<div class="phx-topic abstract-wrapper">Delilah’s Law, a major crackdown on immigrants in the trucking industry, was passed 35 to 26 by the House Transportation and Infrastructure Committee and now heads to a floor vote.</div>

Delilah’s Law, a major crackdown on immigrants in the trucking industry, was passed 35 to 26 by the House Transportation and Infrastructure Committee and now heads to a floor vote.

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<div class="phx-topic">The US House Transportation and Infrastructure Committee on Wednesday advanced the bill known as “Dalilah’s Law,” sending the legislation that could reshape the truckload and drayage industry to the full House for consideration. The committee’s vote to approve the legislation was 35 to 26. President Donald Trump championed the bill in his State of the Union address in late February, calling for illegal immigrants to lose their non-domiciled commercial driver’s licenses (CDLs) while toughening standards around the English language proficiency of all drivers. The bill is named after a young girl named Dalilah Coleman of Bakersfield, California, who was critically injured in June 2024 in an accident with a tractor-trailer. The truck driver was a 20-year-old from India that the Trump administration said was in the US illegally. The legislation contains several provisions that go far beyond the scope of a Federal Motor Carrier Safety Administration (FMCSA) rule restricting non-domiciled CDLs that went into effect earlier this week which the agency estimates could remove up to 194,000 drivers from the market over five years. <h3>Immediate license revocation </h3>Delilah’s Law would prevent states from issuing commercial driver’s licenses to anyone who is not a US citizen or a permanent lawful resident unless the person has a valid H-2A, H-2B or E-2 visa. States would also be required to immediately revoke CDLs of any driver who does not meet the new standards, whereas the FMCSA rule cancels non-domiciled CDLs when they are up for renewal, or when the driver next interacts with a state licensing agency. The bill would even affect US citizens who drive trucks, as it would require a mandatory 180-day recertification of all CDL holders in the US, regardless of citizenship or nationality, with all testing done in English. “I cannot understand how these licenses have been issued to people who do not write or speak English. How are these being issued?” Rep. Mike Collins (R-Ga.) said during Wednesday’s hearing on Capitol Hill. “What happens when you get to a customer and you can’t talk to them, or you don’t know what you’re hauling? There’s a lot more than just reading road signs.” Collins said he supports the bill because the industry needs to crack down on the proliferation of so-called CDL mills that he and others say are putting unqualified men and women on the roads, jeopardizing safety. The bill has the support of more than 55 trucking, safety and transportation organizations including the Owner-Operator Independent Drivers Association (OOIDA), and the American Trucking Associations (ATA). Democrats on the committee opposed the bill because they believe it casts too wide of a net. “It reaches drivers who are lawfully present, who have complied with federal requirements and who have been working safely and consistently in this country for years, sometimes decades,” said Rep. Salud Carbajal (D-Calif.). “They will lose the ability to do the job they have trained for and relied on to support their families. There is no evidence presented here that these drivers are unsafe. This bill, as written, deeply misses the mark.” Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>.</div>

The US House Transportation and Infrastructure Committee on Wednesday advanced the bill known as “Dalilah’s Law,” sending the legislation that could reshape the truckload and drayage industry to the full House for consideration. The committee’s vote to approve the legislation was 35 to 26. President Donald Trump championed the bill in his State of the Union address in late February, calling for illegal immigrants to lose their non-domiciled commercial driver’s licenses (CDLs) while toughening standards around the English language proficiency of all drivers. The bill is named after a young girl named Dalilah Coleman of Bakersfield, California, who was critically injured in June 2024 in an accident with a tractor-trailer. The truck driver was a 20-year-old from India that the Trump administration said was in the US illegally. The legislation contains several provisions that go far beyond the scope of a Federal Motor Carrier Safety Administration (FMCSA) rule restricting non-domiciled CDLs that went into effect earlier this week which the agency estimates could remove up to 194,000 drivers from the market over five years. Immediate license revocation Delilah’s Law would prevent states from issuing commercial driver’s licenses to anyone who is not a US citizen or a permanent lawful resident unless the person has a valid H-2A, H-2B or E-2 visa. States would also be required to immediately revoke CDLs of any driver who does not meet the new standards, whereas the FMCSA rule cancels non-domiciled CDLs when they are up for renewal, or when the driver next interacts with a state licensing agency. The bill would even affect US citizens who drive trucks, as it would require a mandatory 180-day recertification of all CDL holders in the US, regardless of citizenship or nationality, with all testing done in English. “I cannot understand how these licenses have been issued to people who do not write or speak English. How are these being issued?” Rep. Mike Collins (R-Ga.) said during Wednesday’s hearing on Capitol Hill. “What happens when you get to a customer and you can’t talk to them, or you don’t know what you’re hauling? There’s a lot more than just reading road signs.” Collins said he supports the bill because the industry needs to crack down on the proliferation of so-called CDL mills that he and others say are putting unqualified men and women on the roads, jeopardizing safety. The bill has the support of more than 55 trucking, safety and transportation organizations including the Owner-Operator Independent Drivers Association (OOIDA), and the American Trucking Associations (ATA). Democrats on the committee opposed the bill because they believe it casts too wide of a net. “It reaches drivers who are lawfully present, who have complied with federal requirements and who have been working safely and consistently in this country for years, sometimes decades,” said Rep. Salud Carbajal (D-Calif.). “They will lose the ability to do the job they have trained for and relied on to support their families. There is no evidence presented here that these drivers are unsafe. This bill, as written, deeply misses the mark.” Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Trucking labor

Surface

House committee advances bill targeting non-domiciled commercial driver’s licenses

<div class="phx-topic abstract-wrapper">Changing market dynamics offer an opportunity for motor carriers to raise rates, but also for intermodal providers to win business from cost-conscious shippers looking to shift modes.</div>

Changing market dynamics offer an opportunity for motor carriers to raise rates, but also for intermodal providers to win business from cost-conscious shippers looking to shift modes.

<div class="phx-topic">The tightening of truckload capacity and a sharp rise in diesel prices are beginning to reset surface transportation rates in the US, giving carriers renewed leverage while opening a potential growth opportunity for intermodal rail. Crackdowns on <a href="https://www.joc.com/article/impact-of-non-domiciled-cdl-enforcement-splits-us-trucking-sector-6135184">non-domiciled commercial drivers</a> and stricter English-language enforcement are constraining truckload capacity after a four-year freight recession. Meanwhile, diesel prices have surged to their highest level since late 2022 amid the war with Iran, lifting transportation costs for all and forcing shippers to reassess their budgets. It has started a cascading effect across domestic US transportation. Brokers and asset-based truckload carriers are rejecting freight and insisting on renegotiating contract rates, while shippers facing blown transportation budgets consider cheaper options such as intermodal rail. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="f7dc31b8-1e1c-4a59-907f-2391c69d4e9f"></dynamic-object></div>Early signs of that repricing are already evident. Spot truckload rates are up between 15% and 20% from a year ago, according to DAT Freight &amp; Analytics, even as freight demand remains muted amid elevated interest rates, a lackluster housing market, and mixed signals from the US industrial sector. “Not only are you seeing elevated rates across other modalities such as flatbed, but in the overall dry-van market, you’re seeing 14%, 15% tender rejections coming out of the slowest freight month of the year,” said Jared Weisfeld, chief strategy officer for RXO, a non-asset broker, speaking at the J.P. Morgan Industrials Conference on Tuesday. As recently as last year, tender rejections were at or less than 5%, according to Weisfeld. <h3>Regulatory tightening reinforces supply constraint </h3>The supply side could tighten further as new federal regulations take hold. The Federal Motor Carrier Safety Administration (FCMSA) enacted a rule earlier this week restricting non-domiciled commercial driver’s licenses (CDLs), a move the agency estimates could remove up to 194,000 drivers over five years. On Wednesday, the US House of Representatives advanced “Delilah’s Law,” which would accelerate enforcement over non-domiciled CDLs by retroactively invalidating certain licenses, rather than waiting for a non-domiciled CDL holder to interact with state licensing agencies. Despite higher rates, fleets have been cautious about adding capacity, even though stricter emissions regulations in 2027 will increase the purchase price of a new truck. “Our customers are more middle- to smaller-sized [carriers], and I think there’s still a lot of hesitation on that side to make the decisions,” said Cristina Gallo-Aquino, CFO of Ryder Systems, speaking at the J.P. Morgan event. “We are pointing it all out to them to show them how much of a price increase could be coming ... but we haven’t really seen the shift to make a decision and preorder.” <h3>Fuel surge amplifies pricing pressure </h3>Diesel prices averaged $5.07 per gallon last week, according to the US Energy Information Administration, the highest since November 2022 and adding another layer of cost pressure across the truckload market. On the spot market, where rates are often negotiated on an all-in basis, the increase is squeezing owner-operators and smaller carriers that cannot pass through fuel costs. That dynamic may cause more capacity to exit the truckload sector. In the contract market, larger asset-based carriers pass through higher fuel costs via surcharges. Since March 1, the average surcharge has risen nearly 20 cents per mile, although methodologies vary. For shippers, the result is sticker shock on invoices and a renewed focus on lower-cost alternatives such as rail. “For the intermodal space, it starts to put pressure on truck rates, which is a pretty good thing for us,” Mark George, CEO of Norfolk Southern, said at the J.P. Morgan event. “We’ve been pretty depressed [price-wise] for a while. We’d love to see some evacuation of capacity in trucking.” Intermodal providers are already prepared for that shift. Darren Field, president of intermodal at J.B. Hunt Transport Services, said the company is actively engaging with shippers looking to manage rising transportation costs. “How can we convert business from the highway back to intermodal, or to intermodal for the first time to hopefully save you a little money and prepare your budget for a year where truckload capacity and prices could get difficult for you,” Field said at the J.P. Morgan conference. “How can you hedge against the potential for a cost increase coming at your budget as a shipper by utilizing more intermodal?” But capturing that opportunity will depend on execution. Railroads must maintain service reliability even as volumes rise, a lesson of the pandemic when congestion and labor shortages left intermodal with a lingering stigma among some shippers. Service metrics suggest the industry has made progress. In a Journal of Commerce survey conducted late last year, 91.3% of respondents said they were satisfied with domestic intermodal service, up from 45.3% in the spring of 2023. Whether that improvement holds under renewed demand may determine how much freight ultimately shifts modes. Shippers, having experienced pandemic-era disruptions, are unlikely to tolerate a repeat. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The tightening of truckload capacity and a sharp rise in diesel prices are beginning to reset surface transportation rates in the US, giving carriers renewed leverage while opening a potential growth opportunity for intermodal rail. Crackdowns on non-domiciled commercial drivers and stricter English-language enforcement are constraining truckload capacity after a four-year freight recession. Meanwhile, diesel prices have surged to their highest level since late 2022 amid the war with Iran, lifting transportation costs for all and forcing shippers to reassess their budgets. It has started a cascading effect across domestic US transportation. Brokers and asset-based truckload carriers are rejecting freight and insisting on renegotiating contract rates, while shippers facing blown transportation budgets consider cheaper options such as intermodal rail. Early signs of that repricing are already evident. Spot truckload rates are up between 15% and 20% from a year ago, according to DAT Freight & Analytics, even as freight demand remains muted amid elevated interest rates, a lackluster housing market, and mixed signals from the US industrial sector. “Not only are you seeing elevated rates across other modalities such as flatbed, but in the overall dry-van market, you’re seeing 14%, 15% tender rejections coming out of the slowest freight month of the year,” said Jared Weisfeld, chief strategy officer for RXO, a non-asset broker, speaking at the J.P. Morgan Industrials Conference on Tuesday. As recently as last year, tender rejections were at or less than 5%, according to Weisfeld. Regulatory tightening reinforces supply constraint The supply side could tighten further as new federal regulations take hold. The Federal Motor Carrier Safety Administration (FCMSA) enacted a rule earlier this week restricting non-domiciled commercial driver’s licenses (CDLs), a move the agency estimates could remove up to 194,000 drivers over five years. On Wednesday, the US House of Representatives advanced “Delilah’s Law,” which would accelerate enforcement over non-domiciled CDLs by retroactively invalidating certain licenses, rather than waiting for a non-domiciled CDL holder to interact with state licensing agencies. Despite higher rates, fleets have been cautious about adding capacity, even though stricter emissions regulations in 2027 will increase the purchase price of a new truck. “Our customers are more middle- to smaller-sized [carriers], and I think there’s still a lot of hesitation on that side to make the decisions,” said Cristina Gallo-Aquino, CFO of Ryder Systems, speaking at the J.P. Morgan event. “We are pointing it all out to them to show them how much of a price increase could be coming ... but we haven’t really seen the shift to make a decision and preorder.” Fuel surge amplifies pricing pressure Diesel prices averaged $5.07 per gallon last week, according to the US Energy Information Administration, the highest since November 2022 and adding another layer of cost pressure across the truckload market. On the spot market, where rates are often negotiated on an all-in basis, the increase is squeezing owner-operators and smaller carriers that cannot pass through fuel costs. That dynamic may cause more capacity to exit the truckload sector. In the contract market, larger asset-based carriers pass through higher fuel costs via surcharges. Since March 1, the average surcharge has risen nearly 20 cents per mile, although methodologies vary. For shippers, the result is sticker shock on invoices and a renewed focus on lower-cost alternatives such as rail. “For the intermodal space, it starts to put pressure on truck rates, which is a pretty good thing for us,” Mark George, CEO of Norfolk Southern, said at the J.P. Morgan event. “We’ve been pretty depressed [price-wise] for a while. We’d love to see some evacuation of capacity in trucking.” Intermodal providers are already prepared for that shift. Darren Field, president of intermodal at J.B. Hunt Transport Services, said the company is actively engaging with shippers looking to manage rising transportation costs. “How can we convert business from the highway back to intermodal, or to intermodal for the first time to hopefully save you a little money and prepare your budget for a year where truckload capacity and prices could get difficult for you,” Field said at the J.P. Morgan conference. “How can you hedge against the potential for a cost increase coming at your budget as a shipper by utilizing more intermodal?” But capturing that opportunity will depend on execution. Railroads must maintain service reliability even as volumes rise, a lesson of the pandemic when congestion and labor shortages left intermodal with a lingering stigma among some shippers. Service metrics suggest the industry has made progress. In a Journal of Commerce survey conducted late last year, 91.3% of respondents said they were satisfied with domestic intermodal service, up from 45.3% in the spring of 2023. Whether that improvement holds under renewed demand may determine how much freight ultimately shifts modes. Shippers, having experienced pandemic-era disruptions, are unlikely to tolerate a repeat. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Truckload

Capacity cuts, fuel shocks provide openings for trucking and rail

<div class="phx-topic abstract-wrapper">The most disruptive energy shock in modern history has reawakened the debate over whether emergency fuel surcharges are a fair way for ocean carriers to recoup unexpected costs or blatant “double-dipping” that angers shippers.</div>

The most disruptive energy shock in modern history has reawakened the debate over whether emergency fuel surcharges are a fair way for ocean carriers to recoup unexpected costs or blatant “double-dipping” that angers shippers.

<div class="phx-topic">The speed and severity of the jump in global oil prices amid the war in the Middle East have reignited long-standing suspicions by cargo owners that fuel surcharges levied by ocean carriers are used as a revenue stream rather than a cost recovery mechanism. Container lines defend the fees, ranging from $30 to $300 per TEU depending on the trade lane, arguing that what is widely seen as the most significant energy shock in history has forced them to recoup costs with fees beyond the lagging quarterly bunker adjustment factor (BAF). Bunker fuel prices contribute approximately 15% to 30% of operating costs, depending on the year, according to various container line financial reports.And while the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz, according to a Vizion analysis, shippers nonetheless are retaining a cynical view of the emergency fuel surcharges. “Shipping lines always seem to manage to turn a crisis into a cash-grab,” was the blunt message from James Hookham, director of the Global Shippers Forum. “This apparent ‘double-dipping’ brings the whole sordid practice of surcharging into further disrepute.” Emergency bunker adjustment factors (EBAFs) on top of quarterly fuel price adjustments to recover costs in what is a core operational expense were acceptable for the current contract period ending March 26, said Antonios Rigalos, managing partner of shipper network ShiftX. But going forward, increased bunker costs should be recovered by the quarterly BAF review, he noted.“The BAF reviews executed for Q3 will reflect the higher bunker costs for the previous quarter [March/April/May], and an EBAF plus BAF review would create a double charging of customers,” Rigalos said. “While we understand the situation of carriers and that increased bunker costs have a big impact that somehow needs to be recovered, it needs to be carried out in a fair way and not by double charging BCOs [beneficial cargo owners] and clients.” Several carriers have announced emergency bunker fuel surcharges on top of quarterly fuel price adjustments to recover costs in what is a core operational expense, but the moves have sparked growing concern from shippers. An Asia-Europe shipper based in Hong Kong said he negotiated contracts based on the Shanghai Containerized Freight Index (SCFI) that covers both BAF and EBAF surcharges. “We adjust the bunker fuel surcharge bi-monthly and as far as we are concerned, we will fight any additional emergency fuel surcharge from the carriers,” the source said. <h3>Long hauls hit with surcharges </h3>CMA CGM this week announced an upward review of its “emergency fuel surcharge” imposed on March 16 that will increase from $150 per TEU to $265/TEU on all long-haul trade lanes. OOCL said it will impose a temporary emergency bunker surcharge (EBS) from March 23 to manage global challenges to fuel availability because the increased costs are “beyond the scope of existing fuel cost recovery and low sulfur adjustment mechanisms.” Cosco Shipping has also announced emergency bunker surcharges on various trades between Europe, South America and Africa, while Mediterranean Shipping Co. introduced a temporary emergency bunker surcharge on March 16 that varies from $30/TEU to $300/TEU depending on the trade lane. Maersk on March 10 announced it would implement an emergency bunker surcharge of $200/TEU on all long hauls “to safeguard cargo integrity and maintain the stability of our network.” “This surcharge covers the impact of fuel availability, cost and mix outside of what is covered in our fossil fuel fee [FFF],” the carrier said in a statement. “This means we are better positioned to have the necessary access to fuel and the ability to move it to necessary locations.” Maersk CCO Karsten Kildahl said the carrier was being forced to take the unprecedented step of <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia as supplies at bunkering hubs dried up</a>. Most of the emergency fuel surcharges will be reviewed by carriers every two weeks, but with the Strait of Hormuz — through which about 20% of global oil and liquefied natural gas supplies move each day — out of bounds to commercial shipping, there is little chance the EBAF will be dropped anytime soon. The speed with which the fuel surcharges were imposed by carriers made it “nigh on impossible” for shippers to recover costs from their own customers or suppliers, Hookham told the Journal of Commerce. “For smaller businesses, that cash flow hit can be fatal when payments are likely to be late due to late or non-delivery of cargo,” he said, noting that the number of surcharges being introduced made it difficult for shippers to track which ones applied to their shipments. “The US got it right when the [Federal Maritime Commission] <a href="https://www.joc.com/article/fmc-says-closely-monitoring-carrier-rate-moves-tied-to-middle-east-war-6184781">required 30-day notice periods</a> before surcharges could take effect on US services,” Hookham said. “The current surcharging behavior will only hasten demands for similar notice periods to become mandatory worldwide.” <h3>Fractured fuel links </h3>While carriers roll out their fuel surcharges to try to recover rising costs, freight tracking platform Vizion believes the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz. In a recent review of bunker surcharges, Vizion noted that average very low sulfur fuel oil (VLSFO) prices of $535 per metric ton in 2025 were down 14.4% year over year, the lowest since 2020, with BAF contributing just 10% to 20% to total freight costs. The launch of US and Israeli strikes on Iran on Feb. 28 triggered a 73% fuel price spike to $939/metric ton in under two weeks, and carriers within days responded with emergency surcharges of $60/TEU to $190/TEU, far faster than standard quarterly BAF adjustments. That shows the traditional BAF fuel-price correlation has weakened as carriers shift to emergency mechanisms to manage extreme volatility, according to Vizion. But Vizion said a deeper trend was emerging with a market fracture in progress as carriers divided into two camps: immediate risk transfer versus contract stability. Carriers such as Maersk initially absorbed the volatility to protect long-term contract relationships, although the carrier has subsequently announced an emergency fuel surcharge. A more aggressive strategy was taken by MSC and CMA CGM, with both adopting a rapid pass-through of fuel spikes to protect their margins immediately. Shippers with locked-in rates will enjoy a short-term cost advantage, but it will be a temporary relief before fuel adjustments hit. Vizion warned that over the next three to six months, shippers can expect aggressive second-quarter BAF corrections to capture the remaining fuel cost delta. Chantal McRoberts, director and head of advisory at Drewry Supply Chain Advisors, said shippers understand they will pay an increased fuel cost in the third quarter as that is part of the BAF policy that enables carriers to recover fuel costs over time. “The concern around the introduction of EBAF is the potential for double recovery,” McRoberts told the Journal of Commerce. “In practice, a shipper may pay an EBAF during Q2 to reflect higher fuel prices and then see its underlying BAF increase in Q3 as the formula catches up with those same Q2 fuel costs. At that point, the EBAF risks becoming revenue‑generating rather than purely cost‑recovering. “This is the dilemma currently facing shippers,” she added. “As a result, those operating under transparent, formula‑based BAF mechanisms are, in many cases, pushing back on EBAF charges.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The speed and severity of the jump in global oil prices amid the war in the Middle East have reignited long-standing suspicions by cargo owners that fuel surcharges levied by ocean carriers are used as a revenue stream rather than a cost recovery mechanism. Container lines defend the fees, ranging from $30 to $300 per TEU depending on the trade lane, arguing that what is widely seen as the most significant energy shock in history has forced them to recoup costs with fees beyond the lagging quarterly bunker adjustment factor (BAF). Bunker fuel prices contribute approximately 15% to 30% of operating costs, depending on the year, according to various container line financial reports. And while the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz, according to a Vizion analysis, shippers nonetheless are retaining a cynical view of the emergency fuel surcharges. “Shipping lines always seem to manage to turn a crisis into a cash-grab,” was the blunt message from James Hookham, director of the Global Shippers Forum. “This apparent ‘double-dipping’ brings the whole sordid practice of surcharging into further disrepute.” Emergency bunker adjustment factors (EBAFs) on top of quarterly fuel price adjustments to recover costs in what is a core operational expense were acceptable for the current contract period ending March 26, said Antonios Rigalos, managing partner of shipper network ShiftX. But going forward, increased bunker costs should be recovered by the quarterly BAF review, he noted. “The BAF reviews executed for Q3 will reflect the higher bunker costs for the previous quarter [March/April/May], and an EBAF plus BAF review would create a double charging of customers,” Rigalos said. “While we understand the situation of carriers and that increased bunker costs have a big impact that somehow needs to be recovered, it needs to be carried out in a fair way and not by double charging BCOs [beneficial cargo owners] and clients.” Several carriers have announced emergency bunker fuel surcharges on top of quarterly fuel price adjustments to recover costs in what is a core operational expense, but the moves have sparked growing concern from shippers. An Asia-Europe shipper based in Hong Kong said he negotiated contracts based on the Shanghai Containerized Freight Index (SCFI) that covers both BAF and EBAF surcharges. “We adjust the bunker fuel surcharge bi-monthly and as far as we are concerned, we will fight any additional emergency fuel surcharge from the carriers,” the source said. Long hauls hit with surcharges CMA CGM this week announced an upward review of its “emergency fuel surcharge” imposed on March 16 that will increase from $150 per TEU to $265/TEU on all long-haul trade lanes. OOCL said it will impose a temporary emergency bunker surcharge (EBS) from March 23 to manage global challenges to fuel availability because the increased costs are “beyond the scope of existing fuel cost recovery and low sulfur adjustment mechanisms.” Cosco Shipping has also announced emergency bunker surcharges on various trades between Europe, South America and Africa, while Mediterranean Shipping Co. introduced a temporary emergency bunker surcharge on March 16 that varies from $30/TEU to $300/TEU depending on the trade lane. Maersk on March 10 announced it would implement an emergency bunker surcharge of $200/TEU on all long hauls “to safeguard cargo integrity and maintain the stability of our network.” “This surcharge covers the impact of fuel availability, cost and mix outside of what is covered in our fossil fuel fee [FFF],” the carrier said in a statement. “This means we are better positioned to have the necessary access to fuel and the ability to move it to necessary locations.” Maersk CCO Karsten Kildahl said the carrier was being forced to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia as supplies at bunkering hubs dried up . Most of the emergency fuel surcharges will be reviewed by carriers every two weeks, but with the Strait of Hormuz — through which about 20% of global oil and liquefied natural gas supplies move each day — out of bounds to commercial shipping, there is little chance the EBAF will be dropped anytime soon. The speed with which the fuel surcharges were imposed by carriers made it “nigh on impossible” for shippers to recover costs from their own customers or suppliers, Hookham told the Journal of Commerce. “For smaller businesses, that cash flow hit can be fatal when payments are likely to be late due to late or non-delivery of cargo,” he said, noting that the number of surcharges being introduced made it difficult for shippers to track which ones applied to their shipments. “The US got it right when the [Federal Maritime Commission] required 30-day notice periods before surcharges could take effect on US services,” Hookham said. “The current surcharging behavior will only hasten demands for similar notice periods to become mandatory worldwide.” Fractured fuel links While carriers roll out their fuel surcharges to try to recover rising costs, freight tracking platform Vizion believes the traditional linkage between fuel costs and BAFs has fractured due to the rapid escalation of the war and the effective closure of the Strait of Hormuz. In a recent review of bunker surcharges, Vizion noted that average very low sulfur fuel oil (VLSFO) prices of $535 per metric ton in 2025 were down 14.4% year over year, the lowest since 2020, with BAF contributing just 10% to 20% to total freight costs. The launch of US and Israeli strikes on Iran on Feb. 28 triggered a 73% fuel price spike to $939/metric ton in under two weeks, and carriers within days responded with emergency surcharges of $60/TEU to $190/TEU, far faster than standard quarterly BAF adjustments. That shows the traditional BAF fuel-price correlation has weakened as carriers shift to emergency mechanisms to manage extreme volatility, according to Vizion. But Vizion said a deeper trend was emerging with a market fracture in progress as carriers divided into two camps: immediate risk transfer versus contract stability. Carriers such as Maersk initially absorbed the volatility to protect long-term contract relationships, although the carrier has subsequently announced an emergency fuel surcharge. A more aggressive strategy was taken by MSC and CMA CGM, with both adopting a rapid pass-through of fuel spikes to protect their margins immediately. Shippers with locked-in rates will enjoy a short-term cost advantage, but it will be a temporary relief before fuel adjustments hit. Vizion warned that over the next three to six months, shippers can expect aggressive second-quarter BAF corrections to capture the remaining fuel cost delta. Chantal McRoberts, director and head of advisory at Drewry Supply Chain Advisors, said shippers understand they will pay an increased fuel cost in the third quarter as that is part of the BAF policy that enables carriers to recover fuel costs over time. “The concern around the introduction of EBAF is the potential for double recovery,” McRoberts told the Journal of Commerce. “In practice, a shipper may pay an EBAF during Q2 to reflect higher fuel prices and then see its underlying BAF increase in Q3 as the formula catches up with those same Q2 fuel costs. At that point, the EBAF risks becoming revenue‑generating rather than purely cost‑recovering. “This is the dilemma currently facing shippers,” she added. “As a result, those operating under transparent, formula‑based BAF mechanisms are, in many cases, pushing back on EBAF charges.” Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Container Shipping News

Maritime

War reignites tussle between ocean carriers, cargo owners over fuel surcharges

<div class="phx-topic abstract-wrapper">Signs of stress are emerging as boxes pour into a land transport network crucial for the flow of cargo across the war-torn region. </div>

Signs of stress are emerging as boxes pour into a land transport network crucial for the flow of cargo across the war-torn region.

<div class="phx-topic">The injection of containerized cargo by ocean carriers into a land-based transport network not set up to handle such volume is placing road and rail options in the Middle East under increasing pressure. CMA CGM is the latest ocean carrier to deploy road, rail and feeder solutions to shippers with cargo stranded in the war-torn Middle East, joining carriers such as Hapag-Lloyd, Maersk, Ocean Network Express and Zim Integrated Shipping Services. “The infrastructure was not originally designed to accommodate such a high level of incremental trucking demand, particularly given the longer distances resulting from cross-country movements,” a spokesman for Hapag-Lloyd told the Journal of Commerce. “We are partnering closely with our logistics partners to ensure reliable service for our customers in the United Arab Emirates [UAE],” he added. Crane Worldwide Logistics said in a Middle East update Tuesday that road freight was largely operational but faced growing customs delays and capacity pressure as air and sea cargo shifted to land. “A trucking capacity shortage is growing across the Oman, Fujairah and Saudi corridors with the scarcity compressing resolution timelines for stranded and in-transit cargo looking for alternatives to air and ocean,” the update noted. DHL Global Forwarding is also reporting rising congestion across ports and road networks with ships calling at Khor Fakkan in the UAE facing 10-plus day delays and long truck queues, and high demand for road freight driving up transit times and costs. Commercial shipping remains unable to pass through the Strait of Hormuz as the US-Iran war enters its third week and container traffic destined for the Middle East is being offloaded at strategic entry points outside the Persian Gulf, such as Khor Fakkan and Fujairah in the UAE and Sohar in Oman. <h3>Alternative transport solutions </h3>Countries in the Persian Gulf import more than 90% of their products and the disabling of ocean access represents a significant threat. Trucking is the next best option and CMA CGM is offering shippers alternative transport solutions connecting the UAE, Saudi Arabia, Oman, Iraq, Qatar, Bahrain, Kuwait and Jordan via the ports of Khor Fakkan, Fujairah, Sohar and Jeddah in Saudi Arabia. The carrier is using logistics corridors to serve the main hubs in the UAE (Khalifa, Jebel Ali and Sharjah) and other countries bordering the Arabian Gulf via a combination of regional road and maritime transport. From the Red Sea port of Jeddah, CMA CGM has established road corridors, with or without maritime connections, for onward delivery to Saudi Arabia (Dammam), the UAE, Qatar, Bahrain, Kuwait and Iraq. This setup also allows flows to connect to the Mediterranean and Asia without exposure to the Strait of Hormuz. A third option is via the Omani ports with road and feeder connections to the UAE and northern Gulf countries. Before the war started, most of the container lines were offering carrier or merchant haulage across the Middle East but in the past two weeks have had to adapt their land-based services to handle the disruption caused by the war. For general and non-urgent cargo, MSC, CMA CGM and Yang Ming are among the carriers that have declared “end of voyage” for Persian Gulf-bound containers already onboard vessels when the war started. That cargo status means the carriers are unable to fulfil obligations on a bill of lading, and when the containers are offloaded at a port, they become the responsibility of the cargo owner. <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">Maersk has taken a different approach</a>, offering shippers three options: keeping the cargo in temporary storage, having it returned to the port of departure, or delivering it to another destination for onward transport by another mode. “We are using Salalah and Khor Fakkan for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” Maersk CCO Karsten Kildahl told the Journal of Commerce in an interview last week. “For cargo that comes from Europe, we focus mainly on Jeddah and are deploying trucks to take the cargo across the Arabian Peninsula through the desert,” he added. Many of the global forwarders, such as Kuehne + Nagel, DHL Global Forwarding, Crane and DSV are actively using road freight to move cargo between consumer markets in the Middle East. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The injection of containerized cargo by ocean carriers into a land-based transport network not set up to handle such volume is placing road and rail options in the Middle East under increasing pressure. CMA CGM is the latest ocean carrier to deploy road, rail and feeder solutions to shippers with cargo stranded in the war-torn Middle East, joining carriers such as Hapag-Lloyd, Maersk, Ocean Network Express and Zim Integrated Shipping Services. “The infrastructure was not originally designed to accommodate such a high level of incremental trucking demand, particularly given the longer distances resulting from cross-country movements,” a spokesman for Hapag-Lloyd told the Journal of Commerce. “We are partnering closely with our logistics partners to ensure reliable service for our customers in the United Arab Emirates [UAE],” he added. Crane Worldwide Logistics said in a Middle East update Tuesday that road freight was largely operational but faced growing customs delays and capacity pressure as air and sea cargo shifted to land. “A trucking capacity shortage is growing across the Oman, Fujairah and Saudi corridors with the scarcity compressing resolution timelines for stranded and in-transit cargo looking for alternatives to air and ocean,” the update noted. DHL Global Forwarding is also reporting rising congestion across ports and road networks with ships calling at Khor Fakkan in the UAE facing 10-plus day delays and long truck queues, and high demand for road freight driving up transit times and costs. Commercial shipping remains unable to pass through the Strait of Hormuz as the US-Iran war enters its third week and container traffic destined for the Middle East is being offloaded at strategic entry points outside the Persian Gulf, such as Khor Fakkan and Fujairah in the UAE and Sohar in Oman. Alternative transport solutions Countries in the Persian Gulf import more than 90% of their products and the disabling of ocean access represents a significant threat. Trucking is the next best option and CMA CGM is offering shippers alternative transport solutions connecting the UAE, Saudi Arabia, Oman, Iraq, Qatar, Bahrain, Kuwait and Jordan via the ports of Khor Fakkan, Fujairah, Sohar and Jeddah in Saudi Arabia. The carrier is using logistics corridors to serve the main hubs in the UAE (Khalifa, Jebel Ali and Sharjah) and other countries bordering the Arabian Gulf via a combination of regional road and maritime transport. From the Red Sea port of Jeddah, CMA CGM has established road corridors, with or without maritime connections, for onward delivery to Saudi Arabia (Dammam), the UAE, Qatar, Bahrain, Kuwait and Iraq. This setup also allows flows to connect to the Mediterranean and Asia without exposure to the Strait of Hormuz. A third option is via the Omani ports with road and feeder connections to the UAE and northern Gulf countries. Before the war started, most of the container lines were offering carrier or merchant haulage across the Middle East but in the past two weeks have had to adapt their land-based services to handle the disruption caused by the war. For general and non-urgent cargo, MSC, CMA CGM and Yang Ming are among the carriers that have declared “end of voyage” for Persian Gulf-bound containers already onboard vessels when the war started. That cargo status means the carriers are unable to fulfil obligations on a bill of lading, and when the containers are offloaded at a port, they become the responsibility of the cargo owner. Maersk has taken a different approach , offering shippers three options: keeping the cargo in temporary storage, having it returned to the port of departure, or delivering it to another destination for onward transport by another mode. “We are using Salalah and Khor Fakkan for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” Maersk CCO Karsten Kildahl told the Journal of Commerce in an interview last week. “For cargo that comes from Europe, we focus mainly on Jeddah and are deploying trucks to take the cargo across the Arabian Peninsula through the desert,” he added. Many of the global forwarders, such as Kuehne + Nagel, DHL Global Forwarding, Crane and DSV are actively using road freight to move cargo between consumer markets in the Middle East. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

International ports

Rising road volume puts Middle East land-based options under pressure

<div class="phx-topic abstract-wrapper">The terminal, capable of ultimately handling 5.7 million TEUs annually, will be the global terminal operator’s third in Vietnam. </div>

The terminal, capable of ultimately handling 5.7 million TEUs annually, will be the global terminal operator’s third in Vietnam.

<div class="phx-topic">APM Terminals and its long-standing local partner Hateco Group are set for a 50-year concession to develop the $1.8 billion Lieu Chieu container terminal in the central Vietnam port city of Da Nang. The duo was approved by the People’s Committee of Da Nang on Tuesday — the local government — as the preferred bidder for a terminal with an annual capacity of 5.7 million TEUs. Work is due to start later this year, with the first two berths due to open in 2028 and full completion is expected by 2035. Container lines, supported by record profits from disruption, are investing more in marine terminals to gain better control of landside operations and mitigate port congestion. Maersk’s stakes and investment in marine terminals, such as Tanjung Pelepas in Malaysia, enable the Gemini Cooperation’s hub-and-spoke network with partner Hapag-Lloyd. US tariffs on China have made Vietnam a more attractive origin of US imports, with the latter’s share of laden inbound shipments rising to 12% last year from 9.9% in 2024, according to PIERS, a sister company of the Journal of Commerce. APM Terminals, Hateco Group and Hateco Port Company will build, operate and manage the terminal, which will have eight container berths with a total quay of 9,022 feet capable of handling 18,000-TEU container ships. There will also be a barge berth for vessels up to 5,000 metric tons to support local cargo consolidation and distribution, easing pressure on the regional road network, and reducing transport costs. The facility, midway between the major ports of Haiphong in the north near Hanoi and Ho Chi Minh in the south, is expected to become a key hub for cargo in Vietnam’s central provinces and neighboring Laos as well as transshipment traffic. The facility is the second to be jointly developed by APM Terminals division and Hateco after the two firms won a concession to build and operate the Hateco Haiphong International Container Terminal that opened last July. The two-berth terminal at Haiphong’s Lach Huyen port in northern Vietnam can handle 18,000-TEU-sized ships. Da Nang will be APM Terminals’ third facility in Vietnam — the firm operates the two-berth 2.1-million-TEU capacity Cai Mep International Terminal 31 miles southeast of Ho Chin Minh City. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

APM Terminals and its long-standing local partner Hateco Group are set for a 50-year concession to develop the $1.8 billion Lieu Chieu container terminal in the central Vietnam port city of Da Nang. The duo was approved by the People’s Committee of Da Nang on Tuesday — the local government — as the preferred bidder for a terminal with an annual capacity of 5.7 million TEUs. Work is due to start later this year, with the first two berths due to open in 2028 and full completion is expected by 2035. Container lines, supported by record profits from disruption, are investing more in marine terminals to gain better control of landside operations and mitigate port congestion. Maersk’s stakes and investment in marine terminals, such as Tanjung Pelepas in Malaysia, enable the Gemini Cooperation’s hub-and-spoke network with partner Hapag-Lloyd. US tariffs on China have made Vietnam a more attractive origin of US imports, with the latter’s share of laden inbound shipments rising to 12% last year from 9.9% in 2024, according to PIERS, a sister company of the Journal of Commerce. APM Terminals, Hateco Group and Hateco Port Company will build, operate and manage the terminal, which will have eight container berths with a total quay of 9,022 feet capable of handling 18,000-TEU container ships. There will also be a barge berth for vessels up to 5,000 metric tons to support local cargo consolidation and distribution, easing pressure on the regional road network, and reducing transport costs. The facility, midway between the major ports of Haiphong in the north near Hanoi and Ho Chi Minh in the south, is expected to become a key hub for cargo in Vietnam’s central provinces and neighboring Laos as well as transshipment traffic. The facility is the second to be jointly developed by APM Terminals division and Hateco after the two firms won a concession to build and operate the Hateco Haiphong International Container Terminal that opened last July. The two-berth terminal at Haiphong’s Lach Huyen port in northern Vietnam can handle 18,000-TEU-sized ships. Da Nang will be APM Terminals’ third facility in Vietnam — the firm operates the two-berth 2.1-million-TEU capacity Cai Mep International Terminal 31 miles southeast of Ho Chin Minh City. Contact Keith Wallis at keithwallis@hotmail.com .

Port News

Port infrastructure

Marine terminals

APM Terminals to build $1.8 billion terminal in Da Nang

<div class="phx-topic abstract-wrapper">Broad use of Section 301 tariffs, with 60 US trading partners now being scrutinized, provides a window into the administration’s next phase of tariff applications as it seeks to redefine US trade. </div>

Broad use of Section 301 tariffs, with 60 US trading partners now being scrutinized, provides a window into the administration’s next phase of tariff applications as it seeks to redefine US trade.

<div class="phx-topic">Importers buoyed by a February US Supreme Court decision that overturned billions of dollars of tariffs they paid are now coming to grips with a new wave of tariffs that are likely to burden their inventory replenishment and holiday shipping plans. The US Trade Representative (USTR) last week launched two separate Section 301 investigations covering a total of 60 countries: one related to “structural excess capacity and production in manufacturing sectors” and a second aimed at forced labor. Should the investigations result in additional tariffs — widely expected to be the outcome — those duties will heap more cost pressure and customs administrative work on US importers, as well as reduce the appeal of sourcing from countries seen as lower-tariff alternatives to China. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6187602_0.1.jpg"></img></div>More immediately, the tariffs could land just as US retailers typically begin peak season ordering ahead of the winter holidays. That will have an impact on containerized US import market share. Vietnam, for example, saw its share of inbound US volumes rise to 12% in 2025 from 9.9% in 2024, mostly at the expense of mainland China, whose share fell to 36% from 40.4% in 2024, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. <h3>Expected pivot </h3>The two sets of investigations can be viewed as the Trump administration clearly pivoting from tariffs assessed through executive order, by way of the International Emergency Economic Powers Act (IEEPA), to ones with a more straightforward track record of surviving legal challenges. The Supreme Court on Feb. 20 <a href="https://www.joc.com/article/us-supreme-court-rules-against-trump-in-critical-ieepa-tariff-case-6173568">ruled that the IEEPA tariffs had been levied illegally</a>, and the US Court of International Trade has ordered US Customs and Border Protection to <a href="https://www.joc.com/article/cbp-lays-out-initial-tariff-refund-plan-that-requires-minimal-work-from-importers-6183418">create a process to refund importers more than $160 billion in tariffs</a> they paid, plus interest. Trade experts said they expected the administration to quickly use other tools to progress with its tariff-focused foreign trade policy in the event the IEEPA tariffs were struck down. The structural capacity investigation will look into whether 16 different countries or trading blocs, including China, India, Vietnam, Indonesia and the EU, are imposing policies or practices that “burden or restrict US commerce.” The broader investigation into forced labor covers virtually every major US trading partner and can be seen as the US Trade Representative (USTR) trying to replicate the scale of President Trump’s so-called Liberation Day tariffs that were eventually struck down. In the interim, Trump has used Section 122 of the Trade Act to temporarily assess 10% tariffs on all US imports, outside of goods exempted through existing trade agreements. The pace of the investigations also hints at the administration’s desire for the new tariffs, or at least the threat thereof, to be in place by the time the Section 122 duties expire on July 27. Comments on both investigations are due April 15, with hearings for the forced labor and structural capacity inquiries scheduled for April 28 and May 5, respectively. In announcing the probes, USTR said it has requested consultations with all governments named in the investigations. All the economies named in the structural capacity inquiry are also involved in the forced labor investigations, which means the trade representative will be looking to have conversations with 60 different entities in the coming months, presumably to use the threat of tariffs as leverage. <h3>‘One of the most powerful weapons’</h3>Deborah Elms, head of trade policy at Singapore-based Hinrich Foundation, said the USTR’s use of Section 301 in this context, while likely to be effective in that it will allow the administration to impose new tariffs, runs counter to the initial intent of the statute. During President Trump’s first term, the USTR was able to assess 25% Section 301 tariffs on Chinese goods that have remained despite two changes of power in the executive branch. The scope of the new Section 301 tariffs the USTR is seeking would dwarf those previously implemented, although there has yet to be any formal discussion about the level of tariffs that might result from these investigations “Section 301 was originally intended as a tool to get countries to negotiate and remove barriers to US exports,” she wrote in a March 12 blog. “This administration appears keen to retaliate first and discuss mostly later.” For importers, the intent of Section 301 tariffs matter because they are likely to be more durable and legally defensible than either the IEEPA or Section 122 tariffs. Additionally, unless countries are able to negotiate their way out of prospective Section 301 tariffs by providing market access to US exporters or curtailing domestic production subsidies, importers will find there are fewer avenues to escape an added cost on international trade. Elms described Section 301 as “one of the most powerful weapons in the trade policy arsenal for any US executive branch pursuing aggressive unilateralism,” adding that it provides a range of options under the broad category of “relief from unfair trade practices.” Elms noted the 16 industries under investigation in the “structural capacity” probe range from steel production in China to chemical manufacturing in Germany and currency manipulation in Switzerland. The two investigations are also unlikely to be the last. USTR Jamieson Greer has previously hinted at the potential for cases focused on digital trade and digital services taxes. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Importers buoyed by a February US Supreme Court decision that overturned billions of dollars of tariffs they paid are now coming to grips with a new wave of tariffs that are likely to burden their inventory replenishment and holiday shipping plans. The US Trade Representative (USTR) last week launched two separate Section 301 investigations covering a total of 60 countries: one related to “structural excess capacity and production in manufacturing sectors” and a second aimed at forced labor. Should the investigations result in additional tariffs — widely expected to be the outcome — those duties will heap more cost pressure and customs administrative work on US importers, as well as reduce the appeal of sourcing from countries seen as lower-tariff alternatives to China. More immediately, the tariffs could land just as US retailers typically begin peak season ordering ahead of the winter holidays. That will have an impact on containerized US import market share. Vietnam, for example, saw its share of inbound US volumes rise to 12% in 2025 from 9.9% in 2024, mostly at the expense of mainland China, whose share fell to 36% from 40.4% in 2024, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Expected pivot The two sets of investigations can be viewed as the Trump administration clearly pivoting from tariffs assessed through executive order, by way of the International Emergency Economic Powers Act (IEEPA), to ones with a more straightforward track record of surviving legal challenges. The Supreme Court on Feb. 20 ruled that the IEEPA tariffs had been levied illegally , and the US Court of International Trade has ordered US Customs and Border Protection to create a process to refund importers more than $160 billion in tariffs they paid, plus interest. Trade experts said they expected the administration to quickly use other tools to progress with its tariff-focused foreign trade policy in the event the IEEPA tariffs were struck down. The structural capacity investigation will look into whether 16 different countries or trading blocs, including China, India, Vietnam, Indonesia and the EU, are imposing policies or practices that “burden or restrict US commerce.” The broader investigation into forced labor covers virtually every major US trading partner and can be seen as the US Trade Representative (USTR) trying to replicate the scale of President Trump’s so-called Liberation Day tariffs that were eventually struck down. In the interim, Trump has used Section 122 of the Trade Act to temporarily assess 10% tariffs on all US imports, outside of goods exempted through existing trade agreements. The pace of the investigations also hints at the administration’s desire for the new tariffs, or at least the threat thereof, to be in place by the time the Section 122 duties expire on July 27. Comments on both investigations are due April 15, with hearings for the forced labor and structural capacity inquiries scheduled for April 28 and May 5, respectively. In announcing the probes, USTR said it has requested consultations with all governments named in the investigations. All the economies named in the structural capacity inquiry are also involved in the forced labor investigations, which means the trade representative will be looking to have conversations with 60 different entities in the coming months, presumably to use the threat of tariffs as leverage. ‘One of the most powerful weapons’ Deborah Elms, head of trade policy at Singapore-based Hinrich Foundation, said the USTR’s use of Section 301 in this context, while likely to be effective in that it will allow the administration to impose new tariffs, runs counter to the initial intent of the statute. During President Trump’s first term, the USTR was able to assess 25% Section 301 tariffs on Chinese goods that have remained despite two changes of power in the executive branch. The scope of the new Section 301 tariffs the USTR is seeking would dwarf those previously implemented, although there has yet to be any formal discussion about the level of tariffs that might result from these investigations “Section 301 was originally intended as a tool to get countries to negotiate and remove barriers to US exports,” she wrote in a March 12 blog. “This administration appears keen to retaliate first and discuss mostly later.” For importers, the intent of Section 301 tariffs matter because they are likely to be more durable and legally defensible than either the IEEPA or Section 122 tariffs. Additionally, unless countries are able to negotiate their way out of prospective Section 301 tariffs by providing market access to US exporters or curtailing domestic production subsidies, importers will find there are fewer avenues to escape an added cost on international trade. Elms described Section 301 as “one of the most powerful weapons in the trade policy arsenal for any US executive branch pursuing aggressive unilateralism,” adding that it provides a range of options under the broad category of “relief from unfair trade practices.” Elms noted the 16 industries under investigation in the “structural capacity” probe range from steel production in China to chemical manufacturing in Germany and currency manipulation in Switzerland. The two investigations are also unlikely to be the last. USTR Jamieson Greer has previously hinted at the potential for cases focused on digital trade and digital services taxes. Contact Eric Johnson at eric.johnson@spglobal.com .

Transport, Trade and Regulation News

Supply chain

Potential new US tariffs cloud sourcing strategies, peak season demand

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

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

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

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

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

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

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

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

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

North-American rail

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

Singapore

Port Klang

Colombo

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

South Asia port harbor performance (Portcast)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Waves of diverted containers swamping Middle East ports

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<div class="phx-topic abstract-wrapper">After a pause in trans-Pacific service contract negotiations caused by the war in the Middle East, talks are expected to move forward now that the largest US retailer has concluded some of its agreements.</div>

After a pause in trans-Pacific service contract negotiations caused by the war in the Middle East, talks are expected to move forward now that the largest US retailer has concluded some of its agreements.

<div class="phx-topic">Container lines that paused trans-Pacific service contract talks to assess the impact of the war in the Middle East are back at the table, and expectations are that major retailers will sign in the coming week now that Walmart has finalized its 2026–27 contracts with a half-dozen carriers. Walmart’s move opens the door for other major retailers and, in turn, smaller importers and then non-vessel operating common carriers to ink their own service contracts, which typically go into effect May 1. Despite the <a href="https://www.joc.com/article/china-india-warn-carriers-on-higher-pricing-tied-to-middle-east-conflict-6183986">unknowns in terms of length and scope of the now two-week-long Middle East war</a>, carriers say big-box retailers want to lock in vessel capacity. Walmart, <a href="">the largest US importer</a>, has wrapped up its contract discussions with its core carriers, two sources familiar with the matter told the Journal of Commerce.  Carriers, and some forwarders, are urging customers to move expeditiously in their contract negotiations, rather than allowing uncertainties in global trade to deter them. “We now have seen an unpredictable shock to the global ocean market in like four of the last six years,” a carrier executive who asked not to be named told the Journal of Commerce. “Some BCOs [beneficial cargo owners] recognized that and wanted to take risk off the table; they signed early and at higher rates than many were predicting.” The executive added that analyst forecasts of supply and demand have rarely matched reality in recent years due to that outsized volatility. Geopolitical events including diversions away from the Red Sea, unpredictable US tariff policy and even more weather events, impacting ocean reliability, have begun to shift some shippers’ thinking, he said. “Some shippers have come to realize that pushing carriers well below breakeven to save a few cents on their cost of goods is not worth the risk of a major unpredictable event happening,” the executive said. <h3>Recouping higher fuel costs </h3>While securing space remains paramount for cargo owners, rising bunker fuel prices, driven by the closure of the Strait of Hormuz, <a href="https://www.joc.com/article/fmc-says-closely-monitoring-carrier-rate-moves-tied-to-middle-east-war-6184781">is also driving contract discussions regarding bunker fuel adjustment factors</a>. Shippers are reluctant to compensate carriers for the rising operating costs tied to the Middle East on a trade lane that is not directly impacted. “The uncertainty and waiting around for clarity or resolution is not helpful to anyone,” said Kevin Parkerson, a consultant and former logistics manager at retailers. “Yes, it may impact overall capacity. Yes, it may impact fuel prices. But at this point, that shouldn’t delay the process of contracting. Everybody seems to be proceeding cautiously.” At the moment, securing capacity in the Asia-US West Coast trade is not a significant issue that would slow negotiations. “Asia to the West Coast will be fine,” a second carrier executive told the Journal of Commerce, noting that if the war in the Middle East drags on for some weeks, East Coast routings from the Indian sub-continent could be impacted by the <a href="https://www.joc.com/article/waves-of-diverted-containers-swamping-middle-east-ports-6183989">congestion that is already building at some ports in the region</a>. In the interim, most importers would be wise to secure the minimum quantity commitments in their contracts as soon as they have a handle on what their space requirements will be, a third carrier executive said. “Those BCOs who are slow-walking their negotiations to wait for better prices — it may backfire,” the executive said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Container lines that paused trans-Pacific service contract talks to assess the impact of the war in the Middle East are back at the table, and expectations are that major retailers will sign in the coming week now that Walmart has finalized its 2026–27 contracts with a half-dozen carriers. Walmart’s move opens the door for other major retailers and, in turn, smaller importers and then non-vessel operating common carriers to ink their own service contracts, which typically go into effect May 1. Despite the unknowns in terms of length and scope of the now two-week-long Middle East war , carriers say big-box retailers want to lock in vessel capacity. Walmart,  the largest US importer , has wrapped up its contract discussions with its core carriers, two sources familiar with the matter told the Journal of Commerce.   Carriers, and some forwarders, are urging customers to move expeditiously in their contract negotiations, rather than allowing uncertainties in global trade to deter them. “We now have seen an unpredictable shock to the global ocean market in like four of the last six years,” a carrier executive who asked not to be named told the Journal of Commerce. “Some BCOs [beneficial cargo owners] recognized that and wanted to take risk off the table; they signed early and at higher rates than many were predicting.” The executive added that analyst forecasts of supply and demand have rarely matched reality in recent years due to that outsized volatility. Geopolitical events including diversions away from the Red Sea, unpredictable US tariff policy and even more weather events, impacting ocean reliability, have begun to shift some shippers’ thinking, he said. “Some shippers have come to realize that pushing carriers well below breakeven to save a few cents on their cost of goods is not worth the risk of a major unpredictable event happening,” the executive said. Recouping higher fuel costs While securing space remains paramount for cargo owners, rising bunker fuel prices, driven by the closure of the Strait of Hormuz, is also driving contract discussions regarding bunker fuel adjustment factors . Shippers are reluctant to compensate carriers for the rising operating costs tied to the Middle East on a trade lane that is not directly impacted. “The uncertainty and waiting around for clarity or resolution is not helpful to anyone,” said Kevin Parkerson, a consultant and former logistics manager at retailers. “Yes, it may impact overall capacity. Yes, it may impact fuel prices. But at this point, that shouldn’t delay the process of contracting. Everybody seems to be proceeding cautiously.”  At the moment, securing capacity in the Asia-US West Coast trade is not a significant issue that would slow negotiations. “Asia to the West Coast will be fine,” a second carrier executive told the Journal of Commerce, noting that if the war in the Middle East drags on for some weeks, East Coast routings from the Indian sub-continent could be impacted by the congestion that is already building at some ports in the region . In the interim, most importers would be wise to secure the minimum quantity commitments in their contracts as soon as they have a handle on what their space requirements will be, a third carrier executive said. “Those BCOs who are slow-walking their negotiations to wait for better prices — it may backfire,” the executive said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

Trans-Pacific

Trans-Pacific contract talks accelerating after Walmart signs

<div class="phx-topic abstract-wrapper">While the logistical hurdles of sending cargo to the region are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices.</div>

While the logistical hurdles of sending cargo to the region are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices.

<div class="phx-topic">US exporters are scrambling to locate containers they have shipped to the Middle East but were subsequently dropped off at unknown ports after ocean carriers were forced to halt almost all services due to the war with Iran. While the logistical hurdles for Middle East cargo are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices. Mediterranean Shipping Co. invoked an “end of voyage” clause this week on exports into Jebel Ali in Dubai, allowing the carrier to discharge containers at the next available port on the ship’s rotation, forwarders tell the Journal of Commerce. The end-of-voyage clause also includes an $800 surcharge. Stephen Zambo, president of third-party logistics provider AGL Group, said he has about 70 containers on the water with MSC destined for the Middle East. He is now figuring out where the next port of call will be for those boxes and bracing his customers for more costs and delays due to the redirections. Along with those containers, AGL has three containers on the ONE Majesty that was attacked in the Strait of Hormuz on Wednesday. Although the vessel suffered some damage, Zambo was told the ship would continue its original voyage. “We’re having to figure out each day what’s going on and what we need to do,” Zambo said. “It’s like it’s been over the last two years with tariffs and other crises, sort of wait-and-see how things play out and act accordingly.” MSC handles about half the container volumes from the US to the Middle East each year, which amounts to about 290,000 TEUs, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Maersk and CMA CGM are the second- and third-busiest carriers on that trade lane. Tim Avanzato, director of global logistics for paper and plastic products maker Lanca Sales, told the Journal of Commerce there’s little risk of that US export cargo backing up at ports, as most of it can be sold to other markets. However, the shutdown of the Strait of Hormuz and the resulting surge in oil prices is concerning because that raises the cost of the products that Lanca Sales distributes. Water and hygiene services company Ecolab imposed a 10% to 14% energy surcharge on its products on Wednesday due to crude oil futures rising to over $100 per barrel. “The Mideast situation is more of an inconvenience at this point,” Avanzato said. “But the fallout if this goes on for weeks? It’s a catastrophe.” Zambo said there are other markets that US exporters can tap. But some products such as certain softwoods are milled specifically for Middle East markets. “The lumber producers are now trying to figure out what to do with the product they have,” he said. Higher oil prices have also resulted in escalating fuel surcharges for all trades. Zambo said he has been in discussions about shipping trans-Atlantic cargo into the US, but carriers have been unwilling to commit to rates due to the surge in fuel prices. <h3>Reviewing new routes </h3>The director of global logistics for a Houston-based chemicals company told the Journal of Commerce he is expecting his iso-tanks onboard MSC vessels destined for Jebel Ali to land in India now due to the end-of-voyage clause. He is now looking at new routes outside of the Middle East’s main port. CMA CGM, which last week suspended all Middle East bookings, on Wednesday reopened bookings for alternative ports such as the UAE’s Khor Fakkan or Oman’s Sohar port, which sit outside of the Strait of Hormuz. CMA CGM is also offering service to Saudi Arabia’s Red Sea port of Jeddah <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">and trucking cargo from there</a>. But Jeddah would also involve transiting the Red Sea, which raises the risk of a potential attack by Iran-aligned Houthi rebels. The source said the regional risk is such that MSC has also suspended bookings into Israel’s Haifa, leaving Zim Integrated Shipping Services as the only carrier to service that port. MSC’s suspension of Haifa service could not be independently confirmed. “The Red Sea is a mess,” the executive said. “I have no confidence it will get there.” He added that he’s looking to move containers to Egypt’s Port Said, a transshipment hub outside of the immediate warzone at the northern end of the Suez Canal on the Mediterranean Sea. Outside of servicing his customers, the source said his main concern now is how the oil price spike will play out for the economy. The cost of intermediate chemicals from the Middle East, including ammonia and cyclo-hexane, has jumped, resulting in further cost pressures for his own company’s products. “Fuel costs are going to kill everybody,” he said. “That’s the wildcard.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US exporters are scrambling to locate containers they have shipped to the Middle East but were subsequently dropped off at unknown ports after ocean carriers were forced to halt almost all services due to the war with Iran. While the logistical hurdles for Middle East cargo are more of an inconvenience at this point for US exporters rather than a full-blown crisis, shippers see a bigger risk in the war’s longevity and the downstream effect of higher oil prices. Mediterranean Shipping Co. invoked an “end of voyage” clause this week on exports into Jebel Ali in Dubai, allowing the carrier to discharge containers at the next available port on the ship’s rotation, forwarders tell the Journal of Commerce. The end-of-voyage clause also includes an $800 surcharge. Stephen Zambo, president of third-party logistics provider AGL Group, said he has about 70 containers on the water with MSC destined for the Middle East. He is now figuring out where the next port of call will be for those boxes and bracing his customers for more costs and delays due to the redirections. Along with those containers, AGL has three containers on the ONE Majesty that was attacked in the Strait of Hormuz on Wednesday. Although the vessel suffered some damage, Zambo was told the ship would continue its original voyage. “We’re having to figure out each day what’s going on and what we need to do,” Zambo said. “It’s like it’s been over the last two years with tariffs and other crises, sort of wait-and-see how things play out and act accordingly.” MSC handles about half the container volumes from the US to the Middle East each year, which amounts to about 290,000 TEUs, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Maersk and CMA CGM are the second- and third-busiest carriers on that trade lane. Tim Avanzato, director of global logistics for paper and plastic products maker Lanca Sales, told the Journal of Commerce there’s little risk of that US export cargo backing up at ports, as most of it can be sold to other markets. However, the shutdown of the Strait of Hormuz and the resulting surge in oil prices is concerning because that raises the cost of the products that Lanca Sales distributes. Water and hygiene services company Ecolab imposed a 10% to 14% energy surcharge on its products on Wednesday due to crude oil futures rising to over $100 per barrel. “The Mideast situation is more of an inconvenience at this point,” Avanzato said. “But the fallout if this goes on for weeks? It’s a catastrophe.” Zambo said there are other markets that US exporters can tap. But some products such as certain softwoods are milled specifically for Middle East markets. “The lumber producers are now trying to figure out what to do with the product they have,” he said. Higher oil prices have also resulted in escalating fuel surcharges for all trades. Zambo said he has been in discussions about shipping trans-Atlantic cargo into the US, but carriers have been unwilling to commit to rates due to the surge in fuel prices. Reviewing new routes The director of global logistics for a Houston-based chemicals company told the Journal of Commerce he is expecting his iso-tanks onboard MSC vessels destined for Jebel Ali to land in India now due to the end-of-voyage clause. He is now looking at new routes outside of the Middle East’s main port. CMA CGM, which last week suspended all Middle East bookings, on Wednesday reopened bookings for alternative ports such as the UAE’s Khor Fakkan or Oman’s Sohar port, which sit outside of the Strait of Hormuz. CMA CGM is also offering service to Saudi Arabia’s Red Sea port of Jeddah and trucking cargo from there . But Jeddah would also involve transiting the Red Sea, which raises the risk of a potential attack by Iran-aligned Houthi rebels. The source said the regional risk is such that MSC has also suspended bookings into Israel’s Haifa, leaving Zim Integrated Shipping Services as the only carrier to service that port. MSC’s suspension of Haifa service could not be independently confirmed. “The Red Sea is a mess,” the executive said. “I have no confidence it will get there.” He added that he’s looking to move containers to Egypt’s Port Said, a transshipment hub outside of the immediate warzone at the northern end of the Suez Canal on the Mediterranean Sea. Outside of servicing his customers, the source said his main concern now is how the oil price spike will play out for the economy. The cost of intermediate chemicals from the Middle East, including ammonia and cyclo-hexane, has jumped, resulting in further cost pressures for his own company’s products. “Fuel costs are going to kill everybody,” he said. “That’s the wildcard.” Contact Michael Angell at michael.angell@spglobal.com .

Trans-Atlantic

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

<div class="phx-topic abstract-wrapper">All major long-haul liners are seeking temporary supply chain asylum at Indian docks to offload boxes that departed China and Southeast Asia in recent days, according to market sources in India.</div>

All major long-haul liners are seeking temporary supply chain asylum at Indian docks to offload boxes that departed China and Southeast Asia in recent days, according to market sources in India.

<div class="phx-topic">An estimated 100,000 TEUs of Far East-originated cargo that has become stranded en route to the Middle East is set to land across Indian ports as ocean carriers divert from the war zone, market sources in India say. All major long-haul liners are seeking temporary supply chain asylum at Indian docks to offload containers that departed ports in China and Southeast Asia in recent days, according to local industry sources who spoke with the Journal of Commerce. Representatives from Maersk, CMA CGM, Hapag-Lloyd, Ocean Network Express, and Cosco Shipping are already in discussions with authorities at the Indian West Coast ports of Nhava Sheva, Mundra, Pipavav and Kandla to strike yard space deals for the storage of diverted loads, the sources said. With a planned rerouting count of approximately 40,000 TEUs, Maersk is also considering Gangavaram Port on India’s southern East Coast as an additional discharge point, the sources added. Maersk could not be reached for comment. Carriers at Nhava Sheva are primarily engaging with PSA International’s flagship Bharat Mumbai Container Terminals (BMCT), which now has measurable spare cargo-handling space following the 2025 terminal expansions that doubled annual throughput capacity to 4.8 million TEUs. BMCT has already handled a few ships diverted to Nhava Sheva to drop boxes, including Hapag-Lloyd’s 24,000-TEU Damietta Express, while terminal berthing data updated Thursday points to a lineup of nine ad-hoc calls through March 19. The terminal can stack up to 25,000 TEUs on dock, with capacity for 3,000 reefer plug-ins for refrigerated cargo, without causing major operational pressure on the quayside, sources noted. Port and customs authorities in Nhava Sheva are collaborating to identify and allocate dedicated extra yard space off the dock in line with recent government directives to ease Middle East supply chain pain points. Mediterranean Shipping Co. is already a significant regional transshipment player at Mundra and Vizhinjam in the south, riding on its strategic partnerships with Adani Ports, and there are no indications the carrier will stop using those ports to handle stranded cargo. <h3>India-Middle East rates jump </h3>Evacuating diverted containers is complicated in the current scenario, carrier sources agree, but they are betting on alternative shuttle connections to Sohar in Oman and Khor Fakkan and Fujairah in the United Arab Emirates to keep clearing boxes out in parallel, with final transit legs <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">handled by road wherever feasible</a>. While space is not guaranteed, forwarder sources have reported wild swings in spot pricing for Nhava Sheva-Middle East bookings: up to $2,500 per TEU and $3,500 per FEU for Sohar and $2,000 per TEU and $3,000 per FEU for Khor Fakkan. That’s from as low as $50 to $75 per FEU for bookings to Jebel Ali last month. “Our strategy is to prioritize refrigerated containers for onward connectivity,” a Nhava Sheva-based operations executive at a European carrier said. “We are working on a combination of regional options to handle affected cargo,” an executive with an Asia-based carrier said. However, no one is certain how efficiently those plans will play out in such a fluid environment. Terminals across major Indian ports are operating at normal speed at the moment, except for slightly longer waiting times reported at Nhava Sheva due to bunching of vessels. But trade experts warn of port congestion risks if a large influx of diverted containers arrives within a few days as they believe there will be a scramble at yards/terminal gates to connect or reconnect boxes on to ships when normal ocean service patterns return. Another regional factor pushing carriers onto the Indian coast is the space crunch at Sri Lanka’s Colombo Port to hold ad-hoc volumes. Local sources speaking with the Journal of Commerce have reported high yard occupancy levels across Colombo terminals due to a steady surge in traditional transshipment volumes. Colombo handled 604,173 TEUs of transshipments in January, up from 589,134 TEUs in December, industry data shows. “With ongoing schedule disruptions, there has been a bump in container dwells,” said a Colombo terminal executive who didn’t want to be identified. “So, we are turning away Middle East cargo callers at the moment.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

An estimated 100,000 TEUs of Far East-originated cargo that has become stranded en route to the Middle East is set to land across Indian ports as ocean carriers divert from the war zone, market sources in India say. All major long-haul liners are seeking temporary supply chain asylum at Indian docks to offload containers that departed ports in China and Southeast Asia in recent days, according to local industry sources who spoke with the Journal of Commerce. Representatives from Maersk, CMA CGM, Hapag-Lloyd, Ocean Network Express, and Cosco Shipping are already in discussions with authorities at the Indian West Coast ports of Nhava Sheva, Mundra, Pipavav and Kandla to strike yard space deals for the storage of diverted loads, the sources said. With a planned rerouting count of approximately 40,000 TEUs, Maersk is also considering Gangavaram Port on India’s southern East Coast as an additional discharge point, the sources added. Maersk could not be reached for comment. Carriers at Nhava Sheva are primarily engaging with PSA International’s flagship Bharat Mumbai Container Terminals (BMCT), which now has measurable spare cargo-handling space following the 2025 terminal expansions that doubled annual throughput capacity to 4.8 million TEUs. BMCT has already handled a few ships diverted to Nhava Sheva to drop boxes, including Hapag-Lloyd’s 24,000-TEU Damietta Express, while terminal berthing data updated Thursday points to a lineup of nine ad-hoc calls through March 19. The terminal can stack up to 25,000 TEUs on dock, with capacity for 3,000 reefer plug-ins for refrigerated cargo, without causing major operational pressure on the quayside, sources noted. Port and customs authorities in Nhava Sheva are collaborating to identify and allocate dedicated extra yard space off the dock in line with recent government directives to ease Middle East supply chain pain points. Mediterranean Shipping Co. is already a significant regional transshipment player at Mundra and Vizhinjam in the south, riding on its strategic partnerships with Adani Ports, and there are no indications the carrier will stop using those ports to handle stranded cargo. India-Middle East rates jump Evacuating diverted containers is complicated in the current scenario, carrier sources agree, but they are betting on alternative shuttle connections to Sohar in Oman and Khor Fakkan and Fujairah in the United Arab Emirates to keep clearing boxes out in parallel, with final transit legs handled by road wherever feasible . While space is not guaranteed, forwarder sources have reported wild swings in spot pricing for Nhava Sheva-Middle East bookings: up to $2,500 per TEU and $3,500 per FEU for Sohar and $2,000 per TEU and $3,000 per FEU for Khor Fakkan. That’s from as low as $50 to $75 per FEU for bookings to Jebel Ali last month. “Our strategy is to prioritize refrigerated containers for onward connectivity,” a Nhava Sheva-based operations executive at a European carrier said. “We are working on a combination of regional options to handle affected cargo,” an executive with an Asia-based carrier said. However, no one is certain how efficiently those plans will play out in such a fluid environment. Terminals across major Indian ports are operating at normal speed at the moment, except for slightly longer waiting times reported at Nhava Sheva due to bunching of vessels. But trade experts warn of port congestion risks if a large influx of diverted containers arrives within a few days as they believe there will be a scramble at yards/terminal gates to connect or reconnect boxes on to ships when normal ocean service patterns return. Another regional factor pushing carriers onto the Indian coast is the space crunch at Sri Lanka’s Colombo Port to hold ad-hoc volumes. Local sources speaking with the Journal of Commerce have reported high yard occupancy levels across Colombo terminals due to a steady surge in traditional transshipment volumes. Colombo handled 604,173 TEUs of transshipments in January, up from 589,134 TEUs in December, industry data shows. “With ongoing schedule disruptions, there has been a bump in container dwells,” said a Colombo terminal executive who didn’t want to be identified. “So, we are turning away Middle East cargo callers at the moment.” Contact Bency Mathew at bencyvmathew@gmail.com .

Carriers seek to offload stranded Asia-Middle East containers at Indian ports

<div class="phx-topic abstract-wrapper">The UP-NS merger and ONE’s Seaspan stake look like separate deals in separate industries, but they are the same move, writes Paul Tonsager. </div>

The UP-NS merger and ONE’s Seaspan stake look like separate deals in separate industries, but they are the same move, writes Paul Tonsager.

<div class="phx-topic">Two consequential infrastructure transactions are moving simultaneously through their respective regulatory processes, in separate industries, with a single and critical purpose: Secure assets and expand infrastructure. In rail, Union Pacific (UP) and Norfolk Southern (NS) are advancing a proposed $85 billion merger that would unite UP’s western network with NS’ eastern footprint into a single system spanning 43 states. The Surface Transportation Board (STB) rejected the initial application in January as incomplete; the carriers have committed to refiling by April 30, 2026. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6186769_0.1.jpg"></img></div>In ocean, Ocean Network Express <a href="https://www.joc.com/article/one-boosts-ownership-stake-in-seaspan-parent-poseidon-6184045">has agreed to increase its ownership stake in Poseidon Corp.</a> — parent company of Seaspan Corporation, the world’s largest independent containership lessor — to 48.9%. ONE is a Singapore-based joint venture of three Japanese shipping conglomerates; Poseidon is incorporated in the Marshall Islands and tax-resident in the United Kingdom. The regulatory approvals cited in the announcement almost certainly refer to Japan’s competition authority and possibly the EU — not the United States, which has no STB equivalent for ocean shipping. That gap is part of the story. Also in ocean: Hapag-Lloyd, Germany’s largest carrier, <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">has agreed to acquire ZIM Integrated Shipping Services in a deal valued at approximately $4.2 billion</a>, a transaction that would create a combined fleet exceeding 4.8 million TEUs. Hapag-Lloyd is one of Seaspan’s charter customers, along with MSC, Maersk, CMA CGM, Cosco, Evergreen and ONE. The world’s seven largest container lines all rent tonnage from the platform that ONE is moving to control. That fact has not appeared in any headline covering this transaction. The surface details differ. The underlying logic is identical: the dominant players in each mode are moving to consolidate control of the infrastructure layer that competitors depend on. The difference is that one transaction faces a rigorous, public, multi-year regulatory process. The other faces comparatively limited scrutiny from any authority with real enforcement power over the US freight market. <h3>The network versus the tonnage platform </h3>In rail, the infrastructure being consolidated is the network itself. A UP-NS combination would create a single operator controlling track, terminals and dispatch authority across the full breadth of the country. For shippers benefiting from UP-NS interchange competition on transcontinental lanes, the merger eliminates a competitive option that cannot be recreated once it closes. In ocean, the infrastructure being consolidated is the tonnage platform. Seaspan owns 241 vessels with more than 2.5 million TEUs of capacity and charters them to virtually every major container line. ONE, approaching half-ownership of Seaspan’s parent, is not acquiring a competitor’s ships. It is acquiring a structural position in the platform that determines which carrier gets what vessel, at what charter rate, on what timeline. The rail analog is TTX Company, the carrier-owned flatcar cooperative whose shareholders — BNSF, UP, NS among them — own the equipment pool that their competitors must also rent. ONE’s Seaspan stake is the TTX play, extended to the vessel market. <h3>The 48.9% question </h3>ONE’s ownership threshold is a deliberate structural choice. Crossing 50% would likely require consolidation of Poseidon’s debt-heavy balance sheet onto ONE’s financial statements and would reframe the transaction — from a minority investment to a control acquisition of the dominant vessel-leasing platform — in ways that invite harder antitrust scrutiny in Japan and the EU. At 48.9%, ONE secures board influence and fleet planning access without pulling those triggers. The equity is entirely private — Atlas Corp., Seaspan’s parent company, was delisted in 2023. The primary seller was Fairfax Financial Holdings, run by Prem Watsa, which sold a 23.2% stake but retains approximately 22.1% of Poseidon. Watsa is choosing his partner, not his exit. Any future move toward majority control runs through him and the remaining insiders — on their timeline, at their price. <h3>What shippers are actually facing </h3>Considered individually, neither the UP-NS combination nor the ONE-Seaspan stake is disqualifying. Considered together — alongside Hapag-Lloyd’s pending acquisition of ZIM — they describe a synchronized compression of freight infrastructure across two modes simultaneously. Shippers with rail exposure on transcontinental lanes face a market in which UP and NS no longer compete at interchange. Shippers dependent on ocean capacity face a market in which the largest vessel lessor is approaching control by one of its own customers. For manufacturers, retailers and agricultural exporters moving product across both modes — which describes most significant US freight — the implications compound. The STB’s <a href="https://www.joc.com/article/industry-stakeholders-dont-see-regulators-rubber-stamping-up-ns-deal-6181218">rejection of the UP-NS application</a> signals that rigorous competitive impact analysis is required before major rail transactions proceed. No equivalent process exists for the ONE-Seaspan transaction in the United States. The Federal Maritime Commission has limited authority over foreign vessel ownership structures. The transaction will be decided in Tokyo, Brussels and Hamilton — not Washington. Two modes. Two mechanisms. One direction. The infrastructure consolidation story of 2026 is not being told as a single story. It should be. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals &amp; Switches. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

Two consequential infrastructure transactions are moving simultaneously through their respective regulatory processes, in separate industries, with a single and critical purpose: Secure assets and expand infrastructure. In rail, Union Pacific (UP) and Norfolk Southern (NS) are advancing a proposed $85 billion merger that would unite UP’s western network with NS’ eastern footprint into a single system spanning 43 states. The Surface Transportation Board (STB) rejected the initial application in January as incomplete; the carriers have committed to refiling by April 30, 2026. In ocean, Ocean Network Express has agreed to increase its ownership stake in Poseidon Corp. — parent company of Seaspan Corporation, the world’s largest independent containership lessor — to 48.9%. ONE is a Singapore-based joint venture of three Japanese shipping conglomerates; Poseidon is incorporated in the Marshall Islands and tax-resident in the United Kingdom. The regulatory approvals cited in the announcement almost certainly refer to Japan’s competition authority and possibly the EU — not the United States, which has no STB equivalent for ocean shipping. That gap is part of the story. Also in ocean: Hapag-Lloyd, Germany’s largest carrier, has agreed to acquire ZIM Integrated Shipping Services in a deal valued at approximately $4.2 billion , a transaction that would create a combined fleet exceeding 4.8 million TEUs. Hapag-Lloyd is one of Seaspan’s charter customers, along with MSC, Maersk, CMA CGM, Cosco, Evergreen and ONE. The world’s seven largest container lines all rent tonnage from the platform that ONE is moving to control. That fact has not appeared in any headline covering this transaction. The surface details differ. The underlying logic is identical: the dominant players in each mode are moving to consolidate control of the infrastructure layer that competitors depend on. The difference is that one transaction faces a rigorous, public, multi-year regulatory process. The other faces comparatively limited scrutiny from any authority with real enforcement power over the US freight market. The network versus the tonnage platform In rail, the infrastructure being consolidated is the network itself. A UP-NS combination would create a single operator controlling track, terminals and dispatch authority across the full breadth of the country. For shippers benefiting from UP-NS interchange competition on transcontinental lanes, the merger eliminates a competitive option that cannot be recreated once it closes. In ocean, the infrastructure being consolidated is the tonnage platform. Seaspan owns 241 vessels with more than 2.5 million TEUs of capacity and charters them to virtually every major container line. ONE, approaching half-ownership of Seaspan’s parent, is not acquiring a competitor’s ships. It is acquiring a structural position in the platform that determines which carrier gets what vessel, at what charter rate, on what timeline. The rail analog is TTX Company, the carrier-owned flatcar cooperative whose shareholders — BNSF, UP, NS among them — own the equipment pool that their competitors must also rent. ONE’s Seaspan stake is the TTX play, extended to the vessel market. The 48.9% question ONE’s ownership threshold is a deliberate structural choice. Crossing 50% would likely require consolidation of Poseidon’s debt-heavy balance sheet onto ONE’s financial statements and would reframe the transaction — from a minority investment to a control acquisition of the dominant vessel-leasing platform — in ways that invite harder antitrust scrutiny in Japan and the EU. At 48.9%, ONE secures board influence and fleet planning access without pulling those triggers. The equity is entirely private — Atlas Corp., Seaspan’s parent company, was delisted in 2023. The primary seller was Fairfax Financial Holdings, run by Prem Watsa, which sold a 23.2% stake but retains approximately 22.1% of Poseidon. Watsa is choosing his partner, not his exit. Any future move toward majority control runs through him and the remaining insiders — on their timeline, at their price. What shippers are actually facing Considered individually, neither the UP-NS combination nor the ONE-Seaspan stake is disqualifying. Considered together — alongside Hapag-Lloyd’s pending acquisition of ZIM — they describe a synchronized compression of freight infrastructure across two modes simultaneously. Shippers with rail exposure on transcontinental lanes face a market in which UP and NS no longer compete at interchange. Shippers dependent on ocean capacity face a market in which the largest vessel lessor is approaching control by one of its own customers. For manufacturers, retailers and agricultural exporters moving product across both modes — which describes most significant US freight — the implications compound. The STB’s rejection of the UP-NS application signals that rigorous competitive impact analysis is required before major rail transactions proceed. No equivalent process exists for the ONE-Seaspan transaction in the United States. The Federal Maritime Commission has limited authority over foreign vessel ownership structures. The transaction will be decided in Tokyo, Brussels and Hamilton — not Washington. Two modes. Two mechanisms. One direction. The infrastructure consolidation story of 2026 is not being told as a single story. It should be. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals & Switches. Contact him at paul.tonsager@multimodalsolutions.io .

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