<div class="phx-topic abstract-wrapper">The long-term prospect for diesel costs and fuel surcharges is pushing US truck shippers to rethink how they move freight, and even to redesign networks. </div>

The long-term prospect for diesel costs and fuel surcharges is pushing US truck shippers to rethink how they move freight, and even to redesign networks.

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<div class="phx-topic">Diesel prices stuck above $5 per gallon are adding significantly to US trucking costs, squeezing shippers between rising rates and fuel surcharges and tightening capacity, with continued geopolitical uncertainty making a return to lower fuel prices unlikely for the foreseeable future. Companies such as packaged meats manufacturer Smithfield Foods are considering multiple options to control costs. “We’ve done lane consolidation, [we’re] <a href="https://www.joc.com/article/soaring-truck-rates-power-major-rebound-in-domestic-intermodal-volume-6208736">adding intermodal</a>,” Smithfield’s CEO Charles Shane Smith said on an earnings call last week in response to a question about the impact of rising fuel prices. The Virginia-based company eliminated one million road miles in 2025 by optimizing its transportation network and expects to take another million miles off the road in 2026. “We’re still looking at hedging opportunities for diesel where we can, driving fewer miles,” Smith said. But higher oil and fuel prices ripple throughout Smithfield’s freight, packaging and agricultural costs. Soaring oil prices also affect the cost of resin-based packaging, for example, and the cost of agricultural feed supporting hog production, Smith said. Andrew Silvernail, CEO of International Paper, noted that rising freight costs are not passed through directly, but recovered “through pricing over time.” “Diesel prices are putting pressure on costs across the supply chain,” Silvernail said during an earnings call last week. “Combined with an exceptionally tight freight market, this remains a strong headwind.” Fuel’s headwinds are both global and domestic, with the impact of higher fuel costs on ocean and air cargo rippling deep into trucking and rail networks, putting pressure on transportation rates shippers pay and, eventually, the costs of goods to their customers. The average price of diesel fuel in the US has been above $5 per gallon since March 16, according to the US Energy Information Administration. It was $3.81 per gallon when the war began. In 2022, following Russia’s invasion of Ukraine, the US average diesel price stayed above $5 per gallon for 21 weeks, averaging $5.43 per gallon from March into early August. It spiked north of $5 per gallon again for 11 weeks from late August through November of that year. <h3>Dislocated freight drives costs </h3>War-linked <a href="https://www.joc.com/article/cost-hit-ocean-carriers-roll-out-series-of-rate-increases-fuel-surcharges-6202474">bunker fuel surcharges</a> are raising costs for US importers and <a href="https://www.joc.com/article/middle-east-fuel-shock-exacerbates-rising-us-ag-export-costs-6213888">exporters</a>, and ocean shipping lines are trying to constrain costs through increased direct sailings and slow steaming. Soaring jet fuel costs are grounding <a href="https://www.joc.com/article/rising-jet-fuel-costs-challenging-freighter-viability-as-war-enters-second-month-6199130">air cargo capacity</a>. That’s already leading to some mismatch between freight and capacity once shipments arrive in the US, and that dislocation means more truck miles and higher fuel costs. “People who had lead times built into supply chains, those lead times have been compressed,” Ryan Carter, executive vice president of the Americas at AIT Worldwide Logistics, told the Journal of Commerce. Global disruption — whether caused by the closure of the Strait of Hormuz or a pandemic — expedites demand, he said. “Time is your most valuable commodity,” Carter said. “We’ve seen an increase in tie-ins [between international and domestic transportation] that claws back time for those sourcing goods internationally that’s been lost since the conflict began.” Shippers need to be aware of the total cost impact from higher oil prices, said Jenny Vander Zanden, COO of Breakthrough, a transportation technology firm specializing in fuel cost management. “Part of that is understanding the difference between diesel and gasoline price dynamics,” Vander Zanden told the Journal of Commerce. Gas prices tend to fluctuate in sync with oil prices, but not diesel prices. One reason is that gasoline prices tend to be “elastic,” while diesel prices are not. When gasoline prices surge, consumers can, to an extent, cut back on fuel use. It’s much harder for diesel-using truckers and farmers to make fewer trips or plow fewer acres. “When I go to Walmart, I need my stuff — I don’t care if diesel prices are going higher,” said Keith Prather, managing director at Armada Corporate Intelligence. Walmart has to cover the higher diesel price to ensure goods are on its shelves for consumers. “I don’t think diesel prices are going to snap back” if oil prices drop, Prather told the Journal of Commerce. “It’s a question of how long diesel prices stay up.” <h3>Intermodal moment </h3>Intermodal rail is likely to <a href="https://www.joc.com/article/tailwinds-for-us-intermodal-volume-growth-strengthening-analyst-6206045">gain more business</a> the longer fuel prices remain elevated. “A revisit with intermodal is needed to think about strategic road maps to transportation,” Vander Zanden said. “There are some real savings opportunities with intermodal.” The Journal of Commerce Intermodal Savings Index (ISI) shows why that’s the case. In March, the ISI intermodal contract rate, including fuel, was up 8 cents year over year at $1.65 per mile. At $2.34 per mile, the truckload contract rate was up 50 cents from a year ago. That all-inclusive truckload contract rate leapt 14.8% year over year, with higher fuel costs accounting for more than 1,000 basis points of the increase, according to a Journal of Commerce analysis. Sans fuel, the ISI truckload rate was up only 4.4% year over year. That’s a clear indication of how much shippers are really paying in higher fuel costs. Shifting freight to intermodal is part of an answer, but shippers need to find ways to rein in miles driven by their carriers as well, especially deadhead or empty miles. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a1244989-1fd3-41a3-9782-0bf65208b331"></dynamic-object></div>If fuel costs remain elevated for months, rather than weeks, shippers will face even more pressure to rethink transportation networks. Uber Freight says the number of shippers approaching the logistics provider for network optimization is rising fast. That’s especially true for companies that shrank their inventory in late 2025 and now face high replenishment costs. “There was a big push among many companies to reduce inventory in late 2025, with the expectation they could replenish in the first quarter,” Bob Daymon, head of client freight for Uber Freight, told the Journal of Commerce. “They’re finding costs are considerably higher than they expected,” Daymon said. Shippers have “drawn mental lines” based on how long the war in the Middle East and high fuel prices last, he said, adding: “I see the queue filling up with requests for network optimization.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Diesel prices stuck above $5 per gallon are adding significantly to US trucking costs, squeezing shippers between rising rates and fuel surcharges and tightening capacity, with continued geopolitical uncertainty making a return to lower fuel prices unlikely for the foreseeable future. Companies such as packaged meats manufacturer Smithfield Foods are considering multiple options to control costs. “We’ve done lane consolidation, [we’re] adding intermodal ,” Smithfield’s CEO Charles Shane Smith said on an earnings call last week in response to a question about the impact of rising fuel prices. The Virginia-based company eliminated one million road miles in 2025 by optimizing its transportation network and expects to take another million miles off the road in 2026. “We’re still looking at hedging opportunities for diesel where we can, driving fewer miles,” Smith said. But higher oil and fuel prices ripple throughout Smithfield’s freight, packaging and agricultural costs. Soaring oil prices also affect the cost of resin-based packaging, for example, and the cost of agricultural feed supporting hog production, Smith said. Andrew Silvernail, CEO of International Paper, noted that rising freight costs are not passed through directly, but recovered “through pricing over time.” “Diesel prices are putting pressure on costs across the supply chain,” Silvernail said during an earnings call last week. “Combined with an exceptionally tight freight market, this remains a strong headwind.” Fuel’s headwinds are both global and domestic, with the impact of higher fuel costs on ocean and air cargo rippling deep into trucking and rail networks, putting pressure on transportation rates shippers pay and, eventually, the costs of goods to their customers. The average price of diesel fuel in the US has been above $5 per gallon since March 16, according to the US Energy Information Administration. It was $3.81 per gallon when the war began. In 2022, following Russia’s invasion of Ukraine, the US average diesel price stayed above $5 per gallon for 21 weeks, averaging $5.43 per gallon from March into early August. It spiked north of $5 per gallon again for 11 weeks from late August through November of that year. Dislocated freight drives costs War-linked bunker fuel surcharges are raising costs for US importers and exporters , and ocean shipping lines are trying to constrain costs through increased direct sailings and slow steaming. Soaring jet fuel costs are grounding air cargo capacity . That’s already leading to some mismatch between freight and capacity once shipments arrive in the US, and that dislocation means more truck miles and higher fuel costs. “People who had lead times built into supply chains, those lead times have been compressed,” Ryan Carter, executive vice president of the Americas at AIT Worldwide Logistics, told the Journal of Commerce. Global disruption — whether caused by the closure of the Strait of Hormuz or a pandemic — expedites demand, he said. “Time is your most valuable commodity,” Carter said. “We’ve seen an increase in tie-ins [between international and domestic transportation] that claws back time for those sourcing goods internationally that’s been lost since the conflict began.” Shippers need to be aware of the total cost impact from higher oil prices, said Jenny Vander Zanden, COO of Breakthrough, a transportation technology firm specializing in fuel cost management. “Part of that is understanding the difference between diesel and gasoline price dynamics,” Vander Zanden told the Journal of Commerce. Gas prices tend to fluctuate in sync with oil prices, but not diesel prices. One reason is that gasoline prices tend to be “elastic,” while diesel prices are not. When gasoline prices surge, consumers can, to an extent, cut back on fuel use. It’s much harder for diesel-using truckers and farmers to make fewer trips or plow fewer acres. “When I go to Walmart, I need my stuff — I don’t care if diesel prices are going higher,” said Keith Prather, managing director at Armada Corporate Intelligence. Walmart has to cover the higher diesel price to ensure goods are on its shelves for consumers. “I don’t think diesel prices are going to snap back” if oil prices drop, Prather told the Journal of Commerce. “It’s a question of how long diesel prices stay up.” Intermodal moment Intermodal rail is likely to gain more business the longer fuel prices remain elevated. “A revisit with intermodal is needed to think about strategic road maps to transportation,” Vander Zanden said. “There are some real savings opportunities with intermodal.” The Journal of Commerce Intermodal Savings Index (ISI) shows why that’s the case. In March, the ISI intermodal contract rate, including fuel, was up 8 cents year over year at $1.65 per mile. At $2.34 per mile, the truckload contract rate was up 50 cents from a year ago. That all-inclusive truckload contract rate leapt 14.8% year over year, with higher fuel costs accounting for more than 1,000 basis points of the increase, according to a Journal of Commerce analysis. Sans fuel, the ISI truckload rate was up only 4.4% year over year. That’s a clear indication of how much shippers are really paying in higher fuel costs. Shifting freight to intermodal is part of an answer, but shippers need to find ways to rein in miles driven by their carriers as well, especially deadhead or empty miles. If fuel costs remain elevated for months, rather than weeks, shippers will face even more pressure to rethink transportation networks. Uber Freight says the number of shippers approaching the logistics provider for network optimization is rising fast. That’s especially true for companies that shrank their inventory in late 2025 and now face high replenishment costs. “There was a big push among many companies to reduce inventory in late 2025, with the expectation they could replenish in the first quarter,” Bob Daymon, head of client freight for Uber Freight, told the Journal of Commerce. “They’re finding costs are considerably higher than they expected,” Daymon said. Shippers have “drawn mental lines” based on how long the war in the Middle East and high fuel prices last, he said, adding: “I see the queue filling up with requests for network optimization.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

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Rising fuel costs forcing US truck shippers to shift freight

<div class="phx-topic abstract-wrapper">The services, which include land bridge options to circumvent the still-effectively closed Strait of Hormuz, appear to be an acknowledgement by the liners that Hormuz will remain a no-go zone for the foreseeable future.</div>

The services, which include land bridge options to circumvent the still-effectively closed Strait of Hormuz, appear to be an acknowledgement by the liners that Hormuz will remain a no-go zone for the foreseeable future.

<div class="phx-topic">Hapag-Lloyd and Mediterranean Shipping Co. have become among the first ocean carriers to restore seaborne cargo links to the upper Persian Gulf that have been largely severed since early March due to the war in the Middle East. The services, which include land bridge options to circumvent the still-effectively closed Strait of Hormuz, appear to be an acknowledgement by the liners that Hormuz will remain a no-go zone for the foreseeable future. Hostilities <a href="https://www.nytimes.com/live/2026/05/04/world/iran-hormuz-ships-navy">that flared there Monday</a> demonstrate that reality. Hapag and MSC have announced separate services in the last three days that use third-party feeder vessels to connect ports such as Dubai’s Jebel Ali, Damman in Saudi Arabia and Shuwaikh in Kuwait. It has allowed Hapag-Lloyd to resume cargo bookings for the upper Gulf, the carrier said in an advisory Monday, while MSC is using feeders to help launch an express service connecting Europe, the Red Sea and Middle East, it said over the weekend. The carriers join CMA CGM, <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">which has been using feeder vessels since March</a> as part of a wider multimodal service network it launched in the region after lifting a brief halt in cargo bookings. But Maersk said in an advisory Monday it would continue to suspend bookings for dry, reefer and in-gauge cargo to and from the UAE (except for Khor Fakkan), Iraq, Kuwait, Qatar, Saudi Arabia and Bahrain. <h3>‘Subject to transit safety conditions’ </h3>Hapag-Lloyd said dry cargo, reefer and in-gauge special freight containers are the only freight being accepted under its booking resumption. The carrier said the feeder services will operate between Sharjah and other key ports in the UAE, as well as Kuwait, Saudi Arabia, Qatar and Iraq. A bonded trucking service will connect Sharjah with Khor Fakkan on the Gulf of Oman, which has shipping services linking with Mundra and Nhava Sheva in India and Salalah in Oman, Hapag-Lloyd said. The lead time for the bonded road transport between Sharjah and Khor Fakkan is about five days, Hapag-Lloyd said in its advisory. The carrier halted all bookings for the upper Gulf region on March 4, shortly after the US and Israel launched their attacks on Iran on Feb. 28. Highlighting the ongoing security risk to shipping services in the Gulf, Hapag indicated the feeder services will operate on a semi-ad hoc basis. “Feeder rotations do not operate on a fixed weekly schedule and remain subject to transit safety conditions in the region,” the carrier said in its advisory. MSC, meanwhile, confirmed it will use a similar feeder network in the upper Persian Gulf as part of a new Europe-Red Sea-Middle East express service beginning May 10. The service will connect Jebel Ali, Abu Dhabi, Kuwait and Iraq’s Umm Qasr with Damman, from where cargo will be trucked across Saudi Arabia to connect with the Red Sea port of King Abdullah. MSC said the express service is being launched “in response to the growing demand [for] services from Europe to the Red Sea and to the challenging scenario in the Middle East.” The first sailing is scheduled from Antwerp on May 10. The full mainline eastbound rotation is Gdansk, Klaipeda, Bremerhaven, Antwerp, Valencia, Barcelona, Gioia Tauro, Abu Kir, King Abdullah, Jeddah and Aqaba. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Hapag-Lloyd and Mediterranean Shipping Co. have become among the first ocean carriers to restore seaborne cargo links to the upper Persian Gulf that have been largely severed since early March due to the war in the Middle East. The services, which include land bridge options to circumvent the still-effectively closed Strait of Hormuz, appear to be an acknowledgement by the liners that Hormuz will remain a no-go zone for the foreseeable future. Hostilities that flared there Monday demonstrate that reality. Hapag and MSC have announced separate services in the last three days that use third-party feeder vessels to connect ports such as Dubai’s Jebel Ali, Damman in Saudi Arabia and Shuwaikh in Kuwait. It has allowed Hapag-Lloyd to resume cargo bookings for the upper Gulf, the carrier said in an advisory Monday, while MSC is using feeders to help launch an express service connecting Europe, the Red Sea and Middle East, it said over the weekend. The carriers join CMA CGM, which has been using feeder vessels since March as part of a wider multimodal service network it launched in the region after lifting a brief halt in cargo bookings. But Maersk said in an advisory Monday it would continue to suspend bookings for dry, reefer and in-gauge cargo to and from the UAE (except for Khor Fakkan), Iraq, Kuwait, Qatar, Saudi Arabia and Bahrain. ‘Subject to transit safety conditions’ Hapag-Lloyd said dry cargo, reefer and in-gauge special freight containers are the only freight being accepted under its booking resumption. The carrier said the feeder services will operate between Sharjah and other key ports in the UAE, as well as Kuwait, Saudi Arabia, Qatar and Iraq. A bonded trucking service will connect Sharjah with Khor Fakkan on the Gulf of Oman, which has shipping services linking with Mundra and Nhava Sheva in India and Salalah in Oman, Hapag-Lloyd said. The lead time for the bonded road transport between Sharjah and Khor Fakkan is about five days, Hapag-Lloyd said in its advisory. The carrier halted all bookings for the upper Gulf region on March 4, shortly after the US and Israel launched their attacks on Iran on Feb. 28. Highlighting the ongoing security risk to shipping services in the Gulf, Hapag indicated the feeder services will operate on a semi-ad hoc basis. “Feeder rotations do not operate on a fixed weekly schedule and remain subject to transit safety conditions in the region,” the carrier said in its advisory. MSC, meanwhile, confirmed it will use a similar feeder network in the upper Persian Gulf as part of a new Europe-Red Sea-Middle East express service beginning May 10. The service will connect Jebel Ali, Abu Dhabi, Kuwait and Iraq’s Umm Qasr with Damman, from where cargo will be trucked across Saudi Arabia to connect with the Red Sea port of King Abdullah. MSC said the express service is being launched “in response to the growing demand [for] services from Europe to the Red Sea and to the challenging scenario in the Middle East.” The first sailing is scheduled from Antwerp on May 10. The full mainline eastbound rotation is Gdansk, Klaipeda, Bremerhaven, Antwerp, Valencia, Barcelona, Gioia Tauro, Abu Kir, King Abdullah, Jeddah and Aqaba. Contact Keith Wallis at keithwallis@hotmail.com .

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Hapag-Lloyd, MSC to use feeders to restore upper Persian Gulf cargo links

<div class="phx-topic abstract-wrapper">The move coincides with plans by XCTG to develop new berths, upgrade existing berths, and develop a multimodal smart logistics center.</div>

The move coincides with plans by XCTG to develop new berths, upgrade existing berths, and develop a multimodal smart logistics center.

<div class="phx-topic">PSA International, the world’s largest container terminal operator, has expanded its portfolio in China after agreeing to pay $388 million for a 30% stake in Xiamen Container Terminal Group Co. (XCTG) in Fujian province. The move coincides with plans by XCTG to develop new berths, upgrade existing berths, and develop a multimodal smart logistics center. The Singapore-headquartered port operator is acquiring its stake through subsidiary PSA Amoy from XCTG’s parent, Xiamen Port Development Co., after the latter invited public bids for the investment. The deal also includes an increase in PSA’s stake in the Xiamen Port Intermodal Logistics Hub. XCTG comprises eight container terminals with a combined annual capacity of 20 million TEUs, although the company actually handled 12.5 million TEUs last year, a 2% increase over the prior year. Expansion projects there include the construction of five new berths, including in Xiamen’s Gulei Port North, Hai'an, and Haicang port areas, Shenzhen-listed Xiamen Port Development Co. said in regulatory filing. Other plans include new warehouse projects and the expansion of shore-power facilities at existing berths. PSA’s investment, which still has to be approved by regulatory agencies in China, was confirmed in separate statements late last week by PSA and Xiamen Port Development. It also comes about two months after Chinese regulators approved the $1.1 billion acquisition by Xiamen Port Development of a 70% stake in XCTG from Xiamen International Port Co. PSA, which handled a total of 105 million TEUs last year, also operates six other container terminals in China including Dalian, Guangzhou, Tianjin, and Lianyungang near Shanghai. “This partnership reflects the strong alignment between Xiamen Port Group and PSA in supporting the Silk Road maritime strategy and enhancing Fujian’s role in international trade and shipping,” Xiamen Port Group chairman Cai Li Qun said in a statement announcing the deal. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

PSA International, the world’s largest container terminal operator, has expanded its portfolio in China after agreeing to pay $388 million for a 30% stake in Xiamen Container Terminal Group Co. (XCTG) in Fujian province. The move coincides with plans by XCTG to develop new berths, upgrade existing berths, and develop a multimodal smart logistics center. The Singapore-headquartered port operator is acquiring its stake through subsidiary PSA Amoy from XCTG’s parent, Xiamen Port Development Co., after the latter invited public bids for the investment. The deal also includes an increase in PSA’s stake in the Xiamen Port Intermodal Logistics Hub. XCTG comprises eight container terminals with a combined annual capacity of 20 million TEUs, although the company actually handled 12.5 million TEUs last year, a 2% increase over the prior year. Expansion projects there include the construction of five new berths, including in Xiamen’s Gulei Port North, Hai'an, and Haicang port areas, Shenzhen-listed Xiamen Port Development Co. said in regulatory filing. Other plans include new warehouse projects and the expansion of shore-power facilities at existing berths. PSA’s investment, which still has to be approved by regulatory agencies in China, was confirmed in separate statements late last week by PSA and Xiamen Port Development. It also comes about two months after Chinese regulators approved the $1.1 billion acquisition by Xiamen Port Development of a 70% stake in XCTG from Xiamen International Port Co. PSA, which handled a total of 105 million TEUs last year, also operates six other container terminals in China including Dalian, Guangzhou, Tianjin, and Lianyungang near Shanghai. “This partnership reflects the strong alignment between Xiamen Port Group and PSA in supporting the Silk Road maritime strategy and enhancing Fujian’s role in international trade and shipping,” Xiamen Port Group chairman Cai Li Qun said in a statement announcing the deal. Contact Keith Wallis at keithwallis@hotmail.com .

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Singapore’s PSA invests $388 million in Xiamen’s XCTG port group

<div class="phx-topic abstract-wrapper">Linde has adopted a “guarded” outlook for the rest of 2026 as Air Liquide looks to a “rebound effect” in the US for an uplift. Linde has adopted a “guarded” outlook for the rest of 2026 as Air Liquide looks to a “rebound effect” in the US for an uplift. </div>

Linde has adopted a “guarded” outlook for the rest of 2026 as Air Liquide looks to a “rebound effect” in the US for an uplift. Linde has adopted a “guarded” outlook for the rest of 2026 as Air Liquide looks to a “rebound effect” in the US for an uplift.

<div class="phx-topic">Against a backdrop of economic uncertainties, the two largest global industrial gas suppliers are riding on record-high project backlogs while looking to gains from the North American market. In their latest earnings statements, suppliers Linde and Air Liquide highlighted key project wins in the electronics sector while maintaining a cautious tone amid industrial disruptions related to the war in the Middle East. Considered bellwether companies for industrial market trends, Linde and Air Liquide are key shippers of breakbulk and project cargo such as gas storage tanks and heavy equipment for large industrial projects. They supply to industries including manufacturing, chemicals and steel production. With global economic conditions in flux and continued weakness in traditional industrial markets across Europe, the Middle East and Africa, Linde — the world’s largest industrial gas supplier — is taking a “guarded” outlook on its performance for the remainder of the year while posting a record project backlog of nearly $10 billion. The backlog represents industrial gas and engineering project contracts that have been awarded but not yet started. First-quarter project orders grew 24% to $640 million. In his remarks during Linde’s May 1 first-quarter earnings call, CEO Sanjiv Lambda described the 2025 economic environment as a “study in contrast” that set the stage for a challenging backdrop for the industrial sectors the US-German company serves. “On one hand, exuberant investment in AI and digital infrastructure drove unprecedented activity,” he said. “On the other hand, traditional industrial markets like manufacturing, metals, chemicals and energy faced continued retrenchment.” Of the company’s $10 billion backlog, 71% of projects are from the Americas, with 64% in the chemicals sector and 66% qualifying as clean energy. “The US, and I've said this over and over again, proves to be a really resilient market,” Lambda said. “Sales are up across almost every end market.” The company expects $2.5 billion to $3 billion of its projects to start in 2026. Not included in the $10 billion backlog is over $500 million in industrial gas infrastructure projects to supply rocket fuel to the commercial space sector. <h3>Air Liquide readies steel, chip projects </h3>French industrial gas supplier Air Liquide is preparing to deliver two major industrial projects in the US and Asia as the company’s project backlog reached an all-time high of $6.5 billion in the first quarter, up 23% from a year ago. The backlog includes nearly 75 projects globally, balanced between the large industry and electronics sectors. “These are tangible, high-quality projects currently under construction that will fuel our profitable growth as they come online,” CEO François Jackow said during the company’s April 28 first-quarter earnings call. Among its first-quarter project wins, Air Liquide will invest over $350 million in pipeline infrastructure for a low-carbon steel mill Hyundai Steel and POSCO Group are building in Louisiana. The $5.8 billion plant is set for completion by 2029. “This project is a perfect illustration of the industrial reshoring trend currently revitalizing the US market,” Jackow said. The company will also invest $234 million to build two ultra-high purity carrier gas units for a global semiconductor chip manufacturer. In the second quarter, Air Liquide subsidiary Airgas provided industrial gas equipment and infrastructure to support the Artemis II moon mission. The conflict in the Middle East introduced challenges related to global helium sourcing in the first quarter, as helium is used in Air Liquide’s two key growth markets — healthcare and electronics. Disruptions to the world’s largest liquefied natural gas production facility in Qatar has resulted in a global helium shortage. While Jackow declined to speculate on opportunities that could arise from the conflict, he said structural shifts resulting from the situation could lead to “positive outcomes.” “Air Liquide is uniquely positioned to capture regional shifts in industrial demand, as we have a global footprint,” he said. “Also, we could expect a rebound effect in the US, where lower energy costs and manufacturing policy are attracting global industrial production.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

Against a backdrop of economic uncertainties, the two largest global industrial gas suppliers are riding on record-high project backlogs while looking to gains from the North American market. In their latest earnings statements, suppliers Linde and Air Liquide highlighted key project wins in the electronics sector while maintaining a cautious tone amid industrial disruptions related to the war in the Middle East. Considered bellwether companies for industrial market trends, Linde and Air Liquide are key shippers of breakbulk and project cargo such as gas storage tanks and heavy equipment for large industrial projects. They supply to industries including manufacturing, chemicals and steel production. With global economic conditions in flux and continued weakness in traditional industrial markets across Europe, the Middle East and Africa, Linde — the world’s largest industrial gas supplier — is taking a “guarded” outlook on its performance for the remainder of the year while posting a record project backlog of nearly $10 billion. The backlog represents industrial gas and engineering project contracts that have been awarded but not yet started. First-quarter project orders grew 24% to $640 million. In his remarks during Linde’s May 1 first-quarter earnings call, CEO Sanjiv Lambda described the 2025 economic environment as a “study in contrast” that set the stage for a challenging backdrop for the industrial sectors the US-German company serves. “On one hand, exuberant investment in AI and digital infrastructure drove unprecedented activity,” he said. “On the other hand, traditional industrial markets like manufacturing, metals, chemicals and energy faced continued retrenchment.” Of the company’s $10 billion backlog, 71% of projects are from the Americas, with 64% in the chemicals sector and 66% qualifying as clean energy. “The US, and I've said this over and over again, proves to be a really resilient market,” Lambda said. “Sales are up across almost every end market.” The company expects $2.5 billion to $3 billion of its projects to start in 2026. Not included in the $10 billion backlog is over $500 million in industrial gas infrastructure projects to supply rocket fuel to the commercial space sector. Air Liquide readies steel, chip projects French industrial gas supplier Air Liquide is preparing to deliver two major industrial projects in the US and Asia as the company’s project backlog reached an all-time high of $6.5 billion in the first quarter, up 23% from a year ago. The backlog includes nearly 75 projects globally, balanced between the large industry and electronics sectors. “These are tangible, high-quality projects currently under construction that will fuel our profitable growth as they come online,” CEO François Jackow said during the company’s April 28 first-quarter earnings call. Among its first-quarter project wins, Air Liquide will invest over $350 million in pipeline infrastructure for a low-carbon steel mill Hyundai Steel and POSCO Group are building in Louisiana. The $5.8 billion plant is set for completion by 2029. “This project is a perfect illustration of the industrial reshoring trend currently revitalizing the US market,” Jackow said. The company will also invest $234 million to build two ultra-high purity carrier gas units for a global semiconductor chip manufacturer. In the second quarter, Air Liquide subsidiary Airgas provided industrial gas equipment and infrastructure to support the Artemis II moon mission. The conflict in the Middle East introduced challenges related to global helium sourcing in the first quarter, as helium is used in Air Liquide’s two key growth markets — healthcare and electronics. Disruptions to the world’s largest liquefied natural gas production facility in Qatar has resulted in a global helium shortage. While Jackow declined to speculate on opportunities that could arise from the conflict, he said structural shifts resulting from the situation could lead to “positive outcomes.” “Air Liquide is uniquely positioned to capture regional shifts in industrial demand, as we have a global footprint,” he said. “Also, we could expect a rebound effect in the US, where lower energy costs and manufacturing policy are attracting global industrial production.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

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US market helps drive record project backlogs for industrial gas suppliers

<div class="phx-topic abstract-wrapper">Executives say the jump in trucking rates is being driven less by increased volumes and more by higher operating costs and tightening capacity, creating a more fragile recovery. </div>

Executives say the jump in trucking rates is being driven less by increased volumes and more by higher operating costs and tightening capacity, creating a more fragile recovery.

<div class="phx-topic">If wood shipping pallets are a reliable leading indicator of freight demand, the recent surge in US trucking rates may be signaling something other than a true market rebound. Industry executives say the rise in rates is being driven less by increased freight volumes and more by higher operating costs — particularly diesel — combined with tightening capacity. That dynamic is creating a more fragile recovery, even as companies express cautious optimism about the second half of 2026. “There’s a lot of uncertainty right now,” said Brent McClendon, president and CEO of Woodpack Global, an international trade association representing pallet manufacturers in 43 countries. “Demand remains inconsistent. When you’re connected to 90% of the goods that move, some sectors are strong while others are not.” That uneven demand profile has become a defining feature of the current freight cycle. Segments tied to government and defense spending are performing well, while other areas — particularly discretionary consumer goods — remain soft. The result is a fragmented market that lacks the broad-based strength typically seen in the early stages of a freight recovery. “Members supplying military-related firms are doing very well,” McClendon said. “Other parts of the economy are much more sluggish. January and February looked stronger, but March and April were weaker. It’s that ‘fits and starts’ pattern — that uncertainty — that has everyone uncomfortable.” At the same time, cost pressures are reshaping behavior across the supply chain. <h3>Reuse, then restock </h3>At Pennsylvania-based pallet manufacturer TMF Corp., production has declined as customers extend the life of existing pallets to conserve cash and manage higher transportation and materials costs. “Companies are doing what I would do — use every pallet until it’s no longer usable,” said TMF founder and President Tom Fitzgerald. “Pallets are getting beat up more quickly, in part because some manufacturers are using thinner wood to control costs.” TMF produced about 20,000 pallets a week at its peak. That figure has fallen to approximately 15,000, Fitzgerald said — a drop of about 25% that reflects both weaker demand and changing customer behavior. The reuse trend, while practical in the short term, has contributed to a tightening of available pallet supply, setting the stage for potential restocking later this year if freight volumes stabilize or increase. Some early signs of that shift are emerging. Packaging Corp. of America President Thomas Hassfurther told analysts on a recent earnings call that volumes are beginning to recover after a weak first quarter, which is typically the slowest period of the year. “The first quarter is by far the weakest in terms of volume, and then it accelerates through the year,” Hassfurther said. “The good news is it has returned in the second quarter as forecast, giving us flexibility to improve operational efficiency.” <h3>Spot rates still rising </h3>Still, freight market data suggests that the current rate environment is being driven primarily by supply-side constraints rather than a demand surge. DAT Freight &amp; Analytics reported that trucking rates continued to climb through April as capacity tightened and fuel prices rose. In some parts of the country, diesel is more than $2 per gallon higher than a year ago, significantly increasing carriers’ cost base. Excluding fuel surcharges, national dry-van spot rates are 25% higher year over year at a base rate of $2.00 per mile, and 23% above the five-year average. Refrigerated, or reefer, rates sans surcharges have climbed 22% to $2.36 per mile. In produce-growing regions, rates are up 10% year over year to $3.84 per mile before surcharges due to tighter truck availability tied to seasonal demand and limited capacity. Flatbed rates have also surged, reaching $2.69 per mile before surcharges, just 5 cents below the all-time high, after seven consecutive weeks of increases. Rates in that segment are 27% higher than a year ago, reflecting strong demand tied to construction, energy and industrial activity.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7c4fec07-a5cb-4a65-a29e-d9274d1b9816"></dynamic-object></div>The combination of rising fuel costs and constrained capacity is forcing pricing adjustments across the packaging and materials sector. 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. Packaging Corp. of America plans to implement price increases in 2026 in response to higher raw material and transportation costs. “We have room for further improvement and will continue these efforts through the second and third quarters,” Hassfurther said. “Containerboard prices are up a net $50 per ton since the beginning of the year, and we are working with customers to implement increases.” <h3>Transitional phase </h3>Executives say key end markets remain relatively stable, providing a foundation for cautious optimism. Consumer products and food and beverage shipments have held steady, and there are early signs of strengthening demand tied to residential construction and home improvement — sectors that are particularly sensitive to interest rates and broader economic confidence. “The consumer has been very resilient,” said Packaging Corp. of America CEO Mark Kowlzan. “Our customer base feels good about their business going forward, and tax refunds will provide an additional boost in the second half of the year.” Macroeconomic data also points to modest improvement. US gross domestic product grew at a 2% rate in the second quarter, up from 0.5% growth at the end of 2025. While not indicative of a strong expansion, the increase suggests the economy is stabilizing after a period of slower growth. For the pallet and container sector, that stabilization could translate into increased demand for packaging materials, particularly if retailers and manufacturers begin rebuilding inventories that were drawn down during the recent period of cost control and demand uncertainty. Still, industry leaders caution that significant risks remain. Trade policy, interest rates, war-driven fuel costs and broader business confidence all continue to influence freight demand and pricing dynamics. Any disruption in those areas could quickly alter the trajectory of the recovery. “The industry is cautiously optimistic,” McClendon said. “There are a lot of moving parts — tariffs, policy, diesel prices — but overall, the fundamentals look solid.” For now, the pallet and container sector appears to be navigating a transitional phase, one in which rising costs are driving rates higher even as underlying demand remains uneven. Whether that environment evolves into a sustained freight recovery in the second half of 2026 will depend largely on whether demand begins to catch up with the cost-driven pricing pressures already moving through the supply chain. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

If wood shipping pallets are a reliable leading indicator of freight demand, the recent surge in US trucking rates may be signaling something other than a true market rebound. Industry executives say the rise in rates is being driven less by increased freight volumes and more by higher operating costs — particularly diesel — combined with tightening capacity. That dynamic is creating a more fragile recovery, even as companies express cautious optimism about the second half of 2026. “There’s a lot of uncertainty right now,” said Brent McClendon, president and CEO of Woodpack Global, an international trade association representing pallet manufacturers in 43 countries. “Demand remains inconsistent. When you’re connected to 90% of the goods that move, some sectors are strong while others are not.” That uneven demand profile has become a defining feature of the current freight cycle. Segments tied to government and defense spending are performing well, while other areas — particularly discretionary consumer goods — remain soft. The result is a fragmented market that lacks the broad-based strength typically seen in the early stages of a freight recovery. “Members supplying military-related firms are doing very well,” McClendon said. “Other parts of the economy are much more sluggish. January and February looked stronger, but March and April were weaker. It’s that ‘fits and starts’ pattern — that uncertainty — that has everyone uncomfortable.” At the same time, cost pressures are reshaping behavior across the supply chain. Reuse, then restock At Pennsylvania-based pallet manufacturer TMF Corp., production has declined as customers extend the life of existing pallets to conserve cash and manage higher transportation and materials costs. “Companies are doing what I would do — use every pallet until it’s no longer usable,” said TMF founder and President Tom Fitzgerald. “Pallets are getting beat up more quickly, in part because some manufacturers are using thinner wood to control costs.” TMF produced about 20,000 pallets a week at its peak. That figure has fallen to approximately 15,000, Fitzgerald said — a drop of about 25% that reflects both weaker demand and changing customer behavior. The reuse trend, while practical in the short term, has contributed to a tightening of available pallet supply, setting the stage for potential restocking later this year if freight volumes stabilize or increase. Some early signs of that shift are emerging. Packaging Corp. of America President Thomas Hassfurther told analysts on a recent earnings call that volumes are beginning to recover after a weak first quarter, which is typically the slowest period of the year. “The first quarter is by far the weakest in terms of volume, and then it accelerates through the year,” Hassfurther said. “The good news is it has returned in the second quarter as forecast, giving us flexibility to improve operational efficiency.” Spot rates still rising Still, freight market data suggests that the current rate environment is being driven primarily by supply-side constraints rather than a demand surge. DAT Freight & Analytics reported that trucking rates continued to climb through April as capacity tightened and fuel prices rose. In some parts of the country, diesel is more than $2 per gallon higher than a year ago, significantly increasing carriers’ cost base. Excluding fuel surcharges, national dry-van spot rates are 25% higher year over year at a base rate of $2.00 per mile, and 23% above the five-year average. Refrigerated, or reefer, rates sans surcharges have climbed 22% to $2.36 per mile. In produce-growing regions, rates are up 10% year over year to $3.84 per mile before surcharges due to tighter truck availability tied to seasonal demand and limited capacity. Flatbed rates have also surged, reaching $2.69 per mile before surcharges, just 5 cents below the all-time high, after seven consecutive weeks of increases. Rates in that segment are 27% higher than a year ago, reflecting strong demand tied to construction, energy and industrial activity. The combination of rising fuel costs and constrained capacity is forcing pricing adjustments across the packaging and materials sector. Crackdowns on non-domiciled commercial drivers and stricter English-language enforcement are constraining truckload capacity after a four-year freight recession. Packaging Corp. of America plans to implement price increases in 2026 in response to higher raw material and transportation costs. “We have room for further improvement and will continue these efforts through the second and third quarters,” Hassfurther said. “Containerboard prices are up a net $50 per ton since the beginning of the year, and we are working with customers to implement increases.” Transitional phase Executives say key end markets remain relatively stable, providing a foundation for cautious optimism. Consumer products and food and beverage shipments have held steady, and there are early signs of strengthening demand tied to residential construction and home improvement — sectors that are particularly sensitive to interest rates and broader economic confidence. “The consumer has been very resilient,” said Packaging Corp. of America CEO Mark Kowlzan. “Our customer base feels good about their business going forward, and tax refunds will provide an additional boost in the second half of the year.” Macroeconomic data also points to modest improvement. US gross domestic product grew at a 2% rate in the second quarter, up from 0.5% growth at the end of 2025. While not indicative of a strong expansion, the increase suggests the economy is stabilizing after a period of slower growth. For the pallet and container sector, that stabilization could translate into increased demand for packaging materials, particularly if retailers and manufacturers begin rebuilding inventories that were drawn down during the recent period of cost control and demand uncertainty. Still, industry leaders caution that significant risks remain. Trade policy, interest rates, war-driven fuel costs and broader business confidence all continue to influence freight demand and pricing dynamics. Any disruption in those areas could quickly alter the trajectory of the recovery. “The industry is cautiously optimistic,” McClendon said. “There are a lot of moving parts — tariffs, policy, diesel prices — but overall, the fundamentals look solid.” For now, the pallet and container sector appears to be navigating a transitional phase, one in which rising costs are driving rates higher even as underlying demand remains uneven. Whether that environment evolves into a sustained freight recovery in the second half of 2026 will depend largely on whether demand begins to catch up with the cost-driven pricing pressures already moving through the supply chain. Contact Dan Ronan at contactdanronan@gmail.com .

Truckload

Flatbed

Shipping pallet, packaging sectors wade through ‘uncertainty’ in US freight demand

<div class="phx-topic abstract-wrapper">The closure of the Strait of Hormuz only serves to highlight that companies proactively investing in adopting alternative shipping fuels now will be far better off when the next disruption hits, writes Michael Lerner. </div>

The closure of the Strait of Hormuz only serves to highlight that companies proactively investing in adopting alternative shipping fuels now will be far better off when the next disruption hits, writes Michael Lerner.

<div class="phx-topic">Bunker fuel prices have surged 70% since the start of the war in the Middle East and the blockade of the Strait of Hormuz. At present, the global average price for very low sulfur fuel oil (VLSFO) is over <a href="https://urldefense.com/v3/__https:/shipandbunker.com/prices/av/global/av-glb-global-average-bunker-price__;!!DEyr4sPAfcQg!Sie7eoWVctWwupvhkkxfvMLeGOmG0tR2h3MD4BfybxOOb7_m5TV4zfs8wzGrUp_KahTIOUSYa_Agyepill1I$">$930/metric ton</a>, up from $540/mt in early February. Meanwhile, the regulation of maritime greenhouse gas (GHG) emissions is evolving. Both trends favor low-carbon alternative shipping fuels, prompting shipping companies to re-evaluate investment decisions. The International Maritime Organization’s (IMO’s) Marine Environment Protection Committee <a href="https://www.joc.com/article/fmcs-dibella-brings-anti-net-zero-message-to-imo-london-meeting-6210952">just wrapped up a round of meetings</a> on its proposed Net-Zero Framework (NZF), which would be a major, globally applicable step forward for decarbonizing shipping. But it’s unclear if the NZF will be watered down, or adopted in any form. Escalating penalties for noncompliance might get removed, leaving only voluntary measures. The vote to authorize NZF might get delayed again, <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">as it was last October amid pressure from the US and Saudi Arabia</a>. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6213889_0.1.jpg"></img></div>But whatever happens with the NZF, the impetus for decarbonizing shipping is strong, and getting stronger. About a fifth of global oil and gas supply ordinally passes through the Strait of Hormuz. Closing it spiked prices of conventional fuels that 99% of ships use — mainly fossil oil and liquefied natural gas — and demonstrated their vulnerability to supply disruptions. The risk of price volatility and further shocks is ongoing. This is a wake-up call for shipping companies, changing their calculus for adopting  low-carbon alternative fuels. Those fuels cost more than conventional ones, but are becoming more attractive all the time. For one thing, many alternative fuels can be made locally from organic wastes, so they don’t have to pass through Hormuz. For another, European Union maritime emissions regulations (FuelEU Maritime and the EU Emissions Trading System) are helping shrink the price premium for them, as each year, penalties on fossil fuels tighten while alternative fuel production rises. Already, certain alternative fuels on certain routes, for example bioLNG on intra-EU voyages, are at parity or even cheaper than conventional fuels. This affects shipping companies worldwide, including in the US. EU regulations apply to 100% of maritime emissions within EU territorial waters, and 50% of emissions for vessels transiting between an EU port and a non-EU port (for example Marseilles-New York). That means shipping companies servicing EU-US routes will need clean fuel sources in the US, which are growing, although not nearly as fast as in Europe. <h3> Can US legislation drive change? </h3>Current US policy is not conducive for producing or using alternative fuels. But <a href="https://urldefense.com/v3/__https:/www.ricketts.senate.gov/news/press-releases/ricketts-klobuchar-introduce-renewable-fuel-for-ocean-going-vessels-act/__;!!DEyr4sPAfcQg!Sie7eoWVctWwupvhkkxfvMLeGOmG0tR2h3MD4BfybxOOb7_m5TV4zfs8wzGrUp_KahTIOUSYa_AgyWi7Tba1$">bipartisan bills</a> introduced in both houses of Congress aim to change that by making biofuels eligible for the Renewable Fuel Standard (RFS) when used in oceangoing vessels (they’re already eligible when used as road or aviation fuels). This would accelerate US production and use of bioLNG (which requires new dual-fuel engines) as well as renewable diesel and biodiesel (“drop-in” fuels that work in conventional engines). Whether or not those bills become law, US clean maritime fuel producers are also aiming to sell to the European market and working to get their fuels qualified under EU regulations. So are international shipping associations. If they succeed, it would boost US clean fuel production — and energy security — for the European market. The potential for slashing maritime emissions is gigantic. A <a href="https://urldefense.com/v3/__https:/energy-vision.org/pdf/TheFutureOfShipping-EnergyVision.pdf__;!!DEyr4sPAfcQg!Sie7eoWVctWwupvhkkxfvMLeGOmG0tR2h3MD4BfybxOOb7_m5TV4zfs8wzGrUp_KahTIOUSYa_AgybNYDbPM$">new report</a> by the nonprofit Energy Vision finds that alternative low-carbon fuels derived from food waste or manure — including bioLNG, biomethanol, or green ammonia — have carbon-negative lifecycle emissions, i.e., less than net-zero, because more greenhouse gas is captured during production than is released when the fuel is burned. When these fuels are derived from landfill gas or wastewater, they do emit some GHG over their lifecycle, but only a third to half the emissions of heavy fuel oil or fossil LNG. The added cost of using alternative low-carbon fuel is a surprisingly small percentage of the cost of products shipped. Energy Vision calculated that using alternative fuel to ship a container across the Pacific would cost an extra 12 cents per pair of sneakers or less than a cent per smartphone or toothpaste tube — and that’s for a “next-gen” e-fuel (made with renewable electricity and captured CO2) using a high-end cost estimate. The extra cost of existing alternative fuels such as bioLNG is even lower. However regulatory regimes evolve in the near future, the writing is on the wall. As vessels age out, shipping companies must decide what to replace them with. Each alternative maritime fuel comes with its own advantages and disadvantages, but the basic choice comes down to this: continue to bear growing regulatory costs and price volatility of fossil fuels, or invest now in vessels that will have far lower GHG emissions and commodity price risk over their 30-year lifespans. Companies that proactively invest in adopting alternative shipping fuels now will be far better off when the next shock hits. Michael Lerner is Director of Research and Publications at the non-profit organization <a href="https://urldefense.com/v3/__http:/energy-vision.org/__;!!DEyr4sPAfcQg!Sie7eoWVctWwupvhkkxfvMLeGOmG0tR2h3MD4BfybxOOb7_m5TV4zfs8wzGrUp_KahTIOUSYa_AgyZz5b4dX$">Energy Vision</a>. Contact him at <a href="mailto:lerner@energy-vision.org">lerner@energy-vision.org</a>. </div>

Bunker fuel prices have surged 70% since the start of the war in the Middle East and the blockade of the Strait of Hormuz. At present, the global average price for very low sulfur fuel oil (VLSFO) is over $930/metric ton , up from $540/mt in early February. Meanwhile, the regulation of maritime greenhouse gas (GHG) emissions is evolving. Both trends favor low-carbon alternative shipping fuels, prompting shipping companies to re-evaluate investment decisions. The International Maritime Organization’s (IMO’s) Marine Environment Protection Committee just wrapped up a round of meetings on its proposed Net-Zero Framework (NZF), which would be a major, globally applicable step forward for decarbonizing shipping. But it’s unclear if the NZF will be watered down, or adopted in any form. Escalating penalties for noncompliance might get removed, leaving only voluntary measures. The vote to authorize NZF might get delayed again, as it was last October amid pressure from the US and Saudi Arabia . But whatever happens with the NZF, the impetus for decarbonizing shipping is strong, and getting stronger. About a fifth of global oil and gas supply ordinally passes through the Strait of Hormuz. Closing it spiked prices of conventional fuels that 99% of ships use — mainly fossil oil and liquefied natural gas — and demonstrated their vulnerability to supply disruptions. The risk of price volatility and further shocks is ongoing. This is a wake-up call for shipping companies, changing their calculus for adopting  low-carbon alternative fuels. Those fuels cost more than conventional ones, but are becoming more attractive all the time. For one thing, many alternative fuels can be made locally from organic wastes, so they don’t have to pass through Hormuz. For another, European Union maritime emissions regulations (FuelEU Maritime and the EU Emissions Trading System) are helping shrink the price premium for them, as each year, penalties on fossil fuels tighten while alternative fuel production rises. Already, certain alternative fuels on certain routes, for example bioLNG on intra-EU voyages, are at parity or even cheaper than conventional fuels. This affects shipping companies worldwide, including in the US. EU regulations apply to 100% of maritime emissions within EU territorial waters, and 50% of emissions for vessels transiting between an EU port and a non-EU port (for example Marseilles-New York). That means shipping companies servicing EU-US routes will need clean fuel sources in the US, which are growing, although not nearly as fast as in Europe.  Can US legislation drive change? Current US policy is not conducive for producing or using alternative fuels. But bipartisan bills introduced in both houses of Congress aim to change that by making biofuels eligible for the Renewable Fuel Standard (RFS) when used in oceangoing vessels (they’re already eligible when used as road or aviation fuels). This would accelerate US production and use of bioLNG (which requires new dual-fuel engines) as well as renewable diesel and biodiesel (“drop-in” fuels that work in conventional engines). Whether or not those bills become law, US clean maritime fuel producers are also aiming to sell to the European market and working to get their fuels qualified under EU regulations. So are international shipping associations. If they succeed, it would boost US clean fuel production — and energy security — for the European market. The potential for slashing maritime emissions is gigantic. A new report by the nonprofit Energy Vision finds that alternative low-carbon fuels derived from food waste or manure — including bioLNG, biomethanol, or green ammonia — have carbon-negative lifecycle emissions, i.e., less than net-zero, because more greenhouse gas is captured during production than is released when the fuel is burned. When these fuels are derived from landfill gas or wastewater, they do emit some GHG over their lifecycle, but only a third to half the emissions of heavy fuel oil or fossil LNG. The added cost of using alternative low-carbon fuel is a surprisingly small percentage of the cost of products shipped. Energy Vision calculated that using alternative fuel to ship a container across the Pacific would cost an extra 12 cents per pair of sneakers or less than a cent per smartphone or toothpaste tube — and that’s for a “next-gen” e-fuel (made with renewable electricity and captured CO2) using a high-end cost estimate. The extra cost of existing alternative fuels such as bioLNG is even lower. However regulatory regimes evolve in the near future, the writing is on the wall. As vessels age out, shipping companies must decide what to replace them with. Each alternative maritime fuel comes with its own advantages and disadvantages, but the basic choice comes down to this: continue to bear growing regulatory costs and price volatility of fossil fuels, or invest now in vessels that will have far lower GHG emissions and commodity price risk over their 30-year lifespans. Companies that proactively invest in adopting alternative shipping fuels now will be far better off when the next shock hits. Michael Lerner is Director of Research and Publications at the non-profit organization  Energy Vision . Contact him at  lerner@energy-vision.org .

Supply chain

War-driven energy shock makes case for more alternative fuels

<div class="phx-topic abstract-wrapper">The Trump administration’s threatened, and actual, withdrawal from numerous international groups and forums can eventually upset the relative stability that has existed in post-World War II global trade, writes Ted Prince.</div>

The Trump administration’s threatened, and actual, withdrawal from numerous international groups and forums can eventually upset the relative stability that has existed in post-World War II global trade, writes Ted Prince.

<div class="phx-topic">Following World War II, the US led the establishment of numerous multilateral organizations in the belief that a rules-based international order could prevent future global conflicts and promote stability. Our industry has grown and prospered under this doctrine. Today, this post-war consensus is under strain. While our oft-threatened NATO withdrawal is problematic due to (then) Sen. Marco Rubio’s legislation prohibiting any US President from unilaterally withdrawing from the group, this administration has eliminated many multilateral arrangements. On Jan. 7, 2026, President Donald Trump announced the US’ withdrawal from 66 international organizations. It is worth reviewing how just a handful of these organizations impact our industry. <h3>Trade and tariffs </h3>The UN Conference on Trade and Development (UNCTAD) was established in 1964 to serve as a voice for developing nations within the international economic system. From 1968 through 1974, UNCTAD considered “Liner Code” proposals that might have been favorably received by the current administration with its avowed interest in reviving US-flag shipping. One proposal allocated cargo between two countries as follows: one-third each to the fleets of the origin and destination country, with the remainder “open.” This code was never codified as it ran into objections of inefficiency, higher freight costs, protection of weak national lines, and conflict with liberal/trade rules. These trade rules originated from UNCTAD’s complementary organization, the General Agreement on Tariffs and Trade (GATT), a multilateral treaty ratified in 1947 to foster free trade by reducing tariffs. It was replaced by the World Trade Organization (WTO) in 1995. China’s membership in 2001 is viewed as an inflection point in global trade growth. Despite recent Supreme Court rulings, the WTO is confronted with Trump’s tariff initiatives. Its director-general, Ngozi Okonjo-Iweala has called for urgent reforms to maintain a stable, rules-based trading system against unilateral action. It is unclear how that will end. <h3>Law of the sea </h3>With the Strait of Hormuz generating global attention, the United Nations Convention on the Law of the Sea (UNCLOS), a treaty adopted in 1982 and effective since 1994, has generated renewed interest. It established a comprehensive legal framework for maritime zones that governs navigation, environmental protection, and provides dispute resolution mechanisms. The United States never ratified UNCLOS, despite recognizing most of its provisions as customary international law. The Reagan administration was opposed to terms governing deep seabed mining. Although the Senate Foreign Relations Committee unanimously supported ratification in 2004, the full Senate has never held a final vote because the required two-thirds approval for treaty ratification was not apparent. UNCLOS treats the Strait of Hormuz as an international strait, meaning the regime of transit passage applies. Ships of all states have the right of unimpeded transit through the strait even when passing through the territorial sea of bordering states (e.g., Iran and Oman). <h3>IMO net-zero </h3>The United States is still an active member of the International Maritime Organization (IMO), a United Nations specialized agency responsible for regulating international shipping safety, security, and environmental performance. Its most ambitious policy is its “net-zero” framework, which sets various intermediate targets on the way to net-zero shipping emissions by or around 2050. This was the first international effort to combine mandatory emissions limits and greenhouse gas (GHG) pricing across an entire industry. However, last October, the US contended the proposal relies on costly and unproven fuels while unfairly penalizing existing technologies. This objection forced the <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">postponement of adoption</a>. Although positions vary widely, there is an industry consensus on the need for uniform rules. Many ports and US shipowners already have decarbonization initiatives or low‑carbon fuel commitments underway. Certainty is essential for expensive assets with long lives. In today’s uncertain world, multilateral threats are harder to insulate against because they may obviate specific bilateral — or unilateral — actions. They can propagate quickly through interconnected trade, transportation, and finance networks. These lifelines are core to our industry and often require coordinated international policy actions; however, they can be slow (or politically difficult) to create quickly. As the architect (and major funder) of core multilateral institutions, will the US continue to use these forums to set rules, coordinate macroeconomic policy, and resolve disputes? Or, will we see a world where other nations seek alternative arrangements? Our entire industry literally hangs in that balance. 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>

Following World War II, the US led the establishment of numerous multilateral organizations in the belief that a rules-based international order could prevent future global conflicts and promote stability. Our industry has grown and prospered under this doctrine. Today, this post-war consensus is under strain. While our oft-threatened NATO withdrawal is problematic due to (then) Sen. Marco Rubio’s legislation prohibiting any US President from unilaterally withdrawing from the group, this administration has eliminated many multilateral arrangements. On Jan. 7, 2026, President Donald Trump announced the US’ withdrawal from 66 international organizations. It is worth reviewing how just a handful of these organizations impact our industry. Trade and tariffs The UN Conference on Trade and Development (UNCTAD) was established in 1964 to serve as a voice for developing nations within the international economic system. From 1968 through 1974, UNCTAD considered “Liner Code” proposals that might have been favorably received by the current administration with its avowed interest in reviving US-flag shipping. One proposal allocated cargo between two countries as follows: one-third each to the fleets of the origin and destination country, with the remainder “open.” This code was never codified as it ran into objections of inefficiency, higher freight costs, protection of weak national lines, and conflict with liberal/trade rules. These trade rules originated from UNCTAD’s complementary organization, the General Agreement on Tariffs and Trade (GATT), a multilateral treaty ratified in 1947 to foster free trade by reducing tariffs. It was replaced by the World Trade Organization (WTO) in 1995. China’s membership in 2001 is viewed as an inflection point in global trade growth. Despite recent Supreme Court rulings, the WTO is confronted with Trump’s tariff initiatives. Its director-general, Ngozi Okonjo-Iweala has called for urgent reforms to maintain a stable, rules-based trading system against unilateral action. It is unclear how that will end. Law of the sea With the Strait of Hormuz generating global attention, the United Nations Convention on the Law of the Sea (UNCLOS), a treaty adopted in 1982 and effective since 1994, has generated renewed interest. It established a comprehensive legal framework for maritime zones that governs navigation, environmental protection, and provides dispute resolution mechanisms. The United States never ratified UNCLOS, despite recognizing most of its provisions as customary international law. The Reagan administration was opposed to terms governing deep seabed mining. Although the Senate Foreign Relations Committee unanimously supported ratification in 2004, the full Senate has never held a final vote because the required two-thirds approval for treaty ratification was not apparent. UNCLOS treats the Strait of Hormuz as an international strait, meaning the regime of transit passage applies. Ships of all states have the right of unimpeded transit through the strait even when passing through the territorial sea of bordering states (e.g., Iran and Oman). IMO net-zero The United States is still an active member of the International Maritime Organization (IMO), a United Nations specialized agency responsible for regulating international shipping safety, security, and environmental performance. Its most ambitious policy is its “net-zero” framework, which sets various intermediate targets on the way to net-zero shipping emissions by or around 2050. This was the first international effort to combine mandatory emissions limits and greenhouse gas (GHG) pricing across an entire industry. However, last October, the US contended the proposal relies on costly and unproven fuels while unfairly penalizing existing technologies. This objection forced the postponement of adoption . Although positions vary widely, there is an industry consensus on the need for uniform rules. Many ports and US shipowners already have decarbonization initiatives or low‑carbon fuel commitments underway. Certainty is essential for expensive assets with long lives. In today’s uncertain world, multilateral threats are harder to insulate against because they may obviate specific bilateral — or unilateral — actions. They can propagate quickly through interconnected trade, transportation, and finance networks. These lifelines are core to our industry and often require coordinated international policy actions; however, they can be slow (or politically difficult) to create quickly. As the architect (and major funder) of core multilateral institutions, will the US continue to use these forums to set rules, coordinate macroeconomic policy, and resolve disputes? Or, will we see a world where other nations seek alternative arrangements? Our entire industry literally hangs in that balance. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

Container shipping’s ‘multilateral world’ under threat by US-driven strain

<div class="phx-topic abstract-wrapper">After more than two decades of inconsistent federal enforcement, corrective actions are now arriving, raising hopes for a safer trucking industry and the general public it serves. </div>

After more than two decades of inconsistent federal enforcement, corrective actions are now arriving, raising hopes for a safer trucking industry and the general public it serves.

<div class="phx-topic">I’ve watched the Federal Motor Carrier Safety Administration (FMCSA) struggle to fulfill its most critical responsibility: ensuring safer roads. This is not a casual observation; it is a conclusion drawn from over 20 years of experience with the data, policies and the consequences that arise from them. The April 12 60 Minutes segment on trucking fraud is a direct consequence of the FMCSA’s failure to listen, engage, or understand the safety risks associated with the industry it is supposed to regulate. This is just one of many examples that underscores its shortcomings. In 2004, the FMCSA announced its flagship safety initiative, CSA 2010. The premise was straightforward: Use data to identify unsafe carriers and reduce crashes. It did not achieve its intended goals. And its failure was not quiet. It was public, repeated and consequential. More than two decades later, the industry still lacks a reliable, trusted framework to identify and avoid unsafe motor carriers. That outcome is extraordinary given the time, funding and regulatory focus dedicated to the effort. CSA is the most visible example, but not the only one. The program relied on data that could not reliably predict crash risk, yet it was promoted as though it could. Investigations by the Department of Transportation Inspector General and the Government Accountability Office confirmed that key elements were not statistically valid for their intended use, prompting Congressional intervention. This is not refinement, but systemic failure. More broadly, it reflects a pattern: initiatives launched with hope, but without a solid grounding in how safety actually operates in the real world. <h3>A disconnect from the real world </h3>As a member of the FMCSA’s Carrier Safety and Accountability Subcommittee, I saw firsthand how far decision-making had drifted from operational reality. Too often, the FMCSA treated the industry as an adversary rather than a partner. The people responsible for selecting carriers, managing risk and ensuring safe freight movement every day were not meaningfully included. At one point, I renamed my working folder for the CSA Subcommittee meetings to “FMCSA Lies.” This name reflected my frustration with senior-level FMCSA staff who defended positions that contradicted data, real-world situations, and basic common sense. They also seemed unwilling to listen to reason. Meanwhile, the private sector adapted. In 2007, I founded QualifiedCarriers.com to provide actionable safety intelligence to the shipping community on motor carriers. It was later acquired by Highway. The market built what it needed because the FMCSA would not. The problem has been compounded by a focus on issues with little direct impact on safety outcomes. Examining the economics of broker-carrier relationships — such as pricing structures — does not prevent accidents, remove unsafe drivers, or improve training and enforcement. Safety is operational. It comes down to who is behind the wheel, how they were trained, and whether standards are enforced consistently across jurisdictions. Anything else is a distraction. <h3>A turning point </h3>For the first time in 22 years, there are signs that the FMCSA is refocusing on what matters. Under Transportation Secretary Sean Duffy and FMCSA Administrator Derek Barrs, the agency has begun taking steps that directly affect safety outcomes. In a short period, the FMCSA has shut down deficient commercial drivers’ license (CDL) schools, eliminating pipelines of underqualified drivers; actively enforced English language proficiency rules; begun cooperating with federal law enforcement on fraud, including risks tied to foreign-controlled dispatch operations; and started evaluating prior CDL issuances from substandard programs. The agency is also engaging directly with industry at major events, including the Mid-America Trucking Show and the Truckload Carriers Association annual meeting. At the Truckload Carriers Association meeting in March, Barrs received a standing ovation — not because enforcement is easier, but because it is finally becoming more meaningful. He may be the first FMCSA leader since Annette Sandberg to fully grasp that safety is an operational discipline grounded in qualification, enforcement and measurable outcomes. To the professionals inside the FMCSA: you now have leadership aligned with real-world safety. Support it, build on it and do not revert to frameworks that have already failed. To industry leaders — carriers, brokers, shippers and associations: engage constructively. Demand rigor, share data and hold the agency accountable while reinforcing what works. The path forward is not complicated. Put qualified drivers on the road, remove unqualified ones, enforce standards consistently, and use data that reflects reality. Do that, and safety improves. But we should be clear-eyed about the cost of delay. After more than two decades of inconsistent enforcement, corrective actions are now arriving all at once — tightening standards, removing capacity and straining the system. Had these steps been taken steadily over time, the disruption would be far less — and lives would almost certainly have been saved. For 22 years, the FMCSA drifted. Now it has a chance to lead and an obligation not to waste it again.Jeff Tucker is chairman of the National Industrial Transportation League’s Highway Committee. Contact him at <a href="mailto:jeff.tucker@tuckerco.com">jeff.tucker@tuckerco.com</a>. </div>

I’ve watched the Federal Motor Carrier Safety Administration (FMCSA) struggle to fulfill its most critical responsibility: ensuring safer roads. This is not a casual observation; it is a conclusion drawn from over 20 years of experience with the data, policies and the consequences that arise from them. The April 12 60 Minutes segment on trucking fraud is a direct consequence of the FMCSA’s failure to listen, engage, or understand the safety risks associated with the industry it is supposed to regulate. This is just one of many examples that underscores its shortcomings. In 2004, the FMCSA announced its flagship safety initiative, CSA 2010. The premise was straightforward: Use data to identify unsafe carriers and reduce crashes. It did not achieve its intended goals. And its failure was not quiet. It was public, repeated and consequential. More than two decades later, the industry still lacks a reliable, trusted framework to identify and avoid unsafe motor carriers. That outcome is extraordinary given the time, funding and regulatory focus dedicated to the effort. CSA is the most visible example, but not the only one. The program relied on data that could not reliably predict crash risk, yet it was promoted as though it could. Investigations by the Department of Transportation Inspector General and the Government Accountability Office confirmed that key elements were not statistically valid for their intended use, prompting Congressional intervention. This is not refinement, but systemic failure. More broadly, it reflects a pattern: initiatives launched with hope, but without a solid grounding in how safety actually operates in the real world. A disconnect from the real world As a member of the FMCSA’s Carrier Safety and Accountability Subcommittee, I saw firsthand how far decision-making had drifted from operational reality. Too often, the FMCSA treated the industry as an adversary rather than a partner. The people responsible for selecting carriers, managing risk and ensuring safe freight movement every day were not meaningfully included. At one point, I renamed my working folder for the CSA Subcommittee meetings to “FMCSA Lies.” This name reflected my frustration with senior-level FMCSA staff who defended positions that contradicted data, real-world situations, and basic common sense. They also seemed unwilling to listen to reason. Meanwhile, the private sector adapted. In 2007, I founded QualifiedCarriers.com to provide actionable safety intelligence to the shipping community on motor carriers. It was later acquired by Highway. The market built what it needed because the FMCSA would not. The problem has been compounded by a focus on issues with little direct impact on safety outcomes. Examining the economics of broker-carrier relationships — such as pricing structures — does not prevent accidents, remove unsafe drivers, or improve training and enforcement. Safety is operational. It comes down to who is behind the wheel, how they were trained, and whether standards are enforced consistently across jurisdictions. Anything else is a distraction. A turning point For the first time in 22 years, there are signs that the FMCSA is refocusing on what matters. Under Transportation Secretary Sean Duffy and FMCSA Administrator Derek Barrs, the agency has begun taking steps that directly affect safety outcomes. In a short period, the FMCSA has shut down deficient commercial drivers’ license (CDL) schools, eliminating pipelines of underqualified drivers; actively enforced English language proficiency rules; begun cooperating with federal law enforcement on fraud, including risks tied to foreign-controlled dispatch operations; and started evaluating prior CDL issuances from substandard programs. The agency is also engaging directly with industry at major events, including the Mid-America Trucking Show and the Truckload Carriers Association annual meeting. At the Truckload Carriers Association meeting in March, Barrs received a standing ovation — not because enforcement is easier, but because it is finally becoming more meaningful. He may be the first FMCSA leader since Annette Sandberg to fully grasp that safety is an operational discipline grounded in qualification, enforcement and measurable outcomes. To the professionals inside the FMCSA: you now have leadership aligned with real-world safety. Support it, build on it and do not revert to frameworks that have already failed. To industry leaders — carriers, brokers, shippers and associations: engage constructively. Demand rigor, share data and hold the agency accountable while reinforcing what works. The path forward is not complicated. Put qualified drivers on the road, remove unqualified ones, enforce standards consistently, and use data that reflects reality. Do that, and safety improves. But we should be clear-eyed about the cost of delay. After more than two decades of inconsistent enforcement, corrective actions are now arriving all at once — tightening standards, removing capacity and straining the system. Had these steps been taken steadily over time, the disruption would be far less — and lives would almost certainly have been saved. For 22 years, the FMCSA drifted. Now it has a chance to lead and an obligation not to waste it again. Jeff Tucker is chairman of the National Industrial Transportation League’s Highway Committee. Contact him at jeff.tucker@tuckerco.com .

Trucking labor

How FMCSA missed the mark on safety — and how it can get it right

Index

The index for each vessel type is produced from two variables: the number of those vessels chartered compared to the previous month, and the lead time to charter those vessels compared to the previous month. If fewer vessels are chartered than in the previous month, this implies more capacity may be available. If the lead time needed to charter vessels is shorter than the previous month, this implies capacity is more quickly available. Both these scenarios imply a more positive market position from the shipper’s perspective. A rising index line indicates a more positive market position due to the availability of capacity. The start point of 100 denotes the point that accurate results began. The trend is taken from this position (February 2025) and shows movement in capacity compared to this point. The individual indices of the five major vessel types are weighted and consolidated to produce. The data is collected by the Journal of Commerce Breakbulk Shipper Group

Breakbulk ship capacity indicator (JOC) 

JOC Breakbulk and Project Cargo Index Gateway

<div class="phx-topic abstract-wrapper">Midsize importers are generally satisfied with the base rates contained in their 2026–27 service contracts, but many are at the mercy of ocean carriers as to how emergency fuel surcharges are being handled.</div>

Midsize importers are generally satisfied with the base rates contained in their 2026–27 service contracts, but many are at the mercy of ocean carriers as to how emergency fuel surcharges are being handled.

<div class="phx-topic">Midsize US retailers and direct importers of Asia-sourced goods are finalizing 2026–27 service contracts with ocean carriers at base rates roughly comparable to last year — but with hundreds of dollars of additional bunker fuel surcharges baked in amid the war-driven jump in global oil prices. Container lines, despite facing a year of flat or negative volume growth and mounting global overcapacity, have generally been able to hold the line on trans-Pacific base rates while negotiating with cargo owners over how the higher fuel prices will be billed. Midsize importers — those moving approximately 20,000 to 100,000 TEUs annually — have secured contracts in the range of $1,650 to $1,950 per FEU to the West Coast, with East Coast business about $1,000 per FEU higher, according to multiple industry sources. Those levels are comparable to the base rates in the expiring 2025–26 service contracts. However, with crude oil trading over $100 per barrel <a href="https://www.joc.com/article/hapag-lloyd-imposes-emergency-fuel-surcharges-on-third-party-feeder-cargo-6207629">due to the war in the Middle East</a> and closure of the Strait of Hormuz, carriers are approaching customers in the final stages of their 2026–27 service contract negotiations with bunker surcharges of as much as $400 per FEU, which would push the all-in freight rates to the US West Coast above $2,000 per FEU. That’s noticeably higher than last year when bunker fuel prices were stable. Most annual service contracts begin May 1 and run through April 30 of the following year. The Journal of Commerce spoke to seven ocean carriers, five forwarders, and three industry consultants for this story. “A lot of time customers push back on the surcharges, but the market is going to dictate what they are,” one carrier executive said. “Perhaps some carriers are more rigid than others as to how they apply additional surcharges, but I think that’s a matter of discussion.” Direct importers and forwarders are objecting to what they say are unilateral decisions by some carriers to change the standard bunker adjustment factor (BAF) in service contracts from a quarterly review to a monthly reset. Customers are also challenging carriers that are charging <a href="https://www.joc.com/article/carriers-handling-of-fuel-surcharges-agitates-small-midsize-trans-pac-shippers-6208047">emergency bunker surcharges (EBSs) that do not contain a clause</a> that would shift the EBS lower as oil prices drop. A second carrier executive said that given the current uncertainties due to the war in the Middle East, customers are asking shipping lines to offer guarantees and specify timelines around the bunker surcharges that are impossible to give. “If you ask a shipping line today, ‘Can you put an expiration date on the EBS, they cannot,’” the source said. A third carrier executive noted that fuel surcharges will vary noticeably based on the size of the customer and also the business relationship each carrier has with its customers. A large customer with a history of meeting the minimum quantity commitments (MQCs) in its annual contracts may be able to limit its fuel surcharge to as little as $100 per container, whereas smaller customers who have not booked frequently with the carrier may be offered a take-it-or-leave-it EBS of $400 per container, the carrier source explained. An industry consultant who has negotiated service contracts for big-box retailers said in order to finalize their negotiations, midsize retailers and importers should shift their focus to fuel surcharges. “The key for shippers is don’t focus on just the base rate,” the consultant said. “Also understand what the floating bunker [charge] looks like and the emergency bunker surcharge, which at some point will go away.” The source added it is a fact that carriers are getting hit hard right now by higher fuel costs, with bunker fuel prices at major hubs, especially in Asia, essentially doubling after the war began. “It has to be passed down,” the source said. “They can’t just absorb those kinds of costs.” Carriers are including BAFs and EBSs in their service contract negotiations not only because they are being hit with higher bunker costs, but also because they are paying railroads and truckers more due to increased costs in those sectors, said Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’re definitely standing firm on fuel surcharges,” Cook said of ocean carriers. “All costs are going up.” <h3>Contract extensions not a big issue </h3>In mid-April, two weeks before the May 1 start date of 2026–27 contracts, BCOs expressed concern that, facing a backlog of unsigned contracts, carriers would not be able to finalize all of the outstanding deals on time. Customers feared they would have no choice but to pay much higher spot rates until their new contracts were finalized. Spot rates from Asia to the US West Coast as of Wednesday were $2,767 per FEU to the West Coast and $3,767 to the East Coast, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Drewry pegged spot rates as of April 23 at $2,934 per FEU to the West Coast and $3,562 per FEU to the East Coast. In the case of both indexes, West Coast spot/freight-all-kinds (FAK) rates have been above $2,000 per FEU for all of April. In their expiring 2025–26 service contracts, midsize BCOs are paying in the range of $1,700 to $1,850 per FEU to the West Coast, so shipping under spot rates would add hundreds of dollars per container to the all-in rate. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7f641553-97ec-4014-8e54-fef6408538d9"></dynamic-object></div>But most carriers this week are agreeing to give their customers an extension of their 2025–26 service contracts until mid- to late-May while new deals are finalized, sources say, thus sparing customers from the more expensive spot market. “They’re extending the contracts now,” Jon Monroe, who serves as an adviser to forwarders, said of ocean carriers. Bob Fredman, an industry consultant who for many years managed logistics for national retailers, said he encountered similar situations in years when there was a backlog of contracts waiting to be processed. The delays were often needed to wrap up the language in new contracts that went down to the wire. “I don’t think it’s something that’s going to be a deal-breaker for anyone,” Fredman said. <h3>Carriers limiting fixed-account bookings for NVOs </h3>As is customary, carriers have waited until the final week or so before the May 1 deadline to finalize contracts with most of the non-vessel-operating common carriers (NVOs) that book with them. That is once again the case this year, forwarders say. Some carriers are being especially restrictive as to how many containers their NVO customers can ship under their named account (NAC) rates, several forwarders said. NAC rates are fixed for the duration of the contract. Many carriers right now are requiring that NVOs book as many as four containers under higher FAK rates for each fixed-account booking. NAC rates are likely to settle in below $2,000 per FEU to the West Coast, so that means forwarders will be shipping about 80% of their containers under the higher FAK rates, the forwarders said. However, requiring that ratio is not a new strategy, especially when FAK rates are noticeably higher than the fixed rates at the time the contracts are being signed, one forwarder said. “We don’t see this as being any more prevalent than in the past,” said the source. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Executive Editor Mark Szakonyi contributed to this report.</div>

Midsize US retailers and direct importers of Asia-sourced goods are finalizing 2026–27 service contracts with ocean carriers at base rates roughly comparable to last year — but with hundreds of dollars of additional bunker fuel surcharges baked in amid the war-driven jump in global oil prices. Container lines, despite facing a year of flat or negative volume growth and mounting global overcapacity, have generally been able to hold the line on trans-Pacific base rates while negotiating with cargo owners over how the higher fuel prices will be billed. Midsize importers — those moving approximately 20,000 to 100,000 TEUs annually — have secured contracts in the range of $1,650 to $1,950 per FEU to the West Coast, with East Coast business about $1,000 per FEU higher, according to multiple industry sources. Those levels are comparable to the base rates in the expiring 2025–26 service contracts. However, with crude oil trading over $100 per barrel due to the war in the Middle East and closure of the Strait of Hormuz, carriers are approaching customers in the final stages of their 2026–27 service contract negotiations with bunker surcharges of as much as $400 per FEU, which would push the all-in freight rates to the US West Coast above $2,000 per FEU. That’s noticeably higher than last year when bunker fuel prices were stable. Most annual service contracts begin May 1 and run through April 30 of the following year. The Journal of Commerce spoke to seven ocean carriers, five forwarders, and three industry consultants for this story. “A lot of time customers push back on the surcharges, but the market is going to dictate what they are,” one carrier executive said. “Perhaps some carriers are more rigid than others as to how they apply additional surcharges, but I think that’s a matter of discussion.” Direct importers and forwarders are objecting to what they say are unilateral decisions by some carriers to change the standard bunker adjustment factor (BAF) in service contracts from a quarterly review to a monthly reset. Customers are also challenging carriers that are charging emergency bunker surcharges (EBSs) that do not contain a clause that would shift the EBS lower as oil prices drop. A second carrier executive said that given the current uncertainties due to the war in the Middle East, customers are asking shipping lines to offer guarantees and specify timelines around the bunker surcharges that are impossible to give. “If you ask a shipping line today, ‘Can you put an expiration date on the EBS, they cannot,’” the source said. A third carrier executive noted that fuel surcharges will vary noticeably based on the size of the customer and also the business relationship each carrier has with its customers. A large customer with a history of meeting the minimum quantity commitments (MQCs) in its annual contracts may be able to limit its fuel surcharge to as little as $100 per container, whereas smaller customers who have not booked frequently with the carrier may be offered a take-it-or-leave-it EBS of $400 per container, the carrier source explained. An industry consultant who has negotiated service contracts for big-box retailers said in order to finalize their negotiations, midsize retailers and importers should shift their focus to fuel surcharges. “The key for shippers is don’t focus on just the base rate,” the consultant said. “Also understand what the floating bunker [charge] looks like and the emergency bunker surcharge, which at some point will go away.” The source added it is a fact that carriers are getting hit hard right now by higher fuel costs, with bunker fuel prices at major hubs, especially in Asia, essentially doubling after the war began. “It has to be passed down,” the source said. “They can’t just absorb those kinds of costs.” Carriers are including BAFs and EBSs in their service contract negotiations not only because they are being hit with higher bunker costs, but also because they are paying railroads and truckers more due to increased costs in those sectors, said Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’re definitely standing firm on fuel surcharges,” Cook said of ocean carriers. “All costs are going up.” Contract extensions not a big issue In mid-April, two weeks before the May 1 start date of 2026–27 contracts, BCOs expressed concern that, facing a backlog of unsigned contracts, carriers would not be able to finalize all of the outstanding deals on time. Customers feared they would have no choice but to pay much higher spot rates until their new contracts were finalized. Spot rates from Asia to the US West Coast as of Wednesday were $2,767 per FEU to the West Coast and $3,767 to the East Coast, according to Platts, a sister company of the Journal of Commerce within S&P Global. Drewry pegged spot rates as of April 23 at $2,934 per FEU to the West Coast and $3,562 per FEU to the East Coast. In the case of both indexes, West Coast spot/freight-all-kinds (FAK) rates have been above $2,000 per FEU for all of April. In their expiring 2025–26 service contracts, midsize BCOs are paying in the range of $1,700 to $1,850 per FEU to the West Coast, so shipping under spot rates would add hundreds of dollars per container to the all-in rate. But most carriers this week are agreeing to give their customers an extension of their 2025–26 service contracts until mid- to late-May while new deals are finalized, sources say, thus sparing customers from the more expensive spot market. “They’re extending the contracts now,” Jon Monroe, who serves as an adviser to forwarders, said of ocean carriers. Bob Fredman, an industry consultant who for many years managed logistics for national retailers, said he encountered similar situations in years when there was a backlog of contracts waiting to be processed. The delays were often needed to wrap up the language in new contracts that went down to the wire. “I don’t think it’s something that’s going to be a deal-breaker for anyone,” Fredman said. Carriers limiting fixed-account bookings for NVOs As is customary, carriers have waited until the final week or so before the May 1 deadline to finalize contracts with most of the non-vessel-operating common carriers (NVOs) that book with them. That is once again the case this year, forwarders say. Some carriers are being especially restrictive as to how many containers their NVO customers can ship under their named account (NAC) rates, several forwarders said. NAC rates are fixed for the duration of the contract. Many carriers right now are requiring that NVOs book as many as four containers under higher FAK rates for each fixed-account booking. NAC rates are likely to settle in below $2,000 per FEU to the West Coast, so that means forwarders will be shipping about 80% of their containers under the higher FAK rates, the forwarders said. However, requiring that ratio is not a new strategy, especially when FAK rates are noticeably higher than the fixed rates at the time the contracts are being signed, one forwarder said. “We don’t see this as being any more prevalent than in the past,” said the source. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .Executive Editor Mark Szakonyi contributed to this report.

Forwarding

Trans-Pacific

Fuel charges complicate rush to ink new trans-Pacific service contracts

<div class="phx-topic abstract-wrapper">The truckload provider slashed its logistics division’s third-party carrier pool by 30% in the first quarter amid growing attention to truck safety nationwide and a federal crackdown on truck driver licensing. </div>

The truckload provider slashed its logistics division’s third-party carrier pool by 30% in the first quarter amid growing attention to truck safety nationwide and a federal crackdown on truck driver licensing.

<div class="phx-topic">Knight-Swift Transportation Holdings is making deep cuts in its brokerage carrier base, targeting businesses that company officials say may be unsafe. “We have cut down the number of carriers that we work with dramatically,” Adam Miller, CEO of the truckload and less-than-truckload (LTL) provider, told Wall Street analysts during the company’s first-quarter earnings call last week. “Just since the beginning of this year, we’re down 30% and we had made a large cut even earlier last year,” Miller said. The cuts at Knight-Swift come amid growing attention to truck safety nationwide, allegations of widespread illegal trucking and <a href="https://www.joc.com/article/usdot-releases-interim-final-rule-on-non-domiciled-cdl-holders-6169023">a federal crackdown on truck driver licensing</a>. “We felt it was prudent for us to take the steps to eliminate capacity that we didn’t feel comfortable with,” Miller said. “And do I think others will do that? I think some will.” Knight-Swift, which reported $7.5 billion in total revenue last year, had $127.6 million in logistics revenue, largely brokerage-based business, in the first quarter. That revenue was down 9.9% from a year earlier, driven by an 18.9% decline in load counts. <h3>Growing pressure to tighten standards </h3>Brokerages and carriers such as Knight-Swift that operate brokerages as part of a transportation portfolio are under growing pressure to tighten standards used to vet carriers. The US Supreme Court is currently considering a case that could determine what level of <a href="https://www.scotusblog.com/2026/02/court-to-consider-whether-freight-brokers-can-be-held-liable-for-negligent-hiring/">legal liability</a> brokerages bear when contracting with asset-based trucking firms. <a href="https://www.cbsnews.com/news/how-dangerous-trucking-schemes-putting-americans-at-risk-60-minutes-transcript/">Recent media coverage</a> about illegal trucking and unsafe carriers has heightened public attention on how brokers vet the carriers they select to haul freight. “We have taken a great number of steps to really ensure that we have high-quality, safe carriers,” Miller said during the conference call. “We vet how long you've been in business. We're looking at evidence that you have logs that we could see where your tractors are.” A real challenge for brokers and shippers, he said, is identifying and monitoring who is driving a brokered truck. “The broker has no idea, in most cases,” said Miller. “We are taking steps to ensure we have a copy of the license, [that] we know who’s in the truck, especially if they’re going to operate and leverage one of our trailers,” he added. In doing so, Knight-Swift is going well beyond basic legal requirements that a freight broker select trucking firms with active operating authority and motor carrier insurance. That’s a decision more brokers and carriers are going to face, said Miller, as a regulatory crackdown on truck driver licensing eliminates more capacity. “Some logistics companies may not have a choice because the capacity they’re leveraging today won’t exist,” he said. “We’re anticipating that our customers are going to start being more concerned about this as this becomes more of a relevant issue,” Miller said. “We’re already seeing that.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Knight-Swift Transportation Holdings is making deep cuts in its brokerage carrier base, targeting businesses that company officials say may be unsafe. “We have cut down the number of carriers that we work with dramatically,” Adam Miller, CEO of the truckload and less-than-truckload (LTL) provider, told Wall Street analysts during the company’s first-quarter earnings call last week. “Just since the beginning of this year, we’re down 30% and we had made a large cut even earlier last year,” Miller said. The cuts at Knight-Swift come amid growing attention to truck safety nationwide, allegations of widespread illegal trucking and a federal crackdown on truck driver licensing . “We felt it was prudent for us to take the steps to eliminate capacity that we didn’t feel comfortable with,” Miller said. “And do I think others will do that? I think some will.” Knight-Swift, which reported $7.5 billion in total revenue last year, had $127.6 million in logistics revenue, largely brokerage-based business, in the first quarter. That revenue was down 9.9% from a year earlier, driven by an 18.9% decline in load counts. Growing pressure to tighten standards Brokerages and carriers such as Knight-Swift that operate brokerages as part of a transportation portfolio are under growing pressure to tighten standards used to vet carriers. The US Supreme Court is currently considering a case that could determine what level of legal liability brokerages bear when contracting with asset-based trucking firms. Recent media coverage about illegal trucking and unsafe carriers has heightened public attention on how brokers vet the carriers they select to haul freight. “We have taken a great number of steps to really ensure that we have high-quality, safe carriers,” Miller said during the conference call. “We vet how long you've been in business. We're looking at evidence that you have logs that we could see where your tractors are.” A real challenge for brokers and shippers, he said, is identifying and monitoring who is driving a brokered truck. “The broker has no idea, in most cases,” said Miller. “We are taking steps to ensure we have a copy of the license, [that] we know who’s in the truck, especially if they’re going to operate and leverage one of our trailers,” he added. In doing so, Knight-Swift is going well beyond basic legal requirements that a freight broker select trucking firms with active operating authority and motor carrier insurance. That’s a decision more brokers and carriers are going to face, said Miller, as a regulatory crackdown on truck driver licensing eliminates more capacity. “Some logistics companies may not have a choice because the capacity they’re leveraging today won’t exist,” he said. “We’re anticipating that our customers are going to start being more concerned about this as this becomes more of a relevant issue,” Miller said. “We’re already seeing that.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Transport, Trade and Regulation News

Truck brokers

Knight-Swift making safety-related cuts to brokerage fleet

<div class="phx-topic abstract-wrapper">New research from software vendor Altana found that some of the declining China-US trade flows last year morphed into complex, multi-leg supply chains routed through Mexico to qualify for USMCA treatment and thus avoid billions in tariffs. </div>

New research from software vendor Altana found that some of the declining China-US trade flows last year morphed into complex, multi-leg supply chains routed through Mexico to qualify for USMCA treatment and thus avoid billions in tariffs.

<div class="phx-topic">Increased trade volumes from China to Mexico via intermediary Asian nations last year demonstrated a new path for US-bound goods that were able to avoid steep tariffs — an estimated $40 billion — on imports from China, according to a report from global trade software vendor Altana. The company, in a report released Thursday, said that shipment-level supply chain data from its platform, plus a survey of 91 US trade professionals that include former lawmakers and customs officials, found that some of the declining trade flows from China to the US in 2025 morphed into more complex, multi-leg supply chains routed through Mexico in order to qualify under the United States-Mexico-Canada Agreement (USMCA). Altana’s report contends that activity is illegal under current US customs rules — and that the US has lost approximately $40 billion in tariff revenue from goods that passed through Mexico and Canada under the USMCA treaty without going through a substantial transformation. “As US tariff laws became more robust, the flow of global trade shifted, with China-to-US trade contracting and trade that involved intermediary channels that fed into the USMCA market all growing,” Altana said. While China-US direct trade from January through October 2025 fell 28% to $276.5 billion compared with the same period in 2024, trade from Vietnam to Mexico rose 46% to $18.1 billion, according to data from UN Comtrade, which tracks annual global trade flows. The data also showed that trade rose 19% from Thailand to Mexico in the same period, and by 13% from Malaysia to Mexico. Direct Mexico to US imports, meanwhile, rose 6% to $450.5 billion. The Altana report suggests that these trade spikes used existing transshipment pathways, meaning the tariffs didn’t immediately induce “new, capital-intensive supply chain relationships,” but rather rerouted goods “being pumped through established networks of suppliers, facilities and actors.” To wit, Altana said transactions observed in its network on those “pre-existing transshipment routes that end in the USMCA bloc” rose 76% year over year through the first 10 months of 2025. “The estimated dollar value of shipments demonstrating patterns consistent with illegal transshipment rose sharply throughout 2025, accelerating at each major tariff escalation,” the report said. <h3>Scrutinizing transshipment </h3>The Trump administration, in the wake of assessing tariffs on dozens of US trading partners throughout 2025, said US Customs and Border Protection would be scrutinizing the shipment of goods that utilized intermediate countries of origin with lower duty rates to evade higher tariffs on the actual countries of origin. In January and February 2025, Altana said it identified $2.2 billion per month of what it called “suspected transshipment-linked trade entering the US.” By December, that number had reached $31.5 billion. The Trump administration’s so-called liberation day tariffs were rolled out in early April. “The trajectory is telling,” the report said. “As tariff complexity increased throughout 2025, so did the non-compliant rerouting of goods that were subject to tariffs.” Ultimately, the alleged non-compliance activity is related to what trade professionals call transformation, the idea that goods stopping in intermediary markets undergo enough of a change to impact country or origin determination, thus allowing those goods to use preferential trade agreements. The Altana report identified vehicles, machinery and electronics as the three sectors most represented in these transshipment paths. “A Chinese-origin vehicle subject to a 152% duty can be rerouted through a Mexico facility and potentially enter the United States at USMCA preferential rates, if it qualifies under rules of origin,” the report said. “At question is whether meaningful transformation occurred at the Mexican stop, and whether these known transshipment facilities will accurately record regional value content and other, upstream component-level information necessary to calculate and apply complex tariff rates and origin rules.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Increased trade volumes from China to Mexico via intermediary Asian nations last year demonstrated a new path for US-bound goods that were able to avoid steep tariffs — an estimated $40 billion — on imports from China, according to a report from global trade software vendor Altana. The company, in a report released Thursday, said that shipment-level supply chain data from its platform, plus a survey of 91 US trade professionals that include former lawmakers and customs officials, found that some of the declining trade flows from China to the US in 2025 morphed into more complex, multi-leg supply chains routed through Mexico in order to qualify under the United States-Mexico-Canada Agreement (USMCA). Altana’s report contends that activity is illegal under current US customs rules — and that the US has lost approximately $40 billion in tariff revenue from goods that passed through Mexico and Canada under the USMCA treaty without going through a substantial transformation. “As US tariff laws became more robust, the flow of global trade shifted, with China-to-US trade contracting and trade that involved intermediary channels that fed into the USMCA market all growing,” Altana said. While China-US direct trade from January through October 2025 fell 28% to $276.5 billion compared with the same period in 2024, trade from Vietnam to Mexico rose 46% to $18.1 billion, according to data from UN Comtrade, which tracks annual global trade flows. The data also showed that trade rose 19% from Thailand to Mexico in the same period, and by 13% from Malaysia to Mexico. Direct Mexico to US imports, meanwhile, rose 6% to $450.5 billion. The Altana report suggests that these trade spikes used existing transshipment pathways, meaning the tariffs didn’t immediately induce “new, capital-intensive supply chain relationships,” but rather rerouted goods “being pumped through established networks of suppliers, facilities and actors.” To wit, Altana said transactions observed in its network on those “pre-existing transshipment routes that end in the USMCA bloc” rose 76% year over year through the first 10 months of 2025. “The estimated dollar value of shipments demonstrating patterns consistent with illegal transshipment rose sharply throughout 2025, accelerating at each major tariff escalation,” the report said. Scrutinizing transshipment The Trump administration, in the wake of assessing tariffs on dozens of US trading partners throughout 2025, said US Customs and Border Protection would be scrutinizing the shipment of goods that utilized intermediate countries of origin with lower duty rates to evade higher tariffs on the actual countries of origin. In January and February 2025, Altana said it identified $2.2 billion per month of what it called “suspected transshipment-linked trade entering the US.” By December, that number had reached $31.5 billion. The Trump administration’s so-called liberation day tariffs were rolled out in early April. “The trajectory is telling,” the report said. “As tariff complexity increased throughout 2025, so did the non-compliant rerouting of goods that were subject to tariffs.” Ultimately, the alleged non-compliance activity is related to what trade professionals call transformation, the idea that goods stopping in intermediary markets undergo enough of a change to impact country or origin determination, thus allowing those goods to use preferential trade agreements. The Altana report identified vehicles, machinery and electronics as the three sectors most represented in these transshipment paths. “A Chinese-origin vehicle subject to a 152% duty can be rerouted through a Mexico facility and potentially enter the United States at USMCA preferential rates, if it qualifies under rules of origin,” the report said. “At question is whether meaningful transformation occurred at the Mexican stop, and whether these known transshipment facilities will accurately record regional value content and other, upstream component-level information necessary to calculate and apply complex tariff rates and origin rules.” Contact Eric Johnson at eric.johnson@spglobal.com .

Tariff escalation led to enforcement gaps in Mexico rerouted goods: report

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Quarterly Intelligence

<div class="phx-topic abstract-wrapper">The terminal, jointly owned by Ports America and MSC’s Terminal Investment Limited, unveiled new container handling equipment as part of a growth drive to increase capacity by 40%.</div>

The terminal, jointly owned by Ports America and MSC’s Terminal Investment Limited, unveiled new container handling equipment as part of a growth drive to increase capacity by 40%.

<div class="phx-topic">Newark — The Port of New York and New Jersey’s third-busiest marine terminal on Wednesday unveiled $100 million in new container handling equipment and related facilities, the first step in a $1 billion plan to add a new berth and more rail capacity for its main customer, Mediterranean Shipping Co. Port Newark Container Terminal (PNCT) held a ribbon-cutting ceremony at a new maintenance shop designed for the terminal’s new, larger straddle carriers, which can span four-high container stacks. Along with the new shop, PNCT took delivery of the first 15 of the straddle carriers, with another 20 set for delivery by early 2027. The new yard equipment and shop are the first phase of PNCT’s plan to increase container volumes by 40% over the next three years, its Chief Executive Jim Pellicio told the Journal of Commerce. PNCT, jointly owned by Ports America and MSC’s Terminal Investment Limited (TiL), eventually plans to replace its entire fleet with 150 of the new straddle carriers, effectively increasing yard capacity by nearly a third through higher stacks. The new fleet will also be entirely diesel-electric hybrid as PNCT switches an increasing amount of its energy use to renewables. Over the past decade, PNCT has installed a solar array over its truck lanes and parking lot that takes up the equivalent of 12 acres of land, Pellicio said, generating half of the terminal’s energy. “This $100 million is a down payment on where PNCT has to go next,” Pellicio said. “The maintenance facility is built to support a much larger terminal than what we have today.” PNCT’s last upgrade cycle started in 2014, with a <a href="https://www.joc.com/article/upgrade-boosts-nynjs-pnct-terminal-capacity-5224445">$600 million investment</a> that included adding about 17 acres of terminal space, strengthening its three berths for larger ships, and <a href="https://www.joc.com/article/new-cranes-put-ny-nj-port-on-track-to-handle-more-ultra-large-ships-by-2025-5226275">adding two ultra-large ship cranes</a>. By 2020, that project had increased PNCT’s nominal capacity to about 2 million TEUs, up from 1.4 million TEUs. The next investment cycle will bring PNCT’s capacity to about 2.8 million TEUs, Pellicio said, adding that the terminal could add another 150 longshore jobs by 2029 due to the expansion. A big part of that upgrade will be an additional 68 acres on the terminal’s eastern end. The new space will come from <a href="https://www.joc.com/article/newark-port-project-to-give-mscs-terminal-more-room-to-grow-5703152">the Port Authority of New York and New Jersey’s $198 million rehabilitation</a> of a general cargo berth on the Newark peninsula’s southeastern end, along with the relocation of other port tenant properties to make way for container operations. The rehabilitation of Newark’s southeastern portion will provide PNCT another 400 feet of berth space on its eastern end by 2028. PNCT is also renovating another 700 feet of berth space on its western end, which will turn it into a four-berth facility. Pellicio said the additional space would allow PNCT to handle two 18,000-TEU ships simultaneously, along with a 9,000-TEU ship. Currently, its three berths can handle two 9,000-TEU ships and one 18,000-TEU ship. Although ships of that size will also require further dredging of the NY-NJ port to a 55-foot depth, Pellicio said it’s important to have PNCT ready for that next step. “There are no ships that need a 55-foot depth today, but you better build it today because they won’t come otherwise,” he said. <h3>Will add on-dock rail yard </h3>Along with the new equipment and berth, PNCT plans to add an on-dock rail yard at its eastern end, which should allow containers to move more easily to railcars. PNCT currently relies on yard hostlers to ferry containers over a flyover bridge to its rail yard adjacent to the New Jersey Turnpike. PNCT already leads the port in terms of inland cargo moves, with about 24% of its containers moving out on rail compared with a port-wide average of about 15%. Pellicio said the terminal needs more intermodal capacity because “MSC has a significant amount of rail containers.” “The shipping company might say ‘just take my New York boxes and leave the rail boxes for Savannah or Baltimore,’” Pellicio said. “I’m saying to them with this investment, take all the boxes off at PNCT. We will have the berths to do it and the rail to do it.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Newark — The Port of New York and New Jersey’s third-busiest marine terminal on Wednesday unveiled $100 million in new container handling equipment and related facilities, the first step in a $1 billion plan to add a new berth and more rail capacity for its main customer, Mediterranean Shipping Co. Port Newark Container Terminal (PNCT) held a ribbon-cutting ceremony at a new maintenance shop designed for the terminal’s new, larger straddle carriers, which can span four-high container stacks. Along with the new shop, PNCT took delivery of the first 15 of the straddle carriers, with another 20 set for delivery by early 2027. The new yard equipment and shop are the first phase of PNCT’s plan to increase container volumes by 40% over the next three years, its Chief Executive Jim Pellicio told the Journal of Commerce. PNCT, jointly owned by Ports America and MSC’s Terminal Investment Limited (TiL), eventually plans to replace its entire fleet with 150 of the new straddle carriers, effectively increasing yard capacity by nearly a third through higher stacks. The new fleet will also be entirely diesel-electric hybrid as PNCT switches an increasing amount of its energy use to renewables. Over the past decade, PNCT has installed a solar array over its truck lanes and parking lot that takes up the equivalent of 12 acres of land, Pellicio said, generating half of the terminal’s energy. “This $100 million is a down payment on where PNCT has to go next,” Pellicio said. “The maintenance facility is built to support a much larger terminal than what we have today.” PNCT’s last upgrade cycle started in 2014, with a $600 million investment that included adding about 17 acres of terminal space, strengthening its three berths for larger ships, and adding two ultra-large ship cranes . By 2020, that project had increased PNCT’s nominal capacity to about 2 million TEUs, up from 1.4 million TEUs. The next investment cycle will bring PNCT’s capacity to about 2.8 million TEUs, Pellicio said, adding that the terminal could add another 150 longshore jobs by 2029 due to the expansion. A big part of that upgrade will be an additional 68 acres on the terminal’s eastern end. The new space will come from the Port Authority of New York and New Jersey’s $198 million rehabilitation of a general cargo berth on the Newark peninsula’s southeastern end, along with the relocation of other port tenant properties to make way for container operations. The rehabilitation of Newark’s southeastern portion will provide PNCT another 400 feet of berth space on its eastern end by 2028. PNCT is also renovating another 700 feet of berth space on its western end, which will turn it into a four-berth facility. Pellicio said the additional space would allow PNCT to handle two 18,000-TEU ships simultaneously, along with a 9,000-TEU ship. Currently, its three berths can handle two 9,000-TEU ships and one 18,000-TEU ship. Although ships of that size will also require further dredging of the NY-NJ port to a 55-foot depth, Pellicio said it’s important to have PNCT ready for that next step. “There are no ships that need a 55-foot depth today, but you better build it today because they won’t come otherwise,” he said. Will add on-dock rail yard Along with the new equipment and berth, PNCT plans to add an on-dock rail yard at its eastern end, which should allow containers to move more easily to railcars. PNCT currently relies on yard hostlers to ferry containers over a flyover bridge to its rail yard adjacent to the New Jersey Turnpike. PNCT already leads the port in terms of inland cargo moves, with about 24% of its containers moving out on rail compared with a port-wide average of about 15%. Pellicio said the terminal needs more intermodal capacity because “MSC has a significant amount of rail containers.” “The shipping company might say ‘just take my New York boxes and leave the rail boxes for Savannah or Baltimore,’” Pellicio said. “I’m saying to them with this investment, take all the boxes off at PNCT. We will have the berths to do it and the rail to do it.” Contact Michael Angell at michael.angell@spglobal.com .

North American ports

NY-NJ’s Port Newark terminal takes first steps in next big expansion

<div class="phx-topic abstract-wrapper">TRAC Intermodal’s exit from the massive chassis cooperative on June 1, just one year after Flexi-Van’s departure, reflects the shift from a primarily pool-owned and operated chassis market to one that is trucker-owned or leased. </div>

TRAC Intermodal’s exit from the massive chassis cooperative on June 1, just one year after Flexi-Van’s departure, reflects the shift from a primarily pool-owned and operated chassis market to one that is trucker-owned or leased. 

<div class="phx-topic">TRAC Intermodal will leave the Southern California-based “Pool of Pools” on June 1, effectively ending the massive chassis cooperative that has served truckers and their customers at the ports of Los Angeles and Long Beach since 2015. However, executives at the region’s three intermodal equipment providers (IEPs) — TRAC, DCLI and Flexi-Van — are assuring users they will continue to have access to a sufficient number of chassis for the 2026 peak season and beyond.“An emphatic ‘yes,’” said Than Seeds, president of Flexi-Van, which exited the Pool of Pools (PoP) in May 2025. “I am confident that right now there is so much surplus chassis capacity in the market that we can handle a couple of peak seasons right on top of each other.”  The PoP began operations in 2015 with about 80,000 chassis; it is now down to about 25,000, according to the Pool of Pools website. With Flexi-Van’s departure from the pool a year ago and TRAC’s announcement this week, it leaves only DCLI as a member of the Pool of Pools, effectively bringing an end to the cooperative that began business just over 11 years ago. Jake Gilene, TRAC’s executive vice president and chief commercial officer, said the decision to leave PoP reflects the changing environment at the Los Angeles-Long Beach port complex from a primarily pool-owned and -operated chassis market to a trucker-owned or -leased market. In 2015, almost 80% of the chassis in Southern California were controlled by PoP members. That number has flipped to 75%-80% trucker-owned or -leased because of changing operating conditions that call for trucker and customer control of the chassis, Gilene said. He also said the move to leave PoP was based in large part on feedback from customers who were interested in more of a hybrid operating model that offered both a pool-type product and a daily product for customers who can use the chassis however they wish and be billed a daily rate. “Depending on what the customer is looking for, depending on what the motor carrier is looking for, we’re going to offer both options in the market,” Gilene said. <h3>Formed to ease logistical headaches </h3><a href="https://www.joc.com/article/la-long-beach-chassis-lessors-form-neutral-chassis-pool-5247434">The Pool of Pools was formed in Los Angeles-Long Beach in 2015</a>, when container lines serving the US market ceased their decades-long practice of providing chassis to beneficial cargo owners (BCOs) for a nominal fee with each booking. At the same time, a group of trans-Pacific container lines formed the G6 alliance, with the six member carriers serving all 12 container terminals in the port complex. This created logistical problems for carriers in repositioning the chassis where they were needed. A decision was made by the ports and their stakeholders to develop a neutral, or “grey,” chassis pool to eliminate the frustrating and costly requirements that truckers faced — delivering a container to one terminal but the chassis to another because of different ownership of the assets. The IEPs said that while each company has its own business model, they feel the transition out of the Pool of Pools will be seamless to truckers and their customers.  “DCLI remains committed to a comprehensive chassis pool solution to the LA-LB market,” said Mike O’Malley, DCLI’s chief administrative officer. “We intend to maintain our terminal footprints, allowing motor carriers to pick up and drop off chassis at marine terminal and rail locations across the region.”  <h3>Trucker concerns for new environment </h3>While the Pool of Pools was the right solution for the post-2015 environment, motor carriers this past year have dealt with several problem areas in the port-related supply chain regarding inland point intermodal (IPI) and container handling chassis moves, said Robert Loya, CEO of the Harbor Trucking Association. “We have seen incidents of inadequate support when PoP chassis were short, or simply not having the right number of chassis at the right location,” Loya said. “We continue to struggle with the increasing number of ocean carrier specialized pools. These pools result in the ‘deoptimization’ of our fleets due to the inherent inefficiencies they create: increased triangulation, a higher frequency of split returns, lost driver time and increased costs.”  As the IEPs enter the post-Pool of Pools era, Loya sees several red flags the IEPs must address, including whether the port’s rail ramps will still be considered start/stop locations for the chassis providers; how demurrage will be handled if there are insufficient chassis for inland point intermodal moves and appointments are missed; and how potential billing complications will be handled for equipment picked up under the PoP rules but returned after June 1. Loya is also concerned about dual transactions, or the ability of a trucker to drop off a container and pick up another on the same trip.“Dual transactions are critical for efficiency,” he said. “There must be a mechanism to handle the interchange of these chassis without incurring extra fees.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.  </div>

TRAC Intermodal will leave the Southern California-based “Pool of Pools” on June 1, effectively ending the massive chassis cooperative that has served truckers and their customers at the ports of Los Angeles and Long Beach since 2015. However, executives at the region’s three intermodal equipment providers (IEPs) — TRAC, DCLI and Flexi-Van — are assuring users they will continue to have access to a sufficient number of chassis for the 2026 peak season and beyond. “An emphatic ‘yes,’” said Than Seeds, president of Flexi-Van, which exited the Pool of Pools (PoP) in May 2025. “I am confident that right now there is so much surplus chassis capacity in the market that we can handle a couple of peak seasons right on top of each other.”  The PoP began operations in 2015 with about 80,000 chassis; it is now down to about 25,000, according to the Pool of Pools website. With Flexi-Van’s departure from the pool a year ago and TRAC’s announcement this week, it leaves only DCLI as a member of the Pool of Pools, effectively bringing an end to the cooperative that began business just over 11 years ago. Jake Gilene, TRAC’s executive vice president and chief commercial officer, said the decision to leave PoP reflects the changing environment at the Los Angeles-Long Beach port complex from a primarily pool-owned and -operated chassis market to a trucker-owned or -leased market. In 2015, almost 80% of the chassis in Southern California were controlled by PoP members. That number has flipped to 75%-80% trucker-owned or -leased because of changing operating conditions that call for trucker and customer control of the chassis, Gilene said. He also said the move to leave PoP was based in large part on feedback from customers who were interested in more of a hybrid operating model that offered both a pool-type product and a daily product for customers who can use the chassis however they wish and be billed a daily rate. “Depending on what the customer is looking for, depending on what the motor carrier is looking for, we’re going to offer both options in the market,” Gilene said. Formed to ease logistical headaches  The Pool of Pools was formed in Los Angeles-Long Beach in 2015 , when container lines serving the US market ceased their decades-long practice of providing chassis to beneficial cargo owners (BCOs) for a nominal fee with each booking. At the same time, a group of trans-Pacific container lines formed the G6 alliance, with the six member carriers serving all 12 container terminals in the port complex. This created logistical problems for carriers in repositioning the chassis where they were needed.  A decision was made by the ports and their stakeholders to develop a neutral, or “grey,” chassis pool to eliminate the frustrating and costly requirements that truckers faced — delivering a container to one terminal but the chassis to another because of different ownership of the assets. The IEPs said that while each company has its own business model, they feel the transition out of the Pool of Pools will be seamless to truckers and their customers.  “DCLI remains committed to a comprehensive chassis pool solution to the LA-LB market,” said Mike O’Malley, DCLI’s chief administrative officer. “We intend to maintain our terminal footprints, allowing motor carriers to pick up and drop off chassis at marine terminal and rail locations across the region.”  Trucker concerns for new environment  While the Pool of Pools was the right solution for the post-2015 environment, motor carriers this past year have dealt with several problem areas in the port-related supply chain regarding inland point intermodal (IPI) and container handling chassis moves, said Robert Loya, CEO of the Harbor Trucking Association. “We have seen incidents of inadequate support when PoP chassis were short, or simply not having the right number of chassis at the right location,” Loya said. “We continue to struggle with the increasing number of ocean carrier specialized pools. These pools result in the ‘deoptimization’ of our fleets due to the inherent inefficiencies they create: increased triangulation, a higher frequency of split returns, lost driver time and increased costs.”  As the IEPs enter the post-Pool of Pools era, Loya sees several red flags the IEPs must address, including whether the port’s rail ramps will still be considered start/stop locations for the chassis providers; how demurrage will be handled if there are insufficient chassis for inland point intermodal moves and appointments are missed; and how potential billing complications will be handled for equipment picked up under the PoP rules but returned after June 1. Loya is also concerned about dual transactions, or the ability of a trucker to drop off a container and pick up another on the same trip. “Dual transactions are critical for efficiency,” he said. “There must be a mechanism to handle the interchange of these chassis without incurring extra fees.”  Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .  

Demise of ‘Pool of Pools’ marks new chassis era in Southern California

<div class="phx-topic abstract-wrapper">Baltimore’s Sparrows Point Container Terminal is scheduled to debut its first berth in 2028, some 14 years after the site began its transformation from an old steel mill into a comprehensive logistics center. </div>

Baltimore’s Sparrows Point Container Terminal is scheduled to debut its first berth in 2028, some 14 years after the site began its transformation from an old steel mill into a comprehensive logistics center.

<div class="phx-topic">Mediterranean Shipping Co.’s terminal arm and real estate developer Tradepoint Atlantic broke ground Friday at the Port of Baltimore on what would be the first privately built container terminal in the US in 40 years, part of the ocean carrier’s massive push to build out North American capacity. Executives at Terminal Investment Limited (TiL) and Tradepoint took part in the ceremonial event at the future site of the Sparrows Point Container Terminal (SPCT). They were joined by Maryland Gov. Wes Moore, US Sen. Chris Van Hollen (D-Maryland), and other state and local officials, The groundbreaking comes <a href="https://www.joc.com/article/msc-unit-teaming-up-to-develop-new-baltimore-container-terminal-5242503">just over three years after TiL and Tradepoint announced their joint investment</a> in Sparrows Point, a 3,300-acre industrial development that was the former site of a Bethlehem Steel plant. SPCT will occupy 168 acres of the site. The terminal will have two berths, each capable of handling 18,000-TEU ships; 3,000 feet of on-dock rail track, and be capable of handling 2 million TEUs by its full buildout with a second berth. The terminal is expected to employ 1,100 longshore workers. The $1.2 billion project would be the first privately funded and operated container terminal in the US since Penn Terminals opened in Philadelphia in 1986. TiL Chief Executive Ammar Kanaan said it was a “unique project” because of the private funding, adding that Sparrows Point is a response to the port capacity constraints that came to light in the US during the COVID-19 pandemic. “It’s adding capacity, much needed capacity,” Kanaan said. “With just a little bit of disruption, our ports clogged. For those in the industry that say there’s enough capacity, they are wrong.” Container demand in the mid-Atlantic appears strong. Last year, Baltimore’s Seagirt Marine Terminal handled 1.12 million total TEUs, the second highest since 2023, according to the Maryland Port Administration. Imports through the port have grown at an average annual rate of 4.5% since 2010.“This is like a renaissance for the Port of Baltimore,” said Scott Cowan, president of Local 333 International Longshoremen’s Association. “I can see us being in the top three on the East Coast in no time.”Even with the private investment, Sparrows Point will receive some government support. This week, the US Maritime Administration awarded the project $40 million under its port grants program to be used for purchasing container handling equipment. Locally, Maryland state legislators are considering $50 million in funding for the project, while the Baltimore County Council in December approved a 50-year tax abatement for the project. The government support comes as Sparrows Point’s expected costs have increased “significantly” since its 2022 announcement, Aaron Tomarchio, executive vice president of Tradepoint Atlantic, told the Journal of Commerce. The cost increases stem from overall inflation but also US tariffs on steel and <a href="https://www.joc.com/article/looming-us-tariffs-put-economic-viability-of-sts-cranes-in-doubt-6055678">ship-to-shore cranes</a>. Tradepoint owner Redwood Holdings, which bought the site in 2014, is funding half of Sparrows Point. Tradepoint currently has about 15 million square feet of warehousing and distribution centers at the site, 90% of which is leased, Tomarchio said, with room for 6 million square feet of additional space. Among its biggest tenants are spice maker McCormick, Floor &amp; Decor, Under Armor, Amazon, and Home Depot. Many of the tenants will be deconsolidating ocean freight right at the site, Tomarchio said. Tradepoint will be able to handle many of their logistics needs through its short-line railroad, as well as the stevedoring service it will provide at Sparrows Point. “This site has transformed dramatically over that 12-year period,” Tomarchio said. “There’s massive capital that’s been deployed into building these facilities and outfitting them, so they are committed to it.” <h3>Boost rail use </h3>The other big play at Sparrows Point will be the fast rail connection to Chicago, Tom Van Eynde, director for TiL’s North American assets, told the Journal of Commerce. The <a href="https://www.joc.com/article/csx-restarts-baltimore-tunnel-service-for-double-stack-in-2026-6087384">Howard Street Tunnel project</a> will allow CSX Transportation to double stack its intermodal cars out of Baltimore. Only about 2% of Baltimore’s international cargo is going out on rail currently due to the tunnel height clearance limits, Van Eynde said. But given MSC’s interest in serving inland US markets, he said Sparrows Point could see 25% of its cargo heading out on rail. “Rail has not been significant out of Baltimore before Howard Street,” Van Eynde said. “When you start looking at the map, it’s the closest of any port to Chicago.” The biggest lesson that TiL took from the last five years is to build in redundant capacity for cargo surges, Van Eynde said. Sparrows Point will be a rubber-tire gantry facility that can stack containers six high at full capacity, he said, although it will initially also deploy top handlers as it begins operations. The Sparrows Point groundbreaking comes amid a slew of other terminal investments TiL is making in the US. TiL is also funding half of <a href="https://www.joc.com/article/ny-njs-port-newark-terminal-takes-first-steps-in-next-big-expansion-6211543">Port Newark Container Terminal’s $1 billion plan</a> to increase capacity by 50% over the next three years, alongside its partner Ports America. The two are also developing <a href="https://www.joc.com/article/ports-america-msc-to-invest-800-million-in-proposed-new-orleans-terminal-5234722">the $1.8 billion Louisiana International Terminal</a>, along with the state. Along with <a href="https://www.joc.com/article/new-ship-to-shore-cranes-with-us-parts-coming-to-long-beach-6085180">new ship-to-shore cranes at its Total Terminals International facility</a> in Long Beach, TiL is slated to invest some $25 billion in US terminal assets over the next decade, Van Eynde said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Mediterranean Shipping Co.’s terminal arm and real estate developer Tradepoint Atlantic broke ground Friday at the Port of Baltimore on what would be the first privately built container terminal in the US in 40 years, part of the ocean carrier’s massive push to build out North American capacity. Executives at Terminal Investment Limited (TiL) and Tradepoint took part in the ceremonial event at the future site of the Sparrows Point Container Terminal (SPCT). They were joined by Maryland Gov. Wes Moore, US Sen. Chris Van Hollen (D-Maryland), and other state and local officials, The groundbreaking comes just over three years after TiL and Tradepoint announced their joint investment in Sparrows Point, a 3,300-acre industrial development that was the former site of a Bethlehem Steel plant. SPCT will occupy 168 acres of the site. The terminal will have two berths, each capable of handling 18,000-TEU ships; 3,000 feet of on-dock rail track, and be capable of handling 2 million TEUs by its full buildout with a second berth. The terminal is expected to employ 1,100 longshore workers. The $1.2 billion project would be the first privately funded and operated container terminal in the US since Penn Terminals opened in Philadelphia in 1986. TiL Chief Executive Ammar Kanaan said it was a “unique project” because of the private funding, adding that Sparrows Point is a response to the port capacity constraints that came to light in the US during the COVID-19 pandemic. “It’s adding capacity, much needed capacity,” Kanaan said. “With just a little bit of disruption, our ports clogged. For those in the industry that say there’s enough capacity, they are wrong.” Container demand in the mid-Atlantic appears strong. Last year, Baltimore’s Seagirt Marine Terminal handled 1.12 million total TEUs, the second highest since 2023, according to the Maryland Port Administration. Imports through the port have grown at an average annual rate of 4.5% since 2010. “This is like a renaissance for the Port of Baltimore,” said Scott Cowan, president of Local 333 International Longshoremen’s Association. “I can see us being in the top three on the East Coast in no time.” Even with the private investment, Sparrows Point will receive some government support. This week, the US Maritime Administration awarded the project $40 million under its port grants program to be used for purchasing container handling equipment. Locally, Maryland state legislators are considering $50 million in funding for the project, while the Baltimore County Council in December approved a 50-year tax abatement for the project. The government support comes as Sparrows Point’s expected costs have increased “significantly” since its 2022 announcement, Aaron Tomarchio, executive vice president of Tradepoint Atlantic, told the Journal of Commerce. The cost increases stem from overall inflation but also US tariffs on steel and ship-to-shore cranes . Tradepoint owner Redwood Holdings, which bought the site in 2014, is funding half of Sparrows Point. Tradepoint currently has about 15 million square feet of warehousing and distribution centers at the site, 90% of which is leased, Tomarchio said, with room for 6 million square feet of additional space. Among its biggest tenants are spice maker McCormick, Floor & Decor, Under Armor, Amazon, and Home Depot. Many of the tenants will be deconsolidating ocean freight right at the site, Tomarchio said. Tradepoint will be able to handle many of their logistics needs through its short-line railroad, as well as the stevedoring service it will provide at Sparrows Point. “This site has transformed dramatically over that 12-year period,” Tomarchio said. “There’s massive capital that’s been deployed into building these facilities and outfitting them, so they are committed to it.” Boost rail use The other big play at Sparrows Point will be the fast rail connection to Chicago, Tom Van Eynde, director for TiL’s North American assets, told the Journal of Commerce. The Howard Street Tunnel project will allow CSX Transportation to double stack its intermodal cars out of Baltimore. Only about 2% of Baltimore’s international cargo is going out on rail currently due to the tunnel height clearance limits, Van Eynde said. But given MSC’s interest in serving inland US markets, he said Sparrows Point could see 25% of its cargo heading out on rail. “Rail has not been significant out of Baltimore before Howard Street,” Van Eynde said. “When you start looking at the map, it’s the closest of any port to Chicago.” The biggest lesson that TiL took from the last five years is to build in redundant capacity for cargo surges, Van Eynde said. Sparrows Point will be a rubber-tire gantry facility that can stack containers six high at full capacity, he said, although it will initially also deploy top handlers as it begins operations. The Sparrows Point groundbreaking comes amid a slew of other terminal investments TiL is making in the US. TiL is also funding half of Port Newark Container Terminal’s $1 billion plan to increase capacity by 50% over the next three years, alongside its partner Ports America. The two are also developing the $1.8 billion Louisiana International Terminal , along with the state. Along with new ship-to-shore cranes at its Total Terminals International facility in Long Beach, TiL is slated to invest some $25 billion in US terminal assets over the next decade, Van Eynde said. Contact Michael Angell at michael.angell@spglobal.com .

MSC, Tradepoint begin work on first private US terminal in decades

<div class="phx-topic abstract-wrapper">An FMC judge ruled the carrier committed several violations of US shipping law, including unreasonable practices, failure to meet service commitments, and refusal to deal with the now-bankrupt retailer between 2020 and 2022.</div>

An FMC judge ruled the carrier committed several violations of US shipping law, including unreasonable practices, failure to meet service commitments, and refusal to deal with the now-bankrupt retailer between 2020 and 2022.

<div class="phx-topic">OOCL has been ordered to pay over $45 million to bankrupt retailer Bed Bath and Beyond after an administrative law judge ruled the carrier engaged in a pandemic-era practice of refusing the company’s contract cargo in favor of spot bookings and later retaliated against the shipper. In a decision published last week, an administrative law judge for the Federal Maritime Commission (FMC) ruled that OOCL committed several violations of US shipping law, including unreasonable practices, failure to meet service commitments, and refusal to deal with Bed Bath and Beyond between 2020 and 2022. The retailer, which went bankrupt in 2023, filed a slew of complaints that same year against <a href="https://www.joc.com/article/bed-bath-beyond-looks-to-recoup-millions-from-oocl-in-fmc-complaint-5192741">OOCL</a>, <a href="https://www.joc.com/article/bed-bath-beyond-files-fmc-complaint-against-yang-ming-in-capacity-dispute-5220648">Yang Ming</a>, HMM, Evergreen Marine, CMA CGM, and Mediterranean Shipping Co., alleging the carriers failed to meet service contract commitments during the COVID-19 pandemic and instead pushed Bed Bath and Beyond’s freight to higher-priced spot bookings. MSC and Bed Bath and Beyond settled their dispute in March. The other cases are still pending. In the OOCL case, the first one filed, the judge found that container bookings Bed Bath and Beyond made with the carrier had to go through OOCL’s internal yield-management software, which allocated space based on revenue and not on the already agreed service contracts. The software would routinely refuse a booking or keep it pending indefinitely with no confirmation, according to the ALJ’s decision, adding that in the case of Bed Bath and Beyond, it would make multiple different bookings to reach its allocated volume, only to have the software reject all of them. While there was some ability to override the system, OOCL was so short-staffed during the pandemic that few people had the ability to handle exceptions, according to the decision. “Throughout 2020-2022, OOCL’s own employees complained that the system did not provide sufficient space to meet minimum quantity commitments [MQCs] and did not function properly,” the judge’s decision said. “Moreover, the evidence shows [the software] was not implemented to ensure sufficient space allocations or the efficient flow of cargo. Rather, the system was used to maximize profits.” OOCL tried to defend the allocation limits it put on shippers, arguing that it had less shipping capacity during the pandemic. However, the judge ruled that US shipping law requires that carriers “must pro-rate their available space among contract shippers as an alternative to possibly acquiring additional capacity.” <h3>Incriminating emails </h3>After multiple complaints from Bed Bath and Beyond about bumped cargo, OOCL offered to put the retailer’s freight on premium services and ad-hoc vessels at higher rates. However, “the extent that these extra loaders created additional capacity, OOCL should have first fulfilled its pre-existing contractual requirements, rather than being utilized only as a premium service or at higher rates,” the judge ruled. Bed Bath and Beyond sent multiple messages to OOCL about its booking practices possibly violating US shipping law. Yet the retailer still sought to negotiate a 2022–23 contract with the carrier. Instead, the company retaliated and refused to deal, the judge’s decision said. An OOCL executive sent an email that said, “Simple solution is to cut back their bookings, then we will have fewer problems with them. With all the customers who want to expand with us, this one jumped to head of the class for deselection.” Another email from an OOCL executive said, “No need to reach out to Bed Bath &amp; Beyond as our rates are purposely higher than what they will ship against.” The emails were entered into evidence as part of the judge’s review. “The evidence shows that OOCL intentionally quoted a reduced MQC and rates so far above market that they cannot be considered a good faith offer or negotiation,” the judge said. OOCL could not be reached for comment. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

OOCL has been ordered to pay over $45 million to bankrupt retailer Bed Bath and Beyond after an administrative law judge ruled the carrier engaged in a pandemic-era practice of refusing the company’s contract cargo in favor of spot bookings and later retaliated against the shipper. In a decision published last week, an administrative law judge for the Federal Maritime Commission (FMC) ruled that OOCL committed several violations of US shipping law, including unreasonable practices, failure to meet service commitments, and refusal to deal with Bed Bath and Beyond between 2020 and 2022. The retailer, which went bankrupt in 2023, filed a slew of complaints that same year against OOCL , Yang Ming , HMM, Evergreen Marine, CMA CGM, and Mediterranean Shipping Co., alleging the carriers failed to meet service contract commitments during the COVID-19 pandemic and instead pushed Bed Bath and Beyond’s freight to higher-priced spot bookings. MSC and Bed Bath and Beyond settled their dispute in March. The other cases are still pending. In the OOCL case, the first one filed, the judge found that container bookings Bed Bath and Beyond made with the carrier had to go through OOCL’s internal yield-management software, which allocated space based on revenue and not on the already agreed service contracts. The software would routinely refuse a booking or keep it pending indefinitely with no confirmation, according to the ALJ’s decision, adding that in the case of Bed Bath and Beyond, it would make multiple different bookings to reach its allocated volume, only to have the software reject all of them. While there was some ability to override the system, OOCL was so short-staffed during the pandemic that few people had the ability to handle exceptions, according to the decision. “Throughout 2020-2022, OOCL’s own employees complained that the system did not provide sufficient space to meet minimum quantity commitments [MQCs] and did not function properly,” the judge’s decision said. “Moreover, the evidence shows [the software] was not implemented to ensure sufficient space allocations or the efficient flow of cargo. Rather, the system was used to maximize profits.” OOCL tried to defend the allocation limits it put on shippers, arguing that it had less shipping capacity during the pandemic. However, the judge ruled that US shipping law requires that carriers “must pro-rate their available space among contract shippers as an alternative to possibly acquiring additional capacity.” Incriminating emails After multiple complaints from Bed Bath and Beyond about bumped cargo, OOCL offered to put the retailer’s freight on premium services and ad-hoc vessels at higher rates. However, “the extent that these extra loaders created additional capacity, OOCL should have first fulfilled its pre-existing contractual requirements, rather than being utilized only as a premium service or at higher rates,” the judge ruled. Bed Bath and Beyond sent multiple messages to OOCL about its booking practices possibly violating US shipping law. Yet the retailer still sought to negotiate a 2022–23 contract with the carrier. Instead, the company retaliated and refused to deal, the judge’s decision said. An OOCL executive sent an email that said, “Simple solution is to cut back their bookings, then we will have fewer problems with them. With all the customers who want to expand with us, this one jumped to head of the class for deselection.” Another email from an OOCL executive said, “No need to reach out to Bed Bath & Beyond as our rates are purposely higher than what they will ship against.” The emails were entered into evidence as part of the judge’s review. “The evidence shows that OOCL intentionally quoted a reduced MQC and rates so far above market that they cannot be considered a good faith offer or negotiation,” the judge said. OOCL could not be reached for comment. Contact Michael Angell at michael.angell@spglobal.com .

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