<div class="phx-topic abstract-wrapper">The Virginia Port Authority said the longshore union’s lawsuit alleging violations of the master contract doesn’t give clear picture of when it knew about the new rail gantry cranes. </div>

The Virginia Port Authority said the longshore union’s lawsuit alleging violations of the master contract doesn’t give clear picture of when it knew about the new rail gantry cranes.

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<div class="phx-topic">The Port of Virginia argues the International Longshoremen’s Association (ILA) knew two years ago about the rollout of new rail-mounted stacking cranes, despite the union saying it didn’t know about them until this year. The port made the claim as it seeks to dismiss the union’s lawsuit alleging a violation of the new master contract’s provisions on technology deployments. As part of an earlier motion to dismiss the lawsuit, the Virginia Port Authority (VPA) last week attached minutes from a May 2023 meeting of its board of commissioners at which the purchase of 36 automated stacking cranes had been discussed. According to the minutes, the meeting was attended by four ILA officials from two local chapters that represent about 1,500 of the port’s approximately 2,800 longshore workers. In August, <a href="https://www.joc.com/article/ila-suing-virginia-port-chief-executive-over-rollout-of-new-rail-cranes-6070318">the ILA sued the VPA</a> for what the union said was a violation of the new master contract ratified in March 2025. While the VPA is not a party to that contract, the union alleged the violation was done through the port’s control of stevedore Virginia International Terminals (VIT), which is the port’s actual employer. The union’s lawsuit said its members were only made aware of the new cranes as the first batch began to be installed in April 2025. The ILA claimed VIT did not bargain with the national union and its local unions about the new cranes as required under the master contract. Instead, the VIT deferred the matter to the VPA because it bought the cranes, the union’s lawsuit said. “If the ILA was to share the actual timeline surrounding the purchase of the RMG [rail-mounted gantry] cranes, it would reveal that the purchase took place in 2023 under a prior Master Contract and with the knowledge of the ILA,” the VPA’s filing said. The RMG cranes, purchased from Konecranes for $149 million, are part of a $650 million northern expansion of Norfolk International Terminals (NIT) <a href="https://www.joc.com/article/port-of-virginia-readies-more-cranes-for-ultra-large-container-ships-5985615">that will add two new super-post-Panamax berths and bring NIT’s capacity to 3.6 million TEUs by 2027</a>. <h3>RMGs long a bane of ILA </h3>Virginia is the first US port credited with implementation of RMG technology, <a href="https://www.joc.com/article/ila-targets-rail-mounted-gantry-cranes-amid-impasse-in-port-labor-talks-5874742">having rolled it out in 2007</a>. RMGs allow for more densely-stacked container yards than using rubber tire gantry cranes or straddle carriers, which require more room to operate. Across both terminals, Virginia will have 152 RMGs in place by 2027. Despite being called “automated stacking cranes,” RMGs are still operated by a human, either in a cab or remotely. Even so, the ILA’s leadership has viewed RMGs as threatening other skilled operator jobs at the ports. One issue at the heart of local contract negotiations has been staffing machines such as RMGs. Maritime employers won the right to implement remotely-controlled RMGs, which should save time during shift changes or rest breaks. For its part, the ILA secured guarantees for one longshore operator on each RMG, as opposed to one operator on multiple RMGs. The federal judge overseeing the case can either rule directly on VPA’s motion to dismiss or schedule a hearing for both sides, according to the ILA’s legal representative. But there is no specific timeline for either action. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Port of Virginia argues the International Longshoremen’s Association (ILA) knew two years ago about the rollout of new rail-mounted stacking cranes, despite the union saying it didn’t know about them until this year. The port made the claim as it seeks to dismiss the union’s lawsuit alleging a violation of the new master contract’s provisions on technology deployments. As part of an earlier motion to dismiss the lawsuit, the Virginia Port Authority (VPA) last week attached minutes from a May 2023 meeting of its board of commissioners at which the purchase of 36 automated stacking cranes had been discussed. According to the minutes, the meeting was attended by four ILA officials from two local chapters that represent about 1,500 of the port’s approximately 2,800 longshore workers. In August, the ILA sued the VPA for what the union said was a violation of the new master contract ratified in March 2025. While the VPA is not a party to that contract, the union alleged the violation was done through the port’s control of stevedore Virginia International Terminals (VIT), which is the port’s actual employer. The union’s lawsuit said its members were only made aware of the new cranes as the first batch began to be installed in April 2025. The ILA claimed VIT did not bargain with the national union and its local unions about the new cranes as required under the master contract. Instead, the VIT deferred the matter to the VPA because it bought the cranes, the union’s lawsuit said. “If the ILA was to share the actual timeline surrounding the purchase of the RMG [rail-mounted gantry] cranes, it would reveal that the purchase took place in 2023 under a prior Master Contract and with the knowledge of the ILA,” the VPA’s filing said. The RMG cranes, purchased from Konecranes for $149 million, are part of a $650 million northern expansion of Norfolk International Terminals (NIT) that will add two new super-post-Panamax berths and bring NIT’s capacity to 3.6 million TEUs by 2027 . RMGs long a bane of ILA Virginia is the first US port credited with implementation of RMG technology, having rolled it out in 2007 . RMGs allow for more densely-stacked container yards than using rubber tire gantry cranes or straddle carriers, which require more room to operate. Across both terminals, Virginia will have 152 RMGs in place by 2027. Despite being called “automated stacking cranes,” RMGs are still operated by a human, either in a cab or remotely. Even so, the ILA’s leadership has viewed RMGs as threatening other skilled operator jobs at the ports. One issue at the heart of local contract negotiations has been staffing machines such as RMGs. Maritime employers won the right to implement remotely-controlled RMGs, which should save time during shift changes or rest breaks. For its part, the ILA secured guarantees for one longshore operator on each RMG, as opposed to one operator on multiple RMGs. The federal judge overseeing the case can either rule directly on VPA’s motion to dismiss or schedule a hearing for both sides, according to the ILA’s legal representative. But there is no specific timeline for either action. Contact Michael Angell at michael.angell@spglobal.com .

Port infrastructure

Marine terminals

Longshore labor

North American ports

Virginia port looks to dismiss ILA lawsuit on rail crane rollout

<div class="phx-topic abstract-wrapper">Terminal operators in Los Angeles-Long Beach have seen no changes in demurrage billing practices since the Federal Maritime Commission’s demurrage rule was struck down by an appeals court. </div>

Terminal operators in Los Angeles-Long Beach have seen no changes in demurrage billing practices since the Federal Maritime Commission’s demurrage rule was struck down by an appeals court.

<div class="phx-topic">The drayage industry is hoping maritime regulators will come out of the US government shutdown and clarify rulemaking aimed at shielding them from unfounded demurrage charges for the late return or retrieval of containers at marine terminals. In the meantime, a former Federal Maritime Commission (FMC) member is encouraging truckers and terminal operators to continue filing their concerns with the appropriate federal agencies, knowing that responses may be late in coming. Drayage operators’ concerns center on the impact of the DC Court of Appeals in late September <a href="https://www.joc.com/article/appeals-court-strikes-down-fmcs-detention-and-demurrage-billing-rule-6086773">striking down part of an FMC rulemaking</a> to clarify who is responsible for charges on the delayed retrieval and return of containers to marine terminals. Ocean carriers, truckers and terminal operators had anticipated that the FMC would either challenge the court’s decision or rewrite the rule to address the issues the court had with it. The agency then shut down on Oct. 1 and work has since stopped. “Obviously we are disappointed by the court’s ruling,” Jon Eisen, director, Intermodal Motor Carriers Conference of the American Trucking Associations, told the Journal of Commerce. “How this will play out I’m not sure,” he said The FMC rule that was issued in February 2024 had required more transparent invoicing of demurrage and detention charges. It had set timelines for billing and limited which parties involved in container haulage could be charged for the delayed retrieval and return of containers. The court said the FMC’s rule was “arbitrary and capricious.” Although the FMC remains closed, that should not discourage truckers, terminal operators or other stakeholders that operate under the agency’s regulations from continuing to file their concerns with the FMC, said Carl Bentzel, a former FMC commissioner who is now president of the National Association of Waterfront Employers. Container terminals in Los Angeles-Long Beach have remained fluid since the government shutdown. “It’s business as usual. Cargo is flowing nicely,” said Alan McCorkle, president of Yusen Terminals in Los Angeles. Terminal operators in Los Angeles-Long Beach have seen no changes in demurrage billing practices since the Federal Maritime Commission’s demurrage rule was struck down by an appeals court. Contact Bill Mongelluzzo at <a href="bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

The drayage industry is hoping maritime regulators will come out of the US government shutdown and clarify rulemaking aimed at shielding them from unfounded demurrage charges for the late return or retrieval of containers at marine terminals. In the meantime, a former Federal Maritime Commission (FMC) member is encouraging truckers and terminal operators to continue filing their concerns with the appropriate federal agencies, knowing that responses may be late in coming. Drayage operators’ concerns center on the impact of the DC Court of Appeals in late September striking down part of an FMC rulemaking to clarify who is responsible for charges on the delayed retrieval and return of containers to marine terminals. Ocean carriers, truckers and terminal operators had anticipated that the FMC would either challenge the court’s decision or rewrite the rule to address the issues the court had with it. The agency then shut down on Oct. 1 and work has since stopped. “Obviously we are disappointed by the court’s ruling,” Jon Eisen, director, Intermodal Motor Carriers Conference of the American Trucking Associations, told the Journal of Commerce. “How this will play out I’m not sure,” he said The FMC rule that was issued in February 2024 had required more transparent invoicing of demurrage and detention charges. It had set timelines for billing and limited which parties involved in container haulage could be charged for the delayed retrieval and return of containers. The court said the FMC’s rule was “arbitrary and capricious.” Although the FMC remains closed, that should not discourage truckers, terminal operators or other stakeholders that operate under the agency’s regulations from continuing to file their concerns with the FMC, said Carl Bentzel, a former FMC commissioner who is now president of the National Association of Waterfront Employers. Container terminals in Los Angeles-Long Beach have remained fluid since the government shutdown. “It’s business as usual. Cargo is flowing nicely,” said Alan McCorkle, president of Yusen Terminals in Los Angeles. Terminal operators in Los Angeles-Long Beach have seen no changes in demurrage billing practices since the Federal Maritime Commission’s demurrage rule was struck down by an appeals court. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Transport, Trade and Regulation News

Drayage

Drayage industry hopes for FMC relief on demurrage billing

<div class="phx-topic abstract-wrapper">Carriers continue to struggle to raise rates on intermodal shippers, resulting in revenue gains or losses based solely on volume.</div>

Carriers continue to struggle to raise rates on intermodal shippers, resulting in revenue gains or losses based solely on volume.

<div class="phx-topic">Domestic intermodal providers — whether the railroads or intermodal marketing companies — will have to find revenue gains through volume growth rather than stronger pricing into 2026. CSX Transportation said that intermodal revenue grew 4% in the third quarter largely based on a 5% increase in volume rather than raising rates on rail shippers, putting shippers on track for competitive pricing into 2026. The railroad reported Thursday that intermodal volume was led by “strong growth” in international business and “modest growth” in domestic, suggesting containerized ocean freight outpaced 53-foot domestic demand. CSX attributed most of its growth to “new service offerings” rather than higher prices on legacy business. The carrier expects momentum to continue into 2026, bolstered when double-stack intermodal service through Baltimore commences in the spring. The expanded clearance project is expected to attract freight shipped along the Interstate 95 corridor and between the West Coast and Northeast via CSX’s partnership with BNSF Railway. “Intermodal performed well despite a soft trucking market and muted pricing,” said Kevin Boone, CSX’s chief commercial officer, on a Thursday earnings call. “Looking across the markets we serve, business conditions are mixed. Customers face uncertainty and headwinds from shifting trade policies, weak global commodity prices, unsupportive interest rates and a persistently soft trucking market.” Boone described the truckload sector as “the longest down cycle that all of us have seen in a long, long time,” now stretching past three years. CSX’s comments reflect a broader trend that pricing is stagnant nationally, and volume is dictating quarterly results for intermodal. <h3>Rate pressure persists in 2026 </h3>With trucking rates still depressed, intermodal providers are bracing for a fourth straight bid season in which carriers will be unable to recoup rising costs to serve. The average domestic intermodal contract stood at $1.50 per mile in September — approximately the same as pre-pandemic levels — according to the Journal of Commerce Intermodal Savings Index. National rates were unchanged from September 2024 and remain more than 25% below the pandemic-era peak. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ea6d4c62-90a1-4a5f-8fb1-9f00b53850b0"></dynamic-object></div>J.B. Hunt Transport Services, the largest US domestic intermodal provider, said rates are rising on major US lanes traveling west to east, particularly out of Southern California, but are flat or down elsewhere. “There is some good pricing movement in the headhauls and some negative pricing in backhauls, and when you combine them, it looks relatively muted in terms of price per load,” said Darren Field, president of J.B. Hunt’s intermodal division, on an earnings call Wednesday. Schneider National, the third-largest domestic intermodal provider, said recent intermodal awards have produced very little change in pricing. “We expected flat pricing in 2025, and it ultimately played out that way,” said Mark Rourke, CEO of Schneider, speaking Oct. 1 at the Journal of Commerce Inland Distribution Conference in Chicago. “Trucking rates serve as the catalyst to intermodal, and that’s where we are in discussions with customers planning for the 2026 season.” While Rourke declined to provide forward guidance, he said Schneider has been able to raise dry-van truckload rates, although only by sacrificing volume. “When our goal is rate recovery and margin recovery, that’s our number one priority and volume is a lesser concern,” Rourke said. “If we have to get smaller or make different decisions in the one-way [truckload] network, that’s the trade-off we’re willing to make at this part of the cycle.” <h3>Muted peak season demand won’t help carriers </h3>Executives across the sector said the weak freight environment continues to limit carrier pricing power. Schneider said intermodal volume was “sub-standard” in August, while J.B. Hunt reported transcontinental volume <a href="https://www.joc.com/article/jb-hunt-intermodal-volume-retracts-amid-cost-cutting-measures-6098480">declined 6% year over year</a> in the third quarter. Leaders at logistics providers C.H. Robinson Worldwide, Radiant Road &amp; Rail, and Werner Enterprises echoed that peak season volume on the West Coast was “muted.” “Intermodal contracts are going to follow trucking, and we’ve seen trucking remain really flat,” said Julia Hoult, assistant vice president of logistics for Werner, speaking Oct. 1 at the Inland conference. “We shouldn’t be surprised intermodal is feeling the same way.” Taylor Harrington, director of C.H. Robinson’s intermodal division, said that a modest uptick in pricing is possible in early 2026 but probably not enough to offset rising costs. The producer price index for commercial transportation insurance rose 6% year over year in August, according to the US Bureau of Labor Statistics. “Inflationary costs could be 4% or 5%, but the question becomes: can carriers recover 1%? Can they recover 2%?” Harrington said at the conference. “It’ll vary shipper by shipper and lane by lane, but it’ll be tough to recover all of it.” Chris Brach, senior vice president of Radiant Road &amp; Rail, said pricing remains challenging in the East, where the cost gap between rail and trucking is narrower than on long-haul moves from the West Coast to the Midwest. Backhaul lanes into Southern California are also under pressure as Amazon increasingly fills its own containers with return freight from other shippers, undercutting traditional intermodal carriers and intensifying competition for backhaul business. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Domestic intermodal providers — whether the railroads or intermodal marketing companies — will have to find revenue gains through volume growth rather than stronger pricing into 2026. CSX Transportation said that intermodal revenue grew 4% in the third quarter largely based on a 5% increase in volume rather than raising rates on rail shippers, putting shippers on track for competitive pricing into 2026. The railroad reported Thursday that intermodal volume was led by “strong growth” in international business and “modest growth” in domestic, suggesting containerized ocean freight outpaced 53-foot domestic demand. CSX attributed most of its growth to “new service offerings” rather than higher prices on legacy business. The carrier expects momentum to continue into 2026, bolstered when double-stack intermodal service through Baltimore commences in the spring. The expanded clearance project is expected to attract freight shipped along the Interstate 95 corridor and between the West Coast and Northeast via CSX’s partnership with BNSF Railway. “Intermodal performed well despite a soft trucking market and muted pricing,” said Kevin Boone, CSX’s chief commercial officer, on a Thursday earnings call. “Looking across the markets we serve, business conditions are mixed. Customers face uncertainty and headwinds from shifting trade policies, weak global commodity prices, unsupportive interest rates and a persistently soft trucking market.” Boone described the truckload sector as “the longest down cycle that all of us have seen in a long, long time,” now stretching past three years. CSX’s comments reflect a broader trend that pricing is stagnant nationally, and volume is dictating quarterly results for intermodal. Rate pressure persists in 2026 With trucking rates still depressed, intermodal providers are bracing for a fourth straight bid season in which carriers will be unable to recoup rising costs to serve. The average domestic intermodal contract stood at $1.50 per mile in September — approximately the same as pre-pandemic levels — according to the Journal of Commerce Intermodal Savings Index. National rates were unchanged from September 2024 and remain more than 25% below the pandemic-era peak. J.B. Hunt Transport Services, the largest US domestic intermodal provider, said rates are rising on major US lanes traveling west to east, particularly out of Southern California, but are flat or down elsewhere. “There is some good pricing movement in the headhauls and some negative pricing in backhauls, and when you combine them, it looks relatively muted in terms of price per load,” said Darren Field, president of J.B. Hunt’s intermodal division, on an earnings call Wednesday. Schneider National, the third-largest domestic intermodal provider, said recent intermodal awards have produced very little change in pricing. “We expected flat pricing in 2025, and it ultimately played out that way,” said Mark Rourke, CEO of Schneider, speaking Oct. 1 at the Journal of Commerce Inland Distribution Conference in Chicago. “Trucking rates serve as the catalyst to intermodal, and that’s where we are in discussions with customers planning for the 2026 season.” While Rourke declined to provide forward guidance, he said Schneider has been able to raise dry-van truckload rates, although only by sacrificing volume. “When our goal is rate recovery and margin recovery, that’s our number one priority and volume is a lesser concern,” Rourke said. “If we have to get smaller or make different decisions in the one-way [truckload] network, that’s the trade-off we’re willing to make at this part of the cycle.” Muted peak season demand won’t help carriers Executives across the sector said the weak freight environment continues to limit carrier pricing power. Schneider said intermodal volume was “sub-standard” in August, while J.B. Hunt reported transcontinental volume declined 6% year over year in the third quarter. Leaders at logistics providers C.H. Robinson Worldwide, Radiant Road & Rail, and Werner Enterprises echoed that peak season volume on the West Coast was “muted.” “Intermodal contracts are going to follow trucking, and we’ve seen trucking remain really flat,” said Julia Hoult, assistant vice president of logistics for Werner, speaking Oct. 1 at the Inland conference. “We shouldn’t be surprised intermodal is feeling the same way.” Taylor Harrington, director of C.H. Robinson’s intermodal division, said that a modest uptick in pricing is possible in early 2026 but probably not enough to offset rising costs. The producer price index for commercial transportation insurance rose 6% year over year in August, according to the US Bureau of Labor Statistics. “Inflationary costs could be 4% or 5%, but the question becomes: can carriers recover 1%? Can they recover 2%?” Harrington said at the conference. “It’ll vary shipper by shipper and lane by lane, but it’ll be tough to recover all of it.” Chris Brach, senior vice president of Radiant Road & Rail, said pricing remains challenging in the East, where the cost gap between rail and trucking is narrower than on long-haul moves from the West Coast to the Midwest. Backhaul lanes into Southern California are also under pressure as Amazon increasingly fills its own containers with return freight from other shippers, undercutting traditional intermodal carriers and intensifying competition for backhaul business. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Volume, not pricing, driving US intermodal results in Q3

<div class="phx-topic abstract-wrapper">The ill-tempered environmental protection committee session was filled with procedural maneuvering as member states opposed to the net-zero framework attempted to delay the proceedings. </div>

The ill-tempered environmental protection committee session was filled with procedural maneuvering as member states opposed to the net-zero framework attempted to delay the proceedings.

<div class="phx-topic">Member states of the International Maritime Organization (IMO) voted to postpone for one year the adoption of far-reaching decarbonization plans, with the US and petrostates Saudia Arabia and Russia leading efforts to derail the adoption of the greenhouse gas cutting measures. The United States has gone as far as threatening to target the ships of IMO member states that didn’t support efforts to ease fuel standards. A visibly upset IMO secretary general Arsenio Dominguez told delegates in his remarks following the Friday vote that “there are no winners and losers in this session.” The motion to delay the adoption of the IMO’s net-zero framework, put forward by Singapore, was called to a vote by Saudi Arabia in a tense and combative session of the Marine Environment Protection Committee (MEPC) in London this week. The vote to delay was 57 in favor, 49 against and 21 abstentions. “The outcome is your decision, and I will always respect that, but it is the manner in which the conversations took place this week … this was not a normal IMO meeting,” Dominguez said. “As we come to an end, my plea to you is not to repeat the way we have approached this meeting in future discussions of this or any other meeting at the IMO,” he added. “It doesn’t help you or your organization.” In the MEPC meeting in April, there was a clear majority in favor of the net-zero framework among IMO member nations, as well as from container carriers, major ports and shipping associations such as BIMCO, the International Chamber of Shipping (ICS) and the World Shipping Council (WSC). That momentum has now been lost following this week’s ill-tempered MEPC session filled with procedural maneuvering as member states opposed to the net-zero framework attempted to delay the proceedings. At one point, the secretary general was forced to intervene in a debate over carbon rules after the US accused the IMO secretariat of bias. Saudi Arabia and the US later attempted to further stall proceedings by proposing that the rules be accepted by explicit acceptance rather than tacit, an approach to voting that seldom delivers a result. <h3>Aggressive US attempts to limit support </h3>The lead up to the meeting was characterized by aggressive US attempts to limit support for the net-zero framework, with Washington threatening sanctions, port fees and visa restrictions on countries voting in support of the measure. President Trump even weighed in on his Truth Social media platform with a post Thursday saying “the US will not stand for this Global Green New Scam Tax on Shipping. Stand with the US and vote NO in London tomorrow!” As delegates prepared to return home empty-handed, some reflected that putting the talks on hold will give countries more time to find consensus on a flagship climate law, while others fear it was a missed opportunity and the US will simply ramp up pressure on developing countries to oppose adoption at a later stage. Jesse Fahnestock, director of decarbonization at the Global Maritime Forum, called the adjournment a “disappointing setback for shipping.” “The adjournment for a full year creates serious challenges for meeting the timelines in the net-zero framework agreed in April and will make delivery of the sector’s decarbonization targets even more challenging,” he said. “We encourage member states that agreed on the framework in April to re-confirm their commitment to multilateralism and continue the urgent work of developing guidelines and adopting a regulatory framework that can deliver on the IMO’s unanimously agreed greenhouse gas strategy,” he added. Natacha Stamatiou, manager of global shipping and IMO delegation lead at the Environmental Defense Fund, said the delay means “innovation will struggle to scale, inequities will deepen and the transition to clean shipping will become harder and more costly.” Other climate activists were more direct in their criticism. Emma Fenton, senior diplomacy director at Opportunity Green, called the outcome “a devastating indictment of member states’ lack of courage.” “Faced with pressure, too many governments chose political compromise over climate justice, and in doing so, abandoned the countries bearing the brunt of the climate crisis,” she said after the meeting concluded. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Member states of the International Maritime Organization (IMO) voted to postpone for one year the adoption of far-reaching decarbonization plans, with the US and petrostates Saudia Arabia and Russia leading efforts to derail the adoption of the greenhouse gas cutting measures. The United States has gone as far as threatening to target the ships of IMO member states that didn’t support efforts to ease fuel standards. A visibly upset IMO secretary general Arsenio Dominguez told delegates in his remarks following the Friday vote that “there are no winners and losers in this session.” The motion to delay the adoption of the IMO’s net-zero framework, put forward by Singapore, was called to a vote by Saudi Arabia in a tense and combative session of the Marine Environment Protection Committee (MEPC) in London this week. The vote to delay was 57 in favor, 49 against and 21 abstentions. “The outcome is your decision, and I will always respect that, but it is the manner in which the conversations took place this week … this was not a normal IMO meeting,” Dominguez said. “As we come to an end, my plea to you is not to repeat the way we have approached this meeting in future discussions of this or any other meeting at the IMO,” he added. “It doesn’t help you or your organization.” In the MEPC meeting in April, there was a clear majority in favor of the net-zero framework among IMO member nations, as well as from container carriers, major ports and shipping associations such as BIMCO, the International Chamber of Shipping (ICS) and the World Shipping Council (WSC). That momentum has now been lost following this week’s ill-tempered MEPC session filled with procedural maneuvering as member states opposed to the net-zero framework attempted to delay the proceedings. At one point, the secretary general was forced to intervene in a debate over carbon rules after the US accused the IMO secretariat of bias. Saudi Arabia and the US later attempted to further stall proceedings by proposing that the rules be accepted by explicit acceptance rather than tacit, an approach to voting that seldom delivers a result. Aggressive US attempts to limit support The lead up to the meeting was characterized by aggressive US attempts to limit support for the net-zero framework, with Washington threatening sanctions, port fees and visa restrictions on countries voting in support of the measure. President Trump even weighed in on his Truth Social media platform with a post Thursday saying “the US will not stand for this Global Green New Scam Tax on Shipping. Stand with the US and vote NO in London tomorrow!” As delegates prepared to return home empty-handed, some reflected that putting the talks on hold will give countries more time to find consensus on a flagship climate law, while others fear it was a missed opportunity and the US will simply ramp up pressure on developing countries to oppose adoption at a later stage. Jesse Fahnestock, director of decarbonization at the Global Maritime Forum, called the adjournment a “disappointing setback for shipping.” “The adjournment for a full year creates serious challenges for meeting the timelines in the net-zero framework agreed in April and will make delivery of the sector’s decarbonization targets even more challenging,” he said. “We encourage member states that agreed on the framework in April to re-confirm their commitment to multilateralism and continue the urgent work of developing guidelines and adopting a regulatory framework that can deliver on the IMO’s unanimously agreed greenhouse gas strategy,” he added. Natacha Stamatiou, manager of global shipping and IMO delegation lead at the Environmental Defense Fund, said the delay means “innovation will struggle to scale, inequities will deepen and the transition to clean shipping will become harder and more costly.” Other climate activists were more direct in their criticism. Emma Fenton, senior diplomacy director at Opportunity Green, called the outcome “a devastating indictment of member states’ lack of courage.” “Faced with pressure, too many governments chose political compromise over climate justice, and in doing so, abandoned the countries bearing the brunt of the climate crisis,” she said after the meeting concluded. Contact Greg Knowler at greg.knowler@spglobal.com .

Maritime

IMO punts on pivotal net-zero shipping regulation

<div class="phx-topic abstract-wrapper">Tariffs have increased sixfold since January, but those cost increases have yet to fully reveal themselves in consumer prices.</div>

Tariffs have increased sixfold since January, but those cost increases have yet to fully reveal themselves in consumer prices.

<div class="phx-topic">Norfolk, Virginia — US tariffs haven’t yet had a clear impact on inflation but could soon reveal themselves as a <a href="https://www.joc.com/article/tariff-uncertainty-to-keep-lid-on-us-import-growth-until-spring-retailers-6094200">hindrance on economic growth</a>, Renee Haltom, vice president of the Federal Reserve Bank of Richmond, told the Virginia Maritime Association’s International Trade Symposium Thursday. Haltom’s assessment of the impact of tariffs comes amid an environment where overall tariff levels are on average six times higher than they were in January, and ahead of a threatened 100% tariffs on goods from China starting Nov. 1. But, so far, the impact has been muted by a range of factors that have delayed the assessment of tariffs on importers, who have frontloaded volumes during windows in which tariff levels on Chinese goods have been relaxed. “The key question is, are tariffs a one-time price increase?,” she asked. “In principle, you pass a tariff and those adjustment costs happen right away, and then we all move on with our lives. Inflation isn’t sustainably higher with just a one-time price increase. So, the question is, is this going to be this one-time adjustment cost, or is it going to be something more long-lasting?” Haltom said that past tariffs have tended to have a predictable economic effect: Every 10% increase in tariffs results in a 1% increase in prices. “Thinking about the current tariffs levels, which are pretty high, that would be a pretty large increase in prices that we just haven’t seen yet,” she said. There are a number of factors leading to the lack of impact tariffs have had on inflation, Haltom explained. First, there’s been a <a href="https://www.joc.com/article/strong-spending-lean-inventories-could-spur-us-import-rebound-in-early-2026-6099089">lag between the announced tariffs</a> and what has actually been assessed, largely due to grace periods on implementations and exemptions for certain products or companies. Second, there’s a delay between when tariffs are incurred by importers, and when those importers can pass some or all the costs of the tariffs into consumer prices. “That delay is about waiting to see which tariffs are going to stick, because tariff policies are up and down and on and off,” she said. “I don’t want to anger my customers if there’s a chance this is going to go away.” Businesses are engaging in what Haltom called “elasticity testing,” where they might increase the price of a product with inelastic demand, but hold tight on prices in categories where consumers are price sensitive. There’s also an element of watching competitors’ prices that keeps inflation in check, she added. A third element to consider is that, according to Haltom, “businesses say that if your customers are other businesses, you’re going to try to pass it through, but if your customers are consumers and households, they’re not pushing that hard.” Overall, Haltom said the US economy is in a relatively stable position. Household debt relative to income is, on a historical basis, not high. Unemployment is at its lowest level in more than 60 years, largely due to a shrinking labor-ready pool due to retirements and the Trump administration curtailing of immigration. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Norfolk, Virginia — US tariffs haven’t yet had a clear impact on inflation but could soon reveal themselves as a hindrance on economic growth , Renee Haltom, vice president of the Federal Reserve Bank of Richmond, told the Virginia Maritime Association’s International Trade Symposium Thursday. Haltom’s assessment of the impact of tariffs comes amid an environment where overall tariff levels are on average six times higher than they were in January, and ahead of a threatened 100% tariffs on goods from China starting Nov. 1. But, so far, the impact has been muted by a range of factors that have delayed the assessment of tariffs on importers, who have frontloaded volumes during windows in which tariff levels on Chinese goods have been relaxed. “The key question is, are tariffs a one-time price increase?,” she asked. “In principle, you pass a tariff and those adjustment costs happen right away, and then we all move on with our lives. Inflation isn’t sustainably higher with just a one-time price increase. So, the question is, is this going to be this one-time adjustment cost, or is it going to be something more long-lasting?” Haltom said that past tariffs have tended to have a predictable economic effect: Every 10% increase in tariffs results in a 1% increase in prices. “Thinking about the current tariffs levels, which are pretty high, that would be a pretty large increase in prices that we just haven’t seen yet,” she said. There are a number of factors leading to the lack of impact tariffs have had on inflation, Haltom explained. First, there’s been a lag between the announced tariffs and what has actually been assessed, largely due to grace periods on implementations and exemptions for certain products or companies. Second, there’s a delay between when tariffs are incurred by importers, and when those importers can pass some or all the costs of the tariffs into consumer prices. “That delay is about waiting to see which tariffs are going to stick, because tariff policies are up and down and on and off,” she said. “I don’t want to anger my customers if there’s a chance this is going to go away.” Businesses are engaging in what Haltom called “elasticity testing,” where they might increase the price of a product with inelastic demand, but hold tight on prices in categories where consumers are price sensitive. There’s also an element of watching competitors’ prices that keeps inflation in check, she added. A third element to consider is that, according to Haltom, “businesses say that if your customers are other businesses, you’re going to try to pass it through, but if your customers are consumers and households, they’re not pushing that hard.” Overall, Haltom said the US economy is in a relatively stable position. Household debt relative to income is, on a historical basis, not high. Unemployment is at its lowest level in more than 60 years, largely due to a shrinking labor-ready pool due to retirements and the Trump administration curtailing of immigration. Contact Eric Johnson at eric.johnson@spglobal.com .

Trans-Pacific

Importers await tariff impact amid stable economic indicators: Richmond Fed

<div class="phx-topic abstract-wrapper">Some carriers and forward are predicting a strong recovery in volumes in the first quarter of next year despite US retailers’ downward expectations. </div>

Some carriers and forward are predicting a strong recovery in volumes in the first quarter of next year despite US retailers’ downward expectations.

<div class="phx-topic">Trans-Pacific imports fell off a cliff in September, tumbling 11.8% year over year, according to PIERS, but the absence of an obvious pullback in consumer spending or economic slowdown has some carriers and forwarders predicting a strong recovery in volumes in the first quarter of next year. The story of 2025 has been one of frontloading US imports to avoid higher tariffs. But warehouses and gateway ports such as Los Angeles-Long Beach are completely fluid despite handing more cargo over the summer than they did at the height of the COVID-19 pandemic in 2022. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6099145_0.1.jpg"></img></div>This points to goods flowing through the system to final sale, which supports the view, as reported by several US-based banks in recent earnings calls, that consumer spending remains solid. Container dwell times at Los Angeles and Long Beach terminals have been relatively low all year, outside of a brief spike in rail container dwells in the first quarter, according to data from the Pacific Merchant Shipping Association. Intermodal equipment providers tell the Journal of Commerce chassis are being returned more quickly, indicating containerized cargo is arriving at warehouses and being quickly unloaded for onward distribution. With US consumer spending holding up, evidence points to inventory not piling up but rather moving through the supply chain and being sold. To some veteran freight professionals, that suggests retailers will need more freight, and soon. “We see an overcorrection occurring on US imports, which we think will result in a very strong bounce back in the first quarter,” said Trond Prestroenning, CEO for the Americas region at Hamburg-based forwarder Fr. Meyer’s Sohn. “In the first quarter of 2026, there will be a mini revival similar to COVID in terms of volumes,” said a senior US-based carrier executive. “Warehouses are depleted and you can see some real movement of volume, and space will become tight.” The falloff following widespread frontloading that resulted in an early peak season materialized in September, with total US imports down more than 9% from August and 8% year over year, according to data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global. That came after volumes grew more than 5% in the first seven months of the year. And those volume declines are <a href="https://www.joc.com/article/tariff-uncertainty-to-keep-lid-on-us-import-growth-until-spring-retailers-6094200">forecast to accelerate through the remainder of the year</a> in what looks to be a pronounced post-peak season lull. The Global Port Tracker report, co-written by Hackett Associates and the National Retail Federation (NRF), projects total US imports will fall 12.3% year over year in October, 19.2% in November and 19.4% in December and remain below 2025 levels through at least February. “This year’s peak season has come and gone, largely due to retailers frontloading imports ahead of reciprocal tariffs taking effect,” Jonathan Gold, vice president for supply chain and customs policy at the NRF, said in the October Global Port Tracker report. Yet, there is no evidence to suggest a massive pileup of inventory in the US, with stocks remaining approximately aligned with demand. Inventory-to-sales ratios for retailers — which have hovered between 1.28 and 1.32 this year, according to the US Bureau of Economic Analysis — suggest that businesses “are holding leaner inventories than expected amid the frontloading narrative,” Maersk said in an Oct. 1 market update. Inventory-to-sales ratios compare the value of a company’s inventory to net sales and provide a measure of how quickly inventory moves off the shelf. These relatively lean inventories come amid what has been, so far, a limited economic fallout from tariffs and stubborn inflation. US GDP growth is forecast at 2.3% next year, down slightly from the prior forecast of 2.4%, according to S&amp;P Global Market Intelligence. That is leading to optimism in some segments of the supply chain, such as warehouse space. “Demand has clearly turned a corner. The market is in an inflection point,” Christopher Caton, senior vice president and global head of research at Prologis, Inc. told investors on Oct. 15, as reported by CapIQ Pro. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Trans-Pacific imports fell off a cliff in September, tumbling 11.8% year over year, according to PIERS, but the absence of an obvious pullback in consumer spending or economic slowdown has some carriers and forwarders predicting a strong recovery in volumes in the first quarter of next year. The story of 2025 has been one of frontloading US imports to avoid higher tariffs. But warehouses and gateway ports such as Los Angeles-Long Beach are completely fluid despite handing more cargo over the summer than they did at the height of the COVID-19 pandemic in 2022. This points to goods flowing through the system to final sale, which supports the view, as reported by several US-based banks in recent earnings calls, that consumer spending remains solid. Container dwell times at Los Angeles and Long Beach terminals have been relatively low all year, outside of a brief spike in rail container dwells in the first quarter, according to data from the Pacific Merchant Shipping Association. Intermodal equipment providers tell the Journal of Commerce chassis are being returned more quickly, indicating containerized cargo is arriving at warehouses and being quickly unloaded for onward distribution. With US consumer spending holding up, evidence points to inventory not piling up but rather moving through the supply chain and being sold. To some veteran freight professionals, that suggests retailers will need more freight, and soon. “We see an overcorrection occurring on US imports, which we think will result in a very strong bounce back in the first quarter,” said Trond Prestroenning, CEO for the Americas region at Hamburg-based forwarder Fr. Meyer’s Sohn. “In the first quarter of 2026, there will be a mini revival similar to COVID in terms of volumes,” said a senior US-based carrier executive. “Warehouses are depleted and you can see some real movement of volume, and space will become tight.” The falloff following widespread frontloading that resulted in an early peak season materialized in September, with total US imports down more than 9% from August and 8% year over year, according to data from PIERS, a sister company of the Journal of Commerce within S&P Global. That came after volumes grew more than 5% in the first seven months of the year. And those volume declines are forecast to accelerate through the remainder of the year in what looks to be a pronounced post-peak season lull. The Global Port Tracker report, co-written by Hackett Associates and the National Retail Federation (NRF), projects total US imports will fall 12.3% year over year in October, 19.2% in November and 19.4% in December and remain below 2025 levels through at least February. “This year’s peak season has come and gone, largely due to retailers frontloading imports ahead of reciprocal tariffs taking effect,” Jonathan Gold, vice president for supply chain and customs policy at the NRF, said in the October Global Port Tracker report. Yet, there is no evidence to suggest a massive pileup of inventory in the US, with stocks remaining approximately aligned with demand. Inventory-to-sales ratios for retailers — which have hovered between 1.28 and 1.32 this year, according to the US Bureau of Economic Analysis — suggest that businesses “are holding leaner inventories than expected amid the frontloading narrative,” Maersk said in an Oct. 1 market update. Inventory-to-sales ratios compare the value of a company’s inventory to net sales and provide a measure of how quickly inventory moves off the shelf. These relatively lean inventories come amid what has been, so far, a limited economic fallout from tariffs and stubborn inflation. US GDP growth is forecast at 2.3% next year, down slightly from the prior forecast of 2.4%, according to S&P Global Market Intelligence. That is leading to optimism in some segments of the supply chain, such as warehouse space. “Demand has clearly turned a corner. The market is in an inflection point,” Christopher Caton, senior vice president and global head of research at Prologis, Inc. told investors on Oct. 15, as reported by CapIQ Pro. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Container Shipping News

Supply chain

Strong spending, lean inventories could spur US import rebound in early 2026

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

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

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

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

Trucking News

Surface

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 .

Container lines

Ocean carriers are not helpless when it comes to managing capacity

Asia to North Europe

Asia to Mediterranean

eeSea collects and centralizes liner network data from dozens of public sources including carriers’ vessel tracking portals, long-term schedules, customer advisories, port and terminal operator schedules, and pilot schedules. These disparate datasets are continually inspected, cleaned, and carefully structured. eeSea synthesizes this refined public data with AIS positions from a third-party provider and its datasets spanning schedule reliability, transit times, trade capacity evolution, and 60-day vessel forecasts. Ships are deemed late if they are one calendar day or late than scheduled. [eeSea](https://www.eesea.com)

Asia to North Europe and Mediterranean ocean reliability (eeSea)

On-Time Performance Asia to Northern Europe and Mediterranean (eeSea) Gateway

<div class="phx-topic abstract-wrapper">On the eve of IMO’s London gathering this week, Washington has pledged to retaliate against nations supporting what it says is a “European-led neocolonial export of global climate regulations.” </div>

On the eve of IMO’s London gathering this week, Washington has pledged to retaliate against nations supporting what it says is a “European-led neocolonial export of global climate regulations.”

<div class="phx-topic">US opposition to the International Maritime Organization’s (IMO’s) shipping decarbonization plans has escalated dramatically, with the White House now threatening sanctions on countries who vote in favor of measures to cut shipping’s carbon emissions. Washington’s threats of retaliation against the IMO come as its Marine Environment Protection Committee (MEPC) <a href="https://www.joc.com/article/deep-divisions-linger-as-imo-gathers-for-pivotal-decarbonization-talks-6094699">readies to meet Oct. 14–17 in London</a> to vote on the decarbonization regulations, including the proposed net-zero framework that was agreed in principle by a majority of IMO members in April. A joint statement by Secretary of State Marco Rubio, Secretary of Energy Chris Wright and Transportation Secretary Sean Duffy on Friday called the greenhouse gas-cutting measures a global carbon tax on American consumers that would not be tolerated. “The NZF [net-zero framework] proposal poses significant risks to the global economy and subjects not just Americans, but all IMO member states to an unsanctioned global tax regime that levies punitive and regressive financial penalties, which could be avoided,” the statement said. If the net-zero framework is adopted, all large ships operating globally, including cruise ships, will be required to slash emissions by 17% by 2028, with steadily increasing emission reduction targets after that, or pay a fee. Shipping currently accounts for 3% of global carbon emissions. The US has long opposed measures aimed at placing a price on carbon emissions, and on the eve of the pivotal IMO meeting, its threats of retaliation against member states backing the net-zero framework were spelled out in the statement. “The United States will be moving to levy these remedies against nations that sponsor this European-led neocolonial export of global climate regulations,” the US statement said. “We will fight hard to protect our economic interests by imposing costs on countries if they support the NZF. Our fellow IMO members should be on notice.” The US actions would include sanctions on officials “sponsoring activist-driven climate policies that would burden American consumers,” imposing visa restrictions and revising quotas of maritime crew visas, and imposing additional port fees on ships owned, operated or flagged by countries supporting the net-zero framework. Flag states supporting the IMO measures may have their registered vessels blocked from calling at US ports, with the US also evaluating the imposition of financial penalties on the flag states. <h3>Leveling the global playing field </h3>The targeting of vessel flag states is an indication that the US is targeting Liberia, Panama and the Marshall Islands that are home to almost half of the world’s registered gross tonnage, which could play a crucial role during this week’s MEPC meeting. While much has been made about the need for a two-thirds majority vote in favor of the framework for it to pass, those voting yes will also need to control at least 50% of the world’s gross tonnage. Vessels flagged in Marshall Islands, Liberia and Panama constitute more than 45% of global tonnage. In a brief statement responding to the US threats, the European Commission said it supported the IMO’s “ambitious global measures to decarbonize the shipping sector and ensure a global level playing field.” “The EU views the net-zero framework as a significant milestone and calls for its adoption at the IMO,” the European Commission said. It has taken several years for the IMO to get to this point, but the heavily compromised net-zero framework agreement has polarized the shipping industry. Last week, seven shipowner associations <a href="https://www.joc.com/article/deep-divisions-linger-as-imo-gathers-for-pivotal-decarbonization-talks-6094699">urged member states “to make history” by approving the net-zero framework</a> that includes the world’s first industrywide carbon pricing measure. Besides the US, opposing the adoption of the framework in its current form are Greek shipowners representing mostly the tanker and gas carrier fleet and classification societies the American Bureau of Shipping (ABS) and DNV. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

US opposition to the International Maritime Organization’s (IMO’s) shipping decarbonization plans has escalated dramatically, with the White House now threatening sanctions on countries who vote in favor of measures to cut shipping’s carbon emissions. Washington’s threats of retaliation against the IMO come as its Marine Environment Protection Committee (MEPC) readies to meet Oct. 14–17 in London to vote on the decarbonization regulations, including the proposed net-zero framework that was agreed in principle by a majority of IMO members in April. A joint statement by Secretary of State Marco Rubio, Secretary of Energy Chris Wright and Transportation Secretary Sean Duffy on Friday called the greenhouse gas-cutting measures a global carbon tax on American consumers that would not be tolerated. “The NZF [net-zero framework] proposal poses significant risks to the global economy and subjects not just Americans, but all IMO member states to an unsanctioned global tax regime that levies punitive and regressive financial penalties, which could be avoided,” the statement said. If the net-zero framework is adopted, all large ships operating globally, including cruise ships, will be required to slash emissions by 17% by 2028, with steadily increasing emission reduction targets after that, or pay a fee. Shipping currently accounts for 3% of global carbon emissions. The US has long opposed measures aimed at placing a price on carbon emissions, and on the eve of the pivotal IMO meeting, its threats of retaliation against member states backing the net-zero framework were spelled out in the statement. “The United States will be moving to levy these remedies against nations that sponsor this European-led neocolonial export of global climate regulations,” the US statement said. “We will fight hard to protect our economic interests by imposing costs on countries if they support the NZF. Our fellow IMO members should be on notice.” The US actions would include sanctions on officials “sponsoring activist-driven climate policies that would burden American consumers,” imposing visa restrictions and revising quotas of maritime crew visas, and imposing additional port fees on ships owned, operated or flagged by countries supporting the net-zero framework. Flag states supporting the IMO measures may have their registered vessels blocked from calling at US ports, with the US also evaluating the imposition of financial penalties on the flag states. Leveling the global playing field The targeting of vessel flag states is an indication that the US is targeting Liberia, Panama and the Marshall Islands that are home to almost half of the world’s registered gross tonnage, which could play a crucial role during this week’s MEPC meeting. While much has been made about the need for a two-thirds majority vote in favor of the framework for it to pass, those voting yes will also need to control at least 50% of the world’s gross tonnage. Vessels flagged in Marshall Islands, Liberia and Panama constitute more than 45% of global tonnage. In a brief statement responding to the US threats, the European Commission said it supported the IMO’s “ambitious global measures to decarbonize the shipping sector and ensure a global level playing field.” “The EU views the net-zero framework as a significant milestone and calls for its adoption at the IMO,” the European Commission said. It has taken several years for the IMO to get to this point, but the heavily compromised net-zero framework agreement has polarized the shipping industry. Last week, seven shipowner associations urged member states “to make history” by approving the net-zero framework that includes the world’s first industrywide carbon pricing measure. Besides the US, opposing the adoption of the framework in its current form are Greek shipowners representing mostly the tanker and gas carrier fleet and classification societies the American Bureau of Shipping (ABS) and DNV. Contact Greg Knowler at greg.knowler@spglobal.com .

White House sanctions threat ups ante ahead of pivotal IMO meeting

<div class="phx-topic abstract-wrapper">The move would substantially increase costs and reduce capacity for vehicle and equipment makers such as Ford and Caterpillar who rely on vehicle carriers and ro/ro vessels to export their products, stakeholders say.   </div>

The move would substantially increase costs and reduce capacity for vehicle and equipment makers such as Ford and Caterpillar who rely on vehicle carriers and ro/ro vessels to export their products, stakeholders say.  

<div class="phx-topic">Vehicle carrier operators and trade groups are condemning moves by the US Trade Representative (USTR) to more than triple port call fees for all foreign-built vessels calling at US ports starting Oct. 14. The move would substantially increase costs and reduce capacity for vehicle and equipment makers such as Ford and Caterpillar who rely on vehicle carriers and roll-on/roll-off (ro/ro) vessels to export their products, stakeholders said.   “USTR drops the bomb at the last minute, not realizing how badly this will hurt US exporters,” Andrew Abbott, CEO of Atlantic Container Line, the US affiliate of Italy’s Grimaldi Group, told the Journal of Commerce. In a 32-page docket published Friday, the USTR said the port levy would increase to $46 per net ton compared with the $14 per net ton set in June when the USTR switched its fee assessment to a tonnage tax from a cargo tax. This means an average-sized vehicle carrier or ro/ro vessel will face a bill of about $1.2 million when it makes its first call at a US port. USTR will cap the fee at five calls per year for the same vessel. Justifying the three-fold increase in port fees, USTR general counsel Jennifer Thornton said in Friday’s announcement that “a number of comments made in the consultation period raised concerns that the proposed service fee rate of $14 per net ton is too low.” But most of the 69 submissions listed on the USTR website during the June–July industry comment period either wanted the port fee scrapped or levied only on Chinese-built vehicle carriers and ro/ro vessels. <h3>Customers to take the hit </h3>Vessel operators including Wallenius Wilhelmsen, the world’s largest car carrier operator, and Höegh Autoliners said the fees would likely be passed on to customers where feasible. The revised charges will increase Wilhelmsen’s annual port fee bill to about $1 billion, assuming 300 to 350 voyages to the US per year, while Höegh Autoliners will likely face a $225 million hit. Senior executives from the two Norwegian companies did not immediately respond to requests for comment from the Journal of Commerce. Knut Arild Hareide, CEO of the Norwegian Shipowners’ Association, to which the two companies belong, told the Journal of Commerce the group was “closely monitoring the situation and currently reviewing the latest developments.” Mitsui OSK Lines’ Frontier Ace and Glorious Ace, with calls scheduled for Oct.14 at Brunswick’s Colonel’s Island terminal in Georgia, will be among the first vehicles subject to the port call tax. Abbott warned previously that Grimaldi would likely cut its services and US port calls because even with the original fee of $14 per net ton, the cost would be unsustainable. “These fees will harm US automobile and tractor manufacturers who rely on vehicle carriers for both imports to support their American manufacturing operations, as well as some $20 billion in exports,” Joe Kramek, president and CEO of the Washington, DC-based World Shipping Council (WSC), told the Journal of Commerce Saturday. <h3>‘Collapse’ of US short-sea shipping </h3>Florida-headquartered Accordia Shipping, which operates ro/ro services between the US and the Caribbean, said the new fees could cause the collapse of short-sea services from the US, hurting exports and likely costing jobs. In written comments on the changes submitted to the USTR Friday, Farid Escobar, Accordia Shipping’s legal affairs liaison, said the company’s 3,829 net ton ro/ro Minchah will have to pay $176,134 per US port call under the revised $46 per net ton fee. The increase from the earlier $14-per-net-ton proposal “would render short-sea, export-based ro/ro operations economically untenable, dismantling trade lanes that sustain US manufacturing exports, regional supply-chain resilience, and maritime employment,” Escobar said in the filing. “Our operations consist of over 99% outbound US exports — US-manufactured and US-origin vehicles, construction equipment, and heavy rolling machinery — destined for neighboring Caribbean nations,” he added. Tiffany Smith, vice president for global trade policy at the National Foreign Trade Council, said the inclusion of all non-US-built car carriers “is a massive divergence from the objective of the [Section] 301 investigation.” “Imposing broad-based penalties on all operators, including US allies, would do nothing to constrain China’s dominance of the maritime sector and would have harmful effects on US industries that rely on ro/ro vessels,” Smith said. Other changes in Friday’s announcement include the possibility of levying port fees on vehicle carriers and ro/ro vessels below 10,000 deadweight metric tons. USTR has opened a public consultation on the proposal, which closes Nov. 10. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Vehicle carrier operators and trade groups are condemning moves by the US Trade Representative (USTR) to more than triple port call fees for all foreign-built vessels calling at US ports starting Oct. 14. The move would substantially increase costs and reduce capacity for vehicle and equipment makers such as Ford and Caterpillar who rely on vehicle carriers and roll-on/roll-off (ro/ro) vessels to export their products, stakeholders said.   “USTR drops the bomb at the last minute, not realizing how badly this will hurt US exporters,” Andrew Abbott, CEO of Atlantic Container Line, the US affiliate of Italy’s Grimaldi Group, told the Journal of Commerce. In a 32-page docket published Friday, the USTR said the port levy would increase to $46 per net ton compared with the $14 per net ton set in June when the USTR switched its fee assessment to a tonnage tax from a cargo tax. This means an average-sized vehicle carrier or ro/ro vessel will face a bill of about $1.2 million when it makes its first call at a US port. USTR will cap the fee at five calls per year for the same vessel. Justifying the three-fold increase in port fees, USTR general counsel Jennifer Thornton said in Friday’s announcement that “a number of comments made in the consultation period raised concerns that the proposed service fee rate of $14 per net ton is too low.” But most of the 69 submissions listed on the USTR website during the June–July industry comment period either wanted the port fee scrapped or levied only on Chinese-built vehicle carriers and ro/ro vessels. Customers to take the hit Vessel operators including Wallenius Wilhelmsen, the world’s largest car carrier operator, and Höegh Autoliners said the fees would likely be passed on to customers where feasible. The revised charges will increase Wilhelmsen’s annual port fee bill to about $1 billion, assuming 300 to 350 voyages to the US per year, while Höegh Autoliners will likely face a $225 million hit. Senior executives from the two Norwegian companies did not immediately respond to requests for comment from the Journal of Commerce. Knut Arild Hareide, CEO of the Norwegian Shipowners’ Association, to which the two companies belong, told the Journal of Commerce the group was “closely monitoring the situation and currently reviewing the latest developments.” Mitsui OSK Lines’ Frontier Ace and Glorious Ace, with calls scheduled for Oct.14 at Brunswick’s Colonel’s Island terminal in Georgia, will be among the first vehicles subject to the port call tax. Abbott warned previously that Grimaldi would likely cut its services and US port calls because even with the original fee of $14 per net ton, the cost would be unsustainable. “These fees will harm US automobile and tractor manufacturers who rely on vehicle carriers for both imports to support their American manufacturing operations, as well as some $20 billion in exports,” Joe Kramek, president and CEO of the Washington, DC-based World Shipping Council (WSC), told the Journal of Commerce Saturday. ‘Collapse’ of US short-sea shipping Florida-headquartered Accordia Shipping, which operates ro/ro services between the US and the Caribbean, said the new fees could cause the collapse of short-sea services from the US, hurting exports and likely costing jobs. In written comments on the changes submitted to the USTR Friday, Farid Escobar, Accordia Shipping’s legal affairs liaison, said the company’s 3,829 net ton ro/ro Minchah will have to pay $176,134 per US port call under the revised $46 per net ton fee. The increase from the earlier $14-per-net-ton proposal “would render short-sea, export-based ro/ro operations economically untenable, dismantling trade lanes that sustain US manufacturing exports, regional supply-chain resilience, and maritime employment,” Escobar said in the filing. “Our operations consist of over 99% outbound US exports — US-manufactured and US-origin vehicles, construction equipment, and heavy rolling machinery — destined for neighboring Caribbean nations,” he added. Tiffany Smith, vice president for global trade policy at the National Foreign Trade Council, said the inclusion of all non-US-built car carriers “is a massive divergence from the objective of the [Section] 301 investigation.” “Imposing broad-based penalties on all operators, including US allies, would do nothing to constrain China’s dominance of the maritime sector and would have harmful effects on US industries that rely on ro/ro vessels,” Smith said. Other changes in Friday’s announcement include the possibility of levying port fees on vehicle carriers and ro/ro vessels below 10,000 deadweight metric tons. USTR has opened a public consultation on the proposal, which closes Nov. 10. Contact Keith Wallis at keithwallis@hotmail.com .

Ro/ro cargo

Breakbulk News

Car carrier sector slams USTR’s decision for threefold increase in port fees

<div class="phx-topic abstract-wrapper">But it will take several months of sustained peace before liners are confident enough of safe passage to redirect mainline services through the Suez Canal, according to an HSBC report.</div>

But it will take several months of sustained peace before liners are confident enough of safe passage to redirect mainline services through the Suez Canal, according to an HSBC report.

<div class="phx-topic">Two ocean carriers have expanded services in the Red Sea just days after a ceasefire was declared in Gaza between Israel and Hamas, but most liners will not be in a hurry to return to the at-times perilous route, according to one global bank. The expanded services of both CMA CGM and SeaLead pass through the narrow Bab al-Mandab Strait at the southern end of the Red Sea that is controlled by Houthi militants who have been attacking commercial shipping in support of Palestinians in Gaza since late 2023. A new routing structure by SeaLead’s revamped Five Seas Express (5CX) service will be launched on Oct. 27 offering weekly sailings via the Suez Canal connecting China, Egypt, Turkey, Saudi Arabia and Malaysia. The port rotation covers Qingdao, Shanghai, Ningbo, Nansha, Alexandria, Aliaga, Istanbul, Mersin, Jeddah and Port Klang before returning to Qingdao. “With weekly sailings and a time-saving route, the revamped service offers faster, more reliable, and efficient shipping solutions,” Kadir Oruc, regional managing director for Europe and the Mediterranean at SeaLead, said in a statement. CMA CGM told customers in an advisory Tuesday it was upgrading its REX2 service this month to offer expanded direct coverage between China and the Red Sea that would provide weekly sailings and faster transit times. New direct calls will be added at Qingdao and Aqaba in Jordan, with the double calls at Saudi Arabia’s Red Sea hub of Jeddah. The port rotation will be Qingdao, Shanghai, Ningbo, Shekou, Nansha, Singapore, Djibouti, Jeddah, Sokhna, Aqaba, Jeddah and Qingdao. The revamped service does not pass through the Suez. <h3>Carriers to practice caution </h3>The first phase of the Gaza truce took effect Oct. 9, and while a return to the Red Sea was expected at some point, carriers will remain cautious over whether the ceasefire will hold before they redirect mainline services through the Suez, HSBC said in a research report Monday. “In our view, liners will require a period of up to several months to feel confident that safe passage is fully restored before returning to the route,” HSBC said. “We think the ceasefire remains a key risk. A potential breakdown in the truce could lead to a resurgence of Red Sea attacks and further delay the return to the Red Sea.” The threat of attacks by the Houthis has forced carriers to divert around southern Africa since late 2023, adding significant time to journeys and pulling an estimated 7% of global capacity from the market. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Two ocean carriers have expanded services in the Red Sea just days after a ceasefire was declared in Gaza between Israel and Hamas, but most liners will not be in a hurry to return to the at-times perilous route, according to one global bank. The expanded services of both CMA CGM and SeaLead pass through the narrow Bab al-Mandab Strait at the southern end of the Red Sea that is controlled by Houthi militants who have been attacking commercial shipping in support of Palestinians in Gaza since late 2023. A new routing structure by SeaLead’s revamped Five Seas Express (5CX) service will be launched on Oct. 27 offering weekly sailings via the Suez Canal connecting China, Egypt, Turkey, Saudi Arabia and Malaysia. The port rotation covers Qingdao, Shanghai, Ningbo, Nansha, Alexandria, Aliaga, Istanbul, Mersin, Jeddah and Port Klang before returning to Qingdao. “With weekly sailings and a time-saving route, the revamped service offers faster, more reliable, and efficient shipping solutions,” Kadir Oruc, regional managing director for Europe and the Mediterranean at SeaLead, said in a statement. CMA CGM told customers in an advisory Tuesday it was upgrading its REX2 service this month to offer expanded direct coverage between China and the Red Sea that would provide weekly sailings and faster transit times. New direct calls will be added at Qingdao and Aqaba in Jordan, with the double calls at Saudi Arabia’s Red Sea hub of Jeddah. The port rotation will be Qingdao, Shanghai, Ningbo, Shekou, Nansha, Singapore, Djibouti, Jeddah, Sokhna, Aqaba, Jeddah and Qingdao. The revamped service does not pass through the Suez. Carriers to practice caution The first phase of the Gaza truce took effect Oct. 9, and while a return to the Red Sea was expected at some point, carriers will remain cautious over whether the ceasefire will hold before they redirect mainline services through the Suez, HSBC said in a research report Monday. “In our view, liners will require a period of up to several months to feel confident that safe passage is fully restored before returning to the route,” HSBC said. “We think the ceasefire remains a key risk. A potential breakdown in the truce could lead to a resurgence of Red Sea attacks and further delay the return to the Red Sea.” The threat of attacks by the Houthis has forced carriers to divert around southern Africa since late 2023, adding significant time to journeys and pulling an estimated 7% of global capacity from the market. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

CMA CGM, SeaLead revamp Red Sea sailings after Gaza truce

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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">The ILWU is warning the state’s governor of political consequences, while maritime employers say the decision preserves the integrity of collective bargaining.</div>

The ILWU is warning the state’s governor of political consequences, while maritime employers say the decision preserves the integrity of collective bargaining.

<div class="phx-topic">California Gov. Gavin Newsom’s refusal to sign a bill that would have effectively banned automation at the state’s ports “will undoubtedly lead to a loss of jobs,” the International Longshore and Warehouse Union (ILWU) said Tuesday. But maritime employers hailed Newsom’s decision, saying it “reinforces the integrity of collective bargaining” at West Coast ports. The bill, known as SB 34, <a href="https://www.joc.com/article/fate-of-future-automation-at-california-ports-in-governors-hands-6094241">would have banned automated or remotely operated cargo-handling equipment from plugging into the state’s power grid</a>. Newsom late Monday refused to sign the bill, in effect killing it. That means the collective bargaining process between the ILWU and the Pacific Maritime Association (PMA) — and not legislative proposals outside of the coastwide contract — will continue to determine the role of marine terminal automation at California’s ports. Robert Olvera Jr., ILWU international president, said the West Coast dockworkers’ union supports California’s attempts to reduce port-related emissions, but not at the sacrifice of longshore jobs. Olvera pulled no punches in saying Newsom’s decision will have political repercussions. “Make no mistake. Your veto of SB 34 has severely damaged our confidence to work together to achieve these goals, and it will take more than rhetoric to rebuild a partnership in the future,” Olvera said in a letter to the governor. PMA President Stephen Hennessey said in a letter to Newsom that by threatening the efficiencies inherent in automated container terminals, SB 34 would have made California’s ports less competitive. PMA represents shipping lines and terminal operators in negotiating the coastwide labor contract with the ILWU. “[Newsom’s] decision sends an important message to consumers, workers, farmers, small business owners and many others that strong, competitive ports are essential to California’s economy and its role in global trade,” Hennessey said in the letter. <h3>Coastwide contract defines process for terminal automation </h3>The 2008 ILWU-PMA contract defined the process by which individual PMA terminal operators that choose to do so can automate their facilities. In return, PMA agreed to an increase in wages and retirement benefits for all ILWU members coastwide. Long Beach Container Terminal and TraPac in Los Angeles have fully automated terminals, while APM Terminal in Los Angeles has automated 100 acres of its 400-acre terminal. Since the 2008 contract, the ILWU on several occasions has promoted restrictions on automation before <a href="https://www.joc.com/article/commission-vote-allows-apms-electrification-of-automation-5244491">port commissions, city councils and the state legislature</a> through environmental legislation and work-related issues in an attempt to circumvent the language in the contract. The Pacific Merchant Shipping Association (PMSA), which represents shipping lines and terminal operators on the West Coast on legislative and clean air initiatives, said that by using environmental issues as a vehicle for restricting automation, the ILWU’s actions actually threaten the effectiveness of the ports’ clean air efforts. PMSA President Mike Jacob noted that the ports of Los Angeles and Long Beach recently reached an agreement with the South Coast Air Quality Management District (AQMD) to work cooperatively to advance clean air initiatives that the AQMD had proposed in its <a href="https://www.joc.com/article/la-lb-likely-to-work-with-regulator-on-emissions-cutting-plan-for-ports-6084550">port Indirect Source Rule.</a> While the ILWU says it supports environmental efforts at the port, Jacob said stifling automation was the union’s real intention in promoting and supporting SB 34. “This is ILWU’s priority bill,” he said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

California Gov. Gavin Newsom’s refusal to sign a bill that would have effectively banned automation at the state’s ports “will undoubtedly lead to a loss of jobs,” the International Longshore and Warehouse Union (ILWU) said Tuesday. But maritime employers hailed Newsom’s decision, saying it “reinforces the integrity of collective bargaining” at West Coast ports. The bill, known as SB 34, would have banned automated or remotely operated cargo-handling equipment from plugging into the state’s power grid . Newsom late Monday refused to sign the bill, in effect killing it. That means the collective bargaining process between the ILWU and the Pacific Maritime Association (PMA) — and not legislative proposals outside of the coastwide contract — will continue to determine the role of marine terminal automation at California’s ports. Robert Olvera Jr., ILWU international president, said the West Coast dockworkers’ union supports California’s attempts to reduce port-related emissions, but not at the sacrifice of longshore jobs. Olvera pulled no punches in saying Newsom’s decision will have political repercussions. “Make no mistake. Your veto of SB 34 has severely damaged our confidence to work together to achieve these goals, and it will take more than rhetoric to rebuild a partnership in the future,” Olvera said in a letter to the governor. PMA President Stephen Hennessey said in a letter to Newsom that by threatening the efficiencies inherent in automated container terminals, SB 34 would have made California’s ports less competitive. PMA represents shipping lines and terminal operators in negotiating the coastwide labor contract with the ILWU. “[Newsom’s] decision sends an important message to consumers, workers, farmers, small business owners and many others that strong, competitive ports are essential to California’s economy and its role in global trade,” Hennessey said in the letter. Coastwide contract defines process for terminal automation The 2008 ILWU-PMA contract defined the process by which individual PMA terminal operators that choose to do so can automate their facilities. In return, PMA agreed to an increase in wages and retirement benefits for all ILWU members coastwide. Long Beach Container Terminal and TraPac in Los Angeles have fully automated terminals, while APM Terminal in Los Angeles has automated 100 acres of its 400-acre terminal. Since the 2008 contract, the ILWU on several occasions has promoted restrictions on automation before port commissions, city councils and the state legislature through environmental legislation and work-related issues in an attempt to circumvent the language in the contract. The Pacific Merchant Shipping Association (PMSA), which represents shipping lines and terminal operators on the West Coast on legislative and clean air initiatives, said that by using environmental issues as a vehicle for restricting automation, the ILWU’s actions actually threaten the effectiveness of the ports’ clean air efforts. PMSA President Mike Jacob noted that the ports of Los Angeles and Long Beach recently reached an agreement with the South Coast Air Quality Management District (AQMD) to work cooperatively to advance clean air initiatives that the AQMD had proposed in its port Indirect Source Rule. While the ILWU says it supports environmental efforts at the port, Jacob said stifling automation was the union’s real intention in promoting and supporting SB 34. “This is ILWU’s priority bill,” he said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port News

Stakeholders differ on Newsom’s move to kill automation ban at California ports

<div class="phx-topic abstract-wrapper">At first blush, the fees targeting US entities would affect Matson, Maersk Line and APL, part of the CMA CGM group.</div>

At first blush, the fees targeting US entities would affect Matson, Maersk Line and APL, part of the CMA CGM group.

<div class="phx-topic">(Updated to add comment from Matson). China on Friday outlined new port fees targeting ships operated or owned by US companies. The plan mirrors the one the White House is set to implement Tuesday that targets Chinese tonnage. In a statement urging the US government to change course, China’s Ministry of Transport said starting Oct. 14 — the same day the US port fees go into effect — it would begin charging US-operated ships or those where US shareholders control more than a 25% stake. China’s retaliatory fees, which start in the first year at 400 renminbi ($56) per net ton, would hit the likes of US-owned Matson harder than US fees would hit Cosco Shipping. The measures, which mirror those imposed on Chinese-owned or -built ships calling at US ports, were announced by the Transport Ministry in a two-page statement. The fees also apply to US-flagged ships and US-built vessels. The ministry said the fees are being introduced in direct retaliation to the US Trade Representative’s (USTR) moves to impose port fees on Chinese-owned, -controlled or -built ships, adding the US fees “seriously violate the relevant principles of international trade and the Sino-US maritime agreement and causes serious damage to maritime trade between China and the United States.” “We urge the United States to immediately correct its wrong practices and stop its unreasonable suppression of China’s maritime industry,” a ministry spokesperson said. Under China’s plan, the targeted US ships will be charged $56 per net ton from next week, increasing to $90 per net ton from April 17, 2026; $123 from April 17, 2027; and $157 from April 17, 2028. “If a ship calls at multiple Chinese ports on the same voyage, the special port fee for the ship shall be paid only at the first port of call, and the subsequent port of call shall not be charged,” the Transport Ministry said. “The same ship shall be charged no more than five voyages within a year.” By comparison, the USTR fee schedule will charge the targeted Chinese vessels $50 per net ton and the higher of $18 per net ton or $120 per container discharged. <h3>Maersk, Matson and APL under the gun </h3>At first blush, the fees targeting US entities would affect Matson, Maersk Line and APL, part of the CMA CGM group. “Furthermore, this could also apply to vessels owned by Seaspan,” Lars Jensen, a maritime analyst and Journal of Commerce contributor, said in a LinkedIn post Friday. “Seaspan’s ultimate owner is Poseidon, where it seems that just over 25% of the ownership is US-based. “This could be quite an impact as it means that the more than 100 vessels owned by Seaspan, and chartered by a variety of major container lines, would now be subject to fees in China in addition to the fees in the US for their Chinese-built vessels,” Jensen added. Matson told customers in an advisory Friday it had no plans to change its service schedule and would not pass on the cost of China’s new port fees to customers via a surcharge. “We remain fully committed to providing...service offerings from China and the trans-Pacific market to the US,” the carrier said. The China port fees would apparently not apply to Israel’s Zim Integrated Shipping Services because, while there is a substantial US shareholding, the almost 19% would not cross the required threshold. The Transport Ministry said the fees will be collected by the maritime administration agency responsible for the port that is the ship’s first call. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

(Updated to add comment from Matson). China on Friday outlined new port fees targeting ships operated or owned by US companies. The plan mirrors the one the White House is set to implement Tuesday that targets Chinese tonnage. In a statement urging the US government to change course, China’s Ministry of Transport said starting Oct. 14 — the same day the US port fees go into effect — it would begin charging US-operated ships or those where US shareholders control more than a 25% stake. China’s retaliatory fees, which start in the first year at 400 renminbi ($56) per net ton, would hit the likes of US-owned Matson harder than US fees would hit Cosco Shipping. The measures, which mirror those imposed on Chinese-owned or -built ships calling at US ports, were announced by the Transport Ministry in a two-page statement. The fees also apply to US-flagged ships and US-built vessels. The ministry said the fees are being introduced in direct retaliation to the US Trade Representative’s (USTR) moves to impose port fees on Chinese-owned, -controlled or -built ships, adding the US fees “seriously violate the relevant principles of international trade and the Sino-US maritime agreement and causes serious damage to maritime trade between China and the United States.” “We urge the United States to immediately correct its wrong practices and stop its unreasonable suppression of China’s maritime industry,” a ministry spokesperson said. Under China’s plan, the targeted US ships will be charged $56 per net ton from next week, increasing to $90 per net ton from April 17, 2026; $123 from April 17, 2027; and $157 from April 17, 2028. “If a ship calls at multiple Chinese ports on the same voyage, the special port fee for the ship shall be paid only at the first port of call, and the subsequent port of call shall not be charged,” the Transport Ministry said. “The same ship shall be charged no more than five voyages within a year.” By comparison, the USTR fee schedule will charge the targeted Chinese vessels $50 per net ton and the higher of $18 per net ton or $120 per container discharged. Maersk, Matson and APL under the gun At first blush, the fees targeting US entities would affect Matson, Maersk Line and APL, part of the CMA CGM group. “Furthermore, this could also apply to vessels owned by Seaspan,” Lars Jensen, a maritime analyst and Journal of Commerce contributor, said in a LinkedIn post Friday. “Seaspan’s ultimate owner is Poseidon, where it seems that just over 25% of the ownership is US-based. “This could be quite an impact as it means that the more than 100 vessels owned by Seaspan, and chartered by a variety of major container lines, would now be subject to fees in China in addition to the fees in the US for their Chinese-built vessels,” Jensen added. Matson told customers in an advisory Friday it had no plans to change its service schedule and would not pass on the cost of China’s new port fees to customers via a surcharge. “We remain fully committed to providing...service offerings from China and the trans-Pacific market to the US,” the carrier said. The China port fees would apparently not apply to Israel’s Zim Integrated Shipping Services because, while there is a substantial US shareholding, the almost 19% would not cross the required threshold. The Transport Ministry said the fees will be collected by the maritime administration agency responsible for the port that is the ship’s first call. Contact Keith Wallis at keithwallis@hotmail.com.

International ports

China returns fire with retaliatory port fees targeting US-affiliated ships

<div class="phx-topic abstract-wrapper">China’s new port fees on non-China-made vessels that are US-flagged or owned or controlled by US companies are forcing the Gemini Cooperation partners to transship via South Korea to avoid the multimillion-dollar hit. </div>

China’s new port fees on non-China-made vessels that are US-flagged or owned or controlled by US companies are forcing the Gemini Cooperation partners to transship via South Korea to avoid the multimillion-dollar hit.

<div class="phx-topic">The Gemini Cooperation diverted two US-flag vessels in a trans-Pacific service away from China due to that country’s retaliatory port fees, with one of the alliance partners warning of a multimillion-dollar hit that carriers face on US-flag ships because of the fees. Maersk and Hapag-Lloyd advised customers on Tuesday that two US-flag ships in their jointly-operated TP7/WC5 service will no longer call Ningbo. This week’s voyage of Hapag-Lloyd’s Potomac Express will discharge westbound cargo for China in Busan, South Korea, and then be transshipped on another ship. The Denmark-flagged Maersk Luz will carry outbound freight from Ningbo to South Korea’s Kwangyang port, which will then be loaded on the Potomac Express. Next week’s voyage of the Maersk Kinloss will also discharge westbound China cargo in South Korea for transshipment on an unidentified ship, with eastbound cargo from Ningbo being shipped on a Gemini shuttle ship. The service switch-up comes as <a href="https://www.joc.com/article/china-returns-fire-with-retaliatory-port-fees-targeting-us-affiliated-ships-6095198">China’s recently unveiled port fees on US-flag ships</a> went into effect on Oct. 14, the same day as similar US port fees took effect on Chinese-built ships and carriers. While China has exempted US-flag ships built in China from the fees, both of Gemini’s affected ships were built in South Korea. China plans to charge US-flag, non-Chinese vessels $56 per net ton, approximately similar to what the US is levying. Based on their net tonnage, each of the Gemini ships would incur a $2.5 million charge. <h3>Hapag-Lloyd looks to adjust </h3>Stuart Sandlin, Hapag-Lloyd’s North American president, said Wednesday at the Virginia Maritime Association trade conference in Norfolk that the carrier’s five US-flagged, South Korean-built ships would face a total of $125 million in Chinese port fees annually. The US-flag international fleet can also carry commercial cargo to and from China, in addition to any government or military cargo for other Asian countries. Sandlin said Hapag-Lloyd is now looking at how to split up that business to avoid the fees. “We have a US-flag group, and we have a non-US-flag group, and that makes it a lot more difficult because of the current geopolitical situation,” he said. “We’re working to see how we actually manage through that.” There are currently 57 ships in the US-flag international fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Those US-flag ships made 163 calls globally year to date. The US-flag Matson Waikiki, which called Shanghai on Tuesday, faces a $1.7 million fee. Among US-flag carriers, CMA CGM’s APL division runs the only fleet solely built in China. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Gemini Cooperation diverted two US-flag vessels in a trans-Pacific service away from China due to that country’s retaliatory port fees, with one of the alliance partners warning of a multimillion-dollar hit that carriers face on US-flag ships because of the fees. Maersk and Hapag-Lloyd advised customers on Tuesday that two US-flag ships in their jointly-operated TP7/WC5 service will no longer call Ningbo. This week’s voyage of Hapag-Lloyd’s Potomac Express will discharge westbound cargo for China in Busan, South Korea, and then be transshipped on another ship. The Denmark-flagged Maersk Luz will carry outbound freight from Ningbo to South Korea’s Kwangyang port, which will then be loaded on the Potomac Express. Next week’s voyage of the Maersk Kinloss will also discharge westbound China cargo in South Korea for transshipment on an unidentified ship, with eastbound cargo from Ningbo being shipped on a Gemini shuttle ship. The service switch-up comes as China’s recently unveiled port fees on US-flag ships went into effect on Oct. 14, the same day as similar US port fees took effect on Chinese-built ships and carriers. While China has exempted US-flag ships built in China from the fees, both of Gemini’s affected ships were built in South Korea. China plans to charge US-flag, non-Chinese vessels $56 per net ton, approximately similar to what the US is levying. Based on their net tonnage, each of the Gemini ships would incur a $2.5 million charge. Hapag-Lloyd looks to adjust Stuart Sandlin, Hapag-Lloyd’s North American president, said Wednesday at the Virginia Maritime Association trade conference in Norfolk that the carrier’s five US-flagged, South Korean-built ships would face a total of $125 million in Chinese port fees annually. The US-flag international fleet can also carry commercial cargo to and from China, in addition to any government or military cargo for other Asian countries. Sandlin said Hapag-Lloyd is now looking at how to split up that business to avoid the fees. “We have a US-flag group, and we have a non-US-flag group, and that makes it a lot more difficult because of the current geopolitical situation,” he said. “We’re working to see how we actually manage through that.” There are currently 57 ships in the US-flag international fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Those US-flag ships made 163 calls globally year to date. The US-flag Matson Waikiki, which called Shanghai on Tuesday, faces a $1.7 million fee. Among US-flag carriers, CMA CGM’s APL division runs the only fleet solely built in China. Contact Michael Angell at michael.angell@spglobal.com .

China’s port fees forcing Gemini to shift out US-flag ships

<div class="phx-topic abstract-wrapper">J.B. Hunt lowered its peak season surcharge because of disappointing volume on the West Coast.</div>

J.B. Hunt lowered its peak season surcharge because of disappointing volume on the West Coast.

<div class="phx-topic">J.B. Hunt Transport Services said demand for its intermodal business remained soft in the third quarter, particularly on the West Coast, where transcontinental container loads fell 6% from a year earlier, as total rail shipments declined 1% overall. In describing the overall freight market, the company remarked that “it’s no secret, the market hasn’t returned yet,” which has now surpassed three years. The nation’s largest domestic intermodal provider rolled out an early peak-season surcharge in July of $1,500 per container in Los Angeles, but the company <a href="https://www.joc.com/article/jb-hunt-reduces-peak-season-surcharge-on-southern-california-moves-6066323">later trimmed the fee to $800.</a> “We were disappointed in demand off the West Coast during the quarter and even adjusted our peak program in the middle of the quarter as an example,” said Darren Field, president of J.B. Hunt’s intermodal division. “Demand for our domestic intermodal service wasn’t all that strong.” Despite sluggish volume, executives said the peak season may not be finished because much of the cargo unloaded at West Coast ports this summer remains in local warehouses. “It is important to disconnect the timing of peak season on the water from peak season of the inland supply chain,” said Spencer Frazier, executive vice president of sales and marketing. “Our conversations indicate there is a large amount of freight that was imported early that hasn’t moved through the inland supply chain yet. No one has canceled Christmas.” There were some positive results despite the weaker third quarter in Southern California. Domestic intermodal operating income rose 12% year over year, contributing to an 8% increase in company-wide operating income. The company said aggressive cost controls shaved $20 million in costs during the quarter. <h3>East Coast intermodal doing better </h3>Local East Coast intermodal volume climbed 6% in the quarter, a signal that there is strength on containerized freight staying within the CSX Transportation and Norfolk Southern Railway (NS) networks. The carrier credited improved rail service for helping to shift more truckload freight to rail in the region. The Journal of Commerce Intermodal Service Z-Score, a measurement of how a railroad performs against its own history on three key service metrics, showed CSX and NS operated at or above average through the second-to-last week of the quarter. The final week’s data is unavailable because the US Surface Transportation Board, which publishes the metrics, is affected by the federal government shutdown. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="128e25f2-064e-4956-afe3-0fe7d3c06552"></dynamic-object></div>Norfolk Southern CEO Mark George said Thursday at the Virginia Maritime Association conference that intermodal train speeds are up this year. “We’re delivering consistent service, trending about 90% on-time performance,” George said. “In fact, in September, we had a standout month, hitting 100% in intermodal plan compliance.” He added that international intermodal traffic has risen more than 3% year over year, while domestic volume has flatlined because of trade disruptions. The comments suggest either J.B. Hunt’s East Coast gains may be concentrated on the CSX network, or other NS domestic intermodal partners have struggled to sustain shipments. <h3>Not taking sides on UP-NS deal </h3>J.B. Hunt CEO Shelley Simpson addressed Union Pacific Railroad’s (UP’s) <a href="https://www.joc.com/article/major-rail-union-backs-up-ns-merger-after-job-protection-deal-6084510">proposed acquisition</a> of NS before US regulators, signaling that the company would neither endorse nor oppose the transaction. “Our decades of experience, including navigating seven prior Class I railroad mergers and our thoughtfully developed long-term agreements and strong relationships with NS, CSX, and BNSF should provide the basis for us to accept any changes in the industry,” she said Wednesday. J.B. Hunt’s Field pushed back on speculation that a merger would force J.B. Hunt to shift all East Coast traffic to CSX. The assumption stems from the carrier’s long-standing partnership with BNSF Railway under the “Quantum Agreement,” a revenue-sharing arrangement formed more than 35 years ago that gives J.B. Hunt a pricing edge over competitors. It also launched a <a href="https://www.joc.com/article/j-b-hunt-bnsf-launch-new-intermodal-service-to-grab-time-sensitive-freight-5215574">Quantum service product</a> two years ago with a 95% on-time intermodal performance guarantee supported by J.B. Hunt staff embedded at BNSF’s headquarters in Texas. In recent months, BNSF and CSX have deepened their relationship, launching coast-to-coast intermodal routes linking Southern California <a href="https://www.joc.com/article/bnsf-csx-unveil-new-joint-intermodal-lanes-in-aftermath-of-up-ns-merger-6067789">with Charlotte and Jacksonville</a>. Other coast-to-coast routes to the Northeast <a href="https://www.joc.com/article/csx-restarts-baltimore-tunnel-service-for-double-stack-in-2026-6087384">may be announced next year</a> after CSX begins double-stack intermodal service through Baltimore next spring. This budding partnership has fueled speculation that J.B. Hunt could edge closer to CSX along with BNSF. Many West Coast rail contracts include exclusivity clauses preventing companies such as Hub Group or Schneider National from using BNSF in markets where UP also runs. J.B. Hunt’s BNSF deals carry similar restrictions, making it unlikely the carrier would be permitted to shift volume onto a merged UP-NS network in BNSF-served territories. Even so, J.B. Hunt could continue using a combined UP-NS network for freight to stay east of the Mississippi, where BNSF has no presence. “Any future merger that would be approved for whatever reason has been perceived that J.B. Hunt would have to move our traffic to CSX and that’s not accurate at all,” Field said. “There’s nothing about a future state new railroad that would mean our current Norfolk Southern footprint that we have today would be required to change.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. Senior Editor Eric Johnson contributed to this report. </div>

J.B. Hunt Transport Services said demand for its intermodal business remained soft in the third quarter, particularly on the West Coast, where transcontinental container loads fell 6% from a year earlier, as total rail shipments declined 1% overall. In describing the overall freight market, the company remarked that “it’s no secret, the market hasn’t returned yet,” which has now surpassed three years. The nation’s largest domestic intermodal provider rolled out an early peak-season surcharge in July of $1,500 per container in Los Angeles, but the company later trimmed the fee to $800. “We were disappointed in demand off the West Coast during the quarter and even adjusted our peak program in the middle of the quarter as an example,” said Darren Field, president of J.B. Hunt’s intermodal division. “Demand for our domestic intermodal service wasn’t all that strong.” Despite sluggish volume, executives said the peak season may not be finished because much of the cargo unloaded at West Coast ports this summer remains in local warehouses. “It is important to disconnect the timing of peak season on the water from peak season of the inland supply chain,” said Spencer Frazier, executive vice president of sales and marketing. “Our conversations indicate there is a large amount of freight that was imported early that hasn’t moved through the inland supply chain yet. No one has canceled Christmas.” There were some positive results despite the weaker third quarter in Southern California. Domestic intermodal operating income rose 12% year over year, contributing to an 8% increase in company-wide operating income. The company said aggressive cost controls shaved $20 million in costs during the quarter. East Coast intermodal doing better Local East Coast intermodal volume climbed 6% in the quarter, a signal that there is strength on containerized freight staying within the CSX Transportation and Norfolk Southern Railway (NS) networks. The carrier credited improved rail service for helping to shift more truckload freight to rail in the region. The Journal of Commerce Intermodal Service Z-Score, a measurement of how a railroad performs against its own history on three key service metrics, showed CSX and NS operated at or above average through the second-to-last week of the quarter. The final week’s data is unavailable because the US Surface Transportation Board, which publishes the metrics, is affected by the federal government shutdown. Norfolk Southern CEO Mark George said Thursday at the Virginia Maritime Association conference that intermodal train speeds are up this year. “We’re delivering consistent service, trending about 90% on-time performance,” George said. “In fact, in September, we had a standout month, hitting 100% in intermodal plan compliance.” He added that international intermodal traffic has risen more than 3% year over year, while domestic volume has flatlined because of trade disruptions. The comments suggest either J.B. Hunt’s East Coast gains may be concentrated on the CSX network, or other NS domestic intermodal partners have struggled to sustain shipments. Not taking sides on UP-NS deal J.B. Hunt CEO Shelley Simpson addressed Union Pacific Railroad’s (UP’s) proposed acquisition of NS before US regulators, signaling that the company would neither endorse nor oppose the transaction. “Our decades of experience, including navigating seven prior Class I railroad mergers and our thoughtfully developed long-term agreements and strong relationships with NS, CSX, and BNSF should provide the basis for us to accept any changes in the industry,” she said Wednesday. J.B. Hunt’s Field pushed back on speculation that a merger would force J.B. Hunt to shift all East Coast traffic to CSX. The assumption stems from the carrier’s long-standing partnership with BNSF Railway under the “Quantum Agreement,” a revenue-sharing arrangement formed more than 35 years ago that gives J.B. Hunt a pricing edge over competitors. It also launched a Quantum service product two years ago with a 95% on-time intermodal performance guarantee supported by J.B. Hunt staff embedded at BNSF’s headquarters in Texas. In recent months, BNSF and CSX have deepened their relationship, launching coast-to-coast intermodal routes linking Southern California with Charlotte and Jacksonville . Other coast-to-coast routes to the Northeast may be announced next year after CSX begins double-stack intermodal service through Baltimore next spring. This budding partnership has fueled speculation that J.B. Hunt could edge closer to CSX along with BNSF. Many West Coast rail contracts include exclusivity clauses preventing companies such as Hub Group or Schneider National from using BNSF in markets where UP also runs. J.B. Hunt’s BNSF deals carry similar restrictions, making it unlikely the carrier would be permitted to shift volume onto a merged UP-NS network in BNSF-served territories. Even so, J.B. Hunt could continue using a combined UP-NS network for freight to stay east of the Mississippi, where BNSF has no presence. “Any future merger that would be approved for whatever reason has been perceived that J.B. Hunt would have to move our traffic to CSX and that’s not accurate at all,” Field said. “There’s nothing about a future state new railroad that would mean our current Norfolk Southern footprint that we have today would be required to change.” Contact Ari Ashe at ari.ashe@spglobal.com . Senior Editor Eric Johnson contributed to this report.

J.B. Hunt: Intermodal volume retracts amid cost-cutting measures

<div class="phx-topic abstract-wrapper">Fewer trucks arriving with imports in Las Vegas, Chicago and other inland hubs means tighter capacity and higher transactional costs for outbound shipments. </div>

Fewer trucks arriving with imports in Las Vegas, Chicago and other inland hubs means tighter capacity and higher transactional costs for outbound shipments.

<div class="phx-topic">Outbound spot truckload capacity is tightening in several inland US markets, partly because of falling US imports, adding momentum to a seasonal increase in transactional truck rates as trucking's fall peak shipping period gets underway. Tighter capacity may be short-lived, but spot rates could run higher than expected in the fourth quarter, especially if consumer demand strengthens over the holidays. The average US dry-van truckload spot rate rose 3 cents in the week ended Oct. 4 to $1.70 per mile, according to DAT Freight &amp; Analytics. That rate was 5 cents higher year over year. In 13 Midwest states representing 46% of national load volume, spot rates were up 5 cents per mile on average. Carriers in those states earned an average of $1.92 per mile, which remained 22 cents above the national seven-day rolling average, DAT said. Rates shot even higher in specific markets and port-dependent lanes, including some routes connecting Chicago, Las Vegas and Stockton, Calif., to major US seaports, as fewer trucks dropped off imports and searched for return loads, according to DAT. Plenty of capacity was available in July to handle a 25.7% spike in US laden container imports from Asia as tariffs pushed importers to move peak season and holiday goods <a href="https://www.joc.com/article/us-retailers-upgrade-import-forecast-but-still-expect-q4-decline-6077875">earlier than usual</a>, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. But fewer imports now mean fewer trucks looking for return loads to ports. While this may not be a major disruption, it is the first capacity dislocation of its type that shippers have seen since the early days of the COVID-19 pandemic in 2020. <h3>Capacity dislocated </h3>Excess truck capacity isn’t necessarily exiting the market; it’s being diverted. This situation is forcing shippers in certain inland markets to push more freight to spot load boards. Last week, the number of spot loads moved from Los Angeles to Las Vegas fell 11%, leading to a shortage of dry vans in Las Vegas, said DAT principal analyst Dean Croke. “We’re seeing an imbalance in all those markets that need to get freight back to Los Angeles,” Croke told the Journal of Commerce. “This is due to the falloff of imports in LA.” That imbalance led to a 45% surge in outbound load posts from Las Vegas as shippers scrambled to find capacity, Croke said. As of Thursday, the average broker rate from Las Vegas to Los Angeles jumped to $2.15 per mile, up from $1.96 per mile last month. The impact was even starker in the high-volume lane connecting Los Angeles and Stockton. The average DAT spot rate from Stockton to Los Angeles rose to $2.45 per mile in the first three days of this week, up from $1.74 per mile for the month of September. That increase marks a 33% leap from the average rate a year earlier, according to DAT’s data. As of Thursday, the average rate from Los Angeles to Stockton had climbed 7 cents from $2.99 per mile in September to $3.06 per mile in the last three days. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="244aa4d3-6440-4ac1-b876-a4f8341dad3c"></dynamic-object></div>In Chicago, overall spot loads jumped 20% last week, Croke said. Outbound rates from Chicago rose 8 cents on average to $2.20 per mile last week, excluding fuel surcharges, 50 cents higher than the national average, according to DAT. “Normally, markets tend to equalize, but I don’t know how long this will take before it balances out,” said Croke, adding that the freight fluctuations brought on by changing US tariffs “is unprecedented.” US imports should be below 2 million TEUs for at least <a href="https://www.joc.com/article/tariff-uncertainty-to-keep-lid-on-us-import-growth-until-spring-retailers-6094200">the next five months</a>, according to the latest Global Port Tracker forecast from the National Retail Federation and Hackett Associates. That situation gives truck capacity at inland hubs months to find a new level. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Outbound spot truckload capacity is tightening in several inland US markets, partly because of falling US imports, adding momentum to a seasonal increase in transactional truck rates as trucking's fall peak shipping period gets underway. Tighter capacity may be short-lived, but spot rates could run higher than expected in the fourth quarter, especially if consumer demand strengthens over the holidays. The average US dry-van truckload spot rate rose 3 cents in the week ended Oct. 4 to $1.70 per mile, according to DAT Freight & Analytics. That rate was 5 cents higher year over year. In 13 Midwest states representing 46% of national load volume, spot rates were up 5 cents per mile on average. Carriers in those states earned an average of $1.92 per mile, which remained 22 cents above the national seven-day rolling average, DAT said. Rates shot even higher in specific markets and port-dependent lanes, including some routes connecting Chicago, Las Vegas and Stockton, Calif., to major US seaports, as fewer trucks dropped off imports and searched for return loads, according to DAT. Plenty of capacity was available in July to handle a 25.7% spike in US laden container imports from Asia as tariffs pushed importers to move peak season and holiday goods earlier than usual , according to PIERS, a Journal of Commerce sister product within S&P Global. But fewer imports now mean fewer trucks looking for return loads to ports. While this may not be a major disruption, it is the first capacity dislocation of its type that shippers have seen since the early days of the COVID-19 pandemic in 2020. Capacity dislocated Excess truck capacity isn’t necessarily exiting the market; it’s being diverted. This situation is forcing shippers in certain inland markets to push more freight to spot load boards. Last week, the number of spot loads moved from Los Angeles to Las Vegas fell 11%, leading to a shortage of dry vans in Las Vegas, said DAT principal analyst Dean Croke. “We’re seeing an imbalance in all those markets that need to get freight back to Los Angeles,” Croke told the Journal of Commerce. “This is due to the falloff of imports in LA.” That imbalance led to a 45% surge in outbound load posts from Las Vegas as shippers scrambled to find capacity, Croke said. As of Thursday, the average broker rate from Las Vegas to Los Angeles jumped to $2.15 per mile, up from $1.96 per mile last month. The impact was even starker in the high-volume lane connecting Los Angeles and Stockton. The average DAT spot rate from Stockton to Los Angeles rose to $2.45 per mile in the first three days of this week, up from $1.74 per mile for the month of September. That increase marks a 33% leap from the average rate a year earlier, according to DAT’s data. As of Thursday, the average rate from Los Angeles to Stockton had climbed 7 cents from $2.99 per mile in September to $3.06 per mile in the last three days. In Chicago, overall spot loads jumped 20% last week, Croke said. Outbound rates from Chicago rose 8 cents on average to $2.20 per mile last week, excluding fuel surcharges, 50 cents higher than the national average, according to DAT. “Normally, markets tend to equalize, but I don’t know how long this will take before it balances out,” said Croke, adding that the freight fluctuations brought on by changing US tariffs “is unprecedented.” US imports should be below 2 million TEUs for at least the next five months , according to the latest Global Port Tracker forecast from the National Retail Federation and Hackett Associates. That situation gives truck capacity at inland hubs months to find a new level. Contact William B. Cassidy at bill.cassidy@spglobal.com .

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