<div class="phx-topic abstract-wrapper">Whatever capacity might exit the market in 2026, most analysts believe a strong resurgence in freight volumes is needed to enable a true rebound in truckload rates. </div>

Whatever capacity might exit the market in 2026, most analysts believe a strong resurgence in freight volumes is needed to enable a true rebound in truckload rates.

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<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook.The big picture: The depression in demand that has gripped the US truckload sector for three years will likely continue through the first half of 2026. That could mean a sharper correction in capacity followed by higher rates late in the year or in 2027, which some believe will be the real recovery year for truckload carriers. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135199_0.1.jpg"></img></div>A look back: The recovery in trucking volumes many carriers and analysts had expected — or at least hoped for — at the start of 2025 failed to materialize as US manufacturing lost its early momentum and US tariffs distorted import demand. As a result, truckload spot rates stayed in the trough they’ve inhabited since mid-2022. Pricing rose and fell seasonally throughout 2025, and each minor gain was hailed as a potential turning point, but widespread overcapacity and the lack of a demand catalyst kept a lid on spot and contract rate hikes. Large truckload carriers cut their fleets in an attempt to match low levels of demand and preserve profit margins, dragging capacity to historic lows. The Journal of Commerce Truckload Capacity Index (TCI), a measure of actual truck counts at large publicly-owned carriers, dropped to 72.4% in the third quarter, an all-time low in two decades of TCI data. But the “long tail” of small truckload carriers remains long. More than 38,500 operating authorities were canceled between December 2022 and September 2025, but there were almost 90,000 more carriers that month than in December 2019, according to the Federal Motor Carrier Safety Administration (FMCSA). That underscores a shift, with more drivers moving to smaller trucking firms and those smaller firms proving more resilient than in the past. A look ahead: The resiliency demonstrated by small carriers is a significant break from previous economic downturns and, therefore, makes projections for 2026 more difficult. Analysts and large carrier executives have been predicting small fleets would fold and exit the market in increasing numbers for three years, and while rising costs and low demand will continue to squeeze those carriers, the number of companies closing their doors has slowed to a crawl. Just 1,500 operating authorities were revoked in the first nine months of 2025, down from 13,000 in 2024 and 25,000 in 2023, according to FMCSA data. Trucking executives believe a regulatory crackdown on non-domiciled commercial driver’s licenses and increased enforcement of English-language proficiency requirements will pull more drivers off the road, but whether these actions will take enough capacity out of service — and do so quickly enough — to move the needle on rates remains to be seen. Orders for new Class 8 trucks are expected to fall amid low rates, weak demand, tariffs and uncertainty over future emissions regulations, slowing the influx of additional capacity into the oversupplied truckload market. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="5ef87bc3-b502-4e31-85d7-457673195134"></dynamic-object></div>The next inflection: Whatever capacity might exit the market in 2026, most analysts believe a strong resurgence in freight volumes is needed to enable a true rebound in truckload rates. US manufacturing output, as measured by the S&amp;P Global US Manufacturing Purchasing Managers’ Index (PMI), expanded sequentially for the fourth straight month in November, but growth remains constrained by uncertainty over tariffs, trade policy and consumer spending. Absent a sudden and unexpected demand spike, truckload contract rate increases will likely be limited to low single-digit percentages and spot pricing will likely remain depressed well into this year, if not 2027. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: The depression in demand that has gripped the US truckload sector for three years will likely continue through the first half of 2026. That could mean a sharper correction in capacity followed by higher rates late in the year or in 2027, which some believe will be the real recovery year for truckload carriers. A look back: The recovery in trucking volumes many carriers and analysts had expected — or at least hoped for — at the start of 2025 failed to materialize as US manufacturing lost its early momentum and US tariffs distorted import demand. As a result, truckload spot rates stayed in the trough they’ve inhabited since mid-2022. Pricing rose and fell seasonally throughout 2025, and each minor gain was hailed as a potential turning point, but widespread overcapacity and the lack of a demand catalyst kept a lid on spot and contract rate hikes. Large truckload carriers cut their fleets in an attempt to match low levels of demand and preserve profit margins, dragging capacity to historic lows. The Journal of Commerce Truckload Capacity Index (TCI), a measure of actual truck counts at large publicly-owned carriers, dropped to 72.4% in the third quarter, an all-time low in two decades of TCI data. But the “long tail” of small truckload carriers remains long. More than 38,500 operating authorities were canceled between December 2022 and September 2025, but there were almost 90,000 more carriers that month than in December 2019, according to the Federal Motor Carrier Safety Administration (FMCSA). That underscores a shift, with more drivers moving to smaller trucking firms and those smaller firms proving more resilient than in the past. A look ahead: The resiliency demonstrated by small carriers is a significant break from previous economic downturns and, therefore, makes projections for 2026 more difficult. Analysts and large carrier executives have been predicting small fleets would fold and exit the market in increasing numbers for three years, and while rising costs and low demand will continue to squeeze those carriers, the number of companies closing their doors has slowed to a crawl. Just 1,500 operating authorities were revoked in the first nine months of 2025, down from 13,000 in 2024 and 25,000 in 2023, according to FMCSA data. Trucking executives believe a regulatory crackdown on non-domiciled commercial driver’s licenses and increased enforcement of English-language proficiency requirements will pull more drivers off the road, but whether these actions will take enough capacity out of service — and do so quickly enough — to move the needle on rates remains to be seen. Orders for new Class 8 trucks are expected to fall amid low rates, weak demand, tariffs and uncertainty over future emissions regulations, slowing the influx of additional capacity into the oversupplied truckload market. The next inflection: Whatever capacity might exit the market in 2026, most analysts believe a strong resurgence in freight volumes is needed to enable a true rebound in truckload rates. US manufacturing output, as measured by the S&P Global US Manufacturing Purchasing Managers’ Index (PMI), expanded sequentially for the fourth straight month in November, but growth remains constrained by uncertainty over tariffs, trade policy and consumer spending. Absent a sudden and unexpected demand spike, truckload contract rate increases will likely be limited to low single-digit percentages and spot pricing will likely remain depressed well into this year, if not 2027. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Truckload

Surface

Persistent supply-demand imbalance to keep US truckload rates in check

<div class="phx-topic abstract-wrapper">Hapag-Lloyd’s investment in the Aracruz terminal project in Brazil is part of a plan announced by CEO Rolf Habben Jansen last March to expand the carrier’s ports network to more than 30 terminals by 2030.</div>

Hapag-Lloyd’s investment in the Aracruz terminal project in Brazil is part of a plan announced by CEO Rolf Habben Jansen last March to expand the carrier’s ports network to more than 30 terminals by 2030.

<div class="phx-topic">Hapag-Lloyd and Ocean Network Express (ONE) are expanding their container terminal portfolios with separate deals for facilities in Brazil and China, the carriers announced Tuesday. In Brazil, Hanseatic Global Terminals, Hapag-Lloyd’s ports division, has signed a joint venture agreement with the Imetame Group to take a 50% stake in Imetame Logística Porto (ILP), which focuses on container terminal operations. Under the deal, Hanseatic and Imetame will build and operate the 1.2 million-TEU capacity Hanseatic Global Terminals Aracruz container terminal at Aracruz in Brazil’s Espírito Santo state, about 310 miles north of Rio de Janeiro. The two companies declined to disclose the cost of the project, although local sources estimated the terminal would cost $486 million to build. The facility, with 2,461 feet of quay and water depth of 56 feet, is expected to start operations in mid-2028 and handle breakbulk in addition to containerized cargo. “Latin America is a key strategic market for Hanseatic Global Terminals and Hapag-Lloyd,” Dheeraj Bhatia, Hanseatic Global Terminals CEO, said in a statement. “Our joint venture with the Imetame Group and the development of a new transshipment hub and gateway port on Brazil’s east coast strengthens our terminal portfolio while addressing capacity constraints in a growth region.” Operations at some of Brazil’s existing ports, including Santos and Navegantes, are often disrupted due to bad weather, congestion and port construction work, according to advisories published by Hapag-Lloyd and forwarder Kuehne + Nagel. The investment in the Aracruz terminal project is part of a Hapag-Lloyd plan announced by CEO Rolf Habben Jansen last March to expand its ports network to more than 30 terminals by 2030. <h3>ONE extends terminal holdings </h3>Meanwhile, ONE has bolstered its container terminals portfolio after signing a deal to take a minority stake in Dalian Container Terminal (DCT) in northern China, the Singapore-headquartered carrier said. ONE did not disclose how large its interest will be, but the Dalian deal will add to its network that includes stakes in terminals in Los Angeles, Oakland, Rotterdam and Singapore. “This acquisition of a minority stake aligns with our strategy of ensuring access at key regional ports,” Hiroki Tsujii, global chief officer of ONE’s product and network division, said in a statement. “The ownership stake allows us to collaborate with DCT and contribute to its continued infrastructure development and green terminal initiatives.” DCT is one of the biggest container terminals in the region, with 14 container berths, a total quay length of 14,400 feet, and annual handling capacity of 6.6 million TEUs. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Hapag-Lloyd and Ocean Network Express (ONE) are expanding their container terminal portfolios with separate deals for facilities in Brazil and China, the carriers announced Tuesday. In Brazil, Hanseatic Global Terminals, Hapag-Lloyd’s ports division, has signed a joint venture agreement with the Imetame Group to take a 50% stake in Imetame Logística Porto (ILP), which focuses on container terminal operations. Under the deal, Hanseatic and Imetame will build and operate the 1.2 million-TEU capacity Hanseatic Global Terminals Aracruz container terminal at Aracruz in Brazil’s Espírito Santo state, about 310 miles north of Rio de Janeiro. The two companies declined to disclose the cost of the project, although local sources estimated the terminal would cost $486 million to build. The facility, with 2,461 feet of quay and water depth of 56 feet, is expected to start operations in mid-2028 and handle breakbulk in addition to containerized cargo. “Latin America is a key strategic market for Hanseatic Global Terminals and Hapag-Lloyd,” Dheeraj Bhatia, Hanseatic Global Terminals CEO, said in a statement. “Our joint venture with the Imetame Group and the development of a new transshipment hub and gateway port on Brazil’s east coast strengthens our terminal portfolio while addressing capacity constraints in a growth region.” Operations at some of Brazil’s existing ports, including Santos and Navegantes, are often disrupted due to bad weather, congestion and port construction work, according to advisories published by Hapag-Lloyd and forwarder Kuehne + Nagel. The investment in the Aracruz terminal project is part of a Hapag-Lloyd plan announced by CEO Rolf Habben Jansen last March to expand its ports network to more than 30 terminals by 2030. ONE extends terminal holdings Meanwhile, ONE has bolstered its container terminals portfolio after signing a deal to take a minority stake in Dalian Container Terminal (DCT) in northern China, the Singapore-headquartered carrier said. ONE did not disclose how large its interest will be, but the Dalian deal will add to its network that includes stakes in terminals in Los Angeles, Oakland, Rotterdam and Singapore. “This acquisition of a minority stake aligns with our strategy of ensuring access at key regional ports,” Hiroki Tsujii, global chief officer of ONE’s product and network division, said in a statement. “The ownership stake allows us to collaborate with DCT and contribute to its continued infrastructure development and green terminal initiatives.” DCT is one of the biggest container terminals in the region, with 14 container berths, a total quay length of 14,400 feet, and annual handling capacity of 6.6 million TEUs. Contact Keith Wallis at keithwallis@hotmail.com .

Port News

Port infrastructure

Marine terminals

International ports

Container Shipping News

Maritime

Hapag-Lloyd, ONE expand terminal networks with deals in Brazil, China

<div class="phx-topic abstract-wrapper">As 2026 begins, US import demand remains uncertain, but the record amounts of capacity container lines plan to deploy in January and February could put further pressure on already weak rates.</div>

As 2026 begins, US import demand remains uncertain, but the record amounts of capacity container lines plan to deploy in January and February could put further pressure on already weak rates.

<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: An injection of vessels pushed available capacity on the trans-Atlantic beyond market demand in 2025 despite relatively steady volumes. That leaves carriers with little leverage to raise rates from the sustained 16-month low reached in the fourth quarter. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135199_0.1.jpg"></img></div>A look back: US importers frontloading cargo ahead of threatened 30% tariffs on EU goods caused a spring volume surge on the westbound trans-Atlantic. US imports from North Europe peaked in March at 219,560 TEUs, up 14.3% from March 2024 and the third-highest total for any month in nearly nine years of data from PIERS, a sister product of the Journal of Commerce within S&amp;P Global. However, that momentum waned following a late-July trade deal that capped US tariffs on most EU imports at 15%, dragging year-over-year volume growth through November down to just 2.5%. At the same time, carriers added capacity to the trade via new and larger vessels. Mediterranean Shipping Co., for example, added a trans-Atlantic leg to its Asia-Mediterranean Dragon service, which operates with vessels averaging approximately 13,000 TEUs. For context, the largest vessel deployed on any other service between the Mediterranean and East Coast of North America was 9,600 TEUs. That helped boost the average size of container ships deployed on trans-Atlantic routes to nearly 6,200 TEUs in the third quarter, compared with 5,500 TEUs at the start of the year, according to data from Sea-Intelligence Maritime Analysis. A look ahead: As 2026 begins, US import demand remains uncertain, but the record amounts of capacity container lines plan to deploy in January and February could put further pressure on already weak rates. After briefly rising to $2,000 per FEU in March, average spot pricing from North Europe to the US East Coast has been stuck at $1,400 per FEU since early November, according to Platts, also part of S&amp;P Global. Even with a significant number of blank sailings, carriers plan to deploy more than 435,000 TEUs of capacity between North Europe and the US East and Gulf coasts in January and 390,000 TEUs in February, both of which would be all-time highs for the trade, according to eeSea. Further complicating demand projections are growing tensions over the implementation of the US-EU trade agreement. EU member states have been slow to approve the agreement — which would eliminate EU tariffs on most US products and reduce US tariffs on EU goods to 15% — on the grounds that it unfairly favors the US. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ba342d44-7d63-4c55-a3ba-b135fbe604e7"></dynamic-object></div>The next inflection: The trans-Atlantic is indirectly exposed to a resumption of regular Suez Canal transits. If congestion spreads across European ports, as predicted, when Asia-Europe vessels return to the Red Sea, it will be felt acutely on the shorter routes between Europe and the US East Coast. US importers would be wise to increase inventory levels of critical stock before carriers flip the Suez switch to mitigate any resulting disruption. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: An injection of vessels pushed available capacity on the trans-Atlantic beyond market demand in 2025 despite relatively steady volumes. That leaves carriers with little leverage to raise rates from the sustained 16-month low reached in the fourth quarter. A look back: US importers frontloading cargo ahead of threatened 30% tariffs on EU goods caused a spring volume surge on the westbound trans-Atlantic. US imports from North Europe peaked in March at 219,560 TEUs, up 14.3% from March 2024 and the third-highest total for any month in nearly nine years of data from PIERS, a sister product of the Journal of Commerce within S&P Global. However, that momentum waned following a late-July trade deal that capped US tariffs on most EU imports at 15%, dragging year-over-year volume growth through November down to just 2.5%. At the same time, carriers added capacity to the trade via new and larger vessels. Mediterranean Shipping Co., for example, added a trans-Atlantic leg to its Asia-Mediterranean Dragon service, which operates with vessels averaging approximately 13,000 TEUs. For context, the largest vessel deployed on any other service between the Mediterranean and East Coast of North America was 9,600 TEUs. That helped boost the average size of container ships deployed on trans-Atlantic routes to nearly 6,200 TEUs in the third quarter, compared with 5,500 TEUs at the start of the year, according to data from Sea-Intelligence Maritime Analysis. A look ahead: As 2026 begins, US import demand remains uncertain, but the record amounts of capacity container lines plan to deploy in January and February could put further pressure on already weak rates. After briefly rising to $2,000 per FEU in March, average spot pricing from North Europe to the US East Coast has been stuck at $1,400 per FEU since early November, according to Platts, also part of S&P Global. Even with a significant number of blank sailings, carriers plan to deploy more than 435,000 TEUs of capacity between North Europe and the US East and Gulf coasts in January and 390,000 TEUs in February, both of which would be all-time highs for the trade, according to eeSea. Further complicating demand projections are growing tensions over the implementation of the US-EU trade agreement. EU member states have been slow to approve the agreement — which would eliminate EU tariffs on most US products and reduce US tariffs on EU goods to 15% — on the grounds that it unfairly favors the US. The next inflection: The trans-Atlantic is indirectly exposed to a resumption of regular Suez Canal transits. If congestion spreads across European ports, as predicted, when Asia-Europe vessels return to the Red Sea, it will be felt acutely on the shorter routes between Europe and the US East Coast. US importers would be wise to increase inventory levels of critical stock before carriers flip the Suez switch to mitigate any resulting disruption. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Trans-Atlantic capacity injection overtakes market demand

<div class="phx-topic abstract-wrapper">The investment plan was developed amid growing alarm that the country is losing out in the trade stakes due to a lack of investment by South Korean companies in overseas logistics facilities.</div>

The investment plan was developed amid growing alarm that the country is losing out in the trade stakes due to a lack of investment by South Korean companies in overseas logistics facilities.

<div class="phx-topic">South Korea will invest $3 billion to expand the country’s global terminals and logistics network to help strengthen trade efforts in an increasingly challenging business environment. A three-point plan unveiled by the country’s Ocean and Fisheries Ministry Monday involves increasing the number of publicly-supported logistics facilities in other countries from nine to 40, securing investment in 10 overseas port terminals, and helping to develop three major logistics companies by 2030. Priority will be given to investing in storage and processing facilities, including warehouses and container yards in 11 existing target markets that include the US, Canada, Mexico, Vietnam, Indonesia, Thailand, Germany and Poland. The 11 were chosen based on the volume of import and export trade with South Korea over the past 10 years. “Securing overseas logistics bases is a key task for stabilizing the supply chain in an uncertain logistics environment,” Vice Minister of Oceans and Fisheries Kim Seong-beom said in a statement announcing the initiative. “...We will strengthen our logistics competitiveness and firmly support the import and export economy.” Most of the investment will be overseen by the government-backed Korea Ocean Business Corporation (KOBC). The plan calls for the creation of a foreign terminal investment group involving KOBC, shipping companies, logistics operators and port authorities such as Busan that will assess potential terminal targets and develop expansion strategies. Also part of the proposal is the creation of a container terminal investment fund that will be given $670 million to secure stakes in foreign terminals “and use this as a springboard to secure terminal operation rights in the future,” the ministry said. Cash available through KOBC’s Global Logistics Supply Chain Investment Fund will double to $1.3 billion to help small and medium-sized logistics companies expand overseas. <h3>Shift in global trade environment </h3>The investment plan was developed amid growing alarm that South Korea is losing out in the trade stakes due to the lack of investment by South Korean companies in overseas logistics facilities. “Due to changes in the global trade environment represented by tariff hikes, the protracted Russia-Ukraine war, the Red Sea conflict, and the intensification of the climate crisis, supply chain instability has been increasing in the global logistics market in recent years,” the ministry said. “As a result, logistics companies and shipping companies in various countries are strengthening their market dominance by securing logistics infrastructure and acquiring container terminals.” Only 9% of the overseas logistics centers operated by 15 of South Korea’s top companies are owned facilities, while the rest are leased, the ministry said. “There is a high risk of disruption in the provision of logistics services due to the rapid rise in logistics costs and difficulty in securing facilities at the right time in the event of a supply chain crisis,” it said. The ministry pointed out that only seven South Korean companies have stakes in overseas container terminals. They include HMM, which has interests in six terminals including Long Beach, Tacoma, Singapore and Algeciras; CJ Logistics, with facilities in Shenyang in northern China, Klang in Malaysia, and Thailand; and Lotte Global Logistics, which has warehouses in Vietnam, the Philippines and Europe. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

South Korea will invest $3 billion to expand the country’s global terminals and logistics network to help strengthen trade efforts in an increasingly challenging business environment. A three-point plan unveiled by the country’s Ocean and Fisheries Ministry Monday involves increasing the number of publicly-supported logistics facilities in other countries from nine to 40, securing investment in 10 overseas port terminals, and helping to develop three major logistics companies by 2030. Priority will be given to investing in storage and processing facilities, including warehouses and container yards in 11 existing target markets that include the US, Canada, Mexico, Vietnam, Indonesia, Thailand, Germany and Poland. The 11 were chosen based on the volume of import and export trade with South Korea over the past 10 years. “Securing overseas logistics bases is a key task for stabilizing the supply chain in an uncertain logistics environment,” Vice Minister of Oceans and Fisheries Kim Seong-beom said in a statement announcing the initiative. “...We will strengthen our logistics competitiveness and firmly support the import and export economy.” Most of the investment will be overseen by the government-backed Korea Ocean Business Corporation (KOBC). The plan calls for the creation of a foreign terminal investment group involving KOBC, shipping companies, logistics operators and port authorities such as Busan that will assess potential terminal targets and develop expansion strategies. Also part of the proposal is the creation of a container terminal investment fund that will be given $670 million to secure stakes in foreign terminals “and use this as a springboard to secure terminal operation rights in the future,” the ministry said. Cash available through KOBC’s Global Logistics Supply Chain Investment Fund will double to $1.3 billion to help small and medium-sized logistics companies expand overseas. Shift in global trade environment The investment plan was developed amid growing alarm that South Korea is losing out in the trade stakes due to the lack of investment by South Korean companies in overseas logistics facilities. “Due to changes in the global trade environment represented by tariff hikes, the protracted Russia-Ukraine war, the Red Sea conflict, and the intensification of the climate crisis, supply chain instability has been increasing in the global logistics market in recent years,” the ministry said. “As a result, logistics companies and shipping companies in various countries are strengthening their market dominance by securing logistics infrastructure and acquiring container terminals.” Only 9% of the overseas logistics centers operated by 15 of South Korea’s top companies are owned facilities, while the rest are leased, the ministry said. “There is a high risk of disruption in the provision of logistics services due to the rapid rise in logistics costs and difficulty in securing facilities at the right time in the event of a supply chain crisis,” it said. The ministry pointed out that only seven South Korean companies have stakes in overseas container terminals. They include HMM, which has interests in six terminals including Long Beach, Tacoma, Singapore and Algeciras; CJ Logistics, with facilities in Shenyang in northern China, Klang in Malaysia, and Thailand; and Lotte Global Logistics, which has warehouses in Vietnam, the Philippines and Europe. Contact Keith Wallis at keithwallis@hotmail.com .

South Korea to invest $3 billion expanding foreign logistics, terminal network

<div class="phx-topic abstract-wrapper">ONE and SM Line are ocean carrier partners to Union Pacific on the West Coast, and a majority of UP’s international intermodal volume originates at the Port of Los Angeles. </div>

ONE and SM Line are ocean carrier partners to Union Pacific on the West Coast, and a majority of UP’s international intermodal volume originates at the Port of Los Angeles.

<div class="phx-topic">Union Pacific Railroad (UP) has received support from the Port of Los Angeles and ocean carriers Ocean Network Express (ONE) and SM Lines for its proposed acquisition of Norfolk Southern Railway (NS), with the parties citing faster transit times, potential new business opportunities and reduced drayage costs for international intermodal freight. ONE and SM Line are ocean carrier partners to Union Pacific on the West Coast, and a majority of UP’s international intermodal volume originates at the Port of Los Angeles. All three provided letters of support for the $85 billion acquisition that were included in the <a href="https://www.joc.com/article/up-in-merger-filing-vows-to-convert-millions-of-loads-to-intermodal-annually-6138380">nearly 7,000-page application</a> UP filed Friday with the US Surface Transportation Board, which needs to approve the merger. “The merger has the potential to remove several days delay from existing transit times,” wrote Tim Walsh, ONE’s senior vice president of product and network in the US. “The resulting improvement in continuity of service and transit times will enhance ONE’s ability to reliably serve our existing customers and expand our capacity to serve US customers that require faster, more dependable cargo transportation.” SM Line said the combined railroad would enable intermodal service for shippers that do not currently use rail, while POLA emphasized the implications for US exporters. “The unified network expands the reach and speed-to-market for American exports ... thereby reinforcing the Port of Los Angeles’ role in driving national economic growth,” wrote Gene Seroka, the port’s executive director. A primary benefit for international intermodal is reducing the need for long-haul and cross-town truck drayage. UP estimates that approximately 67,000 long-haul drays could be eliminated annually if the merger with NS is approved. The estimate includes three regional dray moves that would disappear: Chicago to Detroit and Toledo, Ohio — ranging from 230 to 290 miles — and Memphis to Huntsville, Alabama, nearly 215 miles. UP estimates that $112.8 million in annual long-haul drayage costs incurred by shippers would be eliminated. While UP does not break out international versus domestic intermodal in its estimate, the issue is more pronounced for ocean containers. Truckload pricing often makes it difficult to win domestic intermodal freight that requires drays of 200 miles or more. By contrast, many beneficial cargo owners (BCOs) prefer long-haul drays to avoid added handling and potential cargo damage during transloading. “The post-merger addition of single-line service linking terminals closer to the freight could result in 100% of this traffic switching to an extended haul,” David Hunt and Matthew Schabas of Oliver Wyman, a consultancy firm hired by UP to analyze the transaction, wrote in the application. “Shippers would benefit from reducing drayage miles and, as a result, their door-to-door cost per shipment.” The analysis did not include Louisville, Kentucky, despite Union Pacific and Norfolk Southern announcing a <a href="https://www.joc.com/article/up-ns-joint-intermodal-service-to-link-west-coast-with-louisville-in-midwest-6080692">joint service</a> to the city earlier this year. While the service was marketed as a domestic intermodal product, ocean containers are often interspersed within longer domestic intermodal trains. Union Pacific does not expect a sharp surge in Louisville traffic. The application states that annual lift capacity in Louisville currently stands at 140,000 units and would rise to 145,000 units following the merger — an increase of 3.6%. By contrast, UP projects lift capacity to increase 17% to 227,000 units annually in Toledo and surge 50% to 219,000 units annually in Detroit. <h3>Cross-town drayage reductions </h3>The formal merger application also projects a significant reduction in cross-town drayage within Chicago. In 2023, UP and NS said an average of 1,139 containers per day were interchanged between the railroads, including via trucks and a third-party switching railroad known as the Belt Railway of Chicago. Both options can add a day or more to the transit times on containers. The merger should eliminate more than 500 crosstown drays, known as “rubber tire” interchanges, per day, or more than 100,000 hauls on Chicago’s roadways annually. Across the US, the application identifies 82 specific intermodal routes where containers will stay on the rail for the entire journey but today require a cross-town dray between two terminals. “Intermodal companies currently tasked with trucking their containers between UP and NS intermodal yards in Chicago, Kansas City, St. Louis and Memphis will finally be able to leave their trailers and containers on railcars for the entirety of the move,” Scott Harris, chief commercial officer of drayage provider CAD Logistics, wrote in the application. “This time and cost savings will help US intermodal traffic grow over the next decade.” UP and NS estimate that approximately 250,000 annual rail lifts across Chicago, Kansas City, St. Louis and Memphis currently dedicated to cross-town drayage would be eliminated, saving about $12 million per year and freeing crane capacity to load and unload other containers more efficiently. The merger would not eliminate all cross-town drayage, however. Chicago hosts six Class I railroads, while Memphis has five and Kansas City four, meaning terminal-to-terminal drayage will remain necessary. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Union Pacific Railroad (UP) has received support from the Port of Los Angeles and ocean carriers Ocean Network Express (ONE) and SM Lines for its proposed acquisition of Norfolk Southern Railway (NS), with the parties citing faster transit times, potential new business opportunities and reduced drayage costs for international intermodal freight. ONE and SM Line are ocean carrier partners to Union Pacific on the West Coast, and a majority of UP’s international intermodal volume originates at the Port of Los Angeles. All three provided letters of support for the $85 billion acquisition that were included in the nearly 7,000-page application UP filed Friday with the US Surface Transportation Board, which needs to approve the merger. “The merger has the potential to remove several days delay from existing transit times,” wrote Tim Walsh, ONE’s senior vice president of product and network in the US. “The resulting improvement in continuity of service and transit times will enhance ONE’s ability to reliably serve our existing customers and expand our capacity to serve US customers that require faster, more dependable cargo transportation.” SM Line said the combined railroad would enable intermodal service for shippers that do not currently use rail, while POLA emphasized the implications for US exporters. “The unified network expands the reach and speed-to-market for American exports ... thereby reinforcing the Port of Los Angeles’ role in driving national economic growth,” wrote Gene Seroka, the port’s executive director. A primary benefit for international intermodal is reducing the need for long-haul and cross-town truck drayage. UP estimates that approximately 67,000 long-haul drays could be eliminated annually if the merger with NS is approved. The estimate includes three regional dray moves that would disappear: Chicago to Detroit and Toledo, Ohio — ranging from 230 to 290 miles — and Memphis to Huntsville, Alabama, nearly 215 miles. UP estimates that $112.8 million in annual long-haul drayage costs incurred by shippers would be eliminated. While UP does not break out international versus domestic intermodal in its estimate, the issue is more pronounced for ocean containers. Truckload pricing often makes it difficult to win domestic intermodal freight that requires drays of 200 miles or more. By contrast, many beneficial cargo owners (BCOs) prefer long-haul drays to avoid added handling and potential cargo damage during transloading. “The post-merger addition of single-line service linking terminals closer to the freight could result in 100% of this traffic switching to an extended haul,” David Hunt and Matthew Schabas of Oliver Wyman, a consultancy firm hired by UP to analyze the transaction, wrote in the application. “Shippers would benefit from reducing drayage miles and, as a result, their door-to-door cost per shipment.” The analysis did not include Louisville, Kentucky, despite Union Pacific and Norfolk Southern announcing a joint service to the city earlier this year. While the service was marketed as a domestic intermodal product, ocean containers are often interspersed within longer domestic intermodal trains. Union Pacific does not expect a sharp surge in Louisville traffic. The application states that annual lift capacity in Louisville currently stands at 140,000 units and would rise to 145,000 units following the merger — an increase of 3.6%. By contrast, UP projects lift capacity to increase 17% to 227,000 units annually in Toledo and surge 50% to 219,000 units annually in Detroit. Cross-town drayage reductions The formal merger application also projects a significant reduction in cross-town drayage within Chicago. In 2023, UP and NS said an average of 1,139 containers per day were interchanged between the railroads, including via trucks and a third-party switching railroad known as the Belt Railway of Chicago. Both options can add a day or more to the transit times on containers. The merger should eliminate more than 500 crosstown drays, known as “rubber tire” interchanges, per day, or more than 100,000 hauls on Chicago’s roadways annually. Across the US, the application identifies 82 specific intermodal routes where containers will stay on the rail for the entire journey but today require a cross-town dray between two terminals. “Intermodal companies currently tasked with trucking their containers between UP and NS intermodal yards in Chicago, Kansas City, St. Louis and Memphis will finally be able to leave their trailers and containers on railcars for the entirety of the move,” Scott Harris, chief commercial officer of drayage provider CAD Logistics, wrote in the application. “This time and cost savings will help US intermodal traffic grow over the next decade.” UP and NS estimate that approximately 250,000 annual rail lifts across Chicago, Kansas City, St. Louis and Memphis currently dedicated to cross-town drayage would be eliminated, saving about $12 million per year and freeing crane capacity to load and unload other containers more efficiently. The merger would not eliminate all cross-town drayage, however. Chicago hosts six Class I railroads, while Memphis has five and Kansas City four, meaning terminal-to-terminal drayage will remain necessary. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Carriers, POLA back UP-NS deal, citing lower transit times, costs

<div class="phx-topic abstract-wrapper">The pause on work at five major offshore wind farms along the US East Coast is likely to have an impact on heavy-lift and project cargoes supporting the installations. </div>

The pause on work at five major offshore wind farms along the US East Coast is likely to have an impact on heavy-lift and project cargoes supporting the installations.

<div class="phx-topic">The US Department of the Interior on Monday suspended the leases of five major offshore wind power projects along the East Coast due to what it says are “national security risks.” The affected projects, all assisted by leasing and tax credit provisions in the 2022 Inflation Reduction Act, are operated by Vineyard Wind 1, Revolution Wind, Coastal Virginia Offshore Wind (CVOW), Sunrise Wind, and Empire Wind 1. “Today’s action addresses emerging national security risks, including the rapid evolution of the relevant adversary technologies, and the vulnerabilities created by large-scale offshore wind projects with proximity near our East Coast population centers,” Interior Secretary Doug Burgum said. In an interview with Fox Business Monday, Burgum said the projects create “radar interference” and a “jamming risk.” <h3>Trump a long-time foe of wind projects </h3>The pausing of the five wind energy projects is likely to impact project cargo shipments; wind farms are a major source of project cargo. The Port of Virginia, for example, said in October it was seeing <a href="https://www.joc.com/article/wind-cargo-helps-virginia-port-lay-groundwork-for-more-heavy-lift-business-6102932">increasing heavy-lift demand</a> because of the now-curtailed CVOW project. President Donald Trump has made no secret of his desire to move the US away from wind projects in favor of building more oil and gas pipelines. “Unclassified reports from the US government have long found that the movement of massive turbine blades and the highly reflective towers create radar interference called ‘clutter,’” the Department of the Interior said in its statement Monday. “The clutter caused by offshore wind projects obscures legitimate moving targets and generates false targets in the vicinity of the wind projects.” Interior cited a 2024 US Department of Energy report that a radar’s threshold for false alarm detection can be increased to reduce some clutter, but an increased detection threshold could cause the radar to “miss actual targets.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

The US Department of the Interior on Monday suspended the leases of five major offshore wind power projects along the East Coast due to what it says are “national security risks.” The affected projects, all assisted by leasing and tax credit provisions in the 2022 Inflation Reduction Act, are operated by Vineyard Wind 1, Revolution Wind, Coastal Virginia Offshore Wind (CVOW), Sunrise Wind, and Empire Wind 1. “Today’s action addresses emerging national security risks, including the rapid evolution of the relevant adversary technologies, and the vulnerabilities created by large-scale offshore wind projects with proximity near our East Coast population centers,” Interior Secretary Doug Burgum said. In an interview with Fox Business Monday, Burgum said the projects create “radar interference” and a “jamming risk.” Trump a long-time foe of wind projects The pausing of the five wind energy projects is likely to impact project cargo shipments; wind farms are a major source of project cargo. The Port of Virginia, for example, said in October it was seeing increasing heavy-lift demand because of the now-curtailed CVOW project. President Donald Trump has made no secret of his desire to move the US away from wind projects in favor of building more oil and gas pipelines. “Unclassified reports from the US government have long found that the movement of massive turbine blades and the highly reflective towers create radar interference called ‘clutter,’” the Department of the Interior said in its statement Monday. “The clutter caused by offshore wind projects obscures legitimate moving targets and generates false targets in the vicinity of the wind projects.” Interior cited a 2024 US Department of Energy report that a radar’s threshold for false alarm detection can be increased to reduce some clutter, but an increased detection threshold could cause the radar to “miss actual targets.” Contact Eric Johnson at eric.johnson@spglobal.com .

Energy projects

Heavy-haul transport

Breakbulk News

Trump administration suspends wind energy projects over ‘national security’ threat

<div class="phx-topic abstract-wrapper">If gaps in strategy are visible to informed observers, they will be obvious to the STB, competitors conducting discovery, and shippers evaluating claimed benefits.</div>

If gaps in strategy are visible to informed observers, they will be obvious to the STB, competitors conducting discovery, and shippers evaluating claimed benefits.

<div class="phx-topic">The Union Pacific (UP)-Norfolk Southern (NS) <a href="https://www.joc.com/article/up-in-merger-filing-vows-to-convert-millions-of-loads-to-intermodal-annually-6138380">merger filing</a> delivered a compelling strategic vision for North America’s first transcontinental railroad. Can that vision withstand the US Surface Transportation Board’s (STB’s) operational scrutiny? I support the strategic direction. Network fluidity matters more than geography. Single-line service beats interchange friction. But high-level assertions — 2 million trucks diverted, $1 billion in synergies — must give way to operational specificity during STB’s review. If gaps are visible to informed observers, they will be obvious to the STB, competitors conducting discovery, and shippers evaluating claimed benefits. <h3>Truck diversion requires pricing discipline </h3>Truck diversion sits at the center of the public interest case. The constraint isn’t visibility — it’s pricing authority. Rail organizations centralize pricing to protect margins. That works poorly for winning truck traffic, where conversion often requires pricing at truck parity initially. Lane-level freight analytics now provide intelligence on truck-dense corridors. The question is whether UP-NS will push pricing authority closer to customers or maintain centralized control that rejects opportunities even when incremental economics are positive. <h3>TTX ownership raises competitive questions </h3>Post-merger, a single entity will control approximately 40% of TTX Company, which operates North America’s largest pooled equipment fleet. TTX preserves competitive neutrality — each railroad accesses the same equipment at the same rates. When one party gains disproportionate ownership, incentives change. UP committed to reducing its stake to not greater than 50%, addressing ownership concentration but leaving governance and allocation questions unresolved. BNSF and CSX depend on TTX access. Preferential allocation will generate STB-imposed conditions. <h3>Port gateway competition will intensify </h3>Single-line transcontinental service will change port gateway economics. Routing becomes discretionary rather than fixed by interchange patterns. Ports compete on performance — dwell time, chassis availability, terminal velocity — not geographic proximity. This benefits high-performing ports on transcontinental lanes while exposing underperforming gateways. A container at Los Angeles-Long Beach bound for Ohio no longer requires a UP-to-NS interchange in Chicago. But only if the LA terminal delivers consistent turn times and equipment access. Gulf ports gain optionality. Southern California faces pressure to improve. For secondary East Coast ports, the shift toward performance-based routing represents an opportunity rather than a threat — provided they leverage their relative flexibility to deliver superior asset fluidity and tighter rail coordination. <h3>Container repositioning economics change </h3>Transcontinental service transforms empty container repositioning. Today’s import-export imbalances require costly empty moves across railroads with different commercial incentives. A unified network can optimize repositioning system-wide. Containers arriving in LA can reposition to southern export markets through single-line moves. This improves equipment utilization and reduces empty miles — but only if commercial incentives align with operational optimization. The question is whether UP-NS will price repositioning to maximize container turns or protect lane-specific margins. <h3>Regulatory framework demands enhanced competition </h3>This is the first Class I merger under the STB’s 2001 standards, which require mergers to affirmatively enhance competition — not merely avoid reducing it. UP-NS must demonstrate that the combined network creates competitive options that didn’t previously exist. The STB must also consider whether approving UP-NS makes BNSF-CSX consolidation inevitable. UP-NS requested an accelerated 345-day review. CSX objected and pushed for the full 485-day period. The timing decision signals how seriously the STB takes enhanced competition requirements. <h3>What the STB must ask </h3>If I were sitting on the STB, I would require specific answers: Identify the top 50 truck-to-rail conversion lanes with corridor-level economics, origin-destination pairs, truck versus rail rates, transit times and conversion timelines. Not aggregated projections — specific commitments. Describe the pricing authority structure. Who can price truck-competitive moves at truck parity? If pricing remains centralized for margin protection, explain how that enables rather than inhibits conversion. Provide TTX governance proposals that preserve competitive neutrality. How will equipment allocation transparency prevent self-preferencing when one entity controls 40% ownership? Identify which ports gain and lose volume under optimized transcontinental routing. What performance criteria determine gateway selection? Explain how container repositioning economics change. Will empty moves be priced to optimize system utilization or protect lane-specific margins? <h3>Execution determines outcomes </h3>UP’s filing establishes strategic direction. The STB process will force operational specificity. Discovery, testimony and cross-examination will test whether truck diversion claims rest on corridor-level economics, whether TTX governance preserves competitive neutrality and whether claimed synergies create value or redistribute it. My support for this merger depends on seeing genuine specificity emerge — not strategic ambiguity preserved through vague assurances. The direction is sound. The proof must follow. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals &amp; Switches. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

The Union Pacific (UP)-Norfolk Southern (NS) merger filing delivered a compelling strategic vision for North America’s first transcontinental railroad. Can that vision withstand the US Surface Transportation Board’s (STB’s) operational scrutiny? I support the strategic direction. Network fluidity matters more than geography. Single-line service beats interchange friction. But high-level assertions — 2 million trucks diverted, $1 billion in synergies — must give way to operational specificity during STB’s review. If gaps are visible to informed observers, they will be obvious to the STB, competitors conducting discovery, and shippers evaluating claimed benefits. Truck diversion requires pricing discipline Truck diversion sits at the center of the public interest case. The constraint isn’t visibility — it’s pricing authority. Rail organizations centralize pricing to protect margins. That works poorly for winning truck traffic, where conversion often requires pricing at truck parity initially. Lane-level freight analytics now provide intelligence on truck-dense corridors. The question is whether UP-NS will push pricing authority closer to customers or maintain centralized control that rejects opportunities even when incremental economics are positive. TTX ownership raises competitive questions Post-merger, a single entity will control approximately 40% of TTX Company, which operates North America’s largest pooled equipment fleet. TTX preserves competitive neutrality — each railroad accesses the same equipment at the same rates. When one party gains disproportionate ownership, incentives change. UP committed to reducing its stake to not greater than 50%, addressing ownership concentration but leaving governance and allocation questions unresolved. BNSF and CSX depend on TTX access. Preferential allocation will generate STB-imposed conditions. Port gateway competition will intensify Single-line transcontinental service will change port gateway economics. Routing becomes discretionary rather than fixed by interchange patterns. Ports compete on performance — dwell time, chassis availability, terminal velocity — not geographic proximity. This benefits high-performing ports on transcontinental lanes while exposing underperforming gateways. A container at Los Angeles-Long Beach bound for Ohio no longer requires a UP-to-NS interchange in Chicago. But only if the LA terminal delivers consistent turn times and equipment access. Gulf ports gain optionality. Southern California faces pressure to improve. For secondary East Coast ports, the shift toward performance-based routing represents an opportunity rather than a threat — provided they leverage their relative flexibility to deliver superior asset fluidity and tighter rail coordination. Container repositioning economics change Transcontinental service transforms empty container repositioning. Today’s import-export imbalances require costly empty moves across railroads with different commercial incentives. A unified network can optimize repositioning system-wide. Containers arriving in LA can reposition to southern export markets through single-line moves. This improves equipment utilization and reduces empty miles — but only if commercial incentives align with operational optimization. The question is whether UP-NS will price repositioning to maximize container turns or protect lane-specific margins. Regulatory framework demands enhanced competition This is the first Class I merger under the STB’s 2001 standards, which require mergers to affirmatively enhance competition — not merely avoid reducing it. UP-NS must demonstrate that the combined network creates competitive options that didn’t previously exist. The STB must also consider whether approving UP-NS makes BNSF-CSX consolidation inevitable. UP-NS requested an accelerated 345-day review. CSX objected and pushed for the full 485-day period. The timing decision signals how seriously the STB takes enhanced competition requirements. What the STB must ask If I were sitting on the STB, I would require specific answers: Identify the top 50 truck-to-rail conversion lanes with corridor-level economics, origin-destination pairs, truck versus rail rates, transit times and conversion timelines. Not aggregated projections — specific commitments. Describe the pricing authority structure. Who can price truck-competitive moves at truck parity? If pricing remains centralized for margin protection, explain how that enables rather than inhibits conversion. Provide TTX governance proposals that preserve competitive neutrality. How will equipment allocation transparency prevent self-preferencing when one entity controls 40% ownership? Identify which ports gain and lose volume under optimized transcontinental routing. What performance criteria determine gateway selection? Explain how container repositioning economics change. Will empty moves be priced to optimize system utilization or protect lane-specific margins? Execution determines outcomes UP’s filing establishes strategic direction. The STB process will force operational specificity. Discovery, testimony and cross-examination will test whether truck diversion claims rest on corridor-level economics, whether TTX governance preserves competitive neutrality and whether claimed synergies create value or redistribute it. My support for this merger depends on seeing genuine specificity emerge — not strategic ambiguity preserved through vague assurances. The direction is sound. The proof must follow. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals & Switches. Contact him at paul.tonsager@multimodalsolutions.io .

Intermodal providers

Strategic vision of UP-NS merger must meet operational reality

<div class="phx-topic abstract-wrapper">The Department of Justice seems to be suggesting that if the Supreme Court pulls the plug on the IEEPA tariffs, it won’t stand in the way of refunds — at least not for parties who get themselves properly in front of the Court.</div>

The Department of Justice seems to be suggesting that if the Supreme Court pulls the plug on the IEEPA tariffs, it won’t stand in the way of refunds — at least not for parties who get themselves properly in front of the Court.

<div class="phx-topic">The US Department of Justice (DOJ) quietly dropped a filing in the Court of International Trade (CIT) last week that, depending on your tolerance for customs law drama, is either deeply boring or absolutely fascinating. Buried in the filing was a declaration from Customs and Border Protection (CBP) with some eye-opening numbers: as of Dec. 10, 2025, the US government has collected approximately $129 billion in International Emergency Economic Powers Act (IEEPA) tariffs. That money came from about 301,000 importers spread across approximately 34 million entries. If you’ve ever wondered how big this issue really is, that’s your answer. It’s not a rounding error. Against that backdrop, DOJ told the CIT something very specific — and very carefully worded. If the US Supreme Court ultimately rules that the IEEPA tariffs are unlawful, the Trump administration would not oppose the Court’s authority to order reliquidation of the plaintiffs’ entries. In plain English, DOJ is acknowledging that the CIT could order those entries to be unwound and the duties refunded through reliquidation. No foot-stomping. No jurisdictional theatrics. Just a quiet concession that the Court has the power to fix this. Put even more simply, DOJ is signaling that if SCOTUS pulls the plug on the IEEPA tariffs, it won’t stand in the way of refunds — at least not for parties who get themselves properly in front of the Court. This lines up neatly with what DOJ has already told the Supreme Court in the pending cases: If the challengers win, they’re entitled to their money back. The only real question has always been how that happens, not whether refunds are theoretically available. <h3>Don’t expect ‘nice, clean’ refund program </h3>And that’s where the subtext starts doing some heavy lifting. What DOJ is very much not saying is that the administration plans to roll out a nice, clean, importer-friendly administrative refund program. There’s no promise of automatic reliquidations, mass refunds or CBP proactively cutting checks. Instead, the filing implicitly points importers toward the Court. If you want your money back, you may need to go to the CIT and ask for an order directing reliquidation. DOJ is saying it won’t object to the Court’s authority to do that — not that it intends to do everyone any favors administratively. This fits squarely with the broader reality importers should be preparing for post-decision. Even if the Supreme Court strikes down the tariffs, refunds are unlikely to be frictionless. Liquidated entries will still need to be protested to CBP. Unliquidated entries will need to be protected. Some companies may pursue litigation; others may try to navigate administrative channels. Many will end up doing both. The idea that $129 billion is just going to flow back to importers on autopilot is, at best, optimistic. The takeaway is straightforward, even if the process won’t be. The government is already laying the groundwork for a refund framework that runs through the courts, not around them. Importers who assume this will all sort itself out may find themselves watching the reliquidation train leave the station without them. The smart money is on preparation, strategy, and knowing exactly which procedural doors need to be opened — before the Supreme Court tells everyone it’s time to start knocking. Contact Pete Mento at <a href="mailto:pete.mento@bakertilly.com">pete.mento@bakertilly.com</a>.</div>

The US Department of Justice (DOJ) quietly dropped a filing in the Court of International Trade (CIT) last week that, depending on your tolerance for customs law drama, is either deeply boring or absolutely fascinating. Buried in the filing was a declaration from Customs and Border Protection (CBP) with some eye-opening numbers: as of Dec. 10, 2025, the US government has collected approximately $129 billion in International Emergency Economic Powers Act (IEEPA) tariffs. That money came from about 301,000 importers spread across approximately 34 million entries. If you’ve ever wondered how big this issue really is, that’s your answer. It’s not a rounding error. Against that backdrop, DOJ told the CIT something very specific — and very carefully worded. If the US Supreme Court ultimately rules that the IEEPA tariffs are unlawful, the Trump administration would not oppose the Court’s authority to order reliquidation of the plaintiffs’ entries. In plain English, DOJ is acknowledging that the CIT could order those entries to be unwound and the duties refunded through reliquidation. No foot-stomping. No jurisdictional theatrics. Just a quiet concession that the Court has the power to fix this. Put even more simply, DOJ is signaling that if SCOTUS pulls the plug on the IEEPA tariffs, it won’t stand in the way of refunds — at least not for parties who get themselves properly in front of the Court. This lines up neatly with what DOJ has already told the Supreme Court in the pending cases: If the challengers win, they’re entitled to their money back. The only real question has always been how that happens, not whether refunds are theoretically available. Don’t expect ‘nice, clean’ refund program And that’s where the subtext starts doing some heavy lifting. What DOJ is very much not saying is that the administration plans to roll out a nice, clean, importer-friendly administrative refund program. There’s no promise of automatic reliquidations, mass refunds or CBP proactively cutting checks. Instead, the filing implicitly points importers toward the Court. If you want your money back, you may need to go to the CIT and ask for an order directing reliquidation. DOJ is saying it won’t object to the Court’s authority to do that — not that it intends to do everyone any favors administratively. This fits squarely with the broader reality importers should be preparing for post-decision. Even if the Supreme Court strikes down the tariffs, refunds are unlikely to be frictionless. Liquidated entries will still need to be protested to CBP. Unliquidated entries will need to be protected. Some companies may pursue litigation; others may try to navigate administrative channels. Many will end up doing both. The idea that $129 billion is just going to flow back to importers on autopilot is, at best, optimistic. The takeaway is straightforward, even if the process won’t be. The government is already laying the groundwork for a refund framework that runs through the courts, not around them. Importers who assume this will all sort itself out may find themselves watching the reliquidation train leave the station without them. The smart money is on preparation, strategy, and knowing exactly which procedural doors need to be opened — before the Supreme Court tells everyone it’s time to start knocking. Contact Pete Mento at pete.mento@bakertilly.com .

Transport, Trade and Regulation News

US signaling importers will need to do ‘heavy lifting’ to secure possible tariff refunds

Dry Van

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Flatbed

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Refrigerated

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

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

US Truckload spot rates weekly (DAT) Gateway

<div class="phx-topic abstract-wrapper">Union Pacific sent a 6,000-plus page application to US regulators Friday seeking formal approval for its closely watched merger proposal with Norfolk Southern that would create the country’s first transcontinental railroad.</div>

Union Pacific sent a 6,000-plus page application to US regulators Friday seeking formal approval for its closely watched merger proposal with Norfolk Southern that would create the country’s first transcontinental railroad.

<div class="phx-topic">Union Pacific Railroad (UP) on Friday filed its formal application with US regulators seeking approval for its proposed $85 billion acquisition of Norfolk Southern Railway (NS), saying the deal would divert nearly 2 million truck movements from highways annually, including an estimated 1.17 million truckloads that would shift to intermodal rail. The application sent to the US Surface Transportation Board (STB) for the closely watched merger proposal that would create the country’s first transcontinental railroad exceeded 6,000 pages. UP CEO Jim Vena, speaking on an investor call Friday morning after the application was filed, said the intermodal figure, which represents an 11% increase over the combined UP-NS intermodal volume in 2023, would be converted from the truckload market. Vena also expects to win some freight from competitor BNSF Railway. “Customers will benefit from faster, more reliable service, improved asset utilization and a streamlined customer experience. Status quo isn’t an option,” Vena said. “Adjustments to train routing and blocking patterns will reduce an estimated 2,400 daily railcar and container handlings per day ... This eliminates the unnecessary touches that can lead to incidents [accidents] and delays.” The STB has 30 days to determine whether the filing is complete and satisfactory; a full review is expected to extend into 2027. The application comes days after <a href="https://www.joc.com/article/two-large-rail-unions-say-they-oppose-planned-up-ns-merger-6137046">two labor unions announced opposition</a> to the deal, although the rail industry’s largest union by membership has <a href="https://www.joc.com/article/major-rail-union-backs-up-ns-merger-after-job-protection-deal-6084510">publicly supported it</a>. If approved, the merger would enable new single-line intermodal routings with shorter transit times. The application highlights four intermodal corridors where an enlarged UP can achieve considerable growth: Northern California-New Jersey; Southern California-Pennsylvania/New Jersey; Southern California-Georgia/North Carolina; and Texas-East Coast. Intermodal trains from Southern California to Harrisburg, Pennsylvania, and Croxton (Newark), New Jersey, routed via Kansas City, would save 17 to 19 hours, according to UP’s application. Trains moving between Southern California and the Southeast via the Meridian Speedway would save three to four days compared with current routings that often move north to Memphis before turning south toward Atlanta. A major upgrade is an expedited Lathrop, California-Croxton service with a sub-four-day transit time, a truck-like schedule that would be difficult for BNSF to match because its route is longer by mileage. The train would travel through Chicago but have a seamless crew handoff rather than draying containers across the city between terminals. <h3>Other changes coming </h3>UP also said it would operate a daily Southern California-Northeast train routed through Kansas City. The approach follows UP’s opening of a new Kansas City terminal this summer and the launch of UP-NS <a href="https://www.joc.com/article/up-ns-joint-intermodal-service-to-link-west-coast-with-louisville-in-midwest-6080692">trains to Louisville</a> routed via Kansas City this fall, a service that would become single line if the merger were approved. UP said it would invest more than $2.1 billion in capital spending, including $136.6 million to upgrade NS’ tracks and siding between Kansas City and Butler, Indiana, which industry observers have long cited as a chokepoint for high-speed, double-stack intermodal service into the Northeast. Another $172.3 million would be spent to upgrade NS’ line from New Orleans to Atlanta. The proposed merger would also consolidate intermodal operations between Chicago and Memphis. UP would close Norfolk Southern’s 63rd Street terminal in Chicago and shift traffic to UP’s Global 2 facility near O’Hare International Airport. In Memphis, Norfolk Southern’s Rossville terminal would be idled and traffic rerouted to UP’s Marion terminal across the Mississippi River in Arkansas. Those are the types of consolidations that have heightened union concerns and fueled negotiations over job protections. But UP, in winning support for the deal from five unions, has offered job protections in return, with the railroad vowing that anyone who has a job after the deal is approved is protected against losing their job for any reason linked to the merger. UP’s application also said the company would invest $63.7 million at Port Laredo in Laredo, Texas, for additional parking and track capacity and $102.5 million in Houston to expand annual lift capacity there. It also acknowledged the possibility of reopening intermodal operations in Birmingham, Alabama, and Greencastle, Pennsylvania, if necessary, to accommodate growth. NS operates in both markets but ceased handling intermodal business in both locations. The combined UP-NS railroad would launch a single-line service from Laredo to the East Coast. Trains originating in Laredo would move through Houston, New Orleans, Atlanta, Charlotte and Harrisburg before terminating in northern New Jersey. Today, an intermodal shipment from Texas to New Jersey moves via UP to Chicago and is then drayed across the city to Norfolk Southern. The proposed new route would bypass Chicago entirely. UP’s application also proposed an additional Laredo-Atlanta train that would be broken down and re-blocked into trains serving Cincinnati and Columbus, Ohio. <h3>Questions remain on Meridian Speedway </h3>The merger would push more intermodal traffic over the Meridian Speedway, a nearly 300-mile corridor linking Shreveport, Louisiana, and Meridian, Mississippi, which UP and NS say would cut as much as three days from a transit versus routings via Memphis to Atlanta. That would benefit shippers with cargo traveling between Southern California and Atlanta or Charlotte. But the application does not address <a href="https://www.joc.com/article/cpkc-slams-up-ns-on-meridian-congestion-merger-plans-6105932">the dispute</a> between Norfolk Southern and Canadian Pacific Kansas City (CPKC) tied to the Meridian corridor, including disagreements over train length. CPKC, which owns 75% of the Meridian joint venture with NS holding the balance, has limited UP and NS to 8,500-foot trains on the route, down from the 10,000- to 12,000-foot trains that were often permitted before Kansas City Southern was combined into CPKC. While the railroads reached a truce after Norfolk Southern complained to the STB in October, the underlying tension remains — and would become a complication for UP if the deal is approved. CPKC’s majority ownership of the Meridian Speedway joint venture gives it significant control over dispatching and operating practices along the corridor. CPKC has said it will not “subsidize” UP or NS operations by accepting longer trains that result in delays to its own trains. The issue raises questions about how UP would achieve its projected volume gains on Meridian, particularly given Norfolk Southern’s claim in its October STB filing that it has lost approximatey 100,000 intermodal loads to trucking and other competitors since 2022. <h3>Competitors respond </h3>UP’s filing is likely to trigger a rush of commentary over the coming weeks. CPKC CEO Keith Creel has <a href="https://www.joc.com/article/up-ceo-says-ns-merger-filing-with-us-regulators-to-be-delayed-two-weeks-6127156">repeatedly attacked</a> the proposed transaction, arguing that the merger would make the US supply chain more fragile by concentrating more freight onto a single railroad, increasing the impact of a service disruption. “The proposed UP-NS merger, unprecedented in scale and scope, would radically and permanently change the US rail network,” CPKC said in a statement Friday morning after the UP filing was made. “If approved, the merger would pose extraordinary and far-reaching risks to customers, rail employees and broader supply chains.” BNSF CEO Katie Farmer also issued a statement in the aftermath of the filing, saying she doubts UP has met the necessary requirements to gain approval for the deal. “Applicants must now prove their deal will not only preserve but enhance competition, that it serves the public interest, and its purported benefits can’t be delivered through partnerships,” Farmer said. “BNSF is confident that UP has not met these requirements. UP has a long history of making promises in past mergers that they back away from once they’ve secured approval.” Schneider National is another company that will be closely watched. It partners with UP and CSX, rather than NS, and has not taken a public position on the deal. It is the third-largest US intermodal carrier after J.B. Hunt Transport Services and Hub Group. Vena said at the Journal of Commerce Inland Distribution Conference in October that Schneider would endorse the deal after thoroughly reviewing the application. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Union Pacific Railroad (UP) on Friday filed its formal application with US regulators seeking approval for its proposed $85 billion acquisition of Norfolk Southern Railway (NS), saying the deal would divert nearly 2 million truck movements from highways annually, including an estimated 1.17 million truckloads that would shift to intermodal rail. The application sent to the US Surface Transportation Board (STB) for the closely watched merger proposal that would create the country’s first transcontinental railroad exceeded 6,000 pages. UP CEO Jim Vena, speaking on an investor call Friday morning after the application was filed, said the intermodal figure, which represents an 11% increase over the combined UP-NS intermodal volume in 2023, would be converted from the truckload market. Vena also expects to win some freight from competitor BNSF Railway. “Customers will benefit from faster, more reliable service, improved asset utilization and a streamlined customer experience. Status quo isn’t an option,” Vena said. “Adjustments to train routing and blocking patterns will reduce an estimated 2,400 daily railcar and container handlings per day ... This eliminates the unnecessary touches that can lead to incidents [accidents] and delays.” The STB has 30 days to determine whether the filing is complete and satisfactory; a full review is expected to extend into 2027. The application comes days after two labor unions announced opposition to the deal, although the rail industry’s largest union by membership has publicly supported it . If approved, the merger would enable new single-line intermodal routings with shorter transit times. The application highlights four intermodal corridors where an enlarged UP can achieve considerable growth: Northern California-New Jersey; Southern California-Pennsylvania/New Jersey; Southern California-Georgia/North Carolina; and Texas-East Coast. Intermodal trains from Southern California to Harrisburg, Pennsylvania, and Croxton (Newark), New Jersey, routed via Kansas City, would save 17 to 19 hours, according to UP’s application. Trains moving between Southern California and the Southeast via the Meridian Speedway would save three to four days compared with current routings that often move north to Memphis before turning south toward Atlanta. A major upgrade is an expedited Lathrop, California-Croxton service with a sub-four-day transit time, a truck-like schedule that would be difficult for BNSF to match because its route is longer by mileage. The train would travel through Chicago but have a seamless crew handoff rather than draying containers across the city between terminals. Other changes coming UP also said it would operate a daily Southern California-Northeast train routed through Kansas City. The approach follows UP’s opening of a new Kansas City terminal this summer and the launch of UP-NS trains to Louisville routed via Kansas City this fall, a service that would become single line if the merger were approved. UP said it would invest more than $2.1 billion in capital spending, including $136.6 million to upgrade NS’ tracks and siding between Kansas City and Butler, Indiana, which industry observers have long cited as a chokepoint for high-speed, double-stack intermodal service into the Northeast. Another $172.3 million would be spent to upgrade NS’ line from New Orleans to Atlanta. The proposed merger would also consolidate intermodal operations between Chicago and Memphis. UP would close Norfolk Southern’s 63rd Street terminal in Chicago and shift traffic to UP’s Global 2 facility near O’Hare International Airport. In Memphis, Norfolk Southern’s Rossville terminal would be idled and traffic rerouted to UP’s Marion terminal across the Mississippi River in Arkansas. Those are the types of consolidations that have heightened union concerns and fueled negotiations over job protections. But UP, in winning support for the deal from five unions, has offered job protections in return, with the railroad vowing that anyone who has a job after the deal is approved is protected against losing their job for any reason linked to the merger. UP’s application also said the company would invest $63.7 million at Port Laredo in Laredo, Texas, for additional parking and track capacity and $102.5 million in Houston to expand annual lift capacity there. It also acknowledged the possibility of reopening intermodal operations in Birmingham, Alabama, and Greencastle, Pennsylvania, if necessary, to accommodate growth. NS operates in both markets but ceased handling intermodal business in both locations. The combined UP-NS railroad would launch a single-line service from Laredo to the East Coast. Trains originating in Laredo would move through Houston, New Orleans, Atlanta, Charlotte and Harrisburg before terminating in northern New Jersey. Today, an intermodal shipment from Texas to New Jersey moves via UP to Chicago and is then drayed across the city to Norfolk Southern. The proposed new route would bypass Chicago entirely. UP’s application also proposed an additional Laredo-Atlanta train that would be broken down and re-blocked into trains serving Cincinnati and Columbus, Ohio. Questions remain on Meridian Speedway The merger would push more intermodal traffic over the Meridian Speedway, a nearly 300-mile corridor linking Shreveport, Louisiana, and Meridian, Mississippi, which UP and NS say would cut as much as three days from a transit versus routings via Memphis to Atlanta. That would benefit shippers with cargo traveling between Southern California and Atlanta or Charlotte. But the application does not address the dispute between Norfolk Southern and Canadian Pacific Kansas City (CPKC) tied to the Meridian corridor, including disagreements over train length. CPKC, which owns 75% of the Meridian joint venture with NS holding the balance, has limited UP and NS to 8,500-foot trains on the route, down from the 10,000- to 12,000-foot trains that were often permitted before Kansas City Southern was combined into CPKC. While the railroads reached a truce after Norfolk Southern complained to the STB in October, the underlying tension remains — and would become a complication for UP if the deal is approved. CPKC’s majority ownership of the Meridian Speedway joint venture gives it significant control over dispatching and operating practices along the corridor. CPKC has said it will not “subsidize” UP or NS operations by accepting longer trains that result in delays to its own trains. The issue raises questions about how UP would achieve its projected volume gains on Meridian, particularly given Norfolk Southern’s claim in its October STB filing that it has lost approximatey 100,000 intermodal loads to trucking and other competitors since 2022. Competitors respond UP’s filing is likely to trigger a rush of commentary over the coming weeks. CPKC CEO Keith Creel has repeatedly attacked the proposed transaction, arguing that the merger would make the US supply chain more fragile by concentrating more freight onto a single railroad, increasing the impact of a service disruption. “The proposed UP-NS merger, unprecedented in scale and scope, would radically and permanently change the US rail network,” CPKC said in a statement Friday morning after the UP filing was made. “If approved, the merger would pose extraordinary and far-reaching risks to customers, rail employees and broader supply chains.” BNSF CEO Katie Farmer also issued a statement in the aftermath of the filing, saying she doubts UP has met the necessary requirements to gain approval for the deal. “Applicants must now prove their deal will not only preserve but enhance competition, that it serves the public interest, and its purported benefits can’t be delivered through partnerships,” Farmer said. “BNSF is confident that UP has not met these requirements. UP has a long history of making promises in past mergers that they back away from once they’ve secured approval.” Schneider National is another company that will be closely watched. It partners with UP and CSX, rather than NS, and has not taken a public position on the deal. It is the third-largest US intermodal carrier after J.B. Hunt Transport Services and Hub Group. Vena said at the Journal of Commerce Inland Distribution Conference in October that Schneider would endorse the deal after thoroughly reviewing the application. Contact Ari Ashe at ari.ashe@spglobal.com .

UP, in merger filing, vows to convert millions of loads to intermodal annually

<div class="phx-topic abstract-wrapper">The carrier, as it sends a US-bound vessel through the region, said if security thresholds hold it will take a “stepwise approach” toward gradually resuming navigation on east-west services via the Suez Canal and Red Sea. </div>

The carrier, as it sends a US-bound vessel through the region, said if security thresholds hold it will take a “stepwise approach” toward gradually resuming navigation on east-west services via the Suez Canal and Red Sea.

<div class="phx-topic">Maersk has become the latest carrier to test Red Sea waters, routing a westbound 6,500-TEU vessel through the Bab al-Mandeb Strait at the southern, Houthi-controlled entrance to the waterway. But an advisory from the carrier Friday was quick to point out that this was not the start of a widescale return of its shipping services to the Red Sea, which has been largely off-limits to commercial shipping since attacks from Houthi militants operating in Yemen began two years ago. “While this is a significant step forward, it does not mean that we are at a point where we are considering a wider east-west network change back to the trans-Suez corridor,” Maersk said. The Singapore-flagged Maersk Sebarok on Maersk’s MECL service from India to the US East Coast departed Salalah in Oman earlier this week and sailed through the Bab al-Mandeb Strait Thursday en route to the Port of New York and New Jersey. Maersk’s advisory said if security thresholds continue to be met, the carrier would continue its “stepwise approach” toward gradually resuming navigation on east-west services via the Suez Canal and Red Sea. “The first step is this initial sailing, followed by a limited number of additional trans-Suez sailings,” it said. “However, there are no planned sailings currently.” Maersk’s advisory on Friday comes after the carrier was forced to correct a Suez Canal Authority statement last month that said the carrier would be returning regular services to the waterway in December. In its own statement at the time, Maersk said transits through the Red Sea would only normalize “as soon as conditions allow, with safety of our crew as the top priority.” The new Maersk sailing follows the launch of a Red Sea-China Service by Thailand’s Regional Container Lines (RCL) last month. <a href="https://www.joc.com/article/one-returns-to-red-sea-under-slot-charter-deal-with-thailands-rcl-partners-6136866">Ocean Network Express (ONE)</a> and Taiwan’s Evergreen Marine are making tentative returns to the Red Sea cargo market under a slot charter agreement with regional carriers, including RCL. CMA CGM <a href="https://www.joc.com/article/stretched-logistics-capacity-in-europe-threatened-by-red-sea-return-6129492">is set to resume a Suez-based rotation for its India-USEC “Indamex” service</a> from January, with the first westbound sailing under the “normal” itinerary known to be the 6,039-TEU CMA CGM Verdi, due to depart India’s Nhava Sheva Port Jan. 18 and transit the Suez Canal Feb. 8, available data indicates. The French carrier plans to switch over to a full Suez rotation for the Indamex in the second quarter of 2026 as it continues to realign capacity deployments. The resumption of shipping activity in the Red Sea is driven by a perceived improvement in the security situation given there have been no attacks on vessels since the Israel-Hamas ceasefire was signed in early October, with a corresponding decline in additional war risk maritime insurance premiums. <h3>Risk levels ‘tolerable’ </h3>With attacks paused, the de-escalation suggests operational risks for shipping companies have become more “tolerable” in the waterway, according to security advisory firm Ambrey. This has seen war risk premiums for ships sailing through the Red Sea falling to about 0.2% of hull value from 0.5% before the ceasefire, according to a UK-based insurer, the lowest level since the Houthi attacks on shipping began in late 2023. Still, while carriers may be willing to shoulder the lower premiums, getting support from cargo owners could be difficult, as <a href="https://www.joc.com/article/hapag-lloyd-nixes-suez-return-for-india-usec-loop-amid-customer-pushback-6137557">Hapag-Lloyd found out this week</a> when it asked customers for feedback on plans to route an India-US East Coast service through the Suez. “Expeditors [one of the carrier’s largest forwarders on the route] was unable to persuade many of its core shipper clients to sign on to a letter of intent framework that would have required them to absorb terrorism and war-risk liabilities for vessels transiting the Red Sea,” an India-based shipping executive with knowledge of the matter told the Journal of Commerce. Helge Neuman-Lezius, global head of full container loads at Hellmann Worldwide Logistics, said insurance excluded coverage for cargo in the southern Red Sea and Bab al-Mandeb strait. “For that reason, we decided to not offer such routings until this passage is declared as safe,” he said. The supply chain director for a Hong Kong-based Asia-Europe shipper told the Journal of Commerce that a directive from their head office prohibited the use of services via the Red Sea and Suez because of difficulties in obtaining cargo insurance cover. DHL Global Forwarding said decisions on whether to return to the waterway would be jointly determined by carriers, forwarders and cargo owners. “We can see a scenario where certain carriers might be willing to pilot services through the Red Sea, and if this were to prove successful, others could follow suit in order to remain competitive, which along with the reduced transit times could mitigate the possibility of elevated insurance costs,” a DHL spokesperson said. Peter Sand, chief analyst with rate benchmarking platform Xeneta, said shippers were simply not interested in paying the current high war risk premiums. “Nevertheless, carriers need to take the first steps and illustrate that voyages can be performed safely,” Sand told the Journal of Commerce. “Later, they can return the services as well when insurance companies lower the premiums paid for cargo, ships and crew sailing through the area.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. Special correspondent Bency Mathew contributed to this report. </div>

Maersk has become the latest carrier to test Red Sea waters, routing a westbound 6,500-TEU vessel through the Bab al-Mandeb Strait at the southern, Houthi-controlled entrance to the waterway. But an advisory from the carrier Friday was quick to point out that this was not the start of a widescale return of its shipping services to the Red Sea, which has been largely off-limits to commercial shipping since attacks from Houthi militants operating in Yemen began two years ago. “While this is a significant step forward, it does not mean that we are at a point where we are considering a wider east-west network change back to the trans-Suez corridor,” Maersk said. The Singapore-flagged Maersk Sebarok on Maersk’s MECL service from India to the US East Coast departed Salalah in Oman earlier this week and sailed through the Bab al-Mandeb Strait Thursday en route to the Port of New York and New Jersey. Maersk’s advisory said if security thresholds continue to be met, the carrier would continue its “stepwise approach” toward gradually resuming navigation on east-west services via the Suez Canal and Red Sea. “The first step is this initial sailing, followed by a limited number of additional trans-Suez sailings,” it said. “However, there are no planned sailings currently.” Maersk’s advisory on Friday comes after the carrier was forced to correct a Suez Canal Authority statement last month that said the carrier would be returning regular services to the waterway in December. In its own statement at the time, Maersk said transits through the Red Sea would only normalize “as soon as conditions allow, with safety of our crew as the top priority.” The new Maersk sailing follows the launch of a Red Sea-China Service by Thailand’s Regional Container Lines (RCL) last month. Ocean Network Express (ONE) and Taiwan’s Evergreen Marine are making tentative returns to the Red Sea cargo market under a slot charter agreement with regional carriers, including RCL. CMA CGM is set to resume a Suez-based rotation for its India-USEC “Indamex” service from January, with the first westbound sailing under the “normal” itinerary known to be the 6,039-TEU CMA CGM Verdi, due to depart India’s Nhava Sheva Port Jan. 18 and transit the Suez Canal Feb. 8, available data indicates. The French carrier plans to switch over to a full Suez rotation for the Indamex in the second quarter of 2026 as it continues to realign capacity deployments. The resumption of shipping activity in the Red Sea is driven by a perceived improvement in the security situation given there have been no attacks on vessels since the Israel-Hamas ceasefire was signed in early October, with a corresponding decline in additional war risk maritime insurance premiums. Risk levels ‘tolerable’ With attacks paused, the de-escalation suggests operational risks for shipping companies have become more “tolerable” in the waterway, according to security advisory firm Ambrey. This has seen war risk premiums for ships sailing through the Red Sea falling to about 0.2% of hull value from 0.5% before the ceasefire, according to a UK-based insurer, the lowest level since the Houthi attacks on shipping began in late 2023. Still, while carriers may be willing to shoulder the lower premiums, getting support from cargo owners could be difficult, as Hapag-Lloyd found out this week when it asked customers for feedback on plans to route an India-US East Coast service through the Suez. “Expeditors [one of the carrier’s largest forwarders on the route] was unable to persuade many of its core shipper clients to sign on to a letter of intent framework that would have required them to absorb terrorism and war-risk liabilities for vessels transiting the Red Sea,” an India-based shipping executive with knowledge of the matter told the Journal of Commerce. Helge Neuman-Lezius, global head of full container loads at Hellmann Worldwide Logistics, said insurance excluded coverage for cargo in the southern Red Sea and Bab al-Mandeb strait. “For that reason, we decided to not offer such routings until this passage is declared as safe,” he said. The supply chain director for a Hong Kong-based Asia-Europe shipper told the Journal of Commerce that a directive from their head office prohibited the use of services via the Red Sea and Suez because of difficulties in obtaining cargo insurance cover. DHL Global Forwarding said decisions on whether to return to the waterway would be jointly determined by carriers, forwarders and cargo owners. “We can see a scenario where certain carriers might be willing to pilot services through the Red Sea, and if this were to prove successful, others could follow suit in order to remain competitive, which along with the reduced transit times could mitigate the possibility of elevated insurance costs,” a DHL spokesperson said. Peter Sand, chief analyst with rate benchmarking platform Xeneta, said shippers were simply not interested in paying the current high war risk premiums. “Nevertheless, carriers need to take the first steps and illustrate that voyages can be performed safely,” Sand told the Journal of Commerce. “Later, they can return the services as well when insurance companies lower the premiums paid for cargo, ships and crew sailing through the area.” Contact Greg Knowler at greg.knowler@spglobal.com . Special correspondent Bency Mathew contributed to this report.

Container lines

Asia-Europe

Maersk takes ‘significant step’ toward return to Red Sea transits

<div class="phx-topic abstract-wrapper">The private equity fund that operates New York-New Jersey’s largest marine terminal agreed to the Port Authority’s new requirement to carry the cost of maintaining berths and wharves. </div>

The private equity fund that operates New York-New Jersey’s largest marine terminal agreed to the Port Authority’s new requirement to carry the cost of maintaining berths and wharves.

<div class="phx-topic">Infrastructure fund Macquarie has renewed its lease of the largest container terminal at the Port of New York and New Jersey through 2063, agreeing to the port’s new terms for tenant terminals that include taking over the upkeep of its wharves and berths and pledging to increase capacity at the busiest East Coast seaport. The board of commissioners for the Port Authority of New York and New Jersey on Thursday voted to approve the amendment to Macquarie’s existing lease for Maher Terminals that was set to expire in 2030. The Port Authority entered negotiations for a new lease last year due to the expected liquidation date for the specific fund that owns Maher and the potential for a sale of the terminal to another operator. Investors in the fund, however, <a href="https://www.joc.com/article/macquarie-looks-to-keep-hold-on-ny-nj-terminal-amid-lease-talks-6043502">opted not to liquidate</a>. While <a href="https://www.joc.com/article/ssa-marine-looks-to-expand-into-new-us-ports-with-deal-for-ceres-5221078">the fund shed its stake in Ceres Terminals in 2023</a>, Macquarie still owns the Long Beach Container Terminal and ITS Terminal in Long Beach and has stakes in Yusen Terminals in Los Angeles and TraPac terminals, which operates in Los Angeles and Oakland. The Maher lease is the latest to be revamped by the Port Authority. Following <a href="https://www.joc.com/article/cma-cgm-adds-terminal-assets-in-new-yorknew-jersey-5217593">CMA CGM’s 2022 purchase of Global Container Terminals’ US assets</a>, the agency has changed the lease terms to move away from a flat annual rent with cost escalators to a rent that is based on actual container throughput, subject to an annual minimum. Terminals will also have to share with the Port Authority any excess demurrage revenue and commit to the agency’s environmental and sustainability goals. <a href="https://www.joc.com/article/apm-to-spend-500-million-to-enhance-cargo-handling-at-elizabeth-terminal-5969027">APM Terminals signed a similar lease agreement in March</a>, extending its tenancy of the Elizabeth Marine Terminal to 2062. <h3>Maher could face $2 billion in wharf maintenance costs</h3>Along with the new terms, the biggest financial burden for terminal operators under the new leases will be responsibility for maintaining their berths and wharves, which was previously handled by the Port Authority. Some of the berths and wharves at New York/New Jersey are 60 years old, with many of the wood pilings also being damaged by marine borer worms. Port Executive Director Beth Rooney said Thursday the combined bill for maintaining the berths and wharves at GCT, APM and Maher could reach $6 billion. With 10,000 linear feet of berth space, Maher could face as much as $2 billion in costs for berth and wharf maintenance. The new leases also include commitments to increase capacity as part of the Port Authority’s expectations that container volumes will double by 2050. Rooney said Maher committed to “demand induced” capacity improvements over the course of the new lease.Maher, which handled 1.8 million container lifts in 2024, is the largest terminal at the port with 450 acres of space. However, similar to other terminals in New Jersey, it is land constrained with little available acreage near the port. Despite the land constraints, Rooney said Maher could eventually double its capacity by switching over from using straddle carriers to rubber tire gantry cranes, which would allow higher density stacks. “By having a 33-year lease, it gives Maher the lanes they need to invest in additional infrastructure and equipment and amortize that cost,” Rooney said. “Our estimates are that within Maher’s footprint they could almost double the capacity of the terminal through densification.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Infrastructure fund Macquarie has renewed its lease of the largest container terminal at the Port of New York and New Jersey through 2063, agreeing to the port’s new terms for tenant terminals that include taking over the upkeep of its wharves and berths and pledging to increase capacity at the busiest East Coast seaport. The board of commissioners for the Port Authority of New York and New Jersey on Thursday voted to approve the amendment to Macquarie’s existing lease for Maher Terminals that was set to expire in 2030. The Port Authority entered negotiations for a new lease last year due to the expected liquidation date for the specific fund that owns Maher and the potential for a sale of the terminal to another operator. Investors in the fund, however, opted not to liquidate . While the fund shed its stake in Ceres Terminals in 2023 , Macquarie still owns the Long Beach Container Terminal and ITS Terminal in Long Beach and has stakes in Yusen Terminals in Los Angeles and TraPac terminals, which operates in Los Angeles and Oakland. The Maher lease is the latest to be revamped by the Port Authority. Following CMA CGM’s 2022 purchase of Global Container Terminals’ US assets , the agency has changed the lease terms to move away from a flat annual rent with cost escalators to a rent that is based on actual container throughput, subject to an annual minimum. Terminals will also have to share with the Port Authority any excess demurrage revenue and commit to the agency’s environmental and sustainability goals. APM Terminals signed a similar lease agreement in March , extending its tenancy of the Elizabeth Marine Terminal to 2062. Maher could face $2 billion in wharf maintenance costs Along with the new terms, the biggest financial burden for terminal operators under the new leases will be responsibility for maintaining their berths and wharves, which was previously handled by the Port Authority. Some of the berths and wharves at New York/New Jersey are 60 years old, with many of the wood pilings also being damaged by marine borer worms. Port Executive Director Beth Rooney said Thursday the combined bill for maintaining the berths and wharves at GCT, APM and Maher could reach $6 billion. With 10,000 linear feet of berth space, Maher could face as much as $2 billion in costs for berth and wharf maintenance. The new leases also include commitments to increase capacity as part of the Port Authority’s expectations that container volumes will double by 2050. Rooney said Maher committed to “demand induced” capacity improvements over the course of the new lease. Maher, which handled 1.8 million container lifts in 2024, is the largest terminal at the port with 450 acres of space. However, similar to other terminals in New Jersey, it is land constrained with little available acreage near the port. Despite the land constraints, Rooney said Maher could eventually double its capacity by switching over from using straddle carriers to rubber tire gantry cranes, which would allow higher density stacks. “By having a 33-year lease, it gives Maher the lanes they need to invest in additional infrastructure and equipment and amortize that cost,” Rooney said. “Our estimates are that within Maher’s footprint they could almost double the capacity of the terminal through densification.” Contact Michael Angell at michael.angell@spglobal.com .

North American ports

Macquarie seals deal for new Maher lease at NY/NJ through 2063

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Electronic Data Interchange (EDI) has long been the backbone of global commerce, quietly facilitating trillions in transactions. Yet, despite its critical role, traditional EDI has remained notoriously complex, labor-intensive, viewed as antique, and costly. Companies have historically grappled with cumbersome mapping processes, intricate partner-specific logic, and extended onboarding timelines. Now, as industries increasingly adopt agile digital frameworks, the limitations of conventional EDI solutions have become glaringly apparent. Enter Mosaic, an innovative solution unveiled by Orderful, which promises to radically streamline and modernize EDI integration through artificial intelligence. Orderful, already recognized for simplifying supply chain data exchanges, has now introduced Mosaic as the first AI-enriched EDI integration product that completely removes traditional mapping processes. 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Brian Roberts, general partner at Andreessen Horowitz and Orderful board member, underscores Mosaic's industry impact: "Mosaic has taken one of the most entrenched bottlenecks in enterprise technology, EDI mapping, and replaced it with an AI-native product that adapts automatically. It’s exactly the type of innovation the industry has been missing." While Mosaic initially supports the complete Order-to-Cash lifecycle, covering purchase orders, acknowledgments, shipping notices, and invoices, the platform is designed for continuous growth and expansion. Orderful sees Mosaic not merely as a product but as a foundational architecture poised to support a broader range of data flows and integrations, aligning perfectly with the scalable requirements of global businesses. “The underlying unified data model not only lets us act as the universal connector, but also enables us to build product once that applies to all partners. This includes EDI functionality like order splitting and consolidation, but also unlocks powerful analytics and insights for our customers to help them grow their business,” said Will Benish, principal product manager at Orderful. Security and reliability are integral to Mosaic’s infrastructure, evidenced by SOC 2 Type II compliance and OAuth 2.0 integration. Additionally, the platform guarantees robust performance, boasting sub-second transaction speeds and immediate access to an extensive network of over 10,000 trading partners. For businesses already utilizing Orderful, Mosaic offers a seamless upgrade pathway, allowing organizations to embrace the future of EDI without disrupting their current trading partner relationships. New clients will find Mosaic’s approach refreshingly modern, providing immediate gains in speed, ease of integration, and scalability. 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To learn more about how Mosaic can transform your EDI capabilities and streamline your integration processes or request a demonstration at <a href="https://www.orderful.com/product/mosaic" rel="noreferrer" class="joc_admin__link">www.orderful.com/product/mosaic</a>.

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From 1940s Roots to AI-Driven Future: Reinventing EDI for Today's Supply Chains

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<div class="phx-topic abstract-wrapper">Widening global overcapacity and import volume forecasts warning of weak volume growth will embolden cargo owners to attempt to secure more favorable fine print in their contracts on key service issues.</div>

Widening global overcapacity and import volume forecasts warning of weak volume growth will embolden cargo owners to attempt to secure more favorable fine print in their contracts on key service issues.

<div class="phx-topic">US importers who will ink annual Asia-US service contracts in the new year are confident enough of their market power in the weakening trade that rates could take a back seat to service-related issues in their coming negotiations with ocean carriers, sources say. Widening global overcapacity and import volume forecasts warning of weak volume growth will embolden cargo owners to attempt to secure more favorable fine print in their 2026–27 contracts on key service issues such as schedule reliability and flexibility in handling contracted allocations, according to sources. For most beneficial cargo owners (BCOs), addressing nettlesome service issues, some of which have been around for years, will be the main focus of BCOs when contract negotiations kick into high gear this spring, said David Bennett, an industry adviser who has dealt with service issues as both a carrier and forwarder executive. “That’s where the conversation needs to go,” Bennett told the Journal of Commerce. Most service contracts in the largest US trade lane generally run from May 1 through April 30 of the following year. The largest retailers who are able to negotiate the lowest contract rates due to their large volumes normally set the pricing floor for midsize retailers and other importers. The big-box retailers usually wrap up their agreements in January and February. Midsize and smaller importers do most of their bargaining after the annual Journal of Commerce TPM Conference in early March in Long Beach. <h3>MQCs in the spotlight </h3>Importers, consultants and forwarders say that with low single-digit growth in container volumes projected in 2026, this will be the year to fine-tune service-related clauses in their contracts, especially those issues that can have a monetary impact. Chief among these is the minimum quantity commitment (MQC) that importers agree to for the life of the contract. The higher the MQC, the lower the fixed rate. Most carriers calculate the fixed rate by taking the total MQC and dividing it by 52. That means the importer is expected to meet its allocation each week, whether it’s at the height of the peak shipping season each fall or during slack seasons such as during the Lunar New Year or post-peak season months. Industry consultant Bob Fredman, who formerly negotiated service contracts for big-box retailers, said he had a clause in his contracts that allowed the importer to exceed the MQC in peak weeks by 20% and still retain the lower fixed rate on those containers. A carrier executive source explained that the MQC mechanism is a tool that carriers use to manage their capacity during peak periods and limit their exposure to unused capacity when the market heads south. He agreed, though, that some retailers have had agreements with their regular customers for years that allow them to exceed their weekly allocation by 10% to 20% during peak periods. A more recent development that is driven by <a href="https://www.joc.com/article/surging-southeast-asia-volumes-strain-intra-asia-capacity-6078465">the migration of sourcing from China to Southeast Asia and the Indian sub-continent</a> due to US tariffs is that some carriers are not providing sufficient capacity from load ports in those regions. The carrier executive said Haiphong, Vietnam, is booming with increased manufacturing, but carrier service levels have not kept up with the growth. An importer in the automotive sector said he is experiencing that issue. “As our business continues to grow and we have had to shift production due to the Trump tariffs, our focus is more around [securing sufficient] MQC out of new ports,” the source said. “[So far] we have been able to get space beyond existing contract volumes due to the soft market, but certain ports are tighter than others.” BCOs in 2026 want greater predictability of capacity deployments from carriers so they will have visibility into their freight spend as they negotiate their service contracts, said James Caradonna, executive vice president at the forwarder Spedag Americas. If market demand drops steeply and carriers increase their blank sailings or suspend vessel strings, Caradonna said his clients may find they are not receiving the allocations at fixed rates that they were guaranteed in their MQC commitments. “They don’t want to go off-contract to get space,” he said. <a href="https://www.joc.com/article/maersk-takes-significant-step-toward-return-to-red-sea-transits-6138361">If carriers return to the Suez Canal in 2026</a> as some lines indicate may happen, and the <a href="https://www.joc.com/article/easing-container-tonnage-delivery-in-2026-belies-signs-of-saturation-6136817">delivery of new container ships from shipyards meets forecasts</a>, spot and freight-all-kinds (FAK) rates charged by forwarders would likely drop below the fixed rates in service contracts given the influx of capacity, a second carrier executive said. BCOs would then look to shift more of their business to the lower FAK rates charged by forwarders, he said. “Those BCOs who feel 2026 will be a year when supply exceeds demand, they will go where they can save money,” the source said. “It’s the nature of the business.” <h3>Spot rates to influence negotiations </h3>As usual, spot rates that are in effect each spring set the tone for service contract negotiations, and retailers and BCOs anticipate that weak rates will be in place this spring, strengthening their bargaining power. Industry adviser Kevin Parkerson, who previously negotiated service contracts for large retailers, said he doesn’t expect the market to strengthen much, if at all, during the next three months, which will bolster BCOs’ negotiating position insofar as the fixed rates in their service contracts. “Retailers are feeling good,” Parkerson said. “Carriers definitely don’t feel too good.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a71889-00bc-46ce-97f0-58e270f5dace"></dynamic-object></div>The spot rate from Asia to the US West Coast as of Dec. 18 was $2,474 per FEU, according to data from Drewry, with the East Coast rate at $3,293 per FEU. In mid-March 2025 with the 2025–26 service contract talks in full steam, rates to the West Coast were $2,906 per FEU, while East Coast rates were at $4,038 per FEU. Several forwarders and industry analysts said they expect the final service contract rates that will be negotiated this spring <a href="https://www.joc.com/article/trans-pacific-capacity-cuts-on-the-rise-as-carriers-look-to-stem-rate-slide-6086815">will resemble the rates in the current 2025–26 contracts</a>, which for the largest retailers were in the range of $1,500 to $1,600 per FEU to the West Coast and about $1,000 higher to the East Coast. For midsize retailers, the negotiated price to the West Coast was about $1,800 to $1,900 per FEU. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

US importers who will ink annual Asia-US service contracts in the new year are confident enough of their market power in the weakening trade that rates could take a back seat to service-related issues in their coming negotiations with ocean carriers, sources say. Widening global overcapacity and import volume forecasts warning of weak volume growth will embolden cargo owners to attempt to secure more favorable fine print in their 2026–27 contracts on key service issues such as schedule reliability and flexibility in handling contracted allocations, according to sources. For most beneficial cargo owners (BCOs), addressing nettlesome service issues, some of which have been around for years, will be the main focus of BCOs when contract negotiations kick into high gear this spring, said David Bennett, an industry adviser who has dealt with service issues as both a carrier and forwarder executive. “That’s where the conversation needs to go,” Bennett told the Journal of Commerce. Most service contracts in the largest US trade lane generally run from May 1 through April 30 of the following year. The largest retailers who are able to negotiate the lowest contract rates due to their large volumes normally set the pricing floor for midsize retailers and other importers. The big-box retailers usually wrap up their agreements in January and February. Midsize and smaller importers do most of their bargaining after the annual Journal of Commerce TPM Conference in early March in Long Beach. MQCs in the spotlight Importers, consultants and forwarders say that with low single-digit growth in container volumes projected in 2026, this will be the year to fine-tune service-related clauses in their contracts, especially those issues that can have a monetary impact. Chief among these is the minimum quantity commitment (MQC) that importers agree to for the life of the contract. The higher the MQC, the lower the fixed rate. Most carriers calculate the fixed rate by taking the total MQC and dividing it by 52. That means the importer is expected to meet its allocation each week, whether it’s at the height of the peak shipping season each fall or during slack seasons such as during the Lunar New Year or post-peak season months. Industry consultant Bob Fredman, who formerly negotiated service contracts for big-box retailers, said he had a clause in his contracts that allowed the importer to exceed the MQC in peak weeks by 20% and still retain the lower fixed rate on those containers. A carrier executive source explained that the MQC mechanism is a tool that carriers use to manage their capacity during peak periods and limit their exposure to unused capacity when the market heads south. He agreed, though, that some retailers have had agreements with their regular customers for years that allow them to exceed their weekly allocation by 10% to 20% during peak periods. A more recent development that is driven by the migration of sourcing from China to Southeast Asia and the Indian sub-continent due to US tariffs is that some carriers are not providing sufficient capacity from load ports in those regions. The carrier executive said Haiphong, Vietnam, is booming with increased manufacturing, but carrier service levels have not kept up with the growth. An importer in the automotive sector said he is experiencing that issue. “As our business continues to grow and we have had to shift production due to the Trump tariffs, our focus is more around [securing sufficient] MQC out of new ports,” the source said. “[So far] we have been able to get space beyond existing contract volumes due to the soft market, but certain ports are tighter than others.” BCOs in 2026 want greater predictability of capacity deployments from carriers so they will have visibility into their freight spend as they negotiate their service contracts, said James Caradonna, executive vice president at the forwarder Spedag Americas. If market demand drops steeply and carriers increase their blank sailings or suspend vessel strings, Caradonna said his clients may find they are not receiving the allocations at fixed rates that they were guaranteed in their MQC commitments. “They don’t want to go off-contract to get space,” he said. If carriers return to the Suez Canal in 2026 as some lines indicate may happen, and the delivery of new container ships from shipyards meets forecasts , spot and freight-all-kinds (FAK) rates charged by forwarders would likely drop below the fixed rates in service contracts given the influx of capacity, a second carrier executive said. BCOs would then look to shift more of their business to the lower FAK rates charged by forwarders, he said. “Those BCOs who feel 2026 will be a year when supply exceeds demand, they will go where they can save money,” the source said. “It’s the nature of the business.” Spot rates to influence negotiations As usual, spot rates that are in effect each spring set the tone for service contract negotiations, and retailers and BCOs anticipate that weak rates will be in place this spring, strengthening their bargaining power. Industry adviser Kevin Parkerson, who previously negotiated service contracts for large retailers, said he doesn’t expect the market to strengthen much, if at all, during the next three months, which will bolster BCOs’ negotiating position insofar as the fixed rates in their service contracts. “Retailers are feeling good,” Parkerson said. “Carriers definitely don’t feel too good.” The spot rate from Asia to the US West Coast as of Dec. 18 was $2,474 per FEU, according to data from Drewry, with the East Coast rate at $3,293 per FEU. In mid-March 2025 with the 2025–26 service contract talks in full steam, rates to the West Coast were $2,906 per FEU, while East Coast rates were at $4,038 per FEU. Several forwarders and industry analysts said they expect the final service contract rates that will be negotiated this spring will resemble the rates in the current 2025–26 contracts , which for the largest retailers were in the range of $1,500 to $1,600 per FEU to the West Coast and about $1,000 higher to the East Coast. For midsize retailers, the negotiated price to the West Coast was about $1,800 to $1,900 per FEU. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Service-related issues to take center stage in 2026–27 ocean contract talks: sources

<div class="phx-topic abstract-wrapper">For shippers whose priority is low price, the possibility certainly exists that the next few years will serve up a favorable pricing environment, if not highly favorable, writes Peter Tirschwell.</div>

For shippers whose priority is low price, the possibility certainly exists that the next few years will serve up a favorable pricing environment, if not highly favorable, writes Peter Tirschwell.

<div class="phx-topic">The container ship order book sits at historic highs and rates were limping into the New Year at levels some believe are approaching the loss-making threshold where carriers will start idling capacity, despite ongoing absorption due to Red Sea re-routings and pockets of port congestion. Combined with slowing volume growth expected in 2026, financial analysts believe this is a recipe for carrier losses triggered by low rates failing to offset higher carrier costs. “Material structural oversupply” exists in the market that will lead to “steep EBIT losses in 2026 and 2027,” JP Morgan wrote in early December, estimating that spot freight rates will fall 40% year over year in 2026 and another 20% in 2027. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135198_0.1.jpg"></img></div>Thus, especially for shippers whose priority is low price, the possibility certainly exists that the next few years will serve up a favorable pricing environment, if not highly favorable. The problem is service. It matters at some level for the great majority of shippers outside of those exporting the lowest-value commodities. And due to a new set of forces increasingly asserting themselves, service quality is under siege. Risk associated with blank sailings, cargo rollings and external shocks tied to geopolitics, climate or other factors is so great that two of the top 10 carriers — Maersk and Hapag-Lloyd — in 2025 rolled out an alliance network premised on a commitment to reliability. The new reality is that, unlike the cyclical nature of rates, pressure on service quality appears to be structural. The factors affecting it are not limited to the catch-all category of geopolitics, which in 2025 encompassed ongoing Red Sea diversions and unpredictable tariff actions that created volume surges and volatility in capacity. <h3>Geopolitical risk greatly elevated </h3>In a period when the world order is in flux, the risk of geopolitical disruption to container service is greatly elevated, yet how and when it occurs is unpredictable; it could subside for years or flare up at any time. The same goes for other factors, including climate change impacts such as the Panama Canal drought or a public health crisis similar to COVID-19. But amid this uncertainty, two factors stand out as both structural and predictable in negatively impacting service, while indirectly impacting price: port congestion and carrier assertiveness. Congestion pre-COVID was periodic, at times severe, and chronic at certain ports. But on a global scale it was never seen as a macro factor affecting transit times or system-wide capacity. That is beginning to change. COVID showed the impact of congestion on a mass scale, where idled ships, whether at berth or anchor, were the main factor in absorbing capacity, which, combined with a volume surge, forced freight rates into record territory. But COVID, unfortunately for shippers, wasn’t a one-time blow to reliability that subsided once the crisis ended. Rather, it turned out to be the beginning of a new era in which congestion, although more severe at some ports and regions than others, is now seen as a globally systematic challenge. The combination of carrier action, port capacity limitations, and geopolitics is illustrated by elevated levels of friction in the system. The Global Supply Chain Stress Index published by the World Bank is a broad measure of capacity; inputs are capacity absorbed by longer transits around Africa, slower steaming, wait times at anchor, and port congestion, including slower turnarounds at berth. The index is approaching levels seen during the pandemic. That suggests, “that the combination of recent turbulences in container shipping demand, including rescheduling, rerouting [and] longer voyages around South Africa, combined, adds up to almost the same supply chain stress we saw during COVID,” said <a href="https://urldefense.com/v3/__https:/www.linkedin.com/in/drjanhoffmann/__;!!DEyr4sPAfcQg!Sqa_3noS4XDUcZugk1SvLhs7V5ObUy-5BuD7kHFcjlrvUXO3WYc1J4p6bJ05AKPEIpNH9pAh--gV0ItyDUhvl1dgB7Iv_hc$">Jan Hoffmann,</a> global lead/Maritime Transport and Ports at the World Bank. It is showing up in other data as well. The Container Port Performance Index, published by Journal of Commerce parent S&amp;P Global, measures berth productivity; it never recovered following the COVID-19 disruptions. The situation in North Europe, a chronic trouble spot in 2025, illustrates the long-term challenges affecting the container system. In Northwest Europe, the past year has seen labor disputes and low water levels on the Rhine River system. But while those issues come and go, longer-term infrastructure challenges affecting port congestion are not so easily fixed. For example, as carriers in recent years upgraded Asia-Europe services from ship sizes of 14,000 to 15,000 TEUs to 20,000 to 24,000 TEUs, terminals are frequently only able to add one or two additional cranes. Thus, the number of required stevedoring moves per individual crane has increased, keeping ships at berth for longer and making others wait. “The result is that the bigger ships need more time in port and that is causing the additional congestion,” Steve Rothberg, founding partner at the port consultant Mercator International, told the Journal of Commerce. <h3>Managing capacity </h3>The second structural factor affecting service is carrier assertiveness in capacity management. The more overcapacity asserts itself, as can be expected over the next three years, the more carriers can be expected to implement countermeasures that by their nature undermine service quality. Whether it’s idling, blank sailings, scrapping, slow steaming or shifting vessels between services, it all has the same effect — pulling capacity. Carriers have simultaneously become more tolerant of port delays, a change from pre-COVID years, based on an understanding of the value in mitigating capacity from ships idled at berth or at anchor. For shippers, it means the savings achieved through lower freight rates are offset by greater inventory needed to prime the pump of lengthy and unpredictable supply chains. The lesson learned by carriers during COVID still holds true for the majority of them. Profits, or at least the mitigation of losses, come through absorption of capacity. Shippers can expect more of this. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

The container ship order book sits at historic highs and rates were limping into the New Year at levels some believe are approaching the loss-making threshold where carriers will start idling capacity, despite ongoing absorption due to Red Sea re-routings and pockets of port congestion. Combined with slowing volume growth expected in 2026, financial analysts believe this is a recipe for carrier losses triggered by low rates failing to offset higher carrier costs. “Material structural oversupply” exists in the market that will lead to “steep EBIT losses in 2026 and 2027,” JP Morgan wrote in early December, estimating that spot freight rates will fall 40% year over year in 2026 and another 20% in 2027. Thus, especially for shippers whose priority is low price, the possibility certainly exists that the next few years will serve up a favorable pricing environment, if not highly favorable. The problem is service. It matters at some level for the great majority of shippers outside of those exporting the lowest-value commodities. And due to a new set of forces increasingly asserting themselves, service quality is under siege. Risk associated with blank sailings, cargo rollings and external shocks tied to geopolitics, climate or other factors is so great that two of the top 10 carriers — Maersk and Hapag-Lloyd — in 2025 rolled out an alliance network premised on a commitment to reliability. The new reality is that, unlike the cyclical nature of rates, pressure on service quality appears to be structural. The factors affecting it are not limited to the catch-all category of geopolitics, which in 2025 encompassed ongoing Red Sea diversions and unpredictable tariff actions that created volume surges and volatility in capacity. Geopolitical risk greatly elevated In a period when the world order is in flux, the risk of geopolitical disruption to container service is greatly elevated, yet how and when it occurs is unpredictable; it could subside for years or flare up at any time. The same goes for other factors, including climate change impacts such as the Panama Canal drought or a public health crisis similar to COVID-19. But amid this uncertainty, two factors stand out as both structural and predictable in negatively impacting service, while indirectly impacting price: port congestion and carrier assertiveness. Congestion pre-COVID was periodic, at times severe, and chronic at certain ports. But on a global scale it was never seen as a macro factor affecting transit times or system-wide capacity. That is beginning to change. COVID showed the impact of congestion on a mass scale, where idled ships, whether at berth or anchor, were the main factor in absorbing capacity, which, combined with a volume surge, forced freight rates into record territory. But COVID, unfortunately for shippers, wasn’t a one-time blow to reliability that subsided once the crisis ended. Rather, it turned out to be the beginning of a new era in which congestion, although more severe at some ports and regions than others, is now seen as a globally systematic challenge. The combination of carrier action, port capacity limitations, and geopolitics is illustrated by elevated levels of friction in the system. The Global Supply Chain Stress Index published by the World Bank is a broad measure of capacity; inputs are capacity absorbed by longer transits around Africa, slower steaming, wait times at anchor, and port congestion, including slower turnarounds at berth. The index is approaching levels seen during the pandemic. That suggests, “that the combination of recent turbulences in container shipping demand, including rescheduling, rerouting [and] longer voyages around South Africa, combined, adds up to almost the same supply chain stress we saw during COVID,” said Jan Hoffmann, global lead/Maritime Transport and Ports at the World Bank. It is showing up in other data as well. The Container Port Performance Index, published by Journal of Commerce parent S&P Global, measures berth productivity; it never recovered following the COVID-19 disruptions. The situation in North Europe, a chronic trouble spot in 2025, illustrates the long-term challenges affecting the container system. In Northwest Europe, the past year has seen labor disputes and low water levels on the Rhine River system. But while those issues come and go, longer-term infrastructure challenges affecting port congestion are not so easily fixed. For example, as carriers in recent years upgraded Asia-Europe services from ship sizes of 14,000 to 15,000 TEUs to 20,000 to 24,000 TEUs, terminals are frequently only able to add one or two additional cranes. Thus, the number of required stevedoring moves per individual crane has increased, keeping ships at berth for longer and making others wait. “The result is that the bigger ships need more time in port and that is causing the additional congestion,” Steve Rothberg, founding partner at the port consultant Mercator International, told the Journal of Commerce. Managing capacity The second structural factor affecting service is carrier assertiveness in capacity management. The more overcapacity asserts itself, as can be expected over the next three years, the more carriers can be expected to implement countermeasures that by their nature undermine service quality. Whether it’s idling, blank sailings, scrapping, slow steaming or shifting vessels between services, it all has the same effect — pulling capacity. Carriers have simultaneously become more tolerant of port delays, a change from pre-COVID years, based on an understanding of the value in mitigating capacity from ships idled at berth or at anchor. For shippers, it means the savings achieved through lower freight rates are offset by greater inventory needed to prime the pump of lengthy and unpredictable supply chains. The lesson learned by carriers during COVID still holds true for the majority of them. Profits, or at least the mitigation of losses, come through absorption of capacity. Shippers can expect more of this. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

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