<div class="phx-topic abstract-wrapper">PSA BDP acquired a majority stake in Mexico-based forwarder ED International, expanding PSA’s cross-border forwarding network.</div>

PSA BDP acquired a majority stake in Mexico-based forwarder ED International, expanding PSA’s cross-border forwarding network.

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<div class="phx-topic">Logistics provider PSA BDP on Tuesday said it would take a majority stake in a Mexico-based forwarder, strengthening its US cross-border capabilities leveraged with parent PSA International’s global marine terminal network. Terms of the sale of the majority stake in Mexico City-based forwarder ED International were not disclosed. Through its <a href="https://www.joc.com/article/psa-leveraging-forwarder-acquisition-to-serve-shippers-directly-5242073">2022 acquisition of BDP International</a>, PSA has positioned the non-vessel-operating common carrier to provide logistics solutions connecting PSA International’s network of 73 marine terminals. “With many shippers continuing the trend of nearshoring from Asia to Mexico, there is a growing need for expanded distribution networks that can provide comprehensive solutions,” PSA BDP said in a statement. Despite US tariffs on Mexican imports of up to 25%, including on finished vehicles, cross-border trade is expected to expand in the long term. Most of that trade is conducted by truck, and in January, the number of northbound trucks headed from Mexico to the US increased 2.8% year over year, with gains in El Paso, Otay Mesa, Nogales, Hildalgo and Eagle Pass, according to the latest US Bureau of Transportation Statistics border-crossing data. Truck traffic into Laredo, Texas, the largest US border crossing, dropped 2% year over year in January, possibly reflecting increased congestion ahead of tariffs that were scheduled to take effect in February. Those tariffs eventually took effect in March but were limited to goods not covered by the US-Mexico-Canada trade agreement. That means many goods are still moving from Mexico to the US duty-free. Stronger US tariff pressure on China encourages continued manufacturing investment in Mexico to serve North and South America. Direct foreign investment rose 1.1% to US$36.9 billion in 2024, according to preliminary data released earlier this year by Mexico’s Secretaría de Economía (SE). About half of that direct foreign investment came from US companies. In recent years, marine terminals operators, including DP World, have sought to take greater control of landside logistics outside the gates of their facilities. That has manifested through acquisitions of forwarders and even ocean feeder services as in the case of DP World. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Logistics provider PSA BDP on Tuesday said it would take a majority stake in a Mexico-based forwarder, strengthening its US cross-border capabilities leveraged with parent PSA International’s global marine terminal network. Terms of the sale of the majority stake in Mexico City-based forwarder ED International were not disclosed. Through its 2022 acquisition of BDP International , PSA has positioned the non-vessel-operating common carrier to provide logistics solutions connecting PSA International’s network of 73 marine terminals. “With many shippers continuing the trend of nearshoring from Asia to Mexico, there is a growing need for expanded distribution networks that can provide comprehensive solutions,” PSA BDP said in a statement. Despite US tariffs on Mexican imports of up to 25%, including on finished vehicles, cross-border trade is expected to expand in the long term. Most of that trade is conducted by truck, and in January, the number of northbound trucks headed from Mexico to the US increased 2.8% year over year, with gains in El Paso, Otay Mesa, Nogales, Hildalgo and Eagle Pass, according to the latest US Bureau of Transportation Statistics border-crossing data. Truck traffic into Laredo, Texas, the largest US border crossing, dropped 2% year over year in January, possibly reflecting increased congestion ahead of tariffs that were scheduled to take effect in February. Those tariffs eventually took effect in March but were limited to goods not covered by the US-Mexico-Canada trade agreement. That means many goods are still moving from Mexico to the US duty-free. Stronger US tariff pressure on China encourages continued manufacturing investment in Mexico to serve North and South America. Direct foreign investment rose 1.1% to US$36.9 billion in 2024, according to preliminary data released earlier this year by Mexico’s Secretaría de Economía (SE). About half of that direct foreign investment came from US companies. In recent years, marine terminals operators, including DP World, have sought to take greater control of landside logistics outside the gates of their facilities. That has manifested through acquisitions of forwarders and even ocean feeder services as in the case of DP World. Contact Laura Robb at laura.robb@spglobal.com . 

Maritime

Forwarding

Port infrastructure

North American ports

Marine terminals

Container Shipping News

Port-focused US logistics provider takes majority stake in Mexican forwarder

<div class="phx-topic abstract-wrapper">The freeing up of vessel capacity that has been diverted around southern Africa for the past 18 months could inject as much as 2 million TEUs of functional capacity into the global container shipping market. </div>

The freeing up of vessel capacity that has been diverted around southern Africa for the past 18 months could inject as much as 2 million TEUs of functional capacity into the global container shipping market.

<div class="phx-topic">US President Donald Trump on Tuesday said Houthi militants operating from Yemen have agreed to stop their 18-month-long series of attacks on commercial shipping in the Red Sea. If true, the apparent ceasefire would raise the prospects of major ocean carriers returning to Suez Canal transits this year, something that would result in significant vessel overcapacity in the container shipping market.While not a formal deal, Trump said the Houthis have agreed to stop their missile and drone attacks on vessels that began in late 2023 as part of what the militants said was a show of solidarity for Gaza amid the Israel-Hamas war.The Houthis have not confirmed that a deal with the US has been made. US bombings of militant positions in Yemen have intensified in the last two months. “They don’t want to fight anymore. They just don’t want to fight. We will honor that, and we will stop the bombings,” Trump said at the White House. “They have capitulated, but more importantly we will take their word. They say they won’t be blowing up ships anymore.” Approximately 1 million to 2 million TEUs of capacity would become available if the container shipping industry returned to Suez Canal transits and no longer needed to use the lengthy diversion around southern Africa, according to Maersk estimates. An estimated 10% of global capacity has been absorbed by the longer transits, according to shipping association BIMCO. The container shipping order book is currently just over 7 million TEUs, representing 25% of the existing fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global, with the supply-demand imbalance expected to be particularly acute over the next two years. Asian container lines along with CMA CGM have transited the Red Sea amid Houthi threats, yet it is unclear whether the apparent de-escalation announced by Trump will change the risk calculations of carriers that include crew safety and insurance costs. A return to a safe shipping environment in the region would also be a boon to Gulf-based ocean shippers, reopening a direct east-west route rather than forcing cargo owners to transship via feeder vessels or even tap overland trucking. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com.">mark.szakonyi@spglobal.com</a>.</div>

US President Donald Trump on Tuesday said Houthi militants operating from Yemen have agreed to stop their 18-month-long series of attacks on commercial shipping in the Red Sea. If true, the apparent ceasefire would raise the prospects of major ocean carriers returning to Suez Canal transits this year, something that would result in significant vessel overcapacity in the container shipping market. While not a formal deal, Trump said the Houthis have agreed to stop their missile and drone attacks on vessels that began in late 2023 as part of what the militants said was a show of solidarity for Gaza amid the Israel-Hamas war. The Houthis have not confirmed that a deal with the US has been made. US bombings of militant positions in Yemen have intensified in the last two months. “They don’t want to fight anymore. They just don’t want to fight. We will honor that, and we will stop the bombings,” Trump said at the White House. “They have capitulated, but more importantly we will take their word. They say they won’t be blowing up ships anymore.” Approximately 1 million to 2 million TEUs of capacity would become available if the container shipping industry returned to Suez Canal transits and no longer needed to use the lengthy diversion around southern Africa, according to Maersk estimates. An estimated 10% of global capacity has been absorbed by the longer transits, according to shipping association BIMCO. The container shipping order book is currently just over 7 million TEUs, representing 25% of the existing fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global, with the supply-demand imbalance expected to be particularly acute over the next two years. Asian container lines along with CMA CGM have transited the Red Sea amid Houthi threats, yet it is unclear whether the apparent de-escalation announced by Trump will change the risk calculations of carriers that include crew safety and insurance costs. A return to a safe shipping environment in the region would also be a boon to Gulf-based ocean shippers, reopening a direct east-west route rather than forcing cargo owners to transship via feeder vessels or even tap overland trucking. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Port News

Container lines

Asia-Europe

Trans-Pacific

Apparent Houthi ceasefire raises container shipping overcapacity risk

<div class="phx-topic abstract-wrapper">As port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains.</div>

As port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains.

<div class="phx-topic">US shippers saved an average of 19% on spot market freight and nearly 26% on contract loads in the first quarter by using domestic intermodal instead of long-haul trucking, savings that softened in March amid rising trade tensions with China, according to the latest Journal of Commerce <a href="https://www.joc.com/resources/special-reports/intermodal-savings-index">Intermodal Savings Index</a> (ISI). Trucking companies managed to secure contract rate increases early in the quarter, but that momentum faded as freight volumes slowed amid the growing trade conflict with Beijing, according to the quarterly earnings reports of several major carriers. Intermodal contracts remained flat, with the only notable increases concentrated in California. Spot truckload rates, a leading indicator for intermodal pricing, fell as geopolitical tensions rose. And now as port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains. “Imports may be dropping faster than consumer demand and a lull in shipping could be the catalyst that removes additional capacity from the market,” Jim Filter, executive vice president of transportation and logistics for Schneider National, said on a May 1 earnings call. “If there were new trade agreements, there could be an abrupt restart of imports with less capacity than there is today [to handle the upswing].” The Spot ISI averaged 119.1 in the first quarter, down from 120.4 in the fourth quarter but up from 117.1 a year ago. The Contract ISI slipped to 125.6 from 126.2 in the fourth quarter and 125.8 one year ago. Index values above 100 indicate intermodal is the more cost-effective mode. The higher the index number, the greater the savings. For example, a spot ISI of 119.1 translates to a 19.1% savings on intermodal versus truckload and a contract ISI of 125.6 implies a 25.6% savings. In terms of raw dollars, shippers saved an average of $706 per container on the spot market and $964 per container on the contract market by using domestic intermodal, according to the ISI. Each is virtually unchanged from the prior year. On hauls longer than 2,000 miles, contract savings topped $1,600 per box. But on lanes under 800 miles, the average savings dropped to $170 per container, which is easily erased if the shipper is located more than an hour from the rail terminal or incurs accessorial fees. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="18f45e44-8027-488a-8afc-87771e60ca91"></dynamic-object></div>Spot truckload rates declined 14 cents between January and March to $1.86 per mile, while spot intermodal rates fell 6 cents to $1.56 per mile, according to the ISI. Contract truckload rates fell 3 cents to $1.95 per mile, while contract intermodal rose a penny to $1.48 per mile in the first quarter. Truckload contracts rose 3 cents in the first two months of the year before falling 6 cents in March amid the rising geopolitical tensions. <h3>A flat bid season </h3>The most common word to describe bid season was “flat,” according to conversations with asset-based and non-asset-based intermodal providers. Rates went up on freight originating in California but remained largely unchanged or down elsewhere in the US. One retail shipper told the Journal of Commerce that a major intermodal provider ramped up outreach in the final five days before freight awards, repeatedly calling and emailing with last-minute rate cuts to secure additional volumes. Downward pricing pressure is intensifying on westbound lanes from Atlanta, Chicago, Dallas and Memphis to Los Angeles, where Amazon is undercutting traditional carriers to fill its fleet of more than 22,000 branded containers. The online retail giant moves heavy eastbound volumes but often struggles to backhaul westbound containers, many of which return empty. While some shippers have rebuffed Amazon’s overtures, others are shifting a portion of their freight previously awarded to established carriers to Amazon to test whether the retail giant can offer consistent capacity and service throughout the year. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription.</div>

US shippers saved an average of 19% on spot market freight and nearly 26% on contract loads in the first quarter by using domestic intermodal instead of long-haul trucking, savings that softened in March amid rising trade tensions with China, according to the latest Journal of Commerce Intermodal Savings Index (ISI). Trucking companies managed to secure contract rate increases early in the quarter, but that momentum faded as freight volumes slowed amid the growing trade conflict with Beijing, according to the quarterly earnings reports of several major carriers. Intermodal contracts remained flat, with the only notable increases concentrated in California. Spot truckload rates, a leading indicator for intermodal pricing, fell as geopolitical tensions rose. And now as port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains. “Imports may be dropping faster than consumer demand and a lull in shipping could be the catalyst that removes additional capacity from the market,” Jim Filter, executive vice president of transportation and logistics for Schneider National, said on a May 1 earnings call. “If there were new trade agreements, there could be an abrupt restart of imports with less capacity than there is today [to handle the upswing].” The Spot ISI averaged 119.1 in the first quarter, down from 120.4 in the fourth quarter but up from 117.1 a year ago. The Contract ISI slipped to 125.6 from 126.2 in the fourth quarter and 125.8 one year ago. Index values above 100 indicate intermodal is the more cost-effective mode. The higher the index number, the greater the savings. For example, a spot ISI of 119.1 translates to a 19.1% savings on intermodal versus truckload and a contract ISI of 125.6 implies a 25.6% savings. In terms of raw dollars, shippers saved an average of $706 per container on the spot market and $964 per container on the contract market by using domestic intermodal, according to the ISI. Each is virtually unchanged from the prior year. On hauls longer than 2,000 miles, contract savings topped $1,600 per box. But on lanes under 800 miles, the average savings dropped to $170 per container, which is easily erased if the shipper is located more than an hour from the rail terminal or incurs accessorial fees. Spot truckload rates declined 14 cents between January and March to $1.86 per mile, while spot intermodal rates fell 6 cents to $1.56 per mile, according to the ISI. Contract truckload rates fell 3 cents to $1.95 per mile, while contract intermodal rose a penny to $1.48 per mile in the first quarter. Truckload contracts rose 3 cents in the first two months of the year before falling 6 cents in March amid the rising geopolitical tensions. A flat bid season The most common word to describe bid season was “flat,” according to conversations with asset-based and non-asset-based intermodal providers. Rates went up on freight originating in California but remained largely unchanged or down elsewhere in the US. One retail shipper told the Journal of Commerce that a major intermodal provider ramped up outreach in the final five days before freight awards, repeatedly calling and emailing with last-minute rate cuts to secure additional volumes. Downward pricing pressure is intensifying on westbound lanes from Atlanta, Chicago, Dallas and Memphis to Los Angeles, where Amazon is undercutting traditional carriers to fill its fleet of more than 22,000 branded containers. The online retail giant moves heavy eastbound volumes but often struggles to backhaul westbound containers, many of which return empty. While some shippers have rebuffed Amazon’s overtures, others are shifting a portion of their freight previously awarded to established carriers to Amazon to test whether the retail giant can offer consistent capacity and service throughout the year. Contact Ari Ashe at ari.ashe@spglobal.com . The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription.

North-American rail

Intermodal providers

US spot intermodal savings dipped in Q1 amid largely flat rate environment

<div class="phx-topic abstract-wrapper">The forwarder offered an unsettled outlook for the trans-Pacific in 2025 as shippers navigate the Trump administration’s 145% tariffs on goods made in China. </div>

The forwarder offered an unsettled outlook for the trans-Pacific in 2025 as shippers navigate the Trump administration’s 145% tariffs on goods made in China.

<div class="phx-topic">Frontloading of imports ahead of US President Donald Trump’s tariffs on China fueled strong first-quarter results for Expeditors, but the forwarder warned Tuesday those same tariffs caused ocean freight volumes to decline “significantly” in April and continue to cloud the outlook for the remainder of 2025. Expeditors reported first-quarter earnings of $1.47 per share, up 26% from a year earlier and better than the $1.37 per share analyst consensus from Capital IQ Estimates, a sister company of the Journal of Commerce within S&amp;P Global. Revenues from the forwarder’s air and ocean businesses grew 19% and 37% year over year, respectively, during the quarter. CEO Daniel Wall said in a statement that shippers bringing cargo into the country ahead of the April 2 unveiling of Trump’s reciprocal tariffs pushed Expeditors’ air freight tonnage up 9% for the quarter while ocean container volumes rose 8%. “Air freight increased on higher buy and sell rates and growth in tonnage from strong demand, primarily in technology, as importers frontloaded shipments in anticipation of higher trade tariffs,” Wall said. “Our ocean business favorably compares to the first quarter a year ago and grew in strength on higher volumes and rates as importers also frontloaded shipments, as well as extended transit times because of the continuing conflict in the Red Sea.” <h3>Partially offsetting China volume loss </h3>However, Wall said both segments face uncertain outlooks due to the ongoing trade conflict between the US and China. With trans-Pacific air freight demand highly exposed to shipments of low-value e-commerce goods from China, “it is too early to predict what impact an end to the de minimis exemption may have on air capacity and rates going forward,” he said. Some of the decline in China-origin freight has been offset by sourcing from other Asian countries. But Wall said the potential for other countries to get hit with tariffs also has shippers feeling nervous about any overseas orders. “While some of those ocean volumes are shifting to other lanes, as customers look to mitigate their exposure to China-specific tariffs, it is too early to know what the overall decline in volumes might be,” he said. “Speculation regarding additional tariffs may cause more customers to pause or cancel shipments entirely.” The weaker demand will also impact forwarders similar to Expeditors, which benefit from the spread between the freight rates they pay carriers and what their customers are willing to pay. Wall said ocean carriers only have so many levers — such as blank sailings or suspending entire services — to keep rates up in the face of softer demand. “While carriers have shown a willingness to manage capacity, the current environment is so unsettled that they simply may not be able to do enough to keep rates from continuing to fall if consumer resilience fades and the capacity and demand imbalance become significant in certain lanes,” Wall said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Frontloading of imports ahead of US President Donald Trump’s tariffs on China fueled strong first-quarter results for Expeditors, but the forwarder warned Tuesday those same tariffs caused ocean freight volumes to decline “significantly” in April and continue to cloud the outlook for the remainder of 2025. Expeditors reported first-quarter earnings of $1.47 per share, up 26% from a year earlier and better than the $1.37 per share analyst consensus from Capital IQ Estimates, a sister company of the Journal of Commerce within S&P Global. Revenues from the forwarder’s air and ocean businesses grew 19% and 37% year over year, respectively, during the quarter. CEO Daniel Wall said in a statement that shippers bringing cargo into the country ahead of the April 2 unveiling of Trump’s reciprocal tariffs pushed Expeditors’ air freight tonnage up 9% for the quarter while ocean container volumes rose 8%. “Air freight increased on higher buy and sell rates and growth in tonnage from strong demand, primarily in technology, as importers frontloaded shipments in anticipation of higher trade tariffs,” Wall said. “Our ocean business favorably compares to the first quarter a year ago and grew in strength on higher volumes and rates as importers also frontloaded shipments, as well as extended transit times because of the continuing conflict in the Red Sea.” Partially offsetting China volume loss However, Wall said both segments face uncertain outlooks due to the ongoing trade conflict between the US and China. With trans-Pacific air freight demand highly exposed to shipments of low-value e-commerce goods from China, “it is too early to predict what impact an end to the de minimis exemption may have on air capacity and rates going forward,” he said. Some of the decline in China-origin freight has been offset by sourcing from other Asian countries. But Wall said the potential for other countries to get hit with tariffs also has shippers feeling nervous about any overseas orders. “While some of those ocean volumes are shifting to other lanes, as customers look to mitigate their exposure to China-specific tariffs, it is too early to know what the overall decline in volumes might be,” he said. “Speculation regarding additional tariffs may cause more customers to pause or cancel shipments entirely.” The weaker demand will also impact forwarders similar to Expeditors, which benefit from the spread between the freight rates they pay carriers and what their customers are willing to pay. Wall said ocean carriers only have so many levers — such as blank sailings or suspending entire services — to keep rates up in the face of softer demand. “While carriers have shown a willingness to manage capacity, the current environment is so unsettled that they simply may not be able to do enough to keep rates from continuing to fall if consumer resilience fades and the capacity and demand imbalance become significant in certain lanes,” Wall said. Contact Michael Angell at michael.angell@spglobal.com .

Air Cargo Forwarder News

US ocean freight from China fell ‘significantly’: Expeditors

<div class="phx-topic abstract-wrapper">While the Jones Act carrier added another service from Vietnam in the first quarter, it says volumes from that country won’t replace what’s lost from China. </div>

While the Jones Act carrier added another service from Vietnam in the first quarter, it says volumes from that country won’t replace what’s lost from China.

<div class="phx-topic">US ocean carrier Matson has issued a downbeat forecast for 2025 as US tariffs on Chinese imports are expected to impact its trans-Pacific container services. While imports out of Vietnam have taken up some slack capacity, Matson said the nearly one-third drop in China-origin freight will be hard to replace. Matson Chief Executive Matt Cox, reporting the company’s first-quarter earnings Monday, said the carrier saw a 30% drop in container volumes out of China immediately after President Donald Trump’s reciprocal tariffs on Beijing went into effect April 9. Due to shipper uncertainty about the direction of the tariffs, Cox said it’s unclear whether volumes will recover within the current quarter or full year. “Given the pronounced market decline in demand in the trans-Pacific in April, coupled with limited visibility to our container demand, we expect container volume and average freight rates in the second quarter to be lower year over year,” he said. “At the moment, it’s difficult to know if these lower volume levels are transitory or will persist for a longer time in 2025.” Cox made the comments after Matson reported first-quarter earnings of $2.18 per share, which was double the year-earlier results thanks to strong trans-Pacific freight rates in the first quarter. However, Matson’s customers do not appear to have frontloaded much cargo, with first-quarter container volumes from China being essentially flat compared with 2024. Matson’s Jones Act services to Hawaii and Alaska saw container volume growth of 3.2% and 4.8%, respectively, in the first quarter. The carrier added a feeder service from Vietnam’s Ho Chi Minh City during the first quarter on both its CLX and MAX services from China to the US, marking a second service expansion after it added Vietnam’s northern port of Haiphong two years earlier. With the new port call, Vietnam now accounts for 20% of Matson’s trans-Pacific business, Cox said. Shippers are indicating they plan to move more freight out of Vietnam, he added, along with other Asian exporters that Matson serves through transshipment. However, Cox said it’s not clear how quickly and easily shippers will be able to further pivot their product sourcing to Southeast Asia. Moreover, shippers will remain cautious about sourcing from other Asian suppliers because they could get hit with tariffs, too. “Vietnam has grown rather significantly, but Vietnam has some of the same issues as many fast-growing Asian economies,” Cox said. “They’ve got shortages of power, they have shortages of labor, and they were pretty busy before this significant tariff change to begin with. So, it’s not obvious to what extent the country itself can scale over such a short period of time.” <h3>No plans to trim capacity </h3>Cox said Matson has no plans to cut capacity or reduce service frequency because its customers need to restock every one to two months, regardless of tariffs. But until shippers and suppliers figure out how to share the cost burden of Trump’s tariffs, Cox said trans-Pacific volumes will likely stay muted. “It’s our view that in four to eight weeks is when a lot of inventory runs out, and cargo’s going to need to move,” he said. “There’s a lot of activity going on right now between manufacturers, importers and retailers about how to cover these tariffs. Our customers are loath to have empty shelves to the extent that they can help it. And we think that a significant amount of cargo will be moving at the last minute.” One trade issue that Cox expects won’t be negotiated away will be the de minimis exemption for low-value goods shipped directly from China via air freight. However, Cox said <a href="https://www.joc.com/article/air-cargo-volumes-fall-on-trans-pacific-as-us-de-minimis-changes-loom-5993599">the end of the de minimis exemption</a> will mean a pivot to ocean freight as China’s e-commerce retailers look to stage their goods for shipment within the US. Regarding the announcement from Chinese online marketplace Temu that it has stopped shipping directly from China to the US, Cox said it looks like a move by the company to “convert itself into more of an Amazon-like model” that will allow Matson to take advantage of a modal shift from air to ocean. “So, I think we do see more of that air cargo now converting into ocean, and that may be a long-term opportunity for us as e-commerce continues to grow,” he said. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US ocean carrier Matson has issued a downbeat forecast for 2025 as US tariffs on Chinese imports are expected to impact its trans-Pacific container services. While imports out of Vietnam have taken up some slack capacity, Matson said the nearly one-third drop in China-origin freight will be hard to replace. Matson Chief Executive Matt Cox, reporting the company’s first-quarter earnings Monday, said the carrier saw a 30% drop in container volumes out of China immediately after President Donald Trump’s reciprocal tariffs on Beijing went into effect April 9. Due to shipper uncertainty about the direction of the tariffs, Cox said it’s unclear whether volumes will recover within the current quarter or full year. “Given the pronounced market decline in demand in the trans-Pacific in April, coupled with limited visibility to our container demand, we expect container volume and average freight rates in the second quarter to be lower year over year,” he said. “At the moment, it’s difficult to know if these lower volume levels are transitory or will persist for a longer time in 2025.” Cox made the comments after Matson reported first-quarter earnings of $2.18 per share, which was double the year-earlier results thanks to strong trans-Pacific freight rates in the first quarter. However, Matson’s customers do not appear to have frontloaded much cargo, with first-quarter container volumes from China being essentially flat compared with 2024. Matson’s Jones Act services to Hawaii and Alaska saw container volume growth of 3.2% and 4.8%, respectively, in the first quarter. The carrier added a feeder service from Vietnam’s Ho Chi Minh City during the first quarter on both its CLX and MAX services from China to the US, marking a second service expansion after it added Vietnam’s northern port of Haiphong two years earlier. With the new port call, Vietnam now accounts for 20% of Matson’s trans-Pacific business, Cox said. Shippers are indicating they plan to move more freight out of Vietnam, he added, along with other Asian exporters that Matson serves through transshipment. However, Cox said it’s not clear how quickly and easily shippers will be able to further pivot their product sourcing to Southeast Asia. Moreover, shippers will remain cautious about sourcing from other Asian suppliers because they could get hit with tariffs, too. “Vietnam has grown rather significantly, but Vietnam has some of the same issues as many fast-growing Asian economies,” Cox said. “They’ve got shortages of power, they have shortages of labor, and they were pretty busy before this significant tariff change to begin with. So, it’s not obvious to what extent the country itself can scale over such a short period of time.” No plans to trim capacity Cox said Matson has no plans to cut capacity or reduce service frequency because its customers need to restock every one to two months, regardless of tariffs. But until shippers and suppliers figure out how to share the cost burden of Trump’s tariffs, Cox said trans-Pacific volumes will likely stay muted. “It’s our view that in four to eight weeks is when a lot of inventory runs out, and cargo’s going to need to move,” he said. “There’s a lot of activity going on right now between manufacturers, importers and retailers about how to cover these tariffs. Our customers are loath to have empty shelves to the extent that they can help it. And we think that a significant amount of cargo will be moving at the last minute.” One trade issue that Cox expects won’t be negotiated away will be the de minimis exemption for low-value goods shipped directly from China via air freight. However, Cox said the end of the de minimis exemption will mean a pivot to ocean freight as China’s e-commerce retailers look to stage their goods for shipment within the US. Regarding the announcement from Chinese online marketplace Temu that it has stopped shipping directly from China to the US, Cox said it looks like a move by the company to “convert itself into more of an Amazon-like model” that will allow Matson to take advantage of a modal shift from air to ocean. “So, I think we do see more of that air cargo now converting into ocean, and that may be a long-term opportunity for us as e-commerce continues to grow,” he said. Contact Michael Angell at michael.angell@spglobal.com .

Chinese tariffs cloud trans-Pacific outlook for 2025: Matson

<div class="phx-topic abstract-wrapper">Relative stability may indicate that during the coming trade war, transloading could fare better than inland point intermodal, writes Larry Gross.</div>

Relative stability may indicate that during the coming trade war, transloading could fare better than inland point intermodal, writes Larry Gross.

<div class="phx-topic">With intermodal staring down the barrel at huge reductions in inbound TEUs on the US West Coast, it’s looking pretty clear that the international intermodal sector is about to take a haircut. But what will the effect be on the domestic intermodal sector? Transloading is an important component of the domestic intermodal market. Much of the volume moving off the West Coast in domestic containers is transloaded import cargo. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5999545_0.1.jpg"></img></div>Southern California is the epicenter of transload activity. Gross Transportation Consulting (GTC) estimates that in the first quarter of 2025, approximately 70% of import TEUs arriving in California moved out of the region via intermodal. Trucks handled the remainder, either for local consumption or long-haul dray to destinations such as Phoenix and Tucson. About 57% of the TEUs emerging from the Southwest on intermodal were transloads, with the remaining 43% moving intact as inland point intermodal (IPI). The first chart tracks the number of TEUs arriving each calendar quarter into California ports and GTC’s estimates for the number of TEUs exiting via intermodal. This latter figure is then further divided into transload and IPI volumes. This chart clearly shows the relative stability of the transload activity as compared with both inbound TEUs and Intact/IPI. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="653d4f31-f6ac-42b8-954e-337df74b6a36"></dynamic-object></div>The second chart displays the same data in terms of intermodal’s participation in import TEUs. At the beginning of 2023, arriving import TEUs reached their lowest point in recent history, but the percentage of those TEUs leaving via intermodal was relatively high. Since then, import TEUs arriving moved up, peaking in the second half of last year before retreating in the first quarter of 2025. Intermodal TEUs coming out of the region also increased, but not quite as quickly, resulting in a drop in the intermodal percentage. This was due entirely to a reduction in the percentage of TEUs coming out via transload. Note that the drop in the transload percentage does not mean that the transload volume went down, but rather that it remained relatively stable, with IPI handling most of the increase in import TEUs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ebc6ee7f-ee5f-4b63-a7c5-bec153f7c798"></dynamic-object></div>This relative stability may indicate that during the coming trade dispute, transloading may fare better than IPI. Undoubtedly, transload activity will drop, but perhaps not by as much as import TEUs or IPI shipments. I estimate that transloads out of California represent over 15% of all North American domestic intermodal activity. Transloading also takes place out of the Pacific Northwest, although to a lesser extent. Western Canadian ports have limited transload activity, as IPI and repositioning of ISO (International Organization for Standardization) boxes with domestic loads are a much more common practice north of the border. Not much transload moves via intermodal off the East Coast, as the shorter haul impairs the economics of the practice. But if you put it all together, transloads likely represent at least 20% of all North American intermodal activity and an even higher percentage of US domestic intermodal volume. While the weaker transloading flows off the West Coast will result in lower eastbound domestic intermodal volume, the westbound flows of domestic freight won’t necessarily decline in lockstep. This could result in an inversion of the norm, with westbound becoming the headhaul direction and eastbound the backhaul side of the main east-west lanes off the West Coast. Contact Larry Gross at <a href="mailto:lgross@intermodalindepth.com">lgross@intermodalindepth.com</a>. </div>

With intermodal staring down the barrel at huge reductions in inbound TEUs on the US West Coast, it’s looking pretty clear that the international intermodal sector is about to take a haircut. But what will the effect be on the domestic intermodal sector? Transloading is an important component of the domestic intermodal market. Much of the volume moving off the West Coast in domestic containers is transloaded import cargo. Southern California is the epicenter of transload activity. Gross Transportation Consulting (GTC) estimates that in the first quarter of 2025, approximately 70% of import TEUs arriving in California moved out of the region via intermodal. Trucks handled the remainder, either for local consumption or long-haul dray to destinations such as Phoenix and Tucson. About 57% of the TEUs emerging from the Southwest on intermodal were transloads, with the remaining 43% moving intact as inland point intermodal (IPI). The first chart tracks the number of TEUs arriving each calendar quarter into California ports and GTC’s estimates for the number of TEUs exiting via intermodal. This latter figure is then further divided into transload and IPI volumes. This chart clearly shows the relative stability of the transload activity as compared with both inbound TEUs and Intact/IPI. The second chart displays the same data in terms of intermodal’s participation in import TEUs. At the beginning of 2023, arriving import TEUs reached their lowest point in recent history, but the percentage of those TEUs leaving via intermodal was relatively high. Since then, import TEUs arriving moved up, peaking in the second half of last year before retreating in the first quarter of 2025. Intermodal TEUs coming out of the region also increased, but not quite as quickly, resulting in a drop in the intermodal percentage. This was due entirely to a reduction in the percentage of TEUs coming out via transload. Note that the drop in the transload percentage does not mean that the transload volume went down, but rather that it remained relatively stable, with IPI handling most of the increase in import TEUs. This relative stability may indicate that during the coming trade dispute, transloading may fare better than IPI. Undoubtedly, transload activity will drop, but perhaps not by as much as import TEUs or IPI shipments. I estimate that transloads out of California represent over 15% of all North American domestic intermodal activity. Transloading also takes place out of the Pacific Northwest, although to a lesser extent. Western Canadian ports have limited transload activity, as IPI and repositioning of ISO (International Organization for Standardization) boxes with domestic loads are a much more common practice north of the border. Not much transload moves via intermodal off the East Coast, as the shorter haul impairs the economics of the practice. But if you put it all together, transloads likely represent at least 20% of all North American intermodal activity and an even higher percentage of US domestic intermodal volume. While the weaker transloading flows off the West Coast will result in lower eastbound domestic intermodal volume, the westbound flows of domestic freight won’t necessarily decline in lockstep. This could result in an inversion of the norm, with westbound becoming the headhaul direction and eastbound the backhaul side of the main east-west lanes off the West Coast. Contact Larry Gross at lgross@intermodalindepth.com .

Trucking News

Rail News

Surface

Domestic intermodal may breathe easy, at least for now: analyst 

<div class="phx-topic abstract-wrapper">The new global trade environment has significantly increased supply chain challenges, notably the arbitrary nature of the implementation of US tariffs.</div>

The new global trade environment has significantly increased supply chain challenges, notably the arbitrary nature of the implementation of US tariffs.

<div class="phx-topic">This commentary is not specifically about tariffs, or about capacity shortages or surpluses or what to expect if your shipment happens to be transferred to a Chinese vessel or service — whatever that means today. Instead, it considers a related question: How do supply chain practitioners balance demand and supply planning in the current environment of uncertainty? To start, let’s assume you are a medium-size importer into the US from any Asian country subject to tariffs nominally above 20%. At this stage, you have called on the more recent lessons from the first term of Donald Trump and from the COVID-19 pandemic. These will include, but are not limited to, some form of cost-sharing of the increase, somewhere between you absorbing it all to the supplier wearing the whole lot. If you are buying in US dollars, then your supplier is already suffering and will have less room to maneuver. To counter this, a temporary option could be to switch to buying in your supplier’s local currency. This will have some appeal to your supplier as they are possibly overweight in the dollar and have actual costs in local currency. A lot will depend on your view of the trajectory of the dollar. However, two notes of caution: You will still have transaction costs when converting from the US dollar to the local currency, and depending on the country you source from, you may face capital controls if you need to get money back. Furthermore, changing back and forth in currencies has administrative risks with potential payment delays and errors. No doubt there will be a suggestion of suppliers providing lower-than-correct value invoices and some form of offline reconciliation. But doing the right thing in the face of malevolence has its longer-term reward. And besides, the penalties do not merit the risk. <h3>‘Roulette game’ </h3>You will have reduced your destination-side inventory to the degree of ensuring safety stocks. If you managed to get ahead of the tariff increases, you will be sitting on volume that requires warehousing. But as you have avoided tariffs to some degree, this will maintain your competitiveness — despite the increased warehousing and inventory working capital cost — assuming your competitors source from outside the US However, the new environment has significantly increased challenges. First, the rate at which tariff levels are changing makes supply planning a roulette game. This is primarily due to the arbitrary nature of their implementation, unlike previous changes that gave some degree of leeway for orders already in process and/or on the water. Equally challenging is the rollercoaster nature of the degree of tariff moves both up and down. Finally, the tactical response <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">to avoid Chinese-built, -owned, and -operated ships</a> will be a nightmare for all logisticians. This is particularly important because carrier and vessel choice is largely transactional at an operational level based on guidance from sourcing, so the likelihood of an error costing thousands is high. Where does that leave beneficial cargo owners (BCOs) in deciding which tactics to adopt? Frankly, for the foreseeable future, you will need to choose your poison. The somewhat binary options of manufacturing and storing at origin have appeal, particularly if the <a href="https://www.joc.com/article/air-cargo-volumes-fall-on-trans-pacific-as-us-de-minimis-changes-loom-5993599">removal of de minimis</a> has a projected impact of freeing up air freight space, allowing cheaper (but not cheap) delivery for urgent orders. Alternatively, having the right stocks in place at the right time will do much for customer relations and, intuitively, result in less likelihood of discounting. The downside will be increased costs that will depend on the cost of the tariff versus your sale price. This will mean you either absorb the increase, thus reducing margins and profitability, or try to pass it on to consumers. The final kicker to this issue is consumer demand. With quite consistent indicators from many sources — Goldman Sachs, the International Monetary Fund, the University of Michigan and others— indicating at best a slowdown in all economies, the likelihood of stagflation emerging in the US, or at best/worst the return of inflation, is actually your greatest risk. Because if consumers truly defer consumption expecting lower prices through price reduction and/or discounting to stimulate demand (stagflation), or cannot afford to spend or increase credit card debt (inflation), then these two factors will cause greater headaches than your deliberations on supply planning. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>.</div>

This commentary is not specifically about tariffs, or about capacity shortages or surpluses or what to expect if your shipment happens to be transferred to a Chinese vessel or service — whatever that means today. Instead, it considers a related question: How do supply chain practitioners balance demand and supply planning in the current environment of uncertainty? To start, let’s assume you are a medium-size importer into the US from any Asian country subject to tariffs nominally above 20%. At this stage, you have called on the more recent lessons from the first term of Donald Trump and from the COVID-19 pandemic. These will include, but are not limited to, some form of cost-sharing of the increase, somewhere between you absorbing it all to the supplier wearing the whole lot. If you are buying in US dollars, then your supplier is already suffering and will have less room to maneuver. To counter this, a temporary option could be to switch to buying in your supplier’s local currency. This will have some appeal to your supplier as they are possibly overweight in the dollar and have actual costs in local currency. A lot will depend on your view of the trajectory of the dollar. However, two notes of caution: You will still have transaction costs when converting from the US dollar to the local currency, and depending on the country you source from, you may face capital controls if you need to get money back. Furthermore, changing back and forth in currencies has administrative risks with potential payment delays and errors. No doubt there will be a suggestion of suppliers providing lower-than-correct value invoices and some form of offline reconciliation. But doing the right thing in the face of malevolence has its longer-term reward. And besides, the penalties do not merit the risk. ‘Roulette game’ You will have reduced your destination-side inventory to the degree of ensuring safety stocks. If you managed to get ahead of the tariff increases, you will be sitting on volume that requires warehousing. But as you have avoided tariffs to some degree, this will maintain your competitiveness — despite the increased warehousing and inventory working capital cost — assuming your competitors source from outside the US However, the new environment has significantly increased challenges. First, the rate at which tariff levels are changing makes supply planning a roulette game. This is primarily due to the arbitrary nature of their implementation, unlike previous changes that gave some degree of leeway for orders already in process and/or on the water. Equally challenging is the rollercoaster nature of the degree of tariff moves both up and down. Finally, the tactical response to avoid Chinese-built, -owned, and -operated ships will be a nightmare for all logisticians. This is particularly important because carrier and vessel choice is largely transactional at an operational level based on guidance from sourcing, so the likelihood of an error costing thousands is high. Where does that leave beneficial cargo owners (BCOs) in deciding which tactics to adopt? Frankly, for the foreseeable future, you will need to choose your poison. The somewhat binary options of manufacturing and storing at origin have appeal, particularly if the removal of de minimis has a projected impact of freeing up air freight space, allowing cheaper (but not cheap) delivery for urgent orders. Alternatively, having the right stocks in place at the right time will do much for customer relations and, intuitively, result in less likelihood of discounting. The downside will be increased costs that will depend on the cost of the tariff versus your sale price. This will mean you either absorb the increase, thus reducing margins and profitability, or try to pass it on to consumers. The final kicker to this issue is consumer demand. With quite consistent indicators from many sources — Goldman Sachs, the International Monetary Fund, the University of Michigan and others— indicating at best a slowdown in all economies, the likelihood of stagflation emerging in the US, or at best/worst the return of inflation, is actually your greatest risk. Because if consumers truly defer consumption expecting lower prices through price reduction and/or discounting to stimulate demand (stagflation), or cannot afford to spend or increase credit card debt (inflation), then these two factors will cause greater headaches than your deliberations on supply planning. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Supply chain

Navigating the current supply chain is a matter of choosing your poison

<div class="phx-topic abstract-wrapper">The continued growth of the San Pedro Bay ports — and the inter-related rail and logistics systems — are vital to a healthy US supply chain, writes the CEO of the Alameda Corridor Transportation Authority.</div>

The continued growth of the San Pedro Bay ports — and the inter-related rail and logistics systems — are vital to a healthy US supply chain, writes the CEO of the Alameda Corridor Transportation Authority.

<div class="phx-topic">The first-quarter surge of cargo flowing into West Coast ports has prompted a key realization — the rail system serving the massive number of exports and imports that come through Southern California has expanded and modernized enough to keep current supply chains functioning, at least for now. The ports of Long Beach and Los Angeles, known as the San Pedro Bay (SPB) Ports, have invested $10 billion, including $4 billion on port rail, and have expanded their infrastructure to support intermodal cargo with efficient connectivity to the US heartland. A vital component of this effort is the Alameda Corridor — a $2 billion investment by SPB Ports to mitigate the impact on local communities and improve the efficiency of rail operations. Import volumes at SPB Ports have grown 3% annually since 2000, doubling volumes over 24 years. During that same period, rail volumes increased 2.5% annually, such that in 2024, rail handled 60% of SPB imports (28% on-dock, 32% off-dock). That rail volume is greater than the total at any other US port — a significant component of the supply chain. In 2024, we saw that SPB handled record cargo and ships were processed without delay. Throughout the 2024 surge, SPB proved itself to be a reliable gateway with available capacity and minimal risk. Rail dwell times at SPB Port terminals were carefully monitored and managed, peaking for two months at a nine-day average. And the ports’ commitment is not waning. To handle forecast cargo demand, they are investing $2.5 billion more in moving cargo efficiently by rail, including the Pier B On-dock Rail Support Facility and several on-dock modernization projects. Despite a looming tariff-related downturn, now is not the time to delay investments. Past downturns, such as the 2009 global recession, seemed insurmountable at the time. But long-term and consistent investments proved prudent as evidenced by the uninterrupted flow of cargo from the recent surge in shipments. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b2536aba-789d-42cd-9870-4ede2743577b"></dynamic-object></div>The ports’ intermodal rail improvements, totaling $3 billion, initiated on-dock rail and expanded infrastructure to support intermodal cargo with efficient connectivity inland. The Alameda Corridor was built to handle volumes forecast to double in the next 20 to 30 years. Western railroads have made comparable investments in the transcontinental railway, and they are enhancing the supply chain with a much broader network of intermodal distribution points west of the Mississippi River. These advances, when combined with enhanced logistics technology, aimed to reduce cargo dwell times and improve transcontinental shipping time. Upcoming investment in the SPB rail system includes $2.5 billion in programmed projects, which encompass the lessons learned over several decades of port rail operations and intensive performance evaluation. The SPB gateway incorporates several intermodal components: the on-dock rail yards, support rail yards and the rail network connecting those yards, which are the focus of a continuous rail enhancement program; the investments by Union Pacific and BNSF on their transcontinental railways; and the development of new multi-modal logistics centers serving as western distribution hubs, including BNSF Railway’s Barstow International Gateway and other projects in California, Arizona, Utah, Colorado, New Mexico and Texas. The speed and efficiency of cargo movement remains the number one priority for all interested parties. The continued growth of SPB — and the inter-related rail and logistics systems — are vital to a healthy US supply chain. We cannot be lulled by disruptions that may result in a temporary reduction in flow. Continued investments in intermodal rail are vital to a healthy supply chain. Contact Michael Leue at <a href="mailto:PR@ACTA.org">PR@ACTA.org</a>.</div>

The first-quarter surge of cargo flowing into West Coast ports has prompted a key realization — the rail system serving the massive number of exports and imports that come through Southern California has expanded and modernized enough to keep current supply chains functioning, at least for now. The ports of Long Beach and Los Angeles, known as the San Pedro Bay (SPB) Ports, have invested $10 billion, including $4 billion on port rail, and have expanded their infrastructure to support intermodal cargo with efficient connectivity to the US heartland. A vital component of this effort is the Alameda Corridor — a $2 billion investment by SPB Ports to mitigate the impact on local communities and improve the efficiency of rail operations. Import volumes at SPB Ports have grown 3% annually since 2000, doubling volumes over 24 years. During that same period, rail volumes increased 2.5% annually, such that in 2024, rail handled 60% of SPB imports (28% on-dock, 32% off-dock). That rail volume is greater than the total at any other US port — a significant component of the supply chain. In 2024, we saw that SPB handled record cargo and ships were processed without delay. Throughout the 2024 surge, SPB proved itself to be a reliable gateway with available capacity and minimal risk. Rail dwell times at SPB Port terminals were carefully monitored and managed, peaking for two months at a nine-day average. And the ports’ commitment is not waning. To handle forecast cargo demand, they are investing $2.5 billion more in moving cargo efficiently by rail, including the Pier B On-dock Rail Support Facility and several on-dock modernization projects. Despite a looming tariff-related downturn, now is not the time to delay investments. Past downturns, such as the 2009 global recession, seemed insurmountable at the time. But long-term and consistent investments proved prudent as evidenced by the uninterrupted flow of cargo from the recent surge in shipments. The ports’ intermodal rail improvements, totaling $3 billion, initiated on-dock rail and expanded infrastructure to support intermodal cargo with efficient connectivity inland. The Alameda Corridor was built to handle volumes forecast to double in the next 20 to 30 years. Western railroads have made comparable investments in the transcontinental railway, and they are enhancing the supply chain with a much broader network of intermodal distribution points west of the Mississippi River. These advances, when combined with enhanced logistics technology, aimed to reduce cargo dwell times and improve transcontinental shipping time. Upcoming investment in the SPB rail system includes $2.5 billion in programmed projects, which encompass the lessons learned over several decades of port rail operations and intensive performance evaluation. The SPB gateway incorporates several intermodal components: the on-dock rail yards, support rail yards and the rail network connecting those yards, which are the focus of a continuous rail enhancement program; the investments by Union Pacific and BNSF on their transcontinental railways; and the development of new multi-modal logistics centers serving as western distribution hubs, including BNSF Railway’s Barstow International Gateway and other projects in California, Arizona, Utah, Colorado, New Mexico and Texas. The speed and efficiency of cargo movement remains the number one priority for all interested parties. The continued growth of SPB — and the inter-related rail and logistics systems — are vital to a healthy US supply chain. We cannot be lulled by disruptions that may result in a temporary reduction in flow. Continued investments in intermodal rail are vital to a healthy supply chain. Contact Michael Leue at PR@ACTA.org .

Continued rail investment needed to keep boosting LA-LB port growth

GEP and S&P Global produce this index from S&P Global’s purchasing managers’ index (PMI) surveys. The variables are the JP Morgan Global Quantity of Purchases Index, the All Items Supply Shortages Indicator, the Transport Price Pressure Indicator and Manufacturing PMI Comments Tracker data, stockpiling levels due to supply or price concerns and backlog activity due to staff and item shortages. [GEP](https://www.gep.com/knowledge-bank/global-supply-chain-volatility-index)

GEP Global Supply Chain Volatility Index (GEP and S&P Global)

GEP Global Supply Chain Volatility Index Gateway

<div class="phx-topic abstract-wrapper">The Los Angeles-Long Beach complex, which handles about half of all US imports from Asia, is so far due to experience 59 blanked sailings between May 1 and June 30.</div>

The Los Angeles-Long Beach complex, which handles about half of all US imports from Asia, is so far due to experience 59 blanked sailings between May 1 and June 30.

<div class="phx-topic">Correction: A previous version of this story attributed blank sailings for the Northwest Seaport Alliance to the Port of Prince Rupert, British Columbia.Ports and marine terminals along the US West Coast are bracing for what could be a massive drop in imports moving across their docks in the coming weeks as the tangible impacts of blank sailings and half-empty container ships arriving from China become apparent. The effects of the US trade war with Beijing will be most visible in Southern California, where stakeholders at the ports of Los Angeles and Long Beach — the US’ busiest gateway — expect a huge cut in imports in May, with a 35% decline in Los Angeles and 38% in Long Beach compared with their normal monthly volumes. “Leading indicators forecast a significant dip in container ship arrivals in the next one to two weeks,” Kip Louttit, executive director of the Marine Exchange of Southern California, said. The Los Angeles-Long Beach complex, which handles about half of all US imports from Asia, is so far due to experience 59 blanked, or canceled, sailings between May 1 and June 30, according to both ports. That number, which could rise, means that about 65,000 to 71,000 TEUs of imports won’t be landing in Southern California each week for the next few weeks. A spokesperson for the Port of Los Angeles said 17 blank sailings are scheduled for May and 12 for June. Long Beach is scheduled to have 13 blanked sailings in May and 17 in June, according to Noel Hacegaba, the port’s chief operating officer. The impact of the blanked sailings will vary from terminal to terminal depending on the lines that call there and the origin of the imports, said Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles. “We’re all experiencing it to some degree,” he said. “We expect a couple of blanks in May.” When cargo volumes drop precipitously, terminal operators generally reduce their gate hours, McCorkle said. “We’ll close two or three gates a week to right-size our operation.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1c1d9578-c129-4d4e-a136-e220473bd136"></dynamic-object></div>While dockworkers won’t face lower pay or job cuts given their contract protections, the International Longshore and Warehouse Union (ILWU) nonetheless savaged the Trump administration this week for implementing the tariffs and for the trade dispute they ignited with China. “Tariffs are taxes. These and other reckless, shortsighted policies have begun to devastate American workers, harm critical sectors of the economy, and line the pockets of the ultra-wealthy at the expense of hardworking families,” the union said in a statement. “Hundreds of thousands of jobs are dependent on or connected to global trade,” the ILWU added. “Constricted trade between the world’s two largest economies could lead to devastating job losses for workers employed in the global supply chain.” <h3>Imports to drop in Oakland and NWSA </h3>Further up the West Coast, the Port of Oakland likewise anticipates a drop in vessel calls and import volumes over the next two months. “In recent weeks, vessel service reductions have increased,” a port spokesperson said. “Between April and June, 39 blank sailings have been announced across multiple shipping alliances calling Oakland. These reductions tighten available vessel capacity for both imports and exports.” A spokesperson for the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma said carriers are scheduled to blank 17 sailings to the port complex in May and June, five more than in the same period last year. And although import volumes through the NWSA have soared 22.4% year over year through March, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global, that appears to be changing. “We are seeing some vessels coming in with less cargo than anticipated, and we are hearing from exporters and importers directly on canceled orders, especially with China,” the spokesperson said. “These impacts are real and will likely be reflected in our data in the coming months.” China accounts for 51% of NWSA imports and 40% of the complex’s total trade, the spokesperson noted. <h3>Vancouver unaffected </h3>The Port of Vancouver does not anticipate a drop in import volumes due to the US tariffs on imports from China, said Rosanna Lau, manager of trade development at the Vancouver-Fraser Port Authority. “Our forecasts for the coming weeks indicate that container volumes at the Port of Vancouver will remain consistent with seasonal norms,” Lau said. “It is worth noting that the overwhelming majority of container traffic moving through the port is Canadian trade and not directly affected by US tariffs.”Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Correction: A previous version of this story attributed blank sailings for the Northwest Seaport Alliance to the Port of Prince Rupert, British Columbia. Ports and marine terminals along the US West Coast are bracing for what could be a massive drop in imports moving across their docks in the coming weeks as the tangible impacts of blank sailings and half-empty container ships arriving from China become apparent. The effects of the US trade war with Beijing will be most visible in Southern California, where stakeholders at the ports of Los Angeles and Long Beach — the US’ busiest gateway — expect a huge cut in imports in May, with a 35% decline in Los Angeles and 38% in Long Beach compared with their normal monthly volumes. “Leading indicators forecast a significant dip in container ship arrivals in the next one to two weeks,” Kip Louttit, executive director of the Marine Exchange of Southern California, said. The Los Angeles-Long Beach complex, which handles about half of all US imports from Asia, is so far due to experience 59 blanked, or canceled, sailings between May 1 and June 30, according to both ports. That number, which could rise, means that about 65,000 to 71,000 TEUs of imports won’t be landing in Southern California each week for the next few weeks. A spokesperson for the Port of Los Angeles said 17 blank sailings are scheduled for May and 12 for June. Long Beach is scheduled to have 13 blanked sailings in May and 17 in June, according to Noel Hacegaba, the port’s chief operating officer. The impact of the blanked sailings will vary from terminal to terminal depending on the lines that call there and the origin of the imports, said Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles. “We’re all experiencing it to some degree,” he said. “We expect a couple of blanks in May.” When cargo volumes drop precipitously, terminal operators generally reduce their gate hours, McCorkle said. “We’ll close two or three gates a week to right-size our operation.” While dockworkers won’t face lower pay or job cuts given their contract protections, the International Longshore and Warehouse Union (ILWU) nonetheless savaged the Trump administration this week for implementing the tariffs and for the trade dispute they ignited with China. “Tariffs are taxes. These and other reckless, shortsighted policies have begun to devastate American workers, harm critical sectors of the economy, and line the pockets of the ultra-wealthy at the expense of hardworking families,” the union said in a statement. “Hundreds of thousands of jobs are dependent on or connected to global trade,” the ILWU added. “Constricted trade between the world’s two largest economies could lead to devastating job losses for workers employed in the global supply chain.” Imports to drop in Oakland and NWSA Further up the West Coast, the Port of Oakland likewise anticipates a drop in vessel calls and import volumes over the next two months. “In recent weeks, vessel service reductions have increased,” a port spokesperson said. “Between April and June, 39 blank sailings have been announced across multiple shipping alliances calling Oakland. These reductions tighten available vessel capacity for both imports and exports.” A spokesperson for the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma said carriers are scheduled to blank 17 sailings to the port complex in May and June, five more than in the same period last year. And although import volumes through the NWSA have soared 22.4% year over year through March, according to PIERS, a sister product of the Journal of Commerce within S&P Global, that appears to be changing. “We are seeing some vessels coming in with less cargo than anticipated, and we are hearing from exporters and importers directly on canceled orders, especially with China,” the spokesperson said. “These impacts are real and will likely be reflected in our data in the coming months.” China accounts for 51% of NWSA imports and 40% of the complex’s total trade, the spokesperson noted. Vancouver unaffected The Port of Vancouver does not anticipate a drop in import volumes due to the US tariffs on imports from China, said Rosanna Lau, manager of trade development at the Vancouver-Fraser Port Authority. “Our forecasts for the coming weeks indicate that container volumes at the Port of Vancouver will remain consistent with seasonal norms,” Lau said. “It is worth noting that the overwhelming majority of container traffic moving through the port is Canadian trade and not directly affected by US tariffs.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Transport, Trade and Regulation News

Uneasy West Coast ports watch as first signs of trade dispute with China emerge

<div class="phx-topic abstract-wrapper">A range of factors including full yards, labor unrest and carrier network changes are making it difficult for the hubs to clear container bottlenecks.</div>

A range of factors including full yards, labor unrest and carrier network changes are making it difficult for the hubs to clear container bottlenecks.

<div class="phx-topic">North Europe’s largest port gateways are continuing to struggle with persistent congestion that has delayed vessels and hampered container operations at the hubs for months. Full container yards, labor unrest, staff shortages and changing carrier alliance networks are among the challenges being piled on top of a steady inbound volume from Asia. “This is systemic by nature and will resurface on a regular basis,” Scan Global Logistics said in a market update this week. The Denmark-based forwarder also noted that the launch of the Gemini Cooperation between Hapag-Lloyd and Maersk “complicates efforts to sustain operational efficiency while the new rotations are phased in.” Kuehne + Nagel’s SeaExplorer visibility platform warned that “heavily disrupted operations” were being experienced at Antwerp, Rotterdam, Hamburg and London Gateway. A national strike in Belgium on April 29, the fourth strike in the country within the past few months, shut down the Port of Antwerp for the day as workers from the private and public sectors protested recent budget cuts made by the federal government. There were 19 vessels waiting to depart from Antwerp on Thursday and 20 waiting to enter the port. SeaExplorer noted that already congested yards there have seen a seven-day average vessel waiting time of about 2.19 days; Scan Global put the seven-day waiting time in Antwerp as high as seven days. <h3>Low-water advisory hampers inland shipping </h3>Labor shortages at Rotterdam because of national holidays are impacting container operations at the port, according to SeaExplorer, with vessels waiting for more than a day to berth. Intermodal operator Contargo told customers in an advisory Wednesday that average waiting times for the handling of barges were 71 hours in Rotterdam and 101 hours in Antwerp. A low-water advisory is also in place on the Rhine River, limiting the volume that can be carried by barges on Europe’s largest inland waterway connecting the industrial heartland of southern Germany to Rotterdam and Antwerp. Container delivery restrictions were imposed by Hamburg’s main terminal operator HHLA in April to tackle yard congestion. Vessel waiting times at Hamburg are currently up to five days, according to Scan Global. On top of ships being delayed in Hamburg, rail shipments are taking up to 10 hours to process and disrupting all terminals in the port. Intermodal logistics operator Metrans said trains to the German ports of Bremerhaven and Wilhelmshaven were experiencing long delays due to unplanned line closures around Hannover following a landslide in the area. Detour routes were up to 200 kilometers long and battling with overcapacity that was stopping trains and blocking traffic to and from Rotterdam and the inland rail hub of Duisburg. The disrupted train circulation was also having a major impact on service to and from Hamburg. In France, the Port of Le Havre is struggling to catch up with container backlogs following several strikes held in April, while the UK ports of Felixstowe and Southampton are also experiencing lengthy vessel delays. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

North Europe’s largest port gateways are continuing to struggle with persistent congestion that has delayed vessels and hampered container operations at the hubs for months. Full container yards, labor unrest, staff shortages and changing carrier alliance networks are among the challenges being piled on top of a steady inbound volume from Asia. “This is systemic by nature and will resurface on a regular basis,” Scan Global Logistics said in a market update this week. The Denmark-based forwarder also noted that the launch of the Gemini Cooperation between Hapag-Lloyd and Maersk “complicates efforts to sustain operational efficiency while the new rotations are phased in.” Kuehne + Nagel’s SeaExplorer visibility platform warned that “heavily disrupted operations” were being experienced at Antwerp, Rotterdam, Hamburg and London Gateway. A national strike in Belgium on April 29, the fourth strike in the country within the past few months, shut down the Port of Antwerp for the day as workers from the private and public sectors protested recent budget cuts made by the federal government. There were 19 vessels waiting to depart from Antwerp on Thursday and 20 waiting to enter the port. SeaExplorer noted that already congested yards there have seen a seven-day average vessel waiting time of about 2.19 days; Scan Global put the seven-day waiting time in Antwerp as high as seven days. Low-water advisory hampers inland shipping Labor shortages at Rotterdam because of national holidays are impacting container operations at the port, according to SeaExplorer, with vessels waiting for more than a day to berth. Intermodal operator Contargo told customers in an advisory Wednesday that average waiting times for the handling of barges were 71 hours in Rotterdam and 101 hours in Antwerp. A low-water advisory is also in place on the Rhine River, limiting the volume that can be carried by barges on Europe’s largest inland waterway connecting the industrial heartland of southern Germany to Rotterdam and Antwerp. Container delivery restrictions were imposed by Hamburg’s main terminal operator HHLA in April to tackle yard congestion. Vessel waiting times at Hamburg are currently up to five days, according to Scan Global. On top of ships being delayed in Hamburg, rail shipments are taking up to 10 hours to process and disrupting all terminals in the port. Intermodal logistics operator Metrans said trains to the German ports of Bremerhaven and Wilhelmshaven were experiencing long delays due to unplanned line closures around Hannover following a landslide in the area. Detour routes were up to 200 kilometers long and battling with overcapacity that was stopping trains and blocking traffic to and from Rotterdam and the inland rail hub of Duisburg. The disrupted train circulation was also having a major impact on service to and from Hamburg. In France, the Port of Le Havre is struggling to catch up with container backlogs following several strikes held in April, while the UK ports of Felixstowe and Southampton are also experiencing lengthy vessel delays. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

International ports

No end to the congestion choking gateway ports in North Europe

<div class="phx-topic abstract-wrapper">US ports and support infrastructure such as warehouses and rail connections aren’t better equipped to handle import surges than they were during the pandemic when record volumes drove congestion to historic highs, carrier executives said this week.</div>

US ports and support infrastructure such as warehouses and rail connections aren’t better equipped to handle import surges than they were during the pandemic when record volumes drove congestion to historic highs, carrier executives said this week.

<div class="phx-topic">Container line executives warn that the inevitable rebound in Asian imports that will come at some point after the expected plunge in volumes linked to US tariffs may overwhelm major US ports because the supporting systems aren’t significantly better prepared than they were during the pandemic. The timing and scale of the rebound isn’t yet known. But import volumes from Asia are expected to recover eventually either because tariffs are eased or cargo owners ultimately decide there is no relief coming and eat the higher costs due to a need to replenish inventories. “Regardless of whether the demand will go up two times or come back to a level of about eight weeks ago, the system is not fundamentally better than it was five years ago,” Charles van der Steene, president of Maersk North America, said at the Georgia International Trade Conference this week. “Right now ... volumes are down [30%-40%] and if that goes up, the sheer surge will test the system and disruption cannot be avoided.” Similar to during the pandemic, the sharpest limits to capacity during an import surge will be less at the marine terminals and more outside the truck gates. There, importers and consignees could face limited availability of warehousing and chassis, while a rush of international intermodal could sap rail car supply, carrier executives told the conference. “If our terminals start working at 70%, 80%, 90% capacity and beyond on a regular basis for weeks, the system will crumble,” said Fabio Santucci, president of US operations for Mediterranean Shipping Co. Santucci added that if import dwell times at marine terminals exceed 10 days, ports can’t dig out of backlogs. <h3>‘Uncertainty’ the key word </h3>Stuart Sandlin, Hapag-Lloyd’s North America president, fears a rise in abandoned containers as some US exporters walk away from Chinese contracts due to 125% retaliatory Chinese tariffs on low-value US commodities. Even more alarming would be if US importers begin to abandon higher-value cargo, something he said would signal a potential wave of bankruptcies. Some smaller US importers are already struggling with backing a larger surety bond thanks to higher US tariff costs. <a href="https://www.joc.com/article/trans-pacific-capacity-cuts-accelerating-amid-sharp-reduction-in-chinese-cargo-5992769">Estimates of the plunge in China bookings from carriers and forwarders range from 30% to up to 50%</a>. The resumption of shipping last week from China by Walmart, Target and other big box retailers after they paused US shipments earlier in the month suggests a rebound is already building, executives at two major carriers told the Journal of Commerce. “I think the key word is ‘uncertainty,’” Santucci told the conference. “Sixty to 70% of customers are reevaluating shipment out of China. They’re either pausing [or] they’ve asked for shipments to be brought back to China.” He said customers are requesting changes to import and inland delivery destinations while containers “are on the water,” adding there’s been a spike in requests to hold shipments at transshipment ports before being loaded onto US-bound vessels. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Container line executives warn that the inevitable rebound in Asian imports that will come at some point after the expected plunge in volumes linked to US tariffs may overwhelm major US ports because the supporting systems aren’t significantly better prepared than they were during the pandemic. The timing and scale of the rebound isn’t yet known. But import volumes from Asia are expected to recover eventually either because tariffs are eased or cargo owners ultimately decide there is no relief coming and eat the higher costs due to a need to replenish inventories. “Regardless of whether the demand will go up two times or come back to a level of about eight weeks ago, the system is not fundamentally better than it was five years ago,” Charles van der Steene, president of Maersk North America, said at the Georgia International Trade Conference this week. “Right now ... volumes are down [30%-40%] and if that goes up, the sheer surge will test the system and disruption cannot be avoided.” Similar to during the pandemic, the sharpest limits to capacity during an import surge will be less at the marine terminals and more outside the truck gates. There, importers and consignees could face limited availability of warehousing and chassis, while a rush of international intermodal could sap rail car supply, carrier executives told the conference. “If our terminals start working at 70%, 80%, 90% capacity and beyond on a regular basis for weeks, the system will crumble,” said Fabio Santucci, president of US operations for Mediterranean Shipping Co. Santucci added that if import dwell times at marine terminals exceed 10 days, ports can’t dig out of backlogs. ‘Uncertainty’ the key word Stuart Sandlin, Hapag-Lloyd’s North America president, fears a rise in abandoned containers as some US exporters walk away from Chinese contracts due to 125% retaliatory Chinese tariffs on low-value US commodities. Even more alarming would be if US importers begin to abandon higher-value cargo, something he said would signal a potential wave of bankruptcies. Some smaller US importers are already struggling with backing a larger surety bond thanks to higher US tariff costs. Estimates of the plunge in China bookings from carriers and forwarders range from 30% to up to 50% . The resumption of shipping last week from China by Walmart, Target and other big box retailers after they paused US shipments earlier in the month suggests a rebound is already building, executives at two major carriers told the Journal of Commerce. “I think the key word is ‘uncertainty,’” Santucci told the conference. “Sixty to 70% of customers are reevaluating shipment out of China. They’re either pausing [or] they’ve asked for shipments to be brought back to China.” He said customers are requesting changes to import and inland delivery destinations while containers “are on the water,” adding there’s been a spike in requests to hold shipments at transshipment ports before being loaded onto US-bound vessels. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container lines warn of congestion threat when Asia imports rebound

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

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Shippers save money, time with automated transportation bidding tools

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

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<div class="phx-topic abstract-wrapper">With a “reintroduced” ground freight shipping option, UPS hopes to tempt LTL shippers seeking alternatives to LTL rates that are up 12% on average from mid-2023. </div>

With a “reintroduced” ground freight shipping option, UPS hopes to tempt LTL shippers seeking alternatives to LTL rates that are up 12% on average from mid-2023.

<div class="phx-topic">UPS no longer owns a less-than-truckload (LTL) subsidiary, but that doesn’t mean it’s lost all interest in LTL freight. The largest US package carrier has “reintroduced” UPS Ground with Freight Pricing, a service option that targets shipments weighing more than 150 pounds typically hauled by LTL carriers as part of a palletized shipment. “This positions us to be the only small package carrier that offers parcel-like pricing for less-than-truckload shipments, which is a true differentiator,” Carol B. Tomé, UPS CEO, said in a first-quarter earnings call last Tuesday. UPS’ major small package competitor, FedEx, owns its own LTL carrier, although it plans to spin off FedEx Freight in 2026. The service is being revived by UPS at a time when LTL shipping costs are rising, with the US long-distance LTL producer price index (PPI) up 5.5% year over year in March and 6% on average in the first quarter. Overall, the selling prices the PPI represents have climbed 12.1% since Yellow, once one of the largest LTL carriers, collapsed in July 2023. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="397d0614-9019-449a-8ca0-64a882efbfbf"></dynamic-object></div>As LTL prices rise, shippers show more interest in alternative modes and shipping options. “We see customers choosing other options in certain instances when we’re taking rate increases,” Matthew J. Batteh, CFO of LTL carrier Saia, said in an earnings call last week. “Customers always challenge the pricing increases that we propose.” With excess truckload capacity available and truckload rates still climbing out of the trough they entered in 2023, some shippers have tried to consolidate LTL shipments into truckloads. But parcel and package shippers have long vied for LTL freight through hundredweight programs and other options similar to ground freight pricing. “They’re bringing back LPL or less-than-pallet load, which they used to have before they bought the LTL business [UPS Freight, sold in 2021],” said Satish Jindel, president of research firm SJ Consulting Group, which covers both LTL and parcel business. “They’re looking for shipments that are higher revenue per parcel.” UPS believes it can move those shipments at a better rate for shippers than an LTL carrier. Boxes, shrink-wrapped together on a pallet, are at the core of LTL volumes, Jindel said. “Shipments under 250 pounds represent 25% of total LTL volumes, and under 500 pounds 45% of the total. Those shipments could be sitting ducks for UPS, depending on how they go after them. They don’t want the pallets, just the nice brown boxes.” UPS sold UPS Freight, now TForce Freight, to <a href="https://www.joc.com/article/ups-freight-sold-to-canadas-tfi-for-800-million-5250895">TFI International for $800 million</a>. Under the 2021 sale agreement, TFI agreed to continue to utilize UPS’ domestic package network to fulfill shipments for five years. <h3>UPS, Amazon shifting freight </h3>UPS is also looking to bolster US domestic package volume, which fell 3.5% year over year in the first quarter. Ground package volume dropped 2.5% in the quarter, while volumes moving through its deferred service fell 17.3% from a year ago. That countered a 7.1% increase in international package volume, pulling UPS’ total volume down 1.9%. Some of the decline came from UPS’ reduced reliance on Amazon, which UPS calls a “glide-down” in volume. The company said it would close 73 facilities and <a href="https://www.reuters.com/markets/us/ups-reports-fall-first-quarter-revenue-2025-04-29/">cut 20,000 jobs</a> as part of that reduction. UPS plans to reduce its Amazon volume by 50% by 2026, largely by dropping unprofitable shipments from Amazon fulfillment centers. “The Amazon volume we plan to keep is profitable and it is healthy volume,” Tomé said. UPS first announced the revival of the ground freight pricing offering in early April, alongside UPS Ground Saver, a business-to-consumer shipping option that offers a slower, economy version of UPS ground package service for less urgent packages. Coincidentally, the announcement came the same day Amazon launched its foray <a href="https://www.joc.com/article/amazon-ltl-offering-is-no-threat-to-standalone-carriers-odfl-5990215">into the LTL business</a>. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. Journal of Commerce Research Analyst Cathy Morrow Roberson contributed to this report. </div>

UPS no longer owns a less-than-truckload (LTL) subsidiary, but that doesn’t mean it’s lost all interest in LTL freight. The largest US package carrier has “reintroduced” UPS Ground with Freight Pricing, a service option that targets shipments weighing more than 150 pounds typically hauled by LTL carriers as part of a palletized shipment. “This positions us to be the only small package carrier that offers parcel-like pricing for less-than-truckload shipments, which is a true differentiator,” Carol B. Tomé, UPS CEO, said in a first-quarter earnings call last Tuesday. UPS’ major small package competitor, FedEx, owns its own LTL carrier, although it plans to spin off FedEx Freight in 2026. The service is being revived by UPS at a time when LTL shipping costs are rising, with the US long-distance LTL producer price index (PPI) up 5.5% year over year in March and 6% on average in the first quarter. Overall, the selling prices the PPI represents have climbed 12.1% since Yellow, once one of the largest LTL carriers, collapsed in July 2023. As LTL prices rise, shippers show more interest in alternative modes and shipping options. “We see customers choosing other options in certain instances when we’re taking rate increases,” Matthew J. Batteh, CFO of LTL carrier Saia, said in an earnings call last week. “Customers always challenge the pricing increases that we propose.” With excess truckload capacity available and truckload rates still climbing out of the trough they entered in 2023, some shippers have tried to consolidate LTL shipments into truckloads. But parcel and package shippers have long vied for LTL freight through hundredweight programs and other options similar to ground freight pricing. “They’re bringing back LPL or less-than-pallet load, which they used to have before they bought the LTL business [UPS Freight, sold in 2021],” said Satish Jindel, president of research firm SJ Consulting Group, which covers both LTL and parcel business. “They’re looking for shipments that are higher revenue per parcel.” UPS believes it can move those shipments at a better rate for shippers than an LTL carrier. Boxes, shrink-wrapped together on a pallet, are at the core of LTL volumes, Jindel said. “Shipments under 250 pounds represent 25% of total LTL volumes, and under 500 pounds 45% of the total. Those shipments could be sitting ducks for UPS, depending on how they go after them. They don’t want the pallets, just the nice brown boxes.” UPS sold UPS Freight, now TForce Freight, to TFI International for $800 million . Under the 2021 sale agreement, TFI agreed to continue to utilize UPS’ domestic package network to fulfill shipments for five years. UPS, Amazon shifting freight UPS is also looking to bolster US domestic package volume, which fell 3.5% year over year in the first quarter. Ground package volume dropped 2.5% in the quarter, while volumes moving through its deferred service fell 17.3% from a year ago. That countered a 7.1% increase in international package volume, pulling UPS’ total volume down 1.9%. Some of the decline came from UPS’ reduced reliance on Amazon, which UPS calls a “glide-down” in volume. The company said it would close 73 facilities and cut 20,000 jobs as part of that reduction. UPS plans to reduce its Amazon volume by 50% by 2026, largely by dropping unprofitable shipments from Amazon fulfillment centers. “The Amazon volume we plan to keep is profitable and it is healthy volume,” Tomé said. UPS first announced the revival of the ground freight pricing offering in early April, alongside UPS Ground Saver, a business-to-consumer shipping option that offers a slower, economy version of UPS ground package service for less urgent packages. Coincidentally, the announcement came the same day Amazon launched its foray into the LTL business . Contact William B. Cassidy at bill.cassidy@spglobal.com . Journal of Commerce Research Analyst Cathy Morrow Roberson contributed to this report.

UPS seeks reentry into LTL space as LTL costs climb higher

<div class="phx-topic abstract-wrapper">Insufficient volumes, including on the lane between the Port of Virginia and Memphis, have forced the railroad to reallocate resources to areas where it believes container business will grow in the future.</div>

Insufficient volumes, including on the lane between the Port of Virginia and Memphis, have forced the railroad to reallocate resources to areas where it believes container business will grow in the future.

<div class="phx-topic">Norfolk Southern Railway (NS) will eliminate international intermodal service on more than 20 routes along the US East Coast, including trains between the Port of Virginia and the key inland hub of Memphis, due to insufficient container volumes. The service changes will take effect May 31, according to a notice NS sent to customers that was obtained by the Journal of Commerce. The railroad did not make a formal public announcement but confirmed the details. “By reallocating those resources, we’re reinforcing our broader network to better serve our customers and to ensure we are investing in growth where it’s most impactful,” Norfolk Southern said in a statement to the Journal of Commerce. The railroad said the services could be restored if a business case arises. Among the affected lanes are two notable routes: the Port of Virginia to Memphis and Chicago to Jacksonville. Norfolk Southern launched trains from Virginia to Memphis with <a href="https://www.joc.com/article/new-ns-norfolk-memphis-service-aims-to-grab-east-coast-cargo-shift-5202715">much fanfare in March 2023</a>, but the service never caught on among ocean carriers or shippers who had other options via the ports of Charleston and Savannah. “While we initially saw some interest from the international community for Port of Virginia-Memphis service, the volume ultimately was not strong enough to support the service sustainably over the long term,” NS said. “Our commitment to supporting international trade through the Port of Virginia remains strong, and we continue to focus on providing reliable, high-quality service for the lanes where customers need it most.” The Virginia Port Authority did not respond to requests for comment. <h3>Onward business to Puerto Rico affected </h3>NS will also discontinue service between Chicago and Jacksonville, which will impact onward business to Puerto Rico. Each year, Norfolk Southern and CSX Transportation move an estimated 16,000 to 22,000 ocean containers between Chicago and Jacksonville, according to a Journal of Commerce analysis of data from the US Surface Transportation Board. While the lane was heavily utilized southbound into Florida, northbound demand remained limited. Jacksonville serves as the launching point for Jones Act services to Puerto Rico operated by Crowley Maritime, Tote Maritime and Trailer Bridge. “Ultimately, the low density of international volumes challenged our ability to provide the consistent and reliable service product that our customers expect,” NS said in its statement on the Chicago-Jacksonville service. “We have been in close communication with our ocean carrier partners to fully understand their needs and priorities. We’ve worked to ensure they have access to alternative service options that continue to support critical trade flows, including the important Puerto Rico market.” While Norfolk Southern will discontinue international trains, CSX will remain an option for shippers moving ocean boxes between Chicago and Jacksonville. NS will still operate domestic intermodal trains between the two cities for 53-foot containers or ocean boxes with local drayage arrangements from its Jacksonville terminal. The other lanes affected by the Norfolk Southern service changes handled minimal international container traffic. For example, international trains will no longer run between Atlanta and Chicago — a high-volume domestic intermodal route that is served by ports in Baltimore, New York-New Jersey and Virginia for ocean freight. NS will also terminate international service between the Port of Charleston and Huntsville, Alabama, although service will continue from Savannah. The railroad also plans to convert the Norfolk Portlock Yard exclusively for domestic intermodal operations, shifting a small amount of remaining international cargo back to on-dock facilities within the Port of Virginia. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Norfolk Southern Railway (NS) will eliminate international intermodal service on more than 20 routes along the US East Coast, including trains between the Port of Virginia and the key inland hub of Memphis, due to insufficient container volumes. The service changes will take effect May 31, according to a notice NS sent to customers that was obtained by the Journal of Commerce. The railroad did not make a formal public announcement but confirmed the details. “By reallocating those resources, we’re reinforcing our broader network to better serve our customers and to ensure we are investing in growth where it’s most impactful,” Norfolk Southern said in a statement to the Journal of Commerce. The railroad said the services could be restored if a business case arises. Among the affected lanes are two notable routes: the Port of Virginia to Memphis and Chicago to Jacksonville. Norfolk Southern launched trains from Virginia to Memphis with much fanfare in March 2023 , but the service never caught on among ocean carriers or shippers who had other options via the ports of Charleston and Savannah. “While we initially saw some interest from the international community for Port of Virginia-Memphis service, the volume ultimately was not strong enough to support the service sustainably over the long term,” NS said. “Our commitment to supporting international trade through the Port of Virginia remains strong, and we continue to focus on providing reliable, high-quality service for the lanes where customers need it most.” The Virginia Port Authority did not respond to requests for comment. Onward business to Puerto Rico affected NS will also discontinue service between Chicago and Jacksonville, which will impact onward business to Puerto Rico. Each year, Norfolk Southern and CSX Transportation move an estimated 16,000 to 22,000 ocean containers between Chicago and Jacksonville, according to a Journal of Commerce analysis of data from the US Surface Transportation Board. While the lane was heavily utilized southbound into Florida, northbound demand remained limited. Jacksonville serves as the launching point for Jones Act services to Puerto Rico operated by Crowley Maritime, Tote Maritime and Trailer Bridge. “Ultimately, the low density of international volumes challenged our ability to provide the consistent and reliable service product that our customers expect,” NS said in its statement on the Chicago-Jacksonville service. “We have been in close communication with our ocean carrier partners to fully understand their needs and priorities. We’ve worked to ensure they have access to alternative service options that continue to support critical trade flows, including the important Puerto Rico market.” While Norfolk Southern will discontinue international trains, CSX will remain an option for shippers moving ocean boxes between Chicago and Jacksonville. NS will still operate domestic intermodal trains between the two cities for 53-foot containers or ocean boxes with local drayage arrangements from its Jacksonville terminal. The other lanes affected by the Norfolk Southern service changes handled minimal international container traffic. For example, international trains will no longer run between Atlanta and Chicago — a high-volume domestic intermodal route that is served by ports in Baltimore, New York-New Jersey and Virginia for ocean freight. NS will also terminate international service between the Port of Charleston and Huntsville, Alabama, although service will continue from Savannah. The railroad also plans to convert the Norfolk Portlock Yard exclusively for domestic intermodal operations, shifting a small amount of remaining international cargo back to on-dock facilities within the Port of Virginia. Contact Ari Ashe at ari.ashe@spglobal.com .

Norfolk Southern to drop international intermodal service on many USEC lanes

<div class="phx-topic abstract-wrapper">National drayage providers experiencing a sharp decline in orders as US tariffs come into effect now warn that a second-half rebound could be just as disruptive. </div>

National drayage providers experiencing a sharp decline in orders as US tariffs come into effect now warn that a second-half rebound could be just as disruptive.

<div class="phx-topic">Drayage providers who handled the early 2025 surge of US-bound cargo booked ahead of US tariffs are now bracing for a significant drop in business that will begin in May and potentially last into the third quarter. They’re also girding for a disruptive import rebound once trade disputes abate. “What happens in the third quarter is going to be the big story,” said Paul Brashier, vice president of global supply chain for ITS Logistics, a Reno, Nevada-based third-party logistics provider offering over-the-road truckload and drayage services. Once US trade disputes with China and other trading partners are resolved, “there will be a wave of freight that will stress the system,” Brashier said. “We’re pretty much looking at a similar event as we saw with COVID in 2020. There will be pent-up demand.” Indeed, container shipping lines are already warning that a rebound in Asian imports following the expected plunge linked to the US-China trade dispute may <a href="https://www.joc.com/article/container-lines-warn-of-congestion-threat-when-asia-imports-rebound-5993793">overwhelm major US ports</a>. The biggest danger, they say, could be a lack of capacity outside port gates to handle a rapid acceleration in freight. That concern starts at drayage. “We’re warning customers to be very strategic with their dray partners,” said Ken Kellaway, CEO of RoadOne IntermodaLogistics, a nationwide drayage provider with headquarters near Boston. “If we lose drivers over the next 30 to 45 days, it will take weeks to get them back,” Kellaway said. “Shippers will be in trouble if we can’t preserve the capacity we have in the system today.” He said a freight “whiplash” could hit US ports as early as mid-June. <h3>Potential for a ‘reset’ </h3>US drayage capacity appears to be <a href="https://www.joc.com/article/shrinking-us-drayage-capacity-to-continue-outstripping-demand-5971095">slowly shrinking from a 2022 high</a>, with some of those losses attributed to the migration of owner-operators to the security of larger carriers. Still, excess drayage capacity persists, putting pressure on already-low rates. However, the Trump administration’s efforts to reshape global trade could reset the drayage market, especially if trade negotiations drag on without a resolution or a lowering of tariff rates that would encourage beneficial cargo owners (BCOs) to boost US imports. “The market’s been soft anyway, so a lot of small drayage companies are struggling with cash flow, taking any freight to keep going,” said Joel Henry, CEO of IMC Logistics, a nationwide drayage provider with headquarters near Memphis. “Now without the volume, they’ll not even have that cash flow,” Henry said. That could push small carriers that have stayed in business despite low rates the past two years out of the market, tightening capacity immediately when a rebound hits US ports. “I think there’s going to be a shakeout in capacity in the next month,” said Brian Kempisty, co-founder of drayage broker Port X Logistics, based in Buffalo, New York. “It could be three months, but when freight comes back, it will come back with a vengeance.” <h3>Drayage on the edge </h3>With the trajectory of trade disputes with China and other countries uncertain, many shippers in April canceled or postponed purchase orders from China. That big pause will lead to a real plunge in drayage demand at US ports and inland rail ramps. The US imposed combined tariffs of 145% on China on April 2, and China in turn imposed a 125% tariff on many US goods, including agricultural products. Another tranche of reciprocal tariffs on trading partners around the globe was paused for 90 days until July 9. And importers are also dealing with a 10% tariff on goods from almost all US trading partners, as well as 25% tariffs on steel, aluminum and automotive products and 25% tariffs on <a href="https://www.joc.com/article/tariff-uncertainty-pushing-up-transportation-costs-at-us-mexico-border-5984698">other goods from Mexico and Canada</a> that took effect in March. Bookings for containers headed from China to the US <a href="https://www.joc.com/article/trans-pacific-capacity-cuts-accelerating-amid-sharp-reduction-in-chinese-cargo-5992769">dropped nearly 54%</a> during the week of April 21–28 versus the comparable week in March, according to maritime visibility provider Vizion and data and analytics company Dun &amp; Bradstreet. “One of our large customers who imports through Savannah shared with us that they canceled all their purchase orders from China for the next 30 days,” said Kent Williams, executive vice president of sales and marketing for Cookeville, Tennessee-based Averitt. The regional trucking and drayage provider, which drays about 45,000 containers a year in the Southeast, saw its drayage business jump 10% to 12% year over year in the first quarter as customers rushed goods to the US ahead of the tariffs. In the past month, as the tariffs on China took effect, Averitt’s drayage volumes have dropped 5% year over year. “There’s a real fear it could get worse,” Williams said. “All the canceled bookings and blanked sailings are about to hit the supply chain in a big way.” The effects of the trade war on drayage are just becoming apparent, said Port X’s Kempisty. “Freight that sailed April 1,” just before the US tariffs on China took effect, “is arriving in the US now,” he said. But that will be the last frontloaded freight from China. “In drayage, we’re at the front end of this,” said Kempisty. The initial impact will be on the West Coast, but it won’t be long before inland markets begin to see volumes drop. “Inland drayage markets in Chicago and Kansas City are going to see a fairly substantial decline in the next couple of weeks,” he said. IMC Logistics, partly owned by Kuehne + Nagel, saw its drayage volume drop 14.2% in the last seven days as of Tuesday, and 8.1% in the last 30 days. “We’re seeing double-digit decreases in the orders we’re tracing,” Henry said. Added RoadOne’s Kellaway: “We haven’t seen the business fall off yet, but we know it’s coming.” Over the next few weeks, RoadOne anticipates its drayage volumes will drop 30% on the West Coast, 20% in the Midwest and 15% on the East Coast. “We could see a three- to four-week lull in volumes, so we’re moving equipment around,” he said. <h3>How long a decline? </h3>Other drayage providers offered similar forecasts of shipment decline, but no one has a clear idea of how long it will last. Guesses — it’s hard to call them estimates — have ranged from three weeks to three months or longer, in worst-case scenarios. The monthly Global Port Tracker produced by the National Retail Foundation (NRF) and Hackett Associates in April predicted US retail imports will be down 20% year over year in the second half of 2025, with a 20.2% decline in May and a 26.6% drop in June. “Even if there’s a [US-China] agreement today, there will still be this period where there will be less work coming inbound to the ports, with less drays, less transload, less truckload and less-than-truckload [LTL],” said Williams. “All this is already in motion.” The longer the “lull” or “pause” in Asian imports lasts, the bigger the long-term impact on drayage. And the bigger the rebound may be when trade disputes are settled. “If we get agreements before July, we could have an aggressive second half of the year,” Keith Prather, managing partner at Armada Capital Intelligence, said during an SMC3 webinar Tuesday on tariffs, the economy and the LTL sector. A big enough freight snap could boost not only drayage but other transportation modes out of what’s now a four-year freight downturn. “I look forward to dealing with the congestion,” said Henry. “That’s a much better challenge than this decline, because our driver base will be stable.” Contact William B. Cassidy at <a href="Mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.Associate editor Laura Robb contributed to this story. </div>

Drayage providers who handled the early 2025 surge of US-bound cargo booked ahead of US tariffs are now bracing for a significant drop in business that will begin in May and potentially last into the third quarter. They’re also girding for a disruptive import rebound once trade disputes abate. “What happens in the third quarter is going to be the big story,” said Paul Brashier, vice president of global supply chain for ITS Logistics, a Reno, Nevada-based third-party logistics provider offering over-the-road truckload and drayage services. Once US trade disputes with China and other trading partners are resolved, “there will be a wave of freight that will stress the system,” Brashier said. “We’re pretty much looking at a similar event as we saw with COVID in 2020. There will be pent-up demand.” Indeed, container shipping lines are already warning that a rebound in Asian imports following the expected plunge linked to the US-China trade dispute may overwhelm major US ports . The biggest danger, they say, could be a lack of capacity outside port gates to handle a rapid acceleration in freight. That concern starts at drayage. “We’re warning customers to be very strategic with their dray partners,” said Ken Kellaway, CEO of RoadOne IntermodaLogistics, a nationwide drayage provider with headquarters near Boston. “If we lose drivers over the next 30 to 45 days, it will take weeks to get them back,” Kellaway said. “Shippers will be in trouble if we can’t preserve the capacity we have in the system today.” He said a freight “whiplash” could hit US ports as early as mid-June. Potential for a ‘reset’ US drayage capacity appears to be slowly shrinking from a 2022 high , with some of those losses attributed to the migration of owner-operators to the security of larger carriers. Still, excess drayage capacity persists, putting pressure on already-low rates. However, the Trump administration’s efforts to reshape global trade could reset the drayage market, especially if trade negotiations drag on without a resolution or a lowering of tariff rates that would encourage beneficial cargo owners (BCOs) to boost US imports. “The market’s been soft anyway, so a lot of small drayage companies are struggling with cash flow, taking any freight to keep going,” said Joel Henry, CEO of IMC Logistics, a nationwide drayage provider with headquarters near Memphis. “Now without the volume, they’ll not even have that cash flow,” Henry said. That could push small carriers that have stayed in business despite low rates the past two years out of the market, tightening capacity immediately when a rebound hits US ports. “I think there’s going to be a shakeout in capacity in the next month,” said Brian Kempisty, co-founder of drayage broker Port X Logistics, based in Buffalo, New York. “It could be three months, but when freight comes back, it will come back with a vengeance.” Drayage on the edge With the trajectory of trade disputes with China and other countries uncertain, many shippers in April canceled or postponed purchase orders from China. That big pause will lead to a real plunge in drayage demand at US ports and inland rail ramps. The US imposed combined tariffs of 145% on China on April 2, and China in turn imposed a 125% tariff on many US goods, including agricultural products. Another tranche of reciprocal tariffs on trading partners around the globe was paused for 90 days until July 9. And importers are also dealing with a 10% tariff on goods from almost all US trading partners, as well as 25% tariffs on steel, aluminum and automotive products and 25% tariffs on other goods from Mexico and Canada that took effect in March. Bookings for containers headed from China to the US dropped nearly 54% during the week of April 21–28 versus the comparable week in March, according to maritime visibility provider Vizion and data and analytics company Dun & Bradstreet. “One of our large customers who imports through Savannah shared with us that they canceled all their purchase orders from China for the next 30 days,” said Kent Williams, executive vice president of sales and marketing for Cookeville, Tennessee-based Averitt. The regional trucking and drayage provider, which drays about 45,000 containers a year in the Southeast, saw its drayage business jump 10% to 12% year over year in the first quarter as customers rushed goods to the US ahead of the tariffs. In the past month, as the tariffs on China took effect, Averitt’s drayage volumes have dropped 5% year over year. “There’s a real fear it could get worse,” Williams said. “All the canceled bookings and blanked sailings are about to hit the supply chain in a big way.” The effects of the trade war on drayage are just becoming apparent, said Port X’s Kempisty. “Freight that sailed April 1,” just before the US tariffs on China took effect, “is arriving in the US now,” he said. But that will be the last frontloaded freight from China. “In drayage, we’re at the front end of this,” said Kempisty. The initial impact will be on the West Coast, but it won’t be long before inland markets begin to see volumes drop. “Inland drayage markets in Chicago and Kansas City are going to see a fairly substantial decline in the next couple of weeks,” he said. IMC Logistics, partly owned by Kuehne + Nagel, saw its drayage volume drop 14.2% in the last seven days as of Tuesday, and 8.1% in the last 30 days. “We’re seeing double-digit decreases in the orders we’re tracing,” Henry said. Added RoadOne’s Kellaway: “We haven’t seen the business fall off yet, but we know it’s coming.” Over the next few weeks, RoadOne anticipates its drayage volumes will drop 30% on the West Coast, 20% in the Midwest and 15% on the East Coast. “We could see a three- to four-week lull in volumes, so we’re moving equipment around,” he said. How long a decline? Other drayage providers offered similar forecasts of shipment decline, but no one has a clear idea of how long it will last. Guesses — it’s hard to call them estimates — have ranged from three weeks to three months or longer, in worst-case scenarios. The monthly Global Port Tracker produced by the National Retail Foundation (NRF) and Hackett Associates in April predicted US retail imports will be down 20% year over year in the second half of 2025, with a 20.2% decline in May and a 26.6% drop in June. “Even if there’s a [US-China] agreement today, there will still be this period where there will be less work coming inbound to the ports, with less drays, less transload, less truckload and less-than-truckload [LTL],” said Williams. “All this is already in motion.” The longer the “lull” or “pause” in Asian imports lasts, the bigger the long-term impact on drayage. And the bigger the rebound may be when trade disputes are settled. “If we get agreements before July, we could have an aggressive second half of the year,” Keith Prather, managing partner at Armada Capital Intelligence, said during an SMC3 webinar Tuesday on tariffs, the economy and the LTL sector. A big enough freight snap could boost not only drayage but other transportation modes out of what’s now a four-year freight downturn. “I look forward to dealing with the congestion,” said Henry. “That’s a much better challenge than this decline, because our driver base will be stable.” Contact William B. Cassidy at bill.cassidy@spglobal.com .Associate editor Laura Robb contributed to this story.

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