<div class="phx-topic abstract-wrapper">Multiple local sources told the Journal of Commerce the escalating unrest that entered its fifth day Wednesday has brought all port operations, including vessel berthing and cargo clearance, to a halt. </div>

Multiple local sources told the Journal of Commerce the escalating unrest that entered its fifth day Wednesday has brought all port operations, including vessel berthing and cargo clearance, to a halt. 

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<div class="phx-topic">Mainline and feeder operators covering trades out of Bangladesh are reporting serious supply chain disruptions from near week-long strike action and protests by dockers and employees at Chittagong Port, the country's chief gateway. The workforce is pushing back against a recent government decision to hand over Chittagong’s busiest box terminal, the New Mooring Container Terminal (NCL), to DP World under a long-term lease deal. Multiple local sources told the Journal of Commerce the escalating unrest that entered its fifth day Wednesday has brought all port operations, including vessel berthing and cargo clearance, to a halt. “There is a full operational standstill at the moment and it’s going to be chaotic for some time even after resumption of services,” said a feeder line executive who did not want to be identified. <h3>Roughly 40 ships said to be at anchorage </h3>Mainline carriers, including Maersk and Ocean Network Express (ONE), have warned customers about potential shipping risks for their freight as the situation remains in a state of flux. “Operations within the port, including the movement of trucks between terminals, have been completely suspended,” a spokesperson for Maersk told the Journal of Commerce. “Maersk is closely monitoring the ongoing strike at Chittagong [Chattogram] Port and is in constant communication with the relevant port and government to understand the situation and its implications for cargo operations.” Maersk commands about 30% of Bangladeshi containerized trade, according to anecdotal industry data. Singapore-based ONE said in a customer advisory the deteriorating situation could hobble export and import trade through Chittagong, adding “it is keeping an eye on the developing port situation.” A Chittagong-based ship agent who spoke with the Journal of Commerce estimated the number of ships waiting at anchorage to enter the port at about 40 as of Wednesday afternoon local time and cargo stranded at the dock at approximately 10,000 TEUs. The agent also noted that off-dock storage yards are holding large export volumes as freight vehicles continue to accumulate in queues outside the port to drop off boxes. Chittagong handled 3.4 million TEUs in 2025, up 4% year over year, according to available data. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Mainline and feeder operators covering trades out of Bangladesh are reporting serious supply chain disruptions from near week-long strike action and protests by dockers and employees at Chittagong Port, the country's chief gateway. The workforce is pushing back against a recent government decision to hand over Chittagong’s busiest box terminal, the New Mooring Container Terminal (NCL), to DP World under a long-term lease deal. Multiple local sources told the Journal of Commerce the escalating unrest that entered its fifth day Wednesday has brought all port operations, including vessel berthing and cargo clearance, to a halt. “There is a full operational standstill at the moment and it’s going to be chaotic for some time even after resumption of services,” said a feeder line executive who did not want to be identified. Roughly 40 ships said to be at anchorage Mainline carriers, including Maersk and Ocean Network Express (ONE), have warned customers about potential shipping risks for their freight as the situation remains in a state of flux. “Operations within the port, including the movement of trucks between terminals, have been completely suspended,” a spokesperson for Maersk told the Journal of Commerce. “Maersk is closely monitoring the ongoing strike at Chittagong [Chattogram] Port and is in constant communication with the relevant port and government to understand the situation and its implications for cargo operations.” Maersk commands about 30% of Bangladeshi containerized trade, according to anecdotal industry data. Singapore-based ONE said in a customer advisory the deteriorating situation could hobble export and import trade through Chittagong, adding “it is keeping an eye on the developing port situation.” A Chittagong-based ship agent who spoke with the Journal of Commerce estimated the number of ships waiting at anchorage to enter the port at about 40 as of Wednesday afternoon local time and cargo stranded at the dock at approximately 10,000 TEUs. The agent also noted that off-dock storage yards are holding large export volumes as freight vehicles continue to accumulate in queues outside the port to drop off boxes. Chittagong handled 3.4 million TEUs in 2025, up 4% year over year, according to available data. Contact Bency Mathew at bencyvmathew@gmail.com .

Port News

International ports

Longshore labor

Maritime

Labor strike at Chittagong Port cripples Bangladesh container flows

<div class="phx-topic abstract-wrapper">Sources say sustained weak market fundamentals have caused this year to be atypical in terms of demand in the immediate run-up to Lunar New Year, which begins Feb. 17.</div>

Sources say sustained weak market fundamentals have caused this year to be atypical in terms of demand in the immediate run-up to Lunar New Year, which begins Feb. 17.

<div class="phx-topic">Softer spot rates, weak volume forecasts and poor consumer sentiment spell one thing in the tariff-weary trans-Pacific container market: The traditional pre-Lunar New Year rush of cargo is not happening in 2026. Sources say sustained weak market fundamentals have caused this year to be atypical in terms of demand in the immediate run-up to Lunar New Year, which begins Feb. 17. Factories in China will close for at least a week for the holiday, which normally causes a freight surge of some magnitude before the doors shut. But not this year. “I would say demand is muted. There’s still uncertainty among retailers about tariffs,” an ocean carrier executive told the Journal of Commerce. “There has already been frontloading of spring merchandise.” To the extent there was any so-called rush at all, even in January, it is “clearly behind us,” said Peter Sand, chief analyst for the rate benchmarking platform Xeneta. “(This year) is another year where supply growth exceeds demand growth,” Sand said. Downward movement in spot rates before the Lunar New Year factory closures is largely the result of the weak demand from retailers and other importers. North Asia to US West Coast spot rates that started January at $2,075 per FEU were at $1,900 as of Tuesday, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Drewry had Shanghai-to-Los Angeles rates at $3,132 per FEU on Jan. 8, but those had fallen to $2,442 by month’s end. Shanghai-West Coast rates of $1,867 per FEU from the Shanghai Shipping Exchange as of Jan. 30 were down from $2,188 at the start of the month. According to all the indices, current spot rates are about 50% lower than they were a year ago. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7f641553-97ec-4014-8e54-fef6408538d9"></dynamic-object></div>A forwarder who spoke with the Journal of Commerce noted that the lower listed spot rates this week are only part of the story. Carriers are continuing to offer discount rates, known as bullet or voyage-specific rates, that are as much as several hundred dollars lower than the posted spot/freight-all-kinds (FAK) rates. For example, some lines are offering bullet rates of $1,750 per FEU to the West Coast and $2,500 per FEU to the East Coast, and they are readily available to shippers. “It’s the bullet rates that are moving cargo,” the source said. That pricing structure would seem to indicate that retailers and other importers will have leverage entering annual service contract negotiations that are already underway and will pick up in intensity in early March following the Journal of Commerce’s TPM26 conference in Long Beach. <h3>Blank sailings accelerating </h3>Meanwhile, blank sailings, another demand barometer, are accelerating in February. Data from eeSea shows that carriers intend thus far to blank 206,835 TEUs of capacity this month on the Asia to West Coast trade, up from 107,318 TEUs in January. From Asia to the East and Gulf coasts, the blanks so far in February are at 96,881 TEUs, according to eeSea, up from 77,339 TEUs in January. ”Carriers are blanking extensively in the weeks commencing Feb. 23 and March 2 in classic response to the lower exports out of China as a result of the CNY festive days,” Xeneta’s Sand said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e5c8a2a0-9aa5-4787-bbed-bf4b7a9f9677"></dynamic-object></div>US retailers have already forecasted weaker cargo volumes over the next three months. Global Port Tracker, published monthly by the National Retail Federation (NRF), forecasts that US imports in February will be down 4.6% from the same month a year ago, with March imports down 12.6% and April down 8.1% from the year-ago months. US import volumes are also impacted by the confidence of consumers to spend. According to the Conference Board, a think tank, the consumer confidence index fell to 84.5 in January, well below market expectations and the lowest reading since May 2014. “Confidence collapsed in January as consumer concerns about both the present situation and expectations for the future deepened,” said Dana Peterson, chief economist at the Conference Board. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com.</a>Contact Mark Szakonyi at <a href="https://www.joc.com/article/mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com.</a></div>

Softer spot rates, weak volume forecasts and poor consumer sentiment spell one thing in the tariff-weary trans-Pacific container market: The traditional pre-Lunar New Year rush of cargo is not happening in 2026. Sources say sustained weak market fundamentals have caused this year to be atypical in terms of demand in the immediate run-up to Lunar New Year, which begins Feb. 17. Factories in China will close for at least a week for the holiday, which normally causes a freight surge of some magnitude before the doors shut. But not this year. “I would say demand is muted. There’s still uncertainty among retailers about tariffs,” an ocean carrier executive told the Journal of Commerce. “There has already been frontloading of spring merchandise.” To the extent there was any so-called rush at all, even in January, it is “clearly behind us,” said Peter Sand, chief analyst for the rate benchmarking platform Xeneta. “(This year) is another year where supply growth exceeds demand growth,” Sand said. Downward movement in spot rates before the Lunar New Year factory closures is largely the result of the weak demand from retailers and other importers. North Asia to US West Coast spot rates that started January at $2,075 per FEU were at $1,900 as of Tuesday, according to Platts, a sister company of the Journal of Commerce within S&P Global. Drewry had Shanghai-to-Los Angeles rates at $3,132 per FEU on Jan. 8, but those had fallen to $2,442 by month’s end. Shanghai-West Coast rates of $1,867 per FEU from the Shanghai Shipping Exchange as of Jan. 30 were down from $2,188 at the start of the month. According to all the indices, current spot rates are about 50% lower than they were a year ago. A forwarder who spoke with the Journal of Commerce noted that the lower listed spot rates this week are only part of the story. Carriers are continuing to offer discount rates, known as bullet or voyage-specific rates, that are as much as several hundred dollars lower than the posted spot/freight-all-kinds (FAK) rates. For example, some lines are offering bullet rates of $1,750 per FEU to the West Coast and $2,500 per FEU to the East Coast, and they are readily available to shippers. “It’s the bullet rates that are moving cargo,” the source said. That pricing structure would seem to indicate that retailers and other importers will have leverage entering annual service contract negotiations that are already underway and will pick up in intensity in early March following the Journal of Commerce’s TPM26 conference in Long Beach. Blank sailings accelerating Meanwhile, blank sailings, another demand barometer, are accelerating in February. Data from eeSea shows that carriers intend thus far to blank 206,835 TEUs of capacity this month on the Asia to West Coast trade, up from 107,318 TEUs in January. From Asia to the East and Gulf coasts, the blanks so far in February are at 96,881 TEUs, according to eeSea, up from 77,339 TEUs in January. ”Carriers are blanking extensively in the weeks commencing Feb. 23 and March 2 in classic response to the lower exports out of China as a result of the CNY festive days,” Xeneta’s Sand said. US retailers have already forecasted weaker cargo volumes over the next three months. Global Port Tracker, published monthly by the National Retail Federation (NRF), forecasts that US imports in February will be down 4.6% from the same month a year ago, with March imports down 12.6% and April down 8.1% from the year-ago months. US import volumes are also impacted by the confidence of consumers to spend. According to the Conference Board, a think tank, the consumer confidence index fell to 84.5 in January, well below market expectations and the lowest reading since May 2014. “Confidence collapsed in January as consumer concerns about both the present situation and expectations for the future deepened,” said Dana Peterson, chief economist at the Conference Board. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com.

Container lines

Forwarding

Trans-Pacific

North American ports

Container Shipping News

Tariffs claim another victim on the trans-Pacific: the pre-CNY cargo surge

<div class="phx-topic abstract-wrapper">Just days after last week’s storm shut terminals and disrupted shipping schedules, Maersk warned that weather in the region has “deteriorated beyond initial expectations.”</div>

Just days after last week’s storm shut terminals and disrupted shipping schedules, Maersk warned that weather in the region has “deteriorated beyond initial expectations.”

<div class="phx-topic">Severe Atlantic storms continue to batter the Bay of Biscay and Western Mediterranean, with container terminals in Morocco and southern Spain forced to shut for the second time in a week. CMA CGM has even announced an “emergency operational recovery” surcharge of $100 per container beginning Feb. 5 for all cargo to the port of Casablanca, which has been heavily impacted by the weather conditions. “Casablanca has been forced to close for almost half of the days in January — an unprecedented situation,” CMA CGM told customers in an advisory this week. “New closures have already been announced for February, driven by the same extreme swell and wind patterns that continue to make safe operations impossible.” Vessel crossings resumed through the Bay of Biscay on Saturday and Sunday and terminal operations were restarted, but Maersk warned customers in an advisory Wednesday that the weather in the region has now “deteriorated beyond initial expectations.” “This means that terminals are expected to close for longer than anticipated, and vessels will be leaving their berths for safety at the latest (Feb. 3),” the carrier said. “This unfortunately also means that vessel schedules will be further delayed, again impacting operations in the Western Mediterranean, Northern Europe and beyond.” The main transhipment terminals affected at the entrance to the Mediterranean are Tanger-Med in Morocco and Algeciras in Spain. A series of extreme winter storms have hammered Europe this year, bringing huge swells and gale force winds to the Western Mediterranean and <a href="https://www.joc.com/article/severe-winter-storm-disrupts-north-europe-port-inland-operations-6148334">freezing temperatures hampering terminal and yard operations</a> in North Europe ports. Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>.    </div>

Severe Atlantic storms continue to batter the Bay of Biscay and Western Mediterranean, with container terminals in Morocco and southern Spain forced to shut for the second time in a week. CMA CGM has even announced an “emergency operational recovery” surcharge of $100 per container beginning Feb. 5 for all cargo to the port of Casablanca, which has been heavily impacted by the weather conditions. “Casablanca has been forced to close for almost half of the days in January — an unprecedented situation,” CMA CGM told customers in an advisory this week. “New closures have already been announced for February, driven by the same extreme swell and wind patterns that continue to make safe operations impossible.” Vessel crossings resumed through the Bay of Biscay on Saturday and Sunday and terminal operations were restarted, but Maersk warned customers in an advisory Wednesday that the weather in the region has now “deteriorated beyond initial expectations.” “This means that terminals are expected to close for longer than anticipated, and vessels will be leaving their berths for safety at the latest (Feb. 3),” the carrier said. “This unfortunately also means that vessel schedules will be further delayed, again impacting operations in the Western Mediterranean, Northern Europe and beyond.” The main transhipment terminals affected at the entrance to the Mediterranean are Tanger-Med in Morocco and Algeciras in Spain. A series of extreme winter storms have hammered Europe this year, bringing huge swells and gale force winds to the Western Mediterranean and freezing temperatures hampering terminal and yard operations in North Europe ports. Contact Greg Knowler at  greg.knowler@spglobal.com .    

Trans-Atlantic

Asia-Europe

Atlantic storms force terminals in Western Mediterranean to close again

<div class="phx-topic abstract-wrapper">Charleston’s total rail lifts for 2025 were about one-quarter of the planned capacity of Navy Base Intermodal Facility, prompting the port’s CEO to reset capital spending plans. </div>

Charleston’s total rail lifts for 2025 were about one-quarter of the planned capacity of Navy Base Intermodal Facility, prompting the port’s CEO to reset capital spending plans.

<div class="phx-topic">The Port of Charleston has paused work on its near-dock rail yard pending agreements with Class I railroads to service the facility, the port’s chief executive said, adding that shipper demand for more intermodal capacity may not be needed until 2028. South Carolina Ports Authority Chief Executive Micah Mallace told state legislators last week Charleston has “slowed construction” of the Navy Base Intermodal Facility until it has finalized operating agreements with CSX Transportation and Norfolk Southern Railway. “We are working on delivering operating agreements with the railroads,” Mallace said. “We aspire to finish that quickly. Upon successful completion of that, we will restart our delivery of the facility.” The last major work on the facility involves 80,000 feet of southbound track that would link Navy Base directly to both CSX and NS trackage. Navy Base has northern access that connects to CSX trackage, but the southern access is a preferred route for both railroads. Under previous chief executive Barbara Melvin, the port expected to announce <a href="https://www.joc.com/article/charlestons-navy-base-rail-yard-project-faces-delays-big-cost-overruns-6070926">a construction award for the project last October</a>, but that award has been paused. Mallace, <a href="https://www.joc.com/article/sc-ports-taps-former-commercial-executive-to-lead-6092988">who took over as CEO that month</a>, has been <a href="https://www.joc.com/article/new-charleston-ceo-seeks-to-regain-container-growth-momentum-6104583">reevaluating the port’s capital spending plans</a> in light of slower growth in cargo demand. “SC Ports continues to work with our partners at CSX and Norfolk Southern to deliver additional rail capacity and enhance intermodal competitiveness to support growth in the Southeast market,” the port said in a statement to the Journal of Commerce. Mallace appeared before the South Carolina legislators to ask that some $2 million in state funding previously appropriated to SC Ports for joint development of a container terminal with the Georgia Port Authority on the South Carolina side of the Savannah River be redirected to a local economic development agency. The request stemmed from the GPA’s “wish to deliver capacity on the Georgia side of the river,” Mallace said. <h3>Navy Base start anticipated for 2028 </h3>SC Ports previously forecast a potential 2026 launch of Navy Base service with CSX and later adding NS access by 2027 once the southern access and other infrastructure was complete. While there’s no specific target for Navy Base’s full completion, Mallace said “we estimate needing to bring it on in 2028.” Intermodal cargo at the port is currently trucked to the CSX and NS intermodal facilities under Charleston’s “Rapid Rail” program. Navy Base allows the port to handle containers faster via a one-mile dedicated drayage road connected to the Leatherman marine terminal. Navy Base is designed to handle 1 million container lifts per year. It connects Charleston directly to its inland ports at Dillon and Greer, which are served respectively by CSX and NS, as well as other destinations in the Southeast. Dillon handled 48,761 container lifts last year, a 33% increase from 2024 largely due to a state initiative to reroute soybean shipments to export markets after the closure of a nearby processing facility, as well as demand from Dillon’s retailer shippers, according to SC Ports. Greer, which serves some of the state’s manufacturers and other retail distributors and can handle 300,000 lifts annually, saw roughly two-thirds of that at 197,805 container lifts last year, up 2% from a year earlier. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a></div>

The Port of Charleston has paused work on its near-dock rail yard pending agreements with Class I railroads to service the facility, the port’s chief executive said, adding that shipper demand for more intermodal capacity may not be needed until 2028. South Carolina Ports Authority Chief Executive Micah Mallace told state legislators last week Charleston has “slowed construction” of the Navy Base Intermodal Facility until it has finalized operating agreements with CSX Transportation and Norfolk Southern Railway. “We are working on delivering operating agreements with the railroads,” Mallace said. “We aspire to finish that quickly. Upon successful completion of that, we will restart our delivery of the facility.” The last major work on the facility involves 80,000 feet of southbound track that would link Navy Base directly to both CSX and NS trackage. Navy Base has northern access that connects to CSX trackage, but the southern access is a preferred route for both railroads. Under previous chief executive Barbara Melvin, the port expected to announce a construction award for the project last October , but that award has been paused. Mallace, who took over as CEO that month , has been reevaluating the port’s capital spending plans in light of slower growth in cargo demand. “SC Ports continues to work with our partners at CSX and Norfolk Southern to deliver additional rail capacity and enhance intermodal competitiveness to support growth in the Southeast market,” the port said in a statement to the Journal of Commerce. Mallace appeared before the South Carolina legislators to ask that some $2 million in state funding previously appropriated to SC Ports for joint development of a container terminal with the Georgia Port Authority on the South Carolina side of the Savannah River be redirected to a local economic development agency. The request stemmed from the GPA’s “wish to deliver capacity on the Georgia side of the river,” Mallace said. Navy Base start anticipated for 2028 SC Ports previously forecast a potential 2026 launch of Navy Base service with CSX and later adding NS access by 2027 once the southern access and other infrastructure was complete. While there’s no specific target for Navy Base’s full completion, Mallace said “we estimate needing to bring it on in 2028.” Intermodal cargo at the port is currently trucked to the CSX and NS intermodal facilities under Charleston’s “Rapid Rail” program. Navy Base allows the port to handle containers faster via a one-mile dedicated drayage road connected to the Leatherman marine terminal. Navy Base is designed to handle 1 million container lifts per year. It connects Charleston directly to its inland ports at Dillon and Greer, which are served respectively by CSX and NS, as well as other destinations in the Southeast. Dillon handled 48,761 container lifts last year, a 33% increase from 2024 largely due to a state initiative to reroute soybean shipments to export markets after the closure of a nearby processing facility, as well as demand from Dillon’s retailer shippers, according to SC Ports. Greer, which serves some of the state’s manufacturers and other retail distributors and can handle 300,000 lifts annually, saw roughly two-thirds of that at 197,805 container lifts last year, up 2% from a year earlier. Contact Michael Angell at michael.angell@spglobal.com

Port infrastructure

Marine terminals

Charleston slows railyard development amid insufficient shipper demand

<div class="phx-topic abstract-wrapper">Absorbing its largest and most complex takeover to date was initially expected to take at least two years to complete, but will now be fully wrapped 20 months after the DB Schenker acquisition closed. </div>

Absorbing its largest and most complex takeover to date was initially expected to take at least two years to complete, but will now be fully wrapped 20 months after the DB Schenker acquisition closed.

<div class="phx-topic">DSV expects to complete its integration of DB Schenker by the end of the year, far earlier than expected, with the emphasis firmly on growing synergies within the combined entity and using artificial intelligence to transform the business, DSV executives said Wednesday. The integration process was initially expected to take at least two years to complete, but will now be fully wrapped 20 months after the Schenker acquisition closed. The full financial impact will be felt in 2027. “It is the largest and most complex transaction we have ever made, and that was reflected in our initial integration plans,” DSV CFO Michael Ebbe told the Journal of Commerce as the Denmark-based forwarder announced its 2025 results. “We started in August by onboarding countries and going live and in Q3 [and] Q4,” Ebbe said. “And the beginning of this year, we started to onboard complex large markets like China, Germany, Sweden and Singapore and now we have a plan for the next phase to finalize integration before year-end.” The contribution of DB Schenker in the fourth quarter significantly boosted DSV’s annual earnings and volumes. Revenue for 2025 was up 51.3% at $39 billion, gross profit rose 59% to $10 billion, and earnings before interest and taxes (EBIT) of $3.1 billion was up 23.8% from the year prior. Air freight volume of 2 million metric tons for 2025 was up 42%, while ocean freight of 3.7 million TEUs was up 38% year over year. Combined revenue for the air and sea division of $21.7 billion was up 35.6% compared with 2024. In the fourth quarter, despite the contribution of Schenker volume, the air and sea business faced headwinds in the form of geopolitical uncertainty, shifting trade flows and the impact of a weakening US dollar against the Danish krone. Air freight volume was up 63% in the fourth quarter at 592,000 metric tons, but average gross profit per metric ton of $1,201 was down 8% year over year, mainly due to Schenker dilution. It was a similar picture in ocean freight. Volume was up 52% in the fourth quarter at just over 1 million TEUs, while average gross profit of $601/TEU was down 17%. Synergies from the Schenker integration will reach almost $800 million this year and close to $1.5 billion in 2027. Total transaction and integration costs will be close to $1.7 billion. <h3>Implementing AI at an enterprise level </h3>It was the focus on consolidating IT infrastructure and implementing AI at an enterprise level to improve productivity across the combined business that stood out in an earnings call with DSV executives Wednesday. Complexity has increased due to the Schenker acquisition, and DSV is consolidating and combining operations into selected systems across its air and sea, road, and contract logistics divisions, with AI playing an integral part of the digital operations. “When you introduce technology, you can do it on an enterprise level, a regional level, in clusters, countries, branches, departments, [or] on a personal level,” DSV CEO Jens Lund told analysts on the earnings call. “But the further you go down into the stack, the less benefit you get of it. “It has to be something that is done on enterprise level,” he added. “This is the only way we’ve managed to create value. This is also how you transform the business.” Lund pointed to a customs AI tool rolled out by DSV last year to improve the efficiency of customs handling, as well as an in-house “AI Factory” platform that was planning, forecasting and developing AI tools aimed at optimizing routes and processes. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

DSV expects to complete its integration of DB Schenker by the end of the year, far earlier than expected, with the emphasis firmly on growing synergies within the combined entity and using artificial intelligence to transform the business, DSV executives said Wednesday. The integration process was initially expected to take at least two years to complete, but will now be fully wrapped 20 months after the Schenker acquisition closed. The full financial impact will be felt in 2027. “It is the largest and most complex transaction we have ever made, and that was reflected in our initial integration plans,” DSV CFO Michael Ebbe told the Journal of Commerce as the Denmark-based forwarder announced its 2025 results. “We started in August by onboarding countries and going live and in Q3 [and] Q4,” Ebbe said. “And the beginning of this year, we started to onboard complex large markets like China, Germany, Sweden and Singapore and now we have a plan for the next phase to finalize integration before year-end.” The contribution of DB Schenker in the fourth quarter significantly boosted DSV’s annual earnings and volumes. Revenue for 2025 was up 51.3% at $39 billion, gross profit rose 59% to $10 billion, and earnings before interest and taxes (EBIT) of $3.1 billion was up 23.8% from the year prior. Air freight volume of 2 million metric tons for 2025 was up 42%, while ocean freight of 3.7 million TEUs was up 38% year over year. Combined revenue for the air and sea division of $21.7 billion was up 35.6% compared with 2024. In the fourth quarter, despite the contribution of Schenker volume, the air and sea business faced headwinds in the form of geopolitical uncertainty, shifting trade flows and the impact of a weakening US dollar against the Danish krone. Air freight volume was up 63% in the fourth quarter at 592,000 metric tons, but average gross profit per metric ton of $1,201 was down 8% year over year, mainly due to Schenker dilution. It was a similar picture in ocean freight. Volume was up 52% in the fourth quarter at just over 1 million TEUs, while average gross profit of $601/TEU was down 17%. Synergies from the Schenker integration will reach almost $800 million this year and close to $1.5 billion in 2027. Total transaction and integration costs will be close to $1.7 billion. Implementing AI at an enterprise level It was the focus on consolidating IT infrastructure and implementing AI at an enterprise level to improve productivity across the combined business that stood out in an earnings call with DSV executives Wednesday. Complexity has increased due to the Schenker acquisition, and DSV is consolidating and combining operations into selected systems across its air and sea, road, and contract logistics divisions, with AI playing an integral part of the digital operations. “When you introduce technology, you can do it on an enterprise level, a regional level, in clusters, countries, branches, departments, [or] on a personal level,” DSV CEO Jens Lund told analysts on the earnings call. “But the further you go down into the stack, the less benefit you get of it. “It has to be something that is done on enterprise level,” he added. “This is the only way we’ve managed to create value. This is also how you transform the business.” Lund pointed to a customs AI tool rolled out by DSV last year to improve the efficiency of customs handling, as well as an in-house “AI Factory” platform that was planning, forecasting and developing AI tools aimed at optimizing routes and processes. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Forwarder News

Air Cargo Carriers News

Air Cargo

DSV moves to transform its business as Schenker integration accelerates

<div class="phx-topic abstract-wrapper">CMA CGM and Hapag-Lloyd are seeking a general rate increase of $1,000 per FEU starting March 1 to reverse a steady spot rate decline that began in July 2025.</div>

CMA CGM and Hapag-Lloyd are seeking a general rate increase of $1,000 per FEU starting March 1 to reverse a steady spot rate decline that began in July 2025.

<div class="phx-topic">Container lines are marshalling another rate hike on the Asia-to-Latin America trade amid rising volumes, but recent capacity injections into a market where spot rates have plummeted more than 80% over the past seven months offer a hard backstop to their efforts. CMA CGM and Hapag-Lloyd are seeking a general rate increase of $1,000 per FEU starting March 1 to reverse a steady spot rate decline that began in July 2025 when prices for Shanghai to Santos in Brazil were $6,374 per TEU, according to the Shanghai Shipping Exchange. Those rates are now at $1,131 per TEU, a decline of 82%. Container lines began adding more capacity to chase the higher rates; major carriers injected some 700,000 TEUs into the trade in the last 12 months, according to advisory firm MDS Transmodal. Capacity from Asia to the East Coast of South America is due to hit 303,517 TEUs in March, according to eeSea. That’s up almost 9% from February and would be the highest level in more than three years. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="3f037742-ccbd-42e6-a9c1-eef2aebad508"></dynamic-object></div>The capacity rush comes as CMA CGM announced its planned rate increase in an advisory Tuesday, following Hapag-Lloyd’s notice on Friday. Both carriers are again seeking a $1,000 per box across-the-board increase on all trades from Asia to Latin America, including the West and East coasts of South America, Mexico, Central America, and the Caribbean. Hapag-Lloyd said the increase will apply to 20-foot, 40-foot and 40-foot non-operated reefers, while CMA CGM said its rate hike will also apply to out-of-gauge and paying empties. The two carriers announced similar $1,000 per-box rate increases at the end of last year. CMA CGM said in a Dec. 18 advisory the increase would apply from Jan. 1, while Hapag-Lloyd published a notice on Nov. 21 saying the revised rate would take effect from Dec. 1. But Brazilian forwarders questioned whether the carriers would be any more successful with their latest planned hike than they were previously. “The fundamentals haven’t really changed since then. Yes, demand has been strong, but there is significant overcapacity,” a senior executive at a Sao Paolo-based freight forwarder told the Journal of Commerce. “Our partners in China tell us shipping lines have struggled to fill their vessels. “Rates might pick up after the Lunar New Year festival period as demand rebounds, but we’ve been told there’s more capacity coming into the market,” the source added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="69a20079-176d-4590-97c9-677559ec748f"></dynamic-object></div>CMA CGM did not give a comparison, but Hapag-Lloyd’s rate notices showed it had attempted to push its December GRI in a falling market. In its latest GRI announcement, Hapag-Lloyd said East Coast of South America base rates were now $1,000 per 20-foot container and $1,200 for a 40-foot box. By comparison, West Coast of South America base rates were down to $750 for both a 20-foot and 40-foot container, it said. Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged rates from North Asia to the West Coast of South America at $1,200 per FEU as of Feb. 2, down 60% year over year. A Hapag-Lloyd spokesperson did not comment specifically on the GRIs, cargo demand or capacity when contacted by the Journal of Commerce. “Not much I can say other than that we are continuously monitoring market developments, and rate adjustments on the back of changed supply and demand are a part of our day-to-day business,” the spokesperson said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Container lines are marshalling another rate hike on the Asia-to-Latin America trade amid rising volumes, but recent capacity injections into a market where spot rates have plummeted more than 80% over the past seven months offer a hard backstop to their efforts. CMA CGM and Hapag-Lloyd are seeking a general rate increase of $1,000 per FEU starting March 1 to reverse a steady spot rate decline that began in July 2025 when prices for Shanghai to Santos in Brazil were $6,374 per TEU, according to the Shanghai Shipping Exchange. Those rates are now at $1,131 per TEU, a decline of 82%. Container lines began adding more capacity to chase the higher rates; major carriers injected some 700,000 TEUs into the trade in the last 12 months, according to advisory firm MDS Transmodal. Capacity from Asia to the East Coast of South America is due to hit 303,517 TEUs in March, according to eeSea. That’s up almost 9% from February and would be the highest level in more than three years. The capacity rush comes as CMA CGM announced its planned rate increase in an advisory Tuesday, following Hapag-Lloyd’s notice on Friday. Both carriers are again seeking a $1,000 per box across-the-board increase on all trades from Asia to Latin America, including the West and East coasts of South America, Mexico, Central America, and the Caribbean. Hapag-Lloyd said the increase will apply to 20-foot, 40-foot and 40-foot non-operated reefers, while CMA CGM said its rate hike will also apply to out-of-gauge and paying empties. The two carriers announced similar $1,000 per-box rate increases at the end of last year. CMA CGM said in a Dec. 18 advisory the increase would apply from Jan. 1, while Hapag-Lloyd published a notice on Nov. 21 saying the revised rate would take effect from Dec. 1. But Brazilian forwarders questioned whether the carriers would be any more successful with their latest planned hike than they were previously. “The fundamentals haven’t really changed since then. Yes, demand has been strong, but there is significant overcapacity,” a senior executive at a Sao Paolo-based freight forwarder told the Journal of Commerce. “Our partners in China tell us shipping lines have struggled to fill their vessels. “Rates might pick up after the Lunar New Year festival period as demand rebounds, but we’ve been told there’s more capacity coming into the market,” the source added. CMA CGM did not give a comparison, but Hapag-Lloyd’s rate notices showed it had attempted to push its December GRI in a falling market. In its latest GRI announcement, Hapag-Lloyd said East Coast of South America base rates were now $1,000 per 20-foot container and $1,200 for a 40-foot box. By comparison, West Coast of South America base rates were down to $750 for both a 20-foot and 40-foot container, it said. Platts, a sister company of the Journal of Commerce within S&P Global, pegged rates from North Asia to the West Coast of South America at $1,200 per FEU as of Feb. 2, down 60% year over year. A Hapag-Lloyd spokesperson did not comment specifically on the GRIs, cargo demand or capacity when contacted by the Journal of Commerce. “Not much I can say other than that we are continuously monitoring market developments, and rate adjustments on the back of changed supply and demand are a part of our day-to-day business,” the spokesperson said. Contact Keith Wallis at keithwallis@hotmail.com .

Carriers try new rate hike on Asia-Latin America, but fresh capacity provides headwind

<div class="phx-topic abstract-wrapper">The current market situation is favorable for BCOs, and the temptation will be great to drive down base rates because of internal cost pressures, writes John McCauley.</div>

The current market situation is favorable for BCOs, and the temptation will be great to drive down base rates because of internal cost pressures, writes John McCauley.

<div class="phx-topic">At this time of year, many have reflected on 2025 and made resolutions for 2026. I have adjusted this to make no resolutions, but a few predictions that, in most cases, I hope will not materialize. In addition, I want to give some advice to beneficial cargo owners (BCOs), many of whom are in various stages of negotiations for 2026–27 service contracts. Starting with the predictions, let’s consider some supply, capacity, and demand issues. <h3>Capacity </h3>I expect Red Sea transits will resume, but very slowly and primarily for East Med cargo and for the India sub-continent to the East Coast of the US. Asia-Europe transits will only resume if insurance premiums disappear. The Houthis are still present and will be volatile and unreliable, so they remain the wild card for this prediction. At best, Asia-Europe, if Suez passage resumes, would take six months to stabilize. The US port fees for Chinese-built and -owned vessels will be a non-event. However, for carriers, the sword of Damocles is hanging over this one, so don’t expect any major service reshuffles. Sadly, service reliability levels will stay stable at a horrible 60%, notwithstanding the herculean efforts of Gemini to drag the industry up. Most carriers won’t care enough to do something about it. Expect significant trucking and drayage disruption in the US. Bankruptcies will rise as seasonality gets more unpredictable. Driver shortages will get worse. The consequences will be price volatility, both up and down, with significant backlogs adding to detention and demurrage bills. Berthing and landside restrictions will continue to hinder moving larger vessels to north-south trades as few terminals are deep-sea; they are river or bay, at best, and are often hemmed in by towns and cities and tidal-constrained. <h3>Demand </h3>Many BCOs are under high internal pressure to contribute to reductions in overall supply chain costs as margins become thinner through higher input costs (somewhat largely driven by tariffs), downstream price squeezing, and weaker demand. Container freight downward trends will be an obvious target. Keep an eye on US credit card debt and defaults, which will rise significantly by the third quarter at the latest, thus further softening demand. Macro level indicators will prey on demand. US inflation will remain stubbornly near at least 2.5% to 3% while unemployment will remain at about 4.5% as immigration net deficits offset layoffs. Job creation will stagnate. Depending on the GDP trend, expect a high likelihood of stagflation toward the end of the fourth quarter (subject to the reliability of US government data). China will continue manufacturing export expansion and increase its proportion of global trade. <h3>Recommendation </h3>What does this mean for upcoming service contract negotiations? With the expectation of vessel oversupply continuing through the year, BCOs will push to the limit to reduce base rates. They will face several dilemmas, including how to get rid of unmerited and unjustifiable surcharges and which carriers to choose from in alliances and vessel-sharing agreements. Overall, the market situation is favorable for BCOs. The temptation to drive down base rates will be great because of internal cost pressures and/or wanting to make up for some years of carrier supply strength. This should be tempered with a caveat that many BCOs have been burnt in the past for being too empathetic to carriers’ financial difficulties. If I were in the shoes of a medium-size BCO of 30,000 TEUs and above, I would select a mix that would aim for base rates around the Xeneta/NYSHEX forecast average index levels, even if offered lower rates than those levels. It is important to keep in with Mediterranean Shipping Co. even if you don’t use them today. I would use index-linked contracts today and continue to do so with a maximum of 50% to leave yourself some volume for fixed rates and some spot prices. Of that remaining volume, I would leave about 25% for spot as the downside risk is still relatively low. Finally, the market situation should allow for BCOs to get into their contracts the exclusion of any non-explainable (by the carrier) and justifiable (judged and accepted by the BCO) surcharges. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>.</div>

At this time of year, many have reflected on 2025 and made resolutions for 2026. I have adjusted this to make no resolutions, but a few predictions that, in most cases, I hope will not materialize. In addition, I want to give some advice to beneficial cargo owners (BCOs), many of whom are in various stages of negotiations for 2026–27 service contracts. Starting with the predictions, let’s consider some supply, capacity, and demand issues. Capacity I expect Red Sea transits will resume, but very slowly and primarily for East Med cargo and for the India sub-continent to the East Coast of the US. Asia-Europe transits will only resume if insurance premiums disappear. The Houthis are still present and will be volatile and unreliable, so they remain the wild card for this prediction. At best, Asia-Europe, if Suez passage resumes, would take six months to stabilize. The US port fees for Chinese-built and -owned vessels will be a non-event. However, for carriers, the sword of Damocles is hanging over this one, so don’t expect any major service reshuffles. Sadly, service reliability levels will stay stable at a horrible 60%, notwithstanding the herculean efforts of Gemini to drag the industry up. Most carriers won’t care enough to do something about it. Expect significant trucking and drayage disruption in the US. Bankruptcies will rise as seasonality gets more unpredictable. Driver shortages will get worse. The consequences will be price volatility, both up and down, with significant backlogs adding to detention and demurrage bills. Berthing and landside restrictions will continue to hinder moving larger vessels to north-south trades as few terminals are deep-sea; they are river or bay, at best, and are often hemmed in by towns and cities and tidal-constrained. Demand Many BCOs are under high internal pressure to contribute to reductions in overall supply chain costs as margins become thinner through higher input costs (somewhat largely driven by tariffs), downstream price squeezing, and weaker demand. Container freight downward trends will be an obvious target. Keep an eye on US credit card debt and defaults, which will rise significantly by the third quarter at the latest, thus further softening demand. Macro level indicators will prey on demand. US inflation will remain stubbornly near at least 2.5% to 3% while unemployment will remain at about 4.5% as immigration net deficits offset layoffs. Job creation will stagnate. Depending on the GDP trend, expect a high likelihood of stagflation toward the end of the fourth quarter (subject to the reliability of US government data). China will continue manufacturing export expansion and increase its proportion of global trade. Recommendation What does this mean for upcoming service contract negotiations? With the expectation of vessel oversupply continuing through the year, BCOs will push to the limit to reduce base rates. They will face several dilemmas, including how to get rid of unmerited and unjustifiable surcharges and which carriers to choose from in alliances and vessel-sharing agreements. Overall, the market situation is favorable for BCOs. The temptation to drive down base rates will be great because of internal cost pressures and/or wanting to make up for some years of carrier supply strength. This should be tempered with a caveat that many BCOs have been burnt in the past for being too empathetic to carriers’ financial difficulties. If I were in the shoes of a medium-size BCO of 30,000 TEUs and above, I would select a mix that would aim for base rates around the Xeneta/NYSHEX forecast average index levels, even if offered lower rates than those levels. It is important to keep in with Mediterranean Shipping Co. even if you don’t use them today. I would use index-linked contracts today and continue to do so with a maximum of 50% to leave yourself some volume for fixed rates and some spot prices. Of that remaining volume, I would leave about 25% for spot as the downside risk is still relatively low. Finally, the market situation should allow for BCOs to get into their contracts the exclusion of any non-explainable (by the carrier) and justifiable (judged and accepted by the BCO) surcharges. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

A few market predictions and some advice for BCOs as contract season heats up

<div class="phx-topic abstract-wrapper">There are a lot of theories explaining the current freight recession, but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components, writes Ted Prince.</div>

There are a lot of theories explaining the current freight recession, but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components, writes Ted Prince.

<div class="phx-topic">In 1948, Gerald Hern, sports editor of the Boston Post, composed a brief poem describing the Boston Braves’ pitching en route to the 1948 National League pennant: First we’ll use Spahn then we’ll use Sain Then an off day, followed by rain Back will come Spahn, followed by Sain And followed, we hope, by two days of rain Warren Spahn and Johnny Sain were responsible for 39 of the Braves’ 91 victories that year. However, it was common to have a one-two punch at the top of a team’s pitching rotation. Intermodal has a similar duality: international and domestic — primarily dry 40- and 53-foot containers, respectively. While intermodal has a plethora of markets and equipment, the two segments have been carrying the industry for decades to constant new heights. They are also closely correlated in that a great deal of the domestic market is import cargo that was transloaded on the West Coast for movement inland. Hern’s work comes to mind when thinking about intermodal’s performance in 2025 and its prospects for 2026. Unlike the hoped-for two days of good rain, the industry has endured four years of painful rain since the halcyon volumes of 2021, the “good old days” of the COVID-19 pandemic. There are a lot of theories explaining the current freight “recession,” but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components. As a result, intermodal has frequently found itself as a surface freight alternative that is slower and more expensive than trucking. And while there were some green shoots in 2024, the industry has been hoping for a second-half recovery — that has failed to materialize — in each of the past three years. The same seems true for 2026. <h3>Supply and demand drivers </h3>As we look forward, we need to consider supply and demand drivers. “Affordability” has taken the place of prominence in our political lexicon. As the costs of food and housing rise, discretionary income for other consumer products has shriveled and reduced demand. The same goes for increasing credit card, car, and student loan debt. Regardless of mortgage rates, there are long-term limitations on housing starts. This can further reduce consumer demand because so many purchases — e.g., furniture, home, electronics, etc. — are often associated with new homes. And although seven-year car loans have become more common, I don’t believe 50-year home mortgages will have the same penetration. With demand problematic, intermodal success will probably rely on supply changes. Many contend that the demand during the early days of COVID-19 created excess capacity that the truck market is still trying to absorb. However, it is unclear whether there was really an increase in overall capacity, or just realignment as many truckers decided to go out on their own. Regardless, there were a number of carriers that acquired capacity at historically high prices and must keep operating to just make their payments. The normal culling of unprofitable capacity was precluded by this inability to exit the market, ensuring a never-ending supply of zombie truckers. This capacity is getting older and more expensive to operate. Nevertheless, there is a feeling (or hope?) that 2026 will finally see marginal carriers leave the market and rate stability restored. <h3>Enhanced regulatory oversight </h3>The environmental green benefits of intermodal are not a priority for the current administration, so economic green will be paramount. Most likely that would come from increased regulatory oversight. Enhanced enforcement on non-domiciled commercial driver’s licenses is reducing driver supply. And there is still the unknown of hacked electronic logging devices allowing for illegal hours of service. What is unclear is whether these initiatives will impact truckload and drayage carriers equally, or whether one segment will suffer disproportionate opprobrium. If it is the former, intermodal will be advantaged; however, if it is the latter, maybe not. The former would be a rising tide that would raise all intermodal ships, whereas the latter could see the further ascendance of bimodal operations with integrated drayage overseen by robust safety regimens. In an attempt to increase demand, we can expect major players to assume prominent roles. Railroads and bimodals will seek to deploy equipment that has been stored for years. Ocean carriers will continue to consider their inland options. Finally, ports may become more involved as they explore inland options to attract more discretionary cargo. There are no historical comparisons for the last five years. It is unclear when the market will turn, but when it does, the recovery will follow Ernest Hemingway’s description: “Gradually, then suddenly.” We can then hope for the sun also to rise on intermodal. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

In 1948, Gerald Hern, sports editor of the Boston Post, composed a brief poem describing the Boston Braves’ pitching en route to the 1948 National League pennant: First we’ll use Spahn then we’ll use Sain Then an off day, followed by rain Back will come Spahn, followed by Sain And followed, we hope, by two days of rain Warren Spahn and Johnny Sain were responsible for 39 of the Braves’ 91 victories that year. However, it was common to have a one-two punch at the top of a team’s pitching rotation. Intermodal has a similar duality: international and domestic — primarily dry 40- and 53-foot containers, respectively. While intermodal has a plethora of markets and equipment, the two segments have been carrying the industry for decades to constant new heights. They are also closely correlated in that a great deal of the domestic market is import cargo that was transloaded on the West Coast for movement inland. Hern’s work comes to mind when thinking about intermodal’s performance in 2025 and its prospects for 2026. Unlike the hoped-for two days of good rain, the industry has endured four years of painful rain since the halcyon volumes of 2021, the “good old days” of the COVID-19 pandemic. There are a lot of theories explaining the current freight “recession,” but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components. As a result, intermodal has frequently found itself as a surface freight alternative that is slower and more expensive than trucking. And while there were some green shoots in 2024, the industry has been hoping for a second-half recovery — that has failed to materialize — in each of the past three years. The same seems true for 2026. Supply and demand drivers As we look forward, we need to consider supply and demand drivers. “Affordability” has taken the place of prominence in our political lexicon. As the costs of food and housing rise, discretionary income for other consumer products has shriveled and reduced demand. The same goes for increasing credit card, car, and student loan debt. Regardless of mortgage rates, there are long-term limitations on housing starts. This can further reduce consumer demand because so many purchases — e.g., furniture, home, electronics, etc. — are often associated with new homes. And although seven-year car loans have become more common, I don’t believe 50-year home mortgages will have the same penetration. With demand problematic, intermodal success will probably rely on supply changes. Many contend that the demand during the early days of COVID-19 created excess capacity that the truck market is still trying to absorb. However, it is unclear whether there was really an increase in overall capacity, or just realignment as many truckers decided to go out on their own. Regardless, there were a number of carriers that acquired capacity at historically high prices and must keep operating to just make their payments. The normal culling of unprofitable capacity was precluded by this inability to exit the market, ensuring a never-ending supply of zombie truckers. This capacity is getting older and more expensive to operate. Nevertheless, there is a feeling (or hope?) that 2026 will finally see marginal carriers leave the market and rate stability restored. Enhanced regulatory oversight The environmental green benefits of intermodal are not a priority for the current administration, so economic green will be paramount. Most likely that would come from increased regulatory oversight. Enhanced enforcement on non-domiciled commercial driver’s licenses is reducing driver supply. And there is still the unknown of hacked electronic logging devices allowing for illegal hours of service. What is unclear is whether these initiatives will impact truckload and drayage carriers equally, or whether one segment will suffer disproportionate opprobrium. If it is the former, intermodal will be advantaged; however, if it is the latter, maybe not. The former would be a rising tide that would raise all intermodal ships, whereas the latter could see the further ascendance of bimodal operations with integrated drayage overseen by robust safety regimens. In an attempt to increase demand, we can expect major players to assume prominent roles. Railroads and bimodals will seek to deploy equipment that has been stored for years. Ocean carriers will continue to consider their inland options. Finally, ports may become more involved as they explore inland options to attract more discretionary cargo. There are no historical comparisons for the last five years. It is unclear when the market will turn, but when it does, the recovery will follow Ernest Hemingway’s description: “Gradually, then suddenly.” We can then hope for the sun also to rise on intermodal. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

Surface

North-American rail

Intermodal providers

Supply chain

Pace of freight market recovery a matter of ‘gradually, then suddenly’

US East Coast

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US West Coast

Total US

Bookings represent shipments entered as booking requests during a given week, with a normalized assigned TEU value to these shipments. Original port of lading and port of discharge are used to map against given trade lanes. Vizion's Booking Trends insights and other details such as shipper, consignee, product value, and transit times are available via its Tradeview platform - sourcing from over 54% of all container booking transactions globally, with over 10 years of historical shipment data available. [Vizion](https://www.vizionapi.com/global-trade-monitoring/tradeview-global-trade-intelligence-platform)

China weekly import bookings to US index (Vizion)

Vizion Trade Index TEU booking volume China to US Coasts Gateway

<div class="phx-topic abstract-wrapper">After announcing a pause on ship attacks in November, the Iran-backed militants posted a pair of threatening videos over the weekend that are sure to cause fresh concerns for ocean carriers planning a return to the Red Sea.</div>

After announcing a pause on ship attacks in November, the Iran-backed militants posted a pair of threatening videos over the weekend that are sure to cause fresh concerns for ocean carriers planning a return to the Red Sea.

<div class="phx-topic">Yemen’s Houthi militants have warned of new attacks on shipping in the Red Sea as tensions escalate between the US and Iran, raising questions over whether moves by some carriers to return services to the shorter Suez Canal route will actually happen. A Houthi video posted on YouTube over the weekend showed a ship on fire accompanied by the headline: “Soon.” It was followed by another video, this one from Houthi spokesman Brigadier Yahya Saree, pointing to “the escalation of possibilities” of the US launching a military strike against Iran, which he said would be met by retaliation against the US and Israel. The Iran-backed Houthi announced a pause on ship attacks in November following the Israel-Hamas ceasefire in Gaza that was agreed the previous month and have so far honored that pledge. But Iran’s clampdown on anti-government protests in late December sparked a threat earlier this month by US President Donald Trump to respond militarily, with a carrier strike group led by the USS Abraham Lincoln now heading for the region. Even before the new Houthi threat, CMA CGM, one of the main Red Sea users over the past two years, said it would <a href="https://www.joc.com/article/cma-cgm-backs-off-plans-to-resume-suez-transits-for-asia-europe-services-6155264">scale back plans to send three Asia-Europe westbound services</a> through the Suez, citing the “complex and uncertain international context.” <h3>Maersk India-US service due to begin shorter route </h3>Maersk’s <a href="https://www.joc.com/article/maersk-set-to-resume-regular-suez-transits-on-india-usec-mecl-loop-sources-6152441">MECL service from India to the US East Coast</a> is due to be rerouted through the Suez and Red Sea beginning Monday. While no change of plan has been announced, the volatility in the region prompted the carrier to include a caveat in its Jan. 15 advisory announcing a return to the shorter route. “Maersk has contingency plans in place should the security situation deteriorate, which may necessitate reverting individual MECL sailings or the wider structural change of the MECL service back to the Cape of Good Hope route,” the carrier said. While Maersk tests the waters and CMA CGM continues to send regional and back-haul services through the Red Sea, most of the other major carriers are content to maintain longer transits around southern Africa until the fluid geopolitical environment stabilizes. Carriers have used the longer route since the Houthis began attacks against commercial shipping in late 2023 in response to the Israel-Hamas war. Resuming services through the Suez represents more than just a routing change. Oversupplied carriers have benefited from the longer route absorbing about 8% of global capacity, preventing rates from falling. “A full-scale return of liner services to the Red Sea would initially be disruptive, with increased risks of port congestion, landside capacity constraints and short-term cost implications,” Bjoern Schoon, senior vice president of ocean freight at DHL Global Forwarding/Asia-Pacific, said in a market update last week. “However, once networks stabilize, it will benefit shippers through faster transit times, and the trade is likely to become more competitive on pricing,” Schoon added. Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>.</div>

Yemen’s Houthi militants have warned of new attacks on shipping in the Red Sea as tensions escalate between the US and Iran, raising questions over whether moves by some carriers to return services to the shorter Suez Canal route will actually happen. A Houthi video posted on YouTube over the weekend showed a ship on fire accompanied by the headline: “Soon.” It was followed by another video, this one from Houthi spokesman Brigadier Yahya Saree, pointing to “the escalation of possibilities” of the US launching a military strike against Iran, which he said would be met by retaliation against the US and Israel. The Iran-backed Houthi announced a pause on ship attacks in November following the Israel-Hamas ceasefire in Gaza that was agreed the previous month and have so far honored that pledge. But Iran’s clampdown on anti-government protests in late December sparked a threat earlier this month by US President Donald Trump to respond militarily, with a carrier strike group led by the USS Abraham Lincoln now heading for the region. Even before the new Houthi threat, CMA CGM, one of the main Red Sea users over the past two years, said it would scale back plans to send three Asia-Europe westbound services through the Suez, citing the “complex and uncertain international context.” Maersk India-US service due to begin shorter route Maersk’s MECL service from India to the US East Coast is due to be rerouted through the Suez and Red Sea beginning Monday. While no change of plan has been announced, the volatility in the region prompted the carrier to include a caveat in its Jan. 15 advisory announcing a return to the shorter route. “Maersk has contingency plans in place should the security situation deteriorate, which may necessitate reverting individual MECL sailings or the wider structural change of the MECL service back to the Cape of Good Hope route,” the carrier said. While Maersk tests the waters and CMA CGM continues to send regional and back-haul services through the Red Sea, most of the other major carriers are content to maintain longer transits around southern Africa until the fluid geopolitical environment stabilizes. Carriers have used the longer route since the Houthis began attacks against commercial shipping in late 2023 in response to the Israel-Hamas war. Resuming services through the Suez represents more than just a routing change. Oversupplied carriers have benefited from the longer route absorbing about 8% of global capacity, preventing rates from falling. “A full-scale return of liner services to the Red Sea would initially be disruptive, with increased risks of port congestion, landside capacity constraints and short-term cost implications,” Bjoern Schoon, senior vice president of ocean freight at DHL Global Forwarding/Asia-Pacific, said in a market update last week. “However, once networks stabilize, it will benefit shippers through faster transit times, and the trade is likely to become more competitive on pricing,” Schoon added. Contact Greg Knowler at  greg.knowler@spglobal.com .

Latest Houthi threat renews questions about Suez route as US-Iran tensions rise 

<div class="phx-topic abstract-wrapper">The agency ruled in 2024 that shippers can pick their own chassis when they arrange for truck transportation, but compliance with that ruling remains unclear. </div>

The agency ruled in 2024 that shippers can pick their own chassis when they arrange for truck transportation, but compliance with that ruling remains unclear.

<div class="phx-topic">The Federal Maritime Commission (FMC) is launching its second probe into chassis restrictions ocean carriers put on truckers when hauling a container. The probe comes after the agency ruled in 2024 that shippers can choose their own chassis when they contract with their own trucker. In a federal register notice Friday, the FMC said it plans to open a 60-day window for comments about “service contract terms or other means to mandate that motor carriers [truckers] and shippers use the ocean common carriers’ designated chassis.” The comments are sought in relation to an investigation by the FMC over allegations that “ocean common carriers may be in violation of the Shipping Act by unjustly and unreasonably restricting truckers and shippers from negotiating and dealing with chassis providers.”The investigation stems from <a href="https://www.joc.com/article/fmc-rules-for-truckers-in-chassis-dispute-with-ocean-carriers-5234355">the 2024 agency ruling</a> that ocean carriers have to stop mandating what specific chassis must be used under merchant haulage contracts. The agency upheld an administrative law judge’s earlier decision in a case between the American Trucking Association and the Ocean Carrier Equipment Management Association (OCEMA) that <a href="https://www.joc.com/article/ocema-appeals-chassis-ruling-to-fmc-commissioners-5193253">container lines violate the Shipping Act when they restrict chassis choice</a> among shippers who are arranging their own container trucking. <a href="https://www.joc.com/article/fmc-says-investigating-potential-violations-of-recent-ruling-on-chassis-control-5192272">The FMC was already investigating compliance</a> with a cease-and-desist order in the 2024 ruling, which is still ongoing. The new probe is looking for “any information concerning new or ongoing ocean common carrier practices ... to affect, restrict, or inhibit chassis provider selection,” the notice said. Part of the new probe involves whether ocean carriers designate single chassis providers at Chicago and Memphis rail ramps, if providers have enough chassis on-hand, any reimbursement for truckers on chassis split, and whether truckers are given notice about a container being under merchant or carrier haulage, the latter allowing an ocean carrier to choose a chassis. Along with the inland rail ramps, the FMC said its investigation is looking at chassis choice at the Savannah, Los Angeles, and Long Beach ports. As part of the probe into the Southern California market, the FMC is seeking how the “Pool of Pools” (PoP) operated by the three main chassis providers for the LA-LB ports distinguishes between “carrier haulage and merchant haulage containers and coordinate billing accordingly,” the notice said. OCEMA did not immediately respond to a request for comment into the new investigation.<h3>‘Sweetheart Deals’</h3>Robert Loya, chief executive of the Harbor Trucking Association, which represents drayage providers in Southern California, told the Journal of Commerce that some shippers have merchant haulage contracts that include a chassis at no additional cost, requiring the trucker to use the ocean carrier’s designated chassis. But servicing the LA-LB ports with the trucker’s own chassis and one from the PoP can result in wasted miles and more costs, he added.Returning an empty container on a PoP chassis can require a trip back to the trucker’s own yard for a shipper without an ocean carrier-provisioned chassis. Truckers are also forced to pay gate fees that marine terminals charge for temporarily storing PoP chassis.“The intermodal equipment providers have negotiated sweetheart deals with the shipping lines to use their chassis, then that gets negotiated into the ocean contract with the beneficial cargo owner,” Loya said. “That puts pressure on us, so we’re forced by the lines to use their chassis. That’s the rub for us.”<h3>Chassis mis-mounts</h3>An executive of a Tennessee-based drayage provider told the Journal of Commerce that ocean carrier chassis pools at inland rail terminals are vulnerable to shortages in times of high demand, resulting in potential delays if a trucker cannot use their own chassis.Containers can also come off a train and be mis-mounted onto the wrong chassis, causing a trucker to wait for the correct chassis. The executive said that what appears to be a no-cost chassis can mean added costs and inefficiencies for truckers.“The trucker is squeezed,” she said. “The frustration is that there’s no change after years. The US would have been better served if we had chassis choice during the pandemic. We need a faster and more fluid way to move freight.”Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Federal Maritime Commission (FMC) is launching its second probe into chassis restrictions ocean carriers put on truckers when hauling a container. The probe comes after the agency ruled in 2024 that shippers can choose their own chassis when they contract with their own trucker. In a federal register notice Friday, the FMC said it plans to open a 60-day window for comments about “service contract terms or other means to mandate that motor carriers [truckers] and shippers use the ocean common carriers’ designated chassis.” The comments are sought in relation to an investigation by the FMC over allegations that “ocean common carriers may be in violation of the Shipping Act by unjustly and unreasonably restricting truckers and shippers from negotiating and dealing with chassis providers.” The investigation stems from the 2024 agency ruling that ocean carriers have to stop mandating what specific chassis must be used under merchant haulage contracts. The agency upheld an administrative law judge’s earlier decision in a case between the American Trucking Association and the Ocean Carrier Equipment Management Association (OCEMA) that container lines violate the Shipping Act when they restrict chassis choice among shippers who are arranging their own container trucking. The FMC was already investigating compliance with a cease-and-desist order in the 2024 ruling, which is still ongoing. The new probe is looking for “any information concerning new or ongoing ocean common carrier practices ... to affect, restrict, or inhibit chassis provider selection,” the notice said. Part of the new probe involves whether ocean carriers designate single chassis providers at Chicago and Memphis rail ramps, if providers have enough chassis on-hand, any reimbursement for truckers on chassis split, and whether truckers are given notice about a container being under merchant or carrier haulage, the latter allowing an ocean carrier to choose a chassis. Along with the inland rail ramps, the FMC said its investigation is looking at chassis choice at the Savannah, Los Angeles, and Long Beach ports. As part of the probe into the Southern California market, the FMC is seeking how the “Pool of Pools” (PoP) operated by the three main chassis providers for the LA-LB ports distinguishes between “carrier haulage and merchant haulage containers and coordinate billing accordingly,” the notice said. OCEMA did not immediately respond to a request for comment into the new investigation. ‘Sweetheart Deals’ Robert Loya, chief executive of the Harbor Trucking Association, which represents drayage providers in Southern California, told the Journal of Commerce that some shippers have merchant haulage contracts that include a chassis at no additional cost, requiring the trucker to use the ocean carrier’s designated chassis. But servicing the LA-LB ports with the trucker’s own chassis and one from the PoP can result in wasted miles and more costs, he added. Returning an empty container on a PoP chassis can require a trip back to the trucker’s own yard for a shipper without an ocean carrier-provisioned chassis. Truckers are also forced to pay gate fees that marine terminals charge for temporarily storing PoP chassis. “The intermodal equipment providers have negotiated sweetheart deals with the shipping lines to use their chassis, then that gets negotiated into the ocean contract with the beneficial cargo owner,” Loya said. “That puts pressure on us, so we’re forced by the lines to use their chassis. That’s the rub for us.” Chassis mis-mounts An executive of a Tennessee-based drayage provider told the Journal of Commerce that ocean carrier chassis pools at inland rail terminals are vulnerable to shortages in times of high demand, resulting in potential delays if a trucker cannot use their own chassis. Containers can also come off a train and be mis-mounted onto the wrong chassis, causing a trucker to wait for the correct chassis. The executive said that what appears to be a no-cost chassis can mean added costs and inefficiencies for truckers. “The trucker is squeezed,” she said. “The frustration is that there’s no change after years. The US would have been better served if we had chassis choice during the pandemic. We need a faster and more fluid way to move freight.” Contact Michael Angell at michael.angell@spglobal.com .

Drayage

FMC takes second look at ocean carrier limits on chassis choice

<div class="phx-topic abstract-wrapper">Tighter capacity amid the federal government’s crackdown on non-domiciled commercial driver’s licenses and English language proficiency among drivers will likely boost rates, the company says.</div>

Tighter capacity amid the federal government’s crackdown on non-domiciled commercial driver’s licenses and English language proficiency among drivers will likely boost rates, the company says.

<div class="phx-topic">Truckload shippers should expect their annual contract rates to rise by low-to mid-single-digit percentages due to the likelihood of tighter capacity this year, according to Knight-Swift Transportation. Negotiations are ongoing or about to begin with many truckload customers. The company said the momentum that propelled rates upward in December had trickled into the first couple of weeks of January, while more shippers are shifting their business from non-asset brokers to asset-based carriers. Shippers are making the move because of uneasiness about the federal government’s crackdown on non-domiciled commercial driver’s licenses (CDLs) and English language proficiency among drivers, Knight Swift said. Shippers who have spoken to the Journal of Commerce have generally said truckload rates are rising 1.5% to 3% in their 2026 bids, although some have been able to lock in unchanged rates by switching away from incumbent carriers. “What we’d be pushing for would be low-to mid-single-digit improvements in contract rates and maybe closer to mid than low,” Knight Swift CEO Adam Miller said during the company’s fourth-quarter earnings call Wednesday. “Maybe that may not align with what our customers want to see in a pre-bid. Some of this stuff is going to go into a bid to see where the market is from a balance standpoint.” Despite what Knight Swift said was a disappointing peak season, it believes capacity is fragile, as the December spot market surge in truckload showed, and more capacity will come out this year. If a disruption occurred, or manufacturing and industrial demand pick up, then capacity might become tight quickly. Knight-Swift, similar to <a href="https://www.joc.com/article/truckload-at-a-tipping-point-intermodal-still-lagging-jb-hunt-6153949">J.B. Hunt Transport Services last week</a>, was careful not to call the end of the freight recession. “We’ve seen head fakes before, but I think we’re feeling better about where this market is headed,” Miller said. “And we do feel better about what the [US Department of Transportation] is doing to clean up capacity in our industry.” The US Department of Transportation and Federal Motor Carrier Safety Administration, a sub-agency, have cracked down on non-domiciled CDLs issued to non-citizens who have certain types of visas, including asylum seekers. Miller also pointed out that temporary protective status is ending for countries such as Ethiopia, Haiti, and Somalia, which would disqualify those drivers from continuing to operate a truck here. “Also, there were 3,000 [driving] schools recently removed because of noncompliance and another 4,000 schools that have placed on notice for noncompliance,” Miller said. “Two of our schools at Swift were audited, and we passed with flying colors, as we’d expect. So, it is real. It is happening.” <h3>Consolidating LTL business </h3>Knight Swift said it saw some “softness” in less-than-truckload (LTL) demand toward the end of the fourth quarter. The company’s emphasis in 2026 is uniting all its LTL businesses under one brand, AAA Cooper Transportation. When Knight Swift started its LTL division in July 2021, it kept the AAA Cooper and Midwest Motor Express brands separate. It continued to keep the brands separate when acquiring the LTL division of Dependable Highway Express in 2024. Nevertheless, it has reversed course because the company believes it has caused confusion among existing and potential LTL shippers. “We had integrated systems from a back-end perspective between the three businesses that we have combined, [but] it was creating confusion in our sales efforts,” Miller said. “We’ve already seen [a united brand] really help us in our sales efforts to present a single face to our customers and get them comfortable with our ability to deliver across our network in a way that meets their needs.” The company’s intermodal volumes decreased 6% year over year in the fourth quarter, but revenue per load rose 2.8%. Nevertheless, the company highlighted that the division’s operating ratio was 100.1%, still losing money, but only barely, after years of significant operating losses in the business. Swift Intermodal and Hub Group are the two companies who would most benefit if federal regulators approved a deal for Union Pacific Railroad to acquire Norfolk Southern Railway. They are the only two asset-owning intermodal providers in the US who are already exclusive partners to both railroads, making any transition in 2027 relatively seamless. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Truckload shippers should expect their annual contract rates to rise by low-to mid-single-digit percentages due to the likelihood of tighter capacity this year, according to Knight-Swift Transportation. Negotiations are ongoing or about to begin with many truckload customers. The company said the momentum that propelled rates upward in December had trickled into the first couple of weeks of January, while more shippers are shifting their business from non-asset brokers to asset-based carriers. Shippers are making the move because of uneasiness about the federal government’s crackdown on non-domiciled commercial driver’s licenses (CDLs) and English language proficiency among drivers, Knight Swift said. Shippers who have spoken to the Journal of Commerce have generally said truckload rates are rising 1.5% to 3% in their 2026 bids, although some have been able to lock in unchanged rates by switching away from incumbent carriers. “What we’d be pushing for would be low-to mid-single-digit improvements in contract rates and maybe closer to mid than low,” Knight Swift CEO Adam Miller said during the company’s fourth-quarter earnings call Wednesday. “Maybe that may not align with what our customers want to see in a pre-bid. Some of this stuff is going to go into a bid to see where the market is from a balance standpoint.” Despite what Knight Swift said was a disappointing peak season, it believes capacity is fragile, as the December spot market surge in truckload showed, and more capacity will come out this year. If a disruption occurred, or manufacturing and industrial demand pick up, then capacity might become tight quickly. Knight-Swift, similar to J.B. Hunt Transport Services last week , was careful not to call the end of the freight recession. “We’ve seen head fakes before, but I think we’re feeling better about where this market is headed,” Miller said. “And we do feel better about what the [US Department of Transportation] is doing to clean up capacity in our industry.” The US Department of Transportation and Federal Motor Carrier Safety Administration, a sub-agency, have cracked down on non-domiciled CDLs issued to non-citizens who have certain types of visas, including asylum seekers. Miller also pointed out that temporary protective status is ending for countries such as Ethiopia, Haiti, and Somalia, which would disqualify those drivers from continuing to operate a truck here. “Also, there were 3,000 [driving] schools recently removed because of noncompliance and another 4,000 schools that have placed on notice for noncompliance,” Miller said. “Two of our schools at Swift were audited, and we passed with flying colors, as we’d expect. So, it is real. It is happening.” Consolidating LTL business Knight Swift said it saw some “softness” in less-than-truckload (LTL) demand toward the end of the fourth quarter. The company’s emphasis in 2026 is uniting all its LTL businesses under one brand, AAA Cooper Transportation. When Knight Swift started its LTL division in July 2021, it kept the AAA Cooper and Midwest Motor Express brands separate. It continued to keep the brands separate when acquiring the LTL division of Dependable Highway Express in 2024. Nevertheless, it has reversed course because the company believes it has caused confusion among existing and potential LTL shippers. “We had integrated systems from a back-end perspective between the three businesses that we have combined, [but] it was creating confusion in our sales efforts,” Miller said. “We’ve already seen [a united brand] really help us in our sales efforts to present a single face to our customers and get them comfortable with our ability to deliver across our network in a way that meets their needs.” The company’s intermodal volumes decreased 6% year over year in the fourth quarter, but revenue per load rose 2.8%. Nevertheless, the company highlighted that the division’s operating ratio was 100.1%, still losing money, but only barely, after years of significant operating losses in the business. Swift Intermodal and Hub Group are the two companies who would most benefit if federal regulators approved a deal for Union Pacific Railroad to acquire Norfolk Southern Railway. They are the only two asset-owning intermodal providers in the US who are already exclusive partners to both railroads, making any transition in 2027 relatively seamless. Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Truckload

Shippers will see rates climb as truckload capacity tightens: Knight Swift

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<div class="phx-topic abstract-wrapper">The appointment of Maersk’s terminals arm came just hours after Panama’s Supreme Court nullified the concessions Hutchison had held at the Balboa and Cristobal ports for almost 30 years.</div>

The appointment of Maersk’s terminals arm came just hours after Panama’s Supreme Court nullified the concessions Hutchison had held at the Balboa and Cristobal ports for almost 30 years.

<div class="phx-topic">Maersk’s APM Terminals on Friday was appointed the interim administrator of the Balboa and Cristobal terminals that bookend the Panama Canal after the country’s Supreme Court nullified the operating concessions long held by the Panama Ports Company, a subsidiary of Hutchinson Port Holdings. The Panama Maritime Authority said it hoped for an orderly and coordinated transition from Panama Ports to APMT, noting Hong Kong conglomerate CK Hutchison Holdings is a “globally recognized organization known for its strong corporate reputation.” “In this context, we trust in their constructive collaboration during this phase, for the benefit of the port system’s stability,” the maritime authority said in a statement announcing the Maersk takeover. This came a day after Panama Ports Company (PPC) <a href="https://www.joc.com/article/panama-court-voids-ck-hutchison-canal-terminal-leases-6161145">angrily rejected the Supreme Court’s decision to cancel its concessions</a>, saying the ruling “lacks legal basis and jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity, but also the rule of law and legal certainty in the country.” PPC also warned it could take national and international legal action against the Panamanian government in response to the court decision, which it said was the latest development in an ongoing campaign that included “a range of surprise actions” targeting the terminal concessions and PPC. PPC did not immediately respond to questions from the Journal of Commerce on whether it would allow APM Terminals to take over operational control of the terminals. PPC has operated the terminals at Balboa on the Pacific side of the canal and Cristobal on the Atlantic coast since 1997 following the award of an initial 25-year concession that was extended in 2021, deals the Supreme Court has now ruled unconstitutional. Hutchison had already agreed to sell the two terminals to a consortium of BlackRock’s Global Infrastructure Partners and Mediterranean Shipping Co. subsidiary Terminal Investments Limited (TiL) as part of a $22.8 billion sale of its 43 terminal operations worldwide. But the deal has run into opposition from Beijing over ties between US President Donald Trump and BlackRock leadership. The maritime authority did not say when APM Terminals would assume responsibility as temporary operator, how long its assignment would last or the process for appointing a new terminal operator. In a separate statement Friday, APM Terminals said it would begin “operations at the terminals in compliance with all legal formalities and procedures.” “This will only occur after the decision of the Supreme Court of Justice of Panama becomes final, a timeframe beyond the company’s control,” APMT said. The terminal operator said it “confirms its willingness” to temporarily assume operation of both terminals. “This aims to mitigate risks that could affect essential services for regional and global trade and to support Panama’s logistics hub,” it said. The maritime authority said Panama, as the owner of the ports, guarantees the operational continuity of the national port system, which it said were “proceeding normally, without interruption, and maintaining optimal levels of productivity, efficiency, and service quality for shipping lines and their clients.” <h3>ACP seeks developers for two new terminals </h3>The legal wrangle over PPC’s concession and APM Terminals interim appointment came as the Panama Canal Authority (ACP) announced Friday that it was asking international terminal operators to prequalify to develop two new container terminals at either end of the canal. Companies have to submit prequalification documents by April 8. The common-user terminals, estimated to cost a total of $2.6 billon, will be built in Corozal at the Pacific entrance of the canal, and Telfers lsland at the canal’s Atlantic entrance. APMT was one of the 12 terminal operators that had individual meetings in October with ACP officials to discuss the project. Others were Cosco Shipping Ports, CMA Terminals, DP World, Hanseatic Global Terminals, MOL, PSA International, SSA Marine-Grupo Carrix, Terminal Investment Limited (TiL), ONE, and Evergreen. Several already run existing terminals. SSA Marine operates Manzanillo International Terminals, while Evergreen is concessionaire for Colon Container Terminal, both on the Atlantic side of the canal. Singapore’s PSA operates its Panama International Terminal on the Pacific Coast. The two new terminals are specifically aimed at boosting Panama’s annual transshipment capacity to between 5 million TEUs and 6 million TEUs and strengthening Panama’s position as a globally competitive intermodal hub. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Maersk’s APM Terminals on Friday was appointed the interim administrator of the Balboa and Cristobal terminals that bookend the Panama Canal after the country’s Supreme Court nullified the operating concessions long held by the Panama Ports Company, a subsidiary of Hutchinson Port Holdings. The Panama Maritime Authority said it hoped for an orderly and coordinated transition from Panama Ports to APMT, noting Hong Kong conglomerate CK Hutchison Holdings is a “globally recognized organization known for its strong corporate reputation.” “In this context, we trust in their constructive collaboration during this phase, for the benefit of the port system’s stability,” the maritime authority said in a statement announcing the Maersk takeover. This came a day after Panama Ports Company (PPC) angrily rejected the Supreme Court’s decision to cancel its concessions , saying the ruling “lacks legal basis and jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity, but also the rule of law and legal certainty in the country.” PPC also warned it could take national and international legal action against the Panamanian government in response to the court decision, which it said was the latest development in an ongoing campaign that included “a range of surprise actions” targeting the terminal concessions and PPC. PPC did not immediately respond to questions from the Journal of Commerce on whether it would allow APM Terminals to take over operational control of the terminals. PPC has operated the terminals at Balboa on the Pacific side of the canal and Cristobal on the Atlantic coast since 1997 following the award of an initial 25-year concession that was extended in 2021, deals the Supreme Court has now ruled unconstitutional. Hutchison had already agreed to sell the two terminals to a consortium of BlackRock’s Global Infrastructure Partners and Mediterranean Shipping Co. subsidiary Terminal Investments Limited (TiL) as part of a $22.8 billion sale of its 43 terminal operations worldwide. But the deal has run into opposition from Beijing over ties between US President Donald Trump and BlackRock leadership. The maritime authority did not say when APM Terminals would assume responsibility as temporary operator, how long its assignment would last or the process for appointing a new terminal operator. In a separate statement Friday, APM Terminals said it would begin “operations at the terminals in compliance with all legal formalities and procedures.” “This will only occur after the decision of the Supreme Court of Justice of Panama becomes final, a timeframe beyond the company’s control,” APMT said. The terminal operator said it “confirms its willingness” to temporarily assume operation of both terminals. “This aims to mitigate risks that could affect essential services for regional and global trade and to support Panama’s logistics hub,” it said. The maritime authority said Panama, as the owner of the ports, guarantees the operational continuity of the national port system, which it said were “proceeding normally, without interruption, and maintaining optimal levels of productivity, efficiency, and service quality for shipping lines and their clients.” ACP seeks developers for two new terminals The legal wrangle over PPC’s concession and APM Terminals interim appointment came as the Panama Canal Authority (ACP) announced Friday that it was asking international terminal operators to prequalify to develop two new container terminals at either end of the canal. Companies have to submit prequalification documents by April 8. The common-user terminals, estimated to cost a total of $2.6 billon, will be built in Corozal at the Pacific entrance of the canal, and Telfers lsland at the canal’s Atlantic entrance. APMT was one of the 12 terminal operators that had individual meetings in October with ACP officials to discuss the project. Others were Cosco Shipping Ports, CMA Terminals, DP World, Hanseatic Global Terminals, MOL, PSA International, SSA Marine-Grupo Carrix, Terminal Investment Limited (TiL), ONE, and Evergreen. Several already run existing terminals. SSA Marine operates Manzanillo International Terminals, while Evergreen is concessionaire for Colon Container Terminal, both on the Atlantic side of the canal. Singapore’s PSA operates its Panama International Terminal on the Pacific Coast. The two new terminals are specifically aimed at boosting Panama’s annual transshipment capacity to between 5 million TEUs and 6 million TEUs and strengthening Panama’s position as a globally competitive intermodal hub. Contact Keith Wallis at keithwallis@hotmail.com .

APMT to run Hutchison’s Panama terminals on interim basis after court ruling 

<div class="phx-topic abstract-wrapper">Stonepeak will pay $2.4 billion to take a 25% stake in the United Ports JV while the French carrier will hold 75% and maintain operational control of the terminals involved. </div>

Stonepeak will pay $2.4 billion to take a 25% stake in the United Ports JV while the French carrier will hold 75% and maintain operational control of the terminals involved.

<div class="phx-topic">CMA CGM and private equity firm Stonepeak on Wednesday said they’ve formed a global marine terminals joint venture that involves 11 of the carrier’s major port assets in the US, South America, Europe, and Asia. Stonepeak will pay $2.4 billion to take a 25% stake in the JV, known as United Ports LLC. CMA CGM will hold 75% and maintain operational control of the terminals. The sale to Stonepeak puts the value of the terminals venture at $9.6 billion.“By joining forces with a partner with strong infrastructure expertise, we strengthen our ability to invest further in our port terminals, secure access to key gateways and enhance service quality for our customers,” CMA CGM Chief Executive Rodolphe Saadé said in a statement. Under the deal, Stonepeak has the option to contribute $3.6 billion in additional funding for future joint terminal projects, while CMA CGM said it will reinvest the initial $2.4 billion from the minority stake sale into its core business. The United Ports JV comes about 11 months after Saadé visited US President Donald Trump at the White House and <a href="https://www.joc.com/article/cma-cgm-to-invest-20-billion-in-us-shipping-ports-and-logistics-5957748">announced CMA CGM would spend $20 billion</a> over the next four years to significantly bolster its logistics presence in the US, including port assets. <h3>Los Angeles, New York terminals part of JV </h3>In the US, the terminals that will be part of the United Ports joint venture are the Fenix Marine Services (FMS) terminal in Los Angeles, and the Port Liberty Terminals in Bayonne, New Jersey. and Staten Island. United Ports will also include four container terminals in Spain: CSP Valencia, CSP Bilbao, Terminal Maritima de Guadalquivir, and TTI Algeciras. Other terminals in the joint venture include Brazil’s Santos terminal, CMA CGM’s Kaohsiung terminal in Taiwan, Nhava Sheva Freeport in India, and Vietnam’s Gemalink terminal in Cai Mep. Stonepeak is a major investor in container logistics and related infrastructure. It owns chassis provider TRAC Intermodal and has invested in cold-storage operator Lineage, container lessor Textainer and breakbulk terminal operator Logistec. “Container terminals play an essential role in global trade and are among the most difficult to substitute or replicate transportation infrastructure assets,” James Wyper, senior managing director and head of US private equity for Stonepeak, said in the statement. CMA CGM operates 41 terminals globally, according to its website, handling over 17 million TEUs annually. CMA CGM is also the majority owner of Terminal Link, a joint venture with China Merchants Port Holdings, that operates 21 terminals handling 29 million TEUs. Much of the CMA CGM terminals portfolio, as with the terminal assets of its competitors, has been assembled since liners pulled in record profits during the pandemic, providing ocean carriers a homeport in major markets. The pandemic highlighted <a href="https://www.joc.com/article/hutchison-deal-shows-thirst-of-big-carriers-to-control-global-terminal-assets-5960717">the need for ocean carriers to have operational control of terminals</a> instead of having ships wait in a queue at third-party terminals. In 2021, <a href="https://www.joc.com/article/cma-cgm-flexes-financial-might-with-fenix-marine-acquisition-5206339">it purchased the 90% share it did not already own in Fenix Marine</a>, which alone had a $2.3 billion enterprise value, according to CMA CGM. The following year, <a href="https://www.joc.com/article/cma-cgm-adds-terminal-assets-in-new-yorknew-jersey-5217593">it bought out Global Container Terminals’ leases for the Bayonne and Staten Island terminals</a>. CMA CGM terminals also formed a joint venture in 2022 with India’s JM Baxi Group for a 30-year concession on the Nhava Sheva terminal. Last year, CMA CGM began a public tender offer <a href="https://www.joc.com/article/cma-cgm-becomes-majority-shareholder-in-santos-brasil-terminal-operator-5991343">for the remaining stake it did not own in the Santos terminal</a>, a deal worth about $2.3 billion. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

CMA CGM and private equity firm Stonepeak on Wednesday said they’ve formed a global marine terminals joint venture that involves 11 of the carrier’s major port assets in the US, South America, Europe, and Asia. Stonepeak will pay $2.4 billion to take a 25% stake in the JV, known as United Ports LLC. CMA CGM will hold 75% and maintain operational control of the terminals. The sale to Stonepeak puts the value of the terminals venture at $9.6 billion. “By joining forces with a partner with strong infrastructure expertise, we strengthen our ability to invest further in our port terminals, secure access to key gateways and enhance service quality for our customers,” CMA CGM Chief Executive Rodolphe Saadé said in a statement. Under the deal, Stonepeak has the option to contribute $3.6 billion in additional funding for future joint terminal projects, while CMA CGM said it will reinvest the initial $2.4 billion from the minority stake sale into its core business. The United Ports JV comes about 11 months after Saadé visited US President Donald Trump at the White House and announced CMA CGM would spend $20 billion over the next four years to significantly bolster its logistics presence in the US, including port assets. Los Angeles, New York terminals part of JV In the US, the terminals that will be part of the United Ports joint venture are the Fenix Marine Services (FMS) terminal in Los Angeles, and the Port Liberty Terminals in Bayonne, New Jersey. and Staten Island. United Ports will also include four container terminals in Spain: CSP Valencia, CSP Bilbao, Terminal Maritima de Guadalquivir, and TTI Algeciras. Other terminals in the joint venture include Brazil’s Santos terminal, CMA CGM’s Kaohsiung terminal in Taiwan, Nhava Sheva Freeport in India, and Vietnam’s Gemalink terminal in Cai Mep. Stonepeak is a major investor in container logistics and related infrastructure. It owns chassis provider TRAC Intermodal and has invested in cold-storage operator Lineage, container lessor Textainer and breakbulk terminal operator Logistec. “Container terminals play an essential role in global trade and are among the most difficult to substitute or replicate transportation infrastructure assets,” James Wyper, senior managing director and head of US private equity for Stonepeak, said in the statement. CMA CGM operates 41 terminals globally, according to its website, handling over 17 million TEUs annually. CMA CGM is also the majority owner of Terminal Link, a joint venture with China Merchants Port Holdings, that operates 21 terminals handling 29 million TEUs. Much of the CMA CGM terminals portfolio, as with the terminal assets of its competitors, has been assembled since liners pulled in record profits during the pandemic, providing ocean carriers a homeport in major markets. The pandemic highlighted the need for ocean carriers to have operational control of terminals instead of having ships wait in a queue at third-party terminals. In 2021, it purchased the 90% share it did not already own in Fenix Marine , which alone had a $2.3 billion enterprise value, according to CMA CGM. The following year, it bought out Global Container Terminals’ leases for the Bayonne and Staten Island terminals . CMA CGM terminals also formed a joint venture in 2022 with India’s JM Baxi Group for a 30-year concession on the Nhava Sheva terminal. Last year, CMA CGM began a public tender offer for the remaining stake it did not own in the Santos terminal , a deal worth about $2.3 billion. Contact Michael Angell at michael.angell@spglobal.com .

CMA CGM forms global terminals venture with private equity firm

<div class="phx-topic abstract-wrapper">Both sides had been engaged in protracted negotiations to break the trade deadlock that had cut India’s imports to the US East Coast by more than 30% over the past six months.</div>

Both sides had been engaged in protracted negotiations to break the trade deadlock that had cut India’s imports to the US East Coast by more than 30% over the past six months.

<div class="phx-topic">The US and India on Monday said they reached a trade agreement after a months-long dispute, prompting Washington to cut tariffs on Indian goods to 18% from the 50% that went into effect last August. In a key concession, India said it would stop its purchases of Russian oil. “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” Indian Prime Minister Narendra Modi said in a statement. Both sides had been engaged in protracted negotiations to break the trade deadlock that had cut India’s imports to the US East Coast (USEC) by more than 30%. Further details, including the timeline for when the lower tariffs go into effect, were not immediately available. But the US said it would lower a “reciprocal” tariff on Indian goods from 25% to 18%, while also eliminating a separate 25% punitive tariff linked to India’s purchases of Russian oil. The lower tariffs make several Indian-made products, particularly textiles and apparel, more competitive than rival Asian sourcing markets, which augurs well for a potential trade boost between India and the US. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ae1df54b-4003-46b5-a8c3-e0d35707e941"></dynamic-object></div>“This is big news for the India-US trade,” an executive at a European ocean carrier told the Journal of Commerce. “We are hoping to see a rebound in capacity demand.” Westbound volumes on the trade lane have been under tremendous pressure since the tariff uncertainty, forcing carriers to push ocean rates down to recent lows. Carriers have also been strategically adjusting capacity through blank calls to keep supply-demand dynamics as balanced as possible. Imports from India to the USEC have fallen 32% since the trade dispute broke out, from 93,160 TEUs in August to 63,590 TEUs in December, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="893ffa5c-0a69-45c7-a555-425e44318711"></dynamic-object></div>And spot rates from India to the USEC that were $2,640 per FEU on Aug. 1 have steadily fallen since to $1,212.50 as of Jan. 30, down 54%, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Major carriers have been unable to hold on to their intended rate hikes over the past few months with little demand support emerging. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

The US and India on Monday said they reached a trade agreement after a months-long dispute, prompting Washington to cut tariffs on Indian goods to 18% from the 50% that went into effect last August. In a key concession, India said it would stop its purchases of Russian oil. “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” Indian Prime Minister Narendra Modi said in a statement. Both sides had been engaged in protracted negotiations to break the trade deadlock that had cut India’s imports to the US East Coast (USEC) by more than 30%. Further details, including the timeline for when the lower tariffs go into effect, were not immediately available. But the US said it would lower a “reciprocal” tariff on Indian goods from 25% to 18%, while also eliminating a separate 25% punitive tariff linked to India’s purchases of Russian oil. The lower tariffs make several Indian-made products, particularly textiles and apparel, more competitive than rival Asian sourcing markets, which augurs well for a potential trade boost between India and the US. “This is big news for the India-US trade,” an executive at a European ocean carrier told the Journal of Commerce. “We are hoping to see a rebound in capacity demand.” Westbound volumes on the trade lane have been under tremendous pressure since the tariff uncertainty, forcing carriers to push ocean rates down to recent lows. Carriers have also been strategically adjusting capacity through blank calls to keep supply-demand dynamics as balanced as possible. Imports from India to the USEC have fallen 32% since the trade dispute broke out, from 93,160 TEUs in August to 63,590 TEUs in December, according to PIERS, a sister product of the Journal of Commerce within S&P Global. And spot rates from India to the USEC that were $2,640 per FEU on Aug. 1 have steadily fallen since to $1,212.50 as of Jan. 30, down 54%, according to Platts, a sister company of the Journal of Commerce within S&P Global. Major carriers have been unable to hold on to their intended rate hikes over the past few months with little demand support emerging. Contact Bency Mathew at bencyvmathew@gmail.com .

Transport, Trade and Regulation News

US agrees to slash tariffs on imports from India after reaching trade deal

<div class="phx-topic abstract-wrapper">Amid new threats from Houthi militants and the arrival of a US carrier strike group in the region, carriers — and their customers — are once again wondering when they will be able to safely transit the Red Sea/Suez route.</div>

Amid new threats from Houthi militants and the arrival of a US carrier strike group in the region, carriers — and their customers — are once again wondering when they will be able to safely transit the Red Sea/Suez route.

<div class="phx-topic">Shippers on the trades linking Asia to Europe and the US East Coast hoping for a resumption of Red Sea and Suez Canal transits remain at the mercy of factors out of their control as the regional security situation deteriorates anew. A US carrier strike group has arrived in the Gulf of Oman to back up another threat by President Donald Trump to take military action against Iran, this time over the lack of progress in a nuclear deal. Tehran has vowed to respond to any attacks, which may spill over into the southern Red Sea controlled by Iran-supported Houthi militants. And that leaves carriers, and their customers, once again wondering when they will be able to safely transit the Red Sea/Suez route, more than two years after the Houthis began their attacks on commercial shipping. “Shippers are faced with the greatest challenges out there right now,” said Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “They’re at the bottom of the operational decision funnel, which leaves them more vulnerable to shocks or setbacks than any other stakeholder in the equation.” Shippers, Ozuygur told the Journal of Commerce, are forced to create a procurement strategy that “rests on their ability to surmise the behavior of carriers, insurers, politicians [and] militias.” “Even with a complex framework of decision-making tools, operational insights and the best data visibility out there, we can’t confidently predict the next six weeks, let alone the next six days in a scenario like this,” she said. The complexity that confounds shipping analysis was illustrated in developments this month. After two years of diversions around southern Africa, expectations that head-haul Suez voyages would likely resume after the Lunar New Year gathered momentum when Maersk on Jan. 15 announced that <a href="https://www.joc.com/article/maersk-set-to-resume-regular-suez-transits-on-india-usec-mecl-loop-sources-6152441">a Middle East-US East Coast service would be routed through the Red Sea</a>. But the ink was barely dry on that announcement when CMA CGM, one of the main Red Sea users over the past two years, said it would <a href="https://www.joc.com/article/cma-cgm-backs-off-plans-to-resume-suez-transits-for-asia-europe-services-6155264">scale back plans to send three Asia-Europe westbound services through the Suez</a>, citing the “complex and uncertain international context.” A week later, the Iran-backed Houthi released two videos warning that <a href="https://www.joc.com/article/latest-houthi-threat-renews-questions-about-suez-route-as-us-iran-tensions-rise-6158709">ship attacks could resume “soon,”</a> just days before the US carrier strike group led by the USS Abraham Lincoln arrived with Trump’s new attack threat on Tehran. <h3>Frustrating turn of events </h3>It has been a frustrating turn of events for shippers eager to return to the shorter Suez route. The Asia-based supply chain director for a European retailer said his company was planning for the resumption of Suez transits after Lunar New Year, which begins Feb. 17, following talks with carriers that were confident head-haul services would gradually increase. That confidence was fueled by the absence of any Houthi attacks since November, following the Israel-Hamas ceasefire the month before. “But the situation has changed again, and we are now not ready to put cargo through the Suez,” the source told the Journal of Commerce, adding that their insurance broker said cargo on ships routed through the Red Sea would not be covered in the event of an attack. Another European importer said his cargo was covered for Red Sea transits, but the high cost of premiums was prohibitive, something that remains a significant hurdle for both carriers and shippers. Marine insurance provider Allianz Commercial told the Journal of Commerce this week that cost increases for ships transiting areas requiring war insurance depended on the assessment of the Joint War Committee in London, comprised of underwriting representatives from Lloyd’s and the International Underwriting Association. “The amount of the additional premiums can be very dynamic and is evaluated by individual underwriters, typically per vessel per voyage, and reflects current developments in individual shipping areas,” a spokesperson for Allianz said. But insurance issues extend beyond costs, according to Andy Gillespie, senior logistics advisor for supply chain management firm WOWL. Shippers sending cargo through the Red Sea would need to alert insurers and obtain specific rider coverage for shipments, but he said carrier alliance networks muddied the waters. “Think of this: The carrier I book and ship with is not transiting Suez but my container with them is on a partner’s vessel that is transiting Suez,” Gillespie said. “It shouldn’t be an issue to get the riders, but shippers better be alert to which shipments will be impacted. Carriers should be communicating the routings to customers.” <h3>Security concerns make visibility difficult </h3>But that kind of visibility from carriers would be difficult to provide under the fluid security situation, believes James Hookham, director of the Global Shippers Forum. “Whether shippers and forwarders will be able to pick a ship that transits the Suez will depend on the lines publishing a schedule of their intended routes, and that might be too much information in the public domain at this time,” he said. Ozuygur also had her doubts that shippers would have the visibility they need over voyages to establish their preferred strategies of shorter transit times/high risk compared with longer transits and lower risks. “Then they must reconcile that against whether they believe the carrier will follow through on that promise, and then finally have a plan B and a plan C in place if things go sideways,” she said. “That means having a close eye on service and voyage-level data across the entire network, access to expert analysis, and visibility into carriers’ track records of transparency, communication and reliability,” Ozuygur added. According to Drewry’s Red Sea Diversion Tracker, the number of container ships sailing via the Suez Canal jumped 69% to 61 in the two-week period ending Jan. 25, from a low base of 36 transits in the previous two-week period, as large carriers and smaller niche liners balanced the changing safety risk and the potential commercial benefit of the shorter route. Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>. </div>

Shippers on the trades linking Asia to Europe and the US East Coast hoping for a resumption of Red Sea and Suez Canal transits remain at the mercy of factors out of their control as the regional security situation deteriorates anew. A US carrier strike group has arrived in the Gulf of Oman to back up another threat by President Donald Trump to take military action against Iran, this time over the lack of progress in a nuclear deal. Tehran has vowed to respond to any attacks, which may spill over into the southern Red Sea controlled by Iran-supported Houthi militants. And that leaves carriers, and their customers, once again wondering when they will be able to safely transit the Red Sea/Suez route, more than two years after the Houthis began their attacks on commercial shipping. “Shippers are faced with the greatest challenges out there right now,” said Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “They’re at the bottom of the operational decision funnel, which leaves them more vulnerable to shocks or setbacks than any other stakeholder in the equation.” Shippers, Ozuygur told the Journal of Commerce, are forced to create a procurement strategy that “rests on their ability to surmise the behavior of carriers, insurers, politicians [and] militias.” “Even with a complex framework of decision-making tools, operational insights and the best data visibility out there, we can’t confidently predict the next six weeks, let alone the next six days in a scenario like this,” she said. The complexity that confounds shipping analysis was illustrated in developments this month. After two years of diversions around southern Africa, expectations that head-haul Suez voyages would likely resume after the Lunar New Year gathered momentum when Maersk on Jan. 15 announced that a Middle East-US East Coast service would be routed through the Red Sea . But the ink was barely dry on that announcement when CMA CGM, one of the main Red Sea users over the past two years, said it would scale back plans to send three Asia-Europe westbound services through the Suez , citing the “complex and uncertain international context.” A week later, the Iran-backed Houthi released two videos warning that ship attacks could resume “soon,” just days before the US carrier strike group led by the USS Abraham Lincoln arrived with Trump’s new attack threat on Tehran. Frustrating turn of events It has been a frustrating turn of events for shippers eager to return to the shorter Suez route. The Asia-based supply chain director for a European retailer said his company was planning for the resumption of Suez transits after Lunar New Year, which begins Feb. 17, following talks with carriers that were confident head-haul services would gradually increase. That confidence was fueled by the absence of any Houthi attacks since November, following the Israel-Hamas ceasefire the month before. “But the situation has changed again, and we are now not ready to put cargo through the Suez,” the source told the Journal of Commerce, adding that their insurance broker said cargo on ships routed through the Red Sea would not be covered in the event of an attack. Another European importer said his cargo was covered for Red Sea transits, but the high cost of premiums was prohibitive, something that remains a significant hurdle for both carriers and shippers. Marine insurance provider Allianz Commercial told the Journal of Commerce this week that cost increases for ships transiting areas requiring war insurance depended on the assessment of the Joint War Committee in London, comprised of underwriting representatives from Lloyd’s and the International Underwriting Association. “The amount of the additional premiums can be very dynamic and is evaluated by individual underwriters, typically per vessel per voyage, and reflects current developments in individual shipping areas,” a spokesperson for Allianz said. But insurance issues extend beyond costs, according to Andy Gillespie, senior logistics advisor for supply chain management firm WOWL. Shippers sending cargo through the Red Sea would need to alert insurers and obtain specific rider coverage for shipments, but he said carrier alliance networks muddied the waters. “Think of this: The carrier I book and ship with is not transiting Suez but my container with them is on a partner’s vessel that is transiting Suez,” Gillespie said. “It shouldn’t be an issue to get the riders, but shippers better be alert to which shipments will be impacted. Carriers should be communicating the routings to customers.” Security concerns make visibility difficult But that kind of visibility from carriers would be difficult to provide under the fluid security situation, believes James Hookham, director of the Global Shippers Forum. “Whether shippers and forwarders will be able to pick a ship that transits the Suez will depend on the lines publishing a schedule of their intended routes, and that might be too much information in the public domain at this time,” he said. Ozuygur also had her doubts that shippers would have the visibility they need over voyages to establish their preferred strategies of shorter transit times/high risk compared with longer transits and lower risks. “Then they must reconcile that against whether they believe the carrier will follow through on that promise, and then finally have a plan B and a plan C in place if things go sideways,” she said. “That means having a close eye on service and voyage-level data across the entire network, access to expert analysis, and visibility into carriers’ track records of transparency, communication and reliability,” Ozuygur added. According to Drewry’s Red Sea Diversion Tracker, the number of container ships sailing via the Suez Canal jumped 69% to 61 in the two-week period ending Jan. 25, from a low base of 36 transits in the previous two-week period, as large carriers and smaller niche liners balanced the changing safety risk and the potential commercial benefit of the shorter route. Contact Greg Knowler at  greg.knowler@spglobal.com . 

Shippers shoulder burden of Red Sea uncertainty as regional tensions rise again

<div class="phx-topic abstract-wrapper">The India/Middle East-Mediterranean service will be the first Gemini loop in two years to transit the Red Sea, with plans for other services to follow “where possible,” the alliance partners say.</div>

The India/Middle East-Mediterranean service will be the first Gemini loop in two years to transit the Red Sea, with plans for other services to follow “where possible,” the alliance partners say.

<div class="phx-topic">Gemini Cooperation partners Maersk and Hapag-Lloyd said Tuesday that the first vessels in their ME11/IMX service will be routed through the Suez Canal in mid-February, with plans by the carriers to send two other services through the waterway. The Journal of Commerce reported on Jan. 15 that the ME11/IMX service <a href="https://www.joc.com/article/gemini-india-med-service-the-next-to-plan-return-to-red-seasuez-passage-6152941">would resume the Suez route “shortly,”</a> citing a Maersk executive. It would be the first time in more than two years that a Gemini service has transited the Red Sea. “The service in scope is the ME11 service, which connects India and the Middle East with the Mediterranean,” Maersk said in a statement. “From mid-February, changes will be implemented on westbound sailings as of the vessel Albert Maersk and on eastbound sailings as of the vessel Astrid Maersk.” On the initial westbound sailing, the Albert Maersk will depart Mundra in India on Feb. 4 after arriving from Jebel Ali in the United Arab Emirates; on the eastbound sailing, the Astrid Maersk will depart Valencia in Spain on Feb. 3. A naval escort will ride shotgun during the Red Sea passages to guard against attacks by Yemen’s Houthi militants, the Gemini statement noted. Maersk and Hapag-Lloyd also said that “where possible,” they will redirect Gemini’s AE12 Asia-Mediterranean and AE15 Asia-Turkey services through the Red Sea and Suez “at a later stage.” The carriers said further information for customers will follow, but no further changes to the Gemini network related to the Red Sea were foreseen at this stage. “We see this announcement as another important milestone for the industry,” J.P. Morgan said Tuesday in a note to customers. “It demonstrates the willingness of container shipping lines to improve flows and increase sailings via the Suez Canal.” But the investment bank said the market has yet to price in a sustained return to the Suez, which will add up to 7% of effective capacity to the global fleet. Earlier this year, Maersk made its first structural move back into the Red Sea by <a href="https://www.joc.com/article/maersk-set-to-resume-regular-suez-transits-on-india-usec-mecl-loop-sources-6152441">rerouting its standalone MECL service</a>, which links the Middle East and India with the US East Coast via the Suez Canal. <h3>Regional unease over volatile US-Iran relations </h3>The regional situation remains tense, with a US carrier strike group now stationed in the Gulf of Oman to back up threats by President Donald Trump to launch military strikes on Iran. Tehran has vowed to respond to any attacks, which may spill over into the southern Red Sea controlled by Iran-backed Houthi militants. Gemini said switching the services from around the Cape of Good Hope to Suez would be carried out in a way that keeps disruption for customers to a minimum. But in a nod to the volatile regional security situation, the Gemini statement added: “Contingency plans are in place should the security situation deteriorate, which may necessitate reverting individual sailings or the wider structural change of the ME11 service back to the Cape of Good Hope route.” Carriers have been forced to divert vessels around southern Africa since late 2023, when the Houthis began their attacks against commercial shipping to protest Israel’s move into Gaza. Maersk and Hapag-Lloyd also warned shippers to review their bookings on the ME11 service and ensure they had sufficient insurance cover for their cargo being transported through the area. <a href="https://www.joc.com/article/shippers-shoulder-burden-of-red-sea-uncertainty-as-regional-tensions-rise-again-6160632">Cargo insurance is a significant hurdle for shippers</a> with freight transiting the Red Sea. Some shippers say their insurance brokers have refused to provide cover, while others say the high cost of premiums was prohibitive. Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>.     </div>

Gemini Cooperation partners Maersk and Hapag-Lloyd said Tuesday that the first vessels in their ME11/IMX service will be routed through the Suez Canal in mid-February, with plans by the carriers to send two other services through the waterway. The Journal of Commerce reported on Jan. 15 that the ME11/IMX service would resume the Suez route “shortly,” citing a Maersk executive. It would be the first time in more than two years that a Gemini service has transited the Red Sea. “The service in scope is the ME11 service, which connects India and the Middle East with the Mediterranean,” Maersk said in a statement. “From mid-February, changes will be implemented on westbound sailings as of the vessel Albert Maersk and on eastbound sailings as of the vessel Astrid Maersk.” On the initial westbound sailing, the Albert Maersk will depart Mundra in India on Feb. 4 after arriving from Jebel Ali in the United Arab Emirates; on the eastbound sailing, the Astrid Maersk will depart Valencia in Spain on Feb. 3. A naval escort will ride shotgun during the Red Sea passages to guard against attacks by Yemen’s Houthi militants, the Gemini statement noted. Maersk and Hapag-Lloyd also said that “where possible,” they will redirect Gemini’s AE12 Asia-Mediterranean and AE15 Asia-Turkey services through the Red Sea and Suez “at a later stage.” The carriers said further information for customers will follow, but no further changes to the Gemini network related to the Red Sea were foreseen at this stage. “We see this announcement as another important milestone for the industry,” J.P. Morgan said Tuesday in a note to customers. “It demonstrates the willingness of container shipping lines to improve flows and increase sailings via the Suez Canal.” But the investment bank said the market has yet to price in a sustained return to the Suez, which will add up to 7% of effective capacity to the global fleet. Earlier this year, Maersk made its first structural move back into the Red Sea by rerouting its standalone MECL service , which links the Middle East and India with the US East Coast via the Suez Canal. Regional unease over volatile US-Iran relations The regional situation remains tense, with a US carrier strike group now stationed in the Gulf of Oman to back up threats by President Donald Trump to launch military strikes on Iran. Tehran has vowed to respond to any attacks, which may spill over into the southern Red Sea controlled by Iran-backed Houthi militants. Gemini said switching the services from around the Cape of Good Hope to Suez would be carried out in a way that keeps disruption for customers to a minimum. But in a nod to the volatile regional security situation, the Gemini statement added: “Contingency plans are in place should the security situation deteriorate, which may necessitate reverting individual sailings or the wider structural change of the ME11 service back to the Cape of Good Hope route.” Carriers have been forced to divert vessels around southern Africa since late 2023, when the Houthis began their attacks against commercial shipping to protest Israel’s move into Gaza. Maersk and Hapag-Lloyd also warned shippers to review their bookings on the ME11 service and ensure they had sufficient insurance cover for their cargo being transported through the area. Cargo insurance is a significant hurdle for shippers with freight transiting the Red Sea. Some shippers say their insurance brokers have refused to provide cover, while others say the high cost of premiums was prohibitive. Contact Greg Knowler at  greg.knowler@spglobal.com .    

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