<div class="phx-topic abstract-wrapper">The Asian Development Bank also warned in a note Wednesday that escalating tariffs and further trade friction would further dim intra-Asia growth prospects. </div>

The Asian Development Bank also warned in a note Wednesday that escalating tariffs and further trade friction would further dim intra-Asia growth prospects.

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<div class="phx-topic">Intra-Asia trade risks being thrown into chaos if the US imposes hefty tariffs on goods from the region should current trade talks break down, Hutchison Port Holdings Trust (HPH Trust) warned Wednesday. While the Singapore-listed port operator, a subsidiary of Hong Kong conglomerate CK Hutchison, was commenting before the Trump administration announced trade deals with three Asian countries — Japan, Indonesia and the Philippines — late Tuesday in the US, those countries still face significant levies on exports to the US. The Asian Development Bank also warned in a note Wednesday that escalating tariffs and further trade friction would further dim intra-Asia growth prospects. HPH Trust, which controls Hutchison’s Hong Kong and mainland China port interests, said the US government sent letters to several counties in Asia to increase pressure on them to conclude trade negotiations by an Aug. 1 deadline. “If these trade deals fail to materialize, the sudden reinstatement of higher tariffs and possible sectoral tariffs by the US could trigger fresh turmoil in global trade, particularly for intra-Asia trade,” HPH Trust said. The warning was included as part of the company’s first-half results announcement. In the agreements confirmed Wednesday, Japanese exports to the US will be charged a 15% tariff, down from a proposed 25% levy, while a 19% tariff will be added to imports from the Philippines. Indonesia will also have a 19% tariff added to its exports to the US, although that is down from the 32% the US said it would apply without a deal. But other major Asian exporters to the US, including South Korea and Thailand, have yet to agree to trade deals. South Korea and Malaysia both face a 25% tariff, with Thailand and Cambodia each looking at a 36% levy. Myanmar and Laos would have exports to the US taxed at 40%. Officials from the US and China, meanwhile, are due to meet next week in Stockholm to continue talks on a trade deal, <a href="https://www.reuters.com/world/china/us-china-discuss-tariff-deadline-extension-trump-reaches-philippines-deal-2025-07-22/">Reuters reported</a>. The US has imposed an Aug. 14 deadline for reaching a deal, without which Chinese goods could face a 145% US tariff. “Uneven progress in tariff negotiations and the potential expansion of tariffs to additional products could further disrupt trade activities and weigh on growth for the region,” said Dong He, chief economist at the regional government-backed ASEAN+3 Macroeconomic Research Office (AMRO). AMRO is forecasting economic growth in the intra-Asia region to be 3.8% this year, slipping to 3.6% in 2026. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Intra-Asia trade risks being thrown into chaos if the US imposes hefty tariffs on goods from the region should current trade talks break down, Hutchison Port Holdings Trust (HPH Trust) warned Wednesday. While the Singapore-listed port operator, a subsidiary of Hong Kong conglomerate CK Hutchison, was commenting before the Trump administration announced trade deals with three Asian countries — Japan, Indonesia and the Philippines — late Tuesday in the US, those countries still face significant levies on exports to the US. The Asian Development Bank also warned in a note Wednesday that escalating tariffs and further trade friction would further dim intra-Asia growth prospects. HPH Trust, which controls Hutchison’s Hong Kong and mainland China port interests, said the US government sent letters to several counties in Asia to increase pressure on them to conclude trade negotiations by an Aug. 1 deadline. “If these trade deals fail to materialize, the sudden reinstatement of higher tariffs and possible sectoral tariffs by the US could trigger fresh turmoil in global trade, particularly for intra-Asia trade,” HPH Trust said. The warning was included as part of the company’s first-half results announcement. In the agreements confirmed Wednesday, Japanese exports to the US will be charged a 15% tariff, down from a proposed 25% levy, while a 19% tariff will be added to imports from the Philippines. Indonesia will also have a 19% tariff added to its exports to the US, although that is down from the 32% the US said it would apply without a deal. But other major Asian exporters to the US, including South Korea and Thailand, have yet to agree to trade deals. South Korea and Malaysia both face a 25% tariff, with Thailand and Cambodia each looking at a 36% levy. Myanmar and Laos would have exports to the US taxed at 40%. Officials from the US and China, meanwhile, are due to meet next week in Stockholm to continue talks on a trade deal, Reuters reported . The US has imposed an Aug. 14 deadline for reaching a deal, without which Chinese goods could face a 145% US tariff. “Uneven progress in tariff negotiations and the potential expansion of tariffs to additional products could further disrupt trade activities and weigh on growth for the region,” said Dong He, chief economist at the regional government-backed ASEAN+3 Macroeconomic Research Office (AMRO). AMRO is forecasting economic growth in the intra-Asia region to be 3.8% this year, slipping to 3.6% in 2026. Contact Keith Wallis at keithwallis@hotmail.com .

Maritime

Container Shipping News

Transport, Trade and Regulation News

Intra-Asia trade faces fresh turmoil from potential hefty US tariffs: HPH Trust

<div class="phx-topic abstract-wrapper">In the wake of several paper mill closures globally so far this year, US pulp importers will be dealt another blow on Aug. 1 when a proposed 50% tariff on cargo from Brazil will go into effect. </div>

In the wake of several paper mill closures globally so far this year, US pulp importers will be dealt another blow on Aug. 1 when a proposed 50% tariff on cargo from Brazil will go into effect.

<div class="phx-topic">After the closure — and announcements of future closures — of more than half a dozen paper mills around the globe this year, the pulp industry will see higher costs and tightened supply when a 50% US tariff on Brazil goes into effect Aug. 1, stakeholders say. As the tariffs are implemented, the US paper pulp market is especially exposed, experts say. According to Chris Rogers, head of supply chain research at S&amp;P Global Market Intelligence, the Trump administration’s plan to apply elevated duties under the International Emergency Economic Powers Act (IEEPA) would increase import tariffs on Brazil to 50%, on Canada to 35% and to the European Union to 30%. According to S&amp;P Global Market Intelligence data, those sources together accounted for 93% of US imports of wood pulp between March and May of 2025. S&amp;P Global is the parent company of the Journal of Commerce. “[The plan] carries significant risks for the US paper manufacturing sector,” Rogers wrote in a July 16 analysis. In 2023, North America was only responsible for 10% of global wood pulp demand, according to Fastmarkets’ World Pulp &amp; Recovered Paper forecast. Meanwhile, China had 43%, Europe 24%, 13% went to the rest of Asia, Latin America had 6%, and less than 2% was bound for the rest of the world. <h3>Mill closures </h3>The global pulp industry was already facing challenges before the US tariffs were announced. Falling demand for paper products, increased consolidation across sectors and reduced margins have long impacted the industry, experts say. According to data analytics company ResourceWise, at least nine mills around the world have moved forward with closures since the beginning of 2025, including several in the US. International Paper shut down its Louisiana containerboard mill in April, while Georgia-Pacific announced it would close its Georgia containerboard mill in August. Similarly, Smurfit WestRock this year closed its Minnesota coated recycle board mill and ceased production at its Texas-based containerboard mill, while Greif permanently closed two recycled paperboard mills in California and Massachusetts, ResourceWise shows. “Many chemical pulp mills in USA and Canada [have] shut down due to high cost and low margins,” said a paper pulp logistics market source. “Future capacity growth will come from Brazil, Indonesia, and Chile due to the low cost of wood and production.” A Tako board mill in Finland owned by Metsa Board and a UPM Communication Papers paper mill in Germany also closed this year. Several of the closure announcements, both in North America and internationally, cited weak demand and high operating costs as contributing factors, according to ResourceWise. <h3>Volatility instead of stabilization </h3>According to paper industry consultant EMGE’s Paper and Pulp Industry Outlook 2025, there were expectations for the paper and board sector to stabilize “somewhat” this year, but tariff announcements have only increased volatility. US imports of wood pulp fell 4.7% year over year in May, according to Rogers’ analysis. That figure includes a 19.9% slide in imports from Canada and a 6.3% drop from the EU, reflecting the different tariff rates applied under the IEEPA (deficit) and IEEPA (fentanyl) programs, including the delayed implementation of higher duties until Aug. 1, he wrote. “The US is a key destination for Brazilian pulp, and any shift in trade policy could influence global supply chains,” Fastmarkets pulp analyst Mateus Saraiva said in a July 14 Fastmarkets article. “Other exporters with lower tariff exposure may gain competitive advantage, while downstream industries such as tissue and packaging could face cost pressures. Currency movements and freight rates may further shape the net impact on landed costs.” According to Parsan Chand Mahaveer, a logistics specialist in the paper pulp industry, some shippers frontloaded their cargo to beat the approaching Aug. 1 deadline, although moving cargo earlier than usual bears its own costs. “Frontloading in volumes to the US incurs extra holding costs ranging from $30 to $50 per ton,” Mahaveer told the Journal of Commerce. “Some shippers are also circumventing tariffs by diversifying end markets and changing their supply sources, [if possible.]” Importers who do get hit with the tariff will likely be forced to shoulder the additional costs directly, ultimately positioning importers to pass on price increases to the consumer. “Most of the pulp on long term commercial agreement is being sold on [a cost, insurance, and freight] basis in the US and any impact is being absorbed by importers in the US,” Mahaveer said. “Pulp producers who import their own pulp into [the US] and distribute by themselves, they absorb the tariff impact.” Still, some sectors of the pulp industry are more exposed than others. According to Fastmarkets, more than 82% of bleached eucalyptus kraft pulp (BEKP) imported into the US comes from Brazil. BEKP, largely favored for its short life span and high quality for kraft pulping, is a type of bleached hardwood kraft (BHK) pulp, which accounted for 55% of global pulp demand in 2023, according to Fastmarkets. Meanwhile, bleached softwood kraft (BSK) — which is more commonly available in North America than BHK — accounted for 26% of global pulp demand in 2023. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com.">laura.robb@spglobal.com</a>.  </div>

After the closure — and announcements of future closures — of more than half a dozen paper mills around the globe this year, the pulp industry will see higher costs and tightened supply when a 50% US tariff on Brazil goes into effect Aug. 1, stakeholders say. As the tariffs are implemented, the US paper pulp market is especially exposed, experts say. According to Chris Rogers, head of supply chain research at S&P Global Market Intelligence, the Trump administration’s plan to apply elevated duties under the International Emergency Economic Powers Act (IEEPA) would increase import tariffs on Brazil to 50%, on Canada to 35% and to the European Union to 30%. According to S&P Global Market Intelligence data, those sources together accounted for 93% of US imports of wood pulp between March and May of 2025. S&P Global is the parent company of the Journal of Commerce. “[The plan] carries significant risks for the US paper manufacturing sector,” Rogers wrote in a July 16 analysis. In 2023, North America was only responsible for 10% of global wood pulp demand, according to Fastmarkets’ World Pulp & Recovered Paper forecast. Meanwhile, China had 43%, Europe 24%, 13% went to the rest of Asia, Latin America had 6%, and less than 2% was bound for the rest of the world. Mill closures The global pulp industry was already facing challenges before the US tariffs were announced. Falling demand for paper products, increased consolidation across sectors and reduced margins have long impacted the industry, experts say. According to data analytics company ResourceWise, at least nine mills around the world have moved forward with closures since the beginning of 2025, including several in the US. International Paper shut down its Louisiana containerboard mill in April, while Georgia-Pacific announced it would close its Georgia containerboard mill in August. Similarly, Smurfit WestRock this year closed its Minnesota coated recycle board mill and ceased production at its Texas-based containerboard mill, while Greif permanently closed two recycled paperboard mills in California and Massachusetts, ResourceWise shows. “Many chemical pulp mills in USA and Canada [have] shut down due to high cost and low margins,” said a paper pulp logistics market source. “Future capacity growth will come from Brazil, Indonesia, and Chile due to the low cost of wood and production.” A Tako board mill in Finland owned by Metsa Board and a UPM Communication Papers paper mill in Germany also closed this year. Several of the closure announcements, both in North America and internationally, cited weak demand and high operating costs as contributing factors, according to ResourceWise. Volatility instead of stabilization According to paper industry consultant EMGE’s Paper and Pulp Industry Outlook 2025, there were expectations for the paper and board sector to stabilize “somewhat” this year, but tariff announcements have only increased volatility. US imports of wood pulp fell 4.7% year over year in May, according to Rogers’ analysis. That figure includes a 19.9% slide in imports from Canada and a 6.3% drop from the EU, reflecting the different tariff rates applied under the IEEPA (deficit) and IEEPA (fentanyl) programs, including the delayed implementation of higher duties until Aug. 1, he wrote. “The US is a key destination for Brazilian pulp, and any shift in trade policy could influence global supply chains,” Fastmarkets pulp analyst Mateus Saraiva said in a July 14 Fastmarkets article. “Other exporters with lower tariff exposure may gain competitive advantage, while downstream industries such as tissue and packaging could face cost pressures. Currency movements and freight rates may further shape the net impact on landed costs.” According to Parsan Chand Mahaveer, a logistics specialist in the paper pulp industry, some shippers frontloaded their cargo to beat the approaching Aug. 1 deadline, although moving cargo earlier than usual bears its own costs. “Frontloading in volumes to the US incurs extra holding costs ranging from $30 to $50 per ton,” Mahaveer told the Journal of Commerce. “Some shippers are also circumventing tariffs by diversifying end markets and changing their supply sources, [if possible.]” Importers who do get hit with the tariff will likely be forced to shoulder the additional costs directly, ultimately positioning importers to pass on price increases to the consumer. “Most of the pulp on long term commercial agreement is being sold on [a cost, insurance, and freight] basis in the US and any impact is being absorbed by importers in the US,” Mahaveer said. “Pulp producers who import their own pulp into [the US] and distribute by themselves, they absorb the tariff impact.” Still, some sectors of the pulp industry are more exposed than others. According to Fastmarkets, more than 82% of bleached eucalyptus kraft pulp (BEKP) imported into the US comes from Brazil. BEKP, largely favored for its short life span and high quality for kraft pulping, is a type of bleached hardwood kraft (BHK) pulp, which accounted for 55% of global pulp demand in 2023, according to Fastmarkets. Meanwhile, bleached softwood kraft (BSK) — which is more commonly available in North America than BHK — accounted for 26% of global pulp demand in 2023. Contact Laura Robb at laura.robb@spglobal.com . 

Supply chain

Impending Brazil tariffs increase pressure on US pulp industry

<div class="phx-topic abstract-wrapper">The head of the Transportation Intermediaries Association says that calls for more access to what shippers pay brokers under the guise of protecting truckers from fraud is a ploy to view what should be confidential business information. </div>

The head of the Transportation Intermediaries Association says that calls for more access to what shippers pay brokers under the guise of protecting truckers from fraud is a ploy to view what should be confidential business information.

<div class="phx-topic">The Transportation Intermediaries Association (TIA) is warning truck safety regulators in the US that proposed rules to allow trucking companies to review the rates shippers pay their brokers would harm small brokers and eventually lead to higher shipper and consumer prices. The issue of increased broker transparency with truckload carriers emerged last November when the Biden administration published a notice of proposed rulemaking to strengthen regulations around what information a broker must make available to carriers. In February, the Federal Motor Carrier Safety Administration (FMCSA) <a href="https://www.joc.com/article/us-regulator-reopens-truck-broker-transparency-proposal-for-new-comments-5946406">extended the comment period</a> on the rulemaking, a move requested by the Small Business in Transportation Coalition (SBTC), one of the groups that petitioned the FMCSA for a rulemaking on broker transparency in 2020. That reopened an old wound in the truckload industry, with brokers arguing that allowing carriers to see the rates paid by shippers to intermediaries would <a href="https://www.joc.com/article/fmcsas-overreach-threatens-small-business-free-enterprise-in-freight-5946820">undermine their ability to operate</a>.TIA’s warning this week was prompted by testimony given to the US Senate Surface Transportation Subcommittee by Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Association (OOIDA). Pugh’s testimony this week centered around the idea that increasing rate transparency would help fight the increasing occurrences of freight theft and fraud in the truckload market. “As motor carriers are increasingly victimized by freight fraud, unpaid claims, dubious charges, unpaid loads, double brokered loads, and load-phishing schemes, the current lack of transparency has left them little to no means to defend themselves from fraud,” Pugh told the subcommittee. But TIA CEO Chris Burroughs said in a statement Tuesday that OOIDA’s call for rate disclosure from brokers isn’t “about protecting truckers — it’s about handing private business information to competitors under the guise of transparency.” “If enacted, the rule or statutory provision would set a dangerous precedent not just for the logistics industry, but for all sectors of the American economy,” Burroughs said. “Will General Motors be forced to disclose what it pays for steel? Will Walmart have to publish its vendor contracts? The competitive market depends on private negotiations. This proposal dismantles that.” TIA represents third-party logistics providers, about three-quarters of which make less than $15 million in annual revenue, Burroughs said. “Requiring these firms to disclose negotiated pricing would increase administrative burdens, narrow margins, and risk forcing many to close,” he said. “The effects won’t stop with brokers.” <h3>‘Government interference’ </h3>Existing FMCSA regulations require brokers to keep records of transactions with motor carriers, and each party to a brokered transaction has the right to review the record of the transaction. But small carrier advocates have argued those regulations don’t work in practice, as there are no time limits or digital requirements on those transaction records. They also argue brokers can apply for waivers that constrain the ability of carriers to query transaction information. Among the mandates on the table in the proposed rulemaking, brokers would be required to keep transaction records in an electronic format, provide a detailed breakdown of charges and payments for each shipment, and respond to carrier information requests within 48 hours. OOIDA, which represents approximately 150,000 small business trucking companies, argued in a January comment supporting the new rulemaking that a lack of transparency “leads to a host of issues such as unfair charges, delayed payments, and fraudulent practices ... our members are asking for fairness in the marketplace.” Burroughs, meanwhile, argued that carriers have access to a range of tools that can give clarity on rate levels. “There are load boards, rate benchmarking tools, and widespread technology platforms that already support a real-time, competitive freight marketplace,” he said. “Forcing rate disclosure adds government interference where none is needed.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

The Transportation Intermediaries Association (TIA) is warning truck safety regulators in the US that proposed rules to allow trucking companies to review the rates shippers pay their brokers would harm small brokers and eventually lead to higher shipper and consumer prices. The issue of increased broker transparency with truckload carriers emerged last November when the Biden administration published a notice of proposed rulemaking to strengthen regulations around what information a broker must make available to carriers. In February, the Federal Motor Carrier Safety Administration (FMCSA) extended the comment period on the rulemaking, a move requested by the Small Business in Transportation Coalition (SBTC), one of the groups that petitioned the FMCSA for a rulemaking on broker transparency in 2020. That reopened an old wound in the truckload industry, with brokers arguing that allowing carriers to see the rates paid by shippers to intermediaries would undermine their ability to operate . TIA’s warning this week was prompted by testimony given to the US Senate Surface Transportation Subcommittee by Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Association (OOIDA). Pugh’s testimony this week centered around the idea that increasing rate transparency would help fight the increasing occurrences of freight theft and fraud in the truckload market. “As motor carriers are increasingly victimized by freight fraud, unpaid claims, dubious charges, unpaid loads, double brokered loads, and load-phishing schemes, the current lack of transparency has left them little to no means to defend themselves from fraud,” Pugh told the subcommittee. But TIA CEO Chris Burroughs said in a statement Tuesday that OOIDA’s call for rate disclosure from brokers isn’t “about protecting truckers — it’s about handing private business information to competitors under the guise of transparency.” “If enacted, the rule or statutory provision would set a dangerous precedent not just for the logistics industry, but for all sectors of the American economy,” Burroughs said. “Will General Motors be forced to disclose what it pays for steel? Will Walmart have to publish its vendor contracts? The competitive market depends on private negotiations. This proposal dismantles that.” TIA represents third-party logistics providers, about three-quarters of which make less than $15 million in annual revenue, Burroughs said. “Requiring these firms to disclose negotiated pricing would increase administrative burdens, narrow margins, and risk forcing many to close,” he said. “The effects won’t stop with brokers.” ‘Government interference’ Existing FMCSA regulations require brokers to keep records of transactions with motor carriers, and each party to a brokered transaction has the right to review the record of the transaction. But small carrier advocates have argued those regulations don’t work in practice, as there are no time limits or digital requirements on those transaction records. They also argue brokers can apply for waivers that constrain the ability of carriers to query transaction information. Among the mandates on the table in the proposed rulemaking, brokers would be required to keep transaction records in an electronic format, provide a detailed breakdown of charges and payments for each shipment, and respond to carrier information requests within 48 hours. OOIDA, which represents approximately 150,000 small business trucking companies, argued in a January comment supporting the new rulemaking that a lack of transparency “leads to a host of issues such as unfair charges, delayed payments, and fraudulent practices ... our members are asking for fairness in the marketplace.” Burroughs, meanwhile, argued that carriers have access to a range of tools that can give clarity on rate levels. “There are load boards, rate benchmarking tools, and widespread technology platforms that already support a real-time, competitive freight marketplace,” he said. “Forcing rate disclosure adds government interference where none is needed.” Contact Eric Johnson at eric.johnson@spglobal.com .

Trucking News

Truckload

Surface

Broker group warns against increased shipper-3PL rate transparency

<div class="phx-topic abstract-wrapper">The joint venture is accompanied by a long-term agreement that will lock in the supply of LNG to the ocean carrier’s fast-growing dual-fuel fleet that will increase to 123 vessels by 2029.</div>

The joint venture is accompanied by a long-term agreement that will lock in the supply of LNG to the ocean carrier’s fast-growing dual-fuel fleet that will increase to 123 vessels by 2029.

<div class="phx-topic">CMA CGM and TotalEnergies have formed a joint venture to co-develop and operate a new liquefied natural gas (LNG) bunkering vessel in the Amsterdam-Rotterdam-Antwerp region. Under a long-term agreement unveiled Wednesday, TotalEnergies will also supply CMA CGM with up to 360,000 tons of LNG per year until 2040. Rodolphe Saadé, chairman and CEO of CMA CGM Group, said the deal marks the first time a shipping company and an energy provider have agreed to jointly operate an LNG bunkering vessel. “It is a concrete way to scale up alternative fuels and accelerate the decarbonization of global trade,” Saadé said in a statement. The joint venture is subject to regulatory approval.The 20,000-cubic-meter vessel will be deployed in 2028 and be based in Rotterdam. The 50/50 JV between the two French companies will offer complete logistics service, from LNG reloading and storing access at gate terminal facilities to bunker delivery to both CMA CGM and other carriers operating LNG-powered ships. TotalEnergies has been operating Gas Agility, an 18,600-cubic-meter LNG bunker vessel, in the Amsterdam-Rotterdam-Antwerp area since 2020; the new vessel will be integrated into the LNG network and the established logistics infrastructure in the region. TotalEnergies also operates the LNG bunker vessel Gas Vitality in CMA CGM’s home port, the Port of Marseille. CMA CGM’s long-term supply agreement with TotalEnergies will run from 2028 to 2040 and will lock in the supply of LNG to the carrier’s dual-fuel fleet that will number 123 vessels by 2029. “LNG is today the most mature and immediately available solution to reduce the environmental footprint of maritime transport,” Patrick Pouyanné, chairman and CEO of TotalEnergies, said in the statement. <h3>Rising popularity of LNG-powered vessels </h3>LNG cuts greenhouse gas emissions by up to 20% compared with conventional marine fuel, with the potential to reduce emissions by 67% using biomethane and by 85% if synthetic LNG is used. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="8d37b682-b951-410d-bd1f-c060a3fe1b8b"></dynamic-object></div>The fuel choice by ocean carriers — at least for now — is increasingly between LNG and methanol that together comprised 70% of the total 1.7 million TEUs in orders made in 2024, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. While methanol led the way in 2023, last year saw a resurgence in LNG-capable ship orders amid growing concerns over the availability of methanol at scale, and that LNG shopping spree has continued in 2025. Just last week, Mediterranean Shipping Co. ordered six 22,000-TEU dual-fuel LNG vessels and upsized another six LNG-fueled container ships from 19,000 TEUs to 22,000 TEUs, while Yang Ming ordered seven 15,000-TEU dual-fuel LNG ships. LNG is produced from fossil fuel, but the intention of dual-fuel shipowners is to gradually replace conventional LNG with more sustainable bio-methane or synthetic e-LNG that is produced using renewable energy and captured carbon. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

CMA CGM and TotalEnergies have formed a joint venture to co-develop and operate a new liquefied natural gas (LNG) bunkering vessel in the Amsterdam-Rotterdam-Antwerp region. Under a long-term agreement unveiled Wednesday, TotalEnergies will also supply CMA CGM with up to 360,000 tons of LNG per year until 2040. Rodolphe Saadé, chairman and CEO of CMA CGM Group, said the deal marks the first time a shipping company and an energy provider have agreed to jointly operate an LNG bunkering vessel. “It is a concrete way to scale up alternative fuels and accelerate the decarbonization of global trade,” Saadé said in a statement. The joint venture is subject to regulatory approval. The 20,000-cubic-meter vessel will be deployed in 2028 and be based in Rotterdam. The 50/50 JV between the two French companies will offer complete logistics service, from LNG reloading and storing access at gate terminal facilities to bunker delivery to both CMA CGM and other carriers operating LNG-powered ships. TotalEnergies has been operating Gas Agility, an 18,600-cubic-meter LNG bunker vessel, in the Amsterdam-Rotterdam-Antwerp area since 2020; the new vessel will be integrated into the LNG network and the established logistics infrastructure in the region. TotalEnergies also operates the LNG bunker vessel Gas Vitality in CMA CGM’s home port, the Port of Marseille. CMA CGM’s long-term supply agreement with TotalEnergies will run from 2028 to 2040 and will lock in the supply of LNG to the carrier’s dual-fuel fleet that will number 123 vessels by 2029. “LNG is today the most mature and immediately available solution to reduce the environmental footprint of maritime transport,” Patrick Pouyanné, chairman and CEO of TotalEnergies, said in the statement. Rising popularity of LNG-powered vessels LNG cuts greenhouse gas emissions by up to 20% compared with conventional marine fuel, with the potential to reduce emissions by 67% using biomethane and by 85% if synthetic LNG is used. The fuel choice by ocean carriers — at least for now — is increasingly between LNG and methanol that together comprised 70% of the total 1.7 million TEUs in orders made in 2024, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. While methanol led the way in 2023, last year saw a resurgence in LNG-capable ship orders amid growing concerns over the availability of methanol at scale, and that LNG shopping spree has continued in 2025. Just last week, Mediterranean Shipping Co. ordered six 22,000-TEU dual-fuel LNG vessels and upsized another six LNG-fueled container ships from 19,000 TEUs to 22,000 TEUs, while Yang Ming ordered seven 15,000-TEU dual-fuel LNG ships. LNG is produced from fossil fuel, but the intention of dual-fuel shipowners is to gradually replace conventional LNG with more sustainable bio-methane or synthetic e-LNG that is produced using renewable energy and captured carbon. Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Asia-Europe

CMA CGM, TotalEnergies ink deal to jointly operate LNG bunkering vessel

<div class="phx-topic abstract-wrapper">Canada’s port stakeholders are hopeful the new prime minister and world-renowned economist will fast-track major projects and modernize labor negotiations.</div>

Canada’s port stakeholders are hopeful the new prime minister and world-renowned economist will fast-track major projects and modernize labor negotiations.

<div class="phx-topic">The new government of Prime Minster Mark Carney has created rare sentiment among Canadian shipping stakeholders about action out of Ottawa: overflowing optimism. Carney, an economist who headed both the Bank of Canada and the Bank of England, brings a hard-charging approach focused on galvanizing the county’s sagging productivity. He rode into office in March thanks to an electorate united in anger and frustration over President Donald Trump’s tariffs and insults over Canada’s sovereignty. The changed relationship with the US has also galvanized efforts to lessen Canada’s trade dependence on its neighbor. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6047895_0.1.jpg"></img></div>Carney’s pledge to streamline the regulatory bureaucracy that has made Canada an Organisation for Economic Co-operation and Development laggard in completing major infrastructure projects is good news for ports and railroads that have seen regulatory approval timelines stretch past a decade. The former Goldman Sachs executive is the best chance the shipping industry has seen in a decade to reduce the power of organized transportation labor to cripple national supply chains when contract negotiations break down, according to one person tied to port labor policy. More competitive tax policies — along with faster regulatory approvals and more guardrails to keep labor-employer negotiations constructive — will make Canada more attractive to investment, said Eric Harvey, president and CEO of the Railway Association of Canada. “We are at a rare moment of opportunity. Government and industry alike seem willing to have a serious conversation about what it takes to keep supply chains moving and competitive,” Harvey told the Journal of Commerce. <h3>Pushing big projects forward </h3>Carney’s Liberal Party on June 20 passed legislation giving the federal government power to fast-track projects deemed of national importance, streamlining the current approval process involving environmental regulators and indigenous parties. Enacting Bill C-5 will benefit projects such as the more than C$3 billion mega-terminal the Vancouver Fraser Port Authority has sought for two decades, as well as Montreal’s C$1.57 million Contrecoeur terminal project Both projects will need more federal investment to lure marine terminal operators, with Vancouver needing well over C$1 billion from the federal government, according to two people familiar with the project. The port has yet to request proposals for an operator of the Robert Bank Terminal 2 but in July began its search for a construction company to plan and build the 2.4 million-TEU facility. The Montreal Port Authority (MPA) also plans to announce this year the concessionaire for the builder and operator of its planned terminal. The facility would be located about 43 miles downriver from the city along the St. Lawrence and have an annual capacity of 1.15 million TEUs. The MPA couldn’t attract a partner in its first attempt two years ago after the winning bidder balked. Since then, the Quebec provincial government and Canada’s infrastructure bank have kicked in C$130 million and $C300 million, respectively, potentially making the project more attractive to bidders. In awarding the money to the Contrecoeur terminal project in February, Quebec Premier François Legault stressed the need to “diversify our markets to reduce our dependence on the United States.” Given his corporate background, Carney is loath to look to public coffers for all the funding and instead will turn to large Canadian investors, according to one veteran railroad leader. <h3>Rethinking transport labor negotiations </h3>While Carney hasn’t publicly addressed organized transportation labor, port stakeholders see a new government ready to listen, have a conversation and then act, in stark contrast to his Liberal predecessor Justin Trudeau. <a href="https://www.joc.com/article/bc-ports-longshore-unions-need-new-bargaining-process-report-6026105">The release of a report by the Labor Ministry</a> in May offers some recommendations on how British Columbia ports can avoid labor unrest that has shaken their image as unexcitingly dependable. <a href="https://www.canada.ca/content/dam/esdc-edsc/documents/programs/labour-relations/reports/industrial-inquiry-commission-longshoring-west-coast-ports/Report-Recommendations-EN.pdf">The report</a>, undertaken after two years of labor disruptions to the ports of Vancouver and Prince Rupert, strongly recommends that unions bargain with employers on a province-wide basis, rather than a port- or employer-specific basis. The report didn’t hold back in its criticism of the current model that “is far from healthy, and is marred by ongoing conflicts, misaligned priorities and a fiercely protectionist stance by the union.” The report’s recommendation of the creation of a “special mediator” to monitor contract negotiations should be adopted by other transportation industries including railroads, the authors argued in the report, released May 8. The last strike involving major railroads Canadian National and Canadian Pacific railways <a href="https://www.joc.com/article/canadian-ports-liner-operators-bracing-for-rail-strike-impact-5708554">lasted just 17 hours in August 2024</a> but disrupted cargo transport nonetheless, as both railroads began embargoing cargo a week prior. Because the current model doesn’t allow the federal government to be fully informed and there isn’t a formal process for dispute intervention, unions can challenge back-to-work orders by saying there are other, less drastic steps that can be taken to keep bargaining on track, according to the report. The report notes that the need for Canada’s ports to become more competitive has “only been amplified” by Trump’s then-tariff threats. Trump has already made it slightly less attractive for US importers to ship imports through Canadian ports. In his May executive order seeking to rebuild US shipbuilding, Trump closed the loophole of the Harbor Maintenance Tax, a 0.125% charge on US imports. The attacks by Trump have put a spotlight on years of weakened Canada productivity, giving Carney arguably the strongest mandate in years north of the border to shake up how the country builds port infrastructure and responds to breakdowns in labor-employer negotiations. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

The new government of Prime Minster Mark Carney has created rare sentiment among Canadian shipping stakeholders about action out of Ottawa: overflowing optimism. Carney, an economist who headed both the Bank of Canada and the Bank of England, brings a hard-charging approach focused on galvanizing the county’s sagging productivity. He rode into office in March thanks to an electorate united in anger and frustration over President Donald Trump’s tariffs and insults over Canada’s sovereignty. The changed relationship with the US has also galvanized efforts to lessen Canada’s trade dependence on its neighbor. Carney’s pledge to streamline the regulatory bureaucracy that has made Canada an Organisation for Economic Co-operation and Development laggard in completing major infrastructure projects is good news for ports and railroads that have seen regulatory approval timelines stretch past a decade. The former Goldman Sachs executive is the best chance the shipping industry has seen in a decade to reduce the power of organized transportation labor to cripple national supply chains when contract negotiations break down, according to one person tied to port labor policy. More competitive tax policies — along with faster regulatory approvals and more guardrails to keep labor-employer negotiations constructive — will make Canada more attractive to investment, said Eric Harvey, president and CEO of the Railway Association of Canada. “We are at a rare moment of opportunity. Government and industry alike seem willing to have a serious conversation about what it takes to keep supply chains moving and competitive,” Harvey told the Journal of Commerce. Pushing big projects forward Carney’s Liberal Party on June 20 passed legislation giving the federal government power to fast-track projects deemed of national importance, streamlining the current approval process involving environmental regulators and indigenous parties. Enacting Bill C-5 will benefit projects such as the more than C$3 billion mega-terminal the Vancouver Fraser Port Authority has sought for two decades, as well as Montreal’s C$1.57 million Contrecoeur terminal project Both projects will need more federal investment to lure marine terminal operators, with Vancouver needing well over C$1 billion from the federal government, according to two people familiar with the project. The port has yet to request proposals for an operator of the Robert Bank Terminal 2 but in July began its search for a construction company to plan and build the 2.4 million-TEU facility. The Montreal Port Authority (MPA) also plans to announce this year the concessionaire for the builder and operator of its planned terminal. The facility would be located about 43 miles downriver from the city along the St. Lawrence and have an annual capacity of 1.15 million TEUs. The MPA couldn’t attract a partner in its first attempt two years ago after the winning bidder balked. Since then, the Quebec provincial government and Canada’s infrastructure bank have kicked in C$130 million and $C300 million, respectively, potentially making the project more attractive to bidders. In awarding the money to the Contrecoeur terminal project in February, Quebec Premier François Legault stressed the need to “diversify our markets to reduce our dependence on the United States.” Given his corporate background, Carney is loath to look to public coffers for all the funding and instead will turn to large Canadian investors, according to one veteran railroad leader. Rethinking transport labor negotiations While Carney hasn’t publicly addressed organized transportation labor, port stakeholders see a new government ready to listen, have a conversation and then act, in stark contrast to his Liberal predecessor Justin Trudeau. The release of a report by the Labor Ministry in May offers some recommendations on how British Columbia ports can avoid labor unrest that has shaken their image as unexcitingly dependable. The report , undertaken after two years of labor disruptions to the ports of Vancouver and Prince Rupert, strongly recommends that unions bargain with employers on a province-wide basis, rather than a port- or employer-specific basis. The report didn’t hold back in its criticism of the current model that “is far from healthy, and is marred by ongoing conflicts, misaligned priorities and a fiercely protectionist stance by the union.” The report’s recommendation of the creation of a “special mediator” to monitor contract negotiations should be adopted by other transportation industries including railroads, the authors argued in the report, released May 8. The last strike involving major railroads Canadian National and Canadian Pacific railways lasted just 17 hours in August 2024 but disrupted cargo transport nonetheless, as both railroads began embargoing cargo a week prior. Because the current model doesn’t allow the federal government to be fully informed and there isn’t a formal process for dispute intervention, unions can challenge back-to-work orders by saying there are other, less drastic steps that can be taken to keep bargaining on track, according to the report. The report notes that the need for Canada’s ports to become more competitive has “only been amplified” by Trump’s then-tariff threats. Trump has already made it slightly less attractive for US importers to ship imports through Canadian ports. In his May executive order seeking to rebuild US shipbuilding, Trump closed the loophole of the Harbor Maintenance Tax, a 0.125% charge on US imports. The attacks by Trump have put a spotlight on years of weakened Canada productivity, giving Carney arguably the strongest mandate in years north of the border to shake up how the country builds port infrastructure and responds to breakdowns in labor-employer negotiations. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Port News

Longshore labor

North-American rail

North American ports

Carney has fresh opportunity to galvanize Canadian shipping industry

<div class="phx-topic abstract-wrapper">The $51.8 million cash deal includes Marten’s physical assets and the transfer of its existing contracts with food and beverage shippers. </div>

The $51.8 million cash deal includes Marten’s physical assets and the transfer of its existing contracts with food and beverage shippers.

<div class="phx-topic">Hub Group has positioned itself to be among the largest temperature-controlled intermodal operators in the US, saying Tuesday it will acquire the reefer intermodal division of Marten Transport for $51.8 million in cash. Hub will add nearly 1,250 refrigerated containers to its existing fleet. “We are excited to more than double Hub Group’s temperature-controlled container fleet and leverage our existing intermodal network to serve Marten Intermodal’s customers,” Hub Group CEO Phil Yeager said in a statement. “We are committed to sustaining the strong service and growth momentum of our leading temperature-controlled intermodal offering.” The acquisition includes Marten’s physical assets and the transfer of its existing contracts with food and beverage shippers. The deal, expected to close by the end of the third quarter, means Illinois-based Hub will be approximately on par in the reefer intermodal space with Prime Inc., which operates a significant trucking fleet and owns about 2,200 refrigerated containers, according to data from Jason Hilsenbeck, president of Loadmatch.com, a drayage tracking platform. Hub owned a little more than 900 reefer containers before the Marten transaction. J.B. Hunt Transport Services remains the market leader in the temperature-controlled intermodal space with a refrigerated container fleet of about 4,700 boxes, more than twice the size of Hub and Prime. <h3>Risks in the reefer space </h3>Wisconsin-based Marten Transport, known for its refrigerated truckload business, will be leaving the intermodal space entirely. The decision reflects a broader industry trend driven in part by Class I railroads raising prices for trailer-on-flatcar loads, thus encouraging customers to shift toward containerized freight, which is easier to stack and lift at terminals. But containers also create operational challenges in the reefer space. Temperature-controlled containers are heavier than trailers due to the combined weight of the box, chassis, insulation and generator sets used to power the units. The additional weight results in fewer pallets being able to be legally loaded into a container than a truck trailer, particularly dense items such as frozen foods. The capacity gap between trailers and containers has narrowed in recent years, but it remains a concern for shippers. For time-sensitive perishable products such as produce or ice cream, trucking remains the faster, more reliable option. Despite those risks, Hub Group apparently sees an opportunity to expand its reach among food and beverage shippers and supplement its dry intermodal business with new refrigerated offerings. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Hub Group has positioned itself to be among the largest temperature-controlled intermodal operators in the US, saying Tuesday it will acquire the reefer intermodal division of Marten Transport for $51.8 million in cash. Hub will add nearly 1,250 refrigerated containers to its existing fleet. “We are excited to more than double Hub Group’s temperature-controlled container fleet and leverage our existing intermodal network to serve Marten Intermodal’s customers,” Hub Group CEO Phil Yeager said in a statement. “We are committed to sustaining the strong service and growth momentum of our leading temperature-controlled intermodal offering.” The acquisition includes Marten’s physical assets and the transfer of its existing contracts with food and beverage shippers. The deal, expected to close by the end of the third quarter, means Illinois-based Hub will be approximately on par in the reefer intermodal space with Prime Inc., which operates a significant trucking fleet and owns about 2,200 refrigerated containers, according to data from Jason Hilsenbeck, president of Loadmatch.com, a drayage tracking platform. Hub owned a little more than 900 reefer containers before the Marten transaction. J.B. Hunt Transport Services remains the market leader in the temperature-controlled intermodal space with a refrigerated container fleet of about 4,700 boxes, more than twice the size of Hub and Prime. Risks in the reefer space Wisconsin-based Marten Transport, known for its refrigerated truckload business, will be leaving the intermodal space entirely. The decision reflects a broader industry trend driven in part by Class I railroads raising prices for trailer-on-flatcar loads, thus encouraging customers to shift toward containerized freight, which is easier to stack and lift at terminals. But containers also create operational challenges in the reefer space. Temperature-controlled containers are heavier than trailers due to the combined weight of the box, chassis, insulation and generator sets used to power the units. The additional weight results in fewer pallets being able to be legally loaded into a container than a truck trailer, particularly dense items such as frozen foods. The capacity gap between trailers and containers has narrowed in recent years, but it remains a concern for shippers. For time-sensitive perishable products such as produce or ice cream, trucking remains the faster, more reliable option. Despite those risks, Hub Group apparently sees an opportunity to expand its reach among food and beverage shippers and supplement its dry intermodal business with new refrigerated offerings. Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

Cool Cargo News

Hub Group boosts reefer intermodal business with Marten acquisition

<div class="phx-topic abstract-wrapper">Creating a transcontinental railroad is a test of whether North American freight can become globally competitive before it’s leapfrogged by digital platforms, foreign investment and shifting supply chains. </div>

Creating a transcontinental railroad is a test of whether North American freight can become globally competitive before it’s leapfrogged by digital platforms, foreign investment and shifting supply chains.

<div class="phx-topic">Over three decades in rail and logistics — from opening Canadian National Railway’s (CN’s) China offices to overseeing over $1 billion a year in rail and truck procurement at Maersk — I’ve seen our industry at its best and most frustrating. These experiences taught me that success in freight isn’t about owning more track, it’s about making what you have work together, predictably and seamlessly. Coordination and integration — not just scale — unlock value in modern freight. That’s why I believe creating a transcontinental railroad isn’t just corporate consolidation. It’s a test of whether North American freight can become globally competitive before it’s leapfrogged by digital platforms, foreign investment and shifting supply chains. We’re in a global race. The real question is whether we’re ready to evolve from a fragmented, legacy-bound system into a digitally enabled, customer-centric network. Modal conversion is hard. At CN, we worked to divert truck volume onto rail. But at Coyote and Maersk, I saw the reverse — when unreliable interchange, visibility gaps and inconsistent service pushed freight back to the highway. Modal shift doesn’t stick unless the product performs across every touchpoint: drayage, chassis, dwell, and data. <a href="https://www.joc.com/article/potential-up-ns-tie-up-would-cause-major-shift-in-us-intermodal-market-6046025">A transcontinental merger</a> would give coast-to-coast reach on their own rails. That’s not just a coverage map — it’s a reimagining of how service is delivered. It could finally make rail more competitive against truck movements, but only if the combined company behaves more like a platform and less like a legacy carrier. That means unifying schedules, data, and service metrics. But let’s be clear — railroads don’t have a great track record here. Past mergers often promised integration but delivered disruption: slower transit, misaligned systems and customer confusion. If the potential tie-up between Union Pacific and Norfolk Southern becomes another top-down rebrand without operational and digital harmony, we’ll squander a once-in-a-generation opportunity. Today’s shippers expect predictive insights, not just tracking pings. Modern tools are raising the bar by providing predictive truck-rail diversion intelligence and transforming frontline operations into structured, searchable data. These aren’t bolt-ons; they’re rewiring how decisions get made and how freight gets moved. Railroads must embed this kind of intelligence into their operating DNA. Visibility is no longer a feature — it’s the product. <h3>‘Align incentives’ </h3>I worked with the Chinese Ministry of Railways to consider a Chengdu to Narvik, Norway, route — ultimately connecting to Halifax. Three-gauge changes, uncertain infrastructure and limited partners made it unachievable. But today, weekly trains run from Asia to Europe. The difference? Capital, coordination and a unified commercial mindset. That’s the blueprint we need. North America has the backbone of rail — what it lacks is connective tissue. A transcontinental railroad would give one network end-to-end visibility and control. Think the kind of integrated vision Cornelius Vanderbilt dreamed of. In the Gilded Age, railroads shaped economies and connected cities. Today’s equivalent is data integration and seamless execution. We don’t need more steel — we need more reliability. For shippers, that means fewer surprises and a more resilient supply chain. Handled correctly, this potential merger could rebuild a product that earns modal conversion — but only if we align incentives across the ecosystem. Every player must show up. Shortlines need to get in the game by pushing for digital handshakes, carload connectivity, and shared metrics. Intermodal marketing companies can bring data and customers to the table and help shape lane strategies and expectations. Steamship lines port-to-door are your future. Make inland rail performance a C-suite issue. Bulk/merchandise shippers should demand parity: carload deserves the same precision as intermodal. Finally, logistics tech and third-party logistics providers must embed intelligence into the freight fabric, not around it. Handled poorly, this could become another merger that burdens operations and alienates customers. In a world of AI-driven dispatch and predictive ETAs, the window to rewire American freight is closing fast. Connecting teams, systems and expectations matters more than just connecting rail lines. Modernize now or risk handing the next decade of North American freight to faster, more agile competitors. Freight isn’t just a cost center — it’s a competitive edge. We either lead or step aside. That’s why I support a transcontinental rail system. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO), and Patriot Rail. He can be reached at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

Over three decades in rail and logistics — from opening Canadian National Railway’s (CN’s) China offices to overseeing over $1 billion a year in rail and truck procurement at Maersk — I’ve seen our industry at its best and most frustrating. These experiences taught me that success in freight isn’t about owning more track, it’s about making what you have work together, predictably and seamlessly. Coordination and integration — not just scale — unlock value in modern freight. That’s why I believe creating a transcontinental railroad isn’t just corporate consolidation. It’s a test of whether North American freight can become globally competitive before it’s leapfrogged by digital platforms, foreign investment and shifting supply chains. We’re in a global race. The real question is whether we’re ready to evolve from a fragmented, legacy-bound system into a digitally enabled, customer-centric network. Modal conversion is hard. At CN, we worked to divert truck volume onto rail. But at Coyote and Maersk, I saw the reverse — when unreliable interchange, visibility gaps and inconsistent service pushed freight back to the highway. Modal shift doesn’t stick unless the product performs across every touchpoint: drayage, chassis, dwell, and data. A transcontinental merger would give coast-to-coast reach on their own rails. That’s not just a coverage map — it’s a reimagining of how service is delivered. It could finally make rail more competitive against truck movements, but only if the combined company behaves more like a platform and less like a legacy carrier. That means unifying schedules, data, and service metrics. But let’s be clear — railroads don’t have a great track record here. Past mergers often promised integration but delivered disruption: slower transit, misaligned systems and customer confusion. If the potential tie-up between Union Pacific and Norfolk Southern becomes another top-down rebrand without operational and digital harmony, we’ll squander a once-in-a-generation opportunity. Today’s shippers expect predictive insights, not just tracking pings. Modern tools are raising the bar by providing predictive truck-rail diversion intelligence and transforming frontline operations into structured, searchable data. These aren’t bolt-ons; they’re rewiring how decisions get made and how freight gets moved. Railroads must embed this kind of intelligence into their operating DNA. Visibility is no longer a feature — it’s the product. ‘Align incentives’ I worked with the Chinese Ministry of Railways to consider a Chengdu to Narvik, Norway, route — ultimately connecting to Halifax. Three-gauge changes, uncertain infrastructure and limited partners made it unachievable. But today, weekly trains run from Asia to Europe. The difference? Capital, coordination and a unified commercial mindset. That’s the blueprint we need. North America has the backbone of rail — what it lacks is connective tissue. A transcontinental railroad would give one network end-to-end visibility and control. Think the kind of integrated vision Cornelius Vanderbilt dreamed of. In the Gilded Age, railroads shaped economies and connected cities. Today’s equivalent is data integration and seamless execution. We don’t need more steel — we need more reliability. For shippers, that means fewer surprises and a more resilient supply chain. Handled correctly, this potential merger could rebuild a product that earns modal conversion — but only if we align incentives across the ecosystem. Every player must show up. Shortlines need to get in the game by pushing for digital handshakes, carload connectivity, and shared metrics. Intermodal marketing companies can bring data and customers to the table and help shape lane strategies and expectations. Steamship lines port-to-door are your future. Make inland rail performance a C-suite issue. Bulk/merchandise shippers should demand parity: carload deserves the same precision as intermodal. Finally, logistics tech and third-party logistics providers must embed intelligence into the freight fabric, not around it. Handled poorly, this could become another merger that burdens operations and alienates customers. In a world of AI-driven dispatch and predictive ETAs, the window to rewire American freight is closing fast. Connecting teams, systems and expectations matters more than just connecting rail lines. Modernize now or risk handing the next decade of North American freight to faster, more agile competitors. Freight isn’t just a cost center — it’s a competitive edge. We either lead or step aside. That’s why I support a transcontinental rail system. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO), and Patriot Rail. He can be reached at paul.tonsager@multimodalsolutions.io .

Possible transcontinental rail a chance to ‘rewire’ US freight movements

<div class="phx-topic abstract-wrapper">Thanks in large part to the current tariff environment, boardrooms are now increasingly focusing on mitigating their exposure to these new taxes and ensuring they’ll have sufficient inventories no matter the disruption.</div>

Thanks in large part to the current tariff environment, boardrooms are now increasingly focusing on mitigating their exposure to these new taxes and ensuring they’ll have sufficient inventories no matter the disruption.

<div class="phx-topic">A recent annual shipping industry event revealed increased attention from the C-suite on tariff and risk mitigation and how far we’ve come in addressing those items, as well as the need for more sophisticated sourcing strategies. At the American Association of Exporters and Importers’ (AAEI’s) annual conference in late June, I witnessed a noticeable shift in terms of a new focus on mitigating trade-related costs and vulnerabilities. This expanded the scope of the Washington, DC event that traditionally centers around compliance, facilitation and influencing policy change. Thanks in large part to the current tariff environment, boardrooms are now increasingly focusing on mitigating their exposure to these new taxes and ensuring they’ll have sufficient inventories no matter the disruption. The first session set the tone, with panel moderator Laura Siegel Rabinowitz of Greenberg Traurig LLP opening with a telling observation: “Companies today are now looking for sourcing strategies involving classification, valuation, and country of origin.” As a trade optimization strategist, I was all smiles. While current tariff rates have certainly put risk planning back into the spotlight, the movement can arguably be traced to the COVID-19 pandemic, when many companies found themselves critically exposed by single-sourcing components. When combined with the unprecedented blockage of the Suez Canal, risk mitigation lights began burning in earnest. But to support the sourcing strategies being raised, companies may need to rethink existing workflows, procedures and tools that would enable trade compliance to work proactively with procurement. The process begins with the corporate buyers/engineering teams sending a list of new products/components to trade compliance for classification. The resulting harmonized system (HS) codes illuminate tariff obligations, identify eligibility for potential Free Trade Agreement (FTA) benefits, and provide visibility to any admissibility requirements that would need to be satisfied as a condition of import. In addition, by involving trade compliance at the earliest stages of new product build/buy decisions, it promotes the potential discovery of tariff engineering opportunities capable of producing surprising savings. <h3>The ‘risk index’ and due diligence </h3>With tariff data in hand, procurement departments can move beyond surface-level quotes based on product cost alone and conduct a more accurate landed cost analysis across pre-qualified suppliers. I’ve personally witnessed examples where purchase orders were awarded to suppliers in China based solely on a lower cost of goods, versus Mexico, which qualified for FTA, had lower transportation costs, and provided shorter door-to-door delivery times. Landed-cost modeling tools allow companies to perform a more accurate “apples-to-apples” comparison by factoring all the costs associated with the door-to-door movement of an international order. They also support dynamic scenario planning by allowing the user to toggle different Incoterms, shipping modes and related transport costs to find the best balance of costs and operational needs. This step also needs to include a key element of strategic sourcing that is often overlooked, and that is understanding a country’s “risk index” — that is, how it scores against a variety of factors, all capable of adding unplanned costs and/or disruption. These include geopolitical stability, crime and corruption, complexity and cost of trade, infrastructure reliability (labor, energy), environmental and social governance (ESG), and natural disasters and climate risk. The final step is due diligence via supplier vetting. Remaining suppliers should be screened through tools that can trace raw materials back to their sources, ensuring compliance with the Uyghur Forced Labor Prevention Act and similar controls. This traceability is critical — not just for ethical sourcing, but also for maintaining customs compliance and brand reputation. With this three-step process, corporate procurement departments gain a complete, comprehensive view that balances cost, compliance, risk and continuity with data that can be shared with other stakeholders as part of a broader, collaborative effort. When implemented as corporate policy, it ensures that a purchase order cannot be awarded without completing this analysis. In short, it just simply makes sense. While tariffs might be the current disruptor headline, the broader truth is that supply chain risk lurks in many corners — be it political unrest, environmental disasters, cyberattacks, and even regulatory whiplash. These risks and other potential disruptions have always been part-and-parcel of international trade. However, the current issue is putting trade compliance departments in the boardroom spotlight, providing an opportune time to lobby for those badly needed resources, systems and process changes. Or, as one event panelist who aptly quoted Winston Churchill said, “Never let a good crisis go to waste.” William G. “Jerry” Peck is a licensed customs broker and trade compliance and optimization specialist with Avalara and can be reached at <a href="mailto:jerry.peck@avalara.com">jerry.peck@avalara.com</a>. </div>

A recent annual shipping industry event revealed increased attention from the C-suite on tariff and risk mitigation and how far we’ve come in addressing those items, as well as the need for more sophisticated sourcing strategies. At the American Association of Exporters and Importers’ (AAEI’s) annual conference in late June, I witnessed a noticeable shift in terms of a new focus on mitigating trade-related costs and vulnerabilities. This expanded the scope of the Washington, DC event that traditionally centers around compliance, facilitation and influencing policy change. Thanks in large part to the current tariff environment, boardrooms are now increasingly focusing on mitigating their exposure to these new taxes and ensuring they’ll have sufficient inventories no matter the disruption. The first session set the tone, with panel moderator Laura Siegel Rabinowitz of Greenberg Traurig LLP opening with a telling observation: “Companies today are now looking for sourcing strategies involving classification, valuation, and country of origin.” As a trade optimization strategist, I was all smiles. While current tariff rates have certainly put risk planning back into the spotlight, the movement can arguably be traced to the COVID-19 pandemic, when many companies found themselves critically exposed by single-sourcing components. When combined with the unprecedented blockage of the Suez Canal, risk mitigation lights began burning in earnest. But to support the sourcing strategies being raised, companies may need to rethink existing workflows, procedures and tools that would enable trade compliance to work proactively with procurement. The process begins with the corporate buyers/engineering teams sending a list of new products/components to trade compliance for classification. The resulting harmonized system (HS) codes illuminate tariff obligations, identify eligibility for potential Free Trade Agreement (FTA) benefits, and provide visibility to any admissibility requirements that would need to be satisfied as a condition of import. In addition, by involving trade compliance at the earliest stages of new product build/buy decisions, it promotes the potential discovery of tariff engineering opportunities capable of producing surprising savings. The ‘risk index’ and due diligence With tariff data in hand, procurement departments can move beyond surface-level quotes based on product cost alone and conduct a more accurate landed cost analysis across pre-qualified suppliers. I’ve personally witnessed examples where purchase orders were awarded to suppliers in China based solely on a lower cost of goods, versus Mexico, which qualified for FTA, had lower transportation costs, and provided shorter door-to-door delivery times. Landed-cost modeling tools allow companies to perform a more accurate “apples-to-apples” comparison by factoring all the costs associated with the door-to-door movement of an international order. They also support dynamic scenario planning by allowing the user to toggle different Incoterms, shipping modes and related transport costs to find the best balance of costs and operational needs. This step also needs to include a key element of strategic sourcing that is often overlooked, and that is understanding a country’s “risk index” — that is, how it scores against a variety of factors, all capable of adding unplanned costs and/or disruption. These include geopolitical stability, crime and corruption, complexity and cost of trade, infrastructure reliability (labor, energy), environmental and social governance (ESG), and natural disasters and climate risk. The final step is due diligence via supplier vetting. Remaining suppliers should be screened through tools that can trace raw materials back to their sources, ensuring compliance with the Uyghur Forced Labor Prevention Act and similar controls. This traceability is critical — not just for ethical sourcing, but also for maintaining customs compliance and brand reputation. With this three-step process, corporate procurement departments gain a complete, comprehensive view that balances cost, compliance, risk and continuity with data that can be shared with other stakeholders as part of a broader, collaborative effort. When implemented as corporate policy, it ensures that a purchase order cannot be awarded without completing this analysis. In short, it just simply makes sense. While tariffs might be the current disruptor headline, the broader truth is that supply chain risk lurks in many corners — be it political unrest, environmental disasters, cyberattacks, and even regulatory whiplash. These risks and other potential disruptions have always been part-and-parcel of international trade. However, the current issue is putting trade compliance departments in the boardroom spotlight, providing an opportune time to lobby for those badly needed resources, systems and process changes. Or, as one event panelist who aptly quoted Winston Churchill said, “Never let a good crisis go to waste.” William G. “Jerry” Peck is a licensed customs broker and trade compliance and optimization specialist with Avalara and can be reached at jerry.peck@avalara.com .

Latest market ‘disruptor’ requires focused procurement approach by C-suites

Manzanillo

{name} {valueY.formatNumber('###,###.')} 
 Y-o-Y: {Manzanillo_YoY_Change.formatNumber('#.0%')}

Lazaro Cardenas

{name} {valueY.formatNumber('###,###.')} 
 Y-o-Y: {Lazaro_Cardenas_YoY_Change.formatNumber('#.0%')}

Veracruz

{name} {valueY.formatNumber('###,###.')} 
 Y-o-Y: {Veracruz_YoY_Change.formatNumber('#.0%')}

Altamira

{name} {valueY.formatNumber('###,###.')} 
 Y-o-Y: {Altamira_YoY_Change.formatNumber('#.0%')}

Ensenada

{name} {valueY.formatNumber('###,###.')} 
 Y-o-Y: {Ensenada_YoY_Change.formatNumber('#.0%')}

Import volumes through major Mexico ports is provided by the Secretariat of Communications and Transport (SCT) includes laden and empty containers. [SCT](https://www.gob.mx/sct)

Import volumes through Mexico ports (SCT)

Top 5 Mexico ports: Manzanillo, Lazaro Cardenas, Veracruz, Altamira, Ensenada imports (year-over-year-change) Gateway

<div class="phx-topic abstract-wrapper">US shippers have pulled forward as much cargo as they can ahead of the latest deadlines for higher US tariffs, leaving carriers little choice but to cancel more voyages. </div>

US shippers have pulled forward as much cargo as they can ahead of the latest deadlines for higher US tariffs, leaving carriers little choice but to cancel more voyages.

<div class="phx-topic">Ocean carriers have begun to reel in capacity ahead of the mid-August expiry of the 90-day pause on higher US tariffs on Chinese goods, with an increasing number of trans-Pacific container services getting blanked for the rest of July. And with most pre-higher tariff imports on the water or ready to ship, spot rates look set for further weakness through the end of summer. Some 175,000 TEUs of container capacity is set to be blanked during July, according to data from maritime intelligence provider eeSea, amounting to 11% of deployed capacity between Asia and the US West Coast. That is an uptick from the 118,500 TEUs of capacity blanked in June, which accounted for about 9% of deployed capacity. The canceled departures from Asia coincide with <a href="https://www.tradecomplianceresourcehub.com/2025/07/17/trump-2-0-tariff-tracker/">the Aug. 12 deadline for the Trump administration to impose country-specific tariffs on China</a> in the absence of a new trade deal. With an Aug. 1 deadline for trade talks with other Asian countries, demand was already drying up, with Chinese goods the last that could get on a ship and enter the US in time to avoid the higher rates. “It’s already too late to ship product from Vietnam and Southeast Asia to beat the Aug. 1 deadline,” an ocean carrier source told the Journal of Commerce. “There has been no spike in imports from Vietnam since June, when it was possible to beat the Aug. 1 deadline, so demand simply isn’t there.” Indeed, many of the services culled through July also call southern Chinese ports that serve as transshipment points for other Asian goods, or services that directly call Southeast Asia. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1c1d9578-c129-4d4e-a136-e220473bd136"></dynamic-object></div>OOCL canceled eastbound sailings on its Pacific South China Express (PSX) service for the last two weeks of July, according to Hong Kong-based logistics provider Honour Lane Shipping. The PSX service will offer an eastbound ad hoc call to Shanghai, though, during the last week of July, with only one call at the southern port of Yantian. Express services are typically the first to get blanked, with CU Lines, SeaLead and other niche carriers also canceling services through July. But the demand slowdown is also hitting big-ship services as well. CMA CGM canceled an eastbound voyage on its Columbus Jax service, which offers average weekly capacity of about 13,000 TEUs, for the last week of July. The pendulum service, which switches to US East Coast ports on its westbound voyages, also calls Malaysia’s Port Klang, Thailand’s Laem Chabang and Vietnam’s Cai Mep.Cosco Shipping canceled a July voyage on its 13,000-TEU Asia-US West Coast service, while the Premier Alliance has also canceled two July voyages on its 13,000-TEU MP2 service. <h3>Weaker second half expected</h3>While a trade deal with China or other Asian countries may be in the offing, forwarders and shippers are not hopeful that it would spark more demand. US importers have mostly frontloaded goods already and will just be dribbling in product as needed through the rest of the year, Sanjay Tejwani, chief executive of consulting firm 365 Logistics, told the Journal of Commerce. “A lot of frontloading has happened, which means that the volumes will remain soft,” Tejwani said. “August through December will be soft. Even if the tariffs were to drop back to zero, a lot of merchandise has been shipped and inventory levels are decent, why would anyone bring in more cargo?”Ocean carriers are quoting spot rates near $2,500 per standard container to the US West Coast as of July 15, hoping the step-up in blank sailings for July would tighten the market, Robert Khachatryan, chief executive of Freight Right Global Logistics, told the Journal of Commerce. But he doesn’t expect the rate level to hold, adding that he is seeing a number of voyage-specific West Coast rates near $1,700. The mid-July rates “were driven largely by a reduction in capacity,” Khachatryan said. “There is no pickup in demand.” Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged Asia-USWC rates at $1,733 per FEU as of July 16, down 2% on the week. But Drewry’s Shanghai-Los Angeles rate as of July 17 was $2,817 per FEU.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>.Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report.</div>

Ocean carriers have begun to reel in capacity ahead of the mid-August expiry of the 90-day pause on higher US tariffs on Chinese goods, with an increasing number of trans-Pacific container services getting blanked for the rest of July. And with most pre-higher tariff imports on the water or ready to ship, spot rates look set for further weakness through the end of summer. Some 175,000 TEUs of container capacity is set to be blanked during July, according to data from maritime intelligence provider eeSea, amounting to 11% of deployed capacity between Asia and the US West Coast. That is an uptick from the 118,500 TEUs of capacity blanked in June, which accounted for about 9% of deployed capacity. The canceled departures from Asia coincide with the Aug. 12 deadline for the Trump administration to impose country-specific tariffs on China in the absence of a new trade deal. With an Aug. 1 deadline for trade talks with other Asian countries, demand was already drying up, with Chinese goods the last that could get on a ship and enter the US in time to avoid the higher rates. “It’s already too late to ship product from Vietnam and Southeast Asia to beat the Aug. 1 deadline,” an ocean carrier source told the Journal of Commerce. “There has been no spike in imports from Vietnam since June, when it was possible to beat the Aug. 1 deadline, so demand simply isn’t there.” Indeed, many of the services culled through July also call southern Chinese ports that serve as transshipment points for other Asian goods, or services that directly call Southeast Asia. OOCL canceled eastbound sailings on its Pacific South China Express (PSX) service for the last two weeks of July, according to Hong Kong-based logistics provider Honour Lane Shipping. The PSX service will offer an eastbound ad hoc call to Shanghai, though, during the last week of July, with only one call at the southern port of Yantian. Express services are typically the first to get blanked, with CU Lines, SeaLead and other niche carriers also canceling services through July. But the demand slowdown is also hitting big-ship services as well. CMA CGM canceled an eastbound voyage on its Columbus Jax service, which offers average weekly capacity of about 13,000 TEUs, for the last week of July. The pendulum service, which switches to US East Coast ports on its westbound voyages, also calls Malaysia’s Port Klang, Thailand’s Laem Chabang and Vietnam’s Cai Mep. Cosco Shipping canceled a July voyage on its 13,000-TEU Asia-US West Coast service, while the Premier Alliance has also canceled two July voyages on its 13,000-TEU MP2 service. Weaker second half expected While a trade deal with China or other Asian countries may be in the offing, forwarders and shippers are not hopeful that it would spark more demand. US importers have mostly frontloaded goods already and will just be dribbling in product as needed through the rest of the year, Sanjay Tejwani, chief executive of consulting firm 365 Logistics, told the Journal of Commerce. “A lot of frontloading has happened, which means that the volumes will remain soft,” Tejwani said. “August through December will be soft. Even if the tariffs were to drop back to zero, a lot of merchandise has been shipped and inventory levels are decent, why would anyone bring in more cargo?” Ocean carriers are quoting spot rates near $2,500 per standard container to the US West Coast as of July 15, hoping the step-up in blank sailings for July would tighten the market, Robert Khachatryan, chief executive of Freight Right Global Logistics, told the Journal of Commerce. But he doesn’t expect the rate level to hold, adding that he is seeing a number of voyage-specific West Coast rates near $1,700. The mid-July rates “were driven largely by a reduction in capacity,” Khachatryan said. “There is no pickup in demand.” Platts, a sister company of the Journal of Commerce within S&P Global, pegged Asia-USWC rates at $1,733 per FEU as of July 16, down 2% on the week. But Drewry’s Shanghai-Los Angeles rate as of July 17 was $2,817 per FEU. Contact Michael Angell at michael.angell@spglobal.com . Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report.

Trans-Pacific

Looming August tariff deadline prompts carriers to pull trans-Pacific capacity

<div class="phx-topic abstract-wrapper">The agreement clears the way for BNSF to move cargo from Los Angeles, Long Beach and Oakland to Salt Lake City for ocean carriers CMA CGM and Mediterranean Shipping Co.</div>

The agreement clears the way for BNSF to move cargo from Los Angeles, Long Beach and Oakland to Salt Lake City for ocean carriers CMA CGM and Mediterranean Shipping Co.

<div class="phx-topic">BNSF Railway and Union Pacific Railroad (UP) have reached an agreement ending a dispute that delayed the launch of international intermodal train service between ports in California and Salt Lake City. The two railroads <a href="https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1752685668843/52671.pdf">notified the US Surface Transportation Board (STB)</a> of the deal ahead of a briefing that had been scheduled for next week to discuss details of the dispute with regulators. The meeting between the railroads and the STB has been canceled in light of the deal. The agreement clears the way for BNSF to move cargo from Los Angeles, Long Beach and Oakland to <a href="https://www.joc.com/article/bnsf-up-dispute-threatens-oakland-slc-service-triggers-stb-petition-6040399">Salt Lake City</a> for ocean carriers CMA CGM and Mediterranean Shipping Co. As part of the deal, BNSF agreed to use a southern route through Donner Pass, coming to an undisclosed financial agreement on compensation it will provide to UP. BNSF originally balked at the idea of the southern route crossing between Lake Tahoe and Reno because it said UP could charge for upgrades it made to the Donner Pass tunnel in 2009, which BNSF said would amount to tens of millions of dollars. UP owns the tracks and dispatching, but BNSF has trackage rights and provides the locomotives and railcars to operate the service. Originally, BNSF wanted to route trains to Keddie, California, then east to Salt Lake City via a northern route that would allow the company to avoid paying the fees to use the southern route through Donner Pass. BNSF argued that UP’s reluctance to agree on the northern route was rooted in a desire to recoup funds for the Donner Pass upgrades and out of retribution because MSC and CMA CGM were former UP customers that switched to BNSF last year. UP said the Salt Lake City service could not begin last week as planned because BNSF did not provide adequate notice to UP management, so it required more time on UP’s part to hire the crews and build work schedules to accommodate BNSF. BNSF is hopeful the new route will result in volume growth. On average, about 25,000 containers per year move from the ports of Los Angeles and Long Beach to Salt Lake City and about 15,000 annually from the Port of Oakland to Salt Lake City, according to Journal of Commerce estimates of data filed with the STB. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

BNSF Railway and Union Pacific Railroad (UP) have reached an agreement ending a dispute that delayed the launch of international intermodal train service between ports in California and Salt Lake City. The two railroads notified the US Surface Transportation Board (STB) of the deal ahead of a briefing that had been scheduled for next week to discuss details of the dispute with regulators. The meeting between the railroads and the STB has been canceled in light of the deal. The agreement clears the way for BNSF to move cargo from Los Angeles, Long Beach and Oakland to Salt Lake City for ocean carriers CMA CGM and Mediterranean Shipping Co. As part of the deal, BNSF agreed to use a southern route through Donner Pass, coming to an undisclosed financial agreement on compensation it will provide to UP. BNSF originally balked at the idea of the southern route crossing between Lake Tahoe and Reno because it said UP could charge for upgrades it made to the Donner Pass tunnel in 2009, which BNSF said would amount to tens of millions of dollars. UP owns the tracks and dispatching, but BNSF has trackage rights and provides the locomotives and railcars to operate the service. Originally, BNSF wanted to route trains to Keddie, California, then east to Salt Lake City via a northern route that would allow the company to avoid paying the fees to use the southern route through Donner Pass. BNSF argued that UP’s reluctance to agree on the northern route was rooted in a desire to recoup funds for the Donner Pass upgrades and out of retribution because MSC and CMA CGM were former UP customers that switched to BNSF last year. UP said the Salt Lake City service could not begin last week as planned because BNSF did not provide adequate notice to UP management, so it required more time on UP’s part to hire the crews and build work schedules to accommodate BNSF. BNSF is hopeful the new route will result in volume growth. On average, about 25,000 containers per year move from the ports of Los Angeles and Long Beach to Salt Lake City and about 15,000 annually from the Port of Oakland to Salt Lake City, according to Journal of Commerce estimates of data filed with the STB. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

BNSF to use ‘southern’ route to Salt Lake City under UP intermodal deal

<div class="phx-topic abstract-wrapper">Some customers and competitors were surprised by the timing of the surcharges, which are typically implemented in August or September, if at all, and only after volume spikes.</div>

Some customers and competitors were surprised by the timing of the surcharges, which are typically implemented in August or September, if at all, and only after volume spikes.

<div class="phx-topic">J.B. Hunt Transport Services is defending its decision to impose surcharges of up to $1,500 per container on some shippers moving goods from Southern California, saying the fees are necessary to maintain service levels during an unpredictable peak season. <a href="https://www.joc.com/article/jb-hunt-hits-some-shippers-with-big-surcharges-in-southern-california-6043454">The surcharges</a>, which apply to certain retail, appliance and electronics shippers, are intended to ensure J.B. Hunt has the equipment and personnel in place if demand increases ahead of the holiday season, the company said during its quarterly earnings call late Tuesday. The surcharges are a tool, in a way, for J.B. Hunt to regulate how much unplanned freight it accepts during the busiest weeks of the year, ensuring there are enough drivers and containers to haul shipments for all its customers in Southern California. The surcharges went into effect July 13. “The last thing our industry can do is fail this shipping community at a time when the demand upticks,” Darren Field, president of J.B. Hunt’s intermodal division, said on the earnings call. “We have a handful of customers that said, ‘Hey, I might have extra business in July.’ We had many customers say, ‘I’m going to have the same peak I had last year’ ... and we just wanted a plan so we’re not caught by surprise.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="69b9e75c-ee79-4b00-9c29-ef0bc47d2af2"></dynamic-object></div>Meanwhile, maintaining strong service is important as J.B. Hunt and rail partner BNSF Railway performed above average in the second quarter, according to indicators. BNSF’s average Z-score, a proprietary Journal of Commerce calculation factoring train speeds, trains being held and idle laden railcars, has been positive for 13 consecutive weeks based on data filed with the US Surface Transportation Board (STB). Positive Z-scores indicate the railroad is outperforming its own history, while negative scores indicate underperformance. J.B. Hunt was also named the best intermodal provider by 41.5% of shippers in the latest Journal of Commerce Intermodal Service Scorecard, the highest percentage among its peers. The survey of more than 240 shippers was conducted between May 1 and June 30. The company regularly topped <a href="https://www.joc.com/resources/special-reports/domestic-intermodal-service-scorecard">prior surveys</a> as well, including in categories such as equipment availability, on-time pickups and on-time deliveries. Executing service becomes harder when week-over-week volumes become volatile. “This added complexity, lack of accurate forecast and potential for volatility, is why our peak season surcharge programs are starting earlier this year,” Spencer Frazier, executive vice president of sales for J.B. Hunt, said on the call. “Regardless of customer strategy and the shape of peak season, we will be ready to meet their demand when it occurs.” <h3>Some customers will look to skirt the charges </h3>Some J.B. Hunt customers and competitors were surprised by the timing of the surcharges. Peak season surcharges (PSSs) are typically implemented in August or September, if at all, and only after volume spikes. BNSF hauled more than 18,000 ocean containers during the week ending July 13, the highest since late January, according to data platform RailState. However, the railroad only hauled about 12,000 domestic containers during the same week, on par with its rolling 26-week average covering the first half of the year. J.B. Hunt implemented the surcharges after discussions with shippers over the last three weeks, customers told the Journal of Commerce. The fees apply only when a shipper out of Southern California exceeds its weekly contracted allotment, but the added costs can be substantial. “At $1,500 extra, our [competing] truckload rates become far cheaper,” said one J.B. Hunt customer who did not want to be identified. “That’s the trifecta of bad: higher rates, slower transit, and increased risk of theft.” Customers have also questioned whether J.B. Hunt incurs $1,500 in costs to reposition equipment to Southern California, or whether the surcharge reflects an attempt by J.B. Hunt to compensate for what it could not obtain during earlier contract negotiations. A second J.B. Hunt customer said they would take steps to avoid the fees. “We will look for opportunities not to pay the $1,500. That’s the short answer,” the source said. “We feel really confident that we’ll be successful.” Shippers said there are multiple ways to sidestep the charges, especially when only a few containers exceed weekly contractual limits. Some may shift overflow freight to J.B. Hunt’s competitors, both asset-based and non-asset-based intermodal providers. Others may opt for truckload carriers on the spot market, particularly as trucking rates remain low. Still others may delay non-urgent cargo by a few days, taking advantage of the weekly reset on allotments. It is not yet clear whether J.B. Hunt’s rivals will follow suit on the surcharges. While most major intermodal providers imposed PSSs last year, none set rates above $1,000 per container, except J.B. Hunt. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

J.B. Hunt Transport Services is defending its decision to impose surcharges of up to $1,500 per container on some shippers moving goods from Southern California, saying the fees are necessary to maintain service levels during an unpredictable peak season. The surcharges , which apply to certain retail, appliance and electronics shippers, are intended to ensure J.B. Hunt has the equipment and personnel in place if demand increases ahead of the holiday season, the company said during its quarterly earnings call late Tuesday. The surcharges are a tool, in a way, for J.B. Hunt to regulate how much unplanned freight it accepts during the busiest weeks of the year, ensuring there are enough drivers and containers to haul shipments for all its customers in Southern California. The surcharges went into effect July 13. “The last thing our industry can do is fail this shipping community at a time when the demand upticks,” Darren Field, president of J.B. Hunt’s intermodal division, said on the earnings call. “We have a handful of customers that said, ‘Hey, I might have extra business in July.’ We had many customers say, ‘I’m going to have the same peak I had last year’ ... and we just wanted a plan so we’re not caught by surprise.” Meanwhile, maintaining strong service is important as J.B. Hunt and rail partner BNSF Railway performed above average in the second quarter, according to indicators. BNSF’s average Z-score, a proprietary Journal of Commerce calculation factoring train speeds, trains being held and idle laden railcars, has been positive for 13 consecutive weeks based on data filed with the US Surface Transportation Board (STB). Positive Z-scores indicate the railroad is outperforming its own history, while negative scores indicate underperformance. J.B. Hunt was also named the best intermodal provider by 41.5% of shippers in the latest Journal of Commerce Intermodal Service Scorecard, the highest percentage among its peers. The survey of more than 240 shippers was conducted between May 1 and June 30. The company regularly topped prior surveys as well, including in categories such as equipment availability, on-time pickups and on-time deliveries. Executing service becomes harder when week-over-week volumes become volatile. “This added complexity, lack of accurate forecast and potential for volatility, is why our peak season surcharge programs are starting earlier this year,” Spencer Frazier, executive vice president of sales for J.B. Hunt, said on the call. “Regardless of customer strategy and the shape of peak season, we will be ready to meet their demand when it occurs.” Some customers will look to skirt the charges Some J.B. Hunt customers and competitors were surprised by the timing of the surcharges. Peak season surcharges (PSSs) are typically implemented in August or September, if at all, and only after volume spikes. BNSF hauled more than 18,000 ocean containers during the week ending July 13, the highest since late January, according to data platform RailState. However, the railroad only hauled about 12,000 domestic containers during the same week, on par with its rolling 26-week average covering the first half of the year. J.B. Hunt implemented the surcharges after discussions with shippers over the last three weeks, customers told the Journal of Commerce. The fees apply only when a shipper out of Southern California exceeds its weekly contracted allotment, but the added costs can be substantial. “At $1,500 extra, our [competing] truckload rates become far cheaper,” said one J.B. Hunt customer who did not want to be identified. “That’s the trifecta of bad: higher rates, slower transit, and increased risk of theft.” Customers have also questioned whether J.B. Hunt incurs $1,500 in costs to reposition equipment to Southern California, or whether the surcharge reflects an attempt by J.B. Hunt to compensate for what it could not obtain during earlier contract negotiations. A second J.B. Hunt customer said they would take steps to avoid the fees. “We will look for opportunities not to pay the $1,500. That’s the short answer,” the source said. “We feel really confident that we’ll be successful.” Shippers said there are multiple ways to sidestep the charges, especially when only a few containers exceed weekly contractual limits. Some may shift overflow freight to J.B. Hunt’s competitors, both asset-based and non-asset-based intermodal providers. Others may opt for truckload carriers on the spot market, particularly as trucking rates remain low. Still others may delay non-urgent cargo by a few days, taking advantage of the weekly reset on allotments. It is not yet clear whether J.B. Hunt’s rivals will follow suit on the surcharges. While most major intermodal providers imposed PSSs last year, none set rates above $1,000 per container, except J.B. Hunt. Contact Ari Ashe at ari.ashe@spglobal.com .

J.B. Hunt says surcharges necessary to maintain peak season service

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">The largest US less-than-truckload provider says it won’t enforce new density-based classifications until Dec. 1, giving shippers more time to adapt to changes. </div>

The largest US less-than-truckload provider says it won’t enforce new density-based classifications until Dec. 1, giving shippers more time to adapt to changes.

<div class="phx-topic">FedEx Freight, the largest US less-than-truckload (LTL) carrier, is delaying by 150 days the implementation of changes to the shipment classification system used to set LTL pricing. The revisions to the National Motor Freight Classification (NMFC), which took effect Saturday, affect thousands of products, moving them to density-based classes. “To ensure ample time to fully adapt processes and pricing to the new classifications, FedEx Freight is delaying enforcement until Dec. 1,” the company said <a href="https://www.fedex.com/en-us/shipping/freight/class-calculator.html#nmfc">on its website</a>. No other LTL carriers have followed suit yet, but FedEx Freight is a large enough provider that the 150-day reprieve will impact thousands of US shippers. FedEx Freight has nearly 15% of the total US LTL market in terms of daily shipments, hauling about 98,900 shipments a day in 2024, according to SJ Consulting Group data. The trucking arm of FedEx had about $9.1 billion in revenue in calendar year 2024. The next largest LTL carrier, Old Dominion Freight Line, had $5.8 billion in revenue. <h3>Greater weight on density </h3>Shippers have been wrestling for much of the past year with <a href="https://www.joc.com/article/us-shippers-urged-to-prepare-now-for-upcoming-ltl-class-changes-rate-resetting-5933927">how to adjust and prepare for changes</a> that move more than 2,000 NMFC items into full-scale density classes. The National Motor Freight Traffic Association (NMFTA), which administers the NMFC, and LTL carriers have urged shippers to review how they build palletized shipments. With the revisions now in place, the question turns from whether shippers are ready to adapt to whether trucking companies are willing to implement them in a weak LTL market. Old Dominion Freight Line (ODFL) and XPO saw shipment volumes drop in May, with ODFL’s daily volume falling 6.8% year over year that month and XPO’s shipments slipping 5%, according to company reports. FedEx Freight’s shipment count fell 1% year over year in the quarter ending May 31. LTL pricing has remained resilient, however, with the US long-distance LTL producer price index (PPI) up 7.8% year over year in June at a reading of 261, its highest to date this year, according to the US Bureau of Labor Statistics. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="2b531ac2-bb4f-4809-9a8a-81ad615a8698"></dynamic-object></div>Classification is a tool used to help determine pricing based on shipment characteristics by commodity including density, handling, stowability and liability. Density-based pricing considers the mass (pounds) and volume (cubic feet) of the load rather than other characteristics. The July 19 changes are only the beginning as the NMFTA continues to review nearly 20,000 commodity codes for additional changes in the future. <h3>Pricing impact </h3>Although there’s no set formula to show how much LTL rates might increase under the NMFC revisions, shippers have said they believe rates will rise — especially if they do nothing. With more products shifting to density-only classifications, shippers that move low-density items such as cabinets, chairs and foam that take up lots of trailer space may pay more. High density items such as ceramic tile, concrete bricks, or steel fasteners are likely to cost less to ship because they take up less space in the truck. The goal is to maximize the use of space inside the trailer with as many shipments from as many customers as possible, increasing daily productivity and reducing costs. The key to avoiding rate increases, experts say, is for shippers to provide exact weight and dimension data for palletized shipments on bills of lading. Inaccurate data or a lack of information could lead to repricing of freight or additional charges. FedEx Freight said after Dec. 1 it may apply an inspection surcharge for shipments with incomplete or inaccurate information listed on the bill of lading. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. Senior Editor Ari Ashe contributed to this report. </div>

FedEx Freight, the largest US less-than-truckload (LTL) carrier, is delaying by 150 days the implementation of changes to the shipment classification system used to set LTL pricing. The revisions to the National Motor Freight Classification (NMFC), which took effect Saturday, affect thousands of products, moving them to density-based classes. “To ensure ample time to fully adapt processes and pricing to the new classifications, FedEx Freight is delaying enforcement until Dec. 1,” the company said on its website . No other LTL carriers have followed suit yet, but FedEx Freight is a large enough provider that the 150-day reprieve will impact thousands of US shippers. FedEx Freight has nearly 15% of the total US LTL market in terms of daily shipments, hauling about 98,900 shipments a day in 2024, according to SJ Consulting Group data. The trucking arm of FedEx had about $9.1 billion in revenue in calendar year 2024. The next largest LTL carrier, Old Dominion Freight Line, had $5.8 billion in revenue. Greater weight on density Shippers have been wrestling for much of the past year with how to adjust and prepare for changes that move more than 2,000 NMFC items into full-scale density classes. The National Motor Freight Traffic Association (NMFTA), which administers the NMFC, and LTL carriers have urged shippers to review how they build palletized shipments. With the revisions now in place, the question turns from whether shippers are ready to adapt to whether trucking companies are willing to implement them in a weak LTL market. Old Dominion Freight Line (ODFL) and XPO saw shipment volumes drop in May, with ODFL’s daily volume falling 6.8% year over year that month and XPO’s shipments slipping 5%, according to company reports. FedEx Freight’s shipment count fell 1% year over year in the quarter ending May 31. LTL pricing has remained resilient, however, with the US long-distance LTL producer price index (PPI) up 7.8% year over year in June at a reading of 261, its highest to date this year, according to the US Bureau of Labor Statistics. Classification is a tool used to help determine pricing based on shipment characteristics by commodity including density, handling, stowability and liability. Density-based pricing considers the mass (pounds) and volume (cubic feet) of the load rather than other characteristics. The July 19 changes are only the beginning as the NMFTA continues to review nearly 20,000 commodity codes for additional changes in the future. Pricing impact Although there’s no set formula to show how much LTL rates might increase under the NMFC revisions, shippers have said they believe rates will rise — especially if they do nothing. With more products shifting to density-only classifications, shippers that move low-density items such as cabinets, chairs and foam that take up lots of trailer space may pay more. High density items such as ceramic tile, concrete bricks, or steel fasteners are likely to cost less to ship because they take up less space in the truck. The goal is to maximize the use of space inside the trailer with as many shipments from as many customers as possible, increasing daily productivity and reducing costs. The key to avoiding rate increases, experts say, is for shippers to provide exact weight and dimension data for palletized shipments on bills of lading. Inaccurate data or a lack of information could lead to repricing of freight or additional charges. FedEx Freight said after Dec. 1 it may apply an inspection surcharge for shipments with incomplete or inaccurate information listed on the bill of lading. Contact William B. Cassidy at bill.cassidy@spglobal.com . Senior Editor Ari Ashe contributed to this report.

FedEx Freight delays enforcement of LTL re-classification

<div class="phx-topic abstract-wrapper">But other Class I railroads will likely be vocal in their opposition to any deal and look to rally support from shippers to block the move, setting the stage for a contentious regulatory battle. </div>

But other Class I railroads will likely be vocal in their opposition to any deal and look to rally support from shippers to block the move, setting the stage for a contentious regulatory battle.

<div class="phx-topic">Union Pacific (UP) is in preliminary discussions to acquire Norfolk Southern (NS), according to <a href="https://www.wsj.com/business/deals/railroad-operator-union-pacific-exploring-deal-for-norfolk-southern-1d06e822?mod=Searchresults_pos2&amp;page=1">The Wall Street Journal</a>, in what could become the largest freight rail merger in American history. If a deal happens, it would create the first coast-to-coast US rail network and mark a dramatic shift in the structure of US freight railroads. The transaction, which would create a mega-railroad valued at $200 billion, would far exceed the $31 billion merger between Canadian Pacific and Kansas City Southern <a href="https://www.joc.com/article/us-regulators-approve-cp-kcs-merger-to-form-first-us-canada-mexico-rail-5192986">completed in 2023</a>. However, UP and NS bring different freight portfolios to the table, and any proposed deal is expected to draw intense scrutiny from regulators. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6046006_0.1.jpg"></img></div>Other Class I railroads BNSF Railway, CSX Transportation and Canadian Pacific Kansas City (CPKC) will likely be vocal in their opposition to any deal and look to rally support from shippers to block the move, setting the stage for a contentious regulatory battle. UP and NS share a common commitment to the principles of precision scheduled railroading (PSR), an operations philosophy that emphasizes efficiency, asset utilization and cost control. But some in the analyst community have speculated that CSX could be a potential target of UP. UP might also see more upside acquiring NS, which has underperformed CSX for several years financially and operationally. But from a freight mix perspective, UP more closely resembles CSX. Since 2018, non-intermodal cargo has accounted for 53.8% of CSX’s volume, nearly identical to Union Pacific’s 55%, according to the Association of American Railroads (AAR). Non-intermodal accounts for just 43.4% of Norfolk Southern volume, with the majority being containerized freight. UP CEO Jim Vena has been critical of intermodal at times because it doesn’t generate the high margins of commodities such as agricultural products, petrochemicals, plastics and construction materials. “In the intermodal piece, I don’t know. I like the industrial and the bulk business,” Vena said last month at the Wells Fargo Industrials &amp; Materials Conference. “I think the railroads have made some real strategically impactful decisions on how they handle intermodal that are not helpful.” After a brief interjection from his chief financial officer, Vena added, “I didn’t say I didn’t love [intermodal customers].” UP’s CEO is a protégé of the late E. Hunter Harrison, the creator of precision scheduled railroading. PSR practitioners measure operating ratios — i.e. the percentage of revenue that is absorbed by expenses. Lower operating ratios mean more revenue flows to the bottom line, driving profits. “We have long believed that the larger carload footprint, better chemicals, autos, and export ag connectivity makes CSX a better target from a freight flow perspective,” David Vernon, an industry analyst with investment bank Bernstein Societe Generale, wrote in a note published Friday. “While the potential synergy value of a UP and CSX combination is slightly greater, it’s not that much greater.” <h3>Intermodal implications would be profound </h3>If it were approved, a transcontinental US freight railroad would cause a significant reshuffling of the domestic and international intermodal markets. Ocean carriers, for example, often sign long-term contracts for inland rail services. If a carrier currently uses BNSF on the West Coast and Norfolk Southern on the East Coast for international business, the fate of those contracts in a post-merger landscape would be uncertain. The implications for domestic intermodal would be even messier. Hub Group, Swift Intermodal and parcel giant UPS are already customers of Union Pacific and Norfolk Southern, but Schneider National and STG Logistics are locked into multi-year deals with CSX in the eastern US. The shakeup could be substantial for non-asset brokers, also known as intermodal marketing companies (IMCs). Union Pacific controls the EMP and UMAX 53-foot container pools, which are shared with CSX, NS, and Canadian National. A UP-NS merger could limit or eliminate CSX’s access to those pools, potentially impacting significant volumes of freight. “While intermodal channel partners would need to adapt, single line trans-con service would likely be more competitive to the highway and accelerate share shifts,” Bernstein’s Vernon noted. The largest unknown would involve J.B. Hunt Transport Services, the largest US intermodal provider. J.B. Hunt exclusively partners with BNSF in the West and relies heavily on NS in the East, although it does put a portion of business on CSX. J.B. Hunt is unlikely to sever ties with BNSF because their relationship spans nearly four decades and includes joint Quantum service offerings in the US and Mexico. J.B. Hunt has also been critical of the PSR model employed by UP and CPKC. While J.B. Hunt could shift its East Coast operations to CSX, a combined Union Pacific-Norfolk Southern could wield unprecedented pricing power, potentially creating the first company with enough leverage to compete with J.B. Hunt on pricing negotiations with shippers. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Union Pacific (UP) is in preliminary discussions to acquire Norfolk Southern (NS), according to The Wall Street Journal , in what could become the largest freight rail merger in American history. If a deal happens, it would create the first coast-to-coast US rail network and mark a dramatic shift in the structure of US freight railroads. The transaction, which would create a mega-railroad valued at $200 billion, would far exceed the $31 billion merger between Canadian Pacific and Kansas City Southern completed in 2023 . However, UP and NS bring different freight portfolios to the table, and any proposed deal is expected to draw intense scrutiny from regulators. Other Class I railroads BNSF Railway, CSX Transportation and Canadian Pacific Kansas City (CPKC) will likely be vocal in their opposition to any deal and look to rally support from shippers to block the move, setting the stage for a contentious regulatory battle. UP and NS share a common commitment to the principles of precision scheduled railroading (PSR), an operations philosophy that emphasizes efficiency, asset utilization and cost control. But some in the analyst community have speculated that CSX could be a potential target of UP. UP might also see more upside acquiring NS, which has underperformed CSX for several years financially and operationally. But from a freight mix perspective, UP more closely resembles CSX. Since 2018, non-intermodal cargo has accounted for 53.8% of CSX’s volume, nearly identical to Union Pacific’s 55%, according to the Association of American Railroads (AAR). Non-intermodal accounts for just 43.4% of Norfolk Southern volume, with the majority being containerized freight. UP CEO Jim Vena has been critical of intermodal at times because it doesn’t generate the high margins of commodities such as agricultural products, petrochemicals, plastics and construction materials. “In the intermodal piece, I don’t know. I like the industrial and the bulk business,” Vena said last month at the Wells Fargo Industrials & Materials Conference. “I think the railroads have made some real strategically impactful decisions on how they handle intermodal that are not helpful.” After a brief interjection from his chief financial officer, Vena added, “I didn’t say I didn’t love [intermodal customers].” UP’s CEO is a protégé of the late E. Hunter Harrison, the creator of precision scheduled railroading. PSR practitioners measure operating ratios — i.e. the percentage of revenue that is absorbed by expenses. Lower operating ratios mean more revenue flows to the bottom line, driving profits. “We have long believed that the larger carload footprint, better chemicals, autos, and export ag connectivity makes CSX a better target from a freight flow perspective,” David Vernon, an industry analyst with investment bank Bernstein Societe Generale, wrote in a note published Friday. “While the potential synergy value of a UP and CSX combination is slightly greater, it’s not that much greater.” Intermodal implications would be profound If it were approved, a transcontinental US freight railroad would cause a significant reshuffling of the domestic and international intermodal markets. Ocean carriers, for example, often sign long-term contracts for inland rail services. If a carrier currently uses BNSF on the West Coast and Norfolk Southern on the East Coast for international business, the fate of those contracts in a post-merger landscape would be uncertain. The implications for domestic intermodal would be even messier. Hub Group, Swift Intermodal and parcel giant UPS are already customers of Union Pacific and Norfolk Southern, but Schneider National and STG Logistics are locked into multi-year deals with CSX in the eastern US. The shakeup could be substantial for non-asset brokers, also known as intermodal marketing companies (IMCs). Union Pacific controls the EMP and UMAX 53-foot container pools, which are shared with CSX, NS, and Canadian National. A UP-NS merger could limit or eliminate CSX’s access to those pools, potentially impacting significant volumes of freight. “While intermodal channel partners would need to adapt, single line trans-con service would likely be more competitive to the highway and accelerate share shifts,” Bernstein’s Vernon noted. The largest unknown would involve J.B. Hunt Transport Services, the largest US intermodal provider. J.B. Hunt exclusively partners with BNSF in the West and relies heavily on NS in the East, although it does put a portion of business on CSX. J.B. Hunt is unlikely to sever ties with BNSF because their relationship spans nearly four decades and includes joint Quantum service offerings in the US and Mexico. J.B. Hunt has also been critical of the PSR model employed by UP and CPKC. While J.B. Hunt could shift its East Coast operations to CSX, a combined Union Pacific-Norfolk Southern could wield unprecedented pricing power, potentially creating the first company with enough leverage to compete with J.B. Hunt on pricing negotiations with shippers. Contact Ari Ashe at ari.ashe@spglobal.com .

Potential UP-NS tie-up would cause major shift in US intermodal market

<div class="phx-topic abstract-wrapper">The decision cuts against what Schneider announced when it acquired Cowan last November, that Cowan’s brand would be retained and the company would operate as a wholly owned subsidiary.</div>

The decision cuts against what Schneider announced when it acquired Cowan last November, that Cowan’s brand would be retained and the company would operate as a wholly owned subsidiary.

<div class="phx-topic">Schneider National is dissolving the brokerage division of Cowan Systems, a company it <a href="https://www.joc.com/article/schneider-bolsters-us-east-coast-business-by-acquiring-cowan-systems-5824223">acquired for $390 million last November</a> to expand its dedicated truckload division. Employees of Cowan Logistics, the acquired company’s brokerage unit, were informed on Tuesday at an internal meeting that Cowan would be rebranded from Oct. 1. The decision cuts against what Schneider announced at the time of the acquisition, when it indicated that Cowan’s brand would be retained and that the company would operate as a wholly owned subsidiary. “As part of our ongoing efforts to strengthen and streamline our brokerage operations, Cowan Logistics will be fully integrated into Schneider Brokerage effective Oct. 1, 2025,” a spokesperson for Wisconsin-based Schneider told the Journal of Commerce. The spokesperson said the move allows Schneider to “unify our capabilities under a single brand, expand our service offerings, and better support our customers and carrier partners.” The change is specific to the brokerage division and will not affect Cowan Systems’ trucking operations, which will continue to operate independently. A company email to employees explaining the consolidation that was viewed by the Journal of Commerce said, “it became clear there were numerous opportunities to the business and [employees] to expedite growth by combining both groups and rebranding Cowan Logistics to Schneider Brokerage.” <h3>Fate of employees unclear </h3>The absorption of Cowan’s brokerage division into Schneider’s comes amid a prolonged period of intense competition among brokers as they vie for truckload freight in a market constrained by muted demand. It’s not immediately clear how many of Cowan’s brokerage employees Schneider plans to retain. A Cowan source who did not want to be identified told the Journal of Commerce Schneider “is basically retaining key employees, trucks [and] key accounts of Cowan’s.” The source said Schneider’s intent is to eliminate redundancies within its own brokerage division, and that its employees were instructed to push off discussions with customers about the dissolution of the Cowan Logistics brand until closer to October. At the time of the acquisition, the 100-year-old, Baltimore-based Cowan provided logistics, trucking, shipping and warehousing services, with a fleet of more than 1,800 trucks and about 7,500 trailers. Schneider will take over Cowan’s motor carrier (MC) number and standard carrier alpha code (SCAC), along with any of Cowan’s retained employees, clients and contracts. Until the rebranding is complete, Cowan’s leadership will largely remain in place but will report to Ben Schuchart, senior vice president of Schneider Transportation Management, and Jim Nicholson, vice president of brokerage operations for Schneider, according to the company email. Schneider is due to release its second-quarter earnings July 31. Contact Clarissa Hawes at <a href="mailto:clarissahawes@gmail.com">clarissahawes@gmail.com</a>. </div>

Schneider National is dissolving the brokerage division of Cowan Systems, a company it acquired for $390 million last November to expand its dedicated truckload division. Employees of Cowan Logistics, the acquired company’s brokerage unit, were informed on Tuesday at an internal meeting that Cowan would be rebranded from Oct. 1. The decision cuts against what Schneider announced at the time of the acquisition, when it indicated that Cowan’s brand would be retained and that the company would operate as a wholly owned subsidiary. “As part of our ongoing efforts to strengthen and streamline our brokerage operations, Cowan Logistics will be fully integrated into Schneider Brokerage effective Oct. 1, 2025,” a spokesperson for Wisconsin-based Schneider told the Journal of Commerce. The spokesperson said the move allows Schneider to “unify our capabilities under a single brand, expand our service offerings, and better support our customers and carrier partners.” The change is specific to the brokerage division and will not affect Cowan Systems’ trucking operations, which will continue to operate independently. A company email to employees explaining the consolidation that was viewed by the Journal of Commerce said, “it became clear there were numerous opportunities to the business and [employees] to expedite growth by combining both groups and rebranding Cowan Logistics to Schneider Brokerage.” Fate of employees unclear The absorption of Cowan’s brokerage division into Schneider’s comes amid a prolonged period of intense competition among brokers as they vie for truckload freight in a market constrained by muted demand. It’s not immediately clear how many of Cowan’s brokerage employees Schneider plans to retain. A Cowan source who did not want to be identified told the Journal of Commerce Schneider “is basically retaining key employees, trucks [and] key accounts of Cowan’s.” The source said Schneider’s intent is to eliminate redundancies within its own brokerage division, and that its employees were instructed to push off discussions with customers about the dissolution of the Cowan Logistics brand until closer to October. At the time of the acquisition, the 100-year-old, Baltimore-based Cowan provided logistics, trucking, shipping and warehousing services, with a fleet of more than 1,800 trucks and about 7,500 trailers. Schneider will take over Cowan’s motor carrier (MC) number and standard carrier alpha code (SCAC), along with any of Cowan’s retained employees, clients and contracts. Until the rebranding is complete, Cowan’s leadership will largely remain in place but will report to Ben Schuchart, senior vice president of Schneider Transportation Management, and Jim Nicholson, vice president of brokerage operations for Schneider, according to the company email. Schneider is due to release its second-quarter earnings July 31. Contact Clarissa Hawes at clarissahawes@gmail.com .

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