<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.

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<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 .

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

<div class="phx-topic abstract-wrapper">Container shipping has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity, attendees at TPM26 were told. </div>

Container shipping has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity, attendees at TPM26 were told.

<div class="phx-topic">A slide presented at TPM26 on March 2 by Maersk’s global head of ocean product said it all. The slide showed just two lines: heavy volatility in volumes over a period of time, and more or less flat vessel utilization over the same time period. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6185926_0.1.jpg"></img></div>The conclusion: Consistent vessel utilization levels in the face of much more volatile volumes point to effective capacity management by carriers. “With very volatile demand, we actually see a utilization which is quite stable,” said the Maersk executive, Johan Sigsgaard. “And of course, the balance between the two is the deployment adjustments that are made on a week-to-week basis, either in the form of ship size adjustments or in the form of [blank sailings].” In other words, as of 2026, the carrier industry has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity. Many others have noticed what amounts to a fundamental shift from the pre-COVID state of the industry and a likely long-term reality of the market going forward. The new reality is that the industry can no longer be understood in terms of supply and demand on paper, and must consider multiple forms of brakes on capacity. “We see this very clearly in the market on a day-to-day basis,” said Serkan Kavas, executive vice president for imports at MTS Logistics in New York, who attended TPM26. “Since the COVID cargo surge ended, carriers have become much more disciplined in managing capacity through blank sailings and vessel deployment to maintain rate levels. “With excess supply still present, capacity management will remain one of the most important tools carriers rely on over the next few years, regardless of how volatile the macro environment is,” he added. <h3>‘Growing relevance’ of capacity post-COVID </h3>Carriers took their first steps toward capacity management at scale during the 2008–09 financial crisis when they laid up about 10% of global tonnage, according to industry analyst Lars Jensen. At the same time, they jointly agreed to engage in systemwide slow steaming in response to a 10% drop in global volumes. Blank sailings began as a regular carrier tactic around 2013. Capacity was further removed due to a series of macro shocks that began in 2020, including COVID-19, the attacks on shipping in the Red Sea, the Panama Canal drought, and most recently the war with Iran. Growing systemic port congestion is another factor pulling more capacity off the market. All that means is that despite a record order book amounting to about 35% of the existing fleet, which has caused several financial analysts to be downbeat on carrier stocks, the downside risks for carriers are much less severe and more manageable than prior to COVID due to the growing relevance of the capacity side of the equation. The industry is experiencing an “illusion of a normal down cycle,” Flexport’s global head of ocean, Trine Nielsen, told TPM26 on March 2. “We do have the macro volatility layer, as we call it, and I think just the past week and a half [of the Middle East war and Supreme Court tariff ruling] ... is the perfect proof of how quickly the world changes.” Nielsen added: “We do have what we call micro volatility, and we see this becoming more and more frequent. One aspect is the capacity management, dealing with blank sailings, dealing with [cargo] rollings, equipment issues that, of course, are becoming even more difficult considering the macro environment that we’re in.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

A slide presented at TPM26 on March 2 by Maersk’s global head of ocean product said it all. The slide showed just two lines: heavy volatility in volumes over a period of time, and more or less flat vessel utilization over the same time period. The conclusion: Consistent vessel utilization levels in the face of much more volatile volumes point to effective capacity management by carriers. “With very volatile demand, we actually see a utilization which is quite stable,” said the Maersk executive, Johan Sigsgaard. “And of course, the balance between the two is the deployment adjustments that are made on a week-to-week basis, either in the form of ship size adjustments or in the form of [blank sailings].” In other words, as of 2026, the carrier industry has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity. Many others have noticed what amounts to a fundamental shift from the pre-COVID state of the industry and a likely long-term reality of the market going forward. The new reality is that the industry can no longer be understood in terms of supply and demand on paper, and must consider multiple forms of brakes on capacity. “We see this very clearly in the market on a day-to-day basis,” said Serkan Kavas, executive vice president for imports at MTS Logistics in New York, who attended TPM26. “Since the COVID cargo surge ended, carriers have become much more disciplined in managing capacity through blank sailings and vessel deployment to maintain rate levels. “With excess supply still present, capacity management will remain one of the most important tools carriers rely on over the next few years, regardless of how volatile the macro environment is,” he added. ‘Growing relevance’ of capacity post-COVID Carriers took their first steps toward capacity management at scale during the 2008–09 financial crisis when they laid up about 10% of global tonnage, according to industry analyst Lars Jensen. At the same time, they jointly agreed to engage in systemwide slow steaming in response to a 10% drop in global volumes. Blank sailings began as a regular carrier tactic around 2013. Capacity was further removed due to a series of macro shocks that began in 2020, including COVID-19, the attacks on shipping in the Red Sea, the Panama Canal drought, and most recently the war with Iran. Growing systemic port congestion is another factor pulling more capacity off the market. All that means is that despite a record order book amounting to about 35% of the existing fleet, which has caused several financial analysts to be downbeat on carrier stocks, the downside risks for carriers are much less severe and more manageable than prior to COVID due to the growing relevance of the capacity side of the equation. The industry is experiencing an “illusion of a normal down cycle,” Flexport’s global head of ocean, Trine Nielsen, told TPM26 on March 2. “We do have the macro volatility layer, as we call it, and I think just the past week and a half [of the Middle East war and Supreme Court tariff ruling] ... is the perfect proof of how quickly the world changes.” Nielsen added: “We do have what we call micro volatility, and we see this becoming more and more frequent. One aspect is the capacity management, dealing with blank sailings, dealing with [cargo] rollings, equipment issues that, of course, are becoming even more difficult considering the macro environment that we’re in.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Ocean carriers employ effective capacity management despite market volatility

<div class="phx-topic abstract-wrapper">The weakness has continued into 2026, with Taiwan’s biggest carrier reporting that combined revenue of $1.9 billion for January and February was down 23% from the same period last year.</div>

The weakness has continued into 2026, with Taiwan’s biggest carrier reporting that combined revenue of $1.9 billion for January and February was down 23% from the same period last year.

<div class="phx-topic">Evergreen Marine on Friday said its net profits for 2025 were almost halved from the year prior, falling 48% to $2.2 billion from $4.2 billion in 2024. In a filing with the Taiwan stock exchange, the carrier revealed its operating revenues have continued to slide in the first two months of this year, following an 18% decline in full-year 2025 revenues. Evergreen, the largest of Taiwan’s “Big Three” carriers <a href="https://www.joc.com/article/yang-ming-wan-hai-boost-combined-order-book-with-12-new-ships-6185215">who reported 2025 results this week</a>, said its revenues last year came in at $12.2 billion, down from $15 billion in 2024. And the weakness has continued into 2026, with the carrier reporting that combined revenue of $1.9 billion for January and February was down 23% from the same period last year. Evergreen said freight rates on all the major trades declined last year, according to data from the Shanghai Shipping Exchange. The biggest falls were on Asia-US West Coast, with rates crashing 52% year over year to $2,188 per TEU, and Asia-US East Coast, which saw a 50% decline to $3,033/TEU, according to SSE data carried on the Journal of Commerce’s Gateway platform. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="066706ac-45f2-46c0-9bd0-a6a626d6b972"></dynamic-object></div>Evergreen gave no further details in its exchange filing. But in a presentation late last year, it said average revenue per TEU started to fall last August while monthly liftings remained steady at about 930,000 TEUs. In separate filing Friday, Evergreen said it is spending more than $247 million to lease 98,796 containers from seven leasing companies and Gaining Enterprise, an Evergreen affiliate. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Evergreen Marine on Friday said its net profits for 2025 were almost halved from the year prior, falling 48% to $2.2 billion from $4.2 billion in 2024. In a filing with the Taiwan stock exchange, the carrier revealed its operating revenues have continued to slide in the first two months of this year, following an 18% decline in full-year 2025 revenues. Evergreen, the largest of Taiwan’s “Big Three” carriers who reported 2025 results this week , said its revenues last year came in at $12.2 billion, down from $15 billion in 2024. And the weakness has continued into 2026, with the carrier reporting that combined revenue of $1.9 billion for January and February was down 23% from the same period last year. Evergreen said freight rates on all the major trades declined last year, according to data from the Shanghai Shipping Exchange. The biggest falls were on Asia-US West Coast, with rates crashing 52% year over year to $2,188 per TEU, and Asia-US East Coast, which saw a 50% decline to $3,033/TEU, according to SSE data carried on the Journal of Commerce’s Gateway platform. Evergreen gave no further details in its exchange filing. But in a presentation late last year, it said average revenue per TEU started to fall last August while monthly liftings remained steady at about 930,000 TEUs. In separate filing Friday, Evergreen said it is spending more than $247 million to lease 98,796 containers from seven leasing companies and Gaining Enterprise, an Evergreen affiliate. Contact Keith Wallis at keithwallis@hotmail.com .

Evergreen’s 2025 profits nearly halved on sharp freight rate declines 

<div class="phx-topic abstract-wrapper">With liquefied natural gas flows at a standstill in the Strait of Hormuz, a near-doubling of LNG export capacity in the US is set to drive breakbulk and project cargo activity into the next decade.</div>

With liquefied natural gas flows at a standstill in the Strait of Hormuz, a near-doubling of LNG export capacity in the US is set to drive breakbulk and project cargo activity into the next decade.

<div class="phx-topic">As historic shipping disruptions in the Middle East squeeze global oil and natural gas supplies, a slew of projects is setting up the US to expand its role as the world’s top liquefied natural gas (LNG) exporter while continuing to generate breakbulk and project cargo activity. Approximately one-fifth of global LNG flows through the Strait of Hormuz, which remains shut and where multiple cargo ships came under attack this week. Meanwhile, in the US — which is already the world’s largest LNG exporter — LNG export capacity is expected to nearly double in the next five years, while overall natural gas production is on pace to reach record highs, according to recent analyses by the US Energy Information Administration (EIA). Michael Mørland, Atlantic project cargo director for Norwegian multipurpose vessel (MPV) operator G2 Ocean, told the Journal of Commerce that LNG capacity expansion in the US has generated significant breakbulk and project flows over the past 10 years. “We expect this development to continue into the next decade, regardless of short-term geopolitical disruptions,” he said Mørland added that larger LNG production units, further expansions, and more efficient technologies are in the works to meet the growing energy demand from AI data centers and ongoing shifts in the US power mix. But because LNG mega-projects are capital-intensive with extended lead time, the interruptions in the Middle East are unlikely to influence final investment decisions (FIDs) for new US projects, he said. “Since the typical sourcing locations for cargo are not based in the Middle East and remain unaffected, we do not currently expect significant changes in cargo volumes or movement patterns outside the region,” Mørland said, explaining that it would take at least six to 18 months for those changes to show up because of the extended timeframe needed for project cargo manufacturing and contracting. <h3>US set to almost double LNG export capacity </h3>The US has eight operating LNG export terminals, and export capacity is expected to nearly double by 2031, according to a Feb. 24 analysis by the EIA. In 2025, US developers signed sale and purchase agreements (SPA) for 5.2 billion cubic feet per day (Bcf/d) of LNG from planned export facilities — the highest volume of SPAs since 2022, according to a March 3 EIA report. SPAs are necessary to secure a final investment decision for LNG terminal construction. Developers reached FIDs on four US LNG projects in 2025: the first phase of the Woodside Louisiana LNG and CP2 projects, and the second phase of the Rio Grande and Port Arthur projects. The four projects will begin operations between 2029 and 2031 and will bring a combined 7.2 Bcf/d in LNG export capacity under construction. That comes as overall natural gas production in the US is set to reach record highs in 2026 and 2027, according to the EIA. Production is set to increase by 2% to an average of 120.8 Bcf/d in 2026 and then grow to 122.3 Bcf/d in 2027. In 2026, US developers plan to add 6.3 gigawatts of natural gas-fired capacity, over 80% of which is planned for locations across Texas, Oklahoma, Ohio, Tennessee and Florida. Edwin Peh, project cargo director for Pacific and global capital projects for G2 Ocean, told the Journal of Commerce that the MPV operator anticipates higher demand for breakbulk and project cargo transportation to support the natural gas-fired capacity additions. “G2 Ocean is receiving inquiries for such shipments and has already shipped turbines and generators for gas-fired power plant projects,” he said. Peh said it’s still too early to detect any shifts in project cargo movement resulting from shipping disruptions in the Middle East. “The market is closely monitoring the evolving situation, including fluctuating bunker prices, while shippers evaluate whether they need additional time and cost buffers for higher insurance premiums and potentially longer transit times,” he said. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

As historic shipping disruptions in the Middle East squeeze global oil and natural gas supplies, a slew of projects is setting up the US to expand its role as the world’s top liquefied natural gas (LNG) exporter while continuing to generate breakbulk and project cargo activity. Approximately one-fifth of global LNG flows through the Strait of Hormuz, which remains shut and where multiple cargo ships came under attack this week. Meanwhile, in the US — which is already the world’s largest LNG exporter — LNG export capacity is expected to nearly double in the next five years, while overall natural gas production is on pace to reach record highs, according to recent analyses by the US Energy Information Administration (EIA). Michael Mørland, Atlantic project cargo director for Norwegian multipurpose vessel (MPV) operator G2 Ocean, told the Journal of Commerce that LNG capacity expansion in the US has generated significant breakbulk and project flows over the past 10 years. “We expect this development to continue into the next decade, regardless of short-term geopolitical disruptions,” he said Mørland added that larger LNG production units, further expansions, and more efficient technologies are in the works to meet the growing energy demand from AI data centers and ongoing shifts in the US power mix. But because LNG mega-projects are capital-intensive with extended lead time, the interruptions in the Middle East are unlikely to influence final investment decisions (FIDs) for new US projects, he said. “Since the typical sourcing locations for cargo are not based in the Middle East and remain unaffected, we do not currently expect significant changes in cargo volumes or movement patterns outside the region,” Mørland said, explaining that it would take at least six to 18 months for those changes to show up because of the extended timeframe needed for project cargo manufacturing and contracting. US set to almost double LNG export capacity The US has eight operating LNG export terminals, and export capacity is expected to nearly double by 2031, according to a Feb. 24 analysis by the EIA. In 2025, US developers signed sale and purchase agreements (SPA) for 5.2 billion cubic feet per day (Bcf/d) of LNG from planned export facilities — the highest volume of SPAs since 2022, according to a March 3 EIA report. SPAs are necessary to secure a final investment decision for LNG terminal construction. Developers reached FIDs on four US LNG projects in 2025: the first phase of the Woodside Louisiana LNG and CP2 projects, and the second phase of the Rio Grande and Port Arthur projects. The four projects will begin operations between 2029 and 2031 and will bring a combined 7.2 Bcf/d in LNG export capacity under construction. That comes as overall natural gas production in the US is set to reach record highs in 2026 and 2027, according to the EIA. Production is set to increase by 2% to an average of 120.8 Bcf/d in 2026 and then grow to 122.3 Bcf/d in 2027. In 2026, US developers plan to add 6.3 gigawatts of natural gas-fired capacity, over 80% of which is planned for locations across Texas, Oklahoma, Ohio, Tennessee and Florida. Edwin Peh, project cargo director for Pacific and global capital projects for G2 Ocean, told the Journal of Commerce that the MPV operator anticipates higher demand for breakbulk and project cargo transportation to support the natural gas-fired capacity additions. “G2 Ocean is receiving inquiries for such shipments and has already shipped turbines and generators for gas-fired power plant projects,” he said. Peh said it’s still too early to detect any shifts in project cargo movement resulting from shipping disruptions in the Middle East. “The market is closely monitoring the evolving situation, including fluctuating bunker prices, while shippers evaluate whether they need additional time and cost buffers for higher insurance premiums and potentially longer transit times,” he said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

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Middle East shipping disruptions boost US position as top LNG exporter

<div class="phx-topic abstract-wrapper">Long-sought regulatory reforms within the Canadian trucking industry could tighten capacity and cause cross-border rates to rise. </div>

Long-sought regulatory reforms within the Canadian trucking industry could tighten capacity and cause cross-border rates to rise.

<div class="phx-topic">The Canadian government is moving to crack down on controversial labor practices in the country’s trucking industry, a move that could reshape the sector, increase fleet costs and ultimately result in tighter capacity and higher rates for shippers. The issues — including driver classification, tax policy, safety and training standards, and immigration — are often referred to collectively by the controversial label “Driver Inc.” and echo similar debates in the US since 2019. The dispute has simmered for more than a decade, but received renewed attention after Mark Carney became Canada’s prime minister last year. Stricter enforcement of the “Driver Inc.” issues could limit access to the lowest-cost trucking capacity that has been available in recent years in Canada, potentially pushing transportation rates higher for shippers. But whether the capacity needle really moves largely depends on how vigorously and thoroughly the Canadian government cracks down on “Driver Inc.” One issue is the classification of drivers as employees versus independent contractors, a question that has been fiercely debated in California, Illinois and New Jersey. Another issue centers on how immigrant drivers are integrated into Canada’s trucking industry, particularly regarding training standards and highway safety. In the US, a similar concern has been raised over “CDL mills,” where fraudulent or low-quality trucking schools provide minimal instruction before putting drivers on highways. A third issue involves tax policy and the treatment of drivers operating as independent contractors. For shippers, the “Driver Inc.” debate ultimately comes down to the cost structure of trucking companies. Fleets that classify drivers as independent contractors operate with lower costs because they avoid payroll taxes, overtime requirements and benefit obligations. And those lower costs translate into lower truckload rates for Canadian shippers. <h3>Dispute over the ‘new generation’ in Canadian trucking </h3>The Canadian Trucking Alliance (CTA) argues that some carriers misclassify drivers as independent contractors and provide inadequate safety training. Part of the controversy stems from a longstanding tax policy loophole. The Canada Revenue Agency (CRA), Canada’s equivalent of the US Internal Revenue Service, imposed a moratorium in 2011 on enforcement actions related to T4A tax filings, a form similar to the US 1099 used for independent contractors. The moratorium was lifted earlier this month. “The carrier benefited from not having to pay overtime and all the other responsibilities, which gave them about a 30% pricing advantage in the marketplace,” said Stephen Laskowski, CTA’s president. “All we’re looking for is fair competition, where carriers compete on service price and other matters all while complying with regulatory and tax requirements.” Laskowski said the issue is tied to broader concerns involving driver safety, immigration fraud, forced labor and organized cargo theft. But Tejpreet Dulat, spokesperson for the Canada Truck Operators Association (CTOA), said many immigrant drivers prefer being an independent contractor because it allows them to choose when to work, which loads they haul and which carriers they serve. The argument echoes <a href="https://www.joc.com/article/brokerage-model-offers-post-ab5-path-in-california-5234932">the debate in California surrounding AB5</a>, which reshaped the rules governing employee versus contractor status. “We see the gig economy now; the new generation is taking over the trucking industry,” Dulat said. “The gig economy workers want to manage their own schedules. Some truck drivers have young families. They prefer shorter routes because they want to be back home on the second or third day. If they work on the payroll, they don’t have this luxury.” Dulat also said the CTOA supports lifting the moratorium on issuing T4As but is concerned that many small carriers need additional time to establish payroll systems required under the new rules. As of March 2, carriers paying more than $500 to an independent contractor must issue a T4A or face financial penalties. Dulat added that his group supports stronger safety and training standards across the trucking industry. “Whether you are an immigrant driver or are Canadian born, you have to follow the same driving rules,” he said. “There should be no compromise on strong safety standards. Road safety is very important.” <h3>Political dimensions </h3>There are also political dimensions to the dispute between the two trucking groups. Dulat, who joined the CTOA last December, is a donor to Canada’s Liberal Party and to Carney, according to the Journal de Montréal. Xavier Barsalou-Duval, a Quebec member of Parliament who has raised concerns about the “Driver Inc.” model, questioned in a December letter whether Dulat’s position could influence the pace of reforms. Canada’s House of Commons Standing Committee on Transport, Infrastructure and Communities last month concluded a series of hearings examining the “Driver Inc.” matter. The committee is preparing a report, entitled The Changing Landscape of Truck Drivers in Canada, that is due to be published this spring and will propose policy recommendations to Parliament. Canada’s Council of Ministers Responsible for Transportation and Highway Safety, which includes Transport Minister Steven MacKinnon, agreed last month to stricter enforcement of driver classification, tax compliance, and safety and training standards in the country’s commercial trucking industry. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The Canadian government is moving to crack down on controversial labor practices in the country’s trucking industry, a move that could reshape the sector, increase fleet costs and ultimately result in tighter capacity and higher rates for shippers. The issues — including driver classification, tax policy, safety and training standards, and immigration — are often referred to collectively by the controversial label “Driver Inc.” and echo similar debates in the US since 2019. The dispute has simmered for more than a decade, but received renewed attention after Mark Carney became Canada’s prime minister last year. Stricter enforcement of the “Driver Inc.” issues could limit access to the lowest-cost trucking capacity that has been available in recent years in Canada, potentially pushing transportation rates higher for shippers. But whether the capacity needle really moves largely depends on how vigorously and thoroughly the Canadian government cracks down on “Driver Inc.” One issue is the classification of drivers as employees versus independent contractors, a question that has been fiercely debated in California, Illinois and New Jersey. Another issue centers on how immigrant drivers are integrated into Canada’s trucking industry, particularly regarding training standards and highway safety. In the US, a similar concern has been raised over “CDL mills,” where fraudulent or low-quality trucking schools provide minimal instruction before putting drivers on highways. A third issue involves tax policy and the treatment of drivers operating as independent contractors. For shippers, the “Driver Inc.” debate ultimately comes down to the cost structure of trucking companies. Fleets that classify drivers as independent contractors operate with lower costs because they avoid payroll taxes, overtime requirements and benefit obligations. And those lower costs translate into lower truckload rates for Canadian shippers. Dispute over the ‘new generation’ in Canadian trucking The Canadian Trucking Alliance (CTA) argues that some carriers misclassify drivers as independent contractors and provide inadequate safety training. Part of the controversy stems from a longstanding tax policy loophole. The Canada Revenue Agency (CRA), Canada’s equivalent of the US Internal Revenue Service, imposed a moratorium in 2011 on enforcement actions related to T4A tax filings, a form similar to the US 1099 used for independent contractors. The moratorium was lifted earlier this month. “The carrier benefited from not having to pay overtime and all the other responsibilities, which gave them about a 30% pricing advantage in the marketplace,” said Stephen Laskowski, CTA’s president. “All we’re looking for is fair competition, where carriers compete on service price and other matters all while complying with regulatory and tax requirements.” Laskowski said the issue is tied to broader concerns involving driver safety, immigration fraud, forced labor and organized cargo theft. But Tejpreet Dulat, spokesperson for the Canada Truck Operators Association (CTOA), said many immigrant drivers prefer being an independent contractor because it allows them to choose when to work, which loads they haul and which carriers they serve. The argument echoes the debate in California surrounding AB5 , which reshaped the rules governing employee versus contractor status. “We see the gig economy now; the new generation is taking over the trucking industry,” Dulat said. “The gig economy workers want to manage their own schedules. Some truck drivers have young families. They prefer shorter routes because they want to be back home on the second or third day. If they work on the payroll, they don’t have this luxury.” Dulat also said the CTOA supports lifting the moratorium on issuing T4As but is concerned that many small carriers need additional time to establish payroll systems required under the new rules. As of March 2, carriers paying more than $500 to an independent contractor must issue a T4A or face financial penalties. Dulat added that his group supports stronger safety and training standards across the trucking industry. “Whether you are an immigrant driver or are Canadian born, you have to follow the same driving rules,” he said. “There should be no compromise on strong safety standards. Road safety is very important.” Political dimensions There are also political dimensions to the dispute between the two trucking groups. Dulat, who joined the CTOA last December, is a donor to Canada’s Liberal Party and to Carney, according to the Journal de Montréal. Xavier Barsalou-Duval, a Quebec member of Parliament who has raised concerns about the “Driver Inc.” model, questioned in a December letter whether Dulat’s position could influence the pace of reforms. Canada’s House of Commons Standing Committee on Transport, Infrastructure and Communities last month concluded a series of hearings examining the “Driver Inc.” matter. The committee is preparing a report, entitled The Changing Landscape of Truck Drivers in Canada, that is due to be published this spring and will propose policy recommendations to Parliament. Canada’s Council of Ministers Responsible for Transportation and Highway Safety, which includes Transport Minister Steven MacKinnon, agreed last month to stricter enforcement of driver classification, tax compliance, and safety and training standards in the country’s commercial trucking industry. Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Truckload

Truck brokers

Surface

Canada’s ‘Driver Inc.’ crackdown could push trucking rates higher

<div class="phx-topic abstract-wrapper">The Hong Kong-based carrier ended the year with a $1.5 billion net profit, but that was a 41% drop from the robust earnings of the previous year.</div>

The Hong Kong-based carrier ended the year with a $1.5 billion net profit, but that was a 41% drop from the robust earnings of the previous year.

<div class="phx-topic">Trade tensions and US tariffs weighed heavily on the 2025 financial results of OOCL, with the ocean carrier reporting Thursday sharp declines across all its earnings metrics for the year. In an uncertain policy environment characterized by extreme market volatility, Hong Kong-headquartered OOCL saw its 2025 revenue fall 9.3% year over year to $9.7 billion. Earnings before interest and taxes (EBIT) fell 42% to $1.5 billion and net profit was down 41%, also to $1.5 billion. The carrier’s volume for the year rose 4% to 7.9 million TEUs. “Tariff measures and trade tensions continued to weigh heavily on the container shipping industry, most notably on the trans‑Pacific trade, driving sharp fluctuations in both cargo volumes and freight rates,” OOCL said in its earnings announcement. “At the same time, policy adjustments and frontloading disrupted the usual post-Lunar New Year seasonal patterns.” One of the carrier’s priorities for 2026 is to accelerate the vertical expansion of its supply chain, building an end-to-end product offering customized solutions such as international order processing, cargo management, warehousing, and distribution services. OOCL took delivery of nine new 16,828-TEU container vessels in 2025, and this year will see the first of a seven-ship order for 24,000-TEU dual-fuel methanol-capable vessels as well as six 13,580-TEU conventional fuel vessels chartered from Seaspan Corporation. The 16,828-TEU fleet has strengthened OOCL’s presence on the trans‑Pacific and indirectly enabled the resumption of the LL3 service on the Asia-Europe trade, which had been suspended due to capacity shortages. <h3>Structural overcapacity adds rate pressure </h3>But even as OOCL significantly adds capacity to its fleet, the Cosco Shipping Holdings subsidiary painted a somber picture in its outlook, warning of structural overcapacity in container shipping that will add downward pressure to rates. It is a valid concern. Just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year. That will be followed by 2.3 million TEUs of capacity due for delivery in 2027 and 3.4 million TEUs in 2028, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="994022ec-453b-46eb-b729-fcd589a9082d"></dynamic-object></div>There is <a href="https://www.joc.com/article/yang-ming-wan-hai-boost-combined-order-book-with-12-new-ships-6185215">no sign of carriers pausing ship orders, either</a>. A record 4.8 million TEUs of new ship capacity was ordered in 2025, and that momentum has carried into 2026 with another 290,000 TEUs ordered in January, according to maritime consultancy Drewry. OOCL made no mention of the Middle East war in its earnings statement, but pointed to “ongoing geopolitical tensions” and “fluctuations in economic policies” that will continue to disrupt supply chains and reshape global trade patterns. “While strengthening our east-west service networks, we are also adapting to shifts in global trade patterns, seizing new growth opportunities, accelerating investment in emerging markets and striving to achieve a more balanced global presence to mitigate risks arising from individual regional markets,” OOCL said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Trade tensions and US tariffs weighed heavily on the 2025 financial results of OOCL, with the ocean carrier reporting Thursday sharp declines across all its earnings metrics for the year. In an uncertain policy environment characterized by extreme market volatility, Hong Kong-headquartered OOCL saw its 2025 revenue fall 9.3% year over year to $9.7 billion. Earnings before interest and taxes (EBIT) fell 42% to $1.5 billion and net profit was down 41%, also to $1.5 billion. The carrier’s volume for the year rose 4% to 7.9 million TEUs. “Tariff measures and trade tensions continued to weigh heavily on the container shipping industry, most notably on the trans‑Pacific trade, driving sharp fluctuations in both cargo volumes and freight rates,” OOCL said in its earnings announcement. “At the same time, policy adjustments and frontloading disrupted the usual post-Lunar New Year seasonal patterns.” One of the carrier’s priorities for 2026 is to accelerate the vertical expansion of its supply chain, building an end-to-end product offering customized solutions such as international order processing, cargo management, warehousing, and distribution services. OOCL took delivery of nine new 16,828-TEU container vessels in 2025, and this year will see the first of a seven-ship order for 24,000-TEU dual-fuel methanol-capable vessels as well as six 13,580-TEU conventional fuel vessels chartered from Seaspan Corporation. The 16,828-TEU fleet has strengthened OOCL’s presence on the trans‑Pacific and indirectly enabled the resumption of the LL3 service on the Asia-Europe trade, which had been suspended due to capacity shortages. Structural overcapacity adds rate pressure But even as OOCL significantly adds capacity to its fleet, the Cosco Shipping Holdings subsidiary painted a somber picture in its outlook, warning of structural overcapacity in container shipping that will add downward pressure to rates. It is a valid concern. Just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year. That will be followed by 2.3 million TEUs of capacity due for delivery in 2027 and 3.4 million TEUs in 2028, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. There is no sign of carriers pausing ship orders, either . A record 4.8 million TEUs of new ship capacity was ordered in 2025, and that momentum has carried into 2026 with another 290,000 TEUs ordered in January, according to maritime consultancy Drewry. OOCL made no mention of the Middle East war in its earnings statement, but pointed to “ongoing geopolitical tensions” and “fluctuations in economic policies” that will continue to disrupt supply chains and reshape global trade patterns. “While strengthening our east-west service networks, we are also adapting to shifts in global trade patterns, seizing new growth opportunities, accelerating investment in emerging markets and striving to achieve a more balanced global presence to mitigate risks arising from individual regional markets,” OOCL said. Contact Greg Knowler at greg.knowler@spglobal.com .

Volatile shipping market drags down OOCL’s 2025 financial results

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

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

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

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

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

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

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

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

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

North-American rail

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

Singapore

Port Klang

Colombo

Portcast reports on port congestion by processing and analyzing rich automatic identification system (AIS) data to determine vessels’ behavior and speed on the way to a given destination port and generate a congestion index for each port. The congestion tracker includes ships that do not have estimated times of arrival or are waiting at anchorage and uses multiple human-monitored data sources to make corrections around outliers. [Portcast](https://portcast.io/solutions/port-congestion-tracker)

South Asia port harbor performance (Portcast)

Southeast Asia harbor congestion number of vessels waiting (Portcast) Gateway

<div class="phx-topic abstract-wrapper">The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the Energy Information Administration, the biggest seven-day spike since the agency began releasing the data in 1994. </div>

The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the Energy Information Administration, the biggest seven-day spike since the agency began releasing the data in 1994.

<div class="phx-topic">The US trucking industry may be showing signs of coming out of a nearly four-year-long freight recession as spot rates have remained elevated, especially along the East Coast and in the Midwest, after the disruption caused by snow and ice storms in January and February. And now lending support to rates is the uncertainty tied to the war in the Middle East and the resulting surge in fuel prices. The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the US Energy Information Administration. That’s the biggest seven-day spike since the agency began releasing data in 1994, topping the previous record of a 75-cent spike in March 2022 after Russia invaded Ukraine. Diesel now sits at nearly $4.90 per gallon nationally and more than $6/gallon in California. For the shipper, it means the average fuel surcharge has risen between 15 and 20 cents per mile, causing rates on long hauls across the US to rise sharply. Shippers will notice when they receive invoices from brokers and carriers in the coming weeks. Trucking executives believe the bullish fundamentals will push contract rates higher as those deals are renegotiated. Indeed, the process has already begun, according to multiple shippers; sources have told the Journal of Commerce that brokers are refusing to handle loads on contracts signed as recently as Jan. 1 unless rates are renegotiated. “Tender rejections are up 13 to 15%,” said ITS Logistics Chief Commercial Officer Josh Allen. “That’s the first rejection. If shippers have done [requests for proposals], maybe as recently as 90 to 180 days ago, some of those contract rates are already underwater.” According to a Journal of Commerce analysis, shipper-paid spot rates nationally increased between 15% and 20% year over year in February. But rates are surging in pockets, rather than nationally. Rates between November and February jumped 52 cents per mile on loads originating in the Midwest, but only rose 10 cents for originations in the Southwest. <h3>‘Signs of disruption’ </h3>Tightening capacity is the result of both slower economic conditions causing some carriers to go bankrupt, and by the Trump administration’s crackdown on non-domiciled drivers and push for English language proficiency rules. There is also the proposed Dalilah’s law, which would prohibit states from issuing commercial driver’s licenses (CDLs) to undocumented immigrants and retroactively cancel all existing licenses to those individuals. “For the first time in roughly three years, routing guides are showing signs of disruption,” said Nolan Transportation Group President and Chief Operating Officer Drew Herpich. “Many transportation RFPs that went live this year were priced in Q3 and Q4 of last year when market conditions were significantly more stable.” Herpich added that as tender rejection rates increase, more freight is going to the second, third, or fourth contract carriers in the shipper’s routing guide or directly posted on the spot market. He also said that carriers and brokers are “becoming more disciplined” around capacity commitments, and communication with customers is becoming clearer as the weekly volume approaches or exceeds the total outlined in the contract. “Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing that supports service reliability and execution.” Allen said the so-called “waterfall” is beginning as rates need to be adjusted. “I think it’s happening everywhere,” he said. “A shipper calls and says ‘you are 12th in line from a rating perspective in the routing guide. The 11 before you have declined, would you like these opportunities at these published rates?’” At the Raymond James Investor Conference last week, truckload carrier J.B. Hunt Transport Services said the tightening capacity shows similarities to the last major regulatory crackdown in 2017. “We’ve really not had a supply market shrinkage since probably ’17 or ’18 with ELDs [electronic logging devices],” Nick Hobbs, J.B. Hunt’s president of highway services, said at the conference. “Probably the most talked about is non-domiciled drivers ... We’re also seeing driver schools shut down [CDL mills] and we’re seeing a lot of enforcement around chameleon carriers.” The term CDL mills has been coined to describe low-quality truck driving schools that prioritize high-volume, rapid training over safety, which are increasingly getting shut down by the US government. Chameleon carriers refer to trucking companies who operate with multiple company names and registration numbers, swapping one placard for another on their trucks to evade law enforcement. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

The US trucking industry may be showing signs of coming out of a nearly four-year-long freight recession as spot rates have remained elevated, especially along the East Coast and in the Midwest, after the disruption caused by snow and ice storms in January and February. And now lending support to rates is the uncertainty tied to the war in the Middle East and the resulting surge in fuel prices. The average price for a gallon of diesel fuel rose 96 cents for the week ending March 9, according to the US Energy Information Administration. That’s the biggest seven-day spike since the agency began releasing data in 1994, topping the previous record of a 75-cent spike in March 2022 after Russia invaded Ukraine. Diesel now sits at nearly $4.90 per gallon nationally and more than $6/gallon in California. For the shipper, it means the average fuel surcharge has risen between 15 and 20 cents per mile, causing rates on long hauls across the US to rise sharply. Shippers will notice when they receive invoices from brokers and carriers in the coming weeks. Trucking executives believe the bullish fundamentals will push contract rates higher as those deals are renegotiated. Indeed, the process has already begun, according to multiple shippers; sources have told the Journal of Commerce that brokers are refusing to handle loads on contracts signed as recently as Jan. 1 unless rates are renegotiated. “Tender rejections are up 13 to 15%,” said ITS Logistics Chief Commercial Officer Josh Allen. “That’s the first rejection. If shippers have done [requests for proposals], maybe as recently as 90 to 180 days ago, some of those contract rates are already underwater.” According to a Journal of Commerce analysis, shipper-paid spot rates nationally increased between 15% and 20% year over year in February. But rates are surging in pockets, rather than nationally. Rates between November and February jumped 52 cents per mile on loads originating in the Midwest, but only rose 10 cents for originations in the Southwest. ‘Signs of disruption’ Tightening capacity is the result of both slower economic conditions causing some carriers to go bankrupt, and by the Trump administration’s crackdown on non-domiciled drivers and push for English language proficiency rules. There is also the proposed Dalilah’s law, which would prohibit states from issuing commercial driver’s licenses (CDLs) to undocumented immigrants and retroactively cancel all existing licenses to those individuals. “For the first time in roughly three years, routing guides are showing signs of disruption,” said Nolan Transportation Group President and Chief Operating Officer Drew Herpich. “Many transportation RFPs that went live this year were priced in Q3 and Q4 of last year when market conditions were significantly more stable.” Herpich added that as tender rejection rates increase, more freight is going to the second, third, or fourth contract carriers in the shipper’s routing guide or directly posted on the spot market. He also said that carriers and brokers are “becoming more disciplined” around capacity commitments, and communication with customers is becoming clearer as the weekly volume approaches or exceeds the total outlined in the contract. “Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing that supports service reliability and execution.” Allen said the so-called “waterfall” is beginning as rates need to be adjusted. “I think it’s happening everywhere,” he said. “A shipper calls and says ‘you are 12th in line from a rating perspective in the routing guide. The 11 before you have declined, would you like these opportunities at these published rates?’” At the Raymond James Investor Conference last week, truckload carrier J.B. Hunt Transport Services said the tightening capacity shows similarities to the last major regulatory crackdown in 2017. “We’ve really not had a supply market shrinkage since probably ’17 or ’18 with ELDs [electronic logging devices],” Nick Hobbs, J.B. Hunt’s president of highway services, said at the conference. “Probably the most talked about is non-domiciled drivers ... We’re also seeing driver schools shut down [CDL mills] and we’re seeing a lot of enforcement around chameleon carriers.” The term CDL mills has been coined to describe low-quality truck driving schools that prioritize high-volume, rapid training over safety, which are increasingly getting shut down by the US government. Chameleon carriers refer to trucking companies who operate with multiple company names and registration numbers, swapping one placard for another on their trucks to evade law enforcement. Contact Dan Ronan at contactdanronan@gmail.com .

Elevated US trucking rates get new boost from diesel gains amid Middle East war 

<div class="phx-topic abstract-wrapper">With the flow of waterborne oil suspended in the Strait of Hormuz, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil orders. </div>

With the flow of waterborne oil suspended in the Strait of Hormuz, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil orders.

<div class="phx-topic">The disruption to oil exports through the Strait of Hormuz is forcing Maersk to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia, the carrier’s chief commercial officer said Wednesday. Karsten Kildahl told the Journal of Commerce in an interview that in the past two days, several of Maersk’s bunker suppliers in key areas in the Middle East and Asia have been unable to refuel the carrier’s vessels. “We’ve had to start moving oil around ourselves because we don’t have enough supplies where we need them,” Kildahl said. “In Asia, nearly half of their supplies come from the Gulf area, so some of the vessels leaving the US and Europe are filled with as much oil as we possibly can, and then we transport the fuel to other vessels we connect with in Asia.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. More than 10 ships have been attacked since the war started, and soaring war risk insurance is keeping most commercial shipping out of the region, including oil tankers. With the flow of waterborne oil suspended, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil fuel orders, Kildahl said. “Salalah is one of our main bunker ports in the Gulf, but we’ve not been able to bunker there for the past two days, so we need to transfer bunkers from one place to another,” he said. “The main concern right now is how do we safeguard the supply of oil?” <h3>Tanker chartering not an option </h3>Chartering a tanker to transport oil to where it is needed was not an option, Kildahl said, with available vessels in short supply. “In the short term, we have started bunkering in less efficient locations with a higher cost and more difficult logistics behind it, and over time we will have to significantly beef this up if [the war drags on],” he warned. “That is where you will have the risk of a larger impact, much more than the 7% of world cargo flow that goes in and out of the Gulf.” Oil prices, meanwhile, have rocketed higher. S&amp;P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Carriers have responded by rolling out “emergency” surcharges. Maersk on Tuesday announced a global emergency bunker surcharge of $400 per FEU, joining Hapag-Lloyd, CMA CGM and Mediterranean Shipping Co. in implementing similar fuel surcharges. Kildahl said the ship-to-ship transfers, moving oil from the US and Europe to Asia, and changing fuel supply patterns was creating additional expenses for the carrier, on top of rising bunker prices. With the Persian Gulf out of bounds, congestion is growing at other ports in the region with carriers looking to discharge cargo that had already departed Asia when booking suspensions were announced on March 1. Most of the carriers are prioritizing urgent cargo, such as food and pharmaceuticals, but Kildahl said at some point “other cargo will become urgent,” such as aluminum and petrochemicals and polyethylene that are raw materials for plastics production. “Those products can’t float out right now realistically, and so is that a problem tomorrow? No, it’s not,” he said. “It’s not a problem next week either, but at some point, it will be.” <h3>‘End-of-voyage’ disruptions </h3>For general and non-urgent cargo, MSC, CMA CGM and Yang Ming are among the carriers that have declared “end-of-voyage” for Persian Gulf-bound containers already onboard vessels. That cargo status means the carriers are unable to fulfill obligations on a bill of lading, and when the containers are offloaded at a port, they become the responsibility of the cargo owner. Kildahl said Maersk has about 40,000 TEUs that are shipped in and out of the Persian Gulf every week, and that bookings have been suspended to avoid diverted volume collapsing terminals in the region. But instead of declaring end-of-voyage, Maersk has taken a different approach, offering shippers three options: Keeping the cargo in temporary storage, having it returned to the port of departure, or delivering it to another destination for onward transport by another mode. “We are using Salalah and Khor Fakkan for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” Kildahl said. “For cargo that comes from Europe, we focus mainly on Jeddah and are deploying trucks to take the cargo across the Arabian Peninsula through the desert. “We don’t think it is a fantastic solution for any customer to get an end-of-voyage declaration,” he added. “If the customer doesn’t want any of the options, we may be forced into an end-of-voyage declaration, but I doubt we will come to that.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The disruption to oil exports through the Strait of Hormuz is forcing Maersk to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia, the carrier’s chief commercial officer said Wednesday. Karsten Kildahl told the Journal of Commerce in an interview that in the past two days, several of Maersk’s bunker suppliers in key areas in the Middle East and Asia have been unable to refuel the carrier’s vessels. “We’ve had to start moving oil around ourselves because we don’t have enough supplies where we need them,” Kildahl said. “In Asia, nearly half of their supplies come from the Gulf area, so some of the vessels leaving the US and Europe are filled with as much oil as we possibly can, and then we transport the fuel to other vessels we connect with in Asia.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. More than 10 ships have been attacked since the war started, and soaring war risk insurance is keeping most commercial shipping out of the region, including oil tankers. With the flow of waterborne oil suspended, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil fuel orders, Kildahl said. “Salalah is one of our main bunker ports in the Gulf, but we’ve not been able to bunker there for the past two days, so we need to transfer bunkers from one place to another,” he said. “The main concern right now is how do we safeguard the supply of oil?” Tanker chartering not an option Chartering a tanker to transport oil to where it is needed was not an option, Kildahl said, with available vessels in short supply. “In the short term, we have started bunkering in less efficient locations with a higher cost and more difficult logistics behind it, and over time we will have to significantly beef this up if [the war drags on],” he warned. “That is where you will have the risk of a larger impact, much more than the 7% of world cargo flow that goes in and out of the Gulf.” Oil prices, meanwhile, have rocketed higher. S&P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Carriers have responded by rolling out “emergency” surcharges. Maersk on Tuesday announced a global emergency bunker surcharge of $400 per FEU, joining Hapag-Lloyd, CMA CGM and Mediterranean Shipping Co. in implementing similar fuel surcharges. Kildahl said the ship-to-ship transfers, moving oil from the US and Europe to Asia, and changing fuel supply patterns was creating additional expenses for the carrier, on top of rising bunker prices. With the Persian Gulf out of bounds, congestion is growing at other ports in the region with carriers looking to discharge cargo that had already departed Asia when booking suspensions were announced on March 1. Most of the carriers are prioritizing urgent cargo, such as food and pharmaceuticals, but Kildahl said at some point “other cargo will become urgent,” such as aluminum and petrochemicals and polyethylene that are raw materials for plastics production. “Those products can’t float out right now realistically, and so is that a problem tomorrow? No, it’s not,” he said. “It’s not a problem next week either, but at some point, it will be.” ‘End-of-voyage’ disruptions For general and non-urgent cargo, MSC, CMA CGM and Yang Ming are among the carriers that have declared “end-of-voyage” for Persian Gulf-bound containers already onboard vessels. That cargo status means the carriers are unable to fulfill obligations on a bill of lading, and when the containers are offloaded at a port, they become the responsibility of the cargo owner. Kildahl said Maersk has about 40,000 TEUs that are shipped in and out of the Persian Gulf every week, and that bookings have been suspended to avoid diverted volume collapsing terminals in the region. But instead of declaring end-of-voyage, Maersk has taken a different approach, offering shippers three options: Keeping the cargo in temporary storage, having it returned to the port of departure, or delivering it to another destination for onward transport by another mode. “We are using Salalah and Khor Fakkan for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” Kildahl said. “For cargo that comes from Europe, we focus mainly on Jeddah and are deploying trucks to take the cargo across the Arabian Peninsula through the desert. “We don’t think it is a fantastic solution for any customer to get an end-of-voyage declaration,” he added. “If the customer doesn’t want any of the options, we may be forced into an end-of-voyage declaration, but I doubt we will come to that.” Contact Greg Knowler at greg.knowler@spglobal.com .

Maersk forced to ship fuel from US, Europe as Asia bunkers start to run dry

<div class="phx-topic abstract-wrapper">Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.</div>

Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.

<div class="phx-topic">Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. <h3>Containers trapped inside Persian Gulf </h3>The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” <h3>Rates, volatility on the rise </h3>Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. Containers trapped inside Persian Gulf The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” Rates, volatility on the rise Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at greg.knowler@spglobal.com .

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<div class="phx-topic abstract-wrapper">Under the US Customs and Border Protection’s proposal, shippers will not have to sue the administration for refunds of the IEEPA tariffs and will receive the monies owed as a single payment.</div>

Under the US Customs and Border Protection’s proposal, shippers will not have to sue the administration for refunds of the IEEPA tariffs and will receive the monies owed as a single payment.

<div class="phx-topic">US Customs and Border Protection (CBP) will need 45 days to set up the process for importers to begin receiving refunds for tariffs charged under the International Emergency Economic Powers Act (IEEPA). But those shippers will not have to sue the administration for relief, according to a declaration filed with US Court of International Trade (CIT). “This new process will require minimal submission from importers,” CBP said in the filing, made Friday. “It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations and allowing for a review period for CBP to resolve any discrepancies with the importer and to confirm no other outstanding enforcement issues or no revenue is owed.” CIT earlier in the week ordered CBP to immediately refund the estimated $166 billion in IEEPA tariffs paid by shippers before the US Supreme Court <a href="https://www.joc.com/article/us-supreme-court-rules-against-trump-in-critical-ieepa-tariff-case-6173568">ruled President Donald Trump did not have the authority to impose them</a>. Refund payments will also include interest, which would cost the US government an additional $23 million for each day that passes prior to payment, according to an estimate from the CATO Institute. However, because “existing administrative procedures and technology are not well-suited to a task of this scale,” it would have taken more than 4 million hours for agency workers to manually examine shipment documentation to determine refund amounts, CBP said in the filing. Crucially, the process being set up by CBP “would spare the hundreds of thousands of small businesses who are owed refunds from having to litigate to obtain them,” Neil Bradley, executive vice president and chief policy officer of the US Chamber of Commerce, said in a statement Friday. As of March 4, more than 2,000 importers had already filed lawsuits with CIT seeking refunds since the Feb. 20 Supreme Court ruling. Shippers would receive the refund as a single payment, regardless of how many shipments or different cargoes they imported, according to the filing. CBP estimates there are more than 330,000 importers eligible for refunds on more than 53 million customs entries. Contact Benjamin Meyer at <a href="mailto:benjamin.meyer@spglobal.com">benjamin.meyer@spglobal.com</a>.</div>

US Customs and Border Protection (CBP) will need 45 days to set up the process for importers to begin receiving refunds for tariffs charged under the International Emergency Economic Powers Act (IEEPA). But those shippers will not have to sue the administration for relief, according to a declaration filed with US Court of International Trade (CIT). “This new process will require minimal submission from importers,” CBP said in the filing, made Friday. “It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations and allowing for a review period for CBP to resolve any discrepancies with the importer and to confirm no other outstanding enforcement issues or no revenue is owed.” CIT earlier in the week ordered CBP to immediately refund the estimated $166 billion in IEEPA tariffs paid by shippers before the US Supreme Court ruled President Donald Trump did not have the authority to impose them . Refund payments will also include interest, which would cost the US government an additional $23 million for each day that passes prior to payment, according to an estimate from the CATO Institute. However, because “existing administrative procedures and technology are not well-suited to a task of this scale,” it would have taken more than 4 million hours for agency workers to manually examine shipment documentation to determine refund amounts, CBP said in the filing. Crucially, the process being set up by CBP “would spare the hundreds of thousands of small businesses who are owed refunds from having to litigate to obtain them,” Neil Bradley, executive vice president and chief policy officer of the US Chamber of Commerce, said in a statement Friday. As of March 4, more than 2,000 importers had already filed lawsuits with CIT seeking refunds since the Feb. 20 Supreme Court ruling. Shippers would receive the refund as a single payment, regardless of how many shipments or different cargoes they imported, according to the filing. CBP estimates there are more than 330,000 importers eligible for refunds on more than 53 million customs entries. Contact Benjamin Meyer at benjamin.meyer@spglobal.com .

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CBP lays out initial tariff refund plan that requires ‘minimal’ work from importers

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

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

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

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

Gemini suspends, revamps Middle East services amid growing conflict

<div class="phx-topic abstract-wrapper">The agency in charge of enforcing US shipping law reminded the market that any change in ocean tariffs must come with a 30-day notice period prior to implementation so it can be reviewed.</div>

The agency in charge of enforcing US shipping law reminded the market that any change in ocean tariffs must come with a 30-day notice period prior to implementation so it can be reviewed.

<div class="phx-topic">The US Federal Maritime Commission (FMC) on Wednesday told shippers to check their ocean freight bills for any surcharges related to the war in the Middle East that have not been formally reviewed by the agency, as carriers look to recoup additional costs from rising bunker fuel prices and disrupted networks. In a statement Wednesday, the agency said it is “closely monitoring the impact the current conflict in the Middle East is having on shipping conditions through the Strait of Hormuz” and any rate adjustments ocean carriers are making in response. The FMC reminded shippers that any change in the ocean tariff must come with a 30-day notice period prior to implementation so it can be reviewed by the agency. The only exception is a “special permission” request, which can have a shorter notice period. “Shippers are encouraged to access and review their common carrier’s tariff,” the FMC said. “Ocean common carriers are responsible for ensuring that service contracts and their amendments are filed in a timely and accurate manner.” Ocean carriers began assessing war-related surcharges for any shipments to and from the Persian Gulf states on March 2, the Iran declared that any commercial ship passing through the Strait of Hormuz would be subject to attack. Within a day of that announcement, five commercial ships were attacked. While those surcharges were effective immediately for non-US trades, ocean carriers did say US trades to the Middle East would be subject to a 30-day notice period. By Monday, ocean carriers began telling customers of emergency fuel surcharges on all global trades. The closure of the Strait of Hormuz has throttled shipments of one-fifth of global oil supply and <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">resulted in fuel shortages</a> in an important bunkering region for the shipping industry. <h3>AgTC watching </h3>Speaking at the Journal of Commerce’s TPM26 event in Long Beach last week, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said the 30-day review period was necessary for the FMC to assess whether the surcharges are justified. When similar surcharges were issued in early 2024 due to the Houthi attacks against ships transiting the Red Sea, Friedmann said the FMC waived a notice period for a surcharge from one ocean carrier. However, a subsequent economic analysis questioned whether the surcharge was warranted, given the ocean carrier was also saving on Suez Canal tolls by diverting around the Cape of Good Hope. “We were pretty upset that the waiver was granted like that, so we made a stink about it,” Friedmann told the conference. “But the key was if you do the analysis, the carrier is not really losing much money. “I have contacted all the FMC commissioners already that this could be repeated,” he added. “But apparently they learned the lesson.” In August 2021, the FMC <a href="https://www.joc.com/article/fmc-orders-carriers-to-justify-us-port-congestion-surcharges-5249012">ordered eight carriers</a> to show how congestion surcharges and other fees tied to the pandemic-driven supply chain disruption met legal and regulatory requirements. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) on Wednesday told shippers to check their ocean freight bills for any surcharges related to the war in the Middle East that have not been formally reviewed by the agency, as carriers look to recoup additional costs from rising bunker fuel prices and disrupted networks. In a statement Wednesday, the agency said it is “closely monitoring the impact the current conflict in the Middle East is having on shipping conditions through the Strait of Hormuz” and any rate adjustments ocean carriers are making in response. The FMC reminded shippers that any change in the ocean tariff must come with a 30-day notice period prior to implementation so it can be reviewed by the agency. The only exception is a “special permission” request, which can have a shorter notice period. “Shippers are encouraged to access and review their common carrier’s tariff,” the FMC said. “Ocean common carriers are responsible for ensuring that service contracts and their amendments are filed in a timely and accurate manner.” Ocean carriers began assessing war-related surcharges for any shipments to and from the Persian Gulf states on March 2, the Iran declared that any commercial ship passing through the Strait of Hormuz would be subject to attack. Within a day of that announcement, five commercial ships were attacked. While those surcharges were effective immediately for non-US trades, ocean carriers did say US trades to the Middle East would be subject to a 30-day notice period. By Monday, ocean carriers began telling customers of emergency fuel surcharges on all global trades. The closure of the Strait of Hormuz has throttled shipments of one-fifth of global oil supply and resulted in fuel shortages in an important bunkering region for the shipping industry. AgTC watching Speaking at the Journal of Commerce’s TPM26 event in Long Beach last week, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said the 30-day review period was necessary for the FMC to assess whether the surcharges are justified. When similar surcharges were issued in early 2024 due to the Houthi attacks against ships transiting the Red Sea, Friedmann said the FMC waived a notice period for a surcharge from one ocean carrier. However, a subsequent economic analysis questioned whether the surcharge was warranted, given the ocean carrier was also saving on Suez Canal tolls by diverting around the Cape of Good Hope. “We were pretty upset that the waiver was granted like that, so we made a stink about it,” Friedmann told the conference. “But the key was if you do the analysis, the carrier is not really losing much money. “I have contacted all the FMC commissioners already that this could be repeated,” he added. “But apparently they learned the lesson.” In August 2021, the FMC ordered eight carriers to show how congestion surcharges and other fees tied to the pandemic-driven supply chain disruption met legal and regulatory requirements. Contact Michael Angell at michael.angell@spglobal.com .

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