<div class="phx-topic abstract-wrapper">The departure of the Montreal Port Authority CEO comes just as development work begins on a new US$1.15 billion container terminal.</div>

The departure of the Montreal Port Authority CEO comes just as development work begins on a new US$1.15 billion container terminal.

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<div class="phx-topic">The two-year tenure of Montreal Port Authority (MPA) chief Julie Gascon ended abruptly Friday, just as development work is beginning on a C$1.6 billion (US$1.15 billion) container terminal to be operated by DP World. A statement from the port authority gave no reason for the departure of Gascon, who became president and CEO of the agency in February 2024. A committee of the port authority’s board of directors will work to ensure interim leadership is in place as Gascon’s successor is sought, according to the statement. “With the Contrecoeur terminal expansion project actively progressing, the Port of Montreal is entering a new phase in its development, which will take place as part of a new strategic cycle for the MPA,” said Nathalie Pilon, chair of the MPA’s board of directors. “The organization is in an excellent position to fulfill its mandate and contribute to Canada’s competitiveness in global markets.” Gascon oversaw DP World <a href="https://www.joc.com/article/dp-world-aims-to-run-carney-backed-montreal-terminal-6072977">being awarded the winning bid</a> to operate the Contrecoeur terminal, which, with a planned annual capacity of 1.15 million TEUs, would increase the total capacity of Canada’s second-largest container port by 150%. Gascon was viewed locally as bringing more maritime expertise and a greater commercial understanding to the role as MPA chief when she succeeded utility veteran Martin Imbleau, who also abruptly exited in July 2023. Contact the JOC news team at <a href="mailto:News@joc.com">news@joc.com.</a></div>

The two-year tenure of Montreal Port Authority (MPA) chief Julie Gascon ended abruptly Friday, just as development work is beginning on a C$1.6 billion (US$1.15 billion) container terminal to be operated by DP World. A statement from the port authority gave no reason for the departure of Gascon, who became president and CEO of the agency in February 2024. A committee of the port authority’s board of directors will work to ensure interim leadership is in place as Gascon’s successor is sought, according to the statement. “With the Contrecoeur terminal expansion project actively progressing, the Port of Montreal is entering a new phase in its development, which will take place as part of a new strategic cycle for the MPA,” said Nathalie Pilon, chair of the MPA’s board of directors. “The organization is in an excellent position to fulfill its mandate and contribute to Canada’s competitiveness in global markets.” Gascon oversaw DP World being awarded the winning bid to operate the Contrecoeur terminal, which, with a planned annual capacity of 1.15 million TEUs, would increase the total capacity of Canada’s second-largest container port by 150%. Gascon was viewed locally as bringing more maritime expertise and a greater commercial understanding to the role as MPA chief when she succeeded utility veteran Martin Imbleau, who also abruptly exited in July 2023. Contact the JOC news team at news@joc.com.

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Montreal Port chief Gascon exits abruptly after two-year tenure

<div class="phx-topic abstract-wrapper">The port’s chief executive said his agency will do more to attract large retail BCOs to reverse lost market share, while also investing in non-container projects. </div>

The port’s chief executive said his agency will do more to attract large retail BCOs to reverse lost market share, while also investing in non-container projects.

<div class="phx-topic">The Port of Charleston will aggressively court retail goods shippers — and possibly invest alongside them — as part of a long-term strategy to regrow the port’s volumes. The port is also looking at how to restructure the operating model of its Leatherman marine terminal following the longshore union’s 2024 victory over work jurisdiction at the facility. South Carolina Ports Authority Chief Executive Micah Mallace told a state senate committee this Wednesday that Charleston’s container volumes for the first eight months of the 2026 fiscal year through February are running about 6% below SC Ports’ original forecast. Along with the overall trade challenges hitting every port, Charleston is heavily levered to the state’s advanced manufacturers, with BMW being the port’s largest customer, Mallace said. The German automaker lowered its 2026 profit outlook in March due to a combination of tariffs, material costs and competition from Chinese automakers. Mallace, who also helped the port attract a Walmart distribution center to Charleston six years ago, said the port needs more such retail shippers to reverse its market share losses. He said the demographics for South Carolina and the Southeast favor a long-term consumer base and that more large retail shippers will further reinforce the manufacturing cargo base through overall job growth. “We need a large local cargo base,” Mallace said. “We have to do a better job of having a compelling offering for distribution center locations and major retailers. The retailers determine where the ships call, and the manufacturers follow.” “Shipping lines pick ports because they have to go there,” he added. “If we can grow our local freight base, the shipping lines will come irrespective of how well we service them and how much it costs.”<h3>Port will ‘carry the water’ on new projects </h3>While offering few direct details about SC Port’s new strategy, Mallace said the agency in the short term will be beefing up its commercial and sales team and increasing outreach to potential shippers. Mallace also told state senators that SC Ports will be redirecting capital spending to “immediate revenue generating opportunities” for the port. At a mid-March board meeting, SC Ports’ CFO Phillip Padgett said overall revenue of $267 million for the eight-month fiscal 2026 period was 4% below forecast. Decreases in container activity, terminal demurrage and chassis rentals were cited for the decline. Mallace did not elaborate on the types of investments the port would make, but he said the agency has a lot of land that could be leased or otherwise monetized. He also suggested SC Ports could take on the role of economic development agency by helping fund or underwrite retail distribution or similar projects to increase the cargo base.“If we have to carry the water on those projects, we will,” Mallace said. “We have to in order to be a going concern in the port industry.“You will see us do deals that don’t look like what we used to do in the past, which were only container-related,” he said. “There are some exciting prospects out there.”The redirection of capital spending comes as Charleston has largely completed most of its short-term port expansion and now just needs to “fill it up” Mallace said. <h3>Leatherman costs need addressing</h3>Work on the Navy Base Intermodal Facility, <a href="https://www.joc.com/article/charlestons-navy-base-rail-yard-project-faces-delays-big-cost-overruns-6070926">which has faced cost overruns and a delayed opening</a>, is largely done, Mallace said. However, the port’s near-dock rail facility still needs about 80,000 feet of rail track installed across North Charleston for it to access the Norfolk Southern Railway and CSX Transportation networks. He said the port is close to reaching operating agreements with both railroads while <a href="https://www.joc.com/article/charleston-slows-railyard-development-amid-insufficient-shipper-demand-6164158">it waits for enough shipper demand to fill the railcars</a>.“The last remaining infrastructure on which we are focused is to get both railroads into the terminal,” Mallace said. “It’s what still needs to be delivered, and it’s very complicated.”SC Ports is also looking at how to restructure its operations at the Hugh K. Leatherman Terminal, which was effectively closed for three years due to a dispute with the International Longshoremen’s Association (ILA) over work jurisdiction for crane jobs that began in 2021. <a href="https://www.joc.com/article/sc-ports-strikes-deal-with-ila-to-fully-open-leatherman-marine-terminal-5192280">SC Ports reached an agreement</a> in 2024 that put Leatherman’s crane operators, who were formerly state employees, under ILA jurisdiction at its contracted wages. As part of that change, SC Ports began levying a $17.95 per container fee to “offset the change in the labor model cost structure.”The change in business model has made Leatherman less cost competitive than SC Ports’ Wando Welch terminal, which retains state crane operators. Mallace said the current freight environment is prizing cost above all, and higher-cost facilities are not competitive. He added that the port is negotiating with the local ILA on how to make Leatherman more efficient. “The Hugh Leatherman terminal has a cost structure that’s different than others in the South Atlantic,” Mallace said. “We are working with our partners to address that right now.” He added that the port, which has been offering employees early retirement packages, is also dealing with higher fuel and other costs that need to be addressed. “Our costs are a little out of line with where they need to be for us to offer the most competitive rates that we can offer,” Mallace told state senators. “Our customers choose us based on cost, first and foremost. Service and other things are also considered. But cost is first and foremost.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

The Port of Charleston will aggressively court retail goods shippers — and possibly invest alongside them — as part of a long-term strategy to regrow the port’s volumes. The port is also looking at how to restructure the operating model of its Leatherman marine terminal following the longshore union’s 2024 victory over work jurisdiction at the facility. South Carolina Ports Authority Chief Executive Micah Mallace told a state senate committee this Wednesday that Charleston’s container volumes for the first eight months of the 2026 fiscal year through February are running about 6% below SC Ports’ original forecast. Along with the overall trade challenges hitting every port, Charleston is heavily levered to the state’s advanced manufacturers, with BMW being the port’s largest customer, Mallace said. The German automaker lowered its 2026 profit outlook in March due to a combination of tariffs, material costs and competition from Chinese automakers. Mallace, who also helped the port attract a Walmart distribution center to Charleston six years ago, said the port needs more such retail shippers to reverse its market share losses. He said the demographics for South Carolina and the Southeast favor a long-term consumer base and that more large retail shippers will further reinforce the manufacturing cargo base through overall job growth. “We need a large local cargo base,” Mallace said. “We have to do a better job of having a compelling offering for distribution center locations and major retailers. The retailers determine where the ships call, and the manufacturers follow.” “Shipping lines pick ports because they have to go there,” he added. “If we can grow our local freight base, the shipping lines will come irrespective of how well we service them and how much it costs.” Port will ‘carry the water’ on new projects While offering few direct details about SC Port’s new strategy, Mallace said the agency in the short term will be beefing up its commercial and sales team and increasing outreach to potential shippers. Mallace also told state senators that SC Ports will be redirecting capital spending to “immediate revenue generating opportunities” for the port. At a mid-March board meeting, SC Ports’ CFO Phillip Padgett said overall revenue of $267 million for the eight-month fiscal 2026 period was 4% below forecast. Decreases in container activity, terminal demurrage and chassis rentals were cited for the decline. Mallace did not elaborate on the types of investments the port would make, but he said the agency has a lot of land that could be leased or otherwise monetized. He also suggested SC Ports could take on the role of economic development agency by helping fund or underwrite retail distribution or similar projects to increase the cargo base. “If we have to carry the water on those projects, we will,” Mallace said. “We have to in order to be a going concern in the port industry. “You will see us do deals that don’t look like what we used to do in the past, which were only container-related,” he said. “There are some exciting prospects out there.” The redirection of capital spending comes as Charleston has largely completed most of its short-term port expansion and now just needs to “fill it up” Mallace said. Leatherman costs need addressing Work on the Navy Base Intermodal Facility, which has faced cost overruns and a delayed opening , is largely done, Mallace said. However, the port’s near-dock rail facility still needs about 80,000 feet of rail track installed across North Charleston for it to access the Norfolk Southern Railway and CSX Transportation networks. He said the port is close to reaching operating agreements with both railroads while it waits for enough shipper demand to fill the railcars . “The last remaining infrastructure on which we are focused is to get both railroads into the terminal,” Mallace said. “It’s what still needs to be delivered, and it’s very complicated.” SC Ports is also looking at how to restructure its operations at the Hugh K. Leatherman Terminal, which was effectively closed for three years due to a dispute with the International Longshoremen’s Association (ILA) over work jurisdiction for crane jobs that began in 2021. SC Ports reached an agreement in 2024 that put Leatherman’s crane operators, who were formerly state employees, under ILA jurisdiction at its contracted wages. As part of that change, SC Ports began levying a $17.95 per container fee to “offset the change in the labor model cost structure.” The change in business model has made Leatherman less cost competitive than SC Ports’ Wando Welch terminal, which retains state crane operators. Mallace said the current freight environment is prizing cost above all, and higher-cost facilities are not competitive. He added that the port is negotiating with the local ILA on how to make Leatherman more efficient. “The Hugh Leatherman terminal has a cost structure that’s different than others in the South Atlantic,” Mallace said. “We are working with our partners to address that right now.” He added that the port, which has been offering employees early retirement packages, is also dealing with higher fuel and other costs that need to be addressed. “Our costs are a little out of line with where they need to be for us to offer the most competitive rates that we can offer,” Mallace told state senators. “Our customers choose us based on cost, first and foremost. Service and other things are also considered. But cost is first and foremost.” Contact Michael Angell at michael.angell@spglobal.com

Charleston looking for retailer shippers to revive port’s growth

<div class="phx-topic abstract-wrapper">The unanimous decision prevents the carrier from immediately implementing the fee, which is meant to help recoup fuel costs on US trades that have been driven higher due to the war with Iran.</div>

The unanimous decision prevents the carrier from immediately implementing the fee, which is meant to help recoup fuel costs on US trades that have been driven higher due to the war with Iran.

<div class="phx-topic">The Federal Maritime Commission (FMC) has rejected a second request from Maersk to waive a 30-day notice period for the implementation of an emergency fuel surcharge, a spokesperson for the agency said Friday. The unanimous rejection prevents the carrier from immediately implementing the fee, which is meant to help recoup fuel costs on US trades that have been driven higher due to the war with Iran. Still, Maersk will only have to wait until April 8 to formally implement the fee, given that its <a href="https://www.joc.com/article/maersk-again-asks-fmc-to-waive-30-day-review-period-for-emergency-fuel-surcharge-6197792">waiver request to the FMC was made on March 11.</a>An April 3 letter from the FMC to Maersk said the carrier “failed to provide good cause” for the agency to waive the 30-day waiting period, and referred to a prior statement from FMC Chairman Laura DiBella that carriers should provide data behind the decision to levy the emergency surcharges and specify a duration, so, as DiBella said, the fee is “reasonably related to the increased costs.” In its petition, Maersk stressed that the surcharges were tied only to higher fuel prices, pointing to how low-sulfur bunker fuel prices jumped 82% on average, to $929 per metric ton, between Feb. 6 and March 9; the war began Feb. 28. The carrier justified the emergency fuel surcharge, saying it couldn’t fully absorb the higher prices that “are likely to remain elevated and volatile given the uncertainty of the duration of hostilities and their impact on the price of oil and bunker fuel.” The surcharge Maersk will implement next week amounts to $200 per TEU for US head-haul trades and $100 per TEU for the backhaul. This week’s rejection of Maersk’s waiver request was the second time in 11 days the carrier was turned down. The FMC <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">on March 23 rejected requests</a> from Maersk, CMA CGM, Hapag-Lloyd, and Zim Integrated Shipping Services to waive the 30-day waiting period for an initial round of emergency fuel surcharges. <h3>Costs rise as concerns grow over fuel availability </h3>Shipper groups, including the Agriculture Transportation Coalition, are skeptical of ocean carriers imposing higher fuel surcharges given that it is not clear how the surcharge amounts were calculated and that freight-all-kinds (FAK) rates include fuel costs. For contract rates, the so-called bunker adjustment factor (BAF) adjusts to higher fuel prices, but it can take up to two months to calibrate to the new levels, hampering ocean carriers’ cash flow in the short-term. The cost of war-related disruption has been substantial. Hapag-Lloyd, for example, is facing $40 million to $50 million per week in higher operating expenses due to war, now in its fifth week, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">CEO Rolf Habben Jansen told reporters on March 26.</a> But the higher price of bunker fuel is not the only problem. Fuel availability, particularly in Asia, is becoming a growing concern for ocean carriers, with analysts warning that the world’s largest bunkering hub of Singapore <a href="https://www.joc.com/article/singapore-bunker-supply-continues-to-run-down-as-middle-east-war-drags-on-6198359">has less than a month’s supply remaining and no replenishment in sight</a>. If bunker fuel scarcity worsens, container lines could be forced to sail slower, take alternative routes, or blank sailings. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com.</a></div>

The Federal Maritime Commission (FMC) has rejected a second request from Maersk to waive a 30-day notice period for the implementation of an emergency fuel surcharge, a spokesperson for the agency said Friday. The unanimous rejection prevents the carrier from immediately implementing the fee, which is meant to help recoup fuel costs on US trades that have been driven higher due to the war with Iran. Still, Maersk will only have to wait until April 8 to formally implement the fee, given that its waiver request to the FMC was made on March 11. An April 3 letter from the FMC to Maersk said the carrier “failed to provide good cause” for the agency to waive the 30-day waiting period, and referred to a prior statement from FMC Chairman Laura DiBella that carriers should provide data behind the decision to levy the emergency surcharges and specify a duration, so, as DiBella said, the fee is “reasonably related to the increased costs.” In its petition, Maersk stressed that the surcharges were tied only to higher fuel prices, pointing to how low-sulfur bunker fuel prices jumped 82% on average, to $929 per metric ton, between Feb. 6 and March 9; the war began Feb. 28. The carrier justified the emergency fuel surcharge, saying it couldn’t fully absorb the higher prices that “are likely to remain elevated and volatile given the uncertainty of the duration of hostilities and their impact on the price of oil and bunker fuel.” The surcharge Maersk will implement next week amounts to $200 per TEU for US head-haul trades and $100 per TEU for the backhaul. This week’s rejection of Maersk’s waiver request was the second time in 11 days the carrier was turned down. The FMC on March 23 rejected requests from Maersk, CMA CGM, Hapag-Lloyd, and Zim Integrated Shipping Services to waive the 30-day waiting period for an initial round of emergency fuel surcharges. Costs rise as concerns grow over fuel availability Shipper groups, including the Agriculture Transportation Coalition, are skeptical of ocean carriers imposing higher fuel surcharges given that it is not clear how the surcharge amounts were calculated and that freight-all-kinds (FAK) rates include fuel costs. For contract rates, the so-called bunker adjustment factor (BAF) adjusts to higher fuel prices, but it can take up to two months to calibrate to the new levels, hampering ocean carriers’ cash flow in the short-term. The cost of war-related disruption has been substantial. Hapag-Lloyd, for example, is facing $40 million to $50 million per week in higher operating expenses due to war, now in its fifth week, CEO Rolf Habben Jansen told reporters on March 26. But the higher price of bunker fuel is not the only problem. Fuel availability, particularly in Asia, is becoming a growing concern for ocean carriers, with analysts warning that the world’s largest bunkering hub of Singapore has less than a month’s supply remaining and no replenishment in sight . If bunker fuel scarcity worsens, container lines could be forced to sail slower, take alternative routes, or blank sailings. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com.

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FMC again rejects Maersk petition to waive notice period for emergency fuel surcharge

<div class="phx-topic abstract-wrapper">The CMA CGM Kribi successfully transited the strait late Thursday, the first passage for a Western-operated container ship since the war between the US/Israel and Iran disrupted access to the crucial waterway five weeks ago.</div>

The CMA CGM Kribi successfully transited the strait late Thursday, the first passage for a Western-operated container ship since the war between the US/Israel and Iran disrupted access to the crucial waterway five weeks ago.

<div class="phx-topic">French ocean carrier CMA CGM is understood to have secured assurances from Iranian authorities guaranteeing safe passage for its 14 container ships trapped inside the Strait of Hormuz since the war began, industry sources with knowledge of the matter told the Journal of Commerce Friday. Signaling that breakthrough, the Malta-flagged CMA CGM Kribi successfully transited the strait late Thursday local time, the first passage for a Western-operated container ship since the war between the US/Israel and Iran disrupted access to the crucial waterway five weeks ago. The 5,500-TEU Kribi is part of the Marseille-based carrier’s Middle East-India-West Africa network known as Midas1 and operated in conjunction with Maersk, available data shows. The industry sources also indicated that there are another six CMA CGM container vessels held up in the Persian Gulf and awaiting clearance to transit Hormuz. The sources believe the measured approach adopted by French President Emmanuel Macron during the Persian Gulf conflict has helped CMA CGM strike a deal with Iran, which recently reiterated that Hormuz would only remain open to maritime traffic from nonhostile countries. Specifics of any possible deal between the carrier and Iran were not known. There have been unconfirmed reports that Tehran is asking carriers to pay a “toll fee” of $1 million or $2 million per ship to guarantee safe passage through the strait. During a briefing with reporters last week, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">Hapag-Lloyd CEO Rolf Habben Jansen was asked</a> whether the carrier would pay Tehran to secure safe passage for its six ships that remain trapped in the war zone. “We are pursuing every avenue that we can to try to get the ships and the crews safely out, and I would not rule out anything at this point,” Habben Jansen said. Earlier this week, three Chinese-linked vessels, including two container ships operated by Cosco Shipping, transited through Hormuz. The industry sources also told the Journal of Commerce that 15 ships operated by Mediterranean Shipping Co. are stuck in the conflict zone, as well as six from Maersk. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

French ocean carrier CMA CGM is understood to have secured assurances from Iranian authorities guaranteeing safe passage for its 14 container ships trapped inside the Strait of Hormuz since the war began, industry sources with knowledge of the matter told the Journal of Commerce Friday. Signaling that breakthrough, the Malta-flagged CMA CGM Kribi successfully transited the strait late Thursday local time, the first passage for a Western-operated container ship since the war between the US/Israel and Iran disrupted access to the crucial waterway five weeks ago. The 5,500-TEU Kribi is part of the Marseille-based carrier’s Middle East-India-West Africa network known as Midas1 and operated in conjunction with Maersk, available data shows. The industry sources also indicated that there are another six CMA CGM container vessels held up in the Persian Gulf and awaiting clearance to transit Hormuz. The sources believe the measured approach adopted by French President Emmanuel Macron during the Persian Gulf conflict has helped CMA CGM strike a deal with Iran, which recently reiterated that Hormuz would only remain open to maritime traffic from nonhostile countries. Specifics of any possible deal between the carrier and Iran were not known. There have been unconfirmed reports that Tehran is asking carriers to pay a “toll fee” of $1 million or $2 million per ship to guarantee safe passage through the strait. During a briefing with reporters last week, Hapag-Lloyd CEO Rolf Habben Jansen was asked whether the carrier would pay Tehran to secure safe passage for its six ships that remain trapped in the war zone. “We are pursuing every avenue that we can to try to get the ships and the crews safely out, and I would not rule out anything at this point,” Habben Jansen said. Earlier this week, three Chinese-linked vessels, including two container ships operated by Cosco Shipping, transited through Hormuz. The industry sources also told the Journal of Commerce that 15 ships operated by Mediterranean Shipping Co. are stuck in the conflict zone, as well as six from Maersk. Contact Bency Mathew at bencyvmathew@gmail.com.

CMA CGM said to have deal with Iran to allow safe passage through Hormuz: sources

<div class="phx-topic abstract-wrapper">Global jet fuel prices have almost doubled since the Middle East war began on Feb. 28, piling additional expenses onto an operating component that before the conflict was already more than 30% of total costs.</div>

Global jet fuel prices have almost doubled since the Middle East war began on Feb. 28, piling additional expenses onto an operating component that before the conflict was already more than 30% of total costs.

<div class="phx-topic">Rising energy prices are placing growing pressure on air freighter operators, with the soaring cost of jet fuel eroding margins and pushing part of the global fleet closer toward economic unviability. Global jet fuel prices have almost doubled since the Middle East war began on Feb. 28, piling additional expenses onto an operating component that before the conflict was already more than 30% of total costs. “For less efficient aircraft like the B747-400F, the math is getting tight,” Rotate analyst Archisman Acharya noted in a report. “Global average profitability is approaching breakeven, and on lanes without strong yield growth, margins have already turned negative.” The B747-400 freighter accounts for a significant share of global freighter capacity, with the trans-Pacific the most exposed trade lane at 22%. During the last comparable fuel spike in 2022, Acharya said global B747-400F capacity declined 12%. While the price of jet fuel has risen sharply, concerns are now growing over its availability, particularly in Asia. China and Thailand have suspended their jet fuel exports, impacting neighbor Vietnam, which imports two-thirds of its supply from the two countries. With its fuel spigot turned off, Vietnam’s aviation authority last week announced cuts in domestic flights and may suspend charters. Elsewhere, refueling restrictions are being imposed in South Korea, while the Philippines has declared a "national energy emergency" and may start grounding flights. Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged the flat price for jet fuel in Northwest Europe delivered via cargo at a record high of $1,842.50 per metric ton on Thursday, up $232.25 on the day. “Since the war broke out, jet fuel prices have been about twice last year's levels and have broken previous records multiple times,” Platts said in a commentary. <h3>Fast resolution to conflict needed </h3>Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said in a market update Thursday that air cargo stakeholders were pinning their hopes on a fast resolution to the Middle East conflict. “Tariffs created uncertainty, but the fallout here is bigger because of the cost of jet fuel, the potential energy crisis and inflation growth,” he said. “Right now, the air cargo market is suffering from a supply issue, and this will be resolved, but the longer this recovery takes is going to determine if it becomes a much bigger demand issue. “Whether air freight benefits or suffers in the longer term is down to the length of the conflict and its outcomes,” van de Wouw added. He said cities like Dubai and Doha occupied strategic midpoints between the Americas, Asia and Europe, and have served as the growth engine behind the rise of super-connector airlines such as Emirates, Etihad and Qatar Airways. But their geographic advantage has now become a strategic vulnerability, with hub airports in the war zone becoming victims of the conflict. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9012e6fb-929b-4707-8282-a10521bcf60e"></dynamic-object></div>Five weeks into the war, air cargo capacity in the region remains roughly 30% below pre-conflict levels, and the squeeze in supply is showing up in rates. Global air cargo spot rates in March surpassed 2025 peak-season levels, reaching $2.86 per kilogram, their highest since December 2024, van de Wouw said. “Will the increase in fuel prices dampen demand for air freight? Not immediately, but if this conflict continues in the longer term, then definitely yes because the world would be facing a much broader economic issue,” he said. Data from Xeneta shows the rate impact has been sharpest on outbound corridors from South Asia and Southeast Asia to the Middle East. Spot rates surged 50% to 100% in the week ended March 29 compared to just four weeks prior. The spike reflected a convergence of pressures: severe capacity shortages from heavy reliance on Middle Eastern carriers, near-doubled jet fuel costs and newly added war-risk surcharges. Spot rates from Southeast Asia and South Asia to Europe followed similar trajectories, given Middle Eastern carriers' dominance on those routes. By contrast, Northeast Asia-Europe lanes held up comparatively better as airlines deployed more direct flights to compensate. Rising fuel costs have pushed air freight rates from Northeast Asia and Southeast Asia to North America up by mid- to high double digits. South Asia-North America rates surged even higher, up approximately 75%, again driven by Middle Eastern carriers' significant share of that corridor, Xeneta data showed. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Rising energy prices are placing growing pressure on air freighter operators, with the soaring cost of jet fuel eroding margins and pushing part of the global fleet closer toward economic unviability. Global jet fuel prices have almost doubled since the Middle East war began on Feb. 28, piling additional expenses onto an operating component that before the conflict was already more than 30% of total costs. “For less efficient aircraft like the B747-400F, the math is getting tight,” Rotate analyst Archisman Acharya noted in a report. “Global average profitability is approaching breakeven, and on lanes without strong yield growth, margins have already turned negative.” The B747-400 freighter accounts for a significant share of global freighter capacity, with the trans-Pacific the most exposed trade lane at 22%. During the last comparable fuel spike in 2022, Acharya said global B747-400F capacity declined 12%. While the price of jet fuel has risen sharply, concerns are now growing over its availability, particularly in Asia. China and Thailand have suspended their jet fuel exports, impacting neighbor Vietnam, which imports two-thirds of its supply from the two countries. With its fuel spigot turned off, Vietnam’s aviation authority last week announced cuts in domestic flights and may suspend charters. Elsewhere, refueling restrictions are being imposed in South Korea, while the Philippines has declared a "national energy emergency" and may start grounding flights. Platts, a sister company of the Journal of Commerce within S&P Global, pegged the flat price for jet fuel in Northwest Europe delivered via cargo at a record high of $1,842.50 per metric ton on Thursday, up $232.25 on the day. “Since the war broke out, jet fuel prices have been about twice last year's levels and have broken previous records multiple times,” Platts said in a commentary. Fast resolution to conflict needed Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said in a market update Thursday that air cargo stakeholders were pinning their hopes on a fast resolution to the Middle East conflict. “Tariffs created uncertainty, but the fallout here is bigger because of the cost of jet fuel, the potential energy crisis and inflation growth,” he said. “Right now, the air cargo market is suffering from a supply issue, and this will be resolved, but the longer this recovery takes is going to determine if it becomes a much bigger demand issue. “Whether air freight benefits or suffers in the longer term is down to the length of the conflict and its outcomes,” van de Wouw added. He said cities like Dubai and Doha occupied strategic midpoints between the Americas, Asia and Europe, and have served as the growth engine behind the rise of super-connector airlines such as Emirates, Etihad and Qatar Airways. But their geographic advantage has now become a strategic vulnerability, with hub airports in the war zone becoming victims of the conflict. Five weeks into the war, air cargo capacity in the region remains roughly 30% below pre-conflict levels, and the squeeze in supply is showing up in rates. Global air cargo spot rates in March surpassed 2025 peak-season levels, reaching $2.86 per kilogram, their highest since December 2024, van de Wouw said. “Will the increase in fuel prices dampen demand for air freight? Not immediately, but if this conflict continues in the longer term, then definitely yes because the world would be facing a much broader economic issue,” he said. Data from Xeneta shows the rate impact has been sharpest on outbound corridors from South Asia and Southeast Asia to the Middle East. Spot rates surged 50% to 100% in the week ended March 29 compared to just four weeks prior. The spike reflected a convergence of pressures: severe capacity shortages from heavy reliance on Middle Eastern carriers, near-doubled jet fuel costs and newly added war-risk surcharges. Spot rates from Southeast Asia and South Asia to Europe followed similar trajectories, given Middle Eastern carriers' dominance on those routes. By contrast, Northeast Asia-Europe lanes held up comparatively better as airlines deployed more direct flights to compensate. Rising fuel costs have pushed air freight rates from Northeast Asia and Southeast Asia to North America up by mid- to high double digits. South Asia-North America rates surged even higher, up approximately 75%, again driven by Middle Eastern carriers' significant share of that corridor, Xeneta data showed. Contact Greg Knowler at greg.knowler@spglobal.com.

Air Cargo Forwarder News

Air Cargo Carriers News

Air Cargo

Rising jet fuel costs challenging freighter viability as war enters second month

<div class="phx-topic abstract-wrapper">The announcement comes as the Singapore-based regional carrier outlined a strategic restructuring of its overall operations, including scaling down trade coverage across its key intra-Asia trade territories.</div>

The announcement comes as the Singapore-based regional carrier outlined a strategic restructuring of its overall operations, including scaling down trade coverage across its key intra-Asia trade territories.

<div class="phx-topic">Singapore-based carrier SeaLead has acknowledged that its services calling at ports in the Middle East war zone were experiencing challenges and that it is assessing contingency measures for all cargo on board affected vessels. “The operational situation may result in broader disruptions, including potential equipment shortages and the use of alternative, more secure routing options,” the liner told customers in an advisory Thursday. As part of that strategy, the carrier is said to have already flushed out the inventory of empty equipment it was holding in India. “SeaLead is handling fewer fresh bookings, mostly for Jeddah [Saudi Arabia] port of discharge only,” a Mumbai-based freight forwarder told the Journal of Commerce. “The operations and customer service are presently in a sort of limbo.” <h3>‘Strategic restructuring’ </h3>The announcement comes as SeaLead outlined a strategic restructuring of its overall operations, including scaling down trade coverage across its key intra-Asia trade territories. “In response to recent market developments and conditions, SeaLead will undertake strategic restructuring to streamline its operations,” it said in an internal communique viewed by the Journal of Commerce. “As part of this realignment, SeaLead will reduce its network coverage in Indonesia, Korea, Morocco, Thailand, Vietnam and selected locations in China.” The regional liner also said it will work through calibrated office transitions in those regions, while adding that honoring contractual commitments and maintaining service reliability will be a priority. “SeaLead values the continued support of its employees, customers, vendors and other stakeholders during this transition period,” it said. Speculation has been growing about the future of SeaLead after the heavy fleet blow it suffered last year due to the <a href="https://www.joc.com/article/new-us-sanctions-on-iran-cut-sealeads-vessel-fleet-by-one-third-6055714">abrupt termination of 16 of its vessel charterparties</a>, an issue linked to US sanctions on entities with connections to the Iranian government. The action effectively removed one-third of the 53 ships SeaLead had in its fleet, according to available data. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

Singapore-based carrier SeaLead has acknowledged that its services calling at ports in the Middle East war zone were experiencing challenges and that it is assessing contingency measures for all cargo on board affected vessels. “The operational situation may result in broader disruptions, including potential equipment shortages and the use of alternative, more secure routing options,” the liner told customers in an advisory Thursday. As part of that strategy, the carrier is said to have already flushed out the inventory of empty equipment it was holding in India. “SeaLead is handling fewer fresh bookings, mostly for Jeddah [Saudi Arabia] port of discharge only,” a Mumbai-based freight forwarder told the Journal of Commerce. “The operations and customer service are presently in a sort of limbo.” ‘Strategic restructuring’ The announcement comes as SeaLead outlined a strategic restructuring of its overall operations, including scaling down trade coverage across its key intra-Asia trade territories. “In response to recent market developments and conditions, SeaLead will undertake strategic restructuring to streamline its operations,” it said in an internal communique viewed by the Journal of Commerce. “As part of this realignment, SeaLead will reduce its network coverage in Indonesia, Korea, Morocco, Thailand, Vietnam and selected locations in China.” The regional liner also said it will work through calibrated office transitions in those regions, while adding that honoring contractual commitments and maintaining service reliability will be a priority. “SeaLead values the continued support of its employees, customers, vendors and other stakeholders during this transition period,” it said. Speculation has been growing about the future of SeaLead after the heavy fleet blow it suffered last year due to the abrupt termination of 16 of its vessel charterparties , an issue linked to US sanctions on entities with connections to the Iranian government. The action effectively removed one-third of the 53 ships SeaLead had in its fleet, according to available data. Contact Bency Mathew at bencyvmathew@gmail.com.

International ports

SeaLead warns of network disruptions in Persian Gulf war zone

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

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

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

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

Surface

Supply chain

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

<div class="phx-topic abstract-wrapper">Record fleet expansion, widening scale disparities, and lingering financial reserves have combined to create a rare window in which transformative deals among ocean carriers are both feasible and strategically rational.</div>

Record fleet expansion, widening scale disparities, and lingering financial reserves have combined to create a rare window in which transformative deals among ocean carriers are both feasible and strategically rational.

<div class="phx-topic">Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability. Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition. In my personal experience, the industry’s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically. The global container ship order book currently stands at more than 35% of the existing fleet — an unprecedented level. At the same time, the four largest carriers — Mediterranean Shipping Co., CMA CGM, Maersk and Cosco — have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL. (Industry data sources include Drewry and Clarksons Research.) Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures. True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M&amp;A offers the additional advantage of organizational synergies — streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead — that alliances cannot replicate. This raises an important question: Why is consolidation particularly relevant now? In cyclical industries such as container shipping, mergers rarely occur at market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions. That transition phase appears to be underway today. <h3>COVID-era profits provide ‘window of opportunity’ for carriers </h3>Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence. They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements. The mid-tier segment of the industry presents multiple potential merger candidates. Historically, national interests have complicated cross-border consolidation, as governments often view shipping lines as strategic assets tied to trade security and economic policy. Yet recent developments suggest that such barriers are not insurmountable. Hapag-Lloyd’s proposed acquisition of Zim demonstrates that creative structures can address national security concerns while still enabling industrial consolidation. The ability to design tailored governance or ownership arrangements may unlock additional transactions that once seemed politically impossible. Customers, too, have a stake in consolidation, perhaps more than is commonly recognized. Over time, a more consolidated industry can produce greater stability. Previous downturns, including those in 2001, 2009 and 2016, revealed how financially distressed carriers can disrupt supply chains. When shipping lines suffer sustained losses, they often resort to abrupt service cancellations, capacity withdrawals, and large-scale blank sailings. These measures create uncertainty for shippers, ports, logistics providers, and equipment lessors. Most of us vividly remember the collapse of Hanjin Shipping. Its bankruptcy triggered widespread cargo disruptions, stranded containers, port congestion and financial losses across the logistics ecosystem. Such systemic shocks underscore the broader economic value of financially stronger carriers. Consolidation, if executed in a timely manner, can reduce the likelihood of extreme distress events by improving cost structures and balance sheet resilience. <h3>‘Pivotal moment’ </h3>To reassure the skeptics, we can rest assured that competition authorities will continue to monitor market concentration carefully, and customers will demand tangible service improvements rather than promises of efficiency. Nevertheless, the strategic logic is compelling. The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational. Delaying action could mean missing that window, as market conditions tighten and financial flexibility declines. For carriers, investors and customers alike, timely consolidation offers the prospect of a more stable and sustainable industry. In a sector long defined by volatility, that outcome should be in everyone’s interest. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&amp;O Nedlloyd and the Maersk Group. Contact him at <a href="mailto:robbert@inceptionpartners.org">robbert@inceptionpartners.org</a>. </div>

Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability. Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition. In my personal experience, the industry’s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically. The global container ship order book currently stands at more than 35% of the existing fleet — an unprecedented level. At the same time, the four largest carriers — Mediterranean Shipping Co., CMA CGM, Maersk and Cosco — have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL. (Industry data sources include Drewry and Clarksons Research.) Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures. True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M&A offers the additional advantage of organizational synergies — streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead — that alliances cannot replicate. This raises an important question: Why is consolidation particularly relevant now? In cyclical industries such as container shipping, mergers rarely occur at market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions. That transition phase appears to be underway today. COVID-era profits provide ‘window of opportunity’ for carriers Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence. They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements. The mid-tier segment of the industry presents multiple potential merger candidates. Historically, national interests have complicated cross-border consolidation, as governments often view shipping lines as strategic assets tied to trade security and economic policy. Yet recent developments suggest that such barriers are not insurmountable. Hapag-Lloyd’s proposed acquisition of Zim demonstrates that creative structures can address national security concerns while still enabling industrial consolidation. The ability to design tailored governance or ownership arrangements may unlock additional transactions that once seemed politically impossible. Customers, too, have a stake in consolidation, perhaps more than is commonly recognized. Over time, a more consolidated industry can produce greater stability. Previous downturns, including those in 2001, 2009 and 2016, revealed how financially distressed carriers can disrupt supply chains. When shipping lines suffer sustained losses, they often resort to abrupt service cancellations, capacity withdrawals, and large-scale blank sailings. These measures create uncertainty for shippers, ports, logistics providers, and equipment lessors. Most of us vividly remember the collapse of Hanjin Shipping. Its bankruptcy triggered widespread cargo disruptions, stranded containers, port congestion and financial losses across the logistics ecosystem. Such systemic shocks underscore the broader economic value of financially stronger carriers. Consolidation, if executed in a timely manner, can reduce the likelihood of extreme distress events by improving cost structures and balance sheet resilience. ‘Pivotal moment’ To reassure the skeptics, we can rest assured that competition authorities will continue to monitor market concentration carefully, and customers will demand tangible service improvements rather than promises of efficiency. Nevertheless, the strategic logic is compelling. The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational. Delaying action could mean missing that window, as market conditions tighten and financial flexibility declines. For carriers, investors and customers alike, timely consolidation offers the prospect of a more stable and sustainable industry. In a sector long defined by volatility, that outcome should be in everyone’s interest. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&O Nedlloyd and the Maersk Group. Contact him at robbert@inceptionpartners.org .

In wake of Zim deal, the time for industry consolidation is now

Shanghai to Korea

{name} 
{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {percet_year_Pusan.formatNumber("##.#%")}

The Shanghai Shipping Exchange’s (SSE) Shanghai Containerized Freight Index (SCFI) reflects spot rates and associated seaborne charges for containerized exports from Shanghai. The SCFI includes indices of freight rates in 13 individual shipping routes and a composite index, using Oct. 16, 2009, as the base period (Oct. 16, 2009 = 1,000). [SSE](https://en.sse.net.cn/indices/scfinew.jsp)

Shanghai to Korea container spot rates (SSE)

Shanghai to Korea Containe Spot Rates (SCFI-Weekly) Gateway

<div class="phx-topic abstract-wrapper">The comments by the US Secretary of State heighten the Trump administration’s involvement a week after the top federal maritime regulator flagged the ship detentions. </div>

The comments by the US Secretary of State heighten the Trump administration’s involvement a week after the top federal maritime regulator flagged the ship detentions.

<div class="phx-topic">The Trump administration Thursday escalated its concern over the recent detention of Panama-flagged vessels at Chinese ports, with Secretary of State Marco Rubio saying the practice, “raise(s) serious concerns about the use of economic tools to undermine the rule of law...” Rubio’s comments come a week after Laura DiBella, chairman of the Federal Maritime Commission, said the agency was “closely monitoring” an apparent “surge” in detentions of Panama-flag ships by Chinese port authorities and the effect it could have on US container trade. “Detentions, delays, or other impediments to the movement of vessels undermine the stability of global supply chains, increase costs for businesses and consumers, and erode confidence in the international trading system,” Rubio said in a statement. Similar to DiBella, Rubio linked the Chinese activity against the vessels to retaliation for the Panamanian Supreme Court recently nullifying the operating concessions at Panama’s Balboa and Cristóbal ports held by Panama Ports Company (PPC), which is 90% owned by Hong Kong-based conglomerate CK Hutchison Holdings. Hutchison held the operating concessions at the two ports for 28 years. Striking back after the ruling, Hutchison  filed an international arbitration claim against the Panamanian government and Panama Maritime Authority (PMA), seeking more than $2 billion in damages. China’s Cosco Shipping Lines earlier this month halted calls at Balboa, redirecting its services to Manzanillo on the Atlantic side of the canal. Cosco and Hong Kong-based OOCL operate nearly one-fifth of the trans-Pacific capacity that transits the canal, according to data from benchmarking platform Xeneta’s eeSea. Panama’s move against Hutchison came a year after US President Donald Trump threatened to take over the canal if Panama did not rid itself of Chinese influence. <a href="mailto:News@joc.com">News@joc.com.</a></div>

The Trump administration Thursday escalated its concern over the recent detention of Panama-flagged vessels at Chinese ports, with Secretary of State Marco Rubio saying the practice, “raise(s) serious concerns about the use of economic tools to undermine the rule of law...” Rubio’s comments come a week after Laura DiBella, chairman of the Federal Maritime Commission, said the agency was “closely monitoring” an apparent “surge” in detentions of Panama-flag ships by Chinese port authorities and the effect it could have on US container trade. “Detentions, delays, or other impediments to the movement of vessels undermine the stability of global supply chains, increase costs for businesses and consumers, and erode confidence in the international trading system,” Rubio said in a statement. Similar to DiBella, Rubio linked the Chinese activity against the vessels to retaliation for the Panamanian Supreme Court recently nullifying the operating concessions at Panama’s Balboa and Cristóbal ports held by Panama Ports Company (PPC), which is 90% owned by Hong Kong-based conglomerate CK Hutchison Holdings. Hutchison held the operating concessions at the two ports for 28 years. Striking back after the ruling, Hutchison  filed an international arbitration claim against the Panamanian government and Panama Maritime Authority (PMA), seeking more than $2 billion in damages. China’s Cosco Shipping Lines earlier this month halted calls at Balboa, redirecting its services to Manzanillo on the Atlantic side of the canal. Cosco and Hong Kong-based OOCL operate nearly one-fifth of the trans-Pacific capacity that transits the canal, according to data from benchmarking platform Xeneta’s eeSea. Panama’s move against Hutchison came a year after US President Donald Trump threatened to take over the canal if Panama did not rid itself of Chinese influence. News@joc.com.

Rubio, in escalation, criticizes China for detaining Panama-flag ships

<div class="phx-topic abstract-wrapper">With more than 50% of the city-state's bunker fuel imported via the Strait of Hormuz, which has been effectively closed since the war started on Feb. 28, suppliers are feeling the pinch.</div>

With more than 50% of the city-state's bunker fuel imported via the Strait of Hormuz, which has been effectively closed since the war started on Feb. 28, suppliers are feeling the pinch.

<div class="phx-topic">Suppliers in the world’s largest bunkering hub of Singapore are under growing stress, with analysts reporting less than a month’s supply remaining and no replenishment in sight from one of its most important fuel supply lines. More than 50% of the city-state's bunker fuel is believed to be imported via the Strait of Hormuz, which has been effectively closed since the war in the Middle East started on Feb. 28. Although Singapore remains able to refuel ships, the clock is ticking on the available supply, according to Fotios Katsoulas, director and head of tankers, freight and alternative fuels research at S&amp;P Global Energy. "If the current supply-demand imbalance persists, we expect a rapid acceleration in stock drawdowns as existing inventories — currently sufficient for about three weeks of typical demand — begin to deplete,” he said. S&amp;P Global is the parent company of the Journal of Commerce. Katsoulas said the Singapore market was under “significant stress,” with recommended lead times for ocean carriers replenishing very low sulfur fuel oil (VLSFO) currently stretching to more than a week in some cases. “Prompt availability is extremely tight,” he said. “We are seeing reports of suppliers already prioritizing existing term contracts and resisting new tenders for the next (few) months.” The immense scale of Singapore’s bunkering industry underlines the problem facing fuel suppliers in the port should the Strait of Hormuz remain closed. Singapore sold 56.2 million metric tons (mt) of bunker fuel in 2025, up 3.2% year over year, according to data from the Maritime and Port Authority of Singapore. That was more than five times the bunker sales at the world’s second-largest ship refueling hub of Rotterdam, with sales driven by strong high sulfur fuel oil (HSFO) demand as VLSFO sales dropped off. Traders in Singapore have been sourcing oil from areas outside the Middle East, such as Brazil and Russia, according to reports. The US in March issued a 30-day waiver allowing the purchase of previously sanctioned Russian oil and gas, and Singapore is taking advantage of that by increasing imports to support bunker availability. <h3>Fuel prices drop off mid-March highs </h3>The scarcity of supply since Feb. 28 has pushed up bunker fuel prices in Singapore, but prices have declined since the mid-March highs. On April 1, VLSFO in Singapore was selling at $873.50 per metric ton, up 70% since Feb. 27 but far below its March 16 high of $1,119/mt, according to the Ship &amp; Bunker platform. HSFO has followed a similar path, up 60% from Feb. 27 at $695/mt, but down 35% from the March 9 price of $1,073/mt. Bucking the trend is low sulfur marine gas oil (MGO), used by carriers in emission control areas such as the coasts of North America, the Caribbean, the Baltic and North seas, and the Mediterranean. MGO prices in Singapore on April 1 were at $1,836/mt, not far off the March 23 high of $1,940, but 160% above the pre-war price, Ship &amp; Bunker data showed. In Rotterdam, VLSFO was trading at $716.50/mt on April 1, up almost 50% from Feb. 27. HSFO was at $661.50, up 50% since before the war, while MGO was 85% higher at $1,331/mt, Ship &amp; Bunker’s latest pricing showed. Katsoulas said Rotterdam was currently the most stable and well-supplied bunkering point compared to the hubs east of the Suez Canal. “It is shielded from the immediate Middle East disruptions, and as a result, Singapore is trading at a massive $140 to $250 per ton premium over Rotterdam prices,” he told the Journal of Commerce. Peter Sand, chief analyst at rate benchmarking platform Xeneta, said bunker fuel in Singapore was available at prices almost double pre-conflict levels, but the prices were trending slowly downwards after the initial spike of 200%. “With no visible end to the crisis, however, carriers are almost certainly drawing up another set of contingency plans,” Sand said in a market update Thursday. “The coming weeks will show whether slow steaming and alternative routing can hold the line, or whether blank sailings become the next lever carriers reach for.” <h3>Emergency surcharge prices rise </h3>One of the contingency plans being aggressively pursued by carriers are emergency bunker fuel surcharges piled on top of existing quarterly fuel cost recovery mechanisms. For instance, Maersk from March 25 has been charging $400 per FEU on long-haul head-haul routes and $600/FEU for reefers, while CMA CGM since March 27 has been charging emergency fuel surcharges of $265/TEU, and $320/TEU for reefers. Ocean Network Express set long-haul head-haul surcharges at $160/TEU, with $210/TEU for reefers, while Mediterranean Shipping Co. has implemented a range of fuel surcharges covering specific regional routes. Maersk this week again asked US maritime regulators to <a href="https://www.joc.com/article/maersk-again-asks-fmc-to-waive-30-day-review-period-for-emergency-fuel-surcharge-6197792">waive the 30-day notice period</a> required before liners can implement surcharges so it could immediately roll out emergency fuel surcharges on long-haul US trades. The Federal Maritime Commission <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">previously rejected an initial attempt by Maersk and three other carriers to waive the notice period</a> and is expected to rule on the second request soon. Rolf Habben Jansen, CEO of Hapag-Lloyd, last week put a price on the Middle East war, telling reporters that the carrier <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">was shouldering added operating costs of $40 million to $50 million a week</a>. Most of that was driven by higher bunker fuel prices and rising insurance premiums in the Middle East. “Our intention is not to make a profit (from surcharges),” Habben Jansen told reporters during a media briefing. “We are trying to limit the charges to the extra costs we need to recover. We are trying to ring-fence the problem as much as possible.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Suppliers in the world’s largest bunkering hub of Singapore are under growing stress, with analysts reporting less than a month’s supply remaining and no replenishment in sight from one of its most important fuel supply lines. More than 50% of the city-state's bunker fuel is believed to be imported via the Strait of Hormuz, which has been effectively closed since the war in the Middle East started on Feb. 28. Although Singapore remains able to refuel ships, the clock is ticking on the available supply, according to Fotios Katsoulas, director and head of tankers, freight and alternative fuels research at S&P Global Energy. "If the current supply-demand imbalance persists, we expect a rapid acceleration in stock drawdowns as existing inventories — currently sufficient for about three weeks of typical demand — begin to deplete,” he said. S&P Global is the parent company of the Journal of Commerce. Katsoulas said the Singapore market was under “significant stress,” with recommended lead times for ocean carriers replenishing very low sulfur fuel oil (VLSFO) currently stretching to more than a week in some cases. “Prompt availability is extremely tight,” he said. “We are seeing reports of suppliers already prioritizing existing term contracts and resisting new tenders for the next (few) months.” The immense scale of Singapore’s bunkering industry underlines the problem facing fuel suppliers in the port should the Strait of Hormuz remain closed. Singapore sold 56.2 million metric tons (mt) of bunker fuel in 2025, up 3.2% year over year, according to data from the Maritime and Port Authority of Singapore. That was more than five times the bunker sales at the world’s second-largest ship refueling hub of Rotterdam, with sales driven by strong high sulfur fuel oil (HSFO) demand as VLSFO sales dropped off. Traders in Singapore have been sourcing oil from areas outside the Middle East, such as Brazil and Russia, according to reports. The US in March issued a 30-day waiver allowing the purchase of previously sanctioned Russian oil and gas, and Singapore is taking advantage of that by increasing imports to support bunker availability. Fuel prices drop off mid-March highs The scarcity of supply since Feb. 28 has pushed up bunker fuel prices in Singapore, but prices have declined since the mid-March highs. On April 1, VLSFO in Singapore was selling at $873.50 per metric ton, up 70% since Feb. 27 but far below its March 16 high of $1,119/mt, according to the Ship & Bunker platform. HSFO has followed a similar path, up 60% from Feb. 27 at $695/mt, but down 35% from the March 9 price of $1,073/mt. Bucking the trend is low sulfur marine gas oil (MGO), used by carriers in emission control areas such as the coasts of North America, the Caribbean, the Baltic and North seas, and the Mediterranean. MGO prices in Singapore on April 1 were at $1,836/mt, not far off the March 23 high of $1,940, but 160% above the pre-war price, Ship & Bunker data showed. In Rotterdam, VLSFO was trading at $716.50/mt on April 1, up almost 50% from Feb. 27. HSFO was at $661.50, up 50% since before the war, while MGO was 85% higher at $1,331/mt, Ship & Bunker’s latest pricing showed. Katsoulas said Rotterdam was currently the most stable and well-supplied bunkering point compared to the hubs east of the Suez Canal. “It is shielded from the immediate Middle East disruptions, and as a result, Singapore is trading at a massive $140 to $250 per ton premium over Rotterdam prices,” he told the Journal of Commerce. Peter Sand, chief analyst at rate benchmarking platform Xeneta, said bunker fuel in Singapore was available at prices almost double pre-conflict levels, but the prices were trending slowly downwards after the initial spike of 200%. “With no visible end to the crisis, however, carriers are almost certainly drawing up another set of contingency plans,” Sand said in a market update Thursday. “The coming weeks will show whether slow steaming and alternative routing can hold the line, or whether blank sailings become the next lever carriers reach for.” Emergency surcharge prices rise One of the contingency plans being aggressively pursued by carriers are emergency bunker fuel surcharges piled on top of existing quarterly fuel cost recovery mechanisms. For instance, Maersk from March 25 has been charging $400 per FEU on long-haul head-haul routes and $600/FEU for reefers, while CMA CGM since March 27 has been charging emergency fuel surcharges of $265/TEU, and $320/TEU for reefers. Ocean Network Express set long-haul head-haul surcharges at $160/TEU, with $210/TEU for reefers, while Mediterranean Shipping Co. has implemented a range of fuel surcharges covering specific regional routes. Maersk this week again asked US maritime regulators to waive the 30-day notice period required before liners can implement surcharges so it could immediately roll out emergency fuel surcharges on long-haul US trades. The Federal Maritime Commission previously rejected an initial attempt by Maersk and three other carriers to waive the notice period and is expected to rule on the second request soon. Rolf Habben Jansen, CEO of Hapag-Lloyd, last week put a price on the Middle East war, telling reporters that the carrier was shouldering added operating costs of $40 million to $50 million a week . Most of that was driven by higher bunker fuel prices and rising insurance premiums in the Middle East. “Our intention is not to make a profit (from surcharges),” Habben Jansen told reporters during a media briefing. “We are trying to limit the charges to the extra costs we need to recover. We are trying to ring-fence the problem as much as possible.” Contact Greg Knowler at greg.knowler@spglobal.com .

Singapore bunker supply continues to run down as Middle East war drags on

<div class="phx-topic abstract-wrapper">The World Shipping Council argued unsuccessfully that a section of OSRA-22 aimed at US exports was an overreach by the country’s maritime regulator. </div>

The World Shipping Council argued unsuccessfully that a section of OSRA-22 aimed at US exports was an overreach by the country’s maritime regulator.

<div class="phx-topic">An appeals court has denied a challenge to US shipping law that blocks ocean carriers from unfairly denying vessel space to exporters, ruling that the Federal Maritime Commission (FMC) has broad latitude to review a carrier’s rates and export policy when it believes such violations occur. A three-judge panel for the District of Columbia appellate court on Tuesday turned down <a href="https://www.joc.com/article/dc-court-hears-challenge-to-fmc-rulemaking-on-refusal-to-deal-6078353">the World Shipping Council’s (WSC’s) petition</a> to review a section of the Ocean Shipping Reform Act of 2022 (OSRA-22) that bars ocean carriers from “unreasonably refus[ing] to deal or negotiate ... with respect to vessel space accommodations.” The provision stemmed from <a href="https://www.joc.com/article/us-regulators-warn-container-lines-on-obligation-to-serve-exporters-5251170">the US agriculture industry’s difficulties in getting export space</a> during the COVID-19-era container shipping surge. After OSRA-22 was passed, a July 2024 rulemaking by the FMC sought to clarify how the agency would determine an unreasonable refusal to deal. The WSC claimed the rulemaking exceeded the FMC’s authority because it allowed the agency to review export freight rates, even though it gave up its ratemaking authority in 1984. The rulemaking also requires ocean carriers to document their export policies, which the WSC claimed also oversteps the agency’s powers, and removed references to “business decisions” as a factor in deciding whether an ocean carrier unreasonably refused to deal. However, the court ruled that even if the FMC no longer regulates rates, it can still review ocean freight rates if they appear to be dissuading an export container booking. The ruling said that removing the FMC’s authority to review export rates “would permit any ocean carrier to refuse to deal or to negotiate with impunity, simply by quoting an unrealistically high rate.” “There is no practical difference between quoting a rate of one billion dollars and outright refusing to deal,” the ruling said. The court also turned away the WSC’s argument that a documented export policy was government overreach because it is “prospective” information, not a factual recounting of what occurred in a particular instance. The judges said the FMC has authority under US shipping law to collect information about carrier pricing strategies and export policies. As for the exclusion of business decisions in the rulemaking, the judges said the rulemaking did not explicitly prevent the FMC from considering that factor in whether a shipper was unfairly denied vessel space. The FMC itself said that it could also consider business decisions. “Counsel for the Commission acknowledged that the Commission may not decline to consider a relevant business decision because failure to consider a relevant factor would itself be arbitrary,” the ruling said. “In short, the Commission did not meaningfully change course by dropping its main reference to business decisions.” <h3>Despite loss, WSC notes ‘clarity’ in ruling </h3>In a statement to the Journal of Commerce, WSC Chief Executive Joe Kramek said, “the ruling provides the liner shipping industry with clarity on the factors the [FMC] must consider in reviewing refusal-to-deal cases.” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in a statement the FMC’s refusal-to-deal rulemaking followed Congress’ intent on providing a level playing field for US exporters. “The provision in OSRA-22 and the subsequent FMC implementing regulation was designed to address refusals of ocean carriers to accept booking of many agriculture commodities during the COVID crisis,” Friedmann said. “Congress responded, on behalf of agriculture and other constituents, leading to this provision of OSRA-22. AgTC is pleased with the Court of Appeals decision denying efforts to derail this FMC regulation.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

An appeals court has denied a challenge to US shipping law that blocks ocean carriers from unfairly denying vessel space to exporters, ruling that the Federal Maritime Commission (FMC) has broad latitude to review a carrier’s rates and export policy when it believes such violations occur. A three-judge panel for the District of Columbia appellate court on Tuesday turned down the World Shipping Council’s (WSC’s) petition to review a section of the Ocean Shipping Reform Act of 2022 (OSRA-22) that bars ocean carriers from “unreasonably refus[ing] to deal or negotiate ... with respect to vessel space accommodations.” The provision stemmed from the US agriculture industry’s difficulties in getting export space during the COVID-19-era container shipping surge. After OSRA-22 was passed, a July 2024 rulemaking by the FMC sought to clarify how the agency would determine an unreasonable refusal to deal. The WSC claimed the rulemaking exceeded the FMC’s authority because it allowed the agency to review export freight rates, even though it gave up its ratemaking authority in 1984. The rulemaking also requires ocean carriers to document their export policies, which the WSC claimed also oversteps the agency’s powers, and removed references to “business decisions” as a factor in deciding whether an ocean carrier unreasonably refused to deal. However, the court ruled that even if the FMC no longer regulates rates, it can still review ocean freight rates if they appear to be dissuading an export container booking. The ruling said that removing the FMC’s authority to review export rates “would permit any ocean carrier to refuse to deal or to negotiate with impunity, simply by quoting an unrealistically high rate.” “There is no practical difference between quoting a rate of one billion dollars and outright refusing to deal,” the ruling said. The court also turned away the WSC’s argument that a documented export policy was government overreach because it is “prospective” information, not a factual recounting of what occurred in a particular instance. The judges said the FMC has authority under US shipping law to collect information about carrier pricing strategies and export policies. As for the exclusion of business decisions in the rulemaking, the judges said the rulemaking did not explicitly prevent the FMC from considering that factor in whether a shipper was unfairly denied vessel space. The FMC itself said that it could also consider business decisions. “Counsel for the Commission acknowledged that the Commission may not decline to consider a relevant business decision because failure to consider a relevant factor would itself be arbitrary,” the ruling said. “In short, the Commission did not meaningfully change course by dropping its main reference to business decisions.” Despite loss, WSC notes ‘clarity’ in ruling In a statement to the Journal of Commerce, WSC Chief Executive Joe Kramek said, “the ruling provides the liner shipping industry with clarity on the factors the [FMC] must consider in reviewing refusal-to-deal cases.” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in a statement the FMC’s refusal-to-deal rulemaking followed Congress’ intent on providing a level playing field for US exporters. “The provision in OSRA-22 and the subsequent FMC implementing regulation was designed to address refusals of ocean carriers to accept booking of many agriculture commodities during the COVID crisis,” Friedmann said. “Congress responded, on behalf of agriculture and other constituents, leading to this provision of OSRA-22. AgTC is pleased with the Court of Appeals decision denying efforts to derail this FMC regulation.” Contact Michael Angell at michael.angell@spglobal.com .

Appeals court upholds FMC rules on carrier refusal-to-deal, export policies

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<div class="phx-topic abstract-wrapper">The carrier is implementing a second surcharge on US trades to recoup higher operating costs driven by the war in the Middle East, and is asking maritime regulators for permission to levy the fee immediately.</div>

The carrier is implementing a second surcharge on US trades to recoup higher operating costs driven by the war in the Middle East, and is asking maritime regulators for permission to levy the fee immediately.

<div class="phx-topic">Maersk is making another attempt to win approval from US maritime regulators to waive a 30-day notice period and permit the carrier to immediately implement an emergency bunker fuel surcharge on long-haul US trades to offset rising costs driven by the war in the Middle East. The Federal Maritime Commission (FMC) is expected to vote soon on Maersk’s new request, a spokesperson for the agency said. That comes as the agency on Wednesday rejected requests from two forwarders for a waiver of the 30-day notice period that is required before liners can implement surcharges. The FMC <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">previously rejected an initial attempt by Maersk and three other carriers</a> to waive the notice period. How the FMC votes on Maersk’s latest request for special permission to implement surcharges in the hundreds of dollars per container could prove a test case for other carriers seeking to recoup war-driven energy costs from US shippers and forwarders. The FMC’s four commissioners on March 23 unanimously voted to reject separate requests from Maersk, CMA CGM, Hapag-Lloyd and Zim Integrated Shipping Services to waive the notice period, forcing the carriers to wait until this week to implement the initial surcharges. FMC Chairman Laura DiBella said the carriers should have provided data behind the decision to levy the surcharge and specify a duration, so the fee is “reasonably related to the increased costs.” In its initial March 11 filing to the FMC, Maersk asked the agency to waive the notice period for the new emergency bunker fuel surcharge so it could take effect March 25, coinciding with the implementation of similar surcharges on non-US trades, rather than April 8. In its latest petition, the carrier said low-sulfur bunker fuel prices jumped 82% on average, to $929 per metric ton, between Feb. 6 and March 9. The war began Feb. 28. “Maersk cannot absorb the full impact of this dramatic increase,” Wayne Rohde, an attorney at Cozen O’Conner representing Maersk, wrote in the filing to the FMC. “Moreover, bunker fuel prices are likely to remain elevated and volatile given the uncertainty of the duration of hostilities and their impact on the price of oil and bunker fuel.” For dry shipments on long-haul trades, Maersk is seeking an emergency fuel surcharge of $200 per TEU for the head-haul and $100 per TEU for the backhaul. Comparatively, Maersk has implemented a $300-per-TEU surcharge for refrigerated shipments on the head-haul of long-haul shipments and $150 for reefer backhaul cargoes. <h3>Holding the line </h3>The FMC on Wednesday rejected two separate requests to waive the 30-day review period for emergency surcharges. The agency denied a request by Turkon Container Transportation and Shipping to immediately impose a fee on all shipments to and from the Middle East of $2,000 per TEU, $3,000 per FEU, and $3,500 for refrigerated and special containers. The agency also denied a request by Vanguard Logistics Services, a non-vessel-operating common carrier, to immediately implement a $75 surcharge on shipments to and from the Middle East. In both cases, the FMC said the parties had failed to establish good cause to have the review period waived.The latest round of requests shows that “carriers are making the same fatal error that led to the prior denials — failing to provide their customers and the FMC specific cost information so they can determine their need for immediate imposition of very specific surcharges,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, said in a statement. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Maersk is making another attempt to win approval from US maritime regulators to waive a 30-day notice period and permit the carrier to immediately implement an emergency bunker fuel surcharge on long-haul US trades to offset rising costs driven by the war in the Middle East. The Federal Maritime Commission (FMC) is expected to vote soon on Maersk’s new request, a spokesperson for the agency said. That comes as the agency on Wednesday rejected requests from two forwarders for a waiver of the 30-day notice period that is required before liners can implement surcharges. The FMC previously rejected an initial attempt by Maersk and three other carriers to waive the notice period. How the FMC votes on Maersk’s latest request for special permission to implement surcharges in the hundreds of dollars per container could prove a test case for other carriers seeking to recoup war-driven energy costs from US shippers and forwarders. The FMC’s four commissioners on March 23 unanimously voted to reject separate requests from Maersk, CMA CGM, Hapag-Lloyd and Zim Integrated Shipping Services to waive the notice period, forcing the carriers to wait until this week to implement the initial surcharges. FMC Chairman Laura DiBella said the carriers should have provided data behind the decision to levy the surcharge and specify a duration, so the fee is “reasonably related to the increased costs.” In its initial March 11 filing to the FMC, Maersk asked the agency to waive the notice period for the new emergency bunker fuel surcharge so it could take effect March 25, coinciding with the implementation of similar surcharges on non-US trades, rather than April 8. In its latest petition, the carrier said low-sulfur bunker fuel prices jumped 82% on average, to $929 per metric ton, between Feb. 6 and March 9. The war began Feb. 28. “Maersk cannot absorb the full impact of this dramatic increase,” Wayne Rohde, an attorney at Cozen O’Conner representing Maersk, wrote in the filing to the FMC. “Moreover, bunker fuel prices are likely to remain elevated and volatile given the uncertainty of the duration of hostilities and their impact on the price of oil and bunker fuel.” For dry shipments on long-haul trades, Maersk is seeking an emergency fuel surcharge of $200 per TEU for the head-haul and $100 per TEU for the backhaul. Comparatively, Maersk has implemented a $300-per-TEU surcharge for refrigerated shipments on the head-haul of long-haul shipments and $150 for reefer backhaul cargoes. Holding the line The FMC on Wednesday rejected two separate requests to waive the 30-day review period for emergency surcharges. The agency denied a request by Turkon Container Transportation and Shipping to immediately impose a fee on all shipments to and from the Middle East of $2,000 per TEU, $3,000 per FEU, and $3,500 for refrigerated and special containers. The agency also denied a request by Vanguard Logistics Services, a non-vessel-operating common carrier, to immediately implement a $75 surcharge on shipments to and from the Middle East. In both cases, the FMC said the parties had failed to establish good cause to have the review period waived. The latest round of requests shows that “carriers are making the same fatal error that led to the prior denials — failing to provide their customers and the FMC specific cost information so they can determine their need for immediate imposition of very specific surcharges,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, said in a statement. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Maersk again asks FMC to waive 30-day review period for emergency fuel surcharge

<div class="phx-topic abstract-wrapper">With operations at Salalah suspended on Saturday due to a drone strike, Hapag-Lloyd has positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim in Pakistan. </div>

With operations at Salalah suspended on Saturday due to a drone strike, Hapag-Lloyd has positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim in Pakistan.

<div class="phx-topic">Stop-and-start operations at Salalah Port in Oman are adding to the schedule challenges that had already forced major carriers on the Indian westbound trades to rework their network rotations in response to the Middle East crisis. Salalah remains a critical hub for Maersk and Hapag-Lloyd, both for the Gemini Cooperation India-Europe/Mediterranean loop and their standalone India-US East Coast services. With operations at Salalah suspended on Saturday due to a drone strike, although <a href="https://www.joc.com/article/drone-strike-closes-key-middle-east-transit-hub-of-salalah-6195094">gradually resuming from Tuesday</a>, Hapag-Lloyd has now positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim (Karachi) in Pakistan. The Niledutch Lion has an estimated time of arrival of April 9 in Karachi after a scheduled departure from India’s Mundra port on April 7, updated data shows. Hapag-Lloyd last year halted calls to Karachi following the country-to-country trade restrictions between India and Pakistan, and instead has been connecting Pakistan cargo via Salalah by using common feeder capacity. Maersk did not immediately disclose its contingency plans for Indian regional transshipment affected by the Salalah shutdown. All the vessels deployed on the Gemini India-Europe loop, known as the ME1 for Maersk and the IOS for Hapag-Lloyd, are from the Danish liner. <h3>Multi-modal solutions </h3>Meanwhile, ocean carriers are rapidly shifting from port-to-port shipping to <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">integrated regional multimodal solutions</a> to handle imports into the Middle East, an alternative supply chain model that industry observers believe could outlast the war as cargo interests seek reliability and resilience in the supply chain. Supporting that transformation, there have been a series of collaborative attempts by Persian Gulf states, including the United Arab Emirates, Oman and Saudi Arabia, to establish “land bridges” by trucking and/or “green corridors” through sea-land networks for cargo flows within the region. One example is a strategic partnership between the UAE’s Gulftainer and the Saudi Ports Authority (Mawani) to open alternative logistics links between Sharjah in the UAE and Dammam in Saudi Arabia. Additionally, Saudi Arabia is offering an extended 60-day free time for the storage of Gulf import/export containers in addition to implementing multiple regulatory relaxations, including raising the permitted operational age of trucks in the country from 20 years to 22 years. Major liners have also stepped up the evacuation of Middle East-bound containers rerouted to Indian ports. Hapag-Lloyd this week has a shuttle sailing from Nhava Sheva in West India to Fujairah in the UAE, with onward connections available for Jebel Ali by trucking. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Stop-and-start operations at Salalah Port in Oman are adding to the schedule challenges that had already forced major carriers on the Indian westbound trades to rework their network rotations in response to the Middle East crisis. Salalah remains a critical hub for Maersk and Hapag-Lloyd, both for the Gemini Cooperation India-Europe/Mediterranean loop and their standalone India-US East Coast services. With operations at Salalah suspended on Saturday due to a drone strike, although gradually resuming from Tuesday , Hapag-Lloyd has now positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim (Karachi) in Pakistan. The Niledutch Lion has an estimated time of arrival of April 9 in Karachi after a scheduled departure from India’s Mundra port on April 7, updated data shows. Hapag-Lloyd last year halted calls to Karachi following the country-to-country trade restrictions between India and Pakistan, and instead has been connecting Pakistan cargo via Salalah by using common feeder capacity. Maersk did not immediately disclose its contingency plans for Indian regional transshipment affected by the Salalah shutdown. All the vessels deployed on the Gemini India-Europe loop, known as the ME1 for Maersk and the IOS for Hapag-Lloyd, are from the Danish liner. Multi-modal solutions Meanwhile, ocean carriers are rapidly shifting from port-to-port shipping to integrated regional multimodal solutions to handle imports into the Middle East, an alternative supply chain model that industry observers believe could outlast the war as cargo interests seek reliability and resilience in the supply chain. Supporting that transformation, there have been a series of collaborative attempts by Persian Gulf states, including the United Arab Emirates, Oman and Saudi Arabia, to establish “land bridges” by trucking and/or “green corridors” through sea-land networks for cargo flows within the region. One example is a strategic partnership between the UAE’s Gulftainer and the Saudi Ports Authority (Mawani) to open alternative logistics links between Sharjah in the UAE and Dammam in Saudi Arabia. Additionally, Saudi Arabia is offering an extended 60-day free time for the storage of Gulf import/export containers in addition to implementing multiple regulatory relaxations, including raising the permitted operational age of trucks in the country from 20 years to 22 years. Major liners have also stepped up the evacuation of Middle East-bound containers rerouted to Indian ports. Hapag-Lloyd this week has a shuttle sailing from Nhava Sheva in West India to Fujairah in the UAE, with onward connections available for Jebel Ali by trucking. Contact Bency Mathew at bencyvmathew@gmail.com .

Asia-Europe

Salalah disruptions send carriers on Indian trades back to adding Pakistan calls

<div class="phx-topic abstract-wrapper">The Omani port operated by APM Terminals is one of the alternative container drop-off points in the region being used by ocean carriers unable to pass through the Strait of Hormuz. </div>

The Omani port operated by APM Terminals is one of the alternative container drop-off points in the region being used by ocean carriers unable to pass through the Strait of Hormuz.

<div class="phx-topic">A drone strike on Saturday closed the APM Terminals (AMPT) regional hub of Salalah in Oman, disrupting operations at one of the key access points for containers being offloaded and trucked overland to Persian Gulf markets that are otherwise inaccessible by ocean due to the war. One port worker was injured in the attack, and a container terminal crane was damaged. No one has claimed responsibility for the strike, although some media is reporting that the drones were fired by Houthi militants in neighboring Yemen. APMT owner Maersk said in a customer advisory Monday that Salalah will gradually resume operations beginning Tuesday, although operational constraints “might remain for some time.” “Additional precautionary security measures have been implemented at the port, and we remain in contact with the relevant authorities and port stakeholders,” the carrier said. Following the attack, Hapag-Lloyd announced that its vessel Lisbon Express has been moved out of the port “as a precautionary measure.” With the Strait of Hormuz effectively closed to commercial shipping, ocean carriers are discharging containers in ports near the Persian Gulf, such as Salalah and Sohar in Oman and Khor Fakkan and Fujairah in the UAE. The cargo is then trucked vast distances inland to the United Arab Emirates, Qatar, Bahrain, Kuwait and Iraq. But customer advisories from forwarders and ocean carriers paint a picture of growing congestion across regional overland networks. Crane Worldwide Logistics said Khor Fakkan congestion was at 100% with wait times longer than 11 days and “vessel queues and dwell times unrelenting.” The region’s main port hub of Jebel Ali is experiencing systemic backlogs with DP World’s emergency land corridors to Dammam in Saudi Arabia and Sohar providing only marginal landside relief. Cross-border trucking capacity shortages persist in key corridors and are most acute in Oman, the UAE’s Fujairah, and Saudi Arabia, Crane noted. The landside disruption for cargo was exacerbated by the Eid holidays and flooding from a severe storm that lashed the UAE last week. Rolf Habben Jansen, CEO of Hapag-Lloyd, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">told reporters during a briefing last week</a> that the carrier was trying to come up with overland solutions for customer cargo that is stranded short of its Persian Gulf destinations. “But capacity there is limited, and that means it is possible for things that are urgent or critical, but it is not possible for the volume that normally would be carried via the water,” Habben Jansen said. “There is simply not enough inland infrastructure and there are not enough trucks to support that,” he added. <h3>Trucking costs rising </h3>It is not only inbound containers that are impacted by the ongoing conflict. The Journal of Commerce has been told that a shipper with containers that urgently need exporting from the Persian Gulf in the next two months is paying $15,000 per container to truck 140 boxes across Saudi Arabia to the port of Jeddah on the Red Sea. That figure was far above the current $2,000-$6,000 per container market price for a cross-desert truck journey from the UAE to Jeddah, according to the Middle East CEO for a global forwarder, who added the $15,000 per box was likely escalated by the urgent nature of the shipment. Still, the forwarder said trucking complications across the Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — extended well beyond high rates. “For example, if you have a Saudi truck and want to drive to an Omani port, it’s not possible,” the source told the Journal of Commerce. “They are currently making some exceptions, but we have just learned that Oman will charge an entry fee per tire.” Another problem that has been escalated by the conflict, according to the executive, is the issuing of visas. “There is so much more cross-border trucking now and drivers need to queue for half a day and longer to get a visa,” he said. “That limits the number of journeys a trucker can make, it creates delays and traffic backlogs, and inflates the price.” <h3>Operational restrictions </h3>Crane Worldwide Logistics said a new operational restriction now in effect bars drivers of Syrian, Pakistani and Yemeni nationality from entering Qatar, directly impacting road-based freight operations in and out of the country. With ocean cargo handling suspended in the Qatari port of Doha, the Crane advisory said containers already discharged in the region were accruing storage charges daily and the driver nationality ban was limiting the ability of cargo owners to collect and move their boxes. Michael Aldwell, executive vice president of sea logistics at Kuehne + Nagel, acknowledged that trucking capacity was a challenge, but said the forwarder had a road network in place before the conflict that it was able to utilize. Priority was being given to transporting healthcare and perishable cargo into the Middle East. “To keep cargo moving, we are working on solutions to find alternative gateways and corridors with trucks into the Persian Gulf markets, such as cross-border trucking between Sohar or Khor Fakkan, and via Mersin [Turkey] or Aqaba [Jordan],” Aldwell told the Journal of Commerce. “We are also implementing air-road solutions via airports in Saudi Arabia [Jeddah] and Oman [Salalah] with cross-border trucking to the UAE, Qatar, Bahrain and Kuwait,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A drone strike on Saturday closed the APM Terminals (AMPT) regional hub of Salalah in Oman, disrupting operations at one of the key access points for containers being offloaded and trucked overland to Persian Gulf markets that are otherwise inaccessible by ocean due to the war. One port worker was injured in the attack, and a container terminal crane was damaged. No one has claimed responsibility for the strike, although some media is reporting that the drones were fired by Houthi militants in neighboring Yemen. APMT owner Maersk said in a customer advisory Monday that Salalah will gradually resume operations beginning Tuesday, although operational constraints “might remain for some time.” “Additional precautionary security measures have been implemented at the port, and we remain in contact with the relevant authorities and port stakeholders,” the carrier said. Following the attack, Hapag-Lloyd announced that its vessel Lisbon Express has been moved out of the port “as a precautionary measure.” With the Strait of Hormuz effectively closed to commercial shipping, ocean carriers are discharging containers in ports near the Persian Gulf, such as Salalah and Sohar in Oman and Khor Fakkan and Fujairah in the UAE. The cargo is then trucked vast distances inland to the United Arab Emirates, Qatar, Bahrain, Kuwait and Iraq. But customer advisories from forwarders and ocean carriers paint a picture of growing congestion across regional overland networks. Crane Worldwide Logistics said Khor Fakkan congestion was at 100% with wait times longer than 11 days and “vessel queues and dwell times unrelenting.” The region’s main port hub of Jebel Ali is experiencing systemic backlogs with DP World’s emergency land corridors to Dammam in Saudi Arabia and Sohar providing only marginal landside relief. Cross-border trucking capacity shortages persist in key corridors and are most acute in Oman, the UAE’s Fujairah, and Saudi Arabia, Crane noted. The landside disruption for cargo was exacerbated by the Eid holidays and flooding from a severe storm that lashed the UAE last week. Rolf Habben Jansen, CEO of Hapag-Lloyd, told reporters during a briefing last week that the carrier was trying to come up with overland solutions for customer cargo that is stranded short of its Persian Gulf destinations. “But capacity there is limited, and that means it is possible for things that are urgent or critical, but it is not possible for the volume that normally would be carried via the water,” Habben Jansen said. “There is simply not enough inland infrastructure and there are not enough trucks to support that,” he added. Trucking costs rising It is not only inbound containers that are impacted by the ongoing conflict. The Journal of Commerce has been told that a shipper with containers that urgently need exporting from the Persian Gulf in the next two months is paying $15,000 per container to truck 140 boxes across Saudi Arabia to the port of Jeddah on the Red Sea. That figure was far above the current $2,000-$6,000 per container market price for a cross-desert truck journey from the UAE to Jeddah, according to the Middle East CEO for a global forwarder, who added the $15,000 per box was likely escalated by the urgent nature of the shipment. Still, the forwarder said trucking complications across the Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — extended well beyond high rates. “For example, if you have a Saudi truck and want to drive to an Omani port, it’s not possible,” the source told the Journal of Commerce. “They are currently making some exceptions, but we have just learned that Oman will charge an entry fee per tire.” Another problem that has been escalated by the conflict, according to the executive, is the issuing of visas. “There is so much more cross-border trucking now and drivers need to queue for half a day and longer to get a visa,” he said. “That limits the number of journeys a trucker can make, it creates delays and traffic backlogs, and inflates the price.” Operational restrictions Crane Worldwide Logistics said a new operational restriction now in effect bars drivers of Syrian, Pakistani and Yemeni nationality from entering Qatar, directly impacting road-based freight operations in and out of the country. With ocean cargo handling suspended in the Qatari port of Doha, the Crane advisory said containers already discharged in the region were accruing storage charges daily and the driver nationality ban was limiting the ability of cargo owners to collect and move their boxes. Michael Aldwell, executive vice president of sea logistics at Kuehne + Nagel, acknowledged that trucking capacity was a challenge, but said the forwarder had a road network in place before the conflict that it was able to utilize. Priority was being given to transporting healthcare and perishable cargo into the Middle East. “To keep cargo moving, we are working on solutions to find alternative gateways and corridors with trucks into the Persian Gulf markets, such as cross-border trucking between Sohar or Khor Fakkan, and via Mersin [Turkey] or Aqaba [Jordan],” Aldwell told the Journal of Commerce. “We are also implementing air-road solutions via airports in Saudi Arabia [Jeddah] and Oman [Salalah] with cross-border trucking to the UAE, Qatar, Bahrain and Kuwait,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

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