<div class="phx-topic abstract-wrapper">Tobias Meyer said 10 dedicated DHL Supply Chain warehouses with 7 million square feet of capacity will go live in North America this year, specifically targeting data center logistics.</div>

Tobias Meyer said 10 dedicated DHL Supply Chain warehouses with 7 million square feet of capacity will go live in North America this year, specifically targeting data center logistics.

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<div class="phx-topic">DHL is targeting the booming US data center market to help boost revenues at its three main transportation divisions as part of efforts to develop its industrial customer base.  Group CEO Tobias Meyer, speaking during the company’s first-quarter earnings call Thursday, said industrial customers typically ship heavier cargoes that, in turn, would drive group revenues.  Meyer said 10 dedicated DHL Supply Chain warehouses with 7 million square feet of capacity will go live in North America this year, specifically targeting data center logistics. The facilities would support hyperscale and co-location data center operators amid AI-driven capacity expansion, he said.  “We see particularly high demand in North America to stage inbound supplies there,” Meyer told an analysts during the call.  Typically, DHL would transport components to warehouses close to data center job sites so they can be “stored locally to have components available when construction of the data center progresses,” he explained.  Meyer pointed out this would involve international and domestic shipments of data center servers, server racks, and other electrical equipment that are “significant components and significant tonnage” that would be moved by DHL’s three main transportation divisions: global forwarding, supply chain and express.  He gave no indication how much the business, which he described as “still unfolding,” would be worth. But real estate company JLL estimated US data center capacity would more than double to 109 gigawatts by 2030 from 49 GW last year. More than 1,500 data centers are in various stages of development nationwide, with 75% planned in the US Southwest and Midwest, according to a Pew Research Center report published in mid-April.  <h3>Jet fuel concerns in Asia </h3> More immediately, Meyer said jet fuel constraints in Asia, a key market for Middle Eastern crude, meant DHL is increasing the amount of fuel its aircraft carry on short-haul express cargo flights in the region to avoid airplanes running out of fuel.  He said aircraft have been "tanking" fuel from DHL’s regional hubs in Asia so they have enough for roundtrip flights in its Asia network rather than refueling at each destination. "We've seen at some airports there is no fuel available for additional flights or there are structural shortages," Meyer said.  He indicated that the situation could worsen, with jet fuel only available to airlines who were prepared to pay higher prices if Middle East oil shipments continued to be limited due to the Iran war and the effective closure of the Strait of Hormuz.  "If there's a continued shortfall of 10 to 12 million barrels of crude every day, something has to give at some point,” Meyer said. “And that's also why higher prices are a logical outcome that allows fuel to be distributed to those areas where there's biggest demand and highest willingness to pay."   Meyer declined to provide a full outlook for the rest of this year, but group earnings before interest and tax (EBIT) this year are forecast to be unchanged from last year at $7.3 billion due to the “muted macro environment.”  His comments came after the company reported mixed first-quarter results.  DHL Global Forwarding saw air freight volumes climb 4% to 438,000 metric tons while gross profit was flat at $698 per mt. Ocean freight volumes increased 2% to 804,000 TEUs, but gross profit fell 20% to $378 per TEU on lower freight rates.   Overall, global forwarding saw its EBIT drop 19% to $193 million, while revenues fell 5% to $5.3 billion.  DHL Express saw a slight decrease in volumes, but EBIT surged 21% to $941 million, supported by higher prices and cost savings. Revenues slipped 2% to $7 billion, with Europe being the only one of the four main express regions posting a revenue gain.  Meyer said DHL’s total Q1 revenue was 2% lower at $24 billion, while net profit increased 3% to $956 million.  Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.  </div>

DHL is targeting the booming US data center market to help boost revenues at its three main transportation divisions as part of efforts to develop its industrial customer base.    Group CEO Tobias Meyer, speaking during the company’s first-quarter earnings call Thursday, said industrial customers typically ship heavier cargoes that, in turn, would drive group revenues.    Meyer said 10 dedicated DHL Supply Chain warehouses with 7 million square feet of capacity will go live in North America this year, specifically targeting data center logistics. The facilities would support hyperscale and co-location data center operators amid AI-driven capacity expansion, he said.    “We see particularly high demand in North America to stage inbound supplies there,” Meyer told an analysts during the call.    Typically, DHL would transport components to warehouses close to data center job sites so they can be “stored locally to have components available when construction of the data center progresses,” he explained.    Meyer pointed out this would involve international and domestic shipments of data center servers, server racks, and other electrical equipment that are “significant components and significant tonnage” that would be moved by DHL’s three main transportation divisions: global forwarding, supply chain and express.    He gave no indication how much the business, which he described as “still unfolding,” would be worth. But real estate company JLL estimated US data center capacity would more than double to 109 gigawatts by 2030 from 49 GW last year. More than 1,500 data centers are in various stages of development nationwide, with 75% planned in the US Southwest and Midwest, according to a Pew Research Center report published in mid-April.    Jet fuel concerns in Asia    More immediately, Meyer said jet fuel constraints in Asia, a key market for Middle Eastern crude, meant DHL is increasing the amount of fuel its aircraft carry on short-haul express cargo flights in the region to avoid airplanes running out of fuel.    He said aircraft have been "tanking" fuel from DHL’s regional hubs in Asia so they have enough for roundtrip flights in its Asia network rather than refueling at each destination.  "We've seen at some airports there is no fuel available for additional flights or there are structural shortages," Meyer said.    He indicated that the situation could worsen, with jet fuel only available to airlines who were prepared to pay higher prices if Middle East oil shipments continued to be limited due to the Iran war and the effective closure of the Strait of Hormuz.    "If there's a continued shortfall of 10 to 12 million barrels of crude every day, something has to give at some point,” Meyer said. “And that's also why higher prices are a logical outcome that allows fuel to be distributed to those areas where there's biggest demand and highest willingness to pay."     Meyer declined to provide a full outlook for the rest of this year, but group earnings before interest and tax (EBIT) this year are forecast to be unchanged from last year at $7.3 billion due to the “muted macro environment.”    His comments came after the company reported mixed first-quarter results.    DHL Global Forwarding saw air freight volumes climb 4% to 438,000 metric tons while gross profit was flat at $698 per mt. Ocean freight volumes increased 2% to 804,000 TEUs, but gross profit fell 20% to $378 per TEU on lower freight rates.     Overall, global forwarding saw its EBIT drop 19% to $193 million, while revenues fell 5% to $5.3 billion.    DHL Express saw a slight decrease in volumes, but EBIT surged 21% to $941 million, supported by higher prices and cost savings. Revenues slipped 2% to $7 billion, with Europe being the only one of the four main express regions posting a revenue gain.    Meyer said DHL’s total Q1 revenue was 2% lower at $24 billion, while net profit increased 3% to $956 million.    Contact Keith Wallis at  keithwallis@hotmail.com .   

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DHL targeting US data center development to boost group revenues: CEO

<div class="phx-topic abstract-wrapper">With lower space allocations offered by Gemini, competing carriers have been able to keep their sailings on the routes maxed out and push rates higher, sources say.</div>

With lower space allocations offered by Gemini, competing carriers have been able to keep their sailings on the routes maxed out and push rates higher, sources say.

<div class="phx-topic">The capacity withdrawn by the Gemini Cooperation from the India–Mediterranean trade following its recent Middle East network adjustments has effectively tightened supply, thus proving a boon for active carrier participants in the market, market sources say. Gemini partners Maersk and Hapag-Lloyd in early March, shortly after the war began, <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.joc.com%2Farticle%2Fgemini-suspends-revamps-middle-east-services-amid-growing-conflict-6182114&amp;data=05%7C02%7Ckevin.saville2%40spglobal.com%7C9bc4790300504e3d15ab08dea6a733c1%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C639131434230985857%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=U6cMDZFpCsKNvoKG%2Bh4hwX699iOagbTAe%2FcM2tzx4F0%3D&amp;reserved=0">halted their independently branded ME11/IMX network operations</a> linking the Middle East, India and the Mediterranean, and opened a revamped India–Middle East–Europe service (ME1/IOS) with access to a West Mediterranean hub. The suspended ME11/IMX loop deployed ultra-large vessels with an average capacity of 15,000 TEUs to 16,000 TEUs, so space availability on the lane for Indian head-haul loads was substantial. With lower space allocations now offered by Gemini for India-North Europe/Med loadings due to combined operations and comparatively smaller tonnage, existing competing carriers, most notably CMA CGM, have been able to keep their sailings on the routes maxed out and push rates higher, local freight forwarder sources told the Journal of Commerce. CMA CGM serves the India–Mediterranean trade through its “Medex” service, which transits via the Red Sea/Suez Canal, and loads for North Europe on its premier “Epic” loop. According to an analysis of port flow data, CMA CGM’s weekly liftings out of West India for Medex and Epic sailings through April have hit a level of 5,000 TEUs per call on average, thanks to additional volume uptake from that altered supply-demand picture. “All the recent vessels have sailed full despite persistent muted demand conditions,” said a forwarder executive who didn’t want to be identified. “CMA CGM has also benefited to some extent from the rotation update centered on Red Sea cargo demand via Jeddah [Saudi Arabia].” India-Med booking rates gained between $800 to $1,000 per FEU from late March through April before stabilizing over the last week, data from forwarders shows. “While varying from carrier to carrier, spot rates are now in the range of $3,000 to $3,200 per FEU from Nhava Sheva to Port Said or Valencia,” a forwarder executive said. <h3>Middle East inland bottlenecks </h3>Meanwhile, Maersk seems to be dealing with fresh logistics bottlenecks in Middle East-bound trades. The carrier said in a customer advisory that it has temporarily paused new bookings involving extensive land bridge solutions, including shipments to the United Arab Emirates (UAE) and Qatar via Jeddah and Oman, as well as from Salalah/Sohar in Oman to the UAE, Qatar, Saudi Arabia, Kuwait and Bahrain. Updates from Middle East-based industry sources who spoke with the Journal of Commerce indicate that a shortage of landside assets, especially trucks, is hindering the ability of carriers to move imports into the region inland. The sources added that CMA CGM is now doing much of its India-Persian Gulf cargo handling via Fujairah in the UAE on the back of a priority service arrangement it set up with port operator AD Ports Group. As a result, the carrier has curtailed Indian calls into the UAE’s Khor Fakkan, the other newfound alternative gateway to Jebel Ali, the sources said. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

The capacity withdrawn by the Gemini Cooperation from the India–Mediterranean trade following its recent Middle East network adjustments has effectively tightened supply, thus proving a boon for active carrier participants in the market, market sources say. Gemini partners Maersk and Hapag-Lloyd in early March, shortly after the war began, halted their independently branded ME11/IMX network operations linking the Middle East, India and the Mediterranean, and opened a revamped India–Middle East–Europe service (ME1/IOS) with access to a West Mediterranean hub. The suspended ME11/IMX loop deployed ultra-large vessels with an average capacity of 15,000 TEUs to 16,000 TEUs, so space availability on the lane for Indian head-haul loads was substantial. With lower space allocations now offered by Gemini for India-North Europe/Med loadings due to combined operations and comparatively smaller tonnage, existing competing carriers, most notably CMA CGM, have been able to keep their sailings on the routes maxed out and push rates higher, local freight forwarder sources told the Journal of Commerce. CMA CGM serves the India–Mediterranean trade through its “Medex” service, which transits via the Red Sea/Suez Canal, and loads for North Europe on its premier “Epic” loop. According to an analysis of port flow data, CMA CGM’s weekly liftings out of West India for Medex and Epic sailings through April have hit a level of 5,000 TEUs per call on average, thanks to additional volume uptake from that altered supply-demand picture. “All the recent vessels have sailed full despite persistent muted demand conditions,” said a forwarder executive who didn’t want to be identified. “CMA CGM has also benefited to some extent from the rotation update centered on Red Sea cargo demand via Jeddah [Saudi Arabia].” India-Med booking rates gained between $800 to $1,000 per FEU from late March through April before stabilizing over the last week, data from forwarders shows. “While varying from carrier to carrier, spot rates are now in the range of $3,000 to $3,200 per FEU from Nhava Sheva to Port Said or Valencia,” a forwarder executive said. Middle East inland bottlenecks Meanwhile, Maersk seems to be dealing with fresh logistics bottlenecks in Middle East-bound trades. The carrier said in a customer advisory that it has temporarily paused new bookings involving extensive land bridge solutions, including shipments to the United Arab Emirates (UAE) and Qatar via Jeddah and Oman, as well as from Salalah/Sohar in Oman to the UAE, Qatar, Saudi Arabia, Kuwait and Bahrain. Updates from Middle East-based industry sources who spoke with the Journal of Commerce indicate that a shortage of landside assets, especially trucks, is hindering the ability of carriers to move imports into the region inland. The sources added that CMA CGM is now doing much of its India-Persian Gulf cargo handling via Fujairah in the UAE on the back of a priority service arrangement it set up with port operator AD Ports Group. As a result, the carrier has curtailed Indian calls into the UAE’s Khor Fakkan, the other newfound alternative gateway to Jebel Ali, the sources said. Contact Bency Mathew at bencyvmathew@gmail.com.

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Gemini capacity cutbacks make India-Med market hotter for rival carriers

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

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

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

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

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OOCL ordered to pay $45 million for Bed Bath and Beyond’s bumped cargo

<div class="phx-topic abstract-wrapper">XPO and other LTL carriers say contract rates are rising by mid-single digits even though industrial demand remains soft, albeit with some bullish indicators apparent. </div>

XPO and other LTL carriers say contract rates are rising by mid-single digits even though industrial demand remains soft, albeit with some bullish indicators apparent.

<div class="phx-topic">US less-than-truckload (LTL) pricing is rising faster than demand, with large publicly-owned carriers reporting contractual rate gains in the mid-single-digit range year over year. The stage is being set for further increases in LTL costs when industrial demand really kicks into higher gear, whether that’s in the second or third quarter or as late as 2027. At XPO, the fourth-largest US LTL provider, rates included in contract renewals rose by mid- to high single-digit percentages in the first quarter, the company said Thursday. Average shipments per day rose 3% year over year to 49,834, although tonnage was flat. First-quarter yield, or revenue per hundredweight, in part a measure of pricing, was up 4% year over year, excluding fuel surcharges. Including fuel, yield was up 5.3% from a year ago. “We had a strong quarter of pricing performance,” XPO CEO Mario Harik said during an earnings call with Wall Street analysts. In the second quarter, “we see an increasingly constructive environment that will drive pricing in the future,” Harik said. That environment includes a US producer price index (PPI) for long-distance LTL that is hitting a record high. The all-inclusive LTL PPI rose 7.2% year over year in March to 278, up from its previous high of 259 in June 2022. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="8afcfdff-15ff-4ec3-8c50-af1aba47062e"></dynamic-object></div>In addition to XPO, national carrier Saia said contract renewal rates rose 6.7% year over year in the first quarter and 7% in March. Knight-Swift Transportation reported LTL contract renewals in the mid-single digit range, while price increases at ArcBest averaged 6%. Several converging factors support LTL price increases. Harik cited new customers, new markets, an expansion of premium services, and improvements in service. “We reduced our damage claims ratio below 0.2% with damages at a record low,” Harik said of the first quarter. “This is the service metric that matters most to LTL customers.” <h3>New shippers, new markets </h3>That service metric translates into higher pricing, Harik told the Journal of Commerce Thursday. And add to that an increase in premium services that comes with a higher price. In an interview, Harik said XPO is also pursuing business in markets beyond the traditional industrial sector, including the healthcare and food and grocery businesses. “Today we have a low single-digit market share in grocery, but in the first quarter we tripled our number of grocery customers on a year-over-year basis,” he said. Although industrial freight represents the lion’s share of LTL business, it’s not the fastest-growing segment. While Purchasing Managers’ Indexes (PMIs) have been positive in 2026, “we’re not seeing a meaningful increase” in industrial freight, Harik said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="16105334-c54a-4d51-9403-6d5bac8369c4"></dynamic-object></div>That doesn’t mean no increase. “Chemicals are doing well, agricultural equipment is doing well, and automotive is starting to build some sea legs,” Harik said. “Other [manufacturing] sectors are not decelerating anymore.” Other carriers are following similar playbooks. FedEx Freight, the largest US LTL provider by revenue and shipments, is chasing <a href="https://www.joc.com/article/fedex-freight-plans-diversification-as-spin-off-date-approaches-6201281">more non-industrial freight</a>, specifically data center, healthcare, energy and grocery loads, the company said earlier this month. Saia is also expanding in grocery and data center markets. When growth in core industrial markets is slow, carriers naturally look elsewhere for additional opportunities. Still, there are signals that industrial freight demand is set to increase. Beyond the improvement in manufacturing PMIs, LTL weight per shipment has been rising, albeit slowly and unevenly, with some carriers seeing more gain than others. “In April, our weight per shipment is up on a year-over-year basis, a little over 1%,” Adam Satterfield, CFO of Old Dominion Freight Line, <a href="https://www.joc.com/article/odfl-sees-signs-of-growing-ltl-demand-in-sequential-volume-gain-6211522">said Wednesday</a>. “That’s usually a leading indicator of an improving demand environment.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

US less-than-truckload (LTL) pricing is rising faster than demand, with large publicly-owned carriers reporting contractual rate gains in the mid-single-digit range year over year. The stage is being set for further increases in LTL costs when industrial demand really kicks into higher gear, whether that’s in the second or third quarter or as late as 2027. At XPO, the fourth-largest US LTL provider, rates included in contract renewals rose by mid- to high single-digit percentages in the first quarter, the company said Thursday. Average shipments per day rose 3% year over year to 49,834, although tonnage was flat. First-quarter yield, or revenue per hundredweight, in part a measure of pricing, was up 4% year over year, excluding fuel surcharges. Including fuel, yield was up 5.3% from a year ago. “We had a strong quarter of pricing performance,” XPO CEO Mario Harik said during an earnings call with Wall Street analysts. In the second quarter, “we see an increasingly constructive environment that will drive pricing in the future,” Harik said. That environment includes a US producer price index (PPI) for long-distance LTL that is hitting a record high. The all-inclusive LTL PPI rose 7.2% year over year in March to 278, up from its previous high of 259 in June 2022. In addition to XPO, national carrier Saia said contract renewal rates rose 6.7% year over year in the first quarter and 7% in March. Knight-Swift Transportation reported LTL contract renewals in the mid-single digit range, while price increases at ArcBest averaged 6%. Several converging factors support LTL price increases. Harik cited new customers, new markets, an expansion of premium services, and improvements in service. “We reduced our damage claims ratio below 0.2% with damages at a record low,” Harik said of the first quarter. “This is the service metric that matters most to LTL customers.” New shippers, new markets That service metric translates into higher pricing, Harik told the Journal of Commerce Thursday. And add to that an increase in premium services that comes with a higher price. In an interview, Harik said XPO is also pursuing business in markets beyond the traditional industrial sector, including the healthcare and food and grocery businesses. “Today we have a low single-digit market share in grocery, but in the first quarter we tripled our number of grocery customers on a year-over-year basis,” he said. Although industrial freight represents the lion’s share of LTL business, it’s not the fastest-growing segment. While Purchasing Managers’ Indexes (PMIs) have been positive in 2026, “we’re not seeing a meaningful increase” in industrial freight, Harik said. That doesn’t mean no increase. “Chemicals are doing well, agricultural equipment is doing well, and automotive is starting to build some sea legs,” Harik said. “Other [manufacturing] sectors are not decelerating anymore.” Other carriers are following similar playbooks. FedEx Freight, the largest US LTL provider by revenue and shipments, is chasing more non-industrial freight , specifically data center, healthcare, energy and grocery loads, the company said earlier this month. Saia is also expanding in grocery and data center markets. When growth in core industrial markets is slow, carriers naturally look elsewhere for additional opportunities. Still, there are signals that industrial freight demand is set to increase. Beyond the improvement in manufacturing PMIs, LTL weight per shipment has been rising, albeit slowly and unevenly, with some carriers seeing more gain than others. “In April, our weight per shipment is up on a year-over-year basis, a little over 1%,” Adam Satterfield, CFO of Old Dominion Freight Line, said Wednesday . “That’s usually a leading indicator of an improving demand environment.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

US LTL pricing rising ahead of industrial demand: XPO

<div class="phx-topic abstract-wrapper">The STB now has 30 days to decide whether the application is complete; a formal review by the regulator would likely stretch for more than a year and include public hearings.</div>

The STB now has 30 days to decide whether the application is complete; a formal review by the regulator would likely stretch for more than a year and include public hearings.

<div class="phx-topic">Union Pacific (UP) on Thursday refiled its formal application to acquire Norfolk Southern (NS) with US regulators on Thursday, arguing that additional analysis shows the merger would take more freight moves off highways than originally thought. The updated application to the US Surface Transportation Board (STB) calls for 2.1 million truck moves converted to rail, including 1.2 million truckload-to-intermodal conversions. That’s up from 2 million and 1.17 million, respectively, in the original application filed last December that the STB <a href="https://www.joc.com/article/stb-rejects-up-ns-merger-application-as-incomplete-6154074">rejected as “incomplete” in mid-January</a>. UP also revised the number of long-haul drays eliminated annually to 70,000 moves compared with 67,000 in the first application. The eliminated drays would primarily come between Chicago to Ohio and Michigan, and Memphis to Alabama. The revised estimates were made possible because UP received access to other Class I volume data that was not available when it submitted the prior application. The STB now has 30 days to decide whether the application is complete. If the new filing passes that threshold, the formal review by the regulator would likely stretch for more than a year and include public hearings. “I have personally witnessed the benefits to Canada of two transcontinental [freight] railroads,” UP CEO Jim Vena wrote in the new application. “American industry deserves an equally efficient supply chain within its own borders.” Vena also argued that unified rail systems in China, India and Mexico have supported economic growth. He said the merger would save shippers $3.5 billion annually across all commodity groups. For intermodal customers, UP is promising faster service, new long-haul lanes and a slightly larger shift of freight off the highway. But the revised filing also puts more weight on the question regulators and shippers will care about most: Can the network handle that growth without sacrificing reliability? And will the UP-NS combination enhance competition in a way that’s not achievable through better cooperation between railroads? <h3>New and updated routes </h3>The most significant addition for intermodal customers is a new expedited Northern California-to-Southeast service that was not included in the UP’s December filing. The proposed lane would begin in Lathrop, east of Oakland, move through St. Louis and terminate in Charlotte. UP said the service would take 109 hours from origin to destination, versus 108 hours by truck. Containers moving to Atlanta and Jacksonville would connect to a second train in Charlotte for the final leg. The revised filing also addresses the Meridian Speedway, the nearly 300-mile corridor across Louisiana and Mississippi that remains a flashpoint between UP-NS and majority owner Canadian Pacific Kansas City (CPKC). In the December filing, UP said it would run 11,000-foot trains over Meridian. But CPKC, which controls traffic on the route, limits train length to 8,500 feet. In the revised filing, UP lowered its average train-length assumption to 9,000 feet and added a provision to split trains as volume grows. The filing also leaves unresolved whether the merged railroad could deliver the projected growth over the Meridian Speedway, as CPKC, not UP-NS, controls all train movements. If trains must be broken into blocks, transit times lengthen and the risk of delay increases. Nevertheless, the service will still likely be faster than the BNSF Railway-CSX Transportation alternative because the length of haul through the Meridian Speedway is much shorter by distance. There was no change to how international intermodal freight will be routed between Southern California and Memphis. UP would still remove 191 ocean containers per day from a train in Greggton, Texas, and place them onto a second train to Memphis.The route would be one of the few examples where a combined railroad would create additional work post-merger, rather than eliminate it, for intermodal customers. It is one of the clearest examples of the merger’s mixed intermodal effect: new conversion opportunities in some lanes, but more complexity and more service risk in others. Other intermodal services in the prior application remain unchanged. UP-NS would add trains from Southern California to New Jersey via Kansas City, bypassing Chicago. The application also keeps proposed services from Lathrop to New Jersey, from Southern California to Detroit, from Laredo to New Jersey, and from Houston to Atlanta. <h3>Trimming capital expenditures </h3>The revised application, however, trims the capital expenditures that UP would lay out to keep the network fluid. The December filing called for more than $1 billion in capital spending on signals, track, sidings and terminals to absorb growth without hurting service. The new filing cuts that sum to $923.3 million, which could raise the prospect of pushback during the public hearings about why UP decided to cut back on infrastructure spending. One of the biggest reductions is at UP’s Houston intermodal terminal. In December, UP said it would add 1,045 parking stalls, two new working tracks and an automated gate to support new Laredo and Houston intermodal trains. In the revised filing, that plan is scaled back to 558 parking spaces and a smaller automated gate, removing about $68 million in spending. UP said the lower investment reflects an updated analysis that shows a lower impact on terminals operations in Houston than originally anticipated. Other projects were dropped altogether. The December application included $7.4 million for 5,205 feet of support track at the Croxton intermodal terminal in New Jersey. That project is no longer in the revised plan. UP left spending unchanged for siding extensions, double-track additions and signal work across the Gulf Coast and Midwest. <h3>Opposition organizing </h3>UP’s revised application will nonetheless face swift resistance. Earlier this week, a new group was formed called the Stop the Rail Merger Coalition, which organized existing merger opponents such as BNSF, CPKC, the Teamsters Rail Conference, the American Farm Bureau Federation, and the American Chemistry Council under a single umbrella. The group released a report Wednesday that included a survey claiming that 71% of those polled oppose the merger after learning about its impacts, and that 68% believe the merged railroad would keep the promised cost savings for itself rather than pass them onto shippers. “This did not begin with a customer asking for a UP-NS merger to happen,” BNSF CEO Katie Famer said in a statement from Stop the Rail Merger Coalition. “It’s driven by Wall Street on the promise of a big shareholder payout. It will eliminate competition, raise costs for consumers, and destabilize the supply chain that powers the American economy.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Union Pacific (UP) on Thursday refiled its formal application to acquire Norfolk Southern (NS) with US regulators on Thursday, arguing that additional analysis shows the merger would take more freight moves off highways than originally thought. The updated application to the US Surface Transportation Board (STB) calls for 2.1 million truck moves converted to rail, including 1.2 million truckload-to-intermodal conversions. That’s up from 2 million and 1.17 million, respectively, in the original application filed last December that the STB rejected as “incomplete” in mid-January . UP also revised the number of long-haul drays eliminated annually to 70,000 moves compared with 67,000 in the first application. The eliminated drays would primarily come between Chicago to Ohio and Michigan, and Memphis to Alabama. The revised estimates were made possible because UP received access to other Class I volume data that was not available when it submitted the prior application. The STB now has 30 days to decide whether the application is complete. If the new filing passes that threshold, the formal review by the regulator would likely stretch for more than a year and include public hearings. “I have personally witnessed the benefits to Canada of two transcontinental [freight] railroads,” UP CEO Jim Vena wrote in the new application. “American industry deserves an equally efficient supply chain within its own borders.” Vena also argued that unified rail systems in China, India and Mexico have supported economic growth. He said the merger would save shippers $3.5 billion annually across all commodity groups. For intermodal customers, UP is promising faster service, new long-haul lanes and a slightly larger shift of freight off the highway. But the revised filing also puts more weight on the question regulators and shippers will care about most: Can the network handle that growth without sacrificing reliability? And will the UP-NS combination enhance competition in a way that’s not achievable through better cooperation between railroads? New and updated routes The most significant addition for intermodal customers is a new expedited Northern California-to-Southeast service that was not included in the UP’s December filing. The proposed lane would begin in Lathrop, east of Oakland, move through St. Louis and terminate in Charlotte. UP said the service would take 109 hours from origin to destination, versus 108 hours by truck. Containers moving to Atlanta and Jacksonville would connect to a second train in Charlotte for the final leg. The revised filing also addresses the Meridian Speedway, the nearly 300-mile corridor across Louisiana and Mississippi that remains a flashpoint between UP-NS and majority owner Canadian Pacific Kansas City (CPKC). In the December filing, UP said it would run 11,000-foot trains over Meridian. But CPKC, which controls traffic on the route, limits train length to 8,500 feet. In the revised filing, UP lowered its average train-length assumption to 9,000 feet and added a provision to split trains as volume grows. The filing also leaves unresolved whether the merged railroad could deliver the projected growth over the Meridian Speedway, as CPKC, not UP-NS, controls all train movements. If trains must be broken into blocks, transit times lengthen and the risk of delay increases. Nevertheless, the service will still likely be faster than the BNSF Railway-CSX Transportation alternative because the length of haul through the Meridian Speedway is much shorter by distance. There was no change to how international intermodal freight will be routed between Southern California and Memphis. UP would still remove 191 ocean containers per day from a train in Greggton, Texas, and place them onto a second train to Memphis. The route would be one of the few examples where a combined railroad would create additional work post-merger, rather than eliminate it, for intermodal customers. It is one of the clearest examples of the merger’s mixed intermodal effect: new conversion opportunities in some lanes, but more complexity and more service risk in others. Other intermodal services in the prior application remain unchanged. UP-NS would add trains from Southern California to New Jersey via Kansas City, bypassing Chicago. The application also keeps proposed services from Lathrop to New Jersey, from Southern California to Detroit, from Laredo to New Jersey, and from Houston to Atlanta. Trimming capital expenditures The revised application, however, trims the capital expenditures that UP would lay out to keep the network fluid. The December filing called for more than $1 billion in capital spending on signals, track, sidings and terminals to absorb growth without hurting service. The new filing cuts that sum to $923.3 million, which could raise the prospect of pushback during the public hearings about why UP decided to cut back on infrastructure spending. One of the biggest reductions is at UP’s Houston intermodal terminal. In December, UP said it would add 1,045 parking stalls, two new working tracks and an automated gate to support new Laredo and Houston intermodal trains. In the revised filing, that plan is scaled back to 558 parking spaces and a smaller automated gate, removing about $68 million in spending. UP said the lower investment reflects an updated analysis that shows a lower impact on terminals operations in Houston than originally anticipated. Other projects were dropped altogether. The December application included $7.4 million for 5,205 feet of support track at the Croxton intermodal terminal in New Jersey. That project is no longer in the revised plan. UP left spending unchanged for siding extensions, double-track additions and signal work across the Gulf Coast and Midwest. Opposition organizing UP’s revised application will nonetheless face swift resistance. Earlier this week, a new group was formed called the Stop the Rail Merger Coalition, which organized existing merger opponents such as BNSF, CPKC, the Teamsters Rail Conference, the American Farm Bureau Federation, and the American Chemistry Council under a single umbrella. The group released a report Wednesday that included a survey claiming that 71% of those polled oppose the merger after learning about its impacts, and that 68% believe the merged railroad would keep the promised cost savings for itself rather than pass them onto shippers. “This did not begin with a customer asking for a UP-NS merger to happen,” BNSF CEO Katie Famer said in a statement from Stop the Rail Merger Coalition. “It’s driven by Wall Street on the promise of a big shareholder payout. It will eliminate competition, raise costs for consumers, and destabilize the supply chain that powers the American economy.” Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Intermodal providers

UP’s revised filing for NS merger boosts number of freight conversions

<div class="phx-topic abstract-wrapper">The carrier and ports group said revenue on all major trades, except its domestic network, fell in the first quarter, resulting in a 13% drop in revenue from container shipping. </div>

The carrier and ports group said revenue on all major trades, except its domestic network, fell in the first quarter, resulting in a 13% drop in revenue from container shipping.

<div class="phx-topic">Cosco Shipping is redoubling efforts to expand into developing markets, including Latin America and Africa, in the face of a tougher economic and geopolitical environment, the container and ports group said. “Impacted by conflicts in the Middle East, the safety and stability of global shipping faced significant challenges,” the carrier said in a first-quarter earnings statement late Wednesday. “In the face of rapidly changing international political and economic conditions ... [Cosco is] ... making sustained efforts, particularly in the development of emerging markets, the establishment of a global digital supply chain product system, and digital and intelligent innovation,” it said. Cosco was commenting as it reported a 49% drop in first-quarter net profits to $861 million due to plunging freight rates, despite an increase in volumes. Total first-quarter revenue fell 11% to $7.6 billion. “The group’s container shipping business experienced a year-on-year decrease in revenue per TEU and a year-on-year decrease in operating performance,” Cosco said, noting that the average China Export Containerized Freight Index (CCFI) fell 16.32% year over year in the first quarter. The carrier’s revenue per TEU on international routes fell 15% to $1,110 in the first quarter. Cosco said revenue on all its major trades except its domestic network fell in the first quarter, resulting in a 13% drop in revenue from container shipping, to $6.6 billion. That came despite a 6.7% increase in container volumes, to 6.9 million TEUs. The biggest drop in Cosco’s first-quarter revenue was on trans-Pacific trades, which fell 23% to $1.8 billion even as liftings slipped just 1% to 1.2 million TEUs. Trans-Atlantic, Latin America and Africa trades saw a combined 22% revenue decline to $962 million, while liftings were 1.6% lower at 757,524 TEUs. Revenue from Asia-Europe services fell 10% to $1.4 billion in the first quarter despite a 14% increase in volumes to 1 million TEUs. Cosco’s ports subsidiary recorded a 2% rise in first-quarter net profit to $86 million, while revenue was 10% higher at $421 million. Total container throughput at Cosco terminals climbed 9% year over year to 39 million TEUs. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Cosco Shipping is redoubling efforts to expand into developing markets, including Latin America and Africa, in the face of a tougher economic and geopolitical environment, the container and ports group said. “Impacted by conflicts in the Middle East, the safety and stability of global shipping faced significant challenges,” the carrier said in a first-quarter earnings statement late Wednesday. “In the face of rapidly changing international political and economic conditions ... [Cosco is] ... making sustained efforts, particularly in the development of emerging markets, the establishment of a global digital supply chain product system, and digital and intelligent innovation,” it said. Cosco was commenting as it reported a 49% drop in first-quarter net profits to $861 million due to plunging freight rates, despite an increase in volumes. Total first-quarter revenue fell 11% to $7.6 billion. “The group’s container shipping business experienced a year-on-year decrease in revenue per TEU and a year-on-year decrease in operating performance,” Cosco said, noting that the average China Export Containerized Freight Index (CCFI) fell 16.32% year over year in the first quarter. The carrier’s revenue per TEU on international routes fell 15% to $1,110 in the first quarter. Cosco said revenue on all its major trades except its domestic network fell in the first quarter, resulting in a 13% drop in revenue from container shipping, to $6.6 billion. That came despite a 6.7% increase in container volumes, to 6.9 million TEUs. The biggest drop in Cosco’s first-quarter revenue was on trans-Pacific trades, which fell 23% to $1.8 billion even as liftings slipped just 1% to 1.2 million TEUs. Trans-Atlantic, Latin America and Africa trades saw a combined 22% revenue decline to $962 million, while liftings were 1.6% lower at 757,524 TEUs. Revenue from Asia-Europe services fell 10% to $1.4 billion in the first quarter despite a 14% increase in volumes to 1 million TEUs. Cosco’s ports subsidiary recorded a 2% rise in first-quarter net profit to $86 million, while revenue was 10% higher at $421 million. Total container throughput at Cosco terminals climbed 9% year over year to 39 million TEUs. Contact Keith Wallis at keithwallis@hotmail.com .

Trans-Atlantic

Asia-Europe

Trans-Pacific

Cosco doubles down on emerging trades as Q1 net profit plunges 49% 

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

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

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

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

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

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

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

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

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

Truckload

Trucking labor

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

Index

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

Breakbulk ship capacity indicator (JOC) 

JOC Breakbulk and Project Cargo Index Gateway

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

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

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

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

Forwarding

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

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

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

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

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

Truck brokers

Knight-Swift making safety-related cuts to brokerage fleet

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

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

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

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

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

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

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

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

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

Port infrastructure

North American ports

Marine terminals

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

<div class="phx-topic abstract-wrapper">The current pipeline of newbuilding programs for ultra-large container vessels vastly outstrips the construction of new berths intended to receive them, meaning we are literally building a fleet for which there may soon be no room at the inn, writes Robbert van Trooijen.</div>

The current pipeline of newbuilding programs for ultra-large container vessels vastly outstrips the construction of new berths intended to receive them, meaning we are literally building a fleet for which there may soon be no room at the inn, writes Robbert van Trooijen.

<div class="phx-topic">In his recent work, Chokepoints: American Power in the Age of Economic Warfare, Edward Fishman argues that while great powers once rose by controlling geographic straits like the Bosphorus, modern power relies on different, often digital, levers. Today we are reminded that even in the Digital Age, physical chokepoints such as the Strait of Hormuz can still disrupt supply chains to such an extent that they threaten global recession. But as we look toward a post-2026 horizon — assuming current geopolitical fires are eventually extinguished — a more systemic bottleneck looms: the stagnation of global port infrastructure. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6209409_0.1.jpg"></img></div>The math of global trade is currently heading toward a collision course. Available ocean terminal capacity at major gateways and hubs is reaching a saturation point. While the industry has leaned heavily on efficiency gains and automation to squeeze more “moves per hour” out of existing footprints, there is a lack of new physical capacity being added to the global map. We see a flurry of merger and acquisition activity — such as the planned sale of assets such as Hutchison Port Holdings — but shifting ownership of an existing facility in itself does nothing to accommodate the actual growth of global trade. The strongest evidence of this disconnect lies in the shipyards. The current pipeline of newbuilding programs for ultra-large container vessels vastly outstrips the construction of new berths intended to receive them. We are, quite literally, building a fleet for which there may soon be no room at the inn. <h3>Protecting margins — at the expense of cargo flow </h3>The hesitation to build is certainly not due to a lack of profitability. The investment case for terminal infrastructure is, in fact, staggering. APM Terminals, a subsidiary of Danish conglomerate A.P. Moller Maersk, reported a return on invested capital (ROIC) of no less than 16.1% in the 2025 fourth quarter, a figure that outperforms almost every other sub-sector in the maritime industry. So, why the inertia? There is no simple answer, but part of the answer lies in a classic “incumbent’s dilemma.” While new capacity would benefit the global economy by increasing competitiveness, it would also — at least temporarily — dilute the high returns currently enjoyed by existing operators. In some markets, bottlenecks are not just a nuisance; they are lucrative. This creates a perverse incentive for incumbents to lobby against greenfield projects, effectively protecting their margins at the expense of trade fluidity. The investment gap is most visible in the Southern Hemisphere. As industry analyst Lars Jensen highlighted at TPM26 in Long Beach in early March, demographic shifts identify Latin America and Africa as the next great trade frontiers. Yet, these are the very regions where the pushback against “carrier-owned” terminals is loudest. Local players often lobby against the participation of ocean carriers, arguing that vertical integration is anti-competitive. This is an understandable yet somewhat protectionist stance. It is the ocean carriers who possess the most direct incentive to drive capacity growth — they are the ones who need the berths to keep their growing fleet of vessels moving. The “dominance” argument falls flat when compared with the alternative: a stagnant, expensive status quo maintained by local (family-owned) oligopolies. <h3>The need to act now </h3>Any legitimate anti-competitive concerns can be easily mitigated through clear, enforceable neutrality clauses within concession agreements. These clauses ensure that while a carrier may own the terminal, it remains an open-access utility for the broader market. The construction of a greenfield site takes three to five years. If we do not break ground today, the “landside chokepoint” of 2028 and beyond could very well make today’s Red Sea/Strait of Hormuz disruptions look like a minor logistical hiccup. To secure the future of global trade, we must look past the protectionist rhetoric of local incumbents and embrace the capital and operational drive of carrier-terminal combinations. The returns are there and the demand is there. But the berths are not. It is time for a virtuous cycle to take over the industry. Robbert van Trooijen, founder of Inception Partners and a McKinsey Senior Advisor, had a 33-year tenure with The Nedlloyd Group, P&amp;O Nedlloyd and the Maersk Group. Contact him at <a href="mailto:robbert@inceptionpartners.org">robbert@inceptionpartners.org</a>. </div>

In his recent work, Chokepoints: American Power in the Age of Economic Warfare, Edward Fishman argues that while great powers once rose by controlling geographic straits like the Bosphorus, modern power relies on different, often digital, levers. Today we are reminded that even in the Digital Age, physical chokepoints such as the Strait of Hormuz can still disrupt supply chains to such an extent that they threaten global recession. But as we look toward a post-2026 horizon — assuming current geopolitical fires are eventually extinguished — a more systemic bottleneck looms: the stagnation of global port infrastructure. The math of global trade is currently heading toward a collision course. Available ocean terminal capacity at major gateways and hubs is reaching a saturation point. While the industry has leaned heavily on efficiency gains and automation to squeeze more “moves per hour” out of existing footprints, there is a lack of new physical capacity being added to the global map. We see a flurry of merger and acquisition activity — such as the planned sale of assets such as Hutchison Port Holdings — but shifting ownership of an existing facility in itself does nothing to accommodate the actual growth of global trade. The strongest evidence of this disconnect lies in the shipyards. The current pipeline of newbuilding programs for ultra-large container vessels vastly outstrips the construction of new berths intended to receive them. We are, quite literally, building a fleet for which there may soon be no room at the inn. Protecting margins — at the expense of cargo flow The hesitation to build is certainly not due to a lack of profitability. The investment case for terminal infrastructure is, in fact, staggering. APM Terminals, a subsidiary of Danish conglomerate A.P. Moller Maersk, reported a return on invested capital (ROIC) of no less than 16.1% in the 2025 fourth quarter, a figure that outperforms almost every other sub-sector in the maritime industry. So, why the inertia? There is no simple answer, but part of the answer lies in a classic “incumbent’s dilemma.” While new capacity would benefit the global economy by increasing competitiveness, it would also — at least temporarily — dilute the high returns currently enjoyed by existing operators. In some markets, bottlenecks are not just a nuisance; they are lucrative. This creates a perverse incentive for incumbents to lobby against greenfield projects, effectively protecting their margins at the expense of trade fluidity. The investment gap is most visible in the Southern Hemisphere. As industry analyst Lars Jensen highlighted at TPM26 in Long Beach in early March, demographic shifts identify Latin America and Africa as the next great trade frontiers. Yet, these are the very regions where the pushback against “carrier-owned” terminals is loudest. Local players often lobby against the participation of ocean carriers, arguing that vertical integration is anti-competitive. This is an understandable yet somewhat protectionist stance. It is the ocean carriers who possess the most direct incentive to drive capacity growth — they are the ones who need the berths to keep their growing fleet of vessels moving. The “dominance” argument falls flat when compared with the alternative: a stagnant, expensive status quo maintained by local (family-owned) oligopolies. The need to act now Any legitimate anti-competitive concerns can be easily mitigated through clear, enforceable neutrality clauses within concession agreements. These clauses ensure that while a carrier may own the terminal, it remains an open-access utility for the broader market. The construction of a greenfield site takes three to five years. If we do not break ground today, the “landside chokepoint” of 2028 and beyond could very well make today’s Red Sea/Strait of Hormuz disruptions look like a minor logistical hiccup. To secure the future of global trade, we must look past the protectionist rhetoric of local incumbents and embrace the capital and operational drive of carrier-terminal combinations. The returns are there and the demand is there. But the berths are not. It is time for a virtuous cycle to take over the industry. Robbert van Trooijen, founder of Inception Partners and a McKinsey Senior Advisor, had a 33-year tenure with The Nedlloyd Group, P&O Nedlloyd and the Maersk Group. Contact him at robbert@inceptionpartners.org .

Landside infrastructure is container shipping’s next great chokepoint

<div class="phx-topic abstract-wrapper">STG’s deal with a group of lenders who filed a lawsuit in New York last year clears the way for it to emerge from bankruptcy as the company has benefited from the rebound in intermodal demand.</div>

STG’s deal with a group of lenders who filed a lawsuit in New York last year clears the way for it to emerge from bankruptcy as the company has benefited from the rebound in intermodal demand.

<div class="phx-topic">STG Logistics has cleared the last major obstacle to emerging from Chapter 11 bankruptcy next month after reaching a settlement with a group of minority lenders that had challenged its restructuring. The settlement removes the last serious challenge to STG’s reorganization and leaves the company positioned to exit bankruptcy with customers, and freight volumes, largely intact. STG, which provides transloading, drayage, and domestic intermodal services, has met all the financial commitments made when it filed for Ch. 11 bankruptcy protection in January. Those included maintaining more than $50 million in cash and staying within budget targets for revenue and expenses over the past three months. The company increased volume year over year in the first quarter in Southern California, based on data from RailState, suggesting customers did not pull back business during the restructuring. The company is the fifth-largest US domestic intermodal provider, with 15,000 containers and about $720 million in annual revenue, according to an analysis of bankruptcy filings. STG also benefited from a broader rebound in intermodal demand as March was the <a href="https://www.joc.com/article/strong-march-volumes-give-intermodal-its-first-real-stress-test-in-years-6205604">third-strongest month on record for intermodal volume</a>, according to the Intermodal Association of North America (IANA). The settlement ends a bitter fight that played out over the last two years. After expanding rapidly during the pandemic-related freight boom, including its 2022 purchase of XPO Logistics’ intermodal division, STG entered the freight downturn with too much debt. The company restructured its debt and shifted valuable assets backing older loans into a new entity beyond the reach of some existing lenders, according to Axos and Siemens, who filed a lawsuit in New York last year. In January, Axos and Siemens scored an important win when a New York court ruled that the claims against STG could move forward. Less than a week later, STG filed for bankruptcy in New Jersey, moving the fight into bankruptcy court. Axos and Siemens continued to object, but the settlement has now resolved that challenge. Terms of the agreement were not disclosed. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

STG Logistics has cleared the last major obstacle to emerging from Chapter 11 bankruptcy next month after reaching a settlement with a group of minority lenders that had challenged its restructuring. The settlement removes the last serious challenge to STG’s reorganization and leaves the company positioned to exit bankruptcy with customers, and freight volumes, largely intact. STG, which provides transloading, drayage, and domestic intermodal services, has met all the financial commitments made when it filed for Ch. 11 bankruptcy protection in January. Those included maintaining more than $50 million in cash and staying within budget targets for revenue and expenses over the past three months. The company increased volume year over year in the first quarter in Southern California, based on data from RailState, suggesting customers did not pull back business during the restructuring. The company is the fifth-largest US domestic intermodal provider, with 15,000 containers and about $720 million in annual revenue, according to an analysis of bankruptcy filings. STG also benefited from a broader rebound in intermodal demand as March was the third-strongest month on record for intermodal volume , according to the Intermodal Association of North America (IANA). The settlement ends a bitter fight that played out over the last two years. After expanding rapidly during the pandemic-related freight boom, including its 2022 purchase of XPO Logistics’ intermodal division, STG entered the freight downturn with too much debt. The company restructured its debt and shifted valuable assets backing older loans into a new entity beyond the reach of some existing lenders, according to Axos and Siemens, who filed a lawsuit in New York last year. In January, Axos and Siemens scored an important win when a New York court ruled that the claims against STG could move forward. Less than a week later, STG filed for bankruptcy in New Jersey, moving the fight into bankruptcy court. Axos and Siemens continued to object, but the settlement has now resolved that challenge. Terms of the agreement were not disclosed. Contact Ari Ashe at ari.ashe@spglobal.com .

Drayage

STG clears final obstacle to exit bankruptcy as lender dispute ends

<div class="phx-topic abstract-wrapper">The Iran conflict, which began late in the first quarter, had little impact on the forwarder’s first-quarter business, accounting for just a 1.5% decline in ocean freight volumes.</div>

The Iran conflict, which began late in the first quarter, had little impact on the forwarder’s first-quarter business, accounting for just a 1.5% decline in ocean freight volumes.

<div class="phx-topic">Kuehne + Nagel is redoubling its efforts to develop new ocean business, while also taking steps to protect its air freight operations in Asia to offset the impact of the war in the Middle East, company executives said Friday. Those steps include expanding K+N’s prepaid ocean freight logistics options in China and refueling aircraft in China to overcome potential jet fuel shortages in Southeast Asia, the forwarder’s CEO Stefan Paul said during a first-quarter results webinar. Paul said there are a lot of new China-based manufacturing and trading companies asking K+N for help in exporting products via ocean freight. The company recently increased its dedicated sales force in the Shenzhen area where a lot of those companies are located. “We are confident from what we have seen in the last couple of weeks in terms of business gains that we can offset [the Middle East disruption] with China prepaid additional volume coming in from new and existing customers...,” Paul said. On air freight, he explained that countries such as Indonesia, Vietnam and Thailand don’t have buffer stocks of jet fuel beyond the end of May due to oil shortages caused by the Iran war and closure of the Strait of Hormuz. But, “China has significantly more reserves [of jet fuel],” Paul said. Consequently, K+N’s Southeast Asia charter cargo flights are refueled in China before returning to the region, while longer-haul services are also making refueling stops in China, he added. Paul said he doesn’t see specific jet fuel shortages now, but the situation could worsen the longer Hormuz remains shut. K+N’s CEO also said the 16% to 18% drop in air freight capacity seen immediately after the Iran conflict started on Feb. 28 as flights were grounded due to airport closures and air space restrictions had eased to “single digits,” without specifying a figure. <h3>Q1 revenue, profit decline </h3>Paul was commenting after Kuehne + Nagel reported a 12% year-over-year decline in first-quarter net profit to $316 million, partly due to a 7% foreign exchange hit. Revenue also fell 12% to $7.1 billion. He said the outlook for the second quarter was “stable.” The Middle East conflict, which began late in the first quarter, had little impact on the forwarder’s first-quarter business, accounting for just a 1.5% decline in ocean freight volumes. That mostly accounted for the 2% year-over-year fall in overall volumes, to 1 million TEUs, seen in the first quarter. Revenue from sea logistics dropped 25% to $2.4 billion, while gross profit fell 22% to $572 million. The decline was mainly due to customers frontloading cargo last year ahead of the US’ broad implementation of tariffs in April 2025, Paul said. Air logistics volumes were flat at 516,000 metric tons as the forwarder was more selective in the cargo mix, targeting higher yield freight such as semiconductors, the CEO said. Revenue for the business was largely unchanged at $2 billion, while gross profit fell 7% to $518 million. K+N saw a more upbeat result from both its road and contract logistics divisions. Paul said the signs of a recovery in road logistics seen in the fourth quarter continued in the first quarter, buoyed by land bridge services in the Middle East amid the war. K+N CFO Markus Blanka-Graff said “market share gains” in the US and Europe in the last six weeks also supported the upbeat result in road logistics, with a 4% increase in revenues to $1.2 billion and a 2% gain in gross profit to $432 million. Revenue in the contract logistics division was flat at $1.5 billion, but gross profit rose 3% to $1.2 billion. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Kuehne + Nagel is redoubling its efforts to develop new ocean business, while also taking steps to protect its air freight operations in Asia to offset the impact of the war in the Middle East, company executives said Friday. Those steps include expanding K+N’s prepaid ocean freight logistics options in China and refueling aircraft in China to overcome potential jet fuel shortages in Southeast Asia, the forwarder’s CEO Stefan Paul said during a first-quarter results webinar. Paul said there are a lot of new China-based manufacturing and trading companies asking K+N for help in exporting products via ocean freight. The company recently increased its dedicated sales force in the Shenzhen area where a lot of those companies are located. “We are confident from what we have seen in the last couple of weeks in terms of business gains that we can offset [the Middle East disruption] with China prepaid additional volume coming in from new and existing customers...,” Paul said. On air freight, he explained that countries such as Indonesia, Vietnam and Thailand don’t have buffer stocks of jet fuel beyond the end of May due to oil shortages caused by the Iran war and closure of the Strait of Hormuz. But, “China has significantly more reserves [of jet fuel],” Paul said. Consequently, K+N’s Southeast Asia charter cargo flights are refueled in China before returning to the region, while longer-haul services are also making refueling stops in China, he added. Paul said he doesn’t see specific jet fuel shortages now, but the situation could worsen the longer Hormuz remains shut. K+N’s CEO also said the 16% to 18% drop in air freight capacity seen immediately after the Iran conflict started on Feb. 28 as flights were grounded due to airport closures and air space restrictions had eased to “single digits,” without specifying a figure. Q1 revenue, profit decline Paul was commenting after Kuehne + Nagel reported a 12% year-over-year decline in first-quarter net profit to $316 million, partly due to a 7% foreign exchange hit. Revenue also fell 12% to $7.1 billion. He said the outlook for the second quarter was “stable.” The Middle East conflict, which began late in the first quarter, had little impact on the forwarder’s first-quarter business, accounting for just a 1.5% decline in ocean freight volumes. That mostly accounted for the 2% year-over-year fall in overall volumes, to 1 million TEUs, seen in the first quarter. Revenue from sea logistics dropped 25% to $2.4 billion, while gross profit fell 22% to $572 million. The decline was mainly due to customers frontloading cargo last year ahead of the US’ broad implementation of tariffs in April 2025, Paul said. Air logistics volumes were flat at 516,000 metric tons as the forwarder was more selective in the cargo mix, targeting higher yield freight such as semiconductors, the CEO said. Revenue for the business was largely unchanged at $2 billion, while gross profit fell 7% to $518 million. K+N saw a more upbeat result from both its road and contract logistics divisions. Paul said the signs of a recovery in road logistics seen in the fourth quarter continued in the first quarter, buoyed by land bridge services in the Middle East amid the war. K+N CFO Markus Blanka-Graff said “market share gains” in the US and Europe in the last six weeks also supported the upbeat result in road logistics, with a 4% increase in revenues to $1.2 billion and a 2% gain in gross profit to $432 million. Revenue in the contract logistics division was flat at $1.5 billion, but gross profit rose 3% to $1.2 billion. Contact Keith Wallis at keithwallis@hotmail.com .

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