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<div class="phx-topic abstract-wrapper">Europe’s busiest container port has maintained its growth so far this year despite persistent congestion, intermittent strikes and growing geopolitical tensions.</div>

Europe’s busiest container port has maintained its growth so far this year despite persistent congestion, intermittent strikes and growing geopolitical tensions.

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<div class="phx-topic">Rotterdam reported a 3% increase in container throughput for the first nine months of the year as solid Asia-Europe imports drove total volumes to 10.7 million TEUs. Third-quarter volumes increased almost 4% at Europe’s largest container port, with throughput from Asia rising 8.8% in the period. The gains came despite persistent congestion that has created bottlenecks and delays at Rotterdam for much of the year. Intermittent strikes and growing geopolitical tensions have added to the challenges. Boudewijn Siemons, CEO of Port of Rotterdam Authority, said the strength in container volume coming as European industry was “under enormous pressure” confirmed the “resilience and strategic value of the port.” Strong import demand of 5.6 million TEUs was recorded in the first nine months, up 3.4% year over year, the port said in a statement Tuesday. The robust Asian import numbers are supported by Container Trades Statistics (CTS), whose latest data for August shows that volumes on Asia-North Europe were up 9% during the first eight months of the year at 12.9 million TEUs. Persistent congestion that has plagued Europe’s northern range ports, including Rotterdam, appeared to have no negative impact on the gateway port’s volume. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e74f9a77-dd33-49ff-89bc-48dbd71051e3"></dynamic-object></div>Another major contributor to Rotterdam’s volume this year was the US, with trans-Atlantic throughput up14.6% in the first nine months compared to last year. New sailing schedules introduced at the beginning of this year from the reshuffled carrier alliances included more services from Rotterdam to North America. Data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global, shows North Europe to North America volume in the first nine months increased 3% year over year to 1.71 million TEUs. Europe’s second- and third-biggest container gateway ports — Antwerp-Bruges and Hamburg — have not yet released their nine-month operating figures. However, one of Hamburg’s largest terminal operators, HHLA, adjusted its annual outlook this week and is expecting “a significant increase in container throughput." The positive outlook was made despite HHLA’s contention that tariff-driven US trade policy was making its business environment “less robust than originally assumed.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Rotterdam reported a 3% increase in container throughput for the first nine months of the year as solid Asia-Europe imports drove total volumes to 10.7 million TEUs. Third-quarter volumes increased almost 4% at Europe’s largest container port, with throughput from Asia rising 8.8% in the period. The gains came despite persistent congestion that has created bottlenecks and delays at Rotterdam for much of the year. Intermittent strikes and growing geopolitical tensions have added to the challenges. Boudewijn Siemons, CEO of Port of Rotterdam Authority, said the strength in container volume coming as European industry was “under enormous pressure” confirmed the “resilience and strategic value of the port.” Strong import demand of 5.6 million TEUs was recorded in the first nine months, up 3.4% year over year, the port said in a statement Tuesday. The robust Asian import numbers are supported by Container Trades Statistics (CTS), whose latest data for August shows that volumes on Asia-North Europe were up 9% during the first eight months of the year at 12.9 million TEUs. Persistent congestion that has plagued Europe’s northern range ports, including Rotterdam, appeared to have no negative impact on the gateway port’s volume. Another major contributor to Rotterdam’s volume this year was the US, with trans-Atlantic throughput up14.6% in the first nine months compared to last year. New sailing schedules introduced at the beginning of this year from the reshuffled carrier alliances included more services from Rotterdam to North America. Data from PIERS, a sister company of the Journal of Commerce within S&P Global, shows North Europe to North America volume in the first nine months increased 3% year over year to 1.71 million TEUs. Europe’s second- and third-biggest container gateway ports — Antwerp-Bruges and Hamburg — have not yet released their nine-month operating figures. However, one of Hamburg’s largest terminal operators, HHLA, adjusted its annual outlook this week and is expecting “a significant increase in container throughput." The positive outlook was made despite HHLA’s contention that tariff-driven US trade policy was making its business environment “less robust than originally assumed.” Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe ocean imports drive up Rotterdam's nine-month volume

<div class="phx-topic abstract-wrapper">A limited supply of alternative fuels will not be helped by the one-year adjournment of the net-zero framework, Rolf Habben Jansen says. </div>

A limited supply of alternative fuels will not be helped by the one-year adjournment of the net-zero framework, Rolf Habben Jansen says.

<div class="phx-topic">The appetite of investors to fund shipping’s transition to green fuels has been hurt by the International Maritime Organization’s (IMO’s) decision to delay the adoption of its net-zero emissions framework, according to Hapag-Lloyd’s CEO. Rolf Habben Jansen said the supply of greener alternatives to traditional heavy bunkers was limited, a situation that would prevail for “at least another 10 years,” and one that would not be helped by the <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">one-year adjournment of the decarbonization regulation</a>. “The appetite of investors to invest in green fuel has not gone up after the IMO decision — the hurdles have gone up,” Habben Jansen told reporters Tuesday at a ship naming ceremony at Wilhelmshaven’s Jade Wesser port. The IMO’s net-zero framework was expected to be adopted at a special meeting of its Marine Environment Protection Committee (MEPC) in London two weeks ago after the measure was approved by a majority of member states in April. But the regulation was derailed by US-led opposition during the combative October meeting and postponed for one year. Still, while the investment case for shipping’s alternative fuel production may have been hurt by the IMO’s delay, the focus of Hapag-Lloyd’s newbuilding program remains firmly in place and is structured around liquefied natural gas (LNG). The carrier’s Wilhelmshaven Express, which was christened Tuesday, is the last of a 12-ship order of 24,000-TEU dual-fuel vessels sailing on LNG. Hapag-Lloyd has another 24 dual-fuel LNG newbuildings in the pipeline, 12 with a capacity of 16,800 TEUs each and 12 with a capacity of 9,200 TEUs each, to be delivered between 2027 and 2029 The vessels can also be operated using biomethane, which can further reduce CO2 emissions by up to 95% compared with conventional propulsion systems, according to the carrier. Technology to improve harmful “methane slip” is also progressing. <h3>Surge in dual-fuel LNG ship orders </h3>The number of LNG-fueled container ships on order <a href="https://www.joc.com/article/lng-increasingly-alternative-fuel-of-choice-for-container-lines-6104125">has grown from 194 in late 2023 to 362 as of mid-October</a>, according to S&amp;P Global Market Intelligence. What’s more, the percentage of vessels on order capable of running on LNG has grown to 40% from 23% during the same period, while the percentage of methanol-powered ships was unchanged at 15%. The 218 LNG container ships currently in operation represent 3.5% of the global container ship fleet. S&amp;P Global is the parent company of the Journal of Commerce. With the IMO delay in adopting global decarbonization measures throwing interim greenhouse gas emissions targets into doubt, improving the fuel efficiency of vessels has attained even greater importance, particularly in Europe. The EU Emissions Trading System (ETS) carbon tax and FuelEU Maritime fuel intensity regulations will come into full effect in 2026, and cutting vessel emissions will directly impact a carrier’s operating costs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="82b6ff12-d7ca-420a-abbe-7b9998b29e56"></dynamic-object></div>Habben Jansen said achieving greater fuel consumption through slower steaming and operating more efficient vessels was a priority for Hapag-Lloyd as it strives to cut its emissions. “Newer ships are 40% more fuel efficient per transported container, and until more alternative fuel is available, we have to use ships and fuel that are more efficient,” he said. Nitesh Ranvah, CEO of naval engineering and consulting firm 21 Knots, said there was significant activity in “radical retrofits” of existing vessels to improve fuel efficiency, but there was little interest in engine conversions. “The engine upgrades are a small part of the conversions happening in the container segment with only 20 or 30 orders in place right now, and with IMO delay, even that might get canceled,” Ranvah told the Journal of Commerce. “Instead, we are seeing major efficiency upgrades to improve a ship’s CII scores and improve the overall fuel consumptions on the vessel that benefits compliance with the ETS,” he added. The CII, or Carbon Intensity Indicator, is a mandatory rating system from the IMO that measures a ship’s fuel efficiency in terms of carbon dioxide emitted per unit of cargo capacity per nautical mile. <h3>Carriers opting for radical retrofits </h3>Ranvah said radical retrofits in the container shipping sector typically involved upgrades to bulbous bows and propellers and high-performance silicon paint on the hull. The projects are predominantly done in China and take three to four weeks with the cost between $1 million and $2 million on a large vessel. Return on investment takes about 2.5 years. “More than 50% of the container fleet that is around 15 years old is going through these retrofits because the original designs were not suited for the trade container ships are in right now,” Ranvah said. "They were all high-speed design vessels and now most of the container ships are sailing on eco modes.” He added it was not about extending the lifespan of a vessel, but improving its fuel consumption. “On paper, we are looking at somewhere around 30% to 40% of efficiency improvement with all the retrofits, although a significant part of it is the silicon paint itself, which adds a lot of efficiency to the hull,” Ranvah said. “But as a package, vessels can deliver somewhere around 20% or 25% better efficiency that saves on operating expenses and gives a better CII rating,” he added. “Most of the vessels are still using heavy fuel, so if they consume less heavy fuel, the burden of ETS and FuelEU compliance will be lower as well.” Data from Alphaliner shows that as of Oct. 20, 183 ships with a combined capacity of 815,232 TEUs were tied up in shipyards undergoing maintenance, repair and more comprehensive retrofit and conversion work. The amount represents an increase of 30 ships and 127,000 TEUs from the analyst’s prior report two weeks earlier. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The appetite of investors to fund shipping’s transition to green fuels has been hurt by the International Maritime Organization’s (IMO’s) decision to delay the adoption of its net-zero emissions framework, according to Hapag-Lloyd’s CEO. Rolf Habben Jansen said the supply of greener alternatives to traditional heavy bunkers was limited, a situation that would prevail for “at least another 10 years,” and one that would not be helped by the one-year adjournment of the decarbonization regulation . “The appetite of investors to invest in green fuel has not gone up after the IMO decision — the hurdles have gone up,” Habben Jansen told reporters Tuesday at a ship naming ceremony at Wilhelmshaven’s Jade Wesser port. The IMO’s net-zero framework was expected to be adopted at a special meeting of its Marine Environment Protection Committee (MEPC) in London two weeks ago after the measure was approved by a majority of member states in April. But the regulation was derailed by US-led opposition during the combative October meeting and postponed for one year. Still, while the investment case for shipping’s alternative fuel production may have been hurt by the IMO’s delay, the focus of Hapag-Lloyd’s newbuilding program remains firmly in place and is structured around liquefied natural gas (LNG). The carrier’s Wilhelmshaven Express, which was christened Tuesday, is the last of a 12-ship order of 24,000-TEU dual-fuel vessels sailing on LNG. Hapag-Lloyd has another 24 dual-fuel LNG newbuildings in the pipeline, 12 with a capacity of 16,800 TEUs each and 12 with a capacity of 9,200 TEUs each, to be delivered between 2027 and 2029 The vessels can also be operated using biomethane, which can further reduce CO2 emissions by up to 95% compared with conventional propulsion systems, according to the carrier. Technology to improve harmful “methane slip” is also progressing. Surge in dual-fuel LNG ship orders The number of LNG-fueled container ships on order has grown from 194 in late 2023 to 362 as of mid-October , according to S&P Global Market Intelligence. What’s more, the percentage of vessels on order capable of running on LNG has grown to 40% from 23% during the same period, while the percentage of methanol-powered ships was unchanged at 15%. The 218 LNG container ships currently in operation represent 3.5% of the global container ship fleet. S&P Global is the parent company of the Journal of Commerce. With the IMO delay in adopting global decarbonization measures throwing interim greenhouse gas emissions targets into doubt, improving the fuel efficiency of vessels has attained even greater importance, particularly in Europe. The EU Emissions Trading System (ETS) carbon tax and FuelEU Maritime fuel intensity regulations will come into full effect in 2026, and cutting vessel emissions will directly impact a carrier’s operating costs. Habben Jansen said achieving greater fuel consumption through slower steaming and operating more efficient vessels was a priority for Hapag-Lloyd as it strives to cut its emissions. “Newer ships are 40% more fuel efficient per transported container, and until more alternative fuel is available, we have to use ships and fuel that are more efficient,” he said. Nitesh Ranvah, CEO of naval engineering and consulting firm 21 Knots, said there was significant activity in “radical retrofits” of existing vessels to improve fuel efficiency, but there was little interest in engine conversions. “The engine upgrades are a small part of the conversions happening in the container segment with only 20 or 30 orders in place right now, and with IMO delay, even that might get canceled,” Ranvah told the Journal of Commerce. “Instead, we are seeing major efficiency upgrades to improve a ship’s CII scores and improve the overall fuel consumptions on the vessel that benefits compliance with the ETS,” he added. The CII, or Carbon Intensity Indicator, is a mandatory rating system from the IMO that measures a ship’s fuel efficiency in terms of carbon dioxide emitted per unit of cargo capacity per nautical mile. Carriers opting for radical retrofits Ranvah said radical retrofits in the container shipping sector typically involved upgrades to bulbous bows and propellers and high-performance silicon paint on the hull. The projects are predominantly done in China and take three to four weeks with the cost between $1 million and $2 million on a large vessel. Return on investment takes about 2.5 years. “More than 50% of the container fleet that is around 15 years old is going through these retrofits because the original designs were not suited for the trade container ships are in right now,” Ranvah said. "They were all high-speed design vessels and now most of the container ships are sailing on eco modes.” He added it was not about extending the lifespan of a vessel, but improving its fuel consumption. “On paper, we are looking at somewhere around 30% to 40% of efficiency improvement with all the retrofits, although a significant part of it is the silicon paint itself, which adds a lot of efficiency to the hull,” Ranvah said. “But as a package, vessels can deliver somewhere around 20% or 25% better efficiency that saves on operating expenses and gives a better CII rating,” he added. “Most of the vessels are still using heavy fuel, so if they consume less heavy fuel, the burden of ETS and FuelEU compliance will be lower as well.” Data from Alphaliner shows that as of Oct. 20, 183 ships with a combined capacity of 815,232 TEUs were tied up in shipyards undergoing maintenance, repair and more comprehensive retrofit and conversion work. The amount represents an increase of 30 ships and 127,000 TEUs from the analyst’s prior report two weeks earlier. Contact Greg Knowler at greg.knowler@spglobal.com .

Green fuel funding slowed by IMO decarbonization delay: Hapag-Lloyd CEO

<div class="phx-topic abstract-wrapper">International lanes that don’t touch the US are growing package volumes faster as higher US tariffs disrupt established patterns, UPS said in its latest earnings report. </div>

International lanes that don’t touch the US are growing package volumes faster as higher US tariffs disrupt established patterns, UPS said in its latest earnings report.

<div class="phx-topic">International package volume is growing at UPS, but not in lanes touching the US, the global logistics company said in its third-quarter earnings call Tuesday. Driven by a 4.8% increase in average daily package volume, UPS’ international package revenue rose 5.9% year over year in the quarter to $4.7 billion. US domestic package revenue declined 2.6% to $14.2 billion in the same period, the company said. Europe and the Americas led the third-quarter growth in international volume, while average daily volume on the China-to-US lane declined 27.1% year over year as higher US tariffs loomed. “There’s still a lot of flux going on in the world where things are moving around,” UPS CFO Brian Dykes told analysts. “What we are seeing is a lot of growth outside the US.” While trade continues to flow, “it’s not touching the US as much as it was before,” Dykes said. “There will be some permanent change until the new equilibrium on trade flows settles.” The third-quarter earnings report from the $91.1 billion global logistics company provides the latest sign of the extent of the change in <a href="https://www.joc.com/article/post-tariff-air-freight-market-diversifies-into-us-plus-one-strategy-tiaca-6091416">global trade flow</a> caused by high US tariffs. International shippers “are shifting trade,” said Kathleen Gutmann, UPS’ president of international, healthcare and supply chain solutions. Of UPS’ 20 largest non-US export lanes, “16 of them are growing and growing very nicely,” Gutmann told analysts. “A lot of [those lanes] are Asia-to-Asia or Asia-to-Europe and reverse,” she said. The trend of faster freight growth outside the United States is reflected in recent <a href="https://www.joc.com/article/us-tariffs-dent-china-import-volumes-but-not-global-container-growth-6101731">container volume trends</a>, with US gains stalling amid persistent global growth. “We’re seeing the return on the investments we made in Asia, expanding our service, fastening our time in transit,” said Gutmann. <h3>De minimis impact </h3>Overall, UPS revenue declined 3.7% year over year in the third quarter to $21.4 billion. Supply chain revenue, including freight operations, fell 22.1% to $2.5 billion, largely as a result of <a href="https://www.joc.com/article/rxo-purchase-of-coyote-logistics-highlights-us-brokerage-market-pressures-5192296">the sale of Coyote Logistics</a> to RXO in June 2024. UPS also experienced a 10-fold increase in daily US customs entries as a result of the elimination of the de minimis exemption for all US imports on Aug. 29. The de minimis exemption had been eliminated on US imports from China in May. In March, about 13,000 packages a day required customs clearance. In September, that number grew to 112,000 packages a day, UPS CEO Carol Tomé told analysts. She called the number of shippers looking for help with the de minimis change “amazing.” “We’ve reached out and had conversations with 61,000 customers trying to help them navigate through these changes in trade policy,” Tome said. UPS’ rupture with Amazon is another factor in changing freight flow. The company’s business with Amazon is in a multi-quarter “glide down,” with Amazon volume dropping 21.2% year over year in the third quarter, compared with 13% in the first half of the year. UPS has closed 93 buildings in the US this year as it reconfigures its domestic network. “Part of the function of bringing down the water level in the total US network is it allows us to run more efficiently,” said Dykes. “You need less variable capacity, fewer leased aircraft, fewer rented vehicles, fewer seasonal workers [and] that allows you to run a much more efficient network,” he said. UPS and package rival FedEx have been investing and expanding beyond the US as trade flows change and competition increases in the domestic package market. UPS said it expects a 20% sequential increase in average daily package volume in the US in the fourth quarter and a 10% increase in daily international volume. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. Journal of Commerce Research Analyst Cathy Morrow Roberson contributed to this report. </div>

International package volume is growing at UPS, but not in lanes touching the US, the global logistics company said in its third-quarter earnings call Tuesday. Driven by a 4.8% increase in average daily package volume, UPS’ international package revenue rose 5.9% year over year in the quarter to $4.7 billion. US domestic package revenue declined 2.6% to $14.2 billion in the same period, the company said. Europe and the Americas led the third-quarter growth in international volume, while average daily volume on the China-to-US lane declined 27.1% year over year as higher US tariffs loomed. “There’s still a lot of flux going on in the world where things are moving around,” UPS CFO Brian Dykes told analysts. “What we are seeing is a lot of growth outside the US.” While trade continues to flow, “it’s not touching the US as much as it was before,” Dykes said. “There will be some permanent change until the new equilibrium on trade flows settles.” The third-quarter earnings report from the $91.1 billion global logistics company provides the latest sign of the extent of the change in global trade flow caused by high US tariffs. International shippers “are shifting trade,” said Kathleen Gutmann, UPS’ president of international, healthcare and supply chain solutions. Of UPS’ 20 largest non-US export lanes, “16 of them are growing and growing very nicely,” Gutmann told analysts. “A lot of [those lanes] are Asia-to-Asia or Asia-to-Europe and reverse,” she said. The trend of faster freight growth outside the United States is reflected in recent container volume trends , with US gains stalling amid persistent global growth. “We’re seeing the return on the investments we made in Asia, expanding our service, fastening our time in transit,” said Gutmann. De minimis impact Overall, UPS revenue declined 3.7% year over year in the third quarter to $21.4 billion. Supply chain revenue, including freight operations, fell 22.1% to $2.5 billion, largely as a result of the sale of Coyote Logistics to RXO in June 2024. UPS also experienced a 10-fold increase in daily US customs entries as a result of the elimination of the de minimis exemption for all US imports on Aug. 29. The de minimis exemption had been eliminated on US imports from China in May. In March, about 13,000 packages a day required customs clearance. In September, that number grew to 112,000 packages a day, UPS CEO Carol Tomé told analysts. She called the number of shippers looking for help with the de minimis change “amazing.” “We’ve reached out and had conversations with 61,000 customers trying to help them navigate through these changes in trade policy,” Tome said. UPS’ rupture with Amazon is another factor in changing freight flow. The company’s business with Amazon is in a multi-quarter “glide down,” with Amazon volume dropping 21.2% year over year in the third quarter, compared with 13% in the first half of the year. UPS has closed 93 buildings in the US this year as it reconfigures its domestic network. “Part of the function of bringing down the water level in the total US network is it allows us to run more efficiently,” said Dykes. “You need less variable capacity, fewer leased aircraft, fewer rented vehicles, fewer seasonal workers [and] that allows you to run a much more efficient network,” he said. UPS and package rival FedEx have been investing and expanding beyond the US as trade flows change and competition increases in the domestic package market. UPS said it expects a 20% sequential increase in average daily package volume in the US in the fourth quarter and a 10% increase in daily international volume. Contact William B. Cassidy at bill.cassidy@spglobal.com . Journal of Commerce Research Analyst Cathy Morrow Roberson contributed to this report.

UPS volumes grow overseas in Q3 as China-to-US shipments drop 27%

<div class="phx-topic abstract-wrapper">Some market observers believe the frontloading story of 2025 was overplayed and that destocking is actually the major theme this year, which will result in a more robust 2026. </div>

Some market observers believe the frontloading story of 2025 was overplayed and that destocking is actually the major theme this year, which will result in a more robust 2026.

<div class="phx-topic">Are the odds growing for a recovery in US imports next year from what are expected to be soft late-year 2025 volumes? Some analysts are beginning to think so, although there remains considerable debate about the strength of 2026 volumes. The lack of congestion seen at major import gateways such as Los Angeles-Long Beach in 2025 is seen by some industry leaders as evidence of fluidity at warehouses — where the 2022 backups originated. In other words, inventory, instead of being stockpiled this year due to frontloading of imports to avoid tariffs, is instead flowing down the supply chain through to final sale. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6104641_0.1.jpg"></img></div>According to investment bank Jefferies, that means when it comes to US imports, “recovery is likely in 2026.” US imports from Asia dropped almost 12% in September year over year after being on a record pace earlier in the year, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Imports are forecast to continue to decline for the remainder of this year and into early next year. Some, however, believe the frontloading story of 2025 was overplayed — the message being that destocking is actually the major theme this year, which will result in a more robust 2026. “Another ‘muted’ peak season in 2026 seems unlikely, given inventory levels,” Jefferies wrote in a research note Tuesday. “Thus, we can see a healthier market on the trans-Pacific [next year].” The bank noted that US inventories outpaced sales throughout 2024 across the retail, wholesale, and manufacturing segments, while this year, sales have outpaced inventories. “If 2024 was defined by US pre-buying, 2025 is defined by US destocking, and we expect 2026 to see a return perhaps to more normalized activity,” Jefferies said. That supports views on the ground at US ports, where major gateways such as Los Angeles-Long Beach have been free of congestion all year, with low container dwells on terminals, including for rail transfers. Also being seen are faster truck turn times and a more rapid return of chassis, all pointing to the smooth flow of cargo despite volumes that, until September, were outpacing the peak COVID-19 years of 2021 and 2022. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="84dc625e-2a2c-4db3-949e-798502bbef70"></dynamic-object></div>Loaded imports at LA-Long Beach were 7.6 million TEUs through September, versus 7.5 million TEUs in 2021 and 7.3 million TEUs in 2022, according to S&amp;P Global Market Intelligence. “While warehouse space in LA and the Inland Empire is relatively well-utilized, there is slack in the system and open space even at high levels of volumes, so I think that the stuff is moving through to the consumer at a pretty brisk pace, otherwise we would be seeing some backups, which we are not,” said Ron Widdows, CEO of chassis lessor FlexiVan. Still, others see a subdued import environment next year. “The current pullback isn’t ‘artificial.’ It’s the early phase of a longer, shallower import cycle into 2026 — not a sharp rebound,” said Michael Stolarczyk, general manager at third-party logistics provider Mohawk Global. Stolarczyk based that view on ongoing tariff uncertainty, micro-replenishment, and just-in-time agility versus broad restocking waves and consumer malaise. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Are the odds growing for a recovery in US imports next year from what are expected to be soft late-year 2025 volumes? Some analysts are beginning to think so, although there remains considerable debate about the strength of 2026 volumes. The lack of congestion seen at major import gateways such as Los Angeles-Long Beach in 2025 is seen by some industry leaders as evidence of fluidity at warehouses — where the 2022 backups originated. In other words, inventory, instead of being stockpiled this year due to frontloading of imports to avoid tariffs, is instead flowing down the supply chain through to final sale. According to investment bank Jefferies, that means when it comes to US imports, “recovery is likely in 2026.” US imports from Asia dropped almost 12% in September year over year after being on a record pace earlier in the year, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Imports are forecast to continue to decline for the remainder of this year and into early next year. Some, however, believe the frontloading story of 2025 was overplayed — the message being that destocking is actually the major theme this year, which will result in a more robust 2026. “Another ‘muted’ peak season in 2026 seems unlikely, given inventory levels,” Jefferies wrote in a research note Tuesday. “Thus, we can see a healthier market on the trans-Pacific [next year].” The bank noted that US inventories outpaced sales throughout 2024 across the retail, wholesale, and manufacturing segments, while this year, sales have outpaced inventories. “If 2024 was defined by US pre-buying, 2025 is defined by US destocking, and we expect 2026 to see a return perhaps to more normalized activity,” Jefferies said. That supports views on the ground at US ports, where major gateways such as Los Angeles-Long Beach have been free of congestion all year, with low container dwells on terminals, including for rail transfers. Also being seen are faster truck turn times and a more rapid return of chassis, all pointing to the smooth flow of cargo despite volumes that, until September, were outpacing the peak COVID-19 years of 2021 and 2022. Loaded imports at LA-Long Beach were 7.6 million TEUs through September, versus 7.5 million TEUs in 2021 and 7.3 million TEUs in 2022, according to S&P Global Market Intelligence. “While warehouse space in LA and the Inland Empire is relatively well-utilized, there is slack in the system and open space even at high levels of volumes, so I think that the stuff is moving through to the consumer at a pretty brisk pace, otherwise we would be seeing some backups, which we are not,” said Ron Widdows, CEO of chassis lessor FlexiVan. Still, others see a subdued import environment next year. “The current pullback isn’t ‘artificial.’ It’s the early phase of a longer, shallower import cycle into 2026 — not a sharp rebound,” said Michael Stolarczyk, general manager at third-party logistics provider Mohawk Global. Stolarczyk based that view on ongoing tariff uncertainty, micro-replenishment, and just-in-time agility versus broad restocking waves and consumer malaise. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Sentiment growing for 2026 rebound in US imports after late-2025 decline

<div class="phx-topic abstract-wrapper">Micah Mallace said SC Ports needs to return its focus to serving cargo owners and carriers after recent below-market volume growth.</div>

Micah Mallace said SC Ports needs to return its focus to serving cargo owners and carriers after recent below-market volume growth.

<div class="phx-topic">The Port of Charleston needs to reclaim its momentum after recent unsatisfactory growth and prioritize projects in the short term to feed expanded terminal capacity, the new head of the SC Ports Authority (SC Ports) says. Micah Mallace, who served as Charleston’s chief commercial officer before heading a regional logistics provider, rejoins SC Ports at a critical time. His predecessor, Barbara Melvin, exited following cost overruns of the port’s yet-to-be-completed on-dock rail connection. “It is very clear to us that in order to achieve above-market growth, we need a momentum change,” Mallace told the Journal of Commerce in an interview Monday. “We have to get extra aggressive in the services that we offer, extra customer-focused and white glove in the way in which we work with our customers, both [beneficial cargo owners] and shipping lines alike.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6104573_0.1.jpg"></img></div>Charleston’s laden volume growth has lagged the US East Coast average over the last five years on a compound average basis, expanding 4.7% while the market expanded at 7.3%, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. While Mallace’s predecessors, including Jim Newsome, rightly made big bets on infrastructure to expand capacity, the port now needs to focus on growing volumes and strengthening its cargo base, Mallace said. SC Ports is focused on completing the Navy Base Intermodal Facility project, he said. The $782 million project, which was once slated to open later this year, will cost $232 million more than estimated. Some $28 million in siding work needs to be completed so that Norfolk Southern Railway will join CSX Transportation in serving the facility. It is unclear who will be handling the extra costs not accounted for in the project design. <h3>Reviewing new investments </h3>SC Ports is currently reviewing $1 billion worth of planned projects, including investments in berths to serve container-on-barge services. Mallace said that while Charleston had lost market share of intermodal discretionary cargo in recent years, the marine terminals were operating well and volumes at inland ports are rising. Intermodal rail lifts at Inland Port Greer hit a record high, jumping 9.6% year over year in fiscal year 2025, which ended June 30. “We have to kind of get back to the way we used to grow,” said Mallace. “For a 10-year period [2009–18], we were the fastest-growing port in the US, [and] that was born out of being especially customer-focused and especially aggressive in how we deliver solutions for our customers.” He noted that years ago, SC Ports secured an unnamed major retailer by doing the near impossible: delivering specialized transloaded capacity in just six months by creating a temporary facility, affectionately known as Dockzilla. SC Ports pulled it off, and now the retailer has a long-term facility lease off-terminal. “We are going to use the heft of what we have at our disposal, whether that is our real estate, our acreage, our operating considerations or balance sheet,” Mallace said. “We are going to back projects that we can offer exceptional service for momentum-changing opportunities.” Container volumes through Charleston, including empties, expanded just 3% in the most recent fiscal year, Mallace said Tuesday at the annual State of the Port event. However, the port is growing North Asia volumes at a faster pace than its South Atlantic peers, expanding volumes 9% in its most recent fiscal year compared with the 2% volume decline in the region. The port also expanded the number of weekly services 16% year over year in fiscal 2025, and doubled the number of weekly services to India to six. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>.</div>

The Port of Charleston needs to reclaim its momentum after recent unsatisfactory growth and prioritize projects in the short term to feed expanded terminal capacity, the new head of the SC Ports Authority (SC Ports) says. Micah Mallace, who served as Charleston’s chief commercial officer before heading a regional logistics provider, rejoins SC Ports at a critical time. His predecessor, Barbara Melvin, exited following cost overruns of the port’s yet-to-be-completed on-dock rail connection. “It is very clear to us that in order to achieve above-market growth, we need a momentum change,” Mallace told the Journal of Commerce in an interview Monday. “We have to get extra aggressive in the services that we offer, extra customer-focused and white glove in the way in which we work with our customers, both [beneficial cargo owners] and shipping lines alike.” Charleston’s laden volume growth has lagged the US East Coast average over the last five years on a compound average basis, expanding 4.7% while the market expanded at 7.3%, according to PIERS, a sister company of the Journal of Commerce within S&P Global. While Mallace’s predecessors, including Jim Newsome, rightly made big bets on infrastructure to expand capacity, the port now needs to focus on growing volumes and strengthening its cargo base, Mallace said. SC Ports is focused on completing the Navy Base Intermodal Facility project, he said. The $782 million project, which was once slated to open later this year, will cost $232 million more than estimated. Some $28 million in siding work needs to be completed so that Norfolk Southern Railway will join CSX Transportation in serving the facility. It is unclear who will be handling the extra costs not accounted for in the project design. Reviewing new investments SC Ports is currently reviewing $1 billion worth of planned projects, including investments in berths to serve container-on-barge services. Mallace said that while Charleston had lost market share of intermodal discretionary cargo in recent years, the marine terminals were operating well and volumes at inland ports are rising. Intermodal rail lifts at Inland Port Greer hit a record high, jumping 9.6% year over year in fiscal year 2025, which ended June 30. “We have to kind of get back to the way we used to grow,” said Mallace. “For a 10-year period [2009–18], we were the fastest-growing port in the US, [and] that was born out of being especially customer-focused and especially aggressive in how we deliver solutions for our customers.” He noted that years ago, SC Ports secured an unnamed major retailer by doing the near impossible: delivering specialized transloaded capacity in just six months by creating a temporary facility, affectionately known as Dockzilla. SC Ports pulled it off, and now the retailer has a long-term facility lease off-terminal. “We are going to use the heft of what we have at our disposal, whether that is our real estate, our acreage, our operating considerations or balance sheet,” Mallace said. “We are going to back projects that we can offer exceptional service for momentum-changing opportunities.” Container volumes through Charleston, including empties, expanded just 3% in the most recent fiscal year, Mallace said Tuesday at the annual State of the Port event. However, the port is growing North Asia volumes at a faster pace than its South Atlantic peers, expanding volumes 9% in its most recent fiscal year compared with the 2% volume decline in the region. The port also expanded the number of weekly services 16% year over year in fiscal 2025, and doubled the number of weekly services to India to six. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

New Charleston CEO seeks to regain container growth ‘momentum’

<div class="phx-topic abstract-wrapper">A meeting of the interested parties kicked off what will likely be a year-long process to select developers to design, build and operate the two terminals at Corozal on the Pacific side of the canal and Colón on the Atlantic that will cost a combined $2.6 billion. </div>

A meeting of the interested parties kicked off what will likely be a year-long process to select developers to design, build and operate the two terminals at Corozal on the Pacific side of the canal and Colón on the Atlantic that will cost a combined $2.6 billion.

<div class="phx-topic">CMA CGM, Cosco Shipping, Hapag-Lloyd, Maersk, DP World and Singapore’s PSA International are among 22 carriers and terminal operators that have expressed interest in developing two container terminals on the Atlantic and Pacific sides of the Panama Canal. The Panama Canal Authority (ACP) confirmed in a statement Monday that executives from the interested parties attended a briefing to discuss the $2.6 billion project, although it did not say when the event took place. The meeting kicked off what ACP said will likely be a year-long process to select developers to design, build and operate the two terminals at Corozal on the Pacific side of the canal and Colón on the Atlantic. Explaining the next steps, the ACP said market and feasibility studies will be done for both terminals, followed by the development of a project plan. That will start the competitive bid process that will see companies invited to pre-qualify to bid for each terminal. Those selected to bid will hold talks with ACP as part of the tender process before the authority chooses the successful concessionaire. “The final phase of the concessionaire selection is expected to conclude in the fourth quarter of 2026,” ACP said. The terminals will have an initial combined capacity of 5 million TEUs and focus mainly on transshipment traffic. “[The terminals] will strengthen Panama’s position as one of the world’s most competitive intermodal hubs, and expand port capacity in the interoceanic area, which is currently operating near its limit,” the ACP said. <h3>Project revived amid US-China terminal wrangling </h3>The terminals are part of an $8.5 billion, 10-year investment plan announced by ACP Administrator Ricaurte Vásquez Morales on Sept. 16. ACP originally planned to develop the Corozal container terminal in 2016, but the project foundered when none of the four shortlisted companies, including APM Terminals, PSA International and CMA CGM, submitted a bid. ACP revived the Corozal terminal project earlier this year following the geopolitical wrangling between the US and China that engulfed the proposed sale of Hong Kong-based CK Hutchison’s 90% interest in the Panama Port Company to BlackRock and Mediterranean Shipping Co.’s terminal arm. Morales told the Journal of Commerce in June that reviving the Corozal project would help allay concerns about the canal’s neutrality and competitiveness as its existing container terminals are concentrated among a handful of operators. At the time, he said the Corozal Container Terminal should be a common-user facility, open to all carriers. The Colón container terminal has since been added to the overall project. Besides CMA CGM, Cosco, Hapag-Lloyd and Maersk, ACP said Monday the other carrier participants at its latest meeting about the project were Ocean Network Express (ONE), Evergreen Line, HMM, MSC, OOCL, Yang Ming and ZIM Integrated Shipping Services. In addition to PSA and DP World, the terminal operators represented were APM Terminals, Cosco Shipping Ports, CMA Terminals, Hanseatic Global Terminals (part of Hapag-Lloyd), MOL Group, Port of Houston, SSA Marine–Grupo Carrix and MSC’s Terminal Investment Ltd. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

CMA CGM, Cosco Shipping, Hapag-Lloyd, Maersk, DP World and Singapore’s PSA International are among 22 carriers and terminal operators that have expressed interest in developing two container terminals on the Atlantic and Pacific sides of the Panama Canal. The Panama Canal Authority (ACP) confirmed in a statement Monday that executives from the interested parties attended a briefing to discuss the $2.6 billion project, although it did not say when the event took place. The meeting kicked off what ACP said will likely be a year-long process to select developers to design, build and operate the two terminals at Corozal on the Pacific side of the canal and Colón on the Atlantic. Explaining the next steps, the ACP said market and feasibility studies will be done for both terminals, followed by the development of a project plan. That will start the competitive bid process that will see companies invited to pre-qualify to bid for each terminal. Those selected to bid will hold talks with ACP as part of the tender process before the authority chooses the successful concessionaire. “The final phase of the concessionaire selection is expected to conclude in the fourth quarter of 2026,” ACP said. The terminals will have an initial combined capacity of 5 million TEUs and focus mainly on transshipment traffic. “[The terminals] will strengthen Panama’s position as one of the world’s most competitive intermodal hubs, and expand port capacity in the interoceanic area, which is currently operating near its limit,” the ACP said. Project revived amid US-China terminal wrangling The terminals are part of an $8.5 billion, 10-year investment plan announced by ACP Administrator Ricaurte Vásquez Morales on Sept. 16. ACP originally planned to develop the Corozal container terminal in 2016, but the project foundered when none of the four shortlisted companies, including APM Terminals, PSA International and CMA CGM, submitted a bid. ACP revived the Corozal terminal project earlier this year following the geopolitical wrangling between the US and China that engulfed the proposed sale of Hong Kong-based CK Hutchison’s 90% interest in the Panama Port Company to BlackRock and Mediterranean Shipping Co.’s terminal arm. Morales told the Journal of Commerce in June that reviving the Corozal project would help allay concerns about the canal’s neutrality and competitiveness as its existing container terminals are concentrated among a handful of operators. At the time, he said the Corozal Container Terminal should be a common-user facility, open to all carriers. The Colón container terminal has since been added to the overall project. Besides CMA CGM, Cosco, Hapag-Lloyd and Maersk, ACP said Monday the other carrier participants at its latest meeting about the project were Ocean Network Express (ONE), Evergreen Line, HMM, MSC, OOCL, Yang Ming and ZIM Integrated Shipping Services. In addition to PSA and DP World, the terminal operators represented were APM Terminals, Cosco Shipping Ports, CMA Terminals, Hanseatic Global Terminals (part of Hapag-Lloyd), MOL Group, Port of Houston, SSA Marine–Grupo Carrix and MSC’s Terminal Investment Ltd. Contact Keith Wallis at keithwallis@hotmail.com .

Panama’s twin terminal project attracts interest from 22 carriers, operators

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

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

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

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

Visibility transforming accessorial and location insights in LTL shipping

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

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

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

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

Ocean carriers are not helpless when it comes to managing capacity

Dry Van

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Refrigerated

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

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

US Truckload spot rates weekly (DAT) Gateway

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LNG increasingly alternative fuel of choice for container lines

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">Tender season is a time when shippers traditionally look to switch forwarders, so signing them to new contracts will be the real test of the DSV-DB Schenker integration, DSV CFO Michael Ebbe says.</div>

Tender season is a time when shippers traditionally look to switch forwarders, so signing them to new contracts will be the real test of the DSV-DB Schenker integration, DSV CFO Michael Ebbe says.

<div class="phx-topic">DSV said Thursday it is stepping up efforts to retain its customer base amid the integration of DB Schenker into its global network as ocean tender season approaches and rival Kuehne + Nagel begins to circle. Cargo owners will soon begin to negotiate Asia–Europe contracts for next year, with the annual service contract talks on the trans-Pacific heating up in March. It is a time when shippers traditionally switch forwarders, so signing them to new contracts will be the real test of the DSV-DB Schenker integration, according to DSV CFO Michael Ebbe. “All the competition is focusing on us right now, but we are the market leaders, and we also did that when we were chasing,” Ebbe told analysts during a third-quarter earnings call. “We'd see quite some attrition by now in a normal integration, which we're not seeing, but the tender season will be the test.” At $16.25 billion, DB Schenker is Denmark-based DSV’s largest acquisition by a huge margin, after having previously taken over <a href="https://www.joc.com/article/size-equals-value-in-fragmented-market-dsvs-andersen-5248808">Agility’s Global Integrated Logistics (GIL) in 2021 for $4.2 billion</a>, <a href="https://www.joc.com/article/newly-combined-dsv-panalpina-targets-trans-pacific-trade-5226703">Panalpina in 2019 for $4.6 billion</a> and <a href="https://www.joc.com/article/dsv-buys-uti-for-135-billion-5205537">UTi in 2015 for $1.35 billion</a>. While exact figures are not available, DSV has previously acknowledged that following the Panalpina and GIL acquisitions, there were some large customer losses to rivals. “Of the customers that we have longer-term agreements with, it's going to come when we have the freight negotiations, basically for the renewal of the contracts, and that's typically happening into the new year,” Ebbe said. “We must make it through the tender season, and then we can really start to focus on the growth.” But also waiting for ocean tender season is rival Kuehne + Nagel, and the Swiss-based forwarder claimed during its own Q3 call Thursday to have already made inroads into DSV’s air freight customer base. “I can confirm we have taken advantage of that merger in air freight, and it has benefited us,” K + N CEO Stefan Paul told analysts. Paul said ocean freight came with two cargo request-for-quotation (RFQ) cycles while air freight shippers decided on a monthly or quarterly basis. “The share of wallet has moved much quicker on the air freight business where the purchasing guidance is more obvious than in sea freight, but that should come in the next RFQ cycle,” he said. <h3>Global headwinds hit forwarder results </h3>Both DSV and Kuehne + Nagel in their Q3 results highlighted significant global headwinds fanned by US tariffs and geopolitics. Boosted by the DB Schenker business, DSV’s Q3 revenue reached $11.7 billion, up 63% year over year, while gross profit increased 76% to $3 billion. Earnings before interest and taxes (EBIT) were up 23% at $842 million, while net profit of $335 million was down 24% year over year. Volume became increasingly volatile during the third quarter, particularly in ocean freight. Although overall volume was up 52% at just over 1 million TEUs, 404,000 TEUs of that was contributed by DB Schenker. Organic volume that excluded Schenker was down 5% year over year. In air freight, the volume grew 64% in the third quarter to 579,000 metric tons, with DB Schenker contributing 232,000 metric tons. Organic volume was flat. DSV reiterated that expected synergies from DB Schenker would be about $1.4 billion by the end of 2028, with an expected financial cost of about $124 million for the full-year 2025 based on the assumption that 30% of the integration will be completed by year-end. DSV has lowered the top range of its full-year profit expectation from $3.34 billion to $3.19 billion but maintained its lower EBIT level at $3.05 billion. <h3>K + N to slash jobs as yield pressure grows </h3>Kuehne + Nagel also lowered its EBIT forecast, and now expects profit of $1.6 billion in 2025, down from the previous expectation of just over $2 billion. The forwarder said overcapacity in the ocean trade, negative currency effects and a drop in volume in the third quarter were placing heavy pressure on air and ocean yields. Third-quarter revenue of $7.6 billion was down 7% year over year, EBIT of $358 million declined 37% and net profit was down 36% at $259 million. K + N handled 1.1 million TEUs in the third quarter, flat compared with the same period last year. But the excess ocean capacity dragged down gross profit per TEU by 15% to $688. In air freight, the forwarder handled 564,000 metric tons, up 7% year over year, although gross profit per 100 kilograms fell 13% to $90. Kuehne + Nagel aims to mitigate its declining profitability through cost cuts of $251 million that will see between 1,000 and 1,500 jobs lost as the forwarder increases automation and digitalization across its global network. “Challenging external factors are forcing us to sustainably and permanently improve our efficiency and performance culture,” Paul noted. “With the launch of group-wide cost reduction measures, we are now taking action to safeguard our cost base.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

DSV said Thursday it is stepping up efforts to retain its customer base amid the integration of DB Schenker into its global network as ocean tender season approaches and rival Kuehne + Nagel begins to circle. Cargo owners will soon begin to negotiate Asia–Europe contracts for next year, with the annual service contract talks on the trans-Pacific heating up in March. It is a time when shippers traditionally switch forwarders, so signing them to new contracts will be the real test of the DSV-DB Schenker integration, according to DSV CFO Michael Ebbe. “All the competition is focusing on us right now, but we are the market leaders, and we also did that when we were chasing,” Ebbe told analysts during a third-quarter earnings call. “We'd see quite some attrition by now in a normal integration, which we're not seeing, but the tender season will be the test.” At $16.25 billion, DB Schenker is Denmark-based DSV’s largest acquisition by a huge margin, after having previously taken over Agility’s Global Integrated Logistics (GIL) in 2021 for $4.2 billion , Panalpina in 2019 for $4.6 billion and UTi in 2015 for $1.35 billion . While exact figures are not available, DSV has previously acknowledged that following the Panalpina and GIL acquisitions, there were some large customer losses to rivals. “Of the customers that we have longer-term agreements with, it's going to come when we have the freight negotiations, basically for the renewal of the contracts, and that's typically happening into the new year,” Ebbe said. “We must make it through the tender season, and then we can really start to focus on the growth.” But also waiting for ocean tender season is rival Kuehne + Nagel, and the Swiss-based forwarder claimed during its own Q3 call Thursday to have already made inroads into DSV’s air freight customer base. “I can confirm we have taken advantage of that merger in air freight, and it has benefited us,” K + N CEO Stefan Paul told analysts. Paul said ocean freight came with two cargo request-for-quotation (RFQ) cycles while air freight shippers decided on a monthly or quarterly basis. “The share of wallet has moved much quicker on the air freight business where the purchasing guidance is more obvious than in sea freight, but that should come in the next RFQ cycle,” he said. Global headwinds hit forwarder results Both DSV and Kuehne + Nagel in their Q3 results highlighted significant global headwinds fanned by US tariffs and geopolitics. Boosted by the DB Schenker business, DSV’s Q3 revenue reached $11.7 billion, up 63% year over year, while gross profit increased 76% to $3 billion. Earnings before interest and taxes (EBIT) were up 23% at $842 million, while net profit of $335 million was down 24% year over year. Volume became increasingly volatile during the third quarter, particularly in ocean freight. Although overall volume was up 52% at just over 1 million TEUs, 404,000 TEUs of that was contributed by DB Schenker. Organic volume that excluded Schenker was down 5% year over year. In air freight, the volume grew 64% in the third quarter to 579,000 metric tons, with DB Schenker contributing 232,000 metric tons. Organic volume was flat. DSV reiterated that expected synergies from DB Schenker would be about $1.4 billion by the end of 2028, with an expected financial cost of about $124 million for the full-year 2025 based on the assumption that 30% of the integration will be completed by year-end. DSV has lowered the top range of its full-year profit expectation from $3.34 billion to $3.19 billion but maintained its lower EBIT level at $3.05 billion. K + N to slash jobs as yield pressure grows Kuehne + Nagel also lowered its EBIT forecast, and now expects profit of $1.6 billion in 2025, down from the previous expectation of just over $2 billion. The forwarder said overcapacity in the ocean trade, negative currency effects and a drop in volume in the third quarter were placing heavy pressure on air and ocean yields. Third-quarter revenue of $7.6 billion was down 7% year over year, EBIT of $358 million declined 37% and net profit was down 36% at $259 million. K + N handled 1.1 million TEUs in the third quarter, flat compared with the same period last year. But the excess ocean capacity dragged down gross profit per TEU by 15% to $688. In air freight, the forwarder handled 564,000 metric tons, up 7% year over year, although gross profit per 100 kilograms fell 13% to $90. Kuehne + Nagel aims to mitigate its declining profitability through cost cuts of $251 million that will see between 1,000 and 1,500 jobs lost as the forwarder increases automation and digitalization across its global network. “Challenging external factors are forcing us to sustainably and permanently improve our efficiency and performance culture,” Paul noted. “With the launch of group-wide cost reduction measures, we are now taking action to safeguard our cost base.” Contact Greg Knowler at greg.knowler@spglobal.com .

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