<div class="phx-topic abstract-wrapper">The 15,000-square-foot, 37-dock-door facility is the latest example of how LTL carriers are expanding into drayage, container handling and global supply chains. </div>

The 15,000-square-foot, 37-dock-door facility is the latest example of how LTL carriers are expanding into drayage, container handling and global supply chains.

Feature image

<div class="phx-topic">US less-than-truckload (LTL) carrier Pitt Ohio is bridging the gap between domestic and international freight by opening its first marine terminal in Norfolk, Virginia. The 15,000-square-foot, 37-dock-door facility is the latest example of how LTL carriers are <a href="https://www.joc.com/article/us-import-disruption-opens-up-ltl-transload-opportunities-5249857">expanding into drayage</a>, container handling and global supply chains. It is a new direction for trucking companies looking to route more freight into their networks. From the Norfolk terminal, Pittsburgh-based Pitt Ohio will coordinate inland transportation, customs clearance and related services, the company said in a statement Tuesday. Pitt Ohio is also a non-vessel-operating common carrier (NVO,). The 14th-largest US LTL carrier in 2024, Pitt Ohio said it will use its own chassis to maintain control over shipments for importers and exporters while integrating maritime, inland transportation and warehousing. The Norfolk terminal has been several years in the making. Pitt Ohio, which has been hauling regional LTL freight since 1979, was <a href="https://www.joc.com/article/disruption-forcing-us-importers-to-take-greater-control-of-landside-logistics-5246609">drawn into the drayage business</a> during the COVID-19 pandemic, when shipper customers turned to the company for help. The pandemic saw increased interest in transloading, which requires the type of cross-dock operation that has sustained LTL carriers since the 1920s. In addition to Pitt Ohio, carriers such as Estes Express Lines, <a href="https://www.joc.com/article/averitt-connects-teu-to-ltl-market-in-houston-5207737">Averitt</a> and A. Duie Pyle are building and opening terminals near seaports. LTL freight is still primarily sourced from domestic industrial manufacturers, but e-commerce and the shrinking size of shipments are driving more freight toward LTL. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US less-than-truckload (LTL) carrier Pitt Ohio is bridging the gap between domestic and international freight by opening its first marine terminal in Norfolk, Virginia. The 15,000-square-foot, 37-dock-door facility is the latest example of how LTL carriers are expanding into drayage , container handling and global supply chains. It is a new direction for trucking companies looking to route more freight into their networks. From the Norfolk terminal, Pittsburgh-based Pitt Ohio will coordinate inland transportation, customs clearance and related services, the company said in a statement Tuesday. Pitt Ohio is also a non-vessel-operating common carrier (NVO,). The 14th-largest US LTL carrier in 2024, Pitt Ohio said it will use its own chassis to maintain control over shipments for importers and exporters while integrating maritime, inland transportation and warehousing. The Norfolk terminal has been several years in the making. Pitt Ohio, which has been hauling regional LTL freight since 1979, was drawn into the drayage business during the COVID-19 pandemic, when shipper customers turned to the company for help. The pandemic saw increased interest in transloading, which requires the type of cross-dock operation that has sustained LTL carriers since the 1920s. In addition to Pitt Ohio, carriers such as Estes Express Lines, Averitt and A. Duie Pyle are building and opening terminals near seaports. LTL freight is still primarily sourced from domestic industrial manufacturers, but e-commerce and the shrinking size of shipments are driving more freight toward LTL. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Port News

Trucking News

Surface

LTL trucker Pitt Ohio opens marine terminal near Norfolk port

<div class="phx-topic abstract-wrapper">The US price index for LTL trucking, bolstered by new contracts, is as high as it’s ever been, but the truckload sector is stuck in a two-year trough. </div>

The US price index for LTL trucking, bolstered by new contracts, is as high as it’s ever been, but the truckload sector is stuck in a two-year trough.

<div class="phx-topic">US less-than-truckload (LTL) pricing has flatlined, but at the highest point on record, according to the US Bureau of Labor Statistics (BLS). The current BLS long-distance LTL producer price index (PPI) of 259 has remained stable from February through April, level with its previous pandemic-era peak in June 2022. The BLS uses pricing data from December 2003 as its base (100) for calculating the LTL and truckload PPIs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9014abeb-369b-4328-97ae-ee1793647b6e"></dynamic-object></div>The April reading is 4.9% higher than a year ago and 12.1% higher than July 2023, when the <a href="https://www.joc.com/article/yellows-collapse-already-pushing-ltl-rates-higher-as-capacity-tightens-5216052">collapse of Yellow</a> into bankruptcy set LTL costs climbing for the next 22 months. The LTL PPI is a measure of the total “selling price” LTL customers pay carriers for services, including accessorial fees and fuel surcharges as well as base LTL trucking rates. It is a metric tracking the total cost of LTL services to shippers, rather than base rates. The LTL PPI flatlined from September through December 2024 before jumping 5.8% from December to January and climbing another 0.8% in February to its current plateau. The jump in early 2025 most likely corresponds with new rates set by contract renewals. The PPI corresponds closely with contractual rate increases reported by LTL carriers in recent first-quarter earnings reports and in interviews with the Journal of Commerce. Most carriers reported annualized rate increases in the <a href="https://www.joc.com/article/us-ltl-rates-rising-despite-falling-volumes-more-cautious-shippers-5996463">mid-single-digit percentage range</a> in the first quarter. New contract agreements are still coming into effect. To date, tariff-related variations in demand have had little effect on the US LTL market. The rebound in LTL pricing stands in contrast to the performance of the truckload sector, where pricing is still close to the bottom of a trough first entered in June 2023. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ca91266b-e12d-4977-9e6a-03d09f9b08f0"></dynamic-object></div>The BLS long-distance truckload PPI of 175.2 fell just less than 1 percentage point in April and is down 2.6% from January and 24.6% from its pandemic-era peak in May 2022. The basic explanation for the LTL/truckload divergence is capacity. The loss of Yellow put more than 300 LTL terminals on the market; not all of them have been sold or returned to service. The LTL sector as a whole added only 83 terminals in 2024, bringing its total to 3,216 facilities, according to SJ Consulting Group. That is a 2.7% gain over 2023. The truckload sector <a href="https://www.joc.com/article/large-truckload-carriers-make-capacity-cuts-but-trucks-reenter-the-market-6004177">still has excess capacity</a>, with about 37% more carriers with active operating authorities than in 2019, data from the Federal Motor Carrier Safety Administration shows. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

US less-than-truckload (LTL) pricing has flatlined, but at the highest point on record, according to the US Bureau of Labor Statistics (BLS). The current BLS long-distance LTL producer price index (PPI) of 259 has remained stable from February through April, level with its previous pandemic-era peak in June 2022. The BLS uses pricing data from December 2003 as its base (100) for calculating the LTL and truckload PPIs. The April reading is 4.9% higher than a year ago and 12.1% higher than July 2023, when the collapse of Yellow into bankruptcy set LTL costs climbing for the next 22 months. The LTL PPI is a measure of the total “selling price” LTL customers pay carriers for services, including accessorial fees and fuel surcharges as well as base LTL trucking rates. It is a metric tracking the total cost of LTL services to shippers, rather than base rates. The LTL PPI flatlined from September through December 2024 before jumping 5.8% from December to January and climbing another 0.8% in February to its current plateau. The jump in early 2025 most likely corresponds with new rates set by contract renewals. The PPI corresponds closely with contractual rate increases reported by LTL carriers in recent first-quarter earnings reports and in interviews with the Journal of Commerce. Most carriers reported annualized rate increases in the mid-single-digit percentage range in the first quarter. New contract agreements are still coming into effect. To date, tariff-related variations in demand have had little effect on the US LTL market. The rebound in LTL pricing stands in contrast to the performance of the truckload sector, where pricing is still close to the bottom of a trough first entered in June 2023. The BLS long-distance truckload PPI of 175.2 fell just less than 1 percentage point in April and is down 2.6% from January and 24.6% from its pandemic-era peak in May 2022. The basic explanation for the LTL/truckload divergence is capacity. The loss of Yellow put more than 300 LTL terminals on the market; not all of them have been sold or returned to service. The LTL sector as a whole added only 83 terminals in 2024, bringing its total to 3,216 facilities, according to SJ Consulting Group. That is a 2.7% gain over 2023. The truckload sector still has excess capacity , with about 37% more carriers with active operating authorities than in 2019, data from the Federal Motor Carrier Safety Administration shows. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Truckload

US LTL pricing maintains record high as truckload slumps

<div class="phx-topic abstract-wrapper">Importers can get a fairly good sense of how to proceed over the next few months based on developments to date, but things will get fuzzy when the separate cooldown periods for tariffs on China and the rest of the world expire this summer, writes Lars Jensen. </div>

Importers can get a fairly good sense of how to proceed over the next few months based on developments to date, but things will get fuzzy when the separate cooldown periods for tariffs on China and the rest of the world expire this summer, writes Lars Jensen.

<div class="phx-topic">How should one think about planning their supply chain to and from the US during the upcoming peak season? The easy answer would be to simply state that everything is unpredictable, and hence, you must resort merely to short-term tactical actions. And while there is some truth to the unpredictability and need for a tactical approach, this does not mean the imminent peak season is completely unpredictable. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6008658_0.1.jpg"></img></div>Let us start with what we know, then follow up with what further developments will likely be. On that basis, it will emerge that some elements are indeed partially predictable. Presently, we know that reciprocal tariffs on countries other than China are on pause until July 9. We also know that the <a href="https://www.joc.com/article/capacity-crunch-beckons-on-eastbound-trans-pacific-after-us-china-deal-6002956">US tariffs on China are lowered to 30% and Chinese tariffs on the US are at 10% until Aug. 14.</a> We know that carriers reduced capacity from Asia to the US West Coast by 18% from the US tariffs announcement on April 2 until the announced pause in China tariffs. The capacity from Asia to the US East Coast was adjusted down by 7%. We know that various carriers and forwarders have reported a cut of 20% to 40% in bookings from China due to the tariffs. We know that following the partial pause in China tariffs, carriers have seen a surge in cargo bookings. Not much has been forthcoming in terms of data yet, but <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">Hapag-Lloyd has mentioned a nearly 50% increase in bookings from China</a>, not compared with the recent slump, but compared with the situation before April 2. These are all elements we know to be factually true. Then there are elements we can predict with a good degree of certainty. Spot rates in the short term will rise sharply. The carriers cannot physically un-blank the blank sailings rapidly. This takes a little while. That means right now demand exceeds the capacity available, which inevitably will cause a sharp spike in spot rates. This will continue until enough capacity has been brought back into the trans-Pacific. Given the sharp rise in spot rates, it is also inevitable that carriers will indeed place more capacity into the trade. One way to do that is to blank sailings on other ex-Asia trades, such as Asia-Europe, Asia-Indian subcontinent and Asia-South America. This is likely to happen, especially where spot rates on those trades have been trending downward. The blank sailings out of Asia for the past four weeks are simply a fact already. But that also means we will now see a four-week period of significant blank sailings on the backhaul from the US to Asia. This also means the ability of carriers to reposition empty containers back to China is reduced. This reduced amount of repositioning will “hit” China about three to four weeks into the future. Given the two deadlines of July 9 and Aug. 14, it is very predictable that US importers will attempt to fast-track part of their peak season cargo where possible. This means the main part of the trans-Pacific peak will be from June to mid-August. The drop in empty container repositioning will come to fruition in the middle of this period. This could lead to sporadic and temporary equipment shortages. Will the surge in Chinese exports lead to congestion at US ports? This is very likely, although it is a matter of nuance in terms of how severe it will be. The main factor is how quickly the carriers can bring more capacity into the trans-Pacific. If it happens rapidly, there will be a significant problem, but if it happens more gradually, the impact will be less severe. It will nonetheless put pressure on truck, rail and chassis availability as we get closer to the middle of June. <h3>Post-pause uncertainty </h3>Where the predictions become much more problematic is when we get to the expiry of the pause on reciprocal tariffs. The latest statements from the US government imply that the US will announce the new reciprocal tariffs within the next two to three weeks. But what the level will be and whether it will only come into force on July 9 is not known. The same applies for the Aug. 14 deadline with China. If the tariffs revert to high levels, we should expect cargo volumes to once again drop sharply, in part because shippers will look to the past track record of the trade war and conclude that “wait and see” appears to be the best strategy under the circumstances. And if this subsequently leads to yet another round of cargo declines followed by a cargo surge and spot rate hikes, this might be an acceptable risk. It should also be noted that the rate spike we are seeing now and in the coming week entails a much lower cost than if the importers had chosen to move cargo subject to the 145% tariffs. All in all, the plan — insofar as there is a medium-term plan — would have to be one that assumes potentially another stop-start cycle of container cargo movements to the US. Contact Lars Jensen at <a href="https://www.joc.com/article/lars.jensen@vespucci-maritime.com">lars.jensen@vespucci-maritime.com</a>.</div>

How should one think about planning their supply chain to and from the US during the upcoming peak season? The easy answer would be to simply state that everything is unpredictable, and hence, you must resort merely to short-term tactical actions. And while there is some truth to the unpredictability and need for a tactical approach, this does not mean the imminent peak season is completely unpredictable. Let us start with what we know, then follow up with what further developments will likely be. On that basis, it will emerge that some elements are indeed partially predictable. Presently, we know that reciprocal tariffs on countries other than China are on pause until July 9. We also know that the US tariffs on China are lowered to 30% and Chinese tariffs on the US are at 10% until Aug. 14. We know that carriers reduced capacity from Asia to the US West Coast by 18% from the US tariffs announcement on April 2 until the announced pause in China tariffs. The capacity from Asia to the US East Coast was adjusted down by 7%. We know that various carriers and forwarders have reported a cut of 20% to 40% in bookings from China due to the tariffs. We know that following the partial pause in China tariffs, carriers have seen a surge in cargo bookings. Not much has been forthcoming in terms of data yet, but Hapag-Lloyd has mentioned a nearly 50% increase in bookings from China , not compared with the recent slump, but compared with the situation before April 2. These are all elements we know to be factually true. Then there are elements we can predict with a good degree of certainty. Spot rates in the short term will rise sharply. The carriers cannot physically un-blank the blank sailings rapidly. This takes a little while. That means right now demand exceeds the capacity available, which inevitably will cause a sharp spike in spot rates. This will continue until enough capacity has been brought back into the trans-Pacific. Given the sharp rise in spot rates, it is also inevitable that carriers will indeed place more capacity into the trade. One way to do that is to blank sailings on other ex-Asia trades, such as Asia-Europe, Asia-Indian subcontinent and Asia-South America. This is likely to happen, especially where spot rates on those trades have been trending downward. The blank sailings out of Asia for the past four weeks are simply a fact already. But that also means we will now see a four-week period of significant blank sailings on the backhaul from the US to Asia. This also means the ability of carriers to reposition empty containers back to China is reduced. This reduced amount of repositioning will “hit” China about three to four weeks into the future. Given the two deadlines of July 9 and Aug. 14, it is very predictable that US importers will attempt to fast-track part of their peak season cargo where possible. This means the main part of the trans-Pacific peak will be from June to mid-August. The drop in empty container repositioning will come to fruition in the middle of this period. This could lead to sporadic and temporary equipment shortages. Will the surge in Chinese exports lead to congestion at US ports? This is very likely, although it is a matter of nuance in terms of how severe it will be. The main factor is how quickly the carriers can bring more capacity into the trans-Pacific. If it happens rapidly, there will be a significant problem, but if it happens more gradually, the impact will be less severe. It will nonetheless put pressure on truck, rail and chassis availability as we get closer to the middle of June. Post-pause uncertainty Where the predictions become much more problematic is when we get to the expiry of the pause on reciprocal tariffs. The latest statements from the US government imply that the US will announce the new reciprocal tariffs within the next two to three weeks. But what the level will be and whether it will only come into force on July 9 is not known. The same applies for the Aug. 14 deadline with China. If the tariffs revert to high levels, we should expect cargo volumes to once again drop sharply, in part because shippers will look to the past track record of the trade war and conclude that “wait and see” appears to be the best strategy under the circumstances. And if this subsequently leads to yet another round of cargo declines followed by a cargo surge and spot rate hikes, this might be an acceptable risk. It should also be noted that the rate spike we are seeing now and in the coming week entails a much lower cost than if the importers had chosen to move cargo subject to the 145% tariffs. All in all, the plan — insofar as there is a medium-term plan — would have to be one that assumes potentially another stop-start cycle of container cargo movements to the US. Contact Lars Jensen at lars.jensen@vespucci-maritime.com .

Container lines

Trans-Pacific

North American ports

Maritime

US supply chain planning must involve a mix of the known and unknown

<div class="phx-topic abstract-wrapper">The Port of Los Angeles took the top spot for containerized imports in 2024 and edged out Houston and Savannah as the busiest gateway for exports.</div>

The Port of Los Angeles took the top spot for containerized imports in 2024 and edged out Houston and Savannah as the busiest gateway for exports.

US West Coast ports regained some North American import market share last year, in part driven by labor uncertainty at ports along the East and Gulf coasts that encouraged some shippers to shift their cargo to Pacific gateways. The Port of Los Angeles maintained its position as the number one port for North American imports, with 15.5% of the total market share — up from 14.7% in 2023, according to PIERS, a sister product of the Journal of Commerce within S&P Global. The Port of Long Beach edged out the Port of New York and New Jersey to secure the second-largest market share for North American imports last year, returning to second place with 13.7% after two years of slipping to third. Los Angeles brought in 5.35 million TEUs in imports last year, up 20.6% compared with 2023. Similarly, Long Beach increased import volumes 24.4% to 4.72 million TEUs. Volumes at New York-New Jersey rose 11.2% to 4.43 million TEUs. Overall, ports on the West Coast secured 49.8% of North American import share last year, up from 47.8% in 2023. The East Coast saw its share dip to 38.1% from 40.6% the year prior, while the Gulf Coast trimmed just under half a percentage point to 9%. Overall, North American imports reached 34.57 million TEUs in 2024, up 14.3% year over year. Los Angeles tops in exports, too Meanwhile, the 2024 export market also showed some notable shifts in market share. Los Angeles climbed into the top spot for outbound containers, moving out 1.49 million TEUs, or 10.1% of the total market share, according to PIERS. That’s the largest export market share of any North American port since at least 2019. The Port of Houston, which tied Savannah for first place in exports in 2023, secured the second spot with 1.42 million TEUs, or 9.65%, in 2024. Savannah slipped to third with 1.37 million TEUs, or 9.3% of the total export market. The ports of New York-New Jersey and Long Beach took the fourth and fifth slots, respectively, with NY-NJ securing a 9.2% share of the export market and Long Beach 8.2%. The export market share held by Atlantic ports moved down to 45.6% last year from 47.9% in 2023, while West Coast ports secured 35.5% of outgoing shipments, up slightly from 35% in 2023. Gulf Coast ports moved 15.8% of 2024 exports, down from 16.1% in 2023. In total, North American exports reached 14.76 million TEUs in 2024, up 3.5% from 2023. Contact Laura Robb at laura.robb@spglobal.com .Journal of Commerce Top 25 North American Container Ports by Imports Annual containerized imports, in laden TEUs Volume Market Share 2024 Rank Port Coast 2023 2024 2023 2024 1 Los Angeles West 4,441,330 5,356,680 14.7% 15.5% 2 Long Beach West 3,804,356 4,729,552 12.6% 13.7% 3 New York-New Jersey East 3,990,107 4,438,854 13.2% 12.8% 4 Savannah East 2,402,328 2,739,628 7.9% 7.9% 5 Houston Gulf 1,746,381 1,888,853 5.8% 5.5% 6 Vancouver, BC West 1,601,919 1,821,755 5.3% 5.3% 7 Manzanillo West 1,486,642 1,698,437 4.9% 4.9% 8 Virginia East 1,398,872 1,543,471 4.6% 4.5% 9 Northwest Seaport Alliance1 West 1,078,005 1,289,198 3.6% 3.7% 10 Charleston East 1,220,386 1,245,723 4.0% 3.6% 11 Oakland West 800,432 937,538 2.6% 2.7% 12 Lazaro Cardenas West 660,314 760,195 2.2% 2.2% 13 Montreal2 East 759,353 750,466 2.5% 2.2% 14 Veracruz Gulf 513,827 606,852 1.7% 1.8% 15 Miami East 513,075 513,209 1.7% 1.5% 16 Philadelphia East 410,063 472,973 1.4% 1.4% 17 Prince Rupert West 369,459 400,267 1.2% 1.2% 18 Port Everglades East 319,370 356,857 1.1% 1.0% 19 Altamira Gulf 318,521 350,372 1.1% 1.0% 20 Baltimore East 504,981 347,975 1.7% 1.0% 21 Jacksonville East 306,383 317,884 1.0% 0.9% 22 Mobile Gulf 285,287 291,119 0.9% 0.8% 23 Halifax2 East 280,332 265,260 0.9% 0.8% 24 Ensenada West 221,182 221,182 0.7% 0.6% 25 Wilmington, Del. East 182,780 194,006 0.6% 0.6% Total US Ports in Top 25 23,404,136 26,663,520 79.0% 77.1% Total Canada Ports in Top 25 3,011,063 3,237,748 10.2% 9.4% Total Mexico Ports in Top 25 3,200,486 3,637,038 10.8% 10.5% TOTAL TOP 25 NORTH AMERICAN PORTS BY IMPORTS 29,615,685 33,538,306 97.9% 97.0% Total US Imports 23,985,173 27,658,025 79.3% 80.0% Total Canada Imports 3,011,063 3,237,748 10.0% 9.4% Total Mexico Imports 3,263,223 3,684,051 10.8% 10.7% TOTAL NORTH AMERICAN IMPORTS 30,259,459 34,579,824 100.0% 100.0% Rankings include container ports in Canada, Mexico and the US, omitting ports in US territories and possessions. US TEU count includes all international containerized ocean borne cargo loading at US ports. Lakes cargo data as available. 1Combined volumes of Seattle and Tacoma, members of The Northwest Seaport Alliance. 2Volumes include empty containers. Sources: Mexico: Ministry of Communications and Transportation; Canada: Port authorities; US: PIERS (www.piers.com), a sister product of the Journal of Commerce within S&P Global, and port authorities © 2025 S&P Global. Journal of Commerce Top 25 North American Container Ports by Exports Annual containerized exports, in laden TEUs Volume Market Share 2024 Rank Port Coast 2023 2024 2023 2024 1 Los Angeles West 1,291,997 1,494,201 9.1% 10.1% 2 Houston Gulf 1,342,941 1,424,311 9.4% 9.6% 3 Savannah East 1,336,121 1,376,887 9.4% 9.3% 4 New York-New Jersey East 1,284,976 1,354,421 9.0% 9.2% 5 Long Beach West 1,282,437 1,207,036 9.0% 8.2% 6 Virginia East 987,515 974,259 6.9% 6.6% 7 Vancouver, BC West 754,747 794,724 5.3% 5.4% 8 Montreal2 East 779,111 735,376 5.5% 5.0% 9 Charleston East 702,974 655,498 4.9% 4.4% 10 Oakland West 615,315 644,463 4.3% 4.4% 11 Northwest Seaport Alliance1 West 588,744 636,507 4.1% 4.3% 12 Jacksonville East 490,792 489,227 3.4% 3.3% 13 Manzanillo West 328,490 332,782 2.3% 2.3% 14 Port Everglades East 289,411 322,412 2.0% 2.2% 15 Altamira Gulf 292,493 285,266 2.1% 1.9% 16 Miami East 288,050 248,986 2.0% 1.7% 17 Halifax2 East 265,831 244,013 1.9% 1.7% 18 New Orleans Gulf 232,601 237,536 1.6% 1.6% 19 Veracruz Gulf 268,792 229,422 1.9% 1.6% 20 Mobile Gulf 159,856 159,148 1.1% 1.1% 21 Baltimore East 208,094 143,773 1.5% 1.0% 22 Prince Rupert West 125,254 130,910 0.9% 0.9% 23 Philadelphia East 91,384 97,784 0.6% 0.7% 24 Wilmington, NC East 106,733 96,553 0.7% 0.7% 25 Ensenada West 66,816 63,091 0.5% 0.4% Total US Ports in Top 25 11,299,941 11,563,002 79.7% 78.3% Total Canada Ports in Top 25 1,857,843 1,905,023 13.1% 12.9% Total Mexico Ports in Top 25 1,412,778 910,561 10.0% 6.2% TOTAL TOP 25 NORTH AMERICA PORTS BY EXPORTS 14,181,475 14,378,586 99.4% 97.4% Total US Exports 11,304,055 11,765,507 79.3% 79.7% Total Canada Exports 1,857,843 1,905,023 13.0% 12.9% Total Mexico Exports 1,098,590 1,092,088 7.7% 7.4% TOTAL NORTH AMERICAN EXPORTS 14,260,488 14,762,618 100.0% 100.0% Rankings include container ports in Canada, Mexico and the US, omitting ports in US territories and possessions. US TEU count includes all international containerized ocean borne cargo loading at US ports. Lakes cargo data as available. 1Combined volumes of Seattle and Tacoma, members of The Northwest Seaport Alliance. 2Volumes include empty containers. Sources: Mexico: Ministry of Communications and Transportation; Canada: Port authorities; US: PIERS (www.piers.com), a sister product of the Journal of Commerce within S&P Global, and port authorities. © 2025 S&P Global.

Container Shipping News

Trans-Atlantic

USWC recovered import market share last year amid East, Gulf coast labor woes

<div class="phx-topic abstract-wrapper">Strained relationships between London and Brussels have plagued trade negotiations over the past five years around complex issues including tariffs, regulations, fishing rights and the movement of people.</div>

Strained relationships between London and Brussels have plagued trade negotiations over the past five years around complex issues including tariffs, regulations, fishing rights and the movement of people.

<div class="phx-topic">The trade deal hammered out between the UK and the European Union is being hailed by business groups and the logistics industry as a positive step toward reducing border frictions that have been in place since Britain formally left the EU in 2020. But even as the ink dries on the EU-UK Trade and Cooperation Agreement signed Monday, business leaders are urging both sides to ensure the streamlined cross-border measures agreed to are implemented in full. “It is now down to government to work out the most practical solutions,” Steve Parker, director-general of the British International Freight Association (BIFA), said in a statement. “We hope that the announcement will significantly simplify border processes and consequently contribute to increased volumes of goods traded between the UK and the EU,” he added. A statement from the UK’s Port of Dover, which handles one-third of all UK-EU trade volume, said it will be working with the governments of the UK, France and the European Commission “to implement this deal effectively and maximize shared prosperity [on] either side of the English Channel.” “An improvement in border processes will not only restore confidence for businesses and investors but also drive economic growth and supply chain resilience, and we are pleased to see these objectives recognized in [the] agreement,” the port noted. <h3>Removing trade barriers </h3>Strained relationships between London and Brussels have plagued trade negotiations over the past five years around complex issues including tariffs, regulations, fishing rights and the movement of people. But the agreement has left the industry optimistic that barriers to trade have been removed. Helen Dickinson, CEO of the British Retail Consortium, said the deal would benefit retail businesses and consumers in both the UK and continental Europe. “As well as supporting growth for exporters to the UK’s biggest export market, retailers operating in the EU will also see a huge reduction in the unnecessary processes, paperwork and administrative burden when exporting goods, supporting our competitiveness abroad,” Dickinson said in a statement Tuesday. <h3>Eliminating food inspections </h3>A key part of the UK-EU agreement is a plan to establish a UK-EU Sanitary and Phytosanitary Zone that will remove routine border checks on agri-food products. British goods such as dairy, fish, eggs and red meat currently require checks of all paperwork and up to 30% physical checks. The Sanitary and Phytosanitary deal will remove these checks entirely, which Parker said will cut costs, complexities and delays that are disrupting trade flows between the two trading bodies. “BIFA members, and the importers and exporters they serve, will be breathing a sigh of relief following practical commitments to improve regulatory cooperation,” Parker said. Dickinson agreed, noting that the removal of border checks for agri-food will be good news for retailers and consumers on both sides of the channel, streamlining border processes, lowering costs and improving the speed and reliability of food imports. Data from consultancy MDS Intermodal shows that UK imports of fresh produce in metric tons, particularly fruit and vegetables, have fallen 17% since 2017, with a switch away from the EU as a source of fresh produce to non-EU and Mediterranean sources. Also agreed to Monday was the linking of the UK and EU emissions trading schemes. Following Brexit, the UK could no longer participate in the <a href="https://www.joc.com/article/european-parliament-approves-shipping-ets-but-stakeholders-wary-5202492">EU Emissions Trading System</a> (ETS) and had to establish its own smaller and more volatile trading scheme. A UK government statement said linking the two measures would create a more stable market and allow the UK to avoid being charged under the EU Carbon Border Adjustment Mechanism (CBAM), a policy aimed at ensuring imported carbon-intensive goods face similar carbon costs as those produced within the EU. CBAM is in a transitional phase and will be implemented next year. The deal with the EU is the third major trade agreement reached by the UK in the past month following deals with India and the US. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The trade deal hammered out between the UK and the European Union is being hailed by business groups and the logistics industry as a positive step toward reducing border frictions that have been in place since Britain formally left the EU in 2020. But even as the ink dries on the EU-UK Trade and Cooperation Agreement signed Monday, business leaders are urging both sides to ensure the streamlined cross-border measures agreed to are implemented in full. “It is now down to government to work out the most practical solutions,” Steve Parker, director-general of the British International Freight Association (BIFA), said in a statement. “We hope that the announcement will significantly simplify border processes and consequently contribute to increased volumes of goods traded between the UK and the EU,” he added. A statement from the UK’s Port of Dover, which handles one-third of all UK-EU trade volume, said it will be working with the governments of the UK, France and the European Commission “to implement this deal effectively and maximize shared prosperity [on] either side of the English Channel.” “An improvement in border processes will not only restore confidence for businesses and investors but also drive economic growth and supply chain resilience, and we are pleased to see these objectives recognized in [the] agreement,” the port noted. Removing trade barriers Strained relationships between London and Brussels have plagued trade negotiations over the past five years around complex issues including tariffs, regulations, fishing rights and the movement of people. But the agreement has left the industry optimistic that barriers to trade have been removed. Helen Dickinson, CEO of the British Retail Consortium, said the deal would benefit retail businesses and consumers in both the UK and continental Europe. “As well as supporting growth for exporters to the UK’s biggest export market, retailers operating in the EU will also see a huge reduction in the unnecessary processes, paperwork and administrative burden when exporting goods, supporting our competitiveness abroad,” Dickinson said in a statement Tuesday. Eliminating food inspections A key part of the UK-EU agreement is a plan to establish a UK-EU Sanitary and Phytosanitary Zone that will remove routine border checks on agri-food products. British goods such as dairy, fish, eggs and red meat currently require checks of all paperwork and up to 30% physical checks. The Sanitary and Phytosanitary deal will remove these checks entirely, which Parker said will cut costs, complexities and delays that are disrupting trade flows between the two trading bodies. “BIFA members, and the importers and exporters they serve, will be breathing a sigh of relief following practical commitments to improve regulatory cooperation,” Parker said. Dickinson agreed, noting that the removal of border checks for agri-food will be good news for retailers and consumers on both sides of the channel, streamlining border processes, lowering costs and improving the speed and reliability of food imports. Data from consultancy MDS Intermodal shows that UK imports of fresh produce in metric tons, particularly fruit and vegetables, have fallen 17% since 2017, with a switch away from the EU as a source of fresh produce to non-EU and Mediterranean sources. Also agreed to Monday was the linking of the UK and EU emissions trading schemes. Following Brexit, the UK could no longer participate in the EU Emissions Trading System (ETS) and had to establish its own smaller and more volatile trading scheme. A UK government statement said linking the two measures would create a more stable market and allow the UK to avoid being charged under the EU Carbon Border Adjustment Mechanism (CBAM), a policy aimed at ensuring imported carbon-intensive goods face similar carbon costs as those produced within the EU. CBAM is in a transitional phase and will be implemented next year. The deal with the EU is the third major trade agreement reached by the UK in the past month following deals with India and the US. Contact Greg Knowler at greg.knowler@spglobal.com .

Transport, Trade and Regulation News

Forwarding

Supply chain

UK-EU trade deal designed to ease Brexit-driven border frictions

<div class="phx-topic abstract-wrapper">Under their current configuration, the newest round of tariffs targeting China’s maritime industry will add $7 billion in costs for US ports, according to one estimate. </div>

Under their current configuration, the newest round of tariffs targeting China’s maritime industry will add $7 billion in costs for US ports, according to one estimate.

<div class="phx-topic">US ports face almost $7 billion in tariff costs under the Trump administration’s proposed levy on Chinese container cranes, according to the American Association of Port Authorities (AAPA), which has joined other stakeholders in calling for a delay to allow a domestic crane industry to develop before cutting China out of the market.AAPA delivered the estimate in prepared comments ahead of a hearing on Monday on the new tariffs at the United States Trade Representative (USTR). The USTR in April unveiled the proposed tariffs on Chinese-made cranes, containers, chassis and similar equipment as part of its one-year-old investigation into China’s dominant market share of the maritime, logistics and shipbuilding industries. The investigation, begun under the Biden administration at the request of several US trade and manufacturing unions, has already resulted in <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">a new tariff</a> to be assessed on Chinese ships and ocean carriers calling the US beginning in October. AAPA said 44 of the 55 cranes currently on order by US ports are being made in China. Over the next 10 years, US ports need to purchase another 151 container cranes, with 121 of those due to come from China, AAPA said. Those current and future orders total about $2.5 billion, AAPA said. If the tariffs on container equipment — up to 100% — are added to existing tariffs on Chinese imports, US ports will pay $6.7 billion in tariffs, according to the group. As an example, AAPA said the Port of Houston is scheduled to receive eight cranes from Shanghai Zhenhua Heavy Industries (ZPMC), China’s leading manufacturer, in the spring of 2026. Houston would be forced to pay $304 million in tariffs on that order if the fees are imposed, AAPA said, adding “that means over $300 million not invested in infrastructure projects at one of the nation’s largest ports.” AAPA asked that any cranes ordered before April be exempt from the tariffs. “American ports need these cranes now, but they simply cannot afford [the] unexpected costs,” AAPA said. “They cannot back out of these purchases.” <h3>‘Significant strain’</h3>The Port Authority of New York and New Jersey said its marine terminal operators, which have over 70 cranes, are currently planning to purchase more. With ZPMC the source for over half of the port’s cranes, the tariffs would “result in a significant strain on the local and national maritime industry,” the port said.Even if a port did not contract with ZPMC, orders with other crane manufacturers in Europe and Asia would also likely face the tariffs because part of their manufacturing is done in China or uses Chinese components, the National Association of Waterfront Employers (NAWE) said in its prepared comments to the USTR.While the Biden administration earmarked $20 billion in incentives last year for developing US crane manufacturing, AAPA and NAWE said that effort will take a long time to develop due to the lack of skilled welders and the reliance on Chinese manufacturers for subassemblies and other crane components. Both groups urged the USTR to delay the implementation by two to three years to allow a US-based crane industry to develop. “Currently, existing suppliers have a lead time of about two years for new orders of STS cranes,” AAPA said. “We can therefore assume that it will take at least that long for the first American STS cranes to roll off the assembly line, and that is if final investment decisions in new factories were made today.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US ports face almost $7 billion in tariff costs under the Trump administration’s proposed levy on Chinese container cranes, according to the American Association of Port Authorities (AAPA), which has joined other stakeholders in calling for a delay to allow a domestic crane industry to develop before cutting China out of the market. AAPA delivered the estimate in prepared comments ahead of a hearing on Monday on the new tariffs at the United States Trade Representative (USTR). The USTR in April unveiled the proposed tariffs on Chinese-made cranes, containers, chassis and similar equipment as part of its one-year-old investigation into China’s dominant market share of the maritime, logistics and shipbuilding industries. The investigation, begun under the Biden administration at the request of several US trade and manufacturing unions, has already resulted in a new tariff to be assessed on Chinese ships and ocean carriers calling the US beginning in October. AAPA said 44 of the 55 cranes currently on order by US ports are being made in China. Over the next 10 years, US ports need to purchase another 151 container cranes, with 121 of those due to come from China, AAPA said. Those current and future orders total about $2.5 billion, AAPA said. If the tariffs on container equipment — up to 100% — are added to existing tariffs on Chinese imports, US ports will pay $6.7 billion in tariffs, according to the group. As an example, AAPA said the Port of Houston is scheduled to receive eight cranes from Shanghai Zhenhua Heavy Industries (ZPMC), China’s leading manufacturer, in the spring of 2026. Houston would be forced to pay $304 million in tariffs on that order if the fees are imposed, AAPA said, adding “that means over $300 million not invested in infrastructure projects at one of the nation’s largest ports.” AAPA asked that any cranes ordered before April be exempt from the tariffs. “American ports need these cranes now, but they simply cannot afford [the] unexpected costs,” AAPA said. “They cannot back out of these purchases.” ‘Significant strain’ The Port Authority of New York and New Jersey said its marine terminal operators, which have over 70 cranes, are currently planning to purchase more. With ZPMC the source for over half of the port’s cranes, the tariffs would “result in a significant strain on the local and national maritime industry,” the port said. Even if a port did not contract with ZPMC, orders with other crane manufacturers in Europe and Asia would also likely face the tariffs because part of their manufacturing is done in China or uses Chinese components, the National Association of Waterfront Employers (NAWE) said in its prepared comments to the USTR. While the Biden administration earmarked $20 billion in incentives last year for developing US crane manufacturing, AAPA and NAWE said that effort will take a long time to develop due to the lack of skilled welders and the reliance on Chinese manufacturers for subassemblies and other crane components. Both groups urged the USTR to delay the implementation by two to three years to allow a US-based crane industry to develop. “Currently, existing suppliers have a lead time of about two years for new orders of STS cranes,” AAPA said. “We can therefore assume that it will take at least that long for the first American STS cranes to roll off the assembly line, and that is if final investment decisions in new factories were made today.” Contact Michael Angell at michael.angell@spglobal.com .

Port infrastructure

Marine terminals

Ports look to delay proposed US tariffs on Chinese-made cranes

<div class="phx-topic abstract-wrapper">The Trump administration’s tariff policy is yet another milestone that has shaken the US economy over the past 60 years, writes Ted Prince. </div>

The Trump administration’s tariff policy is yet another milestone that has shaken the US economy over the past 60 years, writes Ted Prince.

<div class="phx-topic">Since the announcement of reciprocal tariffs on so-called “Liberation Day” last month, we have been bombarded by conflicting predictions of the possible benefits and disasters that may befall our country, our economy and our industry. What I find interesting is that the history of the past 60 years seems to have been forgotten. While there are many important dates, I will focus on four. <h3>Yanqui go home! </h3>I would start in April 1965, when President Lyndon Johnson deployed the Marines and 82nd Airborne to the Dominican Republic to quell a civil war that broke out after a military junta. While the intervention was intended to protect US nationals, mission creep led to the deployment of over 22,000 American troops. While the invasion successfully reinstalled a conservative government, it increased distrust of the US. At the same time, companies such as Hewlett Packard were rolling out a continuous pipeline of electronic innovations. Their intention was to near-shore manufacturing in Latin America; however, the prevalence of “Yanqui Go Home!” made them look elsewhere. Japan and then the “Four Tigers” (Singapore, Hong Kong, Taiwan and South Korea) became the factory sites instead. The Vietnam War had become the first containerized war, and plentiful equipment was available to load back to the US. While electronics required factories, much of the manufacturing was cottage industries. For example, importers of blue jeans were buying from hundreds of small vendors. Ocean carrier consolidators would send pickup trucks into the New Territories to pick up loose articles of clothing (some which no doubt had been made in China) for consolidation at their facilities adjacent to the Kwai Tsing container terminals. <h3>Voluntary restraint </h3>In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to “voluntary export restraint,” which limited exports of passenger cars to the US. However, at the same time, they implemented a strategy of “transplants,” whereby cars were assembled in the US. Some might consider this an example of “reshoring;” however, it is not that simple. Initially, the plants were built in Japan, then disassembled, shipped to the US, and reassembled. Most of the parts (CKD: cars knocked down) came from Japan, so actual US content — other than labor — was minimal. Over time, suppliers proliferated along Interstates 65 and 75 to support these plants. However, many of these were also Japanese transplants. Some were joint ventures with US partners, but many were just US subsidiaries of Japanese manufacturers. Barry Bluestone and Bennett Harrison described this phenomenon in their 1982 work, “The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry.” They pointed out the irony that the Japanese were successfully investing in US industrial sectors that scarcely a decade ago were said to be declining, uncompetitive, and suffering from deindustrialization. <h3>The Plaza Accord </h3>The Plaza Accord in September 1985 effectively devalued the dollar against other major currencies. Initially, the US trade deficit worsened, as imports rose in price with a devalued dollar. However, the devaluation made US exports cheaper for its trading partners to purchase, which grew the market in goods and services — which are unaccounted for in the current administration’s calculation. <h3>China and the WTO </h3>Finally, in 2001, China joined the World Trade Organization (WTO). What followed was a massive dislocation in trade as China built world-class factories and world-class ports to ship goods throughout the world. Some of those factories have since relocated to nations with cheaper labor. However, a whole ecosystem of suppliers has grown up that supports the manufacturing and assembly of sophisticated products. China’s development took over 30 years. It was no shortcut. It was also the result of extensive industrial policy similar to what Japan and the Four Tigers had done previously. Most importantly, these policies did not deviate for decades and supported a long-term strategy whereby investment could be made with confidence. Our current politics are such that it is impossible to invest in today’s doctrine because it may no longer be applicable by the time the factory opens in three to eight years. In the past 30 years, trade has increased dramatically as a share of gross domestic product (GDP). However, while most economists believe that this has been good for the economy, the general public’s outlook is less sanguine. In large part, this is because trade’s impacts can vary widely: localized changes in jobs (both gains and losses) and reduced prices of goods and services. Freight is inextricably linked to trade. It has transformed our industry. We will no doubt have a ringside seat to the policy that is evolving. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>. </div>

Since the announcement of reciprocal tariffs on so-called “Liberation Day” last month, we have been bombarded by conflicting predictions of the possible benefits and disasters that may befall our country, our economy and our industry. What I find interesting is that the history of the past 60 years seems to have been forgotten. While there are many important dates, I will focus on four. Yanqui go home! I would start in April 1965, when President Lyndon Johnson deployed the Marines and 82nd Airborne to the Dominican Republic to quell a civil war that broke out after a military junta. While the intervention was intended to protect US nationals, mission creep led to the deployment of over 22,000 American troops. While the invasion successfully reinstalled a conservative government, it increased distrust of the US. At the same time, companies such as Hewlett Packard were rolling out a continuous pipeline of electronic innovations. Their intention was to near-shore manufacturing in Latin America; however, the prevalence of “Yanqui Go Home!” made them look elsewhere. Japan and then the “Four Tigers” (Singapore, Hong Kong, Taiwan and South Korea) became the factory sites instead. The Vietnam War had become the first containerized war, and plentiful equipment was available to load back to the US. While electronics required factories, much of the manufacturing was cottage industries. For example, importers of blue jeans were buying from hundreds of small vendors. Ocean carrier consolidators would send pickup trucks into the New Territories to pick up loose articles of clothing (some which no doubt had been made in China) for consolidation at their facilities adjacent to the Kwai Tsing container terminals. Voluntary restraint In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to “voluntary export restraint,” which limited exports of passenger cars to the US. However, at the same time, they implemented a strategy of “transplants,” whereby cars were assembled in the US. Some might consider this an example of “reshoring;” however, it is not that simple. Initially, the plants were built in Japan, then disassembled, shipped to the US, and reassembled. Most of the parts (CKD: cars knocked down) came from Japan, so actual US content — other than labor — was minimal. Over time, suppliers proliferated along Interstates 65 and 75 to support these plants. However, many of these were also Japanese transplants. Some were joint ventures with US partners, but many were just US subsidiaries of Japanese manufacturers. Barry Bluestone and Bennett Harrison described this phenomenon in their 1982 work, “The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry.” They pointed out the irony that the Japanese were successfully investing in US industrial sectors that scarcely a decade ago were said to be declining, uncompetitive, and suffering from deindustrialization. The Plaza Accord The Plaza Accord in September 1985 effectively devalued the dollar against other major currencies. Initially, the US trade deficit worsened, as imports rose in price with a devalued dollar. However, the devaluation made US exports cheaper for its trading partners to purchase, which grew the market in goods and services — which are unaccounted for in the current administration’s calculation. China and the WTO Finally, in 2001, China joined the World Trade Organization (WTO). What followed was a massive dislocation in trade as China built world-class factories and world-class ports to ship goods throughout the world. Some of those factories have since relocated to nations with cheaper labor. However, a whole ecosystem of suppliers has grown up that supports the manufacturing and assembly of sophisticated products. China’s development took over 30 years. It was no shortcut. It was also the result of extensive industrial policy similar to what Japan and the Four Tigers had done previously. Most importantly, these policies did not deviate for decades and supported a long-term strategy whereby investment could be made with confidence. Our current politics are such that it is impossible to invest in today’s doctrine because it may no longer be applicable by the time the factory opens in three to eight years. In the past 30 years, trade has increased dramatically as a share of gross domestic product (GDP). However, while most economists believe that this has been good for the economy, the general public’s outlook is less sanguine. In large part, this is because trade’s impacts can vary widely: localized changes in jobs (both gains and losses) and reduced prices of goods and services. Freight is inextricably linked to trade. It has transformed our industry. We will no doubt have a ringside seat to the policy that is evolving. Contact Ted Prince at ted@tricitiesintermodal.com .

A history lesson while we watch current US trade policy unfold

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

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

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

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

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

Local container dwell time

Rail container dwell time

The Pacific Merchant Shipping Association (PMSA) calculates local-delivery container dwell times at the ports of Los Angeles and Long Beach using the number of inbound loaded containers out-gated at each marine terminal by truck during the month as well as the average dwell time in days for those out-gated containers. It calculates average rail container dwell based on the time a container sits on the marine terminal at the ports after it is discharged from the vessel and before it is loaded. [PMSA](https://pmsaship.com)

Los Angeles-Long Beach truck and rail dwell times (PMSA)

Los Angeles-Long Beach terminal and rail dwell times (PMSA) Gateway

<div class="phx-topic abstract-wrapper">Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.</div>

Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet increased demand from shippers.

<div class="phx-topic">A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it is needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines…” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, and was causing lengthy delays and port omissions on some long-haul and intra-Asia services. <h3>Congestion stretches throughout Asia </h3>Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia, where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">it had seen an increase of more than 50% in China-US cargo bookings</a> since the two countries signed a preliminary trade deal slashing tariffs for 90 days following meetings on May 11–12. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

A rush of cargo in the eastbound trans-Pacific in the aftermath of the 90-day tariff cooldown between the US and China is starting to create vessel congestion and equipment shortages at Asian ports, especially in China, carriers and forwarders say. Forwarders expect congestion and container shortages to worsen in the next few weeks as carriers redeploy vessels to trans-Pacific services from Asia-Europe trades to meet the increased demand from shippers. The port congestion in China, not helped by occasional bad weather, is taking out functional capacity at a time when it is needed most. “Current delays at east and north China ports range from three to seven days depending on the carrier and trade lane,” a spokesperson for FIBS Logistics told the Journal of Commerce. “The situation remains fluid, and there are growing concerns congestion will worsen if more vessels are diverted from Europe to the US in June, as we’ve heard is the plan for some lines…” Congestion at Shanghai has led shippers and forwarders to divert cargo to alternative ports, especially Ningbo, which is now starting to lead to congestion and equipment shortages there, sources said. “North China ports are facing increased waiting times due to berth congestion, further impacted by intermittent port closures caused by strong winds and dense fog,” Hapag-Lloyd said in a customer advisory on Thursday. The carrier said vessels are waiting up to 72 hours to berth at Qingdao and at Shanghai’s main Yangshan offshore port complex due to “heavy vessel bunching and congestion.” Waiting time at Ningbo was up to 36 hours depending on the terminal. There are also delays of up to 72 hours at Pusan Newport International Terminal in South Korea and up to 36 hours at Singapore due to vessel bunching, the Hapag-Lloyd advisory said. Ocean Network Express (ONE) said congestion is also plaguing ports in Japan, especially Tokyo and Yokohama, and was causing lengthy delays and port omissions on some long-haul and intra-Asia services. Congestion stretches throughout Asia Kuehne + Nagel said it expected congestion and equipment challenges in China “due to the backlog of trans-Pacific cargo being shipped in the next weeks.” The logistics giant, in updates Monday on its SeaExplorer visibility platform, also highlighted congestion that was causing delays and disruption at ports across Asia. These include Shenzhen, Hong Kong, Xiamen and Nanshan in southern China; Ho Chi Minh City, Vietnam; Laem Chabang, Thailand; Manila in the Philippines; and Port Klang in Malaysia, where yard utilization is 90%. Highlighting the tight supply of containers, FIBS Logistics said CMA CGM and other carriers have started allocating containers to shippers in Shanghai and Ningbo based on available space and rate levels, “which may create selective shortages.” Maersk is particularly affected by equipment shortages in Ningbo, while “HMM is also reportedly controlling equipment release to match vessel space in Ningbo,” the FIBS spokesperson told the Journal of Commerce. Highlighting the surge in cargo, Hapag-Lloyd said last Wednesday it had seen an increase of more than 50% in China-US cargo bookings since the two countries signed a preliminary trade deal slashing tariffs for 90 days following meetings on May 11–12. Contact Keith Wallis at keithwallis@hotmail.com .

International ports

US tariff-linked cargo rush causes port congestion, box shortages in China

<div class="phx-topic abstract-wrapper">The carriers want to raise prices by more than 50% in a bid to stem the slide in rates that began at the end of December and is showing no signs of slowing.</div>

The carriers want to raise prices by more than 50% in a bid to stem the slide in rates that began at the end of December and is showing no signs of slowing.

<div class="phx-topic">Excess capacity and weakening demand continue to exert downward pressure on Asia-North Europe container rates with the various indices showing the spot market has lost more than 60% of its value since the beginning of the year. Several carriers have announced rate increases for more than $3,000 per FEU from June 1 to try to slow the spot market slide but may struggle to find much support in an oversupplied market. CMA CGM will be setting its freight all kinds (FAK) rate from Asia to North Europe at $3,100 per FEU on June 1, while MSC and Hapag-Lloyd will set their rate on that route at $3,200/FEU. MSC and Hapag-Lloyd are also raising their Asia-Mediterranean FAK prices, with MSC rates of about $5,000/FEU and Hapag-Lloyd at $4,500/FEU. The asking prices are significantly higher than current rate levels. Average spot rates from Asia to North Europe on May 15 were $1,994/FEU, down from just over $5,000/FEU on Dec. 31, while Asia-Mediterranean rates of $3,156/FEU were down 42% so far this year, according to the rate benchmarking platform Xeneta. Platts, a sister company of the Journal of Commerce within S&amp;P Global recorded spot rates from Asia to North Europe at $1,600/FEU this week, an almost 70% decline since the beginning of January. Asia-Mediterranean rates this week were at $2,700/FEU, a drop of 50% since the start of the year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="aa85df16-b8fe-4e63-9181-65cba329e464"></dynamic-object></div>The supply chain director for a Germany-based Asia-Europe shipper said he was seeing offers in the market as low as $1,200/FEU, which was putting pressure on carriers to slow the decline. "I can understand the pressure carriers are under, and they are asking for more cargo but many BCOs (beneficial cargo owners) have declining cargo flows, so the market is really imbalanced,” the source said, adding that there was little chance the rate hikes would stick. “Our demand is the same as it was at this time last year, which is a slack period. The rate increases will not be 100% but may stabilize falling prices. Whether there will be another advanced peak season is impossible to gauge, but everything is possible in this market.” <h3>Mismatch between supply and demand </h3>Peter Sand, chief analyst at Xeneta, said the mismatch between offered capacity and demand was keeping spot rates under pressure. “While rates and demand are going up on trans-Pacific, spot rates are sliding into Europe,” he told the Journal of Commerce Friday. The container shipping orderbook of 8.6 million TEUs in capacity is about 27% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce. Just under 1 million TEUs in capacity will be delivered this year, most of it large ships that can only be deployed on Asia-Europe, while only 4,000 TEUs are set to be scrapped by the industry this year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b2f271aa-d66e-49e2-9bc8-99469f7fc20e"></dynamic-object></div>Only 6.5% of the available capacity is being blanked in May while carriers are deploying a record 1.12 million TEUs in the month, according to data from ocean visibility provider eeSea. Sand noted that the tariff cuts on the China-US trade following a 90-day deal between Washington and Beijing last weekend has “changed the picture” with some cargo diverted from the trans-Pacific to Asia-Europe. ”One month of ‘frustrated cargo’ that didn’t go from China to the US and is on its way to Europe, the Middle East and South America. The congested northern European ports will be facing a rush in June on the back of this,” Sand added. North Europe’s largest port gateways <a href="https://www.joc.com/article/no-end-to-the-congestion-choking-gateway-ports-in-north-europe-5995853">continue to struggle with persistent congestion</a> that has delayed vessels and hampered container operations at the hubs for months. The reasons include full container yards, port strikes and slowdowns, labor shortages because of several public holidays in May, crane engineering works in some terminals and changing carrier alliance networks. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Excess capacity and weakening demand continue to exert downward pressure on Asia-North Europe container rates with the various indices showing the spot market has lost more than 60% of its value since the beginning of the year. Several carriers have announced rate increases for more than $3,000 per FEU from June 1 to try to slow the spot market slide but may struggle to find much support in an oversupplied market. CMA CGM will be setting its freight all kinds (FAK) rate from Asia to North Europe at $3,100 per FEU on June 1, while MSC and Hapag-Lloyd will set their rate on that route at $3,200/FEU. MSC and Hapag-Lloyd are also raising their Asia-Mediterranean FAK prices, with MSC rates of about $5,000/FEU and Hapag-Lloyd at $4,500/FEU. The asking prices are significantly higher than current rate levels. Average spot rates from Asia to North Europe on May 15 were $1,994/FEU, down from just over $5,000/FEU on Dec. 31, while Asia-Mediterranean rates of $3,156/FEU were down 42% so far this year, according to the rate benchmarking platform Xeneta. Platts, a sister company of the Journal of Commerce within S&P Global recorded spot rates from Asia to North Europe at $1,600/FEU this week, an almost 70% decline since the beginning of January. Asia-Mediterranean rates this week were at $2,700/FEU, a drop of 50% since the start of the year. The supply chain director for a Germany-based Asia-Europe shipper said he was seeing offers in the market as low as $1,200/FEU, which was putting pressure on carriers to slow the decline. "I can understand the pressure carriers are under, and they are asking for more cargo but many BCOs (beneficial cargo owners) have declining cargo flows, so the market is really imbalanced,” the source said, adding that there was little chance the rate hikes would stick. “Our demand is the same as it was at this time last year, which is a slack period. The rate increases will not be 100% but may stabilize falling prices. Whether there will be another advanced peak season is impossible to gauge, but everything is possible in this market.” Mismatch between supply and demand Peter Sand, chief analyst at Xeneta, said the mismatch between offered capacity and demand was keeping spot rates under pressure. “While rates and demand are going up on trans-Pacific, spot rates are sliding into Europe,” he told the Journal of Commerce Friday. The container shipping orderbook of 8.6 million TEUs in capacity is about 27% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce. Just under 1 million TEUs in capacity will be delivered this year, most of it large ships that can only be deployed on Asia-Europe, while only 4,000 TEUs are set to be scrapped by the industry this year. Only 6.5% of the available capacity is being blanked in May while carriers are deploying a record 1.12 million TEUs in the month, according to data from ocean visibility provider eeSea. Sand noted that the tariff cuts on the China-US trade following a 90-day deal between Washington and Beijing last weekend has “changed the picture” with some cargo diverted from the trans-Pacific to Asia-Europe. ”One month of ‘frustrated cargo’ that didn’t go from China to the US and is on its way to Europe, the Middle East and South America. The congested northern European ports will be facing a rush in June on the back of this,” Sand added. North Europe’s largest port gateways continue to struggle with persistent congestion that has delayed vessels and hampered container operations at the hubs for months. The reasons include full container yards, port strikes and slowdowns, labor shortages because of several public holidays in May, crane engineering works in some terminals and changing carrier alliance networks. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Ocean carriers line up hefty rate hikes on oversupplied Asia-Europe trade

<div class="phx-topic abstract-wrapper">Container lines are looking to capitalize on a ramp-up in Asia-US bookings during the 90-day tariff reduction that followed Monday’s deal between the Trump administration and China.</div>

Container lines are looking to capitalize on a ramp-up in Asia-US bookings during the 90-day tariff reduction that followed Monday’s deal between the Trump administration and China.

<div class="phx-topic">Major container lines are seeking spot rates on service from China to the US West Coast that are more than double the current level as they look to capitalize on an anticipated surge of volume triggered by a 90-day pause in the steepest US tariffs. Container spot rates are already spiking following the Monday announcement, and if carriers are successful in imposing a combination of general rate increases (GRIs) and peak season surcharges (PSSs) set to take effect June 1, pricing would jump to approximately $6,000 per FEU to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers regardless of size, while PSSs are only imposed on smaller shippers that don’t have agreements with carriers prohibiting their use. Momentum appears to be on the carriers’ side. Hapag-Lloyd said it has seen <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">a 50% increase in bookings</a> from China to the US this week, while forwarders have reported jumps as high as 100%. Given the short window of the agreement, and the need to ship fall and holiday merchandise before tariffs may increase if the deal falls apart, forwarders report that bookings are soaring. “It’s shades of 2024,” Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV, told the Journal of Commerce, referring to last summer, when container spot rates jumped to upward of $8,000 per FEU to the West Coast during acrimonious dockworker contract negotiations on the East and Gulf coasts. As of Wednesday, average spot rates from Asia to the West Coast rose to $2,567 per FEU, up from $1,600 per FEU at the end of March, while Asia-East Coast pricing rose to $3,567 per FEU from $2,600 per FEU during the same period, according to Platts, a sister product of the Journal of Commerce within S&amp;P Global. Last year, spot rates <a href="https://www.joc.com/article/carriers-to-deploy-extra-loaders-to-los-angeles-long-beach-amid-import-surge-5714861">peaked at $8,133 per FEU to the West Coast</a> and $10,133 per FEU to the East Coast in the week of July 5. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="db2a41f2-e1d4-498c-bda1-401715921660"></dynamic-object></div>Carriers Hapag-Lloyd, Mediterranean Shipping Co., CMA CGM, Ocean Network Express (ONE) and Zim Integrated Shipping have filed spot rates of $6,000 per FEU starting June 1. Another round of increases is poised for June 15, with Hapag-Lloyd, MSC and CMA CGM set to increase rates to $8,000 per FEU, according to rate notices from the carriers. “Of course, these are just their filings,” noted a forwarder who asked not to be identified. “We will see what levels they really pass on once we get to these dates.” <h3>Bookings from China surge </h3>The carrier rate increases appear to be supported by a spike in bookings since the US and China announced an agreement that reduced US tariffs on Chinese goods from 145% to 30% for at least the next 90 days. “There’s definitely been a ramp up in orders during this 90-day window,” said Robert Khachatryan, CEO of forwarder Freight Right Global Logistics. Khachatryan explained that importers appear to be in a rush to get their shipments into the US while the 30% tariff on China is in effect. They are concerned that after 90 days, if a permanent agreement is not reached, the tariffs could shoot back up. “Everyone seems to be concerned with the 90-day window,” Khachatryan said. Revelyst, an importer of outdoor apparel, paused its purchase orders with factories in China in April, said John Pace, senior manager of global logistics. Now, the company is prioritizing those shipments that are ready to move, to be followed by shipments that will depart in the coming weeks as factories ramp up production. A carrier executive who asked not to be identified told the Journal of Commerce that factories in China should be able to quickly increase production as most vendors paused or slowed down production after the 145% duty went into effect in early April, rather than completely shutting down and laying off staff. Similar to Khachatryan, the carrier executive said importers are frontloading as much merchandise as they can. “They have to ship now in case there is another tariff increase in August,” the source said. However, forwarders and importers say the huge increases in spot rates and surcharges that carriers announced over the past few days would put a large dent in the savings they had anticipated from the tariff cuts. “We are being careful,” Pace said. “Shipping rates are certainly a factor in our decisions.” 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>

Major container lines are seeking spot rates on service from China to the US West Coast that are more than double the current level as they look to capitalize on an anticipated surge of volume triggered by a 90-day pause in the steepest US tariffs. Container spot rates are already spiking following the Monday announcement, and if carriers are successful in imposing a combination of general rate increases (GRIs) and peak season surcharges (PSSs) set to take effect June 1, pricing would jump to approximately $6,000 per FEU to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers regardless of size, while PSSs are only imposed on smaller shippers that don’t have agreements with carriers prohibiting their use. Momentum appears to be on the carriers’ side. Hapag-Lloyd said it has seen a 50% increase in bookings from China to the US this week, while forwarders have reported jumps as high as 100%. Given the short window of the agreement, and the need to ship fall and holiday merchandise before tariffs may increase if the deal falls apart, forwarders report that bookings are soaring. “It’s shades of 2024,” Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV, told the Journal of Commerce, referring to last summer, when container spot rates jumped to upward of $8,000 per FEU to the West Coast during acrimonious dockworker contract negotiations on the East and Gulf coasts. As of Wednesday, average spot rates from Asia to the West Coast rose to $2,567 per FEU, up from $1,600 per FEU at the end of March, while Asia-East Coast pricing rose to $3,567 per FEU from $2,600 per FEU during the same period, according to Platts, a sister product of the Journal of Commerce within S&P Global. Last year, spot rates peaked at $8,133 per FEU to the West Coast and $10,133 per FEU to the East Coast in the week of July 5. Carriers Hapag-Lloyd, Mediterranean Shipping Co., CMA CGM, Ocean Network Express (ONE) and Zim Integrated Shipping have filed spot rates of $6,000 per FEU starting June 1. Another round of increases is poised for June 15, with Hapag-Lloyd, MSC and CMA CGM set to increase rates to $8,000 per FEU, according to rate notices from the carriers. “Of course, these are just their filings,” noted a forwarder who asked not to be identified. “We will see what levels they really pass on once we get to these dates.” Bookings from China surge The carrier rate increases appear to be supported by a spike in bookings since the US and China announced an agreement that reduced US tariffs on Chinese goods from 145% to 30% for at least the next 90 days. “There’s definitely been a ramp up in orders during this 90-day window,” said Robert Khachatryan, CEO of forwarder Freight Right Global Logistics. Khachatryan explained that importers appear to be in a rush to get their shipments into the US while the 30% tariff on China is in effect. They are concerned that after 90 days, if a permanent agreement is not reached, the tariffs could shoot back up. “Everyone seems to be concerned with the 90-day window,” Khachatryan said. Revelyst, an importer of outdoor apparel, paused its purchase orders with factories in China in April, said John Pace, senior manager of global logistics. Now, the company is prioritizing those shipments that are ready to move, to be followed by shipments that will depart in the coming weeks as factories ramp up production. A carrier executive who asked not to be identified told the Journal of Commerce that factories in China should be able to quickly increase production as most vendors paused or slowed down production after the 145% duty went into effect in early April, rather than completely shutting down and laying off staff. Similar to Khachatryan, the carrier executive said importers are frontloading as much merchandise as they can. “They have to ship now in case there is another tariff increase in August,” the source said. However, forwarders and importers say the huge increases in spot rates and surcharges that carriers announced over the past few days would put a large dent in the savings they had anticipated from the tariff cuts. “We are being careful,” Pace said. “Shipping rates are certainly a factor in our decisions.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

Trans-Pacific carriers announce massive June rate hikes

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

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Shippers save money, time with automated transportation bidding tools

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

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<div class="phx-topic abstract-wrapper">Intermodal providers might see a small bullwhip effect, in which international volume declines in May and June but rebounds in July and August as shipments delayed due to now-paused tariffs on Chinese goods begin arriving in Southern California.</div>

Intermodal providers might see a small bullwhip effect, in which international volume declines in May and June but rebounds in July and August as shipments delayed due to now-paused tariffs on Chinese goods begin arriving in Southern California.

<div class="phx-topic">Western US Class I railroads say they are preparing for a potential midsummer surge of imports from China following a 90-day suspension of steeper US tariffs on Chinese-made goods. To avoid a repeat of past breakdowns, such as during the COVID-19 pandemic, BNSF Railway and Union Pacific Railroad (UP) are ensuring they have sufficient staff, locomotives and equipment at critical terminals across the US. Both railroads outlined strategies to handle a likely uptick in cargo, including building longer trains, combining different train types, constructing trains differently and creating special trains temporarily. BNSF and UP say it is not clear yet how strong the rebound will be, with some ocean carriers and forwarders reporting a surge in booking of upward of 50%. “The month of June is where we think that air pocket will hit [most],” Jon Gabriel, BNSF’s group vice president of intermodal, told the Journal of Commerce. “Coming out of the Fourth of July is when what’s being put on vessels now would all start to hit. In the months of July and August, largely speaking.” UP CEO Jim Vena said the lull in volumes, sparked by US President Donald Trump raising tariffs on Chinese goods to 145% in early April before <a href="https://word-edit.officeapps.live.com/we/Eastbound%20trans-Pac%20spot%20rates%20in%20revival%20mode%20in%20wake%20of%20US-China%20trade%20deal%20%7C%20Journal%20of%20Commerce">reducing them to 30% Monday</a>, has begun to show in the numbers. “We can react [with] locomotives very fast; we have 500 of them parked, ready to go,” Vena said at the Bank of America Industrials Conference Wednesday. “We had a 30% increase in international intermodal last year, and we handled it. We’ve built a railroad that has some capacity to be able to flex.” <h3>A collaborative effort </h3>BNSF is positioning empty railcars and locomotives in California, Arizona, and Washington, while staying in close contact with ocean carriers, drayage companies, and third-party terminal operators such as ITS ConGlobal and Parsec. “Our terminal operators are in all the conversations; they are not cutting staff during this lull,” Gabriel said. “If we can give an extra vacation or two in June, let’s do that. But let’s also know it’s going to be a short-lived lull, and we must quickly snap back. It’s important to protect the business and keep it on the railroad versus trucking.” Those conversations also include chassis providers. Gabriel said he’s spoken with the CEOs of major providers such as DCLI, Flexi-Van Leasing, and TRAC Intermodal about what to expect in July and August. To provide a service with minimal dwell, both railroads are focusing on increasing train lengths and reconfiguring train designs to optimize throughput. During quiet periods, a standard international intermodal train may run 1.5 miles long. But in peak periods, railroads can stretch those trains to more than 2 miles. However, crane operators can only lift a finite number of containers per hour, which could lead to extended unloading times, impacting the ability of inland terminals to handle a continuous flow of incoming and outgoing trains. “We can pivot from a lull to a surge without disrupting the network,” UP COO Eric Gehringer said during an April 24 earnings call. “The tools we have today let us do that in hours or days, not weeks like in the past.” BNSF and UP could also send trains directly to smaller inland cities — e.g., Cincinnati, Houston or St. Louis — that normally would be part of a larger train going to Chicago, Dallas, Memphis or Kansas City. “We may run direct point-to-point trains, and I really like that because it reduces cargo transit times,” Gabriel explained. “It could also be that instead of one Chicago train a day, we run two trains. If you didn’t make the noon train, no worries, you’ll be on the 4 o’clock train. That helps all destinations, but certainly those smaller markets benefit more.” With just weeks to prepare, both railroads are betting that early coordination will be enough to keep freight moving and shippers from turning to long-haul trucking as a temporary solution. “It’s the calm before the whiplash,” said a former CN intermodal operations executive who asked not to be identified. “It’s one thing to say you have stored locomotives. It’s another thing to have trained crane operators, chassis, yard labor, and truck capacity all available at the same time. That’s where things broke down in 2021.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Western US Class I railroads say they are preparing for a potential midsummer surge of imports from China following a 90-day suspension of steeper US tariffs on Chinese-made goods. To avoid a repeat of past breakdowns, such as during the COVID-19 pandemic, BNSF Railway and Union Pacific Railroad (UP) are ensuring they have sufficient staff, locomotives and equipment at critical terminals across the US. Both railroads outlined strategies to handle a likely uptick in cargo, including building longer trains, combining different train types, constructing trains differently and creating special trains temporarily. BNSF and UP say it is not clear yet how strong the rebound will be, with some ocean carriers and forwarders reporting a surge in booking of upward of 50%. “The month of June is where we think that air pocket will hit [most],” Jon Gabriel, BNSF’s group vice president of intermodal, told the Journal of Commerce. “Coming out of the Fourth of July is when what’s being put on vessels now would all start to hit. In the months of July and August, largely speaking.” UP CEO Jim Vena said the lull in volumes, sparked by US President Donald Trump raising tariffs on Chinese goods to 145% in early April before reducing them to 30% Monday , has begun to show in the numbers. “We can react [with] locomotives very fast; we have 500 of them parked, ready to go,” Vena said at the Bank of America Industrials Conference Wednesday. “We had a 30% increase in international intermodal last year, and we handled it. We’ve built a railroad that has some capacity to be able to flex.” A collaborative effort BNSF is positioning empty railcars and locomotives in California, Arizona, and Washington, while staying in close contact with ocean carriers, drayage companies, and third-party terminal operators such as ITS ConGlobal and Parsec. “Our terminal operators are in all the conversations; they are not cutting staff during this lull,” Gabriel said. “If we can give an extra vacation or two in June, let’s do that. But let’s also know it’s going to be a short-lived lull, and we must quickly snap back. It’s important to protect the business and keep it on the railroad versus trucking.” Those conversations also include chassis providers. Gabriel said he’s spoken with the CEOs of major providers such as DCLI, Flexi-Van Leasing, and TRAC Intermodal about what to expect in July and August. To provide a service with minimal dwell, both railroads are focusing on increasing train lengths and reconfiguring train designs to optimize throughput. During quiet periods, a standard international intermodal train may run 1.5 miles long. But in peak periods, railroads can stretch those trains to more than 2 miles. However, crane operators can only lift a finite number of containers per hour, which could lead to extended unloading times, impacting the ability of inland terminals to handle a continuous flow of incoming and outgoing trains. “We can pivot from a lull to a surge without disrupting the network,” UP COO Eric Gehringer said during an April 24 earnings call. “The tools we have today let us do that in hours or days, not weeks like in the past.” BNSF and UP could also send trains directly to smaller inland cities — e.g., Cincinnati, Houston or St. Louis — that normally would be part of a larger train going to Chicago, Dallas, Memphis or Kansas City. “We may run direct point-to-point trains, and I really like that because it reduces cargo transit times,” Gabriel explained. “It could also be that instead of one Chicago train a day, we run two trains. If you didn’t make the noon train, no worries, you’ll be on the 4 o’clock train. That helps all destinations, but certainly those smaller markets benefit more.” With just weeks to prepare, both railroads are betting that early coordination will be enough to keep freight moving and shippers from turning to long-haul trucking as a temporary solution. “It’s the calm before the whiplash,” said a former CN intermodal operations executive who asked not to be identified. “It’s one thing to say you have stored locomotives. It’s another thing to have trained crane operators, chassis, yard labor, and truck capacity all available at the same time. That’s where things broke down in 2021.” Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

North-American rail

BNSF, UP prepping for July cargo rebound after tariff-induced lull

<div class="phx-topic abstract-wrapper">Rates are climbing quickly amid fresh Chinese volumes headed to the US, with an expected crunch in vessel capacity and the potential for port congestion driving the gains.  </div>

Rates are climbing quickly amid fresh Chinese volumes headed to the US, with an expected crunch in vessel capacity and the potential for port congestion driving the gains. 

<div class="phx-topic">Spot rates in the eastbound trans-Pacific are on a rapid rise as stakeholders on the trade lane expect a significant increase in cargo on the water in the wake of the <a href="https://www.joc.com/article/capacity-crunch-beckons-on-eastbound-trans-pacific-after-us-china-deal-6002956">preliminary tariff deal agreed to last weekend between the US and China</a>.  While various pricing indexes have yet to reflect the post-deal jump in rates, forwarder sources say they are seeing May 15 general rate increases (GRIs) of about $1,000 for both the US West and East coasts, with an expected <a href="https://www.joc.com/article/capacity-crunch-beckons-on-eastbound-trans-pacific-after-us-china-deal-6002956">crunch in vessel capacity</a> and the potential for port congestion driving the gains.  “We know that a lot of capacity has come out and there’s going to be a tremendous amount of volume that has to move,” said Rachel Shames, vice president of procurement and pricing at CV International. “No one knows how much, but we know it’s going to strain the system. The question is: How high will rates go?” In addition to the $1,000 GRIs carriers are due to implement this week, sources say an additional hike of $1,000 to $3,000 per FEU could be on tap for June 1. And several forwarders who spoke to the Journal of Commerce said shippers already need to book at $6,000 per FEU or above to guarantee space. In a research note Wednesday, analysts at Jefferies said Asia-West Coast spot rates are now being quoted at $3,000 per FEU, with East Coast rates at $4,000/FEU. Just how far rates could rise depends in large part on volumes, as not all observers are ready to categorize the coming flush of imports as a sustained surge. “It is too early to gauge whether this week’s volume surge is a simple return of normal volumes, a pull forward of demand, or an early start to peak season,” Jefferies said. “As of now though, spot rates are likely to continue gaining given limited vessel capacity near term.” Platts, a sister company of the Journal of Commerce within S&amp;P Global, shows North Asia to West Coast rates at $2,500 per FEU as of Wednesday, up $700 from a month ago. East Coast rates were at $3,500/FEU, up $500 month over month. But in the early days of a rapidly moving market, pricing indexes have yet to catch up to actual rate levels. A source at a non-vessel-operating common carrier (NVO) said he is rescinding quotes made to clients in April, unable to honor the initial offers in the new market environment. That same source saw bookings increase by about 200% this week. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div><h3>Carrier moves </h3>An unbalanced supply and demand dynamic is fostering a hospitable environment for the rate hikes after carriers reduced capacity on the trans-Pacific in response to canceled bookings out of China in April in the aftermath of the US tariffs slapped on Beijing. On Wednesday, <a href="https://www.joc.com/article/china-us-ocean-bookings-surge-since-weekend-trade-deal-hapag-lloyd-6004653">Hapag-Lloyd reported an increase of more than 50%</a> in China-US bookings since the preliminary trade deal was signed over the weekend, also noting double-digit increases compared with pre-tariff cargo volumes — likely exacerbated by cargo held in China since early April. CEO Rolf Habben Jensen said the carrier expects “a surge in volume in the upcoming 60 or 90 days.” “But beyond that it is very difficult to predict and will depend on what kind of [trade] agreements will be closed between the US and other countries,” he said. Hapag-Lloyd and Gemini Cooperation partner Maersk each said they had swapped out large vessels for smaller ships on the eastbound trans-Pacific due to the decreased volumes but will reinstate the larger vessels now that demand has rebounded. “Over the next 90 days, there’s clearly going to be pent up supply that sits in China that needs to be reintroduced to the supply chain and [be brought to the US],” Charles van der Steene, president of Maersk North America, <a href="https://www.cnbc.com/video/2025/05/14/were-ready-to-reintroduce-capacity-on-the-trade-out-of-china-says-maersks-charles-van-der-steene.html">told CNBC</a>. “To bring capacity back in for vessels that have been redeployed elsewhere will be more difficult.” While the most prominent carriers operating on the trade lane are working to undo capacity reductions, several forwarder and shipper sources expect opportunistic behavior from some of the more agile carriers. “Big carriers, which reasonably anticipated continued import reductions and announced repositions [and] service suspensions ... will need to reverse course to take advantage of the coming import demand,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, told the Journal of Commerce. “Some of the smaller, nimble carriers that jumped in during the COVID crisis will jump in now.” <h3>Added concerns </h3>As bookings climb and the market faces an increasingly significant capacity imbalance, stakeholders are concerned about the longer-term impacts of the changes, such as port congestion, equipment availability and manufacturing delays. Forwarder sources say West Coast ports will be particularly appealing for shippers due to the lower transit times from Asia and the uncertainty around what will happen after the 90-day cooling off period between Washington and Beijing ends. “It’s all about when you can clear customs, and obviously that is much faster on the West Coast because the ships arrive much earlier,” said Stephen Nothdurft, vice president of North American sales at forwarder MOL Consolidation Service. “You can get three ships cleared [if you ship to the] West Coast before one even gets to the East Coast. I don’t know that people are abandoning the East Coast loaders, per se, but having cargo on the shortest transit possible [is important to importers].” And while orders are increasing, manufacturing delays as some factories in China ramp back up to full speed could slow some US importers down, causing concerns within the 90-day deadline to take advantage of the reduced tariffs. Several importers reported factory closures in China as demand waned, and manufacturers will likely need some runway to reach traditional output levels. Forwarder and shipper sources are reporting some manufacturing delays of several weeks to a month. Meanwhile, fresh data from PIERS, a sister product of the Journal of Commerce within S&amp;P Global, shows that US imports from Asia and China specifically rose in April, likely reflecting the last rush of boats on the water ahead of the April 9 implementation of new tariffs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4ed96169-fa34-4b46-81e8-b67860854e39"></dynamic-object></div>US imports from Asia last month rose to 1.59 million TEUs, up 3.9% from 1.53 million TEUs in March and up 14.5% from April 2024. US imports from China were at 849,390 TEUs, up 5.8% from 802,570 TEUs in March and 12.3% higher than a year ago. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  Senior Editor Bill Mongelluzzo contributed to this report.</div>

Spot rates in the eastbound trans-Pacific are on a rapid rise as stakeholders on the trade lane expect a significant increase in cargo on the water in the wake of the preliminary tariff deal agreed to last weekend between the US and China .  While various pricing indexes have yet to reflect the post-deal jump in rates, forwarder sources say they are seeing May 15 general rate increases (GRIs) of about $1,000 for both the US West and East coasts, with an expected crunch in vessel capacity and the potential for port congestion driving the gains.  “We know that a lot of capacity has come out and there’s going to be a tremendous amount of volume that has to move,” said Rachel Shames, vice president of procurement and pricing at CV International. “No one knows how much, but we know it’s going to strain the system. The question is: How high will rates go?” In addition to the $1,000 GRIs carriers are due to implement this week, sources say an additional hike of $1,000 to $3,000 per FEU could be on tap for June 1. And several forwarders who spoke to the Journal of Commerce said shippers already need to book at $6,000 per FEU or above to guarantee space. In a research note Wednesday, analysts at Jefferies said Asia-West Coast spot rates are now being quoted at $3,000 per FEU, with East Coast rates at $4,000/FEU. Just how far rates could rise depends in large part on volumes, as not all observers are ready to categorize the coming flush of imports as a sustained surge. “It is too early to gauge whether this week’s volume surge is a simple return of normal volumes, a pull forward of demand, or an early start to peak season,” Jefferies said. “As of now though, spot rates are likely to continue gaining given limited vessel capacity near term.” Platts, a sister company of the Journal of Commerce within S&P Global, shows North Asia to West Coast rates at $2,500 per FEU as of Wednesday, up $700 from a month ago. East Coast rates were at $3,500/FEU, up $500 month over month. But in the early days of a rapidly moving market, pricing indexes have yet to catch up to actual rate levels. A source at a non-vessel-operating common carrier (NVO) said he is rescinding quotes made to clients in April, unable to honor the initial offers in the new market environment. That same source saw bookings increase by about 200% this week. Carrier moves An unbalanced supply and demand dynamic is fostering a hospitable environment for the rate hikes after carriers reduced capacity on the trans-Pacific in response to canceled bookings out of China in April in the aftermath of the US tariffs slapped on Beijing. On Wednesday, Hapag-Lloyd reported an increase of more than 50% in China-US bookings since the preliminary trade deal was signed over the weekend, also noting double-digit increases compared with pre-tariff cargo volumes — likely exacerbated by cargo held in China since early April. CEO Rolf Habben Jensen said the carrier expects “a surge in volume in the upcoming 60 or 90 days.” “But beyond that it is very difficult to predict and will depend on what kind of [trade] agreements will be closed between the US and other countries,” he said. Hapag-Lloyd and Gemini Cooperation partner Maersk each said they had swapped out large vessels for smaller ships on the eastbound trans-Pacific due to the decreased volumes but will reinstate the larger vessels now that demand has rebounded. “Over the next 90 days, there’s clearly going to be pent up supply that sits in China that needs to be reintroduced to the supply chain and [be brought to the US],” Charles van der Steene, president of Maersk North America, told CNBC . “To bring capacity back in for vessels that have been redeployed elsewhere will be more difficult.” While the most prominent carriers operating on the trade lane are working to undo capacity reductions, several forwarder and shipper sources expect opportunistic behavior from some of the more agile carriers. “Big carriers, which reasonably anticipated continued import reductions and announced repositions [and] service suspensions ... will need to reverse course to take advantage of the coming import demand,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, told the Journal of Commerce. “Some of the smaller, nimble carriers that jumped in during the COVID crisis will jump in now.” Added concerns As bookings climb and the market faces an increasingly significant capacity imbalance, stakeholders are concerned about the longer-term impacts of the changes, such as port congestion, equipment availability and manufacturing delays. Forwarder sources say West Coast ports will be particularly appealing for shippers due to the lower transit times from Asia and the uncertainty around what will happen after the 90-day cooling off period between Washington and Beijing ends. “It’s all about when you can clear customs, and obviously that is much faster on the West Coast because the ships arrive much earlier,” said Stephen Nothdurft, vice president of North American sales at forwarder MOL Consolidation Service. “You can get three ships cleared [if you ship to the] West Coast before one even gets to the East Coast. I don’t know that people are abandoning the East Coast loaders, per se, but having cargo on the shortest transit possible [is important to importers].” And while orders are increasing, manufacturing delays as some factories in China ramp back up to full speed could slow some US importers down, causing concerns within the 90-day deadline to take advantage of the reduced tariffs. Several importers reported factory closures in China as demand waned, and manufacturers will likely need some runway to reach traditional output levels. Forwarder and shipper sources are reporting some manufacturing delays of several weeks to a month. Meanwhile, fresh data from PIERS, a sister product of the Journal of Commerce within S&P Global, shows that US imports from Asia and China specifically rose in April, likely reflecting the last rush of boats on the water ahead of the April 9 implementation of new tariffs. US imports from Asia last month rose to 1.59 million TEUs, up 3.9% from 1.53 million TEUs in March and up 14.5% from April 2024. US imports from China were at 849,390 TEUs, up 5.8% from 802,570 TEUs in March and 12.3% higher than a year ago. Contact Laura Robb at laura.robb@spglobal.com .  Senior Editor Bill Mongelluzzo contributed to this report.

Eastbound trans-Pac spot rates in revival mode in wake of US-China trade deal

<div class="phx-topic abstract-wrapper">Greater interplay between US drayage and truckload markets may appear as imports fluctuate due to shifting tariff deadlines, but little impact is expected on pricing. </div>

Greater interplay between US drayage and truckload markets may appear as imports fluctuate due to shifting tariff deadlines, but little impact is expected on pricing.

<div class="phx-topic">A sooner-than-anticipated influx of US imports from China is already <a href="https://www.joc.com/article/trans-pacific-carriers-announce-massive-june-rate-hikes-6005450">pushing up ocean container spot rates</a>, but those price increases are not expected to reach landbound drayage and truckload markets. A thick layer of excess truck capacity persists and may even be expanding, and that is likely to keep land transportation pricing in check despite US importers frontloading freight during a 90-day pause in the steepest tariffs on Chinese-made goods. “Right now, we don’t see enough capacity exits to lead us to believe that [truckload] rates are going to be higher,” even as more cargo from China arrives over the next 90 days, Sean Dehan, vice president of corporate strategy and mergers and acquisitions at Truckstop, said Friday. Truckstop, a spot market load-matching and trucking technology company, still expects some greater interplay between spot truckload and drayage in coming weeks. “Drayage drivers could effectively go into power-only mode,” meaning they could use their tractors on the spot market to haul trailers, Dehan said. “There may be some marginal drayage carriers who pop into over-the-road even as import volumes stay measured.” <h3>Supply-demand imbalance </h3>Surface freight demand has been in recession since the second quarter of 2022, and even a large increase in imports, which only account for a small portion of overall over-the-road tonnage, likely won’t be enough to resuscitate demand. “There don’t appear to be too many demand catalysts that we can point to right now,” Dehan said. “Tariffs are not going to create demand.” At the same time, truck capacity is readily available, whether at the ports or on highways. There is still about 35% more over-the-road truckload capacity available than in 2019, according to Avery Vise, vice president of trucking for FTR Transportation Intelligence. Most instances where freight activity has increased in the past few months can be attributed to frontloaded US imports. Spot market load board provider DAT Freight &amp; Analytics noted increased activity around major distribution hubs in April. “The big warehouse markets — Atlanta, Dallas, Phoenix — have all seen a big influx of loads moved in April, both inbound and outbound,” Dean Croke, principal analyst at DAT, told the Journal of Commerce. But that hasn’t moved spot pricing. Average US dry-van spot rates for the week ending May 10 of $1.60 per mile were up just three cents from the same week a year ago, according to DAT, while the average contract replacement rate slipped 0.5% sequentially during the same week. “Overall, we continue to observe a consistent market,” Aaron LaGanke, vice president of freight services at logistics provider AFS Logistics, said Thursday. “Minor month-to-month fluctuations in rates and volumes remain within the bounds of typical variability.” The wild card is going to be the size and extent of the rebound once fresh imports from China and other trading partners hit US ports. Demand “may be a little bit slack for four weeks, and then it will hit in June,” said Paul Brashier, vice president of global supply chain at drayage brokerage ITS Logistics. “We won’t see COVID-level disruption, but it will be a lift, and it’s on the way.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

A sooner-than-anticipated influx of US imports from China is already pushing up ocean container spot rates , but those price increases are not expected to reach landbound drayage and truckload markets. A thick layer of excess truck capacity persists and may even be expanding, and that is likely to keep land transportation pricing in check despite US importers frontloading freight during a 90-day pause in the steepest tariffs on Chinese-made goods. “Right now, we don’t see enough capacity exits to lead us to believe that [truckload] rates are going to be higher,” even as more cargo from China arrives over the next 90 days, Sean Dehan, vice president of corporate strategy and mergers and acquisitions at Truckstop, said Friday. Truckstop, a spot market load-matching and trucking technology company, still expects some greater interplay between spot truckload and drayage in coming weeks. “Drayage drivers could effectively go into power-only mode,” meaning they could use their tractors on the spot market to haul trailers, Dehan said. “There may be some marginal drayage carriers who pop into over-the-road even as import volumes stay measured.” Supply-demand imbalance Surface freight demand has been in recession since the second quarter of 2022, and even a large increase in imports, which only account for a small portion of overall over-the-road tonnage, likely won’t be enough to resuscitate demand. “There don’t appear to be too many demand catalysts that we can point to right now,” Dehan said. “Tariffs are not going to create demand.” At the same time, truck capacity is readily available, whether at the ports or on highways. There is still about 35% more over-the-road truckload capacity available than in 2019, according to Avery Vise, vice president of trucking for FTR Transportation Intelligence. Most instances where freight activity has increased in the past few months can be attributed to frontloaded US imports. Spot market load board provider DAT Freight & Analytics noted increased activity around major distribution hubs in April. “The big warehouse markets — Atlanta, Dallas, Phoenix — have all seen a big influx of loads moved in April, both inbound and outbound,” Dean Croke, principal analyst at DAT, told the Journal of Commerce. But that hasn’t moved spot pricing. Average US dry-van spot rates for the week ending May 10 of $1.60 per mile were up just three cents from the same week a year ago, according to DAT, while the average contract replacement rate slipped 0.5% sequentially during the same week. “Overall, we continue to observe a consistent market,” Aaron LaGanke, vice president of freight services at logistics provider AFS Logistics, said Thursday. “Minor month-to-month fluctuations in rates and volumes remain within the bounds of typical variability.” The wild card is going to be the size and extent of the rebound once fresh imports from China and other trading partners hit US ports. Demand “may be a little bit slack for four weeks, and then it will hit in June,” said Paul Brashier, vice president of global supply chain at drayage brokerage ITS Logistics. “We won’t see COVID-level disruption, but it will be a lift, and it’s on the way.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

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