<div class="phx-topic abstract-wrapper">The increase in volume that would result across the trans-Atlantic and trans-Pacific corridors was particularly welcome, according to Hapag-Lloyd's CEO.</div>

The increase in volume that would result across the trans-Atlantic and trans-Pacific corridors was particularly welcome, according to Hapag-Lloyd's CEO.

Feature image

<div class="phx-topic">Hapag-Lloyd's $4.2 billion acquisition of Zim Integrated Shipping Services that was announced Monday will significantly improve the Hamburg-based carrier’s position on several major trade lanes. While cementing the buyer’s position <a href="https://www.joc.com/article/hapag-lloyds-plan-to-acquire-zim-would-deepen-shipping-oligopoly-6170073">as the world’s fifth-largest container shipping company</a>, the takeover will grow Hapag-Lloyd's volume share on the trans-Atlantic from 24% to 27%, on the trans-Pacific from 7% to 12%, in Asia from 9% to 11%, on Asia-Latin America from 11% to 14%, and from 2% to 7% on the intra-Europe trade, according to data from Container Trades Statistics cited by Hapag-Lloyd. Hapag-Lloyd CEO Rolf Habben Jansen highlighted as particularly welcome the increase in volume that would result across the trans-Atlantic and trans-Pacific corridors. “When we look for a minute at the trade portfolios on the Atlantic and trans-Pacific, if we joined forces we would really get into very strong position,” he told reporters during an online briefing Monday shortly after signing the Zim deal in Tel Aviv. A 27% market share on the trans-Atlantic would put Hapag-Lloyd in second place behind Mediterranean Shipping Co. (MSC) at 29%, according to the CTS figures cited by Hapag-Lloyd. According to PIERS, a sister company of the Journal of Commerce within S&amp;P Global, Hapag-Lloyd had a market share of 19.6% on the trans-Atlantic in January, behind MSC’s 22.6%. But Hapag-Lloyd held the top position throughout the fourth quarter of 2025 with a share that exceeded 25% in October and December. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ce24ca8a-5149-4e8e-a00a-5743e4d2abba"></dynamic-object></div>On the trans-Pacific, the addition of Zim would put Hapag-Lloyd level with Ocean Network Express in third position behind MSC at 13%, according to CTS. Hapag-Lloyd will also inherit Zim’s slot-sharing agreement with ONE. Habben Jansen said the Asia-Latin America trade has long been a corridor he has wanted to expand. In 2023, Hapag-Lloyd strengthened its position with the acquisition of SM SAAM terminal business while growing dedicated service networks on the trade lane. "Zim has done really well on Asia-Latin America in the last couple of years and this would allow us to get closer to the 15%, 16% (volume share) that we’ve always aspired to,” Habben Jansen told reporters. MSC holds the largest market share on the trade at 21%. <h3>Intra-Europe share ‘too small’ </h3>The Zim volume added on the intra-Europe trade would put Hapag-Lloyd level with Cosco Shipping at 7%, though considering it is a home market for the Hamburg-based carrier, Habben Jansen indicated there is still room to grow. “Intra-Europe for Hapag-Lloyd is too small in my view,” he said. “We would like to get to a market share of around 10%, and this would help us make a good step in that direction.” The Zim deal is expected to be completed by the end of the year, subject to approval of the Israeli carrier’s shareholders and regulatory approval in several jurisdictions. The acquisition comes as container shipping moves into a supply-driven down cycle, with the declining market sharply illustrated in Hapag-Lloyd's preliminary results for 2025 <a href="https://www.joc.com/article/fourth-quarter-rate-slump-drags-down-hapag-lloyds-2025-financials-6166755">that included a steep drop in profitability</a>. Zim’s earnings have yet to be announced. Hapag-Lloyd's estimated 2025 revenue for the combined entity would be $28 billion, a $1.1 billion drop from 2024. In earnings before interest and taxes (EBIT), the $5.3 billion reported in 2024 by both carriers is expected to plummet to $2 billion should Zim hit the higher end of its 2025 forecast. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Hapag-Lloyd's $4.2 billion acquisition of Zim Integrated Shipping Services that was announced Monday will significantly improve the Hamburg-based carrier’s position on several major trade lanes. While cementing the buyer’s position as the world’s fifth-largest container shipping company , the takeover will grow Hapag-Lloyd's volume share on the trans-Atlantic from 24% to 27%, on the trans-Pacific from 7% to 12%, in Asia from 9% to 11%, on Asia-Latin America from 11% to 14%, and from 2% to 7% on the intra-Europe trade, according to data from Container Trades Statistics cited by Hapag-Lloyd. Hapag-Lloyd CEO Rolf Habben Jansen highlighted as particularly welcome the increase in volume that would result across the trans-Atlantic and trans-Pacific corridors. “When we look for a minute at the trade portfolios on the Atlantic and trans-Pacific, if we joined forces we would really get into very strong position,” he told reporters during an online briefing Monday shortly after signing the Zim deal in Tel Aviv. A 27% market share on the trans-Atlantic would put Hapag-Lloyd in second place behind Mediterranean Shipping Co. (MSC) at 29%, according to the CTS figures cited by Hapag-Lloyd. According to PIERS, a sister company of the Journal of Commerce within S&P Global, Hapag-Lloyd had a market share of 19.6% on the trans-Atlantic in January, behind MSC’s 22.6%. But Hapag-Lloyd held the top position throughout the fourth quarter of 2025 with a share that exceeded 25% in October and December. On the trans-Pacific, the addition of Zim would put Hapag-Lloyd level with Ocean Network Express in third position behind MSC at 13%, according to CTS. Hapag-Lloyd will also inherit Zim’s slot-sharing agreement with ONE. Habben Jansen said the Asia-Latin America trade has long been a corridor he has wanted to expand. In 2023, Hapag-Lloyd strengthened its position with the acquisition of SM SAAM terminal business while growing dedicated service networks on the trade lane. "Zim has done really well on Asia-Latin America in the last couple of years and this would allow us to get closer to the 15%, 16% (volume share) that we’ve always aspired to,” Habben Jansen told reporters. MSC holds the largest market share on the trade at 21%. Intra-Europe share ‘too small’ The Zim volume added on the intra-Europe trade would put Hapag-Lloyd level with Cosco Shipping at 7%, though considering it is a home market for the Hamburg-based carrier, Habben Jansen indicated there is still room to grow. “Intra-Europe for Hapag-Lloyd is too small in my view,” he said. “We would like to get to a market share of around 10%, and this would help us make a good step in that direction.” The Zim deal is expected to be completed by the end of the year, subject to approval of the Israeli carrier’s shareholders and regulatory approval in several jurisdictions. The acquisition comes as container shipping moves into a supply-driven down cycle, with the declining market sharply illustrated in Hapag-Lloyd's preliminary results for 2025 that included a steep drop in profitability . Zim’s earnings have yet to be announced. Hapag-Lloyd's estimated 2025 revenue for the combined entity would be $28 billion, a $1.1 billion drop from 2024. In earnings before interest and taxes (EBIT), the $5.3 billion reported in 2024 by both carriers is expected to plummet to $2 billion should Zim hit the higher end of its 2025 forecast. Contact Greg Knowler at greg.knowler@spglobal.com .

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Container Shipping News

Maritime

Zim deal to strengthen Hapag-Lloyd's market share across key trade lanes

<div class="phx-topic abstract-wrapper">Fragmented regional greenhouse gas regulatory frameworks such as the EU ETS have increased the complexity of operating a global network and will be difficult to navigate, observers say.</div>

Fragmented regional greenhouse gas regulatory frameworks such as the EU ETS have increased the complexity of operating a global network and will be difficult to navigate, observers say.

<div class="phx-topic">A series of maritime carbon pricing schemes either in effect or under development in various jurisdictions is reinforcing industry concerns that the absence of global regulation will lead to overlapping measures that undermine shipping’s decarbonization drive. The International Maritime Organization last October was forced to <a href="https://www.joc.com/article/delay-in-imo-decarbonization-plans-robs-green-fuel-investors-of-certainty-6101250">delay adoption of its net-zero framework</a> for a year. At the time, critics warned the delay would lead to a host of local carbon pricing initiatives that would be difficult for carriers to navigate; according to design and engineering consultancy BAR Technologies, momentum is building in that direction. “Carbon compliance is becoming more fragmented by the month,” BAR Technologies CEO John Cooper said in a statement. “Instead of building momentum behind a single global framework, we’re creating a patchwork of schemes with different baselines, rules and cost mechanisms. “That creates confusion, inflates costs, and weakens the industry’s ability to invest in real, scalable solutions,” he added. According to the International Carbon Action Partnership (ICAP), the carbon pricing measures currently in effect are the European Union emissions trading system (EU ETS), the South Korean ETS, the New Zealand ETS, and the China-Shanghai pilot ETS that has been in force since 2013. A Brazilian greenhouse gas emissions trading system is under development. Last week, the British House of Commons voted to roll out a UK ETS to the domestic maritime industry from July 1, while it considers expanding that to include international maritime voyages starting or ending in the UK, with a proposed start date of 2028. But the UK Chamber of Shipping warned that the policy risks harming UK competitiveness while increasing costs for island communities and slowing progress towards net-zero. It called for alignment with EU ETS rules to avoid double‑charging and carbon leakage, and for a phased in or “monitor‑only” period until operators and ports have the systems required for compliance. “The sector supports the UK’s climate goals, but cannot deliver meaningful emissions reduction without the necessary fuels, infrastructure and clear guidance in place – and (with) unreasonable timeframes to implement flawed policy,” a spokesperson for the UK chamber said in a statement, noting that premature implementation risks higher costs for freight. Maersk noted in its annual report for 2025 published earlier this month that regional greenhouse gas regulatory frameworks such as the EU ETS have increased the complexity of operating a global network. “With each regulation having different standards and criteria, the need for allocation of lower GHG emission fuels to cover the compliance requirements of different regulations and customer demands in the most cost-effective manner, complexity is added,” the carrier said, adding that global regulation was required to curb emissions. The IMO’s net-zero framework was expected to be adopted at a special meeting of its Marine Environment Protection Committee (MEPC) in London in October last year after the measure was approved by a majority of member states the previous April. But the regulation was postponed for one year after it was derailed by US-led opposition during the combative October meeting. <h3>Europe’s ETS now fully phased in </h3>From a container shipping perspective, the EU ETS is by far the most significant carbon pricing mechanism currently in effect. Compliance has been phased in over the past two years, and 100% of reported maritime emissions are now covered in the EU ETS allowances with carriers passing on the costs to their customers. The regulation covers 100% of emissions for voyages between two EU ports and 50% of emissions for voyages starting or ending outside the EU for any ship of over 5,000 gross tons. Vessels are required to buy European Union Allowances (EUAs) to cover the emissions generated by their voyages and surrender the allowances by September of the following year. Failure to comply can lead to a penalty of €100 per ton. Methane and nitrous oxide have been included in the emissions calculations from this year, with the inclusion designed to incentivize a shift toward cleaner fuels, although the infrastructure and cost of those alternatives remain significant barriers. The EUA price is forecast by carbon market specialist Grey Epoch to rise 19% in 2026 to €86 ($101) per metric ton of CO2 equivalent. According to Deutsche Bank, the EU carbon price will range between $70 to $177 in 2026. Visibility provider Searoutes noted in a recent market update that the introduction of the EU ETS in 2024 coincided with Red Sea ship diversions when ETS surcharges added just 1% to shipping costs, a drop in the ocean as rates soared. But in 2026, the market situation has changed. Rates have fallen and EU ETS compliance costs have increased with carrier surcharges now averaging $168 per FEU from Asia to North Europe, 8% of the current rate on Drewry’s World Container Index. Searoutes warns that surcharges could jump to 12% or more of total costs should a full resumption of Red Sea transits occur this year.Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>. </div>

A series of maritime carbon pricing schemes either in effect or under development in various jurisdictions is reinforcing industry concerns that the absence of global regulation will lead to overlapping measures that undermine shipping’s decarbonization drive. The International Maritime Organization last October was forced to delay adoption of its net-zero framework for a year. At the time, critics warned the delay would lead to a host of local carbon pricing initiatives that would be difficult for carriers to navigate; according to design and engineering consultancy BAR Technologies, momentum is building in that direction. “Carbon compliance is becoming more fragmented by the month,” BAR Technologies CEO John Cooper said in a statement. “Instead of building momentum behind a single global framework, we’re creating a patchwork of schemes with different baselines, rules and cost mechanisms. “That creates confusion, inflates costs, and weakens the industry’s ability to invest in real, scalable solutions,” he added. According to the International Carbon Action Partnership (ICAP), the carbon pricing measures currently in effect are the European Union emissions trading system (EU ETS), the South Korean ETS, the New Zealand ETS, and the China-Shanghai pilot ETS that has been in force since 2013. A Brazilian greenhouse gas emissions trading system is under development. Last week, the British House of Commons voted to roll out a UK ETS to the domestic maritime industry from July 1, while it considers expanding that to include international maritime voyages starting or ending in the UK, with a proposed start date of 2028. But the UK Chamber of Shipping warned that the policy risks harming UK competitiveness while increasing costs for island communities and slowing progress towards net-zero. It called for alignment with EU ETS rules to avoid double‑charging and carbon leakage, and for a phased in or “monitor‑only” period until operators and ports have the systems required for compliance. “The sector supports the UK’s climate goals, but cannot deliver meaningful emissions reduction without the necessary fuels, infrastructure and clear guidance in place – and (with) unreasonable timeframes to implement flawed policy,” a spokesperson for the UK chamber said in a statement, noting that premature implementation risks higher costs for freight. Maersk noted in its annual report for 2025 published earlier this month that regional greenhouse gas regulatory frameworks such as the EU ETS have increased the complexity of operating a global network. “With each regulation having different standards and criteria, the need for allocation of lower GHG emission fuels to cover the compliance requirements of different regulations and customer demands in the most cost-effective manner, complexity is added,” the carrier said, adding that global regulation was required to curb emissions. The IMO’s net-zero framework was expected to be adopted at a special meeting of its Marine Environment Protection Committee (MEPC) in London in October last year after the measure was approved by a majority of member states the previous April. But the regulation was postponed for one year after it was derailed by US-led opposition during the combative October meeting. Europe’s ETS now fully phased in From a container shipping perspective, the EU ETS is by far the most significant carbon pricing mechanism currently in effect. Compliance has been phased in over the past two years, and 100% of reported maritime emissions are now covered in the EU ETS allowances with carriers passing on the costs to their customers. The regulation covers 100% of emissions for voyages between two EU ports and 50% of emissions for voyages starting or ending outside the EU for any ship of over 5,000 gross tons. Vessels are required to buy European Union Allowances (EUAs) to cover the emissions generated by their voyages and surrender the allowances by September of the following year. Failure to comply can lead to a penalty of €100 per ton. Methane and nitrous oxide have been included in the emissions calculations from this year, with the inclusion designed to incentivize a shift toward cleaner fuels, although the infrastructure and cost of those alternatives remain significant barriers. The EUA price is forecast by carbon market specialist Grey Epoch to rise 19% in 2026 to €86 ($101) per metric ton of CO2 equivalent. According to Deutsche Bank, the EU carbon price will range between $70 to $177 in 2026. Visibility provider Searoutes noted in a recent market update that the introduction of the EU ETS in 2024 coincided with Red Sea ship diversions when ETS surcharges added just 1% to shipping costs, a drop in the ocean as rates soared. But in 2026, the market situation has changed. Rates have fallen and EU ETS compliance costs have increased with carrier surcharges now averaging $168 per FEU from Asia to North Europe, 8% of the current rate on Drewry’s World Container Index. Searoutes warns that surcharges could jump to 12% or more of total costs should a full resumption of Red Sea transits occur this year. Contact Greg Knowler at  greg.knowler@spglobal.com . 

Transport, Trade and Regulation News

Shipping decarbonization drive faces patchwork of carbon tax measures

<div class="phx-topic abstract-wrapper">A heavily oversupplied equipment market born out of the pandemic disruption is forcing chassis providers to ensure visibility technology plays a growing role as a differentiator. </div>

A heavily oversupplied equipment market born out of the pandemic disruption is forcing chassis providers to ensure visibility technology plays a growing role as a differentiator.

<div class="phx-topic">Amid a US marine chassis market that is deeply oversupplied in part due to the fluid flow of cargo through ports in 2025, leading chassis lessors are stepping up deployment of location sensors as a competitive tool to create value for beneficial cargo owners (BCOs), forwarders and truckers. The ports of Los Angeles and Long Beach last year handled record loaded import volumes of over 10 million TEUs, according to S&amp;P Global Market Intelligence, with virtually no congestion. That points, among other things, to cargo being quickly unloaded at warehouses and containers and chassis put back into circulation without little or no delay, in contrast to the pandemic cargo rush when equipment was idled for weeks, creating an historic bottleneck. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6170490_0.1.jpg"></img></div>As a result of the COVID experience, thousands of additional marine chassis entered the market during and after the crisis, mirroring heavy investments in trucks, containers and warehouse space. “All of which contributed to the overall US transport and logistics system functioning with little to no friction…even at import volumes that have been at or above COVID levels for all of 2025,” said Ron Widdows, CEO of chassis provider Flexi-Van Leasing. The glut of chassis equipment is severe — Flexi- Van estimates half of the US fleet of 600,000 marine container chassis are utilized currently, and returns are occurring 20% faster, cutting further into lessors’ revenues. “The latent capacity in the system will be there for some time,” Widdows said. “The asset provider part of the supply chain has done a wonderful job in creating the asset availability… and now suffers the impact of a very efficient supply chain and the impact on asset utilization.” In the chassis leasing space that has led to a sharper competitive environment with visibility technology playing a growing role as a differentiator. The offerings fall into the category of in-transit versus milestone visibility, in which chassis units, and by extension the containers and cargo they are carrying, are tracked in real time with various benefits derived from the information. It is not dissimilar to efforts by carriers including, Hapag-Lloyd, to connect their full fleet of dry containers, also aiming to improve on milestone visibility derived from readings at junctures such as marine container gates or arrival at an ultimate destination. “The shipping industry has long relied on discrete and often inaccurate event updates that may lag by hours or even days,” WiseTech Global CEO Zubin Appoo <a href="https://www.wisetechglobal.com/news/wisetech-global-and-hapag-lloyd-launch-iot-container-tracking-pilot-to-deliver-next-generation-supply-chain-visibility/">said on Feb. 10 in announcing an agreement</a> with Hapag-Lloyd to make its container location data available to customers. <h3>Competition growing amid new tech solutions </h3>Flexi-Van introduced a technology-based offering from the beginning of its current iteration in 2016 as American Intermodal Management, or AIM. In 2020, AIM acquired Flexi- Van, whose origins go back to the early days of containers in the 1950s, with the idea of extending its tech-based and new equipment offering into the larger footprint of a legacy national intermodal equipment provider (IEP). That was a natural progression for AIM, which emerged out of the stressed 2014-2015 period at Los Angeles-Long Beach that was marked by a disruptive longshore labor negotiation and an aging, formerly carrier-owned chassis fleet that was subject to regular roadability delays within the context of the much-debated “pool of pools” system. AIM entered the market as an outsider with a new model, offering new and guaranteed equipment under direct leases and a near-port location using longshore union labor. The GPS devices allowed for visibility and resulted in opportunities for cost savings during the round trip from terminal to warehouse through to return. “Fundamentally from the beginning the idea was to establish relationships directly with BCOs and the motor carriers that support them,” Widdows said, noting the concept of AIM came out of APL where Widdows had previously served as CEO and which had implemented equipment tracking at Pier 300 in Los Angeles beginning in the 1990s. “If you can better manage your flow and impact the efficiency of inland transportation, this has much larger financial implications than the cost of the chassis.” Now competition in the space is growing as other lessors bring tech solutions to BCO-specific offerings. Last year, for example, chassis provider DCLI introduced an offering called Direct Chassis Link Reserve tailored to BCOs, providing marine chassis capacity with newer units (seven years old or less), GPS-enabled visibility, and locations at major ports. Trac Intermodal, the other large IEP in the US, described GPS technology as a “cornerstone” of its offering, saying advanced GPS solutions are offered as an add-on to term leases. Trac says each chassis is equipped with GPS, enabling customers to track location, monitor movement, and optimize utilization. It says that by pairing GPS tracking with geofencing, it ensures billing starts only when a chassis leaves the customer’s facility while giving motor carriers, ocean carriers, BCOs, railroads, and non-vessel operating common carriers (NVOCCs) visibility into their equipment and helping them identify idle assets and reduce delays. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com.</a></div>

Amid a US marine chassis market that is deeply oversupplied in part due to the fluid flow of cargo through ports in 2025, leading chassis lessors are stepping up deployment of location sensors as a competitive tool to create value for beneficial cargo owners (BCOs), forwarders and truckers. The ports of Los Angeles and Long Beach last year handled record loaded import volumes of over 10 million TEUs, according to S&P Global Market Intelligence, with virtually no congestion. That points, among other things, to cargo being quickly unloaded at warehouses and containers and chassis put back into circulation without little or no delay, in contrast to the pandemic cargo rush when equipment was idled for weeks, creating an historic bottleneck. As a result of the COVID experience, thousands of additional marine chassis entered the market during and after the crisis, mirroring heavy investments in trucks, containers and warehouse space. “All of which contributed to the overall US transport and logistics system functioning with little to no friction…even at import volumes that have been at or above COVID levels for all of 2025,” said Ron Widdows, CEO of chassis provider Flexi-Van Leasing. The glut of chassis equipment is severe — Flexi- Van estimates half of the US fleet of 600,000 marine container chassis are utilized currently, and returns are occurring 20% faster, cutting further into lessors’ revenues. “The latent capacity in the system will be there for some time,” Widdows said. “The asset provider part of the supply chain has done a wonderful job in creating the asset availability… and now suffers the impact of a very efficient supply chain and the impact on asset utilization.” In the chassis leasing space that has led to a sharper competitive environment with visibility technology playing a growing role as a differentiator. The offerings fall into the category of in-transit versus milestone visibility, in which chassis units, and by extension the containers and cargo they are carrying, are tracked in real time with various benefits derived from the information. It is not dissimilar to efforts by carriers including, Hapag-Lloyd, to connect their full fleet of dry containers, also aiming to improve on milestone visibility derived from readings at junctures such as marine container gates or arrival at an ultimate destination. “The shipping industry has long relied on discrete and often inaccurate event updates that may lag by hours or even days,” WiseTech Global CEO Zubin Appoo said on Feb. 10 in announcing an agreement with Hapag-Lloyd to make its container location data available to customers. Competition growing amid new tech solutions Flexi-Van introduced a technology-based offering from the beginning of its current iteration in 2016 as American Intermodal Management, or AIM. In 2020, AIM acquired Flexi- Van, whose origins go back to the early days of containers in the 1950s, with the idea of extending its tech-based and new equipment offering into the larger footprint of a legacy national intermodal equipment provider (IEP). That was a natural progression for AIM, which emerged out of the stressed 2014-2015 period at Los Angeles-Long Beach that was marked by a disruptive longshore labor negotiation and an aging, formerly carrier-owned chassis fleet that was subject to regular roadability delays within the context of the much-debated “pool of pools” system. AIM entered the market as an outsider with a new model, offering new and guaranteed equipment under direct leases and a near-port location using longshore union labor. The GPS devices allowed for visibility and resulted in opportunities for cost savings during the round trip from terminal to warehouse through to return. “Fundamentally from the beginning the idea was to establish relationships directly with BCOs and the motor carriers that support them,” Widdows said, noting the concept of AIM came out of APL where Widdows had previously served as CEO and which had implemented equipment tracking at Pier 300 in Los Angeles beginning in the 1990s. “If you can better manage your flow and impact the efficiency of inland transportation, this has much larger financial implications than the cost of the chassis.” Now competition in the space is growing as other lessors bring tech solutions to BCO-specific offerings. Last year, for example, chassis provider DCLI introduced an offering called Direct Chassis Link Reserve tailored to BCOs, providing marine chassis capacity with newer units (seven years old or less), GPS-enabled visibility, and locations at major ports. Trac Intermodal, the other large IEP in the US, described GPS technology as a “cornerstone” of its offering, saying advanced GPS solutions are offered as an add-on to term leases. Trac says each chassis is equipped with GPS, enabling customers to track location, monitor movement, and optimize utilization. It says that by pairing GPS tracking with geofencing, it ensures billing starts only when a chassis leaves the customer’s facility while giving motor carriers, ocean carriers, BCOs, railroads, and non-vessel operating common carriers (NVOCCs) visibility into their equipment and helping them identify idle assets and reduce delays. Contact Peter Tirschwell at peter.tirschwell@spglobal.com.

Port News

Surface

Supply chain

North American ports

Marine terminals

Real-time chassis location becoming competitive edge in leasing

<div class="phx-topic abstract-wrapper">The acquisition is expected to be completed this year, and will strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while bringing up to $500 million in synergies, Hapag-Lloyd's CEO said. </div>

The acquisition is expected to be completed this year, and will strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while bringing up to $500 million in synergies, Hapag-Lloyd's CEO said.

<div class="phx-topic">Hapag-Lloyd inked a $4.2 billion deal Monday to acquire 100% of Zim Integrated Shipping Services, cementing the buyer’s position <a href="https://www.joc.com/article/hapag-lloyds-plan-to-acquire-zim-would-deepen-shipping-oligopoly-6170073">as the world’s fifth-largest container shipping company</a> with a fleet of over 400 vessels, a slot capacity of over 3 million TEUs, and an annual transport volume of more than 18 million TEUs. Financing the transaction from cash reserves and a $2.5 billion bridging fund, Hapag-Lloyd will take over the international operations of Zim but leave control of domestic operations to Israel-based private equity group FIMI Opportunity Funds. The deal is expected to be completed by the end of the year, subject to approval of Zim shareholders and regulatory approval in several jurisdictions. Hapag-Lloyd CEO Rolf Habben Jansen said the acquisition of the 10th largest ocean carrier would strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while generating significant synergies. “We expect to see about $300 million to $500 million in synergies, mainly in network and procurement,” Habben Jansen told reporters during an online briefing shortly after signing the deal in Tel Aviv, noting that the synergies would bring down slot costs by an estimated $25 per TEU. “We know how to create those synergies, as we have done so in previous transactions,” he added. Zim will be the sixth carrier Hapag-Lloyd has taken over following previous deals for cpships (2005), CSAV (2014), UASC (2017), NileDutch (2021), and DAL (2022). <h3>‘A fair price’ </h3>Asked whether the $4.2 billion acquisition cost was too high, Habben Jansen said he believed it was “a fair price.” ”It was certainly not a low price that we paid, but we believe that it’s an excellent asset, and as such, I think the premium is justified,” he said. Analysts at investment bank J.P. Morgan were not convinced by the takeover premium, calling the price offered “a significant premium to forward expectations.” An analyst note said this was likely a reflection of the competitive nature of the tender and efforts by strategic players to increase market share in a highly competitive market dynamic where players without a large order book were disadvantaged. J.P. Morgan expects Zim’s earnings before interest, taxes, amortization and depreciation (EBITDA) margin for 2025 to be 30%, compared to 20% in 2023 and 11% in 2019, leaving “material downside potential as the container shipping cycle turns.” “This we expect will likely limit the value creation potential for Hapag-Lloyd in the coming years,” the bank said, although it noted that Hapag-Lloyd appeared less concerned over near-term dynamics, “despite a more challenging multi-year period ahead.” The international element of Zim’s capacity that Hapag-Lloyd will acquire is chartered, thus increasing the chartered portion of Hapag-Lloyd's fleet from its current 39% to 52%. Habben Jansen said there were benefits to holding chartered tonnage in a down cycle, but conceded that the level would be too high. “Dependent on how good or not so good the market is, you have a lot more flexibility in adjusting your cost base than if you do not have a large chunk of chartered tonnage,” he told reporters. “Having said that, I think if this transaction is completed, then the percentage of chartered tonnage that we would have is probably a bit on the high side,” he added. “So over time, one should expect that we then bring that down.” Only Ocean Network Express and Yang Ming have charter ratios above 50%, with other top 10 carriers below 40%. In the case of Evergreen and HMM, it is as low as 30% and 18%, respectively, Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce contributor, noted in a LinkedIn post. “This can prove to be a competitive advantage as the market is heading towards a cyclical downturn where the ability to tactically reduce the size of the operated fleet by redelivering charter vessels can be an important element of maintaining a high utilization and low unit cost,” Jensen wrote Monday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Hapag-Lloyd inked a $4.2 billion deal Monday to acquire 100% of Zim Integrated Shipping Services, cementing the buyer’s position as the world’s fifth-largest container shipping company with a fleet of over 400 vessels, a slot capacity of over 3 million TEUs, and an annual transport volume of more than 18 million TEUs. Financing the transaction from cash reserves and a $2.5 billion bridging fund, Hapag-Lloyd will take over the international operations of Zim but leave control of domestic operations to Israel-based private equity group FIMI Opportunity Funds. The deal is expected to be completed by the end of the year, subject to approval of Zim shareholders and regulatory approval in several jurisdictions. Hapag-Lloyd CEO Rolf Habben Jansen said the acquisition of the 10th largest ocean carrier would strengthen the combined network on the trans-Pacific, intra-Asia, the Atlantic, Latin America, and East Mediterranean while generating significant synergies. “We expect to see about $300 million to $500 million in synergies, mainly in network and procurement,” Habben Jansen told reporters during an online briefing shortly after signing the deal in Tel Aviv, noting that the synergies would bring down slot costs by an estimated $25 per TEU. “We know how to create those synergies, as we have done so in previous transactions,” he added. Zim will be the sixth carrier Hapag-Lloyd has taken over following previous deals for cpships (2005), CSAV (2014), UASC (2017), NileDutch (2021), and DAL (2022). ‘A fair price’ Asked whether the $4.2 billion acquisition cost was too high, Habben Jansen said he believed it was “a fair price.” ”It was certainly not a low price that we paid, but we believe that it’s an excellent asset, and as such, I think the premium is justified,” he said. Analysts at investment bank J.P. Morgan were not convinced by the takeover premium, calling the price offered “a significant premium to forward expectations.” An analyst note said this was likely a reflection of the competitive nature of the tender and efforts by strategic players to increase market share in a highly competitive market dynamic where players without a large order book were disadvantaged. J.P. Morgan expects Zim’s earnings before interest, taxes, amortization and depreciation (EBITDA) margin for 2025 to be 30%, compared to 20% in 2023 and 11% in 2019, leaving “material downside potential as the container shipping cycle turns.” “This we expect will likely limit the value creation potential for Hapag-Lloyd in the coming years,” the bank said, although it noted that Hapag-Lloyd appeared less concerned over near-term dynamics, “despite a more challenging multi-year period ahead.” The international element of Zim’s capacity that Hapag-Lloyd will acquire is chartered, thus increasing the chartered portion of Hapag-Lloyd's fleet from its current 39% to 52%. Habben Jansen said there were benefits to holding chartered tonnage in a down cycle, but conceded that the level would be too high. “Dependent on how good or not so good the market is, you have a lot more flexibility in adjusting your cost base than if you do not have a large chunk of chartered tonnage,” he told reporters. “Having said that, I think if this transaction is completed, then the percentage of chartered tonnage that we would have is probably a bit on the high side,” he added. “So over time, one should expect that we then bring that down.” Only Ocean Network Express and Yang Ming have charter ratios above 50%, with other top 10 carriers below 40%. In the case of Evergreen and HMM, it is as low as 30% and 18%, respectively, Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce contributor, noted in a LinkedIn post. “This can prove to be a competitive advantage as the market is heading towards a cyclical downturn where the ability to tactically reduce the size of the operated fleet by redelivering charter vessels can be an important element of maintaining a high utilization and low unit cost,” Jensen wrote Monday. Contact Greg Knowler at greg.knowler@spglobal.com.

Hapag-Lloyd bolsters fleet with $4.2 billion deal to acquire Zim

<div class="phx-topic abstract-wrapper">The acquisition, if approved, would solidify the Hamburg-based ocean carrier among the five largest container lines by capacity.</div>

The acquisition, if approved, would solidify the Hamburg-based ocean carrier among the five largest container lines by capacity.

<div class="phx-topic">Hapag-Lloyd’s plan to acquire Zim Integrated Shipping Services for more than $3.5 billion, pending regulatory approval, will solidify the Hamburg-based carrier among the five largest container lines by capacity, deepening the industry oligopoly. The negotiations, as reported by Israeli media and confirmed by Hapag-Lloyd, would retain Jersualem’s golden share by allowing Hapag-Lloyd to take over international operations, but leaving control of domestic operation to Israel-based private equity group FIMI. The acquisition wouldl boost Hapag-Lloyd’s existing fleet, including chartered ships, by 704,000 TEUs, bringing its total fleet capacity to more than 3 million TEUs, according to maritime analyst Alphaliner. Aside from the tonnage an acquisition of the 10th largest ocean carrier would bring, Hapag-Lloyd’s focus on container shipping versus end-to-end logistics mirrors that of Zim, which prides itself in its agility compared to larger carriers. Hapag-Lloyd on Sunday said its board “was in advance negotiations regarding a potential acquisition of all shares in its Israeli competitor Zim Integrated Shipping Services Ltd.” The deal, which <a href="https://www.calcalistech.com/ctechnews/article/synasqadwg">has been in the works for six months</a>, according to the Israel financial newspaper Calcalist, resolves government constraints on foreign ownership requiring a set amount of ships to be Israel-owned. <h3>Fewer options for east-west services</h3>The deal would further advance consolidation in an industry that has gone from more than 20 major east-west ocean carriers over 25 years ago to just 10. The top five carriers control 64.5% of global capacity while the top 10 control 84.1%, according to Alphaliner. As recently as 2013, the top 10 lines controlled just over 60% while in 1996 the top 10 carriers controlled 48%, analyst Lars Jensen wrote in “Liner Shipping 2025.”“The liner shipping industry has seen a persistent drive towards consolidation for more than 30 years,” Jensen wrote.The deal also underscores the obstacles to expansion in the current era. Shipyards are full, charter rates remain high, and the top carriers control a greater share of the second-hand market, limiting carriers’ ability to expand organically. Carriers remain flush with cash following a string of profitable years that began with the pandemic, meaning the financial duress that triggered many prior mergers is not present currently. Yet the advantages stemming from scale are undeniable. Despite the potential for three to four years of overcapacity that took a noticeable toll on freight rates and carrier profits in the second half of 2025, the ability of carriers to influence capacity and benefit from external capacity shocks, many believe, leaves them in a more favorable long-term position compared to the 30 years pre-COVID. “A key lesson learned over the last five years is that disruption can be highly profitable for carriers,” <a href="From Tailwind to Headwind: The Changing Dynamics of Maritime Shipping | The Supply Chain Xchange">analyst John McCown wrote in January</a>. Hapag-Lloyd has long been a big part of the consolidation trend in the industry. In 2005, it acquired Canadian carrier CP Ships which itself had absorbed Mexican carrier TMM. In 2014, Hapag-Lloyd acquired Chilean carrier CSAV, and in 2017 it acquired United Arab Shipping Company. Hapag-Lloyd acquired Africa carrier NileDutch and Deutsche Afrika-Linien (DAL) in 2021 and in 2022, respectively.In structuring the Zim sale to satisfy Israel government security concerns, the deal harkens back to the late 1990s sale of APL to Singapore-based Neptune Orient Lines, under which the US government required APL’s US-flag ships to be operated by an American vessel operations entity.Contact Mark Szakonyi <a href="at mark.szakonyi@spglobal.com">at mark.szakonyi@spglobal.com</a>.</div>

Hapag-Lloyd’s plan to acquire Zim Integrated Shipping Services for more than $3.5 billion, pending regulatory approval, will solidify the Hamburg-based carrier among the five largest container lines by capacity, deepening the industry oligopoly. The negotiations, as reported by Israeli media and confirmed by Hapag-Lloyd, would retain Jersualem’s golden share by allowing Hapag-Lloyd to take over international operations, but leaving control of domestic operation to Israel-based private equity group FIMI. The acquisition wouldl boost Hapag-Lloyd’s existing fleet, including chartered ships, by 704,000 TEUs, bringing its total fleet capacity to more than 3 million TEUs, according to maritime analyst Alphaliner. Aside from the tonnage an acquisition of the 10th largest ocean carrier would bring, Hapag-Lloyd’s focus on container shipping versus end-to-end logistics mirrors that of Zim, which prides itself in its agility compared to larger carriers. Hapag-Lloyd on Sunday said its board “was in advance negotiations regarding a potential acquisition of all shares in its Israeli competitor Zim Integrated Shipping Services Ltd.” The deal, which has been in the works for six months , according to the Israel financial newspaper Calcalist, resolves government constraints on foreign ownership requiring a set amount of ships to be Israel-owned. Fewer options for east-west services The deal would further advance consolidation in an industry that has gone from more than 20 major east-west ocean carriers over 25 years ago to just 10. The top five carriers control 64.5% of global capacity while the top 10 control 84.1%, according to Alphaliner. As recently as 2013, the top 10 lines controlled just over 60% while in 1996 the top 10 carriers controlled 48%, analyst Lars Jensen wrote in “Liner Shipping 2025.” “The liner shipping industry has seen a persistent drive towards consolidation for more than 30 years,” Jensen wrote. The deal also underscores the obstacles to expansion in the current era. Shipyards are full, charter rates remain high, and the top carriers control a greater share of the second-hand market, limiting carriers’ ability to expand organically. Carriers remain flush with cash following a string of profitable years that began with the pandemic, meaning the financial duress that triggered many prior mergers is not present currently. Yet the advantages stemming from scale are undeniable. Despite the potential for three to four years of overcapacity that took a noticeable toll on freight rates and carrier profits in the second half of 2025, the ability of carriers to influence capacity and benefit from external capacity shocks, many believe, leaves them in a more favorable long-term position compared to the 30 years pre-COVID. “A key lesson learned over the last five years is that disruption can be highly profitable for carriers,” analyst John McCown wrote in January . Hapag-Lloyd has long been a big part of the consolidation trend in the industry. In 2005, it acquired Canadian carrier CP Ships which itself had absorbed Mexican carrier TMM. In 2014, Hapag-Lloyd acquired Chilean carrier CSAV, and in 2017 it acquired United Arab Shipping Company. Hapag-Lloyd acquired Africa carrier NileDutch and Deutsche Afrika-Linien (DAL) in 2021 and in 2022, respectively. In structuring the Zim sale to satisfy Israel government security concerns, the deal harkens back to the late 1990s sale of APL to Singapore-based Neptune Orient Lines, under which the US government required APL’s US-flag ships to be operated by an American vessel operations entity. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Trans-Atlantic

Asia-Europe

Trans-Pacific

Hapag-Lloyd’s plan to acquire Zim would deepen shipping oligopoly

<div class="phx-topic abstract-wrapper">The wide-ranging plan includes proposals to tax foreign-built ships calling US ports, rebuild domestic shipbuilding capacity, and eliminate “burdensome regulations” through a series of deregulatory measures. </div>

The wide-ranging plan includes proposals to tax foreign-built ships calling US ports, rebuild domestic shipbuilding capacity, and eliminate “burdensome regulations” through a series of deregulatory measures.

<div class="phx-topic">The Trump administration Friday unveiled a wide-ranging blueprint for revitalizing the US maritime sector, the financial cornerstone of which would be a Maritime Security Trust Fund (MSTF) that would be fed in large part by taxing foreign-owned vessels calling US ports. “America’s Maritime Action Plan” includes a “universal infrastructure or security fee” that would be imposed on all foreign-built commercial vessels. The fee would be assessed based on the weight of the imported tonnage carried on the vessel. The action plan also includes a separate fee on imports arriving via land. While no specific figures were proposed, the plan to tax cargo tonnage imported by foreign-built ships did offer two scenarios: A fee of 1 cent per kilogram would generate about $66 billion over 10 years, while a fee of 25 cents per kg would yield close to $1.5 trillion. It’s unclear how the estimates were calculated. “As foreign-built vessels benefit from US market access, this policy ensures they contribute to the long-term revitalization of America’s maritime capabilities,” the plan said. The proposal echoes the tit-for-tat tariffs the US and China intended to impose on each other’s tonnage <a href="https://www.joc.com/article/year-long-pause-on-us-port-fees-targeting-china-vessels-to-start-nov-10-6108431">until a one-year suspension was enacted last November</a> as part of a <a href="https://www.joc.com/article/trade-deal-could-boost-short-term-china-imports-but-uncertainty-lingers-6106809">broader trade deal between Washington and Beijing</a>. The action plan also includes proposals to rebuild domestic shipbuilding capacity, strengthen the maritime industrial base, increase the fleet of US-built and -flagged commercial vessels working international trades, and eliminate “burdensome regulations” through a series of deregulatory measures. “For decades, the nation’s strategic position and shipbuilding industrial capacity have weakened due to a lack of strategic focus, cumbersome government procurement processes and a lack of strategic support for construction of commercial vessels in domestic shipyards,” the plan’s introduction stated. The action plan is an extension of an executive order issued by President Donald Trump last April calling for the restoration of American maritime dominance. The 40-page plan offers several concrete proposals, including the creation of the MSTF that would be fed by new revenue streams. “By securing stable, long-term funding, the MSTF would ensure consistent support for investments in shipbuilding, fleet expansion, industrial base resilience, and maritime workforce development,” the plan said. “Authorized expenditures would include programs identified as helpful for the promotion, growth and strengthening of the domestic maritime sector.” The MSTF would help fund the revitalization of US shipbuilding capacity, which is “the cornerstone of the administration’s strategy to restore America’s maritime strength and self-sufficiency,” according to the plan, which noted only eight shipyards exist in the country that can build vessels greater than 400 feet in length. The plan calls for investment that would fund upgrades to commercial shipyards in order to add and modernize drydocks, heavy-lift and gantry cranes, panel lines, and automated handling systems “to support higher‑rate production and large hull handling.” <h3>Land port tax </h3>A separate proposed funding mechanism, the Land Port Maintenance Tax, would be an equivalent to the existing Harbor Maintenance Tax for marine ports. The plan proposes a “modest tax” on merchandise entering the US via land of 0.125% of the value of the goods. “Funds collected under this tax will be deposited into the newly established Land Port Maintenance Trust Fund (LPMTF), which will support the planning, design, construction, maintenance and improvement of land port infrastructure,” according to the plan. The action plan also proposes the creation of a Strategic Commercial Fleet (SCF) that would consist of US-built vessels working international trades. The SCF would “provide the depth and redundancy required to sustain military logistics around the globe and ensure the continuous flow of goods to the US economy,” the plan said. “Vessels in the SCF would receive financial support for both construction and operation, leveling the playing field between the US and subsidized foreign competition.” Many of the proposals included in the maritime action plan require Congressional approval, so the Trump administration said it is compiling a legislative package that will be sent to Congress after the publication of Trump’s fiscal year 2027 budget request. Presidents typically send annual budget requests to Congress in February, although the timeline can be delayed. “The Trump administration urges Congress to enact this package in tandem with existing legislative vehicles, ensuring the US maritime industry is equipped to meet the demands of global competition, national defense and economic growth,” the plan said. Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>.</div>

The Trump administration Friday unveiled a wide-ranging blueprint for revitalizing the US maritime sector, the financial cornerstone of which would be a Maritime Security Trust Fund (MSTF) that would be fed in large part by taxing foreign-owned vessels calling US ports. “America’s Maritime Action Plan” includes a “universal infrastructure or security fee” that would be imposed on all foreign-built commercial vessels. The fee would be assessed based on the weight of the imported tonnage carried on the vessel. The action plan also includes a separate fee on imports arriving via land. While no specific figures were proposed, the plan to tax cargo tonnage imported by foreign-built ships did offer two scenarios: A fee of 1 cent per kilogram would generate about $66 billion over 10 years, while a fee of 25 cents per kg would yield close to $1.5 trillion. It’s unclear how the estimates were calculated.  “As foreign-built vessels benefit from US market access, this policy ensures they contribute to the long-term revitalization of America’s maritime capabilities,” the plan said. The proposal echoes the tit-for-tat tariffs the US and China intended to impose on each other’s tonnage until a one-year suspension was enacted last November as part of a broader trade deal between Washington and Beijing . The action plan also includes proposals to rebuild domestic shipbuilding capacity, strengthen the maritime industrial base, increase the fleet of US-built and -flagged commercial vessels working international trades, and eliminate “burdensome regulations” through a series of deregulatory measures. “For decades, the nation’s strategic position and shipbuilding industrial capacity have weakened due to a lack of strategic focus, cumbersome government procurement processes and a lack of strategic support for construction of commercial vessels in domestic shipyards,” the plan’s introduction stated. The action plan is an extension of an executive order issued by President Donald Trump last April calling for the restoration of American maritime dominance. The 40-page plan offers several concrete proposals, including the creation of the MSTF that would be fed by new revenue streams. “By securing stable, long-term funding, the MSTF would ensure consistent support for investments in shipbuilding, fleet expansion, industrial base resilience, and maritime workforce development,” the plan said. “Authorized expenditures would include programs identified as helpful for the promotion, growth and strengthening of the domestic maritime sector.” The MSTF would help fund the revitalization of US shipbuilding capacity, which is “the cornerstone of the administration’s strategy to restore America’s maritime strength and self-sufficiency,” according to the plan, which noted only eight shipyards exist in the country that can build vessels greater than 400 feet in length. The plan calls for investment that would fund upgrades to commercial shipyards in order to add and modernize drydocks, heavy-lift and gantry cranes, panel lines, and automated handling systems “to support higher‑rate production and large hull handling.” Land port tax A separate proposed funding mechanism, the Land Port Maintenance Tax, would be an equivalent to the existing Harbor Maintenance Tax for marine ports. The plan proposes a “modest tax” on merchandise entering the US via land of 0.125% of the value of the goods. “Funds collected under this tax will be deposited into the newly established Land Port Maintenance Trust Fund (LPMTF), which will support the planning, design, construction, maintenance and improvement of land port infrastructure,” according to the plan. The action plan also proposes the creation of a Strategic Commercial Fleet (SCF) that would consist of US-built vessels working international trades. The SCF would “provide the depth and redundancy required to sustain military logistics around the globe and ensure the continuous flow of goods to the US economy,” the plan said. “Vessels in the SCF would receive financial support for both construction and operation, leveling the playing field between the US and subsidized foreign competition.” Many of the proposals included in the maritime action plan require Congressional approval, so the Trump administration said it is compiling a legislative package that will be sent to Congress after the publication of Trump’s fiscal year 2027 budget request. Presidents typically send annual budget requests to Congress in February, although the timeline can be delayed. “The Trump administration urges Congress to enact this package in tandem with existing legislative vehicles, ensuring the US maritime industry is equipped to meet the demands of global competition, national defense and economic growth,” the plan said. Contact Kevin Saville at kevin.saville2@spglobal.com .

Port infrastructure

Trump administration unveils US maritime revitalization ‘action plan’

<div class="phx-topic abstract-wrapper">The current market situation is favorable for BCOs, and the temptation will be great to drive down base rates because of internal cost pressures, writes John McCauley.</div>

The current market situation is favorable for BCOs, and the temptation will be great to drive down base rates because of internal cost pressures, writes John McCauley.

<div class="phx-topic">At this time of year, many have reflected on 2025 and made resolutions for 2026. I have adjusted this to make no resolutions, but a few predictions that, in most cases, I hope will not materialize. In addition, I want to give some advice to beneficial cargo owners (BCOs), many of whom are in various stages of negotiations for 2026–27 service contracts. Starting with the predictions, let’s consider some supply, capacity, and demand issues. <h3>Capacity </h3>I expect Red Sea transits will resume, but very slowly and primarily for East Med cargo and for the India sub-continent to the East Coast of the US. Asia-Europe transits will only resume if insurance premiums disappear. The Houthis are still present and will be volatile and unreliable, so they remain the wild card for this prediction. At best, Asia-Europe, if Suez passage resumes, would take six months to stabilize. The US port fees for Chinese-built and -owned vessels will be a non-event. However, for carriers, the sword of Damocles is hanging over this one, so don’t expect any major service reshuffles. Sadly, service reliability levels will stay stable at a horrible 60%, notwithstanding the herculean efforts of Gemini to drag the industry up. Most carriers won’t care enough to do something about it. Expect significant trucking and drayage disruption in the US. Bankruptcies will rise as seasonality gets more unpredictable. Driver shortages will get worse. The consequences will be price volatility, both up and down, with significant backlogs adding to detention and demurrage bills. Berthing and landside restrictions will continue to hinder moving larger vessels to north-south trades as few terminals are deep-sea; they are river or bay, at best, and are often hemmed in by towns and cities and tidal-constrained. <h3>Demand </h3>Many BCOs are under high internal pressure to contribute to reductions in overall supply chain costs as margins become thinner through higher input costs (somewhat largely driven by tariffs), downstream price squeezing, and weaker demand. Container freight downward trends will be an obvious target. Keep an eye on US credit card debt and defaults, which will rise significantly by the third quarter at the latest, thus further softening demand. Macro level indicators will prey on demand. US inflation will remain stubbornly near at least 2.5% to 3% while unemployment will remain at about 4.5% as immigration net deficits offset layoffs. Job creation will stagnate. Depending on the GDP trend, expect a high likelihood of stagflation toward the end of the fourth quarter (subject to the reliability of US government data). China will continue manufacturing export expansion and increase its proportion of global trade. <h3>Recommendation </h3>What does this mean for upcoming service contract negotiations? With the expectation of vessel oversupply continuing through the year, BCOs will push to the limit to reduce base rates. They will face several dilemmas, including how to get rid of unmerited and unjustifiable surcharges and which carriers to choose from in alliances and vessel-sharing agreements. Overall, the market situation is favorable for BCOs. The temptation to drive down base rates will be great because of internal cost pressures and/or wanting to make up for some years of carrier supply strength. This should be tempered with a caveat that many BCOs have been burnt in the past for being too empathetic to carriers’ financial difficulties. If I were in the shoes of a medium-size BCO of 30,000 TEUs and above, I would select a mix that would aim for base rates around the Xeneta/NYSHEX forecast average index levels, even if offered lower rates than those levels. It is important to keep in with Mediterranean Shipping Co. even if you don’t use them today. I would use index-linked contracts today and continue to do so with a maximum of 50% to leave yourself some volume for fixed rates and some spot prices. Of that remaining volume, I would leave about 25% for spot as the downside risk is still relatively low. Finally, the market situation should allow for BCOs to get into their contracts the exclusion of any non-explainable (by the carrier) and justifiable (judged and accepted by the BCO) surcharges. John McCauley, formerly a 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>

At this time of year, many have reflected on 2025 and made resolutions for 2026. I have adjusted this to make no resolutions, but a few predictions that, in most cases, I hope will not materialize. In addition, I want to give some advice to beneficial cargo owners (BCOs), many of whom are in various stages of negotiations for 2026–27 service contracts. Starting with the predictions, let’s consider some supply, capacity, and demand issues. Capacity I expect Red Sea transits will resume, but very slowly and primarily for East Med cargo and for the India sub-continent to the East Coast of the US. Asia-Europe transits will only resume if insurance premiums disappear. The Houthis are still present and will be volatile and unreliable, so they remain the wild card for this prediction. At best, Asia-Europe, if Suez passage resumes, would take six months to stabilize. The US port fees for Chinese-built and -owned vessels will be a non-event. However, for carriers, the sword of Damocles is hanging over this one, so don’t expect any major service reshuffles. Sadly, service reliability levels will stay stable at a horrible 60%, notwithstanding the herculean efforts of Gemini to drag the industry up. Most carriers won’t care enough to do something about it. Expect significant trucking and drayage disruption in the US. Bankruptcies will rise as seasonality gets more unpredictable. Driver shortages will get worse. The consequences will be price volatility, both up and down, with significant backlogs adding to detention and demurrage bills. Berthing and landside restrictions will continue to hinder moving larger vessels to north-south trades as few terminals are deep-sea; they are river or bay, at best, and are often hemmed in by towns and cities and tidal-constrained. Demand Many BCOs are under high internal pressure to contribute to reductions in overall supply chain costs as margins become thinner through higher input costs (somewhat largely driven by tariffs), downstream price squeezing, and weaker demand. Container freight downward trends will be an obvious target. Keep an eye on US credit card debt and defaults, which will rise significantly by the third quarter at the latest, thus further softening demand. Macro level indicators will prey on demand. US inflation will remain stubbornly near at least 2.5% to 3% while unemployment will remain at about 4.5% as immigration net deficits offset layoffs. Job creation will stagnate. Depending on the GDP trend, expect a high likelihood of stagflation toward the end of the fourth quarter (subject to the reliability of US government data). China will continue manufacturing export expansion and increase its proportion of global trade. Recommendation What does this mean for upcoming service contract negotiations? With the expectation of vessel oversupply continuing through the year, BCOs will push to the limit to reduce base rates. They will face several dilemmas, including how to get rid of unmerited and unjustifiable surcharges and which carriers to choose from in alliances and vessel-sharing agreements. Overall, the market situation is favorable for BCOs. The temptation to drive down base rates will be great because of internal cost pressures and/or wanting to make up for some years of carrier supply strength. This should be tempered with a caveat that many BCOs have been burnt in the past for being too empathetic to carriers’ financial difficulties. If I were in the shoes of a medium-size BCO of 30,000 TEUs and above, I would select a mix that would aim for base rates around the Xeneta/NYSHEX forecast average index levels, even if offered lower rates than those levels. It is important to keep in with Mediterranean Shipping Co. even if you don’t use them today. I would use index-linked contracts today and continue to do so with a maximum of 50% to leave yourself some volume for fixed rates and some spot prices. Of that remaining volume, I would leave about 25% for spot as the downside risk is still relatively low. Finally, the market situation should allow for BCOs to get into their contracts the exclusion of any non-explainable (by the carrier) and justifiable (judged and accepted by the BCO) surcharges. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

A few market predictions and some advice for BCOs as contract season heats up

<div class="phx-topic abstract-wrapper">There are a lot of theories explaining the current freight recession, but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components, writes Ted Prince.</div>

There are a lot of theories explaining the current freight recession, but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components, writes Ted Prince.

<div class="phx-topic">In 1948, Gerald Hern, sports editor of the Boston Post, composed a brief poem describing the Boston Braves’ pitching en route to the 1948 National League pennant: First we’ll use Spahn then we’ll use Sain Then an off day, followed by rain Back will come Spahn, followed by Sain And followed, we hope, by two days of rain Warren Spahn and Johnny Sain were responsible for 39 of the Braves’ 91 victories that year. However, it was common to have a one-two punch at the top of a team’s pitching rotation. Intermodal has a similar duality: international and domestic — primarily dry 40- and 53-foot containers, respectively. While intermodal has a plethora of markets and equipment, the two segments have been carrying the industry for decades to constant new heights. They are also closely correlated in that a great deal of the domestic market is import cargo that was transloaded on the West Coast for movement inland. Hern’s work comes to mind when thinking about intermodal’s performance in 2025 and its prospects for 2026. Unlike the hoped-for two days of good rain, the industry has endured four years of painful rain since the halcyon volumes of 2021, the “good old days” of the COVID-19 pandemic. There are a lot of theories explaining the current freight “recession,” but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components. As a result, intermodal has frequently found itself as a surface freight alternative that is slower and more expensive than trucking. And while there were some green shoots in 2024, the industry has been hoping for a second-half recovery — that has failed to materialize — in each of the past three years. The same seems true for 2026. <h3>Supply and demand drivers </h3>As we look forward, we need to consider supply and demand drivers. “Affordability” has taken the place of prominence in our political lexicon. As the costs of food and housing rise, discretionary income for other consumer products has shriveled and reduced demand. The same goes for increasing credit card, car, and student loan debt. Regardless of mortgage rates, there are long-term limitations on housing starts. This can further reduce consumer demand because so many purchases — e.g., furniture, home, electronics, etc. — are often associated with new homes. And although seven-year car loans have become more common, I don’t believe 50-year home mortgages will have the same penetration. With demand problematic, intermodal success will probably rely on supply changes. Many contend that the demand during the early days of COVID-19 created excess capacity that the truck market is still trying to absorb. However, it is unclear whether there was really an increase in overall capacity, or just realignment as many truckers decided to go out on their own. Regardless, there were a number of carriers that acquired capacity at historically high prices and must keep operating to just make their payments. The normal culling of unprofitable capacity was precluded by this inability to exit the market, ensuring a never-ending supply of zombie truckers. This capacity is getting older and more expensive to operate. Nevertheless, there is a feeling (or hope?) that 2026 will finally see marginal carriers leave the market and rate stability restored. <h3>Enhanced regulatory oversight </h3>The environmental green benefits of intermodal are not a priority for the current administration, so economic green will be paramount. Most likely that would come from increased regulatory oversight. Enhanced enforcement on non-domiciled commercial driver’s licenses is reducing driver supply. And there is still the unknown of hacked electronic logging devices allowing for illegal hours of service. What is unclear is whether these initiatives will impact truckload and drayage carriers equally, or whether one segment will suffer disproportionate opprobrium. If it is the former, intermodal will be advantaged; however, if it is the latter, maybe not. The former would be a rising tide that would raise all intermodal ships, whereas the latter could see the further ascendance of bimodal operations with integrated drayage overseen by robust safety regimens. In an attempt to increase demand, we can expect major players to assume prominent roles. Railroads and bimodals will seek to deploy equipment that has been stored for years. Ocean carriers will continue to consider their inland options. Finally, ports may become more involved as they explore inland options to attract more discretionary cargo. There are no historical comparisons for the last five years. It is unclear when the market will turn, but when it does, the recovery will follow Ernest Hemingway’s description: “Gradually, then suddenly.” We can then hope for the sun also to rise on intermodal. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

In 1948, Gerald Hern, sports editor of the Boston Post, composed a brief poem describing the Boston Braves’ pitching en route to the 1948 National League pennant: First we’ll use Spahn then we’ll use Sain Then an off day, followed by rain Back will come Spahn, followed by Sain And followed, we hope, by two days of rain Warren Spahn and Johnny Sain were responsible for 39 of the Braves’ 91 victories that year. However, it was common to have a one-two punch at the top of a team’s pitching rotation. Intermodal has a similar duality: international and domestic — primarily dry 40- and 53-foot containers, respectively. While intermodal has a plethora of markets and equipment, the two segments have been carrying the industry for decades to constant new heights. They are also closely correlated in that a great deal of the domestic market is import cargo that was transloaded on the West Coast for movement inland. Hern’s work comes to mind when thinking about intermodal’s performance in 2025 and its prospects for 2026. Unlike the hoped-for two days of good rain, the industry has endured four years of painful rain since the halcyon volumes of 2021, the “good old days” of the COVID-19 pandemic. There are a lot of theories explaining the current freight “recession,” but there is no disputing that decreased demand, cutthroat competition, and plummeting rates have occurred simultaneously with inflationary cost components. As a result, intermodal has frequently found itself as a surface freight alternative that is slower and more expensive than trucking. And while there were some green shoots in 2024, the industry has been hoping for a second-half recovery — that has failed to materialize — in each of the past three years. The same seems true for 2026. Supply and demand drivers As we look forward, we need to consider supply and demand drivers. “Affordability” has taken the place of prominence in our political lexicon. As the costs of food and housing rise, discretionary income for other consumer products has shriveled and reduced demand. The same goes for increasing credit card, car, and student loan debt. Regardless of mortgage rates, there are long-term limitations on housing starts. This can further reduce consumer demand because so many purchases — e.g., furniture, home, electronics, etc. — are often associated with new homes. And although seven-year car loans have become more common, I don’t believe 50-year home mortgages will have the same penetration. With demand problematic, intermodal success will probably rely on supply changes. Many contend that the demand during the early days of COVID-19 created excess capacity that the truck market is still trying to absorb. However, it is unclear whether there was really an increase in overall capacity, or just realignment as many truckers decided to go out on their own. Regardless, there were a number of carriers that acquired capacity at historically high prices and must keep operating to just make their payments. The normal culling of unprofitable capacity was precluded by this inability to exit the market, ensuring a never-ending supply of zombie truckers. This capacity is getting older and more expensive to operate. Nevertheless, there is a feeling (or hope?) that 2026 will finally see marginal carriers leave the market and rate stability restored. Enhanced regulatory oversight The environmental green benefits of intermodal are not a priority for the current administration, so economic green will be paramount. Most likely that would come from increased regulatory oversight. Enhanced enforcement on non-domiciled commercial driver’s licenses is reducing driver supply. And there is still the unknown of hacked electronic logging devices allowing for illegal hours of service. What is unclear is whether these initiatives will impact truckload and drayage carriers equally, or whether one segment will suffer disproportionate opprobrium. If it is the former, intermodal will be advantaged; however, if it is the latter, maybe not. The former would be a rising tide that would raise all intermodal ships, whereas the latter could see the further ascendance of bimodal operations with integrated drayage overseen by robust safety regimens. In an attempt to increase demand, we can expect major players to assume prominent roles. Railroads and bimodals will seek to deploy equipment that has been stored for years. Ocean carriers will continue to consider their inland options. Finally, ports may become more involved as they explore inland options to attract more discretionary cargo. There are no historical comparisons for the last five years. It is unclear when the market will turn, but when it does, the recovery will follow Ernest Hemingway’s description: “Gradually, then suddenly.” We can then hope for the sun also to rise on intermodal. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

North-American rail

Intermodal providers

Pace of freight market recovery a matter of ‘gradually, then suddenly’

China to US

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The Freightos Air Index (FAX) is based on all-in spot rates for general cargo in US$ for weight category of 100 to 3,000 kilograms. The rates include the air freight fee, fuel, and security and seasonal surcharges. The per kg rate is calculated based on the standard chargeable weight (the greater of the actual gross weight and 166kgs, multiplied by the volume in cubic meters). [Freightos Air Index](https://www.freightos.com/enterprise/terminal/fax-global-freightos-air-index/?utm_source=terminal_embed&utm_medium=referral&utm_content=fax)

China to US air freight rates (Freightos)

China to US Air Freight Price Index by Weight Break 100–3000 kg (Freightos) Gateway

<div class="phx-topic abstract-wrapper">The carrier reported a steep drop in profitability as declining rates combined with higher costs of rerouting ships around southern Africa and startup expenses for the Gemini network.</div>

The carrier reported a steep drop in profitability as declining rates combined with higher costs of rerouting ships around southern Africa and startup expenses for the Gemini network.

<div class="phx-topic">A solid increase in Hapag-Lloyd’s Gemini Cooperation-driven volume last year and cost savings across the new network were not enough to offset a sharply correcting market in 2025, the carrier said Monday. Hapag-Lloyd reported a steep drop in profitability for the year as declining rates combined with the higher costs of rerouting ships around southern Africa and startup expenses for the Gemini network to weigh on its 2025 results. Hapag-Lloyd launched the Gemini network with partner Maersk in February 2025. “Robust growth in global trade and the new Gemini network led to an 8% increase in the transport volume to 13.5 million TEUs,” Hapag-Lloyd said in a statement on its preliminary 2025 results. The carrier provided no after-tax figures; its full annual report with a 2026 outlook will be unveiled March 26. Even as demand rose, it was mirrored by a drop in average rates that were down 8% year over year at $1,376 per TEU. That led to full-year revenue falling 1.9% to $21.1 billion and earnings before interest, taxes, amortization and depreciation (EBITDA) declining 28% to $3.6 billion. While earnings before interest and taxes (EBIT) were down 60% at $1.1 billion, they was at the higher end of the profitability forecast Hapag-Lloyd gave the market following the announcement of its nine-month results last November. <h3>Gemini savings kicking in </h3>The results showed that much of the 2025 financial damage occurred in the fourth quarter, similar to <a href="https://www.joc.com/article/gemini-benefits-face-looming-challenge-from-oversupplied-market-maersk-ceo-6164887">the full-year earnings of Maersk</a> and <a href="https://www.joc.com/article/frontloading-drags-one-to-a-loss-in-its-fiscal-third-quarter-6161263">the fiscal third-quarter results of Ocean Network Express</a>. Hapag-Lloyd’s fourth-quarter volume was up 6% year over year, but revenue fell 7.4% to $5 billion, EBITDA dropped 42% to $800 million and EBIT for the quarter was down 75% at $200 million. “On the other hand, Gemini-related cost savings started kicking in during the second half of 2025 and will be fully realized in 2026,” the carrier said. Hapag-Lloyd’s savings to be generated by Gemini are expected to be between $350 million and $400 million, which is approximately 40% of a total $1 billion in savings the carrier expects to have in place by the end of this year as part of an aggressive cost-savings program across its overall network. Hapag-Lloyd did not provide financials for its Hanseatic Global Terminals division, but it is a key part of the Gemini network. Maersk and Hapag-Lloyd control most of their terminal network, which gives the carriers greater berth access and handling productivity than common user facilities, especially in the congested hubs of Europe. That access saw Maersk reporting a record performance in its terminals division in 2025. Maritime consultant Drewry has upgraded its financial year 2025 profit forecast from $20 billion to $32 billion following “better than expected” third-quarter results from carriers and raised the outlook for 2026 from a $10 billion loss to a $1 billion profit. Contact Greg Knowler at <a href="https://www.joc.com/article/frontloading-drags-one-to-a-loss-in-its-fiscal-third-quarter-6161263">greg.knowler@spglobal.com</a>. </div>

A solid increase in Hapag-Lloyd’s Gemini Cooperation-driven volume last year and cost savings across the new network were not enough to offset a sharply correcting market in 2025, the carrier said Monday. Hapag-Lloyd reported a steep drop in profitability for the year as declining rates combined with the higher costs of rerouting ships around southern Africa and startup expenses for the Gemini network to weigh on its 2025 results. Hapag-Lloyd launched the Gemini network with partner Maersk in February 2025. “Robust growth in global trade and the new Gemini network led to an 8% increase in the transport volume to 13.5 million TEUs,” Hapag-Lloyd said in a statement on its preliminary 2025 results. The carrier provided no after-tax figures; its full annual report with a 2026 outlook will be unveiled March 26. Even as demand rose, it was mirrored by a drop in average rates that were down 8% year over year at $1,376 per TEU. That led to full-year revenue falling 1.9% to $21.1 billion and earnings before interest, taxes, amortization and depreciation (EBITDA) declining 28% to $3.6 billion. While earnings before interest and taxes (EBIT) were down 60% at $1.1 billion, they was at the higher end of the profitability forecast Hapag-Lloyd gave the market following the announcement of its nine-month results last November. Gemini savings kicking in The results showed that much of the 2025 financial damage occurred in the fourth quarter, similar to the full-year earnings of Maersk and the fiscal third-quarter results of Ocean Network Express . Hapag-Lloyd’s fourth-quarter volume was up 6% year over year, but revenue fell 7.4% to $5 billion, EBITDA dropped 42% to $800 million and EBIT for the quarter was down 75% at $200 million. “On the other hand, Gemini-related cost savings started kicking in during the second half of 2025 and will be fully realized in 2026,” the carrier said. Hapag-Lloyd’s savings to be generated by Gemini are expected to be between $350 million and $400 million, which is approximately 40% of a total $1 billion in savings the carrier expects to have in place by the end of this year as part of an aggressive cost-savings program across its overall network. Hapag-Lloyd did not provide financials for its Hanseatic Global Terminals division, but it is a key part of the Gemini network. Maersk and Hapag-Lloyd control most of their terminal network, which gives the carriers greater berth access and handling productivity than common user facilities, especially in the congested hubs of Europe. That access saw Maersk reporting a record performance in its terminals division in 2025. Maritime consultant Drewry has upgraded its financial year 2025 profit forecast from $20 billion to $32 billion following “better than expected” third-quarter results from carriers and raised the outlook for 2026 from a $10 billion loss to a $1 billion profit. Contact Greg Knowler at greg.knowler@spglobal.com .

Fourth-quarter rate slump drags down Hapag-Lloyd’s 2025 financials

<div class="phx-topic abstract-wrapper">The likely sale this year of the Port of New York and New Jersey’s largest marine terminal portends possible changes to how it will be operated in the long run. </div>

The likely sale this year of the Port of New York and New Jersey’s largest marine terminal portends possible changes to how it will be operated in the long run.

<div class="phx-topic">The potential sale of Maher Terminal at the Port of New York and New Jersey will require a buyer to navigate stricter lease terms, billions in new costs, and decisions on how to grow capacity and service its customers, all portending further changes in container handling at the port. A source told the Journal of Commerce that marine terminal operators including DP World, PSA International, SSA Marine, and Terminal Investment Limited have inquired about a potential acquisition of Maher from private equity firm Macquarie Infrastructure Partners. Maher, the largest container terminal at NY-NJ, could fetch $3 billion, according to the Wall Street Journal. The sale of Maher, which could be announced later this year, comes after the Macquarie fund that owns Maher negotiated <a href="https://www.joc.com/article/macquarie-seals-deal-for-new-maher-lease-at-nynj-through-2063-6137751">a new 33-year lease with the Port Authority of New York and New Jersey that starts in 2030</a>. The potential buyers have also contacted the Port Authority, the source said, because the agency would have to sign off on any deal. The new lease means Maher’s buyer faces a variable monthly rent that is based solely on container volume, the source said, rather than the previous lease’s largely fixed-cost base rent. In addition, the new operator will have to share with the Port Authority a greater portion of its “excess revenue,” which generally comes from the demurrage it charges on containers. Outside of the direct rental costs, Maher’s buyer could face at least $3 billion in capital and maintenance costs under the new lease, the source said. <h3>Capacity upgrades</h3>A big chunk of that will be the cost of berth maintenance and repairs that the Port Authority has begun shifting over to tenants under the new leases. Maher, with four berths capable of handling super-post-Panamax ships, faces an estimated $2 billion in such repairs.The new lease also requires Maher to add “demand-induced” capacity as part of the port’s overall plan to double capacity by 2050, Port Director Beth Rooney said after the lease’s December signing. Maher, which can currently handle just over 3 million TEUs, could double its capacity through densification, she said. Densification, though, will require the buyer to rethink signature features of the terminal that have made it preferred among ocean carriers, shippers and motor carriers. The densification process could cost another $1 billion. Maher currently uses a fleet of over 200 straddle carriers to sort containers and bring them to trucks waiting at a parking spot, what the facility bills as a “concierge service,” according to shippers. Maher has won multiple awards from local motor carriers and ocean carriers for its service levels. Densifying the facility would mean gradually rolling out a smaller fleet of gantry cranes, either on rubber tires or rail mounted, for handling higher and wider container stacks. The process would require that yard space within Maher be closed on a rotating basis while the underlying concrete is reinforced and container stacks are remade for the larger machines. It’s not clear how the switch to gantry crane operations will affect service times for trucks, although it would likely mean fewer loading spaces. An equipment change at the terminal will also trigger a clause in the contract with the International Longshoremen’s Association (ILA) over implementing new technology, requiring negotiations with the union. Along with larger yard equipment, a new buyer for Maher will face decisions on how it optimizes space. Maher has a massive truck gate with some 30 inbound lanes and 20 outbound lanes. The large gate complex allows Maher to handle trucks without requiring appointments, a free-flow operation that allows truckers to quickly enter the facility. But the gate complex also occupies about a quarter of its land, making it a potential target for reclamation to container yard space. A smaller gate, though, might require Maher to rethink the free-flow model. Maher will also have to share more of its daily operational data under the new lease terms, which require the terminal to provide data about key metrics and other measures. The data sharing will “enable the Port Authority and its terminal operators to better collaborate on port efficiency initiatives,” the agency said in a statement to the Journal of Commerce.Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The potential sale of Maher Terminal at the Port of New York and New Jersey will require a buyer to navigate stricter lease terms, billions in new costs, and decisions on how to grow capacity and service its customers, all portending further changes in container handling at the port. A source told the Journal of Commerce that marine terminal operators including DP World, PSA International, SSA Marine, and Terminal Investment Limited have inquired about a potential acquisition of Maher from private equity firm Macquarie Infrastructure Partners. Maher, the largest container terminal at NY-NJ, could fetch $3 billion, according to the Wall Street Journal. The sale of Maher, which could be announced later this year, comes after the Macquarie fund that owns Maher negotiated a new 33-year lease with the Port Authority of New York and New Jersey that starts in 2030 . The potential buyers have also contacted the Port Authority, the source said, because the agency would have to sign off on any deal. The new lease means Maher’s buyer faces a variable monthly rent that is based solely on container volume, the source said, rather than the previous lease’s largely fixed-cost base rent. In addition, the new operator will have to share with the Port Authority a greater portion of its “excess revenue,” which generally comes from the demurrage it charges on containers. Outside of the direct rental costs, Maher’s buyer could face at least $3 billion in capital and maintenance costs under the new lease, the source said. Capacity upgrades A big chunk of that will be the cost of berth maintenance and repairs that the Port Authority has begun shifting over to tenants under the new leases. Maher, with four berths capable of handling super-post-Panamax ships, faces an estimated $2 billion in such repairs. The new lease also requires Maher to add “demand-induced” capacity as part of the port’s overall plan to double capacity by 2050, Port Director Beth Rooney said after the lease’s December signing. Maher, which can currently handle just over 3 million TEUs, could double its capacity through densification, she said. Densification, though, will require the buyer to rethink signature features of the terminal that have made it preferred among ocean carriers, shippers and motor carriers. The densification process could cost another $1 billion. Maher currently uses a fleet of over 200 straddle carriers to sort containers and bring them to trucks waiting at a parking spot, what the facility bills as a “concierge service,” according to shippers. Maher has won multiple awards from local motor carriers and ocean carriers for its service levels. Densifying the facility would mean gradually rolling out a smaller fleet of gantry cranes, either on rubber tires or rail mounted, for handling higher and wider container stacks. The process would require that yard space within Maher be closed on a rotating basis while the underlying concrete is reinforced and container stacks are remade for the larger machines. It’s not clear how the switch to gantry crane operations will affect service times for trucks, although it would likely mean fewer loading spaces. An equipment change at the terminal will also trigger a clause in the contract with the International Longshoremen’s Association (ILA) over implementing new technology, requiring negotiations with the union. Along with larger yard equipment, a new buyer for Maher will face decisions on how it optimizes space. Maher has a massive truck gate with some 30 inbound lanes and 20 outbound lanes. The large gate complex allows Maher to handle trucks without requiring appointments, a free-flow operation that allows truckers to quickly enter the facility. But the gate complex also occupies about a quarter of its land, making it a potential target for reclamation to container yard space. A smaller gate, though, might require Maher to rethink the free-flow model. Maher will also have to share more of its daily operational data under the new lease terms, which require the terminal to provide data about key metrics and other measures. The data sharing will “enable the Port Authority and its terminal operators to better collaborate on port efficiency initiatives,” the agency said in a statement to the Journal of Commerce.Contact Michael Angell at michael.angell@spglobal.com .

Longshore labor

Maher’s next buyer faces billions in upgrades, decisions on capacity

<div class="phx-topic abstract-wrapper">While linehaul performance has largely returned to normal for US Class I railroads, delays and bottlenecks triggered by the severe winter storm two weeks ago have now moved downstream to terminals in Chicago, Cincinnati and Memphis.</div>

While linehaul performance has largely returned to normal for US Class I railroads, delays and bottlenecks triggered by the severe winter storm two weeks ago have now moved downstream to terminals in Chicago, Cincinnati and Memphis.

<div class="phx-topic">Rail terminals at key inland hubs have become congested with containers two weeks after a severe winter storm slammed a large portion of the US, slowing both the handoff of import boxes to trucks and the start of export moves. While port-to-rail service and linehaul performance have largely returned to normal for US Class I railroads, the delays and bottlenecks triggered by the storm have now moved downstream to terminals in Chicago, Cincinnati and Memphis. “We’ve had drivers spending up to five hours just in line, consistently missing deliveries and having containers going into [demurrage],” said one Chicago-based trucker who asked not to be identified. “The customers refuse to pay and are getting frustrated. Drivers are getting frustrated.” Truckers say the terminal delays are eroding productivity and adding costs, particularly as railroads assess fees during extended container dwell times. For drayage providers, profitability depends on delivering cargo, making hours-long delays inside terminals costly. Frustration has been directed at BNSF Railway, Norfolk Southern Railway (NS) and Union Pacific Railroad (UP). Slowdowns are common during frigid temperatures because heavy equipment such as overhead cranes and hostler vehicles can malfunction. Outdoor terminal crews also must battle the harsh conditions. In Memphis, drivers have raised concerns after UP began stacking ocean containers inside the terminal on Feb. 4 because of a chassis shortage, according to a UP advisory circulated to drivers and shared with the Journal of Commerce. A UP spokesperson declined to confirm the advisory’s authenticity, although two independent sources provided copies to the Journal of Commerce. “Union Pacific does not own chassis and works closely with customers and their carriers to ensure availability,” the UP spokesperson said in a statement to the Journal of Commerce. “Following the unprecedented storm, Union Pacific recovered exceptionally well and maintained a fluid rail network.” Truckers object to UP’s decision, prompted by the post-storm conditions, to charge a fee to lift containers out of stacks. The so-called “flip fee” traditionally applies when transferring a container from a perfectly usable pool chassis to a trucker’s privately owned chassis. Other North American Class I railroads do not assess a fee in similar circumstances, and major US ports similarly do not charge simply to lift a container from a stack onto a truck. Cargo owners are not covering the cost, so UP’s decision is a financial hit for truckers, provoking angry e-mails from truckers that were shared with the Journal of Commerce. Data from technology provider E-Dray shows that the average time to unload an ocean container and make it available at UP’s Memphis terminal has increased from less than one (0.7) day before the storm to 2.9 days as of this week. <h3>Frustrations with BNSF, Norfolk Southern </h3>Drivers report similar frustrations at BNSF’s Memphis and Logistics Park Chicago terminals, where E-Dray data shows container availability times have doubled from approximately one day to two days in both locations. The delays are not driven by chassis shortages, but by extended waits for crane availability. “Turn times at both facilities are about 30%, or 20 minutes longer,” Jon Gabriel, BNSF’s group vice president of consumer products, told the Journal of Commerce. “We expect that turn times [will] return back to normal at both facilities next week, likely Memphis a little sooner.” In Chicago, drivers have also voiced concerns about Norfolk Southern terminals, although E-Dray data shows no material deterioration in terminal efficiency metrics there. Norfolk Southern, however, acknowledged congestion in Cincinnati. “We are taking proactive steps to improve the driver experience, reduce dwell, and maintain service reliability,” NS wrote in a Feb. 3 advisory posted online. “Our focus is on restoring smooth terminal flow and improving the driver experience as quickly as possible.” Congestion also remains elevated in Louisville, where a disruption that began more than a month ago persists. <h3>Linehaul performance rebounds </h3>Moving containers into major inland hubs is no longer an issue for the railroads. BNSF’s transit times between Floyd, Mississippi, and Plaines, Illinois, nearly doubled to 19 hours in the immediate aftermath of the storm, but had fallen back to about 10 hours as of Feb. 5, according to rail visibility provider RailState. UP’s transit times between Edwardsville, Kansas, and Mazonia, Illinois, spiked to nearly 80 hours after the storm before declining to approximately 35 hours this week, RailState data showed. NS’ transit times between Mishawaka, Indiana, and East Palestine, Ohio, jumped about 50% during the storm but have since returned to historical norms. (The RailState data used in this report was the 75th percentile of transit times, as calculated by RailState, to better capture “outlier” instances created by the storm.) Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Rail terminals at key inland hubs have become congested with containers two weeks after a severe winter storm slammed a large portion of the US, slowing both the handoff of import boxes to trucks and the start of export moves. While port-to-rail service and linehaul performance have largely returned to normal for US Class I railroads, the delays and bottlenecks triggered by the storm have now moved downstream to terminals in Chicago, Cincinnati and Memphis. “We’ve had drivers spending up to five hours just in line, consistently missing deliveries and having containers going into [demurrage],” said one Chicago-based trucker who asked not to be identified. “The customers refuse to pay and are getting frustrated. Drivers are getting frustrated.” Truckers say the terminal delays are eroding productivity and adding costs, particularly as railroads assess fees during extended container dwell times. For drayage providers, profitability depends on delivering cargo, making hours-long delays inside terminals costly. Frustration has been directed at BNSF Railway, Norfolk Southern Railway (NS) and Union Pacific Railroad (UP). Slowdowns are common during frigid temperatures because heavy equipment such as overhead cranes and hostler vehicles can malfunction. Outdoor terminal crews also must battle the harsh conditions. In Memphis, drivers have raised concerns after UP began stacking ocean containers inside the terminal on Feb. 4 because of a chassis shortage, according to a UP advisory circulated to drivers and shared with the Journal of Commerce. A UP spokesperson declined to confirm the advisory’s authenticity, although two independent sources provided copies to the Journal of Commerce. “Union Pacific does not own chassis and works closely with customers and their carriers to ensure availability,” the UP spokesperson said in a statement to the Journal of Commerce. “Following the unprecedented storm, Union Pacific recovered exceptionally well and maintained a fluid rail network.” Truckers object to UP’s decision, prompted by the post-storm conditions, to charge a fee to lift containers out of stacks. The so-called “flip fee” traditionally applies when transferring a container from a perfectly usable pool chassis to a trucker’s privately owned chassis. Other North American Class I railroads do not assess a fee in similar circumstances, and major US ports similarly do not charge simply to lift a container from a stack onto a truck. Cargo owners are not covering the cost, so UP’s decision is a financial hit for truckers, provoking angry e-mails from truckers that were shared with the Journal of Commerce. Data from technology provider E-Dray shows that the average time to unload an ocean container and make it available at UP’s Memphis terminal has increased from less than one (0.7) day before the storm to 2.9 days as of this week. Frustrations with BNSF, Norfolk Southern Drivers report similar frustrations at BNSF’s Memphis and Logistics Park Chicago terminals, where E-Dray data shows container availability times have doubled from approximately one day to two days in both locations. The delays are not driven by chassis shortages, but by extended waits for crane availability. “Turn times at both facilities are about 30%, or 20 minutes longer,” Jon Gabriel, BNSF’s group vice president of consumer products, told the Journal of Commerce. “We expect that turn times [will] return back to normal at both facilities next week, likely Memphis a little sooner.” In Chicago, drivers have also voiced concerns about Norfolk Southern terminals, although E-Dray data shows no material deterioration in terminal efficiency metrics there. Norfolk Southern, however, acknowledged congestion in Cincinnati. “We are taking proactive steps to improve the driver experience, reduce dwell, and maintain service reliability,” NS wrote in a Feb. 3 advisory posted online. “Our focus is on restoring smooth terminal flow and improving the driver experience as quickly as possible.” Congestion also remains elevated in Louisville, where a disruption that began more than a month ago persists. Linehaul performance rebounds Moving containers into major inland hubs is no longer an issue for the railroads. BNSF’s transit times between Floyd, Mississippi, and Plaines, Illinois, nearly doubled to 19 hours in the immediate aftermath of the storm, but had fallen back to about 10 hours as of Feb. 5, according to rail visibility provider RailState. UP’s transit times between Edwardsville, Kansas, and Mazonia, Illinois, spiked to nearly 80 hours after the storm before declining to approximately 35 hours this week, RailState data showed. NS’ transit times between Mishawaka, Indiana, and East Palestine, Ohio, jumped about 50% during the storm but have since returned to historical norms. (The RailState data used in this report was the 75th percentile of transit times, as calculated by RailState, to better capture “outlier” instances created by the storm.) Contact Ari Ashe at ari.ashe@spglobal.com .

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Key inland rail terminals battle post-storm congestion, driver complaints

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<div class="phx-topic abstract-wrapper">La Caisse, a major infrastructure fund and co-investor with DP World, said it wants clarity from the ports operator about Sultan Ahmed Bin Sulayem’s relationship with the convicted sex trafficker after messages between the two men became public this week.</div>

La Caisse, a major infrastructure fund and co-investor with DP World, said it wants clarity from the ports operator about Sultan Ahmed Bin Sulayem’s relationship with the convicted sex trafficker after messages between the two men became public this week.

<div class="phx-topic">A Quebec-based pension fund has put future investments with DP World on hold until the ports operator clarifies the relationship its chief executive had with deceased sex offender Jeffrey Epstein. The pause could slow development of Canada’s next big container terminal. La Caisse, which has C$496 billion in assets under management, said in a statement to the Journal of Commerce Wednesday it is waiting to hear from DP World about what steps it is taking in regards to its Chairman and Chief Executive Sultan Ahmed Bin Sulayem after messages between him and Epstein were released by US Congressional representatives this week as part of a probe into Epstein’s ties to rich and powerful men across the globe. Some of <a href="https://www.ft.com/content/c813601e-e8cb-4eb9-b1de-6ca504bb689f">the messages between Sulayem and Epstein</a> were sexual in nature. La Caisse, which has invested in DP World port projects across the world, said that until it hears from DP World, it is “pausing additional capital deployment alongside the company.” “It is important to distinguish the company, DP World, from the individual, who is the focus of the current situation,” La Caisse said. “On that point, we have made it clear to the company that we expect it to shed light on the situation and take the necessary actions.” According to local media, La Caisse had been slated to provide over C$100 million toward the development of Quebec’s Contrecoeur terminal, which is estimated to cost about C$1.6 billion and <a href="https://www.joc.com/article/dp-world-to-build-big-ship-container-terminal-in-montreal-6077326">would be operated by DP World</a>. La Caisse said no final decision on financing Contrecoeur has been made. In 2020, DP World and La Caisse acquired the Fraser Surrey terminal at the Port of Vancouver. That was followed by La Caisse investing up to $5 billion in 2022 in DP World’s Jebel Ali port in Dubai, along with a nearby free trade zone and industrial park. Montreal Port Authority (MPA) Chief Executive Julie Gascon said in a statement to the Journal of Commerce that it’s not yet clear whether La Caisse’s pause would affect Contrecoeur’s expected 2030 opening date. The MPA, which is responsible for <a href="https://www.joc.com/article/quebec-provides-new-funding-for-proposed-montreal-terminal-citing-us-trade-tensions-5947783">the separate government-backed financing of dredging and other below-water work at the site</a>, is also waiting to hear from DP World about how it will respond to La Caisse. Gascon said, however, that development of Contrecoeur is a national priority for Prime Minister Mark Carney, <a href="https://www.joc.com/article/canada-looks-for-new-container-gateways-for-decoupling-from-us-6122714">who is looking to grow Canada’s non-US international trade</a>. Contrecoeur will be needed to serve the country’s eastern half as the Port of Montreal will likely be at capacity by the next decade. “My concern is that as soon as we start signing more services, then we’re full,” Gascon said. “So, I can’t come in late with Contrecoeur. It’s 2026, and it’s going to be delivered in 2030, so we need to be on time.” <h3>DP World expanded in US </h3>Dubai-based DP World, the fourth-largest ports operator globally by volume, is Canada’s largest terminal company, operating the Fraser Surrey, Centerm and Nanaimo facilities in Vancouver; the Prince Rupert terminal, and the Port of Saint John container terminal. In the US, DP World has a limited presence in non-marine logistics. Last year, it acquired Unique Logistics International, a North Carolina-based contract logistics provider, and bought Michigan-based warehousing and logistics operator Syncreon in 2021. But DP World is also looking to expand in the US, with the company reported to be one of the potential suitors for the Maher terminal at the Port of New York and New Jersey. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.  </div>

A Quebec-based pension fund has put future investments with DP World on hold until the ports operator clarifies the relationship its chief executive had with deceased sex offender Jeffrey Epstein. The pause could slow development of Canada’s next big container terminal. La Caisse, which has C$496 billion in assets under management, said in a statement to the Journal of Commerce Wednesday it is waiting to hear from DP World about what steps it is taking in regards to its Chairman and Chief Executive Sultan Ahmed Bin Sulayem after messages between him and Epstein were released by US Congressional representatives this week as part of a probe into Epstein’s ties to rich and powerful men across the globe. Some of the messages between Sulayem and Epstein were sexual in nature. La Caisse, which has invested in DP World port projects across the world, said that until it hears from DP World, it is “pausing additional capital deployment alongside the company.” “It is important to distinguish the company, DP World, from the individual, who is the focus of the current situation,” La Caisse said. “On that point, we have made it clear to the company that we expect it to shed light on the situation and take the necessary actions.” According to local media, La Caisse had been slated to provide over C$100 million toward the development of Quebec’s Contrecoeur terminal, which is estimated to cost about C$1.6 billion and would be operated by DP World . La Caisse said no final decision on financing Contrecoeur has been made. In 2020, DP World and La Caisse acquired the Fraser Surrey terminal at the Port of Vancouver. That was followed by La Caisse investing up to $5 billion in 2022 in DP World’s Jebel Ali port in Dubai, along with a nearby free trade zone and industrial park. Montreal Port Authority (MPA) Chief Executive Julie Gascon said in a statement to the Journal of Commerce that it’s not yet clear whether La Caisse’s pause would affect Contrecoeur’s expected 2030 opening date. The MPA, which is responsible for the separate government-backed financing of dredging and other below-water work at the site , is also waiting to hear from DP World about how it will respond to La Caisse. Gascon said, however, that development of Contrecoeur is a national priority for Prime Minister Mark Carney, who is looking to grow Canada’s non-US international trade . Contrecoeur will be needed to serve the country’s eastern half as the Port of Montreal will likely be at capacity by the next decade. “My concern is that as soon as we start signing more services, then we’re full,” Gascon said. “So, I can’t come in late with Contrecoeur. It’s 2026, and it’s going to be delivered in 2030, so we need to be on time.” DP World expanded in US Dubai-based DP World, the fourth-largest ports operator globally by volume, is Canada’s largest terminal company, operating the Fraser Surrey, Centerm and Nanaimo facilities in Vancouver; the Prince Rupert terminal, and the Port of Saint John container terminal. In the US, DP World has a limited presence in non-marine logistics. Last year, it acquired Unique Logistics International, a North Carolina-based contract logistics provider, and bought Michigan-based warehousing and logistics operator Syncreon in 2021. But DP World is also looking to expand in the US, with the company reported to be one of the potential suitors for the Maher terminal at the Port of New York and New Jersey. Contact Michael Angell at michael.angell@spglobal.com . 

International ports

DP World’s financial partner hits pause over CEO’s ties to Epstein

<div class="phx-topic abstract-wrapper">The fourth-largest US domestic intermodal provider has received additional funding and now must focus on meeting revenue and expenditure targets through the second quarter.</div>

The fourth-largest US domestic intermodal provider has received additional funding and now must focus on meeting revenue and expenditure targets through the second quarter.

<div class="phx-topic">STG Logistics has received $40 million in new funding and another reserve fund of $25 million after a deal was reached between lenders ahead of a key hearing before a New Jersey bankruptcy court. The deal agreed to on Tuesday results in a temporary truce between two lenders who sued STG Logistics in a New York court and a group of lenders who provided the rescue funds when <a href="https://www.joc.com/article/stg-files-ch-11-bankruptcy-but-intermodal-operations-remain-intact-6150641">the bankruptcy was filed on Jan. 12</a>. STG operates a thriving transloading and drayage business and is also the fourth-largest US domestic intermodal provider with 15,000 privately-owned containers. The agreement allows Axos Financial and Siemens Financial Solutions to proceed as a sub-case within the bankruptcy case in exchange for withdrawing an objection to the rescue funding. If a deal had not been struck, then the bankruptcy judge would have ruled on the objection Tuesday. The final order authorizes STG to pay drivers, warehouse workers, and railroads, among others. STG owed Union Pacific Railroad $13.4 million in back payments, significantly more than the $1.2 million owed to CSX Transportation. In exchange for receiving payment, the railroads cannot change credit terms with STG or increase rates or fees while it remains in Chapter 11 bankruptcy. <h3>Default triggers </h3>Hurdles remain in STG’s efforts to emerge from bankruptcy restructuring. The original bankruptcy filing included a 13-week budget outlining projected revenue from operations and expenses. If STG spends more than 115% of the budgeted expenses, fails to book at least 80% of the estimated revenue, or falls below $50 million in cash on hand, then it will be considered in default. A default doesn’t automatically mean operations would cease, but it gives the lenders the right to stop the cash flow entirely. STG did not fall below the 80% threshold after the recent winter storm briefly disrupted operations on UP and CSX, according to a source close to the bankruptcy hearing. Next month, there will be a window known as a “sale toggle” in which the lenders could decide to sell the company to an outside bidder, who then would decide how to manage STG’s operations. The sale toggle is a standard practice in Chapter 11 bankruptcy allowing the bankrupt company to explore other offers. Finally, the Axos-Siemens case isn’t resolved, just shifted to a sub-case. The bankruptcy judge must still rule before STG emerges from bankruptcy. If the judge rules in favor of Axos and Siemens, the group of rescue lenders could pull their financial support. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

STG Logistics has received $40 million in new funding and another reserve fund of $25 million after a deal was reached between lenders ahead of a key hearing before a New Jersey bankruptcy court. The deal agreed to on Tuesday results in a temporary truce between two lenders who sued STG Logistics in a New York court and a group of lenders who provided the rescue funds when the bankruptcy was filed on Jan. 12 . STG operates a thriving transloading and drayage business and is also the fourth-largest US domestic intermodal provider with 15,000 privately-owned containers. The agreement allows Axos Financial and Siemens Financial Solutions to proceed as a sub-case within the bankruptcy case in exchange for withdrawing an objection to the rescue funding. If a deal had not been struck, then the bankruptcy judge would have ruled on the objection Tuesday. The final order authorizes STG to pay drivers, warehouse workers, and railroads, among others. STG owed Union Pacific Railroad $13.4 million in back payments, significantly more than the $1.2 million owed to CSX Transportation. In exchange for receiving payment, the railroads cannot change credit terms with STG or increase rates or fees while it remains in Chapter 11 bankruptcy. Default triggers Hurdles remain in STG’s efforts to emerge from bankruptcy restructuring. The original bankruptcy filing included a 13-week budget outlining projected revenue from operations and expenses. If STG spends more than 115% of the budgeted expenses, fails to book at least 80% of the estimated revenue, or falls below $50 million in cash on hand, then it will be considered in default. A default doesn’t automatically mean operations would cease, but it gives the lenders the right to stop the cash flow entirely. STG did not fall below the 80% threshold after the recent winter storm briefly disrupted operations on UP and CSX, according to a source close to the bankruptcy hearing. Next month, there will be a window known as a “sale toggle” in which the lenders could decide to sell the company to an outside bidder, who then would decide how to manage STG’s operations. The sale toggle is a standard practice in Chapter 11 bankruptcy allowing the bankrupt company to explore other offers. Finally, the Axos-Siemens case isn’t resolved, just shifted to a sub-case. The bankruptcy judge must still rule before STG emerges from bankruptcy. If the judge rules in favor of Axos and Siemens, the group of rescue lenders could pull their financial support. Contact Ari Ashe at ari.ashe@spglobal.com .

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