeast Asia to Long Beach and Oakland. The new call from Haiphong, MSC’s first direct service from that port into Long Beach, will be in effect as of the April 16 departure from Haiphong of the 16,616-TEU MSC Lorenza. MSC said the change “will offer improved transit times compared to the previous routing, while optimizing port coverage within a more stable network structure.” <h3>Dropping Haiphong on Chinook service </h3>However, MSC will be dropping Haiphong as a call on its Chinook service into the Pacific Northwest, leaving Vietnam’s Vung Tau, major Chinese ports, and South Korea’s Busan on the service. The new Chinook rotation will be in effect as of the April 13 departure of the 10,114-TEU Express Athens from Vung Tau. MSC said the dropped call from Haiphong will provide Pacific Northwest shippers with more schedule buffer in the event of delays. But it also comes as the Pacific Northwest saw only 3% growth in imports from Southeast Asia last year, according to PIERS data, versus a 19.6% overall growth for Southeast Asian imports into West Coast ports. Third-party logistics provider <a href="https://www.joc.com/article/uwl-locks-in-new-vessel-partner-for-trans-pacific-vietnam-service-6032327">UWL recently shut down its express service from northern Vietnam into the Pacific Northwest</a> due to the lack of business. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Mediterranean Shipping Co. (MSC) is reducing the number of West Coast port calls it makes on one of its trans-Pacific services and changing its Asian port rotations in a bid to improve schedule reliability and service consistency. MSC said in a customer advisory late last week that its Orient service from China would no longer call Oakland, effective as of the April 30 departure of the 8,827-TEU MSC Naomi from Qingdao. MSC said it made the change so “the service will be less exposed to port congestion risks, allowing for improved schedule reliability and more consistent on-time arrivals.” Amid last year’s tariff turmoil, Oakland saw an 8.6% drop in imports from China in 2025, according to PIERS, a sister company of the Journal of Commerce within S&P Global, close to the overall 8.1% drop for all inbound volumes from China to West Coast ports. Although not in MSC’s advisory, the Orient service, whose only West Coast call will be the carrier’s Long Beach terminal, has also effectively dropped Portland, Oregon, as a regular call, even though the port was listed on the rotation in earlier Orient service brochures. MSC, which has offered intermittent service to Portland since the pandemic , last called Portland with a post-Panamax container ship in May 2025, according to Sea-web, a sister company of the Journal of Commerce. The carrier, meanwhile, is adding Vietnam’s Haiphong as a regular call to its Sentosa service from Southeast Asia to Long Beach and Oakland. The new call from Haiphong, MSC’s first direct service from that port into Long Beach, will be in effect as of the April 16 departure from Haiphong of the 16,616-TEU MSC Lorenza. MSC said the change “will offer improved transit times compared to the previous routing, while optimizing port coverage within a more stable network structure.” Dropping Haiphong on Chinook service However, MSC will be dropping Haiphong as a call on its Chinook service into the Pacific Northwest, leaving Vietnam’s Vung Tau, major Chinese ports, and South Korea’s Busan on the service. The new Chinook rotation will be in effect as of the April 13 departure of the 10,114-TEU Express Athens from Vung Tau. MSC said the dropped call from Haiphong will provide Pacific Northwest shippers with more schedule buffer in the event of delays. But it also comes as the Pacific Northwest saw only 3% growth in imports from Southeast Asia last year, according to PIERS data, versus a 19.6% overall growth for Southeast Asian imports into West Coast ports. Third-party logistics provider UWL recently shut down its express service from northern Vietnam into the Pacific Northwest due to the lack of business. Contact Michael Angell at michael.angell@spglobal.com .

North American ports

MSC consolidates USWC, Asian calls to boost trans-Pacific reliability

<div class="phx-topic abstract-wrapper">Polyethylene prices have nearly doubled since the end of February as Iran’s closure of the Strait of Hormuz has cut off the region’s petrochemical plants from the rest of the world.</div>

Polyethylene prices have nearly doubled since the end of February as Iran’s closure of the Strait of Hormuz has cut off the region’s petrochemical plants from the rest of the world.

<div class="phx-topic">(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) Following strong growth in 2025, US resins exports could see a repeat due to the global supply squeeze created by the war with Iran. But the degree of growth in 2026 will depend on how quickly new US supply can come online and whether surging resin prices will ultimately cause consumers to pull back. Outbound shipments of polyethylene and polypropylene, which account for over half of US chemicals exports, grew 10.7% to 1.23 million TEUs in 2025, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Last year’s growth was the strongest since 2023, when import container demand returned to normal and allowed more space for exporters. China last year again received the largest share of overall US chemicals exports for any single country, but at 11.2%, it was down from 14.3% in 2024 and the lowest share since before the COVID-19 pandemic, PIERS data showed. Brazil was next at 8%, down marginally from the year prior. Terry Glass, vice president at commodities price reporting agency Argus, said new supply coming online last year fueled 2025 growth. Dow Chemical opened its latest resins production line at its Freeport, Texas, plant, capable of producing enough polyethylene for filling 26,000 20-foot containers per year. After its first production line was completed in 2022, Shell now has three production lines operating at its Monaca plant in Pennsylvania, Glass said. The plant, largely dependent on export markets, can turn out enough resins to fill about 31,000, 20-foot containers annually. The new supply lowered margins on resin, causing producers to lower plant utilization to about 80% toward the end of 2025, Glass said. Producers also typically decrease production ahead of planned maintenance, which generally takes place during the first quarter. However, war in the Middle East has scrambled that plan. Since the end of February, polyethylene prices have nearly doubled as Iran’s closure of the Strait of Hormuz has cut off the region’s petrochemical plants from the rest of the world. Glass said North American plants are now running at 91% utilization and likely to defer maintenance due to the strong pricing. “Producers were starting to cut [output] through December and January because they were not getting enough incremental margin,” he said. “We’re forecasting another six months of elevated prices and elevated demand for the US producers.” <h3>War damage to energy infrastructure </h3>Ted Semesnyei, an associate director for S&amp;P Global, said the strong demand will play out in waves globally. Asia will be the first pinched by the cut in Mideast supply. While China has built up its own resin production to supply the region, it primarily uses crude oil from the Middle East as a feedstock. Chinese producers are starting to cut back because of high feedstock costs and are importing alternative feedstocks, which will also become more expensive over time. Europe has some buffer inventory, having built up resin stocks in anticipation of maintenance season, Glass said. European producers also have some flexibility as to sourcing feedstocks from the Mideast or the US. “Not only are skyrocketing feedstock costs a major upside pricing risk, but increasingly actual supply availability is a growing concern,” Semesnyei said. “Because of the way global trade is set up, the Asia region is most at risk, followed by Europe and then North America.” A big unknown for the resins market is the extent of the damage that has already occurred to Mideast petrochemical capacity. The attacks on Qatar’s Ras Laffan LNG plant and Iran’s South Pars gas field threaten feedstock supply for Mideast resins producers, Glass said, with a preliminary estimate of $25 billion worth of damage. Those facilities could face months, if not years, of repairs. “Even if they could get in and assess the damage, they can’t get access to the parts,” Glass said. “They would need to get some major equipment that is already on back order for two years.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1798929d-28b3-4b03-be92-66a0e269ac32"></dynamic-object></div>There is little, if any, outbound logistical constraint facing North American resin shippers currently. Glass said the distributors and packagers that load resin into containers have enough capacity for more volumes, and container ships have ample space. Export freight rates have ticked higher in anticipation of more demand. The benchmark rate for shipping a dry 20-foot container from Houston to North Europe has reached $1,186, according to Xeneta, a 7% increase from the end of March. The US already exports about 50% of its total polyethylene production currently, Glass said, and that figure could reach 60% thanks to the current strong pricing. US resin customers have about 40 days of inventory, he added, which is a bit of a cushion for diverting product to export markets. But with about one-fifth of global supply coming out of the Mideast, US producers will not be able to replace it entirely. North American producers can likely bring utilization up to about 93% in the short term, but that much utilization will also mean more maintenance for plant equipment. In the near term, the next major supply for the export market will be a Chevron Phillips Chemical and QatarEnergy plant in Orange, Texas, that is expected to be completed in mid-2026. The plant will be capable of making enough polyethylene resins to fill 46,000 20-foot containers per year, but Glass said it will at take least another two to three months after completion for the plant to reach that maximum output. Utilization above 90% is “the max that they can run,” Glass said. “We don’t have a lot of excess capacity.” The ongoing strength in resins prices could also force the market to self-correct, Semesnyei said, with consumers and companies deciding to cut back demand entirely due to higher costs for downstream products. “Major demand destruction will become a growing risk the longer the conflict lasts, impacting the entire world,” he said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) Following strong growth in 2025, US resins exports could see a repeat due to the global supply squeeze created by the war with Iran. But the degree of growth in 2026 will depend on how quickly new US supply can come online and whether surging resin prices will ultimately cause consumers to pull back. Outbound shipments of polyethylene and polypropylene, which account for over half of US chemicals exports, grew 10.7% to 1.23 million TEUs in 2025, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Last year’s growth was the strongest since 2023, when import container demand returned to normal and allowed more space for exporters. China last year again received the largest share of overall US chemicals exports for any single country, but at 11.2%, it was down from 14.3% in 2024 and the lowest share since before the COVID-19 pandemic, PIERS data showed. Brazil was next at 8%, down marginally from the year prior. Terry Glass, vice president at commodities price reporting agency Argus, said new supply coming online last year fueled 2025 growth. Dow Chemical opened its latest resins production line at its Freeport, Texas, plant, capable of producing enough polyethylene for filling 26,000 20-foot containers per year. After its first production line was completed in 2022, Shell now has three production lines operating at its Monaca plant in Pennsylvania, Glass said. The plant, largely dependent on export markets, can turn out enough resins to fill about 31,000, 20-foot containers annually. The new supply lowered margins on resin, causing producers to lower plant utilization to about 80% toward the end of 2025, Glass said. Producers also typically decrease production ahead of planned maintenance, which generally takes place during the first quarter. However, war in the Middle East has scrambled that plan. Since the end of February, polyethylene prices have nearly doubled as Iran’s closure of the Strait of Hormuz has cut off the region’s petrochemical plants from the rest of the world. Glass said North American plants are now running at 91% utilization and likely to defer maintenance due to the strong pricing. “Producers were starting to cut [output] through December and January because they were not getting enough incremental margin,” he said. “We’re forecasting another six months of elevated prices and elevated demand for the US producers.” War damage to energy infrastructure Ted Semesnyei, an associate director for S&P Global, said the strong demand will play out in waves globally. Asia will be the first pinched by the cut in Mideast supply. While China has built up its own resin production to supply the region, it primarily uses crude oil from the Middle East as a feedstock. Chinese producers are starting to cut back because of high feedstock costs and are importing alternative feedstocks, which will also become more expensive over time. Europe has some buffer inventory, having built up resin stocks in anticipation of maintenance season, Glass said. European producers also have some flexibility as to sourcing feedstocks from the Mideast or the US. “Not only are skyrocketing feedstock costs a major upside pricing risk, but increasingly actual supply availability is a growing concern,” Semesnyei said. “Because of the way global trade is set up, the Asia region is most at risk, followed by Europe and then North America.” A big unknown for the resins market is the extent of the damage that has already occurred to Mideast petrochemical capacity. The attacks on Qatar’s Ras Laffan LNG plant and Iran’s South Pars gas field threaten feedstock supply for Mideast resins producers, Glass said, with a preliminary estimate of $25 billion worth of damage. Those facilities could face months, if not years, of repairs. “Even if they could get in and assess the damage, they can’t get access to the parts,” Glass said. “They would need to get some major equipment that is already on back order for two years.” There is little, if any, outbound logistical constraint facing North American resin shippers currently. Glass said the distributors and packagers that load resin into containers have enough capacity for more volumes, and container ships have ample space. Export freight rates have ticked higher in anticipation of more demand. The benchmark rate for shipping a dry 20-foot container from Houston to North Europe has reached $1,186, according to Xeneta, a 7% increase from the end of March. The US already exports about 50% of its total polyethylene production currently, Glass said, and that figure could reach 60% thanks to the current strong pricing. US resin customers have about 40 days of inventory, he added, which is a bit of a cushion for diverting product to export markets. But with about one-fifth of global supply coming out of the Mideast, US producers will not be able to replace it entirely. North American producers can likely bring utilization up to about 93% in the short term, but that much utilization will also mean more maintenance for plant equipment. In the near term, the next major supply for the export market will be a Chevron Phillips Chemical and QatarEnergy plant in Orange, Texas, that is expected to be completed in mid-2026. The plant will be capable of making enough polyethylene resins to fill 46,000 20-foot containers per year, but Glass said it will at take least another two to three months after completion for the plant to reach that maximum output. Utilization above 90% is “the max that they can run,” Glass said. “We don’t have a lot of excess capacity.” The ongoing strength in resins prices could also force the market to self-correct, Semesnyei said, with consumers and companies deciding to cut back demand entirely due to higher costs for downstream products. “Major demand destruction will become a growing risk the longer the conflict lasts, impacting the entire world,” he said. Contact Michael Angell at michael.angell@spglobal.com .

First wave of IEEPA refunds to US importers to start April 20: CBP

Featured Gateway Chart

Essential Reads

Hesitation from port authorities slows automation in Southern California

California truckload rates rise as fuel spikes, capacity cuts tighten market

US household goods imports flatten as housing weakness weighs on demand

Recent Commentary

When the demand signal comes from outside the market

Are SoCal’s planned freight projects a matter of ‘California Dreamin’’?

Top 5 Most Read Stories