<div class="phx-topic abstract-wrapper">Weather-related port congestion in January and February caused higher terminal storage costs while war in the Middle East raised operating expenses late in the quarter.</div>

Weather-related port congestion in January and February caused higher terminal storage costs while war in the Middle East raised operating expenses late in the quarter.

Feature image

<div class="phx-topic">Hapag-Lloyd recorded a $300 million loss in the first quarter as severe winter weather on both sides of the Atlantic, rising energy costs and sharply declining rates dragged down the carrier’s earnings. It was “an unsatisfactory start to the year,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters during a results briefing Wednesday. “We had adverse weather conditions in north and south Europe in January and February, and similar conditions on the East Coast of the US, and we are heavily exposed to those markets,” he said. Although bunker prices fell in the first quarter because of the time lag between purchase and consumption, higher terminal storage costs stacked up from weather-related port congestion in January and February, with Middle East-related disruptions adding to March operating costs. Hapag-Lloyd's first-quarter volume was down 0.7% at 3.2 million TEUs while average freight rates fell 10% year over year to $1,330 per TEU. The weak performance in the liner shipping segment dragged Hapag’s revenue down 7.5% to $4.9 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 54% to $500 million and EBIT was down 60% at $200 million. The $300 million net loss was down from a $500 million profit in Q1 2025. War in the Middle East drove up energy prices from the end of February. Habben Jansen said the carrier was bunkering 100,000 tons of fuel a week, which was adding $50 million to $60 million to its weekly bills. "The situation in the Middle East caused significant extra cost from March, which we hope to recover through surcharges in the second quarter,” the CEO said. “A significant increase in bunker cost is expected in Q2 which will be covered by our emergency fuel surcharge and the regular marine fuel recovery mechanism.” <h3>Recovering rising bunker costs </h3>Half of the carrier’s volume is under contract where surcharges enable rising fuel costs to be fully recovered. On the spot market, Habben Jansen said rising rates through the peak season will factor in the bunker costs. “Looking at the sheer magnitude of the additional costs that we face, I think in most cases we have sensible discussions with customers, and that can be that we either come up with an emergency additional charge, or in some cases we move from a quarterly adjustment in the bunker formula to a monthly adjustment,” he said. While volume was flat compared to the first quarter of last year, the carrier was seeing solid market demand into May and beyond, and Habben Jansen said the industry was on track for a “decent” peak season. ”We don’t see any real softening in demand for cargo at this point,” he said. “When we look at forward bookings, when we look at futures markets, when we talk to customers, there is an expectation that we will have a pretty decent peak season.” That’s not a view necessarily shared by the National Retail Federation, <a href="https://www.joc.com/article/weak-consumer-confidence-rising-inflation-dim-peak-season-hopes-6217405">which indicated on Friday</a> that peak season for US imports will be less than impressive due to weak consumer confidence, rising inflation, and retailers hesitant to launch any meaningful restocking given a hazy economic outlook. <h3>HMM’s Q1 earnings also fall </h3>Meanwhile, South Korea carrier HMM also reported a sharp drop in first-quarter earnings as falling rates and rising costs from the Middle East war weighed on its results. Revenue fell 4.8% year over year to $1.8 million, operating profit declined 56% to $181 million and first-quarter net profit of $237 million was down 52%, HMM said in a statement Wednesday. The carrier warned of growing market uncertainty driven by increasing vessel capacity from a bloated order book, rising costs associated with the Middle East war, and US tariff policies. "HMM will implement fuel cost optimization strategies to mitigate the impact of prolonged high oil prices,” the carrier noted. “HMM also plans to launch new routes to markets like Africa by adopting a hub-and-spoke strategy, while securing new demand in regions such as Southeast Asia.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Hapag-Lloyd recorded a $300 million loss in the first quarter as severe winter weather on both sides of the Atlantic, rising energy costs and sharply declining rates dragged down the carrier’s earnings. It was “an unsatisfactory start to the year,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters during a results briefing Wednesday. “We had adverse weather conditions in north and south Europe in January and February, and similar conditions on the East Coast of the US, and we are heavily exposed to those markets,” he said. Although bunker prices fell in the first quarter because of the time lag between purchase and consumption, higher terminal storage costs stacked up from weather-related port congestion in January and February, with Middle East-related disruptions adding to March operating costs. Hapag-Lloyd's first-quarter volume was down 0.7% at 3.2 million TEUs while average freight rates fell 10% year over year to $1,330 per TEU. The weak performance in the liner shipping segment dragged Hapag’s revenue down 7.5% to $4.9 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 54% to $500 million and EBIT was down 60% at $200 million. The $300 million net loss was down from a $500 million profit in Q1 2025. War in the Middle East drove up energy prices from the end of February. Habben Jansen said the carrier was bunkering 100,000 tons of fuel a week, which was adding $50 million to $60 million to its weekly bills. "The situation in the Middle East caused significant extra cost from March, which we hope to recover through surcharges in the second quarter,” the CEO said. “A significant increase in bunker cost is expected in Q2 which will be covered by our emergency fuel surcharge and the regular marine fuel recovery mechanism.” Recovering rising bunker costs Half of the carrier’s volume is under contract where surcharges enable rising fuel costs to be fully recovered. On the spot market, Habben Jansen said rising rates through the peak season will factor in the bunker costs. “Looking at the sheer magnitude of the additional costs that we face, I think in most cases we have sensible discussions with customers, and that can be that we either come up with an emergency additional charge, or in some cases we move from a quarterly adjustment in the bunker formula to a monthly adjustment,” he said. While volume was flat compared to the first quarter of last year, the carrier was seeing solid market demand into May and beyond, and Habben Jansen said the industry was on track for a “decent” peak season. ”We don’t see any real softening in demand for cargo at this point,” he said. “When we look at forward bookings, when we look at futures markets, when we talk to customers, there is an expectation that we will have a pretty decent peak season.” That’s not a view necessarily shared by the National Retail Federation, which indicated on Friday that peak season for US imports will be less than impressive due to weak consumer confidence, rising inflation, and retailers hesitant to launch any meaningful restocking given a hazy economic outlook. HMM’s Q1 earnings also fall Meanwhile, South Korea carrier HMM also reported a sharp drop in first-quarter earnings as falling rates and rising costs from the Middle East war weighed on its results. Revenue fell 4.8% year over year to $1.8 million, operating profit declined 56% to $181 million and first-quarter net profit of $237 million was down 52%, HMM said in a statement Wednesday. The carrier warned of growing market uncertainty driven by increasing vessel capacity from a bloated order book, rising costs associated with the Middle East war, and US tariff policies. "HMM will implement fuel cost optimization strategies to mitigate the impact of prolonged high oil prices,” the carrier noted. “HMM also plans to launch new routes to markets like Africa by adopting a hub-and-spoke strategy, while securing new demand in regions such as Southeast Asia.” Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Container Shipping News

Maritime

Hapag-Lloyd posts Q1 net loss in ‘unsatisfactory’ start to 2026

<div class="phx-topic abstract-wrapper">If current market conditions continue, analyst Larry Gross believes there will be fresh gains in domestic intermodal share. </div>

If current market conditions continue, analyst Larry Gross believes there will be fresh gains in domestic intermodal share.

<div class="phx-topic">Last month, <a href="https://www.joc.com/article/tailwinds-for-us-intermodal-volume-growth-strengthening-analyst-6206045">I wrote about</a> the gathering tailwinds for domestic intermodal. With truck rates rising under the pressure of tighter driver supply and skyrocketing diesel prices, the intermodal alternative should become more attractive. When they arrived, the March numbers from the Intermodal Association of North America (IANA) confirmed the story. Domestic intermodal across North America was up 8.4% from the prior year, and for loads originating and terminating within the US, the gain was even stronger at 9.3%. This led me to ask another question – will we finally see an upturn in domestic intermodal market share? Looking at those numbers, the answer for the moment appears to be: not yet. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6219923_0.1.jpg"></img></div>My market share calculations have changed a bit this year, because the source of the truck data is new. The truck numbers are now being provided by the highly respected commercial vehicle and transportation market analytical powerhouse ACT Research. US dry-van and reefer loads are compiled monthly by mileage range. The lowest relevant mileage range is 301 to 600 miles. This raises a question: Which truck mileage range should we use to compute intermodal market share – 301 miles and more, or 600 miles and more? The decision has a huge effect on the share calculation, because, according to ACT, almost half of the dry-van and reefer truckloads that are moving distances of over 300 miles lie in that short-haul 301-600-mile range. For long-haul intermodal, the percentage is much lower, with significantly less than 10% of domestic intermodal activity moving 600 miles or less. Neither approach is perfect. Using the 300-mile cutoff has a dramatic downward effect on intermodal market share, while comparing all domestic intermodal to the 601-plus mile market artificially boosts intermodal market share by a bit. Rather than making the choice, the chart included here presents the data both ways. After all, we are far more interested in the trend, i.e. whether the number is rising or falling, than the actual number, which is only an estimate with a pretty decent margin of error. While the numbers are slightly different from my previous calculations, the message is relatively unchanged: domestic intermodal share is down from previous levels. Using the 601-plus-mile figures, share, which averaged 6.5% in 2013, averaged 5.7% over the 12-month period ending in March 2026. Further, it did not change much in 2025. However, these revised numbers do show that a modest gain occurred in 2023 and 2024 versus the trough in 2022, at least when the 601-plus-mile truck numbers are used for the comparison. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="fe43f201-73c6-4a49-a33e-7b3a3a655f43"></dynamic-object></div>Where to from here? I believe that if current conditions continue, then we will see domestic intermodal market share gains. It may simply be too soon to see it in the data. Supply chains, while more agile than they used to be, still don’t turn on a dime. The intermodal growth baton is being handed off from international to domestic. With international loads flagging, the domestic improvement will come just in time. Then the industry will face an operational test, and we will see if lessons have been learned. Ample supplies of domestic containers and chassis remain available to handle higher volumes. Will the railroads be able to cope with increased activity without deterioration in intermodal service levels? In my experience, the four most dangerous words in forecasting are: “this time it’s different.” History says that when volume increases, the railroads lack the surge capacity required and have a tough time catching up. The railroads say that won’t happen this time. On this, I am optimistic, but still very cautious. I don’t think it will take very long to see where things are headed. Larry Gross is president and founder of Gross Transportation Consulting. Contact him at <a href="mailto:lawrencejgross@gmail.com">lawrencejgross@gmail.com</a>. </div>

Last month, I wrote about the gathering tailwinds for domestic intermodal. With truck rates rising under the pressure of tighter driver supply and skyrocketing diesel prices, the intermodal alternative should become more attractive. When they arrived, the March numbers from the Intermodal Association of North America (IANA) confirmed the story. Domestic intermodal across North America was up 8.4% from the prior year, and for loads originating and terminating within the US, the gain was even stronger at 9.3%. This led me to ask another question – will we finally see an upturn in domestic intermodal market share? Looking at those numbers, the answer for the moment appears to be: not yet. My market share calculations have changed a bit this year, because the source of the truck data is new. The truck numbers are now being provided by the highly respected commercial vehicle and transportation market analytical powerhouse ACT Research. US dry-van and reefer loads are compiled monthly by mileage range. The lowest relevant mileage range is 301 to 600 miles. This raises a question: Which truck mileage range should we use to compute intermodal market share – 301 miles and more, or 600 miles and more? The decision has a huge effect on the share calculation, because, according to ACT, almost half of the dry-van and reefer truckloads that are moving distances of over 300 miles lie in that short-haul 301-600-mile range. For long-haul intermodal, the percentage is much lower, with significantly less than 10% of domestic intermodal activity moving 600 miles or less. Neither approach is perfect. Using the 300-mile cutoff has a dramatic downward effect on intermodal market share, while comparing all domestic intermodal to the 601-plus mile market artificially boosts intermodal market share by a bit. Rather than making the choice, the chart included here presents the data both ways. After all, we are far more interested in the trend, i.e. whether the number is rising or falling, than the actual number, which is only an estimate with a pretty decent margin of error. While the numbers are slightly different from my previous calculations, the message is relatively unchanged: domestic intermodal share is down from previous levels. Using the 601-plus-mile figures, share, which averaged 6.5% in 2013, averaged 5.7% over the 12-month period ending in March 2026. Further, it did not change much in 2025. However, these revised numbers do show that a modest gain occurred in 2023 and 2024 versus the trough in 2022, at least when the 601-plus-mile truck numbers are used for the comparison. Where to from here? I believe that if current conditions continue, then we will see domestic intermodal market share gains. It may simply be too soon to see it in the data. Supply chains, while more agile than they used to be, still don’t turn on a dime. The intermodal growth baton is being handed off from international to domestic. With international loads flagging, the domestic improvement will come just in time. Then the industry will face an operational test, and we will see if lessons have been learned. Ample supplies of domestic containers and chassis remain available to handle higher volumes. Will the railroads be able to cope with increased activity without deterioration in intermodal service levels? In my experience, the four most dangerous words in forecasting are: “this time it’s different.” History says that when volume increases, the railroads lack the surge capacity required and have a tough time catching up. The railroads say that won’t happen this time. On this, I am optimistic, but still very cautious. I don’t think it will take very long to see where things are headed. Larry Gross is president and founder of Gross Transportation Consulting. Contact him at lawrencejgross@gmail.com .

Trucking News

Rail News

Surface

Domestic intermodal share improvement remains elusive, for now

<div class="phx-topic abstract-wrapper">The carrier is increasing capacity in response to growth in Indian imports from China and other Asian production markets in recent years, propelled by input sourcing to support rapid industrial development.</div>

The carrier is increasing capacity in response to growth in Indian imports from China and other Asian production markets in recent years, propelled by input sourcing to support rapid industrial development.

<div class="phx-topic">Maersk is restarting an intra-Asia service that was suspended in late 2020 as part of widespread network shakeups in the aftermath of the pandemic. The standalone FI2 service connecting key ports in China, Malaysia, India and Pakistan is set to return to the trade lane in early June, complementing the FI3 that the Danish carrier still operates in a revamped format. Six ships in the 3,400- to 4,500-TEU range will be deployed on the FI2 to provide a weekly rotation, calling at Shanghai, Ningbo, Nansha, Tanjung Pelepas, Nhava Sheva, Pipavav, and Port Qasim (Karachi). The first sailing from Shanghai is planned for June 4. “Designed to strengthen network coverage and offer greater flexibility, the FI2 service provides enhanced connectivity from Southern and Central China to key, fast-growing markets in Northwest India and Pakistan,” Maersk said in a customer advisory. The FI3 has stops at Qingdao, Xingang, Busan, Tanjung Pelepas, Nhava Sheva, Pipavav, Mundra and Karachi. Maersk is increasing capacity in response to growth in Indian imports from China and other Asian production markets in recent years, propelled by input sourcing to support rapid industrial development. Indian imports from China by value were up 16% year over year in the 2025-26 fiscal year that ended in March, according to official data. Logistics industry executives view China–India trade as a fast-growing lane, estimating double-digit growth in volumes over the past year. They expect the boom to accelerate as multinational manufacturers pursuing a China-plus-one strategy add more production lines in India. Japanese automaker Toyota has announced plans to set up a new sports utility vehicle (SUV) manufacturing plant in the western Indian state of Maharashtra, its fourth in the country. <h3>Middle East chokepoints shift focus to intra-Asia </h3>Ashish Sheth, chairman and managing director of Sarjak Container Lines, believes Persian Gulf chokepoints such as the Strait of Hormuz and Red Sea have refueled the strategic importance of intra-Asia trades for India. “China–India container trade continues to show strong structural growth in 2026, driven by electronics, machinery, chemicals and manufacturing inputs,” Sheth told the Journal of Commerce. Cargo booking rates from China to India have risen in recent months, with average mainline Shanghai–Nhava Sheva rates now at $1,300 to $1,400 per FEU, industry data indicates. Most mainliners have already positioned themselves alongside niche intra-Asia operators to capture fresh demand gains. In late 2025, CMA CGM began a regional loop linking Thailand, Vietnam and Malaysia to Chennai in southeast India with extended reach for western India and Pakistan via feeder connectivity. Ocean Network Express and HMM have also cemented their intra-Asia presence out of India through vessel-sharing or slot partnerships. Chinese-backed CU Lines seems to be another emerging capacity participant on the trade lane, rivaling the predominant regional carriers like Wan Hai Lines, Cosco Shipping, Pacific International Lines, Evergreen, Yang Ming and Interasia Lines. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Maersk is restarting an intra-Asia service that was suspended in late 2020 as part of widespread network shakeups in the aftermath of the pandemic. The standalone FI2 service connecting key ports in China, Malaysia, India and Pakistan is set to return to the trade lane in early June, complementing the FI3 that the Danish carrier still operates in a revamped format. Six ships in the 3,400- to 4,500-TEU range will be deployed on the FI2 to provide a weekly rotation, calling at Shanghai, Ningbo, Nansha, Tanjung Pelepas, Nhava Sheva, Pipavav, and Port Qasim (Karachi). The first sailing from Shanghai is planned for June 4. “Designed to strengthen network coverage and offer greater flexibility, the FI2 service provides enhanced connectivity from Southern and Central China to key, fast-growing markets in Northwest India and Pakistan,” Maersk said in a customer advisory. The FI3 has stops at Qingdao, Xingang, Busan, Tanjung Pelepas, Nhava Sheva, Pipavav, Mundra and Karachi. Maersk is increasing capacity in response to growth in Indian imports from China and other Asian production markets in recent years, propelled by input sourcing to support rapid industrial development. Indian imports from China by value were up 16% year over year in the 2025-26 fiscal year that ended in March, according to official data. Logistics industry executives view China–India trade as a fast-growing lane, estimating double-digit growth in volumes over the past year. They expect the boom to accelerate as multinational manufacturers pursuing a China-plus-one strategy add more production lines in India. Japanese automaker Toyota has announced plans to set up a new sports utility vehicle (SUV) manufacturing plant in the western Indian state of Maharashtra, its fourth in the country. Middle East chokepoints shift focus to intra-Asia Ashish Sheth, chairman and managing director of Sarjak Container Lines, believes Persian Gulf chokepoints such as the Strait of Hormuz and Red Sea have refueled the strategic importance of intra-Asia trades for India. “China–India container trade continues to show strong structural growth in 2026, driven by electronics, machinery, chemicals and manufacturing inputs,” Sheth told the Journal of Commerce. Cargo booking rates from China to India have risen in recent months, with average mainline Shanghai–Nhava Sheva rates now at $1,300 to $1,400 per FEU, industry data indicates. Most mainliners have already positioned themselves alongside niche intra-Asia operators to capture fresh demand gains. In late 2025, CMA CGM began a regional loop linking Thailand, Vietnam and Malaysia to Chennai in southeast India with extended reach for western India and Pakistan via feeder connectivity. Ocean Network Express and HMM have also cemented their intra-Asia presence out of India through vessel-sharing or slot partnerships. Chinese-backed CU Lines seems to be another emerging capacity participant on the trade lane, rivaling the predominant regional carriers like Wan Hai Lines, Cosco Shipping, Pacific International Lines, Evergreen, Yang Ming and Interasia Lines. Contact Bency Mathew at bencyvmathew@gmail.com .

Asia-Europe

International ports

Maersk joins race to target burgeoning China-India trade with capacity boost

<div class="phx-topic abstract-wrapper">Without the funding element, shipping groups and environmental campaigners argue that the so-called net-zero framework will be unable to provide crucial funding for shipping’s decarbonization journey.</div>

Without the funding element, shipping groups and environmental campaigners argue that the so-called net-zero framework will be unable to provide crucial funding for shipping’s decarbonization journey.

<div class="phx-topic">The pricing mechanism that is a core pillar of the International Maritime Organization’s (IMO) net-zero framework is “exceedingly unlikely” to be accepted by the US, according to maritime classification society DNV. At a meeting of the IMO’s Marine Environment Protection Committee (MEPC 84) in London in late April, Washington reiterated its opposition to the economic mechanism in the net-zero framework (NZF) that is meant to provide crucial funding for shipping’s decarbonization journey. “The fund mechanism is, in our assessment, dead in the water,” Eirik Nyhus, DNV’s vice president and director of environment, told a webcast organized by the group last week. “We see it as exceedingly unlikely that the US will accept the economic aspects of (the) net-zero framework in any form.” Achieving the IMO target of full decarbonization by or around 2050 with benchmark targets set along the way will require narrowing the wide price gap that exists between fossil fuels and the low- or zero-emission alternatives, which by its very nature will require making fossil fuels more expensive. But without the funding element, shipping groups and environmental campaigners argue that the NZF will become irrelevant. A report from the Global Maritime Forum earlier this year warned that any removal of the economic element— designed to make green technologies cheaper than high-emission alternatives — would also remove the likelihood of effective enforcement. “A standalone global fuel standard with no economic elements would likely merely replicate what already exists in the carbon intensity indicator (CII) mechanism, which requires ships with repeated non-compliance at a certain level to file a corrective action plan,” the report noted. <h3>US reiterates opposition </h3>The Trump administration made clear its opposition to the net-zero framework at a contentious MEPC 83 meeting in October last year, even threatening to leave the IMO over the issue. That <a href="https://www.joc.com/article/fmcs-dibella-brings-anti-net-zero-message-to-imo-london-meeting-6210952">anti-NZF message was reinforced by Federal Maritime Commission (FMC) Chairman Laura DiBella</a> when she attended the most recent MEPC meeting in London two weeks ago. “The NZF is an unnecessary tax on US shippers and vessels operating in international waters,” DiBella said in a statement before attending the meeting. “The NZF would cost the maritime industry billions of dollars annually. As the largest consumer of imported goods, these costs will be directly passed onto US consumers.” The IMO’s NZF is aimed at reducing greenhouse gas (GHG) emissions from ships, in line with its 2023 GHG Strategy. It aims to set global standards for shipping’s carbon emissions and create a greenhouse gas pricing mechanism for ocean carriers to sharply reduce emissions by 2050. The NZF took a big step forward with the formal adoption of <a href="https://www.joc.com/article/imo-sets-out-path-to-decarbonize-shipping-after-contentious-climate-talks-5982209">a two-tier pricing mechanism at the April 2025 MEPC meeting</a>. But it was a short-lived victory as growing pressure from the US and its supporters culminated in a tense MEPC meeting last October. Despite 80% approval for the NZF from member states voting in April 2025, 34 countries switched positions between April and October to favor the deferment in the face of growing pressure from the US. As a result, the IMO <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">was forced to delay adoption of the net-zero framework for one year</a>, until the MEPC 85 meeting planned for Nov. 30 to Dec. 4. “What we saw (at MEPC 84) was that the opposition to, and the coalition against, the net-zero framework that we saw emerge at MEPC 83 was largely unchanged,” Nyhus said. “The language was a little bit different in some cases, but the root positions were more or less what they used to be.” <h3>Binding regulatory measure </h3>While positions are entrenched, there was some progress made at MEPC 84. At the close of the meeting on May 1, countries at least confirmed that the NZF will serve as the foundation for upcoming negotiations in addition to alternate proposals that have been submitted by some countries, including Japan and Liberia. With the architecture of the NZF preserved, non-profit organization Environmental Defense Fund (EDF) said member states can now work through the concerns and priorities of all parties to develop a binding regulatory measure to reduce emissions from the sector. "Decarbonizing shipping isn't just good for the climate, it's good for business,” said Mark Brownstein, EDF’s senior vice president of energy transition. “The market is ready. Investors are ready. What's needed now is certainty and the net-zero framework is the foundation to build it on.” The IMO is now focused on building consensus around some version of the NZF this year before a reconvened MEPC meets in late November to finalize the legally binding measures. There will be two IMO intersessional working groups in the coming months, alongside a technical expert workshop on fuel supply chain traceability, that will try to address outstanding concerns and come up with detailed guidelines needed to get the framework ready for adoption at MEPC 85 in November. “We will see how that all plays out, but there is at least a willingness to keep talking, and it is important that the process keeps moving forward,” Nyhus said. “But as a consequence of this, the timeline for anything post-2026 remains unclear. ”We don’t know if we will have an approval at MEPC 85, and we don’t know what it will look like if we get it,” he added. Contact Greg Knowler at <a href="https://www.joc.com/article/no-clear-path-to-get-imos-net-zero-framework-over-the-line-industry-experts-6175174">greg.knowler@spglobal.com</a>. </div>

The pricing mechanism that is a core pillar of the International Maritime Organization’s (IMO) net-zero framework is “exceedingly unlikely” to be accepted by the US, according to maritime classification society DNV. At a meeting of the IMO’s Marine Environment Protection Committee (MEPC 84) in London in late April, Washington reiterated its opposition to the economic mechanism in the net-zero framework (NZF) that is meant to provide crucial funding for shipping’s decarbonization journey. “The fund mechanism is, in our assessment, dead in the water,” Eirik Nyhus, DNV’s vice president and director of environment, told a webcast organized by the group last week. “We see it as exceedingly unlikely that the US will accept the economic aspects of (the) net-zero framework in any form.” Achieving the IMO target of full decarbonization by or around 2050 with benchmark targets set along the way will require narrowing the wide price gap that exists between fossil fuels and the low- or zero-emission alternatives, which by its very nature will require making fossil fuels more expensive. But without the funding element, shipping groups and environmental campaigners argue that the NZF will become irrelevant. A report from the Global Maritime Forum earlier this year warned that any removal of the economic element— designed to make green technologies cheaper than high-emission alternatives — would also remove the likelihood of effective enforcement. “A standalone global fuel standard with no economic elements would likely merely replicate what already exists in the carbon intensity indicator (CII) mechanism, which requires ships with repeated non-compliance at a certain level to file a corrective action plan,” the report noted. US reiterates opposition The Trump administration made clear its opposition to the net-zero framework at a contentious MEPC 83 meeting in October last year, even threatening to leave the IMO over the issue. That anti-NZF message was reinforced by Federal Maritime Commission (FMC) Chairman Laura DiBella when she attended the most recent MEPC meeting in London two weeks ago. “The NZF is an unnecessary tax on US shippers and vessels operating in international waters,” DiBella said in a statement before attending the meeting. “The NZF would cost the maritime industry billions of dollars annually. As the largest consumer of imported goods, these costs will be directly passed onto US consumers.” The IMO’s NZF is aimed at reducing greenhouse gas (GHG) emissions from ships, in line with its 2023 GHG Strategy. It aims to set global standards for shipping’s carbon emissions and create a greenhouse gas pricing mechanism for ocean carriers to sharply reduce emissions by 2050. The NZF took a big step forward with the formal adoption of a two-tier pricing mechanism at the April 2025 MEPC meeting . But it was a short-lived victory as growing pressure from the US and its supporters culminated in a tense MEPC meeting last October. Despite 80% approval for the NZF from member states voting in April 2025, 34 countries switched positions between April and October to favor the deferment in the face of growing pressure from the US. As a result, the IMO was forced to delay adoption of the net-zero framework for one year , until the MEPC 85 meeting planned for Nov. 30 to Dec. 4. “What we saw (at MEPC 84) was that the opposition to, and the coalition against, the net-zero framework that we saw emerge at MEPC 83 was largely unchanged,” Nyhus said. “The language was a little bit different in some cases, but the root positions were more or less what they used to be.” Binding regulatory measure While positions are entrenched, there was some progress made at MEPC 84. At the close of the meeting on May 1, countries at least confirmed that the NZF will serve as the foundation for upcoming negotiations in addition to alternate proposals that have been submitted by some countries, including Japan and Liberia. With the architecture of the NZF preserved, non-profit organization Environmental Defense Fund (EDF) said member states can now work through the concerns and priorities of all parties to develop a binding regulatory measure to reduce emissions from the sector. "Decarbonizing shipping isn't just good for the climate, it's good for business,” said Mark Brownstein, EDF’s senior vice president of energy transition. “The market is ready. Investors are ready. What's needed now is certainty and the net-zero framework is the foundation to build it on.” The IMO is now focused on building consensus around some version of the NZF this year before a reconvened MEPC meets in late November to finalize the legally binding measures. There will be two IMO intersessional working groups in the coming months, alongside a technical expert workshop on fuel supply chain traceability, that will try to address outstanding concerns and come up with detailed guidelines needed to get the framework ready for adoption at MEPC 85 in November. “We will see how that all plays out, but there is at least a willingness to keep talking, and it is important that the process keeps moving forward,” Nyhus said. “But as a consequence of this, the timeline for anything post-2026 remains unclear. ”We don’t know if we will have an approval at MEPC 85, and we don’t know what it will look like if we get it,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Transport, Trade and Regulation News

IMO carbon pricing mechanism 'dead in the water’: DNV

<div class="phx-topic abstract-wrapper">The closure of the Strait of Hormuz is the most recent example of how maritime chokepoints can be leveraged as a useful political tool, forcing global supply chains to adapt to a more complex geopolitical landscape, writes Lars Jensen.</div>

The closure of the Strait of Hormuz is the most recent example of how maritime chokepoints can be leveraged as a useful political tool, forcing global supply chains to adapt to a more complex geopolitical landscape, writes Lars Jensen.

<div class="phx-topic">Increasing geopolitical tensions are clearly leading to a weaponization of maritime chokepoints. The critical question is how much this will escalate in the coming years and how shipping in general, and container shipping in particular, is going to be impacted. First of all, what is meant by the term “weaponization” of maritime chokepoints? In essence, it is the use of maritime chokepoints as leverage for a political agenda, either for domestic or for international purposes. And the chokepoints refer to elements in the supply chain that are limited in number and/or capacity without the ability to effectively bring in new capacity or easily be bypassed. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6219508_0.1.jpg"></img></div>The obvious example playing itself out presently is the crisis <a href="https://www.joc.com/article/ongoing-hormuz-closure-could-expand-bunker-wait-times-globally-analyst-6215621">in the Strait of Hormuz</a>. Initially with Iran using it as a “weapon” against not just the US and Israel but as an attack vector at the global economy. This de-facto widens the conflict to a global scale. The US subsequently also weaponized the Strait of Hormuz in a blockade against Iranian-related shipping interests, but the scale and scope are much more limited than what Iran has done. However, both the US and Iranian blockades resulted in a reduction of available crude oil in the world market, and as such, the usage of this weapon, regardless by whom, has negative consequences on stakeholders not directly involved in the war. This is certainly not the first such weaponization of maritime chokepoints in recent times. <a href="https://www.joc.com/article/maersk-hapag-lloyd-confirm-theyll-route-gemini-service-through-suez-6163432">The Red Sea crisis</a> is yet another example of this where a relatively weak military power was able to successfully weaponize the chokepoint. Today, more than 900 days later, the Houthis effectively maintain an embargo on certain vessels and shipping lines. The US announcement of million-dollar fees on Chinese vessels calling US ports in 2025 was yet another example of weaponization of maritime chokepoints: In this case, ports and terminals and not a body of water. The <a href="https://www.joc.com/article/china-returns-fire-with-retaliatory-port-fees-targeting-us-affiliated-ships-6095198">Chinese response was a retaliation in kind</a>, with China also weaponizing the Chinese ports as chokepoints. <a href="https://www.joc.com/article/cma-cgm-levies-emergency-surcharges-on-pakistani-trade-amid-india-tensions-6001112https://www.joc.com/article/cma-cgm-levies-emergency-surcharges-on-pakistani-trade-amid-india-tensions-6001112">India weaponized their ports as well in 2025</a>. As Pakistan and India came to the brink of war, India banned the entry of vessels into their ports that had been calling Pakistani ports. Turkey made a similar move for a while in 2025, banning Israeli shipping interest from calling Turkish ports. Spain <a href="https://www.joc.com/article/fmc-weighs-hefty-fees-port-bans-for-spanish-vessels-6161465">banned vessels suspected of carrying weapons for Israel</a> from calling Spanish ports, forcing some container vessels to deviate to Tangiers in Morocco instead of calling Algeciras. Port workers in, for example, the Netherlands refused to handle Russian cargo in Dutch ports following the Russian invasion of Ukraine. These are all just recent examples of the weaponization of maritime chokepoints. With geopolitical turmoil on the rise, we should expect more of such actions to take place in the future. <h3>Panama Canal an obvious flashpoint </h3>One of the most obvious risks is the Panama Canal. It is clearly a vital maritime chokepoint, and the past year has shown <a href="https://www.joc.com/article/cosco-halts-balboa-calls-in-latest-twist-over-panama-port-row-6185309">an increase in the conflict between the US and China</a> in terms of who “controls” the canal. Obviously, in the eyes of the Panamanian government and the canal authorities, neither the US nor China controls the canal; it is instead governed by the neutrality treaty. And the Panamanian government has been a stalwart custodian of that treaty. However, if the US and China insist on making this a geopolitical issue, the influence of Panama is somewhat limited. The Northeastern Arctic sea route north of Siberia is obviously a maritime chokepoint under strong influence by Russia. Even though there is no reason to suspect presently that Egypt would weaponize the Suez Canal itself, it is still within the realm of possibility that Iran could do so given the range of its drones and missiles. The weaponization of maritime chokepoints is nothing new. We have been used to a world in the past many decades where maritime trade was largely governed by economic forces and the advance of more free trade. We are now, however, seeing a world wherein geopolitical differences once more elevate the usage of such leverage to useful political tools, and the maritime industry — and the associated global supply chains — will have to adapt to a more complex landscape. Lars Jensen is CEO and partner at Vespucci Maritime. Contact him at <a href="mailto:lars.jensen@vespucci-maritime.com">lars.jensen@vespucci-maritime.com</a>. </div>

Increasing geopolitical tensions are clearly leading to a weaponization of maritime chokepoints. The critical question is how much this will escalate in the coming years and how shipping in general, and container shipping in particular, is going to be impacted. First of all, what is meant by the term “weaponization” of maritime chokepoints? In essence, it is the use of maritime chokepoints as leverage for a political agenda, either for domestic or for international purposes. And the chokepoints refer to elements in the supply chain that are limited in number and/or capacity without the ability to effectively bring in new capacity or easily be bypassed. The obvious example playing itself out presently is the crisis in the Strait of Hormuz . Initially with Iran using it as a “weapon” against not just the US and Israel but as an attack vector at the global economy. This de-facto widens the conflict to a global scale. The US subsequently also weaponized the Strait of Hormuz in a blockade against Iranian-related shipping interests, but the scale and scope are much more limited than what Iran has done. However, both the US and Iranian blockades resulted in a reduction of available crude oil in the world market, and as such, the usage of this weapon, regardless by whom, has negative consequences on stakeholders not directly involved in the war. This is certainly not the first such weaponization of maritime chokepoints in recent times. The Red Sea crisis is yet another example of this where a relatively weak military power was able to successfully weaponize the chokepoint. Today, more than 900 days later, the Houthis effectively maintain an embargo on certain vessels and shipping lines. The US announcement of million-dollar fees on Chinese vessels calling US ports in 2025 was yet another example of weaponization of maritime chokepoints: In this case, ports and terminals and not a body of water. The Chinese response was a retaliation in kind , with China also weaponizing the Chinese ports as chokepoints. India weaponized their ports as well in 2025 . As Pakistan and India came to the brink of war, India banned the entry of vessels into their ports that had been calling Pakistani ports. Turkey made a similar move for a while in 2025, banning Israeli shipping interest from calling Turkish ports. Spain banned vessels suspected of carrying weapons for Israel from calling Spanish ports, forcing some container vessels to deviate to Tangiers in Morocco instead of calling Algeciras. Port workers in, for example, the Netherlands refused to handle Russian cargo in Dutch ports following the Russian invasion of Ukraine. These are all just recent examples of the weaponization of maritime chokepoints. With geopolitical turmoil on the rise, we should expect more of such actions to take place in the future. Panama Canal an obvious flashpoint One of the most obvious risks is the Panama Canal. It is clearly a vital maritime chokepoint, and the past year has shown an increase in the conflict between the US and China in terms of who “controls” the canal. Obviously, in the eyes of the Panamanian government and the canal authorities, neither the US nor China controls the canal; it is instead governed by the neutrality treaty. And the Panamanian government has been a stalwart custodian of that treaty. However, if the US and China insist on making this a geopolitical issue, the influence of Panama is somewhat limited. The Northeastern Arctic sea route north of Siberia is obviously a maritime chokepoint under strong influence by Russia. Even though there is no reason to suspect presently that Egypt would weaponize the Suez Canal itself, it is still within the realm of possibility that Iran could do so given the range of its drones and missiles. The weaponization of maritime chokepoints is nothing new. We have been used to a world in the past many decades where maritime trade was largely governed by economic forces and the advance of more free trade. We are now, however, seeing a world wherein geopolitical differences once more elevate the usage of such leverage to useful political tools, and the maritime industry — and the associated global supply chains — will have to adapt to a more complex landscape. Lars Jensen is CEO and partner at Vespucci Maritime. Contact him at lars.jensen@vespucci-maritime.com .

Hormuz closure just the latest ‘weaponization’ of maritime chokepoints

<div class="phx-topic abstract-wrapper">With demand on the corridor continuing to outstrip available capacity constrained by the Middle East war, any resumption of hostilities would keep upward pressure on rates. </div>

With demand on the corridor continuing to outstrip available capacity constrained by the Middle East war, any resumption of hostilities would keep upward pressure on rates.

<div class="phx-topic">Peace talks between the US and Iran deteriorated this week, keeping air freight rates elevated and potentially stalling a recovery of flight operations into Persian Gulf airports that before the war handled a third of Asia-Europe air cargo traffic. Spot rates from China to Europe hit $5.76 per kilogram in the first week of May, the highest this year, before easing slightly to $5.42/kg on May 11, according to the Baltic Air Index (BAI). Airport hubs in the United Arab Emirates and Qatar steadily scaled up flight frequencies since the US and Iran agreed to a ceasefire in April, with Dubai-based Emirates announcing last week that 96% of its global network has now been restored. But in a May market report, BAI said a resumption of attacks would pause the recovery. With demand for air cargo on the Asia-Europe corridor continuing to outstrip available capacity constrained by the war, an escalation of hostilities would also keep upward pressure on rates. “Air space across parts of the Gulf remains restricted or closed ... the biggest impact is being felt by Asia-Europe traffic,” BAI said. “In a system with little spare capacity, even modest disruptions now move rates quickly. Even when aircraft are available, longer flight times and operational instability reduce how much cargo they can carry. The result is simple: There is less usable capacity in the system.” The Freightos Air Index also reflected a strengthening of rates. Spot rates from China to Europe on May 10 were up 57% since late February at $5.16/kg, almost 50% higher year over year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1f8878b6-9e77-46fc-bdf5-c1982da8007e"></dynamic-object></div>Air freight analyst Rotate said in a first quarter report that over the last 26 months, air cargo demand grew 10% against 6% capacity growth, noting that “the gap was adding pressure across the market even before the conflict in the Middle East exacerbated matters.” An estimated 30% of Asia-Europe traffic was routed via the Middle East before the war began on Feb. 28. More than 520,000 tons of international cargo capacity was lost in the first two weeks of March when air space across the Persian Gulf was closed, according to Rotate. Air freight capacity is now back to about 30% of pre-war levels. <h3>No sudden demand spike </h3>While cargo fills aircraft out of Asia, forwarders note that it is more a reflection of the disruption to the Asia-Europe network rather than a sudden demand spike. “Air freight demand continues to grow, but not at a super high pace for now and is following GDP expectations of plus 3%,” Frank Sobotka, CEO for air and sea at DSV, told analysts Tuesday at the forwarder’s capital markets day. “The drivers are predominantly high-tech cloud computing and still e-commerce from Asia that has shifted from the trans-Pacific corridor following the end of de minimis in the US into the European markets,” he said. DSV reported a 55% increase in first-quarter air cargo volume, boosted by the integration of DB Schenker traffic. But compared with the fourth quarter of 2025, seasonality and capacity constraints in the Middle East dragged sequential quarterly volume down 12%. The Denmark-based forwarder is optimistic about volume growth in the second quarter that it believes will be generated by the summer tender season and further integration of Schenker business. Kuehne + Nagel reported flat volume growth in the first quarter, a slowdown from the 7% growth seen in the last quarter of 2025. The forwarder attributed the slowdown to reduced demand for perishables and e-commerce volumes carried by its Apex subsidiary in Asia, but expects volume in air freight to be “slightly up” in the second quarter compared with the previous year. One air freight operator seeing robust demand is Maersk Air Cargo. Its air freight volume increased 20% in the first quarter compared with the same period last year, which CEO Vincent Clerc attributed to “operational improvements, enhanced productivity and more effective revenue management.” Clerc told analysts during an earnings call last week he is confident the carrier will continue to grow air cargo volume. He also said that air freight, together with ground freight and contract logistics, “will remain a key area for further productivity improvements and profitability gains throughout the year.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Peace talks between the US and Iran deteriorated this week, keeping air freight rates elevated and potentially stalling a recovery of flight operations into Persian Gulf airports that before the war handled a third of Asia-Europe air cargo traffic. Spot rates from China to Europe hit $5.76 per kilogram in the first week of May, the highest this year, before easing slightly to $5.42/kg on May 11, according to the Baltic Air Index (BAI). Airport hubs in the United Arab Emirates and Qatar steadily scaled up flight frequencies since the US and Iran agreed to a ceasefire in April, with Dubai-based Emirates announcing last week that 96% of its global network has now been restored. But in a May market report, BAI said a resumption of attacks would pause the recovery. With demand for air cargo on the Asia-Europe corridor continuing to outstrip available capacity constrained by the war, an escalation of hostilities would also keep upward pressure on rates. “Air space across parts of the Gulf remains restricted or closed ... the biggest impact is being felt by Asia-Europe traffic,” BAI said. “In a system with little spare capacity, even modest disruptions now move rates quickly. Even when aircraft are available, longer flight times and operational instability reduce how much cargo they can carry. The result is simple: There is less usable capacity in the system.” The Freightos Air Index also reflected a strengthening of rates. Spot rates from China to Europe on May 10 were up 57% since late February at $5.16/kg, almost 50% higher year over year. Air freight analyst Rotate said in a first quarter report that over the last 26 months, air cargo demand grew 10% against 6% capacity growth, noting that “the gap was adding pressure across the market even before the conflict in the Middle East exacerbated matters.” An estimated 30% of Asia-Europe traffic was routed via the Middle East before the war began on Feb. 28. More than 520,000 tons of international cargo capacity was lost in the first two weeks of March when air space across the Persian Gulf was closed, according to Rotate. Air freight capacity is now back to about 30% of pre-war levels. No sudden demand spike While cargo fills aircraft out of Asia, forwarders note that it is more a reflection of the disruption to the Asia-Europe network rather than a sudden demand spike. “Air freight demand continues to grow, but not at a super high pace for now and is following GDP expectations of plus 3%,” Frank Sobotka, CEO for air and sea at DSV, told analysts Tuesday at the forwarder’s capital markets day. “The drivers are predominantly high-tech cloud computing and still e-commerce from Asia that has shifted from the trans-Pacific corridor following the end of de minimis in the US into the European markets,” he said. DSV reported a 55% increase in first-quarter air cargo volume, boosted by the integration of DB Schenker traffic. But compared with the fourth quarter of 2025, seasonality and capacity constraints in the Middle East dragged sequential quarterly volume down 12%. The Denmark-based forwarder is optimistic about volume growth in the second quarter that it believes will be generated by the summer tender season and further integration of Schenker business. Kuehne + Nagel reported flat volume growth in the first quarter, a slowdown from the 7% growth seen in the last quarter of 2025. The forwarder attributed the slowdown to reduced demand for perishables and e-commerce volumes carried by its Apex subsidiary in Asia, but expects volume in air freight to be “slightly up” in the second quarter compared with the previous year. One air freight operator seeing robust demand is Maersk Air Cargo. Its air freight volume increased 20% in the first quarter compared with the same period last year, which CEO Vincent Clerc attributed to “operational improvements, enhanced productivity and more effective revenue management.” Clerc told analysts during an earnings call last week he is confident the carrier will continue to grow air cargo volume. He also said that air freight, together with ground freight and contract logistics, “will remain a key area for further productivity improvements and profitability gains throughout the year.” Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Carriers News

Air Cargo

Asia-Europe air cargo rates remain elevated as Gulf tensions escalate

<div class="phx-topic abstract-wrapper">ASCS debuted last week with great fanfare; now that the dust has settled, the question for shipper traffic and procurement teams is more practical: What do we do about it?</div>

ASCS debuted last week with great fanfare; now that the dust has settled, the question for shipper traffic and procurement teams is more practical: What do we do about it?

<div class="phx-topic">Amazon Supply Chain Services (ASCS) <a href="https://www.joc.com/article/amazons-3pl-foray-marketing-ploy-or-existential-threat-to-3pls-6215791">launched on May 4</a>. By the end of June, it will land on every shipper’s desk as either an inbound sales call or a CFO-mandated cost study. The market reaction was dramatic: UPS down more than 10% on launch day, FedEx down 9%, GXO and Forward Air down double digits. The question for shipper traffic and procurement teams is more practical. What do we do about it? At Maersk, I ran a multi-billion-dollar procurement portfolio. The benchmarking tools we used were built to evaluate rate, service tier, and capacity reliability. None were built to evaluate a trade in which the cost of a service is partial control of our own demand data. ASCS forces that trade. Most procurement organizations do not have a playbook for it. Here is the framework I would run today: <h3>What data does Amazon need, and what data does Amazon retain? </h3>The rate is not the cost. The rate plus the data exposure is the cost. Before any commercial conversation, map exactly what data Amazon ingests across forecasting, transportation, inventory and fulfillment, and what Amazon retains and aggregates outside your account. Patrick Tyler Brown at Raymond James flagged this as the central shipper concern in his post-launch note. The contract language matters more than the rate sheet. <h3>What is the exit cost in 24 months? </h3>Every logistics decision has a switching cost. ASCS’s switching cost is structurally higher than a typical third-party logistics provider (3PL) relationship because the data dependency compounds. Once Amazon’s forecasting models are tuned to your demand pattern, leaving means rebuilding that capability internally or with another partner. If you cannot articulate a clean 24-month exit, you do not have a contract. You have a dependency. <h3>Does ASCS make sense for your network? </h3>Three categories where the answer is yes: long-tail small and medium-sized business customer lanes where current 3PL service is uneven, and volume does not justify direct carrier contracting; regional fulfillment positioning where Amazon’s 200-plus US node count creates a service tier you cannot replicate; and specific intermodal corridors where Amazon’s 24,000 container fleet provides density your current intermodal marketing company (IMC) cannot match. Three categories where the answer is no: lanes where you have enough volume to negotiate directly with the steamship line, the Class I railroad, or the less-than-truckload (LTL) carrier; lanes that touch your most strategic customer relationships; and lanes where your demand data is itself a competitive advantage in your industry. <h3>What is the hybrid model that protects optionality? </h3>The decision is not binary. Most shippers should run a hybrid. The mistake is going all in on rate compression and discovering at the next contract cycle that you no longer have a benchmarking baseline outside the Amazon network. LTL is a useful test case. Amazon Freight already operates inbound LTL into its own fulfillment network and is expanding shipper outreach. FedEx Freight spins off as an independent public company on June 1. Shippers who lock LTL into ASCS without evaluating FDXF will be repricing that decision in 2027. <h3>Is your procurement organization equipped to make this decision? </h3>The honest answer for most teams is no. Procurement organizations were built around request-for-proposal cadence, contract management, cost-per-mode benchmarking, and supplier scorecards. None of those tools price the data-exposure trade. A real ASCS evaluation needs three things most teams do not have: a data governance reviewer with authority to veto data terms, a contract attorney with experience in cloud-style master service agreements rather than transportation contracts, and a scenario modeler who can run the eight-year dependency curve, not just the 12-month rate comparison. Most folks thought USPS had a moat on rural deliveries. Think again. The shippers using 2010 procurement frameworks to evaluate 2026 architecture decisions are about to repeat the mistake. <h3>The bottom line </h3>ASCS is a real product with real network capability. For some lanes and some shippers, it will be the right answer. For others, it will be a strategic mistake dressed up as a cost saving. The difference will not be visible on the rate sheet. It will be visible at the eight-year mark when one set of shippers has built optionality, and another set has built dependency. The CFO is going to ask the question. Be ready with the framework before the question arrives. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals &amp; Switches newsletter on freight strategy at aet1998.substack.com. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

Amazon Supply Chain Services (ASCS) launched on May 4 . By the end of June, it will land on every shipper’s desk as either an inbound sales call or a CFO-mandated cost study. The market reaction was dramatic: UPS down more than 10% on launch day, FedEx down 9%, GXO and Forward Air down double digits. The question for shipper traffic and procurement teams is more practical. What do we do about it? At Maersk, I ran a multi-billion-dollar procurement portfolio. The benchmarking tools we used were built to evaluate rate, service tier, and capacity reliability. None were built to evaluate a trade in which the cost of a service is partial control of our own demand data. ASCS forces that trade. Most procurement organizations do not have a playbook for it. Here is the framework I would run today: What data does Amazon need, and what data does Amazon retain? The rate is not the cost. The rate plus the data exposure is the cost. Before any commercial conversation, map exactly what data Amazon ingests across forecasting, transportation, inventory and fulfillment, and what Amazon retains and aggregates outside your account. Patrick Tyler Brown at Raymond James flagged this as the central shipper concern in his post-launch note. The contract language matters more than the rate sheet. What is the exit cost in 24 months? Every logistics decision has a switching cost. ASCS’s switching cost is structurally higher than a typical third-party logistics provider (3PL) relationship because the data dependency compounds. Once Amazon’s forecasting models are tuned to your demand pattern, leaving means rebuilding that capability internally or with another partner. If you cannot articulate a clean 24-month exit, you do not have a contract. You have a dependency. Does ASCS make sense for your network? Three categories where the answer is yes: long-tail small and medium-sized business customer lanes where current 3PL service is uneven, and volume does not justify direct carrier contracting; regional fulfillment positioning where Amazon’s 200-plus US node count creates a service tier you cannot replicate; and specific intermodal corridors where Amazon’s 24,000 container fleet provides density your current intermodal marketing company (IMC) cannot match. Three categories where the answer is no: lanes where you have enough volume to negotiate directly with the steamship line, the Class I railroad, or the less-than-truckload (LTL) carrier; lanes that touch your most strategic customer relationships; and lanes where your demand data is itself a competitive advantage in your industry. What is the hybrid model that protects optionality? The decision is not binary. Most shippers should run a hybrid. The mistake is going all in on rate compression and discovering at the next contract cycle that you no longer have a benchmarking baseline outside the Amazon network. LTL is a useful test case. Amazon Freight already operates inbound LTL into its own fulfillment network and is expanding shipper outreach. FedEx Freight spins off as an independent public company on June 1. Shippers who lock LTL into ASCS without evaluating FDXF will be repricing that decision in 2027. Is your procurement organization equipped to make this decision? The honest answer for most teams is no. Procurement organizations were built around request-for-proposal cadence, contract management, cost-per-mode benchmarking, and supplier scorecards. None of those tools price the data-exposure trade. A real ASCS evaluation needs three things most teams do not have: a data governance reviewer with authority to veto data terms, a contract attorney with experience in cloud-style master service agreements rather than transportation contracts, and a scenario modeler who can run the eight-year dependency curve, not just the 12-month rate comparison. Most folks thought USPS had a moat on rural deliveries. Think again. The shippers using 2010 procurement frameworks to evaluate 2026 architecture decisions are about to repeat the mistake. The bottom line ASCS is a real product with real network capability. For some lanes and some shippers, it will be the right answer. For others, it will be a strategic mistake dressed up as a cost saving. The difference will not be visible on the rate sheet. It will be visible at the eight-year mark when one set of shippers has built optionality, and another set has built dependency. The CFO is going to ask the question. Be ready with the framework before the question arrives. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals & Switches newsletter on freight strategy at aet1998.substack.com. Contact him at paul.tonsager@multimodalsolutions.io .

Supply chain

A shipper’s decision framework for Amazon Supply Chain Services

<div class="phx-topic abstract-wrapper">The state has pumped money into Portland’s T-6 and other projects with the belief the state required its own infrastructure – despite the availability of cost-effective solutions from California and Washington state ports. </div>

The state has pumped money into Portland’s T-6 and other projects with the belief the state required its own infrastructure – despite the availability of cost-effective solutions from California and Washington state ports.

<div class="phx-topic">Oregon's state motto is Alis volat propriis, which translates to, "She flies with her own wings." I am many years removed from high school Latin. However, when applied to the state’s surface freight transportation policy, I might suggest agere ex tempore (“to act on the spur of the moment.”) Recently, the Port of Portland <a href="https://www.joc.com/article/operator-switch-gives-renewed-hope-to-portlands-terminal-6-6148433">reopened Oregon Container Terminal</a> (OCT) – nee Terminal 6 (T-6) – amid hopes that the latest private management agreement will help revive the port as a trans-Pacific container gateway. (It is already a major bulk and auto gateway.) This effort was supported by tens of millions of public dollars, T-6 has quite a history. It was opened in the late 1970s, operated by the port, and it developed an extensive on-dock rail facility in 1987 where “K” Line (my employer at the time) centered its westbound Pacific Northwest service. Vessels discharged eastbound intermodal and reloaded local export at Tacoma, whereby the vessel then proceeded to Portland. There it discharged local Portland imports and loaded local exports and westbound intermodal – both rail and Columbia/Snake River barge. It was a smooth and seamless operation. However, in the 1990s, ocean carriers were convinced that they needed to own and operate their own marine terminals. Portland resisted this vertical integration. It also had to deal with the urban legend of being a “river port” with the notorious bar to cross at Astoria. A more significant issue was the loss of the barge feeder in favor of trucking to the ports of Seattle and Tacoma. The reason was the Ocean Shipping Reform Act of 1998 which ensured the end of shipping conferences. For many years, “K” Line defended the barge business by claiming that any attempt to truck the volumes to Sea/Tac was an impermissible cross-subsidy that was prohibited under conference rules. This legerdemain was supported by selective accounting. The barge linehaul cost was lower than truck; however, the terminal handling at either end was buried and never considered. Once the TWRA Conference disappeared, the question became moot and the volume converted to truck to SeaTac. The Port of Portland, under the able leadership of Bill Wyatt and Sam Ruda, ultimately yielded to private operation, and International Container Terminal Services, Inc. (ICTSI) was awarded a 25-year lease in 2010. It was terminated in 2017, following years of acrimonious labor disputes with the International Longshore and Warehouse Union (ILWU). Some industry observers believe that Oregon’s “build it and they will come” policy is just a case of throwing good money after bad. Unfortunately, T-6 is not the only case. The state spent $35 million to build the Mid-Willamette Valley Intermodal Center. This 64-acre intermodal hub in Millersburg, Oregon, opened in December 2022 – and closed fourteen months later without having moved a single container. Ironically, the rail movement connected to SeaTac, not T-6. As bad as Millersburg was, it got further than another Oregon project. The Treasure Valley Reload Center in Nyssa, Oregon, never even opened after receiving $25 million in state funding. <h3>Coos Bay proposal </h3>And, while barely keeping T-6 operational, there is an effort to establish yet another <a href="https://www.joc.com/article/oregon-earmarks-funds-for-proposed-coos-bay-terminal-6039724">Oregon container terminal at Coos Bay</a>. If Coos Bay was a cat, it would be on its fourth or fifth life. It evolved as a 19th century deepwater harbor serving regional fishing, shipping and timber. 20th century changes to forest-product economics saw the port diversify into other bulk commodities. The 21st century plan for an LNG export terminal -- and pipeline – could not overcome public controversy. While Coos Bay has deep water ocean entry, it lacks both highway and rail access that would take billions and unknown time to develop. Nevertheless, the project has secured significant federal funding, including a $25 million INFRA grant, to assist with planning, environmental compliance, and design. Local stakeholder alignment and funding/permitting for infrastructure are still problematic. All the while, the I-5 Bridge replacement, a critical link connecting Portland and Vancouver, Washington, is expected to cost $14.4 billion. This represents a significant increase from the 2022 price tag of $5 to $7.5 billion (and the original price tag of $2 to $3 billion.) Oregon has pumped money into T-6 and other projects with the belief the state required its own infrastructure – despite the availability of cost-effective solutions from California and Washington state ports. It might consider the saying “winging it is the art of trusting the next right move without a map.” 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>

Oregon's state motto is Alis volat propriis, which translates to, "She flies with her own wings." I am many years removed from high school Latin. However, when applied to the state’s surface freight transportation policy, I might suggest agere ex tempore (“to act on the spur of the moment.”) Recently, the Port of Portland reopened Oregon Container Terminal (OCT) – nee Terminal 6 (T-6) – amid hopes that the latest private management agreement will help revive the port as a trans-Pacific container gateway. (It is already a major bulk and auto gateway.) This effort was supported by tens of millions of public dollars, T-6 has quite a history. It was opened in the late 1970s, operated by the port, and it developed an extensive on-dock rail facility in 1987 where “K” Line (my employer at the time) centered its westbound Pacific Northwest service. Vessels discharged eastbound intermodal and reloaded local export at Tacoma, whereby the vessel then proceeded to Portland. There it discharged local Portland imports and loaded local exports and westbound intermodal – both rail and Columbia/Snake River barge. It was a smooth and seamless operation. However, in the 1990s, ocean carriers were convinced that they needed to own and operate their own marine terminals. Portland resisted this vertical integration. It also had to deal with the urban legend of being a “river port” with the notorious bar to cross at Astoria. A more significant issue was the loss of the barge feeder in favor of trucking to the ports of Seattle and Tacoma. The reason was the Ocean Shipping Reform Act of 1998 which ensured the end of shipping conferences. For many years, “K” Line defended the barge business by claiming that any attempt to truck the volumes to Sea/Tac was an impermissible cross-subsidy that was prohibited under conference rules. This legerdemain was supported by selective accounting. The barge linehaul cost was lower than truck; however, the terminal handling at either end was buried and never considered. Once the TWRA Conference disappeared, the question became moot and the volume converted to truck to SeaTac. The Port of Portland, under the able leadership of Bill Wyatt and Sam Ruda, ultimately yielded to private operation, and International Container Terminal Services, Inc. (ICTSI) was awarded a 25-year lease in 2010. It was terminated in 2017, following years of acrimonious labor disputes with the International Longshore and Warehouse Union (ILWU). Some industry observers believe that Oregon’s “build it and they will come” policy is just a case of throwing good money after bad. Unfortunately, T-6 is not the only case. The state spent $35 million to build the Mid-Willamette Valley Intermodal Center. This 64-acre intermodal hub in Millersburg, Oregon, opened in December 2022 – and closed fourteen months later without having moved a single container. Ironically, the rail movement connected to SeaTac, not T-6. As bad as Millersburg was, it got further than another Oregon project. The Treasure Valley Reload Center in Nyssa, Oregon, never even opened after receiving $25 million in state funding. Coos Bay proposal And, while barely keeping T-6 operational, there is an effort to establish yet another Oregon container terminal at Coos Bay . If Coos Bay was a cat, it would be on its fourth or fifth life. It evolved as a 19th century deepwater harbor serving regional fishing, shipping and timber. 20th century changes to forest-product economics saw the port diversify into other bulk commodities. The 21st century plan for an LNG export terminal -- and pipeline – could not overcome public controversy. While Coos Bay has deep water ocean entry, it lacks both highway and rail access that would take billions and unknown time to develop. Nevertheless, the project has secured significant federal funding, including a $25 million INFRA grant, to assist with planning, environmental compliance, and design. Local stakeholder alignment and funding/permitting for infrastructure are still problematic. All the while, the I-5 Bridge replacement, a critical link connecting Portland and Vancouver, Washington, is expected to cost $14.4 billion. This represents a significant increase from the 2022 price tag of $5 to $7.5 billion (and the original price tag of $2 to $3 billion.) Oregon has pumped money into T-6 and other projects with the belief the state required its own infrastructure – despite the availability of cost-effective solutions from California and Washington state ports. It might consider the saying “winging it is the art of trusting the next right move without a map.” Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

Port infrastructure

North American ports

Oregon’s strategy for logistics projects: ‘wing it’ and hope

Indian Subcontinent to US East Coast

{date.formatDate('MMM dd, yyyy')}: ${valueY} 
 Y-o-Y change: {previous_year_spot_rate_change_india_to_east_coast.formatNumber('##,##')} 
W-o-W change: {previous_week_spot_rate_change_india_to_east_coast.formatNumber('##,## %')}

S&P Global Platts editors engaging with market participants to assess the current value of freight-all-kinds (FAK) rates on major container trades produce container spot rates. The rates include bunker adjustment factors, general rate increases and emergency rare restoration. They also include low-sulfur fuel, equipment imbalance and repositioning surcharges. The rates exclude terminal handling, port security, overweight container, delivery, and detention and demurrage charges. [Platts](https://www.spglobal.com/commodityinsights)

Indian subcontinent to US East Coast container spot rates (Platts)

Platts Indian Subcontinent Asia to US East Coast Weekly Gateway

<div class="phx-topic abstract-wrapper">The 14-day lead time now in place at Asian hubs would become a “global standard” for vessels seeking bunker fuel should the key waterway remain closed for another month, says S&amp;P Global’s Fotios Katsoulas.</div>

The 14-day lead time now in place at Asian hubs would become a “global standard” for vessels seeking bunker fuel should the key waterway remain closed for another month, says S&P Global’s Fotios Katsoulas.

<div class="phx-topic">Keeping the Strait of Hormuz closed for another month would expand the two-week bunker refueling lead times now required in Asia across the globe and create a new price floor for low-sulfur fuel oil, energy analysts at S&amp;P Global warn. Much of Asia’s bunker fuel is sourced from Persian Gulf countries and exported via Hormuz, which has been effectively closed since the Middle East war began Feb. 28. The availability of the fuel has tightened across key Asian hubs, where carriers report wait times of up to 15 days in Singapore and at Japanese ports. “The 14-day lead time will become the global standard, not just an Eastern one,” Fotios Katsoulas, director and head of tankers, freight and alternative fuels research at S&amp;P Global Energy, told the Journal of Commerce. “We anticipate a permanent price floor for very low-sulfur fuel oil (VLSFO) in Asia as the cost of rerouting supply from the US and Europe becomes baked into the local market.” Katsoulas said the ongoing closure of the Strait of Hormuz will also lead to refining imbalances and potentially force a shift in production away from marine fuels toward higher-value distillates such as jet fuel and diesel, further strangling bunker availability. <h3>Uptick in satellite fuel hub activity </h3>While the regional nature of the conflict may be having a limited effect on major container shipping trade lanes, about 20% of the world’s oil and gas exports are moved via Hormuz, and its closure is being acutely felt at key bunkering hubs. Katsoulas said as Singapore and Fujairah in the UAE become increasingly difficult to navigate, there has been a significant uptick in activity at satellite hubs. Chinese ports at Zhoushan and Hong Kong are acting as overflow valves for North Asian traffic, while Port Klang and Tanjung Pelepas in Malaysia are seeing a surge in bunker demand from container lines that traditionally would have topped off in Singapore. Port Louis in Mauritius is emerging as a vital pit stop for vessels making long-haul voyages to and from Asia around the Cape of Good Hope in southern Africa, although the fast-growing demand has seen lead times there jump to more than 10 days. But Katsoulas said the most significant change in container line behavior has been a shift toward what he labeled “extreme tankering.” “Lines are no longer looking for the cheapest fuel; they are looking for the highest volume per call,” he said. “We see vessels maxing out their tanks in Rotterdam or the US Gulf — carrying a higher fuel load than is aerodynamically or economically optimal— to ensure they can bypass the volatility of the Indian Ocean and Southeast Asia entirely. “This heavy-lifting strategy is effectively a hedge against being caught in a dry port in the East,” Katsoulas added. S&amp;P Global is the parent company of the Journal of Commerce. <h3>‘Project Freedom’ paused </h3>The shifting bunker market dynamics come as a US initiative to free vessels stranded in the Persian Gulf has been paused, mere days after it began. In a social media post Wednesday, President Donald Trump said “Project Freedom,” announced Sunday, was put on hold because “great progress” was being made on a deal with Iran to end hostilities. The Pentagon estimated that about 22,500 mariners on 1,550 vessels were still trapped in the Persian Gulf. Jakob Larsen, chief safety and security officer at shipping association Bimco, called the suspension of Project Freedom so soon after its launch “a surprise.” “Changes announced at short notice or changes that are surprising, such as the sudden suspension of Project Freedom, are a challenge for shipowners attempting to assess the risks and planning for leaving the Persian Gulf,” Larsen said in a statement Wednesday. “While a few ships made it out safely while Project Freedom was in place, it was clear that transits without coordination with Iran entailed significant risk,” he added. Indeed, that was demonstrated Tuesday when a CMA CGM vessel was attacked while transiting the Strait of Hormuz. The carrier said in a statement that the attack on the CMA CGM San Antonio injured an undisclosed number of seafarers and damaged the vessel. “The injured crew members have been evacuated and are provided with the necessary medical care ... CMA CGM is closely monitoring the situation and remains fully mobilized alongside the crew,” the carrier said. Reuters reported that the vessel <a href="https://www.reuters.com/world/cma-cgm-container-ship-hit-strait-hormuz-injuring-crew-2026-05-06/">was hit by an “Iranian projectile”</a> while moving past the coast of Oman at night. The ongoing security concerns are keeping the waterway firmly out of bounds to commercial shipping. “The situation in and around the Strait of Hormuz remains uncertain,” Hapag-Lloyd said in an update Tuesday. “The safety of our crews and personnel remains our top priority. We will continue to avoid transiting the Strait of Hormuz for now and instead <a href="https://www.joc.com/article/hapag-lloyd-msc-to-use-feeders-to-restore-upper-persian-gulf-cargo-links-6214083">use third-party feeder services to serve Upper Gulf ports</a>.” Meanwhile, the US, alongside Bahrain, Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar, on Tuesday presented a draft of a UN Security Council resolution defending freedom of navigation in the Strait of Hormuz. “The Islamic Republic of Iran continues to hold the world’s economy hostage with its efforts to close the Strait of Hormuz, threats to attack ships in the Strait, laying of sea mines that pose a danger to shipping, and attempts to charge tolls for the world’s most important waterway,” US Secretary of State Marco Rubio said in a statement announcing the draft resolution. The resolution requires Iran to cease attacks on ships, and to stop laying mines and applying tolls on vessels using Hormuz. It also demands that Iran disclose the number and location of the mines it has laid and cooperate with efforts to remove them, while also supporting the creation of a humanitarian corridor. The US expects the Security Council to vote on the resolution “in the next couple of days.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Keeping the Strait of Hormuz closed for another month would expand the two-week bunker refueling lead times now required in Asia across the globe and create a new price floor for low-sulfur fuel oil, energy analysts at S&P Global warn. Much of Asia’s bunker fuel is sourced from Persian Gulf countries and exported via Hormuz, which has been effectively closed since the Middle East war began Feb. 28. The availability of the fuel has tightened across key Asian hubs, where carriers report wait times of up to 15 days in Singapore and at Japanese ports. “The 14-day lead time will become the global standard, not just an Eastern one,” Fotios Katsoulas, director and head of tankers, freight and alternative fuels research at S&P Global Energy, told the Journal of Commerce. “We anticipate a permanent price floor for very low-sulfur fuel oil (VLSFO) in Asia as the cost of rerouting supply from the US and Europe becomes baked into the local market.” Katsoulas said the ongoing closure of the Strait of Hormuz will also lead to refining imbalances and potentially force a shift in production away from marine fuels toward higher-value distillates such as jet fuel and diesel, further strangling bunker availability. Uptick in satellite fuel hub activity While the regional nature of the conflict may be having a limited effect on major container shipping trade lanes, about 20% of the world’s oil and gas exports are moved via Hormuz, and its closure is being acutely felt at key bunkering hubs. Katsoulas said as Singapore and Fujairah in the UAE become increasingly difficult to navigate, there has been a significant uptick in activity at satellite hubs. Chinese ports at Zhoushan and Hong Kong are acting as overflow valves for North Asian traffic, while Port Klang and Tanjung Pelepas in Malaysia are seeing a surge in bunker demand from container lines that traditionally would have topped off in Singapore. Port Louis in Mauritius is emerging as a vital pit stop for vessels making long-haul voyages to and from Asia around the Cape of Good Hope in southern Africa, although the fast-growing demand has seen lead times there jump to more than 10 days. But Katsoulas said the most significant change in container line behavior has been a shift toward what he labeled “extreme tankering.” “Lines are no longer looking for the cheapest fuel; they are looking for the highest volume per call,” he said. “We see vessels maxing out their tanks in Rotterdam or the US Gulf — carrying a higher fuel load than is aerodynamically or economically optimal— to ensure they can bypass the volatility of the Indian Ocean and Southeast Asia entirely. “This heavy-lifting strategy is effectively a hedge against being caught in a dry port in the East,” Katsoulas added. S&P Global is the parent company of the Journal of Commerce. ‘Project Freedom’ paused The shifting bunker market dynamics come as a US initiative to free vessels stranded in the Persian Gulf has been paused, mere days after it began. In a social media post Wednesday, President Donald Trump said “Project Freedom,” announced Sunday, was put on hold because “great progress” was being made on a deal with Iran to end hostilities. The Pentagon estimated that about 22,500 mariners on 1,550 vessels were still trapped in the Persian Gulf. Jakob Larsen, chief safety and security officer at shipping association Bimco, called the suspension of Project Freedom so soon after its launch “a surprise.” “Changes announced at short notice or changes that are surprising, such as the sudden suspension of Project Freedom, are a challenge for shipowners attempting to assess the risks and planning for leaving the Persian Gulf,” Larsen said in a statement Wednesday. “While a few ships made it out safely while Project Freedom was in place, it was clear that transits without coordination with Iran entailed significant risk,” he added. Indeed, that was demonstrated Tuesday when a CMA CGM vessel was attacked while transiting the Strait of Hormuz. The carrier said in a statement that the attack on the CMA CGM San Antonio injured an undisclosed number of seafarers and damaged the vessel. “The injured crew members have been evacuated and are provided with the necessary medical care ... CMA CGM is closely monitoring the situation and remains fully mobilized alongside the crew,” the carrier said. Reuters reported that the vessel was hit by an “Iranian projectile” while moving past the coast of Oman at night. The ongoing security concerns are keeping the waterway firmly out of bounds to commercial shipping. “The situation in and around the Strait of Hormuz remains uncertain,” Hapag-Lloyd said in an update Tuesday. “The safety of our crews and personnel remains our top priority. We will continue to avoid transiting the Strait of Hormuz for now and instead use third-party feeder services to serve Upper Gulf ports .” Meanwhile, the US, alongside Bahrain, Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar, on Tuesday presented a draft of a UN Security Council resolution defending freedom of navigation in the Strait of Hormuz. “The Islamic Republic of Iran continues to hold the world’s economy hostage with its efforts to close the Strait of Hormuz, threats to attack ships in the Strait, laying of sea mines that pose a danger to shipping, and attempts to charge tolls for the world’s most important waterway,” US Secretary of State Marco Rubio said in a statement announcing the draft resolution. The resolution requires Iran to cease attacks on ships, and to stop laying mines and applying tolls on vessels using Hormuz. It also demands that Iran disclose the number and location of the mines it has laid and cooperate with efforts to remove them, while also supporting the creation of a humanitarian corridor. The US expects the Security Council to vote on the resolution “in the next couple of days.” Contact Greg Knowler at greg.knowler@spglobal.com .

Ongoing Hormuz closure could expand bunker wait times globally: analyst

<div class="phx-topic abstract-wrapper">But the window to lock in those savings over long-haul trucking will shrink because railroads eventually will increase their spot and contract pricing, too.</div>

But the window to lock in those savings over long-haul trucking will shrink because railroads eventually will increase their spot and contract pricing, too.

<div class="phx-topic">US shippers saved a record 30.6% on spot market freight and 26.2% on contract loads in the first quarter by using domestic intermodal instead of long-haul trucking amid a rise in truckload spot rates, according to <a href="https://www.joc.com/resources/special-reports/intermodal-savings-index">the latest Journal of Commerce Intermodal Savings Index</a> (ISI).       For the second consecutive quarter, the spot market index was higher than the contract index. The window to lock in these record savings, however, will shrink as railroads eventually will increase their spot and contract pricing, too. Similar to motor carriers, railroads and intermodal providers have been unable to recover cost inflation in their intermodal operations for three years. Railroads and intermodal marketing companies (IMCs) have begun the repricing process, which typically lags full truckload by three to six months. Major asset-based IMCs are rejecting tenders, shedding low-margin freight, or taking other measures to limit their exposure to the shipments that they accepted in recent years to keep their containers full. As shippers face the prospect of losing guaranteed capacity, there are many who will agree to rate increases to keep product moving. The higher rates will also show up in annual contracts being negotiated in the second and third quarters. “In terms of pricing, the over-the-road market dropped much further than intermodal did, so, in terms of the degree of change, I am not sure we will see the same degree in Intermodal as over the road,” said Jim Filter, executive vice president of Schneider National, on an April 30 earnings call. “In terms of timing, typically we say about two quarters [lag], and from what we can see, we stay pretty consistent with that.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9f0dff14-0731-4ad3-859c-d093757d1ed4"></dynamic-object></div>Domestic intermodal volume in March jumped 9.5% year over year, according to the Intermodal Association of North America (IANA). North American railroads hauled 2.19 million domestic containers in the first quarter, up 4% compared with a year ago, according to IANA. The results were slightly higher than the Journal of Commerce mid-range forecast of volume growth between 1% and 3%, due mostly to the unanticipated surge in March. “We are seeing increased demand in how [shippers] are thinking about intermodal and what they can allocate to intermodal,” Filter said. “Current fuel cost is making a difference, as well as [shippers’] anticipation of what capacity will look like later this year ... While there is plenty of box capacity, the real constraint in this industry is always dray capacity.” <h3>Rates on the way up </h3>The Spot ISI averaged 130.6 in the first quarter, up from 118.4 a year ago. The Contract ISI rose to 126.3 from 124.9 a year ago.     Index values above 100 indicate intermodal is the more cost-effective mode; the higher the index number, the greater the savings. A Spot ISI of 130.6 translates to a 30.6% savings on intermodal versus truckload, while a Contract ISI of 126.3 implies a 26.3% savings.     All calculations assume local drayage at origin and destination, so shippers with distribution centers more than 30 miles from the terminal may save significantly less than the index values.   Spot truckload rates in the first quarter jumped 19 cents sequentially to $2.34 per mile, including fuel, while spot intermodal rates rose 10 cents to $1.64 per mile on the same routes. Contract truckload rates surged 27 cents to $2.25 per mile, including fuel, while contract intermodal prices climbed 15 cents to $1.65 per mile on the same routes. Contract truckload rates, excluding fuel spikes, rose 4.6% year over year in the first quarter, while contract intermodal rates climbed 2.5% year over year on the same lanes. In terms of raw dollars, intermodal shippers saved an average of $1,025 per container on the spot market in the first quarter compared with truckload, and $900 per box on the contract market. In the first quarter of 2025, the average spot intermodal load saved $675 per container, with the contract load saving $830.   <h3>Service will be put to the test </h3>The coming months will be the first major stress test for the railroads and the drayage networks of the IMCs since the service meltdowns during the pandemic-related freight surge. Multiple shippers have told the Journal of Commerce that on-time pickups and deliveries slipped in March, with their intermodal partners citing dray capacity as a root cause. The pressure isn’t likely to dissipate anytime soon. The  Journal of Commerce forecasts that domestic intermodal volume will grow between 3% and 4.5% year over year in the second quarter. Using advanced statistical analysis, the Journal of Commerce forecasts a 98% probability that volumes will exceed the 2.12 million loads hauled in the second quarter of 2025. The average intermodal train speed among US railroads was 2.7% faster year to date through the end of April compared with the same period a year ago, according to the US Surface Transportation Board. That came as the number of rail cars carrying containers that idled for more than 48 hours through the first four months of the year declined 14% compared with a year ago. Both data points show that, for now, intermodal trains are moving quickly through their service networks, and the handoffs between railroads and trucks remain fluid at most US rail hubs. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.       The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription. </div>

US shippers saved a record 30.6% on spot market freight and 26.2% on contract loads in the first quarter by using domestic intermodal instead of long-haul trucking amid a rise in truckload spot rates, according to the latest Journal of Commerce Intermodal Savings Index  (ISI).       For the second consecutive quarter, the spot market index was higher than the contract index. The window to lock in these record savings, however, will shrink as railroads eventually will increase their spot and contract pricing, too. Similar to motor carriers, railroads and intermodal providers have been unable to recover cost inflation in their intermodal operations for three years. Railroads and intermodal marketing companies (IMCs) have begun the repricing process, which typically lags full truckload by three to six months. Major asset-based IMCs are rejecting tenders, shedding low-margin freight, or taking other measures to limit their exposure to the shipments that they accepted in recent years to keep their containers full. As shippers face the prospect of losing guaranteed capacity, there are many who will agree to rate increases to keep product moving. The higher rates will also show up in annual contracts being negotiated in the second and third quarters. “In terms of pricing, the over-the-road market dropped much further than intermodal did, so, in terms of the degree of change, I am not sure we will see the same degree in Intermodal as over the road,” said Jim Filter, executive vice president of Schneider National, on an April 30 earnings call. “In terms of timing, typically we say about two quarters [lag], and from what we can see, we stay pretty consistent with that.” Domestic intermodal volume in March jumped 9.5% year over year, according to the Intermodal Association of North America (IANA). North American railroads hauled 2.19 million domestic containers in the first quarter, up 4% compared with a year ago, according to IANA. The results were slightly higher than the Journal of Commerce mid-range forecast of volume growth between 1% and 3%, due mostly to the unanticipated surge in March. “We are seeing increased demand in how [shippers] are thinking about intermodal and what they can allocate to intermodal,” Filter said. “Current fuel cost is making a difference, as well as [shippers’] anticipation of what capacity will look like later this year ... While there is plenty of box capacity, the real constraint in this industry is always dray capacity.” Rates on the way up The Spot ISI averaged 130.6 in the first quarter, up from 118.4 a year ago. The Contract ISI rose to 126.3 from 124.9 a year ago.     Index values above 100 indicate intermodal is the more cost-effective mode; the higher the index number, the greater the savings. A Spot ISI of 130.6 translates to a 30.6% savings on intermodal versus truckload, while a Contract ISI of 126.3 implies a 26.3% savings.     All calculations assume local drayage at origin and destination, so shippers with distribution centers more than 30 miles from the terminal may save significantly less than the index values.   Spot truckload rates in the first quarter jumped 19 cents sequentially to $2.34 per mile, including fuel, while spot intermodal rates rose 10 cents to $1.64 per mile on the same routes. Contract truckload rates surged 27 cents to $2.25 per mile, including fuel, while contract intermodal prices climbed 15 cents to $1.65 per mile on the same routes. Contract truckload rates, excluding fuel spikes, rose 4.6% year over year in the first quarter, while contract intermodal rates climbed 2.5% year over year on the same lanes. In terms of raw dollars, intermodal shippers saved an average of $1,025 per container on the spot market in the first quarter compared with truckload, and $900 per box on the contract market. In the first quarter of 2025, the average spot intermodal load saved $675 per container, with the contract load saving $830.   Service will be put to the test The coming months will be the first major stress test for the railroads and the drayage networks of the IMCs since the service meltdowns during the pandemic-related freight surge. Multiple shippers have told the Journal of Commerce that on-time pickups and deliveries slipped in March, with their intermodal partners citing dray capacity as a root cause. The pressure isn’t likely to dissipate anytime soon. The  Journal of Commerce forecasts that domestic intermodal volume will grow between 3% and 4.5% year over year in the second quarter. Using advanced statistical analysis, the Journal of Commerce forecasts a 98% probability that volumes will exceed the 2.12 million loads hauled in the second quarter of 2025. The average intermodal train speed among US railroads was 2.7% faster year to date through the end of April compared with the same period a year ago, according to the US Surface Transportation Board. That came as the number of rail cars carrying containers that idled for more than 48 hours through the first four months of the year declined 14% compared with a year ago. Both data points show that, for now, intermodal trains are moving quickly through their service networks, and the handoffs between railroads and trucks remain fluid at most US rail hubs. Contact Ari Ashe at ari.ashe@spglobal.com .       The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription.

North-American rail

Shippers banked record discounts via intermodal in Q1: ISI

<div class="phx-topic abstract-wrapper">The long-term prospect for diesel costs and fuel surcharges is pushing US truck shippers to rethink how they move freight, and even to redesign networks. </div>

The long-term prospect for diesel costs and fuel surcharges is pushing US truck shippers to rethink how they move freight, and even to redesign networks.

<div class="phx-topic">Diesel prices stuck above $5 per gallon are adding significantly to US trucking costs, squeezing shippers between rising rates and fuel surcharges and tightening capacity, with continued geopolitical uncertainty making a return to lower fuel prices unlikely for the foreseeable future. Companies such as packaged meats manufacturer Smithfield Foods are considering multiple options to control costs. “We’ve done lane consolidation, [we’re] <a href="https://www.joc.com/article/soaring-truck-rates-power-major-rebound-in-domestic-intermodal-volume-6208736">adding intermodal</a>,” Smithfield’s CEO Charles Shane Smith said on an earnings call last week in response to a question about the impact of rising fuel prices. The Virginia-based company eliminated one million road miles in 2025 by optimizing its transportation network and expects to take another million miles off the road in 2026. “We’re still looking at hedging opportunities for diesel where we can, driving fewer miles,” Smith said. But higher oil and fuel prices ripple throughout Smithfield’s freight, packaging and agricultural costs. Soaring oil prices also affect the cost of resin-based packaging, for example, and the cost of agricultural feed supporting hog production, Smith said. Andrew Silvernail, CEO of International Paper, noted that rising freight costs are not passed through directly, but recovered “through pricing over time.” “Diesel prices are putting pressure on costs across the supply chain,” Silvernail said during an earnings call last week. “Combined with an exceptionally tight freight market, this remains a strong headwind.” Fuel’s headwinds are both global and domestic, with the impact of higher fuel costs on ocean and air cargo rippling deep into trucking and rail networks, putting pressure on transportation rates shippers pay and, eventually, the costs of goods to their customers. The average price of diesel fuel in the US has been above $5 per gallon since March 16, according to the US Energy Information Administration. It was $3.81 per gallon when the war began. In 2022, following Russia’s invasion of Ukraine, the US average diesel price stayed above $5 per gallon for 21 weeks, averaging $5.43 per gallon from March into early August. It spiked north of $5 per gallon again for 11 weeks from late August through November of that year. <h3>Dislocated freight drives costs </h3>War-linked <a href="https://www.joc.com/article/cost-hit-ocean-carriers-roll-out-series-of-rate-increases-fuel-surcharges-6202474">bunker fuel surcharges</a> are raising costs for US importers and <a href="https://www.joc.com/article/middle-east-fuel-shock-exacerbates-rising-us-ag-export-costs-6213888">exporters</a>, and ocean shipping lines are trying to constrain costs through increased direct sailings and slow steaming. Soaring jet fuel costs are grounding <a href="https://www.joc.com/article/rising-jet-fuel-costs-challenging-freighter-viability-as-war-enters-second-month-6199130">air cargo capacity</a>. That’s already leading to some mismatch between freight and capacity once shipments arrive in the US, and that dislocation means more truck miles and higher fuel costs. “People who had lead times built into supply chains, those lead times have been compressed,” Ryan Carter, executive vice president of the Americas at AIT Worldwide Logistics, told the Journal of Commerce. Global disruption — whether caused by the closure of the Strait of Hormuz or a pandemic — expedites demand, he said. “Time is your most valuable commodity,” Carter said. “We’ve seen an increase in tie-ins [between international and domestic transportation] that claws back time for those sourcing goods internationally that’s been lost since the conflict began.” Shippers need to be aware of the total cost impact from higher oil prices, said Jenny Vander Zanden, COO of Breakthrough, a transportation technology firm specializing in fuel cost management. “Part of that is understanding the difference between diesel and gasoline price dynamics,” Vander Zanden told the Journal of Commerce. Gas prices tend to fluctuate in sync with oil prices, but not diesel prices. One reason is that gasoline prices tend to be “elastic,” while diesel prices are not. When gasoline prices surge, consumers can, to an extent, cut back on fuel use. It’s much harder for diesel-using truckers and farmers to make fewer trips or plow fewer acres. “When I go to Walmart, I need my stuff — I don’t care if diesel prices are going higher,” said Keith Prather, managing director at Armada Corporate Intelligence. Walmart has to cover the higher diesel price to ensure goods are on its shelves for consumers. “I don’t think diesel prices are going to snap back” if oil prices drop, Prather told the Journal of Commerce. “It’s a question of how long diesel prices stay up.” <h3>Intermodal moment </h3>Intermodal rail is likely to <a href="https://www.joc.com/article/tailwinds-for-us-intermodal-volume-growth-strengthening-analyst-6206045">gain more business</a> the longer fuel prices remain elevated. “A revisit with intermodal is needed to think about strategic road maps to transportation,” Vander Zanden said. “There are some real savings opportunities with intermodal.” The Journal of Commerce Intermodal Savings Index (ISI) shows why that’s the case. In March, the ISI intermodal contract rate, including fuel, was up 8 cents year over year at $1.65 per mile. At $2.34 per mile, the truckload contract rate was up 50 cents from a year ago. That all-inclusive truckload contract rate leapt 14.8% year over year, with higher fuel costs accounting for more than 1,000 basis points of the increase, according to a Journal of Commerce analysis. Sans fuel, the ISI truckload rate was up only 4.4% year over year. That’s a clear indication of how much shippers are really paying in higher fuel costs. Shifting freight to intermodal is part of an answer, but shippers need to find ways to rein in miles driven by their carriers as well, especially deadhead or empty miles. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a1244989-1fd3-41a3-9782-0bf65208b331"></dynamic-object></div>If fuel costs remain elevated for months, rather than weeks, shippers will face even more pressure to rethink transportation networks. Uber Freight says the number of shippers approaching the logistics provider for network optimization is rising fast. That’s especially true for companies that shrank their inventory in late 2025 and now face high replenishment costs. “There was a big push among many companies to reduce inventory in late 2025, with the expectation they could replenish in the first quarter,” Bob Daymon, head of client freight for Uber Freight, told the Journal of Commerce. “They’re finding costs are considerably higher than they expected,” Daymon said. Shippers have “drawn mental lines” based on how long the war in the Middle East and high fuel prices last, he said, adding: “I see the queue filling up with requests for network optimization.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Diesel prices stuck above $5 per gallon are adding significantly to US trucking costs, squeezing shippers between rising rates and fuel surcharges and tightening capacity, with continued geopolitical uncertainty making a return to lower fuel prices unlikely for the foreseeable future. Companies such as packaged meats manufacturer Smithfield Foods are considering multiple options to control costs. “We’ve done lane consolidation, [we’re] adding intermodal ,” Smithfield’s CEO Charles Shane Smith said on an earnings call last week in response to a question about the impact of rising fuel prices. The Virginia-based company eliminated one million road miles in 2025 by optimizing its transportation network and expects to take another million miles off the road in 2026. “We’re still looking at hedging opportunities for diesel where we can, driving fewer miles,” Smith said. But higher oil and fuel prices ripple throughout Smithfield’s freight, packaging and agricultural costs. Soaring oil prices also affect the cost of resin-based packaging, for example, and the cost of agricultural feed supporting hog production, Smith said. Andrew Silvernail, CEO of International Paper, noted that rising freight costs are not passed through directly, but recovered “through pricing over time.” “Diesel prices are putting pressure on costs across the supply chain,” Silvernail said during an earnings call last week. “Combined with an exceptionally tight freight market, this remains a strong headwind.” Fuel’s headwinds are both global and domestic, with the impact of higher fuel costs on ocean and air cargo rippling deep into trucking and rail networks, putting pressure on transportation rates shippers pay and, eventually, the costs of goods to their customers. The average price of diesel fuel in the US has been above $5 per gallon since March 16, according to the US Energy Information Administration. It was $3.81 per gallon when the war began. In 2022, following Russia’s invasion of Ukraine, the US average diesel price stayed above $5 per gallon for 21 weeks, averaging $5.43 per gallon from March into early August. It spiked north of $5 per gallon again for 11 weeks from late August through November of that year. Dislocated freight drives costs War-linked bunker fuel surcharges are raising costs for US importers and exporters , and ocean shipping lines are trying to constrain costs through increased direct sailings and slow steaming. Soaring jet fuel costs are grounding air cargo capacity . That’s already leading to some mismatch between freight and capacity once shipments arrive in the US, and that dislocation means more truck miles and higher fuel costs. “People who had lead times built into supply chains, those lead times have been compressed,” Ryan Carter, executive vice president of the Americas at AIT Worldwide Logistics, told the Journal of Commerce. Global disruption — whether caused by the closure of the Strait of Hormuz or a pandemic — expedites demand, he said. “Time is your most valuable commodity,” Carter said. “We’ve seen an increase in tie-ins [between international and domestic transportation] that claws back time for those sourcing goods internationally that’s been lost since the conflict began.” Shippers need to be aware of the total cost impact from higher oil prices, said Jenny Vander Zanden, COO of Breakthrough, a transportation technology firm specializing in fuel cost management. “Part of that is understanding the difference between diesel and gasoline price dynamics,” Vander Zanden told the Journal of Commerce. Gas prices tend to fluctuate in sync with oil prices, but not diesel prices. One reason is that gasoline prices tend to be “elastic,” while diesel prices are not. When gasoline prices surge, consumers can, to an extent, cut back on fuel use. It’s much harder for diesel-using truckers and farmers to make fewer trips or plow fewer acres. “When I go to Walmart, I need my stuff — I don’t care if diesel prices are going higher,” said Keith Prather, managing director at Armada Corporate Intelligence. Walmart has to cover the higher diesel price to ensure goods are on its shelves for consumers. “I don’t think diesel prices are going to snap back” if oil prices drop, Prather told the Journal of Commerce. “It’s a question of how long diesel prices stay up.” Intermodal moment Intermodal rail is likely to gain more business the longer fuel prices remain elevated. “A revisit with intermodal is needed to think about strategic road maps to transportation,” Vander Zanden said. “There are some real savings opportunities with intermodal.” The Journal of Commerce Intermodal Savings Index (ISI) shows why that’s the case. In March, the ISI intermodal contract rate, including fuel, was up 8 cents year over year at $1.65 per mile. At $2.34 per mile, the truckload contract rate was up 50 cents from a year ago. That all-inclusive truckload contract rate leapt 14.8% year over year, with higher fuel costs accounting for more than 1,000 basis points of the increase, according to a Journal of Commerce analysis. Sans fuel, the ISI truckload rate was up only 4.4% year over year. That’s a clear indication of how much shippers are really paying in higher fuel costs. Shifting freight to intermodal is part of an answer, but shippers need to find ways to rein in miles driven by their carriers as well, especially deadhead or empty miles. If fuel costs remain elevated for months, rather than weeks, shippers will face even more pressure to rethink transportation networks. Uber Freight says the number of shippers approaching the logistics provider for network optimization is rising fast. That’s especially true for companies that shrank their inventory in late 2025 and now face high replenishment costs. “There was a big push among many companies to reduce inventory in late 2025, with the expectation they could replenish in the first quarter,” Bob Daymon, head of client freight for Uber Freight, told the Journal of Commerce. “They’re finding costs are considerably higher than they expected,” Daymon said. Shippers have “drawn mental lines” based on how long the war in the Middle East and high fuel prices last, he said, adding: “I see the queue filling up with requests for network optimization.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Intermodal providers

Rising fuel costs forcing US truck shippers to shift freight

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Quarterly Intelligence

<div class="phx-topic abstract-wrapper">Khor Fakkan and Fujairah in the UAE and Sohar in Oman had kept carriers restricted to imports since the war began due to severe yard space and cargo evacuation constraints. </div>

Khor Fakkan and Fujairah in the UAE and Sohar in Oman had kept carriers restricted to imports since the war began due to severe yard space and cargo evacuation constraints.

<div class="phx-topic">Terminals at alternative ports of call in the Persian Gulf have reopened gates to outbound freight flows, albeit slowly, market sources say. The ports — Khor Fakkan and Fujairah in the United Arab Emirates (UAE) and Sohar in Oman — had kept container carriers restricted to import discharges since the Middle East war began due to severe yard space and cargo evacuation constraints. The ports have been the supply chain lifeline for Middle East-bound shipments since the Middle East war erupted Feb. 28. But contingency port operations effectively meant a “single leg” cargo opportunity for vessel operators as they were not allowed to pick up boxes on the backhaul in order to avoid longer berth stays. Multiple Dubai-based freight forwarder executives who spoke with the Journal of Commerce confirmed that a few mainliners, notably CMA CGM, and other major feeder operators, usually backed by non-vessel-operating common carriers (NVOs), are now moving Middle East-origin containers into India. “Although uneven and dependent on the space situation, export gate-ins have resumed,” said a source who didn’t want to be identified. CMA CGM has regular weekly sailings connecting three western Indian ports — Hazira, Mundra and Nhava Sheva — to Fujairah and Sohar under its “BIGEX” network. The French carrier is also understood to have evacuated most Middle East-bound containers rerouted to Nhava Sheva, including accumulated hazardous/dangerous cargo boxes <a href="https://www.joc.com/article/rerouted-middle-east-hazmat-containers-spark-safety-concerns-at-indian-ports-6208692">that had sparked safety concerns for the port authority</a>. Middle East ports traditionally play a major role for carriers in repositioning empty containers to demand locations, including India. With the renewed operational flexibility, CMA CGM has been able to relocate accumulated empties via Fujairah into Nhava Sheva to replenish its tightening inventory capacity in India. While the Middle East disruption strained carriers’ inventory cycles, weaker export demand from India prevented any sort of industrywide equipment imbalance issues, local sources said. <h3>CMA CGM, AD Ports ink logistics deal </h3>Meanwhile, CMA CGM has reached an agreement with AD Ports Group to work together on intermodal logistics solutions across the UAE to neighboring countries. The move comes as demand for multimodal/land bridge alternatives continues to grow in the region. “The collaboration will explore opportunities to strengthen cargo flows across the UAE and regional markets, including the northern Emirates, whilst extending trade corridor optionality through rail-linked inland connectivity to the borders of ... Oman and ... Saudi Arabia,” the partners said in a joint statement. Through its CMA Terminals subsidiary, the Marseille-based carrier already has a terminal joint venture with AD Ports at Khalifa Port in Abu Dhabi. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Terminals at alternative ports of call in the Persian Gulf have reopened gates to outbound freight flows, albeit slowly, market sources say. The ports — Khor Fakkan and Fujairah in the United Arab Emirates (UAE) and Sohar in Oman — had kept container carriers restricted to import discharges since the Middle East war began due to severe yard space and cargo evacuation constraints. The ports have been the supply chain lifeline for Middle East-bound shipments since the Middle East war erupted Feb. 28. But contingency port operations effectively meant a “single leg” cargo opportunity for vessel operators as they were not allowed to pick up boxes on the backhaul in order to avoid longer berth stays. Multiple Dubai-based freight forwarder executives who spoke with the Journal of Commerce confirmed that a few mainliners, notably CMA CGM, and other major feeder operators, usually backed by non-vessel-operating common carriers (NVOs), are now moving Middle East-origin containers into India. “Although uneven and dependent on the space situation, export gate-ins have resumed,” said a source who didn’t want to be identified. CMA CGM has regular weekly sailings connecting three western Indian ports — Hazira, Mundra and Nhava Sheva — to Fujairah and Sohar under its “BIGEX” network. The French carrier is also understood to have evacuated most Middle East-bound containers rerouted to Nhava Sheva, including accumulated hazardous/dangerous cargo boxes that had sparked safety concerns for the port authority . Middle East ports traditionally play a major role for carriers in repositioning empty containers to demand locations, including India. With the renewed operational flexibility, CMA CGM has been able to relocate accumulated empties via Fujairah into Nhava Sheva to replenish its tightening inventory capacity in India. While the Middle East disruption strained carriers’ inventory cycles, weaker export demand from India prevented any sort of industrywide equipment imbalance issues, local sources said. CMA CGM, AD Ports ink logistics deal Meanwhile, CMA CGM has reached an agreement with AD Ports Group to work together on intermodal logistics solutions across the UAE to neighboring countries. The move comes as demand for multimodal/land bridge alternatives continues to grow in the region. “The collaboration will explore opportunities to strengthen cargo flows across the UAE and regional markets, including the northern Emirates, whilst extending trade corridor optionality through rail-linked inland connectivity to the borders of ... Oman and ... Saudi Arabia,” the partners said in a joint statement. Through its CMA Terminals subsidiary, the Marseille-based carrier already has a terminal joint venture with AD Ports at Khalifa Port in Abu Dhabi. Contact Bency Mathew at bencyvmathew@gmail.com .

Port News

Disrupted Middle East-India shipments restart as choked supply chains ease

<div class="phx-topic abstract-wrapper">The war with Iran, now in its third month, is the prime mover behind the economic uncertainty, the National Retail Federation and Hackett Associates indicated in their latest Global Port Tracker. </div>

The war with Iran, now in its third month, is the prime mover behind the economic uncertainty, the National Retail Federation and Hackett Associates indicated in their latest Global Port Tracker.

<div class="phx-topic">The traditional peak shipping season in the US may effectively pass unnoticed this year, a major retail group suggested Friday, citing weak consumer confidence and retailers hesitant to launch any meaningful restocking given a hazy economic outlook. The war with Iran, now in its third month, is the prime mover behind the economic uncertainty, the National Retail Federation (NRF) and Hackett Associates indicated in their latest Global Port Tracker (GPT). “With inflation rising and consumer confidence falling among global economic uncertainty driven by the conflict in Iran, the overall trend of lower imports is expected to continue...,” Jonathan Gold, NRF’s vice president for Supply Chain and Customs Policy, said in a statement accompanying the group’s forecast. The NRF said US imports in May and June will actually be moderately higher than the year-ago figures, but noted that growth is largely artificial because it’s being compared with May and June 2025 when imports fell sharply following the Trump administration’s implementation of widespread tariffs that April. The true import picture will come into focus in the heart of summer, with the NRF’s July forecast of 2.2 million TEUs down almost 8% year over year. And things will weaken progressively from there, despite August being the traditional start of peak shipping season when retailers stock up ahead of the year-end holidays. The NRF projects August imports at 2.19 million TEUs, down 5.5% year over year; and September at 2.08 million TEUs, 1.3% below the year prior. The fact that September — typically the heart of peak season — is forecast to be one of the weaker import months of 2026 is especially telling. “Containerized imports in the first quarter were down year over year, and forward demand is weakening,” Hackett Associates founder Ben Hackett said in the statement. “<a href="https://www.joc.com/article/potential-new-us-tariffs-cloud-sourcing-strategies-peak-season-demand-6187613">Stalling restocking efforts</a> and rising geopolitical tensions are increasingly clouding the outlook.” This year would be the second in a row without the typical August through October peak season, following last year’s tariff-linked disruptions. “It’s not like we have a traditional peak season anymore,” said Serkan Kavas, executive vice president for imports at the forwarder MTS Logistics. “There may be a couple months peak, year over year, but at the end of the day, the expectations are not that great right now from our customers and from what I’m hearing from industry and from other companies too.” Encouragingly, booking demand is increasing according to an index that has shown sluggish China import ordering since January. The index, based on data from customers of maritime intelligence provider Vizion, hit its 2026 high of 110 in the week ended April 23, the most recent data available, after moving into positive territory earlier in April. <h3>Consumer confidence at new low </h3>Meanwhile, fresh consumer indicators were grim. The University of Michigan Consumer Sentiment Index, out Friday, fell to a new record low of 48.2, down from 49.8 in April. “About one-third of consumers [surveyed] spontaneously mentioned gasoline prices and about 30% mentioned tariffs. Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump,” Joanne Hsu, the survey’s director, said in a statement. “Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall,” Hsu added. US retail sales in March, the most recent data available, increased 1.7% month over month to $752.1 billion, according to the US Census Bureau, driven mainly by soaring gasoline prices, which do not contribute to retail merchandise imports. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b0bc7107-6699-4b28-9759-684b190b845a"></dynamic-object></div>Container lines on the eastbound trans-Pacific are nevertheless deploying or planning to deploy progressively more capacity in May through July than they did a year ago. According to ocean freight visibility provider eeSea, carriers are deploying almost 2 million TEUs in May, 2.13 million TEUs in June and just under 2.2 million TEUs in July. That’s up from 1.6 million TEUs, 1.98 million TEUs, and 2 million TEUs, respectively, in May–July 2025. Carriers are also blanking less capacity, according to eeSea: 207,797 TEUs in May, 117,403 TEUs in June, and 50,969 TEUs in July. That compares with 472,948 TEUs, 249,745 TEUs, and 239,573 TEUs, respectively, in the same period last year. The GPT forecasts imports at 13 US ports: Los Angeles, Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Virginia, Charleston, Savannah, Port Everglades, Miami, Jacksonville and Houston. Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The traditional peak shipping season in the US may effectively pass unnoticed this year, a major retail group suggested Friday, citing weak consumer confidence and retailers hesitant to launch any meaningful restocking given a hazy economic outlook. The war with Iran, now in its third month, is the prime mover behind the economic uncertainty, the National Retail Federation (NRF) and Hackett Associates indicated in their latest Global Port Tracker (GPT). “With inflation rising and consumer confidence falling among global economic uncertainty driven by the conflict in Iran, the overall trend of lower imports is expected to continue...,” Jonathan Gold, NRF’s vice president for Supply Chain and Customs Policy, said in a statement accompanying the group’s forecast. The NRF said US imports in May and June will actually be moderately higher than the year-ago figures, but noted that growth is largely artificial because it’s being compared with May and June 2025 when imports fell sharply following the Trump administration’s implementation of widespread tariffs that April. The true import picture will come into focus in the heart of summer, with the NRF’s July forecast of 2.2 million TEUs down almost 8% year over year. And things will weaken progressively from there, despite August being the traditional start of peak shipping season when retailers stock up ahead of the year-end holidays. The NRF projects August imports at 2.19 million TEUs, down 5.5% year over year; and September at 2.08 million TEUs, 1.3% below the year prior. The fact that September — typically the heart of peak season — is forecast to be one of the weaker import months of 2026 is especially telling. “Containerized imports in the first quarter were down year over year, and forward demand is weakening,” Hackett Associates founder Ben Hackett said in the statement. “ Stalling restocking efforts and rising geopolitical tensions are increasingly clouding the outlook.” This year would be the second in a row without the typical August through October peak season, following last year’s tariff-linked disruptions. “It’s not like we have a traditional peak season anymore,” said Serkan Kavas, executive vice president for imports at the forwarder MTS Logistics. “There may be a couple months peak, year over year, but at the end of the day, the expectations are not that great right now from our customers and from what I’m hearing from industry and from other companies too.” Encouragingly, booking demand is increasing according to an index that has shown sluggish China import ordering since January. The index, based on data from customers of maritime intelligence provider Vizion, hit its 2026 high of 110 in the week ended April 23, the most recent data available, after moving into positive territory earlier in April. Consumer confidence at new low Meanwhile, fresh consumer indicators were grim. The University of Michigan Consumer Sentiment Index, out Friday, fell to a new record low of 48.2, down from 49.8 in April. “About one-third of consumers [surveyed] spontaneously mentioned gasoline prices and about 30% mentioned tariffs. Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump,” Joanne Hsu, the survey’s director, said in a statement. “Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall,” Hsu added. US retail sales in March, the most recent data available, increased 1.7% month over month to $752.1 billion, according to the US Census Bureau, driven mainly by soaring gasoline prices, which do not contribute to retail merchandise imports. Container lines on the eastbound trans-Pacific are nevertheless deploying or planning to deploy progressively more capacity in May through July than they did a year ago. According to ocean freight visibility provider eeSea, carriers are deploying almost 2 million TEUs in May, 2.13 million TEUs in June and just under 2.2 million TEUs in July. That’s up from 1.6 million TEUs, 1.98 million TEUs, and 2 million TEUs, respectively, in May–July 2025. Carriers are also blanking less capacity, according to eeSea: 207,797 TEUs in May, 117,403 TEUs in June, and 50,969 TEUs in July. That compares with 472,948 TEUs, 249,745 TEUs, and 239,573 TEUs, respectively, in the same period last year. The GPT forecasts imports at 13 US ports: Los Angeles, Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Virginia, Charleston, Savannah, Port Everglades, Miami, Jacksonville and Houston. Contact Kevin Saville at kevin.saville2@spglobal.com . Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

Trans-Pacific

Weak consumer confidence, rising inflation dim peak season hopes

<div class="phx-topic abstract-wrapper">The issue of carrier terminal control is front and center with the coming sale of Maher given that carriers overall have become aggressive acquirers and developers of terminal capacity globally, including on the US East Coast. </div>

The issue of carrier terminal control is front and center with the coming sale of Maher given that carriers overall have become aggressive acquirers and developers of terminal capacity globally, including on the US East Coast.

<div class="phx-topic">As Maher Terminals, the largest terminal at the Port of New York and New Jersey, is being prepped for sale with active discussions under way with potential buyers, a possible unfavorable outcome for the port is for all major terminals ending up owned by ocean carriers. The 450-acre Maher facility in New Jersey, at approximately one-third of container capacity and market share within the port, is the last remaining non-carrier-owned terminal following the 2023 acquisition by CMA CGM of previously neutral Global Container Terminals facilities at Bayonne and Howland Hook, other than a small facility in Brooklyn under control of the NYC Economic Development Corp. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6218881_0.1.jpg"></img></div>If Maher were to be sold to a carrier by its owner, Macquarie Asset Management, the result could be several large carriers who don’t own terminals at the port ending up as customers of other carriers. Those carriers and their customers would thus be left at a perpetual disadvantage in terms of berth windows and cargo handling when serving New York-New Jersey. That would make the port less attractive for such carriers versus competitive ports for inland cargo such as Virginia that are operated on a neutral basis. “Maher Terminals has combined an exceptional leadership team with expansive capital investment to create a leading neutral stevedoring operation on the East Coast,” said Ken O’Brien, CEO of Gemini Shippers Group. “It is hard to envision how a purchase of the terminal by one of the liner companies would lead to improved service levels.” The other major terminals partly or fully carrier-owned are APM Terminals, a unit of AP Moller-Maersk; and Port Newark Container Terminal, or PNCT, which is 50% owned by Terminal Investment Limited (TiL), the terminal operating business of Mediterranean Shipping Co. Different outcomes are possible. If Maher were sold to MSC, the world’s largest carrier and an aggressive acquirer of terminal space in the US and globally, it would likely force MSC to sell its PNCT stake due to antitrust concerns over market dominance at the East Coast’s largest port, according to a knowledgeable source. MSC is one of the parties that have expressed interest in Maher, according to a February <a href="https://www.wsj.com/articles/maritime-giants-target-major-new-york-area-port-terminal-3ba57f47?mod=Searchresults&amp;pos=1&amp;page=1">report</a> in the Wall Street Journal. Such a scenario could leave PNCT in the hands of neutral owners, giving the port a common-user facility. “It is important to the port’s competitiveness to retain a common-user facility,” a source said. <h3>Carriers’ healthy appetite for terminal assets </h3>The issue of carrier terminal control is front and center with the impending sale of Maher given that carriers overall have become aggressive acquirers and developers of terminal capacity globally, <a href="https://www.joc.com/article/more-carrier-controlled-terminal-operations-could-be-coming-to-the-east-coast-6207482">including on the US East Coast</a>. For example, if Maher were to fall into the hands of Hapag-Lloyd or Ocean Network Express (ONE), both top 10 carriers that are expanding their terminal portfolios, it could leave the port as essentially a closed shop where non-terminal operating carriers are deprioritized, making the port less competitive overall. The reason is that while carrier-owned terminals often claim to be neutral, in reality they are not. “Within carriers that own terminals, internal debates take place between the port operations team and the liner teams regarding terminals the carrier owns,” said George Goldman, former president of Zim Integrated Shipping Services and CMA CGM in the US. “Third-party terminal revenue is a big deal for the terminal guys, but ultimately decisions pay homage to the mothership and ultimately preference is given to the carrier.” He added: “Independent carriers really have very little leverage so ... I think ultimately it’s a disadvantage for them and the industry.” Such are the implications for non-terminal-owning carriers that — depending on who the buyer is — it could impact alliances and port calls on the US East Coast, said a port expert who asked to remain anonymous. <h3>‘Single-most attractive terminal target in the world’ </h3>The Maher sale, moreover, isn’t just any transaction. It’s the premier terminal property in the heart of the world’s <a href="https://financesonline.com/10-wealthiest-cities-in-the-world-its-not-new-york-or-london-at-the-top/">second-largest</a> metropolitan region by GDP, as well as a dominant player within a strategically located port that over several years has held its own among competitors. The Maher facility is “the single-most attractive terminal target in the world today,” according to the knowledgeable source. The import market share of New York-New Jersey among Northeast ports (including Boston, Philadelphia, Baltimore and Virginia) was 63.1% in 2025 versus 63.6% in 2020, according to S&amp;P Global Market Intelligence. A further benefit to NY-NJ stems from long-term growth in East Coast market share as Asia manufacturing gravitates south from China, which favors the westbound route into North America. It has been widely reported that Maher will be put up for sale in the coming months by Macquarie. JP Morgan has been named as the sell-side advisor, according to Infralogic, an infrastructure publication. The bank is incentivized to achieve a price possibly as lofty as $6 billion, said the knowledgeable source. Macquarie in December renewed Maher’s lease with the Port Authority of New York and New Jersey for 33 years through 2063, <a href="https://www.joc.com/article/macquarie-seals-deal-for-new-maher-lease-at-nynj-through-2063-6137751">agreeing</a> to terms that include responsibility for upkeep of wharves and berths and a commitment to increase capacity in line with demand. The lease renewal was seen as a critical step in Macquarie’s ability to put the terminal up for sale as it removes uncertainty as to what a buyer is committing to. The knowledgeable source said the terminal, which was acquired by Macquarie from Deutsche Bank in 2016, will attract interest from potential buyers including carrier-owned terminal operators, independent operators such as DP World, PSA or Carrix, as well as potentially infrastructure-focused financial players. Yet with indications the port is committed to maintaining a common-user facility within the port, it remains to be seen whether it will intervene to achieve that result given that it has the right to approve the Maher transaction but can’t dictate who the buyer would be. Some port sources speculate that Macquarie would not have renewed the Maher lease without a commitment from the port not to reopen the lease as a condition for approving the sale, which it did to force concessions from CMA CGM regarding the Global terminals deal. A spokesperson for the port of NY-NJ would only say: “We are unable to comment on possible sales or negotiations.” Macquarie could not be reached for comment. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

As Maher Terminals, the largest terminal at the Port of New York and New Jersey, is being prepped for sale with active discussions under way with potential buyers, a possible unfavorable outcome for the port is for all major terminals ending up owned by ocean carriers. The 450-acre Maher facility in New Jersey, at approximately one-third of container capacity and market share within the port, is the last remaining non-carrier-owned terminal following the 2023 acquisition by CMA CGM of previously neutral Global Container Terminals facilities at Bayonne and Howland Hook, other than a small facility in Brooklyn under control of the NYC Economic Development Corp. If Maher were to be sold to a carrier by its owner, Macquarie Asset Management, the result could be several large carriers who don’t own terminals at the port ending up as customers of other carriers. Those carriers and their customers would thus be left at a perpetual disadvantage in terms of berth windows and cargo handling when serving New York-New Jersey. That would make the port less attractive for such carriers versus competitive ports for inland cargo such as Virginia that are operated on a neutral basis. “Maher Terminals has combined an exceptional leadership team with expansive capital investment to create a leading neutral stevedoring operation on the East Coast,” said Ken O’Brien, CEO of Gemini Shippers Group. “It is hard to envision how a purchase of the terminal by one of the liner companies would lead to improved service levels.” The other major terminals partly or fully carrier-owned are APM Terminals, a unit of AP Moller-Maersk; and Port Newark Container Terminal, or PNCT, which is 50% owned by Terminal Investment Limited (TiL), the terminal operating business of Mediterranean Shipping Co. Different outcomes are possible. If Maher were sold to MSC, the world’s largest carrier and an aggressive acquirer of terminal space in the US and globally, it would likely force MSC to sell its PNCT stake due to antitrust concerns over market dominance at the East Coast’s largest port, according to a knowledgeable source. MSC is one of the parties that have expressed interest in Maher, according to a February report in the Wall Street Journal. Such a scenario could leave PNCT in the hands of neutral owners, giving the port a common-user facility. “It is important to the port’s competitiveness to retain a common-user facility,” a source said. Carriers’ healthy appetite for terminal assets The issue of carrier terminal control is front and center with the impending sale of Maher given that carriers overall have become aggressive acquirers and developers of terminal capacity globally, including on the US East Coast . For example, if Maher were to fall into the hands of Hapag-Lloyd or Ocean Network Express (ONE), both top 10 carriers that are expanding their terminal portfolios, it could leave the port as essentially a closed shop where non-terminal operating carriers are deprioritized, making the port less competitive overall. The reason is that while carrier-owned terminals often claim to be neutral, in reality they are not. “Within carriers that own terminals, internal debates take place between the port operations team and the liner teams regarding terminals the carrier owns,” said George Goldman, former president of Zim Integrated Shipping Services and CMA CGM in the US. “Third-party terminal revenue is a big deal for the terminal guys, but ultimately decisions pay homage to the mothership and ultimately preference is given to the carrier.” He added: “Independent carriers really have very little leverage so ... I think ultimately it’s a disadvantage for them and the industry.” Such are the implications for non-terminal-owning carriers that — depending on who the buyer is — it could impact alliances and port calls on the US East Coast, said a port expert who asked to remain anonymous. ‘Single-most attractive terminal target in the world’ The Maher sale, moreover, isn’t just any transaction. It’s the premier terminal property in the heart of the world’s second-largest metropolitan region by GDP, as well as a dominant player within a strategically located port that over several years has held its own among competitors. The Maher facility is “the single-most attractive terminal target in the world today,” according to the knowledgeable source. The import market share of New York-New Jersey among Northeast ports (including Boston, Philadelphia, Baltimore and Virginia) was 63.1% in 2025 versus 63.6% in 2020, according to S&P Global Market Intelligence. A further benefit to NY-NJ stems from long-term growth in East Coast market share as Asia manufacturing gravitates south from China, which favors the westbound route into North America. It has been widely reported that Maher will be put up for sale in the coming months by Macquarie. JP Morgan has been named as the sell-side advisor, according to Infralogic, an infrastructure publication. The bank is incentivized to achieve a price possibly as lofty as $6 billion, said the knowledgeable source. Macquarie in December renewed Maher’s lease with the Port Authority of New York and New Jersey for 33 years through 2063, agreeing to terms that include responsibility for upkeep of wharves and berths and a commitment to increase capacity in line with demand. The lease renewal was seen as a critical step in Macquarie’s ability to put the terminal up for sale as it removes uncertainty as to what a buyer is committing to. The knowledgeable source said the terminal, which was acquired by Macquarie from Deutsche Bank in 2016, will attract interest from potential buyers including carrier-owned terminal operators, independent operators such as DP World, PSA or Carrix, as well as potentially infrastructure-focused financial players. Yet with indications the port is committed to maintaining a common-user facility within the port, it remains to be seen whether it will intervene to achieve that result given that it has the right to approve the Maher transaction but can’t dictate who the buyer would be. Some port sources speculate that Macquarie would not have renewed the Maher lease without a commitment from the port not to reopen the lease as a condition for approving the sale, which it did to force concessions from CMA CGM regarding the Global terminals deal. A spokesperson for the port of NY-NJ would only say: “We are unable to comment on possible sales or negotiations.” Macquarie could not be reached for comment. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Marine terminals

Impending sale of Maher likely to reshape competitive dynamics at Port of NY-NJ

<div class="phx-topic abstract-wrapper">But the carrier’s ability to continue that cost recovery will depend on the long-term impact of high energy prices on consumer demand and how the industry manages its fast-growing order book, Vincent Clerc says. </div>

But the carrier’s ability to continue that cost recovery will depend on the long-term impact of high energy prices on consumer demand and how the industry manages its fast-growing order book, Vincent Clerc says.

<div class="phx-topic">Maersk’s monthly bunker fuel bill has doubled to $500 million since the war in the Middle East began — and those costs are being recovered “in full” from the carrier’s customers via surcharges and revised bunker formulas, CEO Vincent Clerc said Thursday. But Maersk’s ability to continue that cost recovery will depend on the long-term impact of high energy prices on consumer demand and how the container shipping industry manages growing excess capacity, Clerc told analysts during the carrier’s first-quarter earnings call. “Our concern is a softening of the demand environment and insufficient capacity management across the industry, which will lead to an erosion of the recovery of costs on the short-term market, which could, depending on how much it will erode, quickly get you into a not-so-pleasant place in the second half of the year,” he said. Maersk handled 3.2 million FEUs in the first quarter as volume increased 9% year over year. Average load rates were down 14% at $2,081 per FEU, but higher sequentially compared with the fourth quarter of 2025. Despite the robust volume across Maersk’s ocean, logistics and terminals segments, the group’s key first-quarter financial metrics were negative due to an oversupplied market that pushed rates lower. Revenue was down 2.6% year over year at $13 billion; earnings before interest, taxes, depreciation and amortization fell 33% to $1.8 billion; and earnings before interest and taxes (EBIT) of $340 million was down 73%. First-quarter net profit of $100 million was down sharply from the $1.2 billion recorded in the first quarter of 2025. <h3>‘Limited’ financial hit from war in Q1 </h3>Maersk has so far been able to manage the cost impact of the energy shock, but Clerc told analysts that the bunker fuel price increase was unprecedented in terms of size, the speed at which it unfolded, and the dislocations it created in the market. “There is limited financial impact from the conflict in the first quarter, given the accounting effects of delayed recognitions of both revenue and costs,” he said. “The increased costs that will flow through the [profit and loss] in Q2 and beyond are being recovered through higher spot rates and the successful implementation of commercial levers with our contracted customers, most notably surcharges and bunker formulas. “This is about $500 million of extra cost per month, which we are recovering in full today, even in an oversupplied market overall, despite heavy disruptions to energy markets,” Clerc added. Bunker prices in the first quarter were actually down 16% year over year, with the sharply higher prices seen in March after the war began not enough to overwhelm the far lower costs of January and February. Operating costs were up 0.6% but offset by the strong volume growth and unit cost that fell 7.1% in the first quarter. Maersk’s Logistics and Services segment reported revenue up 8.7% year over year at $3.8 billion, although the EBIT margin of 4.6% remained short of the 6% target. In the terminals segment, revenue increased 6.7% year over year to $1.3 billion, driven by higher revenue per move and greater volume, especially in North America. Volume handled by the terminals rose 4% to 3.4 million FEUs. <h3>Overcapacity hangs over industry </h3>Maersk left its financial forecast for the year unchanged, but the wide range between upper and lower EBIT expectation — minus $1.5 billion to $1 billion — underlined the extreme uncertainty the carrier is seeing in global container shipping markets, particularly around overcapacity. The global order book continues to swell, with total capacity on order currently at 12 million TEUs, 36% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="65404dbe-8b60-43eb-9f13-4179bde44e2b"></dynamic-object></div>Clerc believes the high energy costs will soon trigger a wave of slow steaming that could absorb up to 1.5 million TEUs of capacity. “We’re looking at it ourselves, and the cost benefit is quite compelling,” he said. “But if we don’t pick up scrapping and actually retire some of the ships that have not been retired over the last seven years, this is going to be extremely bumpy.” Global long-haul networks were currently sailing at 16-17 knots; Clerc said at the current price of bunker fuel, it would be “quite economical” to reduce speed to 14.5-15 knots. “Another thing that would be extremely positive from a fuel cost perspective is reopening the Red Sea,” he said. “When you’re sailing from India to the Mediterranean, you’re going to burn a lot less fuel by going through the Red Sea than you will taking the long route [around southern Africa].” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Maersk’s monthly bunker fuel bill has doubled to $500 million since the war in the Middle East began — and those costs are being recovered “in full” from the carrier’s customers via surcharges and revised bunker formulas, CEO Vincent Clerc said Thursday. But Maersk’s ability to continue that cost recovery will depend on the long-term impact of high energy prices on consumer demand and how the container shipping industry manages growing excess capacity, Clerc told analysts during the carrier’s first-quarter earnings call. “Our concern is a softening of the demand environment and insufficient capacity management across the industry, which will lead to an erosion of the recovery of costs on the short-term market, which could, depending on how much it will erode, quickly get you into a not-so-pleasant place in the second half of the year,” he said. Maersk handled 3.2 million FEUs in the first quarter as volume increased 9% year over year. Average load rates were down 14% at $2,081 per FEU, but higher sequentially compared with the fourth quarter of 2025. Despite the robust volume across Maersk’s ocean, logistics and terminals segments, the group’s key first-quarter financial metrics were negative due to an oversupplied market that pushed rates lower. Revenue was down 2.6% year over year at $13 billion; earnings before interest, taxes, depreciation and amortization fell 33% to $1.8 billion; and earnings before interest and taxes (EBIT) of $340 million was down 73%. First-quarter net profit of $100 million was down sharply from the $1.2 billion recorded in the first quarter of 2025. ‘Limited’ financial hit from war in Q1 Maersk has so far been able to manage the cost impact of the energy shock, but Clerc told analysts that the bunker fuel price increase was unprecedented in terms of size, the speed at which it unfolded, and the dislocations it created in the market. “There is limited financial impact from the conflict in the first quarter, given the accounting effects of delayed recognitions of both revenue and costs,” he said. “The increased costs that will flow through the [profit and loss] in Q2 and beyond are being recovered through higher spot rates and the successful implementation of commercial levers with our contracted customers, most notably surcharges and bunker formulas. “This is about $500 million of extra cost per month, which we are recovering in full today, even in an oversupplied market overall, despite heavy disruptions to energy markets,” Clerc added. Bunker prices in the first quarter were actually down 16% year over year, with the sharply higher prices seen in March after the war began not enough to overwhelm the far lower costs of January and February. Operating costs were up 0.6% but offset by the strong volume growth and unit cost that fell 7.1% in the first quarter. Maersk’s Logistics and Services segment reported revenue up 8.7% year over year at $3.8 billion, although the EBIT margin of 4.6% remained short of the 6% target. In the terminals segment, revenue increased 6.7% year over year to $1.3 billion, driven by higher revenue per move and greater volume, especially in North America. Volume handled by the terminals rose 4% to 3.4 million FEUs. Overcapacity hangs over industry Maersk left its financial forecast for the year unchanged, but the wide range between upper and lower EBIT expectation — minus $1.5 billion to $1 billion — underlined the extreme uncertainty the carrier is seeing in global container shipping markets, particularly around overcapacity. The global order book continues to swell, with total capacity on order currently at 12 million TEUs, 36% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Clerc believes the high energy costs will soon trigger a wave of slow steaming that could absorb up to 1.5 million TEUs of capacity. “We’re looking at it ourselves, and the cost benefit is quite compelling,” he said. “But if we don’t pick up scrapping and actually retire some of the ships that have not been retired over the last seven years, this is going to be extremely bumpy.” Global long-haul networks were currently sailing at 16-17 knots; Clerc said at the current price of bunker fuel, it would be “quite economical” to reduce speed to 14.5-15 knots. “Another thing that would be extremely positive from a fuel cost perspective is reopening the Red Sea,” he said. “When you’re sailing from India to the Mediterranean, you’re going to burn a lot less fuel by going through the Red Sea than you will taking the long route [around southern Africa].” Contact Greg Knowler at greg.knowler@spglobal.com .

Maersk passing $500 million monthly fuel bill to customers ‘in full’: CEO

<div class="phx-topic abstract-wrapper">Logistics and transportation veterans decried Amazon’s announcement this week that it is offering bundled supply chain services as merely a repackaging of current capabilities; others weren’t as quick to dismiss it. </div>

Logistics and transportation veterans decried Amazon’s announcement this week that it is offering bundled supply chain services as merely a repackaging of current capabilities; others weren’t as quick to dismiss it.

<div class="phx-topic">Amazon’s launch this week of a suite of supply chain services for shippers not currently using its e-commerce seller ecosystem has sparked a healthy debate within the logistics industry about whether the services represent a threat to third-party logistics providers (3PLs). On one side of that debate are mostly transportation and logistics veterans who suggest the announcement is primarily marketing — a neat and more digestible packaging of offerings that Amazon has long provided as individual services, such as warehousing, fulfillment, and brokered and for-hire transportation. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6215654_0.1.jpg"></img></div>On the other side are those who think Amazon’s foray into diversified logistics is taking shape in a way that threatens everyone from integrators such as UPS and FedEx to mom-and-pop forwarders and freight brokers to supply chain software vendors. “I’m laughing at all the ‘oohs’ and ‘aahs’ over something that is essentially just a marketing ploy,” Eric Williams, CEO of freight brokerage pricing vendor Beagl and a former transportation executive with Target, wrote on X. In a response to a question posted on X about whether Amazon had just “knee-capped” the forwarder Flexport, its CEO Ryan Petersen replied: “No, they’ve had this offering for many years.” One longtime logistics veteran who did not want to be identified described the announcement to the Journal of Commerce as “Groundhog Day,” given that it felt familiar. <h3>‘Execution engine’ </h3>Still, there are certainly watchers of the supply chain space who assert that Amazon’s move is more than just a repackaging of existing capabilities. “Amazon has built a fully integrated execution engine,” Brittain Ladd, a former Amazon executive and prolific analyst of the retail, supply chain and technology space, said in a LinkedIn post. “Not a platform. Not software. An integrated execution engine that also includes robotics and automation.” Ladd said sources within Amazon believe the company will be able to save third-party shippers a sizable percentage over what they might be paying now by using current combinations of transportation, contract logistics, final mile, and software partners. “I don’t care how long a 3PL has done business with a customer,” he said. “When customers learn that Amazon can reduce their costs ... and transition their logistics needs into Amazon’s ecosystem with minimal disruption, they will choose Amazon.” Or will they? This type of offering has been tried by large retailers before. Walmart in the late 2000s toyed with the idea of offering third-party contract logistics services to other shippers, but the idea never gained enough traction to grow into a substantial business unit. More recently, American Eagle Outfitters cut bait on a third-party logistics venture designed to attract other shippers. It’s hard to pinpoint how and why these ventures didn’t succeed, but some part of it is attributable to the reticence of shippers to use competitors as logistics partners. <h3>Competitor tension </h3>Amazon is a different beast than American Eagle and even Walmart, but some of that competitive tension will surely remain. Although Amazon noted in its announcement that retail customers such as Lands’ End and, ironically, American Eagle, are existing users of its supply chain services, it’s hard to imagine retailers that compete directly with Amazon’s e-commerce business engaging in a massive migration to its logistics offering. Some commenters made the link between the announcement Monday of Amazon Supply Chain Services (ASCS) and the wildly successful Amazon Web Services (AWS) cloud infrastructure business. Surely, the branding team at Amazon would love for ACSC to become as synonymous with logistics as AWS has become with cloud. In business circles, the much-loved trope is that Amazon takes its biggest cost centers and eventually turns them into revenue drivers. But is logistics like other parts of its business? Amazon has long blended the digital and physical worlds, but the fragmentation of freight transportation across modes is much more challenging than what it has faced in parcel or web hosting or even warehousing and fulfillment. Take, for example, Amazon’s non-vessel-operating common carrier (NVO) business. That unit is big enough to be the <a href="https://www.joc.com/article/journal-of-commerce-top-25-trans-pacific-nvos-in-2025-6182176">seventh-largest trans-Pacific NVO</a>, according to data from S&amp;P Global Market Intelligence, but it is not in any way dominant. <h3>Domestic focus </h3>What’s more, the announcement Monday suggests Amazon’s focus is largely on domestic services — brokerage, drayage, warehousing, final-mile, inventory management, and distribution. Within each of those categories, Amazon will contend with a set of competitors that range from large, diversified, and often well-capitalized players, to the normal cohort of smaller providers. Given the highly fragmented nature of logistics on the whole, and even within each subcategory, this will be a test of whether Amazon’s technological might and huge scale will overpower businesses that focus on people-to-people relationships first and foremost. The not-so-small matter of which shippers might be reluctant to turn over the keys to their supply chains to a company that has become famously dominant in e-commerce, fulfillment and web services overlaps with the fragmentation issue. Competitors in each service category will also be split into ones that cater to many shipper verticals and ones that focus on single verticals. In the announcement, Amazon specifically mentioned automotive, healthcare, electronics, apparel &amp; beauty, and food &amp; beverage, as key verticals it would target. Some of those verticals can be neatly split into manufacturer and retailer segments. Are retailers ready to give Amazon intricate information on their supplier networks or customs information? Or will Amazon find more joy in targeting upstream suppliers within the retail industry, or larger shippers in the industrial sector? <h3>‘Base load’ benefits </h3>Aside from just generating more revenue from its decade of investment in third-party logistics, the benefit to Amazon bundling its services is clear: By providing what one LinkedIn commenter called a “base load“ of third-party cargo across various modes, Amazon could essentially subsidize or even zero out the cost of moving its own freight. That “own” freight could take the form of volume from third-party sellers already on Amazon’s e-commerce platform or its own products that Amazon moves as an outright shipper itself. That’s a target worth chasing for a company with the scale and reach of Amazon. And it would give them yet another lever to distance themselves from competition across the various categories in which it participates. That even includes AWS, where it is competing with Google and Microsoft to collect monetizable logistics industry information. Still... “This is not like AWS,” Dave Ross, chief strategy officer of less-than-truckload carrier Roadrunner and a former equities analyst, wrote on LinkedIn. “There is no ‘move to the cloud’ when it comes to freight. Amazon is adding no new capacity. [It] just wants to be a middleman to replace your current middleman. I’ll take the ‘under’ on its overall impact to the transportation &amp; logistics industry after hype and headlines pass.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Amazon’s launch this week of a suite of supply chain services for shippers not currently using its e-commerce seller ecosystem has sparked a healthy debate within the logistics industry about whether the services represent a threat to third-party logistics providers (3PLs). On one side of that debate are mostly transportation and logistics veterans who suggest the announcement is primarily marketing — a neat and more digestible packaging of offerings that Amazon has long provided as individual services, such as warehousing, fulfillment, and brokered and for-hire transportation. On the other side are those who think Amazon’s foray into diversified logistics is taking shape in a way that threatens everyone from integrators such as UPS and FedEx to mom-and-pop forwarders and freight brokers to supply chain software vendors. “I’m laughing at all the ‘oohs’ and ‘aahs’ over something that is essentially just a marketing ploy,” Eric Williams, CEO of freight brokerage pricing vendor Beagl and a former transportation executive with Target, wrote on X. In a response to a question posted on X about whether Amazon had just “knee-capped” the forwarder Flexport, its CEO Ryan Petersen replied: “No, they’ve had this offering for many years.” One longtime logistics veteran who did not want to be identified described the announcement to the Journal of Commerce as “Groundhog Day,” given that it felt familiar. ‘Execution engine’ Still, there are certainly watchers of the supply chain space who assert that Amazon’s move is more than just a repackaging of existing capabilities. “Amazon has built a fully integrated execution engine,” Brittain Ladd, a former Amazon executive and prolific analyst of the retail, supply chain and technology space, said in a LinkedIn post. “Not a platform. Not software. An integrated execution engine that also includes robotics and automation.” Ladd said sources within Amazon believe the company will be able to save third-party shippers a sizable percentage over what they might be paying now by using current combinations of transportation, contract logistics, final mile, and software partners. “I don’t care how long a 3PL has done business with a customer,” he said. “When customers learn that Amazon can reduce their costs ... and transition their logistics needs into Amazon’s ecosystem with minimal disruption, they will choose Amazon.” Or will they? This type of offering has been tried by large retailers before. Walmart in the late 2000s toyed with the idea of offering third-party contract logistics services to other shippers, but the idea never gained enough traction to grow into a substantial business unit. More recently, American Eagle Outfitters cut bait on a third-party logistics venture designed to attract other shippers. It’s hard to pinpoint how and why these ventures didn’t succeed, but some part of it is attributable to the reticence of shippers to use competitors as logistics partners. Competitor tension Amazon is a different beast than American Eagle and even Walmart, but some of that competitive tension will surely remain. Although Amazon noted in its announcement that retail customers such as Lands’ End and, ironically, American Eagle, are existing users of its supply chain services, it’s hard to imagine retailers that compete directly with Amazon’s e-commerce business engaging in a massive migration to its logistics offering. Some commenters made the link between the announcement Monday of Amazon Supply Chain Services (ASCS) and the wildly successful Amazon Web Services (AWS) cloud infrastructure business. Surely, the branding team at Amazon would love for ACSC to become as synonymous with logistics as AWS has become with cloud. In business circles, the much-loved trope is that Amazon takes its biggest cost centers and eventually turns them into revenue drivers. But is logistics like other parts of its business? Amazon has long blended the digital and physical worlds, but the fragmentation of freight transportation across modes is much more challenging than what it has faced in parcel or web hosting or even warehousing and fulfillment. Take, for example, Amazon’s non-vessel-operating common carrier (NVO) business. That unit is big enough to be the seventh-largest trans-Pacific NVO , according to data from S&P Global Market Intelligence, but it is not in any way dominant. Domestic focus What’s more, the announcement Monday suggests Amazon’s focus is largely on domestic services — brokerage, drayage, warehousing, final-mile, inventory management, and distribution. Within each of those categories, Amazon will contend with a set of competitors that range from large, diversified, and often well-capitalized players, to the normal cohort of smaller providers. Given the highly fragmented nature of logistics on the whole, and even within each subcategory, this will be a test of whether Amazon’s technological might and huge scale will overpower businesses that focus on people-to-people relationships first and foremost. The not-so-small matter of which shippers might be reluctant to turn over the keys to their supply chains to a company that has become famously dominant in e-commerce, fulfillment and web services overlaps with the fragmentation issue. Competitors in each service category will also be split into ones that cater to many shipper verticals and ones that focus on single verticals. In the announcement, Amazon specifically mentioned automotive, healthcare, electronics, apparel & beauty, and food & beverage, as key verticals it would target. Some of those verticals can be neatly split into manufacturer and retailer segments. Are retailers ready to give Amazon intricate information on their supplier networks or customs information? Or will Amazon find more joy in targeting upstream suppliers within the retail industry, or larger shippers in the industrial sector? ‘Base load’ benefits Aside from just generating more revenue from its decade of investment in third-party logistics, the benefit to Amazon bundling its services is clear: By providing what one LinkedIn commenter called a “base load“ of third-party cargo across various modes, Amazon could essentially subsidize or even zero out the cost of moving its own freight. That “own” freight could take the form of volume from third-party sellers already on Amazon’s e-commerce platform or its own products that Amazon moves as an outright shipper itself. That’s a target worth chasing for a company with the scale and reach of Amazon. And it would give them yet another lever to distance themselves from competition across the various categories in which it participates. That even includes AWS, where it is competing with Google and Microsoft to collect monetizable logistics industry information. Still... “This is not like AWS,” Dave Ross, chief strategy officer of less-than-truckload carrier Roadrunner and a former equities analyst, wrote on LinkedIn. “There is no ‘move to the cloud’ when it comes to freight. Amazon is adding no new capacity. [It] just wants to be a middleman to replace your current middleman. I’ll take the ‘under’ on its overall impact to the transportation & logistics industry after hype and headlines pass.” Contact Eric Johnson at eric.johnson@spglobal.com .

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