<div class="phx-topic abstract-wrapper">Trans-Pacific carriers are facing rapidly declining demand and freight rates on the trade lane as the frontloading that occurred during the 90-day pause on new US tariffs — now extended to Aug. 1 — has largely lost steam. </div>

Trans-Pacific carriers are facing rapidly declining demand and freight rates on the trade lane as the frontloading that occurred during the 90-day pause on new US tariffs — now extended to Aug. 1 — has largely lost steam.

Feature image

<div class="phx-topic">Taiwan’s “Big Three” container lines saw their second-quarter revenues fall sharply from the first quarter, an early indicator of the worsening conditions facing ocean carriers as they report second-quarter and first-half results in the coming weeks. Evergreen Marine, Taiwan’s biggest container line, said its revenue fell 21% to $2.9 billion between April and June. Revenues at Yang Ming were 15% lower, while Wan Hai recorded a 6% decline in second-quarter revenue. The companies provided revenue data only in filings made to Taiwan’s stock exchange on Wednesday. They will not release complete first-half results until next month. Evergreen said its first-half revenues were unchanged compared with a year ago at $6.7 billion, while Yang Ming’s first-half revenue dropped 13% to $2.9 billion. Only Wan Hai Lines, strongly focused on the intra-Asia trade, saw revenue gains in the first half, with a 9.4% increase to $2.5 billion. Trans-Pacific carriers are facing rapidly declining demand and freight rates on the trade lane as the frontloading that occurred during the 90-day pause on new US tariffs — now extended to Aug. 1 — has largely lost steam. The Asia-US trade accounts for about 30% of total revenues for Evergreen and Yang Ming, according to company and Journal of Commerce data, while the figure is 26% for Wan Hai. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Taiwan’s “Big Three” container lines saw their second-quarter revenues fall sharply from the first quarter, an early indicator of the worsening conditions facing ocean carriers as they report second-quarter and first-half results in the coming weeks. Evergreen Marine, Taiwan’s biggest container line, said its revenue fell 21% to $2.9 billion between April and June. Revenues at Yang Ming were 15% lower, while Wan Hai recorded a 6% decline in second-quarter revenue. The companies provided revenue data only in filings made to Taiwan’s stock exchange on Wednesday. They will not release complete first-half results until next month. Evergreen said its first-half revenues were unchanged compared with a year ago at $6.7 billion, while Yang Ming’s first-half revenue dropped 13% to $2.9 billion. Only Wan Hai Lines, strongly focused on the intra-Asia trade, saw revenue gains in the first half, with a 9.4% increase to $2.5 billion. Trans-Pacific carriers are facing rapidly declining demand and freight rates on the trade lane as the frontloading that occurred during the 90-day pause on new US tariffs — now extended to Aug. 1 — has largely lost steam. The Asia-US trade accounts for about 30% of total revenues for Evergreen and Yang Ming, according to company and Journal of Commerce data, while the figure is 26% for Wan Hai. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Container lines

Trans-Pacific

Maritime

Taiwan’s ‘Big Three’ carriers see falling Q2 revenues as demand slump begins

<div class="phx-topic abstract-wrapper">Still, analyst Larry Gross suspects that the early strength seen in the first half of the year is substantially composed of volume that has been “borrowed” from a peak season that will be “late and tepid” as a result.</div>

Still, analyst Larry Gross suspects that the early strength seen in the first half of the year is substantially composed of volume that has been “borrowed” from a peak season that will be “late and tepid” as a result.

<div class="phx-topic">The numbers are in for the first half of 2025 from the Association of American Railroads (AAR). While the numbers lack the detail that can be gleaned from the Intermodal Association of North America’s (IANA’s) monthly data, the AAR numbers have the crucial advantage of timeliness. Despite all the trade turmoil, intermodal had a good first half of 2025. North American intermodal activity in the second quarter was up 1.4% versus the prior year and 3.6% higher for the first half. But intermodal was not fully immune from trade effects. North American volume over the past four weeks was down 2% from 2024 and US volume from the “Big Four” rails — BNSF, CSX, Norfolk Southern and UP — was down a bit more at 2.9%. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6041537_0.1.jpg"></img></div>The two charts attempt to put the current numbers in a longer-term context. The first chart shows all the reporting railroads, while the second isolates the Big Four. In each, the blue line represents what used to be “normal,” the average volume for each of the 52 weeks of the year for the 10 years from 2010 to 2019. This predates the disruptive elements of the pandemic and the precision scheduled railroading (PSR) reforms. Results for the years 2023 and 2024 are presented, along with year-to-date results for 2025. One interesting aspect is that both 2023 and 2024 saw volume staying stronger for longer than the previous norm. On average, week 39 marked the peak during the 2010–19 period. But in 2023, the peak was in Week 42 and Weeks 48-50 were just about as strong. In 2024, the two strongest weeks were Week 49 and 50. Does this mark a “new normal” or are we just seeing a couple of years with special situations? Too soon to tell. This year has seen the inverse of the normal pattern, in that volume peaked in Week 6 and has been declining since. This can be seen most clearly in the US-specific chart. Frontloading related to tariffs has been in play. The impact of the imposition of 145% China tariffs can plainly be seen in Week 20, five weeks after they were imposed. The rebound from the rollback to 30% can be seen most recently in Week 26, some six weeks after the rollback was announced. I infer it is easier or quicker to put a hold on shipments, but restarting them takes a bit longer. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="71a18721-0919-4ccd-b2fa-2c4c299e29b7"></dynamic-object></div>Week 27 will show the impacts of the Canada Day/July 4th holidays, so we won’t get a better picture of the size of the recovery until Week 28. Based on what ocean rates are doing, this “mini-surge” will be underwhelming in scope and duration. Conversely, the two Canadian railroads have been relatively strong of late. Canadian National has been up 3.3% over the past four weeks versus the prior year, and Canadian Pacific Kansas City was up 16.9% over the same period, albeit against particularly weak prior-year numbers. It certainly makes sense that we would not be seeing the same tariff-related gyrations north of the border. <h3>Peak season questions </h3>This leaves the question of peak season. Will we have one? And if we do, how strong will it be? Obviously, much depends on where tariffs land and the process by which the landing is achieved. This is, of course, unforecastable. The Trump administration has fulfilled my expectations in one sense by announcing that the 90-day tariff pause on essentially all trading partners has been extended to Aug 1. I would certainly not be surprised to see further slippage, but of course, I could just as easily be wrong about where our mercurial president takes us. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e92d2fdc-94d9-4806-9df7-bbbc2b6aed28"></dynamic-object></div>My sense is that importers are developing a certain level of fatigue with the constant drumbeat of new tariffs, rollbacks and extensions. Rather than taking costly actions to try and game the tariff timing, they are settling back and allowing things to unfold. I suspect that the early strength that we have seen in the first half is substantially composed of volume that has been “borrowed” from peak season. Therefore, my best guess is that if we have a peak, it will be late and tepid. Contact Larry Gross at <a href="mailto:lgross@intermodalindepth.com">lgross@intermodalindepth.com</a>.</div>

The numbers are in for the first half of 2025 from the Association of American Railroads (AAR). While the numbers lack the detail that can be gleaned from the Intermodal Association of North America’s (IANA’s) monthly data, the AAR numbers have the crucial advantage of timeliness. Despite all the trade turmoil, intermodal had a good first half of 2025. North American intermodal activity in the second quarter was up 1.4% versus the prior year and 3.6% higher for the first half. But intermodal was not fully immune from trade effects. North American volume over the past four weeks was down 2% from 2024 and US volume from the “Big Four” rails — BNSF, CSX, Norfolk Southern and UP — was down a bit more at 2.9%. The two charts attempt to put the current numbers in a longer-term context. The first chart shows all the reporting railroads, while the second isolates the Big Four. In each, the blue line represents what used to be “normal,” the average volume for each of the 52 weeks of the year for the 10 years from 2010 to 2019. This predates the disruptive elements of the pandemic and the precision scheduled railroading (PSR) reforms. Results for the years 2023 and 2024 are presented, along with year-to-date results for 2025. One interesting aspect is that both 2023 and 2024 saw volume staying stronger for longer than the previous norm. On average, week 39 marked the peak during the 2010–19 period. But in 2023, the peak was in Week 42 and Weeks 48-50 were just about as strong. In 2024, the two strongest weeks were Week 49 and 50. Does this mark a “new normal” or are we just seeing a couple of years with special situations? Too soon to tell. This year has seen the inverse of the normal pattern, in that volume peaked in Week 6 and has been declining since. This can be seen most clearly in the US-specific chart. Frontloading related to tariffs has been in play. The impact of the imposition of 145% China tariffs can plainly be seen in Week 20, five weeks after they were imposed. The rebound from the rollback to 30% can be seen most recently in Week 26, some six weeks after the rollback was announced. I infer it is easier or quicker to put a hold on shipments, but restarting them takes a bit longer. Week 27 will show the impacts of the Canada Day/July 4th holidays, so we won’t get a better picture of the size of the recovery until Week 28. Based on what ocean rates are doing, this “mini-surge” will be underwhelming in scope and duration. Conversely, the two Canadian railroads have been relatively strong of late. Canadian National has been up 3.3% over the past four weeks versus the prior year, and Canadian Pacific Kansas City was up 16.9% over the same period, albeit against particularly weak prior-year numbers. It certainly makes sense that we would not be seeing the same tariff-related gyrations north of the border. Peak season questions This leaves the question of peak season. Will we have one? And if we do, how strong will it be? Obviously, much depends on where tariffs land and the process by which the landing is achieved. This is, of course, unforecastable. The Trump administration has fulfilled my expectations in one sense by announcing that the 90-day tariff pause on essentially all trading partners has been extended to Aug 1. I would certainly not be surprised to see further slippage, but of course, I could just as easily be wrong about where our mercurial president takes us. My sense is that importers are developing a certain level of fatigue with the constant drumbeat of new tariffs, rollbacks and extensions. Rather than taking costly actions to try and game the tariff timing, they are settling back and allowing things to unfold. I suspect that the early strength that we have seen in the first half is substantially composed of volume that has been “borrowed” from peak season. Therefore, my best guess is that if we have a peak, it will be late and tepid. Contact Larry Gross at lgross@intermodalindepth.com .

North-American rail

Intermodal providers

Surface

North American intermodal notches solid first half despite trade turmoil

<div class="phx-topic abstract-wrapper">The tariff framework agreement between Washington and Hanoi, while still short on details, is expected to support Vietnam’s strong air cargo volume growth this year.</div>

The tariff framework agreement between Washington and Hanoi, while still short on details, is expected to support Vietnam’s strong air cargo volume growth this year.

<div class="phx-topic">Vietnam’s air cargo exports to the US are surging, with higher tariffs on China providing a powerful incentive for US importers to shift sourcing to the Southeast Asian manufacturing nation. Air cargo volumes generated by frontloading ahead of “reciprocal” tariffs in April and the subsequent 90-day pause on those tariffs in early May were piled on top of an already robust start to the year. Vietnam-US volumes out of Ho Chi Minh airport were up 62% through April compared with the same period last year, with 97,000 tons of cargo carried across the Pacific, according to data from air cargo analyst Rotate. Tim van Leeuwen, head of consulting at Rotate, said Vietnam was affected both by tariffs on its own imports as well those on other countries, notably China. The latest tariff framework agreement between the US and Vietnam, while still short on details, would likely result in Vietnam’s volume growth continuing. “As long as China’s tariffs remain higher than those in Vietnam, we expect ... an increase in new US imports from Vietnam that will replace current US imports from China,” van Leeuwen told the Journal of Commerce this week. “For instance, we may see a shipper who currently serves the US from China, and the Middle East/Europe from Vietnam, switch the two to optimize tariff impact,” he noted. Current US tariffs on Vietnam are 10%, but the recently announced framework agreement will increase tariffs to 20% on most Vietnamese exports. The deal <a href="https://www.joc.com/article/trumps-vietnam-transshipment-tariff-puzzles-us-trade-community-6041482">includes a 40% tariff rate on “transshipment” aimed at countering the routing of Chinese exports through Vietnam</a>, although no details regarding the definition and enforcement of that transshipment have been released. In return, Vietnam will impose zero tariffs on US imports and give preferential access to certain goods, such as large-engine automobiles. In contrast, the US and China have a tentative agreement that will see US tariffs of 55% on Chinese exports from Aug. 12, but the transshipment aspect of the US-Vietnam deal has again soured trade relations between Beijing and Washington, with retaliatory threats on both sides. Washington believes one-third of all Vietnamese exports to the US are actually Chinese products shipped through Vietnam. <h3>Capacity boost </h3>While its northern neighbor fights a trade war with the US, Vietnam’s air cargo business has been capitalizing on its relatively low tariff access to US markets. A spokesperson for Kuehne + Nagel said Vietnam has emerged as a leading global growth market, with the forwarder and its Asia-based subsidiary Apex operating 14 self-managed flights per week from Vietnam to the US. The demand is being driven by high tech, electronics and semiconductor cargo. Van Leeuwen said current direct capacity being deployed between Vietnam and the US was a significant increase on the past three years when there was almost no direct capacity. “However, most capacity out of Vietnam towards the US will make an intermediate stop along the way, so in that sense the capacity growth of 15% to Northeast Asia — about 20 B777 freighters per day equivalent — is more indicative of current capacity growth out of the market,” he said. Air cargo rates from Ho Chi Minh to New York and Chicago have followed the upward trend of demand, remaining well above $6 per kilogram all year and rising as high as $6.72/kg in mid-June, according to Freightos Terminal air cargo rate data. Prices eased back to $6.00/kg to Chicago and $6.28/kg to New York this week, possibly reflecting capacity additions to the lane during a final push before the July 9 end of the 90-day pause on tariffs, said Levine. “A US-Vietnam trade agreement that sets tariffs at 20% could push some shippers to source elsewhere, but even at 20%, manufacturing would still be less expensive there compared to other countries like China,” he said. “With so much uncertainty about what tariffs will be for other countries, many shippers may be unlikely to shift sourcing elsewhere just yet,” Levine added. <h3>Fast-growing export business </h3>Dmitry Kulish, general manager for Asia-Pacific air cargo at Air Cargo Network Group (ACN), an association of air freight experts and logistics providers, said the Vietnamese export business was growing fast. “We see the global trend of shifting production across the Asia-Pacific region for some time now, and we definitely pay close attention to fast-growing markets, especially Vietnam,” Kulish told the Journal of Commerce. While confident of future growth in Vietnam, he said tariffs were injecting uncertainty into the market, with ACN “keeping a close eye” on the developing trade environment. “Tariffs and policy have a significant impact on the export business, and we are currently in a phase where political decisions can be unpredictable,” he said. The latest quarterly DHL Hong Kong Air Trade Leading Index survey released Thursday also found increasing interest in Southeast Asia by local air cargo traders, with almost 30% of local air traders reporting an increase in urgent orders following the 90-day suspension of US-China tariffs initiated on May 14. “As the trade landscape evolves, local air traders have identified Southeast Asia as the top market for trade potential,” DHL noted in a statement Thursday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Vietnam’s air cargo exports to the US are surging, with higher tariffs on China providing a powerful incentive for US importers to shift sourcing to the Southeast Asian manufacturing nation. Air cargo volumes generated by frontloading ahead of “reciprocal” tariffs in April and the subsequent 90-day pause on those tariffs in early May were piled on top of an already robust start to the year. Vietnam-US volumes out of Ho Chi Minh airport were up 62% through April compared with the same period last year, with 97,000 tons of cargo carried across the Pacific, according to data from air cargo analyst Rotate. Tim van Leeuwen, head of consulting at Rotate, said Vietnam was affected both by tariffs on its own imports as well those on other countries, notably China. The latest tariff framework agreement between the US and Vietnam, while still short on details, would likely result in Vietnam’s volume growth continuing. “As long as China’s tariffs remain higher than those in Vietnam, we expect ... an increase in new US imports from Vietnam that will replace current US imports from China,” van Leeuwen told the Journal of Commerce this week. “For instance, we may see a shipper who currently serves the US from China, and the Middle East/Europe from Vietnam, switch the two to optimize tariff impact,” he noted. Current US tariffs on Vietnam are 10%, but the recently announced framework agreement will increase tariffs to 20% on most Vietnamese exports. The deal includes a 40% tariff rate on “transshipment” aimed at countering the routing of Chinese exports through Vietnam , although no details regarding the definition and enforcement of that transshipment have been released. In return, Vietnam will impose zero tariffs on US imports and give preferential access to certain goods, such as large-engine automobiles. In contrast, the US and China have a tentative agreement that will see US tariffs of 55% on Chinese exports from Aug. 12, but the transshipment aspect of the US-Vietnam deal has again soured trade relations between Beijing and Washington, with retaliatory threats on both sides. Washington believes one-third of all Vietnamese exports to the US are actually Chinese products shipped through Vietnam. Capacity boost While its northern neighbor fights a trade war with the US, Vietnam’s air cargo business has been capitalizing on its relatively low tariff access to US markets. A spokesperson for Kuehne + Nagel said Vietnam has emerged as a leading global growth market, with the forwarder and its Asia-based subsidiary Apex operating 14 self-managed flights per week from Vietnam to the US. The demand is being driven by high tech, electronics and semiconductor cargo. Van Leeuwen said current direct capacity being deployed between Vietnam and the US was a significant increase on the past three years when there was almost no direct capacity. “However, most capacity out of Vietnam towards the US will make an intermediate stop along the way, so in that sense the capacity growth of 15% to Northeast Asia — about 20 B777 freighters per day equivalent — is more indicative of current capacity growth out of the market,” he said. Air cargo rates from Ho Chi Minh to New York and Chicago have followed the upward trend of demand, remaining well above $6 per kilogram all year and rising as high as $6.72/kg in mid-June, according to Freightos Terminal air cargo rate data. Prices eased back to $6.00/kg to Chicago and $6.28/kg to New York this week, possibly reflecting capacity additions to the lane during a final push before the July 9 end of the 90-day pause on tariffs, said Levine. “A US-Vietnam trade agreement that sets tariffs at 20% could push some shippers to source elsewhere, but even at 20%, manufacturing would still be less expensive there compared to other countries like China,” he said. “With so much uncertainty about what tariffs will be for other countries, many shippers may be unlikely to shift sourcing elsewhere just yet,” Levine added. Fast-growing export business Dmitry Kulish, general manager for Asia-Pacific air cargo at Air Cargo Network Group (ACN), an association of air freight experts and logistics providers, said the Vietnamese export business was growing fast. “We see the global trend of shifting production across the Asia-Pacific region for some time now, and we definitely pay close attention to fast-growing markets, especially Vietnam,” Kulish told the Journal of Commerce. While confident of future growth in Vietnam, he said tariffs were injecting uncertainty into the market, with ACN “keeping a close eye” on the developing trade environment. “Tariffs and policy have a significant impact on the export business, and we are currently in a phase where political decisions can be unpredictable,” he said. The latest quarterly DHL Hong Kong Air Trade Leading Index survey released Thursday also found increasing interest in Southeast Asia by local air cargo traders, with almost 30% of local air traders reporting an increase in urgent orders following the 90-day suspension of US-China tariffs initiated on May 14. “As the trade landscape evolves, local air traders have identified Southeast Asia as the top market for trade potential,” DHL noted in a statement Thursday. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo

Air Cargo Forwarder News

Transport, Trade and Regulation News

Tariff deal with US lifts high-flying Vietnamese air cargo demand

<div class="phx-topic abstract-wrapper">The uncertainty centers on what the White House considers transshipment and how US Customs and Border Protection officials would regulate goods moving from China to the US via Vietnam.</div>

The uncertainty centers on what the White House considers transshipment and how US Customs and Border Protection officials would regulate goods moving from China to the US via Vietnam.

<div class="phx-topic">How the Trump administration defines and regulates transshipment in the aftermath of a proposed trade deal with Vietnam will have major implications for the top Asia sourcing alternative to China. While President Donald Trump’s announcement on July 2 clarified new tariff levels of 20% on imports from Vietnam, his statements on applying a 40% tariff on goods that originate in China but are transshipped via Vietnam have confused some in the US trade community. The uncertainty centers on what Trump considers transshipment and how US Customs officials would crack down on violations. At issue is the extent to which goods with a Vietnam country of origin designation are actually just disguised China-origin goods. Most importers define transshipment as the process of a container connecting from the port of origin to the port of destination via a third port. But the Trump administration appears to be attaching a trade compliance element to transshipment that draws considerations such as country-of-origin determination, minimum local content, and substantial transformation, trade experts told the Journal of Commerce. “On the face of it, the transshipment tariff makes no sense,” said Robert Khachatryan, CEO of Southern California-based forwarder Freight Right Global Logistics, noting that the 40% rate is still lower than US tariffs of 55% on imports sent directly from China. “Which is why I think the language in the announcement is referring to something else.” <h3>Minimum input requirement </h3>One possibility is that the administration will deem that a minimum requirement of inputs into the shipped goods must come from Vietnam, said Paul Diedrich, compliance officer at Virginia-based forwarder Ardent Global Logistics. “While this hasn’t been clearly defined, it would make logical sense,” he said. The White House, the US Trade Representative (USTR), and US Customs and Border Protection (CBP) have yet to clarify how they define transshipment. Even CBP officials are struggling to understand what the new approach means for their monitoring and inspections and await text of the agreement rather than just the announced framework, said a trade compliance officer at a major forwarder who did not want to be identified. “We don’t know if there’s going to be a regional content component,” the source said. “Let’s say 100% of the product is manufactured in Vietnam, but 100% of the components come from China. Is that going to qualify for the agreement? In the framework, they’ve agreed to the level of the tariff, but not to the content. The short answer is no one has a clue how this is going to turn out.” <h3>Tariff games </h3>The source said it’s clear that the intention of the proposed deal with Vietnam is to disincentivize goods being manufactured in China and then moved across the land border to Vietnam to get a lower tariff treatment. It may end up being less costly to source in China and pay higher tariffs depending on the freight rate differential from China. “The framework adds scrutiny for goods with ambiguous or Chinese-origin inputs that most brands wouldn’t have visibility into without access to a product network connecting them with suppliers, regulators and customers,” Amy Morgan, head of trade compliance at supply chain software provider Altana AI, wrote in a blog Monday about the Vietnam tariffs. “Brands relying on Vietnam as a final assembly point for Chinese-made components may face 40% duties if they can’t substantiate that Vietnam is the country of origin.” Khachatryan said he expects the 40% tariff would apply to “Chinese components that undergo a substantial transformation and would hitherto be treated as Vietnamese-origin imports. “This is also evidenced by a sudden increase in export inspections in Vietnam where Vietnamese customs are reportedly scrutinizing ‘Made in Vietnam’ claims,” he added. How much of this transshipment is behind the rise of US imports from Vietnam is unclear. But the direction of trade, reflecting the conventional thinking that Vietnam was generally the best hedge against dependence on China sourcing, is clear. Imports from Vietnam a decade ago accounted for 3.9% of all US oceangoing laden imports; it was 9.9% in 2024, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. On Monday, Trump made a similar threat against South Korea, warning that Chinese goods “transshipped” through South Korea would be subject to additional tariffs beyond the 25% level announced this week. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

How the Trump administration defines and regulates transshipment in the aftermath of a proposed trade deal with Vietnam will have major implications for the top Asia sourcing alternative to China. While President Donald Trump’s announcement on July 2 clarified new tariff levels of 20% on imports from Vietnam, his statements on applying a 40% tariff on goods that originate in China but are transshipped via Vietnam have confused some in the US trade community. The uncertainty centers on what Trump considers transshipment and how US Customs officials would crack down on violations. At issue is the extent to which goods with a Vietnam country of origin designation are actually just disguised China-origin goods. Most importers define transshipment as the process of a container connecting from the port of origin to the port of destination via a third port. But the Trump administration appears to be attaching a trade compliance element to transshipment that draws considerations such as country-of-origin determination, minimum local content, and substantial transformation, trade experts told the Journal of Commerce. “On the face of it, the transshipment tariff makes no sense,” said Robert Khachatryan, CEO of Southern California-based forwarder Freight Right Global Logistics, noting that the 40% rate is still lower than US tariffs of 55% on imports sent directly from China. “Which is why I think the language in the announcement is referring to something else.” Minimum input requirement One possibility is that the administration will deem that a minimum requirement of inputs into the shipped goods must come from Vietnam, said Paul Diedrich, compliance officer at Virginia-based forwarder Ardent Global Logistics. “While this hasn’t been clearly defined, it would make logical sense,” he said. The White House, the US Trade Representative (USTR), and US Customs and Border Protection (CBP) have yet to clarify how they define transshipment. Even CBP officials are struggling to understand what the new approach means for their monitoring and inspections and await text of the agreement rather than just the announced framework, said a trade compliance officer at a major forwarder who did not want to be identified. “We don’t know if there’s going to be a regional content component,” the source said. “Let’s say 100% of the product is manufactured in Vietnam, but 100% of the components come from China. Is that going to qualify for the agreement? In the framework, they’ve agreed to the level of the tariff, but not to the content. The short answer is no one has a clue how this is going to turn out.” Tariff games The source said it’s clear that the intention of the proposed deal with Vietnam is to disincentivize goods being manufactured in China and then moved across the land border to Vietnam to get a lower tariff treatment. It may end up being less costly to source in China and pay higher tariffs depending on the freight rate differential from China. “The framework adds scrutiny for goods with ambiguous or Chinese-origin inputs that most brands wouldn’t have visibility into without access to a product network connecting them with suppliers, regulators and customers,” Amy Morgan, head of trade compliance at supply chain software provider Altana AI, wrote in a blog Monday about the Vietnam tariffs. “Brands relying on Vietnam as a final assembly point for Chinese-made components may face 40% duties if they can’t substantiate that Vietnam is the country of origin.” Khachatryan said he expects the 40% tariff would apply to “Chinese components that undergo a substantial transformation and would hitherto be treated as Vietnamese-origin imports. “This is also evidenced by a sudden increase in export inspections in Vietnam where Vietnamese customs are reportedly scrutinizing ‘Made in Vietnam’ claims,” he added. How much of this transshipment is behind the rise of US imports from Vietnam is unclear. But the direction of trade, reflecting the conventional thinking that Vietnam was generally the best hedge against dependence on China sourcing, is clear. Imports from Vietnam a decade ago accounted for 3.9% of all US oceangoing laden imports; it was 9.9% in 2024, according to PIERS, a sister company of the Journal of Commerce within S&P Global. On Monday, Trump made a similar threat against South Korea, warning that Chinese goods “transshipped” through South Korea would be subject to additional tariffs beyond the 25% level announced this week. Contact Eric Johnson at eric.johnson@spglobal.com .

Supply chain

Trump’s Vietnam ‘transshipment’ tariff puzzles US trade community

<div class="phx-topic abstract-wrapper">With two attacks on commercial vessels in recent days, including one that killed three mariners, any thought that the risk in the Red Sea was easing to the point the Suez route might be restored in the near future has vanished.</div>

With two attacks on commercial vessels in recent days, including one that killed three mariners, any thought that the risk in the Red Sea was easing to the point the Suez route might be restored in the near future has vanished.

<div class="phx-topic">With no attacks on shipping off the Yemeni coast since December — that is, until two strikes over the past three days — a feeling was taking hold among some ocean carriers that the threat posed by Houthi militants was greatly diminished. And as the threat diminished it would become more difficult for carriers to justify the diversions around southern Africa, which for the past 18 months have absorbed an estimated 10% of global capacity, extending transit times and putting carriers in a stronger position to absorb an influx of new capacity. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6040921_0.1.jpg"></img></div>Now with two attacks in recent days, including one that killed three mariners, any thought that the risk was easing to the point the Suez route might be reopened in the near future has vanished. “The dynamic in the Red Sea has changed materially as compared to expectations roughly a month ago in which there had been a growing view that Red Sea transits would start to pick up following the US-Houthi agreement and the long period in which merchant ships had not been attacked,” Jefferies wrote on July 8. While the Houthi militia may have held fire for several months, the restraint should not be taken as a sign the group’s ability to strike is diminished. Although such a conclusion could be inferred from military setbacks experienced across the network of Iran-backed militia and states such as Syria, in reality, the Houthis remain a lethal force, as they showed this week, analysts say. “The most recent Houthi attacks … allow them to demonstrate that, unlike Iran and its other proxy groups in the region, they remain undeterred by the threat of US or Israeli military confrontation,” Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global Market Intelligence, told the Journal of Commerce Wednesday. Israel and the US have upped their strikes on rebels in Yemen in recent months. But without troops on the ground to uproot the rebels, Kennedy has been saying for more than a year that it would be extremely difficult to eliminate the group as a danger to shipping through aerial military action alone. “Houthi missile attack capabilities are highly decentralized across the territory they control,” Kennedy said. “These are unlikely to be fully replenished to levels in place prior to US-led and Israeli airstrikes, but seizures of weapons shipments in the Red Sea and the Houthis’ own industrial manufacturing capacity suggest that they will have been able to partially rebuild weapons stockpiles.” Kennedy added that the original spark for Houthi attacks on shipping — Israeli operations in Gaza — remains a core rationale for their strikes. “It is highly likely that attack attempts on vessels will continue while Israeli military operations in Gaza are ongoing,” he said. The result is an extended timeline, quite possibly into 2026, for any large-scale return to Suez routings. “With the developments over the past few days there is not much chance of a reversal back to a Suez routing for the major container lines in the short to medium term,” shipping analyst and Journal of Commerce contributor Lars Jensen wrote on LinkedIn this week. Added Kennedy: “We expect that Houthi attack activity will continue through 2025 at least.” <h3>Ongoing disruption post-COVID </h3>For ocean carriers who didn’t create the crisis and yet are largely immune from criticism for continuing the longer routings around Africa to protect their crews, ships and cargo, the crisis is part of a larger narrative of ongoing post-COVID-19 disruption, alongside basic supply and demand, underpinning market dynamics. Carriers face intense profit pressures over the next few years, with Drewry last month saying it expects industry operating profit to fall to $20 billion this year, down from over $50 billion in 2024. But the pressure would be much greater without the absorption of capacity due to the Red Sea attacks and resultant diversions. Maersk in May ruled out a return to normal Suez routings this year despite US President Donald Trump on May 6 saying the Houthis “have capitulated” and agreed to stop attacks on commercial shipping in the region. But as the new attacks clearly showed, the Houthis were just lying low, meaning the status quo of limited container ship transits through the Suez remains as entrenched as ever. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

With no attacks on shipping off the Yemeni coast since December — that is, until two strikes over the past three days — a feeling was taking hold among some ocean carriers that the threat posed by Houthi militants was greatly diminished. And as the threat diminished it would become more difficult for carriers to justify the diversions around southern Africa, which for the past 18 months have absorbed an estimated 10% of global capacity, extending transit times and putting carriers in a stronger position to absorb an influx of new capacity. Now with two attacks in recent days, including one that killed three mariners, any thought that the risk was easing to the point the Suez route might be reopened in the near future has vanished. “The dynamic in the Red Sea has changed materially as compared to expectations roughly a month ago in which there had been a growing view that Red Sea transits would start to pick up following the US-Houthi agreement and the long period in which merchant ships had not been attacked,” Jefferies wrote on July 8. While the Houthi militia may have held fire for several months, the restraint should not be taken as a sign the group’s ability to strike is diminished. Although such a conclusion could be inferred from military setbacks experienced across the network of Iran-backed militia and states such as Syria, in reality, the Houthis remain a lethal force, as they showed this week, analysts say. “The most recent Houthi attacks … allow them to demonstrate that, unlike Iran and its other proxy groups in the region, they remain undeterred by the threat of US or Israeli military confrontation,” Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligence, told the Journal of Commerce Wednesday. Israel and the US have upped their strikes on rebels in Yemen in recent months. But without troops on the ground to uproot the rebels, Kennedy has been saying for more than a year that it would be extremely difficult to eliminate the group as a danger to shipping through aerial military action alone. “Houthi missile attack capabilities are highly decentralized across the territory they control,” Kennedy said. “These are unlikely to be fully replenished to levels in place prior to US-led and Israeli airstrikes, but seizures of weapons shipments in the Red Sea and the Houthis’ own industrial manufacturing capacity suggest that they will have been able to partially rebuild weapons stockpiles.” Kennedy added that the original spark for Houthi attacks on shipping — Israeli operations in Gaza — remains a core rationale for their strikes. “It is highly likely that attack attempts on vessels will continue while Israeli military operations in Gaza are ongoing,” he said. The result is an extended timeline, quite possibly into 2026, for any large-scale return to Suez routings. “With the developments over the past few days there is not much chance of a reversal back to a Suez routing for the major container lines in the short to medium term,” shipping analyst and Journal of Commerce contributor Lars Jensen wrote on LinkedIn this week. Added Kennedy: “We expect that Houthi attack activity will continue through 2025 at least.” Ongoing disruption post-COVID For ocean carriers who didn’t create the crisis and yet are largely immune from criticism for continuing the longer routings around Africa to protect their crews, ships and cargo, the crisis is part of a larger narrative of ongoing post-COVID-19 disruption, alongside basic supply and demand, underpinning market dynamics. Carriers face intense profit pressures over the next few years, with Drewry last month saying it expects industry operating profit to fall to $20 billion this year, down from over $50 billion in 2024. But the pressure would be much greater without the absorption of capacity due to the Red Sea attacks and resultant diversions. Maersk in May ruled out a return to normal Suez routings this year despite US President Donald Trump on May 6 saying the Houthis “have capitulated” and agreed to stop attacks on commercial shipping in the region. But as the new attacks clearly showed, the Houthis were just lying low, meaning the status quo of limited container ship transits through the Suez remains as entrenched as ever. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

New Houthi attacks likely kill hopes of shipping returning to Red Sea this year

<div class="phx-topic abstract-wrapper">Mediterranean Shipping Co. is furthering its lead in vessel tonnage so far this year as it absorbs more than double the amount of new capacity added by No. 2 carrier Maersk. </div>

Mediterranean Shipping Co. is furthering its lead in vessel tonnage so far this year as it absorbs more than double the amount of new capacity added by No. 2 carrier Maersk.

<div class="phx-topic">Mediterranean Shipping Co. widened its already leading market share among ocean carriers as its fleet added the most ships in the first half of 2025, according to Alphaliner. Many of those new ships, though, are entering non-US trades as trans-Pacific demand appears to be ebbing for the remainder of the year. MSC’s fleet grew 5.5% in the first half, Alphaliner said in its weekly newsletter Wednesday. Only Ocean Network Express (ONE) saw a higher growth rate during that period at 5.9%, but MSC outstripped others for the most new capacity, adding some 365,173 TEUs to its fleet, Alphaliner said. The additional capacity, a combination of newbuild deliveries and acquisitions of second-hand ships, brings MSC’s total fleet to over 6.6 million TEUs, Alphaliner said. It added that MSC’s “relentless pursuit of capacity” has widened the gap with its former 2M partner Maersk, which added 170,371 TEUs during the first half of 2025 and brought its capacity to 4.5 million TEUs. “To put this into perspective, this gap [between MSC and Maersk] is equal to the entire fleet of ONE,” Alphaliner said, adding MSC is expected to take delivery of another 380,000 TEUs of newbuild capacity during the second half of 2025. Alphaliner said Maersk’s goal is not to enlarge its fleet as much as it aims to replace older vessels and make its network more efficient. It added that CMA CGM, which has the second-largest order book of new ships at 1.5 million TEUs, is “set to overtake Maersk in the coming years” in terms of fleet size. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="00f898cc-0bf5-4e4d-80d3-6db9454b1165"></dynamic-object></div><h3>Ships head to non-US markets </h3>During a speech last month to agriculture shippers, MSC’s US president, Fabio Santucci, said that while the fleet buildup may look excessive, it will head off even worse delays for shippers. Port congestion ties up about 10% of the global feet, he said, while the ongoing diversions around southern Africa absorb another 6%. MSC’s additional tonnage “is being fully absorbed and utilized and we are able to move cargo at 65% schedule reliability,” Santucci said. “Had we been more responsible financially, we would have had fewer ships, but the challenge is 50% schedule reliability.” While Santucci noted that MSC’s trans-Pacific reliability is hovering near 80%, much of the new tonnage is not currently serving US markets. Of 25 post-Panamax vessels delivered to MSC in the first half of 2025, only one — the 8,496-TEU MSC Benin — has called the US West Coast, according to satellite data from Sea-web, a sister product of the Journal of Commerce within S&amp;P Global. Santucci said MSC is seeing the most cargo growth outside the US, with South America and Africa seeing respective growth of 10% and 12% during the first half of the year. Europe is also growing “well above average,” he said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Mediterranean Shipping Co. widened its already leading market share among ocean carriers as its fleet added the most ships in the first half of 2025, according to Alphaliner. Many of those new ships, though, are entering non-US trades as trans-Pacific demand appears to be ebbing for the remainder of the year. MSC’s fleet grew 5.5% in the first half, Alphaliner said in its weekly newsletter Wednesday. Only Ocean Network Express (ONE) saw a higher growth rate during that period at 5.9%, but MSC outstripped others for the most new capacity, adding some 365,173 TEUs to its fleet, Alphaliner said. The additional capacity, a combination of newbuild deliveries and acquisitions of second-hand ships, brings MSC’s total fleet to over 6.6 million TEUs, Alphaliner said. It added that MSC’s “relentless pursuit of capacity” has widened the gap with its former 2M partner Maersk, which added 170,371 TEUs during the first half of 2025 and brought its capacity to 4.5 million TEUs. “To put this into perspective, this gap [between MSC and Maersk] is equal to the entire fleet of ONE,” Alphaliner said, adding MSC is expected to take delivery of another 380,000 TEUs of newbuild capacity during the second half of 2025. Alphaliner said Maersk’s goal is not to enlarge its fleet as much as it aims to replace older vessels and make its network more efficient. It added that CMA CGM, which has the second-largest order book of new ships at 1.5 million TEUs, is “set to overtake Maersk in the coming years” in terms of fleet size. Ships head to non-US markets During a speech last month to agriculture shippers, MSC’s US president, Fabio Santucci, said that while the fleet buildup may look excessive, it will head off even worse delays for shippers. Port congestion ties up about 10% of the global feet, he said, while the ongoing diversions around southern Africa absorb another 6%. MSC’s additional tonnage “is being fully absorbed and utilized and we are able to move cargo at 65% schedule reliability,” Santucci said. “Had we been more responsible financially, we would have had fewer ships, but the challenge is 50% schedule reliability.” While Santucci noted that MSC’s trans-Pacific reliability is hovering near 80%, much of the new tonnage is not currently serving US markets. Of 25 post-Panamax vessels delivered to MSC in the first half of 2025, only one — the 8,496-TEU MSC Benin — has called the US West Coast, according to satellite data from Sea-web, a sister product of the Journal of Commerce within S&P Global. Santucci said MSC is seeing the most cargo growth outside the US, with South America and Africa seeing respective growth of 10% and 12% during the first half of the year. Europe is also growing “well above average,” he said. Contact Michael Angell at michael.angell@spglobal.com .

Asia-Europe

MSC outstripping rivals on new capacity for 2025: Alphaliner

<div class="phx-topic abstract-wrapper">The win for the trucking company at the Texas Supreme Court sets a powerful precedent that narrows the scope of liability in vehicular negligence cases, especially those involving unpredictable, high-impact crashes.</div>

The win for the trucking company at the Texas Supreme Court sets a powerful precedent that narrows the scope of liability in vehicular negligence cases, especially those involving unpredictable, high-impact crashes.

<div class="phx-topic">Shippers operating private trucking fleets will be buoyed by a June 27 decision by the Supreme Court of Texas, which overturned a nearly $100 million 2023 jury verdict in Werner Enterprises, Inc. v. Blake. The court held that the trucking company’s driver, although possibly negligent in how he operated his vehicle on icy roads, was not the proximate cause of a tragic cross-median crash that killed one child and left another permanently paralyzed. The case holds implications for truckload carriers, from large for-hire carriers such as Werner to smaller operators, but also for shippers operating their own private fleets who will be impacted by the precedent set by the court’s decision. That makes it more than merely a procedural victory for Werner Enterprises. It sets a powerful precedent that narrows the scope of liability in vehicular negligence cases, especially those involving unpredictable, high-impact crashes. <h3>Boundaries for shippers </h3>For private fleet operators and shippers with dedicated transportation assets, the implications are significant — and potentially transformative. The ruling offers clarity and potentially limits exposure in high-dollar catastrophic loss cases — particularly those involving third-party drivers who are the true proximate causes of an accident. Previously, plaintiffs’ attorneys have advanced theories of negligent training, hiring, or dispatch to hook employers into liability, even where their driver was not principally at fault. But the Werner decision sharply limits those derivative theories unless the employee’s conduct itself meets the substantial-factor threshold of proximate cause. This limitation matters in an era of rising “nuclear verdicts,” so-called liability verdicts that exceed $10 million, and increasingly aggressive plaintiff strategies in transportation litigation. It restores a degree of predictability to fleet liability by anchoring it in clearly demonstrable causation. <h3>The legal crux: proximate cause </h3>The court’s opinion turned on a technical yet crucial doctrine: proximate cause. Texas law requires that to hold someone liable for negligence, their actions must be a “substantial factor” in causing the injury — not just part of a chain of events. The accident occurred in December 2014, near Odessa, Texas, when an F-350 pickup truck, traveling too fast for the icy conditions, lost control, crossed a 42-foot grassy median, and collided head-on with a Werner 18-wheeler operated by Shiraz Ali, a driver in training. The collision killed seven-year-old Zackery Blake and severely injured his siblings and mother. A Texas jury found Werner and Ali liable, apportioning 70% of the responsibility to Werner and 14% of the responsibility to Ali and awarding $100 million in damages. Werner appealed, arguing that the plaintiffs failed to prove Ali’s driving was a proximate cause of the crash. The Texas Supreme Court ruled that his conduct was not a substantial factor in causing the injuries. The sole proximate cause, according to the opinion, was the F-350’s sudden loss of control. Crucially, the court emphasized that even if Ali’s speed “furnished the condition that made the injuries possible,” it was not enough for liability. The decision pivots on the idea that legal responsibility requires more than being in the wrong place at the wrong time. <h3>Victory for the principle of foreseeability </h3>The ruling clarifies a principle that private fleet operators have long sought courts to recognize: when another driver acts unpredictably and causes an accident, it is unfair — and legally unsound — to hold a fleet operator liable simply because their truck happened to be involved. The decision rebukes the lower court’s expansive view of foreseeability. While a collision might have been possible, the court held, it was not reasonably foreseeable that an out-of-control vehicle would cross a wide median and strike Ali’s truck before he had time to react. It was “a tragic happenstance of place and time,” the opinion declared, “but not a happenstance for which Ali or his employer can reasonably be held responsible.” <h3>A word of caution </h3>While this ruling is a win for carriers and shippers, it also underscores the importance of robust documentation and clear protocols. The Supreme Court of Texas accepted that Werner’s training may have been imperfect. But because the crash wasn’t proximately caused by that training — or by Ali’s conduct — it didn’t matter. Private fleets should take note: This ruling doesn’t absolve companies from preparing their drivers for adverse conditions or documenting compliance with safety protocols. But it does provide a legal firewall when accidents occur beyond their control. Matthew Leffler is a transportation attorney, adjunct professor of law at Michigan State University College of Law, and the host of the Armchair Attorney® Podcast. Contact him at <a href="mailto:matthew@armchairattorney.com">matthew@armchairattorney.com</a>.</div>

Shippers operating private trucking fleets will be buoyed by a June 27 decision by the Supreme Court of Texas, which overturned a nearly $100 million 2023 jury verdict in Werner Enterprises, Inc. v. Blake. The court held that the trucking company’s driver, although possibly negligent in how he operated his vehicle on icy roads, was not the proximate cause of a tragic cross-median crash that killed one child and left another permanently paralyzed. The case holds implications for truckload carriers, from large for-hire carriers such as Werner to smaller operators, but also for shippers operating their own private fleets who will be impacted by the precedent set by the court’s decision. That makes it more than merely a procedural victory for Werner Enterprises. It sets a powerful precedent that narrows the scope of liability in vehicular negligence cases, especially those involving unpredictable, high-impact crashes. Boundaries for shippers For private fleet operators and shippers with dedicated transportation assets, the implications are significant — and potentially transformative. The ruling offers clarity and potentially limits exposure in high-dollar catastrophic loss cases — particularly those involving third-party drivers who are the true proximate causes of an accident. Previously, plaintiffs’ attorneys have advanced theories of negligent training, hiring, or dispatch to hook employers into liability, even where their driver was not principally at fault. But the Werner decision sharply limits those derivative theories unless the employee’s conduct itself meets the substantial-factor threshold of proximate cause. This limitation matters in an era of rising “nuclear verdicts,” so-called liability verdicts that exceed $10 million, and increasingly aggressive plaintiff strategies in transportation litigation. It restores a degree of predictability to fleet liability by anchoring it in clearly demonstrable causation. The legal crux: proximate cause The court’s opinion turned on a technical yet crucial doctrine: proximate cause. Texas law requires that to hold someone liable for negligence, their actions must be a “substantial factor” in causing the injury — not just part of a chain of events. The accident occurred in December 2014, near Odessa, Texas, when an F-350 pickup truck, traveling too fast for the icy conditions, lost control, crossed a 42-foot grassy median, and collided head-on with a Werner 18-wheeler operated by Shiraz Ali, a driver in training. The collision killed seven-year-old Zackery Blake and severely injured his siblings and mother. A Texas jury found Werner and Ali liable, apportioning 70% of the responsibility to Werner and 14% of the responsibility to Ali and awarding $100 million in damages. Werner appealed, arguing that the plaintiffs failed to prove Ali’s driving was a proximate cause of the crash. The Texas Supreme Court ruled that his conduct was not a substantial factor in causing the injuries. The sole proximate cause, according to the opinion, was the F-350’s sudden loss of control. Crucially, the court emphasized that even if Ali’s speed “furnished the condition that made the injuries possible,” it was not enough for liability. The decision pivots on the idea that legal responsibility requires more than being in the wrong place at the wrong time. Victory for the principle of foreseeability The ruling clarifies a principle that private fleet operators have long sought courts to recognize: when another driver acts unpredictably and causes an accident, it is unfair — and legally unsound — to hold a fleet operator liable simply because their truck happened to be involved. The decision rebukes the lower court’s expansive view of foreseeability. While a collision might have been possible, the court held, it was not reasonably foreseeable that an out-of-control vehicle would cross a wide median and strike Ali’s truck before he had time to react. It was “a tragic happenstance of place and time,” the opinion declared, “but not a happenstance for which Ali or his employer can reasonably be held responsible.” A word of caution While this ruling is a win for carriers and shippers, it also underscores the importance of robust documentation and clear protocols. The Supreme Court of Texas accepted that Werner’s training may have been imperfect. But because the crash wasn’t proximately caused by that training — or by Ali’s conduct — it didn’t matter. Private fleets should take note: This ruling doesn’t absolve companies from preparing their drivers for adverse conditions or documenting compliance with safety protocols. But it does provide a legal firewall when accidents occur beyond their control. Matthew Leffler is a transportation attorney, adjunct professor of law at Michigan State University College of Law, and the host of the Armchair Attorney® Podcast. Contact him at matthew@armchairattorney.com .

Truckload

Werner victory in long-running court case has broad implications for truckload carriers

<div class="phx-topic abstract-wrapper">The shipping industry needs a fundamentally new, collaborative approach to build true resilience. </div>

The shipping industry needs a fundamentally new, collaborative approach to build true resilience.

<div class="phx-topic">The early 2020s have reshaped the context for international supply chains. The COVID-19 pandemic, geopolitical tensions, and ongoing adverse events have exposed the sector’s complexities, underscoring the need for greater supply chain resilience. Visibility is a prerequisite for effective supply chain and carbon footprint management. In a world where blocs are driving apart and uncertainty is sky high, incremental improvements and isolated digital tools are no longer sufficient. The industry needs a fundamentally new, collaborative approach to build true resilience. Several high-profile digital supply chain initiatives have failed to deliver a lasting impact. The most prominent example, TradeLens, was discontinued despite strong backing and considerable investment. Its centralized model struggled to achieve broad industry support, ultimately faltering because it could not build the trust required to make such industry-wide solutions economically viable. Other platforms, such as Project44 and FourKites, have made significant strides in transport visibility. Yet, their traction remains limited. A common thread running through shortcomings is a lack of trust, insufficient perceived value, and governance models that do not serve the actors or the sector. Technology can only solve the challenges facing supply chains and logistics when it is <a href="https://unctad.org/news/transport-newsletter-article-no-96-fourth-quarter-2022">underpinned by collaboration</a> and trust. <h3>A different way forward </h3>The <a href="https://encoded-592c9deb-987b-4562-aa3c-9fa3d37d83e9.uri/http%3a%2f%2fwww.virtualwatchtower.org)">Virtual Watch Tower</a> (VWT) was conceived as a direct response to these challenges. It is not just another platform, but a neutral, industry-driven public good. Designed by and for the supply chain community, VWT’s mission is to create a digital infrastructure that links existing tools and platforms, enabling secure, selective, and trustworthy sharing of primary data to close gaps. What sets VWT apart is its governance and inclusivity. Rather than being controlled by a single actor or a small group, it is stewarded by neutral stakeholders and, in the future, a trustee-led foundation, ensuring neutrality and legitimacy. At VWT, shippers and logistics providers co-create solutions, ensuring that the digital infrastructure addresses real-world needs. At the heart of VWT’s approach is VWTnet, powered by <a href="http://www.twin.org">TWIN</a> — the Trade Worldwide Information Network. TWIN is a public-good digital data architecture and federated backbone that enables actors to share primary data on their own terms securely. New data gathering mechanisms will help the VWT members to fill current data gaps. This architecture has already demonstrated its value in the real world. The organic growth of VWT, expanding shipment by shipment and actor by actor, is a testament to the power of network effects when trust and interoperability are embedded in the system’s fabric. The VWT vision is that disruptions can be managed collaboratively. When a disruption occurs, whether it is a port strike or a climate-induced delay, all relevant parties involved in the shipments are informed in real time. Recovery plans can be coordinated rather than improvised, and operational flows can bemanaged with far greater agility. Equally transformative is VWT’s approach to emissions tracking. By leveraging primary operational data, VWT will enable shipment-specific emissions calculations, turning sustainability from a retrospective report into an actionable planning and management tool. Shippers can optimize routes for both speed and carbon impact, and authorities can align incentives with verified, real-time data. Emission performance becomes a differentiator, not a compliance afterthought. VWT’s work on these use cases has begun, and the first minimum viable product is scheduled to be launched in 2026. <h3>Building from ground up </h3>Perhaps the most significant differentiator of the community-driven VWT is not technical, but institutional. Drawing on lessons from failed efforts, VWT will be built from the ground up with a two-tier governance model: strategic oversight by a trustee-led foundation, and technical co-evolution by a global network of providers. This structure ensures legitimacy, trust, and adaptability, qualities that have attracted both private and public sector interest. Open forums, transparent decision-making, and participatory rule-setting have fostered a sense of belonging and ownership across the community. As a result, VWT is a movement — one that is evolving through continuous dialogue and shared stewardship among ecosystem actors. By early 2025, VWT surpassed 50 member organizations, with hundreds of shipments monitored, ready for an emerging ecosystem of services operating on top of VWTnet. The journey from concept to infrastructure has been propelled by relentless awareness-building, turning VWT from an idea and research project into a reference point for digital trade transformation. The next challenge is to institutionalize these gains, embedding VWT’s principles and protocols into the fabric of trade. This means maintaining open standards, transparent governance, and economic viability, especially for smaller actors. The ambition is to scale trust, sustain value, and drive adoption in a traditionally conservative industry. Wolfgang Lehmacher, who formerly served as a director at the World Economic Forum, holds many roles, including as a CEO emeritus of GeoPost Intercontinental and as an advisory board member of The Logistics and Supply Chain. He can be reached at <a href="mailto:w.lehmacher@gmail.com">w.lehmacher@gmail.com</a>. Mikael Lind is an adjunct professor of maritime informatics at Chalmers and Research Institutes of Sweden (RISE). He is co-editor of the first two books on maritime informatics and is co-editor of the book <a href="http://www.maritime-decarbonization.org/">Maritime Decarbonization</a>. He can be reached at <a href="mailto:Mikael.Lind@ri.se">Mikael.Lind@ri.se</a>. </div>

The early 2020s have reshaped the context for international supply chains. The COVID-19 pandemic, geopolitical tensions, and ongoing adverse events have exposed the sector’s complexities, underscoring the need for greater supply chain resilience. Visibility is a prerequisite for effective supply chain and carbon footprint management. In a world where blocs are driving apart and uncertainty is sky high, incremental improvements and isolated digital tools are no longer sufficient. The industry needs a fundamentally new, collaborative approach to build true resilience. Several high-profile digital supply chain initiatives have failed to deliver a lasting impact. The most prominent example, TradeLens, was discontinued despite strong backing and considerable investment. Its centralized model struggled to achieve broad industry support, ultimately faltering because it could not build the trust required to make such industry-wide solutions economically viable. Other platforms, such as Project44 and FourKites, have made significant strides in transport visibility. Yet, their traction remains limited. A common thread running through shortcomings is a lack of trust, insufficient perceived value, and governance models that do not serve the actors or the sector. Technology can only solve the challenges facing supply chains and logistics when it is underpinned by collaboration and trust. A different way forward The Virtual Watch Tower (VWT) was conceived as a direct response to these challenges. It is not just another platform, but a neutral, industry-driven public good. Designed by and for the supply chain community, VWT’s mission is to create a digital infrastructure that links existing tools and platforms, enabling secure, selective, and trustworthy sharing of primary data to close gaps. What sets VWT apart is its governance and inclusivity. Rather than being controlled by a single actor or a small group, it is stewarded by neutral stakeholders and, in the future, a trustee-led foundation, ensuring neutrality and legitimacy. At VWT, shippers and logistics providers co-create solutions, ensuring that the digital infrastructure addresses real-world needs. At the heart of VWT’s approach is VWTnet, powered by TWIN — the Trade Worldwide Information Network. TWIN is a public-good digital data architecture and federated backbone that enables actors to share primary data on their own terms securely. New data gathering mechanisms will help the VWT members to fill current data gaps. This architecture has already demonstrated its value in the real world. The organic growth of VWT, expanding shipment by shipment and actor by actor, is a testament to the power of network effects when trust and interoperability are embedded in the system’s fabric. The VWT vision is that disruptions can be managed collaboratively. When a disruption occurs, whether it is a port strike or a climate-induced delay, all relevant parties involved in the shipments are informed in real time. Recovery plans can be coordinated rather than improvised, and operational flows can bemanaged with far greater agility. Equally transformative is VWT’s approach to emissions tracking. By leveraging primary operational data, VWT will enable shipment-specific emissions calculations, turning sustainability from a retrospective report into an actionable planning and management tool. Shippers can optimize routes for both speed and carbon impact, and authorities can align incentives with verified, real-time data. Emission performance becomes a differentiator, not a compliance afterthought. VWT’s work on these use cases has begun, and the first minimum viable product is scheduled to be launched in 2026. Building from ground up Perhaps the most significant differentiator of the community-driven VWT is not technical, but institutional. Drawing on lessons from failed efforts, VWT will be built from the ground up with a two-tier governance model: strategic oversight by a trustee-led foundation, and technical co-evolution by a global network of providers. This structure ensures legitimacy, trust, and adaptability, qualities that have attracted both private and public sector interest. Open forums, transparent decision-making, and participatory rule-setting have fostered a sense of belonging and ownership across the community. As a result, VWT is a movement — one that is evolving through continuous dialogue and shared stewardship among ecosystem actors. By early 2025, VWT surpassed 50 member organizations, with hundreds of shipments monitored, ready for an emerging ecosystem of services operating on top of VWTnet. The journey from concept to infrastructure has been propelled by relentless awareness-building, turning VWT from an idea and research project into a reference point for digital trade transformation. The next challenge is to institutionalize these gains, embedding VWT’s principles and protocols into the fabric of trade. This means maintaining open standards, transparent governance, and economic viability, especially for smaller actors. The ambition is to scale trust, sustain value, and drive adoption in a traditionally conservative industry. Wolfgang Lehmacher, who formerly served as a director at the World Economic Forum, holds many roles, including as a CEO emeritus of GeoPost Intercontinental and as an advisory board member of The Logistics and Supply Chain. He can be reached at w.lehmacher@gmail.com . Mikael Lind is an adjunct professor of maritime informatics at Chalmers and Research Institutes of Sweden (RISE). He is co-editor of the first two books on maritime informatics and is co-editor of the book Maritime Decarbonization . He can be reached at Mikael.Lind@ri.se .

Logistics Technology News

Creating a digital platform for all

Notes: Average rail performance represents years 2017 to 2019 and 2023.

Average rail performance

Average rail performance: {valueY.formatNumber('#.##')}

Pandemic-era congestion (2020-2022)

Pandemic congestion: {valueY.formatNumber('#.##')}

Current Year

Current year: {valueY.formatNumber('#.##')}

Intermodal train cars holding refers to how many trains with containers or trailers are stopped outside of a designated terminal or crew change point due to a disruption to normal operations. The total in the chart is the rolling four-week average total of the US-based Class I railroads: BNSF Railway, CSX Transportation, Norfolk Southern and Union Pacific Railroad. Average rail performance is defined as the weekly performance prior to and after the pandemic-related freight surge. Pandemic-era congestion is the worst result for each week from 2020 through 2022. [STB](https://www.stb.gov/reports-data/rail-service-data/)

US intermodal trains held (STB)

US intermodal train holdings Gateway

<div class="phx-topic abstract-wrapper">The long-term effects of US tariffs and the removal of the de minimis exemption have disrupted established air cargo flows and is clouding the industry outlook for the year.</div>

The long-term effects of US tariffs and the removal of the de minimis exemption have disrupted established air cargo flows and is clouding the industry outlook for the year.

<div class="phx-topic">The air cargo industry is flying into a bumpy second half, with persistent uncertainty over US tariff levels and the bleeding of freight due to new US “de minimis” curbs on low-value Chinese goods. It is impacting every aspect of the industry, from disrupting cargo flows to capacity deployment to demand, and clouding the outlook for the year. “We just simply cannot predict how that is going to play out,” Brie Carere, FedEx’s chief customer officer, told investors on the company’s fourth-quarter earnings call on June 24. After volumes from the US to China “deteriorated sharply,” in May, FedEx said it couldn’t provide a full-year forecast due to the “uncertain global demand,” environment. Global air cargo spot rates declined for a second consecutive month in June, down 4% year over year as the supply of capacity overtook demand for the first time in 19 months, according to rate benchmarking platform Xeneta. “We are starting to see the longer-term effects of all this uncertainty because a lot of damage has been done,” Niall van de Wouw, chief air freight officer at Xeneta, said in a market update Friday. “This might be the new reality for the foreseeable future as the industry is facing a much more challenging second half of the year. The air cargo market is losing altitude amid so much uncertainty,” he added. After eliminating the duty-free exemption for low-value shipments from China valued at under $800 on May 2, the US on May 14 reduced the de minimis tariff on the low-value imports from 120% to 54%. Items sent via post from China to the US will be charged a flat fee of $100, regardless of value. In 2024, e-commerce shipments accounted for about 50% of China-to-US air freight volume, filling dozens of freighters every day. Data from air cargo analyst Rotate showed that in the days following May 2, 40 freighters per day were pulled out of the trans-Pacific. The International Air Transport Association (IATA) noted in an industry outlook this week that tariffs and the removal of the de minimis exemption have disrupted established air cargo flows, forcing carriers to adjust or redeploy capacity on certain routes. “Uncertainty remains high, which impedes planning and optimization along the supply chain, and further loss of momentum in the coming months cannot be ruled out,” IATA warned. <h3>Refocusing e-commerce efforts </h3>Tim van Leeuwen, head of consulting at Rotate, said China-US air cargo demand in May fell 28% year over year, driven by declines in both general air cargo and e-commerce, with early June figures showing the trend has continued. “Direct China-US freighter capacity in June was down 11% compared to March, wiping out capacity growth we have seen over the past year and returning to similar capacity as June 2024,” he told the Journal of Commerce. “The e-commerce platforms seem to be refocusing their efforts, with significant growth of exports to the European Union and Asia-Pacific replacing lost demand to the US,” he noted. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0bd62abc-58b3-4d7e-bfd7-9616da3c9b9c"></dynamic-object></div>Faced with such an uncertain and volatile trade lane, Van de Wouw said forwarders were taking a cautious approach to the market. “Around 46% of their procured volumes remain in the spot market, reflecting a belief that rates may yet fall further,” he said. “Their wait-and-see approach favours flexibility over long-term commitments — for now.” China-North America spot rates of $4.86/kg last week fell below $5/kg for the first time in almost two months, dropping 5% compared with the previous week, according to the Baltic Air Index (BAI). Spot rates from China to North Europe were at $4.23 per kilogram in the last week of June, down slightly compared with the previous week but remaining above the $4 mark since March. Dimerco Express Group put the total China-US cargo volumes decline at 60% in May and June, with e-commerce bookings down about 50%. The Taiwan-based forwarder noted in a July market outlook that there was no sign of recovery in e-commerce volume and scheduled freighter flights continue to be cancelled. <h3>Positive growth areas </h3>However, there are bright spots in the gloomy outlook. Demand out of Southeast Asia — particularly from Thailand and Vietnam — is rising ahead of the upcoming tariff deadline next week. President Donald Trump’s 90-day pause on so-called “reciprocal” tariffs ends at midnight on July 8. “Intra-Asia traffic is holding strong, especially on routes linking China with Taiwan, Vietnam, Thailand, Malaysia and Singapore,” said Kathy Liu, vice president of global sales and marketing at Dimerco Express Group. “Capacity on these lanes is tight, and we’re seeing higher rates compared to the same period last year,” she added. The summer season will also bring increased demand for perishable exports on the trans-Pacific, both out of Asia and on the backhaul routes, good news for airlines facing such dramatic cuts in e-commerce volume. “Air imports from Asia are expected to rebound and grow during the summer months, driven by the early peak shipping season. Shippers are ramping up volumes, particularly toward Asia, with a growing shift from ocean to air,” the forwarder said. Air freight space on the westbound routes will likely remain tight, with possible booking delays or rollovers, and Dimerco advised pre-booking at least five to seven days in advance for high-volume or time-sensitive cargo. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The air cargo industry is flying into a bumpy second half, with persistent uncertainty over US tariff levels and the bleeding of freight due to new US “de minimis” curbs on low-value Chinese goods. It is impacting every aspect of the industry, from disrupting cargo flows to capacity deployment to demand, and clouding the outlook for the year. “We just simply cannot predict how that is going to play out,” Brie Carere, FedEx’s chief customer officer, told investors on the company’s fourth-quarter earnings call on June 24. After volumes from the US to China “deteriorated sharply,” in May, FedEx said it couldn’t provide a full-year forecast due to the “uncertain global demand,” environment. Global air cargo spot rates declined for a second consecutive month in June, down 4% year over year as the supply of capacity overtook demand for the first time in 19 months, according to rate benchmarking platform Xeneta. “We are starting to see the longer-term effects of all this uncertainty because a lot of damage has been done,” Niall van de Wouw, chief air freight officer at Xeneta, said in a market update Friday. “This might be the new reality for the foreseeable future as the industry is facing a much more challenging second half of the year. The air cargo market is losing altitude amid so much uncertainty,” he added. After eliminating the duty-free exemption for low-value shipments from China valued at under $800 on May 2, the US on May 14 reduced the de minimis tariff on the low-value imports from 120% to 54%. Items sent via post from China to the US will be charged a flat fee of $100, regardless of value. In 2024, e-commerce shipments accounted for about 50% of China-to-US air freight volume, filling dozens of freighters every day. Data from air cargo analyst Rotate showed that in the days following May 2, 40 freighters per day were pulled out of the trans-Pacific. The International Air Transport Association (IATA) noted in an industry outlook this week that tariffs and the removal of the de minimis exemption have disrupted established air cargo flows, forcing carriers to adjust or redeploy capacity on certain routes. “Uncertainty remains high, which impedes planning and optimization along the supply chain, and further loss of momentum in the coming months cannot be ruled out,” IATA warned. Refocusing e-commerce efforts Tim van Leeuwen, head of consulting at Rotate, said China-US air cargo demand in May fell 28% year over year, driven by declines in both general air cargo and e-commerce, with early June figures showing the trend has continued. “Direct China-US freighter capacity in June was down 11% compared to March, wiping out capacity growth we have seen over the past year and returning to similar capacity as June 2024,” he told the Journal of Commerce. “The e-commerce platforms seem to be refocusing their efforts, with significant growth of exports to the European Union and Asia-Pacific replacing lost demand to the US,” he noted. Faced with such an uncertain and volatile trade lane, Van de Wouw said forwarders were taking a cautious approach to the market. “Around 46% of their procured volumes remain in the spot market, reflecting a belief that rates may yet fall further,” he said. “Their wait-and-see approach favours flexibility over long-term commitments — for now.” China-North America spot rates of $4.86/kg last week fell below $5/kg for the first time in almost two months, dropping 5% compared with the previous week, according to the Baltic Air Index (BAI). Spot rates from China to North Europe were at $4.23 per kilogram in the last week of June, down slightly compared with the previous week but remaining above the $4 mark since March. Dimerco Express Group put the total China-US cargo volumes decline at 60% in May and June, with e-commerce bookings down about 50%. The Taiwan-based forwarder noted in a July market outlook that there was no sign of recovery in e-commerce volume and scheduled freighter flights continue to be cancelled. Positive growth areas However, there are bright spots in the gloomy outlook. Demand out of Southeast Asia — particularly from Thailand and Vietnam — is rising ahead of the upcoming tariff deadline next week. President Donald Trump’s 90-day pause on so-called “reciprocal” tariffs ends at midnight on July 8. “Intra-Asia traffic is holding strong, especially on routes linking China with Taiwan, Vietnam, Thailand, Malaysia and Singapore,” said Kathy Liu, vice president of global sales and marketing at Dimerco Express Group. “Capacity on these lanes is tight, and we’re seeing higher rates compared to the same period last year,” she added. The summer season will also bring increased demand for perishable exports on the trans-Pacific, both out of Asia and on the backhaul routes, good news for airlines facing such dramatic cuts in e-commerce volume. “Air imports from Asia are expected to rebound and grow during the summer months, driven by the early peak shipping season. Shippers are ramping up volumes, particularly toward Asia, with a growing shift from ocean to air,” the forwarder said. Air freight space on the westbound routes will likely remain tight, with possible booking delays or rollovers, and Dimerco advised pre-booking at least five to seven days in advance for high-volume or time-sensitive cargo. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Carriers News

Trans-Pacific air cargo market flying into turbulent second half

<div class="phx-topic abstract-wrapper">Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia continue to cause ships to arrive outside their scheduled European arrival windows.</div>

Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia continue to cause ships to arrive outside their scheduled European arrival windows.

<div class="phx-topic">Container lines are making another round of changes to services to mitigate persistent congestion at European ports, avoiding maxed out terminals and overwhelmed inland rail and waterway networks. Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia are causing ships to arrive outside their scheduled European arrival windows. Strong peak season demand is piling on the pressure with the wave of incoming volume adding to congestion and forcing carriers to divert some services away from the congested import gateways. Mediterranean Shipping Co. has adjusted its Asia-Europe services to mitigate the delays, omitting some ports and adding others, while congestion at London Gateway is seeing CMA CGM’s Safran service from Europe to the East Coast of South America calling at Southampton instead. Maersk was scheduled to return its north-south NeoSamba service to London Gateway after moving it to Southampton in early June because of congestion but has decided to maintain the Southampton call. “The current diversion from London Gateway to Southampton will be extended by an additional four weeks, to maintain high service reliability during peak demand periods and to avoid port congestion,” Maersk told customers in its July market update this week. HMM is reporting yard density of 80% and above at several terminals in Rotterdam, Hamburg and Antwerp with full berths and vessels arriving late. Data this week from port visibility provider Portcast shows 11 vessels waiting to berth at Antwerp-Bruges, nine at Hamburg and seven at Rotterdam. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="5eb289f4-4310-4545-b840-86a556bf3fac"></dynamic-object></div>Kuehne + Nagel’s visibility tool SeaExplorer noted that port congestion in North European ports of Antwerp, Hamburg and Bremerhaven was extending transit times, with delays in berthing, operational disruptions and high yard utilization over 92% identified as key factors. Disruption is also extending into inland transport networks. Ocean Network Express is warning of long wait times for trucks and barges in North European hubs, with some terminals suspending the redelivery of empties, while Maersk warned customers of rail disruption in Hamburg from July 2 until July 9. “During this period, no rail transport to or from the Port of Hamburg will be operationally feasible, and customers are kindly asked to change their ocean bookings from Hamburg to Bremerhaven where possible,” the carrier noted. <h3>Low water limits barge loading </h3>Intermodal transport operator Contargo said average waiting times for the handling of its barges this week were 78 hours in Antwerp and 64 hours in Rotterdam. Contargo also warned that low water levels on the Rhine were limiting barge loading and generating low water surcharges. In the north of Italy, major infrastructure works are scheduled on the national railway line serving ports of Genoa, La Spezia and Vado Ligure. At the Port of Genoa, no rail services will be available between Aug. 2 and 31, with Maersk not accepting rail cargo from July 21. In the first four months of 2025, total Asia-Europe volume was up 9% year over year at 6.13 million TEUs, with the Asia-North Europe segment rising 6.6% to 3.72 million TEUs and Asia-Mediterranean surging 12.14% to 2.4 million TEUs, according to the latest volume data from Container Trades Statistics. While Asia-Europe volume data for June is not yet available, carriers and forwarders are reporting robust cargo bookings through the summer months. At the same time, carriers have deployed a record amount of capacity on the North Europe corridor in July while also increasing blank sailings on the trade lane. Freight-all-kinds (FAK) rate increases for Asia-North Europe were imposed from July 1 by MSC ($4,300 per FEU) and CMA CGM ($4,100/FEU), pushing rates on the trade lane up almost $500 to $3,350/FEU, according to rate benchmarking platform Xeneta. Data from visibility provider eeSea shows carriers on Asia-North Europe will deploy a record 1.15 million TEUs in capacity in July and blank 85,727 TEUs. In August, the deployed capacity will drop to just over 1 million TEUs while 104,790 TEUs will be cut from the trade. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="6a5146cf-79d1-41fa-85fb-c1916fc625ac"></dynamic-object></div>Carriers are taking the opposite approach on Asia-Mediterranean, where a record 882,845 TEUs of capacity will be deployed in August, up 50,000 TEUs compared with July, eeSea data shows. Blank sailings will decline from almost 80,000 TEUs in July to 20,000 TEUs in August. “Strong demand from Asia to North Europe and the Mediterranean is forecast for the rest of July in line with seasonality ... we encourage customers to book as early as possible in order to secure space,” advised Maersk in its July update. Forwarders are giving their customers the same advice. “To avoid delays caused by congestion, blank sailings, and container shortages, it is recommended to book space at least one to two weeks in advance for Asia and EU ports,” Taiwan-based forwarder Dimerco Express Group noted in a July market report. Dimerco said some China origins were beginning to apply overweight surcharges to Asia-Europe containers as carriers prioritized light cargo and high-cube containers to improve ship utilization. “Early booking is strongly recommended for heavy cargo in small containers,” the forwarder warned. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Container lines are making another round of changes to services to mitigate persistent congestion at European ports, avoiding maxed out terminals and overwhelmed inland rail and waterway networks. Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia are causing ships to arrive outside their scheduled European arrival windows. Strong peak season demand is piling on the pressure with the wave of incoming volume adding to congestion and forcing carriers to divert some services away from the congested import gateways. Mediterranean Shipping Co. has adjusted its Asia-Europe services to mitigate the delays, omitting some ports and adding others, while congestion at London Gateway is seeing CMA CGM’s Safran service from Europe to the East Coast of South America calling at Southampton instead. Maersk was scheduled to return its north-south NeoSamba service to London Gateway after moving it to Southampton in early June because of congestion but has decided to maintain the Southampton call. “The current diversion from London Gateway to Southampton will be extended by an additional four weeks, to maintain high service reliability during peak demand periods and to avoid port congestion,” Maersk told customers in its July market update this week. HMM is reporting yard density of 80% and above at several terminals in Rotterdam, Hamburg and Antwerp with full berths and vessels arriving late. Data this week from port visibility provider Portcast shows 11 vessels waiting to berth at Antwerp-Bruges, nine at Hamburg and seven at Rotterdam. Kuehne + Nagel’s visibility tool SeaExplorer noted that port congestion in North European ports of Antwerp, Hamburg and Bremerhaven was extending transit times, with delays in berthing, operational disruptions and high yard utilization over 92% identified as key factors. Disruption is also extending into inland transport networks. Ocean Network Express is warning of long wait times for trucks and barges in North European hubs, with some terminals suspending the redelivery of empties, while Maersk warned customers of rail disruption in Hamburg from July 2 until July 9. “During this period, no rail transport to or from the Port of Hamburg will be operationally feasible, and customers are kindly asked to change their ocean bookings from Hamburg to Bremerhaven where possible,” the carrier noted. Low water limits barge loading Intermodal transport operator Contargo said average waiting times for the handling of its barges this week were 78 hours in Antwerp and 64 hours in Rotterdam. Contargo also warned that low water levels on the Rhine were limiting barge loading and generating low water surcharges. In the north of Italy, major infrastructure works are scheduled on the national railway line serving ports of Genoa, La Spezia and Vado Ligure. At the Port of Genoa, no rail services will be available between Aug. 2 and 31, with Maersk not accepting rail cargo from July 21. In the first four months of 2025, total Asia-Europe volume was up 9% year over year at 6.13 million TEUs, with the Asia-North Europe segment rising 6.6% to 3.72 million TEUs and Asia-Mediterranean surging 12.14% to 2.4 million TEUs, according to the latest volume data from Container Trades Statistics. While Asia-Europe volume data for June is not yet available, carriers and forwarders are reporting robust cargo bookings through the summer months. At the same time, carriers have deployed a record amount of capacity on the North Europe corridor in July while also increasing blank sailings on the trade lane. Freight-all-kinds (FAK) rate increases for Asia-North Europe were imposed from July 1 by MSC ($4,300 per FEU) and CMA CGM ($4,100/FEU), pushing rates on the trade lane up almost $500 to $3,350/FEU, according to rate benchmarking platform Xeneta. Data from visibility provider eeSea shows carriers on Asia-North Europe will deploy a record 1.15 million TEUs in capacity in July and blank 85,727 TEUs. In August, the deployed capacity will drop to just over 1 million TEUs while 104,790 TEUs will be cut from the trade. Carriers are taking the opposite approach on Asia-Mediterranean, where a record 882,845 TEUs of capacity will be deployed in August, up 50,000 TEUs compared with July, eeSea data shows. Blank sailings will decline from almost 80,000 TEUs in July to 20,000 TEUs in August. “Strong demand from Asia to North Europe and the Mediterranean is forecast for the rest of July in line with seasonality ... we encourage customers to book as early as possible in order to secure space,” advised Maersk in its July update. Forwarders are giving their customers the same advice. “To avoid delays caused by congestion, blank sailings, and container shortages, it is recommended to book space at least one to two weeks in advance for Asia and EU ports,” Taiwan-based forwarder Dimerco Express Group noted in a July market report. Dimerco said some China origins were beginning to apply overweight surcharges to Asia-Europe containers as carriers prioritized light cargo and high-cube containers to improve ship utilization. “Early booking is strongly recommended for heavy cargo in small containers,” the forwarder warned. Contact Greg Knowler at greg.knowler@spglobal.com .

Ocean carriers adjust calls as congestion chokes European hubs

<div class="phx-topic abstract-wrapper">The federal watchdog agency said the US Maritime Administration has financial levers to help the domestic shipbuilding industry but doesn’t know their effectiveness.</div>

The federal watchdog agency said the US Maritime Administration has financial levers to help the domestic shipbuilding industry but doesn’t know their effectiveness.

<div class="phx-topic">US shipbuilding capacity is hampered by underutilized and poorly funded government incentives, a federal watchdog agency said as it urged the US Maritime Administration (Marad) to take a more active role in programs aimed at reviving the domestic maritime industry. After a year-and-half study on the US commercial maritime industry, the Government Accountability Office (GAO) said that US shipbuilders face challenges in reviving their industry due to competition from other modes of transportation, fewer economies of scale than overseas shipbuilders and aging infrastructure. President Donald Trump has promoted domestic shipbuilding during his second term, and his administration is on track to tax Chinese tonnage starting Oct. 14. The GAO, often referred to as the congressional watchdog, suggested encouraging Jones Act vessels to move more goods between US ports, providing US shipbuilders with larger and more consistent order books, and partnering with foreign shipbuilders to modernize US yards. While government financial programs aim to offset some of the costs of building ships in the US, “the programs’ administration does not follow leading practices for assessing program performance,” the GAO said, adding that Marad needs to look more closely at its incentives. “The Maritime Administration cannot determine to what extent the programs are effective in growing the US maritime fleet because it has not established measurable goals for, or assessed the performance of, these programs,” the report said. The GAO report, funded through a 2023 defense spending bill, arrives after <a href="https://www.joc.com/article/trump-signs-order-for-us-shipbuilding-but-stays-mute-on-port-fees-5980539">President Trump’s April executive order</a> aimed at restoring US shipbuilding through steps such as developing a maritime action plan, establishing a trust fund for the US maritime industry, and collecting harbor maintenance fees on US imports that move through Canada and Mexico first. That effort will also be funded through <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">new tariffs to be collected starting in October</a> on Chinese-operated or -built ships that enter US ports. <h3>Programs under scrutiny </h3>For its part, Marad administers four programs aimed at domestic shipbuilding, but their effectiveness remains unclear, the report said. For example, the Federal Ship Financing Program, which offers loan guarantees for US-built ships, only executed guarantees for two vessel owners totaling $400 million over the last five years, the report said. While the guarantee is “a low-volume program, but has a high impact,” Marad has become more risk averse about which loans it will guarantee, the GAO report said, disincentivizing some companies from using the program. Another incentive, the Small Shipyard Grant Program, allows shipyards to buy new equipment. Congress appropriated about $20 million to the program annually since 2018, but it only received $8.75 million in funding for the 2024 fiscal year. However, the GAO found that shipbuilding and repair companies have requested about $50 million in grant funding. While the grantees said they benefitted from the program, the GAO said the program’s overall effectiveness is unclear because Marad “does not have measurable goals and does not assess the performance of the program.” Marad is supposed to collect data on how the grant improved shipyard operations, but the GAO found the data reporting is spotty. “Maritime Administration officials follow a multistep process for awarding grants to shipyards that apply to the Small Shipyard Grant program, but they do not document their decision rationale for why they award or do not award grants,” the GAO said, as it urged Marad to delve more deeply into its incentive programs. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US shipbuilding capacity is hampered by underutilized and poorly funded government incentives, a federal watchdog agency said as it urged the US Maritime Administration (Marad) to take a more active role in programs aimed at reviving the domestic maritime industry. After a year-and-half study on the US commercial maritime industry, the Government Accountability Office (GAO) said that US shipbuilders face challenges in reviving their industry due to competition from other modes of transportation, fewer economies of scale than overseas shipbuilders and aging infrastructure. President Donald Trump has promoted domestic shipbuilding during his second term, and his administration is on track to tax Chinese tonnage starting Oct. 14. The GAO, often referred to as the congressional watchdog, suggested encouraging Jones Act vessels to move more goods between US ports, providing US shipbuilders with larger and more consistent order books, and partnering with foreign shipbuilders to modernize US yards. While government financial programs aim to offset some of the costs of building ships in the US, “the programs’ administration does not follow leading practices for assessing program performance,” the GAO said, adding that Marad needs to look more closely at its incentives. “The Maritime Administration cannot determine to what extent the programs are effective in growing the US maritime fleet because it has not established measurable goals for, or assessed the performance of, these programs,” the report said. The GAO report, funded through a 2023 defense spending bill, arrives after President Trump’s April executive order aimed at restoring US shipbuilding through steps such as developing a maritime action plan, establishing a trust fund for the US maritime industry, and collecting harbor maintenance fees on US imports that move through Canada and Mexico first. That effort will also be funded through new tariffs to be collected starting in October on Chinese-operated or -built ships that enter US ports. Programs under scrutiny For its part, Marad administers four programs aimed at domestic shipbuilding, but their effectiveness remains unclear, the report said. For example, the Federal Ship Financing Program, which offers loan guarantees for US-built ships, only executed guarantees for two vessel owners totaling $400 million over the last five years, the report said. While the guarantee is “a low-volume program, but has a high impact,” Marad has become more risk averse about which loans it will guarantee, the GAO report said, disincentivizing some companies from using the program. Another incentive, the Small Shipyard Grant Program, allows shipyards to buy new equipment. Congress appropriated about $20 million to the program annually since 2018, but it only received $8.75 million in funding for the 2024 fiscal year. However, the GAO found that shipbuilding and repair companies have requested about $50 million in grant funding. While the grantees said they benefitted from the program, the GAO said the program’s overall effectiveness is unclear because Marad “does not have measurable goals and does not assess the performance of the program.” Marad is supposed to collect data on how the grant improved shipyard operations, but the GAO found the data reporting is spotty. “Maritime Administration officials follow a multistep process for awarding grants to shipyards that apply to the Small Shipyard Grant program, but they do not document their decision rationale for why they award or do not award grants,” the GAO said, as it urged Marad to delve more deeply into its incentive programs. Contact Michael Angell at michael.angell@spglobal.com .

US shipbuilding incentives need more oversight: GAO

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">In the latest course correction in the US’ busiest trade lane, carriers are set to deploy less tonnage in August as spot rates fall and retail import forecasts weaken. </div>

In the latest course correction in the US’ busiest trade lane, carriers are set to deploy less tonnage in August as spot rates fall and retail import forecasts weaken.

<div class="phx-topic">Container lines are pulling back on the deployment of tonnage from Asia to the US in August in the latest course correction linked to stop-and-start import demand amid tariff uncertainty. Container lines are set to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, equating to 90,000 TEUs of capacity, according to maritime intelligence provider eeSea. Comparatively, ocean capacity from Asia to US East and Gulf coasts will be trimmed by just 1.7%. Mediterranean Shipping Co. this week suspended its Pearl service to Long Beach, with the last sailing out of Xiamen on July 13, according to Kuehne + Nagel’s SeaExplorer tool. Container lines can also blank sailings — removing ships from services or skipping ports — to further calibrate capacity to weakening demand.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0d272fa5-b752-4ec3-a342-964ef1a2b1f3"></dynamic-object></div>The rate of blanking compared with deployed capacity in May reached 26%, equating to 262,000 TEUs, as carriers adjusted networks, according to eeSea. In June, the rate was 9.5%. <h3>Tariff whiplash </h3>Carriers began pushing capacity back into the trade in May in anticipation of a surge of imports from China, driven by an early peak season caused in large part by the 90-day reprieve on higher US tariffs. Just a month earlier, US importers canceled China bookings after President Donald Trump on April 9 imposed 145% tariffs. In response, ocean carriers blanked sailings and suspended services, although Trump soon reversed course. Now carriers face an expanding capacity overhang amid downbeat retail import forecasts and the surge in US imports linked to the initial tariff reprieve in its last gasp. The tentative agreement with China to bring US tariffs to 55% hasn’t had much impact on importers’ peak season ordering, thanks to more than eight months of frontloading shipments and a narrow window for getting goods in before the year-end shopping season. While US retailers <a href="https://www.joc.com/article/pause-on-tariffs-prompts-us-retailers-to-upgrade-summer-import-forecast-6022230">upgraded their import forecast</a> slightly in early June, their volume expectations still lag the same period in 2024. US imports are expected to reach 2.13 million TEUs this month, down from 2.32 million TEUs a year ago, according to the Global Port Tracker. Retailers plan to bring in 14.7% less volume, equating to 331,000 TEUs of capacity, next month compared with August 2024. US laden imports from Asia have been falling since September, with the exception of a short-lived recovery in April, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. In September, inbound volumes hit 1.79 million TEUs, falling to 1.4 million TEUs by May. Container spot rates from Asia to the US, a barometer of how capacity is matching up to demand, have been falling for a month, according to various indexes. For example, container spot rates from Shanghai to the US West Coast last week were less than half the price a month ago, at $2,089 per FEU, according to the Shanghai Containerized Freight Index. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com ">mark.szakonyi@spglobal.com</a>. </div>

Container lines are pulling back on the deployment of tonnage from Asia to the US in August in the latest course correction linked to stop-and-start import demand amid tariff uncertainty. Container lines are set to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, equating to 90,000 TEUs of capacity, according to maritime intelligence provider eeSea. Comparatively, ocean capacity from Asia to US East and Gulf coasts will be trimmed by just 1.7%. Mediterranean Shipping Co. this week suspended its Pearl service to Long Beach, with the last sailing out of Xiamen on July 13, according to Kuehne + Nagel’s SeaExplorer tool. Container lines can also blank sailings — removing ships from services or skipping ports — to further calibrate capacity to weakening demand. The rate of blanking compared with deployed capacity in May reached 26%, equating to 262,000 TEUs, as carriers adjusted networks, according to eeSea. In June, the rate was 9.5%. Tariff whiplash Carriers began pushing capacity back into the trade in May in anticipation of a surge of imports from China, driven by an early peak season caused in large part by the 90-day reprieve on higher US tariffs. Just a month earlier, US importers canceled China bookings after President Donald Trump on April 9 imposed 145% tariffs. In response, ocean carriers blanked sailings and suspended services, although Trump soon reversed course. Now carriers face an expanding capacity overhang amid downbeat retail import forecasts and the surge in US imports linked to the initial tariff reprieve in its last gasp. The tentative agreement with China to bring US tariffs to 55% hasn’t had much impact on importers’ peak season ordering, thanks to more than eight months of frontloading shipments and a narrow window for getting goods in before the year-end shopping season. While US retailers upgraded their import forecast slightly in early June, their volume expectations still lag the same period in 2024. US imports are expected to reach 2.13 million TEUs this month, down from 2.32 million TEUs a year ago, according to the Global Port Tracker. Retailers plan to bring in 14.7% less volume, equating to 331,000 TEUs of capacity, next month compared with August 2024. US laden imports from Asia have been falling since September, with the exception of a short-lived recovery in April, according to PIERS, a sister product of the Journal of Commerce within S&P Global. In September, inbound volumes hit 1.79 million TEUs, falling to 1.4 million TEUs by May. Container spot rates from Asia to the US, a barometer of how capacity is matching up to demand, have been falling for a month, according to various indexes. For example, container spot rates from Shanghai to the US West Coast last week were less than half the price a month ago, at $2,089 per FEU, according to the Shanghai Containerized Freight Index. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container lines cutting trans-Pacific capacity overhang

<div class="phx-topic abstract-wrapper">The routing impasse between the railroads threatens supply chain disruptions for ocean carrier CMA CGM, which has cargo booked on the service that is due to begin later this week.</div>

The routing impasse between the railroads threatens supply chain disruptions for ocean carrier CMA CGM, which has cargo booked on the service that is due to begin later this week.

<div class="phx-topic">BNSF Railway has filed an <a href="https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1751927358207/309737.pdf">emergency petition</a> with the US Surface Transportation Board (STB) to intervene in a dispute with Union Pacific Railroad (UP) in which BNSF alleges UP is blocking the launch of a new freight service between the Port of Oakland and Salt Lake City. The impasse threatens supply chain disruptions for ocean carrier CMA CGM, which has cargo booked on the service that is due to begin later this week. The disagreement involves how BNSF will route trains between Oakland and Salt Lake City. BNSF wants to run a double-stack intermodal service along the so-called Northern Route, which passes through Northern California and Nevada. UP said BNSF must instead use the Southern Route over Donner Pass near Lake Tahoe, where UP invested in costly tunnel upgrades more than a decade ago. The route selected has financial implications for both Class I railroads, including how many train crews are needed and whether BNSF would owe Union Pacific millions of dollars for using the upgraded Southern Route. BNSF has the right to use UP-owned tracks between Oakland and Salt Lake City. However, UP controls dispatching and provides train crews, and without its cooperation, BNSF cannot move containers across the corridor. The dispute, meanwhile, threatens the launch of an international intermodal service scheduled for later this week. CMA CGM called the matter “deeply concerning” and costly for cargo owners. “Without immediate resolution, our supply chain will be disrupted, impacting our customers across the region, including potentially a loss of business,” Bob Basila, senior vice president of CMA CGM, wrote in <a href="https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1751927391221/309738.pdf">a filing to the STB Monday</a>. “We have made substantial operational and commercial commitments based on the availability of this service, and the current impasse threatens to undermine those investments.” BNSF said emergency relief is necessary given freight has already arrived in Oakland. “The first empty train arrived in Salt Lake City [July 6] and the first container arrived [July 7],” BNSF wrote Monday in its petition to the STB. “Once loaded, the first westbound train is expected to leave Salt Lake City this week. BNSF anticipates the first eastbound movement of BNSF double-stack intermodal trains over the Northern Route will begin as early as later this week.” There is potential for business growth in Salt Lake City for ocean carriers. In 2020, ocean carriers handled nearly 52,000 TEUs between Oakland and Salt Lake City, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. The total, however, has fallen each subsequent year, ending last year at 16,600 TEUs. If ocean carriers were able to return to the 2020 total, it would be enough volume to support multiple trains per week in both directions, although it’s unlikely there would be daily trains. <h3>Allegations fly in both directions </h3>BNSF told the STB it would prefer to use the Northern Route and claimed UP is employing delay tactics in retaliation for BNSF signing multi-year agreements with two former UP ocean carrier partners, including CMA CGM. UP alleges that BNSF did not provide sufficient prior notice to hire crews and plan resources to handle up to five trains per week in both directions between Oakland and Salt Lake City and requires more time to prepare. Carl Garrison, UP’s vice president of network planning and operations, said BNSF only notified UP senior staff of its needs on June 20. BNSF countered that it contacted UP on May 2, including written correspondence and follow-up phone calls. “If BNSF cannot fulfill its promises to begin running new intermodal service this week, it has only itself to blame,” UP wrote in <a href="https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1751971741044/309739.pdf">its response Monday</a> to the STB. UP also said trains on the Northern Route primarily run westbound, so running a bi-directional service would require significant operational adjustments and could degrade the performance of existing trains. It added that the Southern Route is best equipped to handle bi-directional traffic. The Southern Route was upgraded in 2009 to accommodate double-stack intermodal trains. If BNSF uses it, the company could be required to reimburse UP for up to half the cost of those improvements. BNSF argues doing so would cost tens of millions of dollars, making the new service financially unsustainable. BNSF would only need to pay for crew services, dispatching and track access on the Northern Route, a much lower figure. UP also said the matter should go through the normal STB dispute process, not an emergency filing. The normal dispute resolution process outlined in a 2002 agreement includes meetings, executive escalation, and potential arbitration or mediation, which can take far longer to resolve. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

BNSF Railway has filed an emergency petition with the US Surface Transportation Board (STB) to intervene in a dispute with Union Pacific Railroad (UP) in which BNSF alleges UP is blocking the launch of a new freight service between the Port of Oakland and Salt Lake City. The impasse threatens supply chain disruptions for ocean carrier CMA CGM, which has cargo booked on the service that is due to begin later this week. The disagreement involves how BNSF will route trains between Oakland and Salt Lake City. BNSF wants to run a double-stack intermodal service along the so-called Northern Route, which passes through Northern California and Nevada. UP said BNSF must instead use the Southern Route over Donner Pass near Lake Tahoe, where UP invested in costly tunnel upgrades more than a decade ago. The route selected has financial implications for both Class I railroads, including how many train crews are needed and whether BNSF would owe Union Pacific millions of dollars for using the upgraded Southern Route. BNSF has the right to use UP-owned tracks between Oakland and Salt Lake City. However, UP controls dispatching and provides train crews, and without its cooperation, BNSF cannot move containers across the corridor. The dispute, meanwhile, threatens the launch of an international intermodal service scheduled for later this week. CMA CGM called the matter “deeply concerning” and costly for cargo owners. “Without immediate resolution, our supply chain will be disrupted, impacting our customers across the region, including potentially a loss of business,” Bob Basila, senior vice president of CMA CGM, wrote in a filing to the STB Monday . “We have made substantial operational and commercial commitments based on the availability of this service, and the current impasse threatens to undermine those investments.” BNSF said emergency relief is necessary given freight has already arrived in Oakland. “The first empty train arrived in Salt Lake City [July 6] and the first container arrived [July 7],” BNSF wrote Monday in its petition to the STB. “Once loaded, the first westbound train is expected to leave Salt Lake City this week. BNSF anticipates the first eastbound movement of BNSF double-stack intermodal trains over the Northern Route will begin as early as later this week.” There is potential for business growth in Salt Lake City for ocean carriers. In 2020, ocean carriers handled nearly 52,000 TEUs between Oakland and Salt Lake City, according to PIERS, a sister product of the Journal of Commerce within S&P Global. The total, however, has fallen each subsequent year, ending last year at 16,600 TEUs. If ocean carriers were able to return to the 2020 total, it would be enough volume to support multiple trains per week in both directions, although it’s unlikely there would be daily trains. Allegations fly in both directions BNSF told the STB it would prefer to use the Northern Route and claimed UP is employing delay tactics in retaliation for BNSF signing multi-year agreements with two former UP ocean carrier partners, including CMA CGM. UP alleges that BNSF did not provide sufficient prior notice to hire crews and plan resources to handle up to five trains per week in both directions between Oakland and Salt Lake City and requires more time to prepare. Carl Garrison, UP’s vice president of network planning and operations, said BNSF only notified UP senior staff of its needs on June 20. BNSF countered that it contacted UP on May 2, including written correspondence and follow-up phone calls. “If BNSF cannot fulfill its promises to begin running new intermodal service this week, it has only itself to blame,” UP wrote in its response Monday to the STB. UP also said trains on the Northern Route primarily run westbound, so running a bi-directional service would require significant operational adjustments and could degrade the performance of existing trains. It added that the Southern Route is best equipped to handle bi-directional traffic. The Southern Route was upgraded in 2009 to accommodate double-stack intermodal trains. If BNSF uses it, the company could be required to reimburse UP for up to half the cost of those improvements. BNSF argues doing so would cost tens of millions of dollars, making the new service financially unsustainable. BNSF would only need to pay for crew services, dispatching and track access on the Northern Route, a much lower figure. UP also said the matter should go through the normal STB dispute process, not an emergency filing. The normal dispute resolution process outlined in a 2002 agreement includes meetings, executive escalation, and potential arbitration or mediation, which can take far longer to resolve. Contact Ari Ashe at ari.ashe@spglobal.com .

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North American ports

BNSF-UP dispute threatens Oakland-SLC service, triggers STB petition

<div class="phx-topic abstract-wrapper">But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation and Hackett Associates said in their latest Global Port Tracker.</div>

But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation and Hackett Associates said in their latest Global Port Tracker.

<div class="phx-topic">US imports in July are expected to hit their highest level in at least the past 18 months and their peak for 2025, driven by the Aug. 1 extension granted by the Trump administration before the implementation of so-called reciprocal tariffs on a host of US trading partners, a major retail group said Wednesday. But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation (NRF) and Hackett Associates said in their latest Global Port Tracker (GPT). “The tariff situation remains highly fluid and retailers are working hard to stock up for the holiday season before the various tariffs that have been announced and paused actually take effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “Retailers have brought in as much merchandise as possible ahead of the reciprocal tariffs taking effect...” The White House’s unexpected extension of a 90-day pause in new tariffs that were due to take effect July 9 caused the NRF and Hackett to upgrade their import projections for July through October compared with June’s GPT. And while Gold said the brief extension was “greatly appreciated” by retailers, he chided the Trump administration for the seeming whiplash nature of its tariff policy. “...Uncertainty over tariffs makes it increasingly difficult for retailers to plan, especially small businesses that have no capacity to absorb tariffs,” he said. “...It is vital for the administration to finalize negotiations with our trading partners and provide stability and certainty for US retailers.” <h3>Big bump in July forecast </h3>The GPT’s updated forecast calls for 2.36 million TEUs in US imports in July, up almost 11% from the June GPT and surpassing the 2.32 million TEUs brought in during July 2024. July is the only month in the second half of 2025 forecast to see year-over-year increases, so far. In August, retailers expect US imports to reach 2.08 million TEUs, up 5% from the forecast made in June but more than 10% under the 2.32 million TEUs imported in August 2024. September import projections were upgraded to 1.82 million TEUs — up 2.2% from the projection made last month but nearly 20% below year-ago levels. October’s import forecast increased by just half a percent to 1.81 million TEUs, 19.1% below volumes from October 2024. In its initial forecast for November, the GPT pegs imports at 1.7 million TEUs, down 16.2% year over year. Amid the forecasts for significant year-over-year import declines for the second half of 2025, Hackett Associates founder Ben Hackett pointed to supply chain uncertainty exacerbated by shifting tariff policies. “The global supply chain functions best in a trade environment that is smooth and predictable,” he said. “Instead, it has been forced to contend with erratic policies and geopolitical volatility.” The latest GPT projects June’s import volumes will come in at 2.06 million TEUs, up about 2.5% from the forecast made last month. Meanwhile, May’s actual volume of 1.95 million TEUs was about 2% higher than projected in the prior GPT. As volumes in the trans-Pacific look to retract beyond July, carriers have responded with reductions to capacity, with plans to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, according to maritime intelligence provider eeSea. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

US imports in July are expected to hit their highest level in at least the past 18 months and their peak for 2025, driven by the Aug. 1 extension granted by the Trump administration before the implementation of so-called reciprocal tariffs on a host of US trading partners, a major retail group said Wednesday. But the mini rush will be short-lived, with imports falling month to month between August and November, the National Retail Federation (NRF) and Hackett Associates said in their latest Global Port Tracker (GPT). “The tariff situation remains highly fluid and retailers are working hard to stock up for the holiday season before the various tariffs that have been announced and paused actually take effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “Retailers have brought in as much merchandise as possible ahead of the reciprocal tariffs taking effect...” The White House’s unexpected extension of a 90-day pause in new tariffs that were due to take effect July 9 caused the NRF and Hackett to upgrade their import projections for July through October compared with June’s GPT. And while Gold said the brief extension was “greatly appreciated” by retailers, he chided the Trump administration for the seeming whiplash nature of its tariff policy. “...Uncertainty over tariffs makes it increasingly difficult for retailers to plan, especially small businesses that have no capacity to absorb tariffs,” he said. “...It is vital for the administration to finalize negotiations with our trading partners and provide stability and certainty for US retailers.” Big bump in July forecast The GPT’s updated forecast calls for 2.36 million TEUs in US imports in July, up almost 11% from the June GPT and surpassing the 2.32 million TEUs brought in during July 2024. July is the only month in the second half of 2025 forecast to see year-over-year increases, so far. In August, retailers expect US imports to reach 2.08 million TEUs, up 5% from the forecast made in June but more than 10% under the 2.32 million TEUs imported in August 2024. September import projections were upgraded to 1.82 million TEUs — up 2.2% from the projection made last month but nearly 20% below year-ago levels. October’s import forecast increased by just half a percent to 1.81 million TEUs, 19.1% below volumes from October 2024. In its initial forecast for November, the GPT pegs imports at 1.7 million TEUs, down 16.2% year over year. Amid the forecasts for significant year-over-year import declines for the second half of 2025, Hackett Associates founder Ben Hackett pointed to supply chain uncertainty exacerbated by shifting tariff policies. “The global supply chain functions best in a trade environment that is smooth and predictable,” he said. “Instead, it has been forced to contend with erratic policies and geopolitical volatility.” The latest GPT projects June’s import volumes will come in at 2.06 million TEUs, up about 2.5% from the forecast made last month. Meanwhile, May’s actual volume of 1.95 million TEUs was about 2% higher than projected in the prior GPT. As volumes in the trans-Pacific look to retract beyond July, carriers have responded with reductions to capacity, with plans to deploy 6.2% less tonnage from Asia to the US West Coast in August than in July, according to maritime intelligence provider eeSea. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at laura.robb@spglobal.com .

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