<div class="phx-topic abstract-wrapper">CEO Jeremy Nixon said the investment, which could be valued at close to $1 billion, is part of ONE’s plan to reach 3 million TEUs in capacity by 2030. </div>

CEO Jeremy Nixon said the investment, which could be valued at close to $1 billion, is part of ONE’s plan to reach 3 million TEUs in capacity by 2030.

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<div class="phx-topic">Ocean Network Express (ONE) has increased its ownership stake in its largest provider of chartered tonnage, becoming the largest external shareholder of Poseidon Corp. in a transaction potentially valued at close to $1 billion. ONE said in a statement Tuesday it signed an agreement to acquire an additional stake in Poseidon, the parent company of Singapore-based container shipowner Seaspan, from existing shareholders. ONE said the purchase brings its stake in Poseidon to 48.9%. ONE did not say how much it paid for the additional stake. But Canadian insurance company Fairfax Financial said separately Tuesday that it sold about half of its stake in Poseidon for $1.91 billion, with half of that stake going to an existing Poseidon shareholder who will increase their ownership stake. The other half of Fairfax’s stake was sold to unidentified strategic investors. ONE CEO Jeremy Nixon said in the statement that the investment in Poseidon is part of the carrier’s plan to reach 3 million TEUs in capacity by 2030. ONE currently has a fleet of 281 ships amounting to 2.2 million TEUs. Of that, Seaspan has chartered some 43 container ships to ONE, amounting to about 417,000 TEUs in capacity. “Since our initial investment in 2023, Seaspan has achieved remarkable growth as the world’s leading tonnage platform,” Nixon said. “We are pleased to acquire this additional stake in Poseidon, which fully aligns with our ONE 2030 strategic growth plan.” <a href="https://www.joc.com/article/strategic-investment-underpins-ones-sustainable-profitability-target-nixon-5241768">Poseidon took a nearly one-third ownership stake in Seaspan in 2023 for $1.4 billion</a>. The group included Fairfax, investor David Sokol, and the Washington family, which originally owned Seaspan. Sokol and the Washington family pooled their existing shares to take Seaspan private that year. <h3>Tight supply-demand balance </h3>Speaking at the Journal of Commerce’s TPM26 conference in Long Beach last week, Nixon said it’s important for ONE to continue investing in new vessels because the global supply and demand balance remains tight. The trans-Pacific market is only expected to see slight growth this year, Nixon said. But north-south trade and intra-regional trades are growing at double-digit rates, keeping further pressure on ship supply. “The charter market is so tight. There are really no ships available,” Nixon said at TPM26. “Carriers have to be thinking all the time four, five, six years ahead.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Ocean Network Express (ONE) has increased its ownership stake in its largest provider of chartered tonnage, becoming the largest external shareholder of Poseidon Corp. in a transaction potentially valued at close to $1 billion. ONE said in a statement Tuesday it signed an agreement to acquire an additional stake in Poseidon, the parent company of Singapore-based container shipowner Seaspan, from existing shareholders. ONE said the purchase brings its stake in Poseidon to 48.9%. ONE did not say how much it paid for the additional stake. But Canadian insurance company Fairfax Financial said separately Tuesday that it sold about half of its stake in Poseidon for $1.91 billion, with half of that stake going to an existing Poseidon shareholder who will increase their ownership stake. The other half of Fairfax’s stake was sold to unidentified strategic investors. ONE CEO Jeremy Nixon said in the statement that the investment in Poseidon is part of the carrier’s plan to reach 3 million TEUs in capacity by 2030. ONE currently has a fleet of 281 ships amounting to 2.2 million TEUs. Of that, Seaspan has chartered some 43 container ships to ONE, amounting to about 417,000 TEUs in capacity. “Since our initial investment in 2023, Seaspan has achieved remarkable growth as the world’s leading tonnage platform,” Nixon said. “We are pleased to acquire this additional stake in Poseidon, which fully aligns with our ONE 2030 strategic growth plan.” Poseidon took a nearly one-third ownership stake in Seaspan in 2023 for $1.4 billion . The group included Fairfax, investor David Sokol, and the Washington family, which originally owned Seaspan. Sokol and the Washington family pooled their existing shares to take Seaspan private that year. Tight supply-demand balance Speaking at the Journal of Commerce’s TPM26 conference in Long Beach last week, Nixon said it’s important for ONE to continue investing in new vessels because the global supply and demand balance remains tight. The trans-Pacific market is only expected to see slight growth this year, Nixon said. But north-south trade and intra-regional trades are growing at double-digit rates, keeping further pressure on ship supply. “The charter market is so tight. There are really no ships available,” Nixon said at TPM26. “Carriers have to be thinking all the time four, five, six years ahead.” Contact Michael Angell at michael.angell@spglobal.com .

Container lines

Trans-Pacific

Container Shipping News

Maritime

ONE boosts ownership stake in Seaspan parent Poseidon

<div class="phx-topic abstract-wrapper">Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.</div>

Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.

<div class="phx-topic">Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. <h3>Containers trapped inside Persian Gulf </h3>The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” <h3>Rates, volatility on the rise </h3>Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. Containers trapped inside Persian Gulf The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” Rates, volatility on the rise Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at greg.knowler@spglobal.com .

Port News

Asia-Europe

International ports

Waves of diverted containers swamping Middle East ports

<div class="phx-topic abstract-wrapper">Carriers have defended rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating when tonnage and equipment are tied up in the Middle East due to the war. </div>

Carriers have defended rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating when tonnage and equipment are tied up in the Middle East due to the war.

<div class="phx-topic">Indian and Chinese regulatory authorities are warning container lines against price gouging via surcharges tied to the war in the Middle East as ocean carriers levy additional fees in the thousands of dollars. China’s Ministry of Transport (MOT) <a href="https://xxgk.mot.gov.cn/jigou/syj/202603/t20260309_4201600.html">said in a Tuesday statement</a> that it has spoken to representatives of Maersk and Mediterranean Shipping Co. “regarding international shipping operations.” The ministry expressed concerns about the suspension of service from China to the Middle East, along with additional charges and higher rates being sought by carriers, two people familiar with the matter <a href="https://www.ft.com/content/2a6299a3-c25d-4b05-8f4b-9f745173cb1a">told The Financial Times</a>. Due to the war in the Middle East, the Gemini Cooperation of Maersk and Hapag-Lloyd is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services. Carriers have defended the rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating given that port congestion in the Middle East has tied up 2% of total container tonnage and <a href="https://www.joc.com/article/waves-of-diverted-containers-swamping-middle-east-ports-6183989">more than 200,000 TEUs of equipment are trapped</a> in the Persian Gulf. Maersk, for example, has imposed a $200-per-TEU surcharge for shipments from Asia to the Dar es Salaam, Tanzania, while surcharges from other lanes have been upward of $2,400 per TEU for shipments out of some parts of India. MSC on Tuesday announced it was seeking higher rates for shipments from the Far East to Europe, the Mediterranean and North Africa. Effective March 29, MSC, the largest container line by fleet tonnage, is setting freight-all-kinds (FAK) rates from Asia to North Europe at $2,820 per TEU. In October, MSC set FAK rates for the same trade at $1,620 per TEU. Maersk’s APM Terminals and MSC subsidiary Terminal Investments Limited took over the temporary operation of Panama’s Balboa and Christobal ports after Panama Ports Company, a subsidiary of Hoing Kong-listed subsidiary CK Hutchison Holdings had its 28-year concession nullified by Panama’s Supreme Court. <a href="https://www.joc.com/article/hutchison-seeks-2-billion-in-damages-from-panama-after-terminal-deal-canceled-6183273">China has been highly critical</a> of Panama's decision and has previously warned of severe consequences following the action. <h3>Protecting Indian interests </h3>Separately, Indian regulators on Tuesday warned ocean carriers not to engage in “predatory pricing” to the detriment of Indian importers and exporters. The Directorate General of Shipping specifically stressed the need to ensure transparency in freight charges to avoid potential disputes, adding that exporters and importers must know their logistics costs up front. The regulatory intervention follows complaints from shipper groups about carriers levying war risk surcharges, sometimes retroactively, in the range of $2,000 per TEU and $3,000 per FEU for dry boxes and up to $4,000 per refrigerated container. Sunil Vaswani, executive director of the CSLA, said carriers serving the India-Middle East trade imposed the surcharges to offset additional operating costs driven by the sudden closure of the Strait of Hormuz. “Despite the challenges, container lines are making every effort to assist the trade,” Vaswani explained. The subject of carrier surcharges and ancillary fees in container supply chains has been contentious for decades. And foreign carriers that typically enjoy a capacity fiefdom in the market <a href="https://www.joc.com/article/indias-surcharge-review-threatens-to-squeeze-container-lines-5207313">had resisted previous efforts by Indian logistics policymakers</a> to create a regulated pricing environment, with terminal handling charges at the heart of that acrimonious debate. The warnings from regulators echo <a href="https://www.joc.com/article/chinese-shipping-regulators-flex-muscles-to-protect-exporters-5197047">similar statements made by China’s MOT in September 2020</a>, when a pandemic-driven surge of imports from Asia soaked up all available outbound vessel space and sent container spot rates soaring. At the time, the ministry urged carriers to add capacity to trans-Pacific routes and refrain from aggressive rate hikes. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a> and Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Indian and Chinese regulatory authorities are warning container lines against price gouging via surcharges tied to the war in the Middle East as ocean carriers levy additional fees in the thousands of dollars. China’s Ministry of Transport (MOT) said in a Tuesday statement that it has spoken to representatives of Maersk and Mediterranean Shipping Co. “regarding international shipping operations.” The ministry expressed concerns about the suspension of service from China to the Middle East, along with additional charges and higher rates being sought by carriers, two people familiar with the matter told The Financial Times. Due to the war in the Middle East, the Gemini Cooperation of Maersk and Hapag-Lloyd is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services. Carriers have defended the rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating given that port congestion in the Middle East has tied up 2% of total container tonnage and more than 200,000 TEUs of equipment are trapped in the Persian Gulf. Maersk, for example, has imposed a $200-per-TEU surcharge for shipments from Asia to the Dar es Salaam, Tanzania, while surcharges from other lanes have been upward of $2,400 per TEU for shipments out of some parts of India. MSC on Tuesday announced it was seeking higher rates for shipments from the Far East to Europe, the Mediterranean and North Africa. Effective March 29, MSC, the largest container line by fleet tonnage, is setting freight-all-kinds (FAK) rates from Asia to North Europe at $2,820 per TEU. In October, MSC set FAK rates for the same trade at $1,620 per TEU. Maersk’s APM Terminals and MSC subsidiary Terminal Investments Limited took over the temporary operation of Panama’s Balboa and Christobal ports after Panama Ports Company, a subsidiary of Hoing Kong-listed subsidiary CK Hutchison Holdings had its 28-year concession nullified by Panama’s Supreme Court. China has been highly critical of Panama's decision and has previously warned of severe consequences following the action. Protecting Indian interests Separately, Indian regulators on Tuesday warned ocean carriers not to engage in “predatory pricing” to the detriment of Indian importers and exporters. The Directorate General of Shipping specifically stressed the need to ensure transparency in freight charges to avoid potential disputes, adding that exporters and importers must know their logistics costs up front. The regulatory intervention follows complaints from shipper groups about carriers levying war risk surcharges, sometimes retroactively, in the range of $2,000 per TEU and $3,000 per FEU for dry boxes and up to $4,000 per refrigerated container. Sunil Vaswani, executive director of the CSLA, said carriers serving the India-Middle East trade imposed the surcharges to offset additional operating costs driven by the sudden closure of the Strait of Hormuz. “Despite the challenges, container lines are making every effort to assist the trade,” Vaswani explained. The subject of carrier surcharges and ancillary fees in container supply chains has been contentious for decades. And foreign carriers that typically enjoy a capacity fiefdom in the market had resisted previous efforts by Indian logistics policymakers to create a regulated pricing environment, with terminal handling charges at the heart of that acrimonious debate. The warnings from regulators echo similar statements made by China’s MOT in September 2020 , when a pandemic-driven surge of imports from Asia soaked up all available outbound vessel space and sent container spot rates soaring. At the time, the ministry urged carriers to add capacity to trans-Pacific routes and refrain from aggressive rate hikes. Contact Mark Szakonyi at mark.szakonyi@spglobal.com and Bency Mathew at  bencyvmathew@gmail.com .

China, India warn carriers on higher pricing tied to Middle East conflict

<div class="phx-topic abstract-wrapper">Port stakeholders in Los Angeles acknowledge that redecking the Vincent Thomas Bridge will impact traffic over the next two years, but they say longer truck gates and a real-time communication system will minimize disruptions.</div>

Port stakeholders in Los Angeles acknowledge that redecking the Vincent Thomas Bridge will impact traffic over the next two years, but they say longer truck gates and a real-time communication system will minimize disruptions.

<div class="phx-topic">Long Beach, California — Port and marine terminal executives say they have a plan to minimize disruption during the two-year redecking of a key bridge at the entry of the Los Angeles harbor that includes keeping truck gates open longer and on weekends. The California Department of Transportation (Caltrans) <a href="https://www.joc.com/article/redecking-project-on-los-angeles-harbor-bridge-to-begin-in-early-2026-6105309">will close the 63-year-old Vincent Thomas Bridge</a>, which handles about 53,000 vehicles a day, including 3,400 heavy-duty trucks, in one direction from March 23 to Nov. 1, followed by a complete closure through November 2028. “I’ll be very clear on this one: we will do what it takes to keep the trucks moving,” Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles, said during the Journal of Commerce’s TPM26 conference last week. In addition to extra truck gates, port stakeholders in Los Angeles have been working with Caltrans for two years <a href="https://www.joc.com/article/la-port-stakeholders-warming-to-plan-to-mitigate-impact-of-bridge-project-6013847">to develop and improve a detour route</a> of surface streets that connect with major Southern California freeways. Local police agencies will provide continuous traffic control to respond to accidents and other events that disrupt traffic flow. A system of more than 40 Caltrans cameras — and more than 700 cameras throughout the ports’ six container terminals — will provide real-time information on traffic conditions, enabling terminal operators to respond immediately to delays, according to Port of Los Angeles Executive Director Gene Seroka. “We know that one trucker who has a problem — is delayed, misses an appointment — is a problem,” Seroka said. With 6,000 to 8,000 trucks operating in the harbor every day, an open line of communication among Caltrans, terminals and truckers will be crucial to ensuring minor disruptions don’t turn into prolonged congestion, said Matt Schrap, chief commercial officer of Forum Mobility and former CEO of the Harbor Trucking Association (HTA). “I don’t think there’s anyone in our industry who really knows exactly what’s going to happen, but we’re going to react appropriately,” Schrap told TPM26. The HTA must now impress upon ocean carriers the need for additional free time for container storage at the terminals if traffic disruptions related to the $1.5 billion redecking project delay pickups, he added. In the meantime, the port will continue to push its proposal to construct a new, taller bridge that would allow super-post Panamax vessels to call the Yusen Terminals, TraPac and West Basin terminals, Seroka said. “I want to make sure the 40% of our port’s capacity north of the bridge doesn’t go into obsolescence,” Seroka said. If the project moves forward, Caltrans will “help support it as much as we can,” Osama Megalla, assistant division chief-program/project manager and principal engineer for Caltrans District 7, said during the conference. “We’ll provide our expertise and oversight to make sure that the consultants are doing what they’re supposed to do, and construction is going well,” he said. Contact Bill Mongelluzzo at <a href="mailto: bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Long Beach, California — Port and marine terminal executives say they have a plan to minimize disruption during the two-year redecking of a key bridge at the entry of the Los Angeles harbor that includes keeping truck gates open longer and on weekends. The California Department of Transportation (Caltrans) will close the 63-year-old Vincent Thomas Bridge , which handles about 53,000 vehicles a day, including 3,400 heavy-duty trucks, in one direction from March 23 to Nov. 1, followed by a complete closure through November 2028. “I’ll be very clear on this one: we will do what it takes to keep the trucks moving,” Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles, said during the Journal of Commerce’s TPM26 conference last week. In addition to extra truck gates, port stakeholders in Los Angeles have been working with Caltrans for two years to develop and improve a detour route of surface streets that connect with major Southern California freeways. Local police agencies will provide continuous traffic control to respond to accidents and other events that disrupt traffic flow. A system of more than 40 Caltrans cameras — and more than 700 cameras throughout the ports’ six container terminals — will provide real-time information on traffic conditions, enabling terminal operators to respond immediately to delays, according to Port of Los Angeles Executive Director Gene Seroka. “We know that one trucker who has a problem — is delayed, misses an appointment — is a problem,” Seroka said. With 6,000 to 8,000 trucks operating in the harbor every day, an open line of communication among Caltrans, terminals and truckers will be crucial to ensuring minor disruptions don’t turn into prolonged congestion, said Matt Schrap, chief commercial officer of Forum Mobility and former CEO of the Harbor Trucking Association (HTA). “I don’t think there’s anyone in our industry who really knows exactly what’s going to happen, but we’re going to react appropriately,” Schrap told TPM26. The HTA must now impress upon ocean carriers the need for additional free time for container storage at the terminals if traffic disruptions related to the $1.5 billion redecking project delay pickups, he added. In the meantime, the port will continue to push its proposal to construct a new, taller bridge that would allow super-post Panamax vessels to call the Yusen Terminals, TraPac and West Basin terminals, Seroka said. “I want to make sure the 40% of our port’s capacity north of the bridge doesn’t go into obsolescence,” Seroka said. If the project moves forward, Caltrans will “help support it as much as we can,” Osama Megalla, assistant division chief-program/project manager and principal engineer for Caltrans District 7, said during the conference. “We’ll provide our expertise and oversight to make sure that the consultants are doing what they’re supposed to do, and construction is going well,” he said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

Port infrastructure

North American ports

LA terminals to extend gates to mitigate disruption during bridge closure

<div class="phx-topic abstract-wrapper">A proposed universal tax on foreign-built ships would strain trade relations, raise the cost of doing business and stoke inflation, writes Reason Foundation policy analyst Jay Derr. </div>

A proposed universal tax on foreign-built ships would strain trade relations, raise the cost of doing business and stoke inflation, writes Reason Foundation policy analyst Jay Derr.

<div class="phx-topic">A new proposal from the Trump administration would impose a universal fee on foreign-built vessels entering US ports, adding another layer of cost to international trade at a time when the supply chain is already fragile. Yet the United States already imposes the Harbor Maintenance Tax (HMT) on incoming vessels, regardless of where they are built. This double taxation would harm already-strained relations with our trading partners by raising the cost of doing business in the country. Everyday Americans would ultimately bear these additional costs in the form of higher-priced goods. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6183829_0.1.png"></img></div>This idea is a perversion of a tonnage fee, initially proposed by the Clinton administration in 1999 as a remedy for longstanding problems with the HMT. But the Trump administration proposal does not aim to fix the problems with the HMT. Rather, the problems with the proposed universal fee on foreign vessels mirror those associated with the HMT. The HMT, when first implemented, was an ad valorem tax levied on all vessels, regardless of whether they were importing or exporting goods into the United States. However, the US Constitution flatly states that exports cannot be taxed in Article I, Section 9, Clause 5. As such, the Supreme Court ruled that the HMT could not be applied to exports. This shifted the financial burden for America’s port and navigability projects squarely onto importers’ shoulders. However, the Supreme Court did not rule out the implementation of a user fee, which is distinct from a tax. The test of a user fee was outlined in another Supreme Court case, Evansville Airport v. Delta Airlines. For a levied fee to be considered a user fee rather than a tax, it must pass what is now called the Evansville Test: it must not discriminate against interstate commerce, must be based on a fair approximation of use and must not be excessive. Congress never passed legislation to convert the harbor maintenance tax into a user fee, so the HMT remains an ad valorem tax that cannot be levied on exporters, giving exporters cheaper access to US port infrastructure compared with importers. The Trump administration says of its proposed universal tax: “As foreign-built vessels benefit from US market access, this policy ensures that they contribute to the long-term revitalization of America’s maritime capabilities.” This isn’t wrong in principle. Those who benefit from infrastructure ought to contribute to its maintenance. But those foreign vessels targeted by the administration’s fee already help fund maritime infrastructure through their HMT payments. Instead of this double taxation, the Trump administration should reform the HMT, which could be changed to a harbor maintenance fee. The new fee should be based on tonnage, not on whether the freight is on- or off-loaded, and be applied to the net or gross tonnage of the vessel, depending on the type of vessel. The weight of the cargo being moved on and off a ship has no bearing on the maintenance needs of the harbor itself, but the tonnage and capacity of the ship do. Net and gross tonnage serve as better proxies for the actual costs of services rendered during a port call and account for the vessel’s draft and the dredging depth required. These changes alone would allow a proposed harbor maintenance fee to pass the Evansville Test and satisfy the legal requirements for a fee. If enacted, exporters would once again pay to support the infrastructure they use, regardless of the vessel’s country of origin. The upcoming biennial Water Resources Development Act offers Congress an opportunity to reform the existing HMT into a proper user fee levied on both exports and imports. The best step to improve American maritime infrastructure is to modernize and reform the existing HMT, not to layer more poorly targeted taxes on top of it. Congress and the Trump administration should pursue solutions that expand maritime capacity without raising the cost of moving goods through American ports. Jay Derr is a transportation policy analyst at the Reason Foundation and author of the report, “Navigating port funding: Alternatives for reforming the Harbor Maintenance Trust Fund.” Contact him at <a href="mailto:jay.derr@reason.org">jay.derr@reason.org</a>. </div>

A new proposal from the Trump administration would impose a universal fee on foreign-built vessels entering US ports, adding another layer of cost to international trade at a time when the supply chain is already fragile. Yet the United States already imposes the Harbor Maintenance Tax (HMT) on incoming vessels, regardless of where they are built. This double taxation would harm already-strained relations with our trading partners by raising the cost of doing business in the country. Everyday Americans would ultimately bear these additional costs in the form of higher-priced goods. This idea is a perversion of a tonnage fee, initially proposed by the Clinton administration in 1999 as a remedy for longstanding problems with the HMT. But the Trump administration proposal does not aim to fix the problems with the HMT. Rather, the problems with the proposed universal fee on foreign vessels mirror those associated with the HMT. The HMT, when first implemented, was an ad valorem tax levied on all vessels, regardless of whether they were importing or exporting goods into the United States. However, the US Constitution flatly states that exports cannot be taxed in Article I, Section 9, Clause 5. As such, the Supreme Court ruled that the HMT could not be applied to exports. This shifted the financial burden for America’s port and navigability projects squarely onto importers’ shoulders. However, the Supreme Court did not rule out the implementation of a user fee, which is distinct from a tax. The test of a user fee was outlined in another Supreme Court case, Evansville Airport v. Delta Airlines. For a levied fee to be considered a user fee rather than a tax, it must pass what is now called the Evansville Test: it must not discriminate against interstate commerce, must be based on a fair approximation of use and must not be excessive. Congress never passed legislation to convert the harbor maintenance tax into a user fee, so the HMT remains an ad valorem tax that cannot be levied on exporters, giving exporters cheaper access to US port infrastructure compared with importers. The Trump administration says of its proposed universal tax: “As foreign-built vessels benefit from US market access, this policy ensures that they contribute to the long-term revitalization of America’s maritime capabilities.” This isn’t wrong in principle. Those who benefit from infrastructure ought to contribute to its maintenance. But those foreign vessels targeted by the administration’s fee already help fund maritime infrastructure through their HMT payments. Instead of this double taxation, the Trump administration should reform the HMT, which could be changed to a harbor maintenance fee. The new fee should be based on tonnage, not on whether the freight is on- or off-loaded, and be applied to the net or gross tonnage of the vessel, depending on the type of vessel. The weight of the cargo being moved on and off a ship has no bearing on the maintenance needs of the harbor itself, but the tonnage and capacity of the ship do. Net and gross tonnage serve as better proxies for the actual costs of services rendered during a port call and account for the vessel’s draft and the dredging depth required. These changes alone would allow a proposed harbor maintenance fee to pass the Evansville Test and satisfy the legal requirements for a fee. If enacted, exporters would once again pay to support the infrastructure they use, regardless of the vessel’s country of origin. The upcoming biennial Water Resources Development Act offers Congress an opportunity to reform the existing HMT into a proper user fee levied on both exports and imports. The best step to improve American maritime infrastructure is to modernize and reform the existing HMT, not to layer more poorly targeted taxes on top of it. Congress and the Trump administration should pursue solutions that expand maritime capacity without raising the cost of moving goods through American ports. Jay Derr is a transportation policy analyst at the Reason Foundation and author of the report, “Navigating port funding: Alternatives for reforming the Harbor Maintenance Trust Fund.” Contact him at jay.derr@reason.org .

Transport, Trade and Regulation News

Reform HMT rather than taxing shipping more: analyst

<div class="phx-topic abstract-wrapper">The port’s Cast and Racine terminals remained open to vessels during the five-month strike by clerical staff, which began last September.</div>

The port’s Cast and Racine terminals remained open to vessels during the five-month strike by clerical staff, which began last September.

<div class="phx-topic">Montreal Gateway Terminals (MGT) has signed a new collective bargaining agreement with its unionized clerical workers, ending a five-month strike at the port’s largest terminal operator. MGT on Monday confirmed in a statement to the Journal of Commerce that it signed a new contract with Local 4317 of the Canadian Union of Public Employees (CUPE), without offering further details about the agreement. CUPE could not be reached for comment. Last September, 32 transportation agents from Local 4317 filed a strike notice with MGT, which owns the Cast and Racine terminals. The previous four-year contract with the local expired at the end of 2024. An update from Kuehne + Nagel said the new contract would cover a term of eight years and that a “smooth transition to regular operations, including the gradual reinstatement of standard 17-hour truck gate service,” was expected. CUPE last year said Local 4317 went on strike after mediation and conciliation talks had failed. A source familiar with the matter said the clerical jobs were handled by management during the strike, which allowed vessel operations to continue. CUPE said in a statement last year that the union and MGT failed to come to terms on “minimum operating requirements” under a new contract. The previous collective bargaining agreement called for MGT to have a certain number of transportation agents at the terminals, even during holidays and weekends and even if no vessel operations occurred. It was not clear what staffing levels MGT will be required to maintain under the new contract. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Montreal Gateway Terminals (MGT) has signed a new collective bargaining agreement with its unionized clerical workers, ending a five-month strike at the port’s largest terminal operator. MGT on Monday confirmed in a statement to the Journal of Commerce that it signed a new contract with Local 4317 of the Canadian Union of Public Employees (CUPE), without offering further details about the agreement. CUPE could not be reached for comment. Last September, 32 transportation agents from Local 4317 filed a strike notice with MGT, which owns the Cast and Racine terminals. The previous four-year contract with the local expired at the end of 2024. An update from Kuehne + Nagel said the new contract would cover a term of eight years and that a “smooth transition to regular operations, including the gradual reinstatement of standard 17-hour truck gate service,” was expected. CUPE last year said Local 4317 went on strike after mediation and conciliation talks had failed. A source familiar with the matter said the clerical jobs were handled by management during the strike, which allowed vessel operations to continue. CUPE said in a statement last year that the union and MGT failed to come to terms on “minimum operating requirements” under a new contract. The previous collective bargaining agreement called for MGT to have a certain number of transportation agents at the terminals, even during holidays and weekends and even if no vessel operations occurred. It was not clear what staffing levels MGT will be required to maintain under the new contract. Contact Michael Angell at michael.angell@spglobal.com .

Longshore labor

Montreal terminal operator signs deal with striking office workers

<div class="phx-topic abstract-wrapper">Record fleet expansion, widening scale disparities, and lingering financial reserves have combined to create a rare window in which transformative deals among ocean carriers are both feasible and strategically rational.</div>

Record fleet expansion, widening scale disparities, and lingering financial reserves have combined to create a rare window in which transformative deals among ocean carriers are both feasible and strategically rational.

<div class="phx-topic">Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability. Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition. In my personal experience, the industry’s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically. The global container ship order book currently stands at more than 35% of the existing fleet — an unprecedented level. At the same time, the four largest carriers — Mediterranean Shipping Co., CMA CGM, Maersk and Cosco — have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL. (Industry data sources include Drewry and Clarksons Research.) Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures. True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M&amp;A offers the additional advantage of organizational synergies — streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead — that alliances cannot replicate. This raises an important question: Why is consolidation particularly relevant now? In cyclical industries such as container shipping, mergers rarely occur at market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions. That transition phase appears to be underway today. <h3>COVID-era profits provide ‘window of opportunity’ for carriers </h3>Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence. They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements. The mid-tier segment of the industry presents multiple potential merger candidates. Historically, national interests have complicated cross-border consolidation, as governments often view shipping lines as strategic assets tied to trade security and economic policy. Yet recent developments suggest that such barriers are not insurmountable. Hapag-Lloyd’s proposed acquisition of Zim demonstrates that creative structures can address national security concerns while still enabling industrial consolidation. The ability to design tailored governance or ownership arrangements may unlock additional transactions that once seemed politically impossible. Customers, too, have a stake in consolidation, perhaps more than is commonly recognized. Over time, a more consolidated industry can produce greater stability. Previous downturns, including those in 2001, 2009 and 2016, revealed how financially distressed carriers can disrupt supply chains. When shipping lines suffer sustained losses, they often resort to abrupt service cancellations, capacity withdrawals, and large-scale blank sailings. These measures create uncertainty for shippers, ports, logistics providers, and equipment lessors. Most of us vividly remember the collapse of Hanjin Shipping. Its bankruptcy triggered widespread cargo disruptions, stranded containers, port congestion and financial losses across the logistics ecosystem. Such systemic shocks underscore the broader economic value of financially stronger carriers. Consolidation, if executed in a timely manner, can reduce the likelihood of extreme distress events by improving cost structures and balance sheet resilience. <h3>‘Pivotal moment’ </h3>To reassure the skeptics, we can rest assured that competition authorities will continue to monitor market concentration carefully, and customers will demand tangible service improvements rather than promises of efficiency. Nevertheless, the strategic logic is compelling. The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational. Delaying action could mean missing that window, as market conditions tighten and financial flexibility declines. For carriers, investors and customers alike, timely consolidation offers the prospect of a more stable and sustainable industry. In a sector long defined by volatility, that outcome should be in everyone’s interest. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&amp;O Nedlloyd and the Maersk Group. Contact him at <a href="mailto:robbert@inceptionpartners.org">robbert@inceptionpartners.org</a>. </div>

Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability. Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition. In my personal experience, the industry’s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically. The global container ship order book currently stands at more than 35% of the existing fleet — an unprecedented level. At the same time, the four largest carriers — Mediterranean Shipping Co., CMA CGM, Maersk and Cosco — have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL. (Industry data sources include Drewry and Clarksons Research.) Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures. True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M&A offers the additional advantage of organizational synergies — streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead — that alliances cannot replicate. This raises an important question: Why is consolidation particularly relevant now? In cyclical industries such as container shipping, mergers rarely occur at market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions. That transition phase appears to be underway today. COVID-era profits provide ‘window of opportunity’ for carriers Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence. They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements. The mid-tier segment of the industry presents multiple potential merger candidates. Historically, national interests have complicated cross-border consolidation, as governments often view shipping lines as strategic assets tied to trade security and economic policy. Yet recent developments suggest that such barriers are not insurmountable. Hapag-Lloyd’s proposed acquisition of Zim demonstrates that creative structures can address national security concerns while still enabling industrial consolidation. The ability to design tailored governance or ownership arrangements may unlock additional transactions that once seemed politically impossible. Customers, too, have a stake in consolidation, perhaps more than is commonly recognized. Over time, a more consolidated industry can produce greater stability. Previous downturns, including those in 2001, 2009 and 2016, revealed how financially distressed carriers can disrupt supply chains. When shipping lines suffer sustained losses, they often resort to abrupt service cancellations, capacity withdrawals, and large-scale blank sailings. These measures create uncertainty for shippers, ports, logistics providers, and equipment lessors. Most of us vividly remember the collapse of Hanjin Shipping. Its bankruptcy triggered widespread cargo disruptions, stranded containers, port congestion and financial losses across the logistics ecosystem. Such systemic shocks underscore the broader economic value of financially stronger carriers. Consolidation, if executed in a timely manner, can reduce the likelihood of extreme distress events by improving cost structures and balance sheet resilience. ‘Pivotal moment’ To reassure the skeptics, we can rest assured that competition authorities will continue to monitor market concentration carefully, and customers will demand tangible service improvements rather than promises of efficiency. Nevertheless, the strategic logic is compelling. The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational. Delaying action could mean missing that window, as market conditions tighten and financial flexibility declines. For carriers, investors and customers alike, timely consolidation offers the prospect of a more stable and sustainable industry. In a sector long defined by volatility, that outcome should be in everyone’s interest. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&O Nedlloyd and the Maersk Group. Contact him at robbert@inceptionpartners.org .

In wake of Zim deal, the time for industry consolidation is now

<div class="phx-topic abstract-wrapper">That means minimizing drayage without degrading transit, requiring disaggregating volume from larger hubs into smaller ones. </div>

That means minimizing drayage without degrading transit, requiring disaggregating volume from larger hubs into smaller ones.

<div class="phx-topic">With their proposed merger, Union Pacific and Norfolk Southern have channeled President Abraham Lincoln’s vision for a united transcontinental railroad. Under the tag line “The Great Connection,” they have put forth a vision of a single, integrated rail freight network. Recently, one of their executives touted the benefit from an envisioned “non-stop” service between Los Angeles and northern New Jersey that could be accomplished without needing to change trains in Chicago. This is indeed a powerful service vision. His remarks got me thinking about how airline marketing and flights have become somewhat muddled in their application of terms and performance. For example, many people confuse “non-stop” and “direct.” The former is a single flight that goes from origin to destination without any scheduled stops. One takeoff and one landing. The latter may have one flight number from origin to destination, but may include scheduled stops. Also, passengers may stay on board or change planes. Today, most of the intermodal train network is designed as non-stop at its core. Trains between major hubs run intact without pickups or setouts — although the tenets of precision scheduled railroading (PSR) may look to fill out trains enroute to achieve operating economies. While this works for many intermodal point pairs, it is not comprehensive. A connecting trip requires changing aircraft at an intermediate airport. There are separate flight segments with a layover; you usually change gates and, sometimes, terminals. In rare cases, you may actually need to change airports (e.g., a domestic leg at LaGuardia connecting to an overseas flight at JFK). This is the model for most transcontinental intermodal traffic today and what the UP-NS merger seeks to eliminate. A through flight is one where you stay on the same aircraft across one or more intermediate stops, or the airline provides through-checked baggage and a single itinerary even if you change planes. This is how intermodal efficiently expands scope today. For example, a train may run from Chicago to Harrisburg on one “flight” with the traffic for Philadelphia run as another train from Harrisburg. There are also flights marketed by one airline but operated by another; your ticket may show the marketing airline’s flight number while a partner operates the plane. For example, BNSF offers direct service into CSX facilities in Atlanta and Northwest Ohio. <h3>‘Closest to the pin’ </h3>UP and CSX have a hybrid case of non-stop, connecting code shares. Traffic to Springfield, Mass., is loaded on cars in Los Angeles for non-stop service to Chicago. There the cars are delivered intact to CSX Bedford Park, where they are incorporated into another non-stop train. Of course, in cases of operational trauma, the units may be grounded in Chicago and cross-towned like most traffic. All of this is standard for asset-based, network-operating businesses. There are often competing network economies of scale (larger trains) and scope (more destinations to achieve higher volumes). This is the crux of the “hub-and-spoke” network that so many passenger airlines have implemented. They have a centralized structure: a few hubs connect to many peripheral spokes — which generally do not connect directly to each other. Plane density is achieved, lowering per-unit costs with improved asset utilization. This allows better network reach. Service is enabled between many origin-destination pairs with fewer links than full point-to-point connections. A hub with 10 spokes supports 110 lanes with only 10 spokes. In intermodal, these hubs are at the end points of railroad networks. They offer predictable, scheduled flows with regular, repeatable routes along the spokes. It is scalable because it is easy to add nodes without redesigning the whole network. This is the challenge for intermodal. To compete with trucking, the goal is to seamlessly provide service that looks like trucking but offers economics. That means being “closest to the pin” so as to minimize drayage without degrading transit. This requires disaggregating volume from larger hubs into smaller ones. Not Los Angeles to Croxton rail yard in Jersey City, but LA to ramps beyond immediate North Jersey: i.e., Albany, Allentown, Bethlehem and Philadelphia. And, in the other direction, Croxton to LA, West Colton, and Las Vegas. The ideal outcome would be the ability to connect all of those points in a seamless method in both directions; however, that is probably a future undertaking. For now, we will hopefully keep flying to expanded intermodal networks and service scope. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>. </div>

With their proposed merger, Union Pacific and Norfolk Southern have channeled President Abraham Lincoln’s vision for a united transcontinental railroad. Under the tag line “The Great Connection,” they have put forth a vision of a single, integrated rail freight network. Recently, one of their executives touted the benefit from an envisioned “non-stop” service between Los Angeles and northern New Jersey that could be accomplished without needing to change trains in Chicago. This is indeed a powerful service vision. His remarks got me thinking about how airline marketing and flights have become somewhat muddled in their application of terms and performance. For example, many people confuse “non-stop” and “direct.” The former is a single flight that goes from origin to destination without any scheduled stops. One takeoff and one landing. The latter may have one flight number from origin to destination, but may include scheduled stops. Also, passengers may stay on board or change planes. Today, most of the intermodal train network is designed as non-stop at its core. Trains between major hubs run intact without pickups or setouts — although the tenets of precision scheduled railroading (PSR) may look to fill out trains enroute to achieve operating economies. While this works for many intermodal point pairs, it is not comprehensive. A connecting trip requires changing aircraft at an intermediate airport. There are separate flight segments with a layover; you usually change gates and, sometimes, terminals. In rare cases, you may actually need to change airports (e.g., a domestic leg at LaGuardia connecting to an overseas flight at JFK). This is the model for most transcontinental intermodal traffic today and what the UP-NS merger seeks to eliminate. A through flight is one where you stay on the same aircraft across one or more intermediate stops, or the airline provides through-checked baggage and a single itinerary even if you change planes. This is how intermodal efficiently expands scope today. For example, a train may run from Chicago to Harrisburg on one “flight” with the traffic for Philadelphia run as another train from Harrisburg. There are also flights marketed by one airline but operated by another; your ticket may show the marketing airline’s flight number while a partner operates the plane. For example, BNSF offers direct service into CSX facilities in Atlanta and Northwest Ohio. ‘Closest to the pin’ UP and CSX have a hybrid case of non-stop, connecting code shares. Traffic to Springfield, Mass., is loaded on cars in Los Angeles for non-stop service to Chicago. There the cars are delivered intact to CSX Bedford Park, where they are incorporated into another non-stop train. Of course, in cases of operational trauma, the units may be grounded in Chicago and cross-towned like most traffic. All of this is standard for asset-based, network-operating businesses. There are often competing network economies of scale (larger trains) and scope (more destinations to achieve higher volumes). This is the crux of the “hub-and-spoke” network that so many passenger airlines have implemented. They have a centralized structure: a few hubs connect to many peripheral spokes — which generally do not connect directly to each other. Plane density is achieved, lowering per-unit costs with improved asset utilization. This allows better network reach. Service is enabled between many origin-destination pairs with fewer links than full point-to-point connections. A hub with 10 spokes supports 110 lanes with only 10 spokes. In intermodal, these hubs are at the end points of railroad networks. They offer predictable, scheduled flows with regular, repeatable routes along the spokes. It is scalable because it is easy to add nodes without redesigning the whole network. This is the challenge for intermodal. To compete with trucking, the goal is to seamlessly provide service that looks like trucking but offers economics. That means being “closest to the pin” so as to minimize drayage without degrading transit. This requires disaggregating volume from larger hubs into smaller ones. Not Los Angeles to Croxton rail yard in Jersey City, but LA to ramps beyond immediate North Jersey: i.e., Albany, Allentown, Bethlehem and Philadelphia. And, in the other direction, Croxton to LA, West Colton, and Las Vegas. The ideal outcome would be the ability to connect all of those points in a seamless method in both directions; however, that is probably a future undertaking. For now, we will hopefully keep flying to expanded intermodal networks and service scope. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

North-American rail

Surface

Intermodal needs ‘closest to the pin’ strategy to compete with trucking

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">Hutchison-owned Panama Ports Company had its 28-year concession to manage and operate the Balboa and Cristóbal terminals nullified by Panama’s Supreme Court on Jan 29. </div>

Hutchison-owned Panama Ports Company had its 28-year concession to manage and operate the Balboa and Cristóbal terminals nullified by Panama’s Supreme Court on Jan 29.

<div class="phx-topic">Panama Ports Company (PPC) is seeking more than $2 billion in damages in its international arbitration claim against Panama after the government canceled its long-held operating concession and seized control of the Balboa and Cristóbal marine terminals last month. PPC, a subsidiary of Hong Kong-headquartered conglomerate CK Hutchison Holdings, said it is also taking legal action to recover property, equipment and documents removed when <a href="https://www.joc.com/article/maersk-msc-units-begin-interim-management-of-panama-canal-terminals-6175167">the government took control of the terminals on Feb. 23</a>. Action is being taken against both the Panamanian government and the Panama Maritime Authority (PMA). The details of the arbitration claim were announced in a PPC statement Friday relayed by Hutchison, which has a 90% stake in PPC. The Panama company had its 28-year concession to manage and operate the Balboa and Cristóbal terminals nullified by Panama’s Supreme Court on Jan 29. <h3>Operations returning to normal </h3>Separately, the PMA confirmed operations at the terminals are returning to normal after Maersk’s APM Terminals and Mediterranean Shipping Co.’s Terminal Investments Limited (TiL) were appointed temporary operators of Balboa and Cristóbal, respectively. Both assignments are due to last 18 months. Minister for Canal Affairs José Ramón Icaza said new operating systems were online and being tested, while Balboa is accepting export cargo, empty containers and rolling stock. Icaza said about 526 former PPC staff out of a total workforce of 1,200 at both terminals had been replaced, over 200 at Balboa and 326 at Cristóbal. The government had also reached new agreements with two out of four labor unions at the ports. Hutchison’s operation of the two ports through PPC had been the focus of a highly charged geopolitical spat between the Trump administration and China for more than a year. That was highlighted again during President Donald Trump’s Shield of Americas summit on Saturday in Miami with 12 Latin American leaders, including Panama President José Raúl Mulino. Trump said the US would “not allow hostile foreign influence to establish itself in this hemisphere, and that includes the Panama Canal.” Closer commercial relationships with US companies were highlighted in a separate meeting Saturday between Mulino and US Secretary of State Marco Rubio. “US companies will begin to have greater participation in bidding processes in Panama in this new era of relations with the United States,” Rubio said, without specifically mentioning the awarding of new terminal concessions for Balboa and Cristóbal. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Panama Ports Company (PPC) is seeking more than $2 billion in damages in its international arbitration claim against Panama after the government canceled its long-held operating concession and seized control of the Balboa and Cristóbal marine terminals last month. PPC, a subsidiary of Hong Kong-headquartered conglomerate CK Hutchison Holdings, said it is also taking legal action to recover property, equipment and documents removed when the government took control of the terminals on Feb. 23 . Action is being taken against both the Panamanian government and the Panama Maritime Authority (PMA). The details of the arbitration claim were announced in a PPC statement Friday relayed by Hutchison, which has a 90% stake in PPC. The Panama company had its 28-year concession to manage and operate the Balboa and Cristóbal terminals nullified by Panama’s Supreme Court on Jan 29. Operations returning to normal Separately, the PMA confirmed operations at the terminals are returning to normal after Maersk’s APM Terminals and Mediterranean Shipping Co.’s Terminal Investments Limited (TiL) were appointed temporary operators of Balboa and Cristóbal, respectively. Both assignments are due to last 18 months. Minister for Canal Affairs José Ramón Icaza said new operating systems were online and being tested, while Balboa is accepting export cargo, empty containers and rolling stock. Icaza said about 526 former PPC staff out of a total workforce of 1,200 at both terminals had been replaced, over 200 at Balboa and 326 at Cristóbal. The government had also reached new agreements with two out of four labor unions at the ports. Hutchison’s operation of the two ports through PPC had been the focus of a highly charged geopolitical spat between the Trump administration and China for more than a year. That was highlighted again during President Donald Trump’s Shield of Americas summit on Saturday in Miami with 12 Latin American leaders, including Panama President José Raúl Mulino. Trump said the US would “not allow hostile foreign influence to establish itself in this hemisphere, and that includes the Panama Canal.” Closer commercial relationships with US companies were highlighted in a separate meeting Saturday between Mulino and US Secretary of State Marco Rubio. “US companies will begin to have greater participation in bidding processes in Panama in this new era of relations with the United States,” Rubio said, without specifically mentioning the awarding of new terminal concessions for Balboa and Cristóbal. Contact Keith Wallis at keithwallis@hotmail.com .

Hutchison seeks $2 billion in damages from Panama after terminal deal canceled

<div class="phx-topic abstract-wrapper">The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports.</div>

The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports.

<div class="phx-topic">Gemini Cooperation is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles, due to the ongoing war in the region. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services, partners Maersk and Hapag-Lloyd said Friday. Maersk said the suspensions are being made “following our latest risk assessment and operational review and considering the escalating conflict affecting safe navigation in the Gulf region.” “This decision has been taken as a precautionary measure to ensure the safety of our personnel and vessels while minimizing operational disruption across our wider network,” the carrier added in its advisory. The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports including Jebel Ali, Dammam, Umm Qasr, Sohar, Khalifa, Sharjah, and Al Jubail. Container ports in the Gulf usually book 3.4 million TEUs per year with an estimated cargo value of $140 billion, according to Vizion’s Tradeview platform. The Gemini partners said two mainline services — ME11/IMX linking the Middle East, India and the Mediterranean and FM1/AGX linking Asia and the Middle East — would be halted starting next week. But a new AE19/SE4 service would be launched from March 13 that would replace most of the Asia port calls lost with the suspension of the FM1/AGX. Maersk said the westbound FM1 service being operated by the 10,100-TEU Vung Tau Express would terminate at Tanjung Pelepas in Malaysia on March 9 while the ME11 served by the 15,100-TEU Astrid Maersk would be curtailed at Salalah in Oman on March 13. The carrier said it was still determining the final eastbound FM1 and ME11 voyages and would inform shippers and cargo owners once discharge and contingency plans are confirmed. The ME11/IMX loop normally calls at Jebel Ali and Salalah, along with other ports such as Nheva Shava, Port Said and Valencia, while the FM1/AGX service calls at Jebel Ali in addition to its Asia calls at ports including Pusan, Shanghai, Ningbo, and Tanjung Pelepas. But US and Israeli strikes on Iran and Tehran’s retaliation across the region mean the risk of drone and missile attacks in the Strait of Hormuz has closed the area to shipping, including access to Jebel Ali. As a result, the carriers said they have also dropped Jebel Ali from Gemini’s ME1/IOS service. The revised rotation is now Mundra, Nhava Sheva, Salalah, Port Tangier (TC1), Rotterdam, Wilhelmshaven, Hamburg and London Gateway. <h3>New Gemini service to ease capacity cut </h3>To fill the reduction in cargo capacity caused by the FM1/AGX service suspension, the new Gemini AE19/SE4 loop will call at Jeddah in Saudi Arabia plus its West Med and East Med hubs at Tangier and Damietta (Egypt), respectively. The full rotation, via the Cape of Good Hope, is Xingang, Qingdao, Busan, Ningbo, Shanghai, Tanjung Pelepas, West Med hub, East Med hub, Jeddah, West Med hub, Singapore, and Xingang. The carriers said the first westbound sailing will be by the 13,092-TEU Maersk Elba at Xingang on March 13. The new service “will enable more flexibility and routing options for customers’ supply chain,” Maersk said in an advisory. Three Middle East/Gulf shuttles — OGS, UG2, and UGS — will also stop while Jebel Ali will be omitted from the rotation of the PKS service, which has a revised rotation of Karachi, Bin Qasim, Salalah, and Karachi. Hapag-Lloyd said alternatives are being evaluated following the demise of the shuttles, with details to be confirmed shortly. Meanwhile, Yang Ming said Friday it is declaring “an end of voyage” for cargo currently stranded at transshipment ports. Yang Ming’s other Premier Alliance partners, Ocean Network Express and HMM, have yet to confirm if the measure applies to them. ONE did announce Friday it was imposing an emergency surcharge of $1,200 per 20-foot container and $2,400 per 40-foot box on all imports and exports to and from Persian Gulf countries including Bahrain, Saudi Arabia (Dammam and Jubail), Kuwait, Oman, Qatar, and the United Arab Emirates, that have not been discharged or loaded by March 4. The carrier said the surcharge also applies to all cargo currently in transit, which will be diverted to the next safe port of discharge. At these contingency ports, cargo will be discharged and placed at the disposal of the customer for local pickup and subsequent handling. CMA CGM, meanwhile, has abandoned all alternative Middle East port options it was evaluating to keep shipping schedules running as best as possible. Sohar in Oman and Khor Fakkan in the UAE were part of those interim plans, but the carrier finally found even them unworkable in the current volatile scenario. CMA CGM is the latest carrier to declare a total “end of voyage” for Middle East coverage. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. Special correspondent Bency Mathew contributed to this report. </div>

Gemini Cooperation is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles, due to the ongoing war in the region. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services, partners Maersk and Hapag-Lloyd said Friday. Maersk said the suspensions are being made “following our latest risk assessment and operational review and considering the escalating conflict affecting safe navigation in the Gulf region.” “This decision has been taken as a precautionary measure to ensure the safety of our personnel and vessels while minimizing operational disruption across our wider network,” the carrier added in its advisory. The service disruptions come as freight tracking platform Vizion said Friday there has been an 81% drop in daily bookings placed by shippers looking to import goods into key Persian Gulf ports including Jebel Ali, Dammam, Umm Qasr, Sohar, Khalifa, Sharjah, and Al Jubail. Container ports in the Gulf usually book 3.4 million TEUs per year with an estimated cargo value of $140 billion, according to Vizion’s Tradeview platform. The Gemini partners said two mainline services — ME11/IMX linking the Middle East, India and the Mediterranean and FM1/AGX linking Asia and the Middle East — would be halted starting next week. But a new AE19/SE4 service would be launched from March 13 that would replace most of the Asia port calls lost with the suspension of the FM1/AGX. Maersk said the westbound FM1 service being operated by the 10,100-TEU Vung Tau Express would terminate at Tanjung Pelepas in Malaysia on March 9 while the ME11 served by the 15,100-TEU Astrid Maersk would be curtailed at Salalah in Oman on March 13. The carrier said it was still determining the final eastbound FM1 and ME11 voyages and would inform shippers and cargo owners once discharge and contingency plans are confirmed. The ME11/IMX loop normally calls at Jebel Ali and Salalah, along with other ports such as Nheva Shava, Port Said and Valencia, while the FM1/AGX service calls at Jebel Ali in addition to its Asia calls at ports including Pusan, Shanghai, Ningbo, and Tanjung Pelepas. But US and Israeli strikes on Iran and Tehran’s retaliation across the region mean the risk of drone and missile attacks in the Strait of Hormuz has closed the area to shipping, including access to Jebel Ali. As a result, the carriers said they have also dropped Jebel Ali from Gemini’s ME1/IOS service. The revised rotation is now Mundra, Nhava Sheva, Salalah, Port Tangier (TC1), Rotterdam, Wilhelmshaven, Hamburg and London Gateway. New Gemini service to ease capacity cut To fill the reduction in cargo capacity caused by the FM1/AGX service suspension, the new Gemini AE19/SE4 loop will call at Jeddah in Saudi Arabia plus its West Med and East Med hubs at Tangier and Damietta (Egypt), respectively. The full rotation, via the Cape of Good Hope, is Xingang, Qingdao, Busan, Ningbo, Shanghai, Tanjung Pelepas, West Med hub, East Med hub, Jeddah, West Med hub, Singapore, and Xingang. The carriers said the first westbound sailing will be by the 13,092-TEU Maersk Elba at Xingang on March 13. The new service “will enable more flexibility and routing options for customers’ supply chain,” Maersk said in an advisory. Three Middle East/Gulf shuttles — OGS, UG2, and UGS — will also stop while Jebel Ali will be omitted from the rotation of the PKS service, which has a revised rotation of Karachi, Bin Qasim, Salalah, and Karachi. Hapag-Lloyd said alternatives are being evaluated following the demise of the shuttles, with details to be confirmed shortly. Meanwhile, Yang Ming said Friday it is declaring “an end of voyage” for cargo currently stranded at transshipment ports. Yang Ming’s other Premier Alliance partners, Ocean Network Express and HMM, have yet to confirm if the measure applies to them. ONE did announce Friday it was imposing an emergency surcharge of $1,200 per 20-foot container and $2,400 per 40-foot box on all imports and exports to and from Persian Gulf countries including Bahrain, Saudi Arabia (Dammam and Jubail), Kuwait, Oman, Qatar, and the United Arab Emirates, that have not been discharged or loaded by March 4. The carrier said the surcharge also applies to all cargo currently in transit, which will be diverted to the next safe port of discharge. At these contingency ports, cargo will be discharged and placed at the disposal of the customer for local pickup and subsequent handling. CMA CGM, meanwhile, has abandoned all alternative Middle East port options it was evaluating to keep shipping schedules running as best as possible. Sohar in Oman and Khor Fakkan in the UAE were part of those interim plans, but the carrier finally found even them unworkable in the current volatile scenario. CMA CGM is the latest carrier to declare a total “end of voyage” for Middle East coverage. Contact Keith Wallis at keithwallis@hotmail.com . Special correspondent Bency Mathew contributed to this report.

Gemini suspends, revamps Middle East services amid growing conflict

<div class="phx-topic abstract-wrapper">The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility and disruption in the market.</div>

The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility and disruption in the market.

<div class="phx-topic">Intercontinental Exchange (ICE) on Friday said it intends to launch four container freight futures contracts next month covering shipping routes linking Asia, Europe and the US. Subject to regulatory approval, the contracts will begin trading on ICE, owner of the New York Stock Exchange, on April 7, ICE said in a statement. The contracts, which ICE said “are designed to help the market manage container freight [price] risk,” will be indexed to the New York Shipping Exchange’s (NYSHEX’s) Freight Indices price assessments, <a href="https://www.joc.com/article/nyshex-enters-container-index-fray-targeting-floating-rate-contract-adoption-5996516">which were unveiled last May.</a>The four futures contracts, which will be US-denominated and cash-settled, will cover Asia to the US West Coast, Asia to the US East Coast, Asia to North Europe, and North Europe to the US East Coast. The ICE futures do not represent physical slots on container ships; they are a financial instrument that allows investors to hedge against future spot rate movements. The push to launch futures contracts for container shipping <a href="https://www.joc.com/article/near-constant-disruption-giving-new-momentum-to-freight-futures-5979859">has gained momentum in recent years</a> given the seemingly never-ending volatility in the market — from the supply chain disruption caused by the COVID-19 pandemic, the lengthy and costly vessel diversions around southern Africa to avoid the Red Sea and Suez Canal, and now with up to 10% of global capacity tied up due to the war in the Middle East. One big question about container shipping futures has been the potential liquidity of the market, meaning whether the contacts could gain enough traction and eventually become heavily traded. Previous attempts at launching similar container rate futures markets have struggled to generate demand. ICE sought to ease those doubts by pointing out the four contracts “will be supported by [its] network of extremely liquid energy markets.” Open interest, or the number of actively traded contracts, for ICE’s total oil market was at a record 18.7 million contracts as of Feb. 23, it said. “The container shipping industry is massive and critical for global trade, yet it is incredibly volatile,” Gordon Downes, CEO and co-founder of NYSHEX, said in the statement. “With the launch of ICE’s new freight futures, the market participants can far more easily hedge against unexpected swings in the market price.” Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>.</div>

Intercontinental Exchange (ICE) on Friday said it intends to launch four container freight futures contracts next month covering shipping routes linking Asia, Europe and the US. Subject to regulatory approval, the contracts will begin trading on ICE, owner of the New York Stock Exchange, on April 7, ICE said in a statement. The contracts, which ICE said “are designed to help the market manage container freight [price] risk,” will be indexed to the New York Shipping Exchange’s (NYSHEX’s) Freight Indices price assessments, which were unveiled last May. The four futures contracts, which will be US-denominated and cash-settled, will cover Asia to the US West Coast, Asia to the US East Coast, Asia to North Europe, and North Europe to the US East Coast. The ICE futures do not represent physical slots on container ships; they are a financial instrument that allows investors to hedge against future spot rate movements. The push to launch futures contracts for container shipping has gained momentum in recent years given the seemingly never-ending volatility in the market — from the supply chain disruption caused by the COVID-19 pandemic, the lengthy and costly vessel diversions around southern Africa to avoid the Red Sea and Suez Canal, and now with up to 10% of global capacity tied up due to the war in the Middle East. One big question about container shipping futures has been the potential liquidity of the market, meaning whether the contacts could gain enough traction and eventually become heavily traded. Previous attempts at launching similar container rate futures markets have struggled to generate demand. ICE sought to ease those doubts by pointing out the four contracts “will be supported by [its] network of extremely liquid energy markets.” Open interest, or the number of actively traded contracts, for ICE’s total oil market was at a record 18.7 million contracts as of Feb. 23, it said. “The container shipping industry is massive and critical for global trade, yet it is incredibly volatile,” Gordon Downes, CEO and co-founder of NYSHEX, said in the statement. “With the launch of ICE’s new freight futures, the market participants can far more easily hedge against unexpected swings in the market price.” Contact Kevin Saville at kevin.saville2@spglobal.com .

Trans-Atlantic

Intercontinental Exchange to launch container freight futures in April

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<div class="phx-topic abstract-wrapper">Three ocean carriers told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the hostilities would last.</div>

Three ocean carriers told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the hostilities would last.

<div class="phx-topic">Long Beach, California — Container lines are pausing or slowing annual trans-Pacific service contract negotiations as they assess the impact the war in the Middle East will have on their cost structures and how much functional capacity they can offer. Ocean carriers and US importers had already been <a href="Trans-Pacific carriers, importers slow-walking service contract negotiations | Journal of Commerce">slow-walking negotiations</a> for the 2026–27 service year, but the war — which has tied up between 2% and 10% of global container tonnage, according to various estimates — is preventing them from finalizing agreements. Executives from three ocean carriers who asked not to be identified told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the war would last. Their approach isn’t uniform across the industry, however; other carriers say they are ready to finalize contracts despite the uncertainty. Similar to how Houthi attacks that began in late 2023 spurred major carriers to route away from the Red Sea and Suez Canal and divert around southern Africa, the disruption and dislocation of equipment caused by the war in the Middle East will ripple through ocean networks, including the trans-Pacific trade, forwarders and ocean carriers warn. But the impact of the war on the global shipping system will be less pronounced than the Suez diversions, according to container shipping analyst Lars Jensen.<h3>War ‘adds to cost profile’</h3>The war “adds to our cost profile. We have to think about ‘what is our cost to execute this?’” Michael Britton, Maersk’s head of ocean products for North America, told the Journal of Commerce Wednesday. “There’s a global effect pretty immediately, which is the impact on [bunker] fuel price.” While high oil prices will be reflected in a bunker adjustment factor — albeit with a lag of a couple months — the impact of the war on Maersk’s global network is unclear, said Britton. The war, now in its fifth day, has expanded geographically, stretching as far west as Cyprus, where an Iranian drone was shot down on Monday. “The longer it goes, the wider it becomes, because we end up with ships which are not coming back to their original loading ports, and then we try to plug the holes with additional ships,” Britton said. “Part of it will come down to whether we continue to accept bookings.” The timeline for contract negotiations is also being held up because some of the top retailers, including Walmart, have yet to finalize contracts before the Journal of Commerce’s TPM Conference in Long Beach, as they typically do, according to two carrier executives. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. Most contracts for the new service year begin on May 1. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Long Beach, California — Container lines are pausing or slowing annual trans-Pacific service contract negotiations as they assess the impact the war in the Middle East will have on their cost structures and how much functional capacity they can offer. Ocean carriers and US importers had already been slow-walking negotiations for the 2026–27 service year, but the war — which has tied up between 2% and 10% of global container tonnage, according to various estimates — is preventing them from finalizing agreements. Executives from three ocean carriers who asked not to be identified told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the war would last. Their approach isn’t uniform across the industry, however; other carriers say they are ready to finalize contracts despite the uncertainty. Similar to how Houthi attacks that began in late 2023 spurred major carriers to route away from the Red Sea and Suez Canal and divert around southern Africa, the disruption and dislocation of equipment caused by the war in the Middle East will ripple through ocean networks, including the trans-Pacific trade, forwarders and ocean carriers warn. But the impact of the war on the global shipping system will be less pronounced than the Suez diversions, according to container shipping analyst Lars Jensen. War ‘adds to cost profile’ The war “adds to our cost profile. We have to think about ‘what is our cost to execute this?’” Michael Britton, Maersk’s head of ocean products for North America, told the Journal of Commerce Wednesday. “There’s a global effect pretty immediately, which is the impact on [bunker] fuel price.” While high oil prices will be reflected in a bunker adjustment factor — albeit with a lag of a couple months — the impact of the war on Maersk’s global network is unclear, said Britton. The war, now in its fifth day, has expanded geographically, stretching as far west as Cyprus, where an Iranian drone was shot down on Monday. “The longer it goes, the wider it becomes, because we end up with ships which are not coming back to their original loading ports, and then we try to plug the holes with additional ships,” Britton said. “Part of it will come down to whether we continue to accept bookings.” The timeline for contract negotiations is also being held up because some of the top retailers, including Walmart, have yet to finalize contracts before the Journal of Commerce’s TPM Conference in Long Beach, as they typically do, according to two carrier executives. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. Most contracts for the new service year begin on May 1. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Middle East war slows trans-Pacific service contract talks further

<div class="phx-topic abstract-wrapper">While of concern to shippers and ocean carriers, the global impact of the war in the Middle East on container flows will be less severe than COVID-19 disruptions and Red Sea diversions, Lars Jensen told TPM26.</div>

While of concern to shippers and ocean carriers, the global impact of the war in the Middle East on container flows will be less severe than COVID-19 disruptions and Red Sea diversions, Lars Jensen told TPM26.

<div class="phx-topic">Long Beach, California — The war in the Middle East that has effectively shut the Persian Gulf and Strait of Hormuz is a problem for container shipping, but not on the scale of other recent disruptions the sector has faced. That was the closing message of the Journal of Commerce’s TPM 26 conference, delivered by industry analyst and CEO of Vespucci Maritime Lars Jensen. “This is going to sound weird. Globally, strictly on container shipping, it’s a problem, but it’s not a major problem,” Jensen told conference attendees. “It’s definitely not pandemic-scale.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177005_0.1.jpg"></img></div>When Houthi militants in Yemen began <a href="https://www.joc.com/article/red-sea-diversions-could-last-for-months-until-attack-risk-ends-drewry-5225718">their attacks on shipping in the Red Sea two years ago</a>, container ships serving the Asia-Europe, Asia-Mediterranean and Asia-US East Coast trade lanes were forced to make lengthy and costly diversions around the southern tip of Africa. The current danger zone in the Middle East is much more limited. “In this case, it is ... ‘only’ the cargo in the Gulf. So from a global perspective, yes there will be an impact,” Jensen said. “It will contract capacity some, but it’s not a major disaster for the countries in the Gulf.” Looking at the volume of containers destined for the Strait of Hormuz, either on board vessels already or at least booked within the next 90 days to head toward the Gulf, approximately 2 million TEUs will be impacted, he said. A significant portion of that total will be offloaded at ports around the Strait of Hormuz. The war, meanwhile, has put to rest the assumption importers had entering 2026 that container traffic from Asia bound for Europe and the US East Coast would return to the Suez Canal in the second half of this year, thereby reducing carriers’ leverage in pricing. “The baseline outlook for 2026 now has to include the assumption that the deviations around Africa will continue this year, and therefore materially strengthen the supply and demand balance,” Jensen said. As for when container ships will contemplate returning to the Suez Canal, he said that discussion has been kicked down the road for at least another six months. “So realistically, we are probably looking at least six months into the future before anybody is going to start contemplating doing this again, and that is if we stop the war basically today,” Jensen said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023, when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing the diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale in recent months. <h3>Rising oil prices, congestion are a concern </h3>In the short term, oil prices, and therefore bunker fuel prices, will increase, which will impact container shipping costs. And that means ocean carriers will respond with increased fuel surcharges. “On account of the Middle East, the carriers will go gangbusters in terms of implementing as many and as high surcharges as humanly possible, and not just on trades to and from the Gulf, [but] everywhere,” Jensen said. “They will be called emergency fuel surcharges, emergency conflict surcharges, and whatever nice names, but they will be a reality. The only question is, how high will it go and how long will it last.” Even cargo owners who are shipping only from Asia to the US West Coast will feel an impact from events in the Middle East in terms of surcharges and disrupted operations in the form of knock-on congestion. “You’re going to get all of these congestion effects in Asia that [are] going to impact everything and everyone, so you’re going to see these surcharges also on the Pacific,” Jensen said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Long Beach, California — The war in the Middle East that has effectively shut the Persian Gulf and Strait of Hormuz is a problem for container shipping, but not on the scale of other recent disruptions the sector has faced. That was the closing message of the Journal of Commerce’s TPM 26 conference, delivered by industry analyst and CEO of Vespucci Maritime Lars Jensen. “This is going to sound weird. Globally, strictly on container shipping, it’s a problem, but it’s not a major problem,” Jensen told conference attendees. “It’s definitely not pandemic-scale.” When Houthi militants in Yemen began their attacks on shipping in the Red Sea two years ago , container ships serving the Asia-Europe, Asia-Mediterranean and Asia-US East Coast trade lanes were forced to make lengthy and costly diversions around the southern tip of Africa. The current danger zone in the Middle East is much more limited. “In this case, it is ... ‘only’ the cargo in the Gulf. So from a global perspective, yes there will be an impact,” Jensen said. “It will contract capacity some, but it’s not a major disaster for the countries in the Gulf.” Looking at the volume of containers destined for the Strait of Hormuz, either on board vessels already or at least booked within the next 90 days to head toward the Gulf, approximately 2 million TEUs will be impacted, he said. A significant portion of that total will be offloaded at ports around the Strait of Hormuz. The war, meanwhile, has put to rest the assumption importers had entering 2026 that container traffic from Asia bound for Europe and the US East Coast would return to the Suez Canal in the second half of this year, thereby reducing carriers’ leverage in pricing. “The baseline outlook for 2026 now has to include the assumption that the deviations around Africa will continue this year, and therefore materially strengthen the supply and demand balance,” Jensen said. As for when container ships will contemplate returning to the Suez Canal, he said that discussion has been kicked down the road for at least another six months. “So realistically, we are probably looking at least six months into the future before anybody is going to start contemplating doing this again, and that is if we stop the war basically today,” Jensen said. Major container lines have mostly avoided the Red Sea/Suez route since late 2023, when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing the diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale in recent months. Rising oil prices, congestion are a concern In the short term, oil prices, and therefore bunker fuel prices, will increase, which will impact container shipping costs. And that means ocean carriers will respond with increased fuel surcharges. “On account of the Middle East, the carriers will go gangbusters in terms of implementing as many and as high surcharges as humanly possible, and not just on trades to and from the Gulf, [but] everywhere,” Jensen said. “They will be called emergency fuel surcharges, emergency conflict surcharges, and whatever nice names, but they will be a reality. The only question is, how high will it go and how long will it last.” Even cargo owners who are shipping only from Asia to the US West Coast will feel an impact from events in the Middle East in terms of surcharges and disrupted operations in the form of knock-on congestion. “You’re going to get all of these congestion effects in Asia that [are] going to impact everything and everyone, so you’re going to see these surcharges also on the Pacific,” Jensen said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

TPM26: War a problem for container shipping, but not ‘pandemic-scale’: analyst

<div class="phx-topic abstract-wrapper">Ryan Petersen said his company went into “code red” last year in transitioning to AI, with the technology’s first benefits seen in customs compliance and auditing.</div>

Ryan Petersen said his company went into “code red” last year in transitioning to AI, with the technology’s first benefits seen in customs compliance and auditing.

<div class="phx-topic">Long Beach, California — Flexport CEO Ryan Petersen said Tuesday recent advances in artificial intelligence AI can remove more of the friction involved in shipping, potentially shaving 10% off the back-office cost of ocean freight and allowing logistics companies to easily scale without adding employees. Speaking at the Journal of Commerce’s TPM26 conference, Petersen said Flexport went into “code red” and began a more urgent transition to using AI tools in its processes last November due to the better models and new capabilities available in the market. He said the company plans to use AI to “vibe code” half of its internal applications rather than using traditional programming tools. “I think the ability to build AI right now is phenomenal,” Petersen said. “You can just talk to Claude [AI] in English and get an application out in 30 minutes. So, there’s a huge amount of this that’s possible now that wasn’t possible even 90 days ago.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177003_0.1.jpg"></img></div>AI has been especially helpful in Flexport’s customs business, he said, allowing the company to update its internal systems to reflect 53 changes to US Customs code last year to reflect the multiple changes to tariff and trade codes. Petersen said the adoption of AI has reduced the error rate on Flexport’s customs declarations to almost zero. The company also used AI to build its recently released “tariff simulator” to double check customs duties and other fees. And he said the tool has been able to identify some $4 billion in overcharges on customs documents. “We are now able to do customs for some of the biggest companies in the world because our customs technology stack is really differentiated for very large enterprises,” Petersen said. “We can put things on autopilot with a very high degree of compliance accuracy.” <h3>Using AI to optimize ocean freight </h3>In its forwarding business, Flexport used AI to build an application for optimizing ocean freight by assigning shipments based on the lowest contract rate, sailing schedules, and vessel arrival dates. Many other forwarders are applying AI to ocean freight, which Petersen said is a “simple problem.” He said the real benefits of AI come from handling the industry’s complex problems, such as customs updates and optimizing less-than-container load and consolidated shipments. “We want to be more about how do you bring AI to either do better, more compliant customs keeping track of all the tariff changes or freight consolidation, so being able to have an AI algorithm that takes freight and does Tetris inside the container,” Petersen said. AI is solving the problem of how a logistics company can serve more customers and markets without increasing headcount. Citing the example of DSV’s 2024 acquisition of Schenker that doubled its headcount to 150,000, Petersen said an organization that size can introduce more complexity into logistics that AI can eliminate. “I think you’re going to see a really rapid ability to lower costs in logistics,” he said. “Our estimate is that a shipper can save about 10% on the price of shipping a container [compared with] the white-collar transactional labor to coordinate the shipments.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Long Beach, California — Flexport CEO Ryan Petersen said Tuesday recent advances in artificial intelligence AI can remove more of the friction involved in shipping, potentially shaving 10% off the back-office cost of ocean freight and allowing logistics companies to easily scale without adding employees. Speaking at the Journal of Commerce’s TPM26 conference, Petersen said Flexport went into “code red” and began a more urgent transition to using AI tools in its processes last November due to the better models and new capabilities available in the market. He said the company plans to use AI to “vibe code” half of its internal applications rather than using traditional programming tools. “I think the ability to build AI right now is phenomenal,” Petersen said. “You can just talk to Claude [AI] in English and get an application out in 30 minutes. So, there’s a huge amount of this that’s possible now that wasn’t possible even 90 days ago.” AI has been especially helpful in Flexport’s customs business, he said, allowing the company to update its internal systems to reflect 53 changes to US Customs code last year to reflect the multiple changes to tariff and trade codes. Petersen said the adoption of AI has reduced the error rate on Flexport’s customs declarations to almost zero. The company also used AI to build its recently released “tariff simulator” to double check customs duties and other fees. And he said the tool has been able to identify some $4 billion in overcharges on customs documents. “We are now able to do customs for some of the biggest companies in the world because our customs technology stack is really differentiated for very large enterprises,” Petersen said. “We can put things on autopilot with a very high degree of compliance accuracy.” Using AI to optimize ocean freight In its forwarding business, Flexport used AI to build an application for optimizing ocean freight by assigning shipments based on the lowest contract rate, sailing schedules, and vessel arrival dates. Many other forwarders are applying AI to ocean freight, which Petersen said is a “simple problem.” He said the real benefits of AI come from handling the industry’s complex problems, such as customs updates and optimizing less-than-container load and consolidated shipments. “We want to be more about how do you bring AI to either do better, more compliant customs keeping track of all the tariff changes or freight consolidation, so being able to have an AI algorithm that takes freight and does Tetris inside the container,” Petersen said. AI is solving the problem of how a logistics company can serve more customers and markets without increasing headcount. Citing the example of DSV’s 2024 acquisition of Schenker that doubled its headcount to 150,000, Petersen said an organization that size can introduce more complexity into logistics that AI can eliminate. “I think you’re going to see a really rapid ability to lower costs in logistics,” he said. “Our estimate is that a shipper can save about 10% on the price of shipping a container [compared with] the white-collar transactional labor to coordinate the shipments.” Contact Michael Angell at michael.angell@spglobal.com .

Logistics Technology News

Supply chain

TPM26: Flexport CEO sees AI’s impact on logistics accelerating

<div class="phx-topic abstract-wrapper">While reefer trade is at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have put a stop to all Middle East shipments until further notice. </div>

While reefer trade is at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have put a stop to all Middle East shipments until further notice.

<div class="phx-topic">Supply chains between India and the Middle East have come to a standstill following the en masse suspension of services and cargo acceptance by ocean carriers serving the trade corridor amid the military conflict between Iran and the US and Israel. The economic implications of the developing crisis are enormous for India as it is the second-largest trading partner for the United Arab Emirates (UAE). The two sides in 2022 signed a comprehensive trade pact aimed at pushing non-oil bilateral trade to $100 billion by 2030. While reefer trade is seen to be at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have already put a stop to all kinds of Middle East shipments until further notice. “Effective immediately, we are suspending all new bookings between the Indian Subcontinent [India, Pakistan, Bangladesh and Sri Lanka] and the Upper Gulf markets of the UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia [Dammam and Jubail only],” Maersk said in an operational update. Mediterranean Shipping Co., Hapag-Lloyd and Ocean Network Express (ONE) have also halted all Middle East bookings. “For cargo currently in transit or planned shipments, we are closely assessing the situation voyage by voyage,” Singapore-based ONE said. Concurrently, lead mainline carriers on the trade lane have announced hefty war risk or emergency surcharges — ranging between $1,500 and $3,000 per standard container. Maersk is the latest operator to have issued that advisory, slapping an “emergency freight increase” levy for the region of $1,800 per TEU, $3,000 per FEU, and $3,800 for reefer boxes. <h3>Exports ‘piling up’ on Indian docks </h3>Meanwhile, the abrupt cargo flow stoppage and service disruptions have left many Indian docks facing a buildup of containers, with the accumulation expected to aggravate as planned export containers continue to gate in. “Cargo booked for Middle East destinations is piling up across Indian ports,” Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told the Journal of Commerce. “If the crisis is not resolved quickly, it’s going to cause congestion troubles.” The disruptive impact on Indian exports goes beyond the Middle East regional trade. India’s seasonal grape shipments to Europe, which were picking up, now face longer or unpredictable transits due to vessel diversions around southern Africa for westbound services that recently resumed, and then halted, Red Sea/Suez Canal transits. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Supply chains between India and the Middle East have come to a standstill following the en masse suspension of services and cargo acceptance by ocean carriers serving the trade corridor amid the military conflict between Iran and the US and Israel. The economic implications of the developing crisis are enormous for India as it is the second-largest trading partner for the United Arab Emirates (UAE). The two sides in 2022 signed a comprehensive trade pact aimed at pushing non-oil bilateral trade to $100 billion by 2030. While reefer trade is seen to be at the center of carrier booking suspensions because of its time-sensitive nature, many mainline carriers have already put a stop to all kinds of Middle East shipments until further notice. “Effective immediately, we are suspending all new bookings between the Indian Subcontinent [India, Pakistan, Bangladesh and Sri Lanka] and the Upper Gulf markets of the UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia [Dammam and Jubail only],” Maersk said in an operational update. Mediterranean Shipping Co., Hapag-Lloyd and Ocean Network Express (ONE) have also halted all Middle East bookings. “For cargo currently in transit or planned shipments, we are closely assessing the situation voyage by voyage,” Singapore-based ONE said. Concurrently, lead mainline carriers on the trade lane have announced hefty war risk or emergency surcharges — ranging between $1,500 and $3,000 per standard container. Maersk is the latest operator to have issued that advisory, slapping an “emergency freight increase” levy for the region of $1,800 per TEU, $3,000 per FEU, and $3,800 for reefer boxes. Exports ‘piling up’ on Indian docks Meanwhile, the abrupt cargo flow stoppage and service disruptions have left many Indian docks facing a buildup of containers, with the accumulation expected to aggravate as planned export containers continue to gate in. “Cargo booked for Middle East destinations is piling up across Indian ports,” Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told the Journal of Commerce. “If the crisis is not resolved quickly, it’s going to cause congestion troubles.” The disruptive impact on Indian exports goes beyond the Middle East regional trade. India’s seasonal grape shipments to Europe, which were picking up, now face longer or unpredictable transits due to vessel diversions around southern Africa for westbound services that recently resumed, and then halted, Red Sea/Suez Canal transits. Contact Bency Mathew at bencyvmathew@gmail.com .

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