<div class="phx-topic abstract-wrapper">Costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly BAFs.</div>

Costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly BAFs.

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<div class="phx-topic">Fuel prices that rocketed higher since the war with Iran began on Feb. 28 have so far added $5.5 billion to the bunker costs of container lines, according to Sea-Intelligence Maritime Analysis. Ocean carriers have rolled out emergency fuel surcharges in an urgent bid to recover that increase in operating costs, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">estimated at up to $50 million a week by Hapag-Lloyd</a>. “It is clear that if the (Strait of) Hormuz crisis persists, and hence fuel prices remain elevated, the industry would become clearly loss-making, unless the added fuel costs translate into higher freight rates,” Alan Murphy, CEO of Sea-Intelligence, wrote in his weekly Sunday Spotlight newsletter. “Spot rates have indeed been on the rise these past couple of weeks, especially on the Asia-Europe trade, implying that the process of passing on the added fuel costs is under way,” Murphy added. Bunker costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly bunker adjustment factors (BAFs). <a href="https://www.joc.com/article/demand-rising-on-asia-europe-ocean-trade-as-july-bunker-hike-looms-6225813">Those costs will be passed on to shippers in the third quarter</a> beginning July 1. Murphy put the scale of the additional fuel costs for the three-month period through May in context, noting that the first-quarter financial results for 2026 implied combined industry-wide revenue of $61 billion and earnings before interest and taxes (EBIT) of $2.7 billion. <h3>Peace prospects spark oil price drop</h3>While oil prices have fallen to a two-week low amid hopes that Washington and Tehran were close to a peace deal, the fragility of the current ceasefire was illustrated Monday by renewed US strikes and return fire from Iranian positions. Very low-sulfur fuel oil (VLSFO) was trading at $782 per metric ton (mt) Monday, down 11% since a mid-May high, according to Ship &amp; Bunker. High-sulfur fuel oil (HSFO) is trading at a substantial discount to VLSFO at $628/mt, down 13% since mid-May. To arrive at a daily added fuel cost per-container for the industry from the Middle East war, Sea-Intelligence used an estimated fuel use of 70 million tons per year, with 47.2 million TEUs shipped in the first three months of 2026, according to Container Trades Statistics (CTS). “The CTS data period is not quite the same as the fuel premium period,” Murphy acknowledged. “However, as a ballpark estimate, this implies an added fuel cost on average of $117/TEU.” Whether a vessel was equipped with an exhaust scrubber or not would also influence the cost per container. “Vessels equipped with a scrubber can use the lower-priced (HSFO), whereas vessels without a scrubber need to purchase the more expensive VLSFO,” Murphy said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Fuel prices that rocketed higher since the war with Iran began on Feb. 28 have so far added $5.5 billion to the bunker costs of container lines, according to Sea-Intelligence Maritime Analysis. Ocean carriers have rolled out emergency fuel surcharges in an urgent bid to recover that increase in operating costs, estimated at up to $50 million a week by Hapag-Lloyd . “It is clear that if the (Strait of) Hormuz crisis persists, and hence fuel prices remain elevated, the industry would become clearly loss-making, unless the added fuel costs translate into higher freight rates,” Alan Murphy, CEO of Sea-Intelligence, wrote in his weekly Sunday Spotlight newsletter. “Spot rates have indeed been on the rise these past couple of weeks, especially on the Asia-Europe trade, implying that the process of passing on the added fuel costs is under way,” Murphy added. Bunker costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly bunker adjustment factors (BAFs). Those costs will be passed on to shippers in the third quarter beginning July 1. Murphy put the scale of the additional fuel costs for the three-month period through May in context, noting that the first-quarter financial results for 2026 implied combined industry-wide revenue of $61 billion and earnings before interest and taxes (EBIT) of $2.7 billion. Peace prospects spark oil price drop While oil prices have fallen to a two-week low amid hopes that Washington and Tehran were close to a peace deal, the fragility of the current ceasefire was illustrated Monday by renewed US strikes and return fire from Iranian positions. Very low-sulfur fuel oil (VLSFO) was trading at $782 per metric ton (mt) Monday, down 11% since a mid-May high, according to Ship & Bunker. High-sulfur fuel oil (HSFO) is trading at a substantial discount to VLSFO at $628/mt, down 13% since mid-May. To arrive at a daily added fuel cost per-container for the industry from the Middle East war, Sea-Intelligence used an estimated fuel use of 70 million tons per year, with 47.2 million TEUs shipped in the first three months of 2026, according to Container Trades Statistics (CTS). “The CTS data period is not quite the same as the fuel premium period,” Murphy acknowledged. “However, as a ballpark estimate, this implies an added fuel cost on average of $117/TEU.” Whether a vessel was equipped with an exhaust scrubber or not would also influence the cost per container. “Vessels equipped with a scrubber can use the lower-priced (HSFO), whereas vessels without a scrubber need to purchase the more expensive VLSFO,” Murphy said. Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Asia-Europe

Container Shipping News

Maritime

Middle East war adds $5.5 billion to ocean carriers' bunker costs: Sea-Intelligence

<div class="phx-topic abstract-wrapper">Ag exporters have always faced logistical challenges because their crops are grown in the interior US and shipped through ports located hundreds of miles away; those challenges seem to be growing, the AgTC conference heard this week. </div>

Ag exporters have always faced logistical challenges because their crops are grown in the interior US and shipped through ports located hundreds of miles away; those challenges seem to be growing, the AgTC conference heard this week.

<div class="phx-topic">US agricultural shippers are facing increasing and costly challenges in getting their goods to global markets as the war in the Middle East and schedule changes by ocean carriers upset the cadence of their operations. “Container availability, schedule changes, rail delays from the interior of the country; these things can combine and create sort of a monster for us,” Christopher Jennum, global manager of export logistics and marketing at the Dairy Farmers of America, told the annual Agriculture Transportation Coalition (AgTC) conference this week in Tacoma. Ag exporters have always faced logistical challenges because their crops are grown in the interior US and shipped through ports located hundreds of miles away. This makes it difficult for exporters to secure empty containers, plan their rail moves to the ports, and meet marine terminal requirements for the on-time delivery of their boxes. Shippers must commit to delivery of their containers weeks ahead of time. “They’re committing to an export window that hasn’t formed,” said Vijay Harrell, CEO of logistics provider Tradelanes. Additionally, ag exporters are operating in a transportation environment designed decades ago and not equipped to handle modern day disruptions such as the pandemic and now the war in the Middle East. “I think the system that has carried us this far is starting to show some wear and tear,” Ken O’Brien, CEO of Gemini Shippers Association, told AgTC. “The disruption we face has somehow fundamentally changed our industry.” That wear and tear has affected the reliability of service, while communication between carriers and their customers has been compromised and the ability to accurately forecast supply and demand has been degraded, he said. “Both (carriers and customers) have to do a better job as to how we forecast demand,” O’Brien said. The fact that ag exports originate across a vast heartland and are shipped through a number of gateways makes it difficult for ocean carriers to consistently provide the equipment and services their customers demand and need, said Patrick “PJ” McGrath, senior vice president for commercial at Hapag-Lloyd in North America. If all imports and exports went through either Los Angeles-Long Beach or New York-New Jersey, serving shippers in the interior would be easy and much less costly for the ocean carriers. They’re not, but there is a strategy, McGrath said. “So how do I look at each individual piece? It boils down to communication (between the parties),” he said. <h3>Communication among parties is crucial </h3>Carriers must do a better job of communicating disruptions in vessel scheduling and services, as well as the fuel surcharges they are implementing due to the war in the Middle East, said Irina Brown, cotton export specialist at Dunavant Global Logistics Group. “The biggest problem is managing communication during disruptions, but it is super hard when you have trouble receiving responses from carriers, especially during the past year,” Brown told AgTC. “We get responses from carriers that make no sense.” Rapidly rising fuel costs and accompanying surcharges, which vary from carrier to carrier, have become a huge cost burden for shippers, said Cynthia Tathwell, supply chain logistics specialist at Columbia Grain. “I’ve seen unjustified rises in rates and billing practices outside of published tariffs,” Tathwell said. “It’s a pattern across the industry.” She added that she has challenged these charges, which has its own set of problems, noting that disputes “equal time and money for both sides.” <h3>FMC ‘has teeth’ </h3>Ag exporters also face ongoing problems with transportation providers in the levying of detention fees for the late return of equipment to the marine terminal or railyard and demurrage charges for containers remaining at a marine terminal or railyard after free storage time has expired. Laura DiBella, chairman of the Federal Maritime Commission (FMC), told the ag shippers the agency is aware of these practices and will move to stop any unfair implementation of detention and demurrage fees. “You are going to see plenty more on that,” DiBella told AgTc. “We’re definitely taking a more aggressive stance.” Whether it’s addressing unfair detention and demurrage fees or fuel surcharge issues, the FMC has various investigatory and enforcement powers it will use to move against unfair practices, she said. “The FMC has teeth,” DiBella said. “It has very big teeth.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

US agricultural shippers are facing increasing and costly challenges in getting their goods to global markets as the war in the Middle East and schedule changes by ocean carriers upset the cadence of their operations. “Container availability, schedule changes, rail delays from the interior of the country; these things can combine and create sort of a monster for us,” Christopher Jennum, global manager of export logistics and marketing at the Dairy Farmers of America, told the annual Agriculture Transportation Coalition (AgTC) conference this week in Tacoma. Ag exporters have always faced logistical challenges because their crops are grown in the interior US and shipped through ports located hundreds of miles away. This makes it difficult for exporters to secure empty containers, plan their rail moves to the ports, and meet marine terminal requirements for the on-time delivery of their boxes. Shippers must commit to delivery of their containers weeks ahead of time. “They’re committing to an export window that hasn’t formed,” said Vijay Harrell, CEO of logistics provider Tradelanes. Additionally, ag exporters are operating in a transportation environment designed decades ago and not equipped to handle modern day disruptions such as the pandemic and now the war in the Middle East. “I think the system that has carried us this far is starting to show some wear and tear,” Ken O’Brien, CEO of Gemini Shippers Association, told AgTC. “The disruption we face has somehow fundamentally changed our industry.” That wear and tear has affected the reliability of service, while communication between carriers and their customers has been compromised and the ability to accurately forecast supply and demand has been degraded, he said. “Both (carriers and customers) have to do a better job as to how we forecast demand,” O’Brien said. The fact that ag exports originate across a vast heartland and are shipped through a number of gateways makes it difficult for ocean carriers to consistently provide the equipment and services their customers demand and need, said Patrick “PJ” McGrath, senior vice president for commercial at Hapag-Lloyd in North America. If all imports and exports went through either Los Angeles-Long Beach or New York-New Jersey, serving shippers in the interior would be easy and much less costly for the ocean carriers. They’re not, but there is a strategy, McGrath said. “So how do I look at each individual piece? It boils down to communication (between the parties),” he said. Communication among parties is crucial Carriers must do a better job of communicating disruptions in vessel scheduling and services, as well as the fuel surcharges they are implementing due to the war in the Middle East, said Irina Brown, cotton export specialist at Dunavant Global Logistics Group. “The biggest problem is managing communication during disruptions, but it is super hard when you have trouble receiving responses from carriers, especially during the past year,” Brown told AgTC. “We get responses from carriers that make no sense.” Rapidly rising fuel costs and accompanying surcharges, which vary from carrier to carrier, have become a huge cost burden for shippers, said Cynthia Tathwell, supply chain logistics specialist at Columbia Grain. “I’ve seen unjustified rises in rates and billing practices outside of published tariffs,” Tathwell said. “It’s a pattern across the industry.” She added that she has challenged these charges, which has its own set of problems, noting that disputes “equal time and money for both sides.” FMC ‘has teeth’ Ag exporters also face ongoing problems with transportation providers in the levying of detention fees for the late return of equipment to the marine terminal or railyard and demurrage charges for containers remaining at a marine terminal or railyard after free storage time has expired. Laura DiBella, chairman of the Federal Maritime Commission (FMC), told the ag shippers the agency is aware of these practices and will move to stop any unfair implementation of detention and demurrage fees. “You are going to see plenty more on that,” DiBella told AgTc. “We’re definitely taking a more aggressive stance.” Whether it’s addressing unfair detention and demurrage fees or fuel surcharge issues, the FMC has various investigatory and enforcement powers it will use to move against unfair practices, she said. “The FMC has teeth,” DiBella said. “It has very big teeth.” Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

Supply chain

US ag shippers navigate creaky supply chain not built for modern disruption

<div class="phx-topic abstract-wrapper">Rising fuel costs, reliable service and higher rates amid the end of the four-year recession in trucking are helping convert more freight to rail in the eastern US. </div>

Rising fuel costs, reliable service and higher rates amid the end of the four-year recession in trucking are helping convert more freight to rail in the eastern US.

<div class="phx-topic">US domestic intermodal demand has rebounded sharply since the war with Iran began, with the growth coming, surprisingly, on lanes east of the Mississippi River rather than the long-haul West Coast corridors that typically offer the biggest fuel advantage over trucking. Intermodal providers have historically struggled to compete with trucking in the eastern US because the shorter lengths of haul mean less cost savings than transcontinental moves. But railroads and intermodal marketing companies (IMCs) say rising fuel costs, higher rates amid the end of the four-year recession in the trucking industry, and reliable service are helping convert more freight to rail in the east. Combined domestic container traffic in March and April was up 9% over the same period in 2025, according to the International Association of North America (IANA), a surge not seen since the pandemic-related lockdowns six years ago. Freight originating in the Northeast, South-Central and Southeast US have all jumped more than 10% year over year. “You’re finally seeing us coming out of ... the worst trucking cycle that we’ve witnessed — at least the worst one certainly that I’ve seen,” Kevin Boone, CFO of CSX Transportation, said at the Bank of America Annual Industrials Conference on May 13. “We’re seeing [freight] start to convert over to rail and with our service product, we’re pretty optimistic that can continue here.” The strongest gains have been concentrated in eastern corridors. Traffic from the Northeast to the Southeast jumped 17.7% year over year in March and April, according to IANA, while Southeast-to-Northeast traffic on the same corridor rose 16%. Midwest-to-Northeast volume increased 17.6%. Those are three routes where CSX will be able to better compete after beginning double-stack intermodal service through the Howard Street Tunnel in Baltimore <a href="https://www.joc.com/article/soaring-truck-rates-power-major-rebound-in-domestic-intermodal-volume-6208736">earlier this month</a>. The upgrade allows CSX to compete better against Norfolk Southern (NS) on freight between Atlanta and Newark and cuts about a day from transit times between Chicago and Newark. That gives CSX a chance to capture more of the eastern demand upswing, along with private-asset intermodal partners such as J.B. Hunt Transport Services. J.B. Hunt executives are signaling the same strong demand pattern in the east, with shippers beginning to save more money on freight in the region. “The discount has grown from 15% to 20% in the last six to eight weeks,” Darren Field, the company’s president of intermodal, said this week at Wolfe Research’s Annual Global Transportation and Industrials Conference. “I don’t know that we can close that 20% discount gap back to 15% in just this cycle, but I would anticipate certainly our intermodal pricing opportunity to start to improve [in the 2027 bid cycle].” <h3>Rebound tied to diesel prices? </h3>The Journal of Commerce <a href="https://www.joc.com/resources/special-reports/intermodal-savings-index">Intermodal Savings Index</a> also showed the steepest increases in rail savings sequentially compared with truckload in March occurred in the eastern US. Even so, Norfolk Southern cautioned that the rebound may be tied more to higher diesel prices than to a structural change, meaning it could fade if energy markets ease. “If the war ends in the next couple of weeks and fuel prices start going back down over the next few months, does that dynamic persist or does it reverse back to where it was? Hard to say,” NS CEO Mark George said at the Wolfe Research conference. Service will help determine whether intermodal keeps gaining share from trucking on the East Coast. CSX’s intermodal train speed was 7.2% faster from March through the first week of May than during the same period last year, while Norfolk Southern’s speeds were 1.1% slower over the same span, according to the Association of American Railroads. A disruption at CSX’s Fairburn intermodal terminal in Atlanta in April sharply increased truck turn times, in some cases forcing drivers to wait hours and pushing deliveries to the next day. The issue has since been resolved. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

US domestic intermodal demand has rebounded sharply since the war with Iran began, with the growth coming, surprisingly, on lanes east of the Mississippi River rather than the long-haul West Coast corridors that typically offer the biggest fuel advantage over trucking. Intermodal providers have historically struggled to compete with trucking in the eastern US because the shorter lengths of haul mean less cost savings than transcontinental moves. But railroads and intermodal marketing companies (IMCs) say rising fuel costs, higher rates amid the end of the four-year recession in the trucking industry, and reliable service are helping convert more freight to rail in the east. Combined domestic container traffic in March and April was up 9% over the same period in 2025, according to the International Association of North America (IANA), a surge not seen since the pandemic-related lockdowns six years ago. Freight originating in the Northeast, South-Central and Southeast US have all jumped more than 10% year over year. “You’re finally seeing us coming out of ... the worst trucking cycle that we’ve witnessed — at least the worst one certainly that I’ve seen,” Kevin Boone, CFO of CSX Transportation, said at the Bank of America Annual Industrials Conference on May 13. “We’re seeing [freight] start to convert over to rail and with our service product, we’re pretty optimistic that can continue here.” The strongest gains have been concentrated in eastern corridors. Traffic from the Northeast to the Southeast jumped 17.7% year over year in March and April, according to IANA, while Southeast-to-Northeast traffic on the same corridor rose 16%. Midwest-to-Northeast volume increased 17.6%. Those are three routes where CSX will be able to better compete after beginning double-stack intermodal service through the Howard Street Tunnel in Baltimore earlier this month . The upgrade allows CSX to compete better against Norfolk Southern (NS) on freight between Atlanta and Newark and cuts about a day from transit times between Chicago and Newark. That gives CSX a chance to capture more of the eastern demand upswing, along with private-asset intermodal partners such as J.B. Hunt Transport Services. J.B. Hunt executives are signaling the same strong demand pattern in the east, with shippers beginning to save more money on freight in the region. “The discount has grown from 15% to 20% in the last six to eight weeks,” Darren Field, the company’s president of intermodal, said this week at Wolfe Research’s Annual Global Transportation and Industrials Conference. “I don’t know that we can close that 20% discount gap back to 15% in just this cycle, but I would anticipate certainly our intermodal pricing opportunity to start to improve [in the 2027 bid cycle].” Rebound tied to diesel prices? The Journal of Commerce Intermodal Savings Index also showed the steepest increases in rail savings sequentially compared with truckload in March occurred in the eastern US. Even so, Norfolk Southern cautioned that the rebound may be tied more to higher diesel prices than to a structural change, meaning it could fade if energy markets ease. “If the war ends in the next couple of weeks and fuel prices start going back down over the next few months, does that dynamic persist or does it reverse back to where it was? Hard to say,” NS CEO Mark George said at the Wolfe Research conference. Service will help determine whether intermodal keeps gaining share from trucking on the East Coast. CSX’s intermodal train speed was 7.2% faster from March through the first week of May than during the same period last year, while Norfolk Southern’s speeds were 1.1% slower over the same span, according to the Association of American Railroads. A disruption at CSX’s Fairburn intermodal terminal in Atlanta in April sharply increased truck turn times, in some cases forcing drivers to wait hours and pushing deliveries to the next day. The issue has since been resolved. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Truckload

North-American rail

Surface

Local East Coast freight leading charge on intermodal rebound

<div class="phx-topic abstract-wrapper">The carrier’s first-quarter financials, which included a sharp drop in net profit, were generated in a market roiled by ongoing tensions in the Middle East, rising oil prices and increasing operating costs.</div>

The carrier’s first-quarter financials, which included a sharp drop in net profit, were generated in a market roiled by ongoing tensions in the Middle East, rising oil prices and increasing operating costs.

<div class="phx-topic">CMA CGM on Friday said its first-quarter net profit fell sharply in a volatile container shipping environment marked by persistent geopolitical tensions. The French carrier said it booked net profit of $250 million in the January–March period, down from $1.1 billion in the first quarter of 2025. Earnings before interest, taxes, amortization and depreciation (EBITDA) fell almost 32% to $2.1 billion. First-quarter revenue of $13.2 billion was up a marginal 0.2% year over year. Despite the sharp decline in net profit and EBITDA, Group CEO Rodolphe Saadé described the performance as “resilient” and one that was generated in a market roiled by ongoing tensions in the Middle East, rising oil prices and increasing operating costs. “While tensions in the Middle East and disruptions across global supply chains continued to weigh on the industry, we adjusted our network, implemented alternative logistics corridors and maintained reliable service for our customers,” Saadé said in a statement. For context, Maersk <a href="https://www.joc.com/article/maersk-passing-500-million-monthly-fuel-bill-to-customers-in-full-ceo-6216319">reported first-quarter revenue of $13 billion</a> and a net profit of $100 million. <h3>Revenue per TEU drops sharply </h3>In the group’s container shipping segment, volume in the first quarter was up 1.5% year over year at 5.93 million TEUs, while revenue was down 8.5% to $8 billion. Average revenue per TEU declined almost 10%, which was reflected in the shipping division’s EBITDA that fell 41.3% to $1.49 billion despite a rebound in spot rates at the end of the quarter. First-quarter logistics revenue of $4.6 billion was up 6.6% year over year, while the segment’s EBITDA fell 17.2% to $330 million as a deteriorating market environment and ongoing challenges affecting the automotive sector kept earnings under pressure. The major container shipping companies have now reported their first-quarter results with two carriers — Zim Integrated Shipping Services and its soon-to-be-owner Hapag-Lloyd — posting losses. But there is more financial pain to come, warned Lars Jensen, CEO of Vespucci Consulting. “Anyone with floating bunker surcharges will see the impact in Q3,” <a href="https://www.linkedin.com/feed/update/urn:li:activity:7463177368476545024/">Jensen said in a LinkedIn post</a>, using Wan Hai’s recent third-quarter bunker surcharge announcement as an example. The carrier’s Asia to Mediterranean fuel surcharge will rise from $220/TEU to $605/TEU, with Asia-Red Sea moving from $160/TEU to $440/TEU. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

CMA CGM on Friday said its first-quarter net profit fell sharply in a volatile container shipping environment marked by persistent geopolitical tensions. The French carrier said it booked net profit of $250 million in the January–March period, down from $1.1 billion in the first quarter of 2025. Earnings before interest, taxes, amortization and depreciation (EBITDA) fell almost 32% to $2.1 billion. First-quarter revenue of $13.2 billion was up a marginal 0.2% year over year. Despite the sharp decline in net profit and EBITDA, Group CEO Rodolphe Saadé described the performance as “resilient” and one that was generated in a market roiled by ongoing tensions in the Middle East, rising oil prices and increasing operating costs. “While tensions in the Middle East and disruptions across global supply chains continued to weigh on the industry, we adjusted our network, implemented alternative logistics corridors and maintained reliable service for our customers,” Saadé said in a statement. For context, Maersk reported first-quarter revenue of $13 billion and a net profit of $100 million. Revenue per TEU drops sharply In the group’s container shipping segment, volume in the first quarter was up 1.5% year over year at 5.93 million TEUs, while revenue was down 8.5% to $8 billion. Average revenue per TEU declined almost 10%, which was reflected in the shipping division’s EBITDA that fell 41.3% to $1.49 billion despite a rebound in spot rates at the end of the quarter. First-quarter logistics revenue of $4.6 billion was up 6.6% year over year, while the segment’s EBITDA fell 17.2% to $330 million as a deteriorating market environment and ongoing challenges affecting the automotive sector kept earnings under pressure. The major container shipping companies have now reported their first-quarter results with two carriers — Zim Integrated Shipping Services and its soon-to-be-owner Hapag-Lloyd — posting losses. But there is more financial pain to come, warned Lars Jensen, CEO of Vespucci Consulting. “Anyone with floating bunker surcharges will see the impact in Q3,” Jensen said in a LinkedIn post , using Wan Hai’s recent third-quarter bunker surcharge announcement as an example. The carrier’s Asia to Mediterranean fuel surcharge will rise from $220/TEU to $605/TEU, with Asia-Red Sea moving from $160/TEU to $440/TEU. Contact Greg Knowler at greg.knowler@spglobal.com .

CMA CGM posts Q1 earnings decline amid volatile ocean trade

<div class="phx-topic abstract-wrapper">Volumes under contract when the Middle East war began were locked into quarterly bunker fuel adjustments, and those costs are set to be passed on to shippers at the start of the third quarter.</div>

Volumes under contract when the Middle East war began were locked into quarterly bunker fuel adjustments, and those costs are set to be passed on to shippers at the start of the third quarter.

<div class="phx-topic">Cargo owners are accelerating shipments on the Asia-Europe ocean trade to get ahead of the next quarterly bunker fuel adjustment due July 1, with strong demand seen into June. Bunker costs rocketed higher following the start of the Middle East war on Feb. 28, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly bunker adjustment factors (BAFs). Those costs will now be passed on to shippers in the third quarter, according to Thomas Cassuto, senior vice president of air and ocean at forwarder CEVA Logistics. “We are seeing exceptionally strong shipper demand in late May across most major trade lanes, including Asia-North Europe and Asia-Med, with momentum expected to continue through June,” Cassuto told the Journal of Commerce. “The key driver is a sharp acceleration in bookings from major beneficial cargo owners [BCOs] seeking to move cargo ahead of July 1,” he noted. “From that date, most large shippers will face an automatic increase in freight rates linked to quarterly BAF adjustments.” Data from Vizion indicates bookings from China to the Mediterranean are up almost 50% over the past two weeks and 36% higher to North Europe in what looks to be an early start to the peak shipping season. Traditionally, Asia-Europe peak season activity begins in late June and continues to China’s Golden Week in early October. Recent global disruptions have made seasonal patterns increasingly unpredictable, with last year’s peak season barely getting started and this year’s demand picking up strongly in May and June. <h3>Robust forward bookings </h3>Kuehne + Nagel and DHL Global Forwarding both reported robust forward bookings and rising rates on the Asia-Europe trade lane, despite an increase in deployed capacity and a cut in blank sailings. Data from eeSea, part of rate benchmarking platform Xeneta, shows capacity on Asia-North Europe in May will be up 16% from April at 1.2 million TEUs, with blank sailings down 5%. In June, planned capacity will fall to 1.1 million TEUs while planned blank sailings will be halved. “We are observing an increased demand for Asia-Europe, partly driven by an earlier peak season linked to extended transit times and lower capacity due to the rerouting [around the Cape of Good Hope],” Paolo Montrone, head of global sea logistics at Kuehne + Nagel, told the Journal of Commerce. “This is consistent with patterns seen last year,” he added. “Demand is expected to remain strong in the coming months; however, visibility remains limited as energy costs and rates continue to be a concern.” A spokesperson for DHL Global Forwarding said there was “significant demand” on Asia-Europe, accompanied by a substantial increase in rates. “Vessels are operating at full capacity, and bookings need to be made well in advance,” the spokesperson said. “In addition, there are capacity restrictions in place, and securing space requires a mix of NAC [named accounts] and FAK [freight-all-kinds].” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="3e0caaad-ce43-47fa-b859-a779e74cb6a4"></dynamic-object></div>Named accounts are long-term contracts between carriers and customers that guaranteed space and equipment at fixed rates, while cargo moved under FAK is subject to the spot market. Cassuto said vessels out of Asia were fully booked four to five weeks in advance, which has prompted carriers to implement general rate increases and peak season surcharges. “We expect this pattern to extend into July and overlap with what is traditionally the peak season for Christmas shipments, which effectively started earlier this year,” he said. <h3>Hefty rate increases announced for June 1 </h3>Several carriers this week announced June 1 rate increases on eastbound corridors, with Asia to North Europe FAK rates moving to $4,300-$4,700 per FEU and Asia-East Mediterranean rates at $5,500-$5,700/FEU. If they stick, the FAK increases will be at a significant premium to spot rates currently at $2,900/FEU on Asia-North Europe and $4,000/FEU for Asia to the Mediterranean, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. “I would be very surprised if those spot rates are not going to trend up over the upcoming couple of weeks as we see significant overbooking, and as such, there is certainly not a lot of downward pressure on pricing,” Hapag-Lloyd CEO Rolf Habben Jansen said in a media briefing following the carrier’s first-quarter results. “If anything, there is upward pressure, which is probably a little bit later than we would have liked, but I think you will start seeing that.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="af999948-957c-4237-b7e6-873522d9fd5b"></dynamic-object></div>In a market update Friday, HSBC highlighted the demand holding up in container shipping. The bank’s transportation analysts said the global container trade rose 4.4% year over year in the first quarter, with Maersk and Hapag-Lloyd expecting demand to remain strong through the second quarter and the third-quarter peak season because of disruption-related frontloading. Still, fuel and network cost pressures are building, Cassuto noted, which would place European import volumes from Asia under increasing pressure. “We are anticipating higher energy costs, persistent inflation and elevated inventory levels to weigh on trade flows in the second half of 2026, leading to a gradual slowdown in volumes,” the CEVA executive said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Cargo owners are accelerating shipments on the Asia-Europe ocean trade to get ahead of the next quarterly bunker fuel adjustment due July 1, with strong demand seen into June. Bunker costs rocketed higher following the start of the Middle East war on Feb. 28, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly bunker adjustment factors (BAFs). Those costs will now be passed on to shippers in the third quarter, according to Thomas Cassuto, senior vice president of air and ocean at forwarder CEVA Logistics. “We are seeing exceptionally strong shipper demand in late May across most major trade lanes, including Asia-North Europe and Asia-Med, with momentum expected to continue through June,” Cassuto told the Journal of Commerce. “The key driver is a sharp acceleration in bookings from major beneficial cargo owners [BCOs] seeking to move cargo ahead of July 1,” he noted. “From that date, most large shippers will face an automatic increase in freight rates linked to quarterly BAF adjustments.” Data from Vizion indicates bookings from China to the Mediterranean are up almost 50% over the past two weeks and 36% higher to North Europe in what looks to be an early start to the peak shipping season. Traditionally, Asia-Europe peak season activity begins in late June and continues to China’s Golden Week in early October. Recent global disruptions have made seasonal patterns increasingly unpredictable, with last year’s peak season barely getting started and this year’s demand picking up strongly in May and June. Robust forward bookings Kuehne + Nagel and DHL Global Forwarding both reported robust forward bookings and rising rates on the Asia-Europe trade lane, despite an increase in deployed capacity and a cut in blank sailings. Data from eeSea, part of rate benchmarking platform Xeneta, shows capacity on Asia-North Europe in May will be up 16% from April at 1.2 million TEUs, with blank sailings down 5%. In June, planned capacity will fall to 1.1 million TEUs while planned blank sailings will be halved. “We are observing an increased demand for Asia-Europe, partly driven by an earlier peak season linked to extended transit times and lower capacity due to the rerouting [around the Cape of Good Hope],” Paolo Montrone, head of global sea logistics at Kuehne + Nagel, told the Journal of Commerce. “This is consistent with patterns seen last year,” he added. “Demand is expected to remain strong in the coming months; however, visibility remains limited as energy costs and rates continue to be a concern.” A spokesperson for DHL Global Forwarding said there was “significant demand” on Asia-Europe, accompanied by a substantial increase in rates. “Vessels are operating at full capacity, and bookings need to be made well in advance,” the spokesperson said. “In addition, there are capacity restrictions in place, and securing space requires a mix of NAC [named accounts] and FAK [freight-all-kinds].” Named accounts are long-term contracts between carriers and customers that guaranteed space and equipment at fixed rates, while cargo moved under FAK is subject to the spot market. Cassuto said vessels out of Asia were fully booked four to five weeks in advance, which has prompted carriers to implement general rate increases and peak season surcharges. “We expect this pattern to extend into July and overlap with what is traditionally the peak season for Christmas shipments, which effectively started earlier this year,” he said. Hefty rate increases announced for June 1 Several carriers this week announced June 1 rate increases on eastbound corridors, with Asia to North Europe FAK rates moving to $4,300-$4,700 per FEU and Asia-East Mediterranean rates at $5,500-$5,700/FEU. If they stick, the FAK increases will be at a significant premium to spot rates currently at $2,900/FEU on Asia-North Europe and $4,000/FEU for Asia to the Mediterranean, according to Platts, a sister company of the Journal of Commerce within S&P Global. “I would be very surprised if those spot rates are not going to trend up over the upcoming couple of weeks as we see significant overbooking, and as such, there is certainly not a lot of downward pressure on pricing,” Hapag-Lloyd CEO Rolf Habben Jansen said in a media briefing following the carrier’s first-quarter results. “If anything, there is upward pressure, which is probably a little bit later than we would have liked, but I think you will start seeing that.” In a market update Friday, HSBC highlighted the demand holding up in container shipping. The bank’s transportation analysts said the global container trade rose 4.4% year over year in the first quarter, with Maersk and Hapag-Lloyd expecting demand to remain strong through the second quarter and the third-quarter peak season because of disruption-related frontloading. Still, fuel and network cost pressures are building, Cassuto noted, which would place European import volumes from Asia under increasing pressure. “We are anticipating higher energy costs, persistent inflation and elevated inventory levels to weigh on trade flows in the second half of 2026, leading to a gradual slowdown in volumes,” the CEVA executive said. Contact Greg Knowler at greg.knowler@spglobal.com.

Forwarding

Demand rising on Asia-Europe ocean trade as July bunker hike looms

<div class="phx-topic abstract-wrapper">A lead time of five to seven years to build up domestic crane manufacturing capacity could cripple the US heavy-lift industry if tariffs on imported products are not reduced, industry stakeholders say. </div>

A lead time of five to seven years to build up domestic crane manufacturing capacity could cripple the US heavy-lift industry if tariffs on imported products are not reduced, industry stakeholders say.

<div class="phx-topic">US heavy-lift lobbyists are pushing the federal government for relief from tariffs amid growing concerns about potential new trade levies and their repercussions for the project cargo sector. The Specialized Carriers &amp; Rigging Association (SC&amp;RA), the largest trade group representing the US heavy-lift industry, is awaiting federal action after testifying in front of the US International Trade Commission with a request to exempt crane and trailer imports from Canada, the EU and Japan from new Section 301 tariffs. The US Section 301 provision authorizes the Office of the US Trade Representative (USTR) to investigate and impose retaliatory tariffs against foreign countries with trade practices it deems “unfair” to US interests. Those efforts have largely been focused on Chinese trade, but the US has also opened investigations into the practices of several other countries, including Canada, Japan and parts of the EU. Joel Dandrea, president and CEO of the SC&amp;RA, told the Journal of Commerce the 1,350-member international trade group is not opposed to tariffs and supports the Trump administration’s efforts to balance trade fairly. But he said the ever-changing succession of tariffs has made it difficult to budget, plan and forecast for equipment purchases, cargo moves and critical infrastructure projects. “The tariffs that are placed upon our industry really need to be fair and reasonable, and what we’re seeing at this point are tariff levels that we believe are not reasonable,” Dandrea said. Testifying on behalf of the SC&amp;RA at a May 5 International Trade Commission (ITC) hearing on tariff investigations, Mike Appling, CEO of LiftHigh Cranes &amp; Rigging, told the ITC that the group supports addressing China’s structural overcapacity. “But the EU, Canada and Japan are proven, trusted allies that do not engage in industrial overcapacity, dumping, forced labor or any other unfair trade practice with respect to these products,” he said. “There is no basis for including their merchandise within the scope of proposed Section 301 action.” Appling said approximately 80% of the cranes used in US construction are imported, and less than 3% of all global all-terrain cranes are manufactured domestically. No US company manufactures tower cranes, and the lead time to build additional domestic manufacturing capacity is five to seven years. “Critical infrastructure projects — data centers, nuclear facilities, LNG terminals, semiconductor fabrication plants, defense installations — cannot pause while that capacity develops,” he said. The problem extends up the supply chain, Appling said, as ultra-high-strength steel grades essential to crane and trailer manufacturing are not produced domestically in sufficient quantities, and US steel manufacturers have indicated there is no compelling business case to do so. During his ITC testimony, Appling outlined a series of requests the SC&amp;RA submitted on April 15 to the USTR: the exemption of cranes, trailers and parts imported from the EU, Canada and Japan from Section 301 tariffs, a 24-month phase-in period for any new tariffs imposed on equipment from those nations, and “proportionate” tariff rates on Chinese products. The proposal included a call for no stacking of Section 301 tariffs on top of existing steel tariffs imposed under Section 232. Citing limited domestic supplies, the SC&amp;RA also proposed tariff exemptions on ultra-high-strength steel, which is used to manufacture cranes and trailers. “This is precisely the wrong moment to impose additional cost burdens on the only viable alternative to Chinese equipment,” Appling said. <h3>High costs, thin margins </h3>The SC&amp;RA’s proposal to the USTR is the latest plea from the association to ease the burdens of tariffs on the heavy-lift and transport industry. Dandrea, who attended the ITC hearing and has been a vocal advocate for tariff relief, said the industry was critical to US construction. “You can have raw steel manufactured, but if there’s no one to transport it, lift it and build with it, it’s of no value,” he said. Dandrea said steel tariffs currently imposed under Section 232, along with related measures, are causing delays for equipment purchases and infrastructure projects while driving up costs — forcing some companies to pause or reconsider those purchases altogether. “When you add $300,000 or $400,000 or $500,000 to the cost of a crane coming from Germany or Japan, or $100,000 or $200,000 to the cost of a highly specialized construction trailer, you can’t just click your fingers from a purchasing standpoint and say we’re going to absorb those costs and quickly turn around and pass those costs onto customers,” he said. The Trump administration in April agreed to adjust Section 232 tariffs on steel derivative products from 50% of their full customs value to 25%. Dandrea said SC&amp;RA would like to see those tariffs reduced further, from 25% to 15%, and for the USTR to ensure that Section 301 tariffs are not stacked on top of those existing tariffs. Dandrea expects it will take until July before the USTR responds to SC&amp;RA’s request, but said the association remains optimistic. “The move to 25% was a move in the right direction,” he said. “But the costs are still too high for an industry operating on thin margins.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

US heavy-lift lobbyists are pushing the federal government for relief from tariffs amid growing concerns about potential new trade levies and their repercussions for the project cargo sector. The Specialized Carriers & Rigging Association (SC&RA), the largest trade group representing the US heavy-lift industry, is awaiting federal action after testifying in front of the US International Trade Commission with a request to exempt crane and trailer imports from Canada, the EU and Japan from new Section 301 tariffs. The US Section 301 provision authorizes the Office of the US Trade Representative (USTR) to investigate and impose retaliatory tariffs against foreign countries with trade practices it deems “unfair” to US interests. Those efforts have largely been focused on Chinese trade, but the US has also opened investigations into the practices of several other countries, including Canada, Japan and parts of the EU. Joel Dandrea, president and CEO of the SC&RA, told the Journal of Commerce the 1,350-member international trade group is not opposed to tariffs and supports the Trump administration’s efforts to balance trade fairly. But he said the ever-changing succession of tariffs has made it difficult to budget, plan and forecast for equipment purchases, cargo moves and critical infrastructure projects. “The tariffs that are placed upon our industry really need to be fair and reasonable, and what we’re seeing at this point are tariff levels that we believe are not reasonable,” Dandrea said. Testifying on behalf of the SC&RA at a May 5 International Trade Commission (ITC) hearing on tariff investigations, Mike Appling, CEO of LiftHigh Cranes & Rigging, told the ITC that the group supports addressing China’s structural overcapacity. “But the EU, Canada and Japan are proven, trusted allies that do not engage in industrial overcapacity, dumping, forced labor or any other unfair trade practice with respect to these products,” he said. “There is no basis for including their merchandise within the scope of proposed Section 301 action.” Appling said approximately 80% of the cranes used in US construction are imported, and less than 3% of all global all-terrain cranes are manufactured domestically. No US company manufactures tower cranes, and the lead time to build additional domestic manufacturing capacity is five to seven years. “Critical infrastructure projects — data centers, nuclear facilities, LNG terminals, semiconductor fabrication plants, defense installations — cannot pause while that capacity develops,” he said. The problem extends up the supply chain, Appling said, as ultra-high-strength steel grades essential to crane and trailer manufacturing are not produced domestically in sufficient quantities, and US steel manufacturers have indicated there is no compelling business case to do so. During his ITC testimony, Appling outlined a series of requests the SC&RA submitted on April 15 to the USTR: the exemption of cranes, trailers and parts imported from the EU, Canada and Japan from Section 301 tariffs, a 24-month phase-in period for any new tariffs imposed on equipment from those nations, and “proportionate” tariff rates on Chinese products. The proposal included a call for no stacking of Section 301 tariffs on top of existing steel tariffs imposed under Section 232. Citing limited domestic supplies, the SC&RA also proposed tariff exemptions on ultra-high-strength steel, which is used to manufacture cranes and trailers. “This is precisely the wrong moment to impose additional cost burdens on the only viable alternative to Chinese equipment,” Appling said. High costs, thin margins The SC&RA’s proposal to the USTR is the latest plea from the association to ease the burdens of tariffs on the heavy-lift and transport industry. Dandrea, who attended the ITC hearing and has been a vocal advocate for tariff relief, said the industry was critical to US construction. “You can have raw steel manufactured, but if there’s no one to transport it, lift it and build with it, it’s of no value,” he said. Dandrea said steel tariffs currently imposed under Section 232, along with related measures, are causing delays for equipment purchases and infrastructure projects while driving up costs — forcing some companies to pause or reconsider those purchases altogether. “When you add $300,000 or $400,000 or $500,000 to the cost of a crane coming from Germany or Japan, or $100,000 or $200,000 to the cost of a highly specialized construction trailer, you can’t just click your fingers from a purchasing standpoint and say we’re going to absorb those costs and quickly turn around and pass those costs onto customers,” he said. The Trump administration in April agreed to adjust Section 232 tariffs on steel derivative products from 50% of their full customs value to 25%. Dandrea said SC&RA would like to see those tariffs reduced further, from 25% to 15%, and for the USTR to ensure that Section 301 tariffs are not stacked on top of those existing tariffs. Dandrea expects it will take until July before the USTR responds to SC&RA’s request, but said the association remains optimistic. “The move to 25% was a move in the right direction,” he said. “But the costs are still too high for an industry operating on thin margins.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Breakbulk carriers

Breakbulk News

Heavy-lift trade group lobbies USTR for relief from crane, trailer tariffs

<div class="phx-topic abstract-wrapper">Small carriers that practice pricing discipline and manage costs are turning a profit, but whether they can maintain profitability will directly affect how much capacity is available to shippers and how sharply rates may rise.</div>

Small carriers that practice pricing discipline and manage costs are turning a profit, but whether they can maintain profitability will directly affect how much capacity is available to shippers and how sharply rates may rise.

<div class="phx-topic">A regulatory crackdown is reshaping the US truckload market, leading to a supply-side recovery in spot and contract rates. Suddenly, small carriers that practice pricing discipline and manage costs are turning a profit, not just spinning their wheels. Whether they can maintain profitability will directly affect how much capacity is available to shippers and how sharply rates may rise. Small fleet profitability comes down to two variables: spot rates and diesel prices. When those variables move together, carriers survive. When they diverge, trucks go dark. DAT Freight &amp; Analytics data tracking the estimated annual average gross profit for small fleets reveals a swing from $46,550 in June 2018 to a $5,700 annualized loss in May 2020 (based on all costs for a typical dry-van spot market carrier). That average rose to $110,200 in January 2022 and fell to $5,700 by October 2025. Estimated gross profit is now recovering, rising to $36,000 in April — completing a full cycle that took eight years to complete and wiped out thousands of small carriers along the way. To understand that cycle fully, and where we may be headed, start where the data does: the boom following the 2018 electronic logging device (ELD) mandate. <h3>Strong start in 2018 </h3>January 2018 opened with all-in DAT spot rates at $2.24 per mile and a small fleet gross profit of $43,700. Breakeven costs were a manageable $1.63 per mile, leaving a $0.33 per mile gross margin. But the real catalyst was still building. The US ELD mandate took full effect in April 2018, compressing available capacity overnight. All-in spot rates surged to $2.32 per mile in June. That September, carriers placed record numbers of new truck orders, betting the good times would last. They were wrong. The freight market cooled rapidly into the fourth quarter of 2018. New trucks ordered at the peak of the 2018 boom rolled off assembly lines and into a softening market. By 2019, the industry was sitting on a structural oversupply of capacity. The ELD boom seeded its own bust. <h3>Freight recession </h3>From June 2018 to January 2019, spot linehaul rates collapsed from $2.03 to $1.67 per mile as shippers who had frontloaded inventory ahead of the ELD deadline and US tariffs on China let demand normalize. Small fleet annual gross profit fell from $46,550 to $19,950 in six months, then dropped further to $3,800 by April 2019. Breakeven costs held steady at $1.62 to $1.65 per mile — but costs weren’t the problem; rates simply wouldn’t cooperate. This was a demonstration of how quickly a capacity shock reversal can gut small fleet margins. Then COVID-19 hit. April and May 2020 produced the only negative gross profit months in the dataset, with losses of $4,750 and $5,700, respectively, as all-in rates collapsed to $1.62 and $1.59 per mile while breakeven costs barely budged at $1.58 to $1.59 per mile. It was a brief but brutal reminder that breakeven isn’t the floor — it’s just where you stop making money and start burning it. <h3>Boom to bust </h3>Pandemic stimulus, inventory restocking and port congestion drove spot rates from $1.59 per mile on average in May 2020 to $3.11 per mile by January 2022. Small fleet gross profit surged to $110,200 — the highest in the data set. Then Russia invaded Ukraine in February 2022. Diesel spiked, pushing breakeven costs from $1.77 to $2.08 per mile in five months, a 17% jump. By October 2022, small fleet gross profit had collapsed 75% to $27,550. Spot linehaul rates bottomed around $1.54 to $1.65 per mile and flatlined for nearly two years. Gross profit hovered between $3,800 and $19,950 for 24 consecutive months, with most months in the $6,000 to $12,000 range. This is the period that drove capacity rationalization — small fleets exiting, authorities being revoked, and the industry slowly bleeding out excess trucks. It was the longest freight recession in a generation, and carriers that survived it earned what’s coming next. <h3>A new cycle </h3>What’s coming next is a supply-driven inflection in rates. Spot rates began climbing again in December 2025, with gross profit jumping to $29,450 as all-in rates hit $2.29 per mile. January and February 2026 continued the trend, with average gross profit hitting $30,400 and $32,300, respectively. Then the Iran war started. The national average retail diesel price surged above $5 per gallon, pushing owner-operator breakeven costs from $1.88 per mile in February to $2.09 per mile by early May, a spike eerily similar in magnitude to the 2022 Ukraine shock. But this time spot truckload rates are rising, too. May’s to-date all-in rate of $2.62 per mile is the highest since mid-2022, producing a gross profit of $25,000 despite the elevated fuel costs. The rate recovery and diesel spike are running a race, and right now, rates are keeping pace. Contact Dean Croke at <a href="mailto:dean.croke@dat.com">dean.croke@dat.com</a>.</div>

A regulatory crackdown is reshaping the US truckload market, leading to a supply-side recovery in spot and contract rates. Suddenly, small carriers that practice pricing discipline and manage costs are turning a profit, not just spinning their wheels. Whether they can maintain profitability will directly affect how much capacity is available to shippers and how sharply rates may rise. Small fleet profitability comes down to two variables: spot rates and diesel prices. When those variables move together, carriers survive. When they diverge, trucks go dark. DAT Freight & Analytics data tracking the estimated annual average gross profit for small fleets reveals a swing from $46,550 in June 2018 to a $5,700 annualized loss in May 2020 (based on all costs for a typical dry-van spot market carrier). That average rose to $110,200 in January 2022 and fell to $5,700 by October 2025. Estimated gross profit is now recovering, rising to $36,000 in April — completing a full cycle that took eight years to complete and wiped out thousands of small carriers along the way. To understand that cycle fully, and where we may be headed, start where the data does: the boom following the 2018 electronic logging device (ELD) mandate. Strong start in 2018 January 2018 opened with all-in DAT spot rates at $2.24 per mile and a small fleet gross profit of $43,700. Breakeven costs were a manageable $1.63 per mile, leaving a $0.33 per mile gross margin. But the real catalyst was still building. The US ELD mandate took full effect in April 2018, compressing available capacity overnight. All-in spot rates surged to $2.32 per mile in June. That September, carriers placed record numbers of new truck orders, betting the good times would last. They were wrong. The freight market cooled rapidly into the fourth quarter of 2018. New trucks ordered at the peak of the 2018 boom rolled off assembly lines and into a softening market. By 2019, the industry was sitting on a structural oversupply of capacity. The ELD boom seeded its own bust. Freight recession From June 2018 to January 2019, spot linehaul rates collapsed from $2.03 to $1.67 per mile as shippers who had frontloaded inventory ahead of the ELD deadline and US tariffs on China let demand normalize. Small fleet annual gross profit fell from $46,550 to $19,950 in six months, then dropped further to $3,800 by April 2019. Breakeven costs held steady at $1.62 to $1.65 per mile — but costs weren’t the problem; rates simply wouldn’t cooperate. This was a demonstration of how quickly a capacity shock reversal can gut small fleet margins. Then COVID-19 hit. April and May 2020 produced the only negative gross profit months in the dataset, with losses of $4,750 and $5,700, respectively, as all-in rates collapsed to $1.62 and $1.59 per mile while breakeven costs barely budged at $1.58 to $1.59 per mile. It was a brief but brutal reminder that breakeven isn’t the floor — it’s just where you stop making money and start burning it. Boom to bust Pandemic stimulus, inventory restocking and port congestion drove spot rates from $1.59 per mile on average in May 2020 to $3.11 per mile by January 2022. Small fleet gross profit surged to $110,200 — the highest in the data set. Then Russia invaded Ukraine in February 2022. Diesel spiked, pushing breakeven costs from $1.77 to $2.08 per mile in five months, a 17% jump. By October 2022, small fleet gross profit had collapsed 75% to $27,550. Spot linehaul rates bottomed around $1.54 to $1.65 per mile and flatlined for nearly two years. Gross profit hovered between $3,800 and $19,950 for 24 consecutive months, with most months in the $6,000 to $12,000 range. This is the period that drove capacity rationalization — small fleets exiting, authorities being revoked, and the industry slowly bleeding out excess trucks. It was the longest freight recession in a generation, and carriers that survived it earned what’s coming next. A new cycle What’s coming next is a supply-driven inflection in rates. Spot rates began climbing again in December 2025, with gross profit jumping to $29,450 as all-in rates hit $2.29 per mile. January and February 2026 continued the trend, with average gross profit hitting $30,400 and $32,300, respectively. Then the Iran war started. The national average retail diesel price surged above $5 per gallon, pushing owner-operator breakeven costs from $1.88 per mile in February to $2.09 per mile by early May, a spike eerily similar in magnitude to the 2022 Ukraine shock. But this time spot truckload rates are rising, too. May’s to-date all-in rate of $2.62 per mile is the highest since mid-2022, producing a gross profit of $25,000 despite the elevated fuel costs. The rate recovery and diesel spike are running a race, and right now, rates are keeping pace. Contact Dean Croke at dean.croke@dat.com .

Fuel prices threaten small trucker profits, pose capacity risk for shippers

<div class="phx-topic abstract-wrapper">The application of emergency fuel charges amid the war in the Middle East is the latest episode in poorly thought-out ideas and “short-termism” by carriers that has hammered another nail in the coffin of trust between them and BCOs. </div>

The application of emergency fuel charges amid the war in the Middle East is the latest episode in poorly thought-out ideas and “short-termism” by carriers that has hammered another nail in the coffin of trust between them and BCOs.

<div class="phx-topic">Trust, like any other brand, takes a long time to build. It requires patience, competence, consistency, reliability, and the impression (not always reality) of being not too self-serving. On the other side of the equation, trust is fragile and, depending on the action, can erode over time or vanish in a puff of smoke. I will not attempt to speculate on individual carrier and beneficial cargo owner (BCO) relationships as they are both individualistic and often dependent on one-to-one relationships rather than structural business-to-business in the wider sense. And so to describe the state of BCO-carrier relationships broadly, there is a predominance of mistrust on both sides. Part of this is structural and dates back to the early days of container shipping where the rules were unclear and many of the actors came from a bulk shipping background where charter parties were the benchmark of BCO/carrier contractual and relationship behavior. I recall a venerable shipper, steeped in charter party fine details, insisting we had to position refrigerated containers AND a vessel into Rockhampton, Queensland (Australia), as this was a named port in the annual meat shippers’ negotiations with the Japan Shipping conference. Needless to say, we didn’t do so, much to his disgust. And so it continued through the years. Carriers slowly shifting from trying to manage providing a service and making a profit to maximizing profit, while shippers played at relationships, too. BCOs cashed in when markets crashed and tried to limit the damage when markets were high. Meanwhile, carriers abandoned their attempt to provide a service versus profit. Schedule reliability is laughably low by any measure despite the best efforts to constrain supply through blank sailings, abandoning the chassis market, schedule slippages, etc. All make complete commercial and financial sense, but all contribute to erosion of trust. Shippers have not helped this dynamic, either, with poor forecasting, “best estimate” of volumes, etc., giving many a low reliability standing with carriers. <h3>A ‘new low’ after the pandemic </h3>COVID-19 ushered in a new low, with carriers generating extraordinary profits and cash piles enough to placate their long-suffering shareholders, allowing them to engage in seemingly random excursions into tangential asset plays (aircraft, tankers etc.) while retaining enough cash for the inevitable cyclical downturn. The downturn did not arrive, but in its place we found the geopolitical mess of the war that led to the effective closing of the Strait of Hormuz with all its implications for shipping and seafarers. Which leads to the latest significant erosion of trust. While spot rates typically incorporate the bunker adjustment factor (BAF) and other surcharges into an all-in price (quote, not invoice), a BCO has two contract options for a BAF mechanism. They can choose the carrier-published rates (some BCOs have been coerced to use these), or they can use their own formulas. BAF mechanisms are usually set for a quarter with a tolerance for movement above or below a certain percentage. For example, if the BAF moves 2%, this would be considered an insufficient change to warrant the administration required, thus a threshold is typically set at 5%. However, in either case the mechanism has relied on one overriding truth. The calculation is made at an agreed point before the end of the quarter, and the new BAF (if beyond the threshold) is applied for the subsequent quarter. This means that any significant movement up or down within the current quarter will only be recovered in the subsequent quarter. <h3>‘When is a contract not a contract?’ </h3>Certain carriers have insisted that an emergency BAF is warranted. BCOs read the papers too and know there is a major price and supply issue. Many BCOs have asked for detailed clarification in order to get a sense of what is being asked. In some cases, a flat rate across trades was proposed, which makes no sense. Account managers providing the advice were in most cases unable to explain in any detail what was proposed. Another point of contention is the carrier assertion they are burning cash because of fuel while accumulating cash over time to cover at least three years of operations. As one BCO said to me: “When is a contract not a contract?” This latest episode in poorly thought-out ideas and “short-termism” by carriers has hammered another nail in the coffin of trust between them and BCOs. Surely not the final one? John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>. </div>

Trust, like any other brand, takes a long time to build. It requires patience, competence, consistency, reliability, and the impression (not always reality) of being not too self-serving. On the other side of the equation, trust is fragile and, depending on the action, can erode over time or vanish in a puff of smoke. I will not attempt to speculate on individual carrier and beneficial cargo owner (BCO) relationships as they are both individualistic and often dependent on one-to-one relationships rather than structural business-to-business in the wider sense. And so to describe the state of BCO-carrier relationships broadly, there is a predominance of mistrust on both sides. Part of this is structural and dates back to the early days of container shipping where the rules were unclear and many of the actors came from a bulk shipping background where charter parties were the benchmark of BCO/carrier contractual and relationship behavior. I recall a venerable shipper, steeped in charter party fine details, insisting we had to position refrigerated containers AND a vessel into Rockhampton, Queensland (Australia), as this was a named port in the annual meat shippers’ negotiations with the Japan Shipping conference. Needless to say, we didn’t do so, much to his disgust. And so it continued through the years. Carriers slowly shifting from trying to manage providing a service and making a profit to maximizing profit, while shippers played at relationships, too. BCOs cashed in when markets crashed and tried to limit the damage when markets were high. Meanwhile, carriers abandoned their attempt to provide a service versus profit. Schedule reliability is laughably low by any measure despite the best efforts to constrain supply through blank sailings, abandoning the chassis market, schedule slippages, etc. All make complete commercial and financial sense, but all contribute to erosion of trust. Shippers have not helped this dynamic, either, with poor forecasting, “best estimate” of volumes, etc., giving many a low reliability standing with carriers. A ‘new low’ after the pandemic COVID-19 ushered in a new low, with carriers generating extraordinary profits and cash piles enough to placate their long-suffering shareholders, allowing them to engage in seemingly random excursions into tangential asset plays (aircraft, tankers etc.) while retaining enough cash for the inevitable cyclical downturn. The downturn did not arrive, but in its place we found the geopolitical mess of the war that led to the effective closing of the Strait of Hormuz with all its implications for shipping and seafarers. Which leads to the latest significant erosion of trust. While spot rates typically incorporate the bunker adjustment factor (BAF) and other surcharges into an all-in price (quote, not invoice), a BCO has two contract options for a BAF mechanism. They can choose the carrier-published rates (some BCOs have been coerced to use these), or they can use their own formulas. BAF mechanisms are usually set for a quarter with a tolerance for movement above or below a certain percentage. For example, if the BAF moves 2%, this would be considered an insufficient change to warrant the administration required, thus a threshold is typically set at 5%. However, in either case the mechanism has relied on one overriding truth. The calculation is made at an agreed point before the end of the quarter, and the new BAF (if beyond the threshold) is applied for the subsequent quarter. This means that any significant movement up or down within the current quarter will only be recovered in the subsequent quarter. ‘When is a contract not a contract?’ Certain carriers have insisted that an emergency BAF is warranted. BCOs read the papers too and know there is a major price and supply issue. Many BCOs have asked for detailed clarification in order to get a sense of what is being asked. In some cases, a flat rate across trades was proposed, which makes no sense. Account managers providing the advice were in most cases unable to explain in any detail what was proposed. Another point of contention is the carrier assertion they are burning cash because of fuel while accumulating cash over time to cover at least three years of operations. As one BCO said to me: “When is a contract not a contract?” This latest episode in poorly thought-out ideas and “short-termism” by carriers has hammered another nail in the coffin of trust between them and BCOs. Surely not the final one? John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Another nail in the coffin of trust between carriers, clients

Year-over-year % change

PIERS containerized US import and export volumes is the transportation industry’s largest US waterborne trade data set, covering all US ports. Every day, the PIERS team processes an average of about 60,000 bills of lading filed with US Customs and Border Protection (CBP) and integrates this transactional trade data with standardized company details. PIERS contains US trade data going back to 2003. [PIERS](https://www.spglobal.com/marketintelligence/en/mi/products/piers.html)

Asia to US container volumes (PIERS)

PIERS Total US imports from Asia (Monthly) (year-over-year change) Gateway

<div class="phx-topic abstract-wrapper">Yet liner executives insist that much of the surplus tonnage can be absorbed by a combination of vessel management, trade imbalances, increased scrapping and the ongoing effects of geopolitical disruptions.</div>

Yet liner executives insist that much of the surplus tonnage can be absorbed by a combination of vessel management, trade imbalances, increased scrapping and the ongoing effects of geopolitical disruptions.

<div class="phx-topic">The profitability-sapping effects of vessel overcapacity from an order book closing in on 40% of the in-service fleet were on display in the first quarter when volume gains by some ocean carriers were not enough to prevent a steep drop in earnings. Declining average rates dragged down the <a href="https://www.joc.com/article/maersk-passing-500-million-monthly-fuel-bill-to-customers-in-full-ceo-6216319">first-quarter results of Maersk and HMM</a>, despite solid volume increases; HMM reported a 14% increase in first-quarter volume, while Maersk reported “above market growth” of 9%. And despite stable volumes from other carriers such as <a href="https://www.joc.com/article/hapag-lloyd-posts-q1-net-loss-in-unsatisfactory-start-to-2026-6219964">Hapag-Lloyd</a>, <a href="https://www.joc.com/article/one-expects-11-decline-in-fy26-net-profit-due-to-war-in-middle-east-6212215">Ocean Network Express</a>, <a href="https://www.joc.com/article/lower-freight-rates-hit-q1-revenues-for-taiwans-big-three-carriers-6204140">Evergreen, Yang Ming and OOCL</a>, their revenues were significantly eroded by weaker rates; Hapag even posted a loss in the first quarter. Yet carrier executives insist that the excess supply can be mitigated and the surplus tonnage absorbed — this year at least — by a combination of vessel management, trade imbalances, the ongoing effects of geopolitical disruption, and an increase in scrapping. Some heavy lifting will be required. Maersk CEO Vincent Clerc put the current excess supply in the market at 1 million to 1.5 million TEUs, with the longer routes around southern Africa absorbing another 2 million TEUs. “So, it’s about 3.5 million TEUs overall that is the total capacity overhang to normalized trade routes today,” Clerc said during Maersk’s recent first-quarter earnings call with analysts. But he believes excess capacity can be managed by carriers showing discipline in how they deploy capacity, a rise in scrapping and by a new wave of slow steaming that will be triggered by high energy costs. “The deliveries are okay this year, but they are picking up significantly next year, and that’s going to put further pressure on the overhang,” he added. Despite the excess supply, Clerc said the rising cost of energy, driven by the effective closure of the Strait of Hormuz amid the ongoing war in the Middle East, will push carriers to increase slow steaming that could absorb up to an additional 1.5 million TEUs of capacity.“We’re looking at it ourselves, and the cost benefit is quite compelling,” he said. “But if we don’t pick up scrapping and actually retire some of the ships that have not been retired over the last seven years, this is going to be extremely bumpy.” <h3>Swelling order book </h3>The global order book continues to swell, with total capacity on order currently at 12.3 million TEUs, 37% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Sea-web data shows just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year, contributing to capacity growth of 4% amid market predictions for demand growth of 2% to 3% this year. About 2.3 million TEUs of capacity are due for delivery in 2027 and 3.4 million TEUs in 2028. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4c149ebf-df6c-4535-a9b2-7d12091e03d8"></dynamic-object></div>Rolf Habben Jansen, CEO of Maersk’s Gemini Cooperation partner Hapag-Lloyd, also pointed to vessel management levers such as slow steaming and blank sailings, as well as increased scrapping, to limit the effects of excess tonnage. But he noted that another capacity-absorbing factor was emerging in the form of an imbalance between the dominant trade lanes of head-haul corridors and non-dominant lanes. Habben Jansen said growth on the dominant legs of a trade lane is what drives capacity needs, not the overall market growth, noting that strong growth on dominant trade lanes — 10% in 2024 and 8% in 2025 — was helping to offset the impact of new supply on rate levels. “In 2026, the growth on the dominant legs will be higher than the additional supply that comes into the market, acting as a mitigating factor against overcapacity,” he said during Hapag’s earnings call last week. <h3>Supply management to be tested </h3>How demand and rates shape up through the second quarter and peak season will put the capacity-mitigating confidence of carrier executives to the test, particularly on the trans-Pacific. US imports from Asia have fallen 4.6% this year through April, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Despite the weak demand, carriers on the trans-Pacific are having some success with rate increases amid an environment of sharply higher fuel costs. Platts, a sister company of the Journal of Commerce, believes rates are being supported by blank sailings, smaller vessel deployments and tighter space allocations. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9c18268a-1028-4fd5-916a-6a7afa16d7ec"></dynamic-object></div>Spot rates for Asia to the US West Coast were at $3,200 per FEU as of May 18 — up 84% in two months, according to Platts. East Coast rates were at $4,200/FEU. A series of general rate increases (GRIs) was issued in mid-May, with carriers announcing another set from June 1 as high as $3,000 per FEU, combined with a wave of fuel‑linked surcharge adjustments ranging from $200/FEU to $500/FEU. Asia-Europe volume from Container Trades Statistics is only available for the first quarter but shows a 13% increase year over year, continuing the strong demand recorded last year when the trade lane grew volume by 8%. Rates have been rising; on Asia-North Europe they are up 17% week over week at $2,800/FEU, with Asia-Mediterranean rates climbing 8% to $4,000/FEU, Platts data shows. The gains appear to be driven by demand and not carrier capacity management, with a significant increase in deployed capacity on Asia-North Europe and a cut in blank sailings. Data from eeSea, part of rate benchmarking platform Xeneta, shows capacity on Asia-North Europe in May will be up 16% from April at 1.2 million TEUs, with blank sailings down 5%. In June, planned capacity will fall to 1.1 million TEUs while planned blank sailings will be halved. It is a more dramatic picture on the trans-Pacific. Asia-US will see 1.96 million TEUs deployed in May, up 4% from April, with blank sailings falling 36%. Planned capacity in June will increase to 2.1 million TEUs while blank sailings will drop by almost 40%. The demand picture for the rest of the year remains unclear. Mediterranean Shipping Co. CEO Soren Toft told the Journal of Commerce in London last week that consumer behavior in both the US and Europe was difficult to predict in the current global economic climate. <h3>Rising energy prices to dampen demand </h3>The International Monetary Fund has revised its economic growth forecast downward from 3.3% to 2.8% with the expectation that rising energy prices will dampen demand. At the same time, the war in the Middle East is fueling inflation fears, product shortages and aggressive stockpiling by manufacturers worldwide, according to the GEP Global Supply Chain Volatility Index compiled by S&amp;P Global and released May 12. Businesses globally have ramped up safety stockpiling of goods and raw materials at the fastest rate in three years as they seek to secure supply ahead of further price increases and disruption, the GEP survey found. European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs. “Even if tensions in the Middle East ease quickly, global supply chains are unlikely to normalize for another six to 12 months,” John Piatek, vice president of consulting at GEP, said in his analysis of the survey results. “What stands out in April’s data is how broadly the disruption is spreading,” he added. “Shortages worsened across every major region, signaling this is no longer an isolated transport shock. Companies worldwide are now scrambling to secure supply and protect themselves against further inflation and disruption.” A softening of Asian exports because of the stockpiling will likely result in oversupplied carriers rapidly scaling up blank sailings to support rate levels. Maersk and Hapag-Lloyd in March amended their Gemini Cooperation agreement across all global service loops to modify the timing of discussions regarding potential seasonal blank sailings. Under previous terms, the carriers were authorized to blank sailings only during Chinese New Year or Chinese Golden Week, provided such agreement was reached no later than 12 weeks prior to the scheduled date of the sailing. The new agreement allows the carriers to announce blanks six to eight weeks before sailings. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The profitability-sapping effects of vessel overcapacity from an order book closing in on 40% of the in-service fleet were on display in the first quarter when volume gains by some ocean carriers were not enough to prevent a steep drop in earnings. Declining average rates dragged down the first-quarter results of Maersk and HMM , despite solid volume increases; HMM reported a 14% increase in first-quarter volume, while Maersk reported “above market growth” of 9%. And despite stable volumes from other carriers such as Hapag-Lloyd , Ocean Network Express , Evergreen, Yang Ming and OOCL , their revenues were significantly eroded by weaker rates; Hapag even posted a loss in the first quarter. Yet carrier executives insist that the excess supply can be mitigated and the surplus tonnage absorbed — this year at least — by a combination of vessel management, trade imbalances, the ongoing effects of geopolitical disruption, and an increase in scrapping. Some heavy lifting will be required. Maersk CEO Vincent Clerc put the current excess supply in the market at 1 million to 1.5 million TEUs, with the longer routes around southern Africa absorbing another 2 million TEUs. “So, it’s about 3.5 million TEUs overall that is the total capacity overhang to normalized trade routes today,” Clerc said during Maersk’s recent first-quarter earnings call with analysts. But he believes excess capacity can be managed by carriers showing discipline in how they deploy capacity, a rise in scrapping and by a new wave of slow steaming that will be triggered by high energy costs. “The deliveries are okay this year, but they are picking up significantly next year, and that’s going to put further pressure on the overhang,” he added. Despite the excess supply, Clerc said the rising cost of energy, driven by the effective closure of the Strait of Hormuz amid the ongoing war in the Middle East, will push carriers to increase slow steaming that could absorb up to an additional 1.5 million TEUs of capacity. “We’re looking at it ourselves, and the cost benefit is quite compelling,” he said. “But if we don’t pick up scrapping and actually retire some of the ships that have not been retired over the last seven years, this is going to be extremely bumpy.” Swelling order book The global order book continues to swell, with total capacity on order currently at 12.3 million TEUs, 37% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Sea-web data shows just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year, contributing to capacity growth of 4% amid market predictions for demand growth of 2% to 3% this year. About 2.3 million TEUs of capacity are due for delivery in 2027 and 3.4 million TEUs in 2028. Rolf Habben Jansen, CEO of Maersk’s Gemini Cooperation partner Hapag-Lloyd, also pointed to vessel management levers such as slow steaming and blank sailings, as well as increased scrapping, to limit the effects of excess tonnage. But he noted that another capacity-absorbing factor was emerging in the form of an imbalance between the dominant trade lanes of head-haul corridors and non-dominant lanes. Habben Jansen said growth on the dominant legs of a trade lane is what drives capacity needs, not the overall market growth, noting that strong growth on dominant trade lanes — 10% in 2024 and 8% in 2025 — was helping to offset the impact of new supply on rate levels. “In 2026, the growth on the dominant legs will be higher than the additional supply that comes into the market, acting as a mitigating factor against overcapacity,” he said during Hapag’s earnings call last week. Supply management to be tested How demand and rates shape up through the second quarter and peak season will put the capacity-mitigating confidence of carrier executives to the test, particularly on the trans-Pacific. US imports from Asia have fallen 4.6% this year through April, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Despite the weak demand, carriers on the trans-Pacific are having some success with rate increases amid an environment of sharply higher fuel costs. Platts, a sister company of the Journal of Commerce, believes rates are being supported by blank sailings, smaller vessel deployments and tighter space allocations. Spot rates for Asia to the US West Coast were at $3,200 per FEU as of May 18 — up 84% in two months, according to Platts. East Coast rates were at $4,200/FEU. A series of general rate increases (GRIs) was issued in mid-May, with carriers announcing another set from June 1 as high as $3,000 per FEU, combined with a wave of fuel‑linked surcharge adjustments ranging from $200/FEU to $500/FEU. Asia-Europe volume from Container Trades Statistics is only available for the first quarter but shows a 13% increase year over year, continuing the strong demand recorded last year when the trade lane grew volume by 8%. Rates have been rising; on Asia-North Europe they are up 17% week over week at $2,800/FEU, with Asia-Mediterranean rates climbing 8% to $4,000/FEU, Platts data shows. The gains appear to be driven by demand and not carrier capacity management, with a significant increase in deployed capacity on Asia-North Europe and a cut in blank sailings. Data from eeSea, part of rate benchmarking platform Xeneta, shows capacity on Asia-North Europe in May will be up 16% from April at 1.2 million TEUs, with blank sailings down 5%. In June, planned capacity will fall to 1.1 million TEUs while planned blank sailings will be halved. It is a more dramatic picture on the trans-Pacific. Asia-US will see 1.96 million TEUs deployed in May, up 4% from April, with blank sailings falling 36%. Planned capacity in June will increase to 2.1 million TEUs while blank sailings will drop by almost 40%. The demand picture for the rest of the year remains unclear. Mediterranean Shipping Co. CEO Soren Toft told the Journal of Commerce in London last week that consumer behavior in both the US and Europe was difficult to predict in the current global economic climate. Rising energy prices to dampen demand The International Monetary Fund has revised its economic growth forecast downward from 3.3% to 2.8% with the expectation that rising energy prices will dampen demand. At the same time, the war in the Middle East is fueling inflation fears, product shortages and aggressive stockpiling by manufacturers worldwide, according to the GEP Global Supply Chain Volatility Index compiled by S&P Global and released May 12. Businesses globally have ramped up safety stockpiling of goods and raw materials at the fastest rate in three years as they seek to secure supply ahead of further price increases and disruption, the GEP survey found. European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs. “Even if tensions in the Middle East ease quickly, global supply chains are unlikely to normalize for another six to 12 months,” John Piatek, vice president of consulting at GEP, said in his analysis of the survey results. “What stands out in April’s data is how broadly the disruption is spreading,” he added. “Shortages worsened across every major region, signaling this is no longer an isolated transport shock. Companies worldwide are now scrambling to secure supply and protect themselves against further inflation and disruption.” A softening of Asian exports because of the stockpiling will likely result in oversupplied carriers rapidly scaling up blank sailings to support rate levels. Maersk and Hapag-Lloyd in March amended their Gemini Cooperation agreement across all global service loops to modify the timing of discussions regarding potential seasonal blank sailings. Under previous terms, the carriers were authorized to blank sailings only during Chinese New Year or Chinese Golden Week, provided such agreement was reached no later than 12 weeks prior to the scheduled date of the sailing. The new agreement allows the carriers to announce blanks six to eight weeks before sailings. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Pacific

Ocean carriers face growing order book nearing 40% of in-service fleet

<div class="phx-topic abstract-wrapper">Trucking industry attorneys say last week’s decision by the Supreme Court is likely to intensify scrutiny of carrier selection practices and insurance coverage.</div>

Trucking industry attorneys say last week’s decision by the Supreme Court is likely to intensify scrutiny of carrier selection practices and insurance coverage.

<div class="phx-topic">The unanimous <a href="https://www.joc.com/article/supreme-court-ruling-strips-broker-protection-linked-to-carrier-safety-6220667">Supreme Court ruling</a> allowing certain state-level negligence claims against freight brokers is expected to increase pressure on motor carriers to carry higher insurance limits and could eventually contribute to higher transportation costs, trucking attorneys say. The May 14 decision in Montgomery v. Caribe Transports LLC held that freight brokers are not shielded from some state personal injury lawsuits, potentially expanding liability exposure for intermediaries that arrange truck freight. Attorneys on both sides of the trucking industry said the ruling is likely to intensify scrutiny of carrier selection practices and insurance coverage. “A lot of brokers are going to go to their trucking companies and say, ‘You’ve been running loads with $1 million worth of insurance. Since we’re exposed, you can cause a lot more than $1 million worth of damage,’” Ed Leonard, a partner at San Diego law firm Tyson &amp; Mendes, which represents trucking companies in civil litigation, said. Leonard told the Journal of Commerce that brokers are likely to require higher liability coverage from carriers moving freight, particularly smaller operators with marginal safety records. “They’re going to be asking these trucking companies to buy more insurance,” he said. “This is going to cost more money to get things done.” The ruling could also tighten trucking capacity if higher insurance premiums force some smaller fleets and owner-operators to exit the market, Leonard said. That could place additional upward pressure on freight rates at a time when parts of the trucking industry are already navigating labor and regulatory disruptions. <h3>‘A big deal’ </h3>Plaintiff attorneys, meanwhile, said the decision gives crash victims a significant new legal avenue by allowing brokers to be named in lawsuits involving serious injuries and fatalities. “These major trucking accidents result in deaths, amputations and traumatic brain injuries, and this opens the door to brokers, making them a viable defendant,” said Edward Bassett, a partner at Mirick Law and former president of the Association of Plaintiff Interstate Trucking Lawyers of America. “Whether you are popping champagne or Diet Coke at plaintiff firms, this is a big deal.” Bassett said brokers are likely to more carefully scrutinize the carriers they hire, rather than selecting providers primarily on price. “They’re going to start looking carefully at the carriers they hire and not just the cheaper ones,” he said. “They’re being held responsible if they hire fly-by-night companies.” The case decided by the Supreme Court last week stemmed from a 2017 crash in Illinois involving truck driver Shawn Montgomery, who suffered catastrophic injuries and lost a leg after his parked tractor-trailer was struck by another truck. The Supreme Court ruled Montgomery could pursue claims against freight broker C.H. Robinson, which arranged the shipment. Montgomery’s attorneys argued that carrier Caribe Transport II had a poor safety record and that the broker should share liability for hiring it. C.H. Robinson argued that because trucking companies are federally licensed and regulated, brokers should be shielded from state negligence claims tied to carrier safety. The court disagreed, concluding that federal transportation law does not broadly preempt those claims. <h3>Federal data under scrutiny </h3>The decision could renew debate over trucking insurance minimums, which have remained largely unchanged since the Reagan administration. The Federal Motor Carrier Safety Administration (FMCSA) currently requires minimum liability coverage ranging from $750,000 to $5 million depending on the type of freight being hauled. Since 1985, Congress has repeatedly considered raising those thresholds or indexing them to inflation, but those efforts have stalled. FMCSA studies have suggested current minimums may be insufficient to cover catastrophic crashes and rising medical costs. Industry groups, however, have argued most claims settle below existing coverage requirements and that raising insurance mandates would disproportionately hurt small and midsize carriers by increasing operating costs. “We think it’s a bad decision. We had to be defending these cases before and we’ll be defending them after,” said Nathaniel Saylor, a partner at transportation law firm Scopelitis, Garvin, Light, Hanson &amp; Feary. “The question in these cases before the jury will always be, what is reasonable care. That standard was the standard yesterday and tomorrow as well. Nothing has changed regarding the broker’s duty. But the temperature is up on this issue, and you can expect the plaintiff bar will be pursuing these cases very aggressively.” Saylor said one major issue going forward will be the reliability of FMCSA safety data used by brokers to evaluate carriers, because critics of the system have said the information can be incomplete or outdated. “Brokers are dealing with carriers authorized by the federal government to operate,” Saylor said. “If brokers can be liable, we should at least make sure brokers have the right information available. How is the broker supposed to know that one carrier is more or less safe than another? “More information is good, and it helps,” he added. “With that information, FMCSA can identify unsafe carriers, remove them from the market and ensure the available capacity is safer.” Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

The unanimous Supreme Court ruling allowing certain state-level negligence claims against freight brokers is expected to increase pressure on motor carriers to carry higher insurance limits and could eventually contribute to higher transportation costs, trucking attorneys say. The May 14 decision in Montgomery v. Caribe Transports LLC held that freight brokers are not shielded from some state personal injury lawsuits, potentially expanding liability exposure for intermediaries that arrange truck freight. Attorneys on both sides of the trucking industry said the ruling is likely to intensify scrutiny of carrier selection practices and insurance coverage. “A lot of brokers are going to go to their trucking companies and say, ‘You’ve been running loads with $1 million worth of insurance. Since we’re exposed, you can cause a lot more than $1 million worth of damage,’” Ed Leonard, a partner at San Diego law firm Tyson & Mendes, which represents trucking companies in civil litigation, said. Leonard told the Journal of Commerce that brokers are likely to require higher liability coverage from carriers moving freight, particularly smaller operators with marginal safety records. “They’re going to be asking these trucking companies to buy more insurance,” he said. “This is going to cost more money to get things done.” The ruling could also tighten trucking capacity if higher insurance premiums force some smaller fleets and owner-operators to exit the market, Leonard said. That could place additional upward pressure on freight rates at a time when parts of the trucking industry are already navigating labor and regulatory disruptions. ‘A big deal’ Plaintiff attorneys, meanwhile, said the decision gives crash victims a significant new legal avenue by allowing brokers to be named in lawsuits involving serious injuries and fatalities. “These major trucking accidents result in deaths, amputations and traumatic brain injuries, and this opens the door to brokers, making them a viable defendant,” said Edward Bassett, a partner at Mirick Law and former president of the Association of Plaintiff Interstate Trucking Lawyers of America. “Whether you are popping champagne or Diet Coke at plaintiff firms, this is a big deal.” Bassett said brokers are likely to more carefully scrutinize the carriers they hire, rather than selecting providers primarily on price. “They’re going to start looking carefully at the carriers they hire and not just the cheaper ones,” he said. “They’re being held responsible if they hire fly-by-night companies.” The case decided by the Supreme Court last week stemmed from a 2017 crash in Illinois involving truck driver Shawn Montgomery, who suffered catastrophic injuries and lost a leg after his parked tractor-trailer was struck by another truck. The Supreme Court ruled Montgomery could pursue claims against freight broker C.H. Robinson, which arranged the shipment. Montgomery’s attorneys argued that carrier Caribe Transport II had a poor safety record and that the broker should share liability for hiring it. C.H. Robinson argued that because trucking companies are federally licensed and regulated, brokers should be shielded from state negligence claims tied to carrier safety. The court disagreed, concluding that federal transportation law does not broadly preempt those claims. Federal data under scrutiny The decision could renew debate over trucking insurance minimums, which have remained largely unchanged since the Reagan administration. The Federal Motor Carrier Safety Administration (FMCSA) currently requires minimum liability coverage ranging from $750,000 to $5 million depending on the type of freight being hauled. Since 1985, Congress has repeatedly considered raising those thresholds or indexing them to inflation, but those efforts have stalled. FMCSA studies have suggested current minimums may be insufficient to cover catastrophic crashes and rising medical costs. Industry groups, however, have argued most claims settle below existing coverage requirements and that raising insurance mandates would disproportionately hurt small and midsize carriers by increasing operating costs. “We think it’s a bad decision. We had to be defending these cases before and we’ll be defending them after,” said Nathaniel Saylor, a partner at transportation law firm Scopelitis, Garvin, Light, Hanson & Feary. “The question in these cases before the jury will always be, what is reasonable care. That standard was the standard yesterday and tomorrow as well. Nothing has changed regarding the broker’s duty. But the temperature is up on this issue, and you can expect the plaintiff bar will be pursuing these cases very aggressively.” Saylor said one major issue going forward will be the reliability of FMCSA safety data used by brokers to evaluate carriers, because critics of the system have said the information can be incomplete or outdated. “Brokers are dealing with carriers authorized by the federal government to operate,” Saylor said. “If brokers can be liable, we should at least make sure brokers have the right information available. How is the broker supposed to know that one carrier is more or less safe than another? “More information is good, and it helps,” he added. “With that information, FMCSA can identify unsafe carriers, remove them from the market and ensure the available capacity is safer.” Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Truck brokers

Trucking labor

‘Montgomery’ ruling likely to raise pressure on trucking insurance, broker vetting

<div class="phx-topic abstract-wrapper">Vancouver and Prince Rupert recorded solid year-over-year gains in the eastbound trans-Pacific as they focused on improving their intermodal efficiency to the interior of Canada and the US.</div>

Vancouver and Prince Rupert recorded solid year-over-year gains in the eastbound trans-Pacific as they focused on improving their intermodal efficiency to the interior of Canada and the US.

<div class="phx-topic">The Western Canadian ports of Vancouver and Prince Rupert are enhancing their presence in the Asia-North America trade by building on their intermodal advantages in serving the interior of North America, resulting in an increase in imports in the first quarter while their western US counterparts recorded a first-quarter import decline. Containerized imports moving through Vancouver in the first quarter increased 9% year over year, while imports in Prince Rupert grew 7.8%, according to data from Sea-Intelligence Maritime Analysis. Vancouver, Canada’s largest container gateway, serves both the interior of Canada and the US Midwest with direct inland point intermodal (IPI) service. The most obvious advantage this gives Vancouver over US West Coast ports is that “rail costs are significantly lower from Vancouver to the Midwest than from any US port,” Cliff Stewart, vice president of operations for the Vancouver-Fraser Port Authority, told the Journal of Commerce. The rail passage route through the Canadian Rockies to the North American interior is at a much lower altitude than through the US Rocky Mountains, Stewart explained. “It just takes a whole lot less fuel to move a train from Vancouver to Chicago than it does to move a train from either Los Angeles-Long Beach, Northern California or the Puget Sound area,” he said. The Trump administration’s tariffs that were levied on imports from Asia a year ago do not generally influence retailers on how to route their goods because importers must pay the tariffs regardless of whether the containers move through a US or Canadian port, Stewart said. But the tariffs do influence some retailers, namely big-box stores that have outlets in both countries. Those retailers had been shipping their Canadian-destined merchandise as a subcomponent of US shipments from common origins in Asia. The containers entered a US West Coast port, and then the Canadian freight was broken out and moved by truck into Canada. Those big box retailers are now choosing to ship their Canadian freight through Vancouver or Prince Rupert so the Canadian freight is not subject to a US duty, Stewart said. “There’s some repatriation of Canadian-destined cargo back to Canadian ports,” he acknowledged. <h3>US-destined import share declining </h3>That’s not to say that British Columbia ports are growing by focusing only on US-destined cargo. In fact, it’s quite the opposite. The port’s records show that US-destined imports as a percentage of Vancouver’s total import volumes have declined steadily from about 25% in 2010 to about 8% today, Stewart said. Rather, the BC ports are focusing even more on attracting import and export cargo to and from Canada’s interior. “Canada is certainly where the growth is coming from,” said Stewart. Still, some high-volume retailers and importers of high-value merchandise are saving money by shipping through the British Columbia ports to avoid other costs, such as the US Harbor Maintenance Tax, he said. Vancouver has also been attracting cargo destined for the Canadian interior that was moving through Montreal and Halifax before the <a href="https://www.joc.com/article/maersk-mulls-potential-red-sea-return-as-hopes-rise-over-us-iran-deal-6217039">attacks on vessels transiting the Red Sea began more than two years ago</a>, effectively closing the Suez routing and forcing shipowners to take the longer, costlier route around the southern tip of Africa. “It’s cheaper now to come through Vancouver and then rail it to central Canada,” Stewart said. Prince Rupert is likewise experiencing steady growth this year. “We have seen a sustained recovery in all imports compared to previous years,” the port authority said in a statement. This is especially true compared with the first quarter of 2025, when volumes were softer as reconfigured alliances and service strings affected carriers’ arrival schedules, the port said. Prince Rupert, which is also working to <a href="https://www.joc.com/article/prince-rupert-promoting-transload-operations-to-improve-logistics-efficiency-5937532">attract more export cargo as well as imports</a>, is developing an intermodal center close to the port to improve intermodal efficiency. The LinX facility is scheduled to open in 2027. <h3>Sharp declines in NWSA </h3>While Vancouver and Prince Rupert saw their import volumes increase in the first quarter, imports declined by 3.6% in Los Angeles, 5.6% in Long Beach, and 6.8% in Oakland, according to Sea-Intelligence. The Northwest Seaport Alliance of Seattle and Tacoma (NWSA) was especially hard-hit, with first-quarter imports declining 18% year over year. For more than a decade now, US West Coast ports have been losing market share of US imports from Asia to ports along the East and Gulf coasts, given their location closer to major population centers in the eastern half of the country where two-thirds of the US population resides. Still, that share can shift considerably from month to month based on market dynamics and seasonality. In March, the West Coast had a market share of 53.2% for US imports from Asia, with the East Coast at 37.8% and the Gulf Coast at 9%, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. For April, the shares had moved significantly, with the West Coast jumping to 61.9%, the East Coast falling to 30.5%, and the Gulf slipping to 7.6%. The West Coast’s share last month was the highest since last June. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="14122523-b515-4dea-a851-1389ef954bcd"></dynamic-object></div>Competition among US West Coast ports for imports from Asia has become a battle of internal competition, with Los Angeles-Long Beach capitalizing on the steep losses in the NWSA, said Mike Jacob, president of the Pacific Merchant Shipping Association (PMSA). PMSA represents shipping lines and USWC terminal operators on regulatory issues. “You’re looking at an amazing amount of consolidation in Southern California,” Jacob told the Journal of Commerce. Carriers and railroads seek density in freight volumes. Carriers continue to deploy the bulk of their assets in Southern California, which has not only a much larger local population, but also offers intermodal services to most regions to the east, including Dallas, Kansas City, Chicago, Columbus, and Atlanta. Intermodal services from the NWSA are limited primarily to Chicago and the Midwest, Jacob said. “LA-LB isn’t just attempting to claw back market share from the East and Gulf coast ports,” he said. “They’re at the same time consolidating volumes from across the entire West Coast.” In order to stem its loss of cargo and return to growth, Jacob believes the NWSA must double down on its investments in intermodal infrastructure and focus on promoting more efficient, lower-cost IPI service. For its part, the NWSA said it is taking PMSA’s admonition to invest in infrastructure and intermodal efficiency seriously. “The market share trends PMSA has documented are real and we are investing accordingly — in terminal infrastructure, increased intermodal efficiency and aggressive efforts to attract and retain services,” the NWSA said in a statement to the Journal of Commerce. “We are not complacent about our long-term competitive position and instead are doubling down on our best-in-class service and port investment.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The Western Canadian ports of Vancouver and Prince Rupert are enhancing their presence in the Asia-North America trade by building on their intermodal advantages in serving the interior of North America, resulting in an increase in imports in the first quarter while their western US counterparts recorded a first-quarter import decline. Containerized imports moving through Vancouver in the first quarter increased 9% year over year, while imports in Prince Rupert grew 7.8%, according to data from Sea-Intelligence Maritime Analysis. Vancouver, Canada’s largest container gateway, serves both the interior of Canada and the US Midwest with direct inland point intermodal (IPI) service. The most obvious advantage this gives Vancouver over US West Coast ports is that “rail costs are significantly lower from Vancouver to the Midwest than from any US port,” Cliff Stewart, vice president of operations for the Vancouver-Fraser Port Authority, told the Journal of Commerce. The rail passage route through the Canadian Rockies to the North American interior is at a much lower altitude than through the US Rocky Mountains, Stewart explained. “It just takes a whole lot less fuel to move a train from Vancouver to Chicago than it does to move a train from either Los Angeles-Long Beach, Northern California or the Puget Sound area,” he said. The Trump administration’s tariffs that were levied on imports from Asia a year ago do not generally influence retailers on how to route their goods because importers must pay the tariffs regardless of whether the containers move through a US or Canadian port, Stewart said. But the tariffs do influence some retailers, namely big-box stores that have outlets in both countries. Those retailers had been shipping their Canadian-destined merchandise as a subcomponent of US shipments from common origins in Asia. The containers entered a US West Coast port, and then the Canadian freight was broken out and moved by truck into Canada. Those big box retailers are now choosing to ship their Canadian freight through Vancouver or Prince Rupert so the Canadian freight is not subject to a US duty, Stewart said. “There’s some repatriation of Canadian-destined cargo back to Canadian ports,” he acknowledged. US-destined import share declining That’s not to say that British Columbia ports are growing by focusing only on US-destined cargo. In fact, it’s quite the opposite. The port’s records show that US-destined imports as a percentage of Vancouver’s total import volumes have declined steadily from about 25% in 2010 to about 8% today, Stewart said. Rather, the BC ports are focusing even more on attracting import and export cargo to and from Canada’s interior. “Canada is certainly where the growth is coming from,” said Stewart. Still, some high-volume retailers and importers of high-value merchandise are saving money by shipping through the British Columbia ports to avoid other costs, such as the US Harbor Maintenance Tax, he said. Vancouver has also been attracting cargo destined for the Canadian interior that was moving through Montreal and Halifax before the attacks on vessels transiting the Red Sea began more than two years ago , effectively closing the Suez routing and forcing shipowners to take the longer, costlier route around the southern tip of Africa. “It’s cheaper now to come through Vancouver and then rail it to central Canada,” Stewart said. Prince Rupert is likewise experiencing steady growth this year. “We have seen a sustained recovery in all imports compared to previous years,” the port authority said in a statement. This is especially true compared with the first quarter of 2025, when volumes were softer as reconfigured alliances and service strings affected carriers’ arrival schedules, the port said. Prince Rupert, which is also working to attract more export cargo as well as imports , is developing an intermodal center close to the port to improve intermodal efficiency. The LinX facility is scheduled to open in 2027. Sharp declines in NWSA While Vancouver and Prince Rupert saw their import volumes increase in the first quarter, imports declined by 3.6% in Los Angeles, 5.6% in Long Beach, and 6.8% in Oakland, according to Sea-Intelligence. The Northwest Seaport Alliance of Seattle and Tacoma (NWSA) was especially hard-hit, with first-quarter imports declining 18% year over year. For more than a decade now, US West Coast ports have been losing market share of US imports from Asia to ports along the East and Gulf coasts, given their location closer to major population centers in the eastern half of the country where two-thirds of the US population resides. Still, that share can shift considerably from month to month based on market dynamics and seasonality. In March, the West Coast had a market share of 53.2% for US imports from Asia, with the East Coast at 37.8% and the Gulf Coast at 9%, according to PIERS, a sister product of the Journal of Commerce within S&P Global. For April, the shares had moved significantly, with the West Coast jumping to 61.9%, the East Coast falling to 30.5%, and the Gulf slipping to 7.6%. The West Coast’s share last month was the highest since last June. Competition among US West Coast ports for imports from Asia has become a battle of internal competition, with Los Angeles-Long Beach capitalizing on the steep losses in the NWSA, said Mike Jacob, president of the Pacific Merchant Shipping Association (PMSA). PMSA represents shipping lines and USWC terminal operators on regulatory issues. “You’re looking at an amazing amount of consolidation in Southern California,” Jacob told the Journal of Commerce. Carriers and railroads seek density in freight volumes. Carriers continue to deploy the bulk of their assets in Southern California, which has not only a much larger local population, but also offers intermodal services to most regions to the east, including Dallas, Kansas City, Chicago, Columbus, and Atlanta. Intermodal services from the NWSA are limited primarily to Chicago and the Midwest, Jacob said. “LA-LB isn’t just attempting to claw back market share from the East and Gulf coast ports,” he said. “They’re at the same time consolidating volumes from across the entire West Coast.” In order to stem its loss of cargo and return to growth, Jacob believes the NWSA must double down on its investments in intermodal infrastructure and focus on promoting more efficient, lower-cost IPI service. For its part, the NWSA said it is taking PMSA’s admonition to invest in infrastructure and intermodal efficiency seriously. “The market share trends PMSA has documented are real and we are investing accordingly — in terminal infrastructure, increased intermodal efficiency and aggressive efforts to attract and retain services,” the NWSA said in a statement to the Journal of Commerce. “We are not complacent about our long-term competitive position and instead are doubling down on our best-in-class service and port investment.” Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

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North American ports

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Western Canadian ports push IPI advantage to grow Q1 imports from Asia

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<div class="phx-topic abstract-wrapper">The speech by Bobby Olvera sends a warning shot to employers and cargo owners ahead of the expiration of its longshore contract in 2028.</div>

The speech by Bobby Olvera sends a warning shot to employers and cargo owners ahead of the expiration of its longshore contract in 2028.

<div class="phx-topic">The president of the International Longshore and Warehouse Union (ILWU) on Wednesday slammed US West Coast employers as being dominated by foreign shipping companies, accusing them of caring more about the profits they send back to their headquarters than the port communities in which they operate. The message, delivered by Bobby Olvera at the annual meeting of the Agriculture Transportation Coalition (AgTC) in Tacoma, Washington, sends a warning shot to employers — and cargo owners — ahead of the expiration of the union’s coastwide contract in 2028. The previous contract, in which the ILWU scored a <a href="https://www.joc.com/article/ilwu-scores-32-wage-increase-70-million-bonus-in-tentative-new-contract-5223607">32% increase in wages for its members</a>, was finalized in 2022 after <a href="https://www.joc.com/article/west-coast-ports-hit-with-new-round-of-cargo-handling-disruptions-5226851">work stoppages and slowdowns</a> that resulted in a significant diversion of cargo to East and Gulf Coast ports. “The foreign shipping lines, they should not be operating our terminals here in the United States. That should be American stevedoring companies,” Olvera told the AgTC event. “They don’t care about our ports. It’s all [about] profit generating. It’s control generating.” Olvera said the ILWU is using this period to advocate for strong West Coast ports and their customers, which include agricultural importers and exporters, before the appropriate state and federal agencies regarding legislation and regulations that impact the flow of cargo. “But things have changed. What they’ve done, in my opinion, is turned the PMA into a one-trick pony. All they advocate [and] lobby for are tax incentives, tax breaks, dollars for tax breaks and tax funds for the terminals,” Olvera said. The Pacific Maritime Association (PMA), which represents ocean carrier and terminal operator employers in negotiations with the ILWU, said that is not the case at all. “PMA is focused each day on promoting strong and efficient West Coast ports that support the nation’s supply chain and sustain thousands of jobs at port terminals and millions of jobs throughout the US economy,” the association said in a statement Thursday. <h3>The role of private equity </h3>Former shipping company executive and Journal of Commerce contributor Ted Prince noted that the phenomenon of ocean carriers dominating terminal operators in a vertically-integrated operation developed decades ago, but that model has been changing due to investments by private equity and infrastructure funds in ports and marine terminals. “How do you deal with this silent force of private equity that in my mind is going to increasingly call the shots?” Prince asked Olvera during the event. “It starts and stops with the ports, with our public port authorities,” Olvera said. “I think we fail to recognize that they’re owned by the citizens. They’re owned by the communities. The port authority has an obligation when they execute 30- and 40-year leases on the terminals to ask the right questions.” Those “right questions” involve how to make their facilities more responsive to port users and their needs for sufficient gate hours and efficient operations, he added. A California-based agriculture exporter told Olvera that the lack of trust between the PMA and the ILWU has hurt the supply chain by imposing higher costs on shippers, which has resulted in a diversion of cargo to East and Gulf Coast ports. She suggested that some forms of technology that are now common at marine terminals are designed to reduce costs and improve efficiency, not to eliminate longshore jobs. “That’s where the technology comes in — to move more cargo,” she said. Olvera responded that he was not going to talk about automation at the ports. The West Coast longshore labor contract allows for automation, but anticipated union resistance has resulted in a new dynamic in which port authorities are working with terminal operators and the ILWU to ensure that <a href="https://www.joc.com/article/hesitation-from-port-authorities-slows-automation-in-southern-california-6199922">future projects move forward with the cooperation of both parties</a>. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

The president of the International Longshore and Warehouse Union (ILWU) on Wednesday slammed US West Coast employers as being dominated by foreign shipping companies, accusing them of caring more about the profits they send back to their headquarters than the port communities in which they operate. The message, delivered by Bobby Olvera at the annual meeting of the Agriculture Transportation Coalition (AgTC) in Tacoma, Washington, sends a warning shot to employers — and cargo owners — ahead of the expiration of the union’s coastwide contract in 2028. The previous contract, in which the ILWU scored a 32% increase in wages for its members , was finalized in 2022 after work stoppages and slowdowns that resulted in a significant diversion of cargo to East and Gulf Coast ports. “The foreign shipping lines, they should not be operating our terminals here in the United States. That should be American stevedoring companies,” Olvera told the AgTC event. “They don’t care about our ports. It’s all [about] profit generating. It’s control generating.” Olvera said the ILWU is using this period to advocate for strong West Coast ports and their customers, which include agricultural importers and exporters, before the appropriate state and federal agencies regarding legislation and regulations that impact the flow of cargo. “But things have changed. What they’ve done, in my opinion, is turned the PMA into a one-trick pony. All they advocate [and] lobby for are tax incentives, tax breaks, dollars for tax breaks and tax funds for the terminals,” Olvera said. The Pacific Maritime Association (PMA), which represents ocean carrier and terminal operator employers in negotiations with the ILWU, said that is not the case at all. “PMA is focused each day on promoting strong and efficient West Coast ports that support the nation’s supply chain and sustain thousands of jobs at port terminals and millions of jobs throughout the US economy,” the association said in a statement Thursday. The role of private equity Former shipping company executive and Journal of Commerce contributor Ted Prince noted that the phenomenon of ocean carriers dominating terminal operators in a vertically-integrated operation developed decades ago, but that model has been changing due to investments by private equity and infrastructure funds in ports and marine terminals. “How do you deal with this silent force of private equity that in my mind is going to increasingly call the shots?” Prince asked Olvera during the event. “It starts and stops with the ports, with our public port authorities,” Olvera said. “I think we fail to recognize that they’re owned by the citizens. They’re owned by the communities. The port authority has an obligation when they execute 30- and 40-year leases on the terminals to ask the right questions.” Those “right questions” involve how to make their facilities more responsive to port users and their needs for sufficient gate hours and efficient operations, he added. A California-based agriculture exporter told Olvera that the lack of trust between the PMA and the ILWU has hurt the supply chain by imposing higher costs on shippers, which has resulted in a diversion of cargo to East and Gulf Coast ports. She suggested that some forms of technology that are now common at marine terminals are designed to reduce costs and improve efficiency, not to eliminate longshore jobs. “That’s where the technology comes in — to move more cargo,” she said. Olvera responded that he was not going to talk about automation at the ports. The West Coast longshore labor contract allows for automation, but anticipated union resistance has resulted in a new dynamic in which port authorities are working with terminal operators and the ILWU to ensure that future projects move forward with the cooperation of both parties . Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Marine terminals

ILWU chief slams ‘foreign shipping companies’ ahead of contract expiration

<div class="phx-topic abstract-wrapper">Justice Department indictments against four of the world’s biggest box manufacturers follow reciprocal port fees and tariffs on China-made port equipment.</div>

Justice Department indictments against four of the world’s biggest box manufacturers follow reciprocal port fees and tariffs on China-made port equipment.

<div class="phx-topic">The US Department of Justice’s (DOJ’s) indictment of four of the world’s largest ocean shipping container makers and seven of their senior executives marks the latest US-China supply chain-linked row that has previously included tit-for-tat port fees and tariffs on China-made port equipment. It also follows earlier <a href="https://www.joc.com/article/fmcs-bentzel-cautions-on-china-dominance-in-chassis-container-supply-5249125">US warnings about China’s dominance in container and chassis manufacturing</a> that led one of the indicted companies to drop its <a href="https://www.joc.com/article/cimc-maersk-drop-reefer-deal-after-doj-warning-5222824">planned $987 million acquisition of Maersk’s refrigerated container production business</a> in 2022 after the DOJ raised a red flag on the deal. DOJ, in an indictment unsealed Tuesday, accused the parties of engaging in a price-fixing and production-limiting conspiracy from November 2019 to at least January 2024. The companies indicted are China International Marine Containers (CIMC), the world’s largest container manufacturer; Cosco Shipping Development’s container-making subsidiary Shanghai Universal Logistics Equipment Company, which controls Dong Fang International Containers; CXIC Group Containers Company; and Hong Kong’s Singamas Container (Holdings). The executives targeted include CIMC President Mai Boliang and former vice president Huang Tianhua Huang, and Singamas CEO and Chairman Teo Siong Seng. “The multi-year conspiracy roughly doubled the prices of standard shipping containers between 2019 and 2021, increasing the container manufacturers’ profits approximately one hundredfold during the COVID-19 pandemic and global supply chain crisis,” the DOJ said in a statement. Chinese container manufacturers produce arbout 95% of the world’s dry freight containers, according to maritime consultancy Drewry. The DOJ said one executive, Singamas marketing director Vick Nam Hing Ma, was arrested in France last month and his extradition to the US is pending. The six other co-defendants remain at large. The Justice Department did not say whether it had approached other jurisdictions, including Hong Kong and Singapore, where Singamas CEO Teo normally lives, seeking the arrest of the other executives. In separate statements to the Hong Kong stock exchange Wednesday, both CIMC and Singamas said they were aware the DOJ had issued criminal antitrust charges against them and company executives. But they both said that neither the companies nor their executives had been served with any legal documentation from the DOJ. Singamas added that it had “engaged external legal advisers,” while CIMC said it “will closely monitor and respond proactively.” Both companies said business operations and day-to-day activities remain normal. Dong Fang, Cosco Shipping Development and CXIC did not immediately comment. <h3>Companies allegedly agreed on production cap </h3>In details about the alleged conspiracy, the DOJ said executives from CIMC, Dong Fang, and CXIC, as well as an alleged unnamed co-conspirator, met at CIMC’s headquarters in Shenzhen in November 2019. The executives allegedly agreed to four measures limiting output of dry freight containers, including restricting the number of shifts and hours each factory worked, installing surveillance cameras on all production lines to ensure the agreed-upon limitations were not exceeded, and not building any new container-making factories. DOJ alleges the executives later refined the pact to restrict how many dry containers the companies would manufacture for particular customers, including container lessors, shipping lines and logistics companies in the US, Europe, China and elsewhere, while also capping total container production. “Global price-fixing cartels strike at the heart of our economic liberty,” Omeed Assefi, DOJ’s acting assistant attorney general, said in the statement. “The defendants held hostage the world’s supply of ocean shipping containers during the COVID pandemic when our supply chains needed it the most.” The indictments come just one week after US President Donald Trump traveled to China for meetings with Chinese President Xi Jinping. Washington and Beijing have also been at odds over the past year regarding what the US sees as <a href="https://www.joc.com/article/cosco-halts-balboa-calls-in-latest-twist-over-panama-port-row-6185309">China’s outsized influence in Panama Canal operations</a>, with that coming amid the wider trade spat that saw the US imposing tariffs on China-made products and Beijing responding in kind. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

The US Department of Justice’s (DOJ’s) indictment of four of the world’s largest ocean shipping container makers and seven of their senior executives marks the latest US-China supply chain-linked row that has previously included tit-for-tat port fees and tariffs on China-made port equipment. It also follows earlier US warnings about China’s dominance in container and chassis manufacturing that led one of the indicted companies to drop its planned $987 million acquisition of Maersk’s refrigerated container production business in 2022 after the DOJ raised a red flag on the deal. DOJ, in an indictment unsealed Tuesday, accused the parties of engaging in a price-fixing and production-limiting conspiracy from November 2019 to at least January 2024. The companies indicted are China International Marine Containers (CIMC), the world’s largest container manufacturer; Cosco Shipping Development’s container-making subsidiary Shanghai Universal Logistics Equipment Company, which controls Dong Fang International Containers; CXIC Group Containers Company; and Hong Kong’s Singamas Container (Holdings). The executives targeted include CIMC President Mai Boliang and former vice president Huang Tianhua Huang, and Singamas CEO and Chairman Teo Siong Seng. “The multi-year conspiracy roughly doubled the prices of standard shipping containers between 2019 and 2021, increasing the container manufacturers’ profits approximately one hundredfold during the COVID-19 pandemic and global supply chain crisis,” the DOJ said in a statement. Chinese container manufacturers produce arbout 95% of the world’s dry freight containers, according to maritime consultancy Drewry. The DOJ said one executive, Singamas marketing director Vick Nam Hing Ma, was arrested in France last month and his extradition to the US is pending. The six other co-defendants remain at large. The Justice Department did not say whether it had approached other jurisdictions, including Hong Kong and Singapore, where Singamas CEO Teo normally lives, seeking the arrest of the other executives. In separate statements to the Hong Kong stock exchange Wednesday, both CIMC and Singamas said they were aware the DOJ had issued criminal antitrust charges against them and company executives. But they both said that neither the companies nor their executives had been served with any legal documentation from the DOJ. Singamas added that it had “engaged external legal advisers,” while CIMC said it “will closely monitor and respond proactively.” Both companies said business operations and day-to-day activities remain normal. Dong Fang, Cosco Shipping Development and CXIC did not immediately comment. Companies allegedly agreed on production cap In details about the alleged conspiracy, the DOJ said executives from CIMC, Dong Fang, and CXIC, as well as an alleged unnamed co-conspirator, met at CIMC’s headquarters in Shenzhen in November 2019. The executives allegedly agreed to four measures limiting output of dry freight containers, including restricting the number of shifts and hours each factory worked, installing surveillance cameras on all production lines to ensure the agreed-upon limitations were not exceeded, and not building any new container-making factories. DOJ alleges the executives later refined the pact to restrict how many dry containers the companies would manufacture for particular customers, including container lessors, shipping lines and logistics companies in the US, Europe, China and elsewhere, while also capping total container production. “Global price-fixing cartels strike at the heart of our economic liberty,” Omeed Assefi, DOJ’s acting assistant attorney general, said in the statement. “The defendants held hostage the world’s supply of ocean shipping containers during the COVID pandemic when our supply chains needed it the most.” The indictments come just one week after US President Donald Trump traveled to China for meetings with Chinese President Xi Jinping. Washington and Beijing have also been at odds over the past year regarding what the US sees as China’s outsized influence in Panama Canal operations , with that coming amid the wider trade spat that saw the US imposing tariffs on China-made products and Beijing responding in kind. Contact Keith Wallis at keithwallis@hotmail.com .

Transport, Trade and Regulation News

US move against container makers is latest entry in logistics battle with China

<div class="phx-topic abstract-wrapper">The underlying strength of that peak is unclear, however, with blank sailings, fuel-linked surcharges and a changeover in annual service contracts all putting upward pressure on spot and FAK rates.</div>

The underlying strength of that peak is unclear, however, with blank sailings, fuel-linked surcharges and a changeover in annual service contracts all putting upward pressure on spot and FAK rates.

<div class="phx-topic">An unexpected jump in container spot rates from Asia to the US and the launch of a seasonal service next month suggest that some semblance of an early peak season is hitting the trans-Pacific trade. The underlying strength of that peak is unclear, however, with blank sailings, fuel-linked surcharges and a changeover in annual service contracts all putting upward pressure on spot and freight-all-kind (FAK) rates. Still, some see momentum in the market, with Hapag-Lloyd CEO Rolf Habben Jansen telling investors last week that “demand at the moment is quite strong” on the trans-Pacific. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6224686_0.1.jpg"></img></div>“I’m fairly optimistic about the peak season,” he said on the carrier’s first-quarter earnings call May 13. The general rate increase sought by ocean carriers on May 15 clearly connected, with container rates hitting their highest point so far this year, according to various indexes. The cost to ship an FEU from North Asia to the US West Coast passed the $3,000 mark this week, as measured by the Shanghai Containerized Freight Index, although that was up just 1% from a year ago. US import volumes as forecast by the Global Port Tracker (GPT) are projected to be <a href="https://www.joc.com/article/weak-consumer-confidence-rising-inflation-dim-peak-season-hopes-6217405">up marginally this month</a> on a year-over-year basis, but the gains are illusory because imports crashed during the same period in 2025 following the widespread implementation of US tariffs. Maersk on June 8 plans to launch a seasonal trans-Pacific extra loader connecting Vietnam’s Cai Mep and Busan in South Korea to Long Beach, a modest sign of anticipated demand. Still, the outlook for July and August worsens, with GPT, produced by Hackett Associates on behalf of the National Retail Federation, predicting that import volumes will be down nearly 8% and 5% year over year, respectively. <h3>Carriers on guard after down Q1 </h3>Some of the increase in trans-Pacific spot rates is due to fuel-linked surcharges of hundreds of dollars per container and artificial capacity tightness created by the phasing in of new annual service contracts that generally began May 1. One forwarder estimates that 17% to 20% of capacity had been cut on services it utilizes from Asia to the US West Coast between mid-April and early May. “It seems to be a little bit of surge [of cargo] there that may have been trying to get in before new elevated contract levels [take effect],” the forwarder said. Container lines are blanking less and deploying incrementally more tonnage as peak season nears, according to eeSea data. But blank sailings can still have an impact as demand ratchets up. “Current demand is very strong and the industry is preparing for sustained volume pressure rather than a short-lived spike,” said Serkan Kavas, executive vice president for imports at the forwarder MTS Logistics. “Multiple carrier actions indicate expectations for continued strong booking levels through early summer.” Kavas estimates that the coming weeks will be busy on the eastbound trans-Pacific as carriers take a more disciplined approach to capacity, having booked record profits during the pandemic thanks to tightening of available capacity. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="44b7e856-235d-4131-961a-7ab7cc4f2707"></dynamic-object></div>Facing elevated operating costs due to war-driven fuel prices and after an unspectacular service contracting cycle, ocean carriers have hair-trigger tolerance for non-compensatory services. <a href="https://www.joc.com/article/maersk-passing-500-million-monthly-fuel-bill-to-customers-in-full-ceo-6216319">Maersk</a> and <a href="https://www.joc.com/article/softer-freight-rates-push-evergreen-to-71-decline-in-q1-net-profit-6220526">Evergreen</a> earlier this month reported declining profits in the first quarter, while <a href="https://www.joc.com/article/hapag-lloyd-posts-q1-net-loss-in-unsatisfactory-start-to-2026-6219964">Hapag-Lloyd</a> recorded an “unsatisfactory” loss in the same period. Habben Jansen said service contract rates, excluding the higher fuel costs, “were a bit down compared to previous year.” Annual contracts for midsize importers for the 2026–27 service period ended approximately comparable to slightly less than last year, according to multiple sources. The threat of rising operating costs and weak demand is front and center for ocean carriers. So-called insufficient capacity management “will lead to an erosion of the recovery of costs on the short-term market, which could, depending on how much it will erode, quickly get you into a not-so-pleasant place in the second half of the year,” Maersk CEO Vincent Clerc told investors May 7. The sharply higher bunker fuel costs since the war began have changed carriers’ risk profile and profitability outlook, according to Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’ll be quicker to pull the capacity to fend off losses,” Cook said. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

An unexpected jump in container spot rates from Asia to the US and the launch of a seasonal service next month suggest that some semblance of an early peak season is hitting the trans-Pacific trade. The underlying strength of that peak is unclear, however, with blank sailings, fuel-linked surcharges and a changeover in annual service contracts all putting upward pressure on spot and freight-all-kind (FAK) rates. Still, some see momentum in the market, with Hapag-Lloyd CEO Rolf Habben Jansen telling investors last week that “demand at the moment is quite strong” on the trans-Pacific. “I’m fairly optimistic about the peak season,” he said on the carrier’s first-quarter earnings call May 13. The general rate increase sought by ocean carriers on May 15 clearly connected, with container rates hitting their highest point so far this year, according to various indexes. The cost to ship an FEU from North Asia to the US West Coast passed the $3,000 mark this week, as measured by the Shanghai Containerized Freight Index, although that was up just 1% from a year ago. US import volumes as forecast by the Global Port Tracker (GPT) are projected to be up marginally this month on a year-over-year basis, but the gains are illusory because imports crashed during the same period in 2025 following the widespread implementation of US tariffs. Maersk on June 8 plans to launch a seasonal trans-Pacific extra loader connecting Vietnam’s Cai Mep and Busan in South Korea to Long Beach, a modest sign of anticipated demand. Still, the outlook for July and August worsens, with GPT, produced by Hackett Associates on behalf of the National Retail Federation, predicting that import volumes will be down nearly 8% and 5% year over year, respectively. Carriers on guard after down Q1 Some of the increase in trans-Pacific spot rates is due to fuel-linked surcharges of hundreds of dollars per container and artificial capacity tightness created by the phasing in of new annual service contracts that generally began May 1. One forwarder estimates that 17% to 20% of capacity had been cut on services it utilizes from Asia to the US West Coast between mid-April and early May. “It seems to be a little bit of surge [of cargo] there that may have been trying to get in before new elevated contract levels [take effect],” the forwarder said. Container lines are blanking less and deploying incrementally more tonnage as peak season nears, according to eeSea data. But blank sailings can still have an impact as demand ratchets up. “Current demand is very strong and the industry is preparing for sustained volume pressure rather than a short-lived spike,” said Serkan Kavas, executive vice president for imports at the forwarder MTS Logistics. “Multiple carrier actions indicate expectations for continued strong booking levels through early summer.” Kavas estimates that the coming weeks will be busy on the eastbound trans-Pacific as carriers take a more disciplined approach to capacity, having booked record profits during the pandemic thanks to tightening of available capacity. Facing elevated operating costs due to war-driven fuel prices and after an unspectacular service contracting cycle, ocean carriers have hair-trigger tolerance for non-compensatory services. Maersk and Evergreen earlier this month reported declining profits in the first quarter, while Hapag-Lloyd recorded an “unsatisfactory” loss in the same period. Habben Jansen said service contract rates, excluding the higher fuel costs, “were a bit down compared to previous year.” Annual contracts for midsize importers for the 2026–27 service period ended approximately comparable to slightly less than last year, according to multiple sources. The threat of rising operating costs and weak demand is front and center for ocean carriers. So-called insufficient capacity management “will lead to an erosion of the recovery of costs on the short-term market, which could, depending on how much it will erode, quickly get you into a not-so-pleasant place in the second half of the year,” Maersk CEO Vincent Clerc told investors May 7. The sharply higher bunker fuel costs since the war began have changed carriers’ risk profile and profitability outlook, according to Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’ll be quicker to pull the capacity to fend off losses,” Cook said. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

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