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<div class="phx-topic abstract-wrapper">While Union Pacific plans to spend hundreds of millions of dollars to make a combined railroad run smoothly, there are locations where service could degrade should the merger be approved by federal regulators. </div>

While Union Pacific plans to spend hundreds of millions of dollars to make a combined railroad run smoothly, there are locations where service could degrade should the merger be approved by federal regulators.

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<div class="phx-topic">Union Pacific Railroad’s proposed $85 billion acquisition of Norfolk Southern Railway would set up some shippers for faster transits while others will find that new investments on some routes will come at their expense. UP will spend $507 million for dozens of rail infrastructure upgrades across what would be the newly combined network and $516 million to upgrade or expand a dozen terminals expected to see a surge in containers, automobiles and manifest trains should the merger happen. “To achieve the transit-time improvements on certain routes requires making trade-offs,” Union Pacific wrote in the <a href="https://www.joc.com/article/up-in-merger-filing-vows-to-convert-millions-of-loads-to-intermodal-annually-6138380">formal merger application</a> it filed Dec. 19 with federal regulators. “[This] requires changes that have the opposite impact on a route with less traffic.” Fresh investment will go into supporting a new single-line train from Southern California to New Jersey through Kansas City, bypassing Chicago. At UP’s Inland Empire intermodal terminal in Southern California, daily lifts are projected to rise by roughly 400%. To handle the increase, the railroad plans to invest $58 million there. The Norfolk Southern terminals in Cincinnati and Toledo, Ohio, are expected to see daily lifts more than double within three years of the merger, prompting a combined $52.5 million in planned investment. In Council Bluffs, Iowa, where lifts are projected to increase 163%, UP plans to spend $75.4 million to expand capacity. Track infrastructure supporting the trains also will be upgraded. The combined railroad would invest $136.6 million in infrastructure between Kansas City and Butler, Ind., to support faster Southern California–Northeast intermodal trains. Another $172.3 million would be spent between New Orleans and Atlanta to strengthen the Laredo and Houston intermodal trains. The money will go to more than two dozen projects to improve the tracks and bridges in those areas to handle the additional post-merger volume. Achieving that vision, however, requires trade-offs that could leave other shippers disadvantaged. Rail rivals have warned about those risks in filings with the US Surface Transportation Board (STB), arguing that UP’s merger application understates the downside. Canadian National Railway said the application omits required market analyses, while CSX Transportation wrote that UP’s growth plan relies on outdated or incomplete data, overemphasizing the benefits while masking where service would degrade. In comments filed with the STB earlier this week, the two railroads asked regulators to deem UP’s application incomplete. The STB must decide whether the application is complete before Jan. 20; if the application is deemed incomplete, UP would need to fix any deficiencies and resubmit the document before regulators can resume their review. <h3>Terminals that could be logjammed </h3>While several intermodal terminals would be expanded post-merger, others will have a sharp increase in volume but receive little or no investment. In Minneapolis, container lifts are projected to increase 343%, yet no terminal upgrades are planned. UP said the intermodal terminal would be overcapacity post-merger, only a few years after <a href="https://www.up.com/news/service/twin-cities-intermodal-it-221212">hundreds of millions</a> were poured into the facility. UP said intermodal volume increased 94% in Minneapolis between 2023 and 2024, but there was “<a href="https://www.up.com/news/growth/twin-cities-intermodal-it-250317">ample capacity remaining for future expansion</a>.” Instead, UP wrote in the application that mitigation in Minneapolis would include working with customers to reduce container dwells and exploring off-site parking options. In Tacoma, Wash., container lifts are expected to rise 44%, also without terminal investment. UP said it would seek to address capacity constraints by coordinating with the terminal operator to extend operating hours. The Tacoma terminal was one location that saw <a href="https://www.joc.com/article/tacoma-marine-terminals-grappling-with-heavy-import-rail-congestion-5706377">a massive influx in international intermodal volume</a> in 2024. At NS’s Croxton terminal in Jersey City, daily lifts would rise 67% but receive only $7.3 million in capital spending. UP said it may reopen NS’s E-Rail terminal in nearby Elizabeth, if necessary. In Atlanta, container lifts at the Austell terminal would increase by 24%. The land-constrained terminal would not receive new capital investments, but UP will revive intermodal operations in Birmingham, Ala., and NS also owns a smaller yard about 15 minutes away near downtown Atlanta. <h3>Shippers who might not benefit </h3>One group of shippers who would experience longer transits post-merger are those using trains from Southern California to Memphis and St. Louis. UP identified 191 domestic containers per day that will be removed in Greggton, Texas — between Dallas and Shreveport — and transferred to a second train to Memphis and St. Louis post-merger. On an annual basis, nearly 70,000 containers currently moving on a direct train but would face at least a four-hour layover. That delay assumes the first and second trains run on time, much like two connecting flights at an airport. UP said the Memphis diversions are necessary to build new expedited intermodal trains over the Meridian Speedway to Atlanta, Charlotte, and Jacksonville, saving shippers between 70 and 96 hours of transit time. The Meridian Speedway itself, a roughly 300-mile corridor linking Shreveport, La., and Meridian, Miss., presents additional uncertainty. UP’s merger application calls for the new trains to average nearly 11,000 feet long, but Canadian Pacific Kansas City (CPKC), which owns 75% of the Meridian joint venture to NS’s 25%, limits train lengths to 8,500 feet. UP acknowledged that Meridian Speedway expedited trains “might be split into a second train,” introducing additional dwell that would cut into the 70- to 96-hour savings. Union Pacific also highlighted how 185 intermodal routes, totaling more than 300,000 containers annually, would see fewer handlings or layovers under a post-merger operating plan. However, UP provided no details on 62 of the routes representing about 20,000 containers that would see additional handling. “Any change to train and blocking plans and any yard or terminal rationalization creates a risk of service degradation to the extent plans are flawed in design or execution,” Union Pacific wrote in its application. “[We] will not make any merger-related changes that cannot be reversed, if necessary.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Union Pacific Railroad’s proposed $85 billion acquisition of Norfolk Southern Railway would set up some shippers for faster transits while others will find that new investments on some routes will come at their expense. UP will spend $507 million for dozens of rail infrastructure upgrades across what would be the newly combined network and $516 million to upgrade or expand a dozen terminals expected to see a surge in containers, automobiles and manifest trains should the merger happen. “To achieve the transit-time improvements on certain routes requires making trade-offs,” Union Pacific wrote in the formal merger application it filed Dec. 19 with federal regulators. “[This] requires changes that have the opposite impact on a route with less traffic.” Fresh investment will go into supporting a new single-line train from Southern California to New Jersey through Kansas City, bypassing Chicago. At UP’s Inland Empire intermodal terminal in Southern California, daily lifts are projected to rise by roughly 400%. To handle the increase, the railroad plans to invest $58 million there. The Norfolk Southern terminals in Cincinnati and Toledo, Ohio, are expected to see daily lifts more than double within three years of the merger, prompting a combined $52.5 million in planned investment. In Council Bluffs, Iowa, where lifts are projected to increase 163%, UP plans to spend $75.4 million to expand capacity. Track infrastructure supporting the trains also will be upgraded. The combined railroad would invest $136.6 million in infrastructure between Kansas City and Butler, Ind., to support faster Southern California–Northeast intermodal trains. Another $172.3 million would be spent between New Orleans and Atlanta to strengthen the Laredo and Houston intermodal trains. The money will go to more than two dozen projects to improve the tracks and bridges in those areas to handle the additional post-merger volume. Achieving that vision, however, requires trade-offs that could leave other shippers disadvantaged. Rail rivals have warned about those risks in filings with the US Surface Transportation Board (STB), arguing that UP’s merger application understates the downside. Canadian National Railway said the application omits required market analyses, while CSX Transportation wrote that UP’s growth plan relies on outdated or incomplete data, overemphasizing the benefits while masking where service would degrade. In comments filed with the STB earlier this week, the two railroads asked regulators to deem UP’s application incomplete. The STB must decide whether the application is complete before Jan. 20; if the application is deemed incomplete, UP would need to fix any deficiencies and resubmit the document before regulators can resume their review. Terminals that could be logjammed While several intermodal terminals would be expanded post-merger, others will have a sharp increase in volume but receive little or no investment. In Minneapolis, container lifts are projected to increase 343%, yet no terminal upgrades are planned. UP said the intermodal terminal would be overcapacity post-merger, only a few years after hundreds of millions were poured into the facility. UP said intermodal volume increased 94% in Minneapolis between 2023 and 2024, but there was “ ample capacity remaining for future expansion .” Instead, UP wrote in the application that mitigation in Minneapolis would include working with customers to reduce container dwells and exploring off-site parking options. In Tacoma, Wash., container lifts are expected to rise 44%, also without terminal investment. UP said it would seek to address capacity constraints by coordinating with the terminal operator to extend operating hours. The Tacoma terminal was one location that saw a massive influx in international intermodal volume in 2024. At NS’s Croxton terminal in Jersey City, daily lifts would rise 67% but receive only $7.3 million in capital spending. UP said it may reopen NS’s E-Rail terminal in nearby Elizabeth, if necessary. In Atlanta, container lifts at the Austell terminal would increase by 24%. The land-constrained terminal would not receive new capital investments, but UP will revive intermodal operations in Birmingham, Ala., and NS also owns a smaller yard about 15 minutes away near downtown Atlanta. Shippers who might not benefit One group of shippers who would experience longer transits post-merger are those using trains from Southern California to Memphis and St. Louis. UP identified 191 domestic containers per day that will be removed in Greggton, Texas — between Dallas and Shreveport — and transferred to a second train to Memphis and St. Louis post-merger. On an annual basis, nearly 70,000 containers currently moving on a direct train but would face at least a four-hour layover. That delay assumes the first and second trains run on time, much like two connecting flights at an airport. UP said the Memphis diversions are necessary to build new expedited intermodal trains over the Meridian Speedway to Atlanta, Charlotte, and Jacksonville, saving shippers between 70 and 96 hours of transit time. The Meridian Speedway itself, a roughly 300-mile corridor linking Shreveport, La., and Meridian, Miss., presents additional uncertainty. UP’s merger application calls for the new trains to average nearly 11,000 feet long, but Canadian Pacific Kansas City (CPKC), which owns 75% of the Meridian joint venture to NS’s 25%, limits train lengths to 8,500 feet. UP acknowledged that Meridian Speedway expedited trains “might be split into a second train,” introducing additional dwell that would cut into the 70- to 96-hour savings. Union Pacific also highlighted how 185 intermodal routes, totaling more than 300,000 containers annually, would see fewer handlings or layovers under a post-merger operating plan. However, UP provided no details on 62 of the routes representing about 20,000 containers that would see additional handling. “Any change to train and blocking plans and any yard or terminal rationalization creates a risk of service degradation to the extent plans are flawed in design or execution,” Union Pacific wrote in its application. “[We] will not make any merger-related changes that cannot be reversed, if necessary.” Contact Ari Ashe at ari.ashe@spglobal.com .

UP–NS deal could benefit some shippers, while others face longer transits

<div class="phx-topic abstract-wrapper">The use of real-time cargo status data is expected to make trade finance more efficient, reducing credit costs and processing and payment times, the Hong Kong government said.</div>

The use of real-time cargo status data is expected to make trade finance more efficient, reducing credit costs and processing and payment times, the Hong Kong government said.

<div class="phx-topic">Hong Kong will launch a multi-modal digital cargo tracking and data exchange network in January that will initially focus on cargo flows between Hong Kong and China but is expected to be extended to other countries. Willy Lin, chairman of the Hong Kong Shippers’ Council (HKSC), said the port community system (PCS) will be a “game changer” for shippers and Hong Kong’s port community by improving cargo visibility and operational efficiencies. The use of real-time cargo status data is expected to make trade finance more efficient, reducing credit costs and processing and payment times, the Hong Kong government said. Government officials estimate the PCS could generate cost savings of $406 million a year by improving cargo handling efficiency for ocean, air and landside operators while costing a total of just $28 million to operate for the first three years. “The benefits to shippers include real time track and trace, increased transparency of the status of cargo shipments including customs clearance, and the automatic transmission of data and documents," Sunny Ho, HKSC’s executive director, told the Journal of Commerce. Ho said the system will be free for users, at least initially. “There is no promise that it will be free forever,” he said. “The system needs maintenance and regular updates, and these could be expensive. We’ve had no answers from the government on [who] would be paying for these.” Ho described the issues as “teething problems.” <h3>Wide range of expected users </h3>The Hong Kong government expects about 50,000 users, including shippers, freight forwarders, customs brokers carriers, terminal operators, airlines and trucking companies to sign up to use the system and incorporate their own digital platforms. These include Crown Logistics, which will integrate its proprietary platform, CrownCompass, with the PCS network. This will provide its customers with real-time tracking of shipments and “automate workflows for customs declarations, cargo release, and trucker assignments, significantly reducing administrative overheads,” Crown Logistics said. The system will be operated by the Hong Kong government-backed Logistics and Supply Chain MultiTech R&amp;D Centre (LSCM) to maintain its neutrality and ensure commercial confidentiality, Ho said. LSCM has signed an agreement with the Guangdong e-Port Management Company that will allow the system to complete and submit ocean manifests before vessels enter ports in South China to provide faster Chinese customs clearance. “This digital collaborative platform will provide cargo tracking functions and connect sea, land and air transport networks, enhancing cross-sector information interconnectivity and increasing the Hong Kong Port’s efficiency and overall competitiveness,” Mable Chan, Hong Kong’s secretary for transport and logistics, said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Hong Kong will launch a multi-modal digital cargo tracking and data exchange network in January that will initially focus on cargo flows between Hong Kong and China but is expected to be extended to other countries. Willy Lin, chairman of the Hong Kong Shippers’ Council (HKSC), said the port community system (PCS) will be a “game changer” for shippers and Hong Kong’s port community by improving cargo visibility and operational efficiencies. The use of real-time cargo status data is expected to make trade finance more efficient, reducing credit costs and processing and payment times, the Hong Kong government said. Government officials estimate the PCS could generate cost savings of $406 million a year by improving cargo handling efficiency for ocean, air and landside operators while costing a total of just $28 million to operate for the first three years. “The benefits to shippers include real time track and trace, increased transparency of the status of cargo shipments including customs clearance, and the automatic transmission of data and documents," Sunny Ho, HKSC’s executive director, told the Journal of Commerce. Ho said the system will be free for users, at least initially. “There is no promise that it will be free forever,” he said. “The system needs maintenance and regular updates, and these could be expensive. We’ve had no answers from the government on [who] would be paying for these.” Ho described the issues as “teething problems.” Wide range of expected users The Hong Kong government expects about 50,000 users, including shippers, freight forwarders, customs brokers carriers, terminal operators, airlines and trucking companies to sign up to use the system and incorporate their own digital platforms. These include Crown Logistics, which will integrate its proprietary platform, CrownCompass, with the PCS network. This will provide its customers with real-time tracking of shipments and “automate workflows for customs declarations, cargo release, and trucker assignments, significantly reducing administrative overheads,” Crown Logistics said. The system will be operated by the Hong Kong government-backed Logistics and Supply Chain MultiTech R&D Centre (LSCM) to maintain its neutrality and ensure commercial confidentiality, Ho said. LSCM has signed an agreement with the Guangdong e-Port Management Company that will allow the system to complete and submit ocean manifests before vessels enter ports in South China to provide faster Chinese customs clearance. “This digital collaborative platform will provide cargo tracking functions and connect sea, land and air transport networks, enhancing cross-sector information interconnectivity and increasing the Hong Kong Port’s efficiency and overall competitiveness,” Mable Chan, Hong Kong’s secretary for transport and logistics, said. Contact Keith Wallis at keithwallis@hotmail.com .

Hong Kong to launch digital cargo tracking, data exchange network

<div class="phx-topic abstract-wrapper">While some gateways are expanding their intermodal access to vie for discretionary cargo destined for inland locations, others are moving full speed ahead with capacity expansions that will allow them to handle more and larger ships. </div>

While some gateways are expanding their intermodal access to vie for discretionary cargo destined for inland locations, others are moving full speed ahead with capacity expansions that will allow them to handle more and larger ships.

<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook.The big picture: Ports along the US East and Gulf coasts rode a similar wave of strong tariff-induced imports in the first half of the year and receding volumes — with some gateways registering double-digit percentage declines — in the second half. Ongoing infrastructure expansion and upgrades will continue this year, and with volumes forecast to remain weak at least through the fourth quarter, coastal competition for discretionary cargoes is likely to heat up. A look back: Amid an up-and-down year for cargo activity spurred by stop-start US tariff actions, total laden container imports through East and Gulf coast ports rose 2.5% year over year in the first 11 months of 2025, with inbound shipments to the East Coast climbing 3% and Gulf Coast imports ticking up 0.3%, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. But those totals don’t tell the whole story. For example, annual growth rates at Port Houston, by far the busiest port on the Gulf Coast and a bellwether for the region, ranged from negative 11.5% in February to positive 33.1% in April. The Port of New York and New Jersey, the largest on either coast, handled as few as 354,697 TEUs in June and as many as 420,495 TEUs in August, a nearly 66,000-TEU swing. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135207_0.1.jpg"></img></div>Despite the month-to-month volatility, however, East and Gulf coast ports faced few delays in vessel and cargo handling. Container ships spent an average of 27.6 hours on port calls to the US East Coast in 2025 and 33.1 hours on Gulf Coast calls, according to Sea-web, also part of S&amp;P Global, both within the normal range that indicates fluid terminal operations. The South Carolina Port Authority (SC Ports) in October named Micah Mallace as its new president and CEO. Mallace, who previously served as SC Ports’ chief commercial officer before heading up a regional logistics provider, took the helm after Barbara Melvin exited following delays and cost overruns at the Port of Charleston’s yet-to-be-completed near-dock rail terminal. A look ahead: While some East and Gulf coast gateways are expanding their intermodal access to vie for discretionary cargo destined for inland locations, others are moving full speed ahead with capacity expansions that will allow them to handle more and larger ships. The Navy Base Intermodal Facility (NBIF), now expected to begin operations in October 2026, will connect Charleston’s marine terminals with Inland Ports Greer and Dillon, increasing intermodal capacity to and from Southeast markets such as Atlanta, Memphis, Nashville and Louisville. Completion of CSX Transportation’s Howard Street Tunnel project, expected in the first quarter, will allow for double-stack rail service from the Port of Baltimore, opening additional capacity to Chicago and other Midwest markets. The Port of Houston is expected to finish widening the ship channel leading into the port’s Barbours Cut terminal early in 2026, allowing for more two-way ship transits. A new wharf at Houston’s Bayport terminal, also expected at some point in 2026, will allow the terminal to handle five ships simultaneously and, eventually, vessels of up to 17,000 TEUs, which are commonly deployed on trans-Pacific services. After dredging its harbor to 50 feet, which will allow it to serve large container ships, the Port of Mobile and APM Terminals are in the process of completing a container yard expansion and other capital projects that will increase its handling capacity to just over 1 million TEUs per year. The Port of Virginia is expected to complete dredging of its harbor to 55 feet by the end of December, coinciding with the commissioning of new cranes at its Norfolk International Terminal south berth for handling ultra-large container vessels. The next inflection: Anticipating that ocean carriers will eventually deploy the ultra-large container ships currently serving the Asia-Europe trade on Asia-US East Coast routes, the Port of New York and New Jersey is looking to fund a US Army Corps of Engineers study on the feasibility of dredging to a 55-foot depth, allowing it to handle ships of 18,000 TEUs or more. The Port of Savannah will also complete upgrades to its Ocean Terminal in 2027 that will allow it to handle two post-Panamax ships simultaneously. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Ports along the US East and Gulf coasts rode a similar wave of strong tariff-induced imports in the first half of the year and receding volumes — with some gateways registering double-digit percentage declines — in the second half. Ongoing infrastructure expansion and upgrades will continue this year, and with volumes forecast to remain weak at least through the fourth quarter, coastal competition for discretionary cargoes is likely to heat up. A look back: Amid an up-and-down year for cargo activity spurred by stop-start US tariff actions, total laden container imports through East and Gulf coast ports rose 2.5% year over year in the first 11 months of 2025, with inbound shipments to the East Coast climbing 3% and Gulf Coast imports ticking up 0.3%, according to PIERS, a sister product of the Journal of Commerce within S&P Global. But those totals don’t tell the whole story. For example, annual growth rates at Port Houston, by far the busiest port on the Gulf Coast and a bellwether for the region, ranged from negative 11.5% in February to positive 33.1% in April. The Port of New York and New Jersey, the largest on either coast, handled as few as 354,697 TEUs in June and as many as 420,495 TEUs in August, a nearly 66,000-TEU swing. Despite the month-to-month volatility, however, East and Gulf coast ports faced few delays in vessel and cargo handling. Container ships spent an average of 27.6 hours on port calls to the US East Coast in 2025 and 33.1 hours on Gulf Coast calls, according to Sea-web, also part of S&P Global, both within the normal range that indicates fluid terminal operations. The South Carolina Port Authority (SC Ports) in October named Micah Mallace as its new president and CEO. Mallace, who previously served as SC Ports’ chief commercial officer before heading up a regional logistics provider, took the helm after Barbara Melvin exited following delays and cost overruns at the Port of Charleston’s yet-to-be-completed near-dock rail terminal. A look ahead: While some East and Gulf coast gateways are expanding their intermodal access to vie for discretionary cargo destined for inland locations, others are moving full speed ahead with capacity expansions that will allow them to handle more and larger ships. The Navy Base Intermodal Facility (NBIF), now expected to begin operations in October 2026, will connect Charleston’s marine terminals with Inland Ports Greer and Dillon, increasing intermodal capacity to and from Southeast markets such as Atlanta, Memphis, Nashville and Louisville. Completion of CSX Transportation’s Howard Street Tunnel project, expected in the first quarter, will allow for double-stack rail service from the Port of Baltimore, opening additional capacity to Chicago and other Midwest markets. The Port of Houston is expected to finish widening the ship channel leading into the port’s Barbours Cut terminal early in 2026, allowing for more two-way ship transits. A new wharf at Houston’s Bayport terminal, also expected at some point in 2026, will allow the terminal to handle five ships simultaneously and, eventually, vessels of up to 17,000 TEUs, which are commonly deployed on trans-Pacific services. After dredging its harbor to 50 feet, which will allow it to serve large container ships, the Port of Mobile and APM Terminals are in the process of completing a container yard expansion and other capital projects that will increase its handling capacity to just over 1 million TEUs per year. The Port of Virginia is expected to complete dredging of its harbor to 55 feet by the end of December, coinciding with the commissioning of new cranes at its Norfolk International Terminal south berth for handling ultra-large container vessels. The next inflection: Anticipating that ocean carriers will eventually deploy the ultra-large container ships currently serving the Asia-Europe trade on Asia-US East Coast routes, the Port of New York and New Jersey is looking to fund a US Army Corps of Engineers study on the feasibility of dredging to a 55-foot depth, allowing it to handle ships of 18,000 TEUs or more. The Port of Savannah will also complete upgrades to its Ocean Terminal in 2027 that will allow it to handle two post-Panamax ships simultaneously. Contact Michael Angell at michael.angell@spglobal.com .

US East, Gulf coast ports expanding intermodal access, vessel capacity

<div class="phx-topic abstract-wrapper">With demand conditions unlikely to improve in the short term, LTL carriers are putting more of their capacity, old and new, into reserve. </div>

With demand conditions unlikely to improve in the short term, LTL carriers are putting more of their capacity, old and new, into reserve.

<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook.The big picture: US less-than-truckload (LTL) carriers are girding for market changes in 2026, led by the spin-off of FedEx Freight, and hoping for a resurgence in industrial freight to help fill partially empty trailers and terminals. LTL pricing remains elevated, but continued weak demand will likely put further rate increases and carrier expansion plans on hold. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135207_0.1.jpg"></img></div>A look back: The dust thrown up by the collapse of Yellow, the third-largest LTL carrier when it declared bankruptcy in 2023, and the resulting LTL land rush finally settled last year. With almost all of Yellow’s terminals sold by November, several of the largest LTL carriers ended the year with more terminals despite having less freight to haul. But excess capacity isn’t the negative for LTL providers that it is for truckload carriers. In fact, some LTL carriers aim to keep up to 30% excess capacity in their networks to ensure freight “fluidity” and to provide surge protection and room to grow. What’s more, the LTL sector as a whole still has approximately 6% less capacity — i.e., terminals and doors — than it did before Yellow’s demise and 10% less than in 2020. That capacity shortfall has supported sustained yield and pricing gains, despite most carriers reporting a drop in average daily shipment counts. Average LTL rates in September slipped slightly after climbing to new heights in August, according to the US Bureau of Labor Statistics (BLS) long-distance LTL producer price index, but remained 9.9% higher than in September 2024 and 15.7% higher than in July 2023, the last full month Yellow was in operation. A look ahead: Shippers reported LTL pricing flattening in contract talks late last year, with some carriers offering lower rates in certain lanes to maintain density and “protect their turf.” With demand conditions unlikely to improve in the short term, LTL carriers are putting more of their capacity, old and new, into reserve. Terminals added to networks are likely to remain open, but with fewer active doors, and some lower-volume properties will likely be put in mothballs until the industrial economy gathers steam. LTL capacity may have dropped, but freight demand seems to have fallen farther, so the question now becomes how much longer carriers can avoid deeper cuts. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="44e2ce58-00cd-4b4a-88b2-950f4328ca58"></dynamic-object></div>The next inflection: Unlike their truckload counterparts, LTL carriers can’t rely on capacity cuts alone to drive rate growth. With more than half of LTL freight generated by domestic manufacturing, LTL operators need an industrial revival, but ongoing political and economic uncertainty makes that an unlikely proposition. Carriers are also hoping that lower interest and tax rates will boost consumer spending to an extent that would lift manufacturing output. If, on the other hand, demand continues to fall, that would put more pressure on LTL networks and the industry’s famed “pricing discipline.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: US less-than-truckload (LTL) carriers are girding for market changes in 2026, led by the spin-off of FedEx Freight, and hoping for a resurgence in industrial freight to help fill partially empty trailers and terminals. LTL pricing remains elevated, but continued weak demand will likely put further rate increases and carrier expansion plans on hold. A look back: The dust thrown up by the collapse of Yellow, the third-largest LTL carrier when it declared bankruptcy in 2023, and the resulting LTL land rush finally settled last year. With almost all of Yellow’s terminals sold by November, several of the largest LTL carriers ended the year with more terminals despite having less freight to haul. But excess capacity isn’t the negative for LTL providers that it is for truckload carriers. In fact, some LTL carriers aim to keep up to 30% excess capacity in their networks to ensure freight “fluidity” and to provide surge protection and room to grow. What’s more, the LTL sector as a whole still has approximately 6% less capacity — i.e., terminals and doors — than it did before Yellow’s demise and 10% less than in 2020. That capacity shortfall has supported sustained yield and pricing gains, despite most carriers reporting a drop in average daily shipment counts. Average LTL rates in September slipped slightly after climbing to new heights in August, according to the US Bureau of Labor Statistics (BLS) long-distance LTL producer price index, but remained 9.9% higher than in September 2024 and 15.7% higher than in July 2023, the last full month Yellow was in operation. A look ahead: Shippers reported LTL pricing flattening in contract talks late last year, with some carriers offering lower rates in certain lanes to maintain density and “protect their turf.” With demand conditions unlikely to improve in the short term, LTL carriers are putting more of their capacity, old and new, into reserve. Terminals added to networks are likely to remain open, but with fewer active doors, and some lower-volume properties will likely be put in mothballs until the industrial economy gathers steam. LTL capacity may have dropped, but freight demand seems to have fallen farther, so the question now becomes how much longer carriers can avoid deeper cuts. The next inflection: Unlike their truckload counterparts, LTL carriers can’t rely on capacity cuts alone to drive rate growth. With more than half of LTL freight generated by domestic manufacturing, LTL operators need an industrial revival, but ongoing political and economic uncertainty makes that an unlikely proposition. Carriers are also hoping that lower interest and tax rates will boost consumer spending to an extent that would lift manufacturing output. If, on the other hand, demand continues to fall, that would put more pressure on LTL networks and the industry’s famed “pricing discipline.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

US LTL providers carefully managing capacity in changing market

<div class="phx-topic abstract-wrapper">Developers expect vacancy rates to drop as shippers that had been paralyzed by US tariff uncertainty set more long-term plans in motion.</div>

Developers expect vacancy rates to drop as shippers that had been paralyzed by US tariff uncertainty set more long-term plans in motion.

<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Demand from third-party logistics providers (3PLs) is fueling continued growth in US warehousing and fulfillment space, despite relatively high national vacancy rates and depressed freight volumes. In the longer term, the big opportunity for industrial real estate developers is in data center development, which will continue to drive construction for several years. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135206_0.1.jpg"></img></div>A look back: After years of rampant construction, many of the warehousing projects that were launched during the COVID-19 pandemic came online in 2025, creating more capacity and raising vacancy rates. The national US industrial vacancy rate rose to 7.6% in the third quarter from 6.8% in the same 2024 period, exceeding the pre-pandemic average of 7.1%, according to real estate services firm Jones Lang LaSalle’s (JLL’s) latest US Industrial Market Dynamics report. Waves of US imports frontloaded ahead of higher tariffs — and the changing distribution needs created by those tariffs — helped fill some of that space. And certain sectors, such as bonded warehousing, saw especially high demand due to the tariff uncertainty. At the same time, demand for newer, larger, more sophisticated facilities with technology, especially AI, built into their design continued to grow. “More than 41% of our addressable population are now using our proprietary AI tools daily, up from 35% earlier this year,” JLL CEO Christian Ulbrich said during a Nov. 5 earnings call. US leasing volume totaled 146.2 million square feet in the third quarter, the highest since the first quarter of 2024, while the US development pipeline increased to 246.8 million square feet, the first increase in 12 quarters, JLL said in the report. A look ahead: Developers expect vacancy rates to drop as shippers that had been paralyzed by US tariff uncertainty set more long-term plans in motion. E-commerce trends that helped launch the pandemic-era warehousing boom are still in place, and 3PLs are looking for new, multi-use facilities for their shipper clients. But AI data centers are likely to steal the limelight in the industrial construction market. “Inevitably, it’s going to be a big build cycle over the next five years, maybe longer,” Robert E. Sulentic, CEO of CBRE, said during an October earnings call. “We expect data centers to be around 10% of our earnings this year, and more next year.” Although they employ relatively few people once completed, data centers require large amounts of land and energy. Those developments will compete with logistics warehousing, which also requires increasing amounts of land. Even as companies absorb projects begun two or three years ago, they are still adding facilities to their networks to build greater density and position their operations even closer to customers. Buildings that were once basically empty “shells” are now filled with robots and conveyor systems, Sulentic said. The next inflection: The logistics warehousing market didn’t tighten as expected in 2025, and developers are cagey about when a real resurgence may take place. The fact that shippers and their logistics partners are becoming desensitized to “short-term noise,” as Prologis executives put it, about tariffs bodes well for demand. “Overall, they need to make these long-term decisions and can no longer be held back,” CFO Timothy Arndt said during the developer’s third-quarter earnings call. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Demand from third-party logistics providers (3PLs) is fueling continued growth in US warehousing and fulfillment space, despite relatively high national vacancy rates and depressed freight volumes. In the longer term, the big opportunity for industrial real estate developers is in data center development, which will continue to drive construction for several years. A look back: After years of rampant construction, many of the warehousing projects that were launched during the COVID-19 pandemic came online in 2025, creating more capacity and raising vacancy rates. The national US industrial vacancy rate rose to 7.6% in the third quarter from 6.8% in the same 2024 period, exceeding the pre-pandemic average of 7.1%, according to real estate services firm Jones Lang LaSalle’s (JLL’s) latest US Industrial Market Dynamics report. Waves of US imports frontloaded ahead of higher tariffs — and the changing distribution needs created by those tariffs — helped fill some of that space. And certain sectors, such as bonded warehousing, saw especially high demand due to the tariff uncertainty. At the same time, demand for newer, larger, more sophisticated facilities with technology, especially AI, built into their design continued to grow. “More than 41% of our addressable population are now using our proprietary AI tools daily, up from 35% earlier this year,” JLL CEO Christian Ulbrich said during a Nov. 5 earnings call. US leasing volume totaled 146.2 million square feet in the third quarter, the highest since the first quarter of 2024, while the US development pipeline increased to 246.8 million square feet, the first increase in 12 quarters, JLL said in the report. A look ahead: Developers expect vacancy rates to drop as shippers that had been paralyzed by US tariff uncertainty set more long-term plans in motion. E-commerce trends that helped launch the pandemic-era warehousing boom are still in place, and 3PLs are looking for new, multi-use facilities for their shipper clients. But AI data centers are likely to steal the limelight in the industrial construction market. “Inevitably, it’s going to be a big build cycle over the next five years, maybe longer,” Robert E. Sulentic, CEO of CBRE, said during an October earnings call. “We expect data centers to be around 10% of our earnings this year, and more next year.” Although they employ relatively few people once completed, data centers require large amounts of land and energy. Those developments will compete with logistics warehousing, which also requires increasing amounts of land. Even as companies absorb projects begun two or three years ago, they are still adding facilities to their networks to build greater density and position their operations even closer to customers. Buildings that were once basically empty “shells” are now filled with robots and conveyor systems, Sulentic said. The next inflection: The logistics warehousing market didn’t tighten as expected in 2025, and developers are cagey about when a real resurgence may take place. The fact that shippers and their logistics partners are becoming desensitized to “short-term noise,” as Prologis executives put it, about tariffs bodes well for demand. “Overall, they need to make these long-term decisions and can no longer be held back,” CFO Timothy Arndt said during the developer’s third-quarter earnings call. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Warehousing vacancies hit new peak, but larger facilities still needed

<div class="phx-topic abstract-wrapper">Airlines will continue to adjust capacity to account for shifts in volume, but the volatility of US trade policy and continued demand growth fueled by the AI boom will make this more difficult.</div>

Airlines will continue to adjust capacity to account for shifts in volume, but the volatility of US trade policy and continued demand growth fueled by the AI boom will make this more difficult.

<div class="phx-topic">The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Continued growth in demand for AI components and cross-border e-commerce goods out of Asia will strain air cargo capacity during peak volume periods in 2026. The construction of massive AI data centers around the world will require huge volumes of semiconductors and other high-tech products, and the need for rapid delivery will continue to drive Asian e-commerce shipments to the air. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6135206_0.1.jpg"></img></div>A look back: China’s main e-commerce platforms — Shein, Temu and TikTok — dominated trans-Pacific air cargo in 2024, and that continued into 2025. But when the Trump administration eliminated the so-called de minimis exemption for products made in China — which allowed goods valued under $800 to enter the country without paying tariffs — more than 2 million daily e-commerce shipments from China began stacking up at US airports. After briefly restoring the exemption while US Customs and Border Protection devised an appropriate inspection and duty collection system, the administration eliminated it for good on May 2. As a result, China-US air freight traffic plummeted, but those losses were largely offset by increased volumes from Southeast Asia to the US, as well as from Asia to Latin America and Europe. And even as airlines shifted freighters to those other trade routes, China’s air cargo exports began to recover in the fourth quarter. A look ahead: Airlines will continue to adjust capacity to account for shifts in volume, but the volatility of US trade policy and continued demand growth fueled by the AI boom will make this more difficult. Semiconductors to support strategically located AI data centers will boost air freight volumes, particularly from Taiwan, the largest global semiconductor supplier, and Vietnam, which is increasing its own semiconductor manufacturing capabilities. Those volumes will add to existing e-commerce demand, with online shopping now firmly entrenched in the global consumer system, keeping freighters full on the major trades out of Asia. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ae1f9fa5-ad71-4401-bf34-f607e9979a4d"></dynamic-object></div>The next inflection: In the longer term, new freighters coming online and increased belly space in passenger aircraft could cause available space to outstrip air cargo volumes. Although the excess capacity will not be uniform across all trade lanes, any supply-demand imbalance and resulting pressure on profitability will influence airlines’ approach to the market. They could, for example, become more selective with fixed-rate contracts, preferring shorter and more flexible deals that prioritize yields over volume. At the same time, forwarders will be competing fiercely for market share on the major trades out of Asia, putting further downward pressure on rates. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The following is part of the Journal of Commerce’s 2026 Annual Review and Outlook. The big picture: Continued growth in demand for AI components and cross-border e-commerce goods out of Asia will strain air cargo capacity during peak volume periods in 2026. The construction of massive AI data centers around the world will require huge volumes of semiconductors and other high-tech products, and the need for rapid delivery will continue to drive Asian e-commerce shipments to the air. A look back: China’s main e-commerce platforms — Shein, Temu and TikTok — dominated trans-Pacific air cargo in 2024, and that continued into 2025. But when the Trump administration eliminated the so-called de minimis exemption for products made in China — which allowed goods valued under $800 to enter the country without paying tariffs — more than 2 million daily e-commerce shipments from China began stacking up at US airports. After briefly restoring the exemption while US Customs and Border Protection devised an appropriate inspection and duty collection system, the administration eliminated it for good on May 2. As a result, China-US air freight traffic plummeted, but those losses were largely offset by increased volumes from Southeast Asia to the US, as well as from Asia to Latin America and Europe. And even as airlines shifted freighters to those other trade routes, China’s air cargo exports began to recover in the fourth quarter. A look ahead: Airlines will continue to adjust capacity to account for shifts in volume, but the volatility of US trade policy and continued demand growth fueled by the AI boom will make this more difficult. Semiconductors to support strategically located AI data centers will boost air freight volumes, particularly from Taiwan, the largest global semiconductor supplier, and Vietnam, which is increasing its own semiconductor manufacturing capabilities. Those volumes will add to existing e-commerce demand, with online shopping now firmly entrenched in the global consumer system, keeping freighters full on the major trades out of Asia. The next inflection: In the longer term, new freighters coming online and increased belly space in passenger aircraft could cause available space to outstrip air cargo volumes. Although the excess capacity will not be uniform across all trade lanes, any supply-demand imbalance and resulting pressure on profitability will influence airlines’ approach to the market. They could, for example, become more selective with fixed-rate contracts, preferring shorter and more flexible deals that prioritize yields over volume. At the same time, forwarders will be competing fiercely for market share on the major trades out of Asia, putting further downward pressure on rates. Contact Greg Knowler at greg.knowler@spglobal.com .

E-commerce, AI demand to keep ex-Asia air freight under pressure

<div class="phx-topic abstract-wrapper">While there is little doubt that heightened regulatory enforcement has played some role in affecting dry-van truckload capacity in the fourth quarter of 2025, efforts to attribute the sharp rise in spot prices this month to regulatory enforcement are premature, writes Jason Miller. </div>

While there is little doubt that heightened regulatory enforcement has played some role in affecting dry-van truckload capacity in the fourth quarter of 2025, efforts to attribute the sharp rise in spot prices this month to regulatory enforcement are premature, writes Jason Miller.

<div class="phx-topic">As we enter 2026, questions swirl about dry-van truckload capacity, especially following the sharp rise in dry-van truckload spot rates in December coupled with extensive discourse about heightened regulatory enforcement. By my estimate, adjusting for fuel prices, dry-van truckload spot rates were up 9% year over year this month and posted the best single-month increase in over five years. While we will need to wait until February to fully understand if this rate increase was simply a super-seasonal spike, this analysis on dry-van truckload capacity and demand dynamics in 2025 provides a sense of likely market behavior in 2026. Beginning with supply, administrative records data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages show a substantial exodus of dry-van truckload capacity since early 2023, with an estimated capacity decline of 7.5% as of June 2025 (the most recently available data). Capacity exit was particularly pronounced during 2024 and continued unabated through June 2025. My estimate places June 2025 payrolls down 2.7% from the prior year. Crucially, this is before heightened regulatory and immigration enforcement could play a significant role. As such, efforts to attribute the sharp rise in dry-van truckload spot prices this month to regulatory enforcement are premature. While there is little doubt that heightened regulatory enforcement has played some role in affecting capacity in the fourth quarter of 2025, especially among <a href="https://www.nytimes.com/2025/12/21/business/sikhs-truckers-trump-crackdown.html">immigrant drivers</a>, much of the tightening we saw this month may simply be due to lower supply amid a market-driven exit. Combining this payroll data with dynamics observed for separate nonemployer data — which captures leased owner-operators and for-hire owner-operators — my sense is dry van truckload payrolls have fallen to the levels we saw in 2017. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b62cb6b6-bbe2-4084-b568-3eb5e249d70e"></dynamic-object></div>Turning to demand, quarterly aggregates of the seasonally adjusted trucking ton-mile index show the third quarter of 2025’s year-over-year ton-mile growth was 0.8%. This represents a slow rate of demand growth compared with what we have observed in prior expansionary pricing cycles. For example, the third quarter of 2017 saw ton-miles of demand increase 2.4% from the third quarter of 2016, with the caveat that output was constrained by Hurricane Harvey’s landfall. The fourth quarter of 2017 saw ton-miles of demand increase 3.7% from fourth-quarter 2016 levels. Demand then grew at a 3% to 3.7% year-over-year basis for the first quarter of 2018 through the third quarter of 2018. Demand growth slowed in the fourth quarter of 2018 before dropping significantly in 2019, a year recognized as a freight recession. Industrial production data for the fourth quarter of 2025 suggests that year-over-year growth in ton-miles of demand was likely less than the third quarter of 2025’s 0.8% figure. Combined with ongoing weakness in manufacturing demand as captured by multiple regional manufacturing surveys from Federal Reserve Banks, ongoing weakness in <a href="https://www.dallasfed.org/research/surveys/des/2025/2504">oil and gas activity</a>, and continued soft activity in <a href="https://fred.stlouisfed.org/graph/?g=1PwqO">single-family housing</a> as well as <a href="https://fred.stlouisfed.org/graph/?g=1Pwru">multifamily housing</a>, growth in freight demand in 2026 is likely to remain low compared with what is normally observed during expansionary pricing environments. <h3>Expectations for 2026 </h3>What does this mean for pricing and capacity in 2026? As firms do not expand capacity in response to transient <a href="https://academic.oup.com/ej/article/131/634/598/5873665">increases in demand or prices</a>, dry-van carriers will likely want to observe how spot rates evolve over the next few months. Over the past few years, fuel-adjusted dry-van truckload spot rates in January have remained at or even slightly above levels observed in the prior December. This dynamic held in December 2023 to January 2024 and December 2024 to January 2025. As such, the first thing I will look for is whether spot rates drop in January, but the more significant test is February. If dry-van truckload spot rates hold at current levels in January and February, this is likely to signal to carriers that more supply is needed. This will cause some firms to take action to add capacity, such as ordering more equipment. Historically, year-over-year changes in spot truckload rates are the best predictor of year-over-year changes in <a href="https://doi.org/10.5325/transportationj.61.2.0151">new Class 8 truck orders</a>, suggesting market participants should closely watch where first-quarter 2026 new Class 8 orders land. My sense is carriers acting in the first quarter to add capacity would put more capacity on the road by late third-quarter and early fourth-quarter 2026. Given my expectation that demand growth in 2026 will be slow, this suggests even if an expansionary pricing cycle were to occur in 2026 due primarily to a contraction in supply, these conditions will be shorter-lived and feature smaller price increases on a percentage basis than what occurred during the 2017–18 and 2020–22 expansionary cycles. Jason Miller is an associate professor of logistics at Michigan State University. Contact him at <a href="mailto:mill2831@broad.msu.edu">mill2831@broad.msu.edu</a>. </div>

As we enter 2026, questions swirl about dry-van truckload capacity, especially following the sharp rise in dry-van truckload spot rates in December coupled with extensive discourse about heightened regulatory enforcement. By my estimate, adjusting for fuel prices, dry-van truckload spot rates were up 9% year over year this month and posted the best single-month increase in over five years. While we will need to wait until February to fully understand if this rate increase was simply a super-seasonal spike, this analysis on dry-van truckload capacity and demand dynamics in 2025 provides a sense of likely market behavior in 2026. Beginning with supply, administrative records data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages show a substantial exodus of dry-van truckload capacity since early 2023, with an estimated capacity decline of 7.5% as of June 2025 (the most recently available data). Capacity exit was particularly pronounced during 2024 and continued unabated through June 2025. My estimate places June 2025 payrolls down 2.7% from the prior year. Crucially, this is before heightened regulatory and immigration enforcement could play a significant role. As such, efforts to attribute the sharp rise in dry-van truckload spot prices this month to regulatory enforcement are premature. While there is little doubt that heightened regulatory enforcement has played some role in affecting capacity in the fourth quarter of 2025, especially among immigrant drivers , much of the tightening we saw this month may simply be due to lower supply amid a market-driven exit. Combining this payroll data with dynamics observed for separate nonemployer data — which captures leased owner-operators and for-hire owner-operators — my sense is dry van truckload payrolls have fallen to the levels we saw in 2017. Turning to demand, quarterly aggregates of the seasonally adjusted trucking ton-mile index show the third quarter of 2025’s year-over-year ton-mile growth was 0.8%. This represents a slow rate of demand growth compared with what we have observed in prior expansionary pricing cycles. For example, the third quarter of 2017 saw ton-miles of demand increase 2.4% from the third quarter of 2016, with the caveat that output was constrained by Hurricane Harvey’s landfall. The fourth quarter of 2017 saw ton-miles of demand increase 3.7% from fourth-quarter 2016 levels. Demand then grew at a 3% to 3.7% year-over-year basis for the first quarter of 2018 through the third quarter of 2018. Demand growth slowed in the fourth quarter of 2018 before dropping significantly in 2019, a year recognized as a freight recession. Industrial production data for the fourth quarter of 2025 suggests that year-over-year growth in ton-miles of demand was likely less than the third quarter of 2025’s 0.8% figure. Combined with ongoing weakness in manufacturing demand as captured by multiple regional manufacturing surveys from Federal Reserve Banks, ongoing weakness in oil and gas activity , and continued soft activity in single-family housing as well as multifamily housing , growth in freight demand in 2026 is likely to remain low compared with what is normally observed during expansionary pricing environments. Expectations for 2026 What does this mean for pricing and capacity in 2026? As firms do not expand capacity in response to transient increases in demand or prices , dry-van carriers will likely want to observe how spot rates evolve over the next few months. Over the past few years, fuel-adjusted dry-van truckload spot rates in January have remained at or even slightly above levels observed in the prior December. This dynamic held in December 2023 to January 2024 and December 2024 to January 2025. As such, the first thing I will look for is whether spot rates drop in January, but the more significant test is February. If dry-van truckload spot rates hold at current levels in January and February, this is likely to signal to carriers that more supply is needed. This will cause some firms to take action to add capacity, such as ordering more equipment. Historically, year-over-year changes in spot truckload rates are the best predictor of year-over-year changes in new Class 8 truck orders , suggesting market participants should closely watch where first-quarter 2026 new Class 8 orders land. My sense is carriers acting in the first quarter to add capacity would put more capacity on the road by late third-quarter and early fourth-quarter 2026. Given my expectation that demand growth in 2026 will be slow, this suggests even if an expansionary pricing cycle were to occur in 2026 due primarily to a contraction in supply, these conditions will be shorter-lived and feature smaller price increases on a percentage basis than what occurred during the 2017–18 and 2020–22 expansionary cycles. Jason Miller is an associate professor of logistics at Michigan State University. Contact him at mill2831@broad.msu.edu .

Separating myth from reality in dry-van truckload capacity

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

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

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

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

Strategic vision of UP-NS merger must meet operational reality

 Actual capacity

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Planned capacity

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eeSea collects and centralizes liner network data from dozens of public sources including carriers’ vessel tracking portals, long-term schedules, customer advisories, port and terminal operator schedules, and pilot schedules. These disparate datasets are continually inspected, cleaned, and carefully structured. eeSea synthesizes this refined public data with AIS positions from a third-party provider and its datasets spanning schedule reliability, transit times, trade capacity evolution, and 60-day vessel forecasts. Capacity is measured based on the last load port in Europe. [eeSea](https://www.eesea.com)

North Europe to US East and Gulf coasts container capacity (eeSea)

Northern Europe to US East and Gulf Coasts Container Capacity and Deployment (eeSea) Gateway

<div class="phx-topic abstract-wrapper">The carrier is now including calls at Malta, Port Said (Egypt) and Beirut on the weekly Medex itinerary, replacing Valencia and Barcelona in Spain and For-sur-Mer in France.</div>

The carrier is now including calls at Malta, Port Said (Egypt) and Beirut on the weekly Medex itinerary, replacing Valencia and Barcelona in Spain and For-sur-Mer in France.

<div class="phx-topic">CMA CGM has reorganized the port rotation of its India-Middle East-West Mediterranean “Medex” service that it switched over <a href="https://www.joc.com/article/cma-cgm-unveils-plans-for-suez-return-on-india-mediterranean-service-6012039">to a Red Sea schedule in June</a>. The carrier is now including calls at Malta, Port Said (Egypt) and Beirut on the weekly Medex itinerary, replacing Valencia and Barcelona in Spain and For-sur-Mer in France. “As part of this enhancement, the overall rotation duration will be reduced from 70 days to 63 days..,” CMA CGM (India) said in a customer advisory. “This optimization will enable more frequent sailings and enhanced capacity through additional departures, thereby offering greater flexibility and improved connectivity.” The carrier said it will continue to serve the three dropped ports of call via transshipment. The full updated rotation is Abu Dhabi, Jebel Ali, Mundra, Nhava Sheva, Colombo, Jeddah, Port Said, Piraeus, Malta, Genoa, Beirut, Port Said, Jeddah and back to Abu Dhabi. For Indian loads, the changes are due to begin with the CMA CGM Pelleas that has an estimated time of arrival of Jan. 7 in Mundra. The revised rotation allows the carrier to run the string with nine vessels, compared with the 10 ships it needed to deploy previously. Cosco Shipping has a slot charter deal with CMA CGM on the Medex, with space allotments pegged at approximately 1,000 TEUs out of India per week. India-Mediterranean trades have been the target of a new crop of opportunistic regional carriers over the past year, especially multiple Turkish lines and some others backed by non-vessel-operating common carriers. The new entrants have caused serious market share setbacks for traditional mainline heavyweights, particularly CMA CGM. <h3>Spot rates fall on capacity boost </h3>With the Medex’s enhanced capacity, signs of a downward correction in rates are emerging. Sources have reported a sharp drop in spot rates for loads from Nhava Sheva to Port Said for late-January CMA CGM sailings — down to $2,350 per TEU and $2,300 per FEU, from $3,250 and $2,800, respectively, quoted for early-January sailings. On a broader note, the Medex rotation reset comes as CMA CGM is set to resume Suez Canal transits for its India-US East Coast “Indamex” loop from next month, although it is believed that the carrier still needs to position two more vessels in India to offer a weekly rotation under the normal itinerary. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM has reorganized the port rotation of its India-Middle East-West Mediterranean “Medex” service that it switched over to a Red Sea schedule in June . The carrier is now including calls at Malta, Port Said (Egypt) and Beirut on the weekly Medex itinerary, replacing Valencia and Barcelona in Spain and For-sur-Mer in France. “As part of this enhancement, the overall rotation duration will be reduced from 70 days to 63 days..,” CMA CGM (India) said in a customer advisory. “This optimization will enable more frequent sailings and enhanced capacity through additional departures, thereby offering greater flexibility and improved connectivity.” The carrier said it will continue to serve the three dropped ports of call via transshipment. The full updated rotation is Abu Dhabi, Jebel Ali, Mundra, Nhava Sheva, Colombo, Jeddah, Port Said, Piraeus, Malta, Genoa, Beirut, Port Said, Jeddah and back to Abu Dhabi. For Indian loads, the changes are due to begin with the CMA CGM Pelleas that has an estimated time of arrival of Jan. 7 in Mundra. The revised rotation allows the carrier to run the string with nine vessels, compared with the 10 ships it needed to deploy previously. Cosco Shipping has a slot charter deal with CMA CGM on the Medex, with space allotments pegged at approximately 1,000 TEUs out of India per week. India-Mediterranean trades have been the target of a new crop of opportunistic regional carriers over the past year, especially multiple Turkish lines and some others backed by non-vessel-operating common carriers. The new entrants have caused serious market share setbacks for traditional mainline heavyweights, particularly CMA CGM. Spot rates fall on capacity boost With the Medex’s enhanced capacity, signs of a downward correction in rates are emerging. Sources have reported a sharp drop in spot rates for loads from Nhava Sheva to Port Said for late-January CMA CGM sailings — down to $2,350 per TEU and $2,300 per FEU, from $3,250 and $2,800, respectively, quoted for early-January sailings. On a broader note, the Medex rotation reset comes as CMA CGM is set to resume Suez Canal transits for its India-US East Coast “Indamex” loop from next month, although it is believed that the carrier still needs to position two more vessels in India to offer a weekly rotation under the normal itinerary. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM reworks India-Med loop rotation to streamline Red Sea operations

<div class="phx-topic abstract-wrapper">Current anti-trust protections “have enabled foreign-owned shipping lines to exert disproportionate control over pricing and service levels” in Australia’s maritime industry, the head of a leading shipper group in the country says. </div>

Current anti-trust protections “have enabled foreign-owned shipping lines to exert disproportionate control over pricing and service levels” in Australia’s maritime industry, the head of a leading shipper group in the country says.

<div class="phx-topic">Shipper groups in Australia will urge the abolition of ocean carrier anti-trust immunity and the implementation of legal controls on port and related fees in their submission to a government inquiry into productivity within the country’s maritime and logistics sectors. While groups are still drafting their filing, Paul Zalai, director of the Freight &amp; Trade Alliance (FTA), said the focus will be on the two most contentious issues facing shippers in Australia. “The FTA and the Australian Peak Shippers Association [ASPA] consider both the end of anti-trust immunity and the introduction of a mandatory port-related fees code central to improving productivity, resilience and competitiveness in Australia’s freight supply chains,” Zalai told the Journal of Commerce. Current anti-trust protections “have enabled foreign-owned shipping lines to exert disproportionate control over pricing and service levels, stifling competition, raising costs, and undermining supply chain resilience in our trade-dependent economy,” Zalai said. On the matter of landside fees, Zalai said terminal and container park operators should charge their direct shipping line customers, who can then decide whether to absorb the fees or recover the costs from importers, exporters and freight forwarders. “But under current arrangements, stevedores and container parks impose incontestable landside fees directly on road and rail transport operators, bypassing normal commercial negotiation and distorting market dynamics,” he said. The FTA and ASPA, which together represent more than 550 businesses and trade bodies, were invited to make submissions just before Christmas by a Senate select committee set up to investigate productivity in Australian industry. Filings are due by Feb. 20, with a report scheduled for release by Sept. 30. Explaining the rationale for the probe, the Senate said that “global and domestic freight disruptions continue to destabilize the supply chain, leading to congestion, delays and higher costs.” Among the issues the Senate committee will consider are whether harmonized freight and logistics regulations would better support Australia’s economy; how disrupted freight supply chains have impacted Australia’s infrastructure resilience; and how fit-for-purpose freight infrastructure can encourage productivity growth. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Shipper groups in Australia will urge the abolition of ocean carrier anti-trust immunity and the implementation of legal controls on port and related fees in their submission to a government inquiry into productivity within the country’s maritime and logistics sectors. While groups are still drafting their filing, Paul Zalai, director of the Freight & Trade Alliance (FTA), said the focus will be on the two most contentious issues facing shippers in Australia. “The FTA and the Australian Peak Shippers Association [ASPA] consider both the end of anti-trust immunity and the introduction of a mandatory port-related fees code central to improving productivity, resilience and competitiveness in Australia’s freight supply chains,” Zalai told the Journal of Commerce. Current anti-trust protections “have enabled foreign-owned shipping lines to exert disproportionate control over pricing and service levels, stifling competition, raising costs, and undermining supply chain resilience in our trade-dependent economy,” Zalai said. On the matter of landside fees, Zalai said terminal and container park operators should charge their direct shipping line customers, who can then decide whether to absorb the fees or recover the costs from importers, exporters and freight forwarders. “But under current arrangements, stevedores and container parks impose incontestable landside fees directly on road and rail transport operators, bypassing normal commercial negotiation and distorting market dynamics,” he said. The FTA and ASPA, which together represent more than 550 businesses and trade bodies, were invited to make submissions just before Christmas by a Senate select committee set up to investigate productivity in Australian industry. Filings are due by Feb. 20, with a report scheduled for release by Sept. 30. Explaining the rationale for the probe, the Senate said that “global and domestic freight disruptions continue to destabilize the supply chain, leading to congestion, delays and higher costs.” Among the issues the Senate committee will consider are whether harmonized freight and logistics regulations would better support Australia’s economy; how disrupted freight supply chains have impacted Australia’s infrastructure resilience; and how fit-for-purpose freight infrastructure can encourage productivity growth. Contact Keith Wallis at keithwallis@hotmail.com .

Australian shippers call for end to ocean carrier anti-trust immunity

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

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

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

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

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

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Electronic Data Interchange (EDI) has long been the backbone of global commerce, quietly facilitating trillions in transactions. Yet, despite its critical role, traditional EDI has remained notoriously complex, labor-intensive, viewed as antique, and costly. Companies have historically grappled with cumbersome mapping processes, intricate partner-specific logic, and extended onboarding timelines. Now, as industries increasingly adopt agile digital frameworks, the limitations of conventional EDI solutions have become glaringly apparent. Enter Mosaic, an innovative solution unveiled by Orderful, which promises to radically streamline and modernize EDI integration through artificial intelligence. Orderful, already recognized for simplifying supply chain data exchanges, has now introduced Mosaic as the first AI-enriched EDI integration product that completely removes traditional mapping processes. At its core, Mosaic represents a fundamental shift from legacy EDI protocols, replacing archaic, code-heavy formats such as X12 and EDIFACT with modern, easy to use JSON inputs oriented around system-of-record concepts. This alone significantly lowers the barrier to integration, allowing teams accustomed to modern SaaS API development to seamlessly adopt EDI workflows. Mosaic's AI-powered engine ingests and interprets trading partner requirements as well as millions of actual transactions to build reliable, reuseable, self-healing integration which translating data into partner-specific formats without manual intervention. Such automated adaptability is unprecedented in the EDI landscape and promises a marked reduction in implementation timelines, from what once took months or even years, down to mere weeks. Erik Kiser, founder and CEO of Orderful, understands firsthand the pain points of traditional EDI. Having built integrations himself early in his career, Kiser founded Orderful specifically to address the persistent challenges that frustrate businesses across the supply chain. "Nobody has been more frustrated by EDI than I have," Kiser notes candidly. "Those experiences are precisely why Orderful and now Mosaic exist." Mosaic further distinguishes itself by embedding real-time validation and debugging, streamlining error resolution from lengthy processes into rapid, straightforward fixes. Developers, traditionally burdened by the complexities of partner-specific requirements and intricate coding standards, now gain an intuitive, self-service environment. This reduction in complexity not only accelerates implementation but also reduces operational overhead, offering critical advantages in today’s fast-paced business environment. Brian Roberts, general partner at Andreessen Horowitz and Orderful board member, underscores Mosaic's industry impact: "Mosaic has taken one of the most entrenched bottlenecks in enterprise technology, EDI mapping, and replaced it with an AI-native product that adapts automatically. It’s exactly the type of innovation the industry has been missing." While Mosaic initially supports the complete Order-to-Cash lifecycle, covering purchase orders, acknowledgments, shipping notices, and invoices, the platform is designed for continuous growth and expansion. Orderful sees Mosaic not merely as a product but as a foundational architecture poised to support a broader range of data flows and integrations, aligning perfectly with the scalable requirements of global businesses. “The underlying unified data model not only lets us act as the universal connector, but also enables us to build product once that applies to all partners. This includes EDI functionality like order splitting and consolidation, but also unlocks powerful analytics and insights for our customers to help them grow their business,” said Will Benish, principal product manager at Orderful. Security and reliability are integral to Mosaic’s infrastructure, evidenced by SOC 2 Type II compliance and OAuth 2.0 integration. Additionally, the platform guarantees robust performance, boasting sub-second transaction speeds and immediate access to an extensive network of over 10,000 trading partners. For businesses already utilizing Orderful, Mosaic offers a seamless upgrade pathway, allowing organizations to embrace the future of EDI without disrupting their current trading partner relationships. New clients will find Mosaic’s approach refreshingly modern, providing immediate gains in speed, ease of integration, and scalability. Mosaic represents more than just an incremental improvement; it's a visionary leap forward in how enterprises manage and leverage supply chain data. As businesses grapple with increasingly complex global supply networks, Orderful’s Mosaic emerges as a timely and essential tool, providing clarity, agility, and unprecedented simplicity. Mosaic elevates EDI, providing businesses with a streamlined and efficient pathway to rapidly integrate, adapt, and scale in today's dynamic market. “Mosaic wouldn’t have been possible to build even three years ago. The work our team has put in has been extraordinary, combining cutting edge AI techniques with our deep experience with EDI and our rich library of trading partner guidelines and requirements,” said Benish. To learn more about how Mosaic can transform your EDI capabilities and streamline your integration processes or request a demonstration at <a href="https://www.orderful.com/product/mosaic" rel="noreferrer" class="joc_admin__link">www.orderful.com/product/mosaic</a>.

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

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