<div class="phx-topic abstract-wrapper">At first blush, the fees targeting US entities would affect Matson, Maersk Line and APL, part of the CMA CGM group.</div>

At first blush, the fees targeting US entities would affect Matson, Maersk Line and APL, part of the CMA CGM group.

Feature image

<div class="phx-topic">(Updated to add comment from Matson). China on Friday outlined new port fees targeting ships operated or owned by US companies. The plan mirrors the one the White House is set to implement Tuesday that targets Chinese tonnage. In a statement urging the US government to change course, China’s Ministry of Transport said starting Oct. 14 — the same day the US port fees go into effect — it would begin charging US-operated ships or those where US shareholders control more than a 25% stake. China’s retaliatory fees, which start in the first year at 400 renminbi ($56) per net ton, would hit the likes of US-owned Matson harder than US fees would hit Cosco Shipping. The measures, which mirror those imposed on Chinese-owned or -built ships calling at US ports, were announced by the Transport Ministry in a two-page statement. The fees also apply to US-flagged ships and US-built vessels. The ministry said the fees are being introduced in direct retaliation to the US Trade Representative’s (USTR) moves to impose port fees on Chinese-owned, -controlled or -built ships, adding the US fees “seriously violate the relevant principles of international trade and the Sino-US maritime agreement and causes serious damage to maritime trade between China and the United States.” “We urge the United States to immediately correct its wrong practices and stop its unreasonable suppression of China’s maritime industry,” a ministry spokesperson said. Under China’s plan, the targeted US ships will be charged $56 per net ton from next week, increasing to $90 per net ton from April 17, 2026; $123 from April 17, 2027; and $157 from April 17, 2028. “If a ship calls at multiple Chinese ports on the same voyage, the special port fee for the ship shall be paid only at the first port of call, and the subsequent port of call shall not be charged,” the Transport Ministry said. “The same ship shall be charged no more than five voyages within a year.” By comparison, the USTR fee schedule will charge the targeted Chinese vessels $50 per net ton and the higher of $18 per net ton or $120 per container discharged. <h3>Maersk, Matson and APL under the gun </h3>At first blush, the fees targeting US entities would affect Matson, Maersk Line and APL, part of the CMA CGM group. “Furthermore, this could also apply to vessels owned by Seaspan,” Lars Jensen, a maritime analyst and Journal of Commerce contributor, said in a LinkedIn post Friday. “Seaspan’s ultimate owner is Poseidon, where it seems that just over 25% of the ownership is US-based. “This could be quite an impact as it means that the more than 100 vessels owned by Seaspan, and chartered by a variety of major container lines, would now be subject to fees in China in addition to the fees in the US for their Chinese-built vessels,” Jensen added. Matson told customers in an advisory Friday it had no plans to change its service schedule and would not pass on the cost of China’s new port fees to customers via a surcharge. “We remain fully committed to providing...service offerings from China and the trans-Pacific market to the US,” the carrier said. The China port fees would apparently not apply to Israel’s Zim Integrated Shipping Services because, while there is a substantial US shareholding, the almost 19% would not cross the required threshold. The Transport Ministry said the fees will be collected by the maritime administration agency responsible for the port that is the ship’s first call. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

(Updated to add comment from Matson). China on Friday outlined new port fees targeting ships operated or owned by US companies. The plan mirrors the one the White House is set to implement Tuesday that targets Chinese tonnage. In a statement urging the US government to change course, China’s Ministry of Transport said starting Oct. 14 — the same day the US port fees go into effect — it would begin charging US-operated ships or those where US shareholders control more than a 25% stake. China’s retaliatory fees, which start in the first year at 400 renminbi ($56) per net ton, would hit the likes of US-owned Matson harder than US fees would hit Cosco Shipping. The measures, which mirror those imposed on Chinese-owned or -built ships calling at US ports, were announced by the Transport Ministry in a two-page statement. The fees also apply to US-flagged ships and US-built vessels. The ministry said the fees are being introduced in direct retaliation to the US Trade Representative’s (USTR) moves to impose port fees on Chinese-owned, -controlled or -built ships, adding the US fees “seriously violate the relevant principles of international trade and the Sino-US maritime agreement and causes serious damage to maritime trade between China and the United States.” “We urge the United States to immediately correct its wrong practices and stop its unreasonable suppression of China’s maritime industry,” a ministry spokesperson said. Under China’s plan, the targeted US ships will be charged $56 per net ton from next week, increasing to $90 per net ton from April 17, 2026; $123 from April 17, 2027; and $157 from April 17, 2028. “If a ship calls at multiple Chinese ports on the same voyage, the special port fee for the ship shall be paid only at the first port of call, and the subsequent port of call shall not be charged,” the Transport Ministry said. “The same ship shall be charged no more than five voyages within a year.” By comparison, the USTR fee schedule will charge the targeted Chinese vessels $50 per net ton and the higher of $18 per net ton or $120 per container discharged. Maersk, Matson and APL under the gun At first blush, the fees targeting US entities would affect Matson, Maersk Line and APL, part of the CMA CGM group. “Furthermore, this could also apply to vessels owned by Seaspan,” Lars Jensen, a maritime analyst and Journal of Commerce contributor, said in a LinkedIn post Friday. “Seaspan’s ultimate owner is Poseidon, where it seems that just over 25% of the ownership is US-based. “This could be quite an impact as it means that the more than 100 vessels owned by Seaspan, and chartered by a variety of major container lines, would now be subject to fees in China in addition to the fees in the US for their Chinese-built vessels,” Jensen added. Matson told customers in an advisory Friday it had no plans to change its service schedule and would not pass on the cost of China’s new port fees to customers via a surcharge. “We remain fully committed to providing...service offerings from China and the trans-Pacific market to the US,” the carrier said. The China port fees would apparently not apply to Israel’s Zim Integrated Shipping Services because, while there is a substantial US shareholding, the almost 19% would not cross the required threshold. The Transport Ministry said the fees will be collected by the maritime administration agency responsible for the port that is the ship’s first call. Contact Keith Wallis at keithwallis@hotmail.com.

Port News

Transport, Trade and Regulation News

Container lines

Trans-Pacific

International ports

Container Shipping News

China returns fire with retaliatory port fees targeting US-affiliated ships

<div class="phx-topic abstract-wrapper">Fewer trucks arriving with imports in Las Vegas, Chicago and other inland hubs means tighter capacity and higher transactional costs for outbound shipments. </div>

Fewer trucks arriving with imports in Las Vegas, Chicago and other inland hubs means tighter capacity and higher transactional costs for outbound shipments.

<div class="phx-topic">Outbound spot truckload capacity is tightening in several inland US markets, partly because of falling US imports, adding momentum to a seasonal increase in transactional truck rates as trucking's fall peak shipping period gets underway. Tighter capacity may be short-lived, but spot rates could run higher than expected in the fourth quarter, especially if consumer demand strengthens over the holidays. The average US dry-van truckload spot rate rose 3 cents in the week ended Oct. 4 to $1.70 per mile, according to DAT Freight &amp; Analytics. That rate was 5 cents higher year over year. In 13 Midwest states representing 46% of national load volume, spot rates were up 5 cents per mile on average. Carriers in those states earned an average of $1.92 per mile, which remained 22 cents above the national seven-day rolling average, DAT said. Rates shot even higher in specific markets and port-dependent lanes, including some routes connecting Chicago, Las Vegas and Stockton, Calif., to major US seaports, as fewer trucks dropped off imports and searched for return loads, according to DAT. Plenty of capacity was available in July to handle a 25.7% spike in US laden container imports from Asia as tariffs pushed importers to move peak season and holiday goods <a href="https://www.joc.com/article/us-retailers-upgrade-import-forecast-but-still-expect-q4-decline-6077875">earlier than usual</a>, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. But fewer imports now mean fewer trucks looking for return loads to ports. While this may not be a major disruption, it is the first capacity dislocation of its type that shippers have seen since the early days of the COVID-19 pandemic in 2020. <h3>Capacity dislocated </h3>Excess truck capacity isn’t necessarily exiting the market; it’s being diverted. This situation is forcing shippers in certain inland markets to push more freight to spot load boards. Last week, the number of spot loads moved from Los Angeles to Las Vegas fell 11%, leading to a shortage of dry vans in Las Vegas, said DAT principal analyst Dean Croke. “We’re seeing an imbalance in all those markets that need to get freight back to Los Angeles,” Croke told the Journal of Commerce. “This is due to the falloff of imports in LA.” That imbalance led to a 45% surge in outbound load posts from Las Vegas as shippers scrambled to find capacity, Croke said. As of Thursday, the average broker rate from Las Vegas to Los Angeles jumped to $2.15 per mile, up from $1.96 per mile last month. The impact was even starker in the high-volume lane connecting Los Angeles and Stockton. The average DAT spot rate from Stockton to Los Angeles rose to $2.45 per mile in the first three days of this week, up from $1.74 per mile for the month of September. That increase marks a 33% leap from the average rate a year earlier, according to DAT’s data. As of Thursday, the average rate from Los Angeles to Stockton had climbed 7 cents from $2.99 per mile in September to $3.06 per mile in the last three days. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="244aa4d3-6440-4ac1-b876-a4f8341dad3c"></dynamic-object></div>In Chicago, overall spot loads jumped 20% last week, Croke said. Outbound rates from Chicago rose 8 cents on average to $2.20 per mile last week, excluding fuel surcharges, 50 cents higher than the national average, according to DAT. “Normally, markets tend to equalize, but I don’t know how long this will take before it balances out,” said Croke, adding that the freight fluctuations brought on by changing US tariffs “is unprecedented.” US imports should be below 2 million TEUs for at least <a href="https://www.joc.com/article/tariff-uncertainty-to-keep-lid-on-us-import-growth-until-spring-retailers-6094200">the next five months</a>, according to the latest Global Port Tracker forecast from the National Retail Federation and Hackett Associates. That situation gives truck capacity at inland hubs months to find a new level. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Outbound spot truckload capacity is tightening in several inland US markets, partly because of falling US imports, adding momentum to a seasonal increase in transactional truck rates as trucking's fall peak shipping period gets underway. Tighter capacity may be short-lived, but spot rates could run higher than expected in the fourth quarter, especially if consumer demand strengthens over the holidays. The average US dry-van truckload spot rate rose 3 cents in the week ended Oct. 4 to $1.70 per mile, according to DAT Freight & Analytics. That rate was 5 cents higher year over year. In 13 Midwest states representing 46% of national load volume, spot rates were up 5 cents per mile on average. Carriers in those states earned an average of $1.92 per mile, which remained 22 cents above the national seven-day rolling average, DAT said. Rates shot even higher in specific markets and port-dependent lanes, including some routes connecting Chicago, Las Vegas and Stockton, Calif., to major US seaports, as fewer trucks dropped off imports and searched for return loads, according to DAT. Plenty of capacity was available in July to handle a 25.7% spike in US laden container imports from Asia as tariffs pushed importers to move peak season and holiday goods earlier than usual , according to PIERS, a Journal of Commerce sister product within S&P Global. But fewer imports now mean fewer trucks looking for return loads to ports. While this may not be a major disruption, it is the first capacity dislocation of its type that shippers have seen since the early days of the COVID-19 pandemic in 2020. Capacity dislocated Excess truck capacity isn’t necessarily exiting the market; it’s being diverted. This situation is forcing shippers in certain inland markets to push more freight to spot load boards. Last week, the number of spot loads moved from Los Angeles to Las Vegas fell 11%, leading to a shortage of dry vans in Las Vegas, said DAT principal analyst Dean Croke. “We’re seeing an imbalance in all those markets that need to get freight back to Los Angeles,” Croke told the Journal of Commerce. “This is due to the falloff of imports in LA.” That imbalance led to a 45% surge in outbound load posts from Las Vegas as shippers scrambled to find capacity, Croke said. As of Thursday, the average broker rate from Las Vegas to Los Angeles jumped to $2.15 per mile, up from $1.96 per mile last month. The impact was even starker in the high-volume lane connecting Los Angeles and Stockton. The average DAT spot rate from Stockton to Los Angeles rose to $2.45 per mile in the first three days of this week, up from $1.74 per mile for the month of September. That increase marks a 33% leap from the average rate a year earlier, according to DAT’s data. As of Thursday, the average rate from Los Angeles to Stockton had climbed 7 cents from $2.99 per mile in September to $3.06 per mile in the last three days. In Chicago, overall spot loads jumped 20% last week, Croke said. Outbound rates from Chicago rose 8 cents on average to $2.20 per mile last week, excluding fuel surcharges, 50 cents higher than the national average, according to DAT. “Normally, markets tend to equalize, but I don’t know how long this will take before it balances out,” said Croke, adding that the freight fluctuations brought on by changing US tariffs “is unprecedented.” US imports should be below 2 million TEUs for at least the next five months , according to the latest Global Port Tracker forecast from the National Retail Federation and Hackett Associates. That situation gives truck capacity at inland hubs months to find a new level. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Truckload

Surface

Lower US imports tightening truck capacity at key inland hubs

<div class="phx-topic abstract-wrapper">The LTL carrier has used technology to drive its financial turnaround, with the latest example being a system that has slashed the number of missed pickups for shippers. </div>

The LTL carrier has used technology to drive its financial turnaround, with the latest example being a system that has slashed the number of missed pickups for shippers.

<div class="phx-topic">US less-than-truckload (LTL) carrier Roadrunner has developed a new set of pickup and delivery tools for customers to track their shipments and set up appointment times, part of a broader effort to use technology to decrease missed pickups. “The investment stems from a strategic decision in 2023 to reinvent last-mile efficiency through a hybrid approach, building proprietary tools in-house while integrating best-in-class external components,” Nathalie de Champlain, chief transformation officer at Roadrunner, told the Journal of Commerce. “The result is a seamless experience for Roadrunner’s nationwide owner-operator network and customers.” The company said in a statement this week it has driven down missed pickups from nearly 30% in the early 2020s to 0.5% today, service improvements that have coincided with a rebound in the company’s financial fortunes in an LTL market that has retained pricing power despite muted demand in 2025. De Champlain said the new platform dynamically routes drivers using real-time data, including traffic, availability, distance and location constraints, so that customers get a “ride share-like visibility experience” from pickup to delivery. She said Roadrunner eventually plans to extend automation across dynamic pricing, self-service application programming interfaces (APIs) and robotic process automation for customers. Tomasz Jamroz, Roadrunner’s president and chief operating officer, said in a statement that the company’s investments and subsequent tools will enable the carrier’s owner-operator driver partners to make more money in less time with lower fuel costs. “Our customers should now expect real-time heads-up notifications and precise timing of pending pick-ups further augmented by track-and-trace capabilities that consumers have come to expect from leading e-commerce and home-delivery marketplaces,” he said. <h3>LTL carriers turn to tech </h3>While Roadrunner has used technology to power its turnaround, it’s far from the only LTL carrier focused on technology. Mario Harik, CEO of competitor XPO, told the Journal of Commerce Inland Distribution Conference last week that investment in technology has been key in helping it overperform on service metrics such as on-time delivery and lowering the percentage of shipments that are damaged. Relevant to Roadrunner’s new pickup and delivery capabilities, Harik said XPO has automated its entire line-haul model around handling exceptions. “So if freight comes in early or freight comes in late in our network, we can actually route it in more effective ways,” he said. “In our [pickup and delivery] and our route optimization, we use AI to optimize the routes to get the most amount of density and the best service product for the customer.” More broadly, the industry has been embracing technology to improve customer responsiveness, whether through shipper-direct white-labeled transportation management platforms such as MyCarrier that is used by a majority of the top 15 carriers, or through pricing efficiency tools such as rateHERO. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

US less-than-truckload (LTL) carrier Roadrunner has developed a new set of pickup and delivery tools for customers to track their shipments and set up appointment times, part of a broader effort to use technology to decrease missed pickups. “The investment stems from a strategic decision in 2023 to reinvent last-mile efficiency through a hybrid approach, building proprietary tools in-house while integrating best-in-class external components,” Nathalie de Champlain, chief transformation officer at Roadrunner, told the Journal of Commerce. “The result is a seamless experience for Roadrunner’s nationwide owner-operator network and customers.” The company said in a statement this week it has driven down missed pickups from nearly 30% in the early 2020s to 0.5% today, service improvements that have coincided with a rebound in the company’s financial fortunes in an LTL market that has retained pricing power despite muted demand in 2025. De Champlain said the new platform dynamically routes drivers using real-time data, including traffic, availability, distance and location constraints, so that customers get a “ride share-like visibility experience” from pickup to delivery. She said Roadrunner eventually plans to extend automation across dynamic pricing, self-service application programming interfaces (APIs) and robotic process automation for customers. Tomasz Jamroz, Roadrunner’s president and chief operating officer, said in a statement that the company’s investments and subsequent tools will enable the carrier’s owner-operator driver partners to make more money in less time with lower fuel costs. “Our customers should now expect real-time heads-up notifications and precise timing of pending pick-ups further augmented by track-and-trace capabilities that consumers have come to expect from leading e-commerce and home-delivery marketplaces,” he said. LTL carriers turn to tech While Roadrunner has used technology to power its turnaround, it’s far from the only LTL carrier focused on technology. Mario Harik, CEO of competitor XPO, told the Journal of Commerce Inland Distribution Conference last week that investment in technology has been key in helping it overperform on service metrics such as on-time delivery and lowering the percentage of shipments that are damaged. Relevant to Roadrunner’s new pickup and delivery capabilities, Harik said XPO has automated its entire line-haul model around handling exceptions. “So if freight comes in early or freight comes in late in our network, we can actually route it in more effective ways,” he said. “In our [pickup and delivery] and our route optimization, we use AI to optimize the routes to get the most amount of density and the best service product for the customer.” More broadly, the industry has been embracing technology to improve customer responsiveness, whether through shipper-direct white-labeled transportation management platforms such as MyCarrier that is used by a majority of the top 15 carriers, or through pricing efficiency tools such as rateHERO. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Roadrunner targets ‘ride share-like' shipper experience with new pickup platform

<div class="phx-topic abstract-wrapper"> It has taken several years for the IMO to get to this point, but the heavily compromised net-zero framework agreement has polarized the shipping industry. </div>

It has taken several years for the IMO to get to this point, but the heavily compromised net-zero framework agreement has polarized the shipping industry.

<div class="phx-topic">Member states of the International Maritime Organization (IMO) will go into next week’s pivotal meeting on shipping decarbonization amid deepening divisions among nations and industry groups on the most effective way forward. The primary item on the agenda at the IMO’s Marine Environment Protection Committee (MEPC) meeting in London Oct. 14–17 is the adoption of amendments to Annex VI of the MARPOL Convention. The amendments include the proposed net-zero framework, agreed in principle by a majority of IMO members in April in line with the 2023 greenhouse gas (GHG) strategy. It has taken several years for the IMO to get to this point, but the heavily compromised net-zero framework agreement has polarized the shipping industry. This week, seven shipowner associations urged member states “to make history” by approving the net-zero framework that includes the world’s first industrywide carbon pricing measure. “To deliver on the agreed upon greenhouse gas [GHG] strategy, global regulation is a precondition,” the shipowners noted in a joint statement. The associations are the Japanese Shipowners’ Association, the Royal Belgian Shipowners’ Association, the Royal Association of Netherlands Shipowners, the Singapore Shipping Association, the UK Chamber of Shipping, the Norwegian Shipowners’ Association and Danish Shipping. “It is necessary for reducing emissions, for creating homogeneous and predictable framework conditions for the shipping industry and — perhaps most importantly — sending the strongest possible signal to investors and producers to scale up the production of the alternative fuels that the shipping industry will require to move towards zero emissions,” the statement said. Opposing the adoption of the framework in its current form are Greek shipowners representing mostly the tanker and gas carrier fleet, classification societies the American Bureau of Shipping (ABS) and DNV, and, notably, the White House. US officials last month <a href="https://www.joc.com/article/us-steps-up-attempts-to-derail-imos-net-zero-ambitions-6076148">stepped up attempts to derail support</a> for the net-zero measure, threatening to impose tariffs, port duties and even visa refusals on IMO member states that support the net-zero framework. <h3>Crucial step toward climate neutrality </h3>If the IMO net-zero framework is adopted, all large ships operating globally, including cruise ships, will be required to slash emissions by 17% by 2028, with steadily increasing emission reduction targets after that, or pay a fee. Shipping currently accounts for 3% of global carbon emissions. The framework is regarded as crucial in enabling the industry to reach climate neutrality around 2050 by introducing fuel standards and levies on ships that fail to meet strict targets. It will require a two-thirds majority from member states to win approval and those voting yes will need to represent at least 50% of the world’s registered tonnage. Despite the opposing forces, Natacha Stamatiou, senior analyst for global shipping at the Environmental Defense Fund, was optimistic that the IMO framework will be adopted, although she was expecting “a dramatic week.” “The IMO has a whole book of rules of procedures, and we anticipate that some member states might raise rules and procedure points in order to delay and disrupt proceedings,” Stamatiou told the Journal of Commerce. “But that is what happened in April, so it is nothing new, and we are confident the framework will be adopted, and we can start working on the ambitious timelines,” she added. “From our perspective, the numbers look like they are leaning towards a positive vote.” Delaine McCullough, shipping program director at environmental activist Ocean Conservancy, described the framework as a major win for global climates, health and the oceans. “It’s encouraging to see an industry rally around a real, binding commitment to drastically reduce dangerous emissions,” McCullough said in a statement this week. “More will need to be done to strengthen this agreement to ensure there are no loopholes for unsustainable fuels, incentivize the rapid uptake of clean alternative fuels and distribute revenues fairly,” she added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Member states of the International Maritime Organization (IMO) will go into next week’s pivotal meeting on shipping decarbonization amid deepening divisions among nations and industry groups on the most effective way forward. The primary item on the agenda at the IMO’s Marine Environment Protection Committee (MEPC) meeting in London Oct. 14–17 is the adoption of amendments to Annex VI of the MARPOL Convention. The amendments include the proposed net-zero framework, agreed in principle by a majority of IMO members in April in line with the 2023 greenhouse gas (GHG) strategy. It has taken several years for the IMO to get to this point, but the heavily compromised net-zero framework agreement has polarized the shipping industry. This week, seven shipowner associations urged member states “to make history” by approving the net-zero framework that includes the world’s first industrywide carbon pricing measure. “To deliver on the agreed upon greenhouse gas [GHG] strategy, global regulation is a precondition,” the shipowners noted in a joint statement. The associations are the Japanese Shipowners’ Association, the Royal Belgian Shipowners’ Association, the Royal Association of Netherlands Shipowners, the Singapore Shipping Association, the UK Chamber of Shipping, the Norwegian Shipowners’ Association and Danish Shipping. “It is necessary for reducing emissions, for creating homogeneous and predictable framework conditions for the shipping industry and — perhaps most importantly — sending the strongest possible signal to investors and producers to scale up the production of the alternative fuels that the shipping industry will require to move towards zero emissions,” the statement said. Opposing the adoption of the framework in its current form are Greek shipowners representing mostly the tanker and gas carrier fleet, classification societies the American Bureau of Shipping (ABS) and DNV, and, notably, the White House. US officials last month stepped up attempts to derail support for the net-zero measure, threatening to impose tariffs, port duties and even visa refusals on IMO member states that support the net-zero framework. Crucial step toward climate neutrality If the IMO net-zero framework is adopted, all large ships operating globally, including cruise ships, will be required to slash emissions by 17% by 2028, with steadily increasing emission reduction targets after that, or pay a fee. Shipping currently accounts for 3% of global carbon emissions. The framework is regarded as crucial in enabling the industry to reach climate neutrality around 2050 by introducing fuel standards and levies on ships that fail to meet strict targets. It will require a two-thirds majority from member states to win approval and those voting yes will need to represent at least 50% of the world’s registered tonnage. Despite the opposing forces, Natacha Stamatiou, senior analyst for global shipping at the Environmental Defense Fund, was optimistic that the IMO framework will be adopted, although she was expecting “a dramatic week.” “The IMO has a whole book of rules of procedures, and we anticipate that some member states might raise rules and procedure points in order to delay and disrupt proceedings,” Stamatiou told the Journal of Commerce. “But that is what happened in April, so it is nothing new, and we are confident the framework will be adopted, and we can start working on the ambitious timelines,” she added. “From our perspective, the numbers look like they are leaning towards a positive vote.” Delaine McCullough, shipping program director at environmental activist Ocean Conservancy, described the framework as a major win for global climates, health and the oceans. “It’s encouraging to see an industry rally around a real, binding commitment to drastically reduce dangerous emissions,” McCullough said in a statement this week. “More will need to be done to strengthen this agreement to ensure there are no loopholes for unsustainable fuels, incentivize the rapid uptake of clean alternative fuels and distribute revenues fairly,” she added. Contact Greg Knowler at greg.knowler@spglobal.com .

Maritime

Deep divisions linger as IMO gathers for pivotal decarbonization talks

<div class="phx-topic abstract-wrapper">The overhaul marks the latest in a series of network shakeups among North American railroads competing for international intermodal freight. </div>

The overhaul marks the latest in a series of network shakeups among North American railroads competing for international intermodal freight.

<div class="phx-topic">Editor’s Note: The story has been updated to clarify that Norfolk Southern service will only impact service from certain West Coast marine terminals to Cleveland and Detroit, while others will not be impacted later this month. Norfolk Southern Railway is reshaping its international intermodal network, consolidating some services between the US West Coast and Midwest markets while expanding train capacity from East Coast ports into the Midwest. The most significant changes affect Ohio and the Upper Midwest, where the railroad will consolidate all international Cincinnati-area traffic into a single large terminal in Sharonville, just north of the city. Under the new plan, international trains will interchange in Chicago and terminate in Cincinnati. The changes take effect Oct. 20. The decision was made to consolidate into a single terminal in Cincinnati to put ocean containers into stacks, following similar NS projects in Atlanta, Memphis and Chicago in the last two years. In the long-term, ground stacking will allow Norfolk Southern to be better equipped for import surges. Domestic intermodal traffic will remain at the Gest Street terminal, which is closer to downtown Cincinnati. Meanwhile, the railroad’s decision to cancel international trains will impact only West Coast marine terminals handling very little volume to Cleveland or Detroit. NS will maintain international service from other West Coast terminals with greater demand. The overhaul by NS marks the latest in a series of network shakeups among North American railroads competing for international intermodal freight. In April, BNSF Railway introduced a joint service with Norfolk Southern to move import containers from <a href="https://www.joc.com/article/bnsfs-new-seattle-to-ohio-service-avoids-chicago-dray-5203416">Seattle and Tacoma to the Ohio Valley</a> with a quick crew change in Chicago, eliminating the need to truck cargo across the city. BNSF added another inland service in July, linking Los Angeles, Long Beach and Oakland with <a href="https://www.joc.com/article/bnsf-to-use-southern-route-to-salt-lake-city-under-up-intermodal-deal-6045357">Salt Lake City</a>. In July, Union Pacific Railroad also opened a new terminal in <a href="https://www.joc.com/article/ups-kc-terminal-will-change-approach-on-ocean-cargo-6013727">Kansas City</a> and reconfigured its intermodal network to accelerate domestic and international trains from Southern California in a bid to better compete against BNSF. In September, Canadian National Railway and CSX Transportation unveiled a joint service to move containers from Western Canada <a href="https://www.joc.com/article/cn-csx-joint-service-to-connect-west-canada-and-nashville-6077903">directly to Nashville</a>, rather than depositing the cargo in Memphis and trucking it across Tennessee. <h3>Adjustment for NS shippers </h3>Cargo owners in Cleveland and Detroit will lose access to some West Coast marine terminals unless they are willing to truck containers to Chicago or Cincinnati, but alternative options are available. The easiest would be for cargo owners to re-route cargo into terminals such as Long Beach Container Terminal or APM’s Pier 400 in Los Angeles, which will continue to service Cleveland and Detroit via NS. Detroit shippers can also redirect international volumes to the East Coast ports of New York–New Jersey and Virginia, where CSX and Norfolk Southern already operate frequent service. They can also route freight through Vancouver, using Canadian National Railway, which maintains a large terminal in Detroit. Norfolk Southern, meanwhile, will replace West Coast options for those in Cleveland with new departures from the Port of New York and New Jersey. A new thrice weekly train from Port Liberty Bayonne will launch Oct. 21, the railroad announced, supplementing its existing daily train from APM’s Elizabeth Marine Terminal. Shippers in Kansas City will also see adjustments on Oct. 21. The current daily train from Elizabeth Marine Terminal will be replaced by a three-day per week schedule, but originate from Elizabeth, Port Liberty Bayonne, and Port Liberty New York on Staten Island, offering service from more terminals despite fewer weekly departures. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Editor’s Note: The story has been updated to clarify that Norfolk Southern service will only impact service from certain West Coast marine terminals to Cleveland and Detroit, while others will not be impacted later this month. Norfolk Southern Railway is reshaping its international intermodal network, consolidating some services between the US West Coast and Midwest markets while expanding train capacity from East Coast ports into the Midwest. The most significant changes affect Ohio and the Upper Midwest, where the railroad will consolidate all international Cincinnati-area traffic into a single large terminal in Sharonville, just north of the city. Under the new plan, international trains will interchange in Chicago and terminate in Cincinnati. The changes take effect Oct. 20. The decision was made to consolidate into a single terminal in Cincinnati to put ocean containers into stacks, following similar NS projects in Atlanta, Memphis and Chicago in the last two years. In the long-term, ground stacking will allow Norfolk Southern to be better equipped for import surges. Domestic intermodal traffic will remain at the Gest Street terminal, which is closer to downtown Cincinnati. Meanwhile, the railroad’s decision to cancel international trains will impact only West Coast marine terminals handling very little volume to Cleveland or Detroit. NS will maintain international service from other West Coast terminals with greater demand. The overhaul by NS marks the latest in a series of network shakeups among North American railroads competing for international intermodal freight. In April, BNSF Railway introduced a joint service with Norfolk Southern to move import containers from Seattle and Tacoma to the Ohio Valley with a quick crew change in Chicago, eliminating the need to truck cargo across the city. BNSF added another inland service in July, linking Los Angeles, Long Beach and Oakland with Salt Lake City . In July, Union Pacific Railroad also opened a new terminal in Kansas City and reconfigured its intermodal network to accelerate domestic and international trains from Southern California in a bid to better compete against BNSF. In September, Canadian National Railway and CSX Transportation unveiled a joint service to move containers from Western Canada directly to Nashville , rather than depositing the cargo in Memphis and trucking it across Tennessee. Adjustment for NS shippers Cargo owners in Cleveland and Detroit will lose access to some West Coast marine terminals unless they are willing to truck containers to Chicago or Cincinnati, but alternative options are available. The easiest would be for cargo owners to re-route cargo into terminals such as Long Beach Container Terminal or APM’s Pier 400 in Los Angeles, which will continue to service Cleveland and Detroit via NS. Detroit shippers can also redirect international volumes to the East Coast ports of New York–New Jersey and Virginia, where CSX and Norfolk Southern already operate frequent service. They can also route freight through Vancouver, using Canadian National Railway, which maintains a large terminal in Detroit. Norfolk Southern, meanwhile, will replace West Coast options for those in Cleveland with new departures from the Port of New York and New Jersey. A new thrice weekly train from Port Liberty Bayonne will launch Oct. 21, the railroad announced, supplementing its existing daily train from APM’s Elizabeth Marine Terminal. Shippers in Kansas City will also see adjustments on Oct. 21. The current daily train from Elizabeth Marine Terminal will be replaced by a three-day per week schedule, but originate from Elizabeth, Port Liberty Bayonne, and Port Liberty New York on Staten Island, offering service from more terminals despite fewer weekly departures. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Intermodal providers

Norfolk Southern tweaks international services from West, East coasts

<div class="phx-topic abstract-wrapper">The carrier’s operational update did not provide profit and loss figures, but the declining revenue is an indication of tough times ahead as liners sail into their financial reporting season.</div>

The carrier’s operational update did not provide profit and loss figures, but the declining revenue is an indication of tough times ahead as liners sail into their financial reporting season.

<div class="phx-topic">Hong Kong-based ocean carrier OOCL on Thursday reported a significant drop in third-quarter revenue as fast-declining rates on the trans-Pacific and Asia-Europe trades dragged down its top-line earnings. The operational update did not provide profit and loss figures, but the declining revenue is an indication of tough times ahead as carriers sail into their financial reporting season. The Cosco Shipping Holdings subsidiary ended the third quarter with total revenue of $2.26 billion, down 25.9% year over year, as the average revenue per TEU dropped 26%. The two east-west routes out of Asia were mainly responsible for the declining revenue. Frontloading on both the trans-Pacific and Asia-Europe led to an early end to the peak season, which was evident in the drop in OOCL’s revenue on the two trade lanes as falling demand and excess capacity dragged down rates. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8c13a3e-9f5a-412f-8741-adbf5e1a7779"></dynamic-object></div>Historically, the trans-Pacific is the largest earner among OOCL’s trade lanes, but third-quarter revenue on the route was down 33.2% at $837 million. On Asia-Europe, revenue fell 38.3% to $479 million, while intra-Asia/Australasia revenue was down 12.9% at $766 million. The trans-Atlantic, the smallest of OOCL’s main trades, was the only lane where third-quarter revenue growth was recorded, increasing 25.4% to $180 million. <h3>Flat volume across trade lanes </h3>Third-quarter volume across all four trade lanes was almost flat, increasing 0.7% year over year to 1.9 million TEUs, while the total available capacity rose 4.2%. From a trade lane perspective, the trans-Pacific recorded volume of 526,032 TEUs, a decline of 4.7%, while Asia-Europe volume was flat at 346,001 TEUs. Intra-Asia/Australasia volume was up 1.7% at 938,090 TEUs, with the trans-Atlantic recording a sharp 22.8% increase to 137,016 TEUs. Over the first nine months of the year, OOCL’s total revenue fell 8.3% year over year to nearly $6.7 billion, dragged down by average revenue per TEU that fell 12.4%. Trans-Pacific revenue declined 14.6% to $2.5 billion, while Asia-Europe revenue was down 20.3% at $1.4 billion. Nine-month intra-Asia/Australasia revenue rose 4.2% to $2.2 billion, with trans-Atlantic revenue up 20.3% at $544 million. Volume handled by OOCL in the first nine months was up 4.7% at 5.8 million TEUs. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Hong Kong-based ocean carrier OOCL on Thursday reported a significant drop in third-quarter revenue as fast-declining rates on the trans-Pacific and Asia-Europe trades dragged down its top-line earnings. The operational update did not provide profit and loss figures, but the declining revenue is an indication of tough times ahead as carriers sail into their financial reporting season. The Cosco Shipping Holdings subsidiary ended the third quarter with total revenue of $2.26 billion, down 25.9% year over year, as the average revenue per TEU dropped 26%. The two east-west routes out of Asia were mainly responsible for the declining revenue. Frontloading on both the trans-Pacific and Asia-Europe led to an early end to the peak season, which was evident in the drop in OOCL’s revenue on the two trade lanes as falling demand and excess capacity dragged down rates. Historically, the trans-Pacific is the largest earner among OOCL’s trade lanes, but third-quarter revenue on the route was down 33.2% at $837 million. On Asia-Europe, revenue fell 38.3% to $479 million, while intra-Asia/Australasia revenue was down 12.9% at $766 million. The trans-Atlantic, the smallest of OOCL’s main trades, was the only lane where third-quarter revenue growth was recorded, increasing 25.4% to $180 million. Flat volume across trade lanes Third-quarter volume across all four trade lanes was almost flat, increasing 0.7% year over year to 1.9 million TEUs, while the total available capacity rose 4.2%. From a trade lane perspective, the trans-Pacific recorded volume of 526,032 TEUs, a decline of 4.7%, while Asia-Europe volume was flat at 346,001 TEUs. Intra-Asia/Australasia volume was up 1.7% at 938,090 TEUs, with the trans-Atlantic recording a sharp 22.8% increase to 137,016 TEUs. Over the first nine months of the year, OOCL’s total revenue fell 8.3% year over year to nearly $6.7 billion, dragged down by average revenue per TEU that fell 12.4%. Trans-Pacific revenue declined 14.6% to $2.5 billion, while Asia-Europe revenue was down 20.3% at $1.4 billion. Nine-month intra-Asia/Australasia revenue rose 4.2% to $2.2 billion, with trans-Atlantic revenue up 20.3% at $544 million. Volume handled by OOCL in the first nine months was up 4.7% at 5.8 million TEUs. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Tumbling rates on trans-Pacific, Asia-Europe drag down OOCL Q3 revenue

<div class="phx-topic abstract-wrapper">The LTL world of 2025 does not reward those who guess, but rather those who know — and knowing begins with visibility. </div>

The LTL world of 2025 does not reward those who guess, but rather those who know — and knowing begins with visibility.

<div class="phx-topic">The US less-than-truckload (LTL) sector stands at a critical crossroads. Faced with depressed demand, high operating costs, economic uncertainty and rising customer expectations, LTL carriers, brokers and shippers are under mounting pressure to do more with less. Efficiency, accuracy and transparency have never been more vital. Even as some aspects of LTL have modernized, persistent blind spots still drain time, revenue and customer satisfaction. Accessorial management and location visibility remain at the heart of operational performance and profitability in the LTL sector, and companies must solve these challenges to thrive in this freight environment. Accessorial charges are often treated as the fine print of freight, but their financial impact is anything but small. These additional fees, covering services such as liftgate usage, residential delivery, limited-access sites and inside delivery are frequently not accounted for until after a delivery is completed. At that point, shippers receive unexpected invoices, brokers scramble to reconcile charges, and carriers are left fielding disputes that strain valuable relationships and negatively impact their bottom line. Without an accurate, upfront method of identifying potential accessorials, companies lose control over cost predictability. This unpredictability does more than damage budgets. It undermines long-term rate negotiations and muddies performance metrics such as cost per shipment and gross margin. Billing disputes over accessorials can also slow down cash flow and stretch out time-to-payment cycles. As the logistics sector faces tighter margins and rising customer expectations, these seemingly minor charges can add up to major financial consequences. Location data is another underestimated factor that directly impacts LTL performance. While most transportation management systems (TMSs) offer basic shipment tracking, they often lack granular location insights. This includes data points such as whether a site is residential or commercial, whether there is dock access or a forklift onsite, or if the delivery site has limited hours or requires specialized entry. These details may seem minor, but their absence leads to service mismatches, re-delivery attempts, extended dwell times and more accessorial charges. For example, failing to flag a residential delivery that requires a liftgate can result in a surprise fee and an unhappy customer. A shipment bound for a military base or an airport without the right equipment or credentials can create costly delays and failed deliveries. Inaccurate or incomplete location information does more than increase costs — it erodes operational agility. <h3>Technology can ease challenges </h3>The good news is that technology now exists to solve these challenges at scale. New platforms that leverage AI, machine learning and geospatial data are transforming how logistics professionals manage LTL freight. These tools can identify potential accessorial charges before the freight is tendered, analyze delivery site characteristics in real time and deliver a unified accessorial view across all stakeholders. By automating accessorial identification during order entry and integrating precise location attributes such as limited access, loading dock availability, forklifts on site or gated entry, these platforms allow teams to move from reactive firefighting to proactive planning. With real-time alerts and API integrations that connect directly into a TMS, shippers, brokers and carriers can operate from a shared source of accessorial truth. The impact of smarter accessorial identification and location visibility delivers measurable results. Companies that have adopted these advanced solutions have reported a 75% reduction in unexpected accessorial fees, leading to cleaner invoices and faster dispute resolution. Customers have also seen improved on-time in-full (OTIF) performance, driving higher customer satisfaction and stronger service-level agreement (SLA) compliance. This shift is particularly timely in 2025, as the LTL industry grapples with economic volatility, rising operating costs and major classification changes. Freight volumes are inconsistent, carriers are prioritizing profitability over market share, and the new National Motor Freight Traffic Association density-based classification system is forcing shippers to re-evaluate how they package and price freight. In this environment, hidden costs such as accessorials and inefficiencies tied to poor location visibility can erode already thin margins. With shifting demand, cost inflation and operational headwinds, the ability to forecast costs, identify risks and plan accordingly has become a key competitive advantage. In the past, accessorial management and granular location visibility may have been viewed as optional enhancements. Today, they are essential for any company that relies on LTL shipping as a core part of its logistics strategy. When customer expectations are rising and disruptions are the new norm, having visibility into every shipment detail and every delivery site is table stakes. The LTL world of 2025 does not reward those who guess. It rewards those who know, and knowing begins with visibility. North Winship is president of Shiplify. Contact him at <a href="mailto:northw@shiplify.com">northw@shiplify.com</a>. Bart De Muynck is a strategic advisor for Drewry. Contact him at <a href="mailto:bart@bartdemuynck.com">bart@bartdemuynck.com</a>. </div>

The US less-than-truckload (LTL) sector stands at a critical crossroads. Faced with depressed demand, high operating costs, economic uncertainty and rising customer expectations, LTL carriers, brokers and shippers are under mounting pressure to do more with less. Efficiency, accuracy and transparency have never been more vital. Even as some aspects of LTL have modernized, persistent blind spots still drain time, revenue and customer satisfaction. Accessorial management and location visibility remain at the heart of operational performance and profitability in the LTL sector, and companies must solve these challenges to thrive in this freight environment. Accessorial charges are often treated as the fine print of freight, but their financial impact is anything but small. These additional fees, covering services such as liftgate usage, residential delivery, limited-access sites and inside delivery are frequently not accounted for until after a delivery is completed. At that point, shippers receive unexpected invoices, brokers scramble to reconcile charges, and carriers are left fielding disputes that strain valuable relationships and negatively impact their bottom line. Without an accurate, upfront method of identifying potential accessorials, companies lose control over cost predictability. This unpredictability does more than damage budgets. It undermines long-term rate negotiations and muddies performance metrics such as cost per shipment and gross margin. Billing disputes over accessorials can also slow down cash flow and stretch out time-to-payment cycles. As the logistics sector faces tighter margins and rising customer expectations, these seemingly minor charges can add up to major financial consequences. Location data is another underestimated factor that directly impacts LTL performance. While most transportation management systems (TMSs) offer basic shipment tracking, they often lack granular location insights. This includes data points such as whether a site is residential or commercial, whether there is dock access or a forklift onsite, or if the delivery site has limited hours or requires specialized entry. These details may seem minor, but their absence leads to service mismatches, re-delivery attempts, extended dwell times and more accessorial charges. For example, failing to flag a residential delivery that requires a liftgate can result in a surprise fee and an unhappy customer. A shipment bound for a military base or an airport without the right equipment or credentials can create costly delays and failed deliveries. Inaccurate or incomplete location information does more than increase costs — it erodes operational agility. Technology can ease challenges The good news is that technology now exists to solve these challenges at scale. New platforms that leverage AI, machine learning and geospatial data are transforming how logistics professionals manage LTL freight. These tools can identify potential accessorial charges before the freight is tendered, analyze delivery site characteristics in real time and deliver a unified accessorial view across all stakeholders. By automating accessorial identification during order entry and integrating precise location attributes such as limited access, loading dock availability, forklifts on site or gated entry, these platforms allow teams to move from reactive firefighting to proactive planning. With real-time alerts and API integrations that connect directly into a TMS, shippers, brokers and carriers can operate from a shared source of accessorial truth. The impact of smarter accessorial identification and location visibility delivers measurable results. Companies that have adopted these advanced solutions have reported a 75% reduction in unexpected accessorial fees, leading to cleaner invoices and faster dispute resolution. Customers have also seen improved on-time in-full (OTIF) performance, driving higher customer satisfaction and stronger service-level agreement (SLA) compliance. This shift is particularly timely in 2025, as the LTL industry grapples with economic volatility, rising operating costs and major classification changes. Freight volumes are inconsistent, carriers are prioritizing profitability over market share, and the new National Motor Freight Traffic Association density-based classification system is forcing shippers to re-evaluate how they package and price freight. In this environment, hidden costs such as accessorials and inefficiencies tied to poor location visibility can erode already thin margins. With shifting demand, cost inflation and operational headwinds, the ability to forecast costs, identify risks and plan accordingly has become a key competitive advantage. In the past, accessorial management and granular location visibility may have been viewed as optional enhancements. Today, they are essential for any company that relies on LTL shipping as a core part of its logistics strategy. When customer expectations are rising and disruptions are the new norm, having visibility into every shipment detail and every delivery site is table stakes. The LTL world of 2025 does not reward those who guess. It rewards those who know, and knowing begins with visibility. North Winship is president of Shiplify. Contact him at northw@shiplify.com . Bart De Muynck is a strategic advisor for Drewry. Contact him at bart@bartdemuynck.com .

Visibility transforming accessorial and location insights in LTL shipping

<div class="phx-topic abstract-wrapper">There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters. </div>

There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters.

<div class="phx-topic">The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. <h3>Pushing pause </h3>The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. <h3>Beyond parking </h3>Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. Pushing pause The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. Beyond parking Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Ocean carriers are not helpless when it comes to managing capacity

Asia to North Europe

Asia to Mediterranean

eeSea collects and centralizes liner network data from dozens of public sources including carriers’ vessel tracking portals, long-term schedules, customer advisories, port and terminal operator schedules, and pilot schedules. These disparate datasets are continually inspected, cleaned, and carefully structured. eeSea synthesizes this refined public data with AIS positions from a third-party provider and its datasets spanning schedule reliability, transit times, trade capacity evolution, and 60-day vessel forecasts. Ships are deemed late if they are one calendar day or late than scheduled. [eeSea](https://www.eesea.com)

Asia to North Europe and Mediterranean ocean reliability (eeSea)

On-Time Performance Asia to Northern Europe and Mediterranean (eeSea) Gateway

<div class="phx-topic abstract-wrapper">But if current rate competition doesn’t possess the edge it did in prior years, the question is why and whether that matters if the overall effect is to substantially lower rates for shippers in a down market, writes Peter Tirschwell. </div>

But if current rate competition doesn’t possess the edge it did in prior years, the question is why and whether that matters if the overall effect is to substantially lower rates for shippers in a down market, writes Peter Tirschwell.

<div class="phx-topic">Does the recent rate plunge in the eastbound trans-Pacific — with trade from Asia to the US West Coast down 28% since mid-September after having fallen 66% since June amid a deepening sense of gloom among carriers — qualify as a “rate war?” Before answering, it might help to define “rate war” in a container shipping context. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6093418_0.1.jpg"></img></div>Although the term has surfaced in recent weeks to describe rates in the vicinity of loss-making for carriers, it was more common in the 1990s. Back then, it described not just downward rate adjustments by carriers to reflect realities of supply and demand, but predatory moves by one carrier on another’s book of business, a result of animosity and carriers’ single-minded focused on market share. Many believe that the market has moved on from those days. While it’s as price competitive as ever despite significant consolidation, animosity among carriers has subsided over the years despite well-known rivalries, particularly among family-owned European carriers. For example, it would be unusual for a carrier CEO to make remarks today similar to this one from Nils Smedegaard Anderson of Maersk during the Great Recession in 2009, as reported by American Shipper: “We will not allow anyone to take market share from us by systematically undercutting our prices. If it comes down to that we’re ready to fight it out on prices.” “If a rate war is to be defined as 1) lowering the rate to below break-even level and 2) that is with the intent to harm another player with the potential goal of forcing consolidation, then I agree that today’s situation is not a rate war,” said Nils Roche, former deputy general manager for operations at PIL who wrote about the topic <a href="https://www.linkedin.com/pulse/y25m9-war-new-normal-nils-roche-7nrjc/">in his newsletter</a>. “Carriers no longer follow the traditional path of predatory pricing,” said Jon Monroe, the veteran carrier, non-vessel-operating common carrier and technology executive. “I believe the carriers have too much at stake to play the oldest games of predatory pricing. That does not mean they won’t drop their rates for more business.” For some, that is the point — it doesn’t matter what you call it when rates are headed south amid overcapacity and evaporating volumes, and the mantra from on high is “My ship must be full, do as you must,” as Roche said. But if current rate competition lacks the edge it did in prior years, the question is why and whether it matters if the overall effect is to substantially lower rates for shippers in a down market. <h3>Recent carrier experiences are more shared than divergent </h3>The atmosphere among carriers has changed in part due to recent experience, which is more shared than divergent. On one hand, carriers are going their separate ways in acquisitions and business models, pursuing more holistic relationships with shippers covering a range of logistics services. But having said that, the accumulation of record profits during COVID-19 and the subsequent discovery after years of self-doubt that making money is within their reach, solidified a shared view among carriers that actions contrary to the interests of their customers — such as blank sailings, slow steaming at scale or imposing multi-thousand-dollar rate increases at the first sign of market tightness — are no longer regrettable, but desirable in pursuit of profits that for decades had been elusive. One factor that could accrue to shippers’ benefit is in some ways the best of both worlds: a free and transparent market in freight rates occurring in parallel with efforts by several carriers to build deeper partnerships with shippers that in a down market they will struggle to be fully compensated for. The first half-year of the Gemini alliance of Maersk and Hapag-Lloyd largely delivered the very high on-time reliability initially promised, but they are struggling so far to translate that into premium pricing. “I don’t think customers have experienced this long enough that they’re ready to entertain such a discussion, but it is something that is going to come,” Maersk CEO Vincent Clerc told investors on Aug. 7. In other words, as the market deteriorates in the fall of 2025, Gemini is mirroring earlier carrier struggles to translate reliability into profitability, similar to Daily Maersk launched in 2011 or APL maintaining high schedule reliability in the trans-Pacific. Until the market rebounds, they may have to settle for stickiness in regard to customer relationships and cargo on their ships, but not pricing. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Does the recent rate plunge in the eastbound trans-Pacific — with trade from Asia to the US West Coast down 28% since mid-September after having fallen 66% since June amid a deepening sense of gloom among carriers — qualify as a “rate war?” Before answering, it might help to define “rate war” in a container shipping context. Although the term has surfaced in recent weeks to describe rates in the vicinity of loss-making for carriers, it was more common in the 1990s. Back then, it described not just downward rate adjustments by carriers to reflect realities of supply and demand, but predatory moves by one carrier on another’s book of business, a result of animosity and carriers’ single-minded focused on market share. Many believe that the market has moved on from those days. While it’s as price competitive as ever despite significant consolidation, animosity among carriers has subsided over the years despite well-known rivalries, particularly among family-owned European carriers. For example, it would be unusual for a carrier CEO to make remarks today similar to this one from Nils Smedegaard Anderson of Maersk during the Great Recession in 2009, as reported by American Shipper: “We will not allow anyone to take market share from us by systematically undercutting our prices. If it comes down to that we’re ready to fight it out on prices.” “If a rate war is to be defined as 1) lowering the rate to below break-even level and 2) that is with the intent to harm another player with the potential goal of forcing consolidation, then I agree that today’s situation is not a rate war,” said Nils Roche, former deputy general manager for operations at PIL who wrote about the topic in his newsletter . “Carriers no longer follow the traditional path of predatory pricing,” said Jon Monroe, the veteran carrier, non-vessel-operating common carrier and technology executive. “I believe the carriers have too much at stake to play the oldest games of predatory pricing. That does not mean they won’t drop their rates for more business.” For some, that is the point — it doesn’t matter what you call it when rates are headed south amid overcapacity and evaporating volumes, and the mantra from on high is “My ship must be full, do as you must,” as Roche said. But if current rate competition lacks the edge it did in prior years, the question is why and whether it matters if the overall effect is to substantially lower rates for shippers in a down market. Recent carrier experiences are more shared than divergent The atmosphere among carriers has changed in part due to recent experience, which is more shared than divergent. On one hand, carriers are going their separate ways in acquisitions and business models, pursuing more holistic relationships with shippers covering a range of logistics services. But having said that, the accumulation of record profits during COVID-19 and the subsequent discovery after years of self-doubt that making money is within their reach, solidified a shared view among carriers that actions contrary to the interests of their customers — such as blank sailings, slow steaming at scale or imposing multi-thousand-dollar rate increases at the first sign of market tightness — are no longer regrettable, but desirable in pursuit of profits that for decades had been elusive. One factor that could accrue to shippers’ benefit is in some ways the best of both worlds: a free and transparent market in freight rates occurring in parallel with efforts by several carriers to build deeper partnerships with shippers that in a down market they will struggle to be fully compensated for. The first half-year of the Gemini alliance of Maersk and Hapag-Lloyd largely delivered the very high on-time reliability initially promised, but they are struggling so far to translate that into premium pricing. “I don’t think customers have experienced this long enough that they’re ready to entertain such a discussion, but it is something that is going to come,” Maersk CEO Vincent Clerc told investors on Aug. 7. In other words, as the market deteriorates in the fall of 2025, Gemini is mirroring earlier carrier struggles to translate reliability into profitability, similar to Daily Maersk launched in 2011 or APL maintaining high schedule reliability in the trans-Pacific. Until the market rebounds, they may have to settle for stickiness in regard to customer relationships and cargo on their ships, but not pricing. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Current trans-Pacific price plunge lacks the echoes of prior ‘rate wars’

<div class="phx-topic abstract-wrapper">Shippers and their forwarders will soon be launching long-term contract tenders for 2026 as the spot market — which heavily influences the contract market — slides closer to pre-Red Sea attack levels. </div>

Shippers and their forwarders will soon be launching long-term contract tenders for 2026 as the spot market — which heavily influences the contract market — slides closer to pre-Red Sea attack levels.

<div class="phx-topic">Asia-Europe ocean carriers are under mounting pressure to raise rate levels on the westbound trade, while shippers can expect aggressive capacity management action by carriers as the annual contract negotiation season draws closer, forwarders on the trade lane say. Shippers and their forwarders will soon be launching long-term contract tenders for 2026 as the spot market — which heavily influences the contract market — slides closer to pre-Red Sea attack levels. Helge Neumann-Lezius, global head of full container load (FCL) at Hellmann Worldwide Logistics, said “loads of tenders” will go out in the next two months, with the expectation that long-term rates will come down for the next season. “There is already a rate war [on Asia-Europe], and I think the only part that helped the industry not end up in a race to the bottom is that we have very few tenders out,” Neumann-Lezius told the Journal of Commerce. “A lot of people are counting on that, which means tenders will start to be launched, some of them with the pressure of their companies being in difficult situations,” he added. “That is the context behind the new tender launches — the companies themselves are having a difficult time, and their volumes will be more unpredictable.” Asia-North Europe spot rates are at $1,300 per FEU, down 57% year over year, while Asia-Mediterranean rates of $1,600 are down 53.5%, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. The spot market has plummeted since reaching $3,340/FEU in July on Asia-North Europe and $4,660/FEU on Asia-Mediterranean in June. Average long-term rates for China to North Europe signed in the last three months were at $3,582/FEU as of Monday, down 56% compared with the same time last year, data from industry analyst Xeneta shows. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="73f31d19-63a1-4d2b-950b-193943809ae3"></dynamic-object></div>Still, with no guarantee that rates will continue to decline through the fourth quarter, Sanjay Tejwani, CEO of consulting firm 365 Logistics, warned shippers to expect aggressive capacity and rate-managing action from carriers in October and early November in the run-up to contract talks. “We have seen the push by carriers to implement rate increases — the next one is mid-October — and there will be some additional ad hoc blank sailings on top of the 17% blanks already announced,” he said. Hapag-Lloyd and Mediterranean Shipping Co. will be setting Asia-North Europe freight-all-kinds (FAK) rates at between $2,400/FEU and $2,660/FEU as of Oct. 15, with Asia-Mediterranean rates between $3,500/FEU and $4,600/FEU. Capacity removed through blank sailings in October has reached 195,116 TEUs, up from 109,000 TEUs in September, Xeneta data shows. But deployed capacity is up from 988,600 TEUs in September to just shy of 1.2 million TEUs in October. That number drops sharply in November to 1 million TEUs, with blank sailings announced for the month standing at 108,720 TEUs thus far. “It’s extremely important for carriers to manage capacity and supply versus demand in this quarter, otherwise they are doomed in terms of the contracting season for next year,” Tejwani said. <h3>Annual contracts ‘not all about rates’ </h3>Just how the negotiating environment will shape up remains uncertain, with carriers facing a widening capacity overhang and demand undermined by weak European economies. Drewry Supply Chain Advisors noted in a market update this week that as inflationary pressures on freight rates stemming from Red Sea disruptions, frontloading and tariff-related issues begin to ease, shippers are likely to negotiate more favorable contract rates and improved terms with carriers and forwarders for 2026. But the contract talks should not only be about rates, warned Chantal McRoberts, director of Drewry Supply Chain Advisors. “Other than the prospect of lower contract rates for shippers, the other important aspect of bid strategy for 2026 contracts is risk management and resilience,” she said. Drewry is advising its shipper customers to review their carrier contract language to include longer payment terms, more service quality commitments and clauses to control surcharges such as detention and demurrage. In some cases, Drewry is also recommending that shippers include a clause where a rate review is triggered if market prices collapse. Tejwani told the Journal of Commerce that if cargo owners wanted to avoid having their contracts torn up should the tide turn, they would sign annual rates above loss-making levels for the oversupplied carriers. “Some carriers may blink first and sign deals at very low rates, but the minute you have a rush coming in, those contracts are not going to be worth the paper they’re written on, and I think a lot of shippers realize this,” he said. “If shippers really want to have a smooth supply chain for all of 2026 and access to capacity when the crunch comes, those smart shippers will agree to reasonable rate levels and not push carriers for the last single dollar,” Tejwani added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Asia-Europe ocean carriers are under mounting pressure to raise rate levels on the westbound trade, while shippers can expect aggressive capacity management action by carriers as the annual contract negotiation season draws closer, forwarders on the trade lane say. Shippers and their forwarders will soon be launching long-term contract tenders for 2026 as the spot market — which heavily influences the contract market — slides closer to pre-Red Sea attack levels. Helge Neumann-Lezius, global head of full container load (FCL) at Hellmann Worldwide Logistics, said “loads of tenders” will go out in the next two months, with the expectation that long-term rates will come down for the next season. “There is already a rate war [on Asia-Europe], and I think the only part that helped the industry not end up in a race to the bottom is that we have very few tenders out,” Neumann-Lezius told the Journal of Commerce. “A lot of people are counting on that, which means tenders will start to be launched, some of them with the pressure of their companies being in difficult situations,” he added. “That is the context behind the new tender launches — the companies themselves are having a difficult time, and their volumes will be more unpredictable.” Asia-North Europe spot rates are at $1,300 per FEU, down 57% year over year, while Asia-Mediterranean rates of $1,600 are down 53.5%, according to Platts, a sister company of the Journal of Commerce within S&P Global. The spot market has plummeted since reaching $3,340/FEU in July on Asia-North Europe and $4,660/FEU on Asia-Mediterranean in June. Average long-term rates for China to North Europe signed in the last three months were at $3,582/FEU as of Monday, down 56% compared with the same time last year, data from industry analyst Xeneta shows. Still, with no guarantee that rates will continue to decline through the fourth quarter, Sanjay Tejwani, CEO of consulting firm 365 Logistics, warned shippers to expect aggressive capacity and rate-managing action from carriers in October and early November in the run-up to contract talks. “We have seen the push by carriers to implement rate increases — the next one is mid-October — and there will be some additional ad hoc blank sailings on top of the 17% blanks already announced,” he said. Hapag-Lloyd and Mediterranean Shipping Co. will be setting Asia-North Europe freight-all-kinds (FAK) rates at between $2,400/FEU and $2,660/FEU as of Oct. 15, with Asia-Mediterranean rates between $3,500/FEU and $4,600/FEU. Capacity removed through blank sailings in October has reached 195,116 TEUs, up from 109,000 TEUs in September, Xeneta data shows. But deployed capacity is up from 988,600 TEUs in September to just shy of 1.2 million TEUs in October. That number drops sharply in November to 1 million TEUs, with blank sailings announced for the month standing at 108,720 TEUs thus far. “It’s extremely important for carriers to manage capacity and supply versus demand in this quarter, otherwise they are doomed in terms of the contracting season for next year,” Tejwani said. Annual contracts ‘not all about rates’ Just how the negotiating environment will shape up remains uncertain, with carriers facing a widening capacity overhang and demand undermined by weak European economies. Drewry Supply Chain Advisors noted in a market update this week that as inflationary pressures on freight rates stemming from Red Sea disruptions, frontloading and tariff-related issues begin to ease, shippers are likely to negotiate more favorable contract rates and improved terms with carriers and forwarders for 2026. But the contract talks should not only be about rates, warned Chantal McRoberts, director of Drewry Supply Chain Advisors. “Other than the prospect of lower contract rates for shippers, the other important aspect of bid strategy for 2026 contracts is risk management and resilience,” she said. Drewry is advising its shipper customers to review their carrier contract language to include longer payment terms, more service quality commitments and clauses to control surcharges such as detention and demurrage. In some cases, Drewry is also recommending that shippers include a clause where a rate review is triggered if market prices collapse. Tejwani told the Journal of Commerce that if cargo owners wanted to avoid having their contracts torn up should the tide turn, they would sign annual rates above loss-making levels for the oversupplied carriers. “Some carriers may blink first and sign deals at very low rates, but the minute you have a rush coming in, those contracts are not going to be worth the paper they’re written on, and I think a lot of shippers realize this,” he said. “If shippers really want to have a smooth supply chain for all of 2026 and access to capacity when the crunch comes, those smart shippers will agree to reasonable rate levels and not push carriers for the last single dollar,” Tejwani added. Contact Greg Knowler at greg.knowler@spglobal.com .

Forwarding

Contract season looms for ocean carriers facing Asia-Europe rate slump

<div class="phx-topic abstract-wrapper">The onus of calculating new US port fees that kick in next week falls on ocean carriers. </div>

The onus of calculating new US port fees that kick in next week falls on ocean carriers.

<div class="phx-topic">The United States is moving forward with a plan to collect port fees, putting the onus on ocean carriers to calculate and setting the stage for a showdown with China, which is teeing up its own retaliatory actions. The US Customs and Border Protection in a notice issued Friday, directed ocean carriers to determine any China-built tonnage calling US ports and pay new fees starting Oct. 14. China-based operators face harsher fees than their counterparts, spurring Beijing last week to prepare its own retaliatory “special fees” for ships that are tied to actors hurting Chinese interests. The vagueness of the criteria China could use to determine ties to the United States has expanded the risk of other ocean carriers getting caught in the crossfire beyond the obvious targets: US-flag vessel operators. A change to Chinese shipping law that took effect Sept. 29 allows China to go as far as blocking vessels from its ports. The US Maritime Administration has been in a long-running disagreement with China’s Ministry of Transport, accusing Chinese ports of giving unfavorable treatment to US-owned vessels. Both countries agreed to a level playing field through the US-China Bilateral Maritime Agreement, which took effect in 1998. The US federal register notice doesn’t detail how US Customs and Border Protection (CBP) would enforce the new port fee. The shipping industry largely failed to convince the USTR to again water down the Section 301 tariffs underpinning the port fees, although LNG-vessel shipowners and operators were exempted. The shipping industry successfully lobbied to ease the planned USTR port fee, with the agency releasing <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">a less-severe plan in mid-April</a>. Container lines <a href="https://www.joc.com/article/chinese-tonnage-moving-out-of-us-container-trade-ahead-of-new-fees-xeneta-6081320">have made moves to avoid the new fees</a>. A week prior to Oct. 14, there were 647,000 TEUs of China-built capacity, equating to 13% of the tonnage on the trade between Asia and North America, according to rate benchmarking provider Xeneta. On the trans-Atlantic, which includes some Canada-only calls, there were 81,000 TEUs of capacity or 8.6% of deployed capacity. There’s more than 118,00 TEUs of China-built tonnage from vessels that are smaller than 4,000 TEUs and deployed on US services but are excluded from the new port fee. But Cosco Shipping, its subsidiary OOCL, and Hede can’t avoid them and are the primary targets of the US response to what it sees as unfair subsidies to Chinese shipbuilding. Cosco and OOCL, which handle most US laden imports from China, have pledged to continue operating in the US trades. China has stayed largely silent on the planned US port fees since they were proposed in late February, acting by changing its shipping law just two weeks before planned implementation. Chinese shipowners were quick last week to back the change to the Regulations of the People’s Republic on International Ocean Shipping, which China modeled on the US Shipping Act approximately 20 years ago. “This is of great significance for promoting the establishment of a fair and equal international maritime transportation governance system, facilitating the smooth flow of global trade, and safeguarding the security and resilience of industrial and supply chains,” the China Shipowners’ Association said in a Sept. 30 statement. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

The United States is moving forward with a plan to collect port fees, putting the onus on ocean carriers to calculate and setting the stage for a showdown with China, which is teeing up its own retaliatory actions. The US Customs and Border Protection in a notice issued Friday, directed ocean carriers to determine any China-built tonnage calling US ports and pay new fees starting Oct. 14. China-based operators face harsher fees than their counterparts, spurring Beijing last week to prepare its own retaliatory “special fees” for ships that are tied to actors hurting Chinese interests. The vagueness of the criteria China could use to determine ties to the United States has expanded the risk of other ocean carriers getting caught in the crossfire beyond the obvious targets: US-flag vessel operators. A change to Chinese shipping law that took effect Sept. 29 allows China to go as far as blocking vessels from its ports. The US Maritime Administration has been in a long-running disagreement with China’s Ministry of Transport, accusing Chinese ports of giving unfavorable treatment to US-owned vessels. Both countries agreed to a level playing field through the US-China Bilateral Maritime Agreement, which took effect in 1998. The US federal register notice doesn’t detail how US Customs and Border Protection (CBP) would enforce the new port fee. The shipping industry largely failed to convince the USTR to again water down the Section 301 tariffs underpinning the port fees, although LNG-vessel shipowners and operators were exempted. The shipping industry successfully lobbied to ease the planned USTR port fee, with the agency releasing a less-severe plan in mid-April . Container lines have made moves to avoid the new fees . A week prior to Oct. 14, there were 647,000 TEUs of China-built capacity, equating to 13% of the tonnage on the trade between Asia and North America, according to rate benchmarking provider Xeneta. On the trans-Atlantic, which includes some Canada-only calls, there were 81,000 TEUs of capacity or 8.6% of deployed capacity. There’s more than 118,00 TEUs of China-built tonnage from vessels that are smaller than 4,000 TEUs and deployed on US services but are excluded from the new port fee. But Cosco Shipping, its subsidiary OOCL, and Hede can’t avoid them and are the primary targets of the US response to what it sees as unfair subsidies to Chinese shipbuilding. Cosco and OOCL, which handle most US laden imports from China, have pledged to continue operating in the US trades. China has stayed largely silent on the planned US port fees since they were proposed in late February, acting by changing its shipping law just two weeks before planned implementation. Chinese shipowners were quick last week to back the change to the Regulations of the People’s Republic on International Ocean Shipping, which China modeled on the US Shipping Act approximately 20 years ago. “This is of great significance for promoting the establishment of a fair and equal international maritime transportation governance system, facilitating the smooth flow of global trade, and safeguarding the security and resilience of industrial and supply chains,” the China Shipowners’ Association said in a Sept. 30 statement. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

US presses forward on port fees despite China’s warning

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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">A string of storms in September has roiled vessel schedules and terminal operations throughout the region.</div>

A string of storms in September has roiled vessel schedules and terminal operations throughout the region.

<div class="phx-topic">Ocean carriers are warning of skipped port calls, rerouted cargo and vessel delays on a raft of trans-Pacific and Asia-Europe and Asia-Mediterranean sailings over the next two weeks in the aftermath of the recent typhoons that have hit China. The threat of widespread disruption comes on the eve of China’s National Day holiday that starts Wednesday and is expected to last 10 days. <a href="https://www.joc.com/article/south-china-supply-chains-brace-for-years-strongest-typhoon-6084358">Typhoon Ragasa closed ports in southern China and Taiwan for three days last week</a>, Tropical Storm Mitag affected the Philippines and southeast China in mid-September and Typhoon Tapah struck the same region in early September. Hapag-Lloyd said its Gemini Cooperation services with partner Maersk are among those affected by the string of tropical cyclones. The most severely impacted are Gemini’s Pacific Southwest services, WC1 and WC3, with Nansha omitted this week on the trans-Pacific eastbound sailing by Gerd Maersk. Hapag-Lloyd said cargo will be rolled to the next WC1 voyage. Shanghai will also be omitted this week and next week on Gemini’s WC3 service to recover schedule reliability from delays caused by the typhoons, Hapag-Lloyd said. Sailings affected are those by GSL Lydia this week, with cargo transferred to the WC2 and US2 services, and by Norwalk next week, with cargo shifted to the US2 service operated by Kandla Express and US1 served by CCNI Algol. The delays follow call omissions last week at Yantian by the Gunvor Maersk due to Typhoon Ragasa. Hapag-Lloyd said cargo for Nansha has been discharged in both Vung Tau in Vietnam and Yantian, and will be carried back the Guangzhou international gateway port in three subsequent sailings. The carrier said the Dortmund Express operating Gemini’s Asia-US East Coast 1 service was late berthing at Yantian last Friday due to Ragasa after having already omitted Nansha on the same service due to Typhoon Tapah. Ocean Network Express (ONE) also highlighted delays of up to seven days on its Asia-Mediterranean MS1 and MD2 services due to the storms in the South China Sea. ONE confirmed a four-day delay by ACX Pearl operating its Japan-Straits-Malaysia service due to the disruption at Hong Kong and at Keelung in Taiwan. The carrier also said vessels are being delayed due to Typhoon Neoguri, which affected Japan and South Korea last week. CMA CGM also warned of vessel delays following port closures at Manila and Subic due to Typhoon Bualoi, which hit the Philippines over the weekend. Delays are also likely at Haiphong after Bualoi made landfall in northern Vietnam Monday, killing at least 30 people and causing extensive flooding. <h3>Congested ports gradually recovering </h3>Ports in south China are gradually recovering from the impact of Ragasa, with Hong Kong back to normal operations, but some Shenzhen terminals are still heavily congested. “The backlog [at Hong Kong and DaChan Bay] caused by Typhoon Ragasa has already been cleared,” a spokesperson for Hong Kong’s Modern Terminals told the Journal of Commerce Tuesday. A senior executive at a Hong Kong-based forwarder said Shenzhen’s western terminals, including Shekou and Chiwan, are still heavily congested. “The terminals will remain open during the extended National Day holiday and with factories closed for the holiday, this should provide [the terminals] with some respite to clear the backlog of cargo,” the executive told the Journal of Commerce Tuesday. Hapag-Lloyd said Shekou is still experiencing berthing delays of four to five days, with a five- to seven-day wait at Yantian. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Ocean carriers are warning of skipped port calls, rerouted cargo and vessel delays on a raft of trans-Pacific and Asia-Europe and Asia-Mediterranean sailings over the next two weeks in the aftermath of the recent typhoons that have hit China. The threat of widespread disruption comes on the eve of China’s National Day holiday that starts Wednesday and is expected to last 10 days. Typhoon Ragasa closed ports in southern China and Taiwan for three days last week , Tropical Storm Mitag affected the Philippines and southeast China in mid-September and Typhoon Tapah struck the same region in early September. Hapag-Lloyd said its Gemini Cooperation services with partner Maersk are among those affected by the string of tropical cyclones. The most severely impacted are Gemini’s Pacific Southwest services, WC1 and WC3, with Nansha omitted this week on the trans-Pacific eastbound sailing by Gerd Maersk. Hapag-Lloyd said cargo will be rolled to the next WC1 voyage. Shanghai will also be omitted this week and next week on Gemini’s WC3 service to recover schedule reliability from delays caused by the typhoons, Hapag-Lloyd said. Sailings affected are those by GSL Lydia this week, with cargo transferred to the WC2 and US2 services, and by Norwalk next week, with cargo shifted to the US2 service operated by Kandla Express and US1 served by CCNI Algol. The delays follow call omissions last week at Yantian by the Gunvor Maersk due to Typhoon Ragasa. Hapag-Lloyd said cargo for Nansha has been discharged in both Vung Tau in Vietnam and Yantian, and will be carried back the Guangzhou international gateway port in three subsequent sailings. The carrier said the Dortmund Express operating Gemini’s Asia-US East Coast 1 service was late berthing at Yantian last Friday due to Ragasa after having already omitted Nansha on the same service due to Typhoon Tapah. Ocean Network Express (ONE) also highlighted delays of up to seven days on its Asia-Mediterranean MS1 and MD2 services due to the storms in the South China Sea. ONE confirmed a four-day delay by ACX Pearl operating its Japan-Straits-Malaysia service due to the disruption at Hong Kong and at Keelung in Taiwan. The carrier also said vessels are being delayed due to Typhoon Neoguri, which affected Japan and South Korea last week. CMA CGM also warned of vessel delays following port closures at Manila and Subic due to Typhoon Bualoi, which hit the Philippines over the weekend. Delays are also likely at Haiphong after Bualoi made landfall in northern Vietnam Monday, killing at least 30 people and causing extensive flooding. Congested ports gradually recovering Ports in south China are gradually recovering from the impact of Ragasa, with Hong Kong back to normal operations, but some Shenzhen terminals are still heavily congested. “The backlog [at Hong Kong and DaChan Bay] caused by Typhoon Ragasa has already been cleared,” a spokesperson for Hong Kong’s Modern Terminals told the Journal of Commerce Tuesday. A senior executive at a Hong Kong-based forwarder said Shenzhen’s western terminals, including Shekou and Chiwan, are still heavily congested. “The terminals will remain open during the extended National Day holiday and with factories closed for the holiday, this should provide [the terminals] with some respite to clear the backlog of cargo,” the executive told the Journal of Commerce Tuesday. Hapag-Lloyd said Shekou is still experiencing berthing delays of four to five days, with a five- to seven-day wait at Yantian. Contact Keith Wallis at keithwallis@hotmail.com .

Marine terminals

Hapag-Lloyd, ONE warn of skipped calls, vessel delays due to Asian typhoons

<div class="phx-topic abstract-wrapper">The average monthly year-over-year decline in imports from October through February is almost 16%, according to the latest Global Port Tracker.</div>

The average monthly year-over-year decline in imports from October through February is almost 16%, according to the latest Global Port Tracker.

<div class="phx-topic">Monthly US containerized imports will slide below 2 million TEUs and be at a year-over-year deficit at least through February due to an early peak season driven by tariff frontloading and as importers contend with new tariffs yet to come, a major retail group said Wednesday. The average monthly year-over-year decline in imports from October through February is significant — almost 16%, the National Retail Federation (NRF) and Hackett Associates revealed in their latest Global Port Tracker (GPT). “This year’s peak season has come and gone, largely due to retailers frontloading imports ahead of reciprocal tariffs taking effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “New sectoral tariffs continue to be announced, but most retailers are well-stocked for the holiday season and doing as much as they can to shield their customers from the costs of tariffs for as long as they can.” The latest GPT forecasts sub-2 million TEUs in imports for at least the next five months: October (1.97 million TEUs), November (1.75 million TEUs), December (1.72 million TEUs), January (1.87 million TEUs) and February (1.77 million TEUs). October would be the first month since June to see imports below 2 million TEUs. The monthly projections for the fourth quarter are up about 1% from the forecasts made in September’s GPT. In September, US import volumes — which have not yet been finalized — are projected to reach 2.12 million TEUs, unmoved from <a href="https://www.joc.com/article/us-retailers-upgrade-import-forecast-but-still-expect-q4-decline-6077875">forecasts made last month</a> but down 6.6% compared with last year. August US import volumes came in at 2.32 million TEUs, unchanged from last year but up 1.7% from projections made last month. Full-year imports are forecast at 24.79 million TEUs, down 2.9% from 2024. “Many large companies preemptively imported goods to build up inventories, but as those stockpiles are depleted, the full inflationary impact of the tariffs will become apparent,” Hackett Associates founder Ben Hackett said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="16bac55d-49bc-45ea-8386-312c19837f9b"></dynamic-object></div>From January through July, US retailers have kept only about 1.3 months of inventory on hand, according to the US Census Bureau. “Ongoing volatility in US tariff policy is creating significant economic uncertainty, with trade volumes expected to see unpredictable shifts over the next four to six months,” Hackett said. As tariff uncertainty stifles US demand, August imports from China were down 4.8% month over month and 11% on the year, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. And as imports drop, Chinese producers are turning to customers in other countries to buy their products, said Jon Monroe, who serves as an adviser to forwarders. “They’re pivoting elsewhere,” Monroe told the Journal of Commerce. The Global Port Tracker covers the ports of Los Angeles/Long Beach, Oakland, and Seattle and Tacoma on the West Coast; New York/New Jersey, the Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  Senior Editor Bill Mongelluzzo contributed to this report. </div>

Monthly US containerized imports will slide below 2 million TEUs and be at a year-over-year deficit at least through February due to an early peak season driven by tariff frontloading and as importers contend with new tariffs yet to come, a major retail group said Wednesday. The average monthly year-over-year decline in imports from October through February is significant — almost 16%, the National Retail Federation (NRF) and Hackett Associates revealed in their latest Global Port Tracker (GPT). “This year’s peak season has come and gone, largely due to retailers frontloading imports ahead of reciprocal tariffs taking effect,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said. “New sectoral tariffs continue to be announced, but most retailers are well-stocked for the holiday season and doing as much as they can to shield their customers from the costs of tariffs for as long as they can.” The latest GPT forecasts sub-2 million TEUs in imports for at least the next five months: October (1.97 million TEUs), November (1.75 million TEUs), December (1.72 million TEUs), January (1.87 million TEUs) and February (1.77 million TEUs). October would be the first month since June to see imports below 2 million TEUs. The monthly projections for the fourth quarter are up about 1% from the forecasts made in September’s GPT. In September, US import volumes — which have not yet been finalized — are projected to reach 2.12 million TEUs, unmoved from forecasts made last month but down 6.6% compared with last year. August US import volumes came in at 2.32 million TEUs, unchanged from last year but up 1.7% from projections made last month. Full-year imports are forecast at 24.79 million TEUs, down 2.9% from 2024. “Many large companies preemptively imported goods to build up inventories, but as those stockpiles are depleted, the full inflationary impact of the tariffs will become apparent,” Hackett Associates founder Ben Hackett said. From January through July, US retailers have kept only about 1.3 months of inventory on hand, according to the US Census Bureau. “Ongoing volatility in US tariff policy is creating significant economic uncertainty, with trade volumes expected to see unpredictable shifts over the next four to six months,” Hackett said. As tariff uncertainty stifles US demand, August imports from China were down 4.8% month over month and 11% on the year, according to PIERS, a Journal of Commerce sister product within S&P Global. And as imports drop, Chinese producers are turning to customers in other countries to buy their products, said Jon Monroe, who serves as an adviser to forwarders. “They’re pivoting elsewhere,” Monroe told the Journal of Commerce. The Global Port Tracker covers the ports of Los Angeles/Long Beach, Oakland, and Seattle and Tacoma on the West Coast; New York/New Jersey, the Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast. Contact Laura Robb at laura.robb@spglobal.com .  Senior Editor Bill Mongelluzzo contributed to this report.

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