<div class="phx-topic abstract-wrapper">Higher tariffs prompted importers to shift some manufacturing out of China last year, but other markets simply don’t have the expertise and capacity to wrest much more volume away from the still-dominant source for toys.</div>

Higher tariffs prompted importers to shift some manufacturing out of China last year, but other markets simply don’t have the expertise and capacity to wrest much more volume away from the still-dominant source for toys.

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<div class="phx-topic">(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) US toymakers increased their sales last year on lower import volumes by absorbing higher tariff costs rather than passing them on to consumers, according to industry analysts and executives. Overall US retail toy sales grew 6% in 2025, led primarily by games, puzzles, building sets, and trading cards — like Pokémon or Magic the Gathering — according to the Toy Association, an advocacy and research group representing toy manufacturers and retailers. Containerized imports of those products, however, fell 7.7%, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Greg Ahearn, president and CEO of the Toy Association, said sales were helped by a surge in spending in the early part of 2025 by adults buying toys for themselves, a boon to an industry that historically has relied heavily on holiday spending for children. “Our category is not recession-proof, but it is recession-resistant,” Ahearn said. “It’s the last thing that parents and caregivers will pull back on.” Ahearn estimates manufacturers absorbed roughly two-thirds of the higher tariffs imposed by the Trump administration to shield their customers from price hikes, while suppliers absorbed the other third. “Consumers maybe picked up 5% or so at the most,” he said. “Manufacturers looked very selectively at which products could support a price increase.” Instead, toymakers “redesigned” their supply chains to account for the rapid changes in tariff levels, Ahearn said. Potential refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA) will bolster toymakers and retailers, even as they brace for existing Section 122 tariffs of 10% through July, and the possibility of new tariffs resulting from ongoing Section 301 investigations. “Tariffs on toys fluctuated incredibly over a short period of time given that development of toys takes two years on average. They went from 30% to 70% before settling at 30% for most of last year,” he said, adding that he doesn’t “believe tariffs will go beyond 30%, even with” Section 301 tariffs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="98baa24c-d299-426d-81c8-ed24f551c65a"></dynamic-object></div>Gina Goetter, CFO and COO at Hasbro, pegged the company’s tariff costs at $70 million for 2025. However, “supply chain productivity nearly offset the cost of tariffs,” including manufacturing diversification efforts, she said during Hasbro’s Feb. 10 earnings call. The company is forecasting $150 million in cost savings from supply chain initiatives in 2026. “Tariff costs will be relatively flat year-over-year in the back half [of this year], with much of the incremental cost landing in the front half of the year,” Goetter said. In Mattel’s Feb. 10 earnings call, CEO Ynon Kreiz said the toymaker’s 6% revenue growth in 2025 underperformed expectations due to “uncertainty in US trade dynamics that affected retailer ordering patterns.” “After two challenging quarters where US retailers delayed orders, there was a significant acceleration in orders through most of the fourth quarter,” Kreiz said. “December, however, ended up growing less than anticipated in the US and our full-year results finished below expectations.” <h3>Still made in China </h3>The choice to keep prices relatively stable inevitably impacted toymakers’ margins, forcing some companies to lay off staff and others to shut down. “Our members are made up of 90% small businesses,” Ahearn said. “Some of those went out of business, whether small retailers or manufacturers. The largest companies were getting creative and driving units. They looked at the way they were manufacturing; they looked at partnerships with retailers and adjusted on the fly to be able to hold price inflation to reasonable levels.” Part of “getting creative” meant reducing their reliance on China as the dominant source of imports, but there is only so much capacity for toymaking in alternative markets. China’s share of the US containerized toy import market slipped to 75.8% in 2025 after holding steady between 83% and 84% since the COVID-19 pandemic. Vietnam was the primary beneficiary of diversification away from China, growing its share to 10.6% last year from 6.1% in 2024. However, Ahearn said it would take at least a decade, in the best-case scenario, before manufacturers in Vietnam could produce toys at the same quality and quantity as China. Other markets in Asia, as well as Mexico and the US, likewise lack the necessary expertise and scale to wrest significant volume away from China. “That’s a skill base that needs to be rediscovered in the US,” he said. Toymakers also learned not to overreact to individual developments during last year’s tariff rollercoaster. “As tariffs rates changed, those that tried to get ahead of the curve because they had facilities in India and Vietnam and Mexico, they moved their production forecasts to India, only to discover India’s tariff is 50% and China’s is now 30%,” Ahearn said of the Trump administration imposing higher tariffs on India in mid-2025. Looking ahead to the rest of 2026, Ahearn said toy importers will be selling into a “pretty uncertain geopolitical and macroeconomic market,” in which an extended war in the Middle East could further increase manufacturing and transportation costs for shippers while dampening consumer spending. “Petroleum and oil are in everything,” he said. “That being a volatile component has everyone worried, in terms of the cost of components and movement of goods. But having come through the last year...we don’t think the things that are driving growth are going to slow down, because they are built into people’s lives.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) US toymakers increased their sales last year on lower import volumes by absorbing higher tariff costs rather than passing them on to consumers, according to industry analysts and executives. Overall US retail toy sales grew 6% in 2025, led primarily by games, puzzles, building sets, and trading cards — like Pokémon or Magic the Gathering — according to the Toy Association, an advocacy and research group representing toy manufacturers and retailers. Containerized imports of those products, however, fell 7.7%, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Greg Ahearn, president and CEO of the Toy Association, said sales were helped by a surge in spending in the early part of 2025 by adults buying toys for themselves, a boon to an industry that historically has relied heavily on holiday spending for children. “Our category is not recession-proof, but it is recession-resistant,” Ahearn said. “It’s the last thing that parents and caregivers will pull back on.” Ahearn estimates manufacturers absorbed roughly two-thirds of the higher tariffs imposed by the Trump administration to shield their customers from price hikes, while suppliers absorbed the other third. “Consumers maybe picked up 5% or so at the most,” he said. “Manufacturers looked very selectively at which products could support a price increase.” Instead, toymakers “redesigned” their supply chains to account for the rapid changes in tariff levels, Ahearn said. Potential refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA) will bolster toymakers and retailers, even as they brace for existing Section 122 tariffs of 10% through July, and the possibility of new tariffs resulting from ongoing Section 301 investigations. “Tariffs on toys fluctuated incredibly over a short period of time given that development of toys takes two years on average. They went from 30% to 70% before settling at 30% for most of last year,” he said, adding that he doesn’t “believe tariffs will go beyond 30%, even with” Section 301 tariffs. Gina Goetter, CFO and COO at Hasbro, pegged the company’s tariff costs at $70 million for 2025. However, “supply chain productivity nearly offset the cost of tariffs,” including manufacturing diversification efforts, she said during Hasbro’s Feb. 10 earnings call. The company is forecasting $150 million in cost savings from supply chain initiatives in 2026. “Tariff costs will be relatively flat year-over-year in the back half [of this year], with much of the incremental cost landing in the front half of the year,” Goetter said. In Mattel’s Feb. 10 earnings call, CEO Ynon Kreiz said the toymaker’s 6% revenue growth in 2025 underperformed expectations due to “uncertainty in US trade dynamics that affected retailer ordering patterns.” “After two challenging quarters where US retailers delayed orders, there was a significant acceleration in orders through most of the fourth quarter,” Kreiz said. “December, however, ended up growing less than anticipated in the US and our full-year results finished below expectations.” Still made in China The choice to keep prices relatively stable inevitably impacted toymakers’ margins, forcing some companies to lay off staff and others to shut down. “Our members are made up of 90% small businesses,” Ahearn said. “Some of those went out of business, whether small retailers or manufacturers. The largest companies were getting creative and driving units. They looked at the way they were manufacturing; they looked at partnerships with retailers and adjusted on the fly to be able to hold price inflation to reasonable levels.” Part of “getting creative” meant reducing their reliance on China as the dominant source of imports, but there is only so much capacity for toymaking in alternative markets. China’s share of the US containerized toy import market slipped to 75.8% in 2025 after holding steady between 83% and 84% since the COVID-19 pandemic. Vietnam was the primary beneficiary of diversification away from China, growing its share to 10.6% last year from 6.1% in 2024. However, Ahearn said it would take at least a decade, in the best-case scenario, before manufacturers in Vietnam could produce toys at the same quality and quantity as China. Other markets in Asia, as well as Mexico and the US, likewise lack the necessary expertise and scale to wrest significant volume away from China. “That’s a skill base that needs to be rediscovered in the US,” he said. Toymakers also learned not to overreact to individual developments during last year’s tariff rollercoaster. “As tariffs rates changed, those that tried to get ahead of the curve because they had facilities in India and Vietnam and Mexico, they moved their production forecasts to India, only to discover India’s tariff is 50% and China’s is now 30%,” Ahearn said of the Trump administration imposing higher tariffs on India in mid-2025. Looking ahead to the rest of 2026, Ahearn said toy importers will be selling into a “pretty uncertain geopolitical and macroeconomic market,” in which an extended war in the Middle East could further increase manufacturing and transportation costs for shippers while dampening consumer spending. “Petroleum and oil are in everything,” he said. “That being a volatile component has everyone worried, in terms of the cost of components and movement of goods. But having come through the last year...we don’t think the things that are driving growth are going to slow down, because they are built into people’s lives.” Contact Eric Johnson at eric.johnson@spglobal.com .

Maritime

Container Shipping News

Supply chain

US toymakers absorbing tariff costs, importing less to preserve sales

<div class="phx-topic abstract-wrapper">The ocean carrier said switching up Asia and US East Coast rotations on three trans-Pacific services will provide more reliability and consistency. </div>

The ocean carrier said switching up Asia and US East Coast rotations on three trans-Pacific services will provide more reliability and consistency.

<div class="phx-topic">Mediterranean Shipping Co. is reworking its trans-Pacific network starting next month to offer more reliable, direct China services into US Northeast and Southeast ports, while providing coastwide direct service from Southeast Asia. MSC said in a Thursday customer advisory that it is changing some port calls on its three main East Coast services to “enhance service reliability and schedule stability.” The new networks consolidate some China calls and will change some calls to Florida ports. MSC’s Empire Service will drop a Qingdao call, with the service now only calling Shanghai, Ningbo and Busan on the front haul. Empire’s US rotation will drop the ports of Jacksonville and Miami in favor of calls to Norfolk and Port Everglades on the backhaul. The service’s new rotation will commence with the scheduled May 27 departure of the 6,178-TEU MSC Leo VI from Shanghai. The carrier said Empire would be “less exposed to port congestion risks” due to the rotation change. Qingdao will be added to MSC’s Amberjack service into the US Southeast. However, MSC will no longer provide direct service from Yantian and Xiamen but instead focus the service on northeast Asia ports. The service will also replace a call to Norfolk with a call to Jacksonville. MSC said the Amberjack changes would improve transit times and network stability. The new rotation goes into effect with the service’s estimated May 20 departure from Qingdao. MSC also said it would rework its Emerald service from Southeast Asia to drop a call to Taiwan’s Kaohsiung in favor of Xiamen, providing a direct service from that port into the largest US East Coast ports. The new rotation is expected to take effect with the May 18 departure from Singapore of the 7,000-TEU Zim Topaz. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Mediterranean Shipping Co. is reworking its trans-Pacific network starting next month to offer more reliable, direct China services into US Northeast and Southeast ports, while providing coastwide direct service from Southeast Asia. MSC said in a Thursday customer advisory that it is changing some port calls on its three main East Coast services to “enhance service reliability and schedule stability.” The new networks consolidate some China calls and will change some calls to Florida ports. MSC’s Empire Service will drop a Qingdao call, with the service now only calling Shanghai, Ningbo and Busan on the front haul. Empire’s US rotation will drop the ports of Jacksonville and Miami in favor of calls to Norfolk and Port Everglades on the backhaul. The service’s new rotation will commence with the scheduled May 27 departure of the 6,178-TEU MSC Leo VI from Shanghai. The carrier said Empire would be “less exposed to port congestion risks” due to the rotation change. Qingdao will be added to MSC’s Amberjack service into the US Southeast. However, MSC will no longer provide direct service from Yantian and Xiamen but instead focus the service on northeast Asia ports. The service will also replace a call to Norfolk with a call to Jacksonville. MSC said the Amberjack changes would improve transit times and network stability. The new rotation goes into effect with the service’s estimated May 20 departure from Qingdao. MSC also said it would rework its Emerald service from Southeast Asia to drop a call to Taiwan’s Kaohsiung in favor of Xiamen, providing a direct service from that port into the largest US East Coast ports. The new rotation is expected to take effect with the May 18 departure from Singapore of the 7,000-TEU Zim Topaz. Contact Michael Angell at michael.angell@spglobal.com .

Container lines

Trans-Pacific

MSC revamps Asia-USEC network

<div class="phx-topic abstract-wrapper">The Port of Khor Fakkan “offers a relatively stable operating environment and will serve as the primary discharge hub operations,” Premier Alliance member Yang Ming said in an advisory.</div>

The Port of Khor Fakkan “offers a relatively stable operating environment and will serve as the primary discharge hub operations,” Premier Alliance member Yang Ming said in an advisory.

<div class="phx-topic">The Premier Alliance has tapped Khor Fakkan on the eastern side of the United Arab Emirates as its interim transshipment port for Middle East and Indian cargo on its Middle East-Asia-US West Coast GS2 service. The group, whose members comprise Yang Ming Marine Transport, Ocean Network Express and HMM, suspended calls at Arabian Gulf ports on the GS2 service in March following missile and drone attacks and Iran’s subsequent closure of the Strait of Hormuz. Khor Fakkan “offers a relatively stable operating environment and will serve as the primary discharge hub operations” for vessels originally scheduled to call Middle East ports, Yang Ming said in a Thursday customer advisory. “For cargo with final destinations within the Arabian Gulf region, onward transportation will be arranged via feeder vessels or alternative transshipment solutions to the respective final ports of discharge,” it added. The shift to Khor Fakkan comes as Iran’s foreign ministry Friday announced the Strait of Hormuz is now “completely open” to commercial shipping for the duration of the Iran-US ceasefire, although the situation remains murky. “We are currently verifying the recent announcement related to the reopening of the Strait of Hormuz, in terms of its compliance with freedom of navigation for all merchant vessels and secure passage using the IMO established traffic separation scheme,” International Maritime Organization secretary general Arsenio Dominguez said Friday on social media platform X. The Premier Alliance will begin calling at Khor Fakkan next week, with the first ship, the 16,000-TEU HMM Mir, due to berth Sunday and two other ships due to arrive by the end of the month, according to carrier vessel sailing schedules. The alliance has been holding cargo onboard ships for the past month while it decided what to do with Arabian Gulf cargo after attacks made ports such as Saudi Arabia’s Damman and Dubai’s Jebel Ali too risky to use. These ships are thought to include the 13,253-TEU HMM Peridot, which has been in the Indian Ocean and Arabian Sea since the end of March and is now due to call at Khor Fakkan early next week, according to vessel sailing data Friday. The 13,000-TEU HMM Garnet will be the third ship to call Khor Fakkan, with a scheduled arrival around April 26. The Premier Alliance had also curtailed some sailings to Gulf ports, opting instead to route some eastbound services to the US West Coast from Singapore. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

The Premier Alliance has tapped Khor Fakkan on the eastern side of the United Arab Emirates as its interim transshipment port for Middle East and Indian cargo on its Middle East-Asia-US West Coast GS2 service. The group, whose members comprise Yang Ming Marine Transport, Ocean Network Express and HMM, suspended calls at Arabian Gulf ports on the GS2 service in March following missile and drone attacks and Iran’s subsequent closure of the Strait of Hormuz. Khor Fakkan “offers a relatively stable operating environment and will serve as the primary discharge hub operations” for vessels originally scheduled to call Middle East ports, Yang Ming said in a Thursday customer advisory. “For cargo with final destinations within the Arabian Gulf region, onward transportation will be arranged via feeder vessels or alternative transshipment solutions to the respective final ports of discharge,” it added. The shift to Khor Fakkan comes as Iran’s foreign ministry Friday announced the Strait of Hormuz is now “completely open” to commercial shipping for the duration of the Iran-US ceasefire, although the situation remains murky. “We are currently verifying the recent announcement related to the reopening of the Strait of Hormuz, in terms of its compliance with freedom of navigation for all merchant vessels and secure passage using the IMO established traffic separation scheme,” International Maritime Organization secretary general Arsenio Dominguez said Friday on social media platform X. The Premier Alliance will begin calling at Khor Fakkan next week, with the first ship, the 16,000-TEU HMM Mir, due to berth Sunday and two other ships due to arrive by the end of the month, according to carrier vessel sailing schedules. The alliance has been holding cargo onboard ships for the past month while it decided what to do with Arabian Gulf cargo after attacks made ports such as Saudi Arabia’s Damman and Dubai’s Jebel Ali too risky to use. These ships are thought to include the 13,253-TEU HMM Peridot, which has been in the Indian Ocean and Arabian Sea since the end of March and is now due to call at Khor Fakkan early next week, according to vessel sailing data Friday. The 13,000-TEU HMM Garnet will be the third ship to call Khor Fakkan, with a scheduled arrival around April 26. The Premier Alliance had also curtailed some sailings to Gulf ports, opting instead to route some eastbound services to the US West Coast from Singapore. Contact Keith Wallis at keithwallis@hotmail.com .

International ports

Port News

Premier Alliance taps UAE’s Khor Fakkan for war-diverted cargoes

<div class="phx-topic abstract-wrapper">Domestic intermodal boosters have been waiting for three years for the competitive environment to improve, and perhaps that time has arrived, writes intermodal analyst Larry Gross. </div>

Domestic intermodal boosters have been waiting for three years for the competitive environment to improve, and perhaps that time has arrived, writes intermodal analyst Larry Gross.

<div class="phx-topic">The numbers are in for intermodal performance for the first quarter, and the reading is surprisingly strong, even though the headline numbers don’t look all that wonderful. According to the Association of American Railroads, total North American activity in the first quarter rose 1.8% versus the prior year. Growth for the US “Big Four” (BNSF, CSX, NS and UP) was even lower at just 1.2%. But keep in mind what this is compared with. In 2025, first-quarter activity was juiced by volume pulled forward in time to beat the tariffs. Remember, Trump’s “Liberation Day” was April 2 of last year, just a couple of days after the conclusion of the first quarter. Intermodal’s ability to not only keep pace with, but even modestly improve on last year’s performance is somewhat impressive. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6205607_0.1.jpg"></img></div>Nonetheless, we can’t count on growth in international intermodal to once again save the day in 2026. Import TEUs trailed prior year throughout the first quarter, with my preliminary estimated decline from 2025 coming in at a bit less than 4%. We can expect major gyrations in the year-over-year comps over the next few months, not because of current variations, but rather because of the start-stop effects of the tariffs on last year’s volumes from month to month. Setting aside the year-over-year comparison, the sequential trend in import TEUs is looking quite favorable. After a weak performance in October of last year, seasonally adjusted import TEUs have moved significantly, with March showing the best numbers yet. For the time being, the SA numbers will be the most revealing in terms of current performance, rather than the comparison with last year’s erratic situation. Further, one of the anticipated headwinds for international intermodal in 2026 has, at least for the moment, evaporated. Earlier, it appeared likely that the Red Sea/Suez routing from Asia to the US East Coast would be fully re-opening in 2026. Now, the Iran War has made that unlikely in the near term. We should see the effects in the form of a boost in US West Coast import share in the coming months. This will help intermodal, as intermodal share off the West Coast is higher than out east. <h3>Headline-grabbing growth </h3>In my view, however, it will be domestic intermodal that will generate headlines in the coming months. Intermodal boosters have been waiting for three years for the competitive environment to improve, and perhaps that time has arrived. Truck rates are on the way up, thanks to actions by the Trump administration on several fronts. First and foremost are fuel prices. The price of diesel has skyrocketed with the Middle East war and the closure of the Strait of Hormuz, and there seems to be little prospect for relief in the near term. This has transformed fuel prices from a net drag on intermodal conversion to a powerful booster. The second tailwind is the administration’s crackdown on immigrant truck drivers. Action is occurring on four fronts: English proficiency, non-domicile commercial driver’s licenses, working visa restrictions and immigrant documentation. The result is a diminution in truck capacity. While I don’t expect the decline to be sharp enough to cause a shortage, the effects on trucking rates are plainly visible. There are potential offsets. The most significant would be a dramatic slowdown in the US economy. But that doesn’t seem to be in the cards just yet. The economy has shown remarkable resilience in the face of multiple headwinds, including the tariff gyrations. However, there are danger signs. Inflation is picking up, and there are signs that growth is slowing. The impact of the higher oil prices is only now starting to work their way through the system. A slowdown in the economy would of course result in reduced demand for truckload/intermodal services, counteracting the forces for growth. Intermodal share would likely still improve, but the overall pie could shrink. Another potential issue would be volume-related service stumbles by the railroads. History certainly tells us to be on guard against such problems, but recent STB service data shows no current cause for alarm. Service remains strong. In sum, current conditions provide a good opportunity for intermodal to end an extended period of market share stagnation. Much depends on how the intermodal industry opts to take advantage. If intermodal rates ride up in close concert with truck rates, then profitability will improve but volume gains will be modest. But if price increases are constrained, higher volumes and share should be the result. Larry Gross is president and founder of Gross Transportation Consulting. Contact him at <a href="mailto:lawrencejgross@gmail.com">lawrencejgross@gmail.com</a>. </div>

The numbers are in for intermodal performance for the first quarter, and the reading is surprisingly strong, even though the headline numbers don’t look all that wonderful. According to the Association of American Railroads, total North American activity in the first quarter rose 1.8% versus the prior year. Growth for the US “Big Four” (BNSF, CSX, NS and UP) was even lower at just 1.2%. But keep in mind what this is compared with. In 2025, first-quarter activity was juiced by volume pulled forward in time to beat the tariffs. Remember, Trump’s “Liberation Day” was April 2 of last year, just a couple of days after the conclusion of the first quarter. Intermodal’s ability to not only keep pace with, but even modestly improve on last year’s performance is somewhat impressive. Nonetheless, we can’t count on growth in international intermodal to once again save the day in 2026. Import TEUs trailed prior year throughout the first quarter, with my preliminary estimated decline from 2025 coming in at a bit less than 4%. We can expect major gyrations in the year-over-year comps over the next few months, not because of current variations, but rather because of the start-stop effects of the tariffs on last year’s volumes from month to month. Setting aside the year-over-year comparison, the sequential trend in import TEUs is looking quite favorable. After a weak performance in October of last year, seasonally adjusted import TEUs have moved significantly, with March showing the best numbers yet. For the time being, the SA numbers will be the most revealing in terms of current performance, rather than the comparison with last year’s erratic situation. Further, one of the anticipated headwinds for international intermodal in 2026 has, at least for the moment, evaporated. Earlier, it appeared likely that the Red Sea/Suez routing from Asia to the US East Coast would be fully re-opening in 2026. Now, the Iran War has made that unlikely in the near term. We should see the effects in the form of a boost in US West Coast import share in the coming months. This will help intermodal, as intermodal share off the West Coast is higher than out east. Headline-grabbing growth In my view, however, it will be domestic intermodal that will generate headlines in the coming months. Intermodal boosters have been waiting for three years for the competitive environment to improve, and perhaps that time has arrived. Truck rates are on the way up, thanks to actions by the Trump administration on several fronts. First and foremost are fuel prices. The price of diesel has skyrocketed with the Middle East war and the closure of the Strait of Hormuz, and there seems to be little prospect for relief in the near term. This has transformed fuel prices from a net drag on intermodal conversion to a powerful booster. The second tailwind is the administration’s crackdown on immigrant truck drivers. Action is occurring on four fronts: English proficiency, non-domicile commercial driver’s licenses, working visa restrictions and immigrant documentation. The result is a diminution in truck capacity. While I don’t expect the decline to be sharp enough to cause a shortage, the effects on trucking rates are plainly visible. There are potential offsets. The most significant would be a dramatic slowdown in the US economy. But that doesn’t seem to be in the cards just yet. The economy has shown remarkable resilience in the face of multiple headwinds, including the tariff gyrations. However, there are danger signs. Inflation is picking up, and there are signs that growth is slowing. The impact of the higher oil prices is only now starting to work their way through the system. A slowdown in the economy would of course result in reduced demand for truckload/intermodal services, counteracting the forces for growth. Intermodal share would likely still improve, but the overall pie could shrink. Another potential issue would be volume-related service stumbles by the railroads. History certainly tells us to be on guard against such problems, but recent STB service data shows no current cause for alarm. Service remains strong. In sum, current conditions provide a good opportunity for intermodal to end an extended period of market share stagnation. Much depends on how the intermodal industry opts to take advantage. If intermodal rates ride up in close concert with truck rates, then profitability will improve but volume gains will be modest. But if price increases are constrained, higher volumes and share should be the result. Larry Gross is president and founder of Gross Transportation Consulting. Contact him at lawrencejgross@gmail.com .

Truckload

North-American rail

Intermodal providers

Surface

Tailwinds for US intermodal volume growth strengthening: analyst

<div class="phx-topic abstract-wrapper">The alcoholic beverage industry is going through changes that are roiling demand forecasts, with a growing number of people drinking less than they were during the pandemic and different tastes apparent among young drinkers.</div>

The alcoholic beverage industry is going through changes that are roiling demand forecasts, with a growing number of people drinking less than they were during the pandemic and different tastes apparent among young drinkers.

<div class="phx-topic">(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) US alcoholic beverage importers are still trying to find their right supply-and-demand balance after another volatile year for wines and spirits shipments. Import numbers are also being roiled by changing tastes among US drinkers that are favoring new shipping methods and trade lanes. Containerized imports of wine, beer and distilled spirits fell 4.9% in 2025 and another 16.1% in the first quarter of 2026, according to data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Last year’s drop continues the uneven trajectory that alcoholic beverage imports have had since US inbound shipments hit a peak of 468,465 TEUs in 2022. After that, imports dropped 18% in 2023, followed by a 13.5% rebound in 2024. Allison Leavitt, managing director of the Wine and Spirits Shippers Association, said last year’s import numbers were affected by frontloading ahead of the Trump administration’s various tariff moves and the subsequent gap in later shipments. “There was a push at the beginning of 2025 to get products in prior to the tariffs, and this did create lower volumes in subsequent months, with some importers putting a stop to imports when tariffs were first announced,” Leavitt said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="84b1392e-a3ba-4353-8535-68285ce036da"></dynamic-object></div>But alcoholic beverage shippers are also still figuring out the right level of inventory to hold. The popularity of drinking at home during the pandemic led the industry to estimate stronger growth than what materialized afterward, she said. The alcoholic beverage industry itself is going through changes that are also roiling demand forecasts. A growing number of people are drinking less than they were during the pandemic. Changing tastes among young drinkers who prefer pre-packaged, ready-to-drink cocktails or malt beverages are another headwind for imports of individually bottled wines and spirits. “It’s definitely a confluence of post-COVID hangover from when people were indulging more in alcohol,” Leavitt said. “There’s a huge amount of inventory we are still working through. “There’s a little bit of a kickback in consumption from wellness trends,” she added. “There’s the rise of the ready-to-drink category. Those have impacted both wine and spirits imports.” <h3>Shift in shipping methods </h3>Imports from France, the second-largest source of US wine and spirits imports behind Italy, have fallen 23.7% since 2022. Along with lower demand, Leavitt said some of the volume decline also stems from different shipping methods. Instead of shipping individual bottles, US wine shippers are increasingly using tanks and totes to import thousands of liters of bulk wine that can be bottled domestically. Leavitt expects this trend to continue as major retailers such as Costco and Aldi offer more private-label wines at lower price points than estate-bottled wines. At the same time, shippers of estate-bottled wine are taking smaller consignments to reduce their risk of holding too much inventory at a time of changing tastes, resulting in more demand for less-than-containerload and consolidated shipments. “We see a lot of movement in bulk shipping, and more and more wine and spirits are moving in bulk,” Leavitt said. “It’s wine clubs bringing it in and the largest chains are definitely looking into more private labels.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="5c36d5d7-b71b-42c7-b321-01ecf1899819"></dynamic-object></div>The distilled spirits market faces a similar dynamic. Along with offering low-cost, private label brands, US spirits shippers are contending with the rising popularity of the prepackaged, ready-to-drink cocktail. Those products, along with malt-based seltzers, are steering drinkers away from individual bottles and further driving bulk alcohol shipments. Even though wine and spirits shippers do not lack for space on ships, Leavitt said network and schedule changes by ocean carriers can still impact the industry. Faced with weaker trade volumes, the Ocean Alliance and Ocean Network Express combined two jointly-operated, trans-Atlantic services into one at the start of 2026, which also reduced the number of ships in the services from 11 to seven. Mediterranean Shipping Co. also restructured its US East Coast network by dropping the trans-Atlantic leg of an around-the-world service. That effectively reduced some capacity and service frequency between Northern Europe and US East Coast ports at a time when the wine and spirits industry is moving to more just-in-time shipments, Leavitt said. Schedule reliability and consistency is also a factor on services shipping between Oceania and the US, which are serving Australian and New Zealand wine shipments. While a few direct Oceania services are available, many importers still rely on transshipping, and are dealing with resulting delays in reaching the US. Despite last year’s import decline, Leavitt said the industry might be finding a floor in demand. Import bookings for the early part of 2026 appear healthy. The US and Europe have a trade truce that should avoid further tariff-driven volatility. And newer types of products, whether private label or ready-to-drink, continue to gain traction with drinkers. “We see a lot of news about declining consumption and the phrase ‘neo-prohibitionist’ has come up as the trend toward no- and low-alcohol has picked up speed,” Leavitt said. “However, alcoholic beverages continue be consumed, and the volumes are not that different year on year for imports.”   Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) US alcoholic beverage importers are still trying to find their right supply-and-demand balance after another volatile year for wines and spirits shipments. Import numbers are also being roiled by changing tastes among US drinkers that are favoring new shipping methods and trade lanes. Containerized imports of wine, beer and distilled spirits fell 4.9% in 2025 and another 16.1% in the first quarter of 2026, according to data from PIERS, a sister company of the Journal of Commerce within S&P Global. Last year’s drop continues the uneven trajectory that alcoholic beverage imports have had since US inbound shipments hit a peak of 468,465 TEUs in 2022. After that, imports dropped 18% in 2023, followed by a 13.5% rebound in 2024. Allison Leavitt, managing director of the Wine and Spirits Shippers Association, said last year’s import numbers were affected by frontloading ahead of the Trump administration’s various tariff moves and the subsequent gap in later shipments. “There was a push at the beginning of 2025 to get products in prior to the tariffs, and this did create lower volumes in subsequent months, with some importers putting a stop to imports when tariffs were first announced,” Leavitt said. But alcoholic beverage shippers are also still figuring out the right level of inventory to hold. The popularity of drinking at home during the pandemic led the industry to estimate stronger growth than what materialized afterward, she said. The alcoholic beverage industry itself is going through changes that are also roiling demand forecasts. A growing number of people are drinking less than they were during the pandemic. Changing tastes among young drinkers who prefer pre-packaged, ready-to-drink cocktails or malt beverages are another headwind for imports of individually bottled wines and spirits. “It’s definitely a confluence of post-COVID hangover from when people were indulging more in alcohol,” Leavitt said. “There’s a huge amount of inventory we are still working through. “There’s a little bit of a kickback in consumption from wellness trends,” she added. “There’s the rise of the ready-to-drink category. Those have impacted both wine and spirits imports.” Shift in shipping methods Imports from France, the second-largest source of US wine and spirits imports behind Italy, have fallen 23.7% since 2022. Along with lower demand, Leavitt said some of the volume decline also stems from different shipping methods. Instead of shipping individual bottles, US wine shippers are increasingly using tanks and totes to import thousands of liters of bulk wine that can be bottled domestically. Leavitt expects this trend to continue as major retailers such as Costco and Aldi offer more private-label wines at lower price points than estate-bottled wines. At the same time, shippers of estate-bottled wine are taking smaller consignments to reduce their risk of holding too much inventory at a time of changing tastes, resulting in more demand for less-than-containerload and consolidated shipments. “We see a lot of movement in bulk shipping, and more and more wine and spirits are moving in bulk,” Leavitt said. “It’s wine clubs bringing it in and the largest chains are definitely looking into more private labels.” The distilled spirits market faces a similar dynamic. Along with offering low-cost, private label brands, US spirits shippers are contending with the rising popularity of the prepackaged, ready-to-drink cocktail. Those products, along with malt-based seltzers, are steering drinkers away from individual bottles and further driving bulk alcohol shipments. Even though wine and spirits shippers do not lack for space on ships, Leavitt said network and schedule changes by ocean carriers can still impact the industry. Faced with weaker trade volumes, the Ocean Alliance and Ocean Network Express combined two jointly-operated, trans-Atlantic services into one at the start of 2026, which also reduced the number of ships in the services from 11 to seven. Mediterranean Shipping Co. also restructured its US East Coast network by dropping the trans-Atlantic leg of an around-the-world service. That effectively reduced some capacity and service frequency between Northern Europe and US East Coast ports at a time when the wine and spirits industry is moving to more just-in-time shipments, Leavitt said. Schedule reliability and consistency is also a factor on services shipping between Oceania and the US, which are serving Australian and New Zealand wine shipments. While a few direct Oceania services are available, many importers still rely on transshipping, and are dealing with resulting delays in reaching the US. Despite last year’s import decline, Leavitt said the industry might be finding a floor in demand. Import bookings for the early part of 2026 appear healthy. The US and Europe have a trade truce that should avoid further tariff-driven volatility. And newer types of products, whether private label or ready-to-drink, continue to gain traction with drinkers. “We see a lot of news about declining consumption and the phrase ‘neo-prohibitionist’ has come up as the trend toward no- and low-alcohol has picked up speed,” Leavitt said. “However, alcoholic beverages continue be consumed, and the volumes are not that different year on year for imports.”   Contact Michael Angell at michael.angell@spglobal.com .

US alcohol importers managing shifting consumption habits

<div class="phx-topic abstract-wrapper">Demand returned sharply last month as shippers, facing surging truckload rates, looked to intermodal for lower-cost capacity alternatives.</div>

Demand returned sharply last month as shippers, facing surging truckload rates, looked to intermodal for lower-cost capacity alternatives.

<div class="phx-topic">J.B. Hunt Transport Services delivered more than 46,000 intermodal loads in one week last month, a company record and an early sign that domestic intermodal is entering its first meaningful stress test of the rail and drayage network since the COVID-19 pandemic. The surge followed a weak start to the year, when winter weather and frigid temperatures depressed volumes in January and February. But demand returned sharply in March as shippers, facing surging truckload rates, looked toward intermodal for lower-cost capacity alternatives. J.B. Hunt, the largest US asset-based intermodal carrier, said March volumes rose 8% year over year after flat conditions in the first two months of 2026. First-quarter volumes on the West Coast were flat, while local East Coast volumes increased 7% year over year. If the volumes continue to grow into the second quarter, it’ll put pressure on J.B. Hunt and rail partners BNSF Railway, CSX Transportation and Norfolk Southern Railway to remain reliable and dependable. “As we enter this prove-it time for rail networks, we and the railroads are confident service levels can be maintained even in a period of sustained volume growth,” Darren Field, president of J.B. Hunt’s intermodal division, said during the company’s first-quarter earnings call Wednesday. Rail service has been stable so far this year. Average US intermodal train speed was 2.8% faster in the first quarter than a year earlier, according to the Surface Transportation Board, while the number of railcars idled at least 48 hours fell 1.9%. But some intermodal shippers told the Journal of Commerce that tender rejections have increased, and that on-time performance has weakened since March 1. One Midwest-based shipper, who asked not to be identified, said its on-time performance with J.B. Hunt fell below 90% in March and also deteriorated with Hub Group and Swift Intermodal. All three providers told the shipper the service issues were tied to driver availability. Craig Ingram, owner of Asset-Based Intermodal, a dray provider in Dallas, said driver availability is a major issue. “Right now, we’re at 150% capacity; we’re back to where we were during COVID,” Ingram told the Journal of Commerce. “The ‘busy feeling’ is there with everyone I talk to in this business, from Chicago, Phoenix, California, Atlanta and New Jersey. The dray providers I regularly speak with across the US are all in the same boat I am in. They’re turning downloads left and right.” Other intermodal marketing companies (IMCs) are reporting the same pattern. Knichel Logistics, a non-asset-based IMC, said its first-quarter intermodal loads increased 36% year over year, with March volume alone up 53%. Similar to J.B. Hunt, Knichel said the growth is coming on shorter-haul lanes, where intermodal has traditionally offered less of a cost savings to truckload compared with longer moves. “Our average length of haul declined just under 6% year over year for the quarter and 7% in March, signaling a shift beyond traditional cross-country moves,” said Jon Krystek, Knichel’s chief operating officer. “We’re seeing more adoption across core East Coast corridors and lanes like Chicago to the Mountain West, where intermodal is becoming more competitive with truck.” <h3>Pricing has begun to reset </h3>Ingram said drayage rates are starting to move higher as customers place more value on guaranteed capacity and dependable service than on the lowest possible price. When rates fall out of line with demand, the best drivers choose the highest-paying loads, leaving cheaper freight to less-reliable operators. “Higher rates in this market will give us the ability to book the best drivers that take care of their trucks, keep in constant communication and are more dependable and reliable than their peers,” he said. “The best drivers, who take pride in their work, know the market has turned, so they will sit and wait to get their rate. They won’t take the [low paying] crummy loads anymore.” It may take longer for domestic intermodal providers to push through higher contract rates with shippers. J.B. Hunt said freight moving east to west — i.e. backhaul freight into the West Coast — remains locked into rates below year-ago levels. The company also said pricing on outbound West Coast business has not improved as quickly as it would like. “Every head-haul segment we operate in is [the] positive,” Field said. “We are getting price increases, but we’re not getting to the level of price increases that would cover our inflation at this point in the cycle.” If prior cycles are an indication, intermodal contract pricing typically lags truckload by three to six months. If true, intermodal pricing could begin to reset later this summer or in the fall for larger providers such as Hunt, with smaller non-asset-based operators getting higher rates shortly after. For now, the key question is whether intermodal can absorb the volume returning to the network without repeating the service breakdowns that pushed shippers away during the last major cycle. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

J.B. Hunt Transport Services delivered more than 46,000 intermodal loads in one week last month, a company record and an early sign that domestic intermodal is entering its first meaningful stress test of the rail and drayage network since the COVID-19 pandemic. The surge followed a weak start to the year, when winter weather and frigid temperatures depressed volumes in January and February. But demand returned sharply in March as shippers, facing surging truckload rates, looked toward intermodal for lower-cost capacity alternatives. J.B. Hunt, the largest US asset-based intermodal carrier, said March volumes rose 8% year over year after flat conditions in the first two months of 2026. First-quarter volumes on the West Coast were flat, while local East Coast volumes increased 7% year over year. If the volumes continue to grow into the second quarter, it’ll put pressure on J.B. Hunt and rail partners BNSF Railway, CSX Transportation and Norfolk Southern Railway to remain reliable and dependable. “As we enter this prove-it time for rail networks, we and the railroads are confident service levels can be maintained even in a period of sustained volume growth,” Darren Field, president of J.B. Hunt’s intermodal division, said during the company’s first-quarter earnings call Wednesday. Rail service has been stable so far this year. Average US intermodal train speed was 2.8% faster in the first quarter than a year earlier, according to the Surface Transportation Board, while the number of railcars idled at least 48 hours fell 1.9%. But some intermodal shippers told the Journal of Commerce that tender rejections have increased, and that on-time performance has weakened since March 1. One Midwest-based shipper, who asked not to be identified, said its on-time performance with J.B. Hunt fell below 90% in March and also deteriorated with Hub Group and Swift Intermodal. All three providers told the shipper the service issues were tied to driver availability. Craig Ingram, owner of Asset-Based Intermodal, a dray provider in Dallas, said driver availability is a major issue. “Right now, we’re at 150% capacity; we’re back to where we were during COVID,” Ingram told the Journal of Commerce. “The ‘busy feeling’ is there with everyone I talk to in this business, from Chicago, Phoenix, California, Atlanta and New Jersey. The dray providers I regularly speak with across the US are all in the same boat I am in. They’re turning downloads left and right.” Other intermodal marketing companies (IMCs) are reporting the same pattern. Knichel Logistics, a non-asset-based IMC, said its first-quarter intermodal loads increased 36% year over year, with March volume alone up 53%. Similar to J.B. Hunt, Knichel said the growth is coming on shorter-haul lanes, where intermodal has traditionally offered less of a cost savings to truckload compared with longer moves. “Our average length of haul declined just under 6% year over year for the quarter and 7% in March, signaling a shift beyond traditional cross-country moves,” said Jon Krystek, Knichel’s chief operating officer. “We’re seeing more adoption across core East Coast corridors and lanes like Chicago to the Mountain West, where intermodal is becoming more competitive with truck.” Pricing has begun to reset Ingram said drayage rates are starting to move higher as customers place more value on guaranteed capacity and dependable service than on the lowest possible price. When rates fall out of line with demand, the best drivers choose the highest-paying loads, leaving cheaper freight to less-reliable operators. “Higher rates in this market will give us the ability to book the best drivers that take care of their trucks, keep in constant communication and are more dependable and reliable than their peers,” he said. “The best drivers, who take pride in their work, know the market has turned, so they will sit and wait to get their rate. They won’t take the [low paying] crummy loads anymore.” It may take longer for domestic intermodal providers to push through higher contract rates with shippers. J.B. Hunt said freight moving east to west — i.e. backhaul freight into the West Coast — remains locked into rates below year-ago levels. The company also said pricing on outbound West Coast business has not improved as quickly as it would like. “Every head-haul segment we operate in is [the] positive,” Field said. “We are getting price increases, but we’re not getting to the level of price increases that would cover our inflation at this point in the cycle.” If prior cycles are an indication, intermodal contract pricing typically lags truckload by three to six months. If true, intermodal pricing could begin to reset later this summer or in the fall for larger providers such as Hunt, with smaller non-asset-based operators getting higher rates shortly after. For now, the key question is whether intermodal can absorb the volume returning to the network without repeating the service breakdowns that pushed shippers away during the last major cycle. Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Rail News

Truck brokers

Strong March volumes give intermodal its first real stress test in years

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

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

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

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

Trucking labor

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

<div class="phx-topic abstract-wrapper">GLP-1 weight loss drugs are the most visible example of a force reshaping freight that supply chains weren’t built to detect, writes Paul Tonsager. </div>

GLP-1 weight loss drugs are the most visible example of a force reshaping freight that supply chains weren’t built to detect, writes Paul Tonsager.

<div class="phx-topic">Plus-size apparel is contracting. The numbers are in the earnings calls — store closures accelerating, revenues declining, and CEOs attributing the cause directly to GLP-1 weight loss medications. Approximately 25% of customers at major plus-size retailers are actively losing weight and deferring purchases until they reach their goal size. For freight operators, the translation is straightforward: fewer container bookings out of Bangladesh, softening elastane import volumes from South Korea and China, rising return flows through apparel distribution centers, and athleisure volume shifting to different origins, different factories, different lanes. That’s the GLP-1 story in freight terms. But the more important question isn’t what GLP-1 does to one commodity flow. It’s what GLP-1 represents — and whether the industry is paying attention to the category it belongs to. <h3>A different kind of demand shift </h3>Supply chains are inference machines. They watch what moved last season and build a model of what will move next. Carrier contracts, network design, capacity commitments, inventory positioning — all of them are calibrated to demand cycles that move in human decision-time. A trend emerges. Shippers respond. Freight adjusts. That’s the model. GLP-1 doesn’t fit the model. The consumer isn’t choosing differently based on preference. Their body is changing on a pharmaceutical timeline with no seasonal pattern and no historical precedent in any demand planning system. The signal isn’t coming from the market. It’s coming from a lab. That’s the category: structural demand shifts originating outside the market. And GLP-1 is not the only one in play. <h3>The pattern repeating </h3>The electric vehicle transition is doing to auto parts freight what GLP-1 is doing to apparel — but slower and at far larger scale. An internal combustion vehicle contains approximately 30,000 parts. An EV eliminates approximately 10,000 of them. Transmissions, exhaust systems, fuel injectors — the freight lanes serving these components are in structural decline. The lanes serving battery materials — lithium, cobalt, copper — are being built in real time, often on entirely different corridors with different modal requirements. Carriers and third-party logistics providers (3PLs) who built capacity around internal combustion engine component flows are holding assets against a demand base that is shrinking by design. Food and beverage may be the next GLP-1 impact larger than apparel. If 23% of US households are on these medications — up four points in a single year, according to Circana — and consuming meaningfully fewer calories, the freight infrastructure built around the old consumption baseline is exposed. Bulk grain movements, refrigerated less-than-truckload networks, warehouse footprint, replenishment frequency — all sized to a caloric demand curve that is quietly bending downward. The volume impact hasn’t fully materialized. It will. Remote work ran the same playbook earlier this decade. Office-bound freight flows — commercial furniture, facilities supplies, workplace technology, food service — didn’t disappear. They redistributed to suburbs and residential addresses in patterns that no demand planning model had anticipated. Last-mile density assumptions broke. The signal came from a public health event, not a consumer preference survey. <h3>What the industry is missing </h3>The common thread isn’t the specific force — pharmaceutical, technological, epidemiological. It’s the origin. These signals don’t come from the market. They come from labs, legislatures and external shocks. Freight networks optimized to read market signals — booking velocity, tender acceptance, seasonal lift — are structurally late to detect them. GLP-1 is the most legible example yet because it has a drug name, a measurable penetration curve, and identifiable freight consequences already showing up in origin mix and return volumes. That clarity is unusual. Most structural demand shifts are harder to see until capacity is misaligned, contracts don’t match the freight, and the repositioning cost is already real. The operators who outperform in the next decade won’t necessarily be the ones who move the most freight. They’ll be the ones who developed the capability to read demand signals that don’t originate in the market — and built network flexibility before the curve arrived. GLP-1 is the canary. The question is whether the industry treats it as a one-time anomaly or as a preview of the operating environment it now lives in. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals &amp; Switches newsletter on freight strategy at aet1998.substack.com. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

Plus-size apparel is contracting. The numbers are in the earnings calls — store closures accelerating, revenues declining, and CEOs attributing the cause directly to GLP-1 weight loss medications. Approximately 25% of customers at major plus-size retailers are actively losing weight and deferring purchases until they reach their goal size. For freight operators, the translation is straightforward: fewer container bookings out of Bangladesh, softening elastane import volumes from South Korea and China, rising return flows through apparel distribution centers, and athleisure volume shifting to different origins, different factories, different lanes. That’s the GLP-1 story in freight terms. But the more important question isn’t what GLP-1 does to one commodity flow. It’s what GLP-1 represents — and whether the industry is paying attention to the category it belongs to. A different kind of demand shift Supply chains are inference machines. They watch what moved last season and build a model of what will move next. Carrier contracts, network design, capacity commitments, inventory positioning — all of them are calibrated to demand cycles that move in human decision-time. A trend emerges. Shippers respond. Freight adjusts. That’s the model. GLP-1 doesn’t fit the model. The consumer isn’t choosing differently based on preference. Their body is changing on a pharmaceutical timeline with no seasonal pattern and no historical precedent in any demand planning system. The signal isn’t coming from the market. It’s coming from a lab. That’s the category: structural demand shifts originating outside the market. And GLP-1 is not the only one in play. The pattern repeating The electric vehicle transition is doing to auto parts freight what GLP-1 is doing to apparel — but slower and at far larger scale. An internal combustion vehicle contains approximately 30,000 parts. An EV eliminates approximately 10,000 of them. Transmissions, exhaust systems, fuel injectors — the freight lanes serving these components are in structural decline. The lanes serving battery materials — lithium, cobalt, copper — are being built in real time, often on entirely different corridors with different modal requirements. Carriers and third-party logistics providers (3PLs) who built capacity around internal combustion engine component flows are holding assets against a demand base that is shrinking by design. Food and beverage may be the next GLP-1 impact larger than apparel. If 23% of US households are on these medications — up four points in a single year, according to Circana — and consuming meaningfully fewer calories, the freight infrastructure built around the old consumption baseline is exposed. Bulk grain movements, refrigerated less-than-truckload networks, warehouse footprint, replenishment frequency — all sized to a caloric demand curve that is quietly bending downward. The volume impact hasn’t fully materialized. It will. Remote work ran the same playbook earlier this decade. Office-bound freight flows — commercial furniture, facilities supplies, workplace technology, food service — didn’t disappear. They redistributed to suburbs and residential addresses in patterns that no demand planning model had anticipated. Last-mile density assumptions broke. The signal came from a public health event, not a consumer preference survey. What the industry is missing The common thread isn’t the specific force — pharmaceutical, technological, epidemiological. It’s the origin. These signals don’t come from the market. They come from labs, legislatures and external shocks. Freight networks optimized to read market signals — booking velocity, tender acceptance, seasonal lift — are structurally late to detect them. GLP-1 is the most legible example yet because it has a drug name, a measurable penetration curve, and identifiable freight consequences already showing up in origin mix and return volumes. That clarity is unusual. Most structural demand shifts are harder to see until capacity is misaligned, contracts don’t match the freight, and the repositioning cost is already real. The operators who outperform in the next decade won’t necessarily be the ones who move the most freight. They’ll be the ones who developed the capability to read demand signals that don’t originate in the market — and built network flexibility before the curve arrived. GLP-1 is the canary. The question is whether the industry treats it as a one-time anomaly or as a preview of the operating environment it now lives in. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals & Switches newsletter on freight strategy at aet1998.substack.com. Contact him at paul.tonsager@multimodalsolutions.io .

When the demand signal comes from outside the market

TL PPI

{valueY} 
Y-o-Y: {bls_tl_ppi_year_over_year_change.formatNumber('#.0%')}

Producer Price Indices (PPIs) measure the average change over time in selling prices, including surcharges and other costs, that domestic producers — in this case, truckload carriers — receive for their output — i.e., transportation services. The truckload PPI reflects the dominant role that contract carriage plays in the truckload market, as opposed to transactional rates, which makes up a small portion of industry pricing and PPI data. [BLS](https://www.bls.gov/)

US long-haul truckload producer price index (BLS)

US BLS Long-haul truckload producer price index (PPI) Gateway

<div class="phx-topic abstract-wrapper">Local BCOs are adopting a wait-and-watch strategy until there is greater clarity regarding cargo insurance costs and vessel passage through the Strait of Hormuz before committing to contract deals with carrier partners, sources say. </div>

Local BCOs are adopting a wait-and-watch strategy until there is greater clarity regarding cargo insurance costs and vessel passage through the Strait of Hormuz before committing to contract deals with carrier partners, sources say.

<div class="phx-topic">Annual service contract negotiations on Indian westbound trades to the US for the 2026–27 year have thus far featured an unusually cautious approach by both ocean carriers and beneficial cargo owners (BCOs) amid uncertainty caused by the war in the Middle East, industry sources say. Contracts typically begin May 1 and run through the following April. “The contract season is starting with more flexible structures, shorter validity and increased interest in indexed or hybrid pricing models,” said Ashish Sheth, chairman and managing director of Sarjak Container Lines. “From a market standpoint, this could signal an inflection point where freight derivatives and index-linked contracts gain more traction and traditional annual contracting gives way to dynamic, risk-adjusted pricing strategies.” Amid massive trade volatility, most carriers are limiting new long-term contract deals to global BCOs who have consistently met their minimum quantity commitments (MQCs), according to multiple sources with knowledge of the matter. Local BCOs, meanwhile, are being offered “floating” price contracts in most cases. For India-US East Coast (USEC) shipper clients, floating contract prices are generally lower than the freight-all-kinds (FAK) accounts by between $150 and $300 per FEU, sources said. Theoretically, floating contracts allow carriers to adjust rates over time in line with the market reality. Hapag-Lloyd, Mediterranean Shipping Co. and CMA CGM are among major carriers considering more floating rate contracts in the current distorted market environment, according to multiple sources with knowledge of the matter. Hapag-Lloyd is also said to be downplaying named account contract commitments — where the customers are typically listed — as part of a tweaked strategy, the sources said. The German liner, which recently <a href="https://www.joc.com/article/hapag-lloyd-to-invest-1-billion-across-indian-maritime-verticals-6189463">unveiled a $1 billion investment program for India</a> to cement its footprint in the country, commands the largest market share out of western India (Nhava Sheva/Mundra) for trades into the USEC, which is outside the Gemini Cooperation framework. “Basically, the carriers want to structure a contract that’s then subject to a general rate increase and/or a peak season surcharge, but BCOs are unwilling to go along with such open clauses,” said a forwarder executive who didn’t want to be identified. Sources also said there are indications that Maersk wants to engage in shorter-term, three-month rate contracts with local BCOs instead of annual contracts. Efforts to seek official comment from major carriers, including Maersk and Hapag-Lloyd, were unsuccessful. <h3>BCOs seek clarity </h3>Local BCOs are adopting a wait-and-watch strategy until there is greater clarity regarding cargo insurance costs and vessel passage through the Strait of Hormuz before committing to contract deals with carrier partners. “We have decided to hold off for now [on contract talks],” said a supply chain executive at a Mumbai-based diversified conglomerate who didn’t want to be identified. “We do not want to lock ourselves into rates at the levels being indicated now.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="893ffa5c-0a69-45c7-a555-425e44318711"></dynamic-object></div>Meanwhile, with little demand support and more regular weekly sailings, India-USEC carriers have canceled rate hike plans previously scheduled for April, pushing FAK rates on the trade lane down by up to $500 over the past two weeks. FAK rates now stand at between $2,200 and $2,500 per FEU for European liners and about $2,100 for Asian operators, industry data shows. Platts, a sister company of the Journal of Commerce within S&amp;P Global, put India-USEC spot rates at $2,450 per FEU as of April 13, essentially unchanged on the week. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Annual service contract negotiations on Indian westbound trades to the US for the 2026–27 year have thus far featured an unusually cautious approach by both ocean carriers and beneficial cargo owners (BCOs) amid uncertainty caused by the war in the Middle East, industry sources say. Contracts typically begin May 1 and run through the following April. “The contract season is starting with more flexible structures, shorter validity and increased interest in indexed or hybrid pricing models,” said Ashish Sheth, chairman and managing director of Sarjak Container Lines. “From a market standpoint, this could signal an inflection point where freight derivatives and index-linked contracts gain more traction and traditional annual contracting gives way to dynamic, risk-adjusted pricing strategies.” Amid massive trade volatility, most carriers are limiting new long-term contract deals to global BCOs who have consistently met their minimum quantity commitments (MQCs), according to multiple sources with knowledge of the matter. Local BCOs, meanwhile, are being offered “floating” price contracts in most cases. For India-US East Coast (USEC) shipper clients, floating contract prices are generally lower than the freight-all-kinds (FAK) accounts by between $150 and $300 per FEU, sources said. Theoretically, floating contracts allow carriers to adjust rates over time in line with the market reality. Hapag-Lloyd, Mediterranean Shipping Co. and CMA CGM are among major carriers considering more floating rate contracts in the current distorted market environment, according to multiple sources with knowledge of the matter. Hapag-Lloyd is also said to be downplaying named account contract commitments — where the customers are typically listed — as part of a tweaked strategy, the sources said. The German liner, which recently unveiled a $1 billion investment program for India to cement its footprint in the country, commands the largest market share out of western India (Nhava Sheva/Mundra) for trades into the USEC, which is outside the Gemini Cooperation framework. “Basically, the carriers want to structure a contract that’s then subject to a general rate increase and/or a peak season surcharge, but BCOs are unwilling to go along with such open clauses,” said a forwarder executive who didn’t want to be identified. Sources also said there are indications that Maersk wants to engage in shorter-term, three-month rate contracts with local BCOs instead of annual contracts. Efforts to seek official comment from major carriers, including Maersk and Hapag-Lloyd, were unsuccessful. BCOs seek clarity Local BCOs are adopting a wait-and-watch strategy until there is greater clarity regarding cargo insurance costs and vessel passage through the Strait of Hormuz before committing to contract deals with carrier partners. “We have decided to hold off for now [on contract talks],” said a supply chain executive at a Mumbai-based diversified conglomerate who didn’t want to be identified. “We do not want to lock ourselves into rates at the levels being indicated now.” Meanwhile, with little demand support and more regular weekly sailings, India-USEC carriers have canceled rate hike plans previously scheduled for April, pushing FAK rates on the trade lane down by up to $500 over the past two weeks. FAK rates now stand at between $2,200 and $2,500 per FEU for European liners and about $2,100 for Asian operators, industry data shows. Platts, a sister company of the Journal of Commerce within S&P Global, put India-USEC spot rates at $2,450 per FEU as of April 13, essentially unchanged on the week. Contact Bency Mathew at bencyvmathew@gmail.com .

Asia-Europe

Middle East-linked market ambiguity clouds India-US service contract plans

<div class="phx-topic abstract-wrapper">The doubling in bunker fuel prices in some key hubs since the war in the Middle East began six weeks ago is focusing industry attention on energy costs as supply scarcity worsens.</div>

The doubling in bunker fuel prices in some key hubs since the war in the Middle East began six weeks ago is focusing industry attention on energy costs as supply scarcity worsens.

<div class="phx-topic">Elevated energy prices due to the war in Iran are complicating, and in some cases slowing, some annual trans-Pacific service contract negotiations between container lines and US importers as emergency fees push up container spot rates. Bunker fuel prices, which doubled in many key hubs in the days after the war in the Middle East began disrupting oil supply six weeks ago, have focused shippers’ attention on how the higher carrier operating costs will be passed onto them via bunker adjustment factors (BAFs) and emergency bunker fuel surcharges. Container lines can give few assurances on the limits to the higher costs their customers face as shipowners scramble to secure fuel supplies for May and June amid worsening scarcity. Still, there is little concern that the increased attention on the fuel component of freight rates will derail finalizing 2026–27 service contracts, which typically go in effect May 1. The last time attention to fuel — which is generally treated as a simple pass-through cost within contracts — complicated contract talks was in 2019, ahead of impending low-sulfur regulations. This year, the impact of the war has helped carriers secure higher rates than last year, even when fuel was excluded, two container line executives said. Unlike in past years when negotiated contract rates slipped in early March, one of the carrier executives noted his pricing power increased as the impact of the war widened. The war began on Feb. 28. But increased annual costs from labor, port tariffs and landside transport make most of the contract rate gains a wash compared with rate levels secured last year, the two executives said. Container spot rates, as measured by various indexes, have been rising steadily since late February and early March before ascending even higher in early April. Emergency fuel surcharges began taking effect in the first week of April, following a 30-day review by maritime regulators. The cost to ship an FEU from Shanghai to Los Angeles hit $2,910 in the week ending April 9, a $900 increase from six weeks prior, according to Drewry’s World Container Index. <h3>Higher pass-on costs </h3>Container lines have imperfect means to recoup higher fuel costs and the additional costs accrued through disruption. BAFs can lag up to 90 days, hampering carriers’ cash flow in the meantime. US maritime regulators have prevented carriers from immediately implementing emergency surcharges, <a href="https://www.joc.com/article/fmc-again-rejects-maersk-petition-to-waive-notice-period-for-emergency-fuel-surcharge-6199261">forcing them to adhere to the 30-day notice period</a>, as required by US shipping law. The war has had minimal direct impact on container shipping, affecting just 1% to 2% of the total global capacity that typically transits the Strait of Hormuz. But the growing scarcity of bunker fuel in Asia has forced some ships to alter routings to refuel at alternative hubs, thus burning more fuel and accruing higher operating costs, a third carrier executive said. The rejection by Chinese authorities of emergency bunker fuel surcharges has further complicated efforts by carriers to recoup higher costs from exporters in China. The severity of emergency surcharges varies by carrier, but all are easily in the hundreds of dollars to ship an FEU from Asia to the US West Coast. US importers shipping contracted cargo can also be subject to emergency bunker fuel surcharges even if language within their contract restricts such fees. That is prompting discussions during contract negotiations about just how much exposure cargo owners face from future fees. Shippers and forwarders are also trying to resist attempts by some carriers to calculate BAFs on a monthly rather than quarterly basis. “I can’t mask my frustration about this. The fuel charge in the contract becomes nothing more than a glorified [freight-all-kinds] rate,” a forwarder told the Journal of Commerce. “It nullifies our ability to get longer-term rates for purposes of stability and visibility.” <h3>War volatility outstrips BAF </h3>A fourth carrier executive explained that the BAF was a “pre-war mechanism” that worked well when bunker fuel prices were relatively stable. But the recent surge in oil prices since March is adding literally <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">millions of dollars a week to carriers’ costs</a>. “When oil prices come back down — whenever that is — I don’t think anyone thinks that the price [of bunker fuel] will stay like this,” the carrier source said. “The rate will go back down to the pre-war rate.” The second-quarter BAF shouldn’t be too onerous for most shippers since it will mostly reflect the far less volatile January and February fuel prices, said Jason Cook, chief executive of Ardent Global Logistics. A sustained period of higher fuel prices through March and into the second quarter, however, will mean much higher BAF charges are coming in the third quarter. Shippers may try to frontload third-quarter cargo throughout May and June to avoid paying the higher BAF, he said. “For the second quarter, the BAF should be pretty mild,” Cook said. “It won’t really show up until the third quarter.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. Senior editors Michael Angell and Bill Mongelluzzo contributed to this report. </div>

Elevated energy prices due to the war in Iran are complicating, and in some cases slowing, some annual trans-Pacific service contract negotiations between container lines and US importers as emergency fees push up container spot rates. Bunker fuel prices, which doubled in many key hubs in the days after the war in the Middle East began disrupting oil supply six weeks ago, have focused shippers’ attention on how the higher carrier operating costs will be passed onto them via bunker adjustment factors (BAFs) and emergency bunker fuel surcharges. Container lines can give few assurances on the limits to the higher costs their customers face as shipowners scramble to secure fuel supplies for May and June amid worsening scarcity. Still, there is little concern that the increased attention on the fuel component of freight rates will derail finalizing 2026–27 service contracts, which typically go in effect May 1. The last time attention to fuel — which is generally treated as a simple pass-through cost within contracts — complicated contract talks was in 2019, ahead of impending low-sulfur regulations. This year, the impact of the war has helped carriers secure higher rates than last year, even when fuel was excluded, two container line executives said. Unlike in past years when negotiated contract rates slipped in early March, one of the carrier executives noted his pricing power increased as the impact of the war widened. The war began on Feb. 28. But increased annual costs from labor, port tariffs and landside transport make most of the contract rate gains a wash compared with rate levels secured last year, the two executives said. Container spot rates, as measured by various indexes, have been rising steadily since late February and early March before ascending even higher in early April. Emergency fuel surcharges began taking effect in the first week of April, following a 30-day review by maritime regulators. The cost to ship an FEU from Shanghai to Los Angeles hit $2,910 in the week ending April 9, a $900 increase from six weeks prior, according to Drewry’s World Container Index. Higher pass-on costs Container lines have imperfect means to recoup higher fuel costs and the additional costs accrued through disruption. BAFs can lag up to 90 days, hampering carriers’ cash flow in the meantime. US maritime regulators have prevented carriers from immediately implementing emergency surcharges, forcing them to adhere to the 30-day notice period , as required by US shipping law. The war has had minimal direct impact on container shipping, affecting just 1% to 2% of the total global capacity that typically transits the Strait of Hormuz. But the growing scarcity of bunker fuel in Asia has forced some ships to alter routings to refuel at alternative hubs, thus burning more fuel and accruing higher operating costs, a third carrier executive said. The rejection by Chinese authorities of emergency bunker fuel surcharges has further complicated efforts by carriers to recoup higher costs from exporters in China. The severity of emergency surcharges varies by carrier, but all are easily in the hundreds of dollars to ship an FEU from Asia to the US West Coast. US importers shipping contracted cargo can also be subject to emergency bunker fuel surcharges even if language within their contract restricts such fees. That is prompting discussions during contract negotiations about just how much exposure cargo owners face from future fees. Shippers and forwarders are also trying to resist attempts by some carriers to calculate BAFs on a monthly rather than quarterly basis. “I can’t mask my frustration about this. The fuel charge in the contract becomes nothing more than a glorified [freight-all-kinds] rate,” a forwarder told the Journal of Commerce. “It nullifies our ability to get longer-term rates for purposes of stability and visibility.” War volatility outstrips BAF A fourth carrier executive explained that the BAF was a “pre-war mechanism” that worked well when bunker fuel prices were relatively stable. But the recent surge in oil prices since March is adding literally millions of dollars a week to carriers’ costs . “When oil prices come back down — whenever that is — I don’t think anyone thinks that the price [of bunker fuel] will stay like this,” the carrier source said. “The rate will go back down to the pre-war rate.” The second-quarter BAF shouldn’t be too onerous for most shippers since it will mostly reflect the far less volatile January and February fuel prices, said Jason Cook, chief executive of Ardent Global Logistics. A sustained period of higher fuel prices through March and into the second quarter, however, will mean much higher BAF charges are coming in the third quarter. Shippers may try to frontload third-quarter cargo throughout May and June to avoid paying the higher BAF, he said. “For the second quarter, the BAF should be pretty mild,” Cook said. “It won’t really show up until the third quarter.” Contact Mark Szakonyi at  mark.szakonyi@spglobal.com . Senior editors Michael Angell and Bill Mongelluzzo contributed to this report.

Forwarding

War-driven fuel costs add new twist to trans-Pacific service contract talks

<div class="phx-topic abstract-wrapper">While the $4.2 billion transaction still requires approvals from the Israeli government, it points to an appetite for consolidation among carriers despite the lack of financial distress that accompanied earlier merger eras. </div>

While the $4.2 billion transaction still requires approvals from the Israeli government, it points to an appetite for consolidation among carriers despite the lack of financial distress that accompanied earlier merger eras.

<div class="phx-topic">Could another round of container shipping consolidation be approaching? Hapag-Lloyd’s planned $4.2 billion acquisition of Zim Integrated Shipping Services, announced in February, shows a growing appetite among carriers for scale, including through consolidation, despite the lack of financial hardship that drove earlier rounds of industry mergers and aquisitions. The risk of falling behind is acute. No. 1 carrier Mediterranean Shipping Co., at 21.6% of the global fleet by capacity following a massive expansion since the pandemic, is now more than three times the size of No. 5 Hapag-Lloyd and No. 6 Ocean Network Express (ONE), according to Alphaliner rankings. MSC has accounted for 33.6% of total container carrier fleet growth since 2000, according to the analyst. As a result, midsize carriers — even those firmly within the top 10 — are realizing the urgency of building scale to remain competitive with the top carriers, pursuing that goal by aggressively acquiring tonnage and potentially considering the possibility of once unthinkable M&amp;A. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6202639_0.1.jpg"></img></div>“With post-COVID and the outsized profits from that time period, you are seeing carriers focus on a ‘core’ or ‘integrator’ strategy, but in both cases, scale is still key,” Brian Nemeth, global co-leader of logistics and transportation at Alix Partners, told the Journal of Commerce. A “core” strategy would be a focus on ocean shipping and terminals while “integrator” refers to end-to-end activities including origin consolidation, warehousing, last-mile and visibility. With fewer large carriers remaining — the top 10 control more than 85% percent of the fleet today versus 48% in 1996, according to analyst Lars Jensen — merger opportunities are harder to find, although any further deals would continue a longstanding industry trend. “The liner shipping industry has seen a persistent drive towards consolidation for more than 30 years,” Jensen wrote in his book Liner Shipping 2025, published in 2017. While the Zim deal still requires approvals from the Israeli government, the fact Hapag-Lloyd was able to overcome national security and other obstacles in signing the merger agreement shows that deals some might have regarded as impossible may in fact be within reach. “I was somewhat surprised that Zim would do a deal like Hapag, for many reasons including cultural differences, but also from the point of view of Israeli national security,” consultant and former senior Maersk executive Robbert van Trooijen told the Journal of Commerce. “The fact they found a solution to this, assuming [the deal closes], they have proven there are solutions to be found,” he said. <h3>The vulnerability of midsize carriers </h3>For example, would Japan ever allow Ocean Network Express (ONE), which consolidated its three largest ocean carriers in 2017, to be merged into a larger combined carrier? As important as the trade-dependent nation views shipping, some believe ONE is sub-scale in the current environment, a point that could apply to several other Asian carriers. A deal to privatize South Korea’s HMM <a href="https://www.joc.com/article/hmms-48-billion-share-sale-is-scrapped-over-management-control-issue-5215009">collapsed in 2024</a> but could one day be revived. “Assume in the next three to five years the industry, which has an unprecedented order book of 35% of the global existing fleet, enters a downturn,” van Trooijen said. “There must be a moment where the 1-2 million TEU players start asking themselves, ‘where do we see ourselves 10 years from now?’” The record 35% order book as a percentage of the existing fleet by itself illustrates top carriers’ aggressive pursuit of scale. As of December, the top 10 carriers controlled 79% of the order book, although the actual figure is likely near 85% when expected long-term charters are figured in, according to Alphaliner chief analyst Jan Tiedemann. Under its “2030 Strategy” unveiled in 2024, ONE aims to increase its capacity to 3 million TEUs, a 42% increase from its current fleet size. In March, <a href="https://www.joc.com/article/one-boosts-ownership-stake-in-seaspan-parent-poseidon-6184045">it increased its stake to 48.9% in the parent company of Seaspan</a>, the largest non-operating owner of container ships. HMM in its own 2030 strategy plan also aims to double its fleet size. Increasing the vulnerability of midsize carriers is the possibility the alliances they participate in break up, leaving them at the mercy of larger carriers to expand market coverage beyond what their own fleet capacity can provide. “Hapag-Lloyd leaving its prior alliance to join up with Maersk shows you can’t always depend on stable alliances,” van Trooijen said, observing an emerging disconnect between smaller carriers’ aggressive vessel orders in pursuit of scale and their underlying commercial ability to fill the ships. “In other words [in the event their alliance breaks up], the smaller players run the risk of being left out in the cold where they have big ships but don’t have scale to support that,” he added. “That could very well happen.” <h3>Carriers in good position to withstand downturn </h3>That is further reason why the Hapag/Zim deal, coming at a time when carriers remain flush with cash from the pandemic and thus, according to some, are well-prepared to weather any downturn associated with the high order book, may represent a turning point. “When we look at the industry and when we look at this downturn which we are talking about, I think the industry is very well-prepared,” S&amp;P Global analyst Rahul Kapoor told TPM26 in March. Indeed, according to Alix Partners, the Hapag/Zim deal was announced amid a strong financial phase for the industry, a change from the prior consolidation wave culminating in 2016 and 2017 when the industry was on much shakier ground financially, illustrated by the Hanjin bankruptcy in August 2016. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="6f095f56-8498-498c-b802-0e167eafd666"></dynamic-object></div>For the container shipping industry, Alix’s “Altman Z” score, which measures the likelihood of bankruptcy (the lower the number, the greater the risk), was 1.19 in 2016. That was the year of the Hanjin bankruptcy, the Cosco/China Shipping merger, CMA CGM’s acquisition of APL, Maersk announcing plans to buy Hamburg Sud, and key milestones in the Hapag-Lloyd/United Arab Shipping merger that was finalized in 2017. By 2025, it was more than twice as high, indicating much greater financial health, the Alix data shows. Van Trooijen believes there exists a window for carriers to engage in consolidation deals while they are financially robust in order to address the structural inequities before they become increasingly apparent As he <a href="https://www.joc.com/article/in-wake-of-zim-deal-the-time-for-industry-consolidation-is-now-6179297">wrote on JOC.com recently</a>: “The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Could another round of container shipping consolidation be approaching? Hapag-Lloyd’s planned $4.2 billion acquisition of Zim Integrated Shipping Services, announced in February, shows a growing appetite among carriers for scale, including through consolidation, despite the lack of financial hardship that drove earlier rounds of industry mergers and aquisitions. The risk of falling behind is acute. No. 1 carrier Mediterranean Shipping Co., at 21.6% of the global fleet by capacity following a massive expansion since the pandemic, is now more than three times the size of No. 5 Hapag-Lloyd and No. 6 Ocean Network Express (ONE), according to Alphaliner rankings. MSC has accounted for 33.6% of total container carrier fleet growth since 2000, according to the analyst. As a result, midsize carriers — even those firmly within the top 10 — are realizing the urgency of building scale to remain competitive with the top carriers, pursuing that goal by aggressively acquiring tonnage and potentially considering the possibility of once unthinkable M&A. “With post-COVID and the outsized profits from that time period, you are seeing carriers focus on a ‘core’ or ‘integrator’ strategy, but in both cases, scale is still key,” Brian Nemeth, global co-leader of logistics and transportation at Alix Partners, told the Journal of Commerce. A “core” strategy would be a focus on ocean shipping and terminals while “integrator” refers to end-to-end activities including origin consolidation, warehousing, last-mile and visibility. With fewer large carriers remaining — the top 10 control more than 85% percent of the fleet today versus 48% in 1996, according to analyst Lars Jensen — merger opportunities are harder to find, although any further deals would continue a longstanding industry trend. “The liner shipping industry has seen a persistent drive towards consolidation for more than 30 years,” Jensen wrote in his book Liner Shipping 2025, published in 2017. While the Zim deal still requires approvals from the Israeli government, the fact Hapag-Lloyd was able to overcome national security and other obstacles in signing the merger agreement shows that deals some might have regarded as impossible may in fact be within reach. “I was somewhat surprised that Zim would do a deal like Hapag, for many reasons including cultural differences, but also from the point of view of Israeli national security,” consultant and former senior Maersk executive Robbert van Trooijen told the Journal of Commerce. “The fact they found a solution to this, assuming [the deal closes], they have proven there are solutions to be found,” he said. The vulnerability of midsize carriers For example, would Japan ever allow Ocean Network Express (ONE), which consolidated its three largest ocean carriers in 2017, to be merged into a larger combined carrier? As important as the trade-dependent nation views shipping, some believe ONE is sub-scale in the current environment, a point that could apply to several other Asian carriers. A deal to privatize South Korea’s HMM collapsed in 2024 but could one day be revived. “Assume in the next three to five years the industry, which has an unprecedented order book of 35% of the global existing fleet, enters a downturn,” van Trooijen said. “There must be a moment where the 1-2 million TEU players start asking themselves, ‘where do we see ourselves 10 years from now?’” The record 35% order book as a percentage of the existing fleet by itself illustrates top carriers’ aggressive pursuit of scale. As of December, the top 10 carriers controlled 79% of the order book, although the actual figure is likely near 85% when expected long-term charters are figured in, according to Alphaliner chief analyst Jan Tiedemann. Under its “2030 Strategy” unveiled in 2024, ONE aims to increase its capacity to 3 million TEUs, a 42% increase from its current fleet size. In March, it increased its stake to 48.9% in the parent company of Seaspan , the largest non-operating owner of container ships. HMM in its own 2030 strategy plan also aims to double its fleet size. Increasing the vulnerability of midsize carriers is the possibility the alliances they participate in break up, leaving them at the mercy of larger carriers to expand market coverage beyond what their own fleet capacity can provide. “Hapag-Lloyd leaving its prior alliance to join up with Maersk shows you can’t always depend on stable alliances,” van Trooijen said, observing an emerging disconnect between smaller carriers’ aggressive vessel orders in pursuit of scale and their underlying commercial ability to fill the ships. “In other words [in the event their alliance breaks up], the smaller players run the risk of being left out in the cold where they have big ships but don’t have scale to support that,” he added. “That could very well happen.” Carriers in good position to withstand downturn That is further reason why the Hapag/Zim deal, coming at a time when carriers remain flush with cash from the pandemic and thus, according to some, are well-prepared to weather any downturn associated with the high order book, may represent a turning point. “When we look at the industry and when we look at this downturn which we are talking about, I think the industry is very well-prepared,” S&P Global analyst Rahul Kapoor told TPM26 in March. Indeed, according to Alix Partners, the Hapag/Zim deal was announced amid a strong financial phase for the industry, a change from the prior consolidation wave culminating in 2016 and 2017 when the industry was on much shakier ground financially, illustrated by the Hanjin bankruptcy in August 2016. For the container shipping industry, Alix’s “Altman Z” score, which measures the likelihood of bankruptcy (the lower the number, the greater the risk), was 1.19 in 2016. That was the year of the Hanjin bankruptcy, the Cosco/China Shipping merger, CMA CGM’s acquisition of APL, Maersk announcing plans to buy Hamburg Sud, and key milestones in the Hapag-Lloyd/United Arab Shipping merger that was finalized in 2017. By 2025, it was more than twice as high, indicating much greater financial health, the Alix data shows. Van Trooijen believes there exists a window for carriers to engage in consolidation deals while they are financially robust in order to address the structural inequities before they become increasingly apparent As he wrote on JOC.com recently : “The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Hapag-Zim deal could ignite another merger wave in container shipping

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<div class="phx-topic abstract-wrapper">Ocean carriers say there is still enough bunker fuel availability in general, but the different fuel types are unevenly distributed and affecting key refueling hubs in Asia, notably Singapore. </div>

Ocean carriers say there is still enough bunker fuel availability in general, but the different fuel types are unevenly distributed and affecting key refueling hubs in Asia, notably Singapore.

<div class="phx-topic">Container lines face the prospect of major global shortages of bunker fuel within two or three months if oil shipping through the Strait of Hormuz remains disrupted. Such a scenario where fuel scarcity — particularly the low-sulfur kind — expands from South Asia to other bunkering locations globally would put a premium on ships equipped with exhaust scrubbers that are able to burn high-sulfur fuel. About 40% of the global container shipping fleet have exhaust gas cleaning systems, according to Alphaliner. The scrubbers remove harmful sulfur oxides and particulate matter from marine exhaust fumes, allowing ships to burn high-sulfur fuel oil (HSFO) while complying with international IMO 2020 pollution regulations. Carriers say there is still enough bunker fuel supply in general, but the different fuel types — very low-sulfur fuel oil (VLSFO), HSFO, marine gasoil (MGO) and liquefied natural gas (LNG) — are becoming unevenly distributed at key refueling hubs in Asia, notably Singapore. “As of mid-April 2026, the Strait of Hormuz closure remains the primary driver of supply anxiety, forcing a significant shift in where vessels choose to lift fuel,” said Fotios Katsoulas, director and head of tankers, freight and alternative fuels research at S&amp;P Global Energy. S&amp;P Global is the parent of the Journal of Commerce. “The global bunker market is currently defined by a sharp divide between well-stocked Western hubs and severely constrained Eastern corridors,” he added. “While we aren’t seeing widespread ‘dry’ ports, the tightness in specific regions — particularly around low-sulfur blends and high-viscosity fuel for project cargo vessels — is definitely a valid concern.” <h3>Scrubber-equipped vessels more flexible </h3>The greater availability of HSFO, at least for now, provides an advantage to vessels equipped with scrubbers, according to Paolo Montrone, senior vice president and head of global trades at Kuehne + Nagel. “If there are big shortages, we believe the availability of high-sulfur fuel will probably be more spread out through many bunkering ports, including the smaller ports,” Montrone said in an interview with the Journal of Commerce Tuesday. “Ships with scrubbers will have an advantage in terms of flexibility, not necessarily just over-availability of supply or cost, but purely on where you can actually bunker,” he added. “It will become not so much about supply and demand and price, but about how to get the fuel where you need it and when you need it.” Jan Tiedemann, senior analyst for liner shipping and ports at Alphaliner, agreed that flexibility was key, with some LNG and methanol dual-fuel vessels even equipped with scrubbers. For instance, Mediterranean Shipping Co. retrofitted scrubbers on 35-year-old ships and also had scrubbers fitted on brand new LNG vessels, he noted. A spokesperson for Hapag-Lloyd said fuel type was just one of many factors in how the carrier deployed its ships. “What matters most are stable schedules, network needs and our commitments to customers,” he told the Journal of Commerce.“Scrubber-equipped vessels do provide some additional flexibility, but any changes in deployment would be made very carefully and based on overall network requirements — not just on fuel availability.” The industry welcomed a two-week ceasefire agreed to between the US and Iran last week, but peace talks between the two parties in Islamabad on April 11–12 collapsed after less than 24 hours. Tensions over oil exports from the Persian Gulf were then further ratcheted up Monday when the US launched a counter-blockade in the Strait of Hormuz to force Iran to abandon its blockade and allow toll-free shipping to resume through the waterway. Commercial transit through Hormuz has now effectively halted, Crane Worldwide Logistics said in a Middle East update Tuesday. While approximately 17 vessels transited the strait on April 11 — the highest post‑ceasefire volume — traffic fell to near zero as the US blockade implementation approached. “Major operators have confirmed they will not attempt passage without full insurance cover, citing mines in the main channel and enforcement risk,” Crane noted. “More than 3,200 vessels, including over 800 tankers, remain stranded across the Gulf, with charter and insurance markets re‑hardening sharply and all ceasefire‑era relief erased.” <h3>Visibility to manage fuel types </h3>Carriers say they are still able to find the bunker fuel they need, but it is not always in the locations where it is needed. Some carriers are topping up ships in Europe where VLSFO is available, and at a lower cost to Singapore, and transporting the fuel to Asia. Montrone said feedback from the major carriers is that they expect to see challenges if the distribution of fuel and bottlenecks in the Middle East continue for another two to three months. In preparation, Kuehne + Nagel has been poring over visibility data on its SeaExplorer tool to consider ways to manage potential bunker shortages of certain fuel types. “Eight years ago, in SeaExplorer we classified ships by fuel type and by scrubber or non-scrubber, and it was not that useful in the past,” Montrone said. “We have at our fingertips, loop by loop, what is LNG, what is VLSFO and what ships have scrubbers. “We are now looking at all these details to ensure that we have the right flexibility and capacity to be able to get in front of a potential issue, and we believe we are fairly well prepared,” he added. Jacob Moe, global head of full container load (FCL) and trade management at DHL Global Forwarding, said emerging shortages in bunker supply would bring the network resilience of maritime supply chains into the spotlight. “If Hormuz remains disrupted and replenishment becomes more constrained in key Asian hubs, carriers will need to operate with less flexibility across networks, which typically translates into reduced effective capacity, omitted or adjusted port calls, longer lead times and additional cost pressure,” Moe told the Journal of Commerce. “Cargo will continue to move, but with materially less predictability, and that is usually the first thing customers feel,” he added. Data from Signal Ocean shows global seaborne crude oil shipments have fallen 16% since the beginning of the Middle East war compared with the first nine weeks of 2026. “This represents a reduction of 7.6 million barrels per day [mb/d] to 38.4 mb/p,” Niels Rasmussen, chief shipping analyst at Bimco, said in a market update Tuesday. “Coincidentally, shipments during the past six weeks have likewise been 16% lower than during the same period last year. “Even if the Strait of Hormuz is fully reopened, it may take a long time for crude oil and other energy shipments to return to previous volumes,” he noted. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Container lines face the prospect of major global shortages of bunker fuel within two or three months if oil shipping through the Strait of Hormuz remains disrupted. Such a scenario where fuel scarcity — particularly the low-sulfur kind — expands from South Asia to other bunkering locations globally would put a premium on ships equipped with exhaust scrubbers that are able to burn high-sulfur fuel. About 40% of the global container shipping fleet have exhaust gas cleaning systems, according to Alphaliner. The scrubbers remove harmful sulfur oxides and particulate matter from marine exhaust fumes, allowing ships to burn high-sulfur fuel oil (HSFO) while complying with international IMO 2020 pollution regulations. Carriers say there is still enough bunker fuel supply in general, but the different fuel types — very low-sulfur fuel oil (VLSFO), HSFO, marine gasoil (MGO) and liquefied natural gas (LNG) — are becoming unevenly distributed at key refueling hubs in Asia, notably Singapore. “As of mid-April 2026, the Strait of Hormuz closure remains the primary driver of supply anxiety, forcing a significant shift in where vessels choose to lift fuel,” said Fotios Katsoulas, director and head of tankers, freight and alternative fuels research at S&P Global Energy. S&P Global is the parent of the Journal of Commerce. “The global bunker market is currently defined by a sharp divide between well-stocked Western hubs and severely constrained Eastern corridors,” he added. “While we aren’t seeing widespread ‘dry’ ports, the tightness in specific regions — particularly around low-sulfur blends and high-viscosity fuel for project cargo vessels — is definitely a valid concern.” Scrubber-equipped vessels more flexible The greater availability of HSFO, at least for now, provides an advantage to vessels equipped with scrubbers, according to Paolo Montrone, senior vice president and head of global trades at Kuehne + Nagel. “If there are big shortages, we believe the availability of high-sulfur fuel will probably be more spread out through many bunkering ports, including the smaller ports,” Montrone said in an interview with the Journal of Commerce Tuesday. “Ships with scrubbers will have an advantage in terms of flexibility, not necessarily just over-availability of supply or cost, but purely on where you can actually bunker,” he added. “It will become not so much about supply and demand and price, but about how to get the fuel where you need it and when you need it.” Jan Tiedemann, senior analyst for liner shipping and ports at Alphaliner, agreed that flexibility was key, with some LNG and methanol dual-fuel vessels even equipped with scrubbers. For instance, Mediterranean Shipping Co. retrofitted scrubbers on 35-year-old ships and also had scrubbers fitted on brand new LNG vessels, he noted. A spokesperson for Hapag-Lloyd said fuel type was just one of many factors in how the carrier deployed its ships. “What matters most are stable schedules, network needs and our commitments to customers,” he told the Journal of Commerce. “Scrubber-equipped vessels do provide some additional flexibility, but any changes in deployment would be made very carefully and based on overall network requirements — not just on fuel availability.” The industry welcomed a two-week ceasefire agreed to between the US and Iran last week, but peace talks between the two parties in Islamabad on April 11–12 collapsed after less than 24 hours. Tensions over oil exports from the Persian Gulf were then further ratcheted up Monday when the US launched a counter-blockade in the Strait of Hormuz to force Iran to abandon its blockade and allow toll-free shipping to resume through the waterway. Commercial transit through Hormuz has now effectively halted, Crane Worldwide Logistics said in a Middle East update Tuesday. While approximately 17 vessels transited the strait on April 11 — the highest post‑ceasefire volume — traffic fell to near zero as the US blockade implementation approached. “Major operators have confirmed they will not attempt passage without full insurance cover, citing mines in the main channel and enforcement risk,” Crane noted. “More than 3,200 vessels, including over 800 tankers, remain stranded across the Gulf, with charter and insurance markets re‑hardening sharply and all ceasefire‑era relief erased.” Visibility to manage fuel types Carriers say they are still able to find the bunker fuel they need, but it is not always in the locations where it is needed. Some carriers are topping up ships in Europe where VLSFO is available, and at a lower cost to Singapore, and transporting the fuel to Asia. Montrone said feedback from the major carriers is that they expect to see challenges if the distribution of fuel and bottlenecks in the Middle East continue for another two to three months. In preparation, Kuehne + Nagel has been poring over visibility data on its SeaExplorer tool to consider ways to manage potential bunker shortages of certain fuel types. “Eight years ago, in SeaExplorer we classified ships by fuel type and by scrubber or non-scrubber, and it was not that useful in the past,” Montrone said. “We have at our fingertips, loop by loop, what is LNG, what is VLSFO and what ships have scrubbers. “We are now looking at all these details to ensure that we have the right flexibility and capacity to be able to get in front of a potential issue, and we believe we are fairly well prepared,” he added. Jacob Moe, global head of full container load (FCL) and trade management at DHL Global Forwarding, said emerging shortages in bunker supply would bring the network resilience of maritime supply chains into the spotlight. “If Hormuz remains disrupted and replenishment becomes more constrained in key Asian hubs, carriers will need to operate with less flexibility across networks, which typically translates into reduced effective capacity, omitted or adjusted port calls, longer lead times and additional cost pressure,” Moe told the Journal of Commerce. “Cargo will continue to move, but with materially less predictability, and that is usually the first thing customers feel,” he added. Data from Signal Ocean shows global seaborne crude oil shipments have fallen 16% since the beginning of the Middle East war compared with the first nine weeks of 2026. “This represents a reduction of 7.6 million barrels per day [mb/d] to 38.4 mb/p,” Niels Rasmussen, chief shipping analyst at Bimco, said in a market update Tuesday. “Coincidentally, shipments during the past six weeks have likewise been 16% lower than during the same period last year. “Even if the Strait of Hormuz is fully reopened, it may take a long time for crude oil and other energy shipments to return to previous volumes,” he noted. Contact Greg Knowler at greg.knowler@spglobal.com .

Bunker fuel shortages loom after US counter blocks Strait of Hormuz 

<div class="phx-topic abstract-wrapper">The customs agency will prioritize unliquidated entries in the first phase of the refund process that was instigated by the February Supreme Court decision to invalidate tariffs on most US trading partners.</div>

The customs agency will prioritize unliquidated entries in the first phase of the refund process that was instigated by the February Supreme Court decision to invalidate tariffs on most US trading partners.

<div class="phx-topic">Refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA) will start April 20 under a phased rollout, according to US Customs and Border Protection (CBP). The <a href="https://www.joc.com/article/cbp-lays-out-initial-tariff-refund-plan-that-requires-minimal-work-from-importers-6183418">refund process</a>, which will come as welcome news to importers, is being managed through a new tool, called Consolidated Administration and Processing of Entries (CAPE), that is being built within CBP’s Automated Commercial Environment Secure Data Portal (ACE Portal). The <a href="https://www.joc.com/article/us-supreme-court-rules-against-trump-in-critical-ieepa-tariff-case-6173568">US Supreme Court ruled on Feb. 20</a> that the Trump administration improperly used IEEPA to justify widespread tariffs the US slapped on virtually all of its trading partners beginning in the spring of 2025. That decision shifted details on the refund process to the US Court of International Trade, which instructed CBP to avoid delaying refunds to US importers that had collectively paid more than $150 billion in IEEPA tariffs. The first phase of the refund process prioritizes so-called unliquidated entries and liquidated entries that are fewer than 80 days old. A liquidated entry means CBP has completed the final assessment of duties, taxes and fees, making the entry legal and closed. CBP has said that the refund process will take up to 45 days once a CAPE declaration has been filed, but the agency has issued no formal timeline for when refunds might actually land in the accounts of importers. To apply for IEEPA tariff refunds, importers must either have an ACE portal account or an automated clearing house (ACH) account so they can receive the refunds. Customs experts have advised importers to set up both to avoid delays in the refund process. If a customs broker or other third party is authorized by an importer to act as a notify party on a customs entry, and if the broker is set up to receive refunds electronically, that party can receive refunds via ACH on behalf of an importer. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA) will start April 20 under a phased rollout, according to US Customs and Border Protection (CBP). The refund process , which will come as welcome news to importers, is being managed through a new tool, called Consolidated Administration and Processing of Entries (CAPE), that is being built within CBP’s Automated Commercial Environment Secure Data Portal (ACE Portal). The US Supreme Court ruled on Feb. 20 that the Trump administration improperly used IEEPA to justify widespread tariffs the US slapped on virtually all of its trading partners beginning in the spring of 2025. That decision shifted details on the refund process to the US Court of International Trade, which instructed CBP to avoid delaying refunds to US importers that had collectively paid more than $150 billion in IEEPA tariffs. The first phase of the refund process prioritizes so-called unliquidated entries and liquidated entries that are fewer than 80 days old. A liquidated entry means CBP has completed the final assessment of duties, taxes and fees, making the entry legal and closed. CBP has said that the refund process will take up to 45 days once a CAPE declaration has been filed, but the agency has issued no formal timeline for when refunds might actually land in the accounts of importers. To apply for IEEPA tariff refunds, importers must either have an ACE portal account or an automated clearing house (ACH) account so they can receive the refunds. Customs experts have advised importers to set up both to avoid delays in the refund process. If a customs broker or other third party is authorized by an importer to act as a notify party on a customs entry, and if the broker is set up to receive refunds electronically, that party can receive refunds via ACH on behalf of an importer. Contact Eric Johnson at eric.johnson@spglobal.com .

Transport, Trade and Regulation News

First wave of IEEPA refunds to US importers to start April 20: CBP

<div class="phx-topic abstract-wrapper">The move comes amid softer volumes this year at the gateway, but NSWA’s chief operating officer says now is not the time to “pull back” on service levels. </div>

The move comes amid softer volumes this year at the gateway, but NSWA’s chief operating officer says now is not the time to “pull back” on service levels.

<div class="phx-topic">Officials at the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma are criticizing a move by SSA Terminals to implement once-a-week gate closures at each of its two marine terminals in Seattle following the recent cancellation of a trans-Pacific service, saying it “enters friction” into the port’s operations. SSA is closing gate and yard operations at Terminal 5 on Mondays and Terminal 18 on Fridays in April, although maintaining seven-day vessel operations. The decision, it said, came amid softer volumes at the port; in March, the Sun Chief Express Service from Southeast Asia, which called at T-18, was terminated with the exit of Emirates Shipping Line from the trans-Pacific trade. Also affecting volumes has been recent void calls by the Ocean Alliance’s PNW1 and CPNW services, which call at T-18. SSA has not said whether the gate closures will extend into May. While the advisory it sent out about the April closures went to the port’s trucking community, it was not sent to the NWSA. Jeff Bellerud, chief operating officer of the NWSA, said SSA’s decision to close gates at its two Seattle terminals works counter to the port authority’s efforts to improve service for truckers and shippers. “We want to offer the highest quality service along the West Coast, and as gates are reduced it enters friction into the system at a time when we need to do just the opposite,” Bellerud told the Journal of Commerce Monday. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ac60de38-7aa7-459a-8baa-a45ae18e2f38"></dynamic-object></div>Volumes into NWSA were down sharply at the beginning of the year, with imports from Asia of 160,144 TEUs for January and February combined down almost 23% from the same period in 2025, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. For all of the West Coast, imports from Asia of 931,450 TEUs in January were down 14.4% year over year, while imports of 886,280 for February were up 1.3% from a year earlier, according to PIERS. According to NWSA data, total imports and exports year to date through February at the gateway were down 16.6%. SSA, in a statement to the Journal of Commerce, said cargo volumes have been low “at every port in the United States since the start of 2026.” “Despite these conditions, SSA Terminals Seattle has maintained its operational processes and continues daily vessel operations, seven days a week, at Terminal 5 and Terminal 18 whenever there is demand,” it said. “SSA Terminals Seattle also remains committed to efficiently managing cargo volume changes and minimizing disruptions for our customers and the regional trucking community,” SSA added. “To ensure continued service, gate and yard operations continue at a minimum of one terminal, Monday through Friday.” <h3>Can’t ‘pull back’ on service </h3>There is likely a cost-savings component to SSA’s decision to cut back on some gate shifts. While the cost to the terminal operator of running a full gate shift varies based on the volume of containers lifted on and off a vessel and the number of longshore work gangs that must be employed, about $40,000 “is a good marker for a full-service day shift,” at NWSA, according to Bellerud. But if the NWSA is going to maintain its customer service standards in the highly competitive West Coast port environment, it is essential that all of NWSA’s terminals offer full daytime shifts Monday through Friday, he said. “It is in these soft markets when we need to lean into service, not pull back, if we are going to grow future volumes,” Bellerud said. He’s hopeful that volumes at NWSA will begin to pick up as spring and summer merchandise imports begin to arrive. “What we’re seeing now is vessels and volumes should start to pick up in that mid-May time frame, and thereafter,” Bellerud said. “We’re cautiously bullish on the second half of the year.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Officials at the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma are criticizing a move by SSA Terminals to implement once-a-week gate closures at each of its two marine terminals in Seattle following the recent cancellation of a trans-Pacific service, saying it “enters friction” into the port’s operations. SSA is closing gate and yard operations at Terminal 5 on Mondays and Terminal 18 on Fridays in April, although maintaining seven-day vessel operations. The decision, it said, came amid softer volumes at the port; in March, the Sun Chief Express Service from Southeast Asia, which called at T-18, was terminated with the exit of Emirates Shipping Line from the trans-Pacific trade. Also affecting volumes has been recent void calls by the Ocean Alliance’s PNW1 and CPNW services, which call at T-18. SSA has not said whether the gate closures will extend into May. While the advisory it sent out about the April closures went to the port’s trucking community, it was not sent to the NWSA. Jeff Bellerud, chief operating officer of the NWSA, said SSA’s decision to close gates at its two Seattle terminals works counter to the port authority’s efforts to improve service for truckers and shippers. “We want to offer the highest quality service along the West Coast, and as gates are reduced it enters friction into the system at a time when we need to do just the opposite,” Bellerud told the Journal of Commerce Monday. Volumes into NWSA were down sharply at the beginning of the year, with imports from Asia of 160,144 TEUs for January and February combined down almost 23% from the same period in 2025, according to PIERS, a sister product of the Journal of Commerce within S&P Global. For all of the West Coast, imports from Asia of 931,450 TEUs in January were down 14.4% year over year, while imports of 886,280 for February were up 1.3% from a year earlier, according to PIERS. According to NWSA data, total imports and exports year to date through February at the gateway were down 16.6%. SSA, in a statement to the Journal of Commerce, said cargo volumes have been low “at every port in the United States since the start of 2026.” “Despite these conditions, SSA Terminals Seattle has maintained its operational processes and continues daily vessel operations, seven days a week, at Terminal 5 and Terminal 18 whenever there is demand,” it said. “SSA Terminals Seattle also remains committed to efficiently managing cargo volume changes and minimizing disruptions for our customers and the regional trucking community,” SSA added. “To ensure continued service, gate and yard operations continue at a minimum of one terminal, Monday through Friday.” Can’t ‘pull back’ on service There is likely a cost-savings component to SSA’s decision to cut back on some gate shifts. While the cost to the terminal operator of running a full gate shift varies based on the volume of containers lifted on and off a vessel and the number of longshore work gangs that must be employed, about $40,000 “is a good marker for a full-service day shift,” at NWSA, according to Bellerud. But if the NWSA is going to maintain its customer service standards in the highly competitive West Coast port environment, it is essential that all of NWSA’s terminals offer full daytime shifts Monday through Friday, he said. “It is in these soft markets when we need to lean into service, not pull back, if we are going to grow future volumes,” Bellerud said. He’s hopeful that volumes at NWSA will begin to pick up as spring and summer merchandise imports begin to arrive. “What we’re seeing now is vessels and volumes should start to pick up in that mid-May time frame, and thereafter,” Bellerud said. “We’re cautiously bullish on the second half of the year.” Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

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