<div class="phx-topic abstract-wrapper">The latest quarterly results show that FedEx’s less-than-truckload division is struggling with lackluster industrial demand, but a change in strategy after a planned June spinoff could provide different results.</div>

The latest quarterly results show that FedEx’s less-than-truckload division is struggling with lackluster industrial demand, but a change in strategy after a planned June spinoff could provide different results.

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<div class="phx-topic">Revenue and shipments in FedEx’s less-than-truckload (LTL) division fell during its fiscal third quarter amid the ongoing sluggish US industrial economy as the parent company prepares for a planned spinoff in June of the LTL business. Revenue for FedEx Freight dropped 5% year over year to $1.99 billion between December and February, the company’s fiscal third quarter, while shipments were down 6%. Revenue per shipment, however, increased 1% year over year. “It’s a broader LTL market that we’re in, and there’s nothing necessarily unique about our volumes,” Marshall Witt, CFO of FedEx Freight, said on an earnings call late Thursday. “We need to continue to improve our yield growth...we will expect to continue to improve our customer experience…we expect to continue to be disciplined in our pricing contract renewals.” Fourth-quarter and full fiscal year revenue for LTL will likely be down by low-single percentages year over year, according to the company. More attention on the call, however, was paid to the FedEx Freight spinoff and an investor day on April 8 during which the company will outline a new strategy for LTL focused on yield over volume. As a standalone company, FedEx Freight might reject low-margin or unprofitable freight from shippers who previously used LTL as part of a larger commercial relationship with FedEx’s parcel, logistics, and airfreight divisions. The freight division has hired its sales and operation teams, created new computer systems, and secured a $3.7 billion debt offering in January. “We look at those as good cost incurrences primarily because they’re related to building our IT infrastructure,” Witt said. “Also building out our talent, and that represents both folks that are coming on board externally and folks that are transitioning over from FedEx Corporation. Having those folks and platforms being built now and being ready to address the spin off and the standalone of FedEx Freight is a positive outcome for us.” FedEx also pointed to the possibility that the growth in data centers will generate freight volumes. “We know that as data centers expand, that yes, there will be some LTL business for my friends over at [FedEx] Freight, but in addition, there is going to be some parcel business,” Brie Carere, FedEx’s chief commercial officer, said on Thursday’s call. <h3>Small encouraging signs </h3>There are some small encouraging signs for the less-than-truckload industry overall. The Institute for Supply Chain Management reports that the Purchasing Managers Index for manufacturing was in expansion territory in February, at 52.4, for a second consecutive month after spending most of 2025 in contraction territory. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ccfbe9dd-30e0-4ab0-b6bd-a4eed3591ca5"></dynamic-object></div>In an intra-quarter update, ArcBest, parent of LTL provider ABF Freight System, reported that revenue per day was up 1% and shipments up 2% year over year in January and February combined. XPO reported shipments per day grew 3% year over year in February, although it did not disclose revenue. But Old Dominion Freight Lines reported revenue per day declined 3.3% and shipments fell 7% in February. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

Revenue and shipments in FedEx’s less-than-truckload (LTL) division fell during its fiscal third quarter amid the ongoing sluggish US industrial economy as the parent company prepares for a planned spinoff in June of the LTL business. Revenue for FedEx Freight dropped 5% year over year to $1.99 billion between December and February, the company’s fiscal third quarter, while shipments were down 6%. Revenue per shipment, however, increased 1% year over year. “It’s a broader LTL market that we’re in, and there’s nothing necessarily unique about our volumes,” Marshall Witt, CFO of FedEx Freight, said on an earnings call late Thursday. “We need to continue to improve our yield growth...we will expect to continue to improve our customer experience…we expect to continue to be disciplined in our pricing contract renewals.” Fourth-quarter and full fiscal year revenue for LTL will likely be down by low-single percentages year over year, according to the company. More attention on the call, however, was paid to the FedEx Freight spinoff and an investor day on April 8 during which the company will outline a new strategy for LTL focused on yield over volume. As a standalone company, FedEx Freight might reject low-margin or unprofitable freight from shippers who previously used LTL as part of a larger commercial relationship with FedEx’s parcel, logistics, and airfreight divisions. The freight division has hired its sales and operation teams, created new computer systems, and secured a $3.7 billion debt offering in January. “We look at those as good cost incurrences primarily because they’re related to building our IT infrastructure,” Witt said. “Also building out our talent, and that represents both folks that are coming on board externally and folks that are transitioning over from FedEx Corporation. Having those folks and platforms being built now and being ready to address the spin off and the standalone of FedEx Freight is a positive outcome for us.” FedEx also pointed to the possibility that the growth in data centers will generate freight volumes. “We know that as data centers expand, that yes, there will be some LTL business for my friends over at [FedEx] Freight, but in addition, there is going to be some parcel business,” Brie Carere, FedEx’s chief commercial officer, said on Thursday’s call. Small encouraging signs There are some small encouraging signs for the less-than-truckload industry overall. The Institute for Supply Chain Management reports that the Purchasing Managers Index for manufacturing was in expansion territory in February, at 52.4, for a second consecutive month after spending most of 2025 in contraction territory. In an intra-quarter update, ArcBest, parent of LTL provider ABF Freight System, reported that revenue per day was up 1% and shipments up 2% year over year in January and February combined. XPO reported shipments per day grew 3% year over year in February, although it did not disclose revenue. But Old Dominion Freight Lines reported revenue per day declined 3.3% and shipments fell 7% in February. Contact Ari Ashe at ari.ashe@spglobal.com

Trucking News

Surface

FedEx Freight battles weak US industrial sector ahead of spinoff

<div class="phx-topic abstract-wrapper">The move comes just days after a joint venture between the two companies was selected as the preferred bidder to develop a $1.8 billion container terminal in Da Nang.</div>

The move comes just days after a joint venture between the two companies was selected as the preferred bidder to develop a $1.8 billion container terminal in Da Nang.

<div class="phx-topic">APM Terminals has taken a 49% stake in Hateco Haiphong International Container Terminal (HHIT) in northern Vietnam, Maersk's port affiliate said Friday, cementing its partnership with Vietnam's Hateco Group after helping to develop the $450 million facility. Financial terms were not disclosed. The move comes <a href="https://www.joc.com/article/apm-terminals-to-build-18-billion-terminal-in-da-nang-6187751">days after a joint venture between the two companies was selected</a> as the preferred bidder to develop a $1.8 billion container terminal in Da Nang, about 350 miles south of Haiphong, and 13 months after the 2.2 million-TEU capacity HHIT became operational. HHIT said the two-berth facility, covering berths 5 and 6 at Haiphong’s Lach Huyen port, has already exceeded initial throughput targets after handling 808,000 TEUs in the 11 months after it became operational last year. APM Terminals said its involvement in developing HHIT included shared best practices on safety, port automation, the use of artificial intelligence and process optimization, and decarbonization. That has helped the terminal achieve an average of 30 container moves per hour and cut truck turnaround times to 16 minutes compared with a market average of 35 minutes, HHIT said. "Since we started operating, we can already see that we are delivering on the highest berth productivities in the Port of Haiphong and have set new records for the automated gate operations as well," Hateco Group Chairman Tran Van Ky said in a statement announcing APM Terminals’ minority stake. “We are looking forward to working closely with APM Terminals in the years to come to further optimize the terminal operations to the benefit of our customers.” Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

APM Terminals has taken a 49% stake in Hateco Haiphong International Container Terminal (HHIT) in northern Vietnam, Maersk's port affiliate said Friday, cementing its partnership with Vietnam's Hateco Group after helping to develop the $450 million facility. Financial terms were not disclosed. The move comes days after a joint venture between the two companies was selected as the preferred bidder to develop a $1.8 billion container terminal in Da Nang, about 350 miles south of Haiphong, and 13 months after the 2.2 million-TEU capacity HHIT became operational. HHIT said the two-berth facility, covering berths 5 and 6 at Haiphong’s Lach Huyen port, has already exceeded initial throughput targets after handling 808,000 TEUs in the 11 months after it became operational last year. APM Terminals said its involvement in developing HHIT included shared best practices on safety, port automation, the use of artificial intelligence and process optimization, and decarbonization. That has helped the terminal achieve an average of 30 container moves per hour and cut truck turnaround times to 16 minutes compared with a market average of 35 minutes, HHIT said. "Since we started operating, we can already see that we are delivering on the highest berth productivities in the Port of Haiphong and have set new records for the automated gate operations as well," Hateco Group Chairman Tran Van Ky said in a statement announcing APM Terminals’ minority stake. “We are looking forward to working closely with APM Terminals in the years to come to further optimize the terminal operations to the benefit of our customers.” Contact Keith Wallis at keithwallis@hotmail.com.

Port News

Container lines

International ports

Container Shipping News

Maritime

APMT takes 49% stake in Haiphong's HHIT terminal in northern Vietnam

<div class="phx-topic abstract-wrapper">Market sources say an estimated 40,000 to 50,000 TEUs have landed at Indian ports thus far, with Nhava Sheva (JNPA) terminals alone accounting for 25,000 TEUs of discharges.</div>

Market sources say an estimated 40,000 to 50,000 TEUs have landed at Indian ports thus far, with Nhava Sheva (JNPA) terminals alone accounting for 25,000 TEUs of discharges.

<div class="phx-topic">As Middle East-bound containers sourced from Asia continue to make their way into Indian ports for temporary shelter, container lines are concurrently trying to evacuate them on available shuttle capacity for the final leg of their connection. But carriers are being hobbled by multiple operational and systematic challenges at alternative Persian Gulf gateways, according to industry insights. Market sources say an estimated 40,000 to 50,000 TEUs <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.joc.com%2Farticle%2Fcarriers-seek-to-offload-stranded-asia-middle-east-containers-at-indian-ports-6185263&amp;data=05%7C02%7Ckevin.saville2%40spglobal.com%7C972081c3ba2f499979eb08de8671235c%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C639096017679329220%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=YDeZjDrpaLFB3%2Fkl5wZnogGsDaNv7ZkjIuMMmkD74Pk%3D&amp;reserved=0">have landed at Indian ports thus far</a>, with Nhava Sheva (JNPA) terminals alone accounting for 25,000 TEUs of discharges. Sohar in Oman and Fujairah and Khor Fakkan in the United Arab Emirates have become the contingency lifeline for supply chain stakeholders following <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.joc.com%2Farticle%2Fcarriers-pause-india-middle-east-cargo-bookings-amid-persian-gulf-port-chaos-6179223&amp;data=05%7C02%7Ckevin.saville2%40spglobal.com%7C972081c3ba2f499979eb08de8671235c%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C639096017679373330%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=Tmtv68DMGAWGS5a2%2BTCY46RYQCq7O%2F3%2FryQQLFbWW1k%3D&amp;reserved=0">widespread port suspensions and disruptions</a> across the Middle East in the aftermath of hostilities between the US/Israel and Iran. A five million-TEU capacity terminal makes Gulftainer's Khor Fakkan facility the favorite carrier transit option, but limited availability of reefer handling capacity across all the three alternative ports, particularly Fujairah, is a major concern for carriers. “There are only about 120 reefer plug points at Fujairah,” a carrier executive who didn’t want to be identified told the Journal of Commerce. “This severely constrains perishable cargo movements.” Compounding the pain, UAE authorities have directed ocean carriers seeking access at Khor Fakkan to keep the scale of cargo loads meant for cross-border transits significantly low as onward road dispatches massively struggle. According to industry sources, the Khor Fakkan port authority has either turned away some vessels carrying large transshipment volumes or declined offloading permission for those containers. Given that context, vessel operators out of India are understood to have generally been advised to plan or manifest no more than 30% of loads for transshipment discharges. Khor Fakkan is facing severe port congestion and berthing delays, with several vessels forced to wait more than a week — up to 12 days in some cases — to secure discharge windows. Some ad-hoc callers have finally diverted away with waits extending indefinitely, sources said. Additionally, consignees have been given a firm two-day window to clear goods from the UAE docks amid the import rush, with cargo interests facing the risk of hefty port charges on overstaying boxes. Another concern reported by carrier sources is the scramble at terminal gates when importers not holding pre-customs registration status show up to receive goods at the alternative ports. “Unregistered customers turning up for cargo pickups is adding to the chaos,” said another carrier executive. <h3>CMA CGM ‘inland’ fuel fee </h3>CMA CGM is said to have finalized plans to operate three Middle East shuttle sailings out of West India (Nhava Sheva/Mundra) to call at Sohar and Fujairah over the next week in order to clear up its rerouted containers. To that end, JNPA officials at a stakeholder review meeting Thursday reiterated that the port is working proactively with stakeholders to support unexpected transshipment volumes. JNPA officials said the port currently has adequate storage capacity available, with only around 50% of its container holding space presently occupied. At the same time, some congestion signals are emerging. Container truckers serving Nhava Sheva’s PSA terminal (BMCT) on Friday complained to authorities about vehicles experiencing lengthening turn times over the past week, making drivers refuse trips for BMCT, which has handled most of the vessels rerouted to the port. Sunil Vaswani, executive director at the Container Shipping Lines’ Association (India), told the Journal of Commerce carriers are now deploying capacity over the Red Sea in a contingency approach to handle import deliveries into the Middle East, with multimodal solutions for onward movements. That effort is also triggering more cost add-ons for shippers. After raising emergency fuel surcharges previously rolled into the ocean freight side, CMA CGM has announced an “inland” emergency fuel fee for the Middle East beginning March 23, without specifying the amount. “These (fuel cost) increases are impacting not only sea transportation but also inland operations across all modes, affecting the overall cost of moving containers throughout the supply chain,” the Marseille-based liner noted. Meanwhile, Hapag-Lloyd CEO Rolf Habben Jansen, speaking to media in Mumbai this week, said the Middle East crisis has left six Hapag-Lloyd container ships stranded and about 25,000 shipments impacted. He also noted that the carrier continues a pause on acceptance of bookings to and from the Middle East as it remains wary of landside pressures in a war zone. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

As Middle East-bound containers sourced from Asia continue to make their way into Indian ports for temporary shelter, container lines are concurrently trying to evacuate them on available shuttle capacity for the final leg of their connection. But carriers are being hobbled by multiple operational and systematic challenges at alternative Persian Gulf gateways, according to industry insights. Market sources say an estimated 40,000 to 50,000 TEUs have landed at Indian ports thus far , with Nhava Sheva (JNPA) terminals alone accounting for 25,000 TEUs of discharges. Sohar in Oman and Fujairah and Khor Fakkan in the United Arab Emirates have become the contingency lifeline for supply chain stakeholders following widespread port suspensions and disruptions across the Middle East in the aftermath of hostilities between the US/Israel and Iran. A five million-TEU capacity terminal makes Gulftainer's Khor Fakkan facility the favorite carrier transit option, but limited availability of reefer handling capacity across all the three alternative ports, particularly Fujairah, is a major concern for carriers. “There are only about 120 reefer plug points at Fujairah,” a carrier executive who didn’t want to be identified told the Journal of Commerce. “This severely constrains perishable cargo movements.” Compounding the pain, UAE authorities have directed ocean carriers seeking access at Khor Fakkan to keep the scale of cargo loads meant for cross-border transits significantly low as onward road dispatches massively struggle. According to industry sources, the Khor Fakkan port authority has either turned away some vessels carrying large transshipment volumes or declined offloading permission for those containers. Given that context, vessel operators out of India are understood to have generally been advised to plan or manifest no more than 30% of loads for transshipment discharges. Khor Fakkan is facing severe port congestion and berthing delays, with several vessels forced to wait more than a week — up to 12 days in some cases — to secure discharge windows. Some ad-hoc callers have finally diverted away with waits extending indefinitely, sources said. Additionally, consignees have been given a firm two-day window to clear goods from the UAE docks amid the import rush, with cargo interests facing the risk of hefty port charges on overstaying boxes. Another concern reported by carrier sources is the scramble at terminal gates when importers not holding pre-customs registration status show up to receive goods at the alternative ports. “Unregistered customers turning up for cargo pickups is adding to the chaos,” said another carrier executive. CMA CGM ‘inland’ fuel fee CMA CGM is said to have finalized plans to operate three Middle East shuttle sailings out of West India (Nhava Sheva/Mundra) to call at Sohar and Fujairah over the next week in order to clear up its rerouted containers. To that end, JNPA officials at a stakeholder review meeting Thursday reiterated that the port is working proactively with stakeholders to support unexpected transshipment volumes. JNPA officials said the port currently has adequate storage capacity available, with only around 50% of its container holding space presently occupied. At the same time, some congestion signals are emerging. Container truckers serving Nhava Sheva’s PSA terminal (BMCT) on Friday complained to authorities about vehicles experiencing lengthening turn times over the past week, making drivers refuse trips for BMCT, which has handled most of the vessels rerouted to the port. Sunil Vaswani, executive director at the Container Shipping Lines’ Association (India), told the Journal of Commerce carriers are now deploying capacity over the Red Sea in a contingency approach to handle import deliveries into the Middle East, with multimodal solutions for onward movements. That effort is also triggering more cost add-ons for shippers. After raising emergency fuel surcharges previously rolled into the ocean freight side, CMA CGM has announced an “inland” emergency fuel fee for the Middle East beginning March 23, without specifying the amount. “These (fuel cost) increases are impacting not only sea transportation but also inland operations across all modes, affecting the overall cost of moving containers throughout the supply chain,” the Marseille-based liner noted. Meanwhile, Hapag-Lloyd CEO Rolf Habben Jansen, speaking to media in Mumbai this week, said the Middle East crisis has left six Hapag-Lloyd container ships stranded and about 25,000 shipments impacted. He also noted that the carrier continues a pause on acceptance of bookings to and from the Middle East as it remains wary of landside pressures in a war zone. Contact Bency Mathew at bencyvmathew@gmail.com.

Hurdles in Persian Gulf test carriers moving stranded Asian cargo from India

<div class="phx-topic abstract-wrapper">China’s largest shipping company commented on current geopolitical events as it released its 2025 financial results, which saw net profits plummet 38%.</div>

China’s largest shipping company commented on current geopolitical events as it released its 2025 financial results, which saw net profits plummet 38%.

<div class="phx-topic">Geopolitical tensions, heightened by war in the Middle East, will accelerate the pace of regionalization in global trade and nearshoring this year while “amplifying the volatility of global supply chains,” Cosco Shipping said Thursday. Momentum for global economic growth is weak, and the external environment for the container shipping industry remains severe, the liner shipping and terminals group said in its 2025 results statement filed with the Shanghai stock exchange. “Looking ahead to 2026, the complexity and uncertainty of the container shipping market will further intensify,” Cosco said. More favorably for global trade, Cosco said emerging economies are showing strong growth potential, cooperation among developing countries is warming and tariff uncertainties have temporarily eased. Cosco specifically highlighted Southeast Asia and Latin America, where demand is strengthening, buoyed by the widening implementation of free trade agreements such as the Regional Comprehensive Economic Partnership in Asia. China’s biggest shipping company said the imbalance between cargo demand and fleet growth will also ease this year, with cargo volumes rising by a “low to moderate 2.5%” compared with 3.8% fleet growth, “the lowest in the past three years.” While this increase in capacity is likely to put downward pressure on freight rates, the impact could be mitigated by port congestion caused by the realignment of carrier alliance networks and the war in the Middle East, the carrier said. <h3>Net profit down 38% in 2025 </h3>Cosco saw mixed results last year, largely reflected by volatile US tariff policy, the deteriorating global economy and the crash in freight rates in the fourth quarter. Overall, net profit fell 38% to $4.3 billion last year while operating revenues slipped 6% to $30.7 billion. Cosco said net profit in the fourth quarter was the lowest of all four quarters, falling 60% to $532 million. The carrier said the worst-performing trades last year were the Asia-Europe and Mediterranean services, which saw an 18% decline in total revenues to $5.3 billion. Revenue from trans-Pacific services fell 17% to $7.7 billion, while revenue from intra-Asia routes was unchanged at $7.6 billion. Cosco saw a better performance from its terminals business, with revenue climbing 11% to $1.7 billion last year, supported by a 6% increase in total throughput to 153 million TEUs. Cosco said it would focus the development of its terminal business on emerging markets and trade lanes to reflect the growing trade between Southeast Asia and Latin America and the increasing importance of ports in areas such as North Africa and India. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Geopolitical tensions, heightened by war in the Middle East, will accelerate the pace of regionalization in global trade and nearshoring this year while “amplifying the volatility of global supply chains,” Cosco Shipping said Thursday. Momentum for global economic growth is weak, and the external environment for the container shipping industry remains severe, the liner shipping and terminals group said in its 2025 results statement filed with the Shanghai stock exchange. “Looking ahead to 2026, the complexity and uncertainty of the container shipping market will further intensify,” Cosco said. More favorably for global trade, Cosco said emerging economies are showing strong growth potential, cooperation among developing countries is warming and tariff uncertainties have temporarily eased. Cosco specifically highlighted Southeast Asia and Latin America, where demand is strengthening, buoyed by the widening implementation of free trade agreements such as the Regional Comprehensive Economic Partnership in Asia. China’s biggest shipping company said the imbalance between cargo demand and fleet growth will also ease this year, with cargo volumes rising by a “low to moderate 2.5%” compared with 3.8% fleet growth, “the lowest in the past three years.” While this increase in capacity is likely to put downward pressure on freight rates, the impact could be mitigated by port congestion caused by the realignment of carrier alliance networks and the war in the Middle East, the carrier said. Net profit down 38% in 2025 Cosco saw mixed results last year, largely reflected by volatile US tariff policy, the deteriorating global economy and the crash in freight rates in the fourth quarter. Overall, net profit fell 38% to $4.3 billion last year while operating revenues slipped 6% to $30.7 billion. Cosco said net profit in the fourth quarter was the lowest of all four quarters, falling 60% to $532 million. The carrier said the worst-performing trades last year were the Asia-Europe and Mediterranean services, which saw an 18% decline in total revenues to $5.3 billion. Revenue from trans-Pacific services fell 17% to $7.7 billion, while revenue from intra-Asia routes was unchanged at $7.6 billion. Cosco saw a better performance from its terminals business, with revenue climbing 11% to $1.7 billion last year, supported by a 6% increase in total throughput to 153 million TEUs. Cosco said it would focus the development of its terminal business on emerging markets and trade lanes to reflect the growing trade between Southeast Asia and Latin America and the increasing importance of ports in areas such as North Africa and India. Contact Keith Wallis at keithwallis@hotmail.com .

Asia-Europe

Trans-Pacific

Middle East war will ‘amplify’ volatility in global supply chains: Cosco

<div class="phx-topic abstract-wrapper">Norfolk’s dredging to a 55-foot depth will allow ocean carriers to offer more capacity on big ships that have to load lightly due to draft constraints. </div>

Norfolk’s dredging to a 55-foot depth will allow ocean carriers to offer more capacity on big ships that have to load lightly due to draft constraints.

<div class="phx-topic">The Port of Virginia has completed a dredging project that brings Norfolk Harbor to a 55-foot depth, making it the deepest port on the US East Coast and allowing ocean carriers to better utilize the ultra-large container vessels increasingly deployed on the coast’s long-haul services.The Virginia Port Authority (VPA) said Wednesday the dredging of an additional five feet of navigable depth in its harbor was completed Feb. 28, with the remaining work on official depth soundings and updated navigation charts expected to be finished in late spring. Portions of the ship channel were also widened to allow two-way vessel traffic, with the VPA expecting a 15% improvement in ship turnover, according to a spokesperson. The dredging was part of a $1.4 billion capacity upgrade for Virginia that began in 2023. The upgrades include expansion of the port’s intermodal rail capacity and ongoing development of a new ultra-large container vessel berth on the northern side of Norfolk International Terminals.With the expected completion of the north berth in mid-2027, Virginia will have nominal capacity of 5.8 million TEUs and be capable of handling five large ships simultaneously. VPA’s interim Chief Executive Sarah McCoy said in a statement the dredging and other expansion projects allow ocean carriers and shippers to “expand their operations and cargo volumes at the Port of Virginia without concern for outgrowing our capabilities.”At 52 feet, the Port of Charleston had been the deepest on the East Coast since 2022. The Port of New York and New Jersey, which dredged to 50 feet in 2016, is studying <a href="NY-NJ port takes next steps to study dredging amid larger ship calls | Journal of Commerce">further dredging to a 55-foot depth</a>. <h3>Big ships partially filled</h3>While Virginia and other East Coast ports are already handling ultra-large container vessels (ULCVs), current harbor depths put a limit on the amount of cargo space those larger ships can offer. Since last March, ships over 14,000 TEUs in capacity have made 599 calls to the four largest US East Coast ports, according to Sea-web, a sister product of the Journal of Commerce within S&amp;P Global. Those vessels have an average maximum draft of 16 meters, just over 52 feet. However, the average draft at arrival has been just under 13 meters, or 42 feet. Cargo mix and operational constraints make every vessel loading situation different. But one industry rule of thumb has been that every meter of loaded draft amounts to $3 million to $4 million of available cargo space. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="79349f5e-726b-41eb-b8cb-724e259bae44"></dynamic-object></div>Ocean Network Express’ ULCVs have been the most frequent visitors to the East Coast, with some 149 calls over the past 12 months, followed by Evergreen Marine’s 133 ULCV calls and Zim Integrated Shipping Service’s 109, according to Sea-web data. During 2025, Virginia handled 1.47 million TEUs in loaded imports, a 5.6% drop from a year earlier, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Exports through the gateway during that time were 959,889 TEUs, a 1.5% drop from 2024.The 2.43 million TEUs in total volume, which was down 4% from 2024, made Virginia the sixth-busiest port in the US last year, according to PIERS.Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Port of Virginia has completed a dredging project that brings Norfolk Harbor to a 55-foot depth, making it the deepest port on the US East Coast and allowing ocean carriers to better utilize the ultra-large container vessels increasingly deployed on the coast’s long-haul services. The Virginia Port Authority (VPA) said Wednesday the dredging of an additional five feet of navigable depth in its harbor was completed Feb. 28, with the remaining work on official depth soundings and updated navigation charts expected to be finished in late spring. Portions of the ship channel were also widened to allow two-way vessel traffic, with the VPA expecting a 15% improvement in ship turnover, according to a spokesperson. The dredging was part of a $1.4 billion capacity upgrade for Virginia that began in 2023. The upgrades include expansion of the port’s intermodal rail capacity and ongoing development of a new ultra-large container vessel berth on the northern side of Norfolk International Terminals. With the expected completion of the north berth in mid-2027, Virginia will have nominal capacity of 5.8 million TEUs and be capable of handling five large ships simultaneously. VPA’s interim Chief Executive Sarah McCoy said in a statement the dredging and other expansion projects allow ocean carriers and shippers to “expand their operations and cargo volumes at the Port of Virginia without concern for outgrowing our capabilities.” At 52 feet, the Port of Charleston had been the deepest on the East Coast since 2022. The Port of New York and New Jersey, which dredged to 50 feet in 2016, is studying further dredging to a 55-foot depth . Big ships partially filled While Virginia and other East Coast ports are already handling ultra-large container vessels (ULCVs), current harbor depths put a limit on the amount of cargo space those larger ships can offer. Since last March, ships over 14,000 TEUs in capacity have made 599 calls to the four largest US East Coast ports, according to Sea-web, a sister product of the Journal of Commerce within S&P Global. Those vessels have an average maximum draft of 16 meters, just over 52 feet. However, the average draft at arrival has been just under 13 meters, or 42 feet. Cargo mix and operational constraints make every vessel loading situation different. But one industry rule of thumb has been that every meter of loaded draft amounts to $3 million to $4 million of available cargo space. Ocean Network Express’ ULCVs have been the most frequent visitors to the East Coast, with some 149 calls over the past 12 months, followed by Evergreen Marine’s 133 ULCV calls and Zim Integrated Shipping Service’s 109, according to Sea-web data. During 2025, Virginia handled 1.47 million TEUs in loaded imports, a 5.6% drop from a year earlier, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Exports through the gateway during that time were 959,889 TEUs, a 1.5% drop from 2024. The 2.43 million TEUs in total volume, which was down 4% from 2024, made Virginia the sixth-busiest port in the US last year, according to PIERS. Contact Michael Angell at michael.angell@spglobal.com .

Port infrastructure

North American ports

Virginia’s deeper harbor could allow higher usage on ULCVs

<div class="phx-topic abstract-wrapper">Containers that were inbound when the war started have been plugged into reefer slots in terminals outside the Gulf, accruing mounting storage charges as cargo owners either wait for the Strait of Hormuz to reopen or start looking for new markets</div>

Containers that were inbound when the war started have been plugged into reefer slots in terminals outside the Gulf, accruing mounting storage charges as cargo owners either wait for the Strait of Hormuz to reopen or start looking for new markets

<div class="phx-topic">Düsseldorf — Cold chain shippers with containers destined for the Middle East are in a state of suspended animation with reefer boxes offloaded early at other ports in the region and no timeline on when their voyages will be able to resume through the war zone. Ocean carriers have suspended the acceptance of reefer, dangerous goods and special cargo in and out of the UAE, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia until further notice. Reefer containers that were inbound when the war started on Feb. 28 have been dropped off and plugged into reefer slots in terminals outside the Persian Gulf, accruing mounting storage charges and leaving cargo owners waiting until shipping can again pass through the Strait of Hormuz. Alternatively, cargo owners will need to start looking for new markets. One such shipper with reefers out of position is Tyson Foods. The Middle East is a major market for the global protein producer that brings in halal chicken from Brazil, but Gulf-bound reefer containers were offloaded before reaching their destination, according to Juliana Violato, Tyson’s senior manager of procurement in Europe. “In Brazil we have slowed down production because all containers that were on the water are now sitting in ports near the Gulf or in India or Singapore,” Violato told the Journal of Commerce at the Global Cold Chain Association (GCCA) Europe conference in Dusseldorf this week. “They will be there until they find a new trade lane that could be through Oman or Saudi Arabia, but we don’t know how or when because of the war,” she added. “What we do know is that the market is still there.” Thomas Eskesen, founder of cold chain industry consultants Eskesen Advisory, said the fate of frozen food shipments and perishables with a limited shelf life has been the number one issue for the global cold chain since the Middle East war began. “This has a massive cascading effect with equipment tied up and booking stops affecting carriers individually,” Eskesen told the Journal of Commerce. “Lots of cargo is being diverted via the Jeddah back door [in Saudi Arabia], but it is more difficult if dumped in India and Sri Lanka.” <h3>Land-based options under pressure </h3>The land options via Khor Fakkan and Fujairah in the UAE, Sohar in Oman and Jeddah that are being offered by ocean carriers and forwarders <a href="https://www.joc.com/article/rising-road-volume-puts-middle-east-land-based-options-under-pressure-6187755">are creaking under the heavy demand</a>. Port delays are growing fast, as are trucking bottlenecks, with one forwarder reporting a 20-mile line of trucks waiting to get into Dubai’s Jebel Ali container port. Violato said the clock was ticking as reefers could not wait forever and new markets will need to be found if Hormuz remains unpassable “in the coming weeks,” a move that would bring its own set of problems. “There will be a decision to bring back the containers [to origin] or to sell the products in different markets,” she said. “If it’s chicken breast it can be sold in Europe, and if it’s dark meat it can be sold in Africa, but if the war continues, they will need to find another destination.” Kevin Marchetti, co-founder of Lineage Logistics, said although he had no customers with reefers stuck in the region, those shippers are in a difficult position as there will need to be a different solution depending on the customer, the product and the destination. “Some of the products are pre-approved for certain markets where some traders have licenses and some don’t, so it is a really complicated issue,” Marchetti said on the sidelines of the GCCA conference. “The bigger question is that you produce goods thinking you have the end markets open and the goods will just flow, but now reefers are backing up,” he added. “There is also a limited amount of equipment and although we don’t have shortages yet, people have started to talk about it.” <h3>Holding back shipments from Europe </h3>Andrew Mates, managing director of Europe for temperature-controlled warehousing and food logistics specialist Americold, said shipments from Europe to the Middle East have been held back because of the war. “Our Dubai joint venture has reported the UAE government is being very active in redirecting cargo coming in from ports in Oman and Saudi Arabia and arranging land-based routes to keep the supply chain moving,” Mates said. “But there are trucking constraints where all of a sudden containers need to go thousands of kilometers,” he added. “The UAE government realizes that if the situation stays as it is for a few more weeks, they will simply have to get products in somehow.” While exceptions are being made for critical foodstuffs, pharma and other essential goods, <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">in a recent interview with the Journal of Commerce</a>, Maersk CCO Karsten Kildahl said that at some point “all cargo becomes urgent,” including aluminum, petrochemicals and polyethylene that are all raw materials for plastics production. Persian Gulf states import more than 90% of their goods, and while the closure of the Strait of Hormuz has long been factored into their scenario planning, a long-term closure will start to hit the shelves. Another fast-developing problem is outward-bound cargo, particularly fertilizer from the Middle East that comprises about 30% of the global market and is crucial for food production, according to Violato. “If the war takes longer, we will not have fertilizer for planting and grain production will drop,” she said. “When we impact grain, we impact animal feed and protein becomes more expensive and inflation is impossible to avoid. But again, everything depends on how long the war goes on for.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Düsseldorf — Cold chain shippers with containers destined for the Middle East are in a state of suspended animation with reefer boxes offloaded early at other ports in the region and no timeline on when their voyages will be able to resume through the war zone. Ocean carriers have suspended the acceptance of reefer, dangerous goods and special cargo in and out of the UAE, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia until further notice. Reefer containers that were inbound when the war started on Feb. 28 have been dropped off and plugged into reefer slots in terminals outside the Persian Gulf, accruing mounting storage charges and leaving cargo owners waiting until shipping can again pass through the Strait of Hormuz. Alternatively, cargo owners will need to start looking for new markets. One such shipper with reefers out of position is Tyson Foods. The Middle East is a major market for the global protein producer that brings in halal chicken from Brazil, but Gulf-bound reefer containers were offloaded before reaching their destination, according to Juliana Violato, Tyson’s senior manager of procurement in Europe. “In Brazil we have slowed down production because all containers that were on the water are now sitting in ports near the Gulf or in India or Singapore,” Violato told the Journal of Commerce at the Global Cold Chain Association (GCCA) Europe conference in Dusseldorf this week. “They will be there until they find a new trade lane that could be through Oman or Saudi Arabia, but we don’t know how or when because of the war,” she added. “What we do know is that the market is still there.” Thomas Eskesen, founder of cold chain industry consultants Eskesen Advisory, said the fate of frozen food shipments and perishables with a limited shelf life has been the number one issue for the global cold chain since the Middle East war began. “This has a massive cascading effect with equipment tied up and booking stops affecting carriers individually,” Eskesen told the Journal of Commerce. “Lots of cargo is being diverted via the Jeddah back door [in Saudi Arabia], but it is more difficult if dumped in India and Sri Lanka.” Land-based options under pressure The land options via Khor Fakkan and Fujairah in the UAE, Sohar in Oman and Jeddah that are being offered by ocean carriers and forwarders are creaking under the heavy demand . Port delays are growing fast, as are trucking bottlenecks, with one forwarder reporting a 20-mile line of trucks waiting to get into Dubai’s Jebel Ali container port. Violato said the clock was ticking as reefers could not wait forever and new markets will need to be found if Hormuz remains unpassable “in the coming weeks,” a move that would bring its own set of problems. “There will be a decision to bring back the containers [to origin] or to sell the products in different markets,” she said. “If it’s chicken breast it can be sold in Europe, and if it’s dark meat it can be sold in Africa, but if the war continues, they will need to find another destination.” Kevin Marchetti, co-founder of Lineage Logistics, said although he had no customers with reefers stuck in the region, those shippers are in a difficult position as there will need to be a different solution depending on the customer, the product and the destination. “Some of the products are pre-approved for certain markets where some traders have licenses and some don’t, so it is a really complicated issue,” Marchetti said on the sidelines of the GCCA conference. “The bigger question is that you produce goods thinking you have the end markets open and the goods will just flow, but now reefers are backing up,” he added. “There is also a limited amount of equipment and although we don’t have shortages yet, people have started to talk about it.” Holding back shipments from Europe Andrew Mates, managing director of Europe for temperature-controlled warehousing and food logistics specialist Americold, said shipments from Europe to the Middle East have been held back because of the war. “Our Dubai joint venture has reported the UAE government is being very active in redirecting cargo coming in from ports in Oman and Saudi Arabia and arranging land-based routes to keep the supply chain moving,” Mates said. “But there are trucking constraints where all of a sudden containers need to go thousands of kilometers,” he added. “The UAE government realizes that if the situation stays as it is for a few more weeks, they will simply have to get products in somehow.” While exceptions are being made for critical foodstuffs, pharma and other essential goods, in a recent interview with the Journal of Commerce, Maersk CCO Karsten Kildahl said that at some point “all cargo becomes urgent,” including aluminum, petrochemicals and polyethylene that are all raw materials for plastics production. Persian Gulf states import more than 90% of their goods, and while the closure of the Strait of Hormuz has long been factored into their scenario planning, a long-term closure will start to hit the shelves. Another fast-developing problem is outward-bound cargo, particularly fertilizer from the Middle East that comprises about 30% of the global market and is crucial for food production, according to Violato. “If the war takes longer, we will not have fertilizer for planting and grain production will drop,” she said. “When we impact grain, we impact animal feed and protein becomes more expensive and inflation is impossible to avoid. But again, everything depends on how long the war goes on for.” Contact Greg Knowler at  greg.knowler@spglobal.com . 

Forwarding

Reefer shippers play waiting game with boxes stuck outside Persian Gulf

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

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

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

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

Supply chain

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

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

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

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

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

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

Dry Van

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 Weekly % change: {van_rate_previous_week_change.formatNumber('#.##%')}

Flatbed

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{dateX.formatDate('MMM dd, yyyy')}: ${valueY}
 Weekly % change: {flatbed_rate_previous_week_change.formatNumber('#.##%')}

Refrigerated

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{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
 Weekly % change: {reefer_rate_previous_week_change.formatNumber('#.##%')}

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

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

US Truckload spot rates weekly (DAT) Gateway

<div class="phx-topic abstract-wrapper">After a pause in trans-Pacific service contract negotiations caused by the war in the Middle East, talks are expected to move forward now that the largest US retailer has concluded some of its agreements.</div>

After a pause in trans-Pacific service contract negotiations caused by the war in the Middle East, talks are expected to move forward now that the largest US retailer has concluded some of its agreements.

<div class="phx-topic">Container lines that paused trans-Pacific service contract talks to assess the impact of the war in the Middle East are back at the table, and expectations are that major retailers will sign in the coming week now that Walmart has finalized its 2026–27 contracts with a half-dozen carriers. Walmart’s move opens the door for other major retailers and, in turn, smaller importers and then non-vessel operating common carriers to ink their own service contracts, which typically go into effect May 1. Despite the <a href="https://www.joc.com/article/china-india-warn-carriers-on-higher-pricing-tied-to-middle-east-conflict-6183986">unknowns in terms of length and scope of the now two-week-long Middle East war</a>, carriers say big-box retailers want to lock in vessel capacity. Walmart, <a href="">the largest US importer</a>, has wrapped up its contract discussions with its core carriers, two sources familiar with the matter told the Journal of Commerce.  Carriers, and some forwarders, are urging customers to move expeditiously in their contract negotiations, rather than allowing uncertainties in global trade to deter them. “We now have seen an unpredictable shock to the global ocean market in like four of the last six years,” a carrier executive who asked not to be named told the Journal of Commerce. “Some BCOs [beneficial cargo owners] recognized that and wanted to take risk off the table; they signed early and at higher rates than many were predicting.” The executive added that analyst forecasts of supply and demand have rarely matched reality in recent years due to that outsized volatility. Geopolitical events including diversions away from the Red Sea, unpredictable US tariff policy and even more weather events, impacting ocean reliability, have begun to shift some shippers’ thinking, he said. “Some shippers have come to realize that pushing carriers well below breakeven to save a few cents on their cost of goods is not worth the risk of a major unpredictable event happening,” the executive said. <h3>Recouping higher fuel costs </h3>While securing space remains paramount for cargo owners, rising bunker fuel prices, driven by the closure of the Strait of Hormuz, <a href="https://www.joc.com/article/fmc-says-closely-monitoring-carrier-rate-moves-tied-to-middle-east-war-6184781">is also driving contract discussions regarding bunker fuel adjustment factors</a>. Shippers are reluctant to compensate carriers for the rising operating costs tied to the Middle East on a trade lane that is not directly impacted. “The uncertainty and waiting around for clarity or resolution is not helpful to anyone,” said Kevin Parkerson, a consultant and former logistics manager at retailers. “Yes, it may impact overall capacity. Yes, it may impact fuel prices. But at this point, that shouldn’t delay the process of contracting. Everybody seems to be proceeding cautiously.” At the moment, securing capacity in the Asia-US West Coast trade is not a significant issue that would slow negotiations. “Asia to the West Coast will be fine,” a second carrier executive told the Journal of Commerce, noting that if the war in the Middle East drags on for some weeks, East Coast routings from the Indian sub-continent could be impacted by the <a href="https://www.joc.com/article/waves-of-diverted-containers-swamping-middle-east-ports-6183989">congestion that is already building at some ports in the region</a>. In the interim, most importers would be wise to secure the minimum quantity commitments in their contracts as soon as they have a handle on what their space requirements will be, a third carrier executive said. “Those BCOs who are slow-walking their negotiations to wait for better prices — it may backfire,” the executive said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Container lines that paused trans-Pacific service contract talks to assess the impact of the war in the Middle East are back at the table, and expectations are that major retailers will sign in the coming week now that Walmart has finalized its 2026–27 contracts with a half-dozen carriers. Walmart’s move opens the door for other major retailers and, in turn, smaller importers and then non-vessel operating common carriers to ink their own service contracts, which typically go into effect May 1. Despite the unknowns in terms of length and scope of the now two-week-long Middle East war , carriers say big-box retailers want to lock in vessel capacity. Walmart,  the largest US importer , has wrapped up its contract discussions with its core carriers, two sources familiar with the matter told the Journal of Commerce.   Carriers, and some forwarders, are urging customers to move expeditiously in their contract negotiations, rather than allowing uncertainties in global trade to deter them. “We now have seen an unpredictable shock to the global ocean market in like four of the last six years,” a carrier executive who asked not to be named told the Journal of Commerce. “Some BCOs [beneficial cargo owners] recognized that and wanted to take risk off the table; they signed early and at higher rates than many were predicting.” The executive added that analyst forecasts of supply and demand have rarely matched reality in recent years due to that outsized volatility. Geopolitical events including diversions away from the Red Sea, unpredictable US tariff policy and even more weather events, impacting ocean reliability, have begun to shift some shippers’ thinking, he said. “Some shippers have come to realize that pushing carriers well below breakeven to save a few cents on their cost of goods is not worth the risk of a major unpredictable event happening,” the executive said. Recouping higher fuel costs While securing space remains paramount for cargo owners, rising bunker fuel prices, driven by the closure of the Strait of Hormuz, is also driving contract discussions regarding bunker fuel adjustment factors . Shippers are reluctant to compensate carriers for the rising operating costs tied to the Middle East on a trade lane that is not directly impacted. “The uncertainty and waiting around for clarity or resolution is not helpful to anyone,” said Kevin Parkerson, a consultant and former logistics manager at retailers. “Yes, it may impact overall capacity. Yes, it may impact fuel prices. But at this point, that shouldn’t delay the process of contracting. Everybody seems to be proceeding cautiously.”  At the moment, securing capacity in the Asia-US West Coast trade is not a significant issue that would slow negotiations. “Asia to the West Coast will be fine,” a second carrier executive told the Journal of Commerce, noting that if the war in the Middle East drags on for some weeks, East Coast routings from the Indian sub-continent could be impacted by the congestion that is already building at some ports in the region . In the interim, most importers would be wise to secure the minimum quantity commitments in their contracts as soon as they have a handle on what their space requirements will be, a third carrier executive said. “Those BCOs who are slow-walking their negotiations to wait for better prices — it may backfire,” the executive said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

Trans-Pacific contract talks accelerating after Walmart signs

<div class="phx-topic abstract-wrapper">The Meridian Speedway dispute is important because it’s one of the primary routes where a combined Union Pacific-Norfolk Southern railroad would look to take market share from truckload. </div>

The Meridian Speedway dispute is important because it’s one of the primary routes where a combined Union Pacific-Norfolk Southern railroad would look to take market share from truckload.

<div class="phx-topic">The US Surface Transportation Board (STB) will not intervene in a dispute over the Meridian Speedway, a critical intermodal route connecting the West Coast to the US Southeast where three railroads must team up to execute service. The unanimous ruling, issued Friday, culminates more than six months of arguing between Union Pacific Railroad, Norfolk Southern Railway, and Canadian Pacific Kansas City. CPKC applauded the decision that "exemplifies behavior typical of Union Pacific attempting to bully its way," in a statement. UP, expressing disappointment in the system, told the Journal of Commerce that Canadian Pacific changed operations and service on the line when it acquired Kanas City Southern, but UP also said it was moving on post-decision.The dispute boiled over last summer when FedEx and UPS trucked cargo around the stretch of track to bypass the disruptions. The two parcel giants lean on the railroads to move parcels across the US and impose stringent requirements for on-time performance in their service agreements. The Meridian Speedway, a nearly 300-mile stretch between Louisiana and Mississippi, is a joint venture in which CPKC controls 70% and Norfolk Southern controls the remaining 30%. CPKC oversees dispatching and operations. The Meridian Speedway slashes more than three days between Los Angeles and Atlanta compared with going through Memphis. The dispute centers around CPKC’s decision to restrict train lengths to 8,500 feet, while UP and NS prefer trains that are 11,000 feet long. UP argues the restriction forces them to break up the containers into two different blocks, and CPKC provides substandard service on the second train. CPKC counters that most of the sidings — akin to the shoulder of a highway — are not long enough to handle an 11,000-foot train. When there is a conflict between two trains, the CPKC train is often the one stopped for hours at a time to let the 11,000-foot UP train pass. In an unanimous decision, though, the STB decided not to intervene. “As CPKC notes, the increased dwell of UP’s ‘second train’ could also be attributable to an agreement between CPKC and [Norfolk Southern] that the second train would be scheduled to depart four hours and forty minutes after the first,” STB wrote in the ruling. “Given these facts, there are not sufficient indicia that the conditions the Board imposed in the CP/KCS merger approval are implicated by the increased dwell at UP’s Hollywood Yard.” NS filed a complaint last October but eventually reached an agreement with CPKC and dropped the cast. Last month, however, UP filed a new complaint, citing increased dwell times for the containers going on the second train. UP asked the board to launch an investigation. The Meridian Speedway is a lynchpin to the pending UP-NS transaction before regulators, a route identified as critical to converting more than 1.17 million truckloads to intermodal over three years. However, UP’s application also called for running 11,000-foot trains, the very length that is at the heart of the dispute. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The US Surface Transportation Board (STB) will not intervene in a dispute over the Meridian Speedway, a critical intermodal route connecting the West Coast to the US Southeast where three railroads must team up to execute service. The unanimous ruling, issued Friday, culminates more than six months of arguing between Union Pacific Railroad, Norfolk Southern Railway, and Canadian Pacific Kansas City. CPKC applauded the decision that "exemplifies behavior typical of Union Pacific attempting to bully its way," in a statement. UP, expressing disappointment in the system, told the Journal of Commerce that Canadian Pacific changed operations and service on the line when it acquired Kanas City Southern, but UP also said it was moving on post-decision. The dispute boiled over last summer when FedEx and UPS trucked cargo around the stretch of track to bypass the disruptions. The two parcel giants lean on the railroads to move parcels across the US and impose stringent requirements for on-time performance in their service agreements. The Meridian Speedway, a nearly 300-mile stretch between Louisiana and Mississippi, is a joint venture in which CPKC controls 70% and Norfolk Southern controls the remaining 30%. CPKC oversees dispatching and operations. The Meridian Speedway slashes more than three days between Los Angeles and Atlanta compared with going through Memphis. The dispute centers around CPKC’s decision to restrict train lengths to 8,500 feet, while UP and NS prefer trains that are 11,000 feet long. UP argues the restriction forces them to break up the containers into two different blocks, and CPKC provides substandard service on the second train. CPKC counters that most of the sidings — akin to the shoulder of a highway — are not long enough to handle an 11,000-foot train. When there is a conflict between two trains, the CPKC train is often the one stopped for hours at a time to let the 11,000-foot UP train pass. In an unanimous decision, though, the STB decided not to intervene. “As CPKC notes, the increased dwell of UP’s ‘second train’ could also be attributable to an agreement between CPKC and [Norfolk Southern] that the second train would be scheduled to depart four hours and forty minutes after the first,” STB wrote in the ruling. “Given these facts, there are not sufficient indicia that the conditions the Board imposed in the CP/KCS merger approval are implicated by the increased dwell at UP’s Hollywood Yard.” NS filed a complaint last October but eventually reached an agreement with CPKC and dropped the cast. Last month, however, UP filed a new complaint, citing increased dwell times for the containers going on the second train. UP asked the board to launch an investigation. The Meridian Speedway is a lynchpin to the pending UP-NS transaction before regulators, a route identified as critical to converting more than 1.17 million truckloads to intermodal over three years. However, UP’s application also called for running 11,000-foot trains, the very length that is at the heart of the dispute. Contact Ari Ashe at ari.ashe@spglobal.com .

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STB declines to intervene on Meridian Speedway dispute

<div class="phx-topic abstract-wrapper">An estimated 30% of Asia-Europe air cargo capacity is routed via the Middle East, and with options through the region severely constrained by the US-Iran war, a rush for Asia-Europe air cargo capacity is pushing up prices. </div>

An estimated 30% of Asia-Europe air cargo capacity is routed via the Middle East, and with options through the region severely constrained by the US-Iran war, a rush for Asia-Europe air cargo capacity is pushing up prices.

<div class="phx-topic">Shippers of Asia-Europe air cargo are being hit with a double whammy of rapidly rising freight rates and soaring fuel surcharges as Middle East cargo gets rerouted, China picks up production after Lunar New Year and jet fuel prices double. An estimated 30% of Asia-Europe air cargo is routed via the Middle East, and with options through the region severely constrained by the ongoing US-Iran war, a rush for Asia-Europe air cargo capacity is pushing up rates with hefty fuel surcharges rolled out on top. Niall van de Wouw, air freight officer at rate benchmarking platform Xeneta, said dynamic load factors on the Asia-Europe trade lane rose to 86% last week, up from 80% in the week prior. “That makes it overall a very tight market that will require some creativity to find spare capacity,” he said, but he warned that solutions will come at a price. Ray Zedov, an analyst at Rotate, said some forwarders were employing the creative and costly option of moving cargo from Asia to Europe in the bellies of passenger planes via North America, which was a clear indication there was not enough direct Asia-Europe capacity available. “This routing via North America will be quite expensive given that trans-Pacific carriers were already full on the eastbound routes prior to the war,” he said. While data from Freightos shows spot rates on China-Europe are up about 13% compared with last week, the rates from South Asia to Europe have increased 82% since before the war started. The Baltic Air Index had Singapore outbound rates up 47.6% last week compared with the previous week as Middle East airspace closures drove diversions from Gulf hubs to Asian gateways, tightening capacity. Judah Levine, head of research at Freightos, said rates climbed sharply following the outbreak of war and the airspace closures, but in the last few days prices have leveled off on many lanes. “That may reflect some capacity recovery by Emirates, as well as Etihad, or the addition of direct Asia-Europe capacity by European airlines and carriers from the Far East,” he said. Several freighter operators and integrators have repositioned capacity to serve growing demand on Asia-Europe markets, but a protracted regional conflict could see rates climb even higher. “If this continues, we will see increases of 100% to 200% on the short-term market,” Van de Wouw noted. “In fact, I am picking up anecdotal evidence that this is already happening in selected markets.” <h3>Limited flight availability via Middle East </h3>The war is entering its third week and flights from international carriers remain suspended to the region’s busiest airports of Abu Dhabi, Amman, Bahrain, Doha, Dubai and Tel Aviv. UAE carriers Emirates and Etihad are operating limited flights to the regional hubs of Dubai and Abu Dhabi, and Qatar Cargo, the region’s largest air freight carrier, is not flying in or out of its home base of Doha where Qatari airspace remains closed. Qatar Cargo is the largest air freight operator in the Gulf with a 5.9% share of global capacity, Emirates Skycargo second with 4.9% and Etihad holding a 1.5% share of global capacity, data from air cargo analyst Rotate shows. Total capacity to and from the Middle Eastern airports affected by the US-Iran war is down 90% compared with normal pre-war levels. South Asian origins in particular are heavily dependent on capacity via the Gulf, said Frederic Horst, managing director for Australia-based Trade and Transport Group. He told the Journal of Commerce that 35% of all Indian freight traffic and 46% of cargo traffic from Pakistan and Bangladesh were routed via the Persian Gulf. Kathy Liu, vice president of global sales and marketing at Dimerco Express Group, said with limited opportunity to ship via the main Gulf airports, the market was looking for direct flights from Asia into Europe or services that fly via Asian hubs. “As factories re-open after Chinese New Year, we will see cargo using Middle East carriers in the past moving to Asian hubs including Hong Kong, Taiwan, Singapore, South Korea and Japan,” she told the Journal of Commerce. “That will impact on the first leg of capacity from origins into those hubs and that will squeeze capacity for intra-Asia and trans-Pacific eastbound,” she added. <h3>Fuel surcharges on the rise </h3>Airlines are reviewing their fuel surcharges weekly instead of every month as the war-driven spike in prices piles additional cost on top of what is already a significant portion of a carrier’s expenses. Cathay Pacific’s cargo fuel surcharge will increase from HK$3.20 ($0.41)/kg on March 19 to HK$12.9 ($1.65)/kg from March 20. Lufthansa Cargo raised its air freight surcharge from €0.85 ($0.97)/kg to €1.20 ($1.27)/kg, effective March 16, while IAG Cargo has hedged more than 60% of its fuel for 2026 and has not announced any new fuel surcharge. Jet fuel typically accounts for 20% to 30% of an airline’s total cost base, and with international carriers forced to fly longer distances to avoid Middle East conflict zones with reduced payloads, those costs are mounting fast. “Airspace restrictions or routing adjustments may require airlines to operate longer flight paths between global hubs, increasing fuel demand at a time when supply conditions are already tight,” global forwarder Logfret said in a market update. “This combination of supply constraints and operational adjustments has intensified cost pressures across both passenger and cargo aviation sectors.” Maersk told customers in an advisory Friday that its fuel surcharges will be reviewed on a weekly basis and adjusted in line with developments in aviation fuel prices, based on established market indexes. For contract renewals where no fuel surcharge mechanism is in place, Maersk has proposed that 15% of the rate is allocated to fuel. “At the same time, the evolving situation is placing pressure on global air freight capacity and routing options,” Maersk noted. “As a result, Maersk Air Freight will apply a transit disruption surcharge in respect of the additional costs associated with securing capacity, rerouting shipments and maintaining service continuity on affected operations.” <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">Demand is also growing for multimodal alternatives</a>, with road freight being used to move cargo from Asia to Europe and between transport hubs in the Middle East as an alternative to air. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Shippers of Asia-Europe air cargo are being hit with a double whammy of rapidly rising freight rates and soaring fuel surcharges as Middle East cargo gets rerouted, China picks up production after Lunar New Year and jet fuel prices double. An estimated 30% of Asia-Europe air cargo is routed via the Middle East, and with options through the region severely constrained by the ongoing US-Iran war, a rush for Asia-Europe air cargo capacity is pushing up rates with hefty fuel surcharges rolled out on top. Niall van de Wouw, air freight officer at rate benchmarking platform Xeneta, said dynamic load factors on the Asia-Europe trade lane rose to 86% last week, up from 80% in the week prior. “That makes it overall a very tight market that will require some creativity to find spare capacity,” he said, but he warned that solutions will come at a price. Ray Zedov, an analyst at Rotate, said some forwarders were employing the creative and costly option of moving cargo from Asia to Europe in the bellies of passenger planes via North America, which was a clear indication there was not enough direct Asia-Europe capacity available. “This routing via North America will be quite expensive given that trans-Pacific carriers were already full on the eastbound routes prior to the war,” he said. While data from Freightos shows spot rates on China-Europe are up about 13% compared with last week, the rates from South Asia to Europe have increased 82% since before the war started. The Baltic Air Index had Singapore outbound rates up 47.6% last week compared with the previous week as Middle East airspace closures drove diversions from Gulf hubs to Asian gateways, tightening capacity. Judah Levine, head of research at Freightos, said rates climbed sharply following the outbreak of war and the airspace closures, but in the last few days prices have leveled off on many lanes. “That may reflect some capacity recovery by Emirates, as well as Etihad, or the addition of direct Asia-Europe capacity by European airlines and carriers from the Far East,” he said. Several freighter operators and integrators have repositioned capacity to serve growing demand on Asia-Europe markets, but a protracted regional conflict could see rates climb even higher. “If this continues, we will see increases of 100% to 200% on the short-term market,” Van de Wouw noted. “In fact, I am picking up anecdotal evidence that this is already happening in selected markets.” Limited flight availability via Middle East The war is entering its third week and flights from international carriers remain suspended to the region’s busiest airports of Abu Dhabi, Amman, Bahrain, Doha, Dubai and Tel Aviv. UAE carriers Emirates and Etihad are operating limited flights to the regional hubs of Dubai and Abu Dhabi, and Qatar Cargo, the region’s largest air freight carrier, is not flying in or out of its home base of Doha where Qatari airspace remains closed. Qatar Cargo is the largest air freight operator in the Gulf with a 5.9% share of global capacity, Emirates Skycargo second with 4.9% and Etihad holding a 1.5% share of global capacity, data from air cargo analyst Rotate shows. Total capacity to and from the Middle Eastern airports affected by the US-Iran war is down 90% compared with normal pre-war levels. South Asian origins in particular are heavily dependent on capacity via the Gulf, said Frederic Horst, managing director for Australia-based Trade and Transport Group. He told the Journal of Commerce that 35% of all Indian freight traffic and 46% of cargo traffic from Pakistan and Bangladesh were routed via the Persian Gulf. Kathy Liu, vice president of global sales and marketing at Dimerco Express Group, said with limited opportunity to ship via the main Gulf airports, the market was looking for direct flights from Asia into Europe or services that fly via Asian hubs. “As factories re-open after Chinese New Year, we will see cargo using Middle East carriers in the past moving to Asian hubs including Hong Kong, Taiwan, Singapore, South Korea and Japan,” she told the Journal of Commerce. “That will impact on the first leg of capacity from origins into those hubs and that will squeeze capacity for intra-Asia and trans-Pacific eastbound,” she added. Fuel surcharges on the rise Airlines are reviewing their fuel surcharges weekly instead of every month as the war-driven spike in prices piles additional cost on top of what is already a significant portion of a carrier’s expenses. Cathay Pacific’s cargo fuel surcharge will increase from HK$3.20 ($0.41)/kg on March 19 to HK$12.9 ($1.65)/kg from March 20. Lufthansa Cargo raised its air freight surcharge from €0.85 ($0.97)/kg to €1.20 ($1.27)/kg, effective March 16, while IAG Cargo has hedged more than 60% of its fuel for 2026 and has not announced any new fuel surcharge. Jet fuel typically accounts for 20% to 30% of an airline’s total cost base, and with international carriers forced to fly longer distances to avoid Middle East conflict zones with reduced payloads, those costs are mounting fast. “Airspace restrictions or routing adjustments may require airlines to operate longer flight paths between global hubs, increasing fuel demand at a time when supply conditions are already tight,” global forwarder Logfret said in a market update. “This combination of supply constraints and operational adjustments has intensified cost pressures across both passenger and cargo aviation sectors.” Maersk told customers in an advisory Friday that its fuel surcharges will be reviewed on a weekly basis and adjusted in line with developments in aviation fuel prices, based on established market indexes. For contract renewals where no fuel surcharge mechanism is in place, Maersk has proposed that 15% of the rate is allocated to fuel. “At the same time, the evolving situation is placing pressure on global air freight capacity and routing options,” Maersk noted. “As a result, Maersk Air Freight will apply a transit disruption surcharge in respect of the additional costs associated with securing capacity, rerouting shipments and maintaining service continuity on affected operations.” Demand is also growing for multimodal alternatives , with road freight being used to move cargo from Asia to Europe and between transport hubs in the Middle East as an alternative to air. Contact Greg Knowler at greg.knowler@spglobal.com .

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Asia-Europe air cargo space tightens as rates, fuel surcharges soar

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<div class="phx-topic abstract-wrapper">The most disruptive energy shock in modern history has reawakened the debate over whether emergency fuel surcharges are a fair way for ocean carriers to recoup unexpected costs or blatant “double-dipping” that angers shippers.</div>

The most disruptive energy shock in modern history has reawakened the debate over whether emergency fuel surcharges are a fair way for ocean carriers to recoup unexpected costs or blatant “double-dipping” that angers shippers.

<div class="phx-topic">The speed and severity of the jump in global oil prices amid the war in the Middle East have reignited long-standing suspicions by cargo owners that fuel surcharges levied by ocean carriers are used as a revenue stream rather than a cost recovery mechanism. Container lines defend the fees, ranging from $30 to $300 per TEU depending on the trade lane, arguing that what is widely seen as the most significant energy shock in history has forced them to recoup costs with fees beyond the lagging quarterly bunker adjustment factor (BAF). Bunker fuel prices contribute approximately 15% to 30% of operating costs, depending on the year, according to various container line financial reports.And while the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz, according to a Vizion analysis, shippers nonetheless are retaining a cynical view of the emergency fuel surcharges. “Shipping lines always seem to manage to turn a crisis into a cash-grab,” was the blunt message from James Hookham, director of the Global Shippers Forum. “This apparent ‘double-dipping’ brings the whole sordid practice of surcharging into further disrepute.” Emergency bunker adjustment factors (EBAFs) on top of quarterly fuel price adjustments to recover costs in what is a core operational expense were acceptable for the current contract period ending March 26, said Antonios Rigalos, managing partner of shipper network ShiftX. But going forward, increased bunker costs should be recovered by the quarterly BAF review, he noted.“The BAF reviews executed for Q3 will reflect the higher bunker costs for the previous quarter [March/April/May], and an EBAF plus BAF review would create a double charging of customers,” Rigalos said. “While we understand the situation of carriers and that increased bunker costs have a big impact that somehow needs to be recovered, it needs to be carried out in a fair way and not by double charging BCOs [beneficial cargo owners] and clients.” Several carriers have announced emergency bunker fuel surcharges on top of quarterly fuel price adjustments to recover costs in what is a core operational expense, but the moves have sparked growing concern from shippers. An Asia-Europe shipper based in Hong Kong said he negotiated contracts based on the Shanghai Containerized Freight Index (SCFI) that covers both BAF and EBAF surcharges. “We adjust the bunker fuel surcharge bi-monthly and as far as we are concerned, we will fight any additional emergency fuel surcharge from the carriers,” the source said. <h3>Long hauls hit with surcharges </h3>CMA CGM this week announced an upward review of its “emergency fuel surcharge” imposed on March 16 that will increase from $150 per TEU to $265/TEU on all long-haul trade lanes. OOCL said it will impose a temporary emergency bunker surcharge (EBS) from March 23 to manage global challenges to fuel availability because the increased costs are “beyond the scope of existing fuel cost recovery and low sulfur adjustment mechanisms.” Cosco Shipping has also announced emergency bunker surcharges on various trades between Europe, South America and Africa, while Mediterranean Shipping Co. introduced a temporary emergency bunker surcharge on March 16 that varies from $30/TEU to $300/TEU depending on the trade lane. Maersk on March 10 announced it would implement an emergency bunker surcharge of $200/TEU on all long hauls “to safeguard cargo integrity and maintain the stability of our network.” “This surcharge covers the impact of fuel availability, cost and mix outside of what is covered in our fossil fuel fee [FFF],” the carrier said in a statement. “This means we are better positioned to have the necessary access to fuel and the ability to move it to necessary locations.” Maersk CCO Karsten Kildahl said the carrier was being forced to take the unprecedented step of <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia as supplies at bunkering hubs dried up</a>. Most of the emergency fuel surcharges will be reviewed by carriers every two weeks, but with the Strait of Hormuz — through which about 20% of global oil and liquefied natural gas supplies move each day — out of bounds to commercial shipping, there is little chance the EBAF will be dropped anytime soon. The speed with which the fuel surcharges were imposed by carriers made it “nigh on impossible” for shippers to recover costs from their own customers or suppliers, Hookham told the Journal of Commerce. “For smaller businesses, that cash flow hit can be fatal when payments are likely to be late due to late or non-delivery of cargo,” he said, noting that the number of surcharges being introduced made it difficult for shippers to track which ones applied to their shipments. “The US got it right when the [Federal Maritime Commission] <a href="https://www.joc.com/article/fmc-says-closely-monitoring-carrier-rate-moves-tied-to-middle-east-war-6184781">required 30-day notice periods</a> before surcharges could take effect on US services,” Hookham said. “The current surcharging behavior will only hasten demands for similar notice periods to become mandatory worldwide.” <h3>Fractured fuel links </h3>While carriers roll out their fuel surcharges to try to recover rising costs, freight tracking platform Vizion believes the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz. In a recent review of bunker surcharges, Vizion noted that average very low sulfur fuel oil (VLSFO) prices of $535 per metric ton in 2025 were down 14.4% year over year, the lowest since 2020, with BAF contributing just 10% to 20% to total freight costs. The launch of US and Israeli strikes on Iran on Feb. 28 triggered a 73% fuel price spike to $939/metric ton in under two weeks, and carriers within days responded with emergency surcharges of $60/TEU to $190/TEU, far faster than standard quarterly BAF adjustments. That shows the traditional BAF fuel-price correlation has weakened as carriers shift to emergency mechanisms to manage extreme volatility, according to Vizion. But Vizion said a deeper trend was emerging with a market fracture in progress as carriers divided into two camps: immediate risk transfer versus contract stability. Carriers such as Maersk initially absorbed the volatility to protect long-term contract relationships, although the carrier has subsequently announced an emergency fuel surcharge. A more aggressive strategy was taken by MSC and CMA CGM, with both adopting a rapid pass-through of fuel spikes to protect their margins immediately. Shippers with locked-in rates will enjoy a short-term cost advantage, but it will be a temporary relief before fuel adjustments hit. Vizion warned that over the next three to six months, shippers can expect aggressive second-quarter BAF corrections to capture the remaining fuel cost delta. Chantal McRoberts, director and head of advisory at Drewry Supply Chain Advisors, said shippers understand they will pay an increased fuel cost in the third quarter as that is part of the BAF policy that enables carriers to recover fuel costs over time. “The concern around the introduction of EBAF is the potential for double recovery,” McRoberts told the Journal of Commerce. “In practice, a shipper may pay an EBAF during Q2 to reflect higher fuel prices and then see its underlying BAF increase in Q3 as the formula catches up with those same Q2 fuel costs. At that point, the EBAF risks becoming revenue‑generating rather than purely cost‑recovering. “This is the dilemma currently facing shippers,” she added. “As a result, those operating under transparent, formula‑based BAF mechanisms are, in many cases, pushing back on EBAF charges.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The speed and severity of the jump in global oil prices amid the war in the Middle East have reignited long-standing suspicions by cargo owners that fuel surcharges levied by ocean carriers are used as a revenue stream rather than a cost recovery mechanism. Container lines defend the fees, ranging from $30 to $300 per TEU depending on the trade lane, arguing that what is widely seen as the most significant energy shock in history has forced them to recoup costs with fees beyond the lagging quarterly bunker adjustment factor (BAF). Bunker fuel prices contribute approximately 15% to 30% of operating costs, depending on the year, according to various container line financial reports. And while the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz, according to a Vizion analysis, shippers nonetheless are retaining a cynical view of the emergency fuel surcharges. “Shipping lines always seem to manage to turn a crisis into a cash-grab,” was the blunt message from James Hookham, director of the Global Shippers Forum. “This apparent ‘double-dipping’ brings the whole sordid practice of surcharging into further disrepute.” Emergency bunker adjustment factors (EBAFs) on top of quarterly fuel price adjustments to recover costs in what is a core operational expense were acceptable for the current contract period ending March 26, said Antonios Rigalos, managing partner of shipper network ShiftX. But going forward, increased bunker costs should be recovered by the quarterly BAF review, he noted. “The BAF reviews executed for Q3 will reflect the higher bunker costs for the previous quarter [March/April/May], and an EBAF plus BAF review would create a double charging of customers,” Rigalos said. “While we understand the situation of carriers and that increased bunker costs have a big impact that somehow needs to be recovered, it needs to be carried out in a fair way and not by double charging BCOs [beneficial cargo owners] and clients.” Several carriers have announced emergency bunker fuel surcharges on top of quarterly fuel price adjustments to recover costs in what is a core operational expense, but the moves have sparked growing concern from shippers. An Asia-Europe shipper based in Hong Kong said he negotiated contracts based on the Shanghai Containerized Freight Index (SCFI) that covers both BAF and EBAF surcharges. “We adjust the bunker fuel surcharge bi-monthly and as far as we are concerned, we will fight any additional emergency fuel surcharge from the carriers,” the source said. Long hauls hit with surcharges CMA CGM this week announced an upward review of its “emergency fuel surcharge” imposed on March 16 that will increase from $150 per TEU to $265/TEU on all long-haul trade lanes. OOCL said it will impose a temporary emergency bunker surcharge (EBS) from March 23 to manage global challenges to fuel availability because the increased costs are “beyond the scope of existing fuel cost recovery and low sulfur adjustment mechanisms.” Cosco Shipping has also announced emergency bunker surcharges on various trades between Europe, South America and Africa, while Mediterranean Shipping Co. introduced a temporary emergency bunker surcharge on March 16 that varies from $30/TEU to $300/TEU depending on the trade lane. Maersk on March 10 announced it would implement an emergency bunker surcharge of $200/TEU on all long hauls “to safeguard cargo integrity and maintain the stability of our network.” “This surcharge covers the impact of fuel availability, cost and mix outside of what is covered in our fossil fuel fee [FFF],” the carrier said in a statement. “This means we are better positioned to have the necessary access to fuel and the ability to move it to necessary locations.” Maersk CCO Karsten Kildahl said the carrier was being forced to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia as supplies at bunkering hubs dried up . Most of the emergency fuel surcharges will be reviewed by carriers every two weeks, but with the Strait of Hormuz — through which about 20% of global oil and liquefied natural gas supplies move each day — out of bounds to commercial shipping, there is little chance the EBAF will be dropped anytime soon. The speed with which the fuel surcharges were imposed by carriers made it “nigh on impossible” for shippers to recover costs from their own customers or suppliers, Hookham told the Journal of Commerce. “For smaller businesses, that cash flow hit can be fatal when payments are likely to be late due to late or non-delivery of cargo,” he said, noting that the number of surcharges being introduced made it difficult for shippers to track which ones applied to their shipments. “The US got it right when the [Federal Maritime Commission] required 30-day notice periods before surcharges could take effect on US services,” Hookham said. “The current surcharging behavior will only hasten demands for similar notice periods to become mandatory worldwide.” Fractured fuel links While carriers roll out their fuel surcharges to try to recover rising costs, freight tracking platform Vizion believes the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz. In a recent review of bunker surcharges, Vizion noted that average very low sulfur fuel oil (VLSFO) prices of $535 per metric ton in 2025 were down 14.4% year over year, the lowest since 2020, with BAF contributing just 10% to 20% to total freight costs. The launch of US and Israeli strikes on Iran on Feb. 28 triggered a 73% fuel price spike to $939/metric ton in under two weeks, and carriers within days responded with emergency surcharges of $60/TEU to $190/TEU, far faster than standard quarterly BAF adjustments. That shows the traditional BAF fuel-price correlation has weakened as carriers shift to emergency mechanisms to manage extreme volatility, according to Vizion. But Vizion said a deeper trend was emerging with a market fracture in progress as carriers divided into two camps: immediate risk transfer versus contract stability. Carriers such as Maersk initially absorbed the volatility to protect long-term contract relationships, although the carrier has subsequently announced an emergency fuel surcharge. A more aggressive strategy was taken by MSC and CMA CGM, with both adopting a rapid pass-through of fuel spikes to protect their margins immediately. Shippers with locked-in rates will enjoy a short-term cost advantage, but it will be a temporary relief before fuel adjustments hit. Vizion warned that over the next three to six months, shippers can expect aggressive second-quarter BAF corrections to capture the remaining fuel cost delta. Chantal McRoberts, director and head of advisory at Drewry Supply Chain Advisors, said shippers understand they will pay an increased fuel cost in the third quarter as that is part of the BAF policy that enables carriers to recover fuel costs over time. “The concern around the introduction of EBAF is the potential for double recovery,” McRoberts told the Journal of Commerce. “In practice, a shipper may pay an EBAF during Q2 to reflect higher fuel prices and then see its underlying BAF increase in Q3 as the formula catches up with those same Q2 fuel costs. At that point, the EBAF risks becoming revenue‑generating rather than purely cost‑recovering. “This is the dilemma currently facing shippers,” she added. “As a result, those operating under transparent, formula‑based BAF mechanisms are, in many cases, pushing back on EBAF charges.” Contact Greg Knowler at greg.knowler@spglobal.com .

War reignites tussle between ocean carriers, cargo owners over fuel surcharges

<div class="phx-topic abstract-wrapper">While the logistical hurdles of sending cargo to the region are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices.</div>

While the logistical hurdles of sending cargo to the region are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices.

<div class="phx-topic">US exporters are scrambling to locate containers they have shipped to the Middle East but were subsequently dropped off at unknown ports after ocean carriers were forced to halt almost all services due to the war with Iran. While the logistical hurdles for Middle East cargo are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices. Mediterranean Shipping Co. invoked an “end of voyage” clause this week on exports into Jebel Ali in Dubai, allowing the carrier to discharge containers at the next available port on the ship’s rotation, forwarders tell the Journal of Commerce. The end-of-voyage clause also includes an $800 surcharge. Stephen Zambo, president of third-party logistics provider AGL Group, said he has about 70 containers on the water with MSC destined for the Middle East. He is now figuring out where the next port of call will be for those boxes and bracing his customers for more costs and delays due to the redirections. Along with those containers, AGL has three containers on the ONE Majesty that was attacked in the Strait of Hormuz on Wednesday. Although the vessel suffered some damage, Zambo was told the ship would continue its original voyage. “We’re having to figure out each day what’s going on and what we need to do,” Zambo said. “It’s like it’s been over the last two years with tariffs and other crises, sort of wait-and-see how things play out and act accordingly.” MSC handles about half the container volumes from the US to the Middle East each year, which amounts to about 290,000 TEUs, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Maersk and CMA CGM are the second- and third-busiest carriers on that trade lane. Tim Avanzato, director of global logistics for paper and plastic products maker Lanca Sales, told the Journal of Commerce there’s little risk of that US export cargo backing up at ports, as most of it can be sold to other markets. However, the shutdown of the Strait of Hormuz and the resulting surge in oil prices is concerning because that raises the cost of the products that Lanca Sales distributes. Water and hygiene services company Ecolab imposed a 10% to 14% energy surcharge on its products on Wednesday due to crude oil futures rising to over $100 per barrel. “The Mideast situation is more of an inconvenience at this point,” Avanzato said. “But the fallout if this goes on for weeks? It’s a catastrophe.” Zambo said there are other markets that US exporters can tap. But some products such as certain softwoods are milled specifically for Middle East markets. “The lumber producers are now trying to figure out what to do with the product they have,” he said. Higher oil prices have also resulted in escalating fuel surcharges for all trades. Zambo said he has been in discussions about shipping trans-Atlantic cargo into the US, but carriers have been unwilling to commit to rates due to the surge in fuel prices. <h3>Reviewing new routes </h3>The director of global logistics for a Houston-based chemicals company told the Journal of Commerce he is expecting his iso-tanks onboard MSC vessels destined for Jebel Ali to land in India now due to the end-of-voyage clause. He is now looking at new routes outside of the Middle East’s main port. CMA CGM, which last week suspended all Middle East bookings, on Wednesday reopened bookings for alternative ports such as the UAE’s Khor Fakkan or Oman’s Sohar port, which sit outside of the Strait of Hormuz. CMA CGM is also offering service to Saudi Arabia’s Red Sea port of Jeddah <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">and trucking cargo from there</a>. But Jeddah would also involve transiting the Red Sea, which raises the risk of a potential attack by Iran-aligned Houthi rebels. The source said the regional risk is such that MSC has also suspended bookings into Israel’s Haifa, leaving Zim Integrated Shipping Services as the only carrier to service that port. MSC’s suspension of Haifa service could not be independently confirmed. “The Red Sea is a mess,” the executive said. “I have no confidence it will get there.” He added that he’s looking to move containers to Egypt’s Port Said, a transshipment hub outside of the immediate warzone at the northern end of the Suez Canal on the Mediterranean Sea. Outside of servicing his customers, the source said his main concern now is how the oil price spike will play out for the economy. The cost of intermediate chemicals from the Middle East, including ammonia and cyclo-hexane, has jumped, resulting in further cost pressures for his own company’s products. “Fuel costs are going to kill everybody,” he said. “That’s the wildcard.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US exporters are scrambling to locate containers they have shipped to the Middle East but were subsequently dropped off at unknown ports after ocean carriers were forced to halt almost all services due to the war with Iran. While the logistical hurdles for Middle East cargo are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices. Mediterranean Shipping Co. invoked an “end of voyage” clause this week on exports into Jebel Ali in Dubai, allowing the carrier to discharge containers at the next available port on the ship’s rotation, forwarders tell the Journal of Commerce. The end-of-voyage clause also includes an $800 surcharge. Stephen Zambo, president of third-party logistics provider AGL Group, said he has about 70 containers on the water with MSC destined for the Middle East. He is now figuring out where the next port of call will be for those boxes and bracing his customers for more costs and delays due to the redirections. Along with those containers, AGL has three containers on the ONE Majesty that was attacked in the Strait of Hormuz on Wednesday. Although the vessel suffered some damage, Zambo was told the ship would continue its original voyage. “We’re having to figure out each day what’s going on and what we need to do,” Zambo said. “It’s like it’s been over the last two years with tariffs and other crises, sort of wait-and-see how things play out and act accordingly.” MSC handles about half the container volumes from the US to the Middle East each year, which amounts to about 290,000 TEUs, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Maersk and CMA CGM are the second- and third-busiest carriers on that trade lane. Tim Avanzato, director of global logistics for paper and plastic products maker Lanca Sales, told the Journal of Commerce there’s little risk of that US export cargo backing up at ports, as most of it can be sold to other markets. However, the shutdown of the Strait of Hormuz and the resulting surge in oil prices is concerning because that raises the cost of the products that Lanca Sales distributes. Water and hygiene services company Ecolab imposed a 10% to 14% energy surcharge on its products on Wednesday due to crude oil futures rising to over $100 per barrel. “The Mideast situation is more of an inconvenience at this point,” Avanzato said. “But the fallout if this goes on for weeks? It’s a catastrophe.” Zambo said there are other markets that US exporters can tap. But some products such as certain softwoods are milled specifically for Middle East markets. “The lumber producers are now trying to figure out what to do with the product they have,” he said. Higher oil prices have also resulted in escalating fuel surcharges for all trades. Zambo said he has been in discussions about shipping trans-Atlantic cargo into the US, but carriers have been unwilling to commit to rates due to the surge in fuel prices. Reviewing new routes The director of global logistics for a Houston-based chemicals company told the Journal of Commerce he is expecting his iso-tanks onboard MSC vessels destined for Jebel Ali to land in India now due to the end-of-voyage clause. He is now looking at new routes outside of the Middle East’s main port. CMA CGM, which last week suspended all Middle East bookings, on Wednesday reopened bookings for alternative ports such as the UAE’s Khor Fakkan or Oman’s Sohar port, which sit outside of the Strait of Hormuz. CMA CGM is also offering service to Saudi Arabia’s Red Sea port of Jeddah and trucking cargo from there . But Jeddah would also involve transiting the Red Sea, which raises the risk of a potential attack by Iran-aligned Houthi rebels. The source said the regional risk is such that MSC has also suspended bookings into Israel’s Haifa, leaving Zim Integrated Shipping Services as the only carrier to service that port. MSC’s suspension of Haifa service could not be independently confirmed. “The Red Sea is a mess,” the executive said. “I have no confidence it will get there.” He added that he’s looking to move containers to Egypt’s Port Said, a transshipment hub outside of the immediate warzone at the northern end of the Suez Canal on the Mediterranean Sea. Outside of servicing his customers, the source said his main concern now is how the oil price spike will play out for the economy. The cost of intermediate chemicals from the Middle East, including ammonia and cyclo-hexane, has jumped, resulting in further cost pressures for his own company’s products. “Fuel costs are going to kill everybody,” he said. “That’s the wildcard.” Contact Michael Angell at michael.angell@spglobal.com .

Trans-Atlantic

US exports to Middle East in limbo amid war zone service disruptions

<div class="phx-topic abstract-wrapper">The UP-NS merger and ONE’s Seaspan stake look like separate deals in separate industries, but they are the same move, writes Paul Tonsager. </div>

The UP-NS merger and ONE’s Seaspan stake look like separate deals in separate industries, but they are the same move, writes Paul Tonsager.

<div class="phx-topic">Two consequential infrastructure transactions are moving simultaneously through their respective regulatory processes, in separate industries, with a single and critical purpose: Secure assets and expand infrastructure. In rail, Union Pacific (UP) and Norfolk Southern (NS) are advancing a proposed $85 billion merger that would unite UP’s western network with NS’ eastern footprint into a single system spanning 43 states. The Surface Transportation Board (STB) rejected the initial application in January as incomplete; the carriers have committed to refiling by April 30, 2026. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6186769_0.1.jpg"></img></div>In ocean, Ocean Network Express <a href="https://www.joc.com/article/one-boosts-ownership-stake-in-seaspan-parent-poseidon-6184045">has agreed to increase its ownership stake in Poseidon Corp.</a> — parent company of Seaspan Corporation, the world’s largest independent containership lessor — to 48.9%. ONE is a Singapore-based joint venture of three Japanese shipping conglomerates; Poseidon is incorporated in the Marshall Islands and tax-resident in the United Kingdom. The regulatory approvals cited in the announcement almost certainly refer to Japan’s competition authority and possibly the EU — not the United States, which has no STB equivalent for ocean shipping. That gap is part of the story. Also in ocean: Hapag-Lloyd, Germany’s largest carrier, <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">has agreed to acquire ZIM Integrated Shipping Services in a deal valued at approximately $4.2 billion</a>, a transaction that would create a combined fleet exceeding 4.8 million TEUs. Hapag-Lloyd is one of Seaspan’s charter customers, along with MSC, Maersk, CMA CGM, Cosco, Evergreen and ONE. The world’s seven largest container lines all rent tonnage from the platform that ONE is moving to control. That fact has not appeared in any headline covering this transaction. The surface details differ. The underlying logic is identical: the dominant players in each mode are moving to consolidate control of the infrastructure layer that competitors depend on. The difference is that one transaction faces a rigorous, public, multi-year regulatory process. The other faces comparatively limited scrutiny from any authority with real enforcement power over the US freight market. <h3>The network versus the tonnage platform </h3>In rail, the infrastructure being consolidated is the network itself. A UP-NS combination would create a single operator controlling track, terminals and dispatch authority across the full breadth of the country. For shippers benefiting from UP-NS interchange competition on transcontinental lanes, the merger eliminates a competitive option that cannot be recreated once it closes. In ocean, the infrastructure being consolidated is the tonnage platform. Seaspan owns 241 vessels with more than 2.5 million TEUs of capacity and charters them to virtually every major container line. ONE, approaching half-ownership of Seaspan’s parent, is not acquiring a competitor’s ships. It is acquiring a structural position in the platform that determines which carrier gets what vessel, at what charter rate, on what timeline. The rail analog is TTX Company, the carrier-owned flatcar cooperative whose shareholders — BNSF, UP, NS among them — own the equipment pool that their competitors must also rent. ONE’s Seaspan stake is the TTX play, extended to the vessel market. <h3>The 48.9% question </h3>ONE’s ownership threshold is a deliberate structural choice. Crossing 50% would likely require consolidation of Poseidon’s debt-heavy balance sheet onto ONE’s financial statements and would reframe the transaction — from a minority investment to a control acquisition of the dominant vessel-leasing platform — in ways that invite harder antitrust scrutiny in Japan and the EU. At 48.9%, ONE secures board influence and fleet planning access without pulling those triggers. The equity is entirely private — Atlas Corp., Seaspan’s parent company, was delisted in 2023. The primary seller was Fairfax Financial Holdings, run by Prem Watsa, which sold a 23.2% stake but retains approximately 22.1% of Poseidon. Watsa is choosing his partner, not his exit. Any future move toward majority control runs through him and the remaining insiders — on their timeline, at their price. <h3>What shippers are actually facing </h3>Considered individually, neither the UP-NS combination nor the ONE-Seaspan stake is disqualifying. Considered together — alongside Hapag-Lloyd’s pending acquisition of ZIM — they describe a synchronized compression of freight infrastructure across two modes simultaneously. Shippers with rail exposure on transcontinental lanes face a market in which UP and NS no longer compete at interchange. Shippers dependent on ocean capacity face a market in which the largest vessel lessor is approaching control by one of its own customers. For manufacturers, retailers and agricultural exporters moving product across both modes — which describes most significant US freight — the implications compound. The STB’s <a href="https://www.joc.com/article/industry-stakeholders-dont-see-regulators-rubber-stamping-up-ns-deal-6181218">rejection of the UP-NS application</a> signals that rigorous competitive impact analysis is required before major rail transactions proceed. No equivalent process exists for the ONE-Seaspan transaction in the United States. The Federal Maritime Commission has limited authority over foreign vessel ownership structures. The transaction will be decided in Tokyo, Brussels and Hamilton — not Washington. Two modes. Two mechanisms. One direction. The infrastructure consolidation story of 2026 is not being told as a single story. It should be. 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>

Two consequential infrastructure transactions are moving simultaneously through their respective regulatory processes, in separate industries, with a single and critical purpose: Secure assets and expand infrastructure. In rail, Union Pacific (UP) and Norfolk Southern (NS) are advancing a proposed $85 billion merger that would unite UP’s western network with NS’ eastern footprint into a single system spanning 43 states. The Surface Transportation Board (STB) rejected the initial application in January as incomplete; the carriers have committed to refiling by April 30, 2026. In ocean, Ocean Network Express has agreed to increase its ownership stake in Poseidon Corp. — parent company of Seaspan Corporation, the world’s largest independent containership lessor — to 48.9%. ONE is a Singapore-based joint venture of three Japanese shipping conglomerates; Poseidon is incorporated in the Marshall Islands and tax-resident in the United Kingdom. The regulatory approvals cited in the announcement almost certainly refer to Japan’s competition authority and possibly the EU — not the United States, which has no STB equivalent for ocean shipping. That gap is part of the story. Also in ocean: Hapag-Lloyd, Germany’s largest carrier, has agreed to acquire ZIM Integrated Shipping Services in a deal valued at approximately $4.2 billion , a transaction that would create a combined fleet exceeding 4.8 million TEUs. Hapag-Lloyd is one of Seaspan’s charter customers, along with MSC, Maersk, CMA CGM, Cosco, Evergreen and ONE. The world’s seven largest container lines all rent tonnage from the platform that ONE is moving to control. That fact has not appeared in any headline covering this transaction. The surface details differ. The underlying logic is identical: the dominant players in each mode are moving to consolidate control of the infrastructure layer that competitors depend on. The difference is that one transaction faces a rigorous, public, multi-year regulatory process. The other faces comparatively limited scrutiny from any authority with real enforcement power over the US freight market. The network versus the tonnage platform In rail, the infrastructure being consolidated is the network itself. A UP-NS combination would create a single operator controlling track, terminals and dispatch authority across the full breadth of the country. For shippers benefiting from UP-NS interchange competition on transcontinental lanes, the merger eliminates a competitive option that cannot be recreated once it closes. In ocean, the infrastructure being consolidated is the tonnage platform. Seaspan owns 241 vessels with more than 2.5 million TEUs of capacity and charters them to virtually every major container line. ONE, approaching half-ownership of Seaspan’s parent, is not acquiring a competitor’s ships. It is acquiring a structural position in the platform that determines which carrier gets what vessel, at what charter rate, on what timeline. The rail analog is TTX Company, the carrier-owned flatcar cooperative whose shareholders — BNSF, UP, NS among them — own the equipment pool that their competitors must also rent. ONE’s Seaspan stake is the TTX play, extended to the vessel market. The 48.9% question ONE’s ownership threshold is a deliberate structural choice. Crossing 50% would likely require consolidation of Poseidon’s debt-heavy balance sheet onto ONE’s financial statements and would reframe the transaction — from a minority investment to a control acquisition of the dominant vessel-leasing platform — in ways that invite harder antitrust scrutiny in Japan and the EU. At 48.9%, ONE secures board influence and fleet planning access without pulling those triggers. The equity is entirely private — Atlas Corp., Seaspan’s parent company, was delisted in 2023. The primary seller was Fairfax Financial Holdings, run by Prem Watsa, which sold a 23.2% stake but retains approximately 22.1% of Poseidon. Watsa is choosing his partner, not his exit. Any future move toward majority control runs through him and the remaining insiders — on their timeline, at their price. What shippers are actually facing Considered individually, neither the UP-NS combination nor the ONE-Seaspan stake is disqualifying. Considered together — alongside Hapag-Lloyd’s pending acquisition of ZIM — they describe a synchronized compression of freight infrastructure across two modes simultaneously. Shippers with rail exposure on transcontinental lanes face a market in which UP and NS no longer compete at interchange. Shippers dependent on ocean capacity face a market in which the largest vessel lessor is approaching control by one of its own customers. For manufacturers, retailers and agricultural exporters moving product across both modes — which describes most significant US freight — the implications compound. The STB’s rejection of the UP-NS application signals that rigorous competitive impact analysis is required before major rail transactions proceed. No equivalent process exists for the ONE-Seaspan transaction in the United States. The Federal Maritime Commission has limited authority over foreign vessel ownership structures. The transaction will be decided in Tokyo, Brussels and Hamilton — not Washington. Two modes. Two mechanisms. One direction. The infrastructure consolidation story of 2026 is not being told as a single story. It should be. 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 .

Rail and ocean carriers consolidating shipping infrastructure: analyst

<div class="phx-topic abstract-wrapper">The recent increase in intermodal share in the face of declining West Coast share is intriguing, and it might be signaling a more significant change in the situation, writes Larry Gross. </div>

The recent increase in intermodal share in the face of declining West Coast share is intriguing, and it might be signaling a more significant change in the situation, writes Larry Gross.

<div class="phx-topic">The share of imports arriving in the US and Western Canada that travels inland via rail has been in a long-term decline. Changes in shipping patterns are a big reason why, with major implications as to where things are heading and the railroads’ ability to affect the result. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6187602_0.1.jpg"></img></div>The chart below tracks two measures over the past 16 years. The first is the share of US plus Western Canadian import TEUs arriving on the West Coast. As has been well documented, this share has been in a long-term decline as importers have moved away from West Coast-centric strategies toward four- and five-corner strategies that provide greater diversification and lower costs. Twelve-month moving average West Coast share declined by over 10 points from 59% in 2010 to under 49% in 2025. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="651db556-cc65-494c-abea-84774e97a373"></dynamic-object></div>The second statistic is the percentage of import TEUs arriving that travel inland from the coast via intermodal. This includes inland point intermodal loads and South California transloads. Intermodal share has also seen a long-term decline similar to that of West Coast share. The linear trends over this period for both statistics are almost parallel. The correlation was very strong between 2014 and mid-2022. We know that intermodal share is higher off the West Coast than elsewhere, due primarily to length-of-haul effects. The longer runs from the West Coast to the consumption centers inland are much more intermodal-friendly than the short, dispersed hauls out of other port regions. It is interesting, however, to note that since mid-2022, this tight correlation has loosened significantly. Viewed on a 12-month moving average basis, intermodal share began to recover at that point from the post-pandemic surge congestion, a full year before West Coast share turned upward. In 2023, intermodal share resumed declining, while West Coast share continued to rise. Then, in 2025, West Coast share began to decline once again, but intermodal share began to move up. <h3>Inversely correlated? </h3>Does this de-coupling indicate that the basic bond has been broken between these two measures? I don’t think so. But it does indicate that other factors (congestion, surges, and so forth) have taken control for the time being. It may also say that these inter-dependent but separate systems have reacted to the recent volatility differently and each with their own timing. On the other hand, the recent increase in intermodal share in the face of declining West Coast share is intriguing. It might be signaling a more significant change in the situation and certainly bears watching. If the inter-dependence remains intact, what does that indicate for the future? At the start of the year, West Coast share could have reasonably been expected to continue the decline that resumed in 2025. The Gaza situation had stabilized, and the Red Sea/Suez routing was slowly opening back up. The East Coast option was looking better all the time. But of course, the Iran hostilities have now thrown that all out the window. The trans-Pacific trade is, at least for the moment, more isolated from the disruption. West Coast share can be expected to stabilize or even improve. This will be an intermodal tailwind for the time being. This analysis also tells us that most of what happens here is completely out of the railroads’ control. They will continue to be subject to the routing decisions of the ocean carriers and the importers. It is on the domestic side of the intermodal house where the railroads have more ability to control their destiny and their share. Larry Gross is president and founder of Gross Transportation Consulting. Contact him at <a href="mailto:lawrencejgross@gmail.com">lawrencejgross@gmail.com</a>. </div>

The share of imports arriving in the US and Western Canada that travels inland via rail has been in a long-term decline. Changes in shipping patterns are a big reason why, with major implications as to where things are heading and the railroads’ ability to affect the result. The chart below tracks two measures over the past 16 years. The first is the share of US plus Western Canadian import TEUs arriving on the West Coast. As has been well documented, this share has been in a long-term decline as importers have moved away from West Coast-centric strategies toward four- and five-corner strategies that provide greater diversification and lower costs. Twelve-month moving average West Coast share declined by over 10 points from 59% in 2010 to under 49% in 2025. The second statistic is the percentage of import TEUs arriving that travel inland from the coast via intermodal. This includes inland point intermodal loads and South California transloads. Intermodal share has also seen a long-term decline similar to that of West Coast share. The linear trends over this period for both statistics are almost parallel. The correlation was very strong between 2014 and mid-2022. We know that intermodal share is higher off the West Coast than elsewhere, due primarily to length-of-haul effects. The longer runs from the West Coast to the consumption centers inland are much more intermodal-friendly than the short, dispersed hauls out of other port regions. It is interesting, however, to note that since mid-2022, this tight correlation has loosened significantly. Viewed on a 12-month moving average basis, intermodal share began to recover at that point from the post-pandemic surge congestion, a full year before West Coast share turned upward. In 2023, intermodal share resumed declining, while West Coast share continued to rise. Then, in 2025, West Coast share began to decline once again, but intermodal share began to move up. Inversely correlated? Does this de-coupling indicate that the basic bond has been broken between these two measures? I don’t think so. But it does indicate that other factors (congestion, surges, and so forth) have taken control for the time being. It may also say that these inter-dependent but separate systems have reacted to the recent volatility differently and each with their own timing. On the other hand, the recent increase in intermodal share in the face of declining West Coast share is intriguing. It might be signaling a more significant change in the situation and certainly bears watching. If the inter-dependence remains intact, what does that indicate for the future? At the start of the year, West Coast share could have reasonably been expected to continue the decline that resumed in 2025. The Gaza situation had stabilized, and the Red Sea/Suez routing was slowly opening back up. The East Coast option was looking better all the time. But of course, the Iran hostilities have now thrown that all out the window. The trans-Pacific trade is, at least for the moment, more isolated from the disruption. West Coast share can be expected to stabilize or even improve. This will be an intermodal tailwind for the time being. This analysis also tells us that most of what happens here is completely out of the railroads’ control. They will continue to be subject to the routing decisions of the ocean carriers and the importers. It is on the domestic side of the intermodal house where the railroads have more ability to control their destiny and their share. Larry Gross is president and founder of Gross Transportation Consulting. Contact him at lawrencejgross@gmail.com .

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