<div class="phx-topic abstract-wrapper">The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports.</div>

The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports.

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<div class="phx-topic">Gemini Cooperation is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles, due to the ongoing war in the region. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services, partners Maersk and Hapag-Lloyd said Friday. Maersk said the suspensions are being made “following our latest risk assessment and operational review and considering the escalating conflict affecting safe navigation in the Gulf region.” ”This decision has been taken as a precautionary measure to ensure the safety of our personnel and vessels while minimizing operational disruption across our wider network,” the carrier added in its advisory. The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports including Jebel Ali, Dammam, Umm Qasr, Sohar, Khalifa, Sharjah, and Al Jubail. Container ports in the Gulf usually book 3.4 million TEUs per year with an estimated cargo value of $140 billion, according to Vizion's Tradeview platform. The Gemini partners said two mainline services — ME11/IMX linking the Middle East, India and the Mediterranean and FM1/AGX linking Asia and the Middle East — would be halted starting next week. But a new AE19/SE4 service would be launched from March 13 that would replace most of the Asia port calls lost with the suspension of the FM1/AGX. Maersk said the westbound FM1 service being operated by the 10,100-TEU Vung Tau Express would terminate at Tanjung Pelepas in Malaysia on March 9 while the ME11 served by the 15,100-TEU Astrid Maersk would be curtailed at Salalah in Oman on March 13. The carrier said it was still determining the final eastbound FM1 and ME11 voyages and would inform shippers and cargo owners once discharge and contingency plans are confirmed. The ME11/IMX loop normally calls at Jebel Ali and Salalah, along with other ports such as Nheva Shava, Port Said and Valencia, while the FM1/AGX service calls at Jebel Ali in addition to its Asia calls at ports including Pusan, Shanghai, Ningbo, and Tanjung Pelepas. But US and Israeli strikes on Iran and Tehran’s retaliation across the region means the risk of drone and missile attacks in the Strait of Hormuz has closed the area to shipping, including access to Jebel Ali. As a result, the carriers said they have also dropped Jebel Ali from Gemini’s ME1/IOS service. The revised rotation is now Mundra, Nhava Sheva, Salalah, Port Tangier (TC1), Rotterdam, Wilhelmshaven, Hamburg, and London Gateway. <h3>New Gemini service to ease capacity cut </h3>To fill the reduction in cargo capacity caused by the FM1/AGX service suspension, the new Gemini AE19/SE4 loop will call at Jeddah in Saudi Arabia plus its West Med and East Med hubs at Tangier and Damietta (Egypt), respectively. The full rotation, via the Cape of Good Hope. is Xingang, Qingdao, Busan, Ningbo, Shanghai, Tanjung Pelepas, West Med hub, East Med hub, Jeddah, West Med hub, Singapore, and Xingang. The carriers said the first westbound sailing will be by the 13,092-TEU Maersk Elba at Xingang on March 13. The new service “will enable more flexibility and routing options for customers’ supply chain,” Maersk said in an advisory. Three Middle East/Gulf shuttles — OGS, UG2, and UGS — will also stop while Jebel Ali will be omitted from the rotation of the PKS service, which has a revised rotation of Karachi, Bin Qasim, Salalah, and Karachi. Hapag-Lloyd said alternatives are being evaluated following the demise of the shuttles, with details to be confirmed shortly. Meanwhile, Yang Ming said Friday it is declaring “an end of voyage” for cargo currently stranded at transshipment ports. Yang Ming’s other Premier Alliance partners, Ocean Network Express and HMM, have yet to confirm if the measure applies to them. ONE did announce Friday it was imposing an emergency surcharge of $1,200 per 20-foot container and $2,400 per 40-foot box on all imports and exports to and from Persian Gulf countries including Bahrain, Saudi Arabia (Dammam and Jubail), Kuwait, Oman, Qatar, and the United Arab Emirates, that have not been discharged or loaded by March 4. The carrier said the surcharge also applies to all cargo currently in transit, which will be diverted to the next safe port of discharge. At these contingency ports, cargo will be discharged and placed at the disposal of the customer for local pickup and subsequent handling. CMA CGM, meanwhile, has abandoned all alternative Middle East port options it was evaluating to keep shipping schedules running as best as possible. Sohar in Oman and Khor Fakkan in the UAE were part of those interim plans, but the carrier finally found even them unworkable in the current volatile scenario. CMA CGM is the latest carrier to declare a total “end of voyage” for Middle East coverage. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. Special correspondent Bency Mathew contributed to this report. </div>

Gemini Cooperation is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles, due to the ongoing war in the region. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services, partners Maersk and Hapag-Lloyd said Friday. Maersk said the suspensions are being made “following our latest risk assessment and operational review and considering the escalating conflict affecting safe navigation in the Gulf region.” ”This decision has been taken as a precautionary measure to ensure the safety of our personnel and vessels while minimizing operational disruption across our wider network,” the carrier added in its advisory. The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports including Jebel Ali, Dammam, Umm Qasr, Sohar, Khalifa, Sharjah, and Al Jubail. Container ports in the Gulf usually book 3.4 million TEUs per year with an estimated cargo value of $140 billion, according to Vizion's Tradeview platform. The Gemini partners said two mainline services — ME11/IMX linking the Middle East, India and the Mediterranean and FM1/AGX linking Asia and the Middle East — would be halted starting next week. But a new AE19/SE4 service would be launched from March 13 that would replace most of the Asia port calls lost with the suspension of the FM1/AGX. Maersk said the westbound FM1 service being operated by the 10,100-TEU Vung Tau Express would terminate at Tanjung Pelepas in Malaysia on March 9 while the ME11 served by the 15,100-TEU Astrid Maersk would be curtailed at Salalah in Oman on March 13. The carrier said it was still determining the final eastbound FM1 and ME11 voyages and would inform shippers and cargo owners once discharge and contingency plans are confirmed. The ME11/IMX loop normally calls at Jebel Ali and Salalah, along with other ports such as Nheva Shava, Port Said and Valencia, while the FM1/AGX service calls at Jebel Ali in addition to its Asia calls at ports including Pusan, Shanghai, Ningbo, and Tanjung Pelepas. But US and Israeli strikes on Iran and Tehran’s retaliation across the region means the risk of drone and missile attacks in the Strait of Hormuz has closed the area to shipping, including access to Jebel Ali. As a result, the carriers said they have also dropped Jebel Ali from Gemini’s ME1/IOS service. The revised rotation is now Mundra, Nhava Sheva, Salalah, Port Tangier (TC1), Rotterdam, Wilhelmshaven, Hamburg, and London Gateway. New Gemini service to ease capacity cut To fill the reduction in cargo capacity caused by the FM1/AGX service suspension, the new Gemini AE19/SE4 loop will call at Jeddah in Saudi Arabia plus its West Med and East Med hubs at Tangier and Damietta (Egypt), respectively. The full rotation, via the Cape of Good Hope. is Xingang, Qingdao, Busan, Ningbo, Shanghai, Tanjung Pelepas, West Med hub, East Med hub, Jeddah, West Med hub, Singapore, and Xingang. The carriers said the first westbound sailing will be by the 13,092-TEU Maersk Elba at Xingang on March 13. The new service “will enable more flexibility and routing options for customers’ supply chain,” Maersk said in an advisory. Three Middle East/Gulf shuttles — OGS, UG2, and UGS — will also stop while Jebel Ali will be omitted from the rotation of the PKS service, which has a revised rotation of Karachi, Bin Qasim, Salalah, and Karachi. Hapag-Lloyd said alternatives are being evaluated following the demise of the shuttles, with details to be confirmed shortly. Meanwhile, Yang Ming said Friday it is declaring “an end of voyage” for cargo currently stranded at transshipment ports. Yang Ming’s other Premier Alliance partners, Ocean Network Express and HMM, have yet to confirm if the measure applies to them. ONE did announce Friday it was imposing an emergency surcharge of $1,200 per 20-foot container and $2,400 per 40-foot box on all imports and exports to and from Persian Gulf countries including Bahrain, Saudi Arabia (Dammam and Jubail), Kuwait, Oman, Qatar, and the United Arab Emirates, that have not been discharged or loaded by March 4. The carrier said the surcharge also applies to all cargo currently in transit, which will be diverted to the next safe port of discharge. At these contingency ports, cargo will be discharged and placed at the disposal of the customer for local pickup and subsequent handling. CMA CGM, meanwhile, has abandoned all alternative Middle East port options it was evaluating to keep shipping schedules running as best as possible. Sohar in Oman and Khor Fakkan in the UAE were part of those interim plans, but the carrier finally found even them unworkable in the current volatile scenario. CMA CGM is the latest carrier to declare a total “end of voyage” for Middle East coverage. Contact Keith Wallis at keithwallis@hotmail.com . Special correspondent Bency Mathew contributed to this report.

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Gemini suspends, revamps Middle East services amid growing conflict

<div class="phx-topic abstract-wrapper">The new express service comes amid expectations of a rebound in capacity demand with the easing of tariffs between the two countries and ongoing trade negotiations.</div>

The new express service comes amid expectations of a rebound in capacity demand with the easing of tariffs between the two countries and ongoing trade negotiations.

<div class="phx-topic">CMA CGM is launching a standalone direct service between India and the US West Coast in another apparent revamp of its Asian networks after just <a href="https://www.joc.com/article/cma-cgm-to-launch-standalone-japan-europe-express-service-in-april-6177297">announcing a new Japan-Europe express service</a> to start in early April. As market updates suggest, the Marseille-based carrier has extended the port rotation of its Pearl River Express service between South China and the USWC to the Indian subcontinent, using about 13 vessels with capacities of 10,000 to 13,000 TEUs. The extended weekly loop includes four ports of call across the subcontinent: Nhava Sheva and Mundra in West India, Karachi in Pakistan, and Colombo in Sri Lanka. The relaunched Pearl’s full eastbound rotation will be Nhava Sheva, Mundra, Karachi, Colombo, Singapore, Haiphong, Xiamen, Nansha, Yantian and Los Angeles. On the westbound leg, vessels will call Los Angeles, Gwangyang, Qingdao, Shanghai, Ningbo, Shekou, Singapore, Nhava Sheva, Mundra and Karachi, according to a CMA CGM India advisory. The rotation structure seems to be in sync with ongoing Indian port restrictions for Pakistan transit cargo. CMA-CGM said the service upgrade seeks to enhance connectivity and coverage for Indian trades to the USWC. “The Pearl service will now offer an exclusive and direct connection from West India, Pakistan and Sri Lanka ports to Los Angeles,” the carrier said. The service is due to begin with the 10,000-TEU APL Qingdao departing Nhava Sheva March 30, offering a declared transit time of 47 days to Los Angeles. The restructured Pearl will compete with Ocean Network Express’ Pacific South 3 service, currently the only direct connection on the trade lane, which offers a faster 36-day transit from Nhava Sheva to Los Angeles. CMA CGM has typically relied on transshipment over Asian ports for coverage of trades between India and the USWC, mainly feeding via its Asia-Subcontinent Express (AS1) service with calls at Nhava Sheva and Mundra, according to industry sources. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1cf22f06-bc03-4442-9050-628846faea40"></dynamic-object></div>New direct links between India and the US come amid expectations of a rebound in capacity demand with the easing of tariffs between the two countries and ongoing trade negotiations. Industry data also points to an upward move in Nhava Sheva–Los Angeles spot rates, pegged at $2,500 per FEU for late-March sailings, compared with the current $1,500 per FEU, sources said. Indian exports to the West Coast have shown some strength of late, hitting 19,117 TEUs in January, highest since September, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM is launching a standalone direct service between India and the US West Coast in another apparent revamp of its Asian networks after just announcing a new Japan-Europe express service to start in early April. As market updates suggest, the Marseille-based carrier has extended the port rotation of its Pearl River Express service between South China and the USWC to the Indian subcontinent, using about 13 vessels with capacities of 10,000 to 13,000 TEUs. The extended weekly loop includes four ports of call across the subcontinent: Nhava Sheva and Mundra in West India, Karachi in Pakistan, and Colombo in Sri Lanka. The relaunched Pearl’s full eastbound rotation will be Nhava Sheva, Mundra, Karachi, Colombo, Singapore, Haiphong, Xiamen, Nansha, Yantian and Los Angeles. On the westbound leg, vessels will call Los Angeles, Gwangyang, Qingdao, Shanghai, Ningbo, Shekou, Singapore, Nhava Sheva, Mundra and Karachi, according to a CMA CGM India advisory. The rotation structure seems to be in sync with ongoing Indian port restrictions for Pakistan transit cargo. CMA-CGM said the service upgrade seeks to enhance connectivity and coverage for Indian trades to the USWC. “The Pearl service will now offer an exclusive and direct connection from West India, Pakistan and Sri Lanka ports to Los Angeles,” the carrier said. The service is due to begin with the 10,000-TEU APL Qingdao departing Nhava Sheva March 30, offering a declared transit time of 47 days to Los Angeles. The restructured Pearl will compete with Ocean Network Express’ Pacific South 3 service, currently the only direct connection on the trade lane, which offers a faster 36-day transit from Nhava Sheva to Los Angeles. CMA CGM has typically relied on transshipment over Asian ports for coverage of trades between India and the USWC, mainly feeding via its Asia-Subcontinent Express (AS1) service with calls at Nhava Sheva and Mundra, according to industry sources. New direct links between India and the US come amid expectations of a rebound in capacity demand with the easing of tariffs between the two countries and ongoing trade negotiations. Industry data also points to an upward move in Nhava Sheva–Los Angeles spot rates, pegged at $2,500 per FEU for late-March sailings, compared with the current $1,500 per FEU, sources said. Indian exports to the West Coast have shown some strength of late, hitting 19,117 TEUs in January, highest since September, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM adds direct India-USWC string as part of Asia network overhaul

<div class="phx-topic abstract-wrapper">The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility and disruption in the market.</div>

The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility and disruption in the market.

<div class="phx-topic">Intercontinental Exchange (ICE) on Friday said it intends to launch four container freight futures contracts next month covering shipping routes linking Asia, Europe and the US. Subject to regulatory approval, the contracts will begin trading on ICE, owner of the New York Stock Exchange, on April 7, ICE said in a statement. The contracts, which ICE said “are designed to help the market manage container freight (price) risk,” will be indexed to the New York Shipping Exchange’s (NYSHEX) Freight Indices price assessments, <a href="https://www.joc.com/article/nyshex-enters-container-index-fray-targeting-floating-rate-contract-adoption-5996516">which were unveiled last May.</a>The four futures contracts, which will be US-denominated and cash-settled, will cover Asia to the US West Coast, Asia to the US East Coast, Asia to North Europe, and North Europe to the US East Coast. The ICE futures do not represent physical slots on container ships; they are a financial instrument that allows investors to hedge against future spot rate movements. The push to launch futures contracts for container shipping <a href="https://www.joc.com/article/near-constant-disruption-giving-new-momentum-to-freight-futures-5979859">has gained momentum in recent years</a> given the seemingly never-ending volatility in the market — from the supply chain disruption caused by the COVID-19 pandemic, the lengthy and costly vessel diversions around southern Africa to avoid the Red Sea and Suez Canal, and now with up to 10% of global capacity tied up due to the war in the Middle East. One big question about container shipping futures has been the potential liquidity of the market, meaning whether the contacts could gain enough traction and eventually become heavily traded. Previous attempts at launching similar container rate futures markets have struggled to generate demand. ICE sought to ease those doubts by pointing out the four contracts “will be supported by (its) network of extremely liquid energy markets.” Open interest, or the number of actively traded contracts, for ICE’s total oil market was at a record 18.7 million contracts as of Feb. 23, it said. “The container shipping industry is massive and critical for global trade, yet it is incredibly volatile,” Gordon Downes, CEO and co-founder of NYSHEX, said in the statement. “With the launch of ICE’s new freight futures, the market participants can far more easily hedge against unexpected swings in the market price.” Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com.</a></div>

Intercontinental Exchange (ICE) on Friday said it intends to launch four container freight futures contracts next month covering shipping routes linking Asia, Europe and the US. Subject to regulatory approval, the contracts will begin trading on ICE, owner of the New York Stock Exchange, on April 7, ICE said in a statement. The contracts, which ICE said “are designed to help the market manage container freight (price) risk,” will be indexed to the New York Shipping Exchange’s (NYSHEX) Freight Indices price assessments, which were unveiled last May. The four futures contracts, which will be US-denominated and cash-settled, will cover Asia to the US West Coast, Asia to the US East Coast, Asia to North Europe, and North Europe to the US East Coast. The ICE futures do not represent physical slots on container ships; they are a financial instrument that allows investors to hedge against future spot rate movements. The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility in the market — from the supply chain disruption caused by the COVID-19 pandemic, the lengthy and costly vessel diversions around southern Africa to avoid the Red Sea and Suez Canal, and now with up to 10% of global capacity tied up due to the war in the Middle East. One big question about container shipping futures has been the potential liquidity of the market, meaning whether the contacts could gain enough traction and eventually become heavily traded. Previous attempts at launching similar container rate futures markets have struggled to generate demand. ICE sought to ease those doubts by pointing out the four contracts “will be supported by (its) network of extremely liquid energy markets.” Open interest, or the number of actively traded contracts, for ICE’s total oil market was at a record 18.7 million contracts as of Feb. 23, it said. “The container shipping industry is massive and critical for global trade, yet it is incredibly volatile,” Gordon Downes, CEO and co-founder of NYSHEX, said in the statement. “With the launch of ICE’s new freight futures, the market participants can far more easily hedge against unexpected swings in the market price.” Contact Kevin Saville at kevin.saville2@spglobal.com.

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Intercontinental Exchange to launch container freight futures in April

<div class="phx-topic abstract-wrapper">While of concern to shippers and ocean carriers, the global impact of the war in the Middle East on container flows will be less severe than COVID-19 disruptions and Red Sea diversions, Lars Jensen told TPM26.</div>

While of concern to shippers and ocean carriers, the global impact of the war in the Middle East on container flows will be less severe than COVID-19 disruptions and Red Sea diversions, Lars Jensen told TPM26.

<div class="phx-topic">Long Beach, California — The war in the Middle East that has effectively shut the Persian Gulf and Strait of Hormuz is a problem for container shipping, but not on the scale of other recent disruptions the sector has faced. That was the closing message of the Journal of Commerce’s TPM 26 conference, delivered by industry analyst and CEO of Vespucci Maritime Lars Jensen. “This is going to sound weird. Globally, strictly on container shipping, it’s a problem, but it’s not a major problem,” Jensen told conference attendees. “It’s definitely not pandemic-scale.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177005_0.1.jpg"></img></div>When Houthi militants in Yemen began <a href="https://www.joc.com/article/red-sea-diversions-could-last-for-months-until-attack-risk-ends-drewry-5225718">their attacks on shipping in the Red Sea two years ago</a>, container ships serving the Asia-Europe, Asia-Mediterranean and Asia-US East Coast trade lanes were forced to make lengthy and costly diversions around the southern tip of Africa. The current danger zone in the Middle East is much more limited. “In this case, it is ... ‘only’ the cargo in the Gulf. So from a global perspective, yes there will be an impact,” Jensen said. “It will contract capacity some, but it’s not a major disaster for the countries in the Gulf.” Looking at the volume of containers destined for the Strait of Hormuz, either on board vessels already or at least booked within the next 90 days to head toward the Gulf, approximately 2 million TEUs will be impacted, he said. A significant portion of that total will be offloaded at ports around the Strait of Hormuz. The war, meanwhile, has put to rest the assumption importers had entering 2026 that container traffic from Asia bound for Europe and the US East Coast would return to the Suez Canal in the second half of this year, thereby reducing carriers’ leverage in pricing. “The baseline outlook for 2026 now has to include the assumption that the deviations around Africa will continue this year, and therefore materially strengthen the supply and demand balance,” Jensen said. As for when container ships will contemplate returning to the Suez Canal, he said that discussion has been kicked down the road for at least another six months. “So realistically, we are probably looking at least six months into the future before anybody is going to start contemplating doing this again, and that is if we stop the war basically today,” Jensen said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023, when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing the diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale in recent months. <h3>Rising oil prices, congestion are a concern </h3>In the short term, oil prices, and therefore bunker fuel prices, will increase, which will impact container shipping costs. And that means ocean carriers will respond with increased fuel surcharges. “On account of the Middle East, the carriers will go gangbusters in terms of implementing as many and as high surcharges as humanly possible, and not just on trades to and from the Gulf, [but] everywhere,” Jensen said. “They will be called emergency fuel surcharges, emergency conflict surcharges, and whatever nice names, but they will be a reality. The only question is, how high will it go and how long will it last.” Even cargo owners who are shipping only from Asia to the US West Coast will feel an impact from events in the Middle East in terms of surcharges and disrupted operations in the form of knock-on congestion. “You’re going to get all of these congestion effects in Asia that [are] going to impact everything and everyone, so you’re going to see these surcharges also on the Pacific,” Jensen said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Long Beach, California — The war in the Middle East that has effectively shut the Persian Gulf and Strait of Hormuz is a problem for container shipping, but not on the scale of other recent disruptions the sector has faced. That was the closing message of the Journal of Commerce’s TPM 26 conference, delivered by industry analyst and CEO of Vespucci Maritime Lars Jensen. “This is going to sound weird. Globally, strictly on container shipping, it’s a problem, but it’s not a major problem,” Jensen told conference attendees. “It’s definitely not pandemic-scale.” When Houthi militants in Yemen began their attacks on shipping in the Red Sea two years ago , container ships serving the Asia-Europe, Asia-Mediterranean and Asia-US East Coast trade lanes were forced to make lengthy and costly diversions around the southern tip of Africa. The current danger zone in the Middle East is much more limited. “In this case, it is ... ‘only’ the cargo in the Gulf. So from a global perspective, yes there will be an impact,” Jensen said. “It will contract capacity some, but it’s not a major disaster for the countries in the Gulf.” Looking at the volume of containers destined for the Strait of Hormuz, either on board vessels already or at least booked within the next 90 days to head toward the Gulf, approximately 2 million TEUs will be impacted, he said. A significant portion of that total will be offloaded at ports around the Strait of Hormuz. The war, meanwhile, has put to rest the assumption importers had entering 2026 that container traffic from Asia bound for Europe and the US East Coast would return to the Suez Canal in the second half of this year, thereby reducing carriers’ leverage in pricing. “The baseline outlook for 2026 now has to include the assumption that the deviations around Africa will continue this year, and therefore materially strengthen the supply and demand balance,” Jensen said. As for when container ships will contemplate returning to the Suez Canal, he said that discussion has been kicked down the road for at least another six months. “So realistically, we are probably looking at least six months into the future before anybody is going to start contemplating doing this again, and that is if we stop the war basically today,” Jensen said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023, when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing the diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale in recent months. Rising oil prices, congestion are a concern In the short term, oil prices, and therefore bunker fuel prices, will increase, which will impact container shipping costs. And that means ocean carriers will respond with increased fuel surcharges. “On account of the Middle East, the carriers will go gangbusters in terms of implementing as many and as high surcharges as humanly possible, and not just on trades to and from the Gulf, [but] everywhere,” Jensen said. “They will be called emergency fuel surcharges, emergency conflict surcharges, and whatever nice names, but they will be a reality. The only question is, how high will it go and how long will it last.” Even cargo owners who are shipping only from Asia to the US West Coast will feel an impact from events in the Middle East in terms of surcharges and disrupted operations in the form of knock-on congestion. “You’re going to get all of these congestion effects in Asia that [are] going to impact everything and everyone, so you’re going to see these surcharges also on the Pacific,” Jensen said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

TPM26: War a problem for container shipping, but not ‘pandemic-scale’: analyst

<div class="phx-topic abstract-wrapper">A sharp increase in imports from Asia, declining back-haul volume, and congestion delaying the return of empties are slowing down the repatriation of equipment back to Asia. </div>

A sharp increase in imports from Asia, declining back-haul volume, and congestion delaying the return of empties are slowing down the repatriation of equipment back to Asia.

<div class="phx-topic">Long Beach, California — The equipment imbalance on the Asia-Europe trade lane and repositioning empty containers is fast becoming a structural challenge for the region’s maxed-out ports, industry leaders said this week. While volume on the main Asia-Europe westbound lane increased 9.1% in 2025 against a capacity increase of 8.3% over the past two years, the backhaul trade volume was down 5.7% while capacity rose 11.5%, according to Nigel Pusey, CEO of Container Trades Statistics. “The container imbalance is the fundamental challenge of this trade, and how those boxes will continue to be fed in as the ability to recycle containers becomes more and more difficult,” Pusey told the Journal of Commerce’s TPM26 conference. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177005_0.1.jpg"></img></div>“Only 37% of the slots going between Europe and the Far East were actually carrying commercial cargo,” he added. Hanna Stelzel, director of containers at the Port of Rotterdam, said empty repositioning was becoming a structural challenge for ports in Europe that are all operating at high utilization levels. “We had approximately 10% growth on Asia-Europe in 2025, but the growth was mainly coming from imports,” she told the conference. “China into Rotterdam grew 40% compared to 2024. We have declining exports, and Rotterdam is often the first and last port of call, and that is causing enormous challenges in empty repositioning.” Stelzel explained that empties took up room in container yards and require extra moves as the containers are repositioned from one terminal to another. “We are already operating at maximum capacity in Rotterdam and all those extra moves, especially of empty containers, are something we would like to avoid to keep the port more fluid and more efficient, and that’s not possible if you have those extreme numbers of equipment that needs to be repositioned,” she added. <h3>Second-half surge in Rotterdam volume </h3>Total <a href="https://www.joc.com/article/rotterdam-congestion-limits-benefit-of-second-half-surge-in-imports-6176418">container volume at the Port of Rotterdam grew 3.1% in 2025</a>, driven by a second-half surge in imports from Asia and rising trade with North America that boosted annual throughput. The container imbalance and <a href="https://www.joc.com/article/tpm26-europes-persistent-port-congestion-wont-be-remedied-by-short-term-fixes-6180335">persistent port congestion in Europe</a> were also extending the life of the boxes, Pusey said. Instead of a container on the trade lane revolving three or four times a year, the increase in imports meant it was taking longer for carriers to discharge the containers, and the boxes were taking longer to be emptied and returned from inland locations. “That means you’ve actually got more boxes in the system and are having to find places to store them,” Pusey said. He warned that the war in the Middle East that has <a href="https://www.joc.com/article/carriers-pause-india-middle-east-cargo-bookings-amid-persian-gulf-port-chaos-6179223">halted shipping in the Persian Gulf</a> will worsen the current equipment imbalance. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey said. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” Jakob Jeppesen, CEO of air and sea for Asia-Pacific at forwarder DSV, said Asia will continue to be a growth market for Europe as Asian brands expand their international presence. “When Asian brands go international, they look towards Europe,” Jeppesen told TPM26. “They will ship more than they need to build inventory to make sure that they have a resilient supply chain. We are seeing brands from India and from China. They used to be [original equipment] manufacturing, but now they want their own brands in retail stores, not only in e-commerce.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Long Beach, California — The equipment imbalance on the Asia-Europe trade lane and repositioning empty containers is fast becoming a structural challenge for the region’s maxed-out ports, industry leaders said this week. While volume on the main Asia-Europe westbound lane increased 9.1% in 2025 against a capacity increase of 8.3% over the past two years, the backhaul trade volume was down 5.7% while capacity rose 11.5%, according to Nigel Pusey, CEO of Container Trades Statistics. “The container imbalance is the fundamental challenge of this trade, and how those boxes will continue to be fed in as the ability to recycle containers becomes more and more difficult,” Pusey told the Journal of Commerce’s TPM26 conference. “Only 37% of the slots going between Europe and the Far East were actually carrying commercial cargo,” he added. Hanna Stelzel, director of containers at the Port of Rotterdam, said empty repositioning was becoming a structural challenge for ports in Europe that are all operating at high utilization levels. “We had approximately 10% growth on Asia-Europe in 2025, but the growth was mainly coming from imports,” she told the conference. “China into Rotterdam grew 40% compared to 2024. We have declining exports, and Rotterdam is often the first and last port of call, and that is causing enormous challenges in empty repositioning.” Stelzel explained that empties took up room in container yards and require extra moves as the containers are repositioned from one terminal to another. “We are already operating at maximum capacity in Rotterdam and all those extra moves, especially of empty containers, are something we would like to avoid to keep the port more fluid and more efficient, and that’s not possible if you have those extreme numbers of equipment that needs to be repositioned,” she added. Second-half surge in Rotterdam volume Total container volume at the Port of Rotterdam grew 3.1% in 2025 , driven by a second-half surge in imports from Asia and rising trade with North America that boosted annual throughput. The container imbalance and persistent port congestion in Europe were also extending the life of the boxes, Pusey said. Instead of a container on the trade lane revolving three or four times a year, the increase in imports meant it was taking longer for carriers to discharge the containers, and the boxes were taking longer to be emptied and returned from inland locations. “That means you’ve actually got more boxes in the system and are having to find places to store them,” Pusey said. He warned that the war in the Middle East that has halted shipping in the Persian Gulf will worsen the current equipment imbalance. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey said. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” Jakob Jeppesen, CEO of air and sea for Asia-Pacific at forwarder DSV, said Asia will continue to be a growth market for Europe as Asian brands expand their international presence. “When Asian brands go international, they look towards Europe,” Jeppesen told TPM26. “They will ship more than they need to build inventory to make sure that they have a resilient supply chain. We are seeing brands from India and from China. They used to be [original equipment] manufacturing, but now they want their own brands in retail stores, not only in e-commerce.” Contact Greg Knowler at greg.knowler@spglobal.com .

TPM26: Empty boxes pose structural challenge for Europe’s busy ports

<div class="phx-topic abstract-wrapper">While the White House has signaled support and Republicans hold a majority on the US Surface Transportation Board, opposition has surfaced that has many believing the $85 billion merger is not necessarily a done deal. </div>

While the White House has signaled support and Republicans hold a majority on the US Surface Transportation Board, opposition has surfaced that has many believing the $85 billion merger is not necessarily a done deal.

<div class="phx-topic">Most railroad industry stakeholders, including Union Pacific (UP) itself, reject the idea that federal regulators will “rubber stamp” the proposed $85 billion merger of UP with Norfolk Southern Railway, acknowledging the railroad will have to show that the deal enhances competition for it to be approved. Speculation about whether approval of the deal was a foregone conclusion began last September when President Donald Trump met with UP CEO Jim Vena at the White House, then posted a message on Truth Social expressing support for the transaction. There were other “positive” signs for UP as well. Trump last August fired Robert Primus from the regulatory body that will have final say on the deal — the US Surface Transportation Board (STB), saying Primus did not align with his “America First” agenda. Trump also nominated a third Republican to the STB, tilting the agency toward pro-business conservatives. And UP donated to the fund financing Trump’s efforts to build a White House ballroom. Despite those signals, most industry observers do not believe it makes approval of the deal a foregone conclusion. “People who are not in DC immediately took to heart when President Trump said, ‘Oh, that’s a good idea. Let’s have a merger,’ and thought it was a done deal. Those of us in DC knew that wasn’t the case,” Peter Friedmann, executive director of the Washington-based Agriculture Transportation Coalition (AgTC), said at the Journal of Commerce’s TPM26 conference this week. “You’ve got a railroad [BNSF Railway] that’s opposing it, and the chairman of the Senate Commerce Committee, Ted Cruz of Texas [who’s also opposed],” Friedmann added. Prior comments from Union Pacific executives have indicated the company doesn’t expect automatic approval merely because its CEO had a photo with the president. This week, the railroad simply said in a statement to the Journal of Commerce that it is “confident the Surface Transportation Board will conduct a rigorous review of our application to create a coast-to-coast railroad.” <h3>Ex-chairman says STB will act independently </h3>Martin Oberman, a former chairman of the STB, insists regulators will not decide the fate of the deal based on orders from Trump. Oberman was on the STB between 2019 and 2024 and served alongside current members Patrick Fuchs, Michelle Schultz, and Karen Hedlund. “Occasionally, one of us would say to the other, ‘I was confirmed by the Senate for the purpose of using my independent judgment. That’s what I do. That’s why I'm here,’" Oberman told the Journal of Commerce. “They’re all very conscious of that and treasure it, so they would be loath to, in reality or in perception, to be viewed as doing somebody’s political work." Oberman singled out Fuchs, the current STB chairman, as someone who is an independent thinker. “Patrick will rule based on the merits,” Oberman said. “Now, that is not to say that, on the merits, he and others may come to the conclusion that the merger should be approved, but it absolutely won’t be for political reasons.” Perhaps the best evidence approval won’t be a foregone conclusion, Oberman noted, is that <a href="https://www.joc.com/article/stb-rejects-up-ns-merger-application-as-incomplete-6154074">UP’s initial application was deemed “incomplete” in January</a>, requiring the railroad to make the appropriate changes and resubmit the application. UP plans to refile by April 30, which will kickstart another 30-day review. If deemed “complete” on the second attempt, then an exhaustive regulatory process would commence, including an environmental review and public hearings that will go into 2027. <h3>Republicans don’t universally support the deal </h3>Even with Trump’s support, Republicans aren’t universally supportive of the UP-NS deal. Nearly 50 Republicans in Congress wrote a letter to the STB in early February expressing concerns about the transaction. “Some of us are already hearing initial concerns about the UP-NS application and its lack of serious and meaningful commitments to enhance competition and protect against service meltdowns,” the letter read. “In light of this, the Board must consider with extreme care the potential risks posed by this transaction to determine whether it meets the public interest test.” A week later, seven Republican state attorneys general wrote a letter to the Department of Justice. “We believe that this merger is unnecessary,” the attorneys general wrote. “We cannot afford a merger that stalls America’s industrial momentum and respectfully ask the DOJ to utilize its unique expertise to scrutinize, and, if appropriate, oppose the deal.” Jon Gabriel, group vice president of consumer products for BNSF, said broad opposition to the deal proves the outcome is not pre-determined. “There are many lawmakers that have sent letters to the administration voicing concern or opposition; most of them are Republicans. So clearly, the fix is not in,” Gabriel said at TPM26. Still, there are plenty of stakeholders supporting the deal. Union Pacific’s initial application included more than 2,000 letters of support, including from more than 500 customers and 800 public officials and community leaders. Among the supporters are the Port of Los Angeles, ocean carriers Ocean Network Express and SM Lines, and domestic intermodal partners Hub Group and Knight Swift Transportation. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Most railroad industry stakeholders, including Union Pacific (UP) itself, reject the idea that federal regulators will “rubber stamp” the proposed $85 billion merger of UP with Norfolk Southern Railway, acknowledging the railroad will have to show that the deal enhances competition for it to be approved. Speculation about whether approval of the deal was a foregone conclusion began last September when President Donald Trump met with UP CEO Jim Vena at the White House, then posted a message on Truth Social expressing support for the transaction. There were other “positive” signs for UP as well. Trump last August fired Robert Primus from the regulatory body that will have final say on the deal — the US Surface Transportation Board (STB), saying Primus did not align with his “America First” agenda. Trump also nominated a third Republican to the STB, tilting the agency toward pro-business conservatives. And UP donated to the fund financing Trump’s efforts to build a White House ballroom. Despite those signals, most industry observers do not believe it makes approval of the deal a foregone conclusion. “People who are not in DC immediately took to heart when President Trump said, ‘Oh, that’s a good idea. Let’s have a merger,’ and thought it was a done deal. Those of us in DC knew that wasn’t the case,” Peter Friedmann, executive director of the Washington-based Agriculture Transportation Coalition (AgTC), said at the Journal of Commerce’s TPM26 conference this week. “You’ve got a railroad [BNSF Railway] that’s opposing it, and the chairman of the Senate Commerce Committee, Ted Cruz of Texas [who’s also opposed],” Friedmann added. Prior comments from Union Pacific executives have indicated the company doesn’t expect automatic approval merely because its CEO had a photo with the president. This week, the railroad simply said in a statement to the Journal of Commerce that it is “confident the Surface Transportation Board will conduct a rigorous review of our application to create a coast-to-coast railroad.” Ex-chairman says STB will act independently Martin Oberman, a former chairman of the STB, insists regulators will not decide the fate of the deal based on orders from Trump. Oberman was on the STB between 2019 and 2024 and served alongside current members Patrick Fuchs, Michelle Schultz, and Karen Hedlund. “Occasionally, one of us would say to the other, ‘I was confirmed by the Senate for the purpose of using my independent judgment. That’s what I do. That’s why I'm here,’" Oberman told the Journal of Commerce. “They’re all very conscious of that and treasure it, so they would be loath to, in reality or in perception, to be viewed as doing somebody’s political work." Oberman singled out Fuchs, the current STB chairman, as someone who is an independent thinker. “Patrick will rule based on the merits,” Oberman said. “Now, that is not to say that, on the merits, he and others may come to the conclusion that the merger should be approved, but it absolutely won’t be for political reasons.” Perhaps the best evidence approval won’t be a foregone conclusion, Oberman noted, is that UP’s initial application was deemed “incomplete” in January , requiring the railroad to make the appropriate changes and resubmit the application. UP plans to refile by April 30, which will kickstart another 30-day review. If deemed “complete” on the second attempt, then an exhaustive regulatory process would commence, including an environmental review and public hearings that will go into 2027. Republicans don’t universally support the deal Even with Trump’s support, Republicans aren’t universally supportive of the UP-NS deal. Nearly 50 Republicans in Congress wrote a letter to the STB in early February expressing concerns about the transaction. “Some of us are already hearing initial concerns about the UP-NS application and its lack of serious and meaningful commitments to enhance competition and protect against service meltdowns,” the letter read. “In light of this, the Board must consider with extreme care the potential risks posed by this transaction to determine whether it meets the public interest test.” A week later, seven Republican state attorneys general wrote a letter to the Department of Justice. “We believe that this merger is unnecessary,” the attorneys general wrote. “We cannot afford a merger that stalls America’s industrial momentum and respectfully ask the DOJ to utilize its unique expertise to scrutinize, and, if appropriate, oppose the deal.” Jon Gabriel, group vice president of consumer products for BNSF, said broad opposition to the deal proves the outcome is not pre-determined. “There are many lawmakers that have sent letters to the administration voicing concern or opposition; most of them are Republicans. So clearly, the fix is not in,” Gabriel said at TPM26. Still, there are plenty of stakeholders supporting the deal. Union Pacific’s initial application included more than 2,000 letters of support, including from more than 500 customers and 800 public officials and community leaders. Among the supporters are the Port of Los Angeles, ocean carriers Ocean Network Express and SM Lines, and domestic intermodal partners Hub Group and Knight Swift Transportation. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Surface

Industry stakeholders don’t see regulators rubber-stamping UP-NS deal

<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

<div class="phx-topic abstract-wrapper">That means minimizing drayage without degrading transit, requiring disaggregating volume from larger hubs into smaller ones. </div>

That means minimizing drayage without degrading transit, requiring disaggregating volume from larger hubs into smaller ones.

<div class="phx-topic">With their proposed merger, Union Pacific and Norfolk Southern have channeled President Abraham Lincoln’s vision for a united transcontinental railroad. Under the tag line “The Great Connection,” they have put forth a vision of a single, integrated rail freight network. Recently, one of their executives touted the benefit from an envisioned “non-stop” service between Los Angeles and northern New Jersey that could be accomplished without needing to change trains in Chicago. This is indeed a powerful service vision. His remarks got me thinking about how airline marketing and flights have become somewhat muddled in their application of terms and performance. For example, many people confuse “non-stop” and “direct.” The former is a single flight that goes from origin to destination without any scheduled stops. One takeoff and one landing. The latter may have one flight number from origin to destination, but may include scheduled stops. Also, passengers may stay on board or change planes. Today, most of the intermodal train network is designed as non-stop at its core. Trains between major hubs run intact without pickups or setouts — although the tenets of precision scheduled railroading (PSR) may look to fill out trains enroute to achieve operating economies. While this works for many intermodal point pairs, it is not comprehensive. A connecting trip requires changing aircraft at an intermediate airport. There are separate flight segments with a layover; you usually change gates and, sometimes, terminals. In rare cases, you may actually need to change airports (e.g., a domestic leg at LaGuardia connecting to an overseas flight at JFK). This is the model for most transcontinental intermodal traffic today and what the UP-NS merger seeks to eliminate. A through flight is one where you stay on the same aircraft across one or more intermediate stops, or the airline provides through-checked baggage and a single itinerary even if you change planes. This is how intermodal efficiently expands scope today. For example, a train may run from Chicago to Harrisburg on one “flight” with the traffic for Philadelphia run as another train from Harrisburg. There are also flights marketed by one airline but operated by another; your ticket may show the marketing airline’s flight number while a partner operates the plane. For example, BNSF offers direct service into CSX facilities in Atlanta and Northwest Ohio. <h3>‘Closest to the pin’ </h3>UP and CSX have a hybrid case of non-stop, connecting code shares. Traffic to Springfield, Mass., is loaded on cars in Los Angeles for non-stop service to Chicago. There the cars are delivered intact to CSX Bedford Park, where they are incorporated into another non-stop train. Of course, in cases of operational trauma, the units may be grounded in Chicago and cross-towned like most traffic. All of this is standard for asset-based, network-operating businesses. There are often competing network economies of scale (larger trains) and scope (more destinations to achieve higher volumes). This is the crux of the “hub-and-spoke” network that so many passenger airlines have implemented. They have a centralized structure: a few hubs connect to many peripheral spokes — which generally do not connect directly to each other. Plane density is achieved, lowering per-unit costs with improved asset utilization. This allows better network reach. Service is enabled between many origin-destination pairs with fewer links than full point-to-point connections. A hub with 10 spokes supports 110 lanes with only 10 spokes. In intermodal, these hubs are at the end points of railroad networks. They offer predictable, scheduled flows with regular, repeatable routes along the spokes. It is scalable because it is easy to add nodes without redesigning the whole network. This is the challenge for intermodal. To compete with trucking, the goal is to seamlessly provide service that looks like trucking but offers economics. That means being “closest to the pin” so as to minimize drayage without degrading transit. This requires disaggregating volume from larger hubs into smaller ones. Not Los Angeles to Croxton rail yard in Jersey City, but LA to ramps beyond immediate North Jersey: i.e., Albany, Allentown, Bethlehem and Philadelphia. And, in the other direction, Croxton to LA, West Colton, and Las Vegas. The ideal outcome would be the ability to connect all of those points in a seamless method in both directions; however, that is probably a future undertaking. For now, we will hopefully keep flying to expanded intermodal networks and service scope. 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>

With their proposed merger, Union Pacific and Norfolk Southern have channeled President Abraham Lincoln’s vision for a united transcontinental railroad. Under the tag line “The Great Connection,” they have put forth a vision of a single, integrated rail freight network. Recently, one of their executives touted the benefit from an envisioned “non-stop” service between Los Angeles and northern New Jersey that could be accomplished without needing to change trains in Chicago. This is indeed a powerful service vision. His remarks got me thinking about how airline marketing and flights have become somewhat muddled in their application of terms and performance. For example, many people confuse “non-stop” and “direct.” The former is a single flight that goes from origin to destination without any scheduled stops. One takeoff and one landing. The latter may have one flight number from origin to destination, but may include scheduled stops. Also, passengers may stay on board or change planes. Today, most of the intermodal train network is designed as non-stop at its core. Trains between major hubs run intact without pickups or setouts — although the tenets of precision scheduled railroading (PSR) may look to fill out trains enroute to achieve operating economies. While this works for many intermodal point pairs, it is not comprehensive. A connecting trip requires changing aircraft at an intermediate airport. There are separate flight segments with a layover; you usually change gates and, sometimes, terminals. In rare cases, you may actually need to change airports (e.g., a domestic leg at LaGuardia connecting to an overseas flight at JFK). This is the model for most transcontinental intermodal traffic today and what the UP-NS merger seeks to eliminate. A through flight is one where you stay on the same aircraft across one or more intermediate stops, or the airline provides through-checked baggage and a single itinerary even if you change planes. This is how intermodal efficiently expands scope today. For example, a train may run from Chicago to Harrisburg on one “flight” with the traffic for Philadelphia run as another train from Harrisburg. There are also flights marketed by one airline but operated by another; your ticket may show the marketing airline’s flight number while a partner operates the plane. For example, BNSF offers direct service into CSX facilities in Atlanta and Northwest Ohio. ‘Closest to the pin’ UP and CSX have a hybrid case of non-stop, connecting code shares. Traffic to Springfield, Mass., is loaded on cars in Los Angeles for non-stop service to Chicago. There the cars are delivered intact to CSX Bedford Park, where they are incorporated into another non-stop train. Of course, in cases of operational trauma, the units may be grounded in Chicago and cross-towned like most traffic. All of this is standard for asset-based, network-operating businesses. There are often competing network economies of scale (larger trains) and scope (more destinations to achieve higher volumes). This is the crux of the “hub-and-spoke” network that so many passenger airlines have implemented. They have a centralized structure: a few hubs connect to many peripheral spokes — which generally do not connect directly to each other. Plane density is achieved, lowering per-unit costs with improved asset utilization. This allows better network reach. Service is enabled between many origin-destination pairs with fewer links than full point-to-point connections. A hub with 10 spokes supports 110 lanes with only 10 spokes. In intermodal, these hubs are at the end points of railroad networks. They offer predictable, scheduled flows with regular, repeatable routes along the spokes. It is scalable because it is easy to add nodes without redesigning the whole network. This is the challenge for intermodal. To compete with trucking, the goal is to seamlessly provide service that looks like trucking but offers economics. That means being “closest to the pin” so as to minimize drayage without degrading transit. This requires disaggregating volume from larger hubs into smaller ones. Not Los Angeles to Croxton rail yard in Jersey City, but LA to ramps beyond immediate North Jersey: i.e., Albany, Allentown, Bethlehem and Philadelphia. And, in the other direction, Croxton to LA, West Colton, and Las Vegas. The ideal outcome would be the ability to connect all of those points in a seamless method in both directions; however, that is probably a future undertaking. For now, we will hopefully keep flying to expanded intermodal networks and service scope. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

Intermodal needs ‘closest to the pin’ strategy to compete with trucking

China to US

{date.formatDate('MMM dd, yyyy')}: ${valueY.formatNumber('###.##')} 
 w-o-w change:  {week_over_week.formatNumber("##.#%")} 
 y-o-y change: {year_over_year_percent.formatNumber("##.#%")}

The Freightos Air Index (FAX) is based on all-in spot rates for general cargo in US$ for weight category of 100 to 3,000 kilograms. The rates include the air freight fee, fuel, and security and seasonal surcharges. The per kg rate is calculated based on the standard chargeable weight (the greater of the actual gross weight and 166kgs, multiplied by the volume in cubic meters). [Freightos Air Index](https://www.freightos.com/enterprise/terminal/fax-global-freightos-air-index/?utm_source=terminal_embed&utm_medium=referral&utm_content=fax)

China to US air freight rates (Freightos)

China to US Air Freight Price Index by Weight Break 100–3000 kg (Freightos) Gateway

<div class="phx-topic abstract-wrapper">Stefan Paul said almost 20% of global air freight capacity from the belly hold of passenger aircraft and via freighter aircraft charters has been cut from the market because Middle East airports are closed or flights have been otherwise canceled. </div>

Stefan Paul said almost 20% of global air freight capacity from the belly hold of passenger aircraft and via freighter aircraft charters has been cut from the market because Middle East airports are closed or flights have been otherwise canceled.

<div class="phx-topic">Air cargo originating in Asia and bound for the US and Europe will begin to stack up at airports in Asia within days because a significant amount of the capacity needed to move the freight has been grounded by the widening Middle East conflict, the CEO of forwarder Kuehne + Nagel said Tuesday. The backlogs are expected to be particularly acute at air freight hubs in China and Southeast Asia, K+N CEO Stefan Paul said during his company’s fourth-quarter online results briefing. “By the end of the week [or] beginning of next week, we’ll see most probably certain backlogs arising in Southeast Asia and in China for the European and US marketplace,” Paul said. He said about 18% of global air freight capacity from the belly hold of passenger aircraft and via freighter aircraft charters has been cut from the market because Middle East airports, including the huge regional hub in Dubai, are closed or flights have been otherwise canceled. He said the forwarder would help exporters as much as it could by chartering additional capacity to fly directly “from the various origins into the destinations.” Paul also said the mismatch in cargo demand and supply was similar to the COVID-19 pandemic, when there was a surge in demand for air freight due to port and other disruptions caused by lockdowns and related restrictions. He expected the Middle East crisis to benefit the air freight market via higher rates more so than the ocean sector due to the urgency in fulfilling demand. Kuehne + Nagel was already seeing a continuing rebound in air freight volumes in January and February that started in the fourth quarter. “I’m quite confident we’ll see the same pattern in terms of air freight growth,” Paul said. <h3>Profits down, job cuts accelerate </h3>The forwarder saw air cargo volumes in the fourth quarter climb 6% year over year to 595,000 tons, while full-year volumes grew 7% to 2.2 million tons. Paul said K+N is seeing strong demand from aerospace, pharma and semiconductor-related industries, including AI-focused hyperscalers such as Amazon AWS and Google Cloud. Demand from the automotive industry has also recovered in the first two months of 2026 after it declined last year, he said. But K+N’s net profit in 2025 fell 26% to $1.1 billion, while turnover was unchanged at $31 billion. The figures included $156 million in one-off costs, of which 90% was due to staff redundancies and related costs. The company said more than 2,000 employees will be laid off by the end of this year, up from the 1,000 to 1,500 staff that were originally targeted when the cost-cutting program was unveiled in the fourth quarter. K+N this year will target small and medium-sized enterprises in China to boost ocean freight volumes that were unchanged in 2025 at 4.3 million TEUs, Paul said. The company is also chasing acquisitions, including “smaller bolt-ons and higher-quality businesses,” CFO Markus Blanka-Graff said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Air cargo originating in Asia and bound for the US and Europe will begin to stack up at airports in Asia within days because a significant amount of the capacity needed to move the freight has been grounded by the widening Middle East conflict, the CEO of forwarder Kuehne + Nagel said Tuesday. The backlogs are expected to be particularly acute at air freight hubs in China and Southeast Asia, K+N CEO Stefan Paul said during his company’s fourth-quarter online results briefing. “By the end of the week [or] beginning of next week, we’ll see most probably certain backlogs arising in Southeast Asia and in China for the European and US marketplace,” Paul said. He said about 18% of global air freight capacity from the belly hold of passenger aircraft and via freighter aircraft charters has been cut from the market because Middle East airports, including the huge regional hub in Dubai, are closed or flights have been otherwise canceled. He said the forwarder would help exporters as much as it could by chartering additional capacity to fly directly “from the various origins into the destinations.” Paul also said the mismatch in cargo demand and supply was similar to the COVID-19 pandemic, when there was a surge in demand for air freight due to port and other disruptions caused by lockdowns and related restrictions. He expected the Middle East crisis to benefit the air freight market via higher rates more so than the ocean sector due to the urgency in fulfilling demand. Kuehne + Nagel was already seeing a continuing rebound in air freight volumes in January and February that started in the fourth quarter. “I’m quite confident we’ll see the same pattern in terms of air freight growth,” Paul said. Profits down, job cuts accelerate The forwarder saw air cargo volumes in the fourth quarter climb 6% year over year to 595,000 tons, while full-year volumes grew 7% to 2.2 million tons. Paul said K+N is seeing strong demand from aerospace, pharma and semiconductor-related industries, including AI-focused hyperscalers such as Amazon AWS and Google Cloud. Demand from the automotive industry has also recovered in the first two months of 2026 after it declined last year, he said. But K+N’s net profit in 2025 fell 26% to $1.1 billion, while turnover was unchanged at $31 billion. The figures included $156 million in one-off costs, of which 90% was due to staff redundancies and related costs. The company said more than 2,000 employees will be laid off by the end of this year, up from the 1,000 to 1,500 staff that were originally targeted when the cost-cutting program was unveiled in the fourth quarter. K+N this year will target small and medium-sized enterprises in China to boost ocean freight volumes that were unchanged in 2025 at 4.3 million TEUs, Paul said. The company is also chasing acquisitions, including “smaller bolt-ons and higher-quality businesses,” CFO Markus Blanka-Graff said. Contact Keith Wallis at keithwallis@hotmail.com .

Air Cargo Carriers News

Air Cargo

Air freight backlog set to gridlock Asia airports amid Middle East conflict: K+N CEO

<div class="phx-topic abstract-wrapper">An expert on Yemen told TPM26 the leadership of the Tehran-backed militant group appears to be split on how best to respond to the attacks on Iran that began over the weekend. </div>

An expert on Yemen told TPM26 the leadership of the Tehran-backed militant group appears to be split on how best to respond to the attacks on Iran that began over the weekend.

<div class="phx-topic">Long Beach, California — The next 48 to 72 hours are critical as to how Houthi militants operating in Yemen will react to the US/Israeli bombardment of Iran, specifically what the Tehran-backed rebels may do to once again disrupt shipping in the Red Sea and Suez Canal. That’s the assessment of a veteran security analyst speaking to attendees Monday at the Journal of Commerce’s TPM26 conference. Geopolitical expert Hisham Al-Omeisy is a senior Yemen advisor at the European Institute for Peace. He says the leadership of the Houthis appears to be split on how best to respond to the attacks on Iran that began Saturday. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177003_0.1.jpg"></img></div>“A lot of people were waiting for them to act, and now that the attacks are ongoing in Iran, they’ve stayed relatively on the fence,” al-Omeisy said. He explained that with the huge US military buildup in the Middle East, if the Houthis were to resume their attacks against commercial shipping in the Red Sea, it would be, in his words, “a suicide mission.” “Houthi leadership, I’ve been talking to people there from Yemen for the past couple of days, and there is a bit of an internal fight where the hardliners are basically trigger happy,” al-Omeisy said. “The hardliners are pushing for action.” Cooler heads within the militants believe that taking military action now would prompt a response from the US and Israel that could degrade the Houthis military capability. But al-Omeisy said his sources have told him that to save face, there could be a limited military response from the Houthis. “There are massive protests in Hutu-controlled areas from their base, demanding blood, demanding reaction, especially since part of the Houthi bravado, their rhetoric, you know the slogan, the ‘death to America, death to Israel,’” he said. “People are asking, ‘why aren’t you doing something?’” Al-Omeisy says the longer the conflict goes without action by the Houthis, they risk losing their legitimacy. “We are really holding our breath, waiting for the Houthi reaction,” he said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy and costly diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale. <h3>Paying protection money </h3>Al-Omeisy said the Houthis have made side deals with some shipping companies who essentially pay protection money to get their ships through the waters, something considered a cost of doing business in that part of the world. “I’m not at liberty to say who, where and when, but there have been payments, and I can’t fault them for that,” he said. “People are being pragmatic. They’ve been cutting their own deals, realizing that’s the best way out for certain amounts [of money] that you’ve just secured the safety of your crews, your ships.” That means for the Houthis, it’s a matter of more than just political power; the threat of their attacks has become a profit center. “The Houthis are insistent on those attacks, because it’s an income. They’re making a lot of money from it,” al-Omeisy told TPM26. “And you have to remember, it’s not just a dogma, it’s not just a political incentive. There’s also financial incentive.” Appearing on the same conference panel, Robbert van Trooijen, a veteran shipping consultant and executive director of Inception Holdings, noted the financial windfall of the Houthis’ business. “Piracy, regretfully, is still a very lucrative line of business,” he said. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

Long Beach, California — The next 48 to 72 hours are critical as to how Houthi militants operating in Yemen will react to the US/Israeli bombardment of Iran, specifically what the Tehran-backed rebels may do to once again disrupt shipping in the Red Sea and Suez Canal. That’s the assessment of a veteran security analyst speaking to attendees Monday at the Journal of Commerce’s TPM26 conference. Geopolitical expert Hisham Al-Omeisy is a senior Yemen advisor at the European Institute for Peace. He says the leadership of the Houthis appears to be split on how best to respond to the attacks on Iran that began Saturday. “A lot of people were waiting for them to act, and now that the attacks are ongoing in Iran, they’ve stayed relatively on the fence,” al-Omeisy said. He explained that with the huge US military buildup in the Middle East, if the Houthis were to resume their attacks against commercial shipping in the Red Sea, it would be, in his words, “a suicide mission.” “Houthi leadership, I’ve been talking to people there from Yemen for the past couple of days, and there is a bit of an internal fight where the hardliners are basically trigger happy,” al-Omeisy said. “The hardliners are pushing for action.” Cooler heads within the militants believe that taking military action now would prompt a response from the US and Israel that could degrade the Houthis military capability. But al-Omeisy said his sources have told him that to save face, there could be a limited military response from the Houthis. “There are massive protests in Hutu-controlled areas from their base, demanding blood, demanding reaction, especially since part of the Houthi bravado, their rhetoric, you know the slogan, the ‘death to America, death to Israel,’” he said. “People are asking, ‘why aren’t you doing something?’” Al-Omeisy says the longer the conflict goes without action by the Houthis, they risk losing their legitimacy. “We are really holding our breath, waiting for the Houthi reaction,” he said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy and costly diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale. Paying protection money Al-Omeisy said the Houthis have made side deals with some shipping companies who essentially pay protection money to get their ships through the waters, something considered a cost of doing business in that part of the world. “I’m not at liberty to say who, where and when, but there have been payments, and I can’t fault them for that,” he said. “People are being pragmatic. They’ve been cutting their own deals, realizing that’s the best way out for certain amounts [of money] that you’ve just secured the safety of your crews, your ships.” That means for the Houthis, it’s a matter of more than just political power; the threat of their attacks has become a profit center. “The Houthis are insistent on those attacks, because it’s an income. They’re making a lot of money from it,” al-Omeisy told TPM26. “And you have to remember, it’s not just a dogma, it’s not just a political incentive. There’s also financial incentive.” Appearing on the same conference panel, Robbert van Trooijen, a veteran shipping consultant and executive director of Inception Holdings, noted the financial windfall of the Houthis’ business. “Piracy, regretfully, is still a very lucrative line of business,” he said. Contact Dan Ronan at contactdanronan@gmail.com .

TPM26: Shipping waits for Houthi reaction to US/Israeli attacks on Iran

<div class="phx-topic abstract-wrapper">With on-time performance close to the 90% target, Hapag-Lloyd has begun to remove the additional capacity initially built into the network to ensure 90% reliability, Rolf Habben Jansen told the TPM26 conference. </div>

With on-time performance close to the 90% target, Hapag-Lloyd has begun to remove the additional capacity initially built into the network to ensure 90% reliability, Rolf Habben Jansen told the TPM26 conference.

<div class="phx-topic">Long Beach, California — Gemini Cooperation’s steadily improving schedule reliability has enabled Hapag-Lloyd to take buffer capacity out of the network while maintaining reliable transit times, CEO Rolf Habben Jansen said Tuesday. The additional capacity was built into schedules when Gemini launched in February 2025 because partners Hapag-Lloyd and Maersk wanted to ensure 90% on-time arrivals “no matter what,” Habben Jansen told the Journal of Commerce’s TPM26 conference. “If you look at the product that we’re now launching in 2026 you will see that we have already taken some buffer capacity out here and there, and we will continue to do that because we want to be reliable, but we also want to have competitive transit times,” he said. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177003_0.1.jpg"></img></div>“You need to find a competitive transit time, very high predictability and low variability,” Habben Jansen added. “If you do that, it allows our customers to say, ‘okay, if I put the most valuable stuff on that service I can take out a week of inventory ... It may only be a week of inventory, but a week is a lot.” Data from Sea-Intelligence Maritime Analysis for December and January shows that Gemini had a global schedule reliability of 89.5%, despite congestion challenges at European and Asian ports and severe winter weather. Chelsea Morris, vice president of global inbound transportation at Dollar General, said the discount retailer still needed to pressure-test the reliability in its supply chain, but the trends were positive. “We’ve already seen a demonstrable dip in the standard deviation associated with our cargo,” she told the conference. “When we determine how much product we need in the pipeline, that’s lead times. How much safety stock we need is variability. Anytime you can remove that variability, you don’t need that extra inventory.” <h3>Reliability on ‘a massive scale’ </h3>Morris said that although Gemini was the most reliable alliance, on-time performance was improving across the industry. “What’s really special about what is being done is that it is being done on a massive scale,” she added. “Often when working with carrier partners, it’s singular and it’s directional, but what we’re doing here is really making a difference for the entire industry. It means that we’re not flowing wasteful product through the supply chain that can then bottleneck and cause a lot of issues for all our customers.” Rebecca Ziebarth, vice president of global trade management at Ashley Furniture, agreed that more reliability in ocean schedules improved inventory management. “We want to be able to reduce how much we’re carrying and make sure that we can keep those costs in check, and being able to have the option to direct those raw materials to our manufacturing facility is a huge benefit,” she said. With Gemini’s schedule reliability remaining close to its 90% stated target since its launch early last year, Habben Jansen on Tuesday repeated a view he first expressed at TPM25 last year. “Our objective is to create more value for customers, and I’m firmly convinced that if you create value for the customer, then in the end, you will find a way to share it,” he said. “Whether and how that is then reflected, and how that comes about in the relationship, remains to be seen, but for sure, if we are consistent and always on time, for a lot of customers that has real value,” he added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4abe02d4-ed18-461a-ac0b-87ef52e3192b"></dynamic-object></div>Still, global ocean reliability has been on a steady decline since last October, according to data from eeSea, falling from 36.6% then to 25.4% in February. Oscar de Bok, CEO of DHL Global Forwarding, agreed that consistent delivery of better services would, over time, translate into better pricing for service providers. “In the end, customers will pay for value that you create,” he told the conference. “If you can benefit by $1,000, then you will probably be willing to pay $100 more in order to get $900 for yourself. Once it has proven itself, then the value is visible and a customer will not want to lose it.” Contact Greg Knowler at <a href="https://www.joc.com/article/greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Long Beach, California — Gemini Cooperation’s steadily improving schedule reliability has enabled Hapag-Lloyd to take buffer capacity out of the network while maintaining reliable transit times, CEO Rolf Habben Jansen said Tuesday. The additional capacity was built into schedules when Gemini launched in February 2025 because partners Hapag-Lloyd and Maersk wanted to ensure 90% on-time arrivals “no matter what,” Habben Jansen told the Journal of Commerce’s TPM26 conference. “If you look at the product that we’re now launching in 2026 you will see that we have already taken some buffer capacity out here and there, and we will continue to do that because we want to be reliable, but we also want to have competitive transit times,” he said. “You need to find a competitive transit time, very high predictability and low variability,” Habben Jansen added. “If you do that, it allows our customers to say, ‘okay, if I put the most valuable stuff on that service I can take out a week of inventory ... It may only be a week of inventory, but a week is a lot.” Data from Sea-Intelligence Maritime Analysis for December and January shows that Gemini had a global schedule reliability of 89.5%, despite congestion challenges at European and Asian ports and severe winter weather. Chelsea Morris, vice president of global inbound transportation at Dollar General, said the discount retailer still needed to pressure-test the reliability in its supply chain, but the trends were positive. “We’ve already seen a demonstrable dip in the standard deviation associated with our cargo,” she told the conference. “When we determine how much product we need in the pipeline, that’s lead times. How much safety stock we need is variability. Anytime you can remove that variability, you don’t need that extra inventory.” Reliability on ‘a massive scale’ Morris said that although Gemini was the most reliable alliance, on-time performance was improving across the industry. “What’s really special about what is being done is that it is being done on a massive scale,” she added. “Often when working with carrier partners, it’s singular and it’s directional, but what we’re doing here is really making a difference for the entire industry. It means that we’re not flowing wasteful product through the supply chain that can then bottleneck and cause a lot of issues for all our customers.” Rebecca Ziebarth, vice president of global trade management at Ashley Furniture, agreed that more reliability in ocean schedules improved inventory management. “We want to be able to reduce how much we’re carrying and make sure that we can keep those costs in check, and being able to have the option to direct those raw materials to our manufacturing facility is a huge benefit,” she said. With Gemini’s schedule reliability remaining close to its 90% stated target since its launch early last year, Habben Jansen on Tuesday repeated a view he first expressed at TPM25 last year. “Our objective is to create more value for customers, and I’m firmly convinced that if you create value for the customer, then in the end, you will find a way to share it,” he said. “Whether and how that is then reflected, and how that comes about in the relationship, remains to be seen, but for sure, if we are consistent and always on time, for a lot of customers that has real value,” he added. Still, global ocean reliability has been on a steady decline since last October, according to data from eeSea, falling from 36.6% then to 25.4% in February. Oscar de Bok, CEO of DHL Global Forwarding, agreed that consistent delivery of better services would, over time, translate into better pricing for service providers. “In the end, customers will pay for value that you create,” he told the conference. “If you can benefit by $1,000, then you will probably be willing to pay $100 more in order to get $900 for yourself. Once it has proven itself, then the value is visible and a customer will not want to lose it.” Contact Greg Knowler at greg.knowler@spglobal.com .

TPM26: Buffer capacity being taken out of Gemini network: Hapag-Lloyd CEO

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<div class="phx-topic abstract-wrapper">The US has established a maritime warning zone, effectively placing the region out of bounds to shipping, while airlines have suspended passenger and freighter flights across the Middle East.</div>

The US has established a maritime warning zone, effectively placing the region out of bounds to shipping, while airlines have suspended passenger and freighter flights across the Middle East.

<div class="phx-topic">Commercial shipping and airlines continued to avoid the Middle East Sunday as the US and Israel launched a second day of massive military strikes on Iran. The bombardment, meanwhile, prompted Tehran-backed Houthi militants in Yemen to threaten retaliation by saying they may resume attacks on commercial shipping in the Red Sea. Airlines have suspended passenger and freighter flights across the Middle East and the US has established a maritime warning zone in the Persian Gulf, Gulf of Oman, North Arabian Sea and the Strait of Hormuz, effectively placing the region out of bounds to shipping. “The establishment of the warning zone is intended to provide notice that dangerous military operations are taking place from within these locations and the US Navy cannot guarantee the safety of neutral or merchant shipping,” Jakob Larsen, chief safety and security officer at BIMCO, said in a statement Saturday. Two Houthi officials speaking on the condition of anonymity on Saturday <a href="https://www.yahoo.com/news/articles/yemens-iranian-backed-houthi-rebels-083643083.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuYmluZy5jb20v&amp;guce_referrer_sig=AQAAAHCSkq524Zuax-7RXYPUHL7WjCXLoDzxDA6oxH9lxQY48Svx1eiq28CB1EPKkJs30ZP9956P-XPnfis5r3FnNU3a4X4GWKphMEAzIxOLvy2kEVrs30VhCmW5QTvk4i_UISC1bNGzJqshxlFkcuwfpiUYmp6_A6xzvpJM1G6XP-8G">told the Associated Press</a> that attacks on commercial shipping in the Bab-el-Madeb Strait could restart as early as “tonight.” Houthi leadership has yet to make an official statement. A fire broke out at the Port of Jebel Ali in Dubai Sunday when debris fell to the ground after a drone launched from Iran was intercepted, according to media reports. No information on damage to the port was immediately available.CMA CGM on Sunday implemented an “emergency conflict surcharge” for the region of $2,000 per TEU, $3,000 per FEU, and $4,000 for refrigerated containers and special equipment. “In continued efforts to ensure the safety of our crew, vessels, and your cargo amid the ongoing developments in Iran and across the Arabian Peninsula, precautionary measures have been taken to safeguard operations in the affected areas,” the carrier said in customer advisory. “We understand these measures may impact your logistics and supply chain operations; however, they are necessary steps that also lead to additional operational costs.” That came a day after CMA CGM ordered 14 vessels inside the Persian Gulf and seven en route to the Gulf to immediately proceed to shelter. The carrier has also suspended all passages through the Red Sea and is rerouting ships around southern Africa. “This decision is dictated by safety considerations and is made in compliance with our Bill of Lading terms and conditions,” CMA CGM said in a statement Saturday. “Customers will be contacted as soon as we have more details of the possible alternative ports where their cargo could be discharged.” Maersk on Sunday said it was rerouting all sailings of its ME11 Middle East-India-Mediterranean service and MECL Middle East-India-US East Coast service back around southern Africa until further notice. That is an escalation <a href="https://www.joc.com/article/maersk-hapag-lloyd-to-reroute-some-march-sailings-away-from-red-seasuez-6177149">from Friday</a>, when the carrier announced select sailings of both services would avoid the Red Sea and Suez through the first half of March. “Once the situation stabilizes and the security situation again permits, we will continue to prioritize the trans-Suez route for ME11 and MECL services as it is the fastest, most sustainable and most efficient way for us to serve our customers,” Maersk said in a statement Sunday. The Houthis have not launched any attacks on shipping since the Gaza ceasefire between Israel and Hamas was announced last October. And while the Houthis’ top leader, Abdul-Malik Badr al-Din al-Houthi, voiced support over the weekend for Iran, he held back on pledging military action, Hisisham al-Omeisy, a geopolitical expert on Yemen, told the Journal of Commerce. Seeing the scale and severity of US and Israel attacks on Iran, the Houthis appear to be calculating their next move, he said. The Houthis understand “going full in at this point will prove to be costly if not suicidal, and may instead resort to measures to save face; the movement has called for public protests in areas under their control in Yemen,” al-Omeisy said. “Nevertheless, Houthis are now under immense pressure to act, and their leadership may still authorize limited strikes on ships or even Tel Aviv." Major container lines have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy diversions around southern Africa. Peter Sand, chief analyst for rate benchmarking platform Xeneta, said the military action launched by the US and Israel and Iran’s retaliation will “shatter hopes of a large-scale return of container shipping to the Red Sea” this year. “If Houthi militia resume attacks, as now seems likely, carriers will reverse the decision to return services to the Red Sea and prioritize the safety of crew, ship and cargo,” Sand said in a statement Saturday. “Any plans for a phased return of container shipping to the Red Sea in 2026 will be shelved until the security situation becomes clearer.” The Mediterranean Port of Haifa in Israel was open and operational Monday, according to media reports.<h3>Marine insurance to soar </h3>The escalation of hostilities in the region is expected to push maritime risk insurance through the roof, according to Dylan Mortimer from UK-based insurance risk adviser Marsh. “It is very early to tell at this point, but we would estimate that near-term rate increases for marine hull insurance in the Gulf could range from 25% to 50%, barring any direct attack on merchant shipping, which could have major repercussions across war insurance rates,” Mortimer said in a statement. “The primary risks center on the Persian/Arabian Gulf, particularly the threat of vessel boarding and seizure by Iranian forces and the potential closure of the Strait of Hormuz,” he added. Bimco has also warned that insurance rates are expected to increase “manyfold,” and Larsen said ships with business connections to the US or Israel would likely have their insurance withdrawn. While Iran will be able to disrupt commercial shipping in the Persian Gulf, Larsen did not expect that disruption to be long term. “It is assessed that within a few days US air and naval superiority will eventually establish a level of security which will enable commercial shipping to resume transportation in and out of the Persian Gulf and adjacent waters,” he said. Contact Greg Knowler at <a href="https://www.joc.com/article/rotterdam-congestion-limits-benefit-of-second-half-surge-in-imports-6176418">greg.knowler@spglobal.com</a>.</div>

Commercial shipping and airlines continued to avoid the Middle East Sunday as the US and Israel launched a second day of massive military strikes on Iran. The bombardment, meanwhile, prompted Tehran-backed Houthi militants in Yemen to threaten retaliation by saying they may resume attacks on commercial shipping in the Red Sea. Airlines have suspended passenger and freighter flights across the Middle East and the US has established a maritime warning zone in the Persian Gulf, Gulf of Oman, North Arabian Sea and the Strait of Hormuz, effectively placing the region out of bounds to shipping. “The establishment of the warning zone is intended to provide notice that dangerous military operations are taking place from within these locations and the US Navy cannot guarantee the safety of neutral or merchant shipping,” Jakob Larsen, chief safety and security officer at BIMCO, said in a statement Saturday. Two Houthi officials speaking on the condition of anonymity on Saturday told the Associated Press that attacks on commercial shipping in the Bab-el-Madeb Strait could restart as early as “tonight.” Houthi leadership has yet to make an official statement. A fire broke out at the Port of Jebel Ali in Dubai Sunday when debris fell to the ground after a drone launched from Iran was intercepted, according to media reports. No information on damage to the port was immediately available. CMA CGM on Sunday implemented an “emergency conflict surcharge” for the region of $2,000 per TEU, $3,000 per FEU, and $4,000 for refrigerated containers and special equipment. “In continued efforts to ensure the safety of our crew, vessels, and your cargo amid the ongoing developments in Iran and across the Arabian Peninsula, precautionary measures have been taken to safeguard operations in the affected areas,” the carrier said in customer advisory. “We understand these measures may impact your logistics and supply chain operations; however, they are necessary steps that also lead to additional operational costs.” That came a day after CMA CGM ordered 14 vessels inside the Persian Gulf and seven en route to the Gulf to immediately proceed to shelter. The carrier has also suspended all passages through the Red Sea and is rerouting ships around southern Africa. “This decision is dictated by safety considerations and is made in compliance with our Bill of Lading terms and conditions,” CMA CGM said in a statement Saturday. “Customers will be contacted as soon as we have more details of the possible alternative ports where their cargo could be discharged.” Maersk on Sunday said it was rerouting all sailings of its ME11 Middle East-India-Mediterranean service and MECL Middle East-India-US East Coast service back around southern Africa until further notice. That is an escalation from Friday , when the carrier announced select sailings of both services would avoid the Red Sea and Suez through the first half of March. “Once the situation stabilizes and the security situation again permits, we will continue to prioritize the trans-Suez route for ME11 and MECL services as it is the fastest, most sustainable and most efficient way for us to serve our customers,” Maersk said in a statement Sunday. The Houthis have not launched any attacks on shipping since the Gaza ceasefire between Israel and Hamas was announced last October. And while the Houthis’ top leader, Abdul-Malik Badr al-Din al-Houthi, voiced support over the weekend for Iran, he held back on pledging military action, Hisisham al-Omeisy, a geopolitical expert on Yemen, told the Journal of Commerce. Seeing the scale and severity of US and Israel attacks on Iran, the Houthis appear to be calculating their next move, he said. The Houthis understand “going full in at this point will prove to be costly if not suicidal, and may instead resort to measures to save face; the movement has called for public protests in areas under their control in Yemen,” al-Omeisy said. “Nevertheless, Houthis are now under immense pressure to act, and their leadership may still authorize limited strikes on ships or even Tel Aviv." Major container lines have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy diversions around southern Africa. Peter Sand, chief analyst for rate benchmarking platform Xeneta, said the military action launched by the US and Israel and Iran’s retaliation will “shatter hopes of a large-scale return of container shipping to the Red Sea” this year. “If Houthi militia resume attacks, as now seems likely, carriers will reverse the decision to return services to the Red Sea and prioritize the safety of crew, ship and cargo,” Sand said in a statement Saturday. “Any plans for a phased return of container shipping to the Red Sea in 2026 will be shelved until the security situation becomes clearer.” The Mediterranean Port of Haifa in Israel was open and operational Monday, according to media reports. Marine insurance to soar The escalation of hostilities in the region is expected to push maritime risk insurance through the roof, according to Dylan Mortimer from UK-based insurance risk adviser Marsh. “It is very early to tell at this point, but we would estimate that near-term rate increases for marine hull insurance in the Gulf could range from 25% to 50%, barring any direct attack on merchant shipping, which could have major repercussions across war insurance rates,” Mortimer said in a statement. “The primary risks center on the Persian/Arabian Gulf, particularly the threat of vessel boarding and seizure by Iranian forces and the potential closure of the Strait of Hormuz,” he added. Bimco has also warned that insurance rates are expected to increase “manyfold,” and Larsen said ships with business connections to the US or Israel would likely have their insurance withdrawn. While Iran will be able to disrupt commercial shipping in the Persian Gulf, Larsen did not expect that disruption to be long term. “It is assessed that within a few days US air and naval superiority will eventually establish a level of security which will enable commercial shipping to resume transportation in and out of the Persian Gulf and adjacent waters,” he said. Contact Greg Knowler at greg.knowler@spglobal.com .

Shipping avoids Middle East region after US, Israel begin strikes on Iran

<div class="phx-topic abstract-wrapper">As the war launched by the US and Israel against Iran extends into its third day, about 10% of the global container shipping fleet remains stranded inside the Persian Gulf or held up outside.</div>

As the war launched by the US and Israel against Iran extends into its third day, about 10% of the global container shipping fleet remains stranded inside the Persian Gulf or held up outside.

<div class="phx-topic">Long Beach, California — The container shipping supply chain is bracing for the ripple effects of the war launched by the US and Israel against Iran that will be felt across global trade lanes, industry executives said Monday. As the regional conflict extends into its third day, about 10% of the global container shipping fleet remains stranded inside the Persian Gulf or held up outside the critical waterway, according to Jeremy Nixon, CEO of Ocean Network Express (ONE). “Most of the carriers, including ONE, have had to stop all bookings to the Middle East, and it is a significant trade,” Nixon told the Journal of Commerce’s TPM26 conference. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177002_0.1.jpg"></img></div>“All of that cargo is going to start backing up into the hubs and into the key locations in Europe and Asia,” he added. “Those vessels that have cargo for the Middle East will need to turn around and try to take some of that cargo off in places like Colombo, Fujairah and Singapore, and the hubs are going to lose some of their fluidity.” Triene Nielsen, vice president of ocean/global at forwarder Flexport, said when a ship fails to meet its normal schedule, the ripple effects can be felt across the network, with carriers trying to prioritize equipment and the movement of empty containers. “Those ripples are not going to come tomorrow, but they might come three, four or eight weeks from now,” she told the conference. “Even if this is mainly a Middle East situation, the equipment issues will be felt on the other trade lanes.” Johan Sigsgaard, executive vice president of Maersk, said just dealing with the containers already on the water was going to be a major challenge as the ships and equipment would effectively be suspended. “What we have seen from the last couple of years when these kinds of problems occur is that the same equipment and the same ships are being used worldwide,” Sigsgaard said. “Many of the hubs today touch many trades, particularly the big ones, so depending on how long this goes on for, it will affect more trades than just the Middle East.” <h3>Seafarers stranded in Persian Gulf </h3>Maersk on Sunday said it had suspended all vessel crossings in the Strait of Hormuz, which is effectively closed due to threats from Iran to attack ships transiting the waterway. Nixon also highlighted the human element, with about 40,000 seafarers impacted by the conflict that has trapped 350 ships inside the Persian Gulf and another 350 outside. “Those seafarers will be very concerned,” he said. “Five tankers were attacked in the last 24 hours, one of them at anchor off Oman, and crew have been killed.” The International Transport Workers’ Federation (ITF) and the Joint Negotiating Group (JNG) on Monday designated the Strait of Hormuz and surrounding waters a “high risk area” that requires carriers to provide enhanced protection measures for seafarers operating in or near the affected waters. Contact Greg Knowler at <a href="greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Long Beach, California — The container shipping supply chain is bracing for the ripple effects of the war launched by the US and Israel against Iran that will be felt across global trade lanes, industry executives said Monday. As the regional conflict extends into its third day, about 10% of the global container shipping fleet remains stranded inside the Persian Gulf or held up outside the critical waterway, according to Jeremy Nixon, CEO of Ocean Network Express (ONE). “Most of the carriers, including ONE, have had to stop all bookings to the Middle East, and it is a significant trade,” Nixon told the Journal of Commerce’s TPM26 conference. “All of that cargo is going to start backing up into the hubs and into the key locations in Europe and Asia,” he added. “Those vessels that have cargo for the Middle East will need to turn around and try to take some of that cargo off in places like Colombo, Fujairah and Singapore, and the hubs are going to lose some of their fluidity.” Triene Nielsen, vice president of ocean/global at forwarder Flexport, said when a ship fails to meet its normal schedule, the ripple effects can be felt across the network, with carriers trying to prioritize equipment and the movement of empty containers. “Those ripples are not going to come tomorrow, but they might come three, four or eight weeks from now,” she told the conference. “Even if this is mainly a Middle East situation, the equipment issues will be felt on the other trade lanes.” Johan Sigsgaard, executive vice president of Maersk, said just dealing with the containers already on the water was going to be a major challenge as the ships and equipment would effectively be suspended. “What we have seen from the last couple of years when these kinds of problems occur is that the same equipment and the same ships are being used worldwide,” Sigsgaard said. “Many of the hubs today touch many trades, particularly the big ones, so depending on how long this goes on for, it will affect more trades than just the Middle East.” Seafarers stranded in Persian Gulf Maersk on Sunday said it had suspended all vessel crossings in the Strait of Hormuz, which is effectively closed due to threats from Iran to attack ships transiting the waterway. Nixon also highlighted the human element, with about 40,000 seafarers impacted by the conflict that has trapped 350 ships inside the Persian Gulf and another 350 outside. “Those seafarers will be very concerned,” he said. “Five tankers were attacked in the last 24 hours, one of them at anchor off Oman, and crew have been killed.” The International Transport Workers’ Federation (ITF) and the Joint Negotiating Group (JNG) on Monday designated the Strait of Hormuz and surrounding waters a “high risk area” that requires carriers to provide enhanced protection measures for seafarers operating in or near the affected waters. Contact Greg Knowler at greg.knowler@spglobal.com .

TPM26: Middle East conflict to ripple across global trade lanes: industry experts

<div class="phx-topic abstract-wrapper">Three ocean carriers told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the hostilities would last.</div>

Three ocean carriers told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the hostilities would last.

<div class="phx-topic">Long Beach, California — Container lines are pausing or slowing annual trans-Pacific service contract negotiations as they assess the impact the war in the Middle East will have on their cost structures and how much functional capacity they can offer. Ocean carriers and US importers had already been <a href="Trans-Pacific carriers, importers slow-walking service contract negotiations | Journal of Commerce">slow-walking negotiations</a> for the 2026–27 service year, but the war — which has tied up between 2% and 10% of global container tonnage, according to various estimates — is preventing them from finalizing agreements. Executives from three ocean carriers who asked not to be identified told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the war would last. Their approach isn’t uniform across the industry, however; other carriers say they are ready to finalize contracts despite the uncertainty. Similar to how Houthi attacks that began in late 2023 spurred major carriers to route away from the Red Sea and Suez Canal and divert around southern Africa, the disruption and dislocation of equipment caused by the war in the Middle East will ripple through ocean networks, including the trans-Pacific trade, forwarders and ocean carriers warn. But the impact of the war on the global shipping system will be less pronounced than the Suez diversions, according to container shipping analyst Lars Jensen.<h3>War ‘adds to cost profile’</h3>The war “adds to our cost profile. We have to think about ‘what is our cost to execute this?’” Michael Britton, Maersk’s head of ocean products for North America, told the Journal of Commerce Wednesday. “There’s a global effect pretty immediately, which is the impact on [bunker] fuel price.” While high oil prices will be reflected in a bunker adjustment factor — albeit with a lag of a couple months — the impact of the war on Maersk’s global network is unclear, said Britton. The war, now in its fifth day, has expanded geographically, stretching as far west as Cyprus, where an Iranian drone was shot down on Monday. “The longer it goes, the wider it becomes, because we end up with ships which are not coming back to their original loading ports, and then we try to plug the holes with additional ships,” Britton said. “Part of it will come down to whether we continue to accept bookings.” The timeline for contract negotiations is also being held up because some of the top retailers, including Walmart, have yet to finalize contracts before the Journal of Commerce’s TPM Conference in Long Beach, as they typically do, according to two carrier executives. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. Most contracts for the new service year begin on May 1. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Long Beach, California — Container lines are pausing or slowing annual trans-Pacific service contract negotiations as they assess the impact the war in the Middle East will have on their cost structures and how much functional capacity they can offer. Ocean carriers and US importers had already been slow-walking negotiations for the 2026–27 service year, but the war — which has tied up between 2% and 10% of global container tonnage, according to various estimates — is preventing them from finalizing agreements. Executives from three ocean carriers who asked not to be identified told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the war would last. Their approach isn’t uniform across the industry, however; other carriers say they are ready to finalize contracts despite the uncertainty. Similar to how Houthi attacks that began in late 2023 spurred major carriers to route away from the Red Sea and Suez Canal and divert around southern Africa, the disruption and dislocation of equipment caused by the war in the Middle East will ripple through ocean networks, including the trans-Pacific trade, forwarders and ocean carriers warn. But the impact of the war on the global shipping system will be less pronounced than the Suez diversions, according to container shipping analyst Lars Jensen. War ‘adds to cost profile’ The war “adds to our cost profile. We have to think about ‘what is our cost to execute this?’” Michael Britton, Maersk’s head of ocean products for North America, told the Journal of Commerce Wednesday. “There’s a global effect pretty immediately, which is the impact on [bunker] fuel price.” While high oil prices will be reflected in a bunker adjustment factor — albeit with a lag of a couple months — the impact of the war on Maersk’s global network is unclear, said Britton. The war, now in its fifth day, has expanded geographically, stretching as far west as Cyprus, where an Iranian drone was shot down on Monday. “The longer it goes, the wider it becomes, because we end up with ships which are not coming back to their original loading ports, and then we try to plug the holes with additional ships,” Britton said. “Part of it will come down to whether we continue to accept bookings.” The timeline for contract negotiations is also being held up because some of the top retailers, including Walmart, have yet to finalize contracts before the Journal of Commerce’s TPM Conference in Long Beach, as they typically do, according to two carrier executives. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. Most contracts for the new service year begin on May 1. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Middle East war slows trans-Pacific service contract talks further

<div class="phx-topic abstract-wrapper">While reefer trade is at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have put a stop to all Middle East shipments until further notice. </div>

While reefer trade is at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have put a stop to all Middle East shipments until further notice.

<div class="phx-topic">Supply chains between India and the Middle East have come to a standstill following the en masse suspension of services and cargo acceptance by ocean carriers serving the trade corridor amid the military conflict between Iran and the US and Israel. The economic implications of the developing crisis are enormous for India as it is the second-largest trading partner for the United Arab Emirates (UAE). The two sides in 2022 signed a comprehensive trade pact aimed at pushing non-oil bilateral trade to $100 billion by 2030. While reefer trade is seen to be at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have already put a stop to all kinds of Middle East shipments until further notice. “Effective immediately, we are suspending all new bookings between the Indian Subcontinent [India, Pakistan, Bangladesh and Sri Lanka] and the Upper Gulf markets of the UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia [Dammam and Jubail only],” Maersk said in an operational update. Mediterranean Shipping Co., Hapag-Lloyd and Ocean Network Express (ONE) have also halted all Middle East bookings. “For cargo currently in transit or planned shipments, we are closely assessing the situation voyage by voyage,” Singapore-based ONE said. Concurrently, lead mainline carriers on the trade lane have announced hefty war risk or emergency surcharges — ranging between $1,500 and $3,000 per standard container. Maersk is the latest operator to have issued that advisory, slapping an “emergency freight increase” levy for the region of $1,800 per TEU, $3,000 per FEU, and $3,800 for reefer boxes. <h3>Exports ‘piling up’ on Indian docks </h3>Meanwhile, the abrupt cargo flow stoppage and service disruptions have left many Indian docks facing a buildup of containers, with the accumulation expected to aggravate as planned export containers continue to gate in. “Cargo booked for Middle East destinations is piling up across Indian ports,” Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told the Journal of Commerce. “If the crisis is not resolved quickly, it’s going to cause congestion troubles.” The disruptive impact on Indian exports goes beyond the Middle East regional trade. India’s seasonal grape shipments to Europe, which were picking up, now face longer or unpredictable transits due to vessel diversions around southern Africa for westbound services that recently resumed, and then halted, Red Sea/Suez Canal transits. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Supply chains between India and the Middle East have come to a standstill following the en masse suspension of services and cargo acceptance by ocean carriers serving the trade corridor amid the military conflict between Iran and the US and Israel. The economic implications of the developing crisis are enormous for India as it is the second-largest trading partner for the United Arab Emirates (UAE). The two sides in 2022 signed a comprehensive trade pact aimed at pushing non-oil bilateral trade to $100 billion by 2030. While reefer trade is seen to be at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have already put a stop to all kinds of Middle East shipments until further notice. “Effective immediately, we are suspending all new bookings between the Indian Subcontinent [India, Pakistan, Bangladesh and Sri Lanka] and the Upper Gulf markets of the UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia [Dammam and Jubail only],” Maersk said in an operational update. Mediterranean Shipping Co., Hapag-Lloyd and Ocean Network Express (ONE) have also halted all Middle East bookings. “For cargo currently in transit or planned shipments, we are closely assessing the situation voyage by voyage,” Singapore-based ONE said. Concurrently, lead mainline carriers on the trade lane have announced hefty war risk or emergency surcharges — ranging between $1,500 and $3,000 per standard container. Maersk is the latest operator to have issued that advisory, slapping an “emergency freight increase” levy for the region of $1,800 per TEU, $3,000 per FEU, and $3,800 for reefer boxes. Exports ‘piling up’ on Indian docks Meanwhile, the abrupt cargo flow stoppage and service disruptions have left many Indian docks facing a buildup of containers, with the accumulation expected to aggravate as planned export containers continue to gate in. “Cargo booked for Middle East destinations is piling up across Indian ports,” Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told the Journal of Commerce. “If the crisis is not resolved quickly, it’s going to cause congestion troubles.” The disruptive impact on Indian exports goes beyond the Middle East regional trade. India’s seasonal grape shipments to Europe, which were picking up, now face longer or unpredictable transits due to vessel diversions around southern Africa for westbound services that recently resumed, and then halted, Red Sea/Suez Canal transits. Contact Bency Mathew at bencyvmathew@gmail.com .

Carriers pause India-Middle East cargo bookings amid Persian Gulf port chaos 

<div class="phx-topic abstract-wrapper">Ryan Petersen said his company went into “code red” last year in transitioning to AI, with the technology’s first benefits seen in customs compliance and auditing.</div>

Ryan Petersen said his company went into “code red” last year in transitioning to AI, with the technology’s first benefits seen in customs compliance and auditing.

<div class="phx-topic">Long Beach, California — Flexport CEO Ryan Petersen said Tuesday recent advances in artificial intelligence AI can remove more of the friction involved in shipping, potentially shaving 10% off the back-office cost of ocean freight and allowing logistics companies to easily scale without adding employees. Speaking at the Journal of Commerce’s TPM26 conference, Petersen said Flexport went into “code red” and began a more urgent transition to using AI tools in its processes last November due to the better models and new capabilities available in the market. He said the company plans to use AI to “vibe code” half of its internal applications rather than using traditional programming tools. “I think the ability to build AI right now is phenomenal,” Petersen said. “You can just talk to Claude [AI] in English and get an application out in 30 minutes. So, there’s a huge amount of this that’s possible now that wasn’t possible even 90 days ago.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177003_0.1.jpg"></img></div>AI has been especially helpful in Flexport’s customs business, he said, allowing the company to update its internal systems to reflect 53 changes to US Customs code last year to reflect the multiple changes to tariff and trade codes. Petersen said the adoption of AI has reduced the error rate on Flexport’s customs declarations to almost zero. The company also used AI to build its recently released “tariff simulator” to double check customs duties and other fees. And he said the tool has been able to identify some $4 billion in overcharges on customs documents. “We are now able to do customs for some of the biggest companies in the world because our customs technology stack is really differentiated for very large enterprises,” Petersen said. “We can put things on autopilot with a very high degree of compliance accuracy.” <h3>Using AI to optimize ocean freight </h3>In its forwarding business, Flexport used AI to build an application for optimizing ocean freight by assigning shipments based on the lowest contract rate, sailing schedules, and vessel arrival dates. Many other forwarders are applying AI to ocean freight, which Petersen said is a “simple problem.” He said the real benefits of AI come from handling the industry’s complex problems, such as customs updates and optimizing less-than-container load and consolidated shipments. “We want to be more about how do you bring AI to either do better, more compliant customs keeping track of all the tariff changes or freight consolidation, so being able to have an AI algorithm that takes freight and does Tetris inside the container,” Petersen said. AI is solving the problem of how a logistics company can serve more customers and markets without increasing headcount. Citing the example of DSV’s 2024 acquisition of Schenker that doubled its headcount to 150,000, Petersen said an organization that size can introduce more complexity into logistics that AI can eliminate. “I think you’re going to see a really rapid ability to lower costs in logistics,” he said. “Our estimate is that a shipper can save about 10% on the price of shipping a container [compared with] the white-collar transactional labor to coordinate the shipments.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Long Beach, California — Flexport CEO Ryan Petersen said Tuesday recent advances in artificial intelligence AI can remove more of the friction involved in shipping, potentially shaving 10% off the back-office cost of ocean freight and allowing logistics companies to easily scale without adding employees. Speaking at the Journal of Commerce’s TPM26 conference, Petersen said Flexport went into “code red” and began a more urgent transition to using AI tools in its processes last November due to the better models and new capabilities available in the market. He said the company plans to use AI to “vibe code” half of its internal applications rather than using traditional programming tools. “I think the ability to build AI right now is phenomenal,” Petersen said. “You can just talk to Claude [AI] in English and get an application out in 30 minutes. So, there’s a huge amount of this that’s possible now that wasn’t possible even 90 days ago.” AI has been especially helpful in Flexport’s customs business, he said, allowing the company to update its internal systems to reflect 53 changes to US Customs code last year to reflect the multiple changes to tariff and trade codes. Petersen said the adoption of AI has reduced the error rate on Flexport’s customs declarations to almost zero. The company also used AI to build its recently released “tariff simulator” to double check customs duties and other fees. And he said the tool has been able to identify some $4 billion in overcharges on customs documents. “We are now able to do customs for some of the biggest companies in the world because our customs technology stack is really differentiated for very large enterprises,” Petersen said. “We can put things on autopilot with a very high degree of compliance accuracy.” Using AI to optimize ocean freight In its forwarding business, Flexport used AI to build an application for optimizing ocean freight by assigning shipments based on the lowest contract rate, sailing schedules, and vessel arrival dates. Many other forwarders are applying AI to ocean freight, which Petersen said is a “simple problem.” He said the real benefits of AI come from handling the industry’s complex problems, such as customs updates and optimizing less-than-container load and consolidated shipments. “We want to be more about how do you bring AI to either do better, more compliant customs keeping track of all the tariff changes or freight consolidation, so being able to have an AI algorithm that takes freight and does Tetris inside the container,” Petersen said. AI is solving the problem of how a logistics company can serve more customers and markets without increasing headcount. Citing the example of DSV’s 2024 acquisition of Schenker that doubled its headcount to 150,000, Petersen said an organization that size can introduce more complexity into logistics that AI can eliminate. “I think you’re going to see a really rapid ability to lower costs in logistics,” he said. “Our estimate is that a shipper can save about 10% on the price of shipping a container [compared with] the white-collar transactional labor to coordinate the shipments.” Contact Michael Angell at michael.angell@spglobal.com .

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