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<div class="phx-topic abstract-wrapper">The conclusion of Montreal’s long-running labor dispute with its longshore union will coincide with expiring contracts at other East Coast ports.</div>

The conclusion of Montreal’s long-running labor dispute with its longshore union will coincide with expiring contracts at other East Coast ports.

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<div class="phx-topic">Arbitration hearings for a new deal between maritime employers and longshore workers at the Port of Montreal are expected to wrap up by early 2026, over two years after the expiration of the last contract set off sporadic work stoppages at Canada’s second busiest port. While the conclusion of arbitration should provide more stability to shippers using Montreal, Canada’s other East Coast gateways will soon face their own contract negotiations. Those talks come amid a push by the country’s biggest union to repeal the law that allowed the federal government to end the longshore strikes last year that hit both coasts. In September, arbitrator Maureen Flynn began the initial hearings between Montreal’s Maritime Employers Association (MEA) and the Canadian Union of Public Employees (CUPE) Local 375 over a new contract for the union’s 1,300 members. Flynn was brought in this past May, after mediated talks in the first quarter of 2025 failed to produce a deal. <a href="https://www.joc.com/article/bc-ports-to-reopen-but-longshore-union-plans-challenge-to-back-to-work-order-5810473">Canada’s Labor Minister had ordered striking dockworkers at both Montreal and Vancouver back on the job</a> in November 2024, requiring their disputes go to arbitration due to the impasse at both coasts. But <a href="https://www.joc.com/article/montreal-port-employers-union-agree-to-mediation-in-talks-for-new-contract-5824318">the MEA had asked for more time in mediation with the union</a>, hoping for a more amicable outcome than arbitration. Speaking at a conference in Toronto in October, Paul Bird, chief commercial officer for the Montreal Port Authority, which is not a direct party to the contract talks, said that he expects the arbitration to conclude at least by the first quarter of 2026. “We were hopeful we would get a decision during the fall, but it’s maybe more realistic that were getting a decision during Q1 of 2026,” he said. While the port’s container count is up for 2025 following last year’s work stoppages, containerized cargo tonnage is about 2 million metric tons less than it was in 2019. Much of that drop happened in 2023 as the previous contract with Local 375 was expiring. Bird said some of that drop was the result of shippers deciding to reroute their freight due to concerns over work stoppages at the port. He said a new contract should give shippers confidence to bring more freight back through Montreal. “When forwarders and BCOs look at when the next contract anniversary is coming up, they start rerouting cargo or make plan B options,” Bird said. “We’ve lost some of those volumes that have been rerouted, especially through US East Coast ports. (Work stoppages) have led to a dip in volume that takes time to recuperate.” <h3>Halifax, Saint John contracts expiring </h3>In ending last year’s coast-to-coast longshore strikes, the labor minister used a provision of Canadian law called Section 107 that forces workers back on the job and to submit to arbitration with employers or otherwise face fines. The same provision was used on Canadian railroad workers and postal employees who also threatened to strike. However, that same provision has failed to end a short-lived strike by Air Canada flight attendants this past August, after the government admitted it would fine workers or the union. CUPE, which also represents the flight attendants, said they are working with Canadian legislators to repeal Section 107, arguing the government abused its power last year invoking the section. A challenge to the government’s ability to bring workers back on the job comes its other East Coast gateways face pending labor negotiations. The contract covering 631 members of the International Longshoremen’s Association (ILA) at the Port of Halifax is expiring at the end of 2025. The union there has launched a publicity campaign against terminal operator PSA International, accusing it foisting automation technology on the workforce at the expense of jobs. The Port of Saint John will also see two agreements covering 268 ILA members there expire at the end of 2025. Canada has seen some 62 work stoppages across its transportation industry between 2023 and 2024, according to government statistics. Canadian National Railway Vice President Dan Bresolin said the frequent strikes are shaking the confidence of carriers and shippers to use Canada, especially at a time when it wants to diversify its trade routes away from the US. “It’s the trust that’s eroded a little bit,” Bresolin said. “We need to get back to where carriers can bring in bigger ships, bring more business through Canadian gateways. The last 18 months has impacted that.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

Arbitration hearings for a new deal between maritime employers and longshore workers at the Port of Montreal are expected to wrap up by early 2026, over two years after the expiration of the last contract set off sporadic work stoppages at Canada’s second busiest port. While the conclusion of arbitration should provide more stability to shippers using Montreal, Canada’s other East Coast gateways will soon face their own contract negotiations. Those talks come amid a push by the country’s biggest union to repeal the law that allowed the federal government to end the longshore strikes last year that hit both coasts. In September, arbitrator Maureen Flynn began the initial hearings between Montreal’s Maritime Employers Association (MEA) and the Canadian Union of Public Employees (CUPE) Local 375 over a new contract for the union’s 1,300 members. Flynn was brought in this past May, after mediated talks in the first quarter of 2025 failed to produce a deal. Canada’s Labor Minister had ordered striking dockworkers at both Montreal and Vancouver back on the job in November 2024, requiring their disputes go to arbitration due to the impasse at both coasts. But the MEA had asked for more time in mediation with the union , hoping for a more amicable outcome than arbitration. Speaking at a conference in Toronto in October, Paul Bird, chief commercial officer for the Montreal Port Authority, which is not a direct party to the contract talks, said that he expects the arbitration to conclude at least by the first quarter of 2026. “We were hopeful we would get a decision during the fall, but it’s maybe more realistic that were getting a decision during Q1 of 2026,” he said. While the port’s container count is up for 2025 following last year’s work stoppages, containerized cargo tonnage is about 2 million metric tons less than it was in 2019. Much of that drop happened in 2023 as the previous contract with Local 375 was expiring. Bird said some of that drop was the result of shippers deciding to reroute their freight due to concerns over work stoppages at the port. He said a new contract should give shippers confidence to bring more freight back through Montreal. “When forwarders and BCOs look at when the next contract anniversary is coming up, they start rerouting cargo or make plan B options,” Bird said. “We’ve lost some of those volumes that have been rerouted, especially through US East Coast ports. (Work stoppages) have led to a dip in volume that takes time to recuperate.” Halifax, Saint John contracts expiring In ending last year’s coast-to-coast longshore strikes, the labor minister used a provision of Canadian law called Section 107 that forces workers back on the job and to submit to arbitration with employers or otherwise face fines. The same provision was used on Canadian railroad workers and postal employees who also threatened to strike. However, that same provision has failed to end a short-lived strike by Air Canada flight attendants this past August, after the government admitted it would fine workers or the union. CUPE, which also represents the flight attendants, said they are working with Canadian legislators to repeal Section 107, arguing the government abused its power last year invoking the section. A challenge to the government’s ability to bring workers back on the job comes its other East Coast gateways face pending labor negotiations. The contract covering 631 members of the International Longshoremen’s Association (ILA) at the Port of Halifax is expiring at the end of 2025. The union there has launched a publicity campaign against terminal operator PSA International, accusing it foisting automation technology on the workforce at the expense of jobs. The Port of Saint John will also see two agreements covering 268 ILA members there expire at the end of 2025. Canada has seen some 62 work stoppages across its transportation industry between 2023 and 2024, according to government statistics. Canadian National Railway Vice President Dan Bresolin said the frequent strikes are shaking the confidence of carriers and shippers to use Canada, especially at a time when it wants to diversify its trade routes away from the US. “It’s the trust that’s eroded a little bit,” Bresolin said. “We need to get back to where carriers can bring in bigger ships, bring more business through Canadian gateways. The last 18 months has impacted that.” Contact Michael Angell at michael.angell@spglobal.com

Montreal longshore arbitration expected to conclude in Q1 2026

<div class="phx-topic abstract-wrapper">A surge in replenishment activity in the US could turbocharge container shipping demand, while a wholesale return of container ships to Red Sea and Suez Canal transits would have a far-reaching market impact, speakers on a panel sponsored by the carrier said Wednesday.</div>

A surge in replenishment activity in the US could turbocharge container shipping demand, while a wholesale return of container ships to Red Sea and Suez Canal transits would have a far-reaching market impact, speakers on a panel sponsored by the carrier said Wednesday.

<div class="phx-topic">Restocking depleted inventories in the US and a return of Red Sea-Suez Canal transits are the two biggest uncertainties facing the container shipping industry next year, a group of industry experts said Wednesday. A surge in replenishment activity could turbocharge container shipping demand. But a wholesale return of container ships to Red Sea and Suez Canal transits would have a far-reaching impact, creating significant congestion in Europe, the Mediterranean and Asia that would also impact US East Coast services, they said. “Inventory restocking would have quite a big effect,” Rolf Habben Jansen, CEO of Hapag-Lloyd, said during the online panel briefing organized by the company. Habben Jansen, who gave the odds of such a move at “well above 50%,” said restocking would likely increase container demand by more than 4% next year, compared with 4.7% growth so far this year. Fellow panelist Michael Aldwell, Kuehne + Nagel’s executive vice president for sea logistics, said the recent US government shutdown meant there were no reliable inventory statistics available, although it was assumed inventory levels have fallen to unsustainable levels amid the tariff-driven decline in shipments to the US. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b2c4ed98-5885-4436-931d-5f035f537df1"></dynamic-object></div>Containerized US imports from Asia have fallen from the year’s high of 1.81 million TEUs in July to 1.6 million TEUs in October, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. The potential for the US to become more economically stable next year compared with the upheavals seen this year would “lead to substantial restocking,” Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce contributor, added. <h3>Hapag has ‘a plan on the shelf’ for Red Sea transits </h3>Turning to the possibility of a resumption of Red Sea transits, Aldwell said aside from port congestion due to vessel bunching, there would also be landside bottlenecks with terminal congestion caused by shortages of trucks and equipment. He said carriers were likely to use both Red Sea and Cape of Good Hope routings in their schedules once it became clear the Red Sea was safe to use again, but there was still a lot of caution before that happened, with vessel insurance and crew welfare among the issues that had to be taken into account. Some carriers, including CMA CGM, have made a tentative return to the Red Sea since Houthi rebels announced a ceasefire, with several vessels escorted by naval ships. Habben Jansen said Hapag-Lloyd had no immediate intention to return to Red Sea transits, although it has “a plan on the shelf to follow” once it does decide to shift back. “The risk of significant congestion in the Mediterranean and North Europe is just huge,” he said of when carriers do return to normal transits. Jensen said assuming the latest ceasefire holds, the period after the Lunar New Year holiday in early March would be the best time to mitigate the impact from the disruption caused by transitioning back to Red Sea transits. He pointed out post-Lunar New Year is typically the slack season, so the combination of lower demand and vessel blankings would reduce congestion. Carriers have used the longer route around southern Africa since late 2023 when the Houthis began their attacks on commercial shipping to protest Israel’s move into Gaza. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Restocking depleted inventories in the US and a return of Red Sea-Suez Canal transits are the two biggest uncertainties facing the container shipping industry next year, a group of industry experts said Wednesday. A surge in replenishment activity could turbocharge container shipping demand. But a wholesale return of container ships to Red Sea and Suez Canal transits would have a far-reaching impact, creating significant congestion in Europe, the Mediterranean and Asia that would also impact US East Coast services, they said. “Inventory restocking would have quite a big effect,” Rolf Habben Jansen, CEO of Hapag-Lloyd, said during the online panel briefing organized by the company. Habben Jansen, who gave the odds of such a move at “well above 50%,” said restocking would likely increase container demand by more than 4% next year, compared with 4.7% growth so far this year. Fellow panelist Michael Aldwell, Kuehne + Nagel’s executive vice president for sea logistics, said the recent US government shutdown meant there were no reliable inventory statistics available, although it was assumed inventory levels have fallen to unsustainable levels amid the tariff-driven decline in shipments to the US. Containerized US imports from Asia have fallen from the year’s high of 1.81 million TEUs in July to 1.6 million TEUs in October, according to PIERS, a sister product of the Journal of Commerce within S&P Global. The potential for the US to become more economically stable next year compared with the upheavals seen this year would “lead to substantial restocking,” Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce contributor, added. Hapag has ‘a plan on the shelf’ for Red Sea transits Turning to the possibility of a resumption of Red Sea transits, Aldwell said aside from port congestion due to vessel bunching, there would also be landside bottlenecks with terminal congestion caused by shortages of trucks and equipment. He said carriers were likely to use both Red Sea and Cape of Good Hope routings in their schedules once it became clear the Red Sea was safe to use again, but there was still a lot of caution before that happened, with vessel insurance and crew welfare among the issues that had to be taken into account. Some carriers, including CMA CGM, have made a tentative return to the Red Sea since Houthi rebels announced a ceasefire, with several vessels escorted by naval ships. Habben Jansen said Hapag-Lloyd had no immediate intention to return to Red Sea transits, although it has “a plan on the shelf to follow” once it does decide to shift back. “The risk of significant congestion in the Mediterranean and North Europe is just huge,” he said of when carriers do return to normal transits. Jensen said assuming the latest ceasefire holds, the period after the Lunar New Year holiday in early March would be the best time to mitigate the impact from the disruption caused by transitioning back to Red Sea transits. He pointed out post-Lunar New Year is typically the slack season, so the combination of lower demand and vessel blankings would reduce congestion. Carriers have used the longer route around southern Africa since late 2023 when the Houthis began their attacks on commercial shipping to protest Israel’s move into Gaza. Contact Keith Wallis at keithwallis@hotmail.com .

US restocking, Red Sea return the two big unknowns for 2026: Hapag briefing

<div class="phx-topic abstract-wrapper">A series of freight-all-kinds increases since Oct. 1 has held up the spot market on the trade, with carriers aiming to sustain the pricing momentum through fourth-quarter contract talks.</div>

A series of freight-all-kinds increases since Oct. 1 has held up the spot market on the trade, with carriers aiming to sustain the pricing momentum through fourth-quarter contract talks.

<div class="phx-topic">Ocean carriers on the Asia to North Europe and Mediterranean trades will roll out yet another rate increase on Dec. 1 in a bid to extend an upward pricing run that began in October. It is the latest freight-all-kinds (FAK) increase to be announced on the trade lanes that have seen rate hikes every two weeks since Oct. 1. “Asia-Europe and Mediterranean rates are holding steady, supported by aggressive blank sailings during tender season,” Judah Levine, head of research at online freight marketplace Freightos, wrote in a market update this week. “This stability may reflect more aggressive blanked sailing campaigns for these lanes during the current tendering season, with some carriers announcing additional [rate increases] to push prices up to the $3,000-$4,000 per FEU level in December,” Levine said. On Asia-North Europe, Mediterranean Shipping Co. and Hapag-Lloyd will set their FAK rate at $3,200/FEU from Dec. 1. On Asia-Mediterranean routes, CMA CGM and Hapag-Lloyd have set their FAK rates at $4,000/FEU, while MSC has announced a rate level of $3,950/FEU from Asia to the West Mediterranean and $3,800/FEU to the East Mediterranean. <h3>Spot market momentum </h3>While the fortnightly FAKs have not enabled carriers to achieve all their sought-after increases, the price hikes have seen the spot rate on Asia-North Europe rise steadily from $1,300 per FEU on Oct. 1 to $2,300/FEU this week, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Asia-Mediterranean rates have risen from $1,600/FEU on Oct. 1 to the current level of $3,000/FEU. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b07fd015-2b73-4e9d-a61e-e44aaa45715e"></dynamic-object></div>With tendering season for long-term rates on the European trades now underway, the higher prices are being supported by significant capacity withdrawals in the form of blank sailings. Carriers on Asia-North Europe have announced November blanks of almost 110,000 TEUs of capacity, with blank sailings of 56,000 TEUs set so far for December, according to Xeneta’s eeSea data. Both those numbers are expected to increase as new capacity continues to steam into service. Asia-North Europe carriers will deploy 1.12 million TEUs of capacity in December, a record that will be beaten in January, when 1.17 million TEUs will be in service, according to Xeneta. On Asia-Mediterranean, 100,000 TEUs are set thus far to be blanked in November and 40,000 TEUs in December, with 17,000 TEUs on tap right now for January, according to Xeneta. A record 842,000 TEUs of capacity deployed on the trade in December will be beaten in January when the deployed fleet hits 861,000 TEUs. Whether there will be enough demand to fill ships and hold up rates through December remains to be seen. The latest volume numbers from Container Trades Statistics are for September and showed that demand on Asia-Europe in the first nine months of the year was up 9.8% year over year. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers on the Asia to North Europe and Mediterranean trades will roll out yet another rate increase on Dec. 1 in a bid to extend an upward pricing run that began in October. It is the latest freight-all-kinds (FAK) increase to be announced on the trade lanes that have seen rate hikes every two weeks since Oct. 1. “Asia-Europe and Mediterranean rates are holding steady, supported by aggressive blank sailings during tender season,” Judah Levine, head of research at online freight marketplace Freightos, wrote in a market update this week. “This stability may reflect more aggressive blanked sailing campaigns for these lanes during the current tendering season, with some carriers announcing additional [rate increases] to push prices up to the $3,000-$4,000 per FEU level in December,” Levine said. On Asia-North Europe, Mediterranean Shipping Co. and Hapag-Lloyd will set their FAK rate at $3,200/FEU from Dec. 1. On Asia-Mediterranean routes, CMA CGM and Hapag-Lloyd have set their FAK rates at $4,000/FEU, while MSC has announced a rate level of $3,950/FEU from Asia to the West Mediterranean and $3,800/FEU to the East Mediterranean. Spot market momentum While the fortnightly FAKs have not enabled carriers to achieve all their sought-after increases, the price hikes have seen the spot rate on Asia-North Europe rise steadily from $1,300 per FEU on Oct. 1 to $2,300/FEU this week, according to Platts, a sister company of the Journal of Commerce within S&P Global. Asia-Mediterranean rates have risen from $1,600/FEU on Oct. 1 to the current level of $3,000/FEU. With tendering season for long-term rates on the European trades now underway, the higher prices are being supported by significant capacity withdrawals in the form of blank sailings. Carriers on Asia-North Europe have announced November blanks of almost 110,000 TEUs of capacity, with blank sailings of 56,000 TEUs set so far for December, according to Xeneta’s eeSea data. Both those numbers are expected to increase as new capacity continues to steam into service. Asia-North Europe carriers will deploy 1.12 million TEUs of capacity in December, a record that will be beaten in January, when 1.17 million TEUs will be in service, according to Xeneta. On Asia-Mediterranean, 100,000 TEUs are set thus far to be blanked in November and 40,000 TEUs in December, with 17,000 TEUs on tap right now for January, according to Xeneta. A record 842,000 TEUs of capacity deployed on the trade in December will be beaten in January when the deployed fleet hits 861,000 TEUs. Whether there will be enough demand to fill ships and hold up rates through December remains to be seen. The latest volume numbers from Container Trades Statistics are for September and showed that demand on Asia-Europe in the first nine months of the year was up 9.8% year over year. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe carriers to levy yet another rate hike on Dec. 1

<div class="phx-topic abstract-wrapper">As a result of that heightened overcapacity, spot rates on the trade lane are at their lowest since February, while exports to the US East Coast fell sharply in October.</div>

As a result of that heightened overcapacity, spot rates on the trade lane are at their lowest since February, while exports to the US East Coast fell sharply in October.

<div class="phx-topic">A more settled capacity situation on the India-US East Coast trade due to fewer blank sailings in November has upped the rate pressure on ocean carriers in the market that have been squeezed by US tariffs. With the exception of two calls voided by CMA CGM’s Indamex loop, westbound sailings out of Nhava Sheva/Mundra for the month are known to be on normal schedule across the premier services operated by Hapag-Lloyd, Mediterranean Shipping Co. and Maersk. As a result of that heightened overcapacity, spot rates on the trade lane are at their lowest since February. Platts, a sister company of the Journal of Commerce within S&amp;P Global, put India-USEC spot rates at $1,450 per FEU as of Nov. 18, a 9% decline on the week and the lowest reading since $1,330 per FEU on Feb. 21. Local forwarder sources have reported carrier quotes even lower, in the range of $1,200 to $1,300 per FEU for bookings from Nhava Sheva to New York. That’s a drop of $200 to $300 per FEU from the late-October trendline. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56199e2b-5df4-468f-a149-b18ae7c32e51"></dynamic-object></div>Sources noted that while cargo bookings have weakened, overcapacity is the bigger factor pushing rates lower and prompting carriers to undercut each other in an attempt to keep vessel liftings as close as possible to their declared allocations. “Capacity utilization for USEC sailings out of West India has generally dipped to between 60% to 70% from the normal 80% to 90% level,” a Nhava Sheva-based vessel operations executive at a European liner who didn’t want to be identified told the Journal of Commerce. “Most carriers are now weighing cost control measures to tighten operating expenses.” Additionally, carrier sources are pinning their hopes for a rebound in volumes on an early breakthrough in bilateral trade negotiations between New Delhi and Washington. But they believe a return to the Red Sea and Suez Canal, on which there are some tentative signals, will create a fresh set of capacity problems to solve. “The speed of [Suez] return will determine whether the industry experiences renewed volatility or a more balanced adjustment,” Supal Shah, CEO of Sarjak Container Lines, noted. “A measured, well-sequenced return supports stability across the supply chain.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ae1df54b-4003-46b5-a8c3-e0d35707e941"></dynamic-object></div>Meanwhile, Indian goods exports in October took a severe beating, falling nearly 12% by value year over year, with exports to the US down 7%, according to provisional official data. “The decline in merchandise exports was primarily driven by a sharper fall in several dominant export sectors,” S.C. Ralhan, president of the Federation of Indian Export Organizations, said in a statement. Indian exports to the USEC came in at just under 70,000 TEUs in October, down from 87,970 TEUs in September, according to PIERS, a sister product of the Journal of Commerce. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

A more settled capacity situation on the India-US East Coast trade due to fewer blank sailings in November has upped the rate pressure on ocean carriers in the market that have been squeezed by US tariffs. With the exception of two calls voided by CMA CGM’s Indamex loop, westbound sailings out of Nhava Sheva/Mundra for the month are known to be on normal schedule across the premier services operated by Hapag-Lloyd, Mediterranean Shipping Co. and Maersk. As a result of that heightened overcapacity, spot rates on the trade lane are at their lowest since February. Platts, a sister company of the Journal of Commerce within S&P Global, put India-USEC spot rates at $1,450 per FEU as of Nov. 18, a 9% decline on the week and the lowest reading since $1,330 per FEU on Feb. 21. Local forwarder sources have reported carrier quotes even lower, in the range of $1,200 to $1,300 per FEU for bookings from Nhava Sheva to New York. That’s a drop of $200 to $300 per FEU from the late-October trendline. Sources noted that while cargo bookings have weakened, overcapacity is the bigger factor pushing rates lower and prompting carriers to undercut each other in an attempt to keep vessel liftings as close as possible to their declared allocations. “Capacity utilization for USEC sailings out of West India has generally dipped to between 60% to 70% from the normal 80% to 90% level,” a Nhava Sheva-based vessel operations executive at a European liner who didn’t want to be identified told the Journal of Commerce. “Most carriers are now weighing cost control measures to tighten operating expenses.” Additionally, carrier sources are pinning their hopes for a rebound in volumes on an early breakthrough in bilateral trade negotiations between New Delhi and Washington. But they believe a return to the Red Sea and Suez Canal, on which there are some tentative signals, will create a fresh set of capacity problems to solve. “The speed of [Suez] return will determine whether the industry experiences renewed volatility or a more balanced adjustment,” Supal Shah, CEO of Sarjak Container Lines, noted. “A measured, well-sequenced return supports stability across the supply chain.” Meanwhile, Indian goods exports in October took a severe beating, falling nearly 12% by value year over year, with exports to the US down 7%, according to provisional official data. “The decline in merchandise exports was primarily driven by a sharper fall in several dominant export sectors,” S.C. Ralhan, president of the Federation of Indian Export Organizations, said in a statement. Indian exports to the USEC came in at just under 70,000 TEUs in October, down from 87,970 TEUs in September, according to PIERS, a sister product of the Journal of Commerce. Contact Bency Mathew at bencyvmathew@gmail.com .

Steadier capacity in November adds to India-USEC ocean pricing pressure

<div class="phx-topic abstract-wrapper">The carrier’s first direct service to Halifax comes as Canada looks to pivot its trade networks and as low water levels affect Montreal’s container business.</div>

The carrier’s first direct service to Halifax comes as Canada looks to pivot its trade networks and as low water levels affect Montreal’s container business.

<div class="phx-topic">OOCL is adding the Port of Halifax to a trans-Atlantic Mediterranean service, marking the carrier’s first direct service to the port. The new port call comes as Canada looks outside the US for more trade and as low water levels on the St. Lawrence River make Halifax an offtake point for Montreal-bound cargo. OOCL said its West Mediterranean America service from Italy and Spain would add Halifax as the first call before US East Coast ports, noting in a statement the move “unlocks direct access to Montreal and Toronto.” The OOCL service joins three other Mediterranean-North American East Coast services that also call Halifax; this will be the Hong Kong-based carrier’s first service to the port. While Halifax’s overall cargo volumes have yet to approach their 2022 peak, the port has seen some uptick this year. First-half 2025 import volumes are up 13.6% to 131,980 TEUs and export volumes have risen 8.9% to 126,937 TEUs compared to the first half of 2024. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="09c4541c-c611-4969-af40-74647b74b5fd"></dynamic-object></div>Halifax, meanwhile, has been providing relief to the Port of Montreal this year due to navigational challenges on the St. Lawrence Seaway. One portion of Montreal’s harbor has been hovering at about a 17-foot depth since September, according to the International Lake Ontario-St. Lawrence River Board, among the historical lows recorded for the area. “For the carriers, the biggest problem is low water on the Seaway,” Grace Liang, president of OOCL Canada, said at a conference in Toronto last month. “The impact of low water is pretty substantial.” Paul Bird, chief commercial officer of the Montreal Port Authority, said Montreal’s current water levels are part of the La Niña weather cycle that occurs approximately every 12 years. As a result, container ships have to offload cargo prior to entering the Seaway to reduce their draft, which serves as a temporary measure until water levels rise again. “Carriers have to top off either at Saint John or Halifax before they come into Montreal,” Bird said at the Toronto conference. “But there’s a cycle here. We don’t expect these low water levels to return for another 10 or 12 years.” <h3>Canadian ports handled frontloaded imports </h3>Liang said at the conference that Canada’s ports handled frontloaded imports, either from US-bound freight or as inputs for other Canadian goods shipped to the US. But she said Canadian ports are likely to see the same cargo slowdown as US ports in the fourth quarter. “When it comes to demand, it’s affected by the trade wars and tariffs,” Liang said. “We’ve seen a lot of frontloading both in the US and Canada.” In the long term, Canada’s international trade also faces a restructuring that favors enlarged port coverage. Back in March, Prime Minister Mark Carney said Canada’s traditional reliance on the US export market is now over due to the tariffs imposed by the Trump administration. Carney’s 2025 budget proposes C$5 billion in spending for Transport Canada to develop new trade and infrastructure projects, as well as other funds to help Canadian businesses tap overseas markets. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

OOCL is adding the Port of Halifax to a trans-Atlantic Mediterranean service, marking the carrier’s first direct service to the port. The new port call comes as Canada looks outside the US for more trade and as low water levels on the St. Lawrence River make Halifax an offtake point for Montreal-bound cargo. OOCL said its West Mediterranean America service from Italy and Spain would add Halifax as the first call before US East Coast ports, noting in a statement the move “unlocks direct access to Montreal and Toronto.” The OOCL service joins three other Mediterranean-North American East Coast services that also call Halifax; this will be the Hong Kong-based carrier’s first service to the port. While Halifax’s overall cargo volumes have yet to approach their 2022 peak, the port has seen some uptick this year. First-half 2025 import volumes are up 13.6% to 131,980 TEUs and export volumes have risen 8.9% to 126,937 TEUs compared to the first half of 2024. Halifax, meanwhile, has been providing relief to the Port of Montreal this year due to navigational challenges on the St. Lawrence Seaway. One portion of Montreal’s harbor has been hovering at about a 17-foot depth since September, according to the International Lake Ontario-St. Lawrence River Board, among the historical lows recorded for the area. “For the carriers, the biggest problem is low water on the Seaway,” Grace Liang, president of OOCL Canada, said at a conference in Toronto last month. “The impact of low water is pretty substantial.” Paul Bird, chief commercial officer of the Montreal Port Authority, said Montreal’s current water levels are part of the La Niña weather cycle that occurs approximately every 12 years. As a result, container ships have to offload cargo prior to entering the Seaway to reduce their draft, which serves as a temporary measure until water levels rise again. “Carriers have to top off either at Saint John or Halifax before they come into Montreal,” Bird said at the Toronto conference. “But there’s a cycle here. We don’t expect these low water levels to return for another 10 or 12 years.” Canadian ports handled frontloaded imports Liang said at the conference that Canada’s ports handled frontloaded imports, either from US-bound freight or as inputs for other Canadian goods shipped to the US. But she said Canadian ports are likely to see the same cargo slowdown as US ports in the fourth quarter. “When it comes to demand, it’s affected by the trade wars and tariffs,” Liang said. “We’ve seen a lot of frontloading both in the US and Canada.” In the long term, Canada’s international trade also faces a restructuring that favors enlarged port coverage. Back in March, Prime Minister Mark Carney said Canada’s traditional reliance on the US export market is now over due to the tariffs imposed by the Trump administration. Carney’s 2025 budget proposes C$5 billion in spending for Transport Canada to develop new trade and infrastructure projects, as well as other funds to help Canadian businesses tap overseas markets. Contact Michael Angell at michael.angell@spglobal.com .

OOCL adds Halifax call to trans-Atlantic Med service

<div class="phx-topic abstract-wrapper">The consortium of nine liner carriers has launched its first product to facilitate the adoption of electronic bills of lading and other digital standards it is developing.</div>

The consortium of nine liner carriers has launched its first product to facilitate the adoption of electronic bills of lading and other digital standards it is developing.

<div class="phx-topic">The Digital Container Shipping Association (DCSA) has launched an identity management tool aimed at helping companies involved in global shipping and international trade perform internal compliance checks and vet prospective business partners. The product, called Identity Exchange, expands the reach of the DCSA, a nonprofit consortium of nine container lines whose broader goal is to standardize and digitize the shipping industry. Niels Nuyens, DCSA’s chief product officer, told the Journal of Commerce Tuesday the new product was developed over the past 12 to 15 months as the group was doing work to <a href="https://www.joc.com/article/key-supply-chain-stakeholders-commit-to-electronic-bills-of-lading-5226286">advance electronic bill of lading</a> (eBL) adoption among members and their customers. “As part of shipping and international trade, it’s necessary to be 100% sure about who you’re working with,” Nuyens said. “We learned it’s being done differently across different organizations and felt there was a way to provide better onboarding and compliance processes.” Electronic bill of lading adoption is contingent on making the issuing and transmitting of electronic documents more streamlined, and that quickly led to a discussion around ensuring that the eBL was being submitted to a trusted party. Bills of lading convey titles to recipients and have associated banking implications for suppliers using letters of credit to fund the manufacturing and transportation of goods. Those conversations with members, forwarders and shippers led DCSA to determine there was no unified identity management process to ensure that customers or partners were compliant with internal controls. The means of checking potential business partners are sometimes sophisticated, involving an identity management system and local teams that can verify entities, and sometimes rudimentary, involving nothing more than a Google search of a prospective partner or customer. The demand for vetting is a result of companies’ internal compliance processes, which, in turn, are often driven by customs or banking regulatory mandates, depending on the industry or country. The patchwork of those requirements creates an uneven landscape where some companies are screening for things such as restricted entities and others lack the means to do so. <h3>Product development part of DCSA strategy </h3>The development of a product is a bit of a new direction for DCSA, which has to this point focused on building industry standards for processes such as tracking and tracing, eBLs, and just-in-time port calls. More recently, the group has <a href="https://www.joc.com/article/dcsa-turns-to-industry-partners-to-drive-shipping-standards-adoption-6070237">built a partnership network</a> of terminals, feeders, freight forwarders, shippers, and tech providers to support the adoption of standards and contribute to what DCSA develops. Nuyens said product development is the third pillar in DCSA’s strategy. The identity product, unlike everything else DCSA has developed to date, is not free to use. Companies wanting to use the exchange pay for a certain number of lookups, with the cost-per-lookup going down based on usage. Nuyens said the revenue from the Identity Exchange will be funneled into DCSA’s other initiatives to promote shipping industry standards. More than 150 early users completed over 30,000 identity checks through Identity Exchange, DCSA said in a statement, with match rates above 95% and reports of less manual review time and stronger data accuracy. DCSA called the development of its first product a move into “digital infrastructure that strengthens trust across the container shipping industry.” The product is intended to be used in any business-to-business situation in shipping or trade, Nuyens said. The ocean carrier members of DCSA are Mediterranean Shipping Co., Hapag-Lloyd, Maersk, CMA CGM, Evergreen, HMM, Yang Ming, Zim Integrated Shipping Services and PIL. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

The Digital Container Shipping Association (DCSA) has launched an identity management tool aimed at helping companies involved in global shipping and international trade perform internal compliance checks and vet prospective business partners. The product, called Identity Exchange, expands the reach of the DCSA, a nonprofit consortium of nine container lines whose broader goal is to standardize and digitize the shipping industry. Niels Nuyens, DCSA’s chief product officer, told the Journal of Commerce Tuesday the new product was developed over the past 12 to 15 months as the group was doing work to advance electronic bill of lading (eBL) adoption among members and their customers. “As part of shipping and international trade, it’s necessary to be 100% sure about who you’re working with,” Nuyens said. “We learned it’s being done differently across different organizations and felt there was a way to provide better onboarding and compliance processes.” Electronic bill of lading adoption is contingent on making the issuing and transmitting of electronic documents more streamlined, and that quickly led to a discussion around ensuring that the eBL was being submitted to a trusted party. Bills of lading convey titles to recipients and have associated banking implications for suppliers using letters of credit to fund the manufacturing and transportation of goods. Those conversations with members, forwarders and shippers led DCSA to determine there was no unified identity management process to ensure that customers or partners were compliant with internal controls. The means of checking potential business partners are sometimes sophisticated, involving an identity management system and local teams that can verify entities, and sometimes rudimentary, involving nothing more than a Google search of a prospective partner or customer. The demand for vetting is a result of companies’ internal compliance processes, which, in turn, are often driven by customs or banking regulatory mandates, depending on the industry or country. The patchwork of those requirements creates an uneven landscape where some companies are screening for things such as restricted entities and others lack the means to do so. Product development part of DCSA strategy The development of a product is a bit of a new direction for DCSA, which has to this point focused on building industry standards for processes such as tracking and tracing, eBLs, and just-in-time port calls. More recently, the group has built a partnership network of terminals, feeders, freight forwarders, shippers, and tech providers to support the adoption of standards and contribute to what DCSA develops. Nuyens said product development is the third pillar in DCSA’s strategy. The identity product, unlike everything else DCSA has developed to date, is not free to use. Companies wanting to use the exchange pay for a certain number of lookups, with the cost-per-lookup going down based on usage. Nuyens said the revenue from the Identity Exchange will be funneled into DCSA’s other initiatives to promote shipping industry standards. More than 150 early users completed over 30,000 identity checks through Identity Exchange, DCSA said in a statement, with match rates above 95% and reports of less manual review time and stronger data accuracy. DCSA called the development of its first product a move into “digital infrastructure that strengthens trust across the container shipping industry.” The product is intended to be used in any business-to-business situation in shipping or trade, Nuyens said. The ocean carrier members of DCSA are Mediterranean Shipping Co., Hapag-Lloyd, Maersk, CMA CGM, Evergreen, HMM, Yang Ming, Zim Integrated Shipping Services and PIL. Contact Eric Johnson at eric.johnson@spglobal.com .

DCSA broadens reach with identity exchange for shipping industry

<div class="phx-topic abstract-wrapper">With the proposed Union Pacific-Norfolk Southern merger, the US rail industry finds itself facing a new future but the same historical set of challenges.</div>

With the proposed Union Pacific-Norfolk Southern merger, the US rail industry finds itself facing a new future but the same historical set of challenges.

<div class="phx-topic">Oct. 14 marked the 45th anniversary of President Jimmy Carter signing The Harley O. Staggers Rail Act of 1980, named for the chairman of the House Committee on Interstate and Foreign Commerce (today the Committee on Energy and Commerce). However, the real “heavy lifting” to get the bill passed was by Rep. Jim Florio, the New Jersey Democrat who chaired the House Subcommittee on Commerce, Transportation, and Tourism. The Association of American Railroads (AAR) frequently points out how, by 1980, the railroad industry was on the brink of collapse until Congress passed bipartisan legislation to partially deregulate the industry, thereby allowing market-driven pricing, customer-specific contracts and the ability to shed unprofitable routes. However, this neglects the tortured decade of the 1970s when Congress was repeatedly drawn into legislating railroad matters. It started with The Rail Passenger Service Act of 1970, creating Amtrak. This relieved private railroads from their losses operating passenger service. But it was not enough to save Penn Central, so Congress passed the Regional Rail Reorganization Act of 1973 (the “3R Act”) to salvage viable freight operations from Penn Central and other failing rail lines in the Northeast, mid-Atlantic and Midwest. It created the United States Railway Association (USRA) to develop a “Final System Plan” for the reorganization into a single entity — Conrail. Finally, The Railroad Revitalization and Regulatory Reform Act of 1976 (The “4R Act”) approved the Final System Plan, enabling Conrail to start operations on April 1, 1976. It provided what it thought was sufficient funding — an initial federal “investment” of $2.026 billion for Conrail to acquire the assets of bankrupt Northeast and Midwest railroads and get its operations started. This funding turned out to be insufficient. Conrail subsequently sought and received an additional $3 billion. However, by 1979, it had almost exhausted that amount. Under the leadership of a new CEO, L. Stanley Crane, Conrail claimed that it could succeed as a private entity if the rail marketplace was deregulated. <h3>Regulation intended to perpetuate monopolies </h3>Railroads had been operating under a regulated system since the Interstate Commerce Act of 1887. This legislation was an early initiative of the Progressive era and preceded other efforts at regulation, such as the Sherman Antitrust Act three years later. The Interstate Commerce Commission (ICC) became the model for rate-of-return regulation of public utilities. The microeconomic theory is that a monopoly business can be regulated by having the government control the prices charged by the market to a level equal to the efficient costs of production, plus a government-permitted rate of return on capital. This model became the norm for oversight of many asset-based, network-operating businesses such as communications, utilities, and other transportation modes. What is overlooked by many is that — by design — regulation was intended to perpetuate monopolies because it ensured that excess capacity would be available in the event of war or other national emergencies. The monopoly license was maintained through a series of operating authorities that determined which providers could serve which markets. Consumers paid more — but hopefully not too much more. This legislation was passed when railroads were the primary means of freight and passenger transportation. However, the subsequent development of the Interstate Highway System and air traffic changed that dominant position. Meanwhile, the onset of persistent stagflation during the 1970s encouraged deregulatory efforts in many regulated industries. The Airline Deregulation Act of 1978 was a predecessor. However, the Interstate Commerce Commission, under Chairman Dan O’Neal, had already taken initiatives, permitted by the 4R Act, to deregulate certain rail sectors, such as intermodal. <h3>Key components of Staggers Act </h3>The Staggers Act had three key components: Railroads were able to negotiate contracts with a customer at market-based rates; reduced regulatory oversight over mergers and abandonments was enacted; and a regulatory backstop was established to protect shippers lacking effective competition. These legislative efforts completely inverted the commercial process. Regulation was cost-based pricing. Shippers were price takers. Deregulation begat price-based costing. The market determined the competitive price, and the carrier needed to find a way to produce the service so as to be profitable. This was accomplished in numerous ways: Railroad mergers enabled increased economies of scale and reduced overhead; technology supported cost reductions (e.g., end of train devices replacing the caboose); significant amounts of the networks were spun off to short line operations; and a reduction in train crew size from five to two and extending crew districts reduced costs significantly. The final step of this reduction required Congressional help in 1991, with the imposition of Presidential Emergency Board 219. But downsizing could only do so much. Topline growth was necessary. Into this opportunity stepped intermodal. As international traffic grew with globalization, a large part of the volume growth came from ocean carriers. Traditional domestic customers increased their volume, and major new customers, such as J.B. Hunt, entered as well. It was a win-win situation for everyone. Railroads filled excess capacity, and intermodal customers enjoyed reliable and cost-effective service. Everything went well until the summer of 1993. The weather that summer caused terrible service problems. As an industry, we missed the wakeup call. We were too eager to attribute the problems to a fluke weather condition, not recognizing that capacity utilization was nearing maximum. Since then, the industry has been dealing with the challenge of increasing the top and bottom lines simultaneously. This has frequently proven elusive. The advent of activist investors has only raised the stakes. With the proposed Union Pacific-Norfolk Southern merger, the industry finds itself facing a new future but the same historical set of challenges. In retrospect, it is clear to see how we got here, but it is less clear where we are going. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

Oct. 14 marked the 45th anniversary of President Jimmy Carter signing The Harley O. Staggers Rail Act of 1980, named for the chairman of the House Committee on Interstate and Foreign Commerce (today the Committee on Energy and Commerce). However, the real “heavy lifting” to get the bill passed was by Rep. Jim Florio, the New Jersey Democrat who chaired the House Subcommittee on Commerce, Transportation, and Tourism. The Association of American Railroads (AAR) frequently points out how, by 1980, the railroad industry was on the brink of collapse until Congress passed bipartisan legislation to partially deregulate the industry, thereby allowing market-driven pricing, customer-specific contracts and the ability to shed unprofitable routes. However, this neglects the tortured decade of the 1970s when Congress was repeatedly drawn into legislating railroad matters. It started with The Rail Passenger Service Act of 1970, creating Amtrak. This relieved private railroads from their losses operating passenger service. But it was not enough to save Penn Central, so Congress passed the Regional Rail Reorganization Act of 1973 (the “3R Act”) to salvage viable freight operations from Penn Central and other failing rail lines in the Northeast, mid-Atlantic and Midwest. It created the United States Railway Association (USRA) to develop a “Final System Plan” for the reorganization into a single entity — Conrail. Finally, The Railroad Revitalization and Regulatory Reform Act of 1976 (The “4R Act”) approved the Final System Plan, enabling Conrail to start operations on April 1, 1976. It provided what it thought was sufficient funding — an initial federal “investment” of $2.026 billion for Conrail to acquire the assets of bankrupt Northeast and Midwest railroads and get its operations started. This funding turned out to be insufficient. Conrail subsequently sought and received an additional $3 billion. However, by 1979, it had almost exhausted that amount. Under the leadership of a new CEO, L. Stanley Crane, Conrail claimed that it could succeed as a private entity if the rail marketplace was deregulated. Regulation intended to perpetuate monopolies Railroads had been operating under a regulated system since the Interstate Commerce Act of 1887. This legislation was an early initiative of the Progressive era and preceded other efforts at regulation, such as the Sherman Antitrust Act three years later. The Interstate Commerce Commission (ICC) became the model for rate-of-return regulation of public utilities. The microeconomic theory is that a monopoly business can be regulated by having the government control the prices charged by the market to a level equal to the efficient costs of production, plus a government-permitted rate of return on capital. This model became the norm for oversight of many asset-based, network-operating businesses such as communications, utilities, and other transportation modes. What is overlooked by many is that — by design — regulation was intended to perpetuate monopolies because it ensured that excess capacity would be available in the event of war or other national emergencies. The monopoly license was maintained through a series of operating authorities that determined which providers could serve which markets. Consumers paid more — but hopefully not too much more. This legislation was passed when railroads were the primary means of freight and passenger transportation. However, the subsequent development of the Interstate Highway System and air traffic changed that dominant position. Meanwhile, the onset of persistent stagflation during the 1970s encouraged deregulatory efforts in many regulated industries. The Airline Deregulation Act of 1978 was a predecessor. However, the Interstate Commerce Commission, under Chairman Dan O’Neal, had already taken initiatives, permitted by the 4R Act, to deregulate certain rail sectors, such as intermodal. Key components of Staggers Act The Staggers Act had three key components: Railroads were able to negotiate contracts with a customer at market-based rates; reduced regulatory oversight over mergers and abandonments was enacted; and a regulatory backstop was established to protect shippers lacking effective competition. These legislative efforts completely inverted the commercial process. Regulation was cost-based pricing. Shippers were price takers. Deregulation begat price-based costing. The market determined the competitive price, and the carrier needed to find a way to produce the service so as to be profitable. This was accomplished in numerous ways: Railroad mergers enabled increased economies of scale and reduced overhead; technology supported cost reductions (e.g., end of train devices replacing the caboose); significant amounts of the networks were spun off to short line operations; and a reduction in train crew size from five to two and extending crew districts reduced costs significantly. The final step of this reduction required Congressional help in 1991, with the imposition of Presidential Emergency Board 219. But downsizing could only do so much. Topline growth was necessary. Into this opportunity stepped intermodal. As international traffic grew with globalization, a large part of the volume growth came from ocean carriers. Traditional domestic customers increased their volume, and major new customers, such as J.B. Hunt, entered as well. It was a win-win situation for everyone. Railroads filled excess capacity, and intermodal customers enjoyed reliable and cost-effective service. Everything went well until the summer of 1993. The weather that summer caused terrible service problems. As an industry, we missed the wakeup call. We were too eager to attribute the problems to a fluke weather condition, not recognizing that capacity utilization was nearing maximum. Since then, the industry has been dealing with the challenge of increasing the top and bottom lines simultaneously. This has frequently proven elusive. The advent of activist investors has only raised the stakes. With the proposed Union Pacific-Norfolk Southern merger, the industry finds itself facing a new future but the same historical set of challenges. In retrospect, it is clear to see how we got here, but it is less clear where we are going. Contact Ted Prince at ted@tricitiesintermodal.com .

A look back at the ‘Staggers Act’ and where the US rail industry is today

<div class="phx-topic abstract-wrapper">If the proposed Union Pacific–Norfolk Southern merger proceeds, the balance of power inside a little-known cooperative that serves as the industry’s shared equipment pool could shift dramatically.</div>

If the proposed Union Pacific–Norfolk Southern merger proceeds, the balance of power inside a little-known cooperative that serves as the industry’s shared equipment pool could shift dramatically.

<div class="phx-topic">When your railroad says “no cars available,” the problem usually isn’t a shortage. It’s a cooperative most shippers have never heard of — one that controls nearly every intermodal container, autorack and flatcar in North America. And if the proposed Union Pacific (UP)–Norfolk Southern (NS) merger proceeds, the balance of power inside that cooperative could shift dramatically. That cooperative is TTX Company. While shippers and unions debate potential service disruptions and job losses from the $85 billion merger announced in July, a more fundamental question has gone unasked: What happens when one railroad becomes the dominant voice in the industry’s shared equipment pool? <h3>The system you didn’t know existed </h3>TTX manages approximately 177,000 well cars, flats, autoracks and boxcars, representing about $17 billion in assets. It’s a neutral pool owned collectively by the Class I railroads, operating under Surface Transportation Board (STB) oversight since 1974. The concept is simple: Competing railroads share rolling stock rather than hoarding it. When a car finishes one move, it can be loaded again immediately, regardless of whose track it’s on next. This model has saved the industry billions in duplicate investment and given shippers a measure of reliability in an otherwise fragmented system. Cars flow to demand, not ownership. Repairs are standardized. Procurement is centralized. Until now, no single railroad has had enough control to tilt the playing field. <h3>Why the merger changes everything </h3>The combined Union Pacific–Norfolk Southern network would span nearly 60% of US rail route miles across 43 states, likely making them TTX’s largest shareholder by a significant margin. On paper, neutrality is guaranteed through the STB’s pooling agreement. In practice, concentration of influence can change incentives subtly, but powerfully. Who prioritizes which lanes for car replacement? Who decides where limited heavy-duty flats or autoracks are deployed first? When I was at Maersk negotiating large-scale rail contracts, we constantly ran into a black hole of visibility. Equipment was technically available, but no one could pinpoint where it was or who controlled the next move. The pooling model made coordination possible, but it also made accountability diffuse. Now imagine that opacity combined with ownership concentration. A railroad controlling the largest stake in TTX doesn’t need to explicitly starve competitors of equipment. It just needs to optimize for its own network first. Repairs get prioritized in its lanes. New equipment gets spec’d for its corridors. Allocation algorithms favor its terminals. The result isn’t dramatic — it’s death by a thousand micro-decisions that tilt velocity in one direction. <h3>What gravity looks like </h3>Every time a major shipper changes carriers, the math inside the TTX pool shifts. Steel doesn’t teleport. Cars must physically migrate through the network, a process that can take weeks. Shortages often follow commercial wins because the new carrier gains the freight before it gains the equipment. Even in a neutral pool, gravity takes time to reset. Post-merger, that shock absorption could become selective. If car allocation subtly favors the combined UP-NS lanes, competitors lose not just freight; they lose the equipment velocity needed to compete for the next contract. <h3>What the STB should do </h3>The STB received formal notice of the merger on July 30, 2025. The railroads plan to file their full application by Jan. 29, 2026, triggering a 16-month statutory review. The STB has broad authority to preserve equilibrium through independent TTX governance, fleet-allocation audits and service-performance metrics tied to pooling access. Whether those powers are used will determine if TTX remains the stabilizer it was built to be, or becomes another lever of competitive advantage hidden inside consolidation. The 1996 Union Pacific-Southern Pacific merger produced what the head of the nation’s largest rail union called a “massive meltdown.” Service disruptions lasted months. The STB should apply those lessons to equipment pooling now, before approval — not after the damage is done. <h3>What shippers should ask now </h3>Most customers never deal directly with TTX, but they feel its influence in every service metric. Don’t wait until after the merger is approved. Start asking pointed questions now: How do you measure car velocity in my lanes? Who controls the pool cars that serve my freight? What protections ensure neutrality if ownership concentration shifts? If your railroad can’t answer clearly, you’re not buying transportation, you’re buying uncertainty. <h3>The bottom line </h3>TTX doesn’t appear in marketing campaigns, but its model — shared steel, shared access — keeps the industry balanced. The merger debate has focused on jobs, rates and service promises. But the real test will be whether a system designed for competition can survive when one player holds the dominant stake. Because when the pool tips, everyone feels it. And once gravity shifts, it doesn’t shift back. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO), and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals &amp; Switches. Contact him at  <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

When your railroad says “no cars available,” the problem usually isn’t a shortage. It’s a cooperative most shippers have never heard of — one that controls nearly every intermodal container, autorack and flatcar in North America. And if the proposed Union Pacific (UP)–Norfolk Southern (NS) merger proceeds, the balance of power inside that cooperative could shift dramatically. That cooperative is TTX Company. While shippers and unions debate potential service disruptions and job losses from the $85 billion merger announced in July, a more fundamental question has gone unasked: What happens when one railroad becomes the dominant voice in the industry’s shared equipment pool? The system you didn’t know existed TTX manages approximately 177,000 well cars, flats, autoracks and boxcars, representing about $17 billion in assets. It’s a neutral pool owned collectively by the Class I railroads, operating under Surface Transportation Board (STB) oversight since 1974. The concept is simple: Competing railroads share rolling stock rather than hoarding it. When a car finishes one move, it can be loaded again immediately, regardless of whose track it’s on next. This model has saved the industry billions in duplicate investment and given shippers a measure of reliability in an otherwise fragmented system. Cars flow to demand, not ownership. Repairs are standardized. Procurement is centralized. Until now, no single railroad has had enough control to tilt the playing field. Why the merger changes everything The combined Union Pacific–Norfolk Southern network would span nearly 60% of US rail route miles across 43 states, likely making them TTX’s largest shareholder by a significant margin. On paper, neutrality is guaranteed through the STB’s pooling agreement. In practice, concentration of influence can change incentives subtly, but powerfully. Who prioritizes which lanes for car replacement? Who decides where limited heavy-duty flats or autoracks are deployed first? When I was at Maersk negotiating large-scale rail contracts, we constantly ran into a black hole of visibility. Equipment was technically available, but no one could pinpoint where it was or who controlled the next move. The pooling model made coordination possible, but it also made accountability diffuse. Now imagine that opacity combined with ownership concentration. A railroad controlling the largest stake in TTX doesn’t need to explicitly starve competitors of equipment. It just needs to optimize for its own network first. Repairs get prioritized in its lanes. New equipment gets spec’d for its corridors. Allocation algorithms favor its terminals. The result isn’t dramatic — it’s death by a thousand micro-decisions that tilt velocity in one direction. What gravity looks like Every time a major shipper changes carriers, the math inside the TTX pool shifts. Steel doesn’t teleport. Cars must physically migrate through the network, a process that can take weeks. Shortages often follow commercial wins because the new carrier gains the freight before it gains the equipment. Even in a neutral pool, gravity takes time to reset. Post-merger, that shock absorption could become selective. If car allocation subtly favors the combined UP-NS lanes, competitors lose not just freight; they lose the equipment velocity needed to compete for the next contract. What the STB should do The STB received formal notice of the merger on July 30, 2025. The railroads plan to file their full application by Jan. 29, 2026, triggering a 16-month statutory review. The STB has broad authority to preserve equilibrium through independent TTX governance, fleet-allocation audits and service-performance metrics tied to pooling access. Whether those powers are used will determine if TTX remains the stabilizer it was built to be, or becomes another lever of competitive advantage hidden inside consolidation. The 1996 Union Pacific-Southern Pacific merger produced what the head of the nation’s largest rail union called a “massive meltdown.” Service disruptions lasted months. The STB should apply those lessons to equipment pooling now, before approval — not after the damage is done. What shippers should ask now Most customers never deal directly with TTX, but they feel its influence in every service metric. Don’t wait until after the merger is approved. Start asking pointed questions now: How do you measure car velocity in my lanes? Who controls the pool cars that serve my freight? What protections ensure neutrality if ownership concentration shifts? If your railroad can’t answer clearly, you’re not buying transportation, you’re buying uncertainty. The bottom line TTX doesn’t appear in marketing campaigns, but its model — shared steel, shared access — keeps the industry balanced. The merger debate has focused on jobs, rates and service promises. But the real test will be whether a system designed for competition can survive when one player holds the dominant stake. Because when the pool tips, everyone feels it. And once gravity shifts, it doesn’t shift back. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO), and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals & Switches. Contact him at   paul.tonsager@multimodalsolutions.io .

UP-NS merger could mean new dominant voice inside rail industry cooperative

Year-over-year % change

PIERS containerized US import and export volumes is the transportation industry’s largest US waterborne trade data set, covering all US ports. Every day, the PIERS team processes an average of about 60,000 bills of lading filed with US Customs and Border Protection (CBP) and integrates this transactional trade data with standardized company details. PIERS contains US trade data going back to 2003. [PIERS](https://www.spglobal.com/marketintelligence/en/mi/products/piers.html)

Asia to US container volumes (PIERS)

PIERS Total US imports from Asia (Monthly) (year-over-year change) Gateway

<div class="phx-topic abstract-wrapper">The carrier’s CEO also confirmed Gemini is mulling a price premium, which he forecast would be a “small three-digit number per TEU” to reflect the inventory cost savings customers achieve through the alliance’s consistent on-time delivery.</div>

The carrier’s CEO also confirmed Gemini is mulling a price premium, which he forecast would be a “small three-digit number per TEU” to reflect the inventory cost savings customers achieve through the alliance’s consistent on-time delivery.

<div class="phx-topic">Hapag-Lloyd is refining the Gemini Cooperation hub-and-spoke network with partner Maersk that will likely see some extra port calls and others removed from Gemini services, CEO Rolf Habben Jansen said Thursday. The review is considering “what worked well and what could be improved,” Habben Jansen said during the carrier’s third-quarter results briefing. “We’ll wrap up the review, then ... inform the market, but don’t expect anything revolutionary,” he said. The changes will “strengthen reliability and unlock cost efficiencies, with full cost savings run rate expected by 2026,” Hapag-Lloyd said. Habben Jansen also confirmed <a href="https://www.joc.com/article/value-unlocked-by-gemini-will-clear-path-for-premium-charge-maersk-ceo-6111339">Gemini is mulling a price premium</a>, which he forecast would be a “small three-digit number per TEU” to reflect the inventory cost savings customers achieve through Gemini’s consistent on-time delivery. The CEO gave no further details of the changes, but said Gemini has consistently delivered monthly schedule reliability of 89% to 95% since its launch in February, citing data from Sea-Intelligence Maritime Analysis. That is significantly better than its closest competitors, who had schedule reliability ranging between 70% and 80% from February through September. “We are very happy with [Gemini],” Habben Jansen said. “We hit 90% schedule reliability almost from Day 1.” <h3>Possible expansion of hub-and-spoke model </h3>That reliability helped drive an above-market increase in container volumes for Hapag-Lloyd, growing 9% to 10.2 million TEUs in the first nine months of the year. Most of the increase was on trans-Pacific and Asia-Europe trades, while volumes on the trans-Atlantic, Africa and inter-regional trades were stable. Highlighting the gains, the carrier said trans-Pacific volumes rose to 3 million TEUs this year through September, from 2.5 million TEUs in the same period last year, while Asia-Europe liftings climbed to 3 million TEUs from 2.7 million TEUs. Habben Jansen said while the focus over the next 12 to 18 months is to improve reliability of the current Gemini network schedule, there is potential to adopt Gemini’s hub-and-spoke model in other trades. He said if Hapag-Lloyd did decide to expand the concept, it would have to assess how and where it could be done and “with whom.” Habben Jansen also confirmed the carrier is in talks to add 22 ships to its fleet that would be a mix of newbuildings ordered direct from shipyards and vessels taken on long-term charter. “Final negotiations are going on” with details likely confirmed “in the next 30 days,” he said. The new ships would vary between 1,800 TEUs, 3,000 TEUs and 4,500 TEUs and replace older, less fuel-efficient vessels in the carrier’s 305-strong fleet. “We have a fair number of ships that are reaching 25 years,” Habben Jansen said. The carrier is also planning to continue expanding its terminals business “through acquisitions and synergies with our liner business,” although Habben Jansen said there were no further details to give at this stage. The CEO forecast full-year 2025 revenues at $23 billion. “Rates came back from early October,” he said. “In the last couple of weeks, bookings have been really strong.” Habben Jansen, meanwhile, said the carrier had no immediate plans to return to the Red Sea and Suez Canal region following the latest Houthi ceasefire. “We always said we’d like to see some stability,” he said, pointing out that previous ceasefires were later broken. Hapag-Lloyd saw group net profit fall 86% to $161 million in the third quarter, down from $1.1 billion in the prior year. Revenue fell 11% to $5.4 billion in the third quarter, with liner shipping contributing $5.3 billion and terminals $130 million. The carrier’s average freight rate in the quarter slipped to $1,391 per TEU from $1,612/TEU. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Hapag-Lloyd is refining the Gemini Cooperation hub-and-spoke network with partner Maersk that will likely see some extra port calls and others removed from Gemini services, CEO Rolf Habben Jansen said Thursday. The review is considering “what worked well and what could be improved,” Habben Jansen said during the carrier’s third-quarter results briefing. “We’ll wrap up the review, then ... inform the market, but don’t expect anything revolutionary,” he said. The changes will “strengthen reliability and unlock cost efficiencies, with full cost savings run rate expected by 2026,” Hapag-Lloyd said. Habben Jansen also confirmed Gemini is mulling a price premium , which he forecast would be a “small three-digit number per TEU” to reflect the inventory cost savings customers achieve through Gemini’s consistent on-time delivery. The CEO gave no further details of the changes, but said Gemini has consistently delivered monthly schedule reliability of 89% to 95% since its launch in February, citing data from Sea-Intelligence Maritime Analysis. That is significantly better than its closest competitors, who had schedule reliability ranging between 70% and 80% from February through September. “We are very happy with [Gemini],” Habben Jansen said. “We hit 90% schedule reliability almost from Day 1.” Possible expansion of hub-and-spoke model That reliability helped drive an above-market increase in container volumes for Hapag-Lloyd, growing 9% to 10.2 million TEUs in the first nine months of the year. Most of the increase was on trans-Pacific and Asia-Europe trades, while volumes on the trans-Atlantic, Africa and inter-regional trades were stable. Highlighting the gains, the carrier said trans-Pacific volumes rose to 3 million TEUs this year through September, from 2.5 million TEUs in the same period last year, while Asia-Europe liftings climbed to 3 million TEUs from 2.7 million TEUs. Habben Jansen said while the focus over the next 12 to 18 months is to improve reliability of the current Gemini network schedule, there is potential to adopt Gemini’s hub-and-spoke model in other trades. He said if Hapag-Lloyd did decide to expand the concept, it would have to assess how and where it could be done and “with whom.” Habben Jansen also confirmed the carrier is in talks to add 22 ships to its fleet that would be a mix of newbuildings ordered direct from shipyards and vessels taken on long-term charter. “Final negotiations are going on” with details likely confirmed “in the next 30 days,” he said. The new ships would vary between 1,800 TEUs, 3,000 TEUs and 4,500 TEUs and replace older, less fuel-efficient vessels in the carrier’s 305-strong fleet. “We have a fair number of ships that are reaching 25 years,” Habben Jansen said. The carrier is also planning to continue expanding its terminals business “through acquisitions and synergies with our liner business,” although Habben Jansen said there were no further details to give at this stage. The CEO forecast full-year 2025 revenues at $23 billion. “Rates came back from early October,” he said. “In the last couple of weeks, bookings have been really strong.” Habben Jansen, meanwhile, said the carrier had no immediate plans to return to the Red Sea and Suez Canal region following the latest Houthi ceasefire. “We always said we’d like to see some stability,” he said, pointing out that previous ceasefires were later broken. Hapag-Lloyd saw group net profit fall 86% to $161 million in the third quarter, down from $1.1 billion in the prior year. Revenue fell 11% to $5.4 billion in the third quarter, with liner shipping contributing $5.3 billion and terminals $130 million. The carrier’s average freight rate in the quarter slipped to $1,391 per TEU from $1,612/TEU. Contact Keith Wallis at keithwallis@hotmail.com .

Hapag-Lloyd refining Gemini network to improve efficiencies: Habben Jansen

<div class="phx-topic abstract-wrapper">With 196,000 TEUs of new capacity added to its fleet, the latest orders mean Evergreen will leapfrog both Hapag-Lloyd and Ocean Network Express in global capacity to become the fifth-largest container line.</div>

With 196,000 TEUs of new capacity added to its fleet, the latest orders mean Evergreen will leapfrog both Hapag-Lloyd and Ocean Network Express in global capacity to become the fifth-largest container line.

<div class="phx-topic">Taiwan’s Evergreen Marine on Wednesday confirmed an order for 14 14,000-TEU liquefied natural gas (LNG)-fueled ships that could cost almost $3 billion, with the vessels split between South Korea’s Samsung Heavy Industries and China’s Guangzhou Shipyard International. Evergreen said each ship would cost between $175 million and $205 million, taking the total cost to between $2.45 billion and $2.9 million. The two shipbuilders will construct seven vessels each. The deals were approved at an Evergreen Marine (Asia) board of directors meeting Wednesday, the carrier said in a filing to the Taiwan stock exchange, ending recent speculation by shipbrokers that Evergreen was readying a massive order. With 196,000 TEUs of new capacity added to its fleet, the latest orders mean Evergreen will leapfrog both Hapag-Lloyd and Ocean Network Express in global capacity to become the fifth-largest container line, up from seventh place. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="82b6ff12-d7ca-420a-abbe-7b9998b29e56"></dynamic-object></div>Fleet data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global, shows the latest deals boost Evergreen’s total capacity to 2,747,549 TEUs, against 2,606,972 TEUs for ONE and 2,360,562 TEUs for Hapag-Lloyd. The orders also reinforce LNG as the next generation fuel of choice for carriers, increasing the total number of LNG-fueled container ships on order to about 380, according to S&amp;P Global Market Intelligence. <h3>Q3 financials up from Q2, but down from year-ago period </h3>The green light for the new ships came as Evergreen, together with Taiwan’s two other top carriers — Yang Ming Marine Transport and Wan Hai Lines — announced a rebound in third-quarter net profits compared with the second quarter, buoyed by a recovery in freight rates in July as shippers frontloaded cargo to beat US tariffs. But third-quarter financials were lower across the board compared with the 2024 third quarter. Evergreen led the pack with net profit of $700 million, the carrier said in a separate exchange filing Wednesday, up from $403 million in the second quarter but down 63% compared with $1.9 billion in the third quarter last year. Operating revenues fell 34% to $3.1 billion in the third quarter from $4.7 billion a year earlier, the filing showed. Yang Ming Marine saw third-quarter net profit climb to $194 million, the carrier said Wednesday, up from $31 million in the second quarter but down from $890 million in the third quarter last year. Third-quarter operating revenues of almost $1.4 billion were similar to the previous two quarters, although down 39% from $2.3 billion in the prior year. “Compared with the same period in 2024, weaker freight rates resulted in softer profitability,” Yang Ming said in a statement. Yang Ming, the only one of the three carriers to comment on the market, said it was hopeful that the temporary pause in US-China tariff tensions “may help stimulate pre-Lunar New Year shipment demand on trans-Pacific routes.” The carrier said the intra-Asia and Middle East markets were “expected to remain steady, supported by stable demand.” “Despite persistent global trade policy uncertainty and elevated geopolitical risks, Yang Ming has continued to maintain schedule reliability and enhance operational efficiency, supporting steady business performance,” it said. Meanwhile, intra-Asia-focused Wan Hai Lines saw third-quarter net profit climb to $363 million, up from $41 million in the second quarter but almost half the $600 million reported in the third quarter last year. Operating revenues in the third quarter were $1.1 billion, in line with the previous two quarters but down 35% from $1.7 billion a year earlier. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Taiwan’s Evergreen Marine on Wednesday confirmed an order for 14 14,000-TEU liquefied natural gas (LNG)-fueled ships that could cost almost $3 billion, with the vessels split between South Korea’s Samsung Heavy Industries and China’s Guangzhou Shipyard International. Evergreen said each ship would cost between $175 million and $205 million, taking the total cost to between $2.45 billion and $2.9 million. The two shipbuilders will construct seven vessels each. The deals were approved at an Evergreen Marine (Asia) board of directors meeting Wednesday, the carrier said in a filing to the Taiwan stock exchange, ending recent speculation by shipbrokers that Evergreen was readying a massive order. With 196,000 TEUs of new capacity added to its fleet, the latest orders mean Evergreen will leapfrog both Hapag-Lloyd and Ocean Network Express in global capacity to become the fifth-largest container line, up from seventh place. Fleet data from Sea-web, a sister company of the Journal of Commerce within S&P Global, shows the latest deals boost Evergreen’s total capacity to 2,747,549 TEUs, against 2,606,972 TEUs for ONE and 2,360,562 TEUs for Hapag-Lloyd. The orders also reinforce LNG as the next generation fuel of choice for carriers, increasing the total number of LNG-fueled container ships on order to about 380, according to S&P Global Market Intelligence. Q3 financials up from Q2, but down from year-ago period The green light for the new ships came as Evergreen, together with Taiwan’s two other top carriers — Yang Ming Marine Transport and Wan Hai Lines — announced a rebound in third-quarter net profits compared with the second quarter, buoyed by a recovery in freight rates in July as shippers frontloaded cargo to beat US tariffs. But third-quarter financials were lower across the board compared with the 2024 third quarter. Evergreen led the pack with net profit of $700 million, the carrier said in a separate exchange filing Wednesday, up from $403 million in the second quarter but down 63% compared with $1.9 billion in the third quarter last year. Operating revenues fell 34% to $3.1 billion in the third quarter from $4.7 billion a year earlier, the filing showed. Yang Ming Marine saw third-quarter net profit climb to $194 million, the carrier said Wednesday, up from $31 million in the second quarter but down from $890 million in the third quarter last year. Third-quarter operating revenues of almost $1.4 billion were similar to the previous two quarters, although down 39% from $2.3 billion in the prior year. “Compared with the same period in 2024, weaker freight rates resulted in softer profitability,” Yang Ming said in a statement. Yang Ming, the only one of the three carriers to comment on the market, said it was hopeful that the temporary pause in US-China tariff tensions “may help stimulate pre-Lunar New Year shipment demand on trans-Pacific routes.” The carrier said the intra-Asia and Middle East markets were “expected to remain steady, supported by stable demand.” “Despite persistent global trade policy uncertainty and elevated geopolitical risks, Yang Ming has continued to maintain schedule reliability and enhance operational efficiency, supporting steady business performance,” it said. Meanwhile, intra-Asia-focused Wan Hai Lines saw third-quarter net profit climb to $363 million, up from $41 million in the second quarter but almost half the $600 million reported in the third quarter last year. Operating revenues in the third quarter were $1.1 billion, in line with the previous two quarters but down 35% from $1.7 billion a year earlier. Contact Keith Wallis at keithwallis@hotmail.com .

Evergreen says will spend almost $3 billion on 14 new LNG-fueled ships

<div class="phx-topic abstract-wrapper">While premium pricing has long been elusive for ocean carriers, the cost benefits from the Maersk-Hapag Lloyd alliance may prove to be enough to justify overhauling the network.</div>

While premium pricing has long been elusive for ocean carriers, the cost benefits from the Maersk-Hapag Lloyd alliance may prove to be enough to justify overhauling the network.

<div class="phx-topic">More than nine months into the Gemini Cooperation’s journey — possibly the most radical reinvention ever attempted in container shipping — two things are becoming clear: stated schedule reliability that is well above industry averages has largely been achieved and doubts about its sustainability are fading. A hub-and-spoke network able to keep feeder ships filled is lowering costs, mimicking the common-feeder model in place for decades in Asia and other regions. The one big unanswered question that remains is whether, or to what extent, premium revenue can be extracted from shippers by Gemini partners Maersk and Hapag-Lloyd. Maersk, <a href="https://www.joc.com/article/value-unlocked-by-gemini-will-clear-path-for-premium-charge-maersk-ceo-6111339">during its third-quarter earnings release last week</a>, provided the clearest picture to date on that very question. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6113169_0.1.jpg"></img></div>CEO Vincent Clerc said he believed premium pricing is coming, but that trust in Gemini’s reliability needed to be more firmly entrenched beyond the standards established thus far. “We need to be certain that we have a long enough track record that it unlocks value for them [shippers], that we can then capture some of that value for us,” Clerc told analysts. But a tantalizing possibility may be emerging: It might not actually matter. The reason is that while premium pricing has long been elusive for ocean carriers, the cost benefits from Gemini may themselves prove to be enough to justify overhauling the network. Maersk cited annualized cost savings of $720 million to $950 million through the implementation of the Gemini network as a result of lower bunker costs and greater asset utilization. This is coming from higher utilization of ships and shorter sailing distances, which resulted in 6% higher capacity but 3% lower total fuel consumption. Running ships at a higher utilization in the network, Clerc said, allows the carrier to transport more volumes at the same capacity. Carriers such as Singapore-based X-Press Feeders and Bengal Tiger Line handle large carriers’ feeder volumes by keeping costs lower through higher utilization than the carriers have been able to achieve on their own. On the cost structure, “we are opening up a gap now with Gemini that is going to be ... quite handy, especially in the current rate environment,” Clerc said. “It’s a pretty significant lever that we have unlocked here,” stemming in part from using “fit-for-purpose shuttles rather than underutilized mainliners,” he added. The revenue side is less clear. It is unclear how much of a premium revenue opportunity exists by offering high schedule reliability. In prior eras, carriers invested significant sums in fuel to stay on schedule only for a weak market to undercut their argument for premium rates. Indeed, whether investing more in fuel to keep ships on schedule, deploying 53-foot ocean containers to allow customs to load more cargo or departing every day on time as was envisioned in Daily Maersk, there has been little in terms of premium pricing over a period of decades to show for it. <h3>Premium appetites? </h3>A market exists; the question is how big. The existence of high-reliability, premium-priced services offered by Matson, UWL, Zim Integrated Shipping Services and Tailwind on the Asia-Europe trade point to a segment of the shipper market able to capture supply chain value from reliable schedules. Also, in limited cases, some large shippers have shown themselves willing to pay a premium for preferential stowage, leading to expedited movement of containers off the ship and through the terminal, including for so-called peel-off stacks. The Gemini partners, however, believe a fundamental value proposition continues to exist by enabling customers to slash costs by reducing inventory. “I am optimistic that if someone can remove $10 million a day and [they can] save two weeks in that, that I can get a premium,” Stuart Sandlin, Hapag-Lloyd’s regional president for the Americas, told the South Carolina International Trade Conference on Oct. 29. “I candidly think [Gemini is] a premium product and should command some sort of premium price.” As Clerc put it on the earnings call: “Today, every customer has a buffer stock and that reliability needs to unlock a reduction of that buffer stock. They need to trust that [Gemini] has weathered sufficient ups and downs and is steady [so] that they can take out some of that buffer stock. And if they do, they pocket that savings and then we can capture some of it in form of a premium.” For both Maersk and Hapag-Lloyd, the Gemini network fits respective strategies and approaches to the market. It harks back to hub-and-spoke networks of an earlier day and is true to Maersk’s historic DNA of running on time, a source of tension within the former 2M alliance with Mediterranean Shipping Co. For Hapag-Lloyd, it can’t promote itself as the best major carrier in terms of service quality, its stated objective, and not run on time. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

More than nine months into the Gemini Cooperation’s journey — possibly the most radical reinvention ever attempted in container shipping — two things are becoming clear: stated schedule reliability that is well above industry averages has largely been achieved and doubts about its sustainability are fading. A hub-and-spoke network able to keep feeder ships filled is lowering costs, mimicking the common-feeder model in place for decades in Asia and other regions. The one big unanswered question that remains is whether, or to what extent, premium revenue can be extracted from shippers by Gemini partners Maersk and Hapag-Lloyd. Maersk, during its third-quarter earnings release last week , provided the clearest picture to date on that very question. CEO Vincent Clerc said he believed premium pricing is coming, but that trust in Gemini’s reliability needed to be more firmly entrenched beyond the standards established thus far. “We need to be certain that we have a long enough track record that it unlocks value for them [shippers], that we can then capture some of that value for us,” Clerc told analysts. But a tantalizing possibility may be emerging: It might not actually matter. The reason is that while premium pricing has long been elusive for ocean carriers, the cost benefits from Gemini may themselves prove to be enough to justify overhauling the network. Maersk cited annualized cost savings of $720 million to $950 million through the implementation of the Gemini network as a result of lower bunker costs and greater asset utilization. This is coming from higher utilization of ships and shorter sailing distances, which resulted in 6% higher capacity but 3% lower total fuel consumption. Running ships at a higher utilization in the network, Clerc said, allows the carrier to transport more volumes at the same capacity. Carriers such as Singapore-based X-Press Feeders and Bengal Tiger Line handle large carriers’ feeder volumes by keeping costs lower through higher utilization than the carriers have been able to achieve on their own. On the cost structure, “we are opening up a gap now with Gemini that is going to be ... quite handy, especially in the current rate environment,” Clerc said. “It’s a pretty significant lever that we have unlocked here,” stemming in part from using “fit-for-purpose shuttles rather than underutilized mainliners,” he added. The revenue side is less clear. It is unclear how much of a premium revenue opportunity exists by offering high schedule reliability. In prior eras, carriers invested significant sums in fuel to stay on schedule only for a weak market to undercut their argument for premium rates. Indeed, whether investing more in fuel to keep ships on schedule, deploying 53-foot ocean containers to allow customs to load more cargo or departing every day on time as was envisioned in Daily Maersk, there has been little in terms of premium pricing over a period of decades to show for it. Premium appetites? A market exists; the question is how big. The existence of high-reliability, premium-priced services offered by Matson, UWL, Zim Integrated Shipping Services and Tailwind on the Asia-Europe trade point to a segment of the shipper market able to capture supply chain value from reliable schedules. Also, in limited cases, some large shippers have shown themselves willing to pay a premium for preferential stowage, leading to expedited movement of containers off the ship and through the terminal, including for so-called peel-off stacks. The Gemini partners, however, believe a fundamental value proposition continues to exist by enabling customers to slash costs by reducing inventory. “I am optimistic that if someone can remove $10 million a day and [they can] save two weeks in that, that I can get a premium,” Stuart Sandlin, Hapag-Lloyd’s regional president for the Americas, told the South Carolina International Trade Conference on Oct. 29. “I candidly think [Gemini is] a premium product and should command some sort of premium price.” As Clerc put it on the earnings call: “Today, every customer has a buffer stock and that reliability needs to unlock a reduction of that buffer stock. They need to trust that [Gemini] has weathered sufficient ups and downs and is steady [so] that they can take out some of that buffer stock. And if they do, they pocket that savings and then we can capture some of it in form of a premium.” For both Maersk and Hapag-Lloyd, the Gemini network fits respective strategies and approaches to the market. It harks back to hub-and-spoke networks of an earlier day and is true to Maersk’s historic DNA of running on time, a source of tension within the former 2M alliance with Mediterranean Shipping Co. For Hapag-Lloyd, it can’t promote itself as the best major carrier in terms of service quality, its stated objective, and not run on time. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Gemini delivers cost savings as it marks a path to premium pricing

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

In 1995, we began operations with a clear vision: to grow alongside Mexico and connect the world through our terminals. Our priority has always been to deliver excellence in service, foster economic development, and strengthen our communities. We firmly believe that progress is not only measured in tons of cargo moved, but in the opportunities we create. _______________________________________________________________ This year marks a significant milestone: SSA Marine Mexico celebrates 30 years of presence in the country, having established itself from day one as the leading port operator nationwide. Over the past three decades, we have built a legacy of reliability, innovation, and commitment to Mexico’s growth. Our journey has been defined by continuous evolution and a steadfast dedication to our mission. SSA Marine México currently operates in six of the country’s most important ports: Cozumel, Lazaro Cardenas, Manzanillo, Progreso, Tuxpan, and Veracruz. Additionally, we have signed a concession to operate a new multipurpose terminal in Guaymas, Sonora, expanding our footprint to the north of the country. We serve a wide range of segments including containers, general cargo, automobiles, cruise ships, hydrocarbons, and asphalt. As part of this ongoing commitment, SSA Marine Mexico continues to strengthen its infrastructure and capabilities. International trade remains a key driver of global economic growth, and we are proud to support this momentum. Through our continuous improvement strategy, we invest in cutting-edge technology and equipment to deliver more efficient and competitive services, contributing to the success of Mexican businesses. •	Manzanillo, Colima- Specialized Container Terminal I: On October 13, we celebrated the arrival of two new STS (Ship To Shore) Super Post Panamax dockside cranes. This $21.2 million USD investment significantly boosts our operational capacity, streamlining cargo reception and delivery processes. In line with our modernization efforts, we will also retire four of our oldest cranes, paving the way for a more sustainable and technologically advanced fleet that meets the evolving demands of international trade. With these upgrades, SSA Marine México now operates a total of 16 cranes along our 1,350-meter dock, reaffirming our position as a national benchmark in port <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-4_3 joc_admin__inline-image-position-left joc_admin__inline-image-size-large" data-figure-size="large" data-figure-position="left" data-figure-aspect-ratio="4:3"><img src="/content-assets/1760982635607_Manzanillo.jpg" alt="Image provided by SSA Marine" class="joc_admin__inline-image-inherit"> •	As for the Multipurpose Terminal and Specialized Facility, also in Manzanillo, Colima, improvement and conditioning works are planned, along with the acquisition of four E-RTG (Electric Rubber-Tyred Gantry) cranes to enhance operational efficiency and sustainability. •	At our Automobile and General Cargo Terminal in the port of Veracruz, we continue to lead with specialized value-added services that support our clients’ growth. Recent investments include a new washing cabin and a general cargo warehouse, increasing indoor storage capacity by 67%. •	Lazaro Cardenas, Michoacan – Specialized Automobile Terminal: we are working on the development of an additional 4-hectare storage space within our bonded area and a 10-hectare Vehicle Distribution Center (VDC). These enhancements, along with ongoing personnel and system improvements, will reinforce our leadership in automotive handling across the Mexican Pacific coast.<span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-4_3 joc_admin__inline-image-position-left joc_admin__inline-image-size-large" data-figure-size="large" data-figure-position="left" data-figure-aspect-ratio="4:3"><img src="/content-assets/1760982742240_Lazaro.jpg" alt="Image provided by SSA Marine" class="joc_admin__inline-image-inherit"> Through these strategic investments, SSA Marine Mexico reaffirms its commitment to the sustained growth of Mexico’s foreign trade. By expanding capacity, modernizing infrastructure, and diversifying services, we continue to strengthen the country’s competitiveness in global logistics. Today, we celebrate three decades of dedication, innovation, and leadership, with deep gratitude to our employees, clients, and partners for being part of this incredible journey. LINK: https://www.ssamarine.mx/<span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-16_9 joc_admin__inline-image-position-left joc_admin__inline-image-size-small" data-figure-size="small" data-figure-position="left" data-figure-aspect-ratio="16:9"><img src="/content-assets/1760982787360_SSA%20Marine%20Mexico%20logo%20150pxW.png" alt="" class="joc_admin__inline-image-inherit">

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SSA Marine Mexico: 30 years growing together.

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Quarterly Intelligence

<div class="phx-topic abstract-wrapper">Beijing is expected to soon announce the start date of its own 12-month pause on reciprocal port fees on US ships, a deal that was agreed to last week as part of a broad trade framework hammered out by the two superpowers.</div>

Beijing is expected to soon announce the start date of its own 12-month pause on reciprocal port fees on US ships, a deal that was agreed to last week as part of a broad trade framework hammered out by the two superpowers.

<div class="phx-topic">The year-long pause on US port fees for Chinese-operated or -built ships, <a href="https://www.joc.com/article/us-china-suspend-reciprocal-port-fees-as-part-of-wider-trade-deal-6105849">agreed to last week between US and Chinese officials</a>, will start on Nov. 10, the White House announced Saturday. The move will pave the way for China to lift its retaliatory port fees on US-owned and -controlled vessels, although there was no immediate response from Beijing whether its suspension of port charges will occur on the same day as the US action. But one Hong Kong-based analyst expected China to end its charges on Nov. 10 or shortly after, repeating what happened when China followed the US in imposing reciprocal port call charges on Oct. 14. During the 12-month pause in port fees, “the US will negotiate with China” over Beijing’s alleged dominance in the maritime, logistics and shipbuilding sectors, the White House statement said, without giving further details. Those talks would take place while the US continued “its historic cooperation with the Republic of Korea and Japan on revitalizing American shipbuilding,” the statement added. The Nov. 10 date was announced in a statement that also gave further details of the trade concessions agreed to by both sides during talks in Kuala Lumpur, Malaysia, on Oct. 26 and confirmed by presidents Donald Trump and Xi Jinping at their meeting in South Korea last Thursday. The broad agreement will see China purchase at least 12 million metric tons of US soybeans during the last two months of this year and buy at least 25 million metric tons a year in 2026, 2027 and 2028. Additionally, China will resume purchases of US sorghum and hardwood logs. China will also suspend all the retaliatory tariffs announced since March 4, including levies “on a vast swath of US agricultural products including chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products,” the White House statement said. China will suspend or remove all retaliatory non-tariff countermeasures taken against the US since March, the statement added. “China will further extend the expiration of its market-based tariff exclusion process for imports from the United States and exclusions will remain valid until Dec. 31, 2026,” the White House said. “China will terminate its various investigations targeting US companies in the semiconductor supply chain, including its antitrust, anti-monopoly, and anti-dumping investigations." The White House did not give any timeframe for China’s implementation of the trade concessions. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a08410a8-0b00-4c48-9ef6-78b6354f0678"></dynamic-object></div>For its part, the US will end the 10% so-called “fentanyl tariffs” on Nov. 10 and maintain its suspension of heightened reciprocal tariffs on Chinese imports until Nov. 10, 2026. The current 10% reciprocal tariff will remain in effect during the suspension period, the statement said. US imports from China have fallen sharply since mid-year amid the trade dispute. Imports hit 984,280 TEUs in July, the second-highest mark in 2025, then fell in August and September, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. <h3>Questions remain </h3>Despite the US-China deal on port fees, Brian Maloney, a partner at New York-based law firm Seward &amp; Kissel’s maritime and transportation group, said there are still many questions to be answered. “Will this apply to foreign-built vehicle carriers and ro/ro vessels or will the pause apply only to the fees for Chinese-owned, -operated or -built vessels?,” Maloney said. “When will the Chinese response pause kick in, which could matter for vessels actively trading? And will either country extend retroactive relief to Oct. 14?” Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce contributor, said the lower tariffs open a window of opportunity for US shippers. “The question is whether it will prompt a boost in shipments — effectively pulling the seasonal boost from Chinese New Year forward by more than a month,” Jensen said <a href="https://www.linkedin.com/feed/update/urn:li:activity:7391046713332875264/">in a LinkedIn post Monday</a>. “The coming weeks will show whether this is going to happen, or whether US importers see the upside of lower tariffs more than counteracted by a risk of consumer spending slowdown in the US.” Jensen pointed out that shippers will have to go through the details of how the deal impacts them specifically. “But it is important to note here that almost all US actions are temporary in the sense that actions are merely paused until Nov. 10, 2026,” he wrote. “This means that more trade talks will have to happen prior to that date, and with this comes the risk of more changes [positive or negative]." Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

The year-long pause on US port fees for Chinese-operated or -built ships, agreed to last week between US and Chinese officials , will start on Nov. 10, the White House announced Saturday. The move will pave the way for China to lift its retaliatory port fees on US-owned and -controlled vessels, although there was no immediate response from Beijing whether its suspension of port charges will occur on the same day as the US action. But one Hong Kong-based analyst expected China to end its charges on Nov. 10 or shortly after, repeating what happened when China followed the US in imposing reciprocal port call charges on Oct. 14. During the 12-month pause in port fees, “the US will negotiate with China” over Beijing’s alleged dominance in the maritime, logistics and shipbuilding sectors, the White House statement said, without giving further details. Those talks would take place while the US continued “its historic cooperation with the Republic of Korea and Japan on revitalizing American shipbuilding,” the statement added. The Nov. 10 date was announced in a statement that also gave further details of the trade concessions agreed to by both sides during talks in Kuala Lumpur, Malaysia, on Oct. 26 and confirmed by presidents Donald Trump and Xi Jinping at their meeting in South Korea last Thursday. The broad agreement will see China purchase at least 12 million metric tons of US soybeans during the last two months of this year and buy at least 25 million metric tons a year in 2026, 2027 and 2028. Additionally, China will resume purchases of US sorghum and hardwood logs. China will also suspend all the retaliatory tariffs announced since March 4, including levies “on a vast swath of US agricultural products including chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products,” the White House statement said. China will suspend or remove all retaliatory non-tariff countermeasures taken against the US since March, the statement added. “China will further extend the expiration of its market-based tariff exclusion process for imports from the United States and exclusions will remain valid until Dec. 31, 2026,” the White House said. “China will terminate its various investigations targeting US companies in the semiconductor supply chain, including its antitrust, anti-monopoly, and anti-dumping investigations." The White House did not give any timeframe for China’s implementation of the trade concessions. For its part, the US will end the 10% so-called “fentanyl tariffs” on Nov. 10 and maintain its suspension of heightened reciprocal tariffs on Chinese imports until Nov. 10, 2026. The current 10% reciprocal tariff will remain in effect during the suspension period, the statement said. US imports from China have fallen sharply since mid-year amid the trade dispute. Imports hit 984,280 TEUs in July, the second-highest mark in 2025, then fell in August and September, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Questions remain Despite the US-China deal on port fees, Brian Maloney, a partner at New York-based law firm Seward & Kissel’s maritime and transportation group, said there are still many questions to be answered. “Will this apply to foreign-built vehicle carriers and ro/ro vessels or will the pause apply only to the fees for Chinese-owned, -operated or -built vessels?,” Maloney said. “When will the Chinese response pause kick in, which could matter for vessels actively trading? And will either country extend retroactive relief to Oct. 14?” Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce contributor, said the lower tariffs open a window of opportunity for US shippers. “The question is whether it will prompt a boost in shipments — effectively pulling the seasonal boost from Chinese New Year forward by more than a month,” Jensen said in a LinkedIn post Monday . “The coming weeks will show whether this is going to happen, or whether US importers see the upside of lower tariffs more than counteracted by a risk of consumer spending slowdown in the US.” Jensen pointed out that shippers will have to go through the details of how the deal impacts them specifically. “But it is important to note here that almost all US actions are temporary in the sense that actions are merely paused until Nov. 10, 2026,” he wrote. “This means that more trade talks will have to happen prior to that date, and with this comes the risk of more changes [positive or negative]." Contact Keith Wallis at keithwallis@hotmail.com .

Year-long pause on US port fees targeting China vessels to start Nov. 10

<div class="phx-topic abstract-wrapper">The yawning imbalance between China’s imports and exports is another way functional ocean capacity, like with port congestion, is being sapped by forces beyond the control of ocean carriers. </div>

The yawning imbalance between China’s imports and exports is another way functional ocean capacity, like with port congestion, is being sapped by forces beyond the control of ocean carriers.

<div class="phx-topic">The widening imbalance between what China exports and imports is beginning to absorb functional container ship tonnage, requiring more container equipment and handling. Manufacturers in China have been able to find new export markets outside of the United States since Washington launched an onslaught of tariffs in April, and, notably, kept growing those markets even as domestic consumption lags. The ratio of China exports to imports in the last two years has steadily risen from 3.12 to 3.29, according to a 12-month rolling analysis of data from Container Trade Statistics (CTS). <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6118381_0.1.jpg"></img></div>“The momentum [out of China] is strong,” Maersk CEO Vincent Clerc said during the carrier’s Nov. 6 third-quarter earnings call. “The consequence for us is not only the resilience of demand growth, which will contribute to absorbing some of the new capacity coming online, but also the increased trade imbalance that it is causing, which over time will lead to higher production costs and lower asset intensity for the industry.” The yawning imbalance between China’s import and exports is another way functional ocean capacity, like with port congestion, is being sapped by forces beyond the control of ocean carriers. Those factors blunting functional tonnage will grow in importance as overcapacity — at least as measured conventionally in terms of deployed tonnage and ocean demand — is set to expand next year, deepening the industry downcycle. Global volume demand is forecast to expand 2.5% to 3.5% next year, compared with the 4.5% to 5.5% expected growth in 2025, according to shipowner association BIMCO. Global container capacity will be up 7.3% by the end of this year compared with 2024 and will grow 3.1% year over year in 2026, BIMCO says. China continues to drive container volume growth. The country’s export volumes through the first nine months of this year and last have jumped 20% year over year, according to CTS. In the face of US tariffs of approximately 47%, exporters in China have expanded their reach and depth into Latin America, the Middle East, Africa and Europe. But the Chinese government’s efforts to increased domestic consumption, fueling imports, have yet to spur consumers to significantly up their spending. China’s domestic consumption accounted for 39% of gross domestic product in 2023, according to the Hinrich Foundation, a nonprofit supporting trade. Comparably, US domestic consumption accounted for 68% of GDP in 2023. Notably, China’s manufacturing output and retail sales in October expanded at their slowest pace in a year, according to the country’s National Bureau of Statistics (NBS) Chinese container trade is growing 4%, driven by exports expanding 7%, thus creating “this dichotomy that there is between head-haul growth and average growth ... absorbing a lot more capacity,” Clerc said. As a result, the delivery this year of new tonnage — more than 2.2 million TEUs, according to the global order book — isn’t increasing overcapacity “as brutally as one would suspect” Maersk’s CEO said. <h3>Empty nautical miles </h3>Meanwhile, the imbalance of import and export flows is expanding globally, with 41% of containers moving without cargo, according to Sea-Intelligence Maritime Analysis’ Sept. 14 “Sunday Spotlight” report. Just six years ago, a little less than one-third of container equipment was shipped without cargo, according to the analysis of CTS data. “Clearly, the Red Sea crisis has made a strong impact on the average sailing distance for an empty container, showing that it is not just a relative increase versus the full loads, but also an additional absolute increase in the work needed,” wrote Sea-Intelligence CEO Alan Murphy. Given that, the cost of handling empty containers, from having to reposition them more often and ultimately needing more equipment in total to support laden containers, has increased, Murphy said. The impact of China’s growing import-export imbalance in terms of soaking up tonnage and container equipment capacity, however, may have limited staying power. And the industry has its own levers still to pull, said Clerc. For example, just eight vessels, totaling 4,130 TEUs of capacity, have been scrapped thus far in 2025, according to BIMCO. “There is pent-up demand for [scrapping],” Clerc said. “And so I think over time, we will see that some of the levers that so far have come at us, whether it was higher demand from China or sailing around the Cape of Good Hope or COVID, this will fade away, and we’ll be back to having to use the tools that we normally use in the industry, which [are] scrapping, idling, slow steaming and so on.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

The widening imbalance between what China exports and imports is beginning to absorb functional container ship tonnage, requiring more container equipment and handling. Manufacturers in China have been able to find new export markets outside of the United States since Washington launched an onslaught of tariffs in April, and, notably, kept growing those markets even as domestic consumption lags. The ratio of China exports to imports in the last two years has steadily risen from 3.12 to 3.29, according to a 12-month rolling analysis of data from Container Trade Statistics (CTS). “The momentum [out of China] is strong,” Maersk CEO Vincent Clerc said during the carrier’s Nov. 6 third-quarter earnings call. “The consequence for us is not only the resilience of demand growth, which will contribute to absorbing some of the new capacity coming online, but also the increased trade imbalance that it is causing, which over time will lead to higher production costs and lower asset intensity for the industry.” The yawning imbalance between China’s import and exports is another way functional ocean capacity, like with port congestion, is being sapped by forces beyond the control of ocean carriers. Those factors blunting functional tonnage will grow in importance as overcapacity — at least as measured conventionally in terms of deployed tonnage and ocean demand — is set to expand next year, deepening the industry downcycle. Global volume demand is forecast to expand 2.5% to 3.5% next year, compared with the 4.5% to 5.5% expected growth in 2025, according to shipowner association BIMCO. Global container capacity will be up 7.3% by the end of this year compared with 2024 and will grow 3.1% year over year in 2026, BIMCO says. China continues to drive container volume growth. The country’s export volumes through the first nine months of this year and last have jumped 20% year over year, according to CTS. In the face of US tariffs of approximately 47%, exporters in China have expanded their reach and depth into Latin America, the Middle East, Africa and Europe. But the Chinese government’s efforts to increased domestic consumption, fueling imports, have yet to spur consumers to significantly up their spending. China’s domestic consumption accounted for 39% of gross domestic product in 2023, according to the Hinrich Foundation, a nonprofit supporting trade. Comparably, US domestic consumption accounted for 68% of GDP in 2023. Notably, China’s manufacturing output and retail sales in October expanded at their slowest pace in a year, according to the country’s National Bureau of Statistics (NBS) Chinese container trade is growing 4%, driven by exports expanding 7%, thus creating “this dichotomy that there is between head-haul growth and average growth ... absorbing a lot more capacity,” Clerc said. As a result, the delivery this year of new tonnage — more than 2.2 million TEUs, according to the global order book — isn’t increasing overcapacity “as brutally as one would suspect” Maersk’s CEO said. Empty nautical miles Meanwhile, the imbalance of import and export flows is expanding globally, with 41% of containers moving without cargo, according to Sea-Intelligence Maritime Analysis’ Sept. 14 “Sunday Spotlight” report. Just six years ago, a little less than one-third of container equipment was shipped without cargo, according to the analysis of CTS data. “Clearly, the Red Sea crisis has made a strong impact on the average sailing distance for an empty container, showing that it is not just a relative increase versus the full loads, but also an additional absolute increase in the work needed,” wrote Sea-Intelligence CEO Alan Murphy. Given that, the cost of handling empty containers, from having to reposition them more often and ultimately needing more equipment in total to support laden containers, has increased, Murphy said. The impact of China’s growing import-export imbalance in terms of soaking up tonnage and container equipment capacity, however, may have limited staying power. And the industry has its own levers still to pull, said Clerc. For example, just eight vessels, totaling 4,130 TEUs of capacity, have been scrapped thus far in 2025, according to BIMCO. “There is pent-up demand for [scrapping],” Clerc said. “And so I think over time, we will see that some of the levers that so far have come at us, whether it was higher demand from China or sailing around the Cape of Good Hope or COVID, this will fade away, and we’ll be back to having to use the tools that we normally use in the industry, which [are] scrapping, idling, slow steaming and so on.” Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

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