<div class="phx-topic abstract-wrapper">Fifteen of the 27 EU countries will postpone implementation of the customs risk analysis program for imports into the EU until the end of the year, including France, Belgium, Spain and Italy.</div>

Fifteen of the 27 EU countries will postpone implementation of the customs risk analysis program for imports into the EU until the end of the year, including France, Belgium, Spain and Italy.

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<div class="phx-topic">More than half of the European Union’s 27 member nations will delay implementation of the advance cargo information system for road and rail shipments that was supposed to require full compliance from Sept. 1 to give service providers more time to prepare. But the four-month postponement of the final segment of the Import Control System 2 (ICS2) regulation — a customs risk analysis program for imports into the EU that has taken five years to fully launch — has been roundly criticized by shippers and transport organizations. The incomplete rollout has created “a patchwork implementation that will confuse and frustrate” parties that move cargo into the EU, according to James Hookham, director-general of the Global Shippers’ Forum “It’s an EU-wide system so it’s either ready to work in 27 member states — plus Norway, Northern Ireland and Switzerland — or it’s not,” Hookham told the Journal of Commerce Wednesday. The ICS2 advance filing system was applied to air cargo in 2021 and ocean shipments in 2024. Under ICS2 “Release 3” on Sept. 1, the regulation was applied to road and rail shipments that now also require Entry Summary Declarations (ENS) for shipments entering or transiting the EU Customs Territory. Bryn Heimbeck, president and co-founder of global logistics platform TradeTech, noted that although ICS2 Release 3 was an important step in strengthening supply chain security in Europe, "the decision to allow postponements has created different timelines across the EU, which can be challenging for participants to navigate.” He said 15 of the 27 EU countries will delay implementation of ICS2 Release 3, including France, Belgium, Spain and Italy. The postponements are expected to be in effect until the end of the year, with full compliance mandatory once they expire. Road transport association IRU said granting postponements to EU member nations was logical if the system was not ready, but should have been applied to all member states. “In the current situation, a two-speed approach will expose road transport operators to high penalties and will force difficult and expensive decisions on the routing of operations, while customs administrations may struggle with high volumes of incomplete or missing ENS declarations,” the IRU said in a statement, warning of “severe disruption” at the EU’s external borders. <h3>Landside cargo challenges </h3>While the ICS2 was rolled out relatively painlessly for the ocean sectors, bringing the EU’s customs regulatory processes and data configurations in line with those of the US, Canada and Japan, preparations for advance information for landside cargo have proved to be complicated. The European Association for Forwarding, Transport, Logistics and Customs Services (Clecat), explained in a recent letter to the European Commission that land borders, unlike seaports and airports, had limited capacity and could be congested by only a few delayed trucks. “Practical challenges unique to road and rail, such as split loads, the prevalence of small carriers and the need for a multitude of non-EU operators to register in EU systems were clearly overlooked when assigning the same deployment timeline to all modes of transport,” the forwarder association noted. Clecat, the Global Shippers’ Forum and IRU have urged the European Commission to grant a non-enforcement period for ICS2 for road and rail, warning of serious blockages at European land borders. “The European Commission should act without delay and announce a six-month grace period at EU level to avoid fragmentation, ensure legal certainty and prevent disruption to European supply chains,” Clecat wrote in its letter to Brussels. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

More than half of the European Union’s 27 member nations will delay implementation of the advance cargo information system for road and rail shipments that was supposed to require full compliance from Sept. 1 to give service providers more time to prepare. But the four-month postponement of the final segment of the Import Control System 2 (ICS2) regulation — a customs risk analysis program for imports into the EU that has taken five years to fully launch — has been roundly criticized by shippers and transport organizations. The incomplete rollout has created “a patchwork implementation that will confuse and frustrate” parties that move cargo into the EU, according to James Hookham, director-general of the Global Shippers’ Forum “It’s an EU-wide system so it’s either ready to work in 27 member states — plus Norway, Northern Ireland and Switzerland — or it’s not,” Hookham told the Journal of Commerce Wednesday. The ICS2 advance filing system was applied to air cargo in 2021 and ocean shipments in 2024. Under ICS2 “Release 3” on Sept. 1, the regulation was applied to road and rail shipments that now also require Entry Summary Declarations (ENS) for shipments entering or transiting the EU Customs Territory. Bryn Heimbeck, president and co-founder of global logistics platform TradeTech, noted that although ICS2 Release 3 was an important step in strengthening supply chain security in Europe, "the decision to allow postponements has created different timelines across the EU, which can be challenging for participants to navigate.” He said 15 of the 27 EU countries will delay implementation of ICS2 Release 3, including France, Belgium, Spain and Italy. The postponements are expected to be in effect until the end of the year, with full compliance mandatory once they expire. Road transport association IRU said granting postponements to EU member nations was logical if the system was not ready, but should have been applied to all member states. “In the current situation, a two-speed approach will expose road transport operators to high penalties and will force difficult and expensive decisions on the routing of operations, while customs administrations may struggle with high volumes of incomplete or missing ENS declarations,” the IRU said in a statement, warning of “severe disruption” at the EU’s external borders. Landside cargo challenges While the ICS2 was rolled out relatively painlessly for the ocean sectors, bringing the EU’s customs regulatory processes and data configurations in line with those of the US, Canada and Japan, preparations for advance information for landside cargo have proved to be complicated. The European Association for Forwarding, Transport, Logistics and Customs Services (Clecat), explained in a recent letter to the European Commission that land borders, unlike seaports and airports, had limited capacity and could be congested by only a few delayed trucks. “Practical challenges unique to road and rail, such as split loads, the prevalence of small carriers and the need for a multitude of non-EU operators to register in EU systems were clearly overlooked when assigning the same deployment timeline to all modes of transport,” the forwarder association noted. Clecat, the Global Shippers’ Forum and IRU have urged the European Commission to grant a non-enforcement period for ICS2 for road and rail, warning of serious blockages at European land borders. “The European Commission should act without delay and announce a six-month grace period at EU level to avoid fragmentation, ensure legal certainty and prevent disruption to European supply chains,” Clecat wrote in its letter to Brussels. Contact Greg Knowler at greg.knowler@spglobal.com .

Transport, Trade and Regulation News

Logistics Technology News

Supply chain

Cargo groups slam ‘patchwork’ rollout of Europe’s ICS2 advance filing program

<div class="phx-topic abstract-wrapper">Container lines offering regular calls at India’s busiest port have told customers the landside logjam is causing considerable supply chain risks for the trade as train turnarounds remain increasingly chaotic.</div>

Container lines offering regular calls at India’s busiest port have told customers the landside logjam is causing considerable supply chain risks for the trade as train turnarounds remain increasingly chaotic.

<div class="phx-topic">Mundra Port — India’s busiest container handler — is grappling with major harbor congestion that has severely disrupted the flow of cargo to and from northern hinterlands by rail. Rail freight accounts for a significant portion of box volumes handled by Mundra, with northern inland container depots contributing the most. Container lines offering regular calls at Mundra have told customers the landside logjam is causing considerable supply chain risks for the trade as train turnarounds remain increasingly chaotic. “Due to congestion, train movement towards Mundra Port is currently disrupted,” Maersk said in a customer advisory. “This is affecting the timely placement of export trains at the port and, consequently, causing delays in the evacuation of import containers.” The import backlogs have choked rail yards, complicating the typically followed first-in, first-out model of train operations, sources said. Concerns among local supply chain stakeholders are growing, with freight depot service leader Gateway Distriparks (GDL) sending out a trade advisory to customers. “Train movement towards the port [Mundra] is currently sluggish,” GDL noted. “We are in regular touch with Indian Railways to expedite train movement.” Officials at India’s Association of Container Train Operators (ACTO) who spoke with the Journal of Commerce have attributed the rail slowdowns to chronic capacity pressure at Mundra stemming from landside infrastructure gaps amid steady trade growth. “There is a critical need for port rail capacity to increase with more handling lines and evacuation capacity in order to deal with the growing volumes,” said ACTO President Manish Puri. “This is the only long-term solution, otherwise congestion will keep occurring whenever there is even a minor volume peak or other operational hiccup due to external factors.” <h3>Terminals, train operators at odds </h3>As shippers face additional cost implications, a blame game over the cargo buildups appears to be at play between port terminals and container train operators (CTOs), including state-owned giant Container Corporation of India. “We are not denying the increased pressure from import surges, but CTOs stick to their normal business approach on the export leg — wait until trains are completely full to dispatch,” said a port executive who didn’t want to be identified. Sunil Vaswani, executive director of the Container Shipping Lines’ Association (India), said the issue needs fixing between terminals and CTOs, adding that a shortage of truck drivers linked to the festive season and lingering vessel bunching cases have exacerbated the problem. Mundra is equipped to handle up to 30 trains a day, generally railing out between 5,000 TEUs to 6,000 TEUs daily. But the normal inventory of import containers landing into its yards is in the range of 15,000 TEUs, which sources said has peaked at 20,000 TEUs in recent days. Mundra — Adani Ports’ flagship port entity — features five box terminals, which have had 90%-plus utilization of existing capacity levels for some time because of strong cargo growth. But the pace of volumes passing through rival Nhava Sheva Port has ticked noticeably higher over the past few months following the recent launch of Phase II operations by concessionaire PSA International, pushing overall port capacity to about 10 million TEUs. The latest port data reflects that altering regional trend. April–August volumes at Nhava Sheva were up 13% year over year to 3.3 million TEUs, while Mundra remained relatively flat at 3.5 million TEUs. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Mundra Port — India’s busiest container handler — is grappling with major harbor congestion that has severely disrupted the flow of cargo to and from northern hinterlands by rail. Rail freight accounts for a significant portion of box volumes handled by Mundra, with northern inland container depots contributing the most. Container lines offering regular calls at Mundra have told customers the landside logjam is causing considerable supply chain risks for the trade as train turnarounds remain increasingly chaotic. “Due to congestion, train movement towards Mundra Port is currently disrupted,” Maersk said in a customer advisory. “This is affecting the timely placement of export trains at the port and, consequently, causing delays in the evacuation of import containers.” The import backlogs have choked rail yards, complicating the typically followed first-in, first-out model of train operations, sources said. Concerns among local supply chain stakeholders are growing, with freight depot service leader Gateway Distriparks (GDL) sending out a trade advisory to customers. “Train movement towards the port [Mundra] is currently sluggish,” GDL noted. “We are in regular touch with Indian Railways to expedite train movement.” Officials at India’s Association of Container Train Operators (ACTO) who spoke with the Journal of Commerce have attributed the rail slowdowns to chronic capacity pressure at Mundra stemming from landside infrastructure gaps amid steady trade growth. “There is a critical need for port rail capacity to increase with more handling lines and evacuation capacity in order to deal with the growing volumes,” said ACTO President Manish Puri. “This is the only long-term solution, otherwise congestion will keep occurring whenever there is even a minor volume peak or other operational hiccup due to external factors.” Terminals, train operators at odds As shippers face additional cost implications, a blame game over the cargo buildups appears to be at play between port terminals and container train operators (CTOs), including state-owned giant Container Corporation of India. “We are not denying the increased pressure from import surges, but CTOs stick to their normal business approach on the export leg — wait until trains are completely full to dispatch,” said a port executive who didn’t want to be identified. Sunil Vaswani, executive director of the Container Shipping Lines’ Association (India), said the issue needs fixing between terminals and CTOs, adding that a shortage of truck drivers linked to the festive season and lingering vessel bunching cases have exacerbated the problem. Mundra is equipped to handle up to 30 trains a day, generally railing out between 5,000 TEUs to 6,000 TEUs daily. But the normal inventory of import containers landing into its yards is in the range of 15,000 TEUs, which sources said has peaked at 20,000 TEUs in recent days. Mundra — Adani Ports’ flagship port entity — features five box terminals, which have had 90%-plus utilization of existing capacity levels for some time because of strong cargo growth. But the pace of volumes passing through rival Nhava Sheva Port has ticked noticeably higher over the past few months following the recent launch of Phase II operations by concessionaire PSA International, pushing overall port capacity to about 10 million TEUs. The latest port data reflects that altering regional trend. April–August volumes at Nhava Sheva were up 13% year over year to 3.3 million TEUs, while Mundra remained relatively flat at 3.5 million TEUs. Contact Bency Mathew at bencyvmathew@gmail.com .

Container Shipping News

Port News

International ports

Container lines

Port infrastructure

Maritime

Congestion choking Mundra Port threatens North India cargo flow

<div class="phx-topic abstract-wrapper">Knight-Swift already partners with both UP and NS, so a combined transcontinental railroad would fit nicely into its existing service for shippers.</div>

Knight-Swift already partners with both UP and NS, so a combined transcontinental railroad would fit nicely into its existing service for shippers.

<div class="phx-topic">Knight-Swift Transportation said Tuesday it believes US regulators should approve Union Pacific Railroad’s (UP’s) acquisition of Norfolk Southern Railway (NS), becoming the fourth major intermodal provider to publicly back the $85 billion deal. Swift Intermodal, Knight-Swift’s intermodal division, already partners with both UP and NS, making the acquisition a natural fit for its existing intermodal network. A combined transcontinental railroad would require little to no adjustment for Swift, and it could reap the rewards of eliminating time-consuming interchanges in cities such as Chicago, Memphis and New Orleans. “By knitting together a coast-to-coast rail network, Union Pacific and Norfolk Southern are creating new efficiencies that will benefit everyone — from logistics providers like us to our customers, to the end-consumers,” Knight-Swift CEO Adam Miller said in a statement. “As a company that operates thousands of trucks and thousands of intermodal containers, we know the power of combining modes. This unified rail system will let us seamlessly integrate our trucking with rail on cross-country shipments like never before.” Knight-Swift’s intermodal division owns about 12,000 containers, hauling nearly 150,000 loads across all North American railroads annually. It is the fifth-largest asset-owning intermodal provider in the US behind J.B. Hunt Transport Services, Hub Group, Schneider National and STG Logistics. Knight-Swift joins <a href="https://www.joc.com/article/up-ns-deal-would-trigger-unnecessary-wave-of-rail-mergers-cpkc-6069870">C.R. England, Hub Group, and Mode Transportation</a> as supporters of the UP-NS deal, which would create the US’ first transcontinental railroad and requires approval from the US Surface Transportation Board (STB), which could come sometime in 2027. <h3>Political football </h3>While UP and NS have until January to file their formal application to the STB, the railroads received a boost last week when the Trump administration moved to <a href="https://www.joc.com/article/trump-move-to-oust-stbs-primus-boosts-likelihood-of-up-ns-approval-6070952">fire board member</a> Robert Primus, who has been vocal in his opposition to consolidation in the rail industry. The Sheet Metal, Air, Rail, Transportation Union and its transportation division (SMART-TD), has come out against the UP-NS transaction and criticized the attempted removal of Primus. The Brotherhood of Locomotive Engineers and Trainmen (BLET), another large rail union, has not taken a position on the proposed acquisition. Canadian Pacific Kansas City (CPKC) opposes the deal and last week ruled out a potential merger with the other eastern US railroad, CSX Transportation. Canadian National Railway has not commented publicly on the UP-NS deal. Schneider National and STG Logistics, two other large asset-based partners of UP, have not taken a position on the proposed acquisition. Both partner with CSX in the eastern US, making a UP-NS transcontinental railroad more complicated for their intermodal networks. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Knight-Swift Transportation said Tuesday it believes US regulators should approve Union Pacific Railroad’s (UP’s) acquisition of Norfolk Southern Railway (NS), becoming the fourth major intermodal provider to publicly back the $85 billion deal. Swift Intermodal, Knight-Swift’s intermodal division, already partners with both UP and NS, making the acquisition a natural fit for its existing intermodal network. A combined transcontinental railroad would require little to no adjustment for Swift, and it could reap the rewards of eliminating time-consuming interchanges in cities such as Chicago, Memphis and New Orleans. “By knitting together a coast-to-coast rail network, Union Pacific and Norfolk Southern are creating new efficiencies that will benefit everyone — from logistics providers like us to our customers, to the end-consumers,” Knight-Swift CEO Adam Miller said in a statement. “As a company that operates thousands of trucks and thousands of intermodal containers, we know the power of combining modes. This unified rail system will let us seamlessly integrate our trucking with rail on cross-country shipments like never before.” Knight-Swift’s intermodal division owns about 12,000 containers, hauling nearly 150,000 loads across all North American railroads annually. It is the fifth-largest asset-owning intermodal provider in the US behind J.B. Hunt Transport Services, Hub Group, Schneider National and STG Logistics. Knight-Swift joins C.R. England, Hub Group, and Mode Transportation as supporters of the UP-NS deal, which would create the US’ first transcontinental railroad and requires approval from the US Surface Transportation Board (STB), which could come sometime in 2027. Political football While UP and NS have until January to file their formal application to the STB, the railroads received a boost last week when the Trump administration moved to fire board member Robert Primus, who has been vocal in his opposition to consolidation in the rail industry. The Sheet Metal, Air, Rail, Transportation Union and its transportation division (SMART-TD), has come out against the UP-NS transaction and criticized the attempted removal of Primus. The Brotherhood of Locomotive Engineers and Trainmen (BLET), another large rail union, has not taken a position on the proposed acquisition. Canadian Pacific Kansas City (CPKC) opposes the deal and last week ruled out a potential merger with the other eastern US railroad, CSX Transportation. Canadian National Railway has not commented publicly on the UP-NS deal. Schneider National and STG Logistics, two other large asset-based partners of UP, have not taken a position on the proposed acquisition. Both partner with CSX in the eastern US, making a UP-NS transcontinental railroad more complicated for their intermodal networks. Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

Rail News

Knight-Swift says it backs Union Pacific-Norfolk Southern deal

<div class="phx-topic abstract-wrapper">Ocean carriers are seeking to curb the sharp decline in spot rates in the run-up to next month’s Golden Week holiday. </div>

Ocean carriers are seeking to curb the sharp decline in spot rates in the run-up to next month’s Golden Week holiday.

<div class="phx-topic">The next few weeks on the trans-Pacific trade will be telling as time is running out for container lines to adjust capacity to falling demand or risk losing contracted cargo to the spot market. A slight bump last week in container spot rates, as measured by the Platts and Shanghai Shipping Exchange indexes, could be a sign of blank sailings ending the sharp dive in rates that began in late May, or merely a blip. The run-up to Golden Week that starts Oct. 1, a period of slowing China production due to the holiday observance, gives carriers the last major window this year to stem the rate bleed or see shippers neglect contracted allocations in favor of cheaper spot rates. Ocean carriers are seeking rate increases of $800 to $900 per FEU, sources say, with one carrier representative noting the efforts are focused on curbing the rate erosion of the last two months. Container spot rates from Asia to the US West Coast are about $2,000 per FEU, according to various indexes, with the Shanghai Shipping Exchange registering a 65% drop since June. Bullet rates quoted for single voyages tend to be $200 to $300 less than index rates, and some forwarder quotes for US West Coast routings have been as low as $1,300-$1,400 per FEU.Container lines thus far have been modest in blanking capacity despite falling rates and <a href="https://www.joc.com/article/us-retailers-project-big-year-over-year-import-declines-to-close-out-2025-6060323">weak forecasts for year-end volumes</a>. But analysts and forwarders warn that a sharp increase in blanks is nearly inevitable. Carriers’ averseness to losing import <a href="https://www.joc.com/article/toll-of-us-tariffs-begins-to-emerge-on-unsettled-trans-pacific-6065761">volumes already weakened by US tariff frontloading</a>, the potential for a late-year surge, and <a href="https://www.joc.com/article/niche-carriers-plan-to-ride-out-declining-spot-rates-on-the-trans-pacific-6071722">niche carriers sticking to the trade</a> have kept blanking levels consistent with past years. <h3>More capacity coming in October </h3>Container lines plan to inject more capacity in October, nonetheless, adding nearly 100,000 TEUs more than what’s deployed in September, according to maritime intelligence provider eeSea. The share of tonnage deployed on Asia to the US West Coast that is made unusable through blank sailings hovered near 8.4% in August, and carriers so far plan to blank a similar proportion of tonnage in September and October, although that can rise as weeks progress. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d0dc514b-60a6-4b10-862a-081c37b36db2"></dynamic-object></div>If carriers can’t adjust demand to supply, they face the risk of more shippers turning to the spot market rather than fulfilling contracted cargo allocations. Spot rates, as measured by various indexes, are at levels that many small and medium-sized shippers signed contracts at in the spring. Short-term ocean rates, as measured by benchmarking provider Xeneta, began falling in early August below contract rates covering 88 days or more. The short-term cost to ship an FEU from Asia to the US West Coast was $1,319 for the week ending Aug. 28, compared with $1,597 for the long-term rate in the same period. “We've got customers who are eager to save $100 anywhere, and they want a piece of that,” said a forwarder who did not want to be identified. “We are not trying to sell it, but when they ask us, ‘What are your FAK rates?’ We can’t tell them, ‘No, we’re not going to offer you our FAK rates,’ especially if it means we’re going to get some incremental business out of it.”<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="98a0037a-3658-44f2-86a3-be3148b993eb"></dynamic-object></div>Small and medium-sized importers signed service contract rates at a larger-than-usual premium than the largest retailers in mid-April just as the market was showing strength, said another forwarder. The largest big-box retailers signed contracts that generally began May 1 in the range of $1,600 to $1,800 per FEU, while midsize and smaller importers secured contract rates in the range of $2,000 to $2,200 per FEU. The danger importers face chasing cheaper spot rates when the rates are falling is that carriers will be loath to help out cargo owners when the market inevitably tightens — even if it’s short-lived. Container lines are more agile in moving vessels to and from ocean trades by omitting calls to ports or voiding sailings, according to an Aug. 28 notice sent by forwarder American Shipping Co. to its customers that was seen by the Journal of Commerce. While such tools to manage capacity haven’t had much impact in recent months, “if timed right, it can have a direct impact on the freight rates,” the notice read. Most shippers are not concerned about carriers charging them for dead freight if they do not fill the minimum quantity commitments (MQCs) in their contracts because, historically, carriers have never done that. Carriers normally roll over the unused MQCs into the next year’s contracts. So far, the shift from contracted cargo to spot cargo has been minimal, according to forwarders and carriers who spoke with the Journal of Commerce. But the inflection point is getting closer. “It could happen” that more BCOs turn to the spot market if rates reverse course in the coming weeks and begin dropping again toward $1,600 to the West Coast and $2,600 to the East Coast, said Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV Global Logistics. “If the West Coast spot rate sinks to $1,400, some BCOs will seek to reopen their contracts, or they could book more under spot,” Kauffman said. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report. </div>

The next few weeks on the trans-Pacific trade will be telling as time is running out for container lines to adjust capacity to falling demand or risk losing contracted cargo to the spot market. A slight bump last week in container spot rates, as measured by the Platts and Shanghai Shipping Exchange indexes, could be a sign of blank sailings ending the sharp dive in rates that began in late May, or merely a blip. The run-up to Golden Week that starts Oct. 1, a period of slowing China production due to the holiday observance, gives carriers the last major window this year to stem the rate bleed or see shippers neglect contracted allocations in favor of cheaper spot rates. Ocean carriers are seeking rate increases of $800 to $900 per FEU, sources say, with one carrier representative noting the efforts are focused on curbing the rate erosion of the last two months. Container spot rates from Asia to the US West Coast are about $2,000 per FEU, according to various indexes, with the Shanghai Shipping Exchange registering a 65% drop since June. Bullet rates quoted for single voyages tend to be $200 to $300 less than index rates, and some forwarder quotes for US West Coast routings have been as low as $1,300-$1,400 per FEU. Container lines thus far have been modest in blanking capacity despite falling rates and weak forecasts for year-end volumes . But analysts and forwarders warn that a sharp increase in blanks is nearly inevitable. Carriers’ averseness to losing import volumes already weakened by US tariff frontloading , the potential for a late-year surge, and niche carriers sticking to the trade have kept blanking levels consistent with past years. More capacity coming in October Container lines plan to inject more capacity in October, nonetheless, adding nearly 100,000 TEUs more than what’s deployed in September, according to maritime intelligence provider eeSea. The share of tonnage deployed on Asia to the US West Coast that is made unusable through blank sailings hovered near 8.4% in August, and carriers so far plan to blank a similar proportion of tonnage in September and October, although that can rise as weeks progress. If carriers can’t adjust demand to supply, they face the risk of more shippers turning to the spot market rather than fulfilling contracted cargo allocations. Spot rates, as measured by various indexes, are at levels that many small and medium-sized shippers signed contracts at in the spring. Short-term ocean rates, as measured by benchmarking provider Xeneta, began falling in early August below contract rates covering 88 days or more. The short-term cost to ship an FEU from Asia to the US West Coast was $1,319 for the week ending Aug. 28, compared with $1,597 for the long-term rate in the same period. “We've got customers who are eager to save $100 anywhere, and they want a piece of that,” said a forwarder who did not want to be identified. “We are not trying to sell it, but when they ask us, ‘What are your FAK rates?’ We can’t tell them, ‘No, we’re not going to offer you our FAK rates,’ especially if it means we’re going to get some incremental business out of it.” Small and medium-sized importers signed service contract rates at a larger-than-usual premium than the largest retailers in mid-April just as the market was showing strength, said another forwarder. The largest big-box retailers signed contracts that generally began May 1 in the range of $1,600 to $1,800 per FEU, while midsize and smaller importers secured contract rates in the range of $2,000 to $2,200 per FEU. The danger importers face chasing cheaper spot rates when the rates are falling is that carriers will be loath to help out cargo owners when the market inevitably tightens — even if it’s short-lived. Container lines are more agile in moving vessels to and from ocean trades by omitting calls to ports or voiding sailings, according to an Aug. 28 notice sent by forwarder American Shipping Co. to its customers that was seen by the Journal of Commerce. While such tools to manage capacity haven’t had much impact in recent months, “if timed right, it can have a direct impact on the freight rates,” the notice read. Most shippers are not concerned about carriers charging them for dead freight if they do not fill the minimum quantity commitments (MQCs) in their contracts because, historically, carriers have never done that. Carriers normally roll over the unused MQCs into the next year’s contracts. So far, the shift from contracted cargo to spot cargo has been minimal, according to forwarders and carriers who spoke with the Journal of Commerce. But the inflection point is getting closer. “It could happen” that more BCOs turn to the spot market if rates reverse course in the coming weeks and begin dropping again toward $1,600 to the West Coast and $2,600 to the East Coast, said Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV Global Logistics. “If the West Coast spot rate sinks to $1,400, some BCOs will seek to reopen their contracts, or they could book more under spot,” Kauffman said. Contact Mark Szakonyi at mark.szakonyi@spglobal.com . Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report.

Forwarding

Trans-Pacific

Ocean market in trans-Pacific arrives at spot pricing tipping point

<div class="phx-topic abstract-wrapper">The former NYK Line executive was a swashbuckling figure who epitomized an era of influential and charismatic US heads of European and Asian container lines — figures who dominated the US landscape with levels of authority that have long since given way to headquarter supremacy.</div>

The former NYK Line executive was a swashbuckling figure who epitomized an era of influential and charismatic US heads of European and Asian container lines — figures who dominated the US landscape with levels of authority that have long since given way to headquarter supremacy.

<div class="phx-topic">The passing of <a href="https://www.joc.com/article/dodd-fiori-ex-nyk-north-america-executive-dead-at-82-6067734">former NYK Line executive Dodd Fiori on Aug. 16 at 82</a> is cause to look back on the heyday of his career in the 1990s, a period of profound change in the industry that culminated in an ultimately futile legislative effort to set the industry on a path toward value creation both for itself and its customers. Fiori was a swashbuckling figure who epitomized an era of influential and charismatic US heads of European and Asian container lines — figures who dominated the US landscape with levels of authority that have long since given way to headquarter supremacy within carrier organizations. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6073367_0.1.jpg"></img></div>Figures such as Capt. Nicola Arena of Mediterranean Shipping Co., Oscar J. Abello of “K” Line, Conrad Everhard of Cho Yang, A.B. “Ted” Ruhly of Maersk and Rudy Mack of Hapag-Lloyd rode astride the US industry and had the authority to be go-to sources for deals by shippers and forwarders. The lack of such figures in the US industry today means many large beneficial cargo owners (BCOs) regularly make pilgrimages to carrier headquarters to lock in capacity — the customer traveling to see the vendor — reflecting how the nexus of power within carriers gravitated from regions such as the US to Geneva, Marseille, Shanghai, Hamburg, Singapore and Copenhagen. But years ago, it was the regional leadership that was firmly in charge, especially in the US, where the regional heads were on the frontlines in dealing with customers and regulators. An example was Fiori negotiating NYK’s first contract with Walmart based on the carrier’s new Asia-East Coast via the Suez Canal route, the famed AEX service, which played to the retailer’s desire to land goods closer to East Coast store locations. “While the early 1990’s was still an era where the container industry had sustained periods of excess capacity, the Asia to East Coast [via Panama or Suez] was still somewhat of a niche market and not characterized by severe excess supply; that would of course change,” recalled Sam Ruda, who worked under Fiori before going on to other roles, including heading the Port of New York and New Jersey. “So, in this lane, at least in the early 1990’s, the power balance between the carrier and the shipper was more even,” Ruda said. “Dodd really played into this dynamic in the meeting with Walmart. The West Coast was not really the strategic imperative for Walmart. They needed capacity and service in the emerging East Coast lane from Asia via the canal routings.” <h3>Shippers emerge as a ‘power center’ </h3>While the 1990s saw the emergence of shippers such as Walmart, whose business model was based on supply chain, parallel and interconnected changes were underway that Fiori and other carrier heads were in the middle of. The period saw the emergence of shippers as a power center and the parallel demise of the decades-old conference system, where rate levels were set by conference carriers with little room for flexibility via “independent action” on rates. The idea to replace that system, supported by Fiori and other US industry leaders, as well as shippers, was enshrined in the deregulatory 1998 Ocean Shipping Reform Act, forged out of consensus among all key players. (That was in direct contrast to OSRA-22, which, in an entirely different political environment, was passed over carriers’ objections). The idea in 1998 was that win-win contractual relationships would result from allowing shippers and carriers for the first time to sign confidential contracts not subject to collective pricing actions by conferences. That vision, it seems fair to say, was never realized. At the first TPM in 2001, then-APL CEO Flemming Jacobs based his keynote speech on the need for value-creating relationships to emerge, which had yet to happen three years after the law passed. It was not hard to understand why. Consolidation at that time was still in its early stages. And persistent overcapacity and most shippers’ unwillingness to pay a premium for reliable service created tensions, especially with traditional conference carriers such as NYK and APL, whose services were based on reliability, with rates set 5% to 10% above non-conference lines. <h3>‘In the middle’ of tension </h3>During the 1990s, “the carrier side had sustained periods of overcapacity. Profitability for the carriers was elusive. And this lack of profitability created a lot of underlying tension between the [NYK] home office [in Tokyo] and the regional offices [in the US],” Ruda said. “I think this tension was true across the entire carrier industry. Dodd was right in the middle of this tension.” As the conference system faltered, the deregulated market that replaced it made it increasingly unprofitable for carriers to invest in the extra fuel needed to speed up to maintain schedules. Some carriers spent on extra fuel anyway in an elusive bid to extract premium rates until number crunches later exposed the folly of the spending. That pressure has carried through to the present day, with a key difference being that most carriers seem to have largely given up on the idea of reliability or are minimally focused on it. They prefer instead to see capacity absorbed by port congestion or geopolitical shocks, which resulted in the all-time record profits earned during and after COVID-19, including in the first half of 2025. If Fiori’s day saw the impact of overcapacity, that was partly due to the number of carriers serving the east-west trades being much greater than today. In the 1990s, 12 major conference carriers and five non-conference carriers were operating in the trans-Pacific, said Mike DiVirgilio, who worked under Fiori at NYK. That has now changed. “With a steady stream of mergers, acquisitions and a few bankruptcies, the carrier side has undergone a tectonic transformation,” Ruda said. “From a carrier perspective, consolidation enables significantly improved capability to better manage capacity which then enables improved pricing power and thus, the ability to charge rate levels that offer a return on capital.” While overcapacity is asserting itself again in the second half of 2025, consolidation has resulted in the top 10 carriers controlling 84% of capacity, according to Alphaliner, a fundamental change from the 1990s. “The ‘3-Cs’ have played out on a global scale in the container industry: consolidation, capacity management and the ability to charge [pricing power],” Ruda said. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>.</div>

The passing of former NYK Line executive Dodd Fiori on Aug. 16 at 82 is cause to look back on the heyday of his career in the 1990s, a period of profound change in the industry that culminated in an ultimately futile legislative effort to set the industry on a path toward value creation both for itself and its customers. Fiori was a swashbuckling figure who epitomized an era of influential and charismatic US heads of European and Asian container lines — figures who dominated the US landscape with levels of authority that have long since given way to headquarter supremacy within carrier organizations. Figures such as Capt. Nicola Arena of Mediterranean Shipping Co., Oscar J. Abello of “K” Line, Conrad Everhard of Cho Yang, A.B. “Ted” Ruhly of Maersk and Rudy Mack of Hapag-Lloyd rode astride the US industry and had the authority to be go-to sources for deals by shippers and forwarders. The lack of such figures in the US industry today means many large beneficial cargo owners (BCOs) regularly make pilgrimages to carrier headquarters to lock in capacity — the customer traveling to see the vendor — reflecting how the nexus of power within carriers gravitated from regions such as the US to Geneva, Marseille, Shanghai, Hamburg, Singapore and Copenhagen. But years ago, it was the regional leadership that was firmly in charge, especially in the US, where the regional heads were on the frontlines in dealing with customers and regulators. An example was Fiori negotiating NYK’s first contract with Walmart based on the carrier’s new Asia-East Coast via the Suez Canal route, the famed AEX service, which played to the retailer’s desire to land goods closer to East Coast store locations. “While the early 1990’s was still an era where the container industry had sustained periods of excess capacity, the Asia to East Coast [via Panama or Suez] was still somewhat of a niche market and not characterized by severe excess supply; that would of course change,” recalled Sam Ruda, who worked under Fiori before going on to other roles, including heading the Port of New York and New Jersey. “So, in this lane, at least in the early 1990’s, the power balance between the carrier and the shipper was more even,” Ruda said. “Dodd really played into this dynamic in the meeting with Walmart. The West Coast was not really the strategic imperative for Walmart. They needed capacity and service in the emerging East Coast lane from Asia via the canal routings.” Shippers emerge as a ‘power center’ While the 1990s saw the emergence of shippers such as Walmart, whose business model was based on supply chain, parallel and interconnected changes were underway that Fiori and other carrier heads were in the middle of. The period saw the emergence of shippers as a power center and the parallel demise of the decades-old conference system, where rate levels were set by conference carriers with little room for flexibility via “independent action” on rates. The idea to replace that system, supported by Fiori and other US industry leaders, as well as shippers, was enshrined in the deregulatory 1998 Ocean Shipping Reform Act, forged out of consensus among all key players. (That was in direct contrast to OSRA-22, which, in an entirely different political environment, was passed over carriers’ objections). The idea in 1998 was that win-win contractual relationships would result from allowing shippers and carriers for the first time to sign confidential contracts not subject to collective pricing actions by conferences. That vision, it seems fair to say, was never realized. At the first TPM in 2001, then-APL CEO Flemming Jacobs based his keynote speech on the need for value-creating relationships to emerge, which had yet to happen three years after the law passed. It was not hard to understand why. Consolidation at that time was still in its early stages. And persistent overcapacity and most shippers’ unwillingness to pay a premium for reliable service created tensions, especially with traditional conference carriers such as NYK and APL, whose services were based on reliability, with rates set 5% to 10% above non-conference lines. ‘In the middle’ of tension During the 1990s, “the carrier side had sustained periods of overcapacity. Profitability for the carriers was elusive. And this lack of profitability created a lot of underlying tension between the [NYK] home office [in Tokyo] and the regional offices [in the US],” Ruda said. “I think this tension was true across the entire carrier industry. Dodd was right in the middle of this tension.” As the conference system faltered, the deregulated market that replaced it made it increasingly unprofitable for carriers to invest in the extra fuel needed to speed up to maintain schedules. Some carriers spent on extra fuel anyway in an elusive bid to extract premium rates until number crunches later exposed the folly of the spending. That pressure has carried through to the present day, with a key difference being that most carriers seem to have largely given up on the idea of reliability or are minimally focused on it. They prefer instead to see capacity absorbed by port congestion or geopolitical shocks, which resulted in the all-time record profits earned during and after COVID-19, including in the first half of 2025. If Fiori’s day saw the impact of overcapacity, that was partly due to the number of carriers serving the east-west trades being much greater than today. In the 1990s, 12 major conference carriers and five non-conference carriers were operating in the trans-Pacific, said Mike DiVirgilio, who worked under Fiori at NYK. That has now changed. “With a steady stream of mergers, acquisitions and a few bankruptcies, the carrier side has undergone a tectonic transformation,” Ruda said. “From a carrier perspective, consolidation enables significantly improved capability to better manage capacity which then enables improved pricing power and thus, the ability to charge rate levels that offer a return on capital.” While overcapacity is asserting itself again in the second half of 2025, consolidation has resulted in the top 10 carriers controlling 84% of capacity, according to Alphaliner, a fundamental change from the 1990s. “The ‘3-Cs’ have played out on a global scale in the container industry: consolidation, capacity management and the ability to charge [pricing power],” Ruda said. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Dodd Fiori’s passing harks back to a bygone era in US shipping

<div class="phx-topic abstract-wrapper">The Montreal Port Authority (MPA) is expected later this fall to announce the winning bid to run the Contrecoeur terminal. </div>

The Montreal Port Authority (MPA) is expected later this fall to announce the winning bid to run the Contrecoeur terminal.

<div class="phx-topic">DP World is seeking to operate a long-planned, nearly C$1.6 billion container terminal in Montreal that the new Canadian government is backing amid its shift away from US trade dependence.The Montreal Port Authority (MPA) is expected later this fall to announce the winning bid to run the Contrecoeur terminal, which, with an annual capacity of 1.15 million TEUs, would increase Canada’s second-largest container port by capacity 150%. DP World, which operates at Vancouver and Prince Rupert the first- and third-largest ports in Canada, respectively, <a href="https://www.bloomberg.com/news/articles/2025-08-29/dp-world-vies-for-deal-to-run-montreal-port-championed-by-carney">confirmed to Bloomberg</a> that it was involved in project negotiations. DP said in a statement it was always exploring ways to expand its network in Canada and increase investment in the country. “While we see strong potential for developing logistics infrastructure in Montreal that drives economic growth and long-term value, we have no announcements to share at this time,” said a DP World spokesperson. Since the port failed to attract a bidder in 2021, the <a href="https://www.joc.com/article/quebec-provides-new-funding-for-proposed-montreal-terminal-citing-us-trade-tensions-5947783">Contrecoeur project has received</a> C$130 million from the Quebec provincial government and C$130 million from Canada’s infrastructure bank for construction. Prime Minister Mark Carney last week said that he was seeking to fast-track the Contrecoeur project and highlighted <a href="https://www.joc.com/article/carney-has-fresh-opportunity-to-galvanize-canadian-shipping-industry-6047928">newly passed legislation streamlining regulatory</a> approval for major infrastructure projects. The C$1.57 billion project, which is located 43 miles downriver from legacy Montreal terminals along the St. Lawrence River, requires extensive dredging and shoring up portions of the waterway. MPA seeks to begin construction as early as October and open the facility in 2029. The authority in 2022 <a href="https://www.joc.com/article/montreal-relaunches-search-process-for-contrecoeur-terminal-operator-5204826">sent bid invitations</a> to Axium Infrastructure Canada and Pomerleau Capital, Ports America Holdings, and Terminal Investment Limited, in which Mediterranean Shipping Co. owns a majority stake. The port originally planned to have the first phase of the project finished by 2024 and had identified three finalist but scrapped plans. DP World operates the Centerm facility in Vancouver and solely operates at Prince Rupert and Port Saint John. Montreal’s four existing container terminals are operated by two companies, Montreal Gateway Terminals Partnership and Termont Montreal.Container volumes through Montreal last year slipped 1%, to approximately 750,500 TEUs compared with 2023, according to MPA. Sporadic labor issues and the Port of New York and New Jersey’s ability to attract more exports from the Midwest have contributed to volume declines in recent years, with traffic down 8.9% in 2024 compared with 2020. Container volume, however, is up nearly 6.5% in the first seven months of this year on a year-over-year basis. While the port began the project in the late 1980s, work has gathered speed in the last decade, Julie Gascon, CEO and president of MPA, said on a Journal of Commerce webinar on May 22. The need to diversify away from US trade due to high tariffs has only added more momentum to the project. “If there is a 6% shift of Canadian exports from us to other international markets, Montreal would get at capacity very, very quickly, so it’s not just a project for the future, it’s a project that is urgent,” Gascon said. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

DP World is seeking to operate a long-planned, nearly C$1.6 billion container terminal in Montreal that the new Canadian government is backing amid its shift away from US trade dependence. The Montreal Port Authority (MPA) is expected later this fall to announce the winning bid to run the Contrecoeur terminal, which, with an annual capacity of 1.15 million TEUs, would increase Canada’s second-largest container port by capacity 150%. DP World, which operates at Vancouver and Prince Rupert the first- and third-largest ports in Canada, respectively, confirmed to Bloomberg that it was involved in project negotiations. DP said in a statement it was always exploring ways to expand its network in Canada and increase investment in the country. “While we see strong potential for developing logistics infrastructure in Montreal that drives economic growth and long-term value, we have no announcements to share at this time,” said a DP World spokesperson. Since the port failed to attract a bidder in 2021, the Contrecoeur project has received C$130 million from the Quebec provincial government and C$130 million from Canada’s infrastructure bank for construction. Prime Minister Mark Carney last week said that he was seeking to fast-track the Contrecoeur project and highlighted newly passed legislation streamlining regulatory approval for major infrastructure projects. The C$1.57 billion project, which is located 43 miles downriver from legacy Montreal terminals along the St. Lawrence River, requires extensive dredging and shoring up portions of the waterway. MPA seeks to begin construction as early as October and open the facility in 2029. The authority in 2022 sent bid invitations to Axium Infrastructure Canada and Pomerleau Capital, Ports America Holdings, and Terminal Investment Limited, in which Mediterranean Shipping Co. owns a majority stake. The port originally planned to have the first phase of the project finished by 2024 and had identified three finalist but scrapped plans. DP World operates the Centerm facility in Vancouver and solely operates at Prince Rupert and Port Saint John. Montreal’s four existing container terminals are operated by two companies, Montreal Gateway Terminals Partnership and Termont Montreal. Container volumes through Montreal last year slipped 1%, to approximately 750,500 TEUs compared with 2023, according to MPA. Sporadic labor issues and the Port of New York and New Jersey’s ability to attract more exports from the Midwest have contributed to volume declines in recent years, with traffic down 8.9% in 2024 compared with 2020. Container volume, however, is up nearly 6.5% in the first seven months of this year on a year-over-year basis. While the port began the project in the late 1980s, work has gathered speed in the last decade, Julie Gascon, CEO and president of MPA, said on a Journal of Commerce webinar on May 22. The need to diversify away from US trade due to high tariffs has only added more momentum to the project. “If there is a 6% shift of Canadian exports from us to other international markets, Montreal would get at capacity very, very quickly, so it’s not just a project for the future, it’s a project that is urgent,” Gascon said. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Marine terminals

North American ports

DP World aims to run Carney-backed Montreal terminal

<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

<div class="phx-topic abstract-wrapper">The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base.</div>

The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base.

<div class="phx-topic">For decades, international containerized freight from Michigan and the broader Midwest has been routed through distant US coastal gateways such as New York, Norfolk and Savannah, or Canadian ports such as Halifax and Montreal. Export-side users have included automotive original equipment manufacturers (OEMs), steel and chemical producers and agricultural shippers, while imports have consisted of tier 1 suppliers, machinery and equipment distributors and retail or e-commerce consolidators. These routes were not chosen for efficiency or cost. They were imposed by federal restrictions that have for decades prevented containerized freight from entering or exiting the Great Lakes by vessel. US Customs today does not permit such movements through Michigan because no facility in the state meets the required federal standards for security and processing. That is about to change. In 2026, the Port of Monroe will activate the first SAFE Port Act-compliant international container terminal in the Great Lakes, along with a new roll-on/roll-off (ro/ro) platform that complements existing vessel berths, dual Class I rail access and proximity to interstate highways and Midwest manufacturing. Together, these assets position Monroe as a fully integrated inland gateway for containerized trade and high-value industrial logistics. Conservatively, 1 million to 2 million TEUs of oceangoing cargo are generated annually from the Great Lakes’ industrial core, according to port estimates. This includes high-value shipments from sectors such as automotive, machinery, chemicals and electronics. Rather than projecting future throughput volumes, the Port of Monroe is focused on establishing a lawful and functioning corridor, allowing the market to respond. The goal is to restore balance, provide carriers with a practical entry point and give shippers a logistics option that should have existed decades ago. The terminal at Monroe will be available to operators who recognize the value of establishing service in an underserved but strategically positioned market. The automotive industry, in particular, stands to benefit. With production concentrated in the Midwest and export demand on the rise, direct vessel service from Monroe reduces complexity and supports just-in-time inventory models. Monroe offers a new point of connection between Midwest production and global markets, serving as a strategic outlet for general containerized freight and, more uniquely, for the direct shipment of new vehicles via ro/ro or in containers. Resilience has become a defining priority for today’s logistics networks. The March 2024 collapse of the Francis Scott Key Bridge in Baltimore, a critical ro/ro and vehicle export hub, exposed the system’s fragility. Overnight, cargo flows were disrupted, schedules were delayed and shippers were forced to reroute at significant cost. Inland ports such as the Port of Monroe offer a hedge against that kind of single-point failure. <h3>‘Manageable’ constraints </h3>Do the Great Lakes have constraints? Yes, but they are manageable. The annual three-month winter closure of the St. Lawrence Seaway is predictable and published well in advance, allowing cargo owners and carriers to plan accordingly. Intra-lake shipping continues throughout the winter, particularly with ice-class vessels. Recent climate trends indicate shorter freeze periods and milder conditions, which are gradually increasing intralake shipping capacity during the winter months. Other northern regions facing even harsher winter conditions have demonstrated what is possible. The Baltic Sea offers a relevant example. Despite a smaller economic footprint and more severe ice conditions, Baltic ports remain active year-round through the use of ice-capable vessels and integrated multimodal infrastructure. There is no reason the Great Lakes, now that the regulatory path has been cleared, should not do the same and make a comparable contribution to North American trade resilience. Unlike coastal gateways, which face sudden disruptions from hurricanes, labor action and infrastructure failures, the risks on the Great Lakes are stable and foreseeable. That reliability offers a competitive advantage for shippers navigating global volatility. But infrastructure alone is not enough. What is required is a shift in mindset. Federal freight policy must treat the Great Lakes as a fully integrated corridor. Carriers need to revisit assumptions about vessel size and routing patterns. Shippers will now be able to prioritize proximity, reliability and carbon performance rather than adhering to legacy paths shaped by outdated restrictions. The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base. Supporting inland container movement by vessel can drive demand for US-built ships, sustain skilled shipyard jobs, and expand the national maritime workforce. This is not just a logistics upgrade. It is a long-term investment in national capacity, employment, and competitiveness. This is a practical opportunity to enhance the national freight system using inland infrastructure that is efficient, cost-effective and underutilized. Monroe stands ready to serve shippers, carriers and policymakers seeking flexible, durable solutions. The Great Lakes have always had the potential to support containerized trade. Now that the path is open, the Port of Monroe is prepared to deliver. Capt. Paul C. LaMarre III is also director of the Port of Monroe in Michigan. Contact him at <a href="mailto:plamarre@portofmonroe.com">plamarre@portofmonroe.com</a>. </div>

For decades, international containerized freight from Michigan and the broader Midwest has been routed through distant US coastal gateways such as New York, Norfolk and Savannah, or Canadian ports such as Halifax and Montreal. Export-side users have included automotive original equipment manufacturers (OEMs), steel and chemical producers and agricultural shippers, while imports have consisted of tier 1 suppliers, machinery and equipment distributors and retail or e-commerce consolidators. These routes were not chosen for efficiency or cost. They were imposed by federal restrictions that have for decades prevented containerized freight from entering or exiting the Great Lakes by vessel. US Customs today does not permit such movements through Michigan because no facility in the state meets the required federal standards for security and processing. That is about to change. In 2026, the Port of Monroe will activate the first SAFE Port Act-compliant international container terminal in the Great Lakes, along with a new roll-on/roll-off (ro/ro) platform that complements existing vessel berths, dual Class I rail access and proximity to interstate highways and Midwest manufacturing. Together, these assets position Monroe as a fully integrated inland gateway for containerized trade and high-value industrial logistics. Conservatively, 1 million to 2 million TEUs of oceangoing cargo are generated annually from the Great Lakes’ industrial core, according to port estimates. This includes high-value shipments from sectors such as automotive, machinery, chemicals and electronics. Rather than projecting future throughput volumes, the Port of Monroe is focused on establishing a lawful and functioning corridor, allowing the market to respond. The goal is to restore balance, provide carriers with a practical entry point and give shippers a logistics option that should have existed decades ago. The terminal at Monroe will be available to operators who recognize the value of establishing service in an underserved but strategically positioned market. The automotive industry, in particular, stands to benefit. With production concentrated in the Midwest and export demand on the rise, direct vessel service from Monroe reduces complexity and supports just-in-time inventory models. Monroe offers a new point of connection between Midwest production and global markets, serving as a strategic outlet for general containerized freight and, more uniquely, for the direct shipment of new vehicles via ro/ro or in containers. Resilience has become a defining priority for today’s logistics networks. The March 2024 collapse of the Francis Scott Key Bridge in Baltimore, a critical ro/ro and vehicle export hub, exposed the system’s fragility. Overnight, cargo flows were disrupted, schedules were delayed and shippers were forced to reroute at significant cost. Inland ports such as the Port of Monroe offer a hedge against that kind of single-point failure. ‘Manageable’ constraints Do the Great Lakes have constraints? Yes, but they are manageable. The annual three-month winter closure of the St. Lawrence Seaway is predictable and published well in advance, allowing cargo owners and carriers to plan accordingly. Intra-lake shipping continues throughout the winter, particularly with ice-class vessels. Recent climate trends indicate shorter freeze periods and milder conditions, which are gradually increasing intralake shipping capacity during the winter months. Other northern regions facing even harsher winter conditions have demonstrated what is possible. The Baltic Sea offers a relevant example. Despite a smaller economic footprint and more severe ice conditions, Baltic ports remain active year-round through the use of ice-capable vessels and integrated multimodal infrastructure. There is no reason the Great Lakes, now that the regulatory path has been cleared, should not do the same and make a comparable contribution to North American trade resilience. Unlike coastal gateways, which face sudden disruptions from hurricanes, labor action and infrastructure failures, the risks on the Great Lakes are stable and foreseeable. That reliability offers a competitive advantage for shippers navigating global volatility. But infrastructure alone is not enough. What is required is a shift in mindset. Federal freight policy must treat the Great Lakes as a fully integrated corridor. Carriers need to revisit assumptions about vessel size and routing patterns. Shippers will now be able to prioritize proximity, reliability and carbon performance rather than adhering to legacy paths shaped by outdated restrictions. The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base. Supporting inland container movement by vessel can drive demand for US-built ships, sustain skilled shipyard jobs, and expand the national maritime workforce. This is not just a logistics upgrade. It is a long-term investment in national capacity, employment, and competitiveness. This is a practical opportunity to enhance the national freight system using inland infrastructure that is efficient, cost-effective and underutilized. Monroe stands ready to serve shippers, carriers and policymakers seeking flexible, durable solutions. The Great Lakes have always had the potential to support containerized trade. Now that the path is open, the Port of Monroe is prepared to deliver. Capt. Paul C. LaMarre III is also director of the Port of Monroe in Michigan. Contact him at plamarre@portofmonroe.com .

Ro/ro cargo

Michigan inland port offers new option for Great Lakes containerized freight

Year-over-year % change

PIERS containerized US import and export volumes is the transportation industry’s largest US waterborne trade data set, covering all US ports. Every day, the PIERS team processes an average of about 60,000 bills of lading filed with US Customs and Border Protection (CBP) and integrates this transactional trade data with standardized company details. PIERS contains US trade data going back to 2003. [PIERS](https://www.spglobal.com/marketintelligence/en/mi/products/piers.html)

India to US volumes (PIERS)

old -- PIERS Total US imports from India  (Monthly) (year-over-year change) Gateway

<div class="phx-topic abstract-wrapper">Robert Primus has been vocal in his opposition to consolidation in the rail industry, voting against the Canadian Pacific-Kansas City Southern merger in 2023 and Canadian National Railway’s acquisition of Iowa Northern Railway earlier this year.</div>

Robert Primus has been vocal in his opposition to consolidation in the rail industry, voting against the Canadian Pacific-Kansas City Southern merger in 2023 and Canadian National Railway’s acquisition of Iowa Northern Railway earlier this year.

<div class="phx-topic">President Donald Trump’s move to oust Robert Primus from the US Surface Transportation Board (STB) would seem to eliminate a key obstacle to securing regulatory approval for Union Pacific Railroad’s $85 billion acquisition of Norfolk Southern Railway (NS). Trump “fired” Primus from the STB on Wednesday, according to <a href="https://www.wsj.com/politics/policy/trump-fires-board-member-of-regulator-weighing-rail-merger-4b108713?mod=Searchresults&amp;pos=1&amp;page=1">The Wall Street Journal</a>. But Primus, who called the move “legally invalid,” said he would continue performing his duties as a member of the board, The Journal reported. His removal, if upheld, comes as the board prepares to evaluate Union Pacific’s proposed acquisition of Norfolk Southern in the coming months, a deal that would create the nation’s first transcontinental freight railroad. It also sets up a potential legal showdown, similar to the one Trump faces in the aftermath of his move earlier this week to fire Lisa Cook from the board of the Federal Reserve. Trump, since his return to office in January, has acted on several occasions to remove members from boards and regulatory agencies and replace them with people seen as loyal to his agenda. Ironically, it was Trump who appointed Primus, a Democrat, to the STB in 2020. His apparent ouster means there are now two Republicans and only one Democrat on the board, which can have up to five members. The International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART), the largest rail labor union, criticized the firing. SMART-TD, the transportation division covering rail engineers, has come out against UP’s acquisition of NS. “This action is unprecedented, unlawful in spirit, and reeks of direct interference from hedge funds and the nation’s largest rail carriers,” the union said in a statement Thursday. “The timing of this move cannot be ignored. Prior to its submission to the board, Mr. Primus has made clear his opposition to the so-called ‘merger’ that would be a corporate takeover combining Union Pacific Railroad and Norfolk Southern Railroad.” <h3>Voted against CP-KCS deal </h3>Primus has been vocal in his opposition to consolidation in the rail industry, voting against the Canadian Pacific-Kansas City Southern merger in 2023 and Canadian National Railway’s acquisition of Iowa Northern Railway earlier this year. Removing him from the STB would seem to give the UP-NS deal a far easier avenue to gain the required approval from federal regulators. “We believe the move comes in an effort to clear the path for the potential transcontinental merger,” Jason Seidl, a transportation analyst with TD Securities, wrote in an investor’s note Thursday. “We believe a Republican appointment could still be forthcoming as channel checks indicated four candidates in contention, potentially leaving the [STB] with a 3-1 Republican majority by the time a decision has to be made.” By law, no single political party can have more than three out of the five available seats on the Surface Transportation Board. Chairman Patrick Fuchs and member Michelle Schultz are Republicans, while member Karen Hedlund is a Democrat. There is already an existing vacancy on the board. UP and NS will file their formal merger application by January, kicking off an STB review that would likely not result in a final vote until the spring of 2027, if not later. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

President Donald Trump’s move to oust Robert Primus from the US Surface Transportation Board (STB) would seem to eliminate a key obstacle to securing regulatory approval for Union Pacific Railroad’s $85 billion acquisition of Norfolk Southern Railway (NS). Trump “fired” Primus from the STB on Wednesday, according to The Wall Street Journal . But Primus, who called the move “legally invalid,” said he would continue performing his duties as a member of the board, The Journal reported. His removal, if upheld, comes as the board prepares to evaluate Union Pacific’s proposed acquisition of Norfolk Southern in the coming months, a deal that would create the nation’s first transcontinental freight railroad. It also sets up a potential legal showdown, similar to the one Trump faces in the aftermath of his move earlier this week to fire Lisa Cook from the board of the Federal Reserve. Trump, since his return to office in January, has acted on several occasions to remove members from boards and regulatory agencies and replace them with people seen as loyal to his agenda. Ironically, it was Trump who appointed Primus, a Democrat, to the STB in 2020. His apparent ouster means there are now two Republicans and only one Democrat on the board, which can have up to five members. The International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART), the largest rail labor union, criticized the firing. SMART-TD, the transportation division covering rail engineers, has come out against UP’s acquisition of NS. “This action is unprecedented, unlawful in spirit, and reeks of direct interference from hedge funds and the nation’s largest rail carriers,” the union said in a statement Thursday. “The timing of this move cannot be ignored. Prior to its submission to the board, Mr. Primus has made clear his opposition to the so-called ‘merger’ that would be a corporate takeover combining Union Pacific Railroad and Norfolk Southern Railroad.” Voted against CP-KCS deal Primus has been vocal in his opposition to consolidation in the rail industry, voting against the Canadian Pacific-Kansas City Southern merger in 2023 and Canadian National Railway’s acquisition of Iowa Northern Railway earlier this year. Removing him from the STB would seem to give the UP-NS deal a far easier avenue to gain the required approval from federal regulators. “We believe the move comes in an effort to clear the path for the potential transcontinental merger,” Jason Seidl, a transportation analyst with TD Securities, wrote in an investor’s note Thursday. “We believe a Republican appointment could still be forthcoming as channel checks indicated four candidates in contention, potentially leaving the [STB] with a 3-1 Republican majority by the time a decision has to be made.” By law, no single political party can have more than three out of the five available seats on the Surface Transportation Board. Chairman Patrick Fuchs and member Michelle Schultz are Republicans, while member Karen Hedlund is a Democrat. There is already an existing vacancy on the board. UP and NS will file their formal merger application by January, kicking off an STB review that would likely not result in a final vote until the spring of 2027, if not later. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Trump move to oust STB’s Primus boosts likelihood of UP-NS approval

<div class="phx-topic abstract-wrapper">The opening of the first phase of the port’s new on-dock rail yard will be delayed until next year, while the project faces a 42% increase in budgeted costs. </div>

The opening of the first phase of the port’s new on-dock rail yard will be delayed until next year, while the project faces a 42% increase in budgeted costs.

<div class="phx-topic">The opening of a major project to add on-dock rail to the Port of Charleston is delayed about six months and will only handle CSX Transportation trains initially due to design changes requested by Norfolk Southern Railway (NS). Inflation, redesigns, stalled permits, missed grants and even port crane tariffs have resulted in $232 million of cost overruns, making the project’s troubles a likely factor in the port’s chief executive recently resigning.<a href="https://www.joc.com/article/charleston-moves-ahead-with-plans-for-near-dock-intermodal-facility-5194359">The Navy Base Intermodal Facility</a> was originally budgeted at about $550 million. The brownfield development, adjacent to Charleston’s Hugh K. Leatherman terminal, is designed for handling 1 million container lifts per year and aimed <a href="https://www.joc.com/article/sc-ports-chief-outlines-plans-for-charleston-to-hit-10-million-teu-mark-5749894">to build upon Charleston’s development of inland ports at Greer and Dillon, South Carolina.</a>Since its original proposal in 2021, cost estimates have risen to $782 million, now-former South Carolina State Ports Authority (SC Ports) Chief Executive Barbara Melvin told a state legislative committee in July. South Carolina appropriated $550 million over 2021 and 2022 for the project. “We are seeing challenges in materials, labor and equipment to build these types of projects,” Melvin told the committee. “All of those have escalated over the last three years of this project.” The Navy Base project, which includes a barge service for moving containers to and from Charleson’s Wando Welch Terminal for rail service, was expected to open this summer. The rail yard will now open in January 2026, with some features not yet ready until 2027. Melvin, who was the port’s chief operating officer before becoming chief executive, announced <a href="https://www.joc.com/article/melvin-steps-down-as-sc-ports-chief-6067001">her resignation from SC Ports last week</a>, without citing a reason. South Carolina State Sen. Sean Bennett, one of the members of the fiscal oversight committee briefed on the project, said in a statement Thursday to the Journal of Commerce the rail yard “remains viable and essential, but the execution has clearly fallen short.”“Cost overruns can’t simply be dismissed as inflation — they reflect deeper issues,” Bennett said. “The Port Authority’s board must step up its responsibilities and provide the leadership and accountability this project requires.” SC Ports said in a statement to the Journal of Commerce it is still moving forward with the project as originally envisioned. Most of the yard’s construction is complete and its six gantry cranes have been installed. Cost overages for the remaining parts of the project are now part of the port’s 2026 capital plan. “This project will boost SC Ports’ already robust intermodal connectivity between the Port of Charleston and inland port markets in the Southeast and beyond,” SC Ports said in the statement. <h3>NS needs more access</h3>The rail yard itself, originally budgeted at about $400 million in 2021, is now expected to cost $544 million. Improvements to Charleston’s two terminals for barge service, originally budgeted at $150 million, have since increased to $237 million. Across all those, SC Ports faces higher material and labor costs, Melvin told the committee, adding that Leatherman terminal improvement costs have risen 44% since its initial construction in 2019, while nationwide warehouse and concrete construction costs have increased at rates of 25% and 32%, respectively, between 2021 and 2023.Construction costs on the rail yard itself, a former naval base, have also risen due to unexpectedly soft soil, environmental remediation and unforeseen buried infrastructure. Key features of the project will also not be ready in time for the January opening. A one-mile dedicated drayage road between the rail yard and the Leatherman terminal was redesigned after SC Ports did a land swap with a nearby US Coast Guard base. Until that road opens in November 2026, containers will be drayed on 2.5 miles of another industrial road near the port.Some 80,000 feet of rail track connecting to the rail yard from the south to CSX and NS’s main tracks also won’t be fully ready until March 2027, Melvin said, citing the extensive design challenges involving both railroads and various public entities. The tracks have eight street-level crossings through North Charleston. A construction award for the trackage is expected this October. “The southern connection has been the most challenging piece of the project,” Melvin told the committee, adding that steel tariffs will also raise its cost. Until the southern connection opens, only CSX will be able to access the rail yard through its north tracks. In addition to the south access, NS needs four miles of siding for passing trains, the railroad unexpectedly informed SC Ports this summer, Melvin said. The siding is expected to cost about $28 million and was originally thought to be part of NS’ own capital plans, she said. NS said in a statement to the Journal of Commerce that it has informed SC Ports for the last decade about what it needs to utilize the site, specifically “tracks leading into the facility as well as construction of a passing siding in North Charleston.” “We remain committed to the success of the Navy Base intermodal facility and to collaborating to get this facility online as quickly as possible,” NS said. Melvin told the state senate committee she expects NS could use the facility as early as October 2026 when the first phase of the southern access is ready. <h3>Tariff hit on cranes</h3>For barges, SC Ports planned to build a 700-foot berth extension at Wando Welch. But since applying for a permit in 2018 and after four follow-ups, the US Army Corps of Engineers has yet to issue a permit for the berth, Melvin said. She said the berth hoped to win some $45 million in federal grants applied for under the Biden administration, but did not receive the funding. Melvin told the state senate committee SC Ports expects Wando’s barge berth could cost $76 million, “if we can get a permit quickly and proceed, but if we cannot, that price won’t hold.” “We could still operate a barge [at Wando’s existing berths], but it’s not ideal,” she said. <a href="https://www.joc.com/article/charlestons-leatherman-terminal-eyes-second-berth-by-late-2026-6066963">The Leatherman terminal’s plans to build another 1,600 feet of berth</a> will allow it to handle a barge along with an additional container ship, Melvin said. However, the original plan only called for adding half that length. Melvin said that given the overall cost increases, SC Ports decided to move ahead with a full extension, adding $53 million to Leatherman’s budget. SC Ports originally budgeted $25 million to purchase ZPMC cranes for the Leatherman extension. But due to <a href="https://www.joc.com/article/looming-us-tariffs-put-economic-viability-of-sts-cranes-in-doubt-6055678">the Trump administration’s proposed tariffs on Chinese-made cranes</a>, Melvin said SC Ports increased its crane budget to $34 million based on estimates from four non-Chinese crane makers, but the price could increase further.“You are paying a premium to order non-Chinese cranes,” Melvin said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The opening of a major project to add on-dock rail to the Port of Charleston is delayed about six months and will only handle CSX Transportation trains initially due to design changes requested by Norfolk Southern Railway (NS). Inflation, redesigns, stalled permits, missed grants and even port crane tariffs have resulted in $232 million of cost overruns, making the project’s troubles a likely factor in the port’s chief executive recently resigning. The Navy Base Intermodal Facility was originally budgeted at about $550 million. The brownfield development, adjacent to Charleston’s Hugh K. Leatherman terminal, is designed for handling 1 million container lifts per year and aimed to build upon Charleston’s development of inland ports at Greer and Dillon, South Carolina. Since its original proposal in 2021, cost estimates have risen to $782 million, now-former South Carolina State Ports Authority (SC Ports) Chief Executive Barbara Melvin told a state legislative committee in July. South Carolina appropriated $550 million over 2021 and 2022 for the project. “We are seeing challenges in materials, labor and equipment to build these types of projects,” Melvin told the committee. “All of those have escalated over the last three years of this project.” The Navy Base project, which includes a barge service for moving containers to and from Charleson’s Wando Welch Terminal for rail service, was expected to open this summer. The rail yard will now open in January 2026, with some features not yet ready until 2027. Melvin, who was the port’s chief operating officer before becoming chief executive, announced her resignation from SC Ports last week , without citing a reason. South Carolina State Sen. Sean Bennett, one of the members of the fiscal oversight committee briefed on the project, said in a statement Thursday to the Journal of Commerce the rail yard “remains viable and essential, but the execution has clearly fallen short.” “Cost overruns can’t simply be dismissed as inflation — they reflect deeper issues,” Bennett said. “The Port Authority’s board must step up its responsibilities and provide the leadership and accountability this project requires.” SC Ports said in a statement to the Journal of Commerce it is still moving forward with the project as originally envisioned. Most of the yard’s construction is complete and its six gantry cranes have been installed. Cost overages for the remaining parts of the project are now part of the port’s 2026 capital plan. “This project will boost SC Ports’ already robust intermodal connectivity between the Port of Charleston and inland port markets in the Southeast and beyond,” SC Ports said in the statement. NS needs more access The rail yard itself, originally budgeted at about $400 million in 2021, is now expected to cost $544 million. Improvements to Charleston’s two terminals for barge service, originally budgeted at $150 million, have since increased to $237 million. Across all those, SC Ports faces higher material and labor costs, Melvin told the committee, adding that Leatherman terminal improvement costs have risen 44% since its initial construction in 2019, while nationwide warehouse and concrete construction costs have increased at rates of 25% and 32%, respectively, between 2021 and 2023. Construction costs on the rail yard itself, a former naval base, have also risen due to unexpectedly soft soil, environmental remediation and unforeseen buried infrastructure. Key features of the project will also not be ready in time for the January opening. A one-mile dedicated drayage road between the rail yard and the Leatherman terminal was redesigned after SC Ports did a land swap with a nearby US Coast Guard base. Until that road opens in November 2026, containers will be drayed on 2.5 miles of another industrial road near the port. Some 80,000 feet of rail track connecting to the rail yard from the south to CSX and NS’s main tracks also won’t be fully ready until March 2027, Melvin said, citing the extensive design challenges involving both railroads and various public entities. The tracks have eight street-level crossings through North Charleston. A construction award for the trackage is expected this October. “The southern connection has been the most challenging piece of the project,” Melvin told the committee, adding that steel tariffs will also raise its cost. Until the southern connection opens, only CSX will be able to access the rail yard through its north tracks. In addition to the south access, NS needs four miles of siding for passing trains, the railroad unexpectedly informed SC Ports this summer, Melvin said. The siding is expected to cost about $28 million and was originally thought to be part of NS’ own capital plans, she said. NS said in a statement to the Journal of Commerce that it has informed SC Ports for the last decade about what it needs to utilize the site, specifically “tracks leading into the facility as well as construction of a passing siding in North Charleston.” “We remain committed to the success of the Navy Base intermodal facility and to collaborating to get this facility online as quickly as possible,” NS said. Melvin told the state senate committee she expects NS could use the facility as early as October 2026 when the first phase of the southern access is ready. Tariff hit on cranes For barges, SC Ports planned to build a 700-foot berth extension at Wando Welch. But since applying for a permit in 2018 and after four follow-ups, the US Army Corps of Engineers has yet to issue a permit for the berth, Melvin said. She said the berth hoped to win some $45 million in federal grants applied for under the Biden administration, but did not receive the funding. Melvin told the state senate committee SC Ports expects Wando’s barge berth could cost $76 million, “if we can get a permit quickly and proceed, but if we cannot, that price won’t hold.” “We could still operate a barge [at Wando’s existing berths], but it’s not ideal,” she said. The Leatherman terminal’s plans to build another 1,600 feet of berth will allow it to handle a barge along with an additional container ship, Melvin said. However, the original plan only called for adding half that length. Melvin said that given the overall cost increases, SC Ports decided to move ahead with a full extension, adding $53 million to Leatherman’s budget. SC Ports originally budgeted $25 million to purchase ZPMC cranes for the Leatherman extension. But due to the Trump administration’s proposed tariffs on Chinese-made cranes , Melvin said SC Ports increased its crane budget to $34 million based on estimates from four non-Chinese crane makers, but the price could increase further. “You are paying a premium to order non-Chinese cranes,” Melvin said. Contact Michael Angell at michael.angell@spglobal.com .

Charleston’s Navy Base rail yard project faces delays, big cost overruns

<div class="phx-topic abstract-wrapper">The union claims the Virginia Port Authority is tacitly violating the new master contract’s technology clauses through its influence over the port’s main terminal employer. </div>

The union claims the Virginia Port Authority is tacitly violating the new master contract’s technology clauses through its influence over the port’s main terminal employer.

<div class="phx-topic">The International Longshoremen’s Association (ILA) is suing the Virginia Port Authority (VPA) and its chief executive, alleging they are using their control of the port’s terminal employer to violate the union’s master contract by forcing new rail crane technology on longshore workers. The lawsuit, filed Tuesday in federal court in Virginia, says the VPA and Chief Executive Stephen Edwards leveraged Virginia International Terminals (VIT) — the port’s separate legal entity that handles daily operations and directly employs longshore workers — to implement new technology at the port without going through the process required by the master contract. The suit, which further alleges the port authority sought to influence contract talks held earlier this year and in 2024 even though it was not a party to the talks, seeks to bar the VPA and Edwards from interfering in the contractual relationship between the union and VIT. “VPA and Edwards are aware of the terms and conditions of the master contract, specifically as they relate to the specific processes, procedures and assurances for implementing new technology, as well as the workforce protections guaranteed to ILA labor,” the lawsuit reads. “Yet, despite their knowledge of the terms and conditions of the master contract, VPA and Edwards have knowingly and intentionally interfered with the contract between VIT and ILA by causing VIT to violate that contract,” the suit adds. The VPA declined comment on the lawsuit. <h3>Crane installation began in April </h3>The VPA in April began to install <a href="https://www.joc.com/article/ila-targets-rail-mounted-gantry-cranes-amid-impasse-in-port-labor-talks-5874742">semi-automated rail-mounted gantry cranes</a> on the north berth of Norfolk International Terminals, the suit said. The ILA claims that VIT, as the signatory to the master contract and the actual employer at the terminal, did not notify the union about the new rail cranes being installed. Under the ILA master contract ratified this past March, any new technology implemented by ports along the East and Gulf coasts must be vetted by a new technology committee comprised of the union and maritime employers to determine staffing levels for the new equipment, training and pay rates. The local union must also be notified so it can negotiate with employers about the new technology. However, the ILA alleges that VIT did not follow this process. Instead, “VIT said that the cranes had been purchased by VPA, not VIT.” VIT said that because VPA is not a party to the master contract, it did not have to inform the union about the new technology, the suit claims. The ILA said it only undertook the lawsuit after filing multiple grievances under the master contract. “Thus, VPA is using its authority to frustrate the collective bargaining process and interfere with the master contract relationship between ILA and VIT,” the lawsuit reads. Even before the new cranes arrived, the ILA alleges that Edwards and the VPA were seeking to influence the contract talks, claiming that VIT “argued vociferously against more stringent workforce protections for ILA labor related to the implementation of new technology.” “VIT’s argument during contract negotiations in favor of automating and against workforce protection was at the behest of defendants VPA, in general, and defendant Edwards, in particular,” the suit alleges. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The International Longshoremen’s Association (ILA) is suing the Virginia Port Authority (VPA) and its chief executive, alleging they are using their control of the port’s terminal employer to violate the union’s master contract by forcing new rail crane technology on longshore workers. The lawsuit, filed Tuesday in federal court in Virginia, says the VPA and Chief Executive Stephen Edwards leveraged Virginia International Terminals (VIT) — the port’s separate legal entity that handles daily operations and directly employs longshore workers — to implement new technology at the port without going through the process required by the master contract. The suit, which further alleges the port authority sought to influence contract talks held earlier this year and in 2024 even though it was not a party to the talks, seeks to bar the VPA and Edwards from interfering in the contractual relationship between the union and VIT. “VPA and Edwards are aware of the terms and conditions of the master contract, specifically as they relate to the specific processes, procedures and assurances for implementing new technology, as well as the workforce protections guaranteed to ILA labor,” the lawsuit reads. “Yet, despite their knowledge of the terms and conditions of the master contract, VPA and Edwards have knowingly and intentionally interfered with the contract between VIT and ILA by causing VIT to violate that contract,” the suit adds. The VPA declined comment on the lawsuit. Crane installation began in April The VPA in April began to install semi-automated rail-mounted gantry cranes on the north berth of Norfolk International Terminals, the suit said. The ILA claims that VIT, as the signatory to the master contract and the actual employer at the terminal, did not notify the union about the new rail cranes being installed. Under the ILA master contract ratified this past March, any new technology implemented by ports along the East and Gulf coasts must be vetted by a new technology committee comprised of the union and maritime employers to determine staffing levels for the new equipment, training and pay rates. The local union must also be notified so it can negotiate with employers about the new technology. However, the ILA alleges that VIT did not follow this process. Instead, “VIT said that the cranes had been purchased by VPA, not VIT.” VIT said that because VPA is not a party to the master contract, it did not have to inform the union about the new technology, the suit claims. The ILA said it only undertook the lawsuit after filing multiple grievances under the master contract. “Thus, VPA is using its authority to frustrate the collective bargaining process and interfere with the master contract relationship between ILA and VIT,” the lawsuit reads. Even before the new cranes arrived, the ILA alleges that Edwards and the VPA were seeking to influence the contract talks, claiming that VIT “argued vociferously against more stringent workforce protections for ILA labor related to the implementation of new technology.” “VIT’s argument during contract negotiations in favor of automating and against workforce protection was at the behest of defendants VPA, in general, and defendant Edwards, in particular,” the suit alleges. Contact Michael Angell at michael.angell@spglobal.com .

Longshore labor

ILA suing Virginia port, chief executive over rollout of new rail cranes

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At SSA Marine Mexico, we firmly believe that business development must go hand in hand with social and environmental well-being. Our vision is not solely focused on operating efficiently, but also on creating a meaningful and positive impact in the communities where we are present. Since 1995, we have reaffirmed this commitment through tangible actions that reflect our core values of responsibility, solidarity, and sustainability. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584535914_Photo%201.jpg" alt="" class="joc_admin__inline-image-inherit"> A Year of Major Achievements Over the past year, we allocated more than $107,000 USD to the implementation of 60 social and environmental projects, positively impacting over 7,800 people across various regions of Mexico. Each initiative was designed with a holistic approach, addressing key areas that contribute to long-term community development. Education: Laying the Foundation for the Future Education is one of the most powerful tools to promote social mobility and equitable development. At SSA Marine Mexico, we support academic initiatives that inspire and empower the next generation of leaders. One of our most impactful partnerships was with the University of Colima, where we sponsored the “Reto Camp” program. This initiative encourages university students to develop innovative solutions in the fields of sustainability, logistics, and port operations, offering them mentorship, tools, and real-world challenges to solve. In addition, we donated microscopes, school supplies, and educational materials to institutions in underserved communities, helping to improve the learning environment and provide students with the resources they need to succeed. Health and Sports: Promoting Wellness We believe that healthy communities are strong communities. We have supported several local sporting events and provided direct assistance to talented athletes, enabling them to pursue their passions and represent their regions with pride. Beyond sports, we also strengthened our collaboration with critical emergency response organizations such as the Mexican Red Cross and Civil Protection. Our contributions helped enhance their readiness and capabilities in times of crisis, ensuring better outcomes for those affected by emergencies. Supporting Vulnerable Groups: Reaching Those Who Need It Most A core part of our social responsibility efforts is directed toward supporting vulnerable populations. We have contributed to a range of initiatives focused on children, migrants, and at-risk families. These efforts included donations to orphanages and shelters, as well as support for the National Institute of Migration and grassroots organizations dedicated to protecting and empowering people facing adversity. By standing with those in need, we reinforce our commitment to inclusion and social justice, values that are central to our identity as a responsible company. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584944645_Photo%202.png" alt="" class="joc_admin__inline-image-inherit">Culture: Strengthening Community Identity Cultural identity is a key element in building resilient and united communities. At SSA Marine Mexico, we actively participate in the organization and sponsorship of cultural events that celebrate local traditions and foster civic pride. Working alongside port authorities and municipal governments, we helped bring music, art, and heritage to the forefront, creating spaces for community engagement and intercultural dialogue. Environment: Investing in the Planet Our commitment to sustainability goes beyond operations—it’s a philosophy that drives every decision we make. We have partnered with environmental institutions to carry out reforestation campaigns, beach cleanups, and conservation efforts. In collaboration with the Institute for the Environment, we supported initiatives aimed at decarbonization, biodiversity protection, and environmental education. By involving our employees and local volunteers in these actions, we also foster a culture of environmental stewardship throughout our organization and our surrounding communities. Innovation for a Sustainable Future Sustainability is not just about doing good—it’s also about doing things better. In 2024, we invested $22 million USD in the acquisition of 11 state-of-the-art E-RTG cranes. These electric rubber-tired gantry cranes represent a significant technological advancement in port equipment. Seven of them are already operating on clean electric energy, resulting in a reduction of nearly 4,000 tons of CO₂ emissions and improving operational efficiency by 7%. The remaining four cranes are fully compatible with future electrification, underscoring our long-term strategy to modernize our operations in an environmentally responsible way. This investment is part of a broader innovation roadmap that includes digitalization, automation, and cleaner energy sources—all designed to ensure that our ports continue to grow without compromising the health of our planet. Building a Better Tomorrow, Together At SSA Marine Mexico, we understand that sustainability is a shared and ongoing responsibility. True impact requires collaboration across sectors, long-term vision, and unwavering commitment. That is why we continue to work hand-in-hand with local authorities, non-profit organizations, universities, and our own employees to create solutions that are both scalable and sustainable. Our journey is far from over. In the years ahead, we will continue to deepen our community engagement, explore cleaner technologies, and strengthen the social fabric of the regions where we operate. Each initiative, no matter the size, is a step toward building a future where business success goes hand-in-hand with human and environmental prosperity. We are proud of what we have achieved in 2024, but we are even more excited about what lies ahead. SSA Marine Mexico — Moving the World, Caring for People and Planet. LINK: https://www.ssamarine.mx/

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Quarterly Intelligence

<div class="phx-topic abstract-wrapper">The Premier Alliance is revamping a trans-Pacific service that would otherwise incur hundreds of millions of dollars in US port fees on Chinese-built vessels.</div>

The Premier Alliance is revamping a trans-Pacific service that would otherwise incur hundreds of millions of dollars in US port fees on Chinese-built vessels.

<div class="phx-topic">Container lines are taking preemptive steps to reduce their exposure to hefty tariffs on Chinese-built and -operated vessels calling US ports that take effect in mid-October. The Premier Alliance of Ocean Network Express (ONE), HMM and Yang Ming Marine Transport is revamping a trans-Pacific service to avoid the <a href="https://www.joc.com/article/revised-china-tonnage-tax-less-disruptive-still-costly-6005402">US Trade Representative’s fees</a>, and other major carriers are expected to follow suit. Carriers say the deployment of non-China-built ships won’t be the most efficient for their networks but balk at fees that will initially equate to $1 million per voyage. The savings that come from removing China-built vessels from US services could increase to ultimately more than $500 million per year by April 2028, as the severity of the tariffs ratchets up over the next three years. Ocean Network Express and HMM have confirmed that the Asia-Mediterranean segment of the current Mediterranean Pacific South 2 (MS2) service will operate as a standalone service, renamed Mediterranean 2 (MD2), starting early next month. The trans-Pacific leg of the MS2 will be incorporated into the alliance’s existing Asia Gulf Express 2 service, which will be rebranded as the Gulf Pacific South 2 (GS2) as of next week, limiting the deployment of 10 Chinese-built ONE container ships currently operating the MS2 service to the shortened MD2 route. According to ONE service schedules, these vessels include seven 15,300-TEU ships built by Yangzijiang Shipbuilding Group, China’s largest privately owned shipyard, and three built by state-controlled China State Shipbuilding Corp. Yang Ming Marine Transport has yet to announce the changes, which stand to save ONE an estimated $185 million in tariffs in the first year after the levy is implemented on Oct. 14. Under the USTR fee proposal, ships operated by China-based carriers or built by Chinese shipyards will be subject to fees of $50 per net ton of capacity per voyage calling at US ports in the first year of enforcement, rising to $140 per net ton in April 2028. The fees will be capped at five voyages, and <a href="https://www.joc.com/article/cosco-slams-us-port-fees-as-other-carriers-reckon-with-potential-costs-5989606">China-based carriers, the USTR’s primary target</a>, will face higher levies. With each of the MS2 deployed vessels assessed at about 74,000 net tons, ONE would face a bill of $3.7 million per ship per voyage, maxing out at $18.5 million for each of the 10 ships — a total of $185 million — after five voyages. In announcing the MS2 service adjustment, ONE and HMM said the changes would improve connectivity and transit times to certain markets. HMM said the new Mediterranean Service 2 (MD2) would provide an express service from western Mediterranean to Busan and central China. Similarly, GS2 — which HMM calls the Korea Middle East–Pacific South (KMP) loop — will provide direct services from Dubai to the US West Coast and the US West Coast to Dalian and Xingang, HMM said. Contact Keith Wallis at <a href="keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Container lines are taking preemptive steps to reduce their exposure to hefty tariffs on Chinese-built and -operated vessels calling US ports that take effect in mid-October. The Premier Alliance of Ocean Network Express (ONE), HMM and Yang Ming Marine Transport is revamping a trans-Pacific service to avoid the US Trade Representative’s fees , and other major carriers are expected to follow suit. Carriers say the deployment of non-China-built ships won’t be the most efficient for their networks but balk at fees that will initially equate to $1 million per voyage. The savings that come from removing China-built vessels from US services could increase to ultimately more than $500 million per year by April 2028, as the severity of the tariffs ratchets up over the next three years. Ocean Network Express and HMM have confirmed that the Asia-Mediterranean segment of the current Mediterranean Pacific South 2 (MS2) service will operate as a standalone service, renamed Mediterranean 2 (MD2), starting early next month. The trans-Pacific leg of the MS2 will be incorporated into the alliance’s existing Asia Gulf Express 2 service, which will be rebranded as the Gulf Pacific South 2 (GS2) as of next week, limiting the deployment of 10 Chinese-built ONE container ships currently operating the MS2 service to the shortened MD2 route. According to ONE service schedules, these vessels include seven 15,300-TEU ships built by Yangzijiang Shipbuilding Group, China’s largest privately owned shipyard, and three built by state-controlled China State Shipbuilding Corp. Yang Ming Marine Transport has yet to announce the changes, which stand to save ONE an estimated $185 million in tariffs in the first year after the levy is implemented on Oct. 14. Under the USTR fee proposal, ships operated by China-based carriers or built by Chinese shipyards will be subject to fees of $50 per net ton of capacity per voyage calling at US ports in the first year of enforcement, rising to $140 per net ton in April 2028. The fees will be capped at five voyages, and China-based carriers, the USTR’s primary target , will face higher levies. With each of the MS2 deployed vessels assessed at about 74,000 net tons, ONE would face a bill of $3.7 million per ship per voyage, maxing out at $18.5 million for each of the 10 ships — a total of $185 million — after five voyages. In announcing the MS2 service adjustment, ONE and HMM said the changes would improve connectivity and transit times to certain markets. HMM said the new Mediterranean Service 2 (MD2) would provide an express service from western Mediterranean to Busan and central China. Similarly, GS2 — which HMM calls the Korea Middle East–Pacific South (KMP) loop — will provide direct services from Dubai to the US West Coast and the US West Coast to Dalian and Xingang, HMM said. Contact Keith Wallis at keithwallis@hotmail.com .

Container lines begin shifting China-built ships out of US loops

<div class="phx-topic abstract-wrapper">The carriers, because they offer services tailored to their customers’ needs, say they are “sheltered” somewhat from declining spot rates given they are able to charge a premium for those services.</div>

The carriers, because they offer services tailored to their customers’ needs, say they are “sheltered” somewhat from declining spot rates given they are able to charge a premium for those services.

<div class="phx-topic">Several niche carriers that added tonnage to the trans-Pacific trade over the past year say they aren’t going anywhere despite retreating spot rates and the downward pressure tariffs are exerting on US imports from Asia. Those carriers, offering services tailored to their customers’ needs, say they are sheltered somewhat from declining spot rates because they charge a premium for their services that provide expedited ocean transport from Asia and Southeast Asia and, oftentimes, next-day container availability for landside pickup. “We’re fairly sheltered from the spot rates because 80% of our cargo is BCO [beneficial cargo owner] contracted cargo,” said Duncan Wright, president of third-party logistics provider UWL, which offers <a href="https://www.joc.com/article/uwl-locks-in-new-vessel-partner-for-trans-pacific-vietnam-service-6032327">the bi-weekly Sun Chief Express service</a> from Vietnam to Seattle. The ocean transit is 19 days from the last port call at Ho Chi Minh City to the Seattle gateway, while most other lines are 20-plus days, Wright told the Journal of Commerce Friday. China-based Hede Shipping in July launched its <a href="https://www.joc.com/article/hede-shipping-to-launch-third-expedited-service-from-china-to-los-angeles-6034891">third expedited service from China to Los Angeles</a>, zeroing in on the e-commerce sector with its expedited transit times and quick delivery of containers upon discharge from vessels. A Hede representative confirmed that newest service is in operation. Premium niche services offered by UWL, Hede and Matson appeal to BCOs with specific requirements based upon their customers’ needs. For example, customers of UWL’s Sun Chief service focus on footwear importers who are based in Southeast Asia and ship through Seattle, which offers direct inland point intermodal (IPI) rail service to markets such as Minneapolis and Chicago, Wright said. <h3>Huge spot rate swings this year </h3>The niche carriers, which also include SeaLead and CU Lines, entered the trans-Pacific trades in 2024 when spot and freight-all-kinds (FAK) rates surged as high as $7,800 per FEU to the US West Coast and $10,000 per FEU to the East Coast, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. Niche carriers account for about 4.5% of total capacity on the trans-Pacific trade to the West Coast, about the same percentage in the post-COVID-19 import surge in 2021–22, Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter this week. While that market share is not enough to prevent a further slide in spot rates, the continued presence of the niche lines in the trans-Pacific indicates they are not just “opportunistic” carriers that came into the trade when spot rates were high and plan to leave if rates drop too low, he said. “These carriers are seemingly staying on the trade lane ... and it seems as if they are continuing to introduce capacity on the trade lane,” Murphy said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e9676ea4-c6b9-4589-9a4b-822a9c82e2f8"></dynamic-object></div>Given the volatile nature of the trans-Pacific market so far this year, with major rate spikes in January and June followed by plunging prices in subsequent months, the niche lines apparently have ample cash on hand to weather the current downturn. Spot rates from Asia to the West Coast as of Thursday were $1,500 per FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global; Drewry pegged the market at $2,332 per FEU. “Pulling the plug is a tough decision because the money, when available, was so lucrative there’s the hope such margins will return,” said Stephen Nothdurft, vice president of sales at the forwarder MOL Consolidation Service. “It seems the current operators are taking a hard look at their commitments and calculating a longer-term strategy,” he said. “Maybe the new normal is continued chaos, so the smaller players are staying in place, building a viable clientele, [and] preparing to pounce when another catastrophe hits the liner market,” Nothdurft said. <h3>Premium rates can only do so much </h3>Still, if spot/FAK rates continue to drift below $1,500 to the West Coast, and possibly lower, some niche lines will find it difficult to sustain the losses for very long, an executive at an alliance carrier told the Journal of Commerce. “Even with an upcharge of $500-$600 [per FEU], it’s not going to be enough,” said the executive, who did not want to be identified. “The niche carriers, like all lines, have fixed costs such as bunker fuel, port fees and crew costs.” The source said $2,000 per FEU is the breakeven spot for most carriers’ West Coast business, adding their presence on the eastbound trans-Pacific “can’t last forever.” The challenge these carriers face is that rates are also depressed in the intra-Asia trade, and the small vessels they deploy in the range of 3,000-TEU capacity are not suited for the long-distance Asia-Europe trades, he said. Contact Bill Mongelluzzo at <a href="https://www.joc.com/article/bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Several niche carriers that added tonnage to the trans-Pacific trade over the past year say they aren’t going anywhere despite retreating spot rates and the downward pressure tariffs are exerting on US imports from Asia. Those carriers, offering services tailored to their customers’ needs, say they are sheltered somewhat from declining spot rates because they charge a premium for their services that provide expedited ocean transport from Asia and Southeast Asia and, oftentimes, next-day container availability for landside pickup. “We’re fairly sheltered from the spot rates because 80% of our cargo is BCO [beneficial cargo owner] contracted cargo,” said Duncan Wright, president of third-party logistics provider UWL, which offers the bi-weekly Sun Chief Express service from Vietnam to Seattle. The ocean transit is 19 days from the last port call at Ho Chi Minh City to the Seattle gateway, while most other lines are 20-plus days, Wright told the Journal of Commerce Friday. China-based Hede Shipping in July launched its third expedited service from China to Los Angeles , zeroing in on the e-commerce sector with its expedited transit times and quick delivery of containers upon discharge from vessels. A Hede representative confirmed that newest service is in operation. Premium niche services offered by UWL, Hede and Matson appeal to BCOs with specific requirements based upon their customers’ needs. For example, customers of UWL’s Sun Chief service focus on footwear importers who are based in Southeast Asia and ship through Seattle, which offers direct inland point intermodal (IPI) rail service to markets such as Minneapolis and Chicago, Wright said. Huge spot rate swings this year The niche carriers, which also include SeaLead and CU Lines, entered the trans-Pacific trades in 2024 when spot and freight-all-kinds (FAK) rates surged as high as $7,800 per FEU to the US West Coast and $10,000 per FEU to the East Coast, according to PIERS, a Journal of Commerce sister product within S&P Global. Niche carriers account for about 4.5% of total capacity on the trans-Pacific trade to the West Coast, about the same percentage in the post-COVID-19 import surge in 2021–22, Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter this week. While that market share is not enough to prevent a further slide in spot rates, the continued presence of the niche lines in the trans-Pacific indicates they are not just “opportunistic” carriers that came into the trade when spot rates were high and plan to leave if rates drop too low, he said. “These carriers are seemingly staying on the trade lane ... and it seems as if they are continuing to introduce capacity on the trade lane,” Murphy said. Given the volatile nature of the trans-Pacific market so far this year, with major rate spikes in January and June followed by plunging prices in subsequent months, the niche lines apparently have ample cash on hand to weather the current downturn. Spot rates from Asia to the West Coast as of Thursday were $1,500 per FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global; Drewry pegged the market at $2,332 per FEU. “Pulling the plug is a tough decision because the money, when available, was so lucrative there’s the hope such margins will return,” said Stephen Nothdurft, vice president of sales at the forwarder MOL Consolidation Service. “It seems the current operators are taking a hard look at their commitments and calculating a longer-term strategy,” he said. “Maybe the new normal is continued chaos, so the smaller players are staying in place, building a viable clientele, [and] preparing to pounce when another catastrophe hits the liner market,” Nothdurft said. Premium rates can only do so much Still, if spot/FAK rates continue to drift below $1,500 to the West Coast, and possibly lower, some niche lines will find it difficult to sustain the losses for very long, an executive at an alliance carrier told the Journal of Commerce. “Even with an upcharge of $500-$600 [per FEU], it’s not going to be enough,” said the executive, who did not want to be identified. “The niche carriers, like all lines, have fixed costs such as bunker fuel, port fees and crew costs.” The source said $2,000 per FEU is the breakeven spot for most carriers’ West Coast business, adding their presence on the eastbound trans-Pacific “can’t last forever.” The challenge these carriers face is that rates are also depressed in the intra-Asia trade, and the small vessels they deploy in the range of 3,000-TEU capacity are not suited for the long-distance Asia-Europe trades, he said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Niche carriers plan to ride out declining spot rates on the trans-Pacific

<div class="phx-topic abstract-wrapper">Transportation Secretary Sean Duffy gave California, New Mexico and Washington 30 days to adopt and enforce ELP regulations or lose access to federal safety funding. </div>

Transportation Secretary Sean Duffy gave California, New Mexico and Washington 30 days to adopt and enforce ELP regulations or lose access to federal safety funding.

<div class="phx-topic">California, New Mexico and Washington will lose access to federal motor carrier safety funding unless those states adopt and enforce a federal <a href="https://www.joc.com/article/us-dot-initiates-crackdown-on-non-english-speaking-truckers-6009357">English language proficiency</a> (ELP) requirement for truck drivers, US Transportation Secretary Sean Duffy said Tuesday. “States don’t get to pick and choose which federal safety rules to follow,” Duffy said at a press conference in Washington, DC. Duffy gave the states 30 days to adopt and enforce ELP regulations or lose access to Motor Carrier Safety Assistance Program (MCSAP) funds. The Department of Transportation (DOT) sent notices to California, New Mexico and Washington opening a process that would freeze millions of dollars in funds distributed annually through the MCSAP program, which helps fund law enforcement. California received approximately $30.7 million in MCSAP funding in fiscal year 2024, while Washington received $9.8 million and New Mexico about $6.7 million, according to the US Federal Motor Carrier Safety Administration (FMCSA), which administers MCSAP. “It’s my hope these states will understand the common sense nature of what we’re doing and become good partners,” Duffy said. “This is about keeping individuals and families safe as we use our roadways.” The states have not responded to DOT’s announcement. The DOT’s action follows an investigation into an Aug. 12 accident in Florida that claimed three lives when a truck driver, Harjinder Singh, made an illegal U-turn. Singh, who federal officials claim entered the US illegally and obtained commercial driver’s licenses from Washington and California, failed a post-accident English language test. Following the accident, US Secretary of State Marco Rubio <a href="https://x.com/secrubio/status/1958644528253948015?s=46&amp;t=yxYBta0zhKqvzUP8zCYxjw">last Thursday announced</a> a freeze on certain worker visas for non-US commercial truck drivers. The State Department later clarified the targeted credentials were H-2B, E-2 and EB-3 work visas. H-2B visas are capped at 66,000 a year, and truck drivers represent a small portion of those. The other visas are aimed at investors and skilled workers. Singh has not been reported to have a work visa of any type. The company he worked for, White Hawk Carriers of Ceres, California, no longer has <a href="https://ai.fmcsa.dot.gov/SMS/Carrier/2866642/Overview.aspx?FirstView=True">for-hire operating authority</a>. Neither greater ELP enforcement nor a related freeze on new work visas are expected to have <a href="https://apnews.com/article/foreign-truckers-visas-rubio-trump-florida-crash-beee82cfa284a174d7a74c42199bbd45">a major impact</a> on US truck capacity or pricing. <h3>ELP enforcement </h3>The DOT action highlights uneven state enforcement of the ELP requirement. Since June 25, the FMCSA has considered failure to pass an ELP test as an out-of-service violation for truck drivers. New Mexico and Washington have adopted the ELP guidance issued by the DOT but are not enforcing it, the DOT said in a statement, adding that California has yet to adopt and enforce compatible ELP laws and regulations. New Mexico allegedly did not administer an ELP test when state police conducted a roadside inspection of Singh and his truck in July. Singh was given a speeding ticket. States receiving MCSAP funds are required to adopt FMCSA regulations <a href="https://www.joc.com/article/congress-states-join-dot-targeting-non-english-speaking-truckers-6014680">in their own laws</a>, but how that is done, and how quickly, can vary from state to state. Out of 6,067 ELP violations issued during roadside inspections so far in calendar year 2025, 1,201 have resulted in out-of-service orders, according to FMCSA data. That compares with 5,863 violations and five out-of-service orders in calendar year 2024. An analysis by <a href="https://www.overdriveonline.com/regulations/article/15751741/california-highway-patrol-not-enforcing-trumps-elp-mandate-for-truck-drivers">trucker magazine Overdrive</a> found Texas, Arizona and California were the top three states for ELP violations from June 25 to July 20, with 2,089 violations. Those violations only resulted in 50 out-of-service orders, however. That’s because most of those violations occurred in counties on the US-Mexico border, where inspectors are allowed to issue violations but not place drivers out of service. Non-border states mostly have placed drivers with ELP violations out of service since June 25, Overdrive found. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

California, New Mexico and Washington will lose access to federal motor carrier safety funding unless those states adopt and enforce a federal English language proficiency (ELP) requirement for truck drivers, US Transportation Secretary Sean Duffy said Tuesday. “States don’t get to pick and choose which federal safety rules to follow,” Duffy said at a press conference in Washington, DC. Duffy gave the states 30 days to adopt and enforce ELP regulations or lose access to Motor Carrier Safety Assistance Program (MCSAP) funds. The Department of Transportation (DOT) sent notices to California, New Mexico and Washington opening a process that would freeze millions of dollars in funds distributed annually through the MCSAP program, which helps fund law enforcement. California received approximately $30.7 million in MCSAP funding in fiscal year 2024, while Washington received $9.8 million and New Mexico about $6.7 million, according to the US Federal Motor Carrier Safety Administration (FMCSA), which administers MCSAP. “It’s my hope these states will understand the common sense nature of what we’re doing and become good partners,” Duffy said. “This is about keeping individuals and families safe as we use our roadways.” The states have not responded to DOT’s announcement. The DOT’s action follows an investigation into an Aug. 12 accident in Florida that claimed three lives when a truck driver, Harjinder Singh, made an illegal U-turn. Singh, who federal officials claim entered the US illegally and obtained commercial driver’s licenses from Washington and California, failed a post-accident English language test. Following the accident, US Secretary of State Marco Rubio last Thursday announced a freeze on certain worker visas for non-US commercial truck drivers. The State Department later clarified the targeted credentials were H-2B, E-2 and EB-3 work visas. H-2B visas are capped at 66,000 a year, and truck drivers represent a small portion of those. The other visas are aimed at investors and skilled workers. Singh has not been reported to have a work visa of any type. The company he worked for, White Hawk Carriers of Ceres, California, no longer has for-hire operating authority . Neither greater ELP enforcement nor a related freeze on new work visas are expected to have a major impact on US truck capacity or pricing. ELP enforcement The DOT action highlights uneven state enforcement of the ELP requirement. Since June 25, the FMCSA has considered failure to pass an ELP test as an out-of-service violation for truck drivers. New Mexico and Washington have adopted the ELP guidance issued by the DOT but are not enforcing it, the DOT said in a statement, adding that California has yet to adopt and enforce compatible ELP laws and regulations. New Mexico allegedly did not administer an ELP test when state police conducted a roadside inspection of Singh and his truck in July. Singh was given a speeding ticket. States receiving MCSAP funds are required to adopt FMCSA regulations in their own laws , but how that is done, and how quickly, can vary from state to state. Out of 6,067 ELP violations issued during roadside inspections so far in calendar year 2025, 1,201 have resulted in out-of-service orders, according to FMCSA data. That compares with 5,863 violations and five out-of-service orders in calendar year 2024. An analysis by trucker magazine Overdrive found Texas, Arizona and California were the top three states for ELP violations from June 25 to July 20, with 2,089 violations. Those violations only resulted in 50 out-of-service orders, however. That’s because most of those violations occurred in counties on the US-Mexico border, where inspectors are allowed to issue violations but not place drivers out of service. Non-border states mostly have placed drivers with ELP violations out of service since June 25, Overdrive found. Contact William B. Cassidy at bill.cassidy@spglobal.com .

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