<div class="phx-topic abstract-wrapper">The trade group of ocean carriers is exempt from US antitrust scrutiny under an agreement it filed with the FMC five years ago, but the agency is now questioning that arrangement. </div>

The trade group of ocean carriers is exempt from US antitrust scrutiny under an agreement it filed with the FMC five years ago, but the agency is now questioning that arrangement.

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<div class="phx-topic">The Federal Maritime Commission (FMC) is reviewing why the World Shipping Council should fall under US shipping law, a probe that could end the antitrust exemption for the WSC’s ocean carrier members to discuss cooperative matters. The FMC announced Thursday it was investigating the “working arrangement” between WSC’s members and whether that agreement violates US shipping law. Under US shipping law, ocean carriers or other regulated entities must file agreements to cooperate on commercial matters, exempting them from antitrust claims. WSC filed its cooperation agreement with the FMC in 2020, two decades after it was formed. The FMC ordered the WSC to show why the agency has “jurisdiction over the agreement and should not cancel the agreement as outside the agency’s jurisdiction.” The WSC agreement does not cover rates, operations, capacity or other strictly commercial matters. However, the group said it filed the agreement so members could discuss other issues such as safety, environmental and legal matters that could fall under FMC jurisdiction. But the FMC questioned that view in its Thursday order. The agency said the WSC may not be a regulated entity under the Shipping Act because it does not provide ocean transportation services. While its members are ocean carriers, within the confines of the agreement filed with the FMC, the members are not acting under their capacity as regulated carriers, the agency said. “An entity engaged only in the discussion and lobbying activities under the agreement would not qualify as an ‘ocean common carrier’ under the Shipping Act because it is performing none of the functions that define a common carrier,” the FMC said. The agency conceded that the WSC’s work on cargo screening may fall under the type of operational activities that are covered in FMC-filed agreements. But the agency said courts have previously ruled the WSC’s type of agreement “was meant as a narrow catch-all closely related to other explicitly operations-focused agreement categories” in US shipping law. While FMC agreements allow carriers and others to avoid antitrust scrutiny, “a trade association not involved in providing ocean transportation service does not appear to be engaged in the type of conduct Congress intended to immunize from scrutiny by antitrust enforcers and private plaintiffs,” the FMC’s order said. <h3>Two months to reply</h3>The FMC has given the WSC two months to reply to the order, with the agency’s final decision expected next March. WSC said in a statement to the Journal of Commerce that its 2020 agreement was filed “in accordance with its legal obligation (under US shipping law) and with the encouragement of the FMC.” “As a global trade association, the World Shipping Council takes its regulatory compliance responsibilities very seriously,” WSC said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

The Federal Maritime Commission (FMC) is reviewing why the World Shipping Council should fall under US shipping law, a probe that could end the antitrust exemption for the WSC’s ocean carrier members to discuss cooperative matters. The FMC announced Thursday it was investigating the “working arrangement” between WSC’s members and whether that agreement violates US shipping law. Under US shipping law, ocean carriers or other regulated entities must file agreements to cooperate on commercial matters, exempting them from antitrust claims. WSC filed its cooperation agreement with the FMC in 2020, two decades after it was formed. The FMC ordered the WSC to show why the agency has “jurisdiction over the agreement and should not cancel the agreement as outside the agency’s jurisdiction.” The WSC agreement does not cover rates, operations, capacity or other strictly commercial matters. However, the group said it filed the agreement so members could discuss other issues such as safety, environmental and legal matters that could fall under FMC jurisdiction. But the FMC questioned that view in its Thursday order. The agency said the WSC may not be a regulated entity under the Shipping Act because it does not provide ocean transportation services. While its members are ocean carriers, within the confines of the agreement filed with the FMC, the members are not acting under their capacity as regulated carriers, the agency said. “An entity engaged only in the discussion and lobbying activities under the agreement would not qualify as an ‘ocean common carrier’ under the Shipping Act because it is performing none of the functions that define a common carrier,” the FMC said. The agency conceded that the WSC’s work on cargo screening may fall under the type of operational activities that are covered in FMC-filed agreements. But the agency said courts have previously ruled the WSC’s type of agreement “was meant as a narrow catch-all closely related to other explicitly operations-focused agreement categories” in US shipping law. While FMC agreements allow carriers and others to avoid antitrust scrutiny, “a trade association not involved in providing ocean transportation service does not appear to be engaged in the type of conduct Congress intended to immunize from scrutiny by antitrust enforcers and private plaintiffs,” the FMC’s order said. Two months to reply The FMC has given the WSC two months to reply to the order, with the agency’s final decision expected next March. WSC said in a statement to the Journal of Commerce that its 2020 agreement was filed “in accordance with its legal obligation (under US shipping law) and with the encouragement of the FMC.” “As a global trade association, the World Shipping Council takes its regulatory compliance responsibilities very seriously,” WSC said. Contact Michael Angell at michael.angell@spglobal.com

Container lines

Transport, Trade and Regulation News

FMC probes legal standing of World Shipping Council agreement

<div class="phx-topic abstract-wrapper">New bottlenecks in Louisiana and Mississippi are now affecting freight flows between Mexico and the Southeast US.</div>

New bottlenecks in Louisiana and Mississippi are now affecting freight flows between Mexico and the Southeast US.

<div class="phx-topic">Canadian Pacific Kansas City (CPKC) is making progress in restoring normal rail service in the southern US following a troubled systems integration, but the epicenter of disruptions has shifted from Texas to critical points in Louisiana and Mississippi, where intermodal and carload traffic converge. Congestion initially began in Laredo and Wylie, Texas, outside Dallas after a <a href="https://www.joc.com/article/cpkc-grapples-with-complaints-over-us-canada-terminal-operations-6009914">May 3 systems upgrade</a> went poorly as CPKC was transitioning legacy Kansas City Southern (KCS) systems to Canadian Pacific networks. Service in Wylie has largely returned to normal, but new bottlenecks in Shreveport, Louisiana, and Jackson, Mississippi, are now affecting freight flows between Mexico and the Southeast US. “CPKC is continuing to devote the resources and attention necessary to return service levels to the normal range expeditiously,” CPKC wrote in a <a href="https://www.stb.gov/cpkc-merger-oversight/">June 25 letter</a> to the US Surface Transportation Board (STB). “CPKC continues to project that it will achieve a return of service performance to the normal range for the vast majority of customers by the second half of July.” CPKC dwell times in the hot spots have risen sharply since May, according to data from the Association of American Railroads (AAR). In Shreveport, the railroad’s average dwell time has increased nearly 70% year over year in the last seven weeks. In Jackson, it is up 77%. In Laredo, another intermodal crew change location, CPKC dwells have skyrocketed 127% during the same period, according to the AAR data. CPKC told the STB that company executives remain stationed at key locations, including Shreveport and Jackson, to address the ongoing issues. Inconsistent container flow Shreveport is the largest switching yard on the former Kansas City Southern network, while Jackson is the second-largest. Switching yards primarily handle non-containerized freight, but Jackson and Shreveport also serve as crew change locations for intermodal trains traveling between Mexico/Texas and the Southeast. Multiple CPKC customers have said the flow of containers between Mexico/Texas and the Southeast has been inconsistent in recent weeks. “On northbound Mexico to the Southeast, we experienced long delays at the ramp after customs cleared but before boxes were loaded and moved on a train, although it has improved in the last week,” one customer said. “Customer service is struggling [and] getting information on distressed freight is difficult.” A second customer said their shipments have gotten stuck in various Gulf Coast locations in recent weeks. CPKC told the STB the on-time performance to deliver railcars to non-containerized customers improved in all parts of the network week over week through June 20, but the on-time performance of manifest trains, which carry a mix of cargo and go into yards such as Jackson and Shreveport, fell week over week, to 55.8%. Delays in Jackson and Shreveport also affect interchange partners such as CSX Transportation and Norfolk Southern Railway (NS). Train crews are scheduled around expected handoff times, but when CPKC trains arrive late, crews on connecting railroads can exhaust their federally mandated hours before reaching the next crew change point, further compounding delays. NS interchanges freight with CPKC in Shreveport and Meridian, Mississippi, while CSX exchanges containers in Myrtlewood, Alabama. CPKC said it plans to focus on this stretch of the network in the coming week. “[Staff] will maintain their in-person presence at locations across the legacy KCS network to support operating personnel and customers … with a focus in the coming week on the Southeast Division (areas east and southeast of Shreveport),” the railroad said in its letter to the STB. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Canadian Pacific Kansas City (CPKC) is making progress in restoring normal rail service in the southern US following a troubled systems integration, but the epicenter of disruptions has shifted from Texas to critical points in Louisiana and Mississippi, where intermodal and carload traffic converge. Congestion initially began in Laredo and Wylie, Texas, outside Dallas after a May 3 systems upgrade went poorly as CPKC was transitioning legacy Kansas City Southern (KCS) systems to Canadian Pacific networks. Service in Wylie has largely returned to normal, but new bottlenecks in Shreveport, Louisiana, and Jackson, Mississippi, are now affecting freight flows between Mexico and the Southeast US. “CPKC is continuing to devote the resources and attention necessary to return service levels to the normal range expeditiously,” CPKC wrote in a June 25 letter to the US Surface Transportation Board (STB). “CPKC continues to project that it will achieve a return of service performance to the normal range for the vast majority of customers by the second half of July.” CPKC dwell times in the hot spots have risen sharply since May, according to data from the Association of American Railroads (AAR). In Shreveport, the railroad’s average dwell time has increased nearly 70% year over year in the last seven weeks. In Jackson, it is up 77%. In Laredo, another intermodal crew change location, CPKC dwells have skyrocketed 127% during the same period, according to the AAR data. CPKC told the STB that company executives remain stationed at key locations, including Shreveport and Jackson, to address the ongoing issues. Inconsistent container flow Shreveport is the largest switching yard on the former Kansas City Southern network, while Jackson is the second-largest. Switching yards primarily handle non-containerized freight, but Jackson and Shreveport also serve as crew change locations for intermodal trains traveling between Mexico/Texas and the Southeast. Multiple CPKC customers have said the flow of containers between Mexico/Texas and the Southeast has been inconsistent in recent weeks. “On northbound Mexico to the Southeast, we experienced long delays at the ramp after customs cleared but before boxes were loaded and moved on a train, although it has improved in the last week,” one customer said. “Customer service is struggling [and] getting information on distressed freight is difficult.” A second customer said their shipments have gotten stuck in various Gulf Coast locations in recent weeks. CPKC told the STB the on-time performance to deliver railcars to non-containerized customers improved in all parts of the network week over week through June 20, but the on-time performance of manifest trains, which carry a mix of cargo and go into yards such as Jackson and Shreveport, fell week over week, to 55.8%. Delays in Jackson and Shreveport also affect interchange partners such as CSX Transportation and Norfolk Southern Railway (NS). Train crews are scheduled around expected handoff times, but when CPKC trains arrive late, crews on connecting railroads can exhaust their federally mandated hours before reaching the next crew change point, further compounding delays. NS interchanges freight with CPKC in Shreveport and Meridian, Mississippi, while CSX exchanges containers in Myrtlewood, Alabama. CPKC said it plans to focus on this stretch of the network in the coming week. “[Staff] will maintain their in-person presence at locations across the legacy KCS network to support operating personnel and customers … with a focus in the coming week on the Southeast Division (areas east and southeast of Shreveport),” the railroad said in its letter to the STB. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

CPKC disruptions in Gulf states now impacting carload, intermodal traffic

<div class="phx-topic abstract-wrapper">Diversifying suppliers out of China has been a long-term trend among tech companies, but a recent acceleration of that shift is driven by fresh trade tensions rather than a desire to divest entirely, says Everstream Analytics.</div>

Diversifying suppliers out of China has been a long-term trend among tech companies, but a recent acceleration of that shift is driven by fresh trade tensions rather than a desire to divest entirely, says Everstream Analytics.

<div class="phx-topic">Escalating trade tensions and ongoing tariff uncertainties are adding to rising labor costs, prompting technology giants to accelerate the diversification of suppliers away from China, according to a new report from supply chain insight provider Everstream Analytics. While the diversification of manufacturing has been a long-term trend, the recent increase in that shift is being driven more by the need to reduce short-term risk in the face of recent trade disruption rather than a desire to completely divest from China, noted Jena Santoro, global head of research and analytics at Everstream. “Our analysis shows Thailand and Vietnam have nearly doubled their tech suppliers since 2019, while companies like HP are committing to move 90% of their manufacturing out of China by next year,” Santoro told the Journal of Commerce Thursday. The report, “Shifting away from China,” analyzed supplier data from 2019 to 2024 from tech majors that included Samsung, Apple, Dell, Nokia and NXP, and found the companies were moving core product lines to alternative manufacturing centers. India, Malaysia, Thailand, Vietnam and Taiwan have emerged as the most prominent alternative suppliers to China for the technology industry, the report found. The products most affected by the diversification strategies were smartphones, smart watches, computers and laptops. “But the reality is that China spent more than 30 years building its manufacturing ecosystem, and it may take just as long for alternatives to match that scale,” Santoro said. “So, while companies are absolutely diversifying, and they need to, this is about reducing risk, not replacing China entirely. At least not anytime soon.” <h3>End of 90-day pause on tariffs </h3>The Everstream report highlighted the upcoming end to the 90-day pause on US tariffs on China on Aug. 14 and the trade restrictions that could be imposed following its expiry. “Trade between China and the US remains unstable, with the current negotiations only resulting in a 90-day pause on the escalated tariff scheme, which includes a 125% import tariff on Chinese goods,” the report stated. “This level of tariff would make many technology products prohibitively expensive if manufactured entirely in China, creating strong financial incentives for diversification,” it added. “Global technology manufacturers will likely continue to seek alternative suppliers in countries perceived as less risky for business continuity.” On top of the trade tensions are long-term trends in China’s workforce that have led to an increasingly less cost-efficient labor market, a factor that has long encouraged companies to consider investing in cheaper production systems in other parts of the world as a way to increase margins. That trend shows no signs of reversal, as China no longer has the developing economy wages it once had. “Given these ... realities, technology supply chains with procurement operations integrated in China have become less stable and reliably more expensive than potential alternatives,” the Everstream report found. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Escalating trade tensions and ongoing tariff uncertainties are adding to rising labor costs, prompting technology giants to accelerate the diversification of suppliers away from China, according to a new report from supply chain insight provider Everstream Analytics. While the diversification of manufacturing has been a long-term trend, the recent increase in that shift is being driven more by the need to reduce short-term risk in the face of recent trade disruption rather than a desire to completely divest from China, noted Jena Santoro, global head of research and analytics at Everstream. “Our analysis shows Thailand and Vietnam have nearly doubled their tech suppliers since 2019, while companies like HP are committing to move 90% of their manufacturing out of China by next year,” Santoro told the Journal of Commerce Thursday. The report, “Shifting away from China,” analyzed supplier data from 2019 to 2024 from tech majors that included Samsung, Apple, Dell, Nokia and NXP, and found the companies were moving core product lines to alternative manufacturing centers. India, Malaysia, Thailand, Vietnam and Taiwan have emerged as the most prominent alternative suppliers to China for the technology industry, the report found. The products most affected by the diversification strategies were smartphones, smart watches, computers and laptops. “But the reality is that China spent more than 30 years building its manufacturing ecosystem, and it may take just as long for alternatives to match that scale,” Santoro said. “So, while companies are absolutely diversifying, and they need to, this is about reducing risk, not replacing China entirely. At least not anytime soon.” End of 90-day pause on tariffs The Everstream report highlighted the upcoming end to the 90-day pause on US tariffs on China on Aug. 14 and the trade restrictions that could be imposed following its expiry. “Trade between China and the US remains unstable, with the current negotiations only resulting in a 90-day pause on the escalated tariff scheme, which includes a 125% import tariff on Chinese goods,” the report stated. “This level of tariff would make many technology products prohibitively expensive if manufactured entirely in China, creating strong financial incentives for diversification,” it added. “Global technology manufacturers will likely continue to seek alternative suppliers in countries perceived as less risky for business continuity.” On top of the trade tensions are long-term trends in China’s workforce that have led to an increasingly less cost-efficient labor market, a factor that has long encouraged companies to consider investing in cheaper production systems in other parts of the world as a way to increase margins. That trend shows no signs of reversal, as China no longer has the developing economy wages it once had. “Given these ... realities, technology supply chains with procurement operations integrated in China have become less stable and reliably more expensive than potential alternatives,” the Everstream report found. Contact Greg Knowler at greg.knowler@spglobal.com.

Supply chain

Tech giants shift production out of China as trade tariffs raise supply risk: analysis

<div class="phx-topic abstract-wrapper">The carrier said vessels on the five-day transit to Philadelphia will carry food, apparel, industrial products and consumer goods. </div>

The carrier said vessels on the five-day transit to Philadelphia will carry food, apparel, industrial products and consumer goods.

<div class="phx-topic">US-based ocean carrier Crowley will expand its intra-Americas network in July with a new direct service linking ports in Guatemala and Honduras to Philadelphia. The five-day transit will be Crowley’s first route between Central America and the US Northeast Coast. The first northbound voyage for the service, using the 1,400-TEU Copan, will leave Central America for Philadelphia on July 3. A statement from Crowley this week announcing the service did not provide details on its frequency but said the vessels will carry food, apparel, industrial products and consumer goods. Reinier van Delden, vice president of commercial operations for Crowley Logistics, said in the statement the service, using new LNG-powered vessels, will “deliver the fastest transit times in the market.” “This means less inventory idle time, lower supply chain costs, and longer shelf life for critical products like fresh produce,” he said. The service, which van Delden said already has “significant booking commitments,” will serve Central America’s Northern Zone, which includes El Salvador and Nicaragua in addition to Guatemala and Honduras. The vessels used by Crowley for the service can carry various container sizes for dry cargo and have capacity for 300 refrigerated boxes. According to data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global, import volumes from Central America’s Northern Zone into the East Coast of North America have been relatively steady in recent years; May 2025 volumes of 50,121 TEUs were down just 3.3% from May 2019. PIERS data shows imports from the Northern Zone accounted for 3.2% of imports to the East Coast of North America in May. In March, which is the peak season for Central American plantain exports, that share climbed to 3.6%. Northbound perishables cargo includes plantains, pineapples and melons, according to PIERS. The new service from Crowley comes after the company launched in May a three-day ocean service from Tuxpan, Mexico, to Gulfport, Mississippi. Crowley also started a <a href="https://www.joc.com/article/crowley-cn-strike-mexico-intermodal-deal-through-port-of-mobile-5220379">multimodal Mexico-US service in 2023</a>. Also this week, Green Tide Logistics <a href="https://www.joc.com/article/mexico-us-ocean-market-expands-amid-growing-nearshoring-interest-6031786">announced a combined truck-ocean service</a> linking the Gulf Coast of Mexico with Philadelphia. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US-based ocean carrier Crowley will expand its intra-Americas network in July with a new direct service linking ports in Guatemala and Honduras to Philadelphia. The five-day transit will be Crowley’s first route between Central America and the US Northeast Coast. The first northbound voyage for the service, using the 1,400-TEU Copan, will leave Central America for Philadelphia on July 3. A statement from Crowley this week announcing the service did not provide details on its frequency but said the vessels will carry food, apparel, industrial products and consumer goods. Reinier van Delden, vice president of commercial operations for Crowley Logistics, said in the statement the service, using new LNG-powered vessels, will “deliver the fastest transit times in the market.” “This means less inventory idle time, lower supply chain costs, and longer shelf life for critical products like fresh produce,” he said. The service, which van Delden said already has “significant booking commitments,” will serve Central America’s Northern Zone, which includes El Salvador and Nicaragua in addition to Guatemala and Honduras. The vessels used by Crowley for the service can carry various container sizes for dry cargo and have capacity for 300 refrigerated boxes. According to data from PIERS, a sister company of the Journal of Commerce within S&P Global, import volumes from Central America’s Northern Zone into the East Coast of North America have been relatively steady in recent years; May 2025 volumes of 50,121 TEUs were down just 3.3% from May 2019. PIERS data shows imports from the Northern Zone accounted for 3.2% of imports to the East Coast of North America in May. In March, which is the peak season for Central American plantain exports, that share climbed to 3.6%. Northbound perishables cargo includes plantains, pineapples and melons, according to PIERS. The new service from Crowley comes after the company launched in May a three-day ocean service from Tuxpan, Mexico, to Gulfport, Mississippi. Crowley also started a multimodal Mexico-US service in 2023 . Also this week, Green Tide Logistics announced a combined truck-ocean service linking the Gulf Coast of Mexico with Philadelphia. Contact Laura Robb at laura.robb@spglobal.com . 

Maritime

Container Shipping News

Crowley launches first service linking Central America to US Northeast Coast

<div class="phx-topic abstract-wrapper">Swire, UWL’s original partner for the express service to Seattle, will phase out its vessels during July while new partner Emirate Shipping Line rotates into the loop.</div>

Swire, UWL’s original partner for the express service to Seattle, will phase out its vessels during July while new partner Emirate Shipping Line rotates into the loop.

<div class="phx-topic">Third-party logistics provider UWL is switching the ocean carrier it uses for its Vietnamese trans-Pacific container service to Seattle — and swapping in a new China call on the loop — with a view to eventually offering weekly sailings on the niche service. UWL Chief Executive Duncan Wright said in a letter to customers this week the company signed a contract with Emirates Shipping Line (ESL) to become the new vessel operator on its Sun Chief Express Service, replacing Swire Shipping, part of Asian conglomerate Swire Group. UWL originally partnered with Swire <a href="https://www.joc.com/article/new-vietnam-pnw-express-service-comes-amid-rise-in-se-asia-imports-5195234">to launch the Sun Chief Express in 2022</a>. The service connects Vietnam’s Hai Phong and Ho Chi Minh City ports with Seattle, offering about 2,700 TEUs in biweekly vessel capacity and an approximate 20-day sailing time. Wright said that while UWL was vetting other vessel operators for possibly offering a weekly service, Swire decided to “phase out” its involvement in the Sun Chief service. The last Swire ship will depart Ho Chi Minh port on July 14, while two westbound sailings during July on Swire vessels will be blanked as part of the phaseout. The first ESL vessel, the 2,782-TEU Bright, will depart Ho Chi Minh port on July 22. It will call Shekou in China before continuing to Seattle. The Sun Chief service will remain biweekly for the time being. Dubai-based ESL is the 23rd-largest ocean carrier globally, focusing chiefly on “niche and emerging trade lanes across Asia, the Middle East, and Africa,” UWL said. ESL operates a fleet of 11 ships, with capacities ranging between 2,700 TEUS and 6,700 TEUs. UWL added that ESL’s experience in the intra-Asia trade will allow the Sun Chief to eventually serve “additional key markets across Southeast Asia and the Indian Subcontinent.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Third-party logistics provider UWL is switching the ocean carrier it uses for its Vietnamese trans-Pacific container service to Seattle — and swapping in a new China call on the loop — with a view to eventually offering weekly sailings on the niche service. UWL Chief Executive Duncan Wright said in a letter to customers this week the company signed a contract with Emirates Shipping Line (ESL) to become the new vessel operator on its Sun Chief Express Service, replacing Swire Shipping, part of Asian conglomerate Swire Group. UWL originally partnered with Swire to launch the Sun Chief Express in 2022 . The service connects Vietnam’s Hai Phong and Ho Chi Minh City ports with Seattle, offering about 2,700 TEUs in biweekly vessel capacity and an approximate 20-day sailing time. Wright said that while UWL was vetting other vessel operators for possibly offering a weekly service, Swire decided to “phase out” its involvement in the Sun Chief service. The last Swire ship will depart Ho Chi Minh port on July 14, while two westbound sailings during July on Swire vessels will be blanked as part of the phaseout. The first ESL vessel, the 2,782-TEU Bright, will depart Ho Chi Minh port on July 22. It will call Shekou in China before continuing to Seattle. The Sun Chief service will remain biweekly for the time being. Dubai-based ESL is the 23rd-largest ocean carrier globally, focusing chiefly on “niche and emerging trade lanes across Asia, the Middle East, and Africa,” UWL said. ESL operates a fleet of 11 ships, with capacities ranging between 2,700 TEUS and 6,700 TEUs. UWL added that ESL’s experience in the intra-Asia trade will allow the Sun Chief to eventually serve “additional key markets across Southeast Asia and the Indian Subcontinent.” Contact Michael Angell at michael.angell@spglobal.com .

Trans-Pacific

UWL locks in new vessel partner for trans-Pacific Vietnam service

<div class="phx-topic abstract-wrapper">Unifor, the union representing more than 2,100 truck drivers, couriers, and warehouse and clerical workers in seven Canadian provinces, will vote on the agreement on Friday and Saturday.</div>

Unifor, the union representing more than 2,100 truck drivers, couriers, and warehouse and clerical workers in seven Canadian provinces, will vote on the agreement on Friday and Saturday.

<div class="phx-topic">DHL Express Canada and its union have reached an agreement in principle to end a contract dispute that forced the parcel carrier to shut down service in the country late last week. Terms of the deal were not disclosed. Unifor, the union representing more than 2,100 truck drivers, couriers, and warehouse and clerical workers in seven Canadian provinces, will vote on the tentative deal on Friday and Saturday. “Upon successful ratification, DHL Express Canada expects to lift [the] service suspension with immediate effect,” the company said in a statement late Wednesday. DHL Express Canada locked out Unifor workers on June 8 after the two sides couldn’t reach a deal on a new collective bargaining agreement. DHL was <a href="https://www.joc.com/article/dhl-express-to-suspend-canadian-parcel-business-amid-labor-dispute-6026786">forced to shut down service</a> as of June 20, the day Canadian federal legislation preventing the use of replacement workers went into effect. As a result, DHL stopped accepting parcels within Canada as well as cross-border US-Canada business. The move did not affect the company’s less-than-truckload or other supply chain service businesses. DHL’s competitors such as Canada Post, FedEx, and UPS were operating normally, so the overall disruption within Canada was minimal. Nevertheless, shippers who had to make last-minute changes were paying higher rates. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

DHL Express Canada and its union have reached an agreement in principle to end a contract dispute that forced the parcel carrier to shut down service in the country late last week. Terms of the deal were not disclosed. Unifor, the union representing more than 2,100 truck drivers, couriers, and warehouse and clerical workers in seven Canadian provinces, will vote on the tentative deal on Friday and Saturday. “Upon successful ratification, DHL Express Canada expects to lift [the] service suspension with immediate effect,” the company said in a statement late Wednesday. DHL Express Canada locked out Unifor workers on June 8 after the two sides couldn’t reach a deal on a new collective bargaining agreement. DHL was forced to shut down service as of June 20, the day Canadian federal legislation preventing the use of replacement workers went into effect. As a result, DHL stopped accepting parcels within Canada as well as cross-border US-Canada business. The move did not affect the company’s less-than-truckload or other supply chain service businesses. DHL’s competitors such as Canada Post, FedEx, and UPS were operating normally, so the overall disruption within Canada was minimal. Nevertheless, shippers who had to make last-minute changes were paying higher rates. Contact Ari Ashe at ari.ashe@spglobal.com .

Surface

Trucking labor

Trucking News

DHL, union workers reach tentative deal to end Canadian work stoppage

<div class="phx-topic abstract-wrapper">Container market participants should be open to a better way to support their overall risk management, particularly with the amount of new tonnage scheduled to hit the market in the near future.</div>

Container market participants should be open to a better way to support their overall risk management, particularly with the amount of new tonnage scheduled to hit the market in the near future.

<div class="phx-topic">This piece follows <a href="https://www.joc.com/article/near-constant-disruption-giving-new-momentum-to-freight-futures-5979859">Peter Tirschwell’s update</a> on the freight forward agreement (FFA) market. While I agree with many points raised and was personally involved in many of the 2011 discussions, there is a wider point that needs to be raised and deepened. Let’s start with a basic premise of risk management: If you own an asset, you have a long position for that asset. In the case of container shipping, assuming the carrier is also the vessel owner (directly or disponent), then that asset is the long position (or more precisely, the vessel’s nominal TEU capacity is the long position, as TEUs are the primary revenue-earning unit). Let’s also assume a vessel’s capacity is 20,000 TEUs and it does five round trips per annum on an Asia-Europe service that requires 10 vessels. The combined asset or long position is 1 million TEUs per annum. The enduring question is how to earn revenue to at least cover the 1 million TEUs at margin cost and normal profit (or at higher revenue but lower volume). On the supply side, you could sell slots to others, preferably on a used/unused basis either as a slot charter or as part of a vessel-sharing agreement/alliance. The downside of the latter is clearly the requirement to purchase reciprocal slots. Let’s assume you sell off 20,000 slots per annum to a small competitor. You have covered 2% and only have 980,000 TEUs to cover! On the demand side, you have many contracts, with the promise, estimate or best effort of the counterparty to honor the volumes in the agreed time windows. But let’s say you have 50% contract coverage (we’ll include your 2% of slot sales). You will have contracted at above-normal profit, giving you a further 15% cover for your 1 million slots. However, we’ll subtract 5% for BCO/NVO underperformance with no fault on either party. You are back to 60% coverage and still require cover for the remaining 40%. Your standard assumption would be to look at historical indicators such as GDP (which may or may not correlate to actual trade and TEUs), purchasing managers’ indices and (hopefully) talk to key customers, and look at other inputs the clever economists will consider. These will be plugged in to spit out a number with an upside and downside tolerance that will show a correlation between all these indicators and likely volume trends. But what about trade wars, Houthi militants, COVID-19 and any other number of white or black swan events? Any of these can affect demand in the short to long term and defy standard assumptions. So in reality, your 40% capacity long position has just one strategy: optimism. <h3>Be risk ‘aware’ </h3>I would advise taking a few preliminary steps. The first is to benchmark the container FFA market with other futures markets. Start with the Baltic for dry and wet bulk. While helpful, there are many dissimilarities in the physical market versus container to make this only of passing interest. Try more of the commodities such as metals, but in any case, understand more deeply what is in play, what risks you carry and how to manage them. Also, look in-house with your treasury teams to more deeply understand your foreign exchange trading and fuel hedging. The good news is you have at least some good risk management practices, knowledge and controls in place. Second, get to know how the exchanges function. There have been concerns raised about counterparty risk. The exchanges/indexes of choice are ICE/NYSHEX and Baltic/Freightos, which will obviate this concern. The exchanges will manage liquidity on margin calls and overall exposure. The days of relying solely on less-credible indices are long gone, and players like Xeneta and others are well established and reliable. Finally, ensure your organization is well prepared. The benefit of the existing indices is they fall relatively easily into existing carrier trade profit and loss (PnL). This makes it easy for visibility and transparency for PnL owners and allows for direct allocation of the costs to manage and the eventual revenue streams. Be very clear about the amount of FFA exposure you want in total and by quarter and at what PnL level. Be sure to implement strict controls at the PnL level to avoid creating undue risk at the overall level. If it were my money, I’d keep an enterprise level of 5% of my overall TEU capacity as a maximum. I realize some or all of this may fall on deaf ears for those who are naturally cautious and/or risk averse. My suggestion is to be “risk aware” and be open to a better way to support your overall risk management, particularly with the amount of new tonnage scheduled to hit the market in the near future. 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>

This piece follows Peter Tirschwell’s update on the freight forward agreement (FFA) market. While I agree with many points raised and was personally involved in many of the 2011 discussions, there is a wider point that needs to be raised and deepened. Let’s start with a basic premise of risk management: If you own an asset, you have a long position for that asset. In the case of container shipping, assuming the carrier is also the vessel owner (directly or disponent), then that asset is the long position (or more precisely, the vessel’s nominal TEU capacity is the long position, as TEUs are the primary revenue-earning unit). Let’s also assume a vessel’s capacity is 20,000 TEUs and it does five round trips per annum on an Asia-Europe service that requires 10 vessels. The combined asset or long position is 1 million TEUs per annum. The enduring question is how to earn revenue to at least cover the 1 million TEUs at margin cost and normal profit (or at higher revenue but lower volume). On the supply side, you could sell slots to others, preferably on a used/unused basis either as a slot charter or as part of a vessel-sharing agreement/alliance. The downside of the latter is clearly the requirement to purchase reciprocal slots. Let’s assume you sell off 20,000 slots per annum to a small competitor. You have covered 2% and only have 980,000 TEUs to cover! On the demand side, you have many contracts, with the promise, estimate or best effort of the counterparty to honor the volumes in the agreed time windows. But let’s say you have 50% contract coverage (we’ll include your 2% of slot sales). You will have contracted at above-normal profit, giving you a further 15% cover for your 1 million slots. However, we’ll subtract 5% for BCO/NVO underperformance with no fault on either party. You are back to 60% coverage and still require cover for the remaining 40%. Your standard assumption would be to look at historical indicators such as GDP (which may or may not correlate to actual trade and TEUs), purchasing managers’ indices and (hopefully) talk to key customers, and look at other inputs the clever economists will consider. These will be plugged in to spit out a number with an upside and downside tolerance that will show a correlation between all these indicators and likely volume trends. But what about trade wars, Houthi militants, COVID-19 and any other number of white or black swan events? Any of these can affect demand in the short to long term and defy standard assumptions. So in reality, your 40% capacity long position has just one strategy: optimism. Be risk ‘aware’ I would advise taking a few preliminary steps. The first is to benchmark the container FFA market with other futures markets. Start with the Baltic for dry and wet bulk. While helpful, there are many dissimilarities in the physical market versus container to make this only of passing interest. Try more of the commodities such as metals, but in any case, understand more deeply what is in play, what risks you carry and how to manage them. Also, look in-house with your treasury teams to more deeply understand your foreign exchange trading and fuel hedging. The good news is you have at least some good risk management practices, knowledge and controls in place. Second, get to know how the exchanges function. There have been concerns raised about counterparty risk. The exchanges/indexes of choice are ICE/NYSHEX and Baltic/Freightos, which will obviate this concern. The exchanges will manage liquidity on margin calls and overall exposure. The days of relying solely on less-credible indices are long gone, and players like Xeneta and others are well established and reliable. Finally, ensure your organization is well prepared. The benefit of the existing indices is they fall relatively easily into existing carrier trade profit and loss (PnL). This makes it easy for visibility and transparency for PnL owners and allows for direct allocation of the costs to manage and the eventual revenue streams. Be very clear about the amount of FFA exposure you want in total and by quarter and at what PnL level. Be sure to implement strict controls at the PnL level to avoid creating undue risk at the overall level. If it were my money, I’d keep an enterprise level of 5% of my overall TEU capacity as a maximum. I realize some or all of this may fall on deaf ears for those who are naturally cautious and/or risk averse. My suggestion is to be “risk aware” and be open to a better way to support your overall risk management, particularly with the amount of new tonnage scheduled to hit the market in the near future. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Be open to new ways to support your risk management strategy

<div class="phx-topic abstract-wrapper">As agricultural exports enter their traditional peak season, it is prudent to be proactive now — while there is still an empty container supply extant in North America. </div>

As agricultural exports enter their traditional peak season, it is prudent to be proactive now — while there is still an empty container supply extant in North America.

<div class="phx-topic">“Where Have All the Flowers Gone?” is a folk song written by American singer-songwriter Pete Seeger. Legend has it that he wrote it while on an airplane to play at Oberlin College, one of the few locations willing to defy the McCarthy hiring blacklist imposed on him. Subsequently, the song became a mainstay of the anti-war movement during the Vietnam War and has been covered by many artists and in many languages. The song utilizes the image of flowers and the cycle of life to depict the cyclical and destructive nature of war. And while I recognize that applying this metaphor to our industry’s cyclicality may be a step too far, I believe that the plaintive refrain, “Oh when will you/we ever learn; Oh, when will you/we ever learn?” certainly applies. In today’s transportation industry, there are very few of us that can remember the days of regulation when we struggled in an economy beset by stagflation. President Jimmy Carter then liberated our sector with deregulation. Because regulation — by design — was intended to ensure excess capacity, two decades of halcyon growth followed as this capacity was redeployed to productive applications. Along with globalization and outsourcing, logistics and supply chain management became industries in their own right, and intermodal was a key driver. However, about 25 years ago, the “free” capacity unleashed by deregulation had been consumed and growth needed to be supported by investment. Coincidentally, these changes took place against the aftermath of the 9/11 terrorist attack. A bipartisan blue-ribbon commission was established, and three years later, they released their report. The findings were extensive. The government was not prepared and did not know how to respond. Problems with intelligence collection, analysis, sharing across agencies, and a lack of coordination among federal agencies exacerbated the challenges. In fact, the whole structure represented a maze of siloed and disaggregated responsibilities. When I read the report, I was struck by the potential for a future commission assembled to write many of the same findings about the transportation network in our country. I actually wrote a white paper in 2004 claiming that it would be unnecessary to convene an investigation of the inevitable supply chain meltdown because it was already written. All that was necessary was to take the 9/11 report and replace “national security” with “supply chain.” <h3>COVID-19 drove changes </h3>Of course, our industry did nothing to address these structural shortcomings and muddled on until COVID-19 struck. At that time, it seemed that our entire industry adopted the “4C” excuse — everything was the fault of COVID, China, Congestion and Chassis. Everyone was surprised that such a terrible fate could befall our industry. Even worse, our industry seemed to be represented by our least qualified spokespeople and most of the media had no idea of basic facts. Somehow, we all survived that mess. Many of the problems impacted the entire network. The maelstrom of detention and demurrage bills gave rise to the Ocean Shipping Reform Act of 2022 (OSRA-22). It increased the authority of the Federal Maritime Commission (FMC) to promote the growth and development of US exports through an ocean transportation system that is competitive, efficient and economical. Beyond its mandate addressing complaints about detention and demurrage charges, OSRA-22 prohibits common ocean carriers, marine terminal operators or ocean transportation intermediaries from unreasonably refusing cargo space when available or resorting to other unfair or unjustly discriminatory methods. These protections were welcomed by the export community. However, we have to recognize that a complaint process after the fact may be insufficient to provide adequate protection if there is no effective remedy available. At times of high demand (and rates) for imports from Asia to North America, ocean carriers frequently evacuate all containers as soon as their import cargo is devanned. This moots the question of available space because there may be vessel space — but no empty containers.  As agricultural exports enter their traditional peak season, we believe that it is prudent to be proactive now, while there is still an empty container supply extant in North America. The Agriculture Transportation Coalition convenes June 16 for its annual meeting. I am sure Executive Director Peter Friedmann will have this high on the agenda; we do not want to be wondering where all the containers have gone. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

“Where Have All the Flowers Gone?” is a folk song written by American singer-songwriter Pete Seeger. Legend has it that he wrote it while on an airplane to play at Oberlin College, one of the few locations willing to defy the McCarthy hiring blacklist imposed on him. Subsequently, the song became a mainstay of the anti-war movement during the Vietnam War and has been covered by many artists and in many languages. The song utilizes the image of flowers and the cycle of life to depict the cyclical and destructive nature of war. And while I recognize that applying this metaphor to our industry’s cyclicality may be a step too far, I believe that the plaintive refrain, “Oh when will you/we ever learn; Oh, when will you/we ever learn?” certainly applies. In today’s transportation industry, there are very few of us that can remember the days of regulation when we struggled in an economy beset by stagflation. President Jimmy Carter then liberated our sector with deregulation. Because regulation — by design — was intended to ensure excess capacity, two decades of halcyon growth followed as this capacity was redeployed to productive applications. Along with globalization and outsourcing, logistics and supply chain management became industries in their own right, and intermodal was a key driver. However, about 25 years ago, the “free” capacity unleashed by deregulation had been consumed and growth needed to be supported by investment. Coincidentally, these changes took place against the aftermath of the 9/11 terrorist attack. A bipartisan blue-ribbon commission was established, and three years later, they released their report. The findings were extensive. The government was not prepared and did not know how to respond. Problems with intelligence collection, analysis, sharing across agencies, and a lack of coordination among federal agencies exacerbated the challenges. In fact, the whole structure represented a maze of siloed and disaggregated responsibilities. When I read the report, I was struck by the potential for a future commission assembled to write many of the same findings about the transportation network in our country. I actually wrote a white paper in 2004 claiming that it would be unnecessary to convene an investigation of the inevitable supply chain meltdown because it was already written. All that was necessary was to take the 9/11 report and replace “national security” with “supply chain.” COVID-19 drove changes Of course, our industry did nothing to address these structural shortcomings and muddled on until COVID-19 struck. At that time, it seemed that our entire industry adopted the “4C” excuse — everything was the fault of COVID, China, Congestion and Chassis. Everyone was surprised that such a terrible fate could befall our industry. Even worse, our industry seemed to be represented by our least qualified spokespeople and most of the media had no idea of basic facts. Somehow, we all survived that mess. Many of the problems impacted the entire network. The maelstrom of detention and demurrage bills gave rise to the Ocean Shipping Reform Act of 2022 (OSRA-22). It increased the authority of the Federal Maritime Commission (FMC) to promote the growth and development of US exports through an ocean transportation system that is competitive, efficient and economical. Beyond its mandate addressing complaints about detention and demurrage charges, OSRA-22 prohibits common ocean carriers, marine terminal operators or ocean transportation intermediaries from unreasonably refusing cargo space when available or resorting to other unfair or unjustly discriminatory methods. These protections were welcomed by the export community. However, we have to recognize that a complaint process after the fact may be insufficient to provide adequate protection if there is no effective remedy available. At times of high demand (and rates) for imports from Asia to North America, ocean carriers frequently evacuate all containers as soon as their import cargo is devanned. This moots the question of available space because there may be vessel space — but no empty containers.  As agricultural exports enter their traditional peak season, we believe that it is prudent to be proactive now, while there is still an empty container supply extant in North America. The Agriculture Transportation Coalition convenes June 16 for its annual meeting. I am sure Executive Director Peter Friedmann will have this high on the agenda; we do not want to be wondering where all the containers have gone. Contact Ted Prince at ted@tricitiesintermodal.com .

Act now before we wonder where all the containers have gone

World

Asia

China

Purchasing managers’ index (PMI) datasets are compiled from questionnaire responses from a survey panel of senior purchasing executives (or similar) from about 400 companies. For each variable, the index is the sum of the percentage of “higher” responses and half the percentage of “no change” responses. PMIs range from 0 to 100, with a reading above 50 indicating an overall increase compared to the previous month and readings below 50 indicating an overall decrease. S&P Global compiles the China PMI in conjunction with Caixin. [S&P Global](https://ihsmarkit.com/products/pmi.html)

World, US, Asia, China and EU manufacturing PMIs (S&P Global)

World, US, Asia China, EU US PMI Manufacturing (PMI) by S&P Global Gateway

<div class="phx-topic abstract-wrapper">The surge, however brief, will nonetheless be a welcome boost in business for the ports after a lackluster May and early June.</div>

The surge, however brief, will nonetheless be a welcome boost in business for the ports after a lackluster May and early June.

<div class="phx-topic">Ports along the US West Coast are due to experience a short-lived cargo surge over the next few weeks as importers rush to bring goods into the country ahead of the expiry of temporary tariff relief implemented by the Trump administration. The surge, however brief, will nonetheless be a welcome boost in business for the ports after a lackluster May and early June. Kip Louttit, executive director of the Marine Exchange of Southern California, told the Journal of Commerce that vessel arrivals scheduled for the ports of Los Angeles and Long Beach in the coming weeks “are the highest container ships on-the-way levels since January 2025 and July and September 2024.” According to the ports’ websites, Los Angeles projects that imports this week will total 138,519 TEUs before dipping to 124,713 TEUs next week and 101,003 TEUs for the week of July 6. Long Beach is forecasting its imports will total 84,109 TEUs this week before jumping to 125,286 TEUs next week and 116,947 TEUs the week of July 6. Further out, 93,797 TEUs are expected for the week of July 13, rising again to 114,073 TEUs for the week of July 20. The ports consider 100,000 TEUs or greater to be a strong week. In May, Los Angeles totaled 320,878 TEUs in imports, or approximately 71,000 TEUs a week, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Long Beach saw 296,348 TEUs, or about 66,000 TEUs weekly. The import boost expected over the next few weeks comes ahead of <a href="https://www.joc.com/article/trans-pacific-spot-rates-falling-as-tariff-linked-demand-surge-loses-steam-6027420">two key dates put in place by the White House — July 9 and Aug. 14</a>. The first is when a 90-day reprieve on higher tariffs against essentially all US trading partners expires; the second is when similar relief on imports from China ends. What will happen after those dates is unknown. The Northwest Seaport Alliance (NWSA) of Seattle and Tacoma, meanwhile, forecasts 55 vessel arrivals for June, 49 in July and 48 in August. That’s up from 46 in May. “Looking forward, numbers will likely increase for the last two weeks in June,” a spokesperson for the NWSA told the Journal of Commerce. “There are both fewer blank sailings and additional cargo that is anticipated for the second half of the month.” West Coast ports should not face any significant congestion issues handling the spike in imports in the coming few weeks given the weak month of May. <h3>Could rate decline pause? </h3>An increase in import volumes over the coming weeks could slow the ongoing decline in spot rates in the eastbound trans-Pacific. The rate from Asia to the West Coast as of Monday was $2,900 per FEU, down 10% on the week and 50% lower than the recent high of $6,040 per FEU on June 6, according to Platts, a Journal of Commerce sister company within S&amp;P Global. “The trans-Pac just seems to be such a moving target,” a forwarder in the Pacific Northwest told the Journal of Commerce. “We’re updating our rates almost daily.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8c13a3e-9f5a-412f-8741-adbf5e1a7779"></dynamic-object></div>The import surge on the West Coast also seems to be additional proof that the peak shipping season — normally August through October — has come early this year. The most recent <a href="https://www.joc.com/article/pause-on-tariffs-prompts-us-retailers-to-upgrade-summer-import-forecast-6022230">Global Port Tracker</a> published by the National Retail Federation and Hackett Associates forecasts that US imports will decline 8.1% in July, 14.7% in August, 21.8% in September and 19.8% in October compared with the same months in 2024. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Ports along the US West Coast are due to experience a short-lived cargo surge over the next few weeks as importers rush to bring goods into the country ahead of the expiry of temporary tariff relief implemented by the Trump administration. The surge, however brief, will nonetheless be a welcome boost in business for the ports after a lackluster May and early June. Kip Louttit, executive director of the Marine Exchange of Southern California, told the Journal of Commerce that vessel arrivals scheduled for the ports of Los Angeles and Long Beach in the coming weeks “are the highest container ships on-the-way levels since January 2025 and July and September 2024.” According to the ports’ websites, Los Angeles projects that imports this week will total 138,519 TEUs before dipping to 124,713 TEUs next week and 101,003 TEUs for the week of July 6. Long Beach is forecasting its imports will total 84,109 TEUs this week before jumping to 125,286 TEUs next week and 116,947 TEUs the week of July 6. Further out, 93,797 TEUs are expected for the week of July 13, rising again to 114,073 TEUs for the week of July 20. The ports consider 100,000 TEUs or greater to be a strong week. In May, Los Angeles totaled 320,878 TEUs in imports, or approximately 71,000 TEUs a week, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Long Beach saw 296,348 TEUs, or about 66,000 TEUs weekly. The import boost expected over the next few weeks comes ahead of two key dates put in place by the White House — July 9 and Aug. 14 . The first is when a 90-day reprieve on higher tariffs against essentially all US trading partners expires; the second is when similar relief on imports from China ends. What will happen after those dates is unknown. The Northwest Seaport Alliance (NWSA) of Seattle and Tacoma, meanwhile, forecasts 55 vessel arrivals for June, 49 in July and 48 in August. That’s up from 46 in May. “Looking forward, numbers will likely increase for the last two weeks in June,” a spokesperson for the NWSA told the Journal of Commerce. “There are both fewer blank sailings and additional cargo that is anticipated for the second half of the month.” West Coast ports should not face any significant congestion issues handling the spike in imports in the coming few weeks given the weak month of May. Could rate decline pause? An increase in import volumes over the coming weeks could slow the ongoing decline in spot rates in the eastbound trans-Pacific. The rate from Asia to the West Coast as of Monday was $2,900 per FEU, down 10% on the week and 50% lower than the recent high of $6,040 per FEU on June 6, according to Platts, a Journal of Commerce sister company within S&P Global. “The trans-Pac just seems to be such a moving target,” a forwarder in the Pacific Northwest told the Journal of Commerce. “We’re updating our rates almost daily.” The import surge on the West Coast also seems to be additional proof that the peak shipping season — normally August through October — has come early this year. The most recent Global Port Tracker published by the National Retail Federation and Hackett Associates forecasts that US imports will decline 8.1% in July, 14.7% in August, 21.8% in September and 19.8% in October compared with the same months in 2024. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Port News

Trans-Atlantic

North American ports

Quick-hit, tariff-driven import surge on tap for US West Coast ports

<div class="phx-topic abstract-wrapper">In a statement posted on the FMC’s website, Sola said his last day at the agency would be June 30 and did not give a reason for his departure.</div>

In a statement posted on the FMC’s website, Sola said his last day at the agency would be June 30 and did not give a reason for his departure.

<div class="phx-topic">Chairman Louis Sola announced Tuesday he is leaving the US Federal Maritime Commission (FMC) a mere five months after being <a href="https://www.joc.com/article/trump-appoints-louis-sola-to-chairmans-slot-at-fmc-5926442">appointed to lead the agency</a> responsible for regulating ocean trade to and from US ports. In a statement posted on the FMC’s website, Sola said his last day at the agency will be June 30. He did not give a reason for his departure. “I have had the privilege of helping safeguard the integrity of the US maritime industry, bringing greater transparency to port operations, and overseeing a supply chain that moves more than $5 trillion in goods annually,” Sola said in the statement. Sola, appointed to the commission in 2018 during President Donald Trump’s first term, pointed to work he did as a commissioner during the pandemic to resolve supply chain-related disruptions, as well as a recent investigation into flags of convenience, which resulted in calls for the deflagging of more than 140 sanctioned vessels. On Jan. 20, Trump elevated Sola to replace previous FMC Chairman Daniel Maffei, with a mandate to support initiatives around balanced trade and an emphasis on enhancing trade to and from Latin America. Early in his brief tenure as chairman, Sola was outspoken about whether the Panama Canal was a <a href="https://www.joc.com/article/fmc-chair-questions-level-playing-field-in-panama-canal-operations-5932469">“level playing field”</a> for US shippers due to Chinese operational involvement in ports on both ends of the canal. He also was leading an investigation into whether global chokepoints, primarily major canals, were hurting US maritime transportation interests. Sola formerly served on the Florida Board of Pilots Commissioners and as CEO of a ship and yacht brokerage before being nominated to the FMC. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

Chairman Louis Sola announced Tuesday he is leaving the US Federal Maritime Commission (FMC) a mere five months after being appointed to lead the agency responsible for regulating ocean trade to and from US ports. In a statement posted on the FMC’s website, Sola said his last day at the agency will be June 30. He did not give a reason for his departure. “I have had the privilege of helping safeguard the integrity of the US maritime industry, bringing greater transparency to port operations, and overseeing a supply chain that moves more than $5 trillion in goods annually,” Sola said in the statement. Sola, appointed to the commission in 2018 during President Donald Trump’s first term, pointed to work he did as a commissioner during the pandemic to resolve supply chain-related disruptions, as well as a recent investigation into flags of convenience, which resulted in calls for the deflagging of more than 140 sanctioned vessels. On Jan. 20, Trump elevated Sola to replace previous FMC Chairman Daniel Maffei, with a mandate to support initiatives around balanced trade and an emphasis on enhancing trade to and from Latin America. Early in his brief tenure as chairman, Sola was outspoken about whether the Panama Canal was a “level playing field” for US shippers due to Chinese operational involvement in ports on both ends of the canal. He also was leading an investigation into whether global chokepoints, primarily major canals, were hurting US maritime transportation interests. Sola formerly served on the Florida Board of Pilots Commissioners and as CEO of a ship and yacht brokerage before being nominated to the FMC. Contact Eric Johnson at eric.johnson@spglobal.com .

FMC’s Sola to leave agency months after being elevated to chairman’s slot

<div class="phx-topic abstract-wrapper">The railroad said the disruptions were the result of the switchover to a new operating system in early May, with the technology integration intended to unify old KCS systems into the CP network.</div>

The railroad said the disruptions were the result of the switchover to a new operating system in early May, with the technology integration intended to unify old KCS systems into the CP network.

<div class="phx-topic">Canadian Pacific Kansas City (CPKC) has acknowledged to US regulators that its customers have experienced poor service from the railroad since early May and vowed to fix the core issue — a messy transition from legacy Kansas City Southern (KCS) computer systems to CP networks. <a href="https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1750688210397/309692.pdf">A letter from CPKC</a> to the US Surface Transportation Board (STB), dated June 20, outlined how the railroad will restore service to normal levels within the next month. The disruptions have centered not on the trains themselves but rather on the first and last miles of journeys, with the problems linked to terminals and switch yards. “CPKC’s level of service performance on the legacy KCS network since May 3, 2025 … does not measure up to CPKC’s standards for the quality of service it provides customers or the efficient operation of its network,” the railroad wrote to the STB. “CPKC also wishes to reassure the board that there is no broader underlying service problem.” CPKC said the disruptions were the result of the switchover to a new operating system in early May. The technology integration was intended to unify old KCS systems into the CP network. But CPKC wrote that the rollout encountered critical failures that disrupted car tracking, customer billing and switching operations. The ripple effects were significant, forcing crews to manually reconstruct data. Congestion soon mounted across the former KCS network, and some of the railroad’s customers were caught unprepared. <h3>Impact on intermodal and manifest trains </h3>In the initial weeks of the disruption, truck drivers were <a href="https://www.joc.com/article/cpkc-grapples-with-complaints-over-us-canada-terminal-operations-6009914">spending hours waiting in lines</a> at terminals as crews had to be stationed at the gate to write receipts by hand. One CPKC customer had containers stuck inside the Wylie terminal in Texas for 10 days, according to data from GPS devices on the boxes. Two high-volume intermodal customers told the Journal of Commerce they pulled freight off the CPKC network in response. But Schneider National, CPKC’s top US partner, said the disruption was a minor blip. While CPKC’s letter to the STB focused on non-containerized freight, manifest and intermodal trains can impact one another in Laredo and Wylie, Texas, because they often share the same human resources, equipment and infrastructure. CPKC said the on-time performance of manifest trains, which hold a mixture of cargo, fell to 57.3% in a rolling four-week average ending June 13, dropping each week since the May 3 transition. Prior to May, on-time performance was regularly 75% to 85%. The situation was serious enough that CPKC created a “war room” in early May to troubleshoot issues. CPKC also flew in top executives, including COO Mark Redd, from Calgary to locations in Texas and the Gulf Coast to organize remedial efforts. “CPKC soon established cross-functional ‘SWAT-like’ support teams [comprised of experts from Operations, IT, and Network Support, and Marketing &amp; Sales, and including senior executives] to work through the issues arising from the IT transition,” CPKC wrote in the STB letter. “CPKC understands that some customer interactions with CPKC customer service personnel during the period may have been frustrating as a result of the issues with data visibility.” CPKC said it will continue to file weekly supplemental reports to update US regulators on the status of recovery efforts. “This report, along with the weekly cadence of updates we anticipate filing with the board as noted below, will provide those stakeholders with up-to-date data reflecting progress towards a return to normal service,” the railroad wrote. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Canadian Pacific Kansas City (CPKC) has acknowledged to US regulators that its customers have experienced poor service from the railroad since early May and vowed to fix the core issue — a messy transition from legacy Kansas City Southern (KCS) computer systems to CP networks. A letter from CPKC to the US Surface Transportation Board (STB), dated June 20, outlined how the railroad will restore service to normal levels within the next month. The disruptions have centered not on the trains themselves but rather on the first and last miles of journeys, with the problems linked to terminals and switch yards. “CPKC’s level of service performance on the legacy KCS network since May 3, 2025 … does not measure up to CPKC’s standards for the quality of service it provides customers or the efficient operation of its network,” the railroad wrote to the STB. “CPKC also wishes to reassure the board that there is no broader underlying service problem.” CPKC said the disruptions were the result of the switchover to a new operating system in early May. The technology integration was intended to unify old KCS systems into the CP network. But CPKC wrote that the rollout encountered critical failures that disrupted car tracking, customer billing and switching operations. The ripple effects were significant, forcing crews to manually reconstruct data. Congestion soon mounted across the former KCS network, and some of the railroad’s customers were caught unprepared. Impact on intermodal and manifest trains In the initial weeks of the disruption, truck drivers were spending hours waiting in lines at terminals as crews had to be stationed at the gate to write receipts by hand. One CPKC customer had containers stuck inside the Wylie terminal in Texas for 10 days, according to data from GPS devices on the boxes. Two high-volume intermodal customers told the Journal of Commerce they pulled freight off the CPKC network in response. But Schneider National, CPKC’s top US partner, said the disruption was a minor blip. While CPKC’s letter to the STB focused on non-containerized freight, manifest and intermodal trains can impact one another in Laredo and Wylie, Texas, because they often share the same human resources, equipment and infrastructure. CPKC said the on-time performance of manifest trains, which hold a mixture of cargo, fell to 57.3% in a rolling four-week average ending June 13, dropping each week since the May 3 transition. Prior to May, on-time performance was regularly 75% to 85%. The situation was serious enough that CPKC created a “war room” in early May to troubleshoot issues. CPKC also flew in top executives, including COO Mark Redd, from Calgary to locations in Texas and the Gulf Coast to organize remedial efforts. “CPKC soon established cross-functional ‘SWAT-like’ support teams [comprised of experts from Operations, IT, and Network Support, and Marketing & Sales, and including senior executives] to work through the issues arising from the IT transition,” CPKC wrote in the STB letter. “CPKC understands that some customer interactions with CPKC customer service personnel during the period may have been frustrating as a result of the issues with data visibility.” CPKC said it will continue to file weekly supplemental reports to update US regulators on the status of recovery efforts. “This report, along with the weekly cadence of updates we anticipate filing with the board as noted below, will provide those stakeholders with up-to-date data reflecting progress towards a return to normal service,” the railroad wrote. Contact Ari Ashe at ari.ashe@spglobal.com .

CPKC acknowledges service woes to US regulators, vows remediation

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">Iran has yet to make good on its threat to close the Strait of Hormuz, but nervous carriers are preparing contingency plans as the region moves onto a war footing.</div>

Iran has yet to make good on its threat to close the Strait of Hormuz, but nervous carriers are preparing contingency plans as the region moves onto a war footing.

<div class="phx-topic">Ocean carriers are poised to adjust schedules and omit key Persian Gulf transshipment hubs should Tehran carry out its threat to close the Strait of Hormuz to international shipping following the US bombing raids on Iranian nuclear facilities on Sunday. A series of customer advisories were issued by carriers on Monday, emphasizing the safety of crew, vessels and cargo as the shipping companies closely monitor a rapidly deteriorating security situation. “We are actively evaluating potential risks and stand ready to adjust our operations should conditions change,” Hapag-Lloyd said in an advisory. “At present, our vessels continue to transit the Strait of Hormuz. The safety and well-being of our crews and ships remain our highest priority.” The US launched airstrikes on three of Iran’s nuclear sites at Fordow, Natanz and Isfahan early Sunday in a dramatic escalation of the war between Iran and Israel. Iran’s parliament voted on June 22 in support of closing the Strait of Hormuz, although the final decision will be made by the Supreme Leader in consultation with the Supreme National Security Council. As of Monday, the only entrance to the Persian Gulf remained open to shipping. Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce analyst, said how and where Iran would retaliate against US interests in the region was being closely monitored. “But for commercial shipping, the question is not whether or not vessels are attacked — the question is whether or not the risk itself is sufficient to cause a change in vessel deployment to reduce traffic through the Strait of Hormuz,” Jensen wrote in a LinkedIn post. In a country risk report Monday, S&amp;P Global Maritime Intelligence noted that Iran’s leadership now almost certainly perceives a severe threat to its survival, whether direct or indirect, and that is likely to heavily influence decision making. “We expect Iran’s response to first remain focused on continued ballistic missile and [drone] attacks on Israel [and] being likely to attempt to impede transit through the Strait of Hormuz,” the report noted. Disrupting ship transits could include vessel seizures, GPS/AIS spoofing and the use of military boats to harass vessels, it added. CMA CGM said in its customer advisory that “the geopolitical context is evolving.” “At this stage, we confirm that shipping activities are proceeding as normal in the area, and that our operations and logistics chains remain unchanged,” the carrier stated. “We continue to ensure full service coverage across all routes and ports of call.” However, ocean visibility provider eeSea noted that CMA CGM’s CMA-LMX service has been renamed and rerouted. The Europe-Middle East service that has been operating in the Persian Gulf since September 2024 has dropped calls to Jebel Ali, Abu Dhabi and Jubail in the Gulf and has added an additional call to the Turkish port of Ambarli near Istanbul. The service is now advertised under the name CMA-LRX (Levant Red Sea Express) and will see a reduction of three slots and a total roundtrip time cut in half from 42 to 21 days. <h3>Hormuz closure would impact key transshipment hub </h3>Any closure of the Strait of Hormuz will be felt first in the energy markets. According to Platts, a sister company of the Journal of Commerce within S&amp;P Global, more than 17 million barrels of crude oil each day move through Hormuz, coming not just from Iran, but from Saudi Arabia, Kuwait, the UAE and Qatar. That is more than 20% of daily global crude production. But container traffic would face significant disruption as well, with 4% of global volume passing through the strait in 2024, primarily destined for the United Arab Emirates’ transshipment hubs of Jebel Ali and Khalifa, and for the ports of Dammam in Saudi Arabia and Doha in Qatar. Jebel Ali, which handled 15.5 million TEUs in 2024, has become the region’s leading transshipment hub with feeder services connecting ports across the Persian Gulf, South Asia and East Africa. A blockade of Hormuz would see calls diverted to neighboring Indian, Omani and East African ports, where a surge in transshipment demand could lead to congestion and delays, a report from S&amp;P Global Market Intelligence noted. Multipurpose carrier AAL Shipping said in a statement Monday it was “deeply concerned” with the war between Israel and Iran and its impact on shipping in the region. “While our normal trade lane schedules currently remain unaffected, we are monitoring the situation and taking all necessary precautions to ensure the safety of our crew and cargo as we trade regional waters for our customers,” AAL said. But the carrier warned that there was also a rising cost element to the deteriorating situation in the Middle East. “We would highlight that such evolving threats can lead to increased insurance premiums and other security-related costs, affecting operational considerations for all parties,” it said. Meanwhile, at the other end of the war, Maersk announced it was cutting calls to the Israeli port of Haifa in the Mediterranean. “After carefully analyzing threat risk reports regarding the ongoing conflict between Israel and Iran — particularly the potential risks of calling specific Israeli ports and their implications for the safety of our crews — Maersk has made the decision to temporarily suspend vessel calls at the Port of Haifa, Israel, and also suspend cargo acceptance for Haifa,” the carrier said in an advisory Friday. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com ">greg.knowler@spglobal.com</a>.</div>

Ocean carriers are poised to adjust schedules and omit key Persian Gulf transshipment hubs should Tehran carry out its threat to close the Strait of Hormuz to international shipping following the US bombing raids on Iranian nuclear facilities on Sunday. A series of customer advisories were issued by carriers on Monday, emphasizing the safety of crew, vessels and cargo as the shipping companies closely monitor a rapidly deteriorating security situation. “We are actively evaluating potential risks and stand ready to adjust our operations should conditions change,” Hapag-Lloyd said in an advisory. “At present, our vessels continue to transit the Strait of Hormuz. The safety and well-being of our crews and ships remain our highest priority.” The US launched airstrikes on three of Iran’s nuclear sites at Fordow, Natanz and Isfahan early Sunday in a dramatic escalation of the war between Iran and Israel. Iran’s parliament voted on June 22 in support of closing the Strait of Hormuz, although the final decision will be made by the Supreme Leader in consultation with the Supreme National Security Council. As of Monday, the only entrance to the Persian Gulf remained open to shipping. Lars Jensen, CEO of consultant Vespucci Maritime and a Journal of Commerce analyst, said how and where Iran would retaliate against US interests in the region was being closely monitored. “But for commercial shipping, the question is not whether or not vessels are attacked — the question is whether or not the risk itself is sufficient to cause a change in vessel deployment to reduce traffic through the Strait of Hormuz,” Jensen wrote in a LinkedIn post. In a country risk report Monday, S&P Global Maritime Intelligence noted that Iran’s leadership now almost certainly perceives a severe threat to its survival, whether direct or indirect, and that is likely to heavily influence decision making. “We expect Iran’s response to first remain focused on continued ballistic missile and [drone] attacks on Israel [and] being likely to attempt to impede transit through the Strait of Hormuz,” the report noted. Disrupting ship transits could include vessel seizures, GPS/AIS spoofing and the use of military boats to harass vessels, it added. CMA CGM said in its customer advisory that “the geopolitical context is evolving.” “At this stage, we confirm that shipping activities are proceeding as normal in the area, and that our operations and logistics chains remain unchanged,” the carrier stated. “We continue to ensure full service coverage across all routes and ports of call.” However, ocean visibility provider eeSea noted that CMA CGM’s CMA-LMX service has been renamed and rerouted. The Europe-Middle East service that has been operating in the Persian Gulf since September 2024 has dropped calls to Jebel Ali, Abu Dhabi and Jubail in the Gulf and has added an additional call to the Turkish port of Ambarli near Istanbul. The service is now advertised under the name CMA-LRX (Levant Red Sea Express) and will see a reduction of three slots and a total roundtrip time cut in half from 42 to 21 days. Hormuz closure would impact key transshipment hub Any closure of the Strait of Hormuz will be felt first in the energy markets. According to Platts, a sister company of the Journal of Commerce within S&P Global, more than 17 million barrels of crude oil each day move through Hormuz, coming not just from Iran, but from Saudi Arabia, Kuwait, the UAE and Qatar. That is more than 20% of daily global crude production. But container traffic would face significant disruption as well, with 4% of global volume passing through the strait in 2024, primarily destined for the United Arab Emirates’ transshipment hubs of Jebel Ali and Khalifa, and for the ports of Dammam in Saudi Arabia and Doha in Qatar. Jebel Ali, which handled 15.5 million TEUs in 2024, has become the region’s leading transshipment hub with feeder services connecting ports across the Persian Gulf, South Asia and East Africa. A blockade of Hormuz would see calls diverted to neighboring Indian, Omani and East African ports, where a surge in transshipment demand could lead to congestion and delays, a report from S&P Global Market Intelligence noted. Multipurpose carrier AAL Shipping said in a statement Monday it was “deeply concerned” with the war between Israel and Iran and its impact on shipping in the region. “While our normal trade lane schedules currently remain unaffected, we are monitoring the situation and taking all necessary precautions to ensure the safety of our crew and cargo as we trade regional waters for our customers,” AAL said. But the carrier warned that there was also a rising cost element to the deteriorating situation in the Middle East. “We would highlight that such evolving threats can lead to increased insurance premiums and other security-related costs, affecting operational considerations for all parties,” it said. Meanwhile, at the other end of the war, Maersk announced it was cutting calls to the Israeli port of Haifa in the Mediterranean. “After carefully analyzing threat risk reports regarding the ongoing conflict between Israel and Iran — particularly the potential risks of calling specific Israeli ports and their implications for the safety of our crews — Maersk has made the decision to temporarily suspend vessel calls at the Port of Haifa, Israel, and also suspend cargo acceptance for Haifa,” the carrier said in an advisory Friday. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

International ports

Carriers ‘stand ready’ to cut Persian Gulf calls as security threat escalates

<div class="phx-topic abstract-wrapper">A new service from Green Tide Logistics will connect Veracruz to Philadelphia in five to six days via truck and multi-purpose vessels capable of handling 1,200 to 1,700 TEUs. </div>

A new service from Green Tide Logistics will connect Veracruz to Philadelphia in five to six days via truck and multi-purpose vessels capable of handling 1,200 to 1,700 TEUs.

<div class="phx-topic">A Mexico City-based logistics company will launch a twice-monthly combined ocean-trucking service between Mexico’s Gulf Coast and the US East Coast in late July, offering shippers a way to avoid cross-border surface delays and <a href="https://www.joc.com/article/congress-makes-fresh-attempt-to-target-cargo-theft-in-us-5982118">security concerns</a>. The service by Green Tide Logistics will connect Veracruz to Philadelphia in five to six days via truck and multi-purpose vessels (MPVs) capable of handling 1,200 to 1,700 TEUs. Via truck only, the route typically takes up to 10 days. Green Tide CEO Hans Schriwer said the service will start July 28 with a single time-chartered MPV; the company has plans to expand to a weekly service using two vessels in the fourth quarter. “There’s huge potential in terms of steering stuff away from nearly all truck, to a combination of truck and ocean,” Schriwer told the Journal of Commerce. “With nearshoring, we felt that the timing now was appropriate to push this through.” The service will handle inland Mexico via truck and then move cargo out of Tuxpan and Coatzacoalcos via ocean to Philadelphia. Once in the US, Schriwer said customers can choose truck or rail to get the shipment to its destination. The Green Tide offering is the latest service aimed at tapping the shifting US-Mexico ocean trade — which represents less than half a percent of total US ocean imports — even though Mexico-to-US ocean volumes have shrunk considerably since 2019. Most recently, US-based ocean carrier Crowley started a three-day ocean service from Tuxpan to Gulfport, Mississippi, in May. That came on the heels of another <a href="https://www.joc.com/article/crowley-cn-strike-mexico-intermodal-deal-through-port-of-mobile-5220379">multimodal Mexico-US Crowley service</a> launched in 2023. <h3>Serving a niche market </h3>The Green Tide vessels will move forty-foot-equivalent units, twenty-foot-equivalent units, 53-foot containers, refrigerated containers and bulk options, Schriwer said. According to PIERS, a sister company of the Journal of Commerce within S&amp;P Global, the top commodities moved via ocean on the lane so far this year have been beer, liqueurs, watermelons, ethyl alcohol and coffee. Mexico shipped 2,749 TEUs via ocean into the East Coast of North America (ECNA) in May, according to the most recent PIERS data available. That marked a 26% month-over-month increase but a 29% reduction on the year. Overall, the ocean trade has shrunk 51% since May 2019, when ECNA received 5,619 TEUs from Mexico. Despite the small market, Schriwer said there is growing demand for the Mexico-US service. According to the United States Trade Representative, the US imported almost $506 billion worth of cargo from Mexico last year, up 6.4% from 2023 — mostly via truck. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

A Mexico City-based logistics company will launch a twice-monthly combined ocean-trucking service between Mexico’s Gulf Coast and the US East Coast in late July, offering shippers a way to avoid cross-border surface delays and security concerns . The service by Green Tide Logistics will connect Veracruz to Philadelphia in five to six days via truck and multi-purpose vessels (MPVs) capable of handling 1,200 to 1,700 TEUs. Via truck only, the route typically takes up to 10 days. Green Tide CEO Hans Schriwer said the service will start July 28 with a single time-chartered MPV; the company has plans to expand to a weekly service using two vessels in the fourth quarter. “There’s huge potential in terms of steering stuff away from nearly all truck, to a combination of truck and ocean,” Schriwer told the Journal of Commerce. “With nearshoring, we felt that the timing now was appropriate to push this through.” The service will handle inland Mexico via truck and then move cargo out of Tuxpan and Coatzacoalcos via ocean to Philadelphia. Once in the US, Schriwer said customers can choose truck or rail to get the shipment to its destination. The Green Tide offering is the latest service aimed at tapping the shifting US-Mexico ocean trade — which represents less than half a percent of total US ocean imports — even though Mexico-to-US ocean volumes have shrunk considerably since 2019. Most recently, US-based ocean carrier Crowley started a three-day ocean service from Tuxpan to Gulfport, Mississippi, in May. That came on the heels of another multimodal Mexico-US Crowley service launched in 2023. Serving a niche market The Green Tide vessels will move forty-foot-equivalent units, twenty-foot-equivalent units, 53-foot containers, refrigerated containers and bulk options, Schriwer said. According to PIERS, a sister company of the Journal of Commerce within S&P Global, the top commodities moved via ocean on the lane so far this year have been beer, liqueurs, watermelons, ethyl alcohol and coffee. Mexico shipped 2,749 TEUs via ocean into the East Coast of North America (ECNA) in May, according to the most recent PIERS data available. That marked a 26% month-over-month increase but a 29% reduction on the year. Overall, the ocean trade has shrunk 51% since May 2019, when ECNA received 5,619 TEUs from Mexico. Despite the small market, Schriwer said there is growing demand for the Mexico-US service. According to the United States Trade Representative, the US imported almost $506 billion worth of cargo from Mexico last year, up 6.4% from 2023 — mostly via truck. Contact Laura Robb at laura.robb@spglobal.com . 

Forwarding

Mexico-US ocean market expands amid growing nearshoring interest

<div class="phx-topic abstract-wrapper">Peak shipping season began early on both trade lanes, but the advancing of US orders from China will hit trans-Pacific demand in the second half of the year.</div>

Peak shipping season began early on both trade lanes, but the advancing of US orders from China will hit trans-Pacific demand in the second half of the year.

<div class="phx-topic">China-US trade in the second half of 2025 will be characterized by sharply falling rates and volume as frontloading momentum peters out and shippers sit with bloated inventories, while the demand outlook for Asia-Europe is far brighter, shipping analysts say. Just two weeks remain before the 90-day pause on global tariffs by the US ends on July 9, with a similar pause on China tariffs expiring Aug. 14. Although the outcome of Washington’s negotiations with its trading partners remains uncertain, declining demand on the trans-Pacific is expected whatever the result of talks. “Demand is expected to drop significantly, even if lower tariffs continue after the 90-day pause,” said Peter Sand, chief analyst at rate benchmarking platform Xeneta. “Shippers have been frontloading imports throughout 2024 and early 2025 so inventories will be brimming once the current cargo rush is over.” Ports along the US West Coast are due to experience a short-lived cargo surge over the next few weeks, which may slow the ongoing decline in spot rates in the eastbound trans-Pacific. The rate from Asia to the West Coast as of Tuesday was $2,800 per FEU, down 13% on the week and 54% lower than the recent high of $6,040 per FEU on June 6, according to Platts, a Journal of Commerce sister company within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="bea6613f-87e3-42b2-84e2-aa2fd6f34f8f"></dynamic-object></div>Niels Rasmussen, chief shipping analyst at Bimco, said when the 90-day pause on tariffs ends, US importers will turn to the inventories they built up through frontloading in the first half of the year. “We expect that US import volume growth will suffer under the increased import tariffs and weaker economic growth,” Rasmussen noted in Bimco’s latest container shipping outlook released Wednesday. “We therefore estimate that the year-to-date frontloading of cargo will result in an equal downturn in imports during the second half of 2025,” he added. “In fact, we expect the downturn to be even more pronounced as the 55% tariff on Chinese goods gets implemented and the reciprocal tariff increases announced in April are implemented following the 90-day delay.” The import tariff for China went as high as 145% but was later lowered to 30% for the 90-day period ending Aug. 14. Last week, President Donald Trump wrote on his social media platform that an agreement had been reached with China that will set the tariff applied on Chinese imports to 55%, although that has yet to be officially confirmed. A trade agreement has been reached between the US and UK that will lower the general tariff level for imports from the UK to 10%. And although negotiations are continuing with the European Union, it is likely the EU will face a 10% baseline tariff on all its US exports. Bimco has adjusted its 2025 volume growth forecast for the European and Mediterranean region upward from 3.5% to 6% to reflect the stronger-than-expected year-to-date volumes. “Volume to the region grew 7.3% during the first four months of the year and economic conditions are improving with lower inflation, lower interest rates, lower unemployment than before COVID and a stronger euro all contributing to a brighter outlook,” Rasmussen said. “In the EU, consumers appear significantly better off as retail volumes have seen robust growth compared to a very weak second half of 2024, and consumer confidence remains mostly stable,” he added. <h3>Rates flatten on Asia-North Europe </h3>The peak season on Asia-Europe has begun and spot rates of $2,842 per FEU are up 49% since May 31, according to Xeneta. Rates have flattened out following the June freight-all-kinds (FAK) increases, but ocean carriers are planning to significantly reduce the deployed capacity on Asia-North Europe in August. If demand remains strong, rates are sure to rise. Data from visibility provider eeSea shows that the expected capacity on Asia-North Europe will fall by 90,000 TEUs in August from July, with blank capacity up 25% to 105,000 TEUs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="6a5146cf-79d1-41fa-85fb-c1916fc625ac"></dynamic-object></div>Rasmussen noted that the conflict between Israel and Iran may have further delayed when ships will return to normal Red Sea and Suez Canal routings, and the Bimco outlook assumes no change in the diversions around southern Africa. When ships do return to Suez transits, Bimco is forecasting a 10% reduction in ship demand because of the shorter sailing distances. S&amp;P Global Market Intelligence has not recorded a Houthi militant attack on commercial shipping in the Red Sea since Dec. 10, 2024. While an apparent ceasefire was agreed to between the Houthis and the US in May, the US Department of Defense says the USS Harry S. Truman aircraft carrier strike group intercepted approximately 160 Houthi drone and missile attacks over its five-month deployment in the Red Sea that ended in May, an indication of the resilience of Houthi attack capabilities. “Houthi attacks on US-affiliated shipping are likely to resume in the Red Sea and Gulf of Aden at volumes probably not exceeding previous attacks and maintaining a severe risk to all vessels in transit due to uncertainties around Houthi targeting selection,” Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global Market Intelligence, wrote in a report this week. S&amp;P Global is the parent company of the Journal of Commerce. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

China-US trade in the second half of 2025 will be characterized by sharply falling rates and volume as frontloading momentum peters out and shippers sit with bloated inventories, while the demand outlook for Asia-Europe is far brighter, shipping analysts say. Just two weeks remain before the 90-day pause on global tariffs by the US ends on July 9, with a similar pause on China tariffs expiring Aug. 14. Although the outcome of Washington’s negotiations with its trading partners remains uncertain, declining demand on the trans-Pacific is expected whatever the result of talks. “Demand is expected to drop significantly, even if lower tariffs continue after the 90-day pause,” said Peter Sand, chief analyst at rate benchmarking platform Xeneta. “Shippers have been frontloading imports throughout 2024 and early 2025 so inventories will be brimming once the current cargo rush is over.” Ports along the US West Coast are due to experience a short-lived cargo surge over the next few weeks, which may slow the ongoing decline in spot rates in the eastbound trans-Pacific. The rate from Asia to the West Coast as of Tuesday was $2,800 per FEU, down 13% on the week and 54% lower than the recent high of $6,040 per FEU on June 6, according to Platts, a Journal of Commerce sister company within S&P Global. Niels Rasmussen, chief shipping analyst at Bimco, said when the 90-day pause on tariffs ends, US importers will turn to the inventories they built up through frontloading in the first half of the year. “We expect that US import volume growth will suffer under the increased import tariffs and weaker economic growth,” Rasmussen noted in Bimco’s latest container shipping outlook released Wednesday. “We therefore estimate that the year-to-date frontloading of cargo will result in an equal downturn in imports during the second half of 2025,” he added. “In fact, we expect the downturn to be even more pronounced as the 55% tariff on Chinese goods gets implemented and the reciprocal tariff increases announced in April are implemented following the 90-day delay.” The import tariff for China went as high as 145% but was later lowered to 30% for the 90-day period ending Aug. 14. Last week, President Donald Trump wrote on his social media platform that an agreement had been reached with China that will set the tariff applied on Chinese imports to 55%, although that has yet to be officially confirmed. A trade agreement has been reached between the US and UK that will lower the general tariff level for imports from the UK to 10%. And although negotiations are continuing with the European Union, it is likely the EU will face a 10% baseline tariff on all its US exports. Bimco has adjusted its 2025 volume growth forecast for the European and Mediterranean region upward from 3.5% to 6% to reflect the stronger-than-expected year-to-date volumes. “Volume to the region grew 7.3% during the first four months of the year and economic conditions are improving with lower inflation, lower interest rates, lower unemployment than before COVID and a stronger euro all contributing to a brighter outlook,” Rasmussen said. “In the EU, consumers appear significantly better off as retail volumes have seen robust growth compared to a very weak second half of 2024, and consumer confidence remains mostly stable,” he added. Rates flatten on Asia-North Europe The peak season on Asia-Europe has begun and spot rates of $2,842 per FEU are up 49% since May 31, according to Xeneta. Rates have flattened out following the June freight-all-kinds (FAK) increases, but ocean carriers are planning to significantly reduce the deployed capacity on Asia-North Europe in August. If demand remains strong, rates are sure to rise. Data from visibility provider eeSea shows that the expected capacity on Asia-North Europe will fall by 90,000 TEUs in August from July, with blank capacity up 25% to 105,000 TEUs. Rasmussen noted that the conflict between Israel and Iran may have further delayed when ships will return to normal Red Sea and Suez Canal routings, and the Bimco outlook assumes no change in the diversions around southern Africa. When ships do return to Suez transits, Bimco is forecasting a 10% reduction in ship demand because of the shorter sailing distances. S&P Global Market Intelligence has not recorded a Houthi militant attack on commercial shipping in the Red Sea since Dec. 10, 2024. While an apparent ceasefire was agreed to between the Houthis and the US in May, the US Department of Defense says the USS Harry S. Truman aircraft carrier strike group intercepted approximately 160 Houthi drone and missile attacks over its five-month deployment in the Red Sea that ended in May, an indication of the resilience of Houthi attack capabilities. “Houthi attacks on US-affiliated shipping are likely to resume in the Red Sea and Gulf of Aden at volumes probably not exceeding previous attacks and maintaining a severe risk to all vessels in transit due to uncertainties around Houthi targeting selection,” Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligence, wrote in a report this week. S&P Global is the parent company of the Journal of Commerce. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Pacific sailing into slowdown; Asia-Europe outlook brightens: analysts

<div class="phx-topic abstract-wrapper">With little relief forthcoming, cargo owners need to build delays into their shipping plans as port and ship capacity remain tight, speakers at the Agriculture Transportation Coalition’s annual meeting said.</div>

With little relief forthcoming, cargo owners need to build delays into their shipping plans as port and ship capacity remain tight, speakers at the Agriculture Transportation Coalition’s annual meeting said.

<div class="phx-topic">TACOMA — Ongoing congestion at Asian and European transshipment ports and stricter carbon emission rules are hurting vessel schedule reliability, industry experts said at an agriculture shipping conference this week. With little relief on either issue forthcoming, cargo owners need to build delays into their shipping plans as port and ship capacity remain tight. Speaking at the Agriculture Transportation Coalition’s (AgTC’s) annual meeting here, Kuehne + Nagel Vice President Bill Rooney said schedule reliability among ocean carriers is “still a dumpster fire.” He cited data that showed less than 60% of vessel calls in April globally were within a day of their scheduled berthing window. The post-COVID-19 high for schedule reliability was near 65%, Rooney said, adding that he doubts the industry can hit that target, much less pre-pandemic levels of service reliability. Agriculture shippers are among the most sensitive to poor schedule reliability due to the high handling costs and perishability of their products. “The traditional number was more like 75% or 80%,” Rooney said. “I’m not sure we’ll get back there.” Since its start this year, the Gemini Cooperation alliance of Maersk and Hapag-Lloyd has said it has been reaching its 90% schedule reliability goal regularly. However, Rooney said that likely reflects major linehaul services from the two carriers and not necessarily feeder or standalone services. Individually, Maersk and Hapag-Lloyd have global schedule reliability hovering under 70%, he estimated. “They may achieve 90% on your trade lane, but my advice is to check whether your port is now a feeder port versus a linehaul port,” said Rooney. Slower ships factor into the lower reliability, he said. In 2023, the global fleet averaged speeds at just under 14 knots, or about 16 miles per hour. That’s the slowest speed on record and about half the average speed that ships traveled 50 years earlier, he said. “If you were 12 hours behind schedule, you could step on the gas and make your slot at your terminal,” Rooney said. “That’s not happening ever again.” He added shippers will have to plan around the fact that schedule reliability will likely remain subpar indefinitely. “You want to build a resilient supply chain? Resiliency is recognizing that the ships are seldom on time,” Rooney said. <h3>IMO rules, port congestion </h3>In 2023, the International Maritime Organization’s (IMO’s) Carbon Intensity Indicator (CII) rating went into effect for ships, requiring them to report and collect fuel consumption data. Fabio Santucci, US president for Mediterranean Shipping Co., said lower speeds reduce fuel consumption to meet the increasingly strict CII ratings. “Vessels cannot legally afford to go any faster,” Santucci said. “That’s where we lost, as an industry, the ability to catch up.” Along with slower speeds, ports globally are operating at nearly full capacity, Santucci said. Overall, there were about 900 million TEUs of containers shipped globally in 2024, with nameplate port capacity at about 1 billion TEUs. Santucci said congestion both inside and outside a port takes up the remaining capacity, leaving little space to manage cargo. While North American ports are mostly fluid, other ports across the globe right now are experiencing congestion levels as high as during the pandemic, Santucci said, with the problem most acute at major transshipment ports. “If your cargo is transshipping, it’s witnessing congestion levels that are as high as those seen during COVID,” he said. “While we don’t see this effect in the United States, we have issues pretty much everywhere else in the world.” Among major European transshipment ports, <a href="https://www.joc.com/article/no-end-to-the-congestion-choking-gateway-ports-in-north-europe-5995853">Hamburg</a> and <a href="https://www.joc.com/article/bottlenecks-flare-in-barcelona-as-port-battles-rise-in-transshipment-volumes-5244343">Tanger Med</a> are “heavily disrupted,” according to a Kuehne + Nagel port status report. In the Western Hemisphere, Santucci said <a href="https://www.joc.com/article/cargo-bottlenecks-persist-at-mexicos-manzanillo-port-one-month-after-strike-6027313">Manzanillo</a> and the transshipment ports of Panama are also congested. Many ports throughout China are also congested, as are the Southeast Asia ports, including Malaysia’s Port Klang and <a href="https://www.joc.com/article/asia-port-disruption-wave-reaches-singapore-6014754">Singapore</a>, which Santucci said has been working at close to full capacity for months. “Singapore has been steadily working at 90% capacity for months and months and months,” Santucci said. “I can tell you that working at 90% capacity for months generates a lot of inefficiencies.” MSC’s large fleet allows it to offer more direct port calls, but Santucci said transshipping will remain a necessity for some services, particularly as shippers diversify their product sourcing to other countries. With only about 1% of the global container fleet idled, Santucci said carriers have little capacity to offer more direct services without the use of transshipping. “Transshipment is always going to remain the Achilles heel of any network,” he said. “The more you transship, the more issues and more costs you’re going to have.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

TACOMA — Ongoing congestion at Asian and European transshipment ports and stricter carbon emission rules are hurting vessel schedule reliability, industry experts said at an agriculture shipping conference this week. With little relief on either issue forthcoming, cargo owners need to build delays into their shipping plans as port and ship capacity remain tight. Speaking at the Agriculture Transportation Coalition’s (AgTC’s) annual meeting here, Kuehne + Nagel Vice President Bill Rooney said schedule reliability among ocean carriers is “still a dumpster fire.” He cited data that showed less than 60% of vessel calls in April globally were within a day of their scheduled berthing window. The post-COVID-19 high for schedule reliability was near 65%, Rooney said, adding that he doubts the industry can hit that target, much less pre-pandemic levels of service reliability. Agriculture shippers are among the most sensitive to poor schedule reliability due to the high handling costs and perishability of their products. “The traditional number was more like 75% or 80%,” Rooney said. “I’m not sure we’ll get back there.” Since its start this year, the Gemini Cooperation alliance of Maersk and Hapag-Lloyd has said it has been reaching its 90% schedule reliability goal regularly. However, Rooney said that likely reflects major linehaul services from the two carriers and not necessarily feeder or standalone services. Individually, Maersk and Hapag-Lloyd have global schedule reliability hovering under 70%, he estimated. “They may achieve 90% on your trade lane, but my advice is to check whether your port is now a feeder port versus a linehaul port,” said Rooney. Slower ships factor into the lower reliability, he said. In 2023, the global fleet averaged speeds at just under 14 knots, or about 16 miles per hour. That’s the slowest speed on record and about half the average speed that ships traveled 50 years earlier, he said. “If you were 12 hours behind schedule, you could step on the gas and make your slot at your terminal,” Rooney said. “That’s not happening ever again.” He added shippers will have to plan around the fact that schedule reliability will likely remain subpar indefinitely. “You want to build a resilient supply chain? Resiliency is recognizing that the ships are seldom on time,” Rooney said. IMO rules, port congestion In 2023, the International Maritime Organization’s (IMO’s) Carbon Intensity Indicator (CII) rating went into effect for ships, requiring them to report and collect fuel consumption data. Fabio Santucci, US president for Mediterranean Shipping Co., said lower speeds reduce fuel consumption to meet the increasingly strict CII ratings. “Vessels cannot legally afford to go any faster,” Santucci said. “That’s where we lost, as an industry, the ability to catch up.” Along with slower speeds, ports globally are operating at nearly full capacity, Santucci said. Overall, there were about 900 million TEUs of containers shipped globally in 2024, with nameplate port capacity at about 1 billion TEUs. Santucci said congestion both inside and outside a port takes up the remaining capacity, leaving little space to manage cargo. While North American ports are mostly fluid, other ports across the globe right now are experiencing congestion levels as high as during the pandemic, Santucci said, with the problem most acute at major transshipment ports. “If your cargo is transshipping, it’s witnessing congestion levels that are as high as those seen during COVID,” he said. “While we don’t see this effect in the United States, we have issues pretty much everywhere else in the world.” Among major European transshipment ports, Hamburg and Tanger Med are “heavily disrupted,” according to a Kuehne + Nagel port status report. In the Western Hemisphere, Santucci said Manzanillo and the transshipment ports of Panama are also congested. Many ports throughout China are also congested, as are the Southeast Asia ports, including Malaysia’s Port Klang and Singapore , which Santucci said has been working at close to full capacity for months. “Singapore has been steadily working at 90% capacity for months and months and months,” Santucci said. “I can tell you that working at 90% capacity for months generates a lot of inefficiencies.” MSC’s large fleet allows it to offer more direct port calls, but Santucci said transshipping will remain a necessity for some services, particularly as shippers diversify their product sourcing to other countries. With only about 1% of the global container fleet idled, Santucci said carriers have little capacity to offer more direct services without the use of transshipping. “Transshipment is always going to remain the Achilles heel of any network,” he said. “The more you transship, the more issues and more costs you’re going to have.” Contact Michael Angell at michael.angell@spglobal.com .

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