<div class="phx-topic abstract-wrapper">Less-than-truckload carriers are holding onto pricing discipline despite low demand, but more opportunities for LTL savings exist, speakers told the Inland ‘25 conference. </div>

Less-than-truckload carriers are holding onto pricing discipline despite low demand, but more opportunities for LTL savings exist, speakers told the Inland ‘25 conference.

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<div class="phx-topic">The famed discipline that has driven US less-than-truckload (LTL) pricing higher over the past decade appears to be holding. But some cracks in that pricing wall have been sighted and may be growing as low freight demand puts pressure on carrier profit margins. “The cracks in the wall are there,” Mike Regan, co-founder of TranzAct Technologies, told the Journal of Commerce’s 2025 Inland Distribution Conference in Chicago Tuesday. “We are seeing LTL carriers doing what I call defending their turf in a sea of uncertainty.” In negotiations with LTL trucking companies and shippers, Regan sees more carriers lowering rates in lanes where they need more shipments and density to protect margins. And many carriers have expanded their networks and have more space to fill. “If you have freight in lanes you want to protect, you’re going to see great pricing,” Regan said. “If you have freight in other lanes, you’re going to see different pricing.” He said he has seen one LTL carrier seeking a 5% rate hike accept a 12% rate cut to keep business. “We’re seeing carrier pricing behavior that’s irrational,” Regan said. He expects to see more such behavior as the spinoff of FedEx Freight by FedEx approaches next June. Other speakers at the conference disagreed, saying they see LTL carriers holding a line on pricing, while suggesting shippers that help carriers cut costs will benefit. “The pricing discipline is actually very solid,” said Mich Fabriga, vice president of LTL pricing at AFS Logistics, who noted the pricing floor in LTL is uneven. “One carrier can drop pricing, but that lower rate is actually an increase for another carrier.” Regional LTL carrier A. Duie Pyle is seeing low single-digit increases in contract LTL rates, said John Luciani, COO for LTL solutions. But rising costs put a premium on efficiency. “It’s a race to reduce costs,” Luciani told the conference. Increased use of dimensioning equipment to rebill shipments and new density-based classifications may also impact the cost shippers pay for LTL service, although changes to the LTL freight classification system have not had a major effect on pricing. Any cracks in LTL pricing haven’t shown up in data the US Bureau of Labor Statistics uses to create the long-distance LTL producer price index (PPI). The index, based on final, all-inclusive selling prices paid by shippers, was at a record high of 269 in August. That reading is 10.5% higher year over year and 4.3% higher than in May. Shippers facing such cost hikes — including rates and accessorial charges — need new strategies. Shippers need to “take a step back” and determine what is going to drive carrier behavior going forward, said Regan. “We have a unique opportunity to sit down with carriers, throw out the stagnant procurement model, and come up with something different,” he said. <h3>Ongoing expansion </h3>Pyle, a multiregional carrier covering the Northeast from Maine to Virginia and parts of the Midwest, has been expanding into Ohio this year and plans to keep expanding even though Pyle’s freight volume, year over year, is essentially flat, Luciani said. “We’re seeing the same number of shipments, but shipments are getting smaller,” he said during a panel discussion with Regan and other speakers. “What used to be a 1,100-pound LTL shipment two years ago is now a 950-pound shipment,” he said. It’s a trend that other speakers said will continue as shippers reduce the size of shipments and ship more frequently to meet customer replenishment and inventory needs. However, shipment numbers, not just weights, are down at many LTL carriers. FedEx Freight, the largest US LTL provider, saw its average daily shipment count <a href="https://www.joc.com/article/truckload-carriers-capturing-more-ltl-shipments-fedex-freight-6083463">drop 2.2% year over year</a> and 2.3% from the previous quarter in the quarter that ended Aug. 31. In its most recent earnings report, FedEx Freight highlighted two factors many analysts and executives say are inhibiting LTL growth — <a href="https://www.joc.com/article/manufacturing-malaise-clouds-outlook-for-us-industrial-freight-6001813">softness in US manufacturing</a> and a glut of cheap truckload capacity. Neither problem is expected to fade in the near future. Carriers aren’t retreating on plans to expand their networks, although some may postpone those plans, or portions of them, until later in 2026. Instead, the industry has been building its way back from significant contraction following the collapse of Yellow in 2023. “We’re looking at a functional restructuring of the LTL industry even as we speak,” Regan said. The eventual spinoff of FedEx Freight could accelerate that restructuring. Pyle has seen significant contraction in its home territory in the past decade. Even before Yellow’s collapse, New England Motor Freight, a large regional LTL carrier, <a href="https://www.joc.com/article/nemf-bankruptcy-reveals-ltl-sinkholes-5226845">shut down in 2019</a>. When Yellow <a href="https://www.joc.com/article/us-ltl-trucking-market-still-in-flux-as-freight-shifts-among-carriers-5200601">shut down</a>, so did its northeastern subsidiary, New Penn. That created room for Pyle to grow, and competitive dynamics and customer needs keep Pyle looking for opportunities, Luciani said. The need to cut transit times was a primary factor behind Pyle’s decision to open terminals in Columbus and Toledo, Ohio. “We’re expanding our coverage to compete with two of our regional competitors,” as shippers look for faster ways to move freight from the Midwest to the East, he said. The company is planning to expand terminals in various parts of the Northeast, too. Customers leave carriers no choice. As the use of more sophisticated shipping technologies increases, changing how and when companies ship, carriers need to meet the new stakes, Luciani said. “We’re always looking for long-term partnerships,” he said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The famed discipline that has driven US less-than-truckload (LTL) pricing higher over the past decade appears to be holding. But some cracks in that pricing wall have been sighted and may be growing as low freight demand puts pressure on carrier profit margins. “The cracks in the wall are there,” Mike Regan, co-founder of TranzAct Technologies, told the Journal of Commerce’s 2025 Inland Distribution Conference in Chicago Tuesday. “We are seeing LTL carriers doing what I call defending their turf in a sea of uncertainty.” In negotiations with LTL trucking companies and shippers, Regan sees more carriers lowering rates in lanes where they need more shipments and density to protect margins. And many carriers have expanded their networks and have more space to fill. “If you have freight in lanes you want to protect, you’re going to see great pricing,” Regan said. “If you have freight in other lanes, you’re going to see different pricing.” He said he has seen one LTL carrier seeking a 5% rate hike accept a 12% rate cut to keep business. “We’re seeing carrier pricing behavior that’s irrational,” Regan said. He expects to see more such behavior as the spinoff of FedEx Freight by FedEx approaches next June. Other speakers at the conference disagreed, saying they see LTL carriers holding a line on pricing, while suggesting shippers that help carriers cut costs will benefit. “The pricing discipline is actually very solid,” said Mich Fabriga, vice president of LTL pricing at AFS Logistics, who noted the pricing floor in LTL is uneven. “One carrier can drop pricing, but that lower rate is actually an increase for another carrier.” Regional LTL carrier A. Duie Pyle is seeing low single-digit increases in contract LTL rates, said John Luciani, COO for LTL solutions. But rising costs put a premium on efficiency. “It’s a race to reduce costs,” Luciani told the conference. Increased use of dimensioning equipment to rebill shipments and new density-based classifications may also impact the cost shippers pay for LTL service, although changes to the LTL freight classification system have not had a major effect on pricing. Any cracks in LTL pricing haven’t shown up in data the US Bureau of Labor Statistics uses to create the long-distance LTL producer price index (PPI). The index, based on final, all-inclusive selling prices paid by shippers, was at a record high of 269 in August. That reading is 10.5% higher year over year and 4.3% higher than in May. Shippers facing such cost hikes — including rates and accessorial charges — need new strategies. Shippers need to “take a step back” and determine what is going to drive carrier behavior going forward, said Regan. “We have a unique opportunity to sit down with carriers, throw out the stagnant procurement model, and come up with something different,” he said. Ongoing expansion Pyle, a multiregional carrier covering the Northeast from Maine to Virginia and parts of the Midwest, has been expanding into Ohio this year and plans to keep expanding even though Pyle’s freight volume, year over year, is essentially flat, Luciani said. “We’re seeing the same number of shipments, but shipments are getting smaller,” he said during a panel discussion with Regan and other speakers. “What used to be a 1,100-pound LTL shipment two years ago is now a 950-pound shipment,” he said. It’s a trend that other speakers said will continue as shippers reduce the size of shipments and ship more frequently to meet customer replenishment and inventory needs. However, shipment numbers, not just weights, are down at many LTL carriers. FedEx Freight, the largest US LTL provider, saw its average daily shipment count drop 2.2% year over year and 2.3% from the previous quarter in the quarter that ended Aug. 31. In its most recent earnings report, FedEx Freight highlighted two factors many analysts and executives say are inhibiting LTL growth — softness in US manufacturing and a glut of cheap truckload capacity. Neither problem is expected to fade in the near future. Carriers aren’t retreating on plans to expand their networks, although some may postpone those plans, or portions of them, until later in 2026. Instead, the industry has been building its way back from significant contraction following the collapse of Yellow in 2023. “We’re looking at a functional restructuring of the LTL industry even as we speak,” Regan said. The eventual spinoff of FedEx Freight could accelerate that restructuring. Pyle has seen significant contraction in its home territory in the past decade. Even before Yellow’s collapse, New England Motor Freight, a large regional LTL carrier, shut down in 2019 . When Yellow shut down , so did its northeastern subsidiary, New Penn. That created room for Pyle to grow, and competitive dynamics and customer needs keep Pyle looking for opportunities, Luciani said. The need to cut transit times was a primary factor behind Pyle’s decision to open terminals in Columbus and Toledo, Ohio. “We’re expanding our coverage to compete with two of our regional competitors,” as shippers look for faster ways to move freight from the Midwest to the East, he said. The company is planning to expand terminals in various parts of the Northeast, too. Customers leave carriers no choice. As the use of more sophisticated shipping technologies increases, changing how and when companies ship, carriers need to meet the new stakes, Luciani said. “We’re always looking for long-term partnerships,” he said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

Inland ‘25: Low demand putting pricing pressure on US LTL carriers

<div class="phx-topic abstract-wrapper">But Union Pacific’s Jim Vena says the cooperation agreements that rival railroads are making to compete with a combined UP-NS don’t yield the same benefits as a merger. </div>

But Union Pacific’s Jim Vena says the cooperation agreements that rival railroads are making to compete with a combined UP-NS don’t yield the same benefits as a merger.

<div class="phx-topic">Chicago — Shippers will still have easy access to other rail networks should Union Pacific’s (UP’s) merger with Norfolk Southern (NS) be completed, according to UP CEO Jim Vena. But Vena, speaking Tuesday at the Journal of Commerce’s Inland Distribution Conference, said such interline partnerships between railroads fail to deliver the same efficiencies as a merger, citing problems that NS is having in a track access agreement with Canadian Pacific Kansas City (CPKC). Vena said he’s confident UP can maintain <a href="https://www.joc.com/article/shippers-logistics-providers-satisfied-with-h1-rail-performance-6063203">its current high satisfaction with intermodal shippers</a> once its merger with NS is approved. While UP’s average 20-hour dwell time for railcars is among the lowest in the industry, Vena said that dwell could drop even further through a coast-to-coast network with NS. He expects overall transit times on many routes will fall by 24 to 48 hours once the merger is approved. “There’s going to be 1,000 truck moves today in Chicago that are going to move containers from our railroad to another one,” Vena told Inland ‘25. “That rubber-tire interchange is gone when you ship on the new Union Pacific. We won’t be stopping the train. We’re going to give you service right through to the end location.” In addition to avoiding interchange delays, a merged rail network will also be able to spread its volumes through more terminals and potentially avoid the congestion issues that periodically hit Chicago. Smaller hubs such as Kansas City can offer faster crew changes, while <a href="https://www.joc.com/article/up-ns-joint-intermodal-service-to-link-west-coast-with-louisville-in-midwest-6080692">opening new destinations such as Louisville</a>. “If that’s the fastest route, we’re going through Chicago,” Vena said. “If the best way is to go through Kansas City and head to the northeast, then we’ll go that way.” UP already offers a coast-to-coast intermodal service through its EMP shared container service with NS and UMAX shared container service with CSX Transportation. Even while a combined UP-NS will have that same service, Vena said his railroad will still offer shippers the option of using UMAX if they choose. “We want to keep the UMAX program,” he said. “There are certain things that are going to be better with the combined UP-NS. But if the customer says I want that service with the CSX and UMAX, that’s what we’ll do.” During a separate panel, CSX Vice President Andrew Johnson said the carrier also remains committed to the UMAX program, citing a recently weekly volume record for UMAX shipments. He said the steel-wheel interchange with CSX in Chicago eliminates hundreds of truck trips. “We are committed to growing the UMAX product regardless of what happens with this merger,” Johnson said. “We will have a rail box product that we’re not walking away from.” <h3>Vena not happy with CPKC-linked NS delays in Southeast </h3>Even with a coast-to-coast network, Vena said there are regions where a combined UP-NS will still need to cooperate with other railroads to reach certain destinations, especially in the Southeast. Vena said UP will steer shippers to the fastest option, even if it involves other railroads. “If freight is headed to Florida, the fastest way and the quickest route is with CSX connecting through New Orleans,” he said. “We’ll make sure we give that option to shippers.” However, Vena said that type of cooperation is not being reciprocated by others. NS shipments to the Southeast market are facing delays on a 320-mile track segment through Mississippi and Louisiana that NS owns with CPKC known as the Meridian Speedway. Vena said CPKC, the track’s majority owner, is currently only allowing 8,000-foot trains to operate on the tracks, rather than the 11,000-foot trains allowed on the tracks under its previous owner, pre-merger Kansas City Southern. The Southeast service is primarily used by large parcel shippers FedEx and UPS to reach Atlanta. Vena said NS runs two trains instead of one to ensure those shipments will not be delayed. While the track access is NS’ problem until the merger is completed, Vena said he sent a letter to CPKC questioning why the limits are in place. And on Tuesday, Norfolk Southern filed a complaint with the Surface Transportation Board (STB), alleging that CPKC is violating commitments it made to regulators when it acquired Kansas City Southern in 2023. “We ran trains for a long time with no major headaches until you get the combination of CP and Kansas City and for some reason, they decided that they couldn’t run an 11,000-foot train even though that’s the commitment they made to the STB,” Vena said. “I’m not happy with it and hopefully they wake up and change their mind and go back to operating the trains the way they were supposed to.” Vena said the track access issue shows the difficulties that railroads have had in executing cooperation agreements. While <a href="https://www.joc.com/article/bnsf-csx-unveil-new-joint-intermodal-lanes-in-aftermath-of-up-ns-merger-6067789">other railroads</a> are marketing new intermodal services through cooperation agreements, Vena said those deals will still be plagued by the different processes and operations of separate railroads. “Those cooperation agreements have never worked out,” he said. CSX’s Johnson, whose company is adding <a href="https://www.joc.com/article/cn-csx-joint-service-to-connect-west-canada-and-nashville-6077903">other intermodal lanes to compete with UP-NS</a>, defended cooperation agreements as an efficient, viable way to link two railroads. “Despite what you heard earlier this morning, interline partnerships do work, they’ve worked for a long, long time, and they will continue to work with whatever happens with this merger,” he said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Chicago — Shippers will still have easy access to other rail networks should Union Pacific’s (UP’s) merger with Norfolk Southern (NS) be completed, according to UP CEO Jim Vena. But Vena, speaking Tuesday at the Journal of Commerce’s Inland Distribution Conference, said such interline partnerships between railroads fail to deliver the same efficiencies as a merger, citing problems that NS is having in a track access agreement with Canadian Pacific Kansas City (CPKC). Vena said he’s confident UP can maintain its current high satisfaction with intermodal shippers once its merger with NS is approved. While UP’s average 20-hour dwell time for railcars is among the lowest in the industry, Vena said that dwell could drop even further through a coast-to-coast network with NS. He expects overall transit times on many routes will fall by 24 to 48 hours once the merger is approved. “There’s going to be 1,000 truck moves today in Chicago that are going to move containers from our railroad to another one,” Vena told Inland ‘25. “That rubber-tire interchange is gone when you ship on the new Union Pacific. We won’t be stopping the train. We’re going to give you service right through to the end location.” In addition to avoiding interchange delays, a merged rail network will also be able to spread its volumes through more terminals and potentially avoid the congestion issues that periodically hit Chicago. Smaller hubs such as Kansas City can offer faster crew changes, while opening new destinations such as Louisville . “If that’s the fastest route, we’re going through Chicago,” Vena said. “If the best way is to go through Kansas City and head to the northeast, then we’ll go that way.” UP already offers a coast-to-coast intermodal service through its EMP shared container service with NS and UMAX shared container service with CSX Transportation. Even while a combined UP-NS will have that same service, Vena said his railroad will still offer shippers the option of using UMAX if they choose. “We want to keep the UMAX program,” he said. “There are certain things that are going to be better with the combined UP-NS. But if the customer says I want that service with the CSX and UMAX, that’s what we’ll do.” During a separate panel, CSX Vice President Andrew Johnson said the carrier also remains committed to the UMAX program, citing a recently weekly volume record for UMAX shipments. He said the steel-wheel interchange with CSX in Chicago eliminates hundreds of truck trips. “We are committed to growing the UMAX product regardless of what happens with this merger,” Johnson said. “We will have a rail box product that we’re not walking away from.” Vena not happy with CPKC-linked NS delays in Southeast Even with a coast-to-coast network, Vena said there are regions where a combined UP-NS will still need to cooperate with other railroads to reach certain destinations, especially in the Southeast. Vena said UP will steer shippers to the fastest option, even if it involves other railroads. “If freight is headed to Florida, the fastest way and the quickest route is with CSX connecting through New Orleans,” he said. “We’ll make sure we give that option to shippers.” However, Vena said that type of cooperation is not being reciprocated by others. NS shipments to the Southeast market are facing delays on a 320-mile track segment through Mississippi and Louisiana that NS owns with CPKC known as the Meridian Speedway. Vena said CPKC, the track’s majority owner, is currently only allowing 8,000-foot trains to operate on the tracks, rather than the 11,000-foot trains allowed on the tracks under its previous owner, pre-merger Kansas City Southern. The Southeast service is primarily used by large parcel shippers FedEx and UPS to reach Atlanta. Vena said NS runs two trains instead of one to ensure those shipments will not be delayed. While the track access is NS’ problem until the merger is completed, Vena said he sent a letter to CPKC questioning why the limits are in place. And on Tuesday, Norfolk Southern filed a complaint with the Surface Transportation Board (STB), alleging that CPKC is violating commitments it made to regulators when it acquired Kansas City Southern in 2023. “We ran trains for a long time with no major headaches until you get the combination of CP and Kansas City and for some reason, they decided that they couldn’t run an 11,000-foot train even though that’s the commitment they made to the STB,” Vena said. “I’m not happy with it and hopefully they wake up and change their mind and go back to operating the trains the way they were supposed to.” Vena said the track access issue shows the difficulties that railroads have had in executing cooperation agreements. While other railroads are marketing new intermodal services through cooperation agreements, Vena said those deals will still be plagued by the different processes and operations of separate railroads. “Those cooperation agreements have never worked out,” he said. CSX’s Johnson, whose company is adding other intermodal lanes to compete with UP-NS , defended cooperation agreements as an efficient, viable way to link two railroads. “Despite what you heard earlier this morning, interline partnerships do work, they’ve worked for a long, long time, and they will continue to work with whatever happens with this merger,” he said. Contact Michael Angell at michael.angell@spglobal.com .

Rail News

North-American rail

Intermodal providers

Inland ‘25: NS merger won’t limit access to other railroads: UP CEO

<div class="phx-topic abstract-wrapper">Robust international demand was led by the growth on the Asia-Europe trade that IATA attributes to a modal shift from ocean and evolving import rules from Washington that have diverted shipments from the trans-Pacific. </div>

Robust international demand was led by the growth on the Asia-Europe trade that IATA attributes to a modal shift from ocean and evolving import rules from Washington that have diverted shipments from the trans-Pacific.

<div class="phx-topic">Air cargo demand on Asia-Europe and intra-Asia routes grew by double digits in August as widespread US tariffs and a clampdown on low-value imports continued to influence trade flows. While global air cargo demand for most trade lanes, as measured in cargo metric ton kilometers, remained robust at 7% growth year over year, Asia-Europe demand was up 13% in August, while intra-Asia rose 12.4%, according to the latest data from the International Air Transport Association (IATA). Asia-US demand was down 2.2% in August. Willie Walsh, IATA’s director-general, said in the association’s monthly update this week that August marked the sixth consecutive month of year-over-year growth in global demand, aided by US tariffs. “Air cargo has benefited from a shift from sea for some high-value goods as shippers try to minimize the risk of tariff changes,” Walsh said. “Growth patterns indicate some being diverted away from North America, fueling stronger growth for the Asia-Europe, within Asia, Africa-Asia and Middle East-Asia trade lanes.” He added that the “adaptability is vital as shippers navigate the evolving landscape of US tariff policy.” Growth in cross-border e-commerce traffic from China into Europe has risen sharply this year after the US on May 2 removed a Chinese exemption from “de minimis” rules that grant duty-free access for goods valued at under $800. The US subsequently <a href="https://www.joc.com/article/elimination-of-us-de-minimis-rule-hits-smes-hardest-6078319">extended the removal of the de minimis rule</a> to all its trading partners on Aug. 29. <h3>Focus shifts to Europe </h3>Dozens of freighter aircraft serving the previously booming China-US trade were suddenly surplus to requirements. China-US e-commerce filled half the air freight capacity on the trans-Pacific and about 6% of global air freight demand before the tariffs were introduced on May 2, prompting China’s online platforms to quickly shift focus to Europe. Rates have followed the same pattern as demand, increasing 10% on China-North Europe from early August to the last week in September and settling at $4.47 per kilogram, according to the Baltic Air Index. China-North America rates fell 4.5% over the same period to $5.02/kg. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="2ff119f8-b590-425a-bc08-d0f500249f00"></dynamic-object></div>Data from air cargo analyst Rotate shows capacity deployed on Asia-Europe increased 15% from June through September year over year, reaching 1.3 million metric tons. Asia-US capacity of 1.5 million metric tons was down 1% over the same period, although general air cargo demand saw China-US capacity increasing 4%. Niall van de Wouw, chief air freight analyst at rate benchmarking platform Xeneta, said in a recent market update that higher global air cargo demand was the result of a modal shift that began in July, supported by e-commerce. “It is not an indicator of increased economic activity. It’s just that air freight is getting a bigger share,” he said. “Volumes are certainly not as bad as people feared, but also not as good as people hoped.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Air cargo demand on Asia-Europe and intra-Asia routes grew by double digits in August as widespread US tariffs and a clampdown on low-value imports continued to influence trade flows. While global air cargo demand for most trade lanes, as measured in cargo metric ton kilometers, remained robust at 7% growth year over year, Asia-Europe demand was up 13% in August, while intra-Asia rose 12.4%, according to the latest data from the International Air Transport Association (IATA). Asia-US demand was down 2.2% in August. Willie Walsh, IATA’s director-general, said in the association’s monthly update this week that August marked the sixth consecutive month of year-over-year growth in global demand, aided by US tariffs. “Air cargo has benefited from a shift from sea for some high-value goods as shippers try to minimize the risk of tariff changes,” Walsh said. “Growth patterns indicate some being diverted away from North America, fueling stronger growth for the Asia-Europe, within Asia, Africa-Asia and Middle East-Asia trade lanes.” He added that the “adaptability is vital as shippers navigate the evolving landscape of US tariff policy.” Growth in cross-border e-commerce traffic from China into Europe has risen sharply this year after the US on May 2 removed a Chinese exemption from “de minimis” rules that grant duty-free access for goods valued at under $800. The US subsequently extended the removal of the de minimis rule to all its trading partners on Aug. 29. Focus shifts to Europe Dozens of freighter aircraft serving the previously booming China-US trade were suddenly surplus to requirements. China-US e-commerce filled half the air freight capacity on the trans-Pacific and about 6% of global air freight demand before the tariffs were introduced on May 2, prompting China’s online platforms to quickly shift focus to Europe. Rates have followed the same pattern as demand, increasing 10% on China-North Europe from early August to the last week in September and settling at $4.47 per kilogram, according to the Baltic Air Index. China-North America rates fell 4.5% over the same period to $5.02/kg. Data from air cargo analyst Rotate shows capacity deployed on Asia-Europe increased 15% from June through September year over year, reaching 1.3 million metric tons. Asia-US capacity of 1.5 million metric tons was down 1% over the same period, although general air cargo demand saw China-US capacity increasing 4%. Niall van de Wouw, chief air freight analyst at rate benchmarking platform Xeneta, said in a recent market update that higher global air cargo demand was the result of a modal shift that began in July, supported by e-commerce. “It is not an indicator of increased economic activity. It’s just that air freight is getting a bigger share,” he said. “Volumes are certainly not as bad as people feared, but also not as good as people hoped.” Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo

E-commerce, US tariffs drive sharp rise in Asia-Europe air cargo demand

<div class="phx-topic abstract-wrapper">Many drivers could be caught up in a growing US crackdown on non-domiciled commercial driver’s licenses, with California ground zero in that campaign. </div>

Many drivers could be caught up in a growing US crackdown on non-domiciled commercial driver’s licenses, with California ground zero in that campaign.

<div class="phx-topic">The US drayage market is weak amid plenty of capacity available to start the fourth quarter, but that could change quickly if demand rises or a <a href="https://www.joc.com/article/usdot-cracks-down-on-non-domiciled-cdls-targets-california-6087419">regulatory crackdown</a> limits capacity, attendees at the Journal of Commerce’s 2025 Inland Distribution Conference heard. “If we lose 25% of the [drayage] drivers in California, you’ll have a real problem real fast,” Brian Kempisty, founder of Port X Logistics, warned during the conference in Chicago Tuesday. Many of those drivers could be caught up in a growing US crackdown on non-domiciled commercial driver’s licenses (CDLs), with California ground zero in that campaign. The US Department of Transportation (DOT) last week ordered California to stop issuing non-domiciled CDLs and to review all such licenses. The state has 30 days to identify those CDLs that don’t meet new standards introduced to identify illegal CDL holders. In late August, the US DOT gave California, New Mexico and Washington State 30 days to begin <a href="https://www.joc.com/article/us-dot-presses-states-to-enforce-english-language-trucking-rules-6069884">enforcing its English-language proficiency</a> (ELP) requirements or risk losing Motor Carrier Safety Assistance Program (MCSAP) funds appropriated by Congress. California received approximately $30.7 million in MCSAP funds in 2024. The impact on drayage is difficult to predict, but strict enforcement of federal CDL licensing regulations, both the non-domiciled CDL and ELP requirements, could cut into interstate drayage capacity, Kempisty said. “If there’s strict enforcement, Southern California is going to be the hardest area hit,” he said. Tougher enforcement of existing regulations was a theme for speakers during a “View from the Top” discussion among a panel of executives at the conference. “It may be odd to say there are regulations on the books that aren’t currently being enforced, but that’s a theme right now,” said Chris Burroughs, president and CEO of the Transportation Intermediaries Association (TIA). Burroughs pointed to penalties for double-brokering and freight fraud and called on the Federal Motor Carrier Safety Administration (FMCSA) to do more to enforce them. “We’re working with Congress to restore some penalties against these criminal actors,” he said. The FMCSA, he noted, often lacks funding and personnel needed for enforcement. “Even the threat of enforcement has a deterrent effect,” Mark Rourke, president and CEO of Schneider National, told the conference. But the impact of enforcement has yet to be seen. <h3>OOS orders rising </h3>According to FMCSA data, approximately 3,000 drivers had been placed out of service (OOS) as of Aug. 29 this year in more than 7,000 inspections for failing to meet ELP standards during roadside inspections. Those ELP requirements only became an OOS criteria in June. In comparison, about 5,700 ELP violations were reported in 2024, with only five OOS orders during roadside inspections, FMCSA data shows. The number of ELP out-of-service orders issued in the first eight months of this year is still dwarfed by those handed out for driving without a valid CDL (25,874) or without an FMCSA-required medical certificate (26,483). The potential impact on drayage, truckload or less-than-truckload transportation of the US DOT drive to get non-English speaking drivers and those obtaining CDLs illegally off the road remains unclear. For Kempisty, Rourke and other trucking executives, however, heightened regulatory enforcement is one more straw thrown onto the backs of small trucking firms. “We’re already starting to see capacity come out of the [drayage] market,” Kempisty said. “We’ve seen some <a href="https://www.joc.com/article/second-california-drayage-operator-shuts-business-cites-electric-truck-costs-6056822">businesses close down</a>, and the driver pool in some ports is starting to reduce.” The main reason is continued low rates, but higher insurance costs, wages and equipment costs also put a thumb on the scale. If freight demand picks up as inventories shrink in 2026, “maybe there’s not much capacity that needs to leave,” Kempisty said. “Things have been slow for two years, and they could take off fairly quickly.” US importers need to make drayage more a part of their supply chain strategy and less an afterthought, he said. “When you need capacity and your old carrier goes out of business, you don’t want to be stuck,” said Kempisty. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The US drayage market is weak amid plenty of capacity available to start the fourth quarter, but that could change quickly if demand rises or a regulatory crackdown limits capacity, attendees at the Journal of Commerce’s 2025 Inland Distribution Conference heard. “If we lose 25% of the [drayage] drivers in California, you’ll have a real problem real fast,” Brian Kempisty, founder of Port X Logistics, warned during the conference in Chicago Tuesday. Many of those drivers could be caught up in a growing US crackdown on non-domiciled commercial driver’s licenses (CDLs), with California ground zero in that campaign. The US Department of Transportation (DOT) last week ordered California to stop issuing non-domiciled CDLs and to review all such licenses. The state has 30 days to identify those CDLs that don’t meet new standards introduced to identify illegal CDL holders. In late August, the US DOT gave California, New Mexico and Washington State 30 days to begin enforcing its English-language proficiency (ELP) requirements or risk losing Motor Carrier Safety Assistance Program (MCSAP) funds appropriated by Congress. California received approximately $30.7 million in MCSAP funds in 2024. The impact on drayage is difficult to predict, but strict enforcement of federal CDL licensing regulations, both the non-domiciled CDL and ELP requirements, could cut into interstate drayage capacity, Kempisty said. “If there’s strict enforcement, Southern California is going to be the hardest area hit,” he said. Tougher enforcement of existing regulations was a theme for speakers during a “View from the Top” discussion among a panel of executives at the conference. “It may be odd to say there are regulations on the books that aren’t currently being enforced, but that’s a theme right now,” said Chris Burroughs, president and CEO of the Transportation Intermediaries Association (TIA). Burroughs pointed to penalties for double-brokering and freight fraud and called on the Federal Motor Carrier Safety Administration (FMCSA) to do more to enforce them. “We’re working with Congress to restore some penalties against these criminal actors,” he said. The FMCSA, he noted, often lacks funding and personnel needed for enforcement. “Even the threat of enforcement has a deterrent effect,” Mark Rourke, president and CEO of Schneider National, told the conference. But the impact of enforcement has yet to be seen. OOS orders rising According to FMCSA data, approximately 3,000 drivers had been placed out of service (OOS) as of Aug. 29 this year in more than 7,000 inspections for failing to meet ELP standards during roadside inspections. Those ELP requirements only became an OOS criteria in June. In comparison, about 5,700 ELP violations were reported in 2024, with only five OOS orders during roadside inspections, FMCSA data shows. The number of ELP out-of-service orders issued in the first eight months of this year is still dwarfed by those handed out for driving without a valid CDL (25,874) or without an FMCSA-required medical certificate (26,483). The potential impact on drayage, truckload or less-than-truckload transportation of the US DOT drive to get non-English speaking drivers and those obtaining CDLs illegally off the road remains unclear. For Kempisty, Rourke and other trucking executives, however, heightened regulatory enforcement is one more straw thrown onto the backs of small trucking firms. “We’re already starting to see capacity come out of the [drayage] market,” Kempisty said. “We’ve seen some businesses close down , and the driver pool in some ports is starting to reduce.” The main reason is continued low rates, but higher insurance costs, wages and equipment costs also put a thumb on the scale. If freight demand picks up as inventories shrink in 2026, “maybe there’s not much capacity that needs to leave,” Kempisty said. “Things have been slow for two years, and they could take off fairly quickly.” US importers need to make drayage more a part of their supply chain strategy and less an afterthought, he said. “When you need capacity and your old carrier goes out of business, you don’t want to be stuck,” said Kempisty. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Port News

Drayage

Inland ‘25: Drayage capacity could tighten quickly under tougher regulations

<div class="phx-topic abstract-wrapper">The US economy looks to weaken further in the fourth quarter due to tariffs and unemployment, but inventories are historically low and may spur 2026 freight demand, attendees at the Journal of Commerce’s Inland ‘25 Distribution Conference heard. </div>

The US economy looks to weaken further in the fourth quarter due to tariffs and unemployment, but inventories are historically low and may spur 2026 freight demand, attendees at the Journal of Commerce’s Inland ‘25 Distribution Conference heard.

<div class="phx-topic">Chicago — US growth is likely to weaken through the end of 2025 as tariff-driven inflation and the resulting business uncertainty affect consumer spending and hiring and put further pressure on the freight economy, attendees at the Journal of Commerce’s Inland ‘25 Distribution Conference were told Tuesday. However, inventory data and the potential for President Donald Trump’s tax bill to spur business investment point trucking to a better start to 2026. After three quarters of uneven growth, US gross domestic product (GDP) is expected to come in slightly negative, S&amp;P Global economist Paul Bingham told Inland ‘25. S&amp;P Global is the parent company of the Journal of Commerce. The coming quarter will see another burst of inflation as businesses face more tariff costs after drawing down inventories of goods frontloaded earlier in the year, Bingham said. That will put a further pause on new capital investments as companies reckon with higher costs. “It takes time [for tariffs] on those imported goods to get to the retail shelves from distribution centers, so we’re forecasting actually [that] inflation is increasing right now despite what the Federal Reserve believes,” Bingham said. Bingham said it’s likely unemployment will also tick higher, creating more uncertainty for growth in consumer spending. October will likely see an increase in unemployment data, he said, as government layoffs from earlier in the year start to show up in data. “This is still a relatively weak freight demand world from a consumption perspective,” Bingham said. While 2025 GDP growth is expected to come at 1.9%, Bingham said the early outlook for 2026 is for 2.6% growth, on par with 2024. If trade deals are sealed and import duties are settled, tariffs will be a one-time price hike that will not result in persistent inflation. Record US tariff rates that average 23% could also moderate as the Trump administration makes new trade deals. “If we have stability, business can plan and you can accommodate with those increased costs,” Bingham said. <h3>More inventory restocking next year? </h3>A more stable 2026 is likely to prompt more inventory restocking, Keith Prather, managing director at economics consultancy Armada Corporate Intelligence, told the conference. Prather’s research showed that some 85% of businesses dependent on freight have an inventory-to-sales ratio at or below their 2019 level, implying pent-up demand to restock. “Inventories are leaner than what they have been historically over the last six to seven years,” Prather said. Whether 2026 will be the beginning of the end of a three-year freight recession remains unclear, though, as trucking supply still has room to shrink, Mark Rourke, CEO of intermodal carrier Schneider National, said. Rourke said Schneider has been able to get low- to mid-single-digit-rate increases from its customers, but those customers have also switched some of their freight to other carriers. “We are willing at this juncture, particularly this part of the cycle, to give up volume for price and that’s our strategy,” he told the conference. Rourke said there are some early indications that truck supply could further tighten in the coming months as orders for new heavy-duty trucks remain weak. The shuttering of <a href="https://www.joc.com/article/second-california-drayage-operator-shuts-business-cites-electric-truck-costs-6056822">two drayage providers on the West Coast in recent months</a> indicates lenders to the trucking industry are becoming stricter, he noted. Likewise, the Trump administration’s recent enforcement action around <a href="https://www.joc.com/article/us-dot-presses-states-to-enforce-english-language-trucking-rules-6069884">English-language proficiency</a> and <a href="https://www.joc.com/article/usdot-cracks-down-on-non-domiciled-cdls-targets-california-6087419">the potential crackdowns against non-US drivers</a> could impact the “shadow capacity” in the market. “I think all of those things can serve as a catalyst [for tighter capacity],” Rourke said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Chicago — US growth is likely to weaken through the end of 2025 as tariff-driven inflation and the resulting business uncertainty affect consumer spending and hiring and put further pressure on the freight economy, attendees at the Journal of Commerce’s Inland ‘25 Distribution Conference were told Tuesday. However, inventory data and the potential for President Donald Trump’s tax bill to spur business investment point trucking to a better start to 2026. After three quarters of uneven growth, US gross domestic product (GDP) is expected to come in slightly negative, S&P Global economist Paul Bingham told Inland ‘25. S&P Global is the parent company of the Journal of Commerce. The coming quarter will see another burst of inflation as businesses face more tariff costs after drawing down inventories of goods frontloaded earlier in the year, Bingham said. That will put a further pause on new capital investments as companies reckon with higher costs. “It takes time [for tariffs] on those imported goods to get to the retail shelves from distribution centers, so we’re forecasting actually [that] inflation is increasing right now despite what the Federal Reserve believes,” Bingham said. Bingham said it’s likely unemployment will also tick higher, creating more uncertainty for growth in consumer spending. October will likely see an increase in unemployment data, he said, as government layoffs from earlier in the year start to show up in data. “This is still a relatively weak freight demand world from a consumption perspective,” Bingham said. While 2025 GDP growth is expected to come at 1.9%, Bingham said the early outlook for 2026 is for 2.6% growth, on par with 2024. If trade deals are sealed and import duties are settled, tariffs will be a one-time price hike that will not result in persistent inflation. Record US tariff rates that average 23% could also moderate as the Trump administration makes new trade deals. “If we have stability, business can plan and you can accommodate with those increased costs,” Bingham said. More inventory restocking next year? A more stable 2026 is likely to prompt more inventory restocking, Keith Prather, managing director at economics consultancy Armada Corporate Intelligence, told the conference. Prather’s research showed that some 85% of businesses dependent on freight have an inventory-to-sales ratio at or below their 2019 level, implying pent-up demand to restock. “Inventories are leaner than what they have been historically over the last six to seven years,” Prather said. Whether 2026 will be the beginning of the end of a three-year freight recession remains unclear, though, as trucking supply still has room to shrink, Mark Rourke, CEO of intermodal carrier Schneider National, said. Rourke said Schneider has been able to get low- to mid-single-digit-rate increases from its customers, but those customers have also switched some of their freight to other carriers. “We are willing at this juncture, particularly this part of the cycle, to give up volume for price and that’s our strategy,” he told the conference. Rourke said there are some early indications that truck supply could further tighten in the coming months as orders for new heavy-duty trucks remain weak. The shuttering of two drayage providers on the West Coast in recent months indicates lenders to the trucking industry are becoming stricter, he noted. Likewise, the Trump administration’s recent enforcement action around English-language proficiency and the potential crackdowns against non-US drivers could impact the “shadow capacity” in the market. “I think all of those things can serve as a catalyst [for tighter capacity],” Rourke said. Contact Michael Angell at michael.angell@spglobal.com .

Inland ‘25: Weak end to 2025 could set up US freight economy for better 2026

<div class="phx-topic abstract-wrapper">Canadian transportation regulators are considering whether empty container fees are justified, following protests from shipowners and vessel operators. </div>

Canadian transportation regulators are considering whether empty container fees are justified, following protests from shipowners and vessel operators.

<div class="phx-topic">The Port of Montreal has joined Vancouver in imposing a surcharge on outbound empty containers as ocean carriers challenge the justification for the fees with Canadian regulators. The Montreal Port Authority (MPA) imposed a one-time C$10 fee per outbound empty TEU container starting Tuesday after Vancouver implemented a similar C$17.58 surcharge on May 1. The ports have defended the fees, arguing they’ll speed up cargo flow at marine terminals and help pay for infrastructure improvements. “The surcharge will help us recover the costs of maintaining infrastructure that empties strain daily,” a spokesperson for the Montreal Port Authority told the Journal of Commerce. “Ultimately, this initiative supports our broader goals of reducing congestion, maintaining fluidity and minimizing environmental impacts across the supply chain.” The Shipping Federation of Canada, which represents shipowners and carriers, rejected the justification for the fees, saying they will disrupt operations and incentivize shippers to use other Canadian ports or even shift to the US. The clash comes as Prime Minister Mark Carney trumpets the need to make Canadian exporters more competitive and diversify trade away from the US. The fees at Vancouver and Montreal are expected to yield millions of dollars. Approximately 507,000 TEUs of empty outbound containers were shipped out of Vancouver in the first half of 2025, which would have accrued $8.9 million if the new surcharge had taken effect at the start of the year. The Shipping Federation in the spring appealed the Vancouver Fraser Port Authority’s then-proposed empty container fee, asking the Canadian Transportation Agency to intervene. The agency has not yet responded; a decision against the port authority could spur lawmakers to introduce legislation. A bill that would have allowed port users to challenge fees was introduced in the Canadian Parliament in 2023 but was never passed. Saying that the fee is under review, a spokesperson for the Vancouver port declined to comment. The fee for loading empty equipment onto vessels is half that of laden export containers, which is $35.15 per FEU. <h3>Shipping group pushes back </h3>According to the Shipping Federation of Canada, Vancouver has justified the fees in presentations to the industry, saying the handling of empty containers places wear and tear on infrastructure and the boxes take up terminal space, so the fees would help ease port congestion by encouraging movement of the containers. The shipping federation has countered by saying that the terminal operator, not the port authority, takes on such costs and that wharfage by its definition only applies to laden cargo. There’s a natural imbalance in the weight of inbound containers loaded with items such as toys and other retail items compared with outbound containers loaded with heavier agriculture and machinery exports, the shipping federation noted in a March 12 comment on Vancouver’s fee. Thus, it said, it’s not uncommon to “top off” outbound vessels with empty containers to optimize ship utilization. “The concept of incentivizing the carrier to fill more empties with export cargo makes no sense within such a context, as the vessel’s cargo carrying capacity is inherently constrained from both an operational and commercial perspective, and cannot simply be expanded in response to a new financial measure imposed by the port,” the federation wrote. The group added that the new fee disadvantages container transport versus bulk and multipurpose shipping and criticized the lack of transparency on how the fees would be invested in infrastructure. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

The Port of Montreal has joined Vancouver in imposing a surcharge on outbound empty containers as ocean carriers challenge the justification for the fees with Canadian regulators. The Montreal Port Authority (MPA) imposed a one-time C$10 fee per outbound empty TEU container starting Tuesday after Vancouver implemented a similar C$17.58 surcharge on May 1. The ports have defended the fees, arguing they’ll speed up cargo flow at marine terminals and help pay for infrastructure improvements. “The surcharge will help us recover the costs of maintaining infrastructure that empties strain daily,” a spokesperson for the Montreal Port Authority told the Journal of Commerce. “Ultimately, this initiative supports our broader goals of reducing congestion, maintaining fluidity and minimizing environmental impacts across the supply chain.” The Shipping Federation of Canada, which represents shipowners and carriers, rejected the justification for the fees, saying they will disrupt operations and incentivize shippers to use other Canadian ports or even shift to the US. The clash comes as Prime Minister Mark Carney trumpets the need to make Canadian exporters more competitive and diversify trade away from the US. The fees at Vancouver and Montreal are expected to yield millions of dollars. Approximately 507,000 TEUs of empty outbound containers were shipped out of Vancouver in the first half of 2025, which would have accrued $8.9 million if the new surcharge had taken effect at the start of the year. The Shipping Federation in the spring appealed the Vancouver Fraser Port Authority’s then-proposed empty container fee, asking the Canadian Transportation Agency to intervene. The agency has not yet responded; a decision against the port authority could spur lawmakers to introduce legislation. A bill that would have allowed port users to challenge fees was introduced in the Canadian Parliament in 2023 but was never passed. Saying that the fee is under review, a spokesperson for the Vancouver port declined to comment. The fee for loading empty equipment onto vessels is half that of laden export containers, which is $35.15 per FEU. Shipping group pushes back According to the Shipping Federation of Canada, Vancouver has justified the fees in presentations to the industry, saying the handling of empty containers places wear and tear on infrastructure and the boxes take up terminal space, so the fees would help ease port congestion by encouraging movement of the containers. The shipping federation has countered by saying that the terminal operator, not the port authority, takes on such costs and that wharfage by its definition only applies to laden cargo. There’s a natural imbalance in the weight of inbound containers loaded with items such as toys and other retail items compared with outbound containers loaded with heavier agriculture and machinery exports, the shipping federation noted in a March 12 comment on Vancouver’s fee. Thus, it said, it’s not uncommon to “top off” outbound vessels with empty containers to optimize ship utilization. “The concept of incentivizing the carrier to fill more empties with export cargo makes no sense within such a context, as the vessel’s cargo carrying capacity is inherently constrained from both an operational and commercial perspective, and cannot simply be expanded in response to a new financial measure imposed by the port,” the federation wrote. The group added that the new fee disadvantages container transport versus bulk and multipurpose shipping and criticized the lack of transparency on how the fees would be invested in infrastructure. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

North American ports

Maritime

Montreal joins Vancouver in levying empty container fee

<div class="phx-topic abstract-wrapper">The LTL world of 2025 does not reward those who guess, but rather those who know — and knowing begins with visibility. </div>

The LTL world of 2025 does not reward those who guess, but rather those who know — and knowing begins with visibility.

<div class="phx-topic">The US less-than-truckload (LTL) sector stands at a critical crossroads. Faced with depressed demand, high operating costs, economic uncertainty and rising customer expectations, LTL carriers, brokers and shippers are under mounting pressure to do more with less. Efficiency, accuracy and transparency have never been more vital. Even as some aspects of LTL have modernized, persistent blind spots still drain time, revenue and customer satisfaction. Accessorial management and location visibility remain at the heart of operational performance and profitability in the LTL sector, and companies must solve these challenges to thrive in this freight environment. Accessorial charges are often treated as the fine print of freight, but their financial impact is anything but small. These additional fees, covering services such as liftgate usage, residential delivery, limited-access sites and inside delivery are frequently not accounted for until after a delivery is completed. At that point, shippers receive unexpected invoices, brokers scramble to reconcile charges, and carriers are left fielding disputes that strain valuable relationships and negatively impact their bottom line. Without an accurate, upfront method of identifying potential accessorials, companies lose control over cost predictability. This unpredictability does more than damage budgets. It undermines long-term rate negotiations and muddies performance metrics such as cost per shipment and gross margin. Billing disputes over accessorials can also slow down cash flow and stretch out time-to-payment cycles. As the logistics sector faces tighter margins and rising customer expectations, these seemingly minor charges can add up to major financial consequences. Location data is another underestimated factor that directly impacts LTL performance. While most transportation management systems (TMSs) offer basic shipment tracking, they often lack granular location insights. This includes data points such as whether a site is residential or commercial, whether there is dock access or a forklift onsite, or if the delivery site has limited hours or requires specialized entry. These details may seem minor, but their absence leads to service mismatches, re-delivery attempts, extended dwell times and more accessorial charges. For example, failing to flag a residential delivery that requires a liftgate can result in a surprise fee and an unhappy customer. A shipment bound for a military base or an airport without the right equipment or credentials can create costly delays and failed deliveries. Inaccurate or incomplete location information does more than increase costs — it erodes operational agility. <h3>Technology can ease challenges </h3>The good news is that technology now exists to solve these challenges at scale. New platforms that leverage AI, machine learning and geospatial data are transforming how logistics professionals manage LTL freight. These tools can identify potential accessorial charges before the freight is tendered, analyze delivery site characteristics in real time and deliver a unified accessorial view across all stakeholders. By automating accessorial identification during order entry and integrating precise location attributes such as limited access, loading dock availability, forklifts on site or gated entry, these platforms allow teams to move from reactive firefighting to proactive planning. With real-time alerts and API integrations that connect directly into a TMS, shippers, brokers and carriers can operate from a shared source of accessorial truth. The impact of smarter accessorial identification and location visibility delivers measurable results. Companies that have adopted these advanced solutions have reported a 75% reduction in unexpected accessorial fees, leading to cleaner invoices and faster dispute resolution. Customers have also seen improved on-time in-full (OTIF) performance, driving higher customer satisfaction and stronger service-level agreement (SLA) compliance. This shift is particularly timely in 2025, as the LTL industry grapples with economic volatility, rising operating costs and major classification changes. Freight volumes are inconsistent, carriers are prioritizing profitability over market share, and the new National Motor Freight Traffic Association density-based classification system is forcing shippers to re-evaluate how they package and price freight. In this environment, hidden costs such as accessorials and inefficiencies tied to poor location visibility can erode already thin margins. With shifting demand, cost inflation and operational headwinds, the ability to forecast costs, identify risks and plan accordingly has become a key competitive advantage. In the past, accessorial management and granular location visibility may have been viewed as optional enhancements. Today, they are essential for any company that relies on LTL shipping as a core part of its logistics strategy. When customer expectations are rising and disruptions are the new norm, having visibility into every shipment detail and every delivery site is table stakes. The LTL world of 2025 does not reward those who guess. It rewards those who know, and knowing begins with visibility. North Winship is president of Shiplify. Contact him at <a href="mailto:northw@shiplify.com">northw@shiplify.com</a>. Bart De Muynck is a strategic advisor for Drewry. Contact him at <a href="mailto:bart@bartdemuynck.com">bart@bartdemuynck.com</a>. </div>

The US less-than-truckload (LTL) sector stands at a critical crossroads. Faced with depressed demand, high operating costs, economic uncertainty and rising customer expectations, LTL carriers, brokers and shippers are under mounting pressure to do more with less. Efficiency, accuracy and transparency have never been more vital. Even as some aspects of LTL have modernized, persistent blind spots still drain time, revenue and customer satisfaction. Accessorial management and location visibility remain at the heart of operational performance and profitability in the LTL sector, and companies must solve these challenges to thrive in this freight environment. Accessorial charges are often treated as the fine print of freight, but their financial impact is anything but small. These additional fees, covering services such as liftgate usage, residential delivery, limited-access sites and inside delivery are frequently not accounted for until after a delivery is completed. At that point, shippers receive unexpected invoices, brokers scramble to reconcile charges, and carriers are left fielding disputes that strain valuable relationships and negatively impact their bottom line. Without an accurate, upfront method of identifying potential accessorials, companies lose control over cost predictability. This unpredictability does more than damage budgets. It undermines long-term rate negotiations and muddies performance metrics such as cost per shipment and gross margin. Billing disputes over accessorials can also slow down cash flow and stretch out time-to-payment cycles. As the logistics sector faces tighter margins and rising customer expectations, these seemingly minor charges can add up to major financial consequences. Location data is another underestimated factor that directly impacts LTL performance. While most transportation management systems (TMSs) offer basic shipment tracking, they often lack granular location insights. This includes data points such as whether a site is residential or commercial, whether there is dock access or a forklift onsite, or if the delivery site has limited hours or requires specialized entry. These details may seem minor, but their absence leads to service mismatches, re-delivery attempts, extended dwell times and more accessorial charges. For example, failing to flag a residential delivery that requires a liftgate can result in a surprise fee and an unhappy customer. A shipment bound for a military base or an airport without the right equipment or credentials can create costly delays and failed deliveries. Inaccurate or incomplete location information does more than increase costs — it erodes operational agility. Technology can ease challenges The good news is that technology now exists to solve these challenges at scale. New platforms that leverage AI, machine learning and geospatial data are transforming how logistics professionals manage LTL freight. These tools can identify potential accessorial charges before the freight is tendered, analyze delivery site characteristics in real time and deliver a unified accessorial view across all stakeholders. By automating accessorial identification during order entry and integrating precise location attributes such as limited access, loading dock availability, forklifts on site or gated entry, these platforms allow teams to move from reactive firefighting to proactive planning. With real-time alerts and API integrations that connect directly into a TMS, shippers, brokers and carriers can operate from a shared source of accessorial truth. The impact of smarter accessorial identification and location visibility delivers measurable results. Companies that have adopted these advanced solutions have reported a 75% reduction in unexpected accessorial fees, leading to cleaner invoices and faster dispute resolution. Customers have also seen improved on-time in-full (OTIF) performance, driving higher customer satisfaction and stronger service-level agreement (SLA) compliance. This shift is particularly timely in 2025, as the LTL industry grapples with economic volatility, rising operating costs and major classification changes. Freight volumes are inconsistent, carriers are prioritizing profitability over market share, and the new National Motor Freight Traffic Association density-based classification system is forcing shippers to re-evaluate how they package and price freight. In this environment, hidden costs such as accessorials and inefficiencies tied to poor location visibility can erode already thin margins. With shifting demand, cost inflation and operational headwinds, the ability to forecast costs, identify risks and plan accordingly has become a key competitive advantage. In the past, accessorial management and granular location visibility may have been viewed as optional enhancements. Today, they are essential for any company that relies on LTL shipping as a core part of its logistics strategy. When customer expectations are rising and disruptions are the new norm, having visibility into every shipment detail and every delivery site is table stakes. The LTL world of 2025 does not reward those who guess. It rewards those who know, and knowing begins with visibility. North Winship is president of Shiplify. Contact him at northw@shiplify.com . Bart De Muynck is a strategic advisor for Drewry. Contact him at bart@bartdemuynck.com .

Visibility transforming accessorial and location insights in LTL shipping

<div class="phx-topic abstract-wrapper">There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters. </div>

There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters.

<div class="phx-topic">The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. <h3>Pushing pause </h3>The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. <h3>Beyond parking </h3>Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. Pushing pause The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. Beyond parking Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Container lines

Ocean carriers are not helpless when it comes to managing capacity

Shanghai to Melbourne

{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {percet_year_Melbourne.formatNumber("##.#%")}

The Shanghai Shipping Exchange’s (SSE) Shanghai Containerized Freight Index (SCFI) reflects spot rates and associated seaborne charges for containerized exports from Shanghai. The SCFI includes indices of freight rates in 13 individual shipping routes and a composite index, using Oct. 16, 2009, as the base period (Oct. 16, 2009 = 1,000). [SSE](https://en.sse.net.cn/indices/scfinew.jsp)

Shanghai to Melbourne container spot rates (SSE)

Shanghai to Melbourne Container Spot Rates (SCFI-Weekly) Gateway

<div class="phx-topic abstract-wrapper">The Port of Los Angeles is meeting with California state officials to promote its plan to extend the Vincent Thomas Bridge repair project to allow 23,000-TEU ships to call all six of its marine terminals. </div>

The Port of Los Angeles is meeting with California state officials to promote its plan to extend the Vincent Thomas Bridge repair project to allow 23,000-TEU ships to call all six of its marine terminals.

<div class="phx-topic">The Port of Los Angeles and its industry stakeholders are trying to convince the California Department of Transportation (Caltrans) to expand a key bridge project to allow ships up to 23,000 TEUs to call the other half of its terminals. The port says expanding the Vincent Thomas Bridge redecking project to include raising the height of the bridge by 26 feet will increase the total cost from $1.5 billion to $2.2 billion and extend its timeline — and, in turn, disruptions to truck traffic in and out of the port — from 16 months to 28 months. The Vincent Thomas Bridge is crossed daily by 53,000 vehicles, about 3,400 of which are heavy-duty trucks, according to Caltrans. But without the additional clearance under the bridge, access to three of Los Angeles’ six container terminals will remain limited to vessels with 15,000 TEUs of capacity. Increasing the clearance to 211 feet will allow super-post-Panamax vessels with up to 23,000 TEUs of capacity to serve Yusen Terminals, TraPac and the West Basin Container Terminal, according to Gene Seroka, executive director at the Port of Los Angeles. Terminal operators and industry representatives joined Seroka in Sacramento on Friday to discuss the details of the port’s proposal with Caltrans officials. “We believe they’re willing to listen. We began talking about this months ago,” Seroka told the Journal of Commerce Thursday, adding that he expects Caltrans to announce a decision “soon.” <h3>One fell swoop? </h3>Caltrans representatives in late May told the Propeller Club of Los Angeles the agency <a href="https://www.joc.com/article/la-port-stakeholders-warming-to-plan-to-mitigate-impact-of-bridge-project-6013847">must address the 62-year-old bridge’s structural defects</a>, which have been judged to be a safety hazard. Caltrans’ initial plans included resurfacing the deck of the bridge and replacing its railings, fences and median barrier. At the Propeller Club meeting, Caltrans representatives said construction would begin in early 2026 and would involve one-directional lane closures at night, followed by complete closure of the bridge from November 2026 to March 2028. The port estimates its proposal to raise the height of the bridge will delay completion of the project into 2029. However, Seroka said it would make more sense to do the bridge repairs and raise the structure all at once rather than having to return some years later to finish the job. He pointed to the project to <a href="https://www.joc.com/article/us-gulf-trade-momentum-puts-focus-on-houston-port-channel-widening-5251013">raise the height of the Bayonne Bridge</a> that connects New Jersey with Staten Island as the model that could be used in Los Angeles. Caltrans said it is well along in designating and repaving detour routes in the harbor area to prepare for when construction shuts down the bridge. Caltrans said it is also developing a real-time communications network to update motorists and truckers on traffic conditions. Seroka said access by the largest and most efficient ships in use today will not only increase the effective capacity of Yusen, TraPac and West Basin by 20%, but will also attract the newest, greenest vessels afloat. Those container ships are often equipped with fuel tanks that carry alternatives to traditional higher-emission bunker fuel, he said. As for the increased cost, Seroka said he has lined up commitments of private equity financing, including from banks, pension funds and industry sources, which he planned to detail at Friday’s meeting with Caltrans in Sacramento. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The Port of Los Angeles and its industry stakeholders are trying to convince the California Department of Transportation (Caltrans) to expand a key bridge project to allow ships up to 23,000 TEUs to call the other half of its terminals. The port says expanding the Vincent Thomas Bridge redecking project to include raising the height of the bridge by 26 feet will increase the total cost from $1.5 billion to $2.2 billion and extend its timeline — and, in turn, disruptions to truck traffic in and out of the port — from 16 months to 28 months. The Vincent Thomas Bridge is crossed daily by 53,000 vehicles, about 3,400 of which are heavy-duty trucks, according to Caltrans. But without the additional clearance under the bridge, access to three of Los Angeles’ six container terminals will remain limited to vessels with 15,000 TEUs of capacity. Increasing the clearance to 211 feet will allow super-post-Panamax vessels with up to 23,000 TEUs of capacity to serve Yusen Terminals, TraPac and the West Basin Container Terminal, according to Gene Seroka, executive director at the Port of Los Angeles. Terminal operators and industry representatives joined Seroka in Sacramento on Friday to discuss the details of the port’s proposal with Caltrans officials. “We believe they’re willing to listen. We began talking about this months ago,” Seroka told the Journal of Commerce Thursday, adding that he expects Caltrans to announce a decision “soon.” One fell swoop? Caltrans representatives in late May told the Propeller Club of Los Angeles the agency must address the 62-year-old bridge’s structural defects , which have been judged to be a safety hazard. Caltrans’ initial plans included resurfacing the deck of the bridge and replacing its railings, fences and median barrier. At the Propeller Club meeting, Caltrans representatives said construction would begin in early 2026 and would involve one-directional lane closures at night, followed by complete closure of the bridge from November 2026 to March 2028. The port estimates its proposal to raise the height of the bridge will delay completion of the project into 2029. However, Seroka said it would make more sense to do the bridge repairs and raise the structure all at once rather than having to return some years later to finish the job. He pointed to the project to raise the height of the Bayonne Bridge that connects New Jersey with Staten Island as the model that could be used in Los Angeles. Caltrans said it is well along in designating and repaving detour routes in the harbor area to prepare for when construction shuts down the bridge. Caltrans said it is also developing a real-time communications network to update motorists and truckers on traffic conditions. Seroka said access by the largest and most efficient ships in use today will not only increase the effective capacity of Yusen, TraPac and West Basin by 20%, but will also attract the newest, greenest vessels afloat. Those container ships are often equipped with fuel tanks that carry alternatives to traditional higher-emission bunker fuel, he said. As for the increased cost, Seroka said he has lined up commitments of private equity financing, including from banks, pension funds and industry sources, which he planned to detail at Friday’s meeting with Caltrans in Sacramento. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port infrastructure

LA port wants California to raise bridge to accommodate big ships

<div class="phx-topic abstract-wrapper">The Gulf Coast port faced the potential that later US actions against Chinese ship-to-shore cranes would raise costs more if it deferred delivery. </div>

The Gulf Coast port faced the potential that later US actions against Chinese ship-to-shore cranes would raise costs more if it deferred delivery.

<div class="phx-topic">Port Freeport is taking direct delivery of two Chinese-made ship-to-shore cranes, determining that the cost of the current US tariffs against China outweigh the risk of further punitive tariffs against that country’s maritime industry. Port Freeport said in a statement to the Journal of Commerce that it plans to install and commission two new super-Post-Panamax cranes manufactured by China’s ZPMC before the end of the calendar year. The cranes arrived at the port this week, were entered into US Customs, and the “applicable tariff has been paid.”<a href="https://www.joc.com/article/ports-america-to-pay-30-tariff-on-china-made-ship-to-shore-crane-6080582">Chinese cranes are subject to a 30% import duty</a> that is the result of an August trade truce between the US and China, with the Trump administration agreeing to that baseline tariff before the Nov. 10 deadline for a new trade deal. Port Freeport will face a $7.5 million bill at the current tariff rate. The cranes are arriving as Freeport prepares for a deepening project that will bring its ship channel down to 56 feet from 51 feet. Port Freeport prepared to put the cranes into a bonded warehouse to defer any import duties, according to meeting minutes of Port Freeport’s commission. That would give the port time for US-China trade negotiations to take place or the US Supreme Court to rule that Trump’s tariffs were illegal. However, commission staff said the port faced the risk of an additional tariff up to 100% from the US Trade Representative’s (USTR’s) proposed action against Chinese crane makers. While the USTR has not made a final decision on the proposed action, commission staff said they understand a decision is coming in October. Port Freeport was among those that <a href="https://www.joc.com/article/ports-look-to-delay-proposed-us-tariffs-on-chinese-made-cranes-6007628">provided feedback to the USTR</a> about its proposal, saying in May that it would face a $25 million USTR tariff bill on cranes ordered in November 2023. “Port Freeport and other U.S. seaports with cranes under contract are in an untenable situation,” according to its written report. “If the cranes are put in customs bonded warehouse status, it’s unlikely that tariffs will go lower than 30%; however, there is a greater risk the rates could go higher,” commission staff said. Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

Port Freeport is taking direct delivery of two Chinese-made ship-to-shore cranes, determining that the cost of the current US tariffs against China outweigh the risk of further punitive tariffs against that country’s maritime industry. Port Freeport said in a statement to the Journal of Commerce that it plans to install and commission two new super-Post-Panamax cranes manufactured by China’s ZPMC before the end of the calendar year. The cranes arrived at the port this week, were entered into US Customs, and the “applicable tariff has been paid.” Chinese cranes are subject to a 30% import duty that is the result of an August trade truce between the US and China, with the Trump administration agreeing to that baseline tariff before the Nov. 10 deadline for a new trade deal. Port Freeport will face a $7.5 million bill at the current tariff rate. The cranes are arriving as Freeport prepares for a deepening project that will bring its ship channel down to 56 feet from 51 feet. Port Freeport prepared to put the cranes into a bonded warehouse to defer any import duties, according to meeting minutes of Port Freeport’s commission. That would give the port time for US-China trade negotiations to take place or the US Supreme Court to rule that Trump’s tariffs were illegal. However, commission staff said the port faced the risk of an additional tariff up to 100% from the US Trade Representative’s (USTR’s) proposed action against Chinese crane makers. While the USTR has not made a final decision on the proposed action, commission staff said they understand a decision is coming in October. Port Freeport was among those that provided feedback to the USTR about its proposal, saying in May that it would face a $25 million USTR tariff bill on cranes ordered in November 2023. “Port Freeport and other U.S. seaports with cranes under contract are in an untenable situation,” according to its written report. “If the cranes are put in customs bonded warehouse status, it’s unlikely that tariffs will go lower than 30%; however, there is a greater risk the rates could go higher,” commission staff said. Contact Michael Angell at michael.angell@spglobal.com

Transport, Trade and Regulation News

Marine terminals

Freeport pays crane tariffs to avoid USTR fee risk

<div class="phx-topic abstract-wrapper">The jump in blank sailings comes as spot rates to the West Coast have fallen 30% over the past three weeks, with East Coast prices down almost 20%.</div>

The jump in blank sailings comes as spot rates to the West Coast have fallen 30% over the past three weeks, with East Coast prices down almost 20%.

<div class="phx-topic">Trans-Pacific container lines will accelerate blank sailings over the next four weeks in an effort to stabilize spot rates that are continuing to fall amid an unusually soft pre-Golden Week market. The reduction in planned capacity for October has increased from 3.8% to 13.6% on the Asia-North America West Coast trade and from 4.8% to 14.4% on the Asia to East Coast lane, Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in this week’s Sunday Spotlight newsletter. That comes as spot rates to the West Coast have fallen 30% over the past three weeks, with East Coast prices down almost 20%. “The blanks won’t increase the [spot] rates, they will just prevent a further freefall, and with all of the announced blank sailings, there will probably be some ad hoc blank sailings that haven’t been announced yet,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. “We could still see more action.” When compared with capacity reductions in recent years, “the current level of capacity reductions have fully met that threshold on Asia-North America East Coast ... while partially meeting that threshold on Asia-North America West Coast,” Murphy said. Almost 17% of capacity from Asia into North America will be blanked in October, up from about 10% in September, according to maritime intelligence provider eeSea. Spot rates from Asia to the West Coast had fallen to $1,400 per FEU as of Sept. 24, down from $2,025 on Sept. 5, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. East Coast rates of $2,433 per FEU are down from $3,000 on Sept. 5. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8c13a3e-9f5a-412f-8741-adbf5e1a7779"></dynamic-object></div>Forwarders this week said some larger carriers have already begun to undercut those rates. One forwarder told the Journal of Commerce some larger lines are offering $1,350 per FEU to the West Coast and sub-$2,400 per FEU to the East Coast. “Are we getting near the bottom? I would think so,” the source said, adding those rates have been extended through Oct. 14. “How much lower can they go? They’ve been going down on almost a daily basis,” said Chris Sur, executive vice president of ocean freight logistics at Unique Logistics International. A carrier executive said some of the smaller lines are also contributing to the falling spot rates by offering sub-$1,400 rates to the West Coast. “They want to grab what cargo they can,” the source said. <h3>Further capacity reductions in Q4? </h3>Amid the current capacity reductions, Tejwani said the global idle fleet may begin to increase in the fourth quarter “now that there won’t be much demand for the next three to four months.” Forwarders and carriers anticipate a soft fourth quarter because the frontloading of peak season cargo prevented what is normally a busy September–October period in the trans-Pacific. Also, because Lunar New Year falls on Feb. 17, 2026, retailers are expected to shorten their inventory carrying period by waiting until January to ship their spring merchandise. “[Carriers] continue to pull capacity out of this market and it won’t be brought back into service,” Tejwani said. The idle fleet is just 0.5% of total liner capacity, according to a Sept. 1 report from the maritime intelligence company AXS Marine, which owns Alphaliner. Midsize retailers have access now to spot rates that are lower than the fixed rates they signed for in their 2025–26 service contracts in May. The service contract rates for midsize shippers <a href="https://www.joc.com/article/ocean-carriers-flex-tonnage-control-but-overcapacity-is-mounting-6030004">approached $2,000 per FEU to the West Coast</a> and about $1,000 per FEU higher to the East Coast. The breakeven rate in terms of covering carriers’ fixed costs varies from carrier to carrier based on their operating efficiency and the size of the vessels they deploy, but at the current spot rate levels, some lines may not be covering their fixed costs. “At $1,350, some may already be there,” said the forwarder source. Sur said how carriers respond to the Golden Week factory closures in Asia will be crucial in their attempt to find a bottom for spot rates. “I think [spot rates] have gone low enough,” he said. 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>

Trans-Pacific container lines will accelerate blank sailings over the next four weeks in an effort to stabilize spot rates that are continuing to fall amid an unusually soft pre-Golden Week market. The reduction in planned capacity for October has increased from 3.8% to 13.6% on the Asia-North America West Coast trade and from 4.8% to 14.4% on the Asia to East Coast lane, Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in this week’s Sunday Spotlight newsletter. That comes as spot rates to the West Coast have fallen 30% over the past three weeks, with East Coast prices down almost 20%. “The blanks won’t increase the [spot] rates, they will just prevent a further freefall, and with all of the announced blank sailings, there will probably be some ad hoc blank sailings that haven’t been announced yet,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. “We could still see more action.” When compared with capacity reductions in recent years, “the current level of capacity reductions have fully met that threshold on Asia-North America East Coast ... while partially meeting that threshold on Asia-North America West Coast,” Murphy said. Almost 17% of capacity from Asia into North America will be blanked in October, up from about 10% in September, according to maritime intelligence provider eeSea. Spot rates from Asia to the West Coast had fallen to $1,400 per FEU as of Sept. 24, down from $2,025 on Sept. 5, according to Platts, a sister company of the Journal of Commerce within S&P Global. East Coast rates of $2,433 per FEU are down from $3,000 on Sept. 5. Forwarders this week said some larger carriers have already begun to undercut those rates. One forwarder told the Journal of Commerce some larger lines are offering $1,350 per FEU to the West Coast and sub-$2,400 per FEU to the East Coast. “Are we getting near the bottom? I would think so,” the source said, adding those rates have been extended through Oct. 14. “How much lower can they go? They’ve been going down on almost a daily basis,” said Chris Sur, executive vice president of ocean freight logistics at Unique Logistics International. A carrier executive said some of the smaller lines are also contributing to the falling spot rates by offering sub-$1,400 rates to the West Coast. “They want to grab what cargo they can,” the source said. Further capacity reductions in Q4? Amid the current capacity reductions, Tejwani said the global idle fleet may begin to increase in the fourth quarter “now that there won’t be much demand for the next three to four months.” Forwarders and carriers anticipate a soft fourth quarter because the frontloading of peak season cargo prevented what is normally a busy September–October period in the trans-Pacific. Also, because Lunar New Year falls on Feb. 17, 2026, retailers are expected to shorten their inventory carrying period by waiting until January to ship their spring merchandise. “[Carriers] continue to pull capacity out of this market and it won’t be brought back into service,” Tejwani said. The idle fleet is just 0.5% of total liner capacity, according to a Sept. 1 report from the maritime intelligence company AXS Marine, which owns Alphaliner. Midsize retailers have access now to spot rates that are lower than the fixed rates they signed for in their 2025–26 service contracts in May. The service contract rates for midsize shippers approached $2,000 per FEU to the West Coast and about $1,000 per FEU higher to the East Coast. The breakeven rate in terms of covering carriers’ fixed costs varies from carrier to carrier based on their operating efficiency and the size of the vessels they deploy, but at the current spot rate levels, some lines may not be covering their fixed costs. “At $1,350, some may already be there,” said the forwarder source. Sur said how carriers respond to the Golden Week factory closures in Asia will be crucial in their attempt to find a bottom for spot rates. “I think [spot rates] have gone low enough,” he said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

Trans-Pacific

Container Shipping News

Trans-Pacific capacity cuts on the rise as carriers look to stem rate slide

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">A regulation change that went into effect over the weekend allows Beijing to penalize and block vessels from countries that it accuses of targeting its own shipping activities. </div>

A regulation change that went into effect over the weekend allows Beijing to penalize and block vessels from countries that it accuses of targeting its own shipping activities.

<div class="phx-topic">China has amended its maritime regulations to allow it to penalize and restrict vessels of countries accused of targeting its shipping operations, flexing its power and raising the stakes just two weeks before a US tax on Chinese operators and shipbuilding takes effect. China Premier Li Qiang has signed into law an amendment that took effect Sunday, laying the groundwork for China to block not just vessels, but also data, information and other maritime services of other countries it wishes to target, according to an order from China’s State Council seen by the Journal of Commerce. The amendment keeps the door open for conciliation through treaties and agreements, which comes as the Trump administration seeks to negotiate a larger trade deal with China. The move by Beijing comes ahead of the Oct. 14 date when US Customs and Border Protection will begin collecting special taxes on ships calling US ports that are operated by China-based companies or were built in China. The US has accused China of unfairly subsidizing its shipbuilding industry to establish global maritime dominance and is leveling the sharpest taxes on Cosco Shipping and its OOCL subsidiary. Container lines not based in China <a href="https://www.joc.com/article/chinese-tonnage-moving-out-of-us-container-trade-ahead-of-new-fees-xeneta-6081320">have shifted China-built ships out of US services</a> and replaced them with vessels from South Korea and elsewhere to avoid the new fees. Major carriers including <a href="https://www.joc.com/article/msc-ready-for-us-port-fees-after-network-changes-ceo-6079762">Maersk and Mediterranean Shipping Co.</a> have said in recent weeks they won’t need to levy a surcharge to recoup costs from the new fee. Cosco and OOCL, which together handle the largest share of US imports from Asia, have signaled they will continue to operate in the US trades. The port fees, <a href="https://www.joc.com/article/us-port-fees-could-exceed-2b-for-cosco-oocl-hsbc-6077305">estimated by investment bank HSBC to cost the two Chinese carriers at least $2 billion in the first year</a>, will rise incrementally over the next four years. The US Trade Representative (USTR) is expected in the coming week to release an FAQ regarding the so-called Section 301 investigation into China’s maritime activities and respond to requests for clarifications and changes on the US new tax, according to one person close to the matter. The investigation targets Chinese-built chassis, container equipment and cranes, some of which are being <a href="https://www.joc.com/article/freeport-pays-crane-tariffs-to-avoid-ustr-fee-risk-6087337">received by US ports this month before the Oct. 14 deadline</a>. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

China has amended its maritime regulations to allow it to penalize and restrict vessels of countries accused of targeting its shipping operations, flexing its power and raising the stakes just two weeks before a US tax on Chinese operators and shipbuilding takes effect. China Premier Li Qiang has signed into law an amendment that took effect Sunday, laying the groundwork for China to block not just vessels, but also data, information and other maritime services of other countries it wishes to target, according to an order from China’s State Council seen by the Journal of Commerce. The amendment keeps the door open for conciliation through treaties and agreements, which comes as the Trump administration seeks to negotiate a larger trade deal with China. The move by Beijing comes ahead of the Oct. 14 date when US Customs and Border Protection will begin collecting special taxes on ships calling US ports that are operated by China-based companies or were built in China. The US has accused China of unfairly subsidizing its shipbuilding industry to establish global maritime dominance and is leveling the sharpest taxes on Cosco Shipping and its OOCL subsidiary. Container lines not based in China have shifted China-built ships out of US services and replaced them with vessels from South Korea and elsewhere to avoid the new fees. Major carriers including Maersk and Mediterranean Shipping Co. have said in recent weeks they won’t need to levy a surcharge to recoup costs from the new fee. Cosco and OOCL, which together handle the largest share of US imports from Asia, have signaled they will continue to operate in the US trades. The port fees, estimated by investment bank HSBC to cost the two Chinese carriers at least $2 billion in the first year , will rise incrementally over the next four years. The US Trade Representative (USTR) is expected in the coming week to release an FAQ regarding the so-called Section 301 investigation into China’s maritime activities and respond to requests for clarifications and changes on the US new tax, according to one person close to the matter. The investigation targets Chinese-built chassis, container equipment and cranes, some of which are being received by US ports this month before the Oct. 14 deadline . Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Supply chain

China flexes maritime power in response to coming US port fee

<div class="phx-topic abstract-wrapper">The shipbuilding interest would follow the carrier’s recent trio of container vessel reflaggings in India as it looks to develop a stronger profile in the subcontinent market. </div>

The shipbuilding interest would follow the carrier’s recent trio of container vessel reflaggings in India as it looks to develop a stronger profile in the subcontinent market.

<div class="phx-topic">CMA CGM is set to become the first major ocean carrier to build container ships in India, ordering three short-haul box ships with Cochin Shipyard Ltd. (CSL), India’s largest facility, industry sources tell the Journal of Commerce. While the final details are still being worked out, the planned newbuildings will most likely be liquefied natural gas (LNG)-powered vessels. An official announcement is expected in the coming weeks, but a CSL executive who did not want to be identified confirmed ongoing talks with CMA CGM, who did not respond to a request for comment. The shipbuilding interest builds on the carrier’s recent trio of container vessel reflaggings in India, with the CMA CGM Vitoria, CMA CGM Manaus and CMA CGM Diamond now part of a regional India-Red Sea “BIGEX” loop it runs jointly with two Middle East-based feeder operators. <h3>Government investing in shipbuilding </h3>The Indian government has been seeking industry support to rev up the country’s shipbuilding ecosystems through liberalization policies and incentive schemes, a push turbo-charged this week with the announcement of a whopping $8 billion maritime investment package. “The package introduces a four-pillar approach designed to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and implement legal, taxation and policy reforms to create a robust maritime infrastructure,” an official statement from the government said. CSL has already agreed to collaborate with South Korea’s HD Korea Shipbuilding &amp; Offshore Engineering on shipbuilding projects, with those efforts having yielded some positive results. Maersk in early 2025 struck a deal with CSL for ship repair/drydocking services in a near-term diversification strategy, with the potential to pursue shipbuilding opportunities in the longer term. “Our partnership with CSL is progressing well,” a Maersk spokesperson said. “We endeavor to have our first ship repair soon.” In another shot in the arm, Swan Defence and Heavy Industries -- India's largest private shipyard -- on Tuesday announced it had formed a strategic alliance with South Korea's Samsung Heavy Industries to jointly explore shipbuilding and heavy engineering projects.Mediterranean Shipping Co., the largest global operator of container tonnage, has also shown interest in Indian shipbuilding. MSC CEO Soren Toft in February met with Piyush Goyal, India’s minister of commerce and industry, to discuss a number of items, including shipbuilding and repair, according to local reports. Still, shipbuilding is not a “low-hanging fruit” opportunity for India to reap quickly because of its vast infrastructure and cost gaps with traditional marketplaces in East Asia, industry observers say. “Except for two yards, none of the [Indian] yards have a capacity of more than 10,000 deadweight tons, so the ships that we build will be limited to that size only,” said a local shipowner who did not want to be identified. “We have made some inquiries and found that our yards are completely priced out.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM is set to become the first major ocean carrier to build container ships in India, ordering three short-haul box ships with Cochin Shipyard Ltd. (CSL), India’s largest facility, industry sources tell the Journal of Commerce. While the final details are still being worked out, the planned newbuildings will most likely be liquefied natural gas (LNG)-powered vessels. An official announcement is expected in the coming weeks, but a CSL executive who did not want to be identified confirmed ongoing talks with CMA CGM, who did not respond to a request for comment. The shipbuilding interest builds on the carrier’s recent trio of container vessel reflaggings in India, with the CMA CGM Vitoria, CMA CGM Manaus and CMA CGM Diamond now part of a regional India-Red Sea “BIGEX” loop it runs jointly with two Middle East-based feeder operators. Government investing in shipbuilding The Indian government has been seeking industry support to rev up the country’s shipbuilding ecosystems through liberalization policies and incentive schemes, a push turbo-charged this week with the announcement of a whopping $8 billion maritime investment package. “The package introduces a four-pillar approach designed to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and implement legal, taxation and policy reforms to create a robust maritime infrastructure,” an official statement from the government said. CSL has already agreed to collaborate with South Korea’s HD Korea Shipbuilding & Offshore Engineering on shipbuilding projects, with those efforts having yielded some positive results. Maersk in early 2025 struck a deal with CSL for ship repair/drydocking services in a near-term diversification strategy, with the potential to pursue shipbuilding opportunities in the longer term. “Our partnership with CSL is progressing well,” a Maersk spokesperson said. “We endeavor to have our first ship repair soon.” In another shot in the arm, Swan Defence and Heavy Industries -- India's largest private shipyard -- on Tuesday announced it had formed a strategic alliance with South Korea's Samsung Heavy Industries to jointly explore shipbuilding and heavy engineering projects. Mediterranean Shipping Co., the largest global operator of container tonnage, has also shown interest in Indian shipbuilding. MSC CEO Soren Toft in February met with Piyush Goyal, India’s minister of commerce and industry, to discuss a number of items, including shipbuilding and repair, according to local reports. Still, shipbuilding is not a “low-hanging fruit” opportunity for India to reap quickly because of its vast infrastructure and cost gaps with traditional marketplaces in East Asia, industry observers say. “Except for two yards, none of the [Indian] yards have a capacity of more than 10,000 deadweight tons, so the ships that we build will be limited to that size only,” said a local shipowner who did not want to be identified. “We have made some inquiries and found that our yards are completely priced out.” Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM eyes shipbuilding plans for India in trade diversification strategy: sources

<div class="phx-topic abstract-wrapper">A federal appeals court said the agency made an unfair and arbitrary rule that allows ocean carriers to bill late fees to one set of contracted parties but not others, like truckers. </div>

A federal appeals court said the agency made an unfair and arbitrary rule that allows ocean carriers to bill late fees to one set of contracted parties but not others, like truckers.

<div class="phx-topic">The Federal Maritime Commission (FMC) made an “arbitrary and capricious” rule about who should pay detention and demurrage, which effectively blocked ocean carriers from billing their in-house truckers for late charges on containers, an appeals court says. A three-judge panel for the DC Court of Appeals on Tuesday ruled in favor of a petition by the World Shipping Council (WSC) to review an FMC rulemaking that stemmed from the passage of the Ocean Shipping Reform Act of 2022 (OSRA-22). The rulemaking sought to clarify who is responsible for charges on the delayed retrieval and return of containers to marine terminals. In February 2024, the FMC said that <a href="https://www.joc.com/article/fmcs-new-rules-to-prevent-truckers-from-being-hit-with-dd-bills-5225636">ocean carriers could only bill detention and demurrage to the party who contracted for ocean transportation</a>, or in some instances the consignee. The rule sought to prevent instances where port truckers said they were blocked from retrieving a container until they paid any fees associated with the shipment. While the FMC tried to clarify that the rule did not prevent ocean carriers from billing late charges to truckers under carrier haulage agreements, <a href="https://www.joc.com/article/ocean-carriers-seek-clarity-on-dd-billing-to-truckers-under-new-fmc-rules-5221906">the WSC challenged</a> the plain text of the rule as preventing that. The appellate court agreed with the WSC’s argument that there is a contradiction in allowing parties in a contract to bill each other in one instance but not in another instance. The court said the rule should be removed because it is “arbitrary and capricious.” While the FMC’s rule aimed to “confine the parties against who demurrage and detention charges may be levied to entities who are in a contractual relationship with the billing party, the commission, without adequate explanation, left out entities who are in such a contractual relationship while seemingly including others who are not,” according to the ruling. The FMC’s rulemaking attempted to protect parties that may not know the terms for when detention and demurrage could be billed. But the court determined that truckers in carrier haulage agreements with ocean carriers are aware of detention and demurrage provisions in those agreements, so they can be held responsible for those fees. “The trucker has precisely the kind of first-hand information from negotiating the contract that the commission views to be vital to allowing imposition of demurrage and detention fees,” the court said. Even though the WSC did not challenge the FMC’s determination that consignees could also be hit with detention and demurrage, the judges said the inclusion of consignees highlights the rule’s seeming contradiction because they may not have a contractual relationship with an ocean carrier. “There may well be sound explanations for allowing billing of consignees even absent privity, but the commission’s account of its decision to include consignees — which is found in the rule’s preamble — does not attempt to provide one,” the court said. The WSC said in a statement to the Journal of Commerce that it wants to work with the FMC on promulgating a rule “Incentivizing the on-time pickup and return of shipping containers to and from ports to prevent supply chain congestion.” “Consumers, shippers, truckers, port operators, and ocean carriers all benefit from a D&amp;D rule that ensures containers keep moving to where they’re scheduled to be, without delays and backups,” the WSC said. The FMC said in a statement to the Journal of Commerce the ruling only applied to one part of the agency’s entire rulemaking which aimed to better police how detention and demurrage are charged. Thirty-day deadlines for issuing and contesting the late fees and detailed information on invoices about how detention and demurrage are calculated remain enforceable by the agency. “Failing to include any of the required information eliminates any obligation of the billed party to pay the charges,” the FMC’s statement said. “The court’s ruling only addressed one section of the demurrage and detention rule, regarding who invoices can be sent to. The majority of the rule remains fully in effect.”Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Federal Maritime Commission (FMC) made an “arbitrary and capricious” rule about who should pay detention and demurrage, which effectively blocked ocean carriers from billing their in-house truckers for late charges on containers, an appeals court says. A three-judge panel for the DC Court of Appeals on Tuesday ruled in favor of a petition by the World Shipping Council (WSC) to review an FMC rulemaking that stemmed from the passage of the Ocean Shipping Reform Act of 2022 (OSRA-22). The rulemaking sought to clarify who is responsible for charges on the delayed retrieval and return of containers to marine terminals. In February 2024, the FMC said that ocean carriers could only bill detention and demurrage to the party who contracted for ocean transportation , or in some instances the consignee. The rule sought to prevent instances where port truckers said they were blocked from retrieving a container until they paid any fees associated with the shipment. While the FMC tried to clarify that the rule did not prevent ocean carriers from billing late charges to truckers under carrier haulage agreements, the WSC challenged the plain text of the rule as preventing that. The appellate court agreed with the WSC’s argument that there is a contradiction in allowing parties in a contract to bill each other in one instance but not in another instance. The court said the rule should be removed because it is “arbitrary and capricious.” While the FMC’s rule aimed to “confine the parties against who demurrage and detention charges may be levied to entities who are in a contractual relationship with the billing party, the commission, without adequate explanation, left out entities who are in such a contractual relationship while seemingly including others who are not,” according to the ruling. The FMC’s rulemaking attempted to protect parties that may not know the terms for when detention and demurrage could be billed. But the court determined that truckers in carrier haulage agreements with ocean carriers are aware of detention and demurrage provisions in those agreements, so they can be held responsible for those fees. “The trucker has precisely the kind of first-hand information from negotiating the contract that the commission views to be vital to allowing imposition of demurrage and detention fees,” the court said. Even though the WSC did not challenge the FMC’s determination that consignees could also be hit with detention and demurrage, the judges said the inclusion of consignees highlights the rule’s seeming contradiction because they may not have a contractual relationship with an ocean carrier. “There may well be sound explanations for allowing billing of consignees even absent privity, but the commission’s account of its decision to include consignees — which is found in the rule’s preamble — does not attempt to provide one,” the court said. The WSC said in a statement to the Journal of Commerce that it wants to work with the FMC on promulgating a rule “Incentivizing the on-time pickup and return of shipping containers to and from ports to prevent supply chain congestion.” “Consumers, shippers, truckers, port operators, and ocean carriers all benefit from a D&D rule that ensures containers keep moving to where they’re scheduled to be, without delays and backups,” the WSC said. The FMC said in a statement to the Journal of Commerce the ruling only applied to one part of the agency’s entire rulemaking which aimed to better police how detention and demurrage are charged. Thirty-day deadlines for issuing and contesting the late fees and detailed information on invoices about how detention and demurrage are calculated remain enforceable by the agency. “Failing to include any of the required information eliminates any obligation of the billed party to pay the charges,” the FMC’s statement said. “The court’s ruling only addressed one section of the demurrage and detention rule, regarding who invoices can be sent to. The majority of the rule remains fully in effect.” Contact Michael Angell at michael.angell@spglobal.com .

Appeals court strikes down FMC’s detention and demurrage billing rule

<div class="phx-topic abstract-wrapper">California must immediately stop issuing CDLs to drivers not “domiciled” in the state and revoke the licenses of unqualified drivers or face the loss of federal highway funds. </div>

California must immediately stop issuing CDLs to drivers not “domiciled” in the state and revoke the licenses of unqualified drivers or face the loss of federal highway funds.

<div class="phx-topic">The US Department of Transportation (USDOT) on Friday said it is cracking down on state licensing of “non-domiciled” commercial truck drivers, threatening states with the loss of millions of dollars in federal funds unless they comply with USDOT requirements. “Moving forward, non-citizens will not be eligible for a non-domiciled CDL (commercial driver’s license) unless they meet a much stricter set of rules, including an employment-based visa and undergoing a mandatory federal immigration status check,” USDOT said. The department spelled out its requirements for new non-domiciled CDL applicants — drivers who don’t permanently reside in the state issuing the license — in an interim final rule that will be published in the Sept. 29 edition of the Federal Register. But the USDOT also took specific additional action against California, ordering the state to immediately stop issuing non-domiciled CDLs and to identify all unexpired non-domiciled CDLs that fail to comply with USDOT rules and revoke them within 30 days. “California must get its act together immediately, or I will not hesitate to pull millions in funding,” US Secretary of Transportation Sean Duffy said in a statement. “To every other state around the country — find all improperly issued CDLs and revoke their licenses now.” <h3>Heightened enforcement effort </h3>The order is the latest push by USDOT to get states to adopt and enforce tougher driver licensing standards. Duffy in August gave California, Washington and New Mexico 30 days to <a href="https://www.joc.com/article/us-dot-presses-states-to-enforce-english-language-trucking-rules-6069884">adopt and enforce English-language proficiency (ELP) requirements</a> or risk losing funds. The USDOT’s latest move followed a nationwide audit of non-domiciled CDL licensing by states that found “systematic non-compliance" with federal rules across several states, including California, Colorado, Pennsylvania, South Dakota, Texas and Washington. “In California alone, more than 25% of non-domiciled CDLs reviewed were improperly issued,” the USDOT said in a statement. An unspecified number of these non-domiciled licenses went to foreign drivers in the US illegally, according to USDOT. USDOT’s Federal Motor Carrier Safety Administration (FMCSA) launched its nationwide audit of non-domiciled CDLs in June. USDOT did not release data on how many drivers with non-domiciled CDLs it believes are unqualified or in the country illegally. Non-domiciled CDLs are not issued to Mexican or Canadian truck drivers. Commercial driver’s licenses from Mexico and Canada are recognized in the US. The US State Department has suspended certain visas issued to foreign truck drivers, including the H-2B, E-2 and EB-3 visas. Only a small number of truck drivers are believed to hold such visas, with about 1,500 truck drivers receiving H-2B visas each year. Trucking groups including the Owner-Operator Independent Drivers Association and American Trucking Associations have been pushing USDOT to crack down on the issuance of non-domiciled CDLs, claiming thousands of unqualified drivers are obtaining them. Contact William B. Cassidy at <a href="mailto://bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

The US Department of Transportation (USDOT) on Friday said it is cracking down on state licensing of “non-domiciled” commercial truck drivers, threatening states with the loss of millions of dollars in federal funds unless they comply with USDOT requirements. “Moving forward, non-citizens will not be eligible for a non-domiciled CDL (commercial driver’s license) unless they meet a much stricter set of rules, including an employment-based visa and undergoing a mandatory federal immigration status check,” USDOT said. The department spelled out its requirements for new non-domiciled CDL applicants — drivers who don’t permanently reside in the state issuing the license — in an interim final rule that will be published in the Sept. 29 edition of the Federal Register. But the USDOT also took specific additional action against California, ordering the state to immediately stop issuing non-domiciled CDLs and to identify all unexpired non-domiciled CDLs that fail to comply with USDOT rules and revoke them within 30 days. “California must get its act together immediately, or I will not hesitate to pull millions in funding,” US Secretary of Transportation Sean Duffy said in a statement. “To every other state around the country — find all improperly issued CDLs and revoke their licenses now.” Heightened enforcement effort The order is the latest push by USDOT to get states to adopt and enforce tougher driver licensing standards. Duffy in August gave California, Washington and New Mexico 30 days to adopt and enforce English-language proficiency (ELP) requirements or risk losing funds. The USDOT’s latest move followed a nationwide audit of non-domiciled CDL licensing by states that found “systematic non-compliance" with federal rules across several states, including California, Colorado, Pennsylvania, South Dakota, Texas and Washington. “In California alone, more than 25% of non-domiciled CDLs reviewed were improperly issued,” the USDOT said in a statement. An unspecified number of these non-domiciled licenses went to foreign drivers in the US illegally, according to USDOT. USDOT’s Federal Motor Carrier Safety Administration (FMCSA) launched its nationwide audit of non-domiciled CDLs in June. USDOT did not release data on how many drivers with non-domiciled CDLs it believes are unqualified or in the country illegally. Non-domiciled CDLs are not issued to Mexican or Canadian truck drivers. Commercial driver’s licenses from Mexico and Canada are recognized in the US. The US State Department has suspended certain visas issued to foreign truck drivers, including the H-2B, E-2 and EB-3 visas. Only a small number of truck drivers are believed to hold such visas, with about 1,500 truck drivers receiving H-2B visas each year. Trucking groups including the Owner-Operator Independent Drivers Association and American Trucking Associations have been pushing USDOT to crack down on the issuance of non-domiciled CDLs, claiming thousands of unqualified drivers are obtaining them. Contact William B. Cassidy at bill.cassidy@spglobal.com .

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