<div class="phx-topic abstract-wrapper">Hapag-Lloyd said it wants to integrate Zim into the alliance with Maersk, but adding new ports and overlapping coverage means changes to services. </div>

Hapag-Lloyd said it wants to integrate Zim into the alliance with Maersk, but adding new ports and overlapping coverage means changes to services.

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<div class="phx-topic">Hapag-Lloyd’s acquisition of Zim Integrated Shipping Services raises questions of how much of Zim’s express, port-direct services will survive under Gemini Cooperation’s transshipment model and to what extent the acquisition will force further changes in trans-Pacific networks, according to Sea-Intelligence Maritime AnalysisIntegrating Zim’s services into the Gemini network makes more sense than operating Zim as a separate product, Sea-Intelligence said in a report Sunday. Even though Zim offers a premium product based on its transit times and direct service, Sea-Intelligence said a premium, standalone service confuses the messaging for Gemini customers “Operating premium direct strings outside the alliance effectively positions Hapag-Lloyd in competition with its own shared hub-and-spoke infrastructure, which could potentially draw high-yield cargo away from Gemini’s core network.” Sea-Intelligence said. Adding Zim’s current trans-Pacific services would increase Gemini’s port coverage by 28%, Sea-Intelligence said. In particular, Zim’s network would give Gemini more coverage between origin ports in southeast China, South Korea, and Taiwan to US East Coast ports. Yet offering those additional port calls will introduce more complexity into Gemini’s network, Sea-Intelligence said. Offering the same port coverage to the Gemini network will require “careful product design to avoid undermining customer expectations.”Speaking during a briefing last week after the <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">$4.2 billion acquisition of Zim was announced</a>, Hapag-Lloyd Chief Executive Rolf Habben Jansen said the approximately 100 vessels controlled by Zim will eventually be integrated into services that Hapag-Lloyd offers alongside Maersk under the Gemini banner. He added that the additional capacity could help Gemini gain market share in certain trade lanes. “It’s very likely to assume that indeed, some of the tonnage that Zim deploys on the east-west trades would also phase into Gemini,” Habben Jansen said. “We think that’s actually a good thing that will help Gemini gain a little bit of scale that will help us to bring unit cost further down.” <h3>‘Structural challenge’ for Gemini</h3>Integrating Zim’s current network would also mean Gemini offering a second Asia service to the Port of Baltimore and providing service to Boston. Sea-Intelligence said that while some services with port overlap could be consolidated, servicing smaller ports might require standalone services that won’t affect Gemini’s reliability. “If this market reach is integrated, Gemini faces a structural challenge: servicing these secondary gateways via transshipment hubs can add transit time on the ocean leg, and it may dilute the faster transit times some legacy Zim customers currently value,” Sea-Intelligence said. Along with Gemini’s network, the acquisition of Zim has the potential to reshape other vessel-sharing arrangements, Sea-Intelligence said. For the past two years, Hapag-Lloyd has offered a jointly-operated Asia-US East Coast service with Wan Hai Lines, the AA7. But Sea-Intelligence said the AA7’s large overlap with existing Zim services suggests “Hapag-Lloyd could exit this joint operation over time.” Zim has its own vessel-sharing agreement with Mediterranean Shipping Co. for five services between Asia and the US East and Gulf coasts. Zim and MSC each operate two of the services, while the fifth service is jointly operated. While it would take between six months and a year to dissolve the joint agreement, Sea-Intelligence said the end of the agreement would reduce MSC’s port coverage on Asia-to-US East Coast services by nearly one-third. Sea-Intelligence said it’s likely that MSC will launch a new US East Coast anchor service to compensate for the potential exit of Zim. “If MSC opts not to launch a replacement service, they would be ceding a defined strategic advantage to the potentially expanded Gemini network,” Sea-Intelligence said. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Hapag-Lloyd’s acquisition of Zim Integrated Shipping Services raises questions of how much of Zim’s express, port-direct services will survive under Gemini Cooperation’s transshipment model and to what extent the acquisition will force further changes in trans-Pacific networks, according to Sea-Intelligence Maritime Analysis Integrating Zim’s services into the Gemini network makes more sense than operating Zim as a separate product, Sea-Intelligence said in a report Sunday. Even though Zim offers a premium product based on its transit times and direct service, Sea-Intelligence said a premium, standalone service confuses the messaging for Gemini customers “Operating premium direct strings outside the alliance effectively positions Hapag-Lloyd in competition with its own shared hub-and-spoke infrastructure, which could potentially draw high-yield cargo away from Gemini’s core network.” Sea-Intelligence said. Adding Zim’s current trans-Pacific services would increase Gemini’s port coverage by 28%, Sea-Intelligence said. In particular, Zim’s network would give Gemini more coverage between origin ports in southeast China, South Korea, and Taiwan to US East Coast ports. Yet offering those additional port calls will introduce more complexity into Gemini’s network, Sea-Intelligence said. Offering the same port coverage to the Gemini network will require “careful product design to avoid undermining customer expectations.” Speaking during a briefing last week after the $4.2 billion acquisition of Zim was announced , Hapag-Lloyd Chief Executive Rolf Habben Jansen said the approximately 100 vessels controlled by Zim will eventually be integrated into services that Hapag-Lloyd offers alongside Maersk under the Gemini banner. He added that the additional capacity could help Gemini gain market share in certain trade lanes. “It’s very likely to assume that indeed, some of the tonnage that Zim deploys on the east-west trades would also phase into Gemini,” Habben Jansen said. “We think that’s actually a good thing that will help Gemini gain a little bit of scale that will help us to bring unit cost further down.” ‘Structural challenge’ for Gemini Integrating Zim’s current network would also mean Gemini offering a second Asia service to the Port of Baltimore and providing service to Boston. Sea-Intelligence said that while some services with port overlap could be consolidated, servicing smaller ports might require standalone services that won’t affect Gemini’s reliability. “If this market reach is integrated, Gemini faces a structural challenge: servicing these secondary gateways via transshipment hubs can add transit time on the ocean leg, and it may dilute the faster transit times some legacy Zim customers currently value,” Sea-Intelligence said. Along with Gemini’s network, the acquisition of Zim has the potential to reshape other vessel-sharing arrangements, Sea-Intelligence said. For the past two years, Hapag-Lloyd has offered a jointly-operated Asia-US East Coast service with Wan Hai Lines, the AA7. But Sea-Intelligence said the AA7’s large overlap with existing Zim services suggests “Hapag-Lloyd could exit this joint operation over time.” Zim has its own vessel-sharing agreement with Mediterranean Shipping Co. for five services between Asia and the US East and Gulf coasts. Zim and MSC each operate two of the services, while the fifth service is jointly operated. While it would take between six months and a year to dissolve the joint agreement, Sea-Intelligence said the end of the agreement would reduce MSC’s port coverage on Asia-to-US East Coast services by nearly one-third. Sea-Intelligence said it’s likely that MSC will launch a new US East Coast anchor service to compensate for the potential exit of Zim. “If MSC opts not to launch a replacement service, they would be ceding a defined strategic advantage to the potentially expanded Gemini network,” Sea-Intelligence said. Contact Michael Angell at michael.angell@spglobal.com .

Trans-Pacific

Container lines

Zim acquisition sets up network changes for Gemini: Sea-Intelligence

<div class="phx-topic abstract-wrapper">The $4.2 billion acquisition announced last week does nothing to alter the market’s weak fundamentals, notably soft demand and vessel oversupply, writes analyst John McCauley.</div>

The $4.2 billion acquisition announced last week does nothing to alter the market’s weak fundamentals, notably soft demand and vessel oversupply, writes analyst John McCauley.

<div class="phx-topic">The ink has barely dried on the <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">Hapag-Lloyd tie up with Zim Integrated Shipping Services</a> and there is a view that the enlargement of the container shipping oligopoly will have some far-reaching effect and potentially stem the tide of red ink in carriers’ results. Indeed, in the longer term, this should bring about significant cost savings for the combined HL/Zim entity through procurement and agent network rationalization. However, adding another name or moving one slot higher in the rankings of the biggest carriers will not change the underlying issues facing the industry. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6174595_0.1.jpg"></img></div>Let’s start with demand. Global container freight demand is up and forecast to maintain that performance, which is good overall. However, prospects for the two key trade lanes — the trans-Pacific and Asia-Europe — are poor. Trans-Pacific is dire, and without any structural change in the trade, I can see us heading back to $500 rates sooner rather than later. Asia-Europe is benefiting from the China and China + shift to non-US markets, but the fundamentals in European economies indicate this demand surge will be short-lived. The biggest problem is oversupply. With over 30% of the existing global fleet on order, oversupply is a self-inflicted wound. Surely, common sense prevailed in certain boardrooms to foresee the need to better deploy the extraordinary cash piles most carriers possess (although the piles are starting to shrink). In some cases, we can see that using cash flow to mop up charter tonnage in key segments, particularly Panamax and post-Panamax, was a smart move to increase fleet flexibility, but also to keep charter rates high and potentially push out bottom feeders as rates drop and margins erode. However — and the following comments assume there will be no full reopening of the Red Sea and Suez Canal — the continued desire to add new tonnage alongside the bloated order book seems nonsensical. This will leave very few options for carriers should demand continue to soften. Bear in mind that even without Red Sea resumption, schedule slippages, blank sailings and other current tactics will seem like trying to ride a wakeboard in a tsunami. Anchoring up will solve some immediate supply problems, but only layups will actually take tonnage out of service for an extensive period. Those who remember 2009 and the Eastern Anchorage in Singapore with multiple vessels moored together will get the picture. The compounding oversupply issue is that the trades benefiting from increased demand are not predominantly the trades that suit new tonnage coming out of the shipyards. If a magic wand could be waved, you would order 5,000- and 8,000-TEU ships, and not any bigger. Ordering 14,000-TEU-plus, even with the best intentions of dual-fuel to help the planet, will only exacerbate oversupply. <h3>Strong argument for scrapping </h3>The other supply reduction strategy is scrapping. There is a strong argument for scrapping, particularly older vessels that will come up against regulatory requirements that will prove costlier to implement than the return the vessels will derive. Granted, many will have reached their full depreciation, so are essentially running on operating expenses only. The temptation will be to keep them going, particularly those in the desirable 5,000- to 8,000-TEU range. Two other factors suggest large-scale scrapping is unlikely. The first is that while scrap yards have capacity, they need reservations well in advance given that most vessels in line for scrapping are usually part of a homogeneous order for multiple vessels rather than one-offs. Second, scrapping regulations have become tighter, which will make it more costly to scrap. Scrap prices are also weak, although container vessel scrap prices are at a small premium above dry and wet vessels. Even the E-class Maersk vessels and their (near) equivalents that are at or near 20 years old would still seem a bizarre candidate for scrapping So where does all that leave carriers? Some will hope that the US recovers, and global trade rebalances and tactical supply constraints will suffice. Combined with that will be the knowledge that carriers have about three years of free cash flow cover to ride out the downturn. Others will review their order book and see how they can delay or even withdraw from purchase and delivery. However, the favorable financing terms on offer will make this unlikely. Most will hope a smaller competitor or two will go bust, but that would not stem the vessel glut. And some will look at their playbook and go the acquisition route. But hope is never a good strategy, and a combination of layups and scrapping seems the only viable solution. So the question for this (failed) oligopolistic market is: “Who blinks first?” John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>. </div>

The ink has barely dried on the Hapag-Lloyd tie up with Zim Integrated Shipping Services and there is a view that the enlargement of the container shipping oligopoly will have some far-reaching effect and potentially stem the tide of red ink in carriers’ results. Indeed, in the longer term, this should bring about significant cost savings for the combined HL/Zim entity through procurement and agent network rationalization. However, adding another name or moving one slot higher in the rankings of the biggest carriers will not change the underlying issues facing the industry. Let’s start with demand. Global container freight demand is up and forecast to maintain that performance, which is good overall. However, prospects for the two key trade lanes — the trans-Pacific and Asia-Europe — are poor. Trans-Pacific is dire, and without any structural change in the trade, I can see us heading back to $500 rates sooner rather than later. Asia-Europe is benefiting from the China and China + shift to non-US markets, but the fundamentals in European economies indicate this demand surge will be short-lived. The biggest problem is oversupply. With over 30% of the existing global fleet on order, oversupply is a self-inflicted wound. Surely, common sense prevailed in certain boardrooms to foresee the need to better deploy the extraordinary cash piles most carriers possess (although the piles are starting to shrink). In some cases, we can see that using cash flow to mop up charter tonnage in key segments, particularly Panamax and post-Panamax, was a smart move to increase fleet flexibility, but also to keep charter rates high and potentially push out bottom feeders as rates drop and margins erode. However — and the following comments assume there will be no full reopening of the Red Sea and Suez Canal — the continued desire to add new tonnage alongside the bloated order book seems nonsensical. This will leave very few options for carriers should demand continue to soften. Bear in mind that even without Red Sea resumption, schedule slippages, blank sailings and other current tactics will seem like trying to ride a wakeboard in a tsunami. Anchoring up will solve some immediate supply problems, but only layups will actually take tonnage out of service for an extensive period. Those who remember 2009 and the Eastern Anchorage in Singapore with multiple vessels moored together will get the picture. The compounding oversupply issue is that the trades benefiting from increased demand are not predominantly the trades that suit new tonnage coming out of the shipyards. If a magic wand could be waved, you would order 5,000- and 8,000-TEU ships, and not any bigger. Ordering 14,000-TEU-plus, even with the best intentions of dual-fuel to help the planet, will only exacerbate oversupply. Strong argument for scrapping The other supply reduction strategy is scrapping. There is a strong argument for scrapping, particularly older vessels that will come up against regulatory requirements that will prove costlier to implement than the return the vessels will derive. Granted, many will have reached their full depreciation, so are essentially running on operating expenses only. The temptation will be to keep them going, particularly those in the desirable 5,000- to 8,000-TEU range. Two other factors suggest large-scale scrapping is unlikely. The first is that while scrap yards have capacity, they need reservations well in advance given that most vessels in line for scrapping are usually part of a homogeneous order for multiple vessels rather than one-offs. Second, scrapping regulations have become tighter, which will make it more costly to scrap. Scrap prices are also weak, although container vessel scrap prices are at a small premium above dry and wet vessels. Even the E-class Maersk vessels and their (near) equivalents that are at or near 20 years old would still seem a bizarre candidate for scrapping So where does all that leave carriers? Some will hope that the US recovers, and global trade rebalances and tactical supply constraints will suffice. Combined with that will be the knowledge that carriers have about three years of free cash flow cover to ride out the downturn. Others will review their order book and see how they can delay or even withdraw from purchase and delivery. However, the favorable financing terms on offer will make this unlikely. Most will hope a smaller competitor or two will go bust, but that would not stem the vessel glut. And some will look at their playbook and go the acquisition route. But hope is never a good strategy, and a combination of layups and scrapping seems the only viable solution. So the question for this (failed) oligopolistic market is: “Who blinks first?” John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Container Shipping News

Maritime

Hapag-Lloyd’s deal for Zim won’t fix challenges facing container shipping

<div class="phx-topic abstract-wrapper">A record number of wind farm installations in 2025 has set the tone for accelerated year-over-year demand growth for wind components, according to the Global Wind Energy Council. </div>

A record number of wind farm installations in 2025 has set the tone for accelerated year-over-year demand growth for wind components, according to the Global Wind Energy Council.

<div class="phx-topic">Global wind capacity is forecast to exceed 2 terawatts by 2030, building on a record year for new wind energy installations in 2025, according to the Global Wind Energy Council (GWEC). Wind farm installations provide regular cargo for the breakbulk and project cargo industry. In its latest forecast, GWEC raised its full-year global wind installation forecast for last year by 8.8% to 150 gigawatts. Ben Backwell, GWEC CEO, said in a statement that is up from 94 GW just four years ago, “driven largely by Asia’s fast-growing economies.” GWEC is an international trade association for the wind power industry. China was the runaway leader, with total installation thought to exceed 100 GW in 2025. By 2030, Asia-Pacific countries, excluding China, will account for 12% of installations, said GWEC. India set a record of 6.3 GW installed in 2025, while Europe installed 22.5 GW, a year-over-year increase of 5 GW. The US installed more than 7 GW. Wind component shipper and manufacturer Siemens Gamesa said in a year-end report that its installations now totaled 119 GWs onshore consisting of more than 61,000 turbines, and 31 GW offshore consisting of more than 5,100 turbines. A spokesperson for multipurpose and heavy-lift vessel operator Chipolbrok told the Journal of Commerce the company is seeing increasing demand for shipping of complete wind turbines. However, demand is highly dependent on the routes and destinations that they call. For example, in parts of Europe, there is an investment backlog for renewables projects as economic uncertainty is making investors jittery. “This is currently leading to a decline in demand for offshore installations,” Chipolbrok said. <h3>Europe still a stronghold for wind </h3>Siemens Gamesa aims to install about 500 offshore turbines per year in fiscal 2026 and 2027. Offshore remains a promising market, with the EU and UK as a stronghold for the company with 37 GW already installed and a high commitment to renewables given the EU’s 300-GW target by 2050. Colin Charnock, group CEO of freight forwarder Trans Global Projects (TGP), told the Journal of Commerce TGP is “continuing to strengthen its capability for the power sector.” That includes the opening of TGP Finland by the third quarter of 2026, which will enhance the forwarder’s presence in a region with significant activity in grid expansion, offshore wind and heavy industrial power projects. “This development supports our long‑term plan to be positioned close to strategic corridors where large‑scale energy projects are planned or underway,” Charnock said. Asian markets, especially Taiwan, South Korea and Japan, also bring opportunities, Siemens Gamesa said, with those countries combined having committed to build 100 GW of offshore wind capacity between now and 2040. The company noted that excluding China, the global onshore market is expected to grow from about 40 to 45 GW today to 65 GW in 2030. <h3>Turbine orders fell in 2025 </h3>Still, S&amp;P Global Energy’s Wind Turbine Order Tracker published earlier this month reported a contraction in global wind turbine orders last year, driven by a pullback in key markets. Firm global wind turbine orders last year totaled approximately 140 GW, a 20% decline from 2024. Another 60 GW of “non-firm orders” brings the total to 200 GW. Hwei Ling Lee, associate analyst for clean energy technologies and supply chains at S&amp;P Global Energy, explained that S&amp;P Global’s dataset reports volumes of wind turbine orders secured, whereas GWEC reports actual installations of wind capacity. “Since turbines are typically installed 12 to 18 months after an order is placed, orders for wind turbines secured in 2025 will mostly be installed in 2026 and 2027,” Lee said. “This makes the order data a more forward-looking view of market activity.” The drop in orders in 2025 could translate into a slower installation rate in 2026, but “it may not be as pronounced as the decline in orders might suggest,” Lee added. S&amp;P Global is the parent company of the Journal of Commerce. Contact Felicity Landon on <a href="mailto:felicity@felicitylandon.com">felicity@felicitylandon.com</a>. </div>

Global wind capacity is forecast to exceed 2 terawatts by 2030, building on a record year for new wind energy installations in 2025, according to the Global Wind Energy Council (GWEC). Wind farm installations provide regular cargo for the breakbulk and project cargo industry. In its latest forecast, GWEC raised its full-year global wind installation forecast for last year by 8.8% to 150 gigawatts. Ben Backwell, GWEC CEO, said in a statement that is up from 94 GW just four years ago, “driven largely by Asia’s fast-growing economies.” GWEC is an international trade association for the wind power industry. China was the runaway leader, with total installation thought to exceed 100 GW in 2025. By 2030, Asia-Pacific countries, excluding China, will account for 12% of installations, said GWEC. India set a record of 6.3 GW installed in 2025, while Europe installed 22.5 GW, a year-over-year increase of 5 GW. The US installed more than 7 GW. Wind component shipper and manufacturer Siemens Gamesa said in a year-end report that its installations now totaled 119 GWs onshore consisting of more than 61,000 turbines, and 31 GW offshore consisting of more than 5,100 turbines. A spokesperson for multipurpose and heavy-lift vessel operator Chipolbrok told the Journal of Commerce the company is seeing increasing demand for shipping of complete wind turbines. However, demand is highly dependent on the routes and destinations that they call. For example, in parts of Europe, there is an investment backlog for renewables projects as economic uncertainty is making investors jittery. “This is currently leading to a decline in demand for offshore installations,” Chipolbrok said. Europe still a stronghold for wind Siemens Gamesa aims to install about 500 offshore turbines per year in fiscal 2026 and 2027. Offshore remains a promising market, with the EU and UK as a stronghold for the company with 37 GW already installed and a high commitment to renewables given the EU’s 300-GW target by 2050. Colin Charnock, group CEO of freight forwarder Trans Global Projects (TGP), told the Journal of Commerce TGP is “continuing to strengthen its capability for the power sector.” That includes the opening of TGP Finland by the third quarter of 2026, which will enhance the forwarder’s presence in a region with significant activity in grid expansion, offshore wind and heavy industrial power projects. “This development supports our long‑term plan to be positioned close to strategic corridors where large‑scale energy projects are planned or underway,” Charnock said. Asian markets, especially Taiwan, South Korea and Japan, also bring opportunities, Siemens Gamesa said, with those countries combined having committed to build 100 GW of offshore wind capacity between now and 2040. The company noted that excluding China, the global onshore market is expected to grow from about 40 to 45 GW today to 65 GW in 2030. Turbine orders fell in 2025 Still, S&P Global Energy’s Wind Turbine Order Tracker published earlier this month reported a contraction in global wind turbine orders last year, driven by a pullback in key markets. Firm global wind turbine orders last year totaled approximately 140 GW, a 20% decline from 2024. Another 60 GW of “non-firm orders” brings the total to 200 GW. Hwei Ling Lee, associate analyst for clean energy technologies and supply chains at S&P Global Energy, explained that S&P Global’s dataset reports volumes of wind turbine orders secured, whereas GWEC reports actual installations of wind capacity. “Since turbines are typically installed 12 to 18 months after an order is placed, orders for wind turbines secured in 2025 will mostly be installed in 2026 and 2027,” Lee said. “This makes the order data a more forward-looking view of market activity.” The drop in orders in 2025 could translate into a slower installation rate in 2026, but “it may not be as pronounced as the decline in orders might suggest,” Lee added. S&P Global is the parent company of the Journal of Commerce. Contact Felicity Landon on felicity@felicitylandon.com .

Energy projects

Project cargo

Breakbulk News

Asia to dominate global wind cargo market through end of the decade

<div class="phx-topic abstract-wrapper">In the wake of several successful appeals that crimped Donald Trump’s executive order banning new projects, wind developers are racing against the clock to complete work as quickly as possible.</div>

In the wake of several successful appeals that crimped Donald Trump’s executive order banning new projects, wind developers are racing against the clock to complete work as quickly as possible.

<div class="phx-topic">The Trump administration has begun taking steps to reverse a sweep of recent court victories for US offshore wind projects as developers rush to complete work on the five projects the courts have allowed to resume. The offshore wind industry is a key driver of project cargo such as turbine blades and other oversize components with complex transport requirements. These projects also call for significant amounts of port space and specialized heavy-lift vessels for installation. But US offshore wind projects have come under attack by President Donald Trump, who issued an executive order banning new wind power projects upon taking office in January 2025. Then, on Dec. 22, the administration’s Bureau of Ocean Energy Management (BOEM) issued stop-work orders on five East Coast offshore wind projects that are fully permitted and over halfway complete. Those are Coastal Virginia Offshore Wind (CVOW) by Dominion Energy, Empire Wind 1 by Equinor, Revolution Wind by Ørsted and Global Infrastructure Partners’ Skyborn Renewables, Sunrise Wind by Ørsted, and Vineyard Wind 1 by Iberdrola subsidiary Avangrid Inc. and Copenhagen Infrastructure Partners. In a series of rulings issued in January and early February, federal district courts granted preliminary injunctions allowing all five projects to restart construction. However, on Feb. 11, US Interior Secretary Doug Burgum told Bloomberg Television the federal government would “absolutely” appeal the courts’ decisions allowing construction to resume on the five existing projects, adding, “There will be further discussion on this.” The administration contends offshore wind turbines pose a national security risk because of radar interference. In a separate move on Feb. 17, Deputy Assistant Attorney General Adam Gustafson filed a notice to appeal a Dec. 8 ruling by a Massachusetts federal district court striking down the administration’s federal permitting ban on new wind energy projects. Projects are racing against the clock to complete work as quickly as possible before any future court rulings come down against them. “This constant political jockeying undoubtedly injects new levels of uncertainty into the industry as a whole and the industries that support it,” Abby Watson, president of Groundwire Group, a US consulting firm, told the Journal of Commerce. <h3>No ‘wiggle room’ for project schedules </h3>Absent any federal pushback, US offshore wind projects still face significant challenges stemming from the scarcity of resources needed for project construction. Watson cited the limited number of highly specialized installation vessels available for building these projects globally. “Fierce competition has these vessels booked up years in advance, and with utilization rates this high, projects can’t afford to build a lot of wiggle room into their schedules,” she said. Transporting and storing massive offshore wind components presents additional concerns, as space at East Coast ports comes at a premium, Watson said. “Unexpected delays in clearing out huge storage and laydown areas are bound to cause a major headache for logistics managers and port operators,” she said. In a statement to the Journal of Commerce, the Oceantic Network, a nonprofit trade group, called for bipartisan permitting reform, saying it was crucial to offshore wind project development. “It can unlock billions of dollars of investment and port/vessel activity to advance shared national priorities like shipyard revitalization, steel and port investments, and domestic energy dominance,” the group said. US offshore wind projects have resulted in $5 billion in port redevelopment and $2 billion in vessel builds and retrofits, according to the Oceantic Network. “There are hundreds of vessels operating on each of the five projects under construction today, and billions of dollars of equipment and components that can resume transit either from the factory to a staging port, or from port to construction site,” it said. Multiple offshore wind project cargo shippers declined requests from the Journal of Commerce to comment for this story, citing the ongoing litigation. <h3>Delays, tariffs pile on costs </h3>US offshore wind projects are grappling with mounting costs from the double whammy of federal stop-work orders and import tariffs imposed by the Trump administration. According to court filings, individual project costs from work shutdowns range from $1 million to $5 million per day. According to Dominion Energy’s latest Coastal Virginia Offshore Wind update, the project’s budget has risen to $11.5 billion because of an additional $365 million in costs related to tariffs and the federal government’s order to halt work. In recent remarks on the 810-megawatt Empire Wind project off the coast of Long Island, New York, developer Equinor also cited the one-two punch of tariffs and work shutdowns in driving up the project’s cost by $500 million to $7.5 billion. Equinor CEO Anders Opedal called the federal stop-work orders “unlawful” during the company’s Feb. 4 fourth-quarter earnings call. “We are moving forward with a strong belief that we will have a good case in the court,” Opedal said. With work stoppages lifted, project developers are reporting various stages of progress. Dominion spokesperson Jeremy Slayton told the Journal of Commerce that the 2.6-gigawatt project is over 70% complete and should begin generating power by the end of March. The project is set for completion by February 2027. In Ørsted’s Feb. 6 earnings call, company executives said the 704-MW Revolution Wind project off the coast of Rhode Island and Connecticut is set to begin producing power “within weeks” and should be fully operational in the second half of 2026. Ørsted’s other project, the 924-MW Sunrise Wind farm, is on track to begin generating power by October, executives said. On the 806-MW Vineyard Wind 1 farm, court filings show the $4.5 billion project is 95% complete and has been generating power for over a year. Empire Wind is over 60% complete, but future work stoppages could put the wind farm in jeopardy. According to a Jan. 6 court filing by Empire Wind, “if allowed to stand, the suspension order substantially threatens cancellation of a project that is fully and duly permitted under the law and has been in active construction for over a year and a half at a cost of billions of dollars.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>.</div>

The Trump administration has begun taking steps to reverse a sweep of recent court victories for US offshore wind projects as developers rush to complete work on the five projects the courts have allowed to resume. The offshore wind industry is a key driver of project cargo such as turbine blades and other oversize components with complex transport requirements. These projects also call for significant amounts of port space and specialized heavy-lift vessels for installation. But US offshore wind projects have come under attack by President Donald Trump, who issued an executive order banning new wind power projects upon taking office in January 2025. Then, on Dec. 22, the administration’s Bureau of Ocean Energy Management (BOEM) issued stop-work orders on five East Coast offshore wind projects that are fully permitted and over halfway complete. Those are Coastal Virginia Offshore Wind (CVOW) by Dominion Energy, Empire Wind 1 by Equinor, Revolution Wind by Ørsted and Global Infrastructure Partners’ Skyborn Renewables, Sunrise Wind by Ørsted, and Vineyard Wind 1 by Iberdrola subsidiary Avangrid Inc. and Copenhagen Infrastructure Partners. In a series of rulings issued in January and early February, federal district courts granted preliminary injunctions allowing all five projects to restart construction. However, on Feb. 11, US Interior Secretary Doug Burgum told Bloomberg Television the federal government would “absolutely” appeal the courts’ decisions allowing construction to resume on the five existing projects, adding, “There will be further discussion on this.” The administration contends offshore wind turbines pose a national security risk because of radar interference. In a separate move on Feb. 17, Deputy Assistant Attorney General Adam Gustafson filed a notice to appeal a Dec. 8 ruling by a Massachusetts federal district court striking down the administration’s federal permitting ban on new wind energy projects. Projects are racing against the clock to complete work as quickly as possible before any future court rulings come down against them. “This constant political jockeying undoubtedly injects new levels of uncertainty into the industry as a whole and the industries that support it,” Abby Watson, president of Groundwire Group, a US consulting firm, told the Journal of Commerce. No ‘wiggle room’ for project schedules Absent any federal pushback, US offshore wind projects still face significant challenges stemming from the scarcity of resources needed for project construction. Watson cited the limited number of highly specialized installation vessels available for building these projects globally. “Fierce competition has these vessels booked up years in advance, and with utilization rates this high, projects can’t afford to build a lot of wiggle room into their schedules,” she said. Transporting and storing massive offshore wind components presents additional concerns, as space at East Coast ports comes at a premium, Watson said. “Unexpected delays in clearing out huge storage and laydown areas are bound to cause a major headache for logistics managers and port operators,” she said. In a statement to the Journal of Commerce, the Oceantic Network, a nonprofit trade group, called for bipartisan permitting reform, saying it was crucial to offshore wind project development. “It can unlock billions of dollars of investment and port/vessel activity to advance shared national priorities like shipyard revitalization, steel and port investments, and domestic energy dominance,” the group said. US offshore wind projects have resulted in $5 billion in port redevelopment and $2 billion in vessel builds and retrofits, according to the Oceantic Network. “There are hundreds of vessels operating on each of the five projects under construction today, and billions of dollars of equipment and components that can resume transit either from the factory to a staging port, or from port to construction site,” it said. Multiple offshore wind project cargo shippers declined requests from the Journal of Commerce to comment for this story, citing the ongoing litigation. Delays, tariffs pile on costs US offshore wind projects are grappling with mounting costs from the double whammy of federal stop-work orders and import tariffs imposed by the Trump administration. According to court filings, individual project costs from work shutdowns range from $1 million to $5 million per day. According to Dominion Energy’s latest Coastal Virginia Offshore Wind update, the project’s budget has risen to $11.5 billion because of an additional $365 million in costs related to tariffs and the federal government’s order to halt work. In recent remarks on the 810-megawatt Empire Wind project off the coast of Long Island, New York, developer Equinor also cited the one-two punch of tariffs and work shutdowns in driving up the project’s cost by $500 million to $7.5 billion. Equinor CEO Anders Opedal called the federal stop-work orders “unlawful” during the company’s Feb. 4 fourth-quarter earnings call. “We are moving forward with a strong belief that we will have a good case in the court,” Opedal said. With work stoppages lifted, project developers are reporting various stages of progress. Dominion spokesperson Jeremy Slayton told the Journal of Commerce that the 2.6-gigawatt project is over 70% complete and should begin generating power by the end of March. The project is set for completion by February 2027. In Ørsted’s Feb. 6 earnings call, company executives said the 704-MW Revolution Wind project off the coast of Rhode Island and Connecticut is set to begin producing power “within weeks” and should be fully operational in the second half of 2026. Ørsted’s other project, the 924-MW Sunrise Wind farm, is on track to begin generating power by October, executives said. On the 806-MW Vineyard Wind 1 farm, court filings show the $4.5 billion project is 95% complete and has been generating power for over a year. Empire Wind is over 60% complete, but future work stoppages could put the wind farm in jeopardy. According to a Jan. 6 court filing by Empire Wind, “if allowed to stand, the suspension order substantially threatens cancellation of a project that is fully and duly permitted under the law and has been in active construction for over a year and a half at a cost of billions of dollars.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Heavy-haul transport

Trump administration seeks to undo court rulings favoring offshore wind projects

<div class="phx-topic abstract-wrapper">Gold Star has a network of 20 China-centric liner services operated by 40 owned and chartered ships totaling 100,000 TEUs serving Asia, India and South Africa.</div>

Gold Star has a network of 20 China-centric liner services operated by 40 owned and chartered ships totaling 100,000 TEUs serving Asia, India and South Africa.

<div class="phx-topic">Hapag-Lloyd will likely use its <a href="https://www.joc.com/article/zim-deal-to-strengthen-hapag-lloyds-market-share-across-key-trade-lanes-6171044">$4.2 billion takeover of Zim Integrated Shipping Services</a> as the springboard for a significant expansion of its intra-Asia business through Zim’s Hong Kong-headquartered affiliate Gold Star Line. Hapag’s existing intra-Asia coverage is limited to a series of slot charters with other shipping lines. It also utilizes intra-Asia services established by its Gemini Cooperation partner Maersk, which had several regional carriers including MCC and Sealand Asia before being consolidated within Maersk. By comparison, Gold Star has a network of 20 liner services operated by 40 owned and chartered ships totaling 100,000 TEUs serving Asia, India and South Africa. But they are also China-centric, linking ports such as Shanghai and Ningbo to specific Southeast Asia countries including Indonesia, Vietnam and Thailand while also connecting China with India, Africa and the Middle East. There is no or very little coverage to markets such as Japan, Taiwan or within the Southeast Asia region. “I definitely see huge advantages for Hapag-Lloyd from Gold Star Line,” Capt. Igal Dafni told the Journal of Commerce. Dafni was managing director of Gold Star Line in the early 2000s before joining CNC Line and helping to drive CMA CGM’s purchase of the Taiwan-based intra-Asia carrier in 2007. Dafni is now president and CEO of IRIS Shipping Line, a domestic carrier in the Philippines. The gaps in Gold Star’s extended Asia and regional coverage give Hapag-Lloyd tremendous scope to expand its Asia network to those countries either through new services or adding ports on existing Gold Star services, Dafni said Friday. He said Gold Star’s network growth was restricted partly due to parent company Zim’s trade priorities and Israeli ownership. “There is very little activity in Japan or South Korea, for example, because those countries have never been a big market for Zim,” Dafni said. “There are also countries Gold Star definitely can’t call at such as Saudi Arabia, Pakistan and Bangladesh.” Those restrictions will end under Hapag-Lloyd’s ownership. Alphaliner, in its newsletter this week, said Hapag-Lloyd’s takeover of Gold Star Line will help the German carrier to “enlarge its Asian footprint.” <h3>Improved connectivity, faster transits expected </h3>Aside from new services, Dafni said growth would probably also come from significant cost savings through the elimination of costly feeders and slot charters. Drawing a comparison with CMA CGM’s takeover of CNC Line, he pointed out that the French carrier’s intra-Asia network was similarly as insubstantial as Hapag-Lloyd’s is now. CNC’s total liftings were 400,000 TEUs a year at the time of the CMA CGM takeover, but that doubled to at least 1 million TEUs within a few years after CMA CGM expanded coverage and services. Dafni expected a similar level of growth for Hapag’s intra-Asia and wider regional volumes once Gold Star Line was under the carrier’s control. Gold Star’s extensive intra-Asia services will feed cargo into Hapag’s mainline hub-and-spoke Gemini Cooperation network with Maersk, offering Southeast Asia and regional exporters improved connectivity with more destinations and faster transit times. Similarly, import volumes via the Gemini network will increase volumes from the main Asia hubs to neighboring countries. “Feedering will shift from being a cost for Hapag-Lloyd to becoming a profit and revenue generator as third-party cargo shifts to its Asia services,” Dafni said. Hapag-Lloyd and Gold Star Line said it was premature to comment on what would happen to Gold Star under new ownership. The Zim deal “includes Gold Star Line, but no decision has yet been made about what will happen to the brand. It is simply too early to talk about it,” a Hapag-Lloyd spokesperson told the Journal of Commerce. A senior source close to Gold Star Line said it was “too early to evaluate the impact.” “We are still learning about the deal and waiting for the relevant approvals,” the source said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Hapag-Lloyd will likely use its $4.2 billion takeover of Zim Integrated Shipping Services as the springboard for a significant expansion of its intra-Asia business through Zim’s Hong Kong-headquartered affiliate Gold Star Line. Hapag’s existing intra-Asia coverage is limited to a series of slot charters with other shipping lines. It also utilizes intra-Asia services established by its Gemini Cooperation partner Maersk, which had several regional carriers including MCC and Sealand Asia before being consolidated within Maersk. By comparison, Gold Star has a network of 20 liner services operated by 40 owned and chartered ships totaling 100,000 TEUs serving Asia, India and South Africa. But they are also China-centric, linking ports such as Shanghai and Ningbo to specific Southeast Asia countries including Indonesia, Vietnam and Thailand while also connecting China with India, Africa and the Middle East. There is no or very little coverage to markets such as Japan, Taiwan or within the Southeast Asia region. “I definitely see huge advantages for Hapag-Lloyd from Gold Star Line,” Capt. Igal Dafni told the Journal of Commerce. Dafni was managing director of Gold Star Line in the early 2000s before joining CNC Line and helping to drive CMA CGM’s purchase of the Taiwan-based intra-Asia carrier in 2007. Dafni is now president and CEO of IRIS Shipping Line, a domestic carrier in the Philippines. The gaps in Gold Star’s extended Asia and regional coverage give Hapag-Lloyd tremendous scope to expand its Asia network to those countries either through new services or adding ports on existing Gold Star services, Dafni said Friday. He said Gold Star’s network growth was restricted partly due to parent company Zim’s trade priorities and Israeli ownership. “There is very little activity in Japan or South Korea, for example, because those countries have never been a big market for Zim,” Dafni said. “There are also countries Gold Star definitely can’t call at such as Saudi Arabia, Pakistan and Bangladesh.” Those restrictions will end under Hapag-Lloyd’s ownership. Alphaliner, in its newsletter this week, said Hapag-Lloyd’s takeover of Gold Star Line will help the German carrier to “enlarge its Asian footprint.” Improved connectivity, faster transits expected Aside from new services, Dafni said growth would probably also come from significant cost savings through the elimination of costly feeders and slot charters. Drawing a comparison with CMA CGM’s takeover of CNC Line, he pointed out that the French carrier’s intra-Asia network was similarly as insubstantial as Hapag-Lloyd’s is now. CNC’s total liftings were 400,000 TEUs a year at the time of the CMA CGM takeover, but that doubled to at least 1 million TEUs within a few years after CMA CGM expanded coverage and services. Dafni expected a similar level of growth for Hapag’s intra-Asia and wider regional volumes once Gold Star Line was under the carrier’s control. Gold Star’s extensive intra-Asia services will feed cargo into Hapag’s mainline hub-and-spoke Gemini Cooperation network with Maersk, offering Southeast Asia and regional exporters improved connectivity with more destinations and faster transit times. Similarly, import volumes via the Gemini network will increase volumes from the main Asia hubs to neighboring countries. “Feedering will shift from being a cost for Hapag-Lloyd to becoming a profit and revenue generator as third-party cargo shifts to its Asia services,” Dafni said. Hapag-Lloyd and Gold Star Line said it was premature to comment on what would happen to Gold Star under new ownership. The Zim deal “includes Gold Star Line, but no decision has yet been made about what will happen to the brand. It is simply too early to talk about it,” a Hapag-Lloyd spokesperson told the Journal of Commerce. A senior source close to Gold Star Line said it was “too early to evaluate the impact.” “We are still learning about the deal and waiting for the relevant approvals,” the source said. Contact Keith Wallis at keithwallis@hotmail.com .

Port News

International ports

Hapag-Lloyd set to grow its intra-Asia network through Zim’s Gold Star Line

<div class="phx-topic abstract-wrapper">Retailers are holding back on signing their 2026–27 service contracts because they anticipate spot rates may sink further in the next few weeks, while carriers hold out hope market fundamentals will emerge to reverse the softening trend. </div>

Retailers are holding back on signing their 2026–27 service contracts because they anticipate spot rates may sink further in the next few weeks, while carriers hold out hope market fundamentals will emerge to reverse the softening trend.

<div class="phx-topic">Neither ocean carriers nor US importers are in a rush to sign contracts for the 2026–27 service year in a trans-Pacific market where spot rates to the West Coast have fallen more than 20% since early January and, many believe, have room to slide further. Multiple sources who spoke to the Journal of Commerce this week said carriers are in no hurry to ink deals with their customers, holding out hope market fundamentals will emerge to reverse the softening trend on the trans-Pacific. And shippers are biding their time, happy to watch rates continue to fall before they’ll put pen to paper on service contracts, most of which begin May 1. The levels and direction of spot rates impact service contracting, as it’s a barometer of the degree to which carriers can effectively match supply to demand. Long-term contract rates generally allow shippers to lock in lower prices than they could find in the spot market, leading shippers to watch the latter closely ahead of and during service contract negotiations. The Journal of Commerce spoke with three ocean carriers, three retailers, three forwarders, two consultants, and an industry analyst for this story. “No one will sign now,” one carrier executive said. “Most shippers will wait until [TPM26] to see if rates have dropped further.” In past years leading up to the Journal of Commerce’s Trans-Pacific Maritime Conference in Long Beach in the first week of March, at least one or two of the half-dozen largest retailers had already signed their service contracts. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. TPM26 will be held March 1–4. “No major big-box retailers have signed as of yet,” a source with a top 20 US retailer said. “We’re running two to three weeks late.” A second carrier executive said while a couple of carriers could be “close” to signing a big-box account, most customers are holding out to see how much further the market falls. <h3>Shippers’ market </h3>The signals, at least now, favor the importers. In addition to <a href="https://www.joc.com/article/soft-demand-in-eastbound-trans-pacific-overwhelms-carriers-gri-attempt-6109240">softer demand</a> and <a href="https://www.joc.com/article/pre-lunar-new-year-demand-to-give-trans-pac-market-first-test-of-2026-6149869">falling spot rates</a>, no significant surge in imports is projected in March, when the factories in Asia that closed for the Lunar New Year holiday that began Feb. 17 return to full production. Indeed, retailers and direct importers are holding back on signing their 2026–27 service contracts because they anticipate spot rates may sink further in the next few weeks, forcing carriers to reduce their contract tenders, said Bob Fredman, principal at the consulting firm SF Global Logistics who formerly negotiated service contracts for big-box retailers. “That’s what smart shippers should do,” Fredman said. “It doesn’t make much sense to get too far in front of the [big retailers].” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56cdc0fc-22a5-4ef9-9e3e-11f96f369c70"></dynamic-object></div>A national furniture importer said he circulated his “boilerplate” tender to his core carrier partners but is not pressuring them to finalize a contract because he anticipates rates will move lower in March. “As a mid-size importer, why not wait? I want to get more clarity as to where the market is,” the source said. As of Feb. 19, the market from Asia to the West Coast was at $1,600 per FEU, down 23% since early January and 42% lower year over year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. The East Coast spot rate of $2,400 was down 21% so far this year and 39% lower year over year. According to online rate benchmarking platform Xeneta, Asia-West Coast rates were at $1.356 per FEU as of Feb. 19, down from $2,289 per FEU on Jan. 4 and almost 60% lower year over year. A second top 20 retailer said carriers and their customers are holding back from signing service contracts to see what the negotiating environment looks like after TPM26 in terms of spot rates and forecasts for demand in the second quarter. “We are pretty much completed with our tenders. I suspect we will be completed within the next couple of weeks,” the source said. “Demand right now leading up to Q2 is soft. Carriers are holding back to see if demand picks up after Chinese New Year.” <h3>Carriers ‘failed’ to balance supply and demand </h3>But the slower-than-usual finalizing of contracts by the largest big-box retailers does not mean that medium to smaller retailers will sign later than usual, said Jason Cook, CEO of forwarder Ardent Global Logistics. “After TPM there will be a rapid succession of completions for the big-box retailers,” Cook said. “Then the midsize and smaller importers will get serious in round two...” Unlike in past years when importers were anxious to lock in volume allotments, known as minimum quantity commitments (MQCs), because vessel space was tight, capacity is readily available this year, and it is the carriers who are edgy. The second top 20 retailer source said her preliminary discussions with carriers have been “colorful.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e5c8a2a0-9aa5-4787-bbed-bf4b7a9f9677"></dynamic-object></div>A major reason why there was no capacity shortage in the trans-Pacific leading into the Lunar New Year was that carriers did not respond quickly enough to the market conditions by managing vessel space, said Destine Ozuygur, senior analyst for liner network performance at Xeneta. According to data from Xeneta’s eeSea, carriers had 1.19 million TEUs of actual capacity on the Asia-West Coast trade lane in January, with that expected to rise to 1.26 million TEUs in February and 1.4 million TEUs in March. “Given the current slump in rates on the trans-Pacific and the absence of a strong Lunar New Year surge, it appears the carriers failed to balance supply against demand,” Ozuygur said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Neither ocean carriers nor US importers are in a rush to sign contracts for the 2026–27 service year in a trans-Pacific market where spot rates to the West Coast have fallen more than 20% since early January and, many believe, have room to slide further. Multiple sources who spoke to the Journal of Commerce this week said carriers are in no hurry to ink deals with their customers, holding out hope market fundamentals will emerge to reverse the softening trend on the trans-Pacific. And shippers are biding their time, happy to watch rates continue to fall before they’ll put pen to paper on service contracts, most of which begin May 1. The levels and direction of spot rates impact service contracting, as it’s a barometer of the degree to which carriers can effectively match supply to demand. Long-term contract rates generally allow shippers to lock in lower prices than they could find in the spot market, leading shippers to watch the latter closely ahead of and during service contract negotiations. The Journal of Commerce spoke with three ocean carriers, three retailers, three forwarders, two consultants, and an industry analyst for this story. “No one will sign now,” one carrier executive said. “Most shippers will wait until [TPM26] to see if rates have dropped further.” In past years leading up to the Journal of Commerce’s Trans-Pacific Maritime Conference in Long Beach in the first week of March, at least one or two of the half-dozen largest retailers had already signed their service contracts. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. TPM26 will be held March 1–4. “No major big-box retailers have signed as of yet,” a source with a top 20 US retailer said. “We’re running two to three weeks late.” A second carrier executive said while a couple of carriers could be “close” to signing a big-box account, most customers are holding out to see how much further the market falls. Shippers’ market The signals, at least now, favor the importers. In addition to softer demand and falling spot rates , no significant surge in imports is projected in March, when the factories in Asia that closed for the Lunar New Year holiday that began Feb. 17 return to full production. Indeed, retailers and direct importers are holding back on signing their 2026–27 service contracts because they anticipate spot rates may sink further in the next few weeks, forcing carriers to reduce their contract tenders, said Bob Fredman, principal at the consulting firm SF Global Logistics who formerly negotiated service contracts for big-box retailers. “That’s what smart shippers should do,” Fredman said. “It doesn’t make much sense to get too far in front of the [big retailers].” A national furniture importer said he circulated his “boilerplate” tender to his core carrier partners but is not pressuring them to finalize a contract because he anticipates rates will move lower in March. “As a mid-size importer, why not wait? I want to get more clarity as to where the market is,” the source said. As of Feb. 19, the market from Asia to the West Coast was at $1,600 per FEU, down 23% since early January and 42% lower year over year, according to Platts, a sister company of the Journal of Commerce within S&P Global. The East Coast spot rate of $2,400 was down 21% so far this year and 39% lower year over year. According to online rate benchmarking platform Xeneta, Asia-West Coast rates were at $1.356 per FEU as of Feb. 19, down from $2,289 per FEU on Jan. 4 and almost 60% lower year over year. A second top 20 retailer said carriers and their customers are holding back from signing service contracts to see what the negotiating environment looks like after TPM26 in terms of spot rates and forecasts for demand in the second quarter. “We are pretty much completed with our tenders. I suspect we will be completed within the next couple of weeks,” the source said. “Demand right now leading up to Q2 is soft. Carriers are holding back to see if demand picks up after Chinese New Year.” Carriers ‘failed’ to balance supply and demand But the slower-than-usual finalizing of contracts by the largest big-box retailers does not mean that medium to smaller retailers will sign later than usual, said Jason Cook, CEO of forwarder Ardent Global Logistics. “After TPM there will be a rapid succession of completions for the big-box retailers,” Cook said. “Then the midsize and smaller importers will get serious in round two...” Unlike in past years when importers were anxious to lock in volume allotments, known as minimum quantity commitments (MQCs), because vessel space was tight, capacity is readily available this year, and it is the carriers who are edgy. The second top 20 retailer source said her preliminary discussions with carriers have been “colorful.” A major reason why there was no capacity shortage in the trans-Pacific leading into the Lunar New Year was that carriers did not respond quickly enough to the market conditions by managing vessel space, said Destine Ozuygur, senior analyst for liner network performance at Xeneta. According to data from Xeneta’s eeSea, carriers had 1.19 million TEUs of actual capacity on the Asia-West Coast trade lane in January, with that expected to rise to 1.26 million TEUs in February and 1.4 million TEUs in March. “Given the current slump in rates on the trans-Pacific and the absence of a strong Lunar New Year surge, it appears the carriers failed to balance supply against demand,” Ozuygur said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Trans-Pacific carriers, importers slow-walking service contract negotiations

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

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

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

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

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

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

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

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

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

Surface

North-American rail

Intermodal providers

Supply chain

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

China to US

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The Freightos Air Index (FAX) is based on all-in spot rates for general cargo in US$ for weight category of 100 to 3,000 kilograms. The rates include the air freight fee, fuel, and security and seasonal surcharges. The per kg rate is calculated based on the standard chargeable weight (the greater of the actual gross weight and 166kgs, multiplied by the volume in cubic meters). [Freightos Air Index](https://www.freightos.com/enterprise/terminal/fax-global-freightos-air-index/?utm_source=terminal_embed&utm_medium=referral&utm_content=fax)

China to US air freight rates (Freightos)

China to US Air Freight Price Index by Weight Break 100–3000 kg (Freightos) Gateway

<div class="phx-topic abstract-wrapper">If trucking rates remain elevated into the spring, carriers will likely move to push prices higher on new and existing contracts in the second half of the year.</div>

If trucking rates remain elevated into the spring, carriers will likely move to push prices higher on new and existing contracts in the second half of the year.

<div class="phx-topic">US trucking executives are beginning to feel better about the state of the freight economy, hoping tighter capacity will lead to higher rates and, ultimately, an end to the long freight recession. The increasingly upbeat mood comes as spot dry-van rates, as compiled by DAT Freight and Analytics, remain elevated compared with a year ago, even after the disruptive winter weather of January subsided. The average rate, excluding fuel, on DAT’s top 50 US lanes has hovered near $2.30 per mile this month, up 18% to 20% compared with the same period a year ago. Adam Miller, CEO of Knight-Swift Transportation, told the Journal of Commerce that the market is balanced between carriers and shippers. He noted that the reaction to the winter storms and frigid temperatures last month were in stark contrast to January 2025, when a similar snowstorm had zero impact on spot market rates. “It kind of feels like a little bit of Goldilocks right now,” Miller said. “Inflation seems to be under control. I think it’s positioning for demand to see some life because it’s been relatively muted. While capacity continues to exit, I think that puts the supply-demand relationship in a much better position [for trucking companies].” The snow and ice from the heavy winter storm that blanketed a large portion of the US in late January are melting, and trucks that were sidelined are now back in business. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="f7dc31b8-1e1c-4a59-907f-2391c69d4e9f"></dynamic-object></div>Trucking executives say there is a feeling that the next two or three weeks will indicate whether this is really the beginning of the end of the three-year freight recession, something that could determine if trucking companies can push contract rate increases on shippers in the coming months. “The farther we can get from storms, if we continue to see that strength, then it’s going to feel a little bit different this year than the last few years,” Brad Hicks, president of Dedicated Contract Services at J.B. Hunt, said Tuesday at Barclays’ Annual Industrial Select Conference in Miami. “We have had a lot of disruptions from winter weather. We’ve had a lot of customer meetings over the last several weeks, and I would say it should be no surprise that no customer is raising their hands saying, ‘can’t wait to pay you more.’” <h3>Gain in Cass Index for January </h3>The Cass Freight Index suggests the changes taking place in the truckload market might be more than a weather disruption. The Cass Truckload Linehaul Index, a measurement of rates, rose 3.2% year over year in January. “This index is mostly comprised of contract rates, and anecdotally we hear about more shippers initiating one-year bids, suggesting movement in the cycle beyond just weather effects,” Tim Denoyer, author of the Cass Freight Index, wrote Tuesday. The 3.2% hike is consistent with what carrier Werner Enterprises is seeing. “Low to mid-single digits on our contract renewals would be really the starting point there,” Chris Neal, Werner’s senior vice president of pricing, said at the Citi Global Industrial Tech &amp; Mobility Conference Tuesday. "We’ve had some good success already early in the year with some of those renewals.” Werner CEO Derek Leathers admitted while the winter weather played a role, the recovery is also supply-driven <a href="https://www.joc.com/article/usdot-releases-interim-final-rule-on-non-domiciled-cdl-holders-6169023">as the federal government cracks down on non-domiciled commercial drivers’ licenses</a> and English language proficiency of truckers in the US. “You’re finally starting to see a cleansing of some of the capacity out there that needed to be addressed,” Leathers said at the Citi Global conference. “It’s been mostly supply-driven up until now, and with some signs now of a little bit of demand spark coupled with that, it puts us in a pretty optimistic position.” Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>.</div>

US trucking executives are beginning to feel better about the state of the freight economy, hoping tighter capacity will lead to higher rates and, ultimately, an end to the long freight recession. The increasingly upbeat mood comes as spot dry-van rates, as compiled by DAT Freight and Analytics, remain elevated compared with a year ago, even after the disruptive winter weather of January subsided. The average rate, excluding fuel, on DAT’s top 50 US lanes has hovered near $2.30 per mile this month, up 18% to 20% compared with the same period a year ago. Adam Miller, CEO of Knight-Swift Transportation, told the Journal of Commerce that the market is balanced between carriers and shippers. He noted that the reaction to the winter storms and frigid temperatures last month were in stark contrast to January 2025, when a similar snowstorm had zero impact on spot market rates. “It kind of feels like a little bit of Goldilocks right now,” Miller said. “Inflation seems to be under control. I think it’s positioning for demand to see some life because it’s been relatively muted. While capacity continues to exit, I think that puts the supply-demand relationship in a much better position [for trucking companies].” The snow and ice from the heavy winter storm that blanketed a large portion of the US in late January are melting, and trucks that were sidelined are now back in business. Trucking executives say there is a feeling that the next two or three weeks will indicate whether this is really the beginning of the end of the three-year freight recession, something that could determine if trucking companies can push contract rate increases on shippers in the coming months. “The farther we can get from storms, if we continue to see that strength, then it’s going to feel a little bit different this year than the last few years,” Brad Hicks, president of Dedicated Contract Services at J.B. Hunt, said Tuesday at Barclays’ Annual Industrial Select Conference in Miami. “We have had a lot of disruptions from winter weather. We’ve had a lot of customer meetings over the last several weeks, and I would say it should be no surprise that no customer is raising their hands saying, ‘can’t wait to pay you more.’” Gain in Cass Index for January The Cass Freight Index suggests the changes taking place in the truckload market might be more than a weather disruption. The Cass Truckload Linehaul Index, a measurement of rates, rose 3.2% year over year in January. “This index is mostly comprised of contract rates, and anecdotally we hear about more shippers initiating one-year bids, suggesting movement in the cycle beyond just weather effects,” Tim Denoyer, author of the Cass Freight Index, wrote Tuesday. The 3.2% hike is consistent with what carrier Werner Enterprises is seeing. “Low to mid-single digits on our contract renewals would be really the starting point there,” Chris Neal, Werner’s senior vice president of pricing, said at the Citi Global Industrial Tech & Mobility Conference Tuesday. "We’ve had some good success already early in the year with some of those renewals.” Werner CEO Derek Leathers admitted while the winter weather played a role, the recovery is also supply-driven as the federal government cracks down on non-domiciled commercial drivers’ licenses and English language proficiency of truckers in the US. “You’re finally starting to see a cleansing of some of the capacity out there that needed to be addressed,” Leathers said at the Citi Global conference. “It’s been mostly supply-driven up until now, and with some signs now of a little bit of demand spark coupled with that, it puts us in a pretty optimistic position.” Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Truckload

Trucking executives buoyed by market signals as winter exit nears

<div class="phx-topic abstract-wrapper">The success of container lines in keeping vessel utilization high by removing functional capacity weakens the network and ups volatility in ocean reliability.</div>

The success of container lines in keeping vessel utilization high by removing functional capacity weakens the network and ups volatility in ocean reliability.

<div class="phx-topic">The high level of port-to-port ocean reliability the Gemini Cooperation has delivered since its launch a year ago is pressuring other carriers and alliances to up their game. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6172263_0.1.jpg"></img></div>Yet the obstacles for ocean carriers to remain profitable are only expanding as liners cycle deeper into overcapacity in the coming years. To protect their profitability, container lines have become better at managing short-term demand and supply and removing functional capacity. Their success in keeping utilization high, paradoxically, weakens the network, said Trine Nielsen, vice president of ocean/global at forwarder Flexport.“As ‘micro-events’ [e.g., localized port congestion, labor strikes] are expected to increase due to shifting trade patterns and introducing more mega-ships, we expect network instability to rise,” she said. “In fact, as more capacity enters the market, we anticipate even further instability because we should expect more aggressive capacity management actions by carriers to protect their profitability.” Facing congestion at Asia load centers such as Shanghai or Ningbo, ocean carriers may have the vessel omit the port entirely to not throw off the rest of their schedule. In some cases, vessels “swap” calls with one vessel covering Shanghai rather than Ningbo, and vice versa, Nielsen said. “While this maximizes asset utilization and prevents a vessel backlog, it triggers blank sailings and forces customers to deal with rolled cargo and unpredictable transit times,” she said. <h3>Obstacles to reliability ratchet up </h3>Port productivity globally is worsening, with S&amp;P Global’s Container Port Performance Index falling from a reading of 38 in 2020 to zero in 2024. The number of tropical storms has increased in recent years, and the intensity and unpredictability of cyclones has increased in the last decade, said Craig West, CEO/Europe at forecasting company Weathernews. “Volatility is not confined to extreme events. Conditions in the Central Atlantic have recently been practically impassable, with persistent weather patterns across the Bay of Biscay and English Channel leaving vessels drifting for multiple days,” West told the Journal of Commerce. “There is no headline-grabbing storm in these situations, yet the commercial damage to uptime and schedule reliability is significant.” Optimistically, the volatility from an overall shambolic network offers increased incentives for ocean carriers to improve their reliability, allowing them to stand out more in a volatile, oft-commoditized market and gain higher and more stable pricing in return. After launching in February 2025, Gemini members Maersk and Hapag-Lloyd are making the case that their joint network’s better than 90% reliability is giving customers enough certainty to reduce their inventories by two weeks. Vessels operated within the alliance hit 81% reliability in 2025, according to online benchmarking platform Xeneta’s eeSea data. Global ocean reliability for the entire industry has been falling since July, notching a reading of 25.4% thus far in February, according to eeSea. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4abe02d4-ed18-461a-ac0b-87ef52e3192b"></dynamic-object></div>“Shippers are also telling us that one of their priorities for 2026 is service reliability,” said Kelly Buckley, deputy director of ocean procurement at Drewry Supply Chain advisors. “Gemini has really raised the profile of that topic, and we can expect shippers to assess much more carefully on-time performance and lead times as part of their [trans-Pacific service contracting] tender process this year.” <h3>Finding reliability in service contracts </h3>The last few years of shipping disruptions due to the pandemic, Suez Canal diversions, and then tariffs left small and medium-size shippers with little time to focus on reliability as they tried to keep their business afloat, Buckley said. Mounting overcapacity gives these shippers more leverage in service contract negotiations and allows them, she said, to “actually start to take a step back and ask questions without fear of the fact that your cargo then may not make it on the vessel the next week.” Transparency on schedule changes remains an issue, Buckley said. Shippers still struggle to keep up with nearly last-minute blank notice announcements, and she said some Drewry customers learned after that fact that their cargo was routed through the Suez Canal via the perilous waters of the Red Sea. Meanwhile, although transit time reliability is critical for Sanmar’s new product launches and deliveries from new vendors, it’s only one element of service, said John Janson, global logistics director at the apparel shipper. “Normally, transit reliability is not as important to us if it is within a reasonable timeframe,” he said. “Having the equipment and space is more critical as our origins are counting on being able to load as most do not have storage.” Janson noted that ocean carriers allowed Sanmar — the US’ 79th-largest importer, according to the Journal of Commerce’s 2024 rankings — to exceed forecast volumes for emergencies and guaranteed that shipments would beat tariffs deadlines, saving the company hundreds of thousands of dollars. “No surprise, the folks that stepped up were the ones where we have made the most serious investment in relationships,” he said. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

The high level of port-to-port ocean reliability the Gemini Cooperation has delivered since its launch a year ago is pressuring other carriers and alliances to up their game. Yet the obstacles for ocean carriers to remain profitable are only expanding as liners cycle deeper into overcapacity in the coming years. To protect their profitability, container lines have become better at managing short-term demand and supply and removing functional capacity. Their success in keeping utilization high, paradoxically, weakens the network, said Trine Nielsen, vice president of ocean/global at forwarder Flexport. “As ‘micro-events’ [e.g., localized port congestion, labor strikes] are expected to increase due to shifting trade patterns and introducing more mega-ships, we expect network instability to rise,” she said. “In fact, as more capacity enters the market, we anticipate even further instability because we should expect more aggressive capacity management actions by carriers to protect their profitability.” Facing congestion at Asia load centers such as Shanghai or Ningbo, ocean carriers may have the vessel omit the port entirely to not throw off the rest of their schedule. In some cases, vessels “swap” calls with one vessel covering Shanghai rather than Ningbo, and vice versa, Nielsen said. “While this maximizes asset utilization and prevents a vessel backlog, it triggers blank sailings and forces customers to deal with rolled cargo and unpredictable transit times,” she said. Obstacles to reliability ratchet up Port productivity globally is worsening, with S&P Global’s Container Port Performance Index falling from a reading of 38 in 2020 to zero in 2024. The number of tropical storms has increased in recent years, and the intensity and unpredictability of cyclones has increased in the last decade, said Craig West, CEO/Europe at forecasting company Weathernews. “Volatility is not confined to extreme events. Conditions in the Central Atlantic have recently been practically impassable, with persistent weather patterns across the Bay of Biscay and English Channel leaving vessels drifting for multiple days,” West told the Journal of Commerce. “There is no headline-grabbing storm in these situations, yet the commercial damage to uptime and schedule reliability is significant.” Optimistically, the volatility from an overall shambolic network offers increased incentives for ocean carriers to improve their reliability, allowing them to stand out more in a volatile, oft-commoditized market and gain higher and more stable pricing in return. After launching in February 2025, Gemini members Maersk and Hapag-Lloyd are making the case that their joint network’s better than 90% reliability is giving customers enough certainty to reduce their inventories by two weeks. Vessels operated within the alliance hit 81% reliability in 2025, according to online benchmarking platform Xeneta’s eeSea data. Global ocean reliability for the entire industry has been falling since July, notching a reading of 25.4% thus far in February, according to eeSea. “Shippers are also telling us that one of their priorities for 2026 is service reliability,” said Kelly Buckley, deputy director of ocean procurement at Drewry Supply Chain advisors. “Gemini has really raised the profile of that topic, and we can expect shippers to assess much more carefully on-time performance and lead times as part of their [trans-Pacific service contracting] tender process this year.” Finding reliability in service contracts The last few years of shipping disruptions due to the pandemic, Suez Canal diversions, and then tariffs left small and medium-size shippers with little time to focus on reliability as they tried to keep their business afloat, Buckley said. Mounting overcapacity gives these shippers more leverage in service contract negotiations and allows them, she said, to “actually start to take a step back and ask questions without fear of the fact that your cargo then may not make it on the vessel the next week.” Transparency on schedule changes remains an issue, Buckley said. Shippers still struggle to keep up with nearly last-minute blank notice announcements, and she said some Drewry customers learned after that fact that their cargo was routed through the Suez Canal via the perilous waters of the Red Sea. Meanwhile, although transit time reliability is critical for Sanmar’s new product launches and deliveries from new vendors, it’s only one element of service, said John Janson, global logistics director at the apparel shipper. “Normally, transit reliability is not as important to us if it is within a reasonable timeframe,” he said. “Having the equipment and space is more critical as our origins are counting on being able to load as most do not have storage.” Janson noted that ocean carriers allowed Sanmar — the US’ 79th-largest importer, according to the Journal of Commerce’s 2024 rankings — to exceed forecast volumes for emergencies and guaranteed that shipments would beat tariffs deadlines, saving the company hundreds of thousands of dollars. “No surprise, the folks that stepped up were the ones where we have made the most serious investment in relationships,” he said. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Trans-Atlantic

Asia-Europe

Greater capacity control needs hinder ocean reliability efforts

<div class="phx-topic abstract-wrapper">The increase in volume that would result across the trans-Atlantic and trans-Pacific corridors was particularly welcome, according to Hapag-Lloyd’s CEO.</div>

The increase in volume that would result across the trans-Atlantic and trans-Pacific corridors was particularly welcome, according to Hapag-Lloyd’s CEO.

<div class="phx-topic">Hapag-Lloyd’s $4.2 billion acquisition of Zim Integrated Shipping Services that was announced Monday will significantly improve the Hamburg-based carrier’s position on several major trade lanes. While cementing the buyer’s position <a href="https://www.joc.com/article/hapag-lloyds-plan-to-acquire-zim-would-deepen-shipping-oligopoly-6170073">as the world’s fifth-largest container shipping company</a>, the takeover will grow Hapag-Lloyd’s volume share on the trans-Atlantic from 24% to 27%, on the trans-Pacific from 7% to 12%, in Asia from 9% to 11%, on Asia-Latin America from 11% to 14%, and from 2% to 7% on the intra-Europe trade, according to data from Container Trades Statistics (CTS) cited by Hapag-Lloyd. Hapag-Lloyd CEO Rolf Habben Jansen highlighted as particularly welcome the increase in volume that would result across the trans-Atlantic and trans-Pacific corridors. “When we look for a minute at the trade portfolios on the Atlantic and trans-Pacific, if we joined forces we would really get into very strong position,” he told reporters during an online briefing Monday shortly after signing the Zim deal in Tel Aviv. A 27% market share on the trans-Atlantic would put Hapag-Lloyd in second place behind Mediterranean Shipping Co. at 29%, according to the CTS figures cited by Hapag-Lloyd. According to PIERS, a sister company of the Journal of Commerce within S&amp;P Global, Hapag-Lloyd had a market share of 19.6% on the trans-Atlantic in January, behind MSC’s 22.6%. But Hapag-Lloyd held the top position throughout the fourth quarter of 2025 with a share that exceeded 25% in October and December. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ce24ca8a-5149-4e8e-a00a-5743e4d2abba"></dynamic-object></div>On the trans-Pacific, the addition of Zim would put Hapag-Lloyd level with Ocean Network Express in third position behind MSC at 13%, according to CTS. Habben Jansen said the Asia-Latin America trade has long been a corridor he has wanted to expand. In 2023, Hapag-Lloyd strengthened its position with the acquisition of SM SAAM terminal business while growing dedicated service networks on the trade lane. “Zim has done really well on Asia-Latin America in the last couple of years and this would allow us to get closer to the 15%, 16% [volume share] that we’ve always aspired to,” Habben Jansen told reporters. MSC holds the largest market share on the trade at 21%. <h3>Intra-Europe share ‘too small’ </h3>The Zim volume added on the intra-Europe trade would put Hapag-Lloyd level with Cosco Shipping at 7%, although considering it is a home market for the Hamburg-based carrier, Habben Jansen indicated there is still room to grow. “Intra-Europe for Hapag-Lloyd is too small in my view,” he said. “We would like to get to a market share of around 10%, and this would help us make a good step in that direction.” The Zim deal is expected to be completed by the end of the year, subject to approval of the Israeli carrier’s shareholders and regulatory approval in several jurisdictions. The acquisition comes as container shipping moves into a supply-driven downcycle, with the declining market sharply illustrated in Hapag-Lloyd’s preliminary results for 2025 <a href="https://www.joc.com/article/fourth-quarter-rate-slump-drags-down-hapag-lloyds-2025-financials-6166755">that included a steep drop in profitability</a>. Zim’s earnings have yet to be announced. Hapag-Lloyd’s estimated 2025 revenue for the combined entity would be $28 billion, a $1.1 billion drop from 2024. In earnings before interest and taxes, the $5.3 billion reported in 2024 by both carriers is expected to plummet to $2 billion should Zim hit the higher end of its 2025 forecast. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Hapag-Lloyd’s $4.2 billion acquisition of Zim Integrated Shipping Services that was announced Monday will significantly improve the Hamburg-based carrier’s position on several major trade lanes. While cementing the buyer’s position as the world’s fifth-largest container shipping company , the takeover will grow Hapag-Lloyd’s volume share on the trans-Atlantic from 24% to 27%, on the trans-Pacific from 7% to 12%, in Asia from 9% to 11%, on Asia-Latin America from 11% to 14%, and from 2% to 7% on the intra-Europe trade, according to data from Container Trades Statistics (CTS) cited by Hapag-Lloyd. Hapag-Lloyd CEO Rolf Habben Jansen highlighted as particularly welcome the increase in volume that would result across the trans-Atlantic and trans-Pacific corridors. “When we look for a minute at the trade portfolios on the Atlantic and trans-Pacific, if we joined forces we would really get into very strong position,” he told reporters during an online briefing Monday shortly after signing the Zim deal in Tel Aviv. A 27% market share on the trans-Atlantic would put Hapag-Lloyd in second place behind Mediterranean Shipping Co. at 29%, according to the CTS figures cited by Hapag-Lloyd. According to PIERS, a sister company of the Journal of Commerce within S&P Global, Hapag-Lloyd had a market share of 19.6% on the trans-Atlantic in January, behind MSC’s 22.6%. But Hapag-Lloyd held the top position throughout the fourth quarter of 2025 with a share that exceeded 25% in October and December. On the trans-Pacific, the addition of Zim would put Hapag-Lloyd level with Ocean Network Express in third position behind MSC at 13%, according to CTS. Habben Jansen said the Asia-Latin America trade has long been a corridor he has wanted to expand. In 2023, Hapag-Lloyd strengthened its position with the acquisition of SM SAAM terminal business while growing dedicated service networks on the trade lane. “Zim has done really well on Asia-Latin America in the last couple of years and this would allow us to get closer to the 15%, 16% [volume share] that we’ve always aspired to,” Habben Jansen told reporters. MSC holds the largest market share on the trade at 21%. Intra-Europe share ‘too small’ The Zim volume added on the intra-Europe trade would put Hapag-Lloyd level with Cosco Shipping at 7%, although considering it is a home market for the Hamburg-based carrier, Habben Jansen indicated there is still room to grow. “Intra-Europe for Hapag-Lloyd is too small in my view,” he said. “We would like to get to a market share of around 10%, and this would help us make a good step in that direction.” The Zim deal is expected to be completed by the end of the year, subject to approval of the Israeli carrier’s shareholders and regulatory approval in several jurisdictions. The acquisition comes as container shipping moves into a supply-driven downcycle, with the declining market sharply illustrated in Hapag-Lloyd’s preliminary results for 2025 that included a steep drop in profitability . Zim’s earnings have yet to be announced. Hapag-Lloyd’s estimated 2025 revenue for the combined entity would be $28 billion, a $1.1 billion drop from 2024. In earnings before interest and taxes, the $5.3 billion reported in 2024 by both carriers is expected to plummet to $2 billion should Zim hit the higher end of its 2025 forecast. Contact Greg Knowler at greg.knowler@spglobal.com .

Zim deal to strengthen Hapag-Lloyd’s market share across key trade lanes

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<div class="phx-topic abstract-wrapper">The 6-3 decision by the nation’s highest court to declare as illegal the global tariffs implemented by the US since last April’s so-called “Liberation Day” is likely to throw the Trump administration’s tariff policy into disarray.</div>

The 6-3 decision by the nation’s highest court to declare as illegal the global tariffs implemented by the US since last April’s so-called “Liberation Day” is likely to throw the Trump administration’s tariff policy into disarray.

<div class="phx-topic">The US Supreme Court on Friday ruled that President Donald Trump <a href="https://www.supremecourt.gov/opinions/25pdf/24-1287_4gcj.pdf">did not have the authority</a> under the International Emergency Economic Powers Act (IEEPA) to implement his wide-ranging global tariffs against US trading partners, upending the cornerstone of his administration’s economic policy. The 6-3 decision by the nation’s highest court to essentially declare as illegal the tariffs implemented by the US since last April’s so-called “Liberation Day” is likely to throw the Trump administration’s tariff policy into disarray. Trump, during a press briefing at the White House after the ruling, said he was “ashamed” of the justices who voted to kill the tariffs, but vowed he would pursue new options to put them in place. “Other alternatives will be used to replace the ones the Court incorrectly suspended,” he said. That includes the immediate implementation of a 10% “global” tariff under so-called Section 122 action, presumably levied against all US trading partners. “We’ll go in a different direction, which is even stronger than our original choice,” Trump said. The ruling could potentially unlock US-bound ocean freight volumes that have been bogged down since the end of the 2025 peak season due to economic uncertainty and worries that tariff costs couldn’t be effectively passed on to consumers. IEEPA-based tariffs vary between 10% and 50%, depending on the country, although most were 15% or lower. Numerous importers have decried the cost of paying tariffs as a material drag on their businesses over the past year, either due to the impact of price increases or profit margin pressure. Companies have also had to undertake nearly constant scenario planning to account for rapid changes to tariff exposure and subsequent sourcing location changes. A paper <a href="https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-for-the-2025-u-s-tariffs/">published earlier this month by the New York Federal Reserve</a> found that 90% of the added costs of Trump’s tariffs were being passed on to consumers and businesses. <h3>What’s next? </h3>The Supreme Court ruling is likely to lead to a chain reaction of legislation and administrative actions involving the Trump administration, US Customs and Border Protection, US importers, and trade consultants and attorneys representing those importers. CBP will have to refund importers hundreds of billions of dollars of tariffs paid over the course of the last nine months, though the Supreme Court’s decision Friday did not specify how that process should take place. Pete Mento, director of global trade advisory services at accounting firm Baker Tilly, told the Journal of Commerce that the Court of International Trade will decide how the refund process will unfold, a decision he said will likely come quickly. In early January, CBP shared a new electronic refund process that trade experts saw as a foreshadowing of Friday’s decision. “The court said tariffs are taxes, taxes belong to Congress, and ‘regulating importation’ in a sanctions statue does not secretly mean ‘rewrite the HTS [Harmonized Tariff Schedule] because the trade deficit hurt your feelings,’” Mento wrote in a LinkedIn post Friday. The calls for refunds are coming fast. The National Retail Federation praised the Supreme Court’s decision and urged lower courts to “ensure a seamless process to refund the tariffs to US importers.” “[The Court’s decision] provides much-needed certainty for US businesses and manufacturers, enabling global supply chains to operate without ambiguity,” David French, the NRF’s executive vice president of government relations, said in a statement. Analysts at Global Trade Alert estimate that the trade-weighted average tariff will fall from 15.4% to 8.3% on US imports, notwithstanding the imminent imposition of 10% tariffs under the Section 122 provision. <h3>Other tariff mechanisms available </h3>In the meantime, the administration has previously signaled its intent to implement tariffs through other legislative mechanisms if the Court struck down its IEEPA tariffs. Levers that are available to the Trump administration include the aforementioned Section 122, a provision that allows the executive branch to assess tariffs on countries to address a “large and serious” balance-of-payments deficit through import surcharges of up to 15%, import quotas, or a combination of the two, according to a December blog from the American Enterprise Institute. The catch with actions under Section 122 is that while they don’t require Congressional approval, they expire after 150 days. The president could, theoretically, extend them for another 150 days, but that action would be seen to contravene the spirit of the section. Also notable is that Section 122 has never been used before specifically to impose trade restrictions. Another option is use of Section 338, a largely defunct provision that allows the president to impose tariffs of up to 50% on imports from countries that discriminate against US commerce compared with other nations, the AEI blog explained. Section 338 is largely thought to have been supplanted by Section 301, the unfair trading practices provision under which Trump instituted tariffs against China in his first term. Under 301, the US Trade Representative must conduct an investigation before deciding that tariffs are necessary. The administration could expand its use of Section 232 tariffs, also deployed widely in Trump’s first term, to target national security risks. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

The US Supreme Court on Friday ruled that President Donald Trump did not have the authority under the International Emergency Economic Powers Act (IEEPA) to implement his wide-ranging global tariffs against US trading partners, upending the cornerstone of his administration’s economic policy. The 6-3 decision by the nation’s highest court to essentially declare as illegal the tariffs implemented by the US since last April’s so-called “Liberation Day” is likely to throw the Trump administration’s tariff policy into disarray. Trump, during a press briefing at the White House after the ruling, said he was “ashamed” of the justices who voted to kill the tariffs, but vowed he would pursue new options to put them in place. “Other alternatives will be used to replace the ones the Court incorrectly suspended,” he said. That includes the immediate implementation of a 10% “global” tariff under so-called Section 122 action, presumably levied against all US trading partners. “We’ll go in a different direction, which is even stronger than our original choice,” Trump said. The ruling could potentially unlock US-bound ocean freight volumes that have been bogged down since the end of the 2025 peak season due to economic uncertainty and worries that tariff costs couldn’t be effectively passed on to consumers. IEEPA-based tariffs vary between 10% and 50%, depending on the country, although most were 15% or lower. Numerous importers have decried the cost of paying tariffs as a material drag on their businesses over the past year, either due to the impact of price increases or profit margin pressure. Companies have also had to undertake nearly constant scenario planning to account for rapid changes to tariff exposure and subsequent sourcing location changes. A paper published earlier this month by the New York Federal Reserve found that 90% of the added costs of Trump’s tariffs were being passed on to consumers and businesses. What’s next? The Supreme Court ruling is likely to lead to a chain reaction of legislation and administrative actions involving the Trump administration, US Customs and Border Protection, US importers, and trade consultants and attorneys representing those importers. CBP will have to refund importers hundreds of billions of dollars of tariffs paid over the course of the last nine months, though the Supreme Court’s decision Friday did not specify how that process should take place. Pete Mento, director of global trade advisory services at accounting firm Baker Tilly, told the Journal of Commerce that the Court of International Trade will decide how the refund process will unfold, a decision he said will likely come quickly. In early January, CBP shared a new electronic refund process that trade experts saw as a foreshadowing of Friday’s decision. “The court said tariffs are taxes, taxes belong to Congress, and ‘regulating importation’ in a sanctions statue does not secretly mean ‘rewrite the HTS [Harmonized Tariff Schedule] because the trade deficit hurt your feelings,’” Mento wrote in a LinkedIn post Friday. The calls for refunds are coming fast. The National Retail Federation praised the Supreme Court’s decision and urged lower courts to “ensure a seamless process to refund the tariffs to US importers.” “[The Court’s decision] provides much-needed certainty for US businesses and manufacturers, enabling global supply chains to operate without ambiguity,” David French, the NRF’s executive vice president of government relations, said in a statement. Analysts at Global Trade Alert estimate that the trade-weighted average tariff will fall from 15.4% to 8.3% on US imports, notwithstanding the imminent imposition of 10% tariffs under the Section 122 provision. Other tariff mechanisms available In the meantime, the administration has previously signaled its intent to implement tariffs through other legislative mechanisms if the Court struck down its IEEPA tariffs. Levers that are available to the Trump administration include the aforementioned Section 122, a provision that allows the executive branch to assess tariffs on countries to address a “large and serious” balance-of-payments deficit through import surcharges of up to 15%, import quotas, or a combination of the two, according to a December blog from the American Enterprise Institute. The catch with actions under Section 122 is that while they don’t require Congressional approval, they expire after 150 days. The president could, theoretically, extend them for another 150 days, but that action would be seen to contravene the spirit of the section. Also notable is that Section 122 has never been used before specifically to impose trade restrictions. Another option is use of Section 338, a largely defunct provision that allows the president to impose tariffs of up to 50% on imports from countries that discriminate against US commerce compared with other nations, the AEI blog explained. Section 338 is largely thought to have been supplanted by Section 301, the unfair trading practices provision under which Trump instituted tariffs against China in his first term. Under 301, the US Trade Representative must conduct an investigation before deciding that tariffs are necessary. The administration could expand its use of Section 232 tariffs, also deployed widely in Trump’s first term, to target national security risks. Contact Eric Johnson at eric.johnson@spglobal.com .

US Supreme Court rules against Trump in critical IEEPA tariff case

<div class="phx-topic abstract-wrapper">The acquisition is expected to be completed this year, and will strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while bringing up to $500 million in synergies, Hapag-Lloyd's CEO said. </div>

The acquisition is expected to be completed this year, and will strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while bringing up to $500 million in synergies, Hapag-Lloyd's CEO said.

<div class="phx-topic">Hapag-Lloyd inked a $4.2 billion deal Monday to acquire 100% of Zim Integrated Shipping Services, cementing the buyer’s position <a href="https://www.joc.com/article/hapag-lloyds-plan-to-acquire-zim-would-deepen-shipping-oligopoly-6170073">as the world’s fifth-largest container shipping company</a> with a fleet of over 400 vessels, a slot capacity of over 3 million TEUs, and an annual transport volume of more than 18 million TEUs. Financing the transaction from cash reserves and a $2.5 billion bridging fund, Hapag-Lloyd will take over the international operations of Zim but leave control of domestic operations to Israel-based private equity group FIMI Opportunity Funds. The deal is expected to be completed by the end of the year, subject to approval of Zim shareholders and regulatory approval in several jurisdictions. Hapag-Lloyd CEO Rolf Habben Jansen said the acquisition of the 10th largest ocean carrier would strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while generating significant synergies. “We expect to see about $300 million to $500 million in synergies, mainly in network and procurement,” Habben Jansen told reporters during an online briefing shortly after signing the deal in Tel Aviv, noting that the synergies would bring down slot costs by an estimated $25 per TEU. “We know how to create those synergies, as we have done so in previous transactions,” he added. Zim will be the sixth carrier Hapag-Lloyd has taken over following previous deals for cpships (2005), CSAV (2014), UASC (2017), NileDutch (2021), and DAL (2022). <h3>‘A fair price’ </h3>Asked whether the $4.2 billion acquisition cost was too high, Habben Jansen said he believed it was “a fair price.” ”It was certainly not a low price that we paid, but we believe that it’s an excellent asset, and as such, I think the premium is justified,” he said. Analysts at investment bank J.P. Morgan were not convinced by the takeover premium, calling the price offered “a significant premium to forward expectations.” An analyst note said this was likely a reflection of the competitive nature of the tender and efforts by strategic players to increase market share in a highly competitive market dynamic where players without a large order book were disadvantaged. J.P. Morgan expects Zim’s earnings before interest, taxes, amortization and depreciation (EBITDA) margin for 2025 to be 30%, compared to 20% in 2023 and 11% in 2019, leaving “material downside potential as the container shipping cycle turns.” “This we expect will likely limit the value creation potential for Hapag-Lloyd in the coming years,” the bank said, although it noted that Hapag-Lloyd appeared less concerned over near-term dynamics, “despite a more challenging multi-year period ahead.” The international element of Zim’s capacity that Hapag-Lloyd will acquire is chartered, thus increasing the chartered portion of Hapag-Lloyd's fleet from its current 39% to 52%. Habben Jansen said there were benefits to holding chartered tonnage in a down cycle, but conceded that the level would be too high. “Dependent on how good or not so good the market is, you have a lot more flexibility in adjusting your cost base than if you do not have a large chunk of chartered tonnage,” he told reporters. “Having said that, I think if this transaction is completed, then the percentage of chartered tonnage that we would have is probably a bit on the high side,” he added. “So over time, one should expect that we then bring that down.” Only Ocean Network Express and Yang Ming have charter ratios above 50%, with other top 10 carriers below 40%. In the case of Evergreen and HMM, it is as low as 30% and 18%, respectively, Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce contributor, noted in a LinkedIn post. “This can prove to be a competitive advantage as the market is heading towards a cyclical downturn where the ability to tactically reduce the size of the operated fleet by redelivering charter vessels can be an important element of maintaining a high utilization and low unit cost,” Jensen wrote Monday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Hapag-Lloyd inked a $4.2 billion deal Monday to acquire 100% of Zim Integrated Shipping Services, cementing the buyer’s position as the world’s fifth-largest container shipping company with a fleet of over 400 vessels, a slot capacity of over 3 million TEUs, and an annual transport volume of more than 18 million TEUs. Financing the transaction from cash reserves and a $2.5 billion bridging fund, Hapag-Lloyd will take over the international operations of Zim but leave control of domestic operations to Israel-based private equity group FIMI Opportunity Funds. The deal is expected to be completed by the end of the year, subject to approval of Zim shareholders and regulatory approval in several jurisdictions. Hapag-Lloyd CEO Rolf Habben Jansen said the acquisition of the 10th largest ocean carrier would strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while generating significant synergies. “We expect to see about $300 million to $500 million in synergies, mainly in network and procurement,” Habben Jansen told reporters during an online briefing shortly after signing the deal in Tel Aviv, noting that the synergies would bring down slot costs by an estimated $25 per TEU. “We know how to create those synergies, as we have done so in previous transactions,” he added. Zim will be the sixth carrier Hapag-Lloyd has taken over following previous deals for cpships (2005), CSAV (2014), UASC (2017), NileDutch (2021), and DAL (2022). ‘A fair price’ Asked whether the $4.2 billion acquisition cost was too high, Habben Jansen said he believed it was “a fair price.” ”It was certainly not a low price that we paid, but we believe that it’s an excellent asset, and as such, I think the premium is justified,” he said. Analysts at investment bank J.P. Morgan were not convinced by the takeover premium, calling the price offered “a significant premium to forward expectations.” An analyst note said this was likely a reflection of the competitive nature of the tender and efforts by strategic players to increase market share in a highly competitive market dynamic where players without a large order book were disadvantaged. J.P. Morgan expects Zim’s earnings before interest, taxes, amortization and depreciation (EBITDA) margin for 2025 to be 30%, compared to 20% in 2023 and 11% in 2019, leaving “material downside potential as the container shipping cycle turns.” “This we expect will likely limit the value creation potential for Hapag-Lloyd in the coming years,” the bank said, although it noted that Hapag-Lloyd appeared less concerned over near-term dynamics, “despite a more challenging multi-year period ahead.” The international element of Zim’s capacity that Hapag-Lloyd will acquire is chartered, thus increasing the chartered portion of Hapag-Lloyd's fleet from its current 39% to 52%. Habben Jansen said there were benefits to holding chartered tonnage in a down cycle, but conceded that the level would be too high. “Dependent on how good or not so good the market is, you have a lot more flexibility in adjusting your cost base than if you do not have a large chunk of chartered tonnage,” he told reporters. “Having said that, I think if this transaction is completed, then the percentage of chartered tonnage that we would have is probably a bit on the high side,” he added. “So over time, one should expect that we then bring that down.” Only Ocean Network Express and Yang Ming have charter ratios above 50%, with other top 10 carriers below 40%. In the case of Evergreen and HMM, it is as low as 30% and 18%, respectively, Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce contributor, noted in a LinkedIn post. “This can prove to be a competitive advantage as the market is heading towards a cyclical downturn where the ability to tactically reduce the size of the operated fleet by redelivering charter vessels can be an important element of maintaining a high utilization and low unit cost,” Jensen wrote Monday. Contact Greg Knowler at greg.knowler@spglobal.com.

Hapag-Lloyd bolsters fleet with $4.2 billion deal to acquire Zim

<div class="phx-topic abstract-wrapper">The wide-ranging plan includes proposals to tax foreign-built ships calling US ports, rebuild domestic shipbuilding capacity, and eliminate “burdensome regulations” through a series of deregulatory measures. </div>

The wide-ranging plan includes proposals to tax foreign-built ships calling US ports, rebuild domestic shipbuilding capacity, and eliminate “burdensome regulations” through a series of deregulatory measures.

<div class="phx-topic">The Trump administration Friday unveiled a wide-ranging blueprint for revitalizing the US maritime sector, the financial cornerstone of which would be a Maritime Security Trust Fund (MSTF) that would be fed in large part by taxing foreign-owned vessels calling US ports. “America’s Maritime Action Plan” includes a “universal infrastructure or security fee” that would be imposed on all foreign-built commercial vessels. The fee would be assessed based on the weight of the imported tonnage carried on the vessel. The action plan also includes a separate fee on imports arriving via land. While no specific figures were proposed, the plan to tax cargo tonnage imported by foreign-built ships did offer two scenarios: A fee of 1 cent per kilogram would generate about $66 billion over 10 years, while a fee of 25 cents per kg would yield close to $1.5 trillion. It’s unclear how the estimates were calculated. “As foreign-built vessels benefit from US market access, this policy ensures they contribute to the long-term revitalization of America’s maritime capabilities,” the plan said. The proposal echoes the tit-for-tat tariffs the US and China intended to impose on each other’s tonnage <a href="https://www.joc.com/article/year-long-pause-on-us-port-fees-targeting-china-vessels-to-start-nov-10-6108431">until a one-year suspension was enacted last November</a> as part of a <a href="https://www.joc.com/article/trade-deal-could-boost-short-term-china-imports-but-uncertainty-lingers-6106809">broader trade deal between Washington and Beijing</a>. The action plan also includes proposals to rebuild domestic shipbuilding capacity, strengthen the maritime industrial base, increase the fleet of US-built and -flagged commercial vessels working international trades, and eliminate “burdensome regulations” through a series of deregulatory measures. “For decades, the nation’s strategic position and shipbuilding industrial capacity have weakened due to a lack of strategic focus, cumbersome government procurement processes and a lack of strategic support for construction of commercial vessels in domestic shipyards,” the plan’s introduction stated. The action plan is an extension of an executive order issued by President Donald Trump last April calling for the restoration of American maritime dominance. The 40-page plan offers several concrete proposals, including the creation of the MSTF that would be fed by new revenue streams. “By securing stable, long-term funding, the MSTF would ensure consistent support for investments in shipbuilding, fleet expansion, industrial base resilience, and maritime workforce development,” the plan said. “Authorized expenditures would include programs identified as helpful for the promotion, growth and strengthening of the domestic maritime sector.” The MSTF would help fund the revitalization of US shipbuilding capacity, which is “the cornerstone of the administration’s strategy to restore America’s maritime strength and self-sufficiency,” according to the plan, which noted only eight shipyards exist in the country that can build vessels greater than 400 feet in length. The plan calls for investment that would fund upgrades to commercial shipyards in order to add and modernize drydocks, heavy-lift and gantry cranes, panel lines, and automated handling systems “to support higher‑rate production and large hull handling.” <h3>Land port tax </h3>A separate proposed funding mechanism, the Land Port Maintenance Tax, would be an equivalent to the existing Harbor Maintenance Tax for marine ports. The plan proposes a “modest tax” on merchandise entering the US via land of 0.125% of the value of the goods. “Funds collected under this tax will be deposited into the newly established Land Port Maintenance Trust Fund (LPMTF), which will support the planning, design, construction, maintenance and improvement of land port infrastructure,” according to the plan. The action plan also proposes the creation of a Strategic Commercial Fleet (SCF) that would consist of US-built vessels working international trades. The SCF would “provide the depth and redundancy required to sustain military logistics around the globe and ensure the continuous flow of goods to the US economy,” the plan said. “Vessels in the SCF would receive financial support for both construction and operation, leveling the playing field between the US and subsidized foreign competition.” Many of the proposals included in the maritime action plan require Congressional approval, so the Trump administration said it is compiling a legislative package that will be sent to Congress after the publication of Trump’s fiscal year 2027 budget request. Presidents typically send annual budget requests to Congress in February, although the timeline can be delayed. “The Trump administration urges Congress to enact this package in tandem with existing legislative vehicles, ensuring the US maritime industry is equipped to meet the demands of global competition, national defense and economic growth,” the plan said. Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>.</div>

The Trump administration Friday unveiled a wide-ranging blueprint for revitalizing the US maritime sector, the financial cornerstone of which would be a Maritime Security Trust Fund (MSTF) that would be fed in large part by taxing foreign-owned vessels calling US ports. “America’s Maritime Action Plan” includes a “universal infrastructure or security fee” that would be imposed on all foreign-built commercial vessels. The fee would be assessed based on the weight of the imported tonnage carried on the vessel. The action plan also includes a separate fee on imports arriving via land. While no specific figures were proposed, the plan to tax cargo tonnage imported by foreign-built ships did offer two scenarios: A fee of 1 cent per kilogram would generate about $66 billion over 10 years, while a fee of 25 cents per kg would yield close to $1.5 trillion. It’s unclear how the estimates were calculated.  “As foreign-built vessels benefit from US market access, this policy ensures they contribute to the long-term revitalization of America’s maritime capabilities,” the plan said. The proposal echoes the tit-for-tat tariffs the US and China intended to impose on each other’s tonnage until a one-year suspension was enacted last November as part of a broader trade deal between Washington and Beijing . The action plan also includes proposals to rebuild domestic shipbuilding capacity, strengthen the maritime industrial base, increase the fleet of US-built and -flagged commercial vessels working international trades, and eliminate “burdensome regulations” through a series of deregulatory measures. “For decades, the nation’s strategic position and shipbuilding industrial capacity have weakened due to a lack of strategic focus, cumbersome government procurement processes and a lack of strategic support for construction of commercial vessels in domestic shipyards,” the plan’s introduction stated. The action plan is an extension of an executive order issued by President Donald Trump last April calling for the restoration of American maritime dominance. The 40-page plan offers several concrete proposals, including the creation of the MSTF that would be fed by new revenue streams. “By securing stable, long-term funding, the MSTF would ensure consistent support for investments in shipbuilding, fleet expansion, industrial base resilience, and maritime workforce development,” the plan said. “Authorized expenditures would include programs identified as helpful for the promotion, growth and strengthening of the domestic maritime sector.” The MSTF would help fund the revitalization of US shipbuilding capacity, which is “the cornerstone of the administration’s strategy to restore America’s maritime strength and self-sufficiency,” according to the plan, which noted only eight shipyards exist in the country that can build vessels greater than 400 feet in length. The plan calls for investment that would fund upgrades to commercial shipyards in order to add and modernize drydocks, heavy-lift and gantry cranes, panel lines, and automated handling systems “to support higher‑rate production and large hull handling.” Land port tax A separate proposed funding mechanism, the Land Port Maintenance Tax, would be an equivalent to the existing Harbor Maintenance Tax for marine ports. The plan proposes a “modest tax” on merchandise entering the US via land of 0.125% of the value of the goods. “Funds collected under this tax will be deposited into the newly established Land Port Maintenance Trust Fund (LPMTF), which will support the planning, design, construction, maintenance and improvement of land port infrastructure,” according to the plan. The action plan also proposes the creation of a Strategic Commercial Fleet (SCF) that would consist of US-built vessels working international trades. The SCF would “provide the depth and redundancy required to sustain military logistics around the globe and ensure the continuous flow of goods to the US economy,” the plan said. “Vessels in the SCF would receive financial support for both construction and operation, leveling the playing field between the US and subsidized foreign competition.” Many of the proposals included in the maritime action plan require Congressional approval, so the Trump administration said it is compiling a legislative package that will be sent to Congress after the publication of Trump’s fiscal year 2027 budget request. Presidents typically send annual budget requests to Congress in February, although the timeline can be delayed. “The Trump administration urges Congress to enact this package in tandem with existing legislative vehicles, ensuring the US maritime industry is equipped to meet the demands of global competition, national defense and economic growth,” the plan said. Contact Kevin Saville at kevin.saville2@spglobal.com .

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<div class="phx-topic abstract-wrapper">The International Air Transport Association Wednesday condemned a Canadian government plan to impose</div>

The International Air Transport Association Wednesday condemned a Canadian government plan to impose

<div class="phx-topic">The International Air Transport Association Wednesday condemned a Canadian government plan to impose a tax Nov. 1 on foreign airlines flying over Canada.The fee primarily will hit flights between the United States and Europe and the Pacific Rim.At a press conference in Montreal, IATA Director General Pierre Jeanniot urged Ottawa authorities to scrap a plan that "discriminates against international airlines overflying Canada."He called for "an equitable distribution of the costs among all users of air traffic control" and a phasing out of new charges over a three-year period.Cargo as well as passenger airlines will be hit by a fee - virtual seed money - destined to help defray costs for Nav Canada, a newly created privatized air traffic control system set to become operational in April 1996.The charge is expected to generate revenue of about 165 million Canadiandollars (US$120 million) annually."We are shocked," said Pete Diefenbach, New York-based marketing manager for North America of Nippon Cargo Airlines, which has regular flights between Tokyo, Anchorage, Chicago and New York."It's a very inopportune move at a time carriers are trying to return to profitability," he said.Most affected will be the major American, European and Asian airlines, including American Airlines, Delta, British Airways, Air France, KLM, Swissair, Lufthansa, Japan Airlines and Cathay Pacific.To offset the levy, many airlines will be compelled to impose a ticket surcharge, IATA said in a press release.As many as 800 international flights daily arc over Canadian airspace without touching down.Under the fee plan, for instance, a Boeing 747 flying from Los Angeles to London would be billed C$1,423. On this route, the distance flown over Canadian airspace is estimated at 2,300 miles.The formula for the charge is described as C$0.026 times the square root of the maximum takeoff weight of the aircraft times the distance flown in Canada airspace.Such charges can be found in Europe and Australia, but do not exist in Canada and the United States.U.S. domestic flights that overfly Canada, like Boston-Chicago, will not be charged the new fee. Neither will government or military aircraft.The fee, however, will apply to flights on large aircraft flying between Alaska and the continental United States.The official Canada Gazette recently commented, "These would be international flights from Asia that stop over in Alaska."Mr. Jeanniot said foreign airlines did not get adequate warning of the impending levy - first mentioned in the February 1995 federal budget and detailed in June.In a strongly worded letter to Canadian Transport Minister Doug Young, Mr. Jeanniot stressed that IATA was prepared to cooperate with Transport Canada and Nav Canada "in defining an equitable charging system for a full cost recovery of an agreed cost-base."Nav Canada is a nonprofit corporation whose board is dominated by air traffic controllers, government officials and users of the system, including domestic airlines.In a letter to Transport Canada, dated July 27, Carol Hallett, president of the Washington-based Air Transport Association, said a selective overflight charge should not be imposed just months before Nav Canada establishes its own charging mechanism for all users of the air navigation system.</div>

The International Air Transport Association Wednesday condemned a Canadian government plan to impose a tax Nov. 1 on foreign airlines flying over Canada. The fee primarily will hit flights between the United States and Europe and the Pacific Rim.At a press conference in Montreal, IATA Director General Pierre Jeanniot urged Ottawa authorities to scrap a plan that "discriminates against international airlines overflying Canada." He called for "an equitable distribution of the costs among all users of air traffic control" and a phasing out of new charges over a three-year period. Cargo as well as passenger airlines will be hit by a fee - virtual seed money - destined to help defray costs for Nav Canada, a newly created privatized air traffic control system set to become operational in April 1996. The charge is expected to generate revenue of about 165 million Canadian dollars (US$120 million) annually. "We are shocked," said Pete Diefenbach, New York-based marketing manager for North America of Nippon Cargo Airlines, which has regular flights between Tokyo, Anchorage, Chicago and New York. "It's a very inopportune move at a time carriers are trying to return to profitability," he said. Most affected will be the major American, European and Asian airlines, including American Airlines, Delta, British Airways, Air France, KLM, Swissair, Lufthansa, Japan Airlines and Cathay Pacific. To offset the levy, many airlines will be compelled to impose a ticket surcharge, IATA said in a press release. As many as 800 international flights daily arc over Canadian airspace without touching down. Under the fee plan, for instance, a Boeing 747 flying from Los Angeles to London would be billed C$1,423. On this route, the distance flown over Canadian airspace is estimated at 2,300 miles. The formula for the charge is described as C$0.026 times the square root of the maximum takeoff weight of the aircraft times the distance flown in Canada airspace. Such charges can be found in Europe and Australia, but do not exist in Canada and the United States. U.S. domestic flights that overfly Canada, like Boston-Chicago, will not be charged the new fee. Neither will government or military aircraft. The fee, however, will apply to flights on large aircraft flying between Alaska and the continental United States. The official Canada Gazette recently commented, "These would be international flights from Asia that stop over in Alaska." Mr. Jeanniot said foreign airlines did not get adequate warning of the impending levy - first mentioned in the February 1995 federal budget and detailed in June. In a strongly worded letter to Canadian Transport Minister Doug Young, Mr. Jeanniot stressed that IATA was prepared to cooperate with Transport Canada and Nav Canada "in defining an equitable charging system for a full cost recovery of an agreed cost-base." Nav Canada is a nonprofit corporation whose board is dominated by air traffic controllers, government officials and users of the system, including domestic airlines. In a letter to Transport Canada, dated July 27, Carol Hallett, president of the Washington-based Air Transport Association, said a selective overflight charge should not be imposed just months before Nav Canada establishes its own charging mechanism for all users of the air navigation system.

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