<div class="phx-topic abstract-wrapper">The Montreal Port Authority said permits are in the works for Contrecoeur’s underwater work, while DP World has signed on to design and operate the terminal</div>

The Montreal Port Authority said permits are in the works for Contrecoeur’s underwater work, while DP World has signed on to design and operate the terminal

Feature image

<div class="phx-topic">DP World plans to develop and operate a C$1.6 billion container terminal outside of Montreal, after the port authority took the first step in securing a development permit for the facility capable of handling post-Panamax vessels.The global terminal operator on Monday said it had signed an agreement with the Montreal Port Authority (MPA) authority to design Contrecoeur’s surface work, which would be finalized in the coming weeks before developing a plan for long-term operations. DP World operates the Centerm facility at the Port of Vancouver, as well as the container terminals at the ports of Prince Rupert and Saint John.“This agreement marks an important milestone in shaping the Port of Montreal’s future and reinforces Canada’s role as a gateway for global trade,” DP World’s Canadian Chief Executive Douglas Smith said in <a href="https://www.linkedin.com/posts/dougsmithadani_im-proud-to-share-that-dp-world-in-canada-activity-7370841590816329729-ZOtQ?utm_source=share&amp;utm_medium=member_ios&amp;rcm=ACoAAAEaE6wBxuCBA3GF9B8BLvf-lPuv3EJkHFE">a LinkedIn post</a>. The Contrecoeur terminal, to be built on land the MPA acquired three decades ago, would have an annual throughput capacity of 1.15 million TEUs. Thanks to its location further up the St. Lawrence River, Contrecoeur will be able to handle larger ships than the roughly 8,000-TEU vessels that can call Montreal.The workhorse vessels serving Montreal’s four existing containers terminals, which are operated by Montreal Gateway Terminals Partnership and Termont Montreal, range in capacity from 4,000 to 5,000 TEUs. The port authority is working with federal agencies and river pilots to start trialing the navigation of larger ships on the St. Lawrence River.The MPA said last week it submitted a permitting application to the Canadian federal agency in charge of waterways for below-surface work on the Contrecoeur marine terminal. The MPA said it expects the agency to issue a permit for the work in the coming weeks. DP World said it expects underwater work on Contrecoeur to begin next year, with surface work slated to begin in 2027 and terminal operations to begin by 2030.The application involved 10 studies over two years on the project’s impact to local fish habits. The MPA said it plans to do extensive underwater and above-ground plantings and other remediation work to minimize the environmental impact of the Contrecoeur project.In planning since the 1980s, the Contrecoeur project faced <a href="https://www.joc.com/article/montreal-relaunches-search-process-for-contrecoeur-terminal-operator-5204826">a delay in 2023</a>after several terminal operators decided not to participate in bidding for the terminal’s concession due to the cost of the underwater work. Originally budgeted at C$1 billion, the project is now expected to cost C$1.5 billion.Since that time, the <a href="https://www.joc.com/article/montreal-port-gets-federal-funds-for-mega-terminal-after-operators-balk-at-risk-5222977">federal</a> and <a href="https://www.joc.com/article/quebec-provides-new-funding-for-proposed-montreal-terminal-citing-us-trade-tensions-5947783">provincial governments</a> have provided more funding to the project. Advancing the Contrecoeur project has become more of a priority for Canada as the country <a href="https://www.joc.com/article/carney-has-fresh-opportunity-to-galvanize-canadian-shipping-industry-6047928">looks to lessen the country’s reliance on trade with the US</a>. In a visit to Montreal last month, Prime Minister Mark Carney said the Contrecouer project could benefit from newly passed legislation streamlining environmental rules and other regulations to speed the construction of infrastructure projects of national importance.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

DP World plans to develop and operate a C$1.6 billion container terminal outside of Montreal, after the port authority took the first step in securing a development permit for the facility capable of handling post-Panamax vessels. The global terminal operator on Monday said it had signed an agreement with the Montreal Port Authority (MPA) authority to design Contrecoeur’s surface work, which would be finalized in the coming weeks before developing a plan for long-term operations. DP World operates the Centerm facility at the Port of Vancouver, as well as the container terminals at the ports of Prince Rupert and Saint John. “This agreement marks an important milestone in shaping the Port of Montreal’s future and reinforces Canada’s role as a gateway for global trade,” DP World’s Canadian Chief Executive Douglas Smith said in a LinkedIn post . The Contrecoeur terminal, to be built on land the MPA acquired three decades ago, would have an annual throughput capacity of 1.15 million TEUs. Thanks to its location further up the St. Lawrence River, Contrecoeur will be able to handle larger ships than the roughly 8,000-TEU vessels that can call Montreal. The workhorse vessels serving Montreal’s four existing containers terminals, which are operated by Montreal Gateway Terminals Partnership and Termont Montreal, range in capacity from 4,000 to 5,000 TEUs. The port authority is working with federal agencies and river pilots to start trialing the navigation of larger ships on the St. Lawrence River. The MPA said last week it submitted a permitting application to the Canadian federal agency in charge of waterways for below-surface work on the Contrecoeur marine terminal. The MPA said it expects the agency to issue a permit for the work in the coming weeks. DP World said it expects underwater work on Contrecoeur to begin next year, with surface work slated to begin in 2027 and terminal operations to begin by 2030. The application involved 10 studies over two years on the project’s impact to local fish habits. The MPA said it plans to do extensive underwater and above-ground plantings and other remediation work to minimize the environmental impact of the Contrecoeur project. In planning since the 1980s, the Contrecoeur project faced a delay in 2023 after several terminal operators decided not to participate in bidding for the terminal’s concession due to the cost of the underwater work. Originally budgeted at C$1 billion, the project is now expected to cost C$1.5 billion. Since that time, the federal and provincial governments have provided more funding to the project. Advancing the Contrecoeur project has become more of a priority for Canada as the country looks to lessen the country’s reliance on trade with the US . In a visit to Montreal last month, Prime Minister Mark Carney said the Contrecouer project could benefit from newly passed legislation streamlining environmental rules and other regulations to speed the construction of infrastructure projects of national importance. Contact Michael Angell at michael.angell@spglobal.com

Container lines

North American ports

DP World to build big-ship container terminal in Montreal

<div class="phx-topic abstract-wrapper">The investment bank said non-Chinese carriers will largely avoid looming and escalating port fees, but Cosco and OOCL will be on the hook unless they adjust networks.</div>

The investment bank said non-Chinese carriers will largely avoid looming and escalating port fees, but Cosco and OOCL will be on the hook unless they adjust networks.

<div class="phx-topic">Most container lines will avoid paying new US fees on port calls next month after switching out any Chinese-built ships from their services, while Cosco Shipping and subsidiary OOCL face a $2 billion hit in the first year, unless they adjust their networks, according to a new report from investment bank HSBC.Barring a trade deal with China or last-minute delays by the Trump administration, the US Trade Representative (USTR) <a href="https://www.joc.com/article/revised-china-tonnage-tax-less-disruptive-still-costly-6005402">will begin collecting fees on Chinese-built and -operated ships</a> that call US ports from Oct. 14. The administration hasn’t given any indications of postponing or easing the tariffs, a maritime attorney with ties to the White House who asked not to be identified told the Journal of Commerce, noting that US Customs and Border Protection has already been instructed to collect the fees.The fees on Chinese-built ships start at the higher of $18 per net ton of vessel capacity or $120 per container, while ships operated by carriers based in China face a fee of $50 per net ton. Both sets of fees escalate over the next four years as part of the Trump administration’s attempt to <a href="https://www.joc.com/article/trumps-expansionist-worldview-puts-us-maritime-interests-in-spotlight-5946935">boost US shipbuilding</a> at the expense of China’s industry. For Cosco and OOCL, which handle <a href="https://www.joc.com/article/coscooocl-saw-big-gains-in-us-imports-from-asia-in-early-2025-6026695">the largest share of containerized US imports from Asia</a>, the tariffs equate roughly to $600 per FEU, according to the HSBC report.However, the industrywide impact for container shipping may be minimal, the HSBC report suggests, as just 15% of US port calls in 2024 were made by vessels built in China. Chinese-built ships account for just under 30% of the global container vessel fleet, with most ships built in Japan or South Korea.<h3>Rotating China-built ships out </h3>In the lead-up to the Oct. 14 enforcement deadline, carriers have been making moves to avoid any US calls by Chinese-built ships. The Premier Alliance, for example, <a href="https://www.joc.com/article/container-lines-begin-shifting-china-built-ships-out-of-us-loops-6069162">reconfigured a round-the-world service</a> to use Chinese ships on the Asia-Mediterranean leg and non-Chinese ships on the trans-Pacific leg. HSBC said the move will allow Premier Alliance partner Ocean Network Express to remove 10 Chinese-built ships from US service.By contrast, Maersk doesn’t expect any of its services will be affected by the new fees, nor will shippers have any added costs because of the fees, Michael Britton, North American head of ocean products, said during a Journal of Commerce webinar last week. Maersk and its Gemini Cooperation partner Hapag-Lloyd primarily use South Korean ships in their trans-Pacific services, the HBSC report noted. ”The fleet has been deployed in such a way that we’re fully compliant with the rule, and we won’t have any costs associated with this,” Britton said. “We’ve also made it very clear: we have no intention of introducing any surcharge for this.”Although it said the USTR fees will be “negligible for non-Chinese lines,” HSBC estimated that Cosco could face $1.5 billion in port fees in 2026, equivalent to about $600 per US-bound container. The fee represents about 5% of the carrier’s expected revenue during the period, the report said. OOCL could face a $654 million hit, which would account for about 7% of estimated revenue during 2026, HSBC said, adding that the cost of the port fees could result in a two-thirds decline in operating earnings for 2026. Cosco in April said the USTR fees <a href="https://www.joc.com/article/cosco-slams-us-port-fees-as-other-carriers-reckon-with-potential-costs-5989606">would distort the shipping market</a>, while OOCL on Aug. 21 told investors that <a href="https://www.joc.com/article/tariff-linked-trade-pattern-shifts-could-offset-impact-of-us-port-fees-ooil-6066902">changing trade patterns away from the US</a> would mitigate the impact. <h3>Global capacity ripples </h3>Even though the impact of the USTR fees may be limited to certain carriers, they could still affect shipping more broadly, HSBC said. The current supply glut could extend further in the future if carriers decide to keep older non-Chinese vessels in operation longer than they would have otherwise. On the other hand, carriers will also have less flexibility to rotate in new ships or add new capacity to US trade lanes if the only available vessels were built in China.Service changes may be most critical for the Ocean Alliance, which comprises Cosco, OOCL, CMA CGM and Evergreen Marine. HSBC said CMA CGM and/or Evergreen may have to provide more of the vessels operating on the alliance’s trans-Pacific services to avoid exposure to the port fees. Cosco and OOCL, meanwhile, could provide more of the tonnage going into the Ocean Alliance’s non-US trade lanes, or the group could offer transshipment options through Mexico and Canada. “The network realignment by Chinese and non-Chinese carriers could temporarily reduce services and tighten capacity,” HSBC said.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Most container lines will avoid paying new US fees on port calls next month after switching out any Chinese-built ships from their services, while Cosco Shipping and subsidiary OOCL face a $2 billion hit in the first year, unless they adjust their networks, according to a new report from investment bank HSBC. Barring a trade deal with China or last-minute delays by the Trump administration, the US Trade Representative (USTR) will begin collecting fees on Chinese-built and -operated ships that call US ports from Oct. 14. The administration hasn’t given any indications of postponing or easing the tariffs, a maritime attorney with ties to the White House who asked not to be identified told the Journal of Commerce, noting that US Customs and Border Protection has already been instructed to collect the fees. The fees on Chinese-built ships start at the higher of $18 per net ton of vessel capacity or $120 per container, while ships operated by carriers based in China face a fee of $50 per net ton. Both sets of fees escalate over the next four years as part of the Trump administration’s attempt to boost US shipbuilding at the expense of China’s industry. For Cosco and OOCL, which handle the largest share of containerized US imports from Asia , the tariffs equate roughly to $600 per FEU, according to the HSBC report. However, the industrywide impact for container shipping may be minimal, the HSBC report suggests, as just 15% of US port calls in 2024 were made by vessels built in China. Chinese-built ships account for just under 30% of the global container vessel fleet, with most ships built in Japan or South Korea. Rotating China-built ships out In the lead-up to the Oct. 14 enforcement deadline, carriers have been making moves to avoid any US calls by Chinese-built ships. The Premier Alliance, for example, reconfigured a round-the-world service to use Chinese ships on the Asia-Mediterranean leg and non-Chinese ships on the trans-Pacific leg. HSBC said the move will allow Premier Alliance partner Ocean Network Express to remove 10 Chinese-built ships from US service. By contrast, Maersk doesn’t expect any of its services will be affected by the new fees, nor will shippers have any added costs because of the fees, Michael Britton, North American head of ocean products, said during a Journal of Commerce webinar last week. Maersk and its Gemini Cooperation partner Hapag-Lloyd primarily use South Korean ships in their trans-Pacific services, the HBSC report noted. ”The fleet has been deployed in such a way that we’re fully compliant with the rule, and we won’t have any costs associated with this,” Britton said. “We’ve also made it very clear: we have no intention of introducing any surcharge for this.” Although it said the USTR fees will be “negligible for non-Chinese lines,” HSBC estimated that Cosco could face $1.5 billion in port fees in 2026, equivalent to about $600 per US-bound container. The fee represents about 5% of the carrier’s expected revenue during the period, the report said. OOCL could face a $654 million hit, which would account for about 7% of estimated revenue during 2026, HSBC said, adding that the cost of the port fees could result in a two-thirds decline in operating earnings for 2026. Cosco in April said the USTR fees would distort the shipping market , while OOCL on Aug. 21 told investors that changing trade patterns away from the US would mitigate the impact. Global capacity ripples Even though the impact of the USTR fees may be limited to certain carriers, they could still affect shipping more broadly, HSBC said. The current supply glut could extend further in the future if carriers decide to keep older non-Chinese vessels in operation longer than they would have otherwise. On the other hand, carriers will also have less flexibility to rotate in new ships or add new capacity to US trade lanes if the only available vessels were built in China. Service changes may be most critical for the Ocean Alliance, which comprises Cosco, OOCL, CMA CGM and Evergreen Marine. HSBC said CMA CGM and/or Evergreen may have to provide more of the vessels operating on the alliance’s trans-Pacific services to avoid exposure to the port fees. Cosco and OOCL, meanwhile, could provide more of the tonnage going into the Ocean Alliance’s non-US trade lanes, or the group could offer transshipment options through Mexico and Canada. “The network realignment by Chinese and non-Chinese carriers could temporarily reduce services and tighten capacity,” HSBC said. Contact Michael Angell at michael.angell@spglobal.com .

Trans-Atlantic

Trans-Pacific

US port fees could exceed $2B for Cosco, OOCL: HSBC

<div class="phx-topic abstract-wrapper">The fruit shipper cites the downsides of moving perishables by breakbulk methods, criticizing the “hours of exposure to extreme heat or cold and frequent handling.” </div>

The fruit shipper cites the downsides of moving perishables by breakbulk methods, criticizing the “hours of exposure to extreme heat or cold and frequent handling.”

<div class="phx-topic">Fresh Del Monte Produce will switch from breakbulk to dedicated container shipping services for its banana and pineapple exports from the Philippines when intra-Asia carrier CNC Line upgrades its services to South Korea and Japan next week. This adds another <a href="https://www.joc.com/article/breakbulk-reefer-segment-hanging-on-in-shrinking-market-5738520">blow to breakbulk as a transport mode</a> for both fruits, which are under broader pressure from tariff reforms in both countries. The global fruit and vegetable producer confirmed the switch to CNC Line in a statement. CNC Line said the short transit times for its two revamped services is “ideal for perishables and fresh fruits,” without naming Fresh Del Monte Produce specifically. The fruit producer said the collaboration with CNC Line “marks a departure from traditional breakbulk shipping methods.”“By transitioning to dedicated container vessels, we’re not only improving cold chain reliability and minimizing damage but also creating a more agile, scalable logistics model that better serves our retail partners across Asia,” Raul Saca, Fresh Del Monte senior vice president, global logistics, said in the statement.Fresh Del Monte said fruits transported by traditional breakbulk methods “may face hours of exposure to extreme heat or cold and frequent handling,” whereas shipping in container ships “keeps fruit in consistent, temperature-controlled conditions from farm to customer.” The company said it would utilize CNC’s upgraded BMX Philippines-South Korea service that will relaunch from Davao in Mindanao on Sept. 19 with a direct sailing to Pusan and a new call at the nearby city of Masan. The backhaul will include calls at Dalian and Qingdao in northern China, Xiamen and Nansha in southern China and Manila. Fresh Del Monte will start using CNC’s expanded Japan-Philippines (JP8) service when it begins on Sept. 21. CNC said in a customer advisory that the service will be direct from Davao to Tokyo with expanded coverage with calls at three additional Japanese ports — Yokohama, Kobe and Moji. The return leg includes calls at Nansha and Shekou in southern China and Subic Bay in the Philippines. Contact Keith Wallis at <a href="keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Fresh Del Monte Produce will switch from breakbulk to dedicated container shipping services for its banana and pineapple exports from the Philippines when intra-Asia carrier CNC Line upgrades its services to South Korea and Japan next week. This adds another blow to breakbulk as a transport mode for both fruits, which are under broader pressure from tariff reforms in both countries. The global fruit and vegetable producer confirmed the switch to CNC Line in a statement. CNC Line said the short transit times for its two revamped services is “ideal for perishables and fresh fruits,” without naming Fresh Del Monte Produce specifically. The fruit producer said the collaboration with CNC Line “marks a departure from traditional breakbulk shipping methods.” “By transitioning to dedicated container vessels, we’re not only improving cold chain reliability and minimizing damage but also creating a more agile, scalable logistics model that better serves our retail partners across Asia,” Raul Saca, Fresh Del Monte senior vice president, global logistics, said in the statement. Fresh Del Monte said fruits transported by traditional breakbulk methods “may face hours of exposure to extreme heat or cold and frequent handling,” whereas shipping in container ships “keeps fruit in consistent, temperature-controlled conditions from farm to customer.” The company said it would utilize CNC’s upgraded BMX Philippines-South Korea service that will relaunch from Davao in Mindanao on Sept. 19 with a direct sailing to Pusan and a new call at the nearby city of Masan. The backhaul will include calls at Dalian and Qingdao in northern China, Xiamen and Nansha in southern China and Manila. Fresh Del Monte will start using CNC’s expanded Japan-Philippines (JP8) service when it begins on Sept. 21. CNC said in a customer advisory that the service will be direct from Davao to Tokyo with expanded coverage with calls at three additional Japanese ports — Yokohama, Kobe and Moji. The return leg includes calls at Nansha and Shekou in southern China and Subic Bay in the Philippines. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Maritime

Breakbulk News

Fresh Del Monte Produce switching from breakbulk to box transport

<div class="phx-topic abstract-wrapper">Full ships, a low number of blank sailings and improving schedule reliability have stabilized the westbound trade lane but will do little to raise rate levels, say executives and analysts. </div>

Full ships, a low number of blank sailings and improving schedule reliability have stabilized the westbound trade lane but will do little to raise rate levels, say executives and analysts.

<div class="phx-topic">The absence of another bump of volume on the horizon for the rest of the year will further weaken the westbound trans-Atlantic trade despite fully utilized ships and low levels of blank sailings, shipping executives warn. Spot and contract rates are under pressure and US retailers’ subdued expectations for the winter shopping season, as reflected by low single-digit volume growth, are adding to the uncertainty gripping the trans-Atlantic. “With long-term rates at an all-time low and moving sideways, short-term rates could slide in the near future,” Destine Ozuygur, product marketing manager at rate benchmarking platform Xeneta, told the Journal of Commerce’s European Shipping and Trade Outlook: The Trans-Atlantic webinar. Data from Xeneta shows long-term rates from North Europe to the US East Coast signed in the last three months falling to $627 per FEU by Sept. 8, down 42% since Jan. 1. The long-term rate has fallen 32% since June 30. Spot rates are following the same pattern and at $1,060 per FEU on Sept. 8, are down 43% since the beginning of the year and down 20% since June 30. ”We are not seeing blanks introduced in order to actually tighten capacity or bump up the rates, and I do believe that signals healthy demand,” Ozuygur said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="5033ee53-82a4-4316-827d-9bf04d8c4c5d"></dynamic-object></div>Michael Britton, head of ocean products for North America at Maersk, noted that the underlying health of the US economy and imports through September appeared to be strong. ”We’re seeing pretty positive reports coming out of some of the sectors here in the US, including the retail sector,” he told the webinar. “We maintain cautious optimism that the market will continue to grow, and demand will remain positive.” Volumes from January through July are up 2% year over year, according to the latest available data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global. <h3>Upward trend of schedule reliability </h3>Shippers on the trade are also benefitting from significant improvement in schedule reliability on routes from both North Europe and the Mediterranean to the US East Coast, according to Ozuygur. ”We’ve seen an increase in on-time performance from 24% to 58% from North Europe since January, and the Mediterranean monthly reliability has nudged its way up from 24% to 36%,” Ozuygur said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9ef503b6-2b15-4e10-afa3-6f0a419f0374"></dynamic-object></div>While the trans-Atlantic schedule reliability is significantly better than the major trades out of Asia and has improved steadily through the year, “50% within the grand scope of things is not amazing,” Ozuygur said. The trans-Atlantic is the only trade lane where the Gemini Cooperation of Maersk and Hapag-Lloyd has been able to maintain its above-90% schedule reliability promise. Xeneta data shows Gemini’s average schedule reliability on the trans-Atlantic was 92%; the next best was non-alliance services at 58% and third was Mediterranean Shipping Co. (MSC), whose standalone services averaged an on-time performance of 36%. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a6f7b7e7-2b0f-41f9-85bf-6830b97b301c"></dynamic-object></div>Britton said the hub-and-spoke network offered by Gemini was a structural change that underpinned the improved performance. ”What we’ve seen in the past is that the services which were calling anywhere from 12 to 15 ports on any one rotation had a much lower reliability than those that were calling six to eight ports,” he told the webinar. “So, we came up with a network design that allows us to make every vessel sail a shorter distance, add fewer ports on every rotation, and that is done by leveraging a network of hubs that we operate around the world,” he noted. The improvement in schedule reliability is appreciated by customers of the carriers, but Scott Dudley, head of ocean freight for North America at Rhenus Logistics, said maintaining the reliability over the long term will be Gemini’s greatest challenge. “The big question is how Gemini is planning to keep up the high performance,” he said. “It is less about the effectiveness of it, because they have shown they can be effective, but the big question is about the efficiency of the whole system.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The absence of another bump of volume on the horizon for the rest of the year will further weaken the westbound trans-Atlantic trade despite fully utilized ships and low levels of blank sailings, shipping executives warn. Spot and contract rates are under pressure and US retailers’ subdued expectations for the winter shopping season, as reflected by low single-digit volume growth, are adding to the uncertainty gripping the trans-Atlantic. “With long-term rates at an all-time low and moving sideways, short-term rates could slide in the near future,” Destine Ozuygur, product marketing manager at rate benchmarking platform Xeneta, told the Journal of Commerce’s European Shipping and Trade Outlook: The Trans-Atlantic webinar. Data from Xeneta shows long-term rates from North Europe to the US East Coast signed in the last three months falling to $627 per FEU by Sept. 8, down 42% since Jan. 1. The long-term rate has fallen 32% since June 30. Spot rates are following the same pattern and at $1,060 per FEU on Sept. 8, are down 43% since the beginning of the year and down 20% since June 30. ”We are not seeing blanks introduced in order to actually tighten capacity or bump up the rates, and I do believe that signals healthy demand,” Ozuygur said. Michael Britton, head of ocean products for North America at Maersk, noted that the underlying health of the US economy and imports through September appeared to be strong. ”We’re seeing pretty positive reports coming out of some of the sectors here in the US, including the retail sector,” he told the webinar. “We maintain cautious optimism that the market will continue to grow, and demand will remain positive.” Volumes from January through July are up 2% year over year, according to the latest available data from PIERS, a sister company of the Journal of Commerce within S&P Global. Upward trend of schedule reliability Shippers on the trade are also benefitting from significant improvement in schedule reliability on routes from both North Europe and the Mediterranean to the US East Coast, according to Ozuygur. ”We’ve seen an increase in on-time performance from 24% to 58% from North Europe since January, and the Mediterranean monthly reliability has nudged its way up from 24% to 36%,” Ozuygur said. While the trans-Atlantic schedule reliability is significantly better than the major trades out of Asia and has improved steadily through the year, “50% within the grand scope of things is not amazing,” Ozuygur said. The trans-Atlantic is the only trade lane where the Gemini Cooperation of Maersk and Hapag-Lloyd has been able to maintain its above-90% schedule reliability promise. Xeneta data shows Gemini’s average schedule reliability on the trans-Atlantic was 92%; the next best was non-alliance services at 58% and third was Mediterranean Shipping Co. (MSC), whose standalone services averaged an on-time performance of 36%. Britton said the hub-and-spoke network offered by Gemini was a structural change that underpinned the improved performance. ”What we’ve seen in the past is that the services which were calling anywhere from 12 to 15 ports on any one rotation had a much lower reliability than those that were calling six to eight ports,” he told the webinar. “So, we came up with a network design that allows us to make every vessel sail a shorter distance, add fewer ports on every rotation, and that is done by leveraging a network of hubs that we operate around the world,” he noted. The improvement in schedule reliability is appreciated by customers of the carriers, but Scott Dudley, head of ocean freight for North America at Rhenus Logistics, said maintaining the reliability over the long term will be Gemini’s greatest challenge. “The big question is how Gemini is planning to keep up the high performance,” he said. “It is less about the effectiveness of it, because they have shown they can be effective, but the big question is about the efficiency of the whole system.” Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic pricing weakens without year-end volume bump

<div class="phx-topic abstract-wrapper">Railroads are expanding services between Mexico and the US, while Canada–US intermodal container traffic is down by double-digit percentages, writes rail analyst Larry Gross. </div>

Railroads are expanding services between Mexico and the US, while Canada–US intermodal container traffic is down by double-digit percentages, writes rail analyst Larry Gross.

<div class="phx-topic">With all the trade turmoil currently underway, it might be useful to take another look at the cross-border intermodal markets, where two very different stories are playing out. The Canada–US market is in a world of hurt, while the Mexico–US market is showing signs of improvement. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6077199_0.1.jpg"></img></div>These two markets are very different. The Canada–US market is substantially larger than the Mexico–US market; more than twice as many containers crossed the Canadian border in the past 12 months as crossed the Mexican border. Further, the composition of these markets is distinct. The Canadian cross-border market is all about marine containers, which comprise over 90% of traffic. Most of these 20- and 40-foot boxes land at ports in Western and Eastern Canada and are transported to inland US destinations by stack trains. In contrast, 53-foot domestic containers accounted for 99% of the Mexican cross-border market in the last 12 months. How have these markets performed? Consider the 10-year history on a 12-month moving average through July 25, according to the most recent data available from the Intermodal Association of North America (IANA). <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="98a22d6d-11ce-4c3b-a2b5-adfcc080503b"></dynamic-object></div>Total North American intermodal volume has grown 6% since 2015. That’s not terribly impressive given that real GDP has moved up 24% over the same time frame, but traffic has increased. The same cannot be said for either of the cross-border markets. As of July, Mexico–US traffic is down about 10% from 2015 levels, while Canada–US volumes have fallen a stunning 42%. Yet, there were indeed periods during which each of the cross-border markets outperformed the average. For Mexico, it was a rather brief interlude in 2016–17. The heyday for Canada began in 2017 and lasted for four years. Things changed dramatically for both markets in 2021. It marked the beginning of an unsteady recovery for the Mexico–US cross-border market, with the index rising from 76 in December 2021 to a reading of 90 in July 2025, an 18% improvement. At the same time, the Canada–US index has dropped from 112 in April 2021 to 58 in July, a 48% decline. But is total North American intermodal activity the right benchmark? After all, the Canada cross-border trade is international, and Mexico–US trade is overwhelmingly domestic. Figure 2 contains both the North American International and Domestic performance as the benchmarks. It tells a more nuanced story with regard to the Canadian market. Total international activity also declined significantly from the middle of 2021 through the end of 2023. It was only in 2024 and 2025 that the bulk of the divergence occurred. Clearly, substantial damage was inflicted in 2024 by the various disruptions that impacted this trade. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9e292c73-4ae9-4673-a69a-6ab4f9bbfb89"></dynamic-object></div>On the other hand, the Mexican market has not tracked very well with the North American domestic market. Cross-border volume improved through 2022 and 2023, while overall domestic activity largely declined. There followed, however, a dip in cross-border activity in 2023 in the face of generally improving domestic intermodal volume. Only recently has the cross-border volume regained the level achieved 18 months earlier. Through the first seven months of 2025, Canada–US cross-border revenue moves slid 18% year over year, while Mexico–US volume rose 13%. This can be compared with a 4.3% year-to-date gain in total North American volume, with international and domestic container traffic rising 6.5% and 2.1%, respectively. There may be additional heavy weather ahead for the Canadian border market. Under the US Trade Representative’s Section 301 action, Chinese-owned and -built ships docking in the US will incur fees starting Oct. 14. Within the same Section 301 document is a proposal for fees on containers originating overseas and entering the US via land routes. These fees would be meant to compensate for the China-related ship fees, as well as potentially the Harbor Maintenance Tax. As of now, these fees have not been formalized, but the threat remains. On the other hand, it appears that Mexico–US intermodal services are gaining traction. The dip in 2024 may have been a function of the market scrambling that resulted from the merger of Canadian Pacific Railway and Kansas City Southern, but now, it appears that these services are gaining stride. Larry Gross is president and founder of Gross Transportation Consulting. Contact him at <a href="lgross@intermodalindepth.com">lgross@intermodalindepth.com</a>. </div>

With all the trade turmoil currently underway, it might be useful to take another look at the cross-border intermodal markets, where two very different stories are playing out. The Canada–US market is in a world of hurt, while the Mexico–US market is showing signs of improvement. These two markets are very different. The Canada–US market is substantially larger than the Mexico–US market; more than twice as many containers crossed the Canadian border in the past 12 months as crossed the Mexican border. Further, the composition of these markets is distinct. The Canadian cross-border market is all about marine containers, which comprise over 90% of traffic. Most of these 20- and 40-foot boxes land at ports in Western and Eastern Canada and are transported to inland US destinations by stack trains. In contrast, 53-foot domestic containers accounted for 99% of the Mexican cross-border market in the last 12 months. How have these markets performed? Consider the 10-year history on a 12-month moving average through July 25, according to the most recent data available from the Intermodal Association of North America (IANA). Total North American intermodal volume has grown 6% since 2015. That’s not terribly impressive given that real GDP has moved up 24% over the same time frame, but traffic has increased. The same cannot be said for either of the cross-border markets. As of July, Mexico–US traffic is down about 10% from 2015 levels, while Canada–US volumes have fallen a stunning 42%. Yet, there were indeed periods during which each of the cross-border markets outperformed the average. For Mexico, it was a rather brief interlude in 2016–17. The heyday for Canada began in 2017 and lasted for four years. Things changed dramatically for both markets in 2021. It marked the beginning of an unsteady recovery for the Mexico–US cross-border market, with the index rising from 76 in December 2021 to a reading of 90 in July 2025, an 18% improvement. At the same time, the Canada–US index has dropped from 112 in April 2021 to 58 in July, a 48% decline. But is total North American intermodal activity the right benchmark? After all, the Canada cross-border trade is international, and Mexico–US trade is overwhelmingly domestic. Figure 2 contains both the North American International and Domestic performance as the benchmarks. It tells a more nuanced story with regard to the Canadian market. Total international activity also declined significantly from the middle of 2021 through the end of 2023. It was only in 2024 and 2025 that the bulk of the divergence occurred. Clearly, substantial damage was inflicted in 2024 by the various disruptions that impacted this trade. On the other hand, the Mexican market has not tracked very well with the North American domestic market. Cross-border volume improved through 2022 and 2023, while overall domestic activity largely declined. There followed, however, a dip in cross-border activity in 2023 in the face of generally improving domestic intermodal volume. Only recently has the cross-border volume regained the level achieved 18 months earlier. Through the first seven months of 2025, Canada–US cross-border revenue moves slid 18% year over year, while Mexico–US volume rose 13%. This can be compared with a 4.3% year-to-date gain in total North American volume, with international and domestic container traffic rising 6.5% and 2.1%, respectively. There may be additional heavy weather ahead for the Canadian border market. Under the US Trade Representative’s Section 301 action, Chinese-owned and -built ships docking in the US will incur fees starting Oct. 14. Within the same Section 301 document is a proposal for fees on containers originating overseas and entering the US via land routes. These fees would be meant to compensate for the China-related ship fees, as well as potentially the Harbor Maintenance Tax. As of now, these fees have not been formalized, but the threat remains. On the other hand, it appears that Mexico–US intermodal services are gaining traction. The dip in 2024 may have been a function of the market scrambling that resulted from the merger of Canadian Pacific Railway and Kansas City Southern, but now, it appears that these services are gaining stride. Larry Gross is president and founder of Gross Transportation Consulting. Contact him at lgross@intermodalindepth.com .

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US cross-border rail tracks Mexico recovery, Canada decline: analyst

<div class="phx-topic abstract-wrapper">Suspension of the Pacific South 5 service comes as container lines are announcing more blanked sailings from Asia to the US in an attempt to boost spot rates ahead of China’s Golden Week.</div>

Suspension of the Pacific South 5 service comes as container lines are announcing more blanked sailings from Asia to the US in an attempt to boost spot rates ahead of China’s Golden Week.

<div class="phx-topic">The Premier Alliance said Friday it is suspending its express Pacific South 5 service between eastern China and the US West Coast after only four months amid a drop in demand on the eastbound trans-Pacific. The move is the latest sign that bookings before an annual holiday slowdown in Chinese production are weaker than usual, presenting a challenge to carriers trying to stem a container spot rate bleed. Alliance members Ocean Network Express (ONE), HMM and Yang Ming gave no reason for the change in separate customer advisories, but it is possible the fall in trans-Pacific volumes amid US tariff uncertainty did not justify an express loop. The service provided a transit time of 14 days from Ningbo to Long Beach and 17 days from Qingdao to Long Beach. Instead, the Premier Alliance carriers announced additional port calls on four other trans-Pacific services. These comprise Ningbo on its PS4 service, Qingdao on the PS6 service, Pusan on the Far East Pacific North 2 and Norfolk on the US East Coast 2 services. The PS5 service was launched in June, but the carriers said the last sailing was by the 4,888 TEU NYK Constellation that left Qingdao Sept. 1 and was due to arrive at Ningbo Friday. The suspension comes as container lines are announcing more blanked sailings from Asia to the US as they attempt to boost spot rates ahead of China’s Golden Week, which begins Oct. 1. Carriers are blanking at least five sailings this week compared to two last week and two in the week before, sources confirmed. “Blank sailing activity to the East Coast is moderate now,” James Caradonna, executive vice president of the forwarder Spedag America, told the Journal of Commerce. Several sources said they expect blanking to pick up further as Golden Week approaches. <h3>Carriers try to recoup losses </h3>The next four weeks offer container lines what is likely their last shot this year to claw back at least some of the recent decline in rates. Starting Oct. 1, Chinese factories will close for eight days for Golden Week. The industry is split on whether there is any boost in cargo on the way, with forwarders seeing little signs of late-year traffic gains and a few carriers saying they are hopeful. One carrier executive said retailers should be incentivized to ship what they can this month before the Golden Week holiday. During the second half of August, bookings for Chinese shipments into the US were down nearly 33% from the same time last year, according to data from maritime visibility provider Vizion and data and analytics company Dun &amp; Bradstreet. Even as carriers take more functional capacity out of the market through blank sailings, there is still plenty of slot availability, according to multiple forwarder notices seen by the Journal of Commerce. In September, carriers are blanking almost 15% of capacity into the East and Gulf coasts, according to maritime intelligence provider eeSea. Container spot rates to both coasts have been climbing since Aug. 22, according to various indices, with the Shanghai Shipping Exchange measuring a 33.1% increase on US West Coast routing, to $2,189 per FEU over the past two weeks. Bullet rates quoted for single voyages tend to be $200-$300 less than index rates, and some forwarder quotes for US West Coast routings have been as low as $1,600 per FEU. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="da1b20b1-3e87-4d61-b13f-10e2633dce91"></dynamic-object></div>Several forwarders said they are already seeing some reductions to the latest general rate increase (GRI) implemented Sept. 1. ”We’ve got notifications from carriers already starting to pull the rate down — only like $100 to $200,” said a freight forwarder. “It’s not a huge drop, but we’re only four days in, [and] already seeing some rate reductions.” “Given the lack of volume surge prior to Golden Week, these rate increases are unlikely to stick in full and, at best, will allow the carriers to maintain rate levels,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. “This behavior will continue as we get into [the fourth quarter] when the volume decline will be more pronounced [than the third quarter.]” September bookings so far are lower than last year, said Robert Khachatryan, CEO of the forwarder FreightRight Global Logistics. “It doesn’t look good to me. If there is any tightness, it is probably going to be because of the blank sailings,” he said. Overall, another forwarder said, most shippers are not in a hurry to book their shipments, especially with the rate increases. ”The shipper has the power in that sense,” the source said. “At some point they’re [going to realize they] don’t have any inventory. But in the meantime, nobody’s in a hurry.” The US head at a major carrier confirmed blank announcements are encouraging some bookings but noted “bookings are much slower than usual” during the lead-up to Golden Week. <h3>Plentiful capacity </h3>Some container lines are optimistic that demand will rise ahead of Golden Week and that demand for the rest of the year may be stronger than expected. With US inventories low, there is room for restocking even with tariffs, while US durable goods consumption continues to expand, carriers note. “I think what we’re hearing from customers is yes, they frontloaded their volumes, but US consumer demand has probably also exceeded expectations,” Michael Britton, head of North American markets for ocean products at Maersk, told the Journal of Commerce. But Britton acknowledged it was likely that Maersk would have to blank some sailings ahead of Golden Week and could trim services such as the TP9 launched in June if demand weakens more than anticipated. ”[Rates are elevated] because of pre-Golden Week push,” said another carrier source. “We also have had some blanks, so some cargo is being rolled, and our [utilization] is closer to 90%, so it will keep the spot rate at the higher level.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="f0d3021d-c84d-4556-9f93-72c0f6230a17"></dynamic-object></div>The source said their elevated utilization had helped support rates, which is why they have not lowered their rates like some other carriers. ”If [utilization] gets to 50% or 60%, then we will start seeing drops,” the source said. “Maybe by the end of the month.” Carriers are already announcing blank sailings for October, which will further constrict capacity. “There will be heavy blanks through mid-October,” the first carrier executive said. “In the final week of October, they’ll be reinstated.” Forwarders say that although most of the alliance carriers this week are attempting to stand firm on the Sept. 1 GRIs, space is plentiful and importers have access to special rates that could begin to erode the posted rates by mid-month. “There is no problem getting space — across the board. Carriers are in a bit of a pickle,” said Jon Monroe, who serves as an advisor to non-vessel-operating common carriers. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Special Correspondent Keith Wallis contributed to this report. </div>

The Premier Alliance said Friday it is suspending its express Pacific South 5 service between eastern China and the US West Coast after only four months amid a drop in demand on the eastbound trans-Pacific. The move is the latest sign that bookings before an annual holiday slowdown in Chinese production are weaker than usual, presenting a challenge to carriers trying to stem a container spot rate bleed. Alliance members Ocean Network Express (ONE), HMM and Yang Ming gave no reason for the change in separate customer advisories, but it is possible the fall in trans-Pacific volumes amid US tariff uncertainty did not justify an express loop. The service provided a transit time of 14 days from Ningbo to Long Beach and 17 days from Qingdao to Long Beach. Instead, the Premier Alliance carriers announced additional port calls on four other trans-Pacific services. These comprise Ningbo on its PS4 service, Qingdao on the PS6 service, Pusan on the Far East Pacific North 2 and Norfolk on the US East Coast 2 services. The PS5 service was launched in June, but the carriers said the last sailing was by the 4,888 TEU NYK Constellation that left Qingdao Sept. 1 and was due to arrive at Ningbo Friday. The suspension comes as container lines are announcing more blanked sailings from Asia to the US as they attempt to boost spot rates ahead of China’s Golden Week, which begins Oct. 1. Carriers are blanking at least five sailings this week compared to two last week and two in the week before, sources confirmed. “Blank sailing activity to the East Coast is moderate now,” James Caradonna, executive vice president of the forwarder Spedag America, told the Journal of Commerce. Several sources said they expect blanking to pick up further as Golden Week approaches. Carriers try to recoup losses The next four weeks offer container lines what is likely their last shot this year to claw back at least some of the recent decline in rates. Starting Oct. 1, Chinese factories will close for eight days for Golden Week. The industry is split on whether there is any boost in cargo on the way, with forwarders seeing little signs of late-year traffic gains and a few carriers saying they are hopeful. One carrier executive said retailers should be incentivized to ship what they can this month before the Golden Week holiday. During the second half of August, bookings for Chinese shipments into the US were down nearly 33% from the same time last year, according to data from maritime visibility provider Vizion and data and analytics company Dun & Bradstreet. Even as carriers take more functional capacity out of the market through blank sailings, there is still plenty of slot availability, according to multiple forwarder notices seen by the Journal of Commerce. In September, carriers are blanking almost 15% of capacity into the East and Gulf coasts, according to maritime intelligence provider eeSea. Container spot rates to both coasts have been climbing since Aug. 22, according to various indices, with the Shanghai Shipping Exchange measuring a 33.1% increase on US West Coast routing, to $2,189 per FEU over the past two weeks. Bullet rates quoted for single voyages tend to be $200-$300 less than index rates, and some forwarder quotes for US West Coast routings have been as low as $1,600 per FEU. Several forwarders said they are already seeing some reductions to the latest general rate increase (GRI) implemented Sept. 1. ”We’ve got notifications from carriers already starting to pull the rate down — only like $100 to $200,” said a freight forwarder. “It’s not a huge drop, but we’re only four days in, [and] already seeing some rate reductions.” “Given the lack of volume surge prior to Golden Week, these rate increases are unlikely to stick in full and, at best, will allow the carriers to maintain rate levels,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. “This behavior will continue as we get into [the fourth quarter] when the volume decline will be more pronounced [than the third quarter.]” September bookings so far are lower than last year, said Robert Khachatryan, CEO of the forwarder FreightRight Global Logistics. “It doesn’t look good to me. If there is any tightness, it is probably going to be because of the blank sailings,” he said. Overall, another forwarder said, most shippers are not in a hurry to book their shipments, especially with the rate increases. ”The shipper has the power in that sense,” the source said. “At some point they’re [going to realize they] don’t have any inventory. But in the meantime, nobody’s in a hurry.” The US head at a major carrier confirmed blank announcements are encouraging some bookings but noted “bookings are much slower than usual” during the lead-up to Golden Week. Plentiful capacity Some container lines are optimistic that demand will rise ahead of Golden Week and that demand for the rest of the year may be stronger than expected. With US inventories low, there is room for restocking even with tariffs, while US durable goods consumption continues to expand, carriers note. “I think what we’re hearing from customers is yes, they frontloaded their volumes, but US consumer demand has probably also exceeded expectations,” Michael Britton, head of North American markets for ocean products at Maersk, told the Journal of Commerce. But Britton acknowledged it was likely that Maersk would have to blank some sailings ahead of Golden Week and could trim services such as the TP9 launched in June if demand weakens more than anticipated. ”[Rates are elevated] because of pre-Golden Week push,” said another carrier source. “We also have had some blanks, so some cargo is being rolled, and our [utilization] is closer to 90%, so it will keep the spot rate at the higher level.” The source said their elevated utilization had helped support rates, which is why they have not lowered their rates like some other carriers. ”If [utilization] gets to 50% or 60%, then we will start seeing drops,” the source said. “Maybe by the end of the month.” Carriers are already announcing blank sailings for October, which will further constrict capacity. “There will be heavy blanks through mid-October,” the first carrier executive said. “In the final week of October, they’ll be reinstated.” Forwarders say that although most of the alliance carriers this week are attempting to stand firm on the Sept. 1 GRIs, space is plentiful and importers have access to special rates that could begin to erode the posted rates by mid-month. “There is no problem getting space — across the board. Carriers are in a bit of a pickle,” said Jon Monroe, who serves as an advisor to non-vessel-operating common carriers. Contact Laura Robb at laura.robb@spglobal.com . Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Special Correspondent Keith Wallis contributed to this report.

Forwarding

Premier Alliance service halt latest sign of trans-Pacific demand downturn

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

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

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

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

Ocean carriers are not helpless when it comes to managing capacity

<div class="phx-topic abstract-wrapper">The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base.</div>

The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base.

<div class="phx-topic">For decades, international containerized freight from Michigan and the broader Midwest has been routed through distant US coastal gateways such as New York, Norfolk and Savannah, or Canadian ports such as Halifax and Montreal. Export-side users have included automotive original equipment manufacturers (OEMs), steel and chemical producers and agricultural shippers, while imports have consisted of tier 1 suppliers, machinery and equipment distributors and retail or e-commerce consolidators. These routes were not chosen for efficiency or cost. They were imposed by federal restrictions that have for decades prevented containerized freight from entering or exiting the Great Lakes by vessel. US Customs today does not permit such movements through Michigan because no facility in the state meets the required federal standards for security and processing. That is about to change. In 2026, the Port of Monroe will activate the first SAFE Port Act-compliant international container terminal in the Great Lakes, along with a new roll-on/roll-off (ro/ro) platform that complements existing vessel berths, dual Class I rail access and proximity to interstate highways and Midwest manufacturing. Together, these assets position Monroe as a fully integrated inland gateway for containerized trade and high-value industrial logistics. Conservatively, 1 million to 2 million TEUs of oceangoing cargo are generated annually from the Great Lakes’ industrial core, according to port estimates. This includes high-value shipments from sectors such as automotive, machinery, chemicals and electronics. Rather than projecting future throughput volumes, the Port of Monroe is focused on establishing a lawful and functioning corridor, allowing the market to respond. The goal is to restore balance, provide carriers with a practical entry point and give shippers a logistics option that should have existed decades ago. The terminal at Monroe will be available to operators who recognize the value of establishing service in an underserved but strategically positioned market. The automotive industry, in particular, stands to benefit. With production concentrated in the Midwest and export demand on the rise, direct vessel service from Monroe reduces complexity and supports just-in-time inventory models. Monroe offers a new point of connection between Midwest production and global markets, serving as a strategic outlet for general containerized freight and, more uniquely, for the direct shipment of new vehicles via ro/ro or in containers. Resilience has become a defining priority for today’s logistics networks. The March 2024 collapse of the Francis Scott Key Bridge in Baltimore, a critical ro/ro and vehicle export hub, exposed the system’s fragility. Overnight, cargo flows were disrupted, schedules were delayed and shippers were forced to reroute at significant cost. Inland ports such as the Port of Monroe offer a hedge against that kind of single-point failure. <h3>‘Manageable’ constraints </h3>Do the Great Lakes have constraints? Yes, but they are manageable. The annual three-month winter closure of the St. Lawrence Seaway is predictable and published well in advance, allowing cargo owners and carriers to plan accordingly. Intra-lake shipping continues throughout the winter, particularly with ice-class vessels. Recent climate trends indicate shorter freeze periods and milder conditions, which are gradually increasing intralake shipping capacity during the winter months. Other northern regions facing even harsher winter conditions have demonstrated what is possible. The Baltic Sea offers a relevant example. Despite a smaller economic footprint and more severe ice conditions, Baltic ports remain active year-round through the use of ice-capable vessels and integrated multimodal infrastructure. There is no reason the Great Lakes, now that the regulatory path has been cleared, should not do the same and make a comparable contribution to North American trade resilience. Unlike coastal gateways, which face sudden disruptions from hurricanes, labor action and infrastructure failures, the risks on the Great Lakes are stable and foreseeable. That reliability offers a competitive advantage for shippers navigating global volatility. But infrastructure alone is not enough. What is required is a shift in mindset. Federal freight policy must treat the Great Lakes as a fully integrated corridor. Carriers need to revisit assumptions about vessel size and routing patterns. Shippers will now be able to prioritize proximity, reliability and carbon performance rather than adhering to legacy paths shaped by outdated restrictions. The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base. Supporting inland container movement by vessel can drive demand for US-built ships, sustain skilled shipyard jobs, and expand the national maritime workforce. This is not just a logistics upgrade. It is a long-term investment in national capacity, employment, and competitiveness. This is a practical opportunity to enhance the national freight system using inland infrastructure that is efficient, cost-effective and underutilized. Monroe stands ready to serve shippers, carriers and policymakers seeking flexible, durable solutions. The Great Lakes have always had the potential to support containerized trade. Now that the path is open, the Port of Monroe is prepared to deliver. Capt. Paul C. LaMarre III is also director of the Port of Monroe in Michigan. Contact him at <a href="mailto:plamarre@portofmonroe.com">plamarre@portofmonroe.com</a>. </div>

For decades, international containerized freight from Michigan and the broader Midwest has been routed through distant US coastal gateways such as New York, Norfolk and Savannah, or Canadian ports such as Halifax and Montreal. Export-side users have included automotive original equipment manufacturers (OEMs), steel and chemical producers and agricultural shippers, while imports have consisted of tier 1 suppliers, machinery and equipment distributors and retail or e-commerce consolidators. These routes were not chosen for efficiency or cost. They were imposed by federal restrictions that have for decades prevented containerized freight from entering or exiting the Great Lakes by vessel. US Customs today does not permit such movements through Michigan because no facility in the state meets the required federal standards for security and processing. That is about to change. In 2026, the Port of Monroe will activate the first SAFE Port Act-compliant international container terminal in the Great Lakes, along with a new roll-on/roll-off (ro/ro) platform that complements existing vessel berths, dual Class I rail access and proximity to interstate highways and Midwest manufacturing. Together, these assets position Monroe as a fully integrated inland gateway for containerized trade and high-value industrial logistics. Conservatively, 1 million to 2 million TEUs of oceangoing cargo are generated annually from the Great Lakes’ industrial core, according to port estimates. This includes high-value shipments from sectors such as automotive, machinery, chemicals and electronics. Rather than projecting future throughput volumes, the Port of Monroe is focused on establishing a lawful and functioning corridor, allowing the market to respond. The goal is to restore balance, provide carriers with a practical entry point and give shippers a logistics option that should have existed decades ago. The terminal at Monroe will be available to operators who recognize the value of establishing service in an underserved but strategically positioned market. The automotive industry, in particular, stands to benefit. With production concentrated in the Midwest and export demand on the rise, direct vessel service from Monroe reduces complexity and supports just-in-time inventory models. Monroe offers a new point of connection between Midwest production and global markets, serving as a strategic outlet for general containerized freight and, more uniquely, for the direct shipment of new vehicles via ro/ro or in containers. Resilience has become a defining priority for today’s logistics networks. The March 2024 collapse of the Francis Scott Key Bridge in Baltimore, a critical ro/ro and vehicle export hub, exposed the system’s fragility. Overnight, cargo flows were disrupted, schedules were delayed and shippers were forced to reroute at significant cost. Inland ports such as the Port of Monroe offer a hedge against that kind of single-point failure. ‘Manageable’ constraints Do the Great Lakes have constraints? Yes, but they are manageable. The annual three-month winter closure of the St. Lawrence Seaway is predictable and published well in advance, allowing cargo owners and carriers to plan accordingly. Intra-lake shipping continues throughout the winter, particularly with ice-class vessels. Recent climate trends indicate shorter freeze periods and milder conditions, which are gradually increasing intralake shipping capacity during the winter months. Other northern regions facing even harsher winter conditions have demonstrated what is possible. The Baltic Sea offers a relevant example. Despite a smaller economic footprint and more severe ice conditions, Baltic ports remain active year-round through the use of ice-capable vessels and integrated multimodal infrastructure. There is no reason the Great Lakes, now that the regulatory path has been cleared, should not do the same and make a comparable contribution to North American trade resilience. Unlike coastal gateways, which face sudden disruptions from hurricanes, labor action and infrastructure failures, the risks on the Great Lakes are stable and foreseeable. That reliability offers a competitive advantage for shippers navigating global volatility. But infrastructure alone is not enough. What is required is a shift in mindset. Federal freight policy must treat the Great Lakes as a fully integrated corridor. Carriers need to revisit assumptions about vessel size and routing patterns. Shippers will now be able to prioritize proximity, reliability and carbon performance rather than adhering to legacy paths shaped by outdated restrictions. The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base. Supporting inland container movement by vessel can drive demand for US-built ships, sustain skilled shipyard jobs, and expand the national maritime workforce. This is not just a logistics upgrade. It is a long-term investment in national capacity, employment, and competitiveness. This is a practical opportunity to enhance the national freight system using inland infrastructure that is efficient, cost-effective and underutilized. Monroe stands ready to serve shippers, carriers and policymakers seeking flexible, durable solutions. The Great Lakes have always had the potential to support containerized trade. Now that the path is open, the Port of Monroe is prepared to deliver. Capt. Paul C. LaMarre III is also director of the Port of Monroe in Michigan. Contact him at plamarre@portofmonroe.com .

Supply chain

Marine terminals

Ro/ro cargo

Port infrastructure

Michigan inland port offers new option for Great Lakes containerized freight

 Actual capacity

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Planned capacity

Blanked capacity

eeSea collects and centralizes liner network data from dozens of public sources including carriers’ vessel tracking portals, long-term schedules, customer advisories, port and terminal operator schedules, and pilot schedules. These disparate datasets are continually inspected, cleaned, and carefully structured. eeSea synthesizes this refined public data with AIS positions from a third-party provider and its datasets spanning schedule reliability, transit times, trade capacity evolution, and 60-day vessel forecasts. Capacity is measured based on the last load port in Asia [eeSea](https://www.eesea.com)

Asia to US West Coast container capacity (eeSea)

Asia to US West Coast container capacity(eeSea)

<div class="phx-topic abstract-wrapper">Knight-Swift already partners with both UP and NS, so a combined transcontinental railroad would fit nicely into its existing service for shippers.</div>

Knight-Swift already partners with both UP and NS, so a combined transcontinental railroad would fit nicely into its existing service for shippers.

<div class="phx-topic">Knight-Swift Transportation said Tuesday it believes US regulators should approve Union Pacific Railroad’s (UP’s) acquisition of Norfolk Southern Railway (NS), becoming the fourth major intermodal provider to publicly back the $85 billion deal. Swift Intermodal, Knight-Swift’s intermodal division, already partners with both UP and NS, making the acquisition a natural fit for its existing intermodal network. A combined transcontinental railroad would require little to no adjustment for Swift, and it could reap the rewards of eliminating time-consuming interchanges in cities such as Chicago, Memphis and New Orleans. “By knitting together a coast-to-coast rail network, Union Pacific and Norfolk Southern are creating new efficiencies that will benefit everyone — from logistics providers like us to our customers, to the end-consumers,” Knight-Swift CEO Adam Miller said in a statement. “As a company that operates thousands of trucks and thousands of intermodal containers, we know the power of combining modes. This unified rail system will let us seamlessly integrate our trucking with rail on cross-country shipments like never before.” Knight-Swift’s intermodal division owns about 12,000 containers, hauling nearly 150,000 loads across all North American railroads annually. It is the fifth-largest asset-owning intermodal provider in the US behind J.B. Hunt Transport Services, Hub Group, Schneider National and STG Logistics. Knight-Swift joins <a href="https://www.joc.com/article/up-ns-deal-would-trigger-unnecessary-wave-of-rail-mergers-cpkc-6069870">C.R. England, Hub Group, and Mode Transportation</a> as supporters of the UP-NS deal, which would create the US’ first transcontinental railroad and requires approval from the US Surface Transportation Board (STB), which could come sometime in 2027. <h3>Political football </h3>While UP and NS have until January to file their formal application to the STB, the railroads received a boost last week when the Trump administration moved to <a href="https://www.joc.com/article/trump-move-to-oust-stbs-primus-boosts-likelihood-of-up-ns-approval-6070952">fire board member</a> Robert Primus, who has been vocal in his opposition to consolidation in the rail industry. The Sheet Metal, Air, Rail, Transportation Union and its transportation division (SMART-TD), has come out against the UP-NS transaction and criticized the attempted removal of Primus. The Brotherhood of Locomotive Engineers and Trainmen (BLET), another large rail union, has not taken a position on the proposed acquisition. Canadian Pacific Kansas City (CPKC) opposes the deal and last week ruled out a potential merger with the other eastern US railroad, CSX Transportation. Canadian National Railway has not commented publicly on the UP-NS deal. Schneider National and STG Logistics, two other large asset-based partners of UP, have not taken a position on the proposed acquisition. Both partner with CSX in the eastern US, making a UP-NS transcontinental railroad more complicated for their intermodal networks. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Knight-Swift Transportation said Tuesday it believes US regulators should approve Union Pacific Railroad’s (UP’s) acquisition of Norfolk Southern Railway (NS), becoming the fourth major intermodal provider to publicly back the $85 billion deal. Swift Intermodal, Knight-Swift’s intermodal division, already partners with both UP and NS, making the acquisition a natural fit for its existing intermodal network. A combined transcontinental railroad would require little to no adjustment for Swift, and it could reap the rewards of eliminating time-consuming interchanges in cities such as Chicago, Memphis and New Orleans. “By knitting together a coast-to-coast rail network, Union Pacific and Norfolk Southern are creating new efficiencies that will benefit everyone — from logistics providers like us to our customers, to the end-consumers,” Knight-Swift CEO Adam Miller said in a statement. “As a company that operates thousands of trucks and thousands of intermodal containers, we know the power of combining modes. This unified rail system will let us seamlessly integrate our trucking with rail on cross-country shipments like never before.” Knight-Swift’s intermodal division owns about 12,000 containers, hauling nearly 150,000 loads across all North American railroads annually. It is the fifth-largest asset-owning intermodal provider in the US behind J.B. Hunt Transport Services, Hub Group, Schneider National and STG Logistics. Knight-Swift joins C.R. England, Hub Group, and Mode Transportation as supporters of the UP-NS deal, which would create the US’ first transcontinental railroad and requires approval from the US Surface Transportation Board (STB), which could come sometime in 2027. Political football While UP and NS have until January to file their formal application to the STB, the railroads received a boost last week when the Trump administration moved to fire board member Robert Primus, who has been vocal in his opposition to consolidation in the rail industry. The Sheet Metal, Air, Rail, Transportation Union and its transportation division (SMART-TD), has come out against the UP-NS transaction and criticized the attempted removal of Primus. The Brotherhood of Locomotive Engineers and Trainmen (BLET), another large rail union, has not taken a position on the proposed acquisition. Canadian Pacific Kansas City (CPKC) opposes the deal and last week ruled out a potential merger with the other eastern US railroad, CSX Transportation. Canadian National Railway has not commented publicly on the UP-NS deal. Schneider National and STG Logistics, two other large asset-based partners of UP, have not taken a position on the proposed acquisition. Both partner with CSX in the eastern US, making a UP-NS transcontinental railroad more complicated for their intermodal networks. Contact Ari Ashe at ari.ashe@spglobal.com .

Knight-Swift says it backs Union Pacific-Norfolk Southern deal

<div class="phx-topic abstract-wrapper">Ocean carriers are seeking to curb the sharp decline in spot rates in the run-up to next month’s Golden Week holiday. </div>

Ocean carriers are seeking to curb the sharp decline in spot rates in the run-up to next month’s Golden Week holiday.

<div class="phx-topic">The next few weeks on the trans-Pacific trade will be telling as time is running out for container lines to adjust capacity to falling demand or risk losing contracted cargo to the spot market. A slight bump last week in container spot rates, as measured by the Platts and Shanghai Shipping Exchange indexes, could be a sign of blank sailings ending the sharp dive in rates that began in late May, or merely a blip. The run-up to Golden Week that starts Oct. 1, a period of slowing China production due to the holiday observance, gives carriers the last major window this year to stem the rate bleed or see shippers neglect contracted allocations in favor of cheaper spot rates. Ocean carriers are seeking rate increases of $800 to $900 per FEU, sources say, with one carrier representative noting the efforts are focused on curbing the rate erosion of the last two months. Container spot rates from Asia to the US West Coast are about $2,000 per FEU, according to various indexes, with the Shanghai Shipping Exchange registering a 65% drop since June. Bullet rates quoted for single voyages tend to be $200 to $300 less than index rates, and some forwarder quotes for US West Coast routings have been as low as $1,300-$1,400 per FEU.Container lines thus far have been modest in blanking capacity despite falling rates and <a href="https://www.joc.com/article/us-retailers-project-big-year-over-year-import-declines-to-close-out-2025-6060323">weak forecasts for year-end volumes</a>. But analysts and forwarders warn that a sharp increase in blanks is nearly inevitable. Carriers’ averseness to losing import <a href="https://www.joc.com/article/toll-of-us-tariffs-begins-to-emerge-on-unsettled-trans-pacific-6065761">volumes already weakened by US tariff frontloading</a>, the potential for a late-year surge, and <a href="https://www.joc.com/article/niche-carriers-plan-to-ride-out-declining-spot-rates-on-the-trans-pacific-6071722">niche carriers sticking to the trade</a> have kept blanking levels consistent with past years. <h3>More capacity coming in October </h3>Container lines plan to inject more capacity in October, nonetheless, adding nearly 100,000 TEUs more than what’s deployed in September, according to maritime intelligence provider eeSea. The share of tonnage deployed on Asia to the US West Coast that is made unusable through blank sailings hovered near 8.4% in August, and carriers so far plan to blank a similar proportion of tonnage in September and October, although that can rise as weeks progress. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d0dc514b-60a6-4b10-862a-081c37b36db2"></dynamic-object></div>If carriers can’t adjust demand to supply, they face the risk of more shippers turning to the spot market rather than fulfilling contracted cargo allocations. Spot rates, as measured by various indexes, are at levels that many small and medium-sized shippers signed contracts at in the spring. Short-term ocean rates, as measured by benchmarking provider Xeneta, began falling in early August below contract rates covering 88 days or more. The short-term cost to ship an FEU from Asia to the US West Coast was $1,319 for the week ending Aug. 28, compared with $1,597 for the long-term rate in the same period. “We've got customers who are eager to save $100 anywhere, and they want a piece of that,” said a forwarder who did not want to be identified. “We are not trying to sell it, but when they ask us, ‘What are your FAK rates?’ We can’t tell them, ‘No, we’re not going to offer you our FAK rates,’ especially if it means we’re going to get some incremental business out of it.”<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="98a0037a-3658-44f2-86a3-be3148b993eb"></dynamic-object></div>Small and medium-sized importers signed service contract rates at a larger-than-usual premium than the largest retailers in mid-April just as the market was showing strength, said another forwarder. The largest big-box retailers signed contracts that generally began May 1 in the range of $1,600 to $1,800 per FEU, while midsize and smaller importers secured contract rates in the range of $2,000 to $2,200 per FEU. The danger importers face chasing cheaper spot rates when the rates are falling is that carriers will be loath to help out cargo owners when the market inevitably tightens — even if it’s short-lived. Container lines are more agile in moving vessels to and from ocean trades by omitting calls to ports or voiding sailings, according to an Aug. 28 notice sent by forwarder American Shipping Co. to its customers that was seen by the Journal of Commerce. While such tools to manage capacity haven’t had much impact in recent months, “if timed right, it can have a direct impact on the freight rates,” the notice read. Most shippers are not concerned about carriers charging them for dead freight if they do not fill the minimum quantity commitments (MQCs) in their contracts because, historically, carriers have never done that. Carriers normally roll over the unused MQCs into the next year’s contracts. So far, the shift from contracted cargo to spot cargo has been minimal, according to forwarders and carriers who spoke with the Journal of Commerce. But the inflection point is getting closer. “It could happen” that more BCOs turn to the spot market if rates reverse course in the coming weeks and begin dropping again toward $1,600 to the West Coast and $2,600 to the East Coast, said Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV Global Logistics. “If the West Coast spot rate sinks to $1,400, some BCOs will seek to reopen their contracts, or they could book more under spot,” Kauffman said. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report. </div>

The next few weeks on the trans-Pacific trade will be telling as time is running out for container lines to adjust capacity to falling demand or risk losing contracted cargo to the spot market. A slight bump last week in container spot rates, as measured by the Platts and Shanghai Shipping Exchange indexes, could be a sign of blank sailings ending the sharp dive in rates that began in late May, or merely a blip. The run-up to Golden Week that starts Oct. 1, a period of slowing China production due to the holiday observance, gives carriers the last major window this year to stem the rate bleed or see shippers neglect contracted allocations in favor of cheaper spot rates. Ocean carriers are seeking rate increases of $800 to $900 per FEU, sources say, with one carrier representative noting the efforts are focused on curbing the rate erosion of the last two months. Container spot rates from Asia to the US West Coast are about $2,000 per FEU, according to various indexes, with the Shanghai Shipping Exchange registering a 65% drop since June. Bullet rates quoted for single voyages tend to be $200 to $300 less than index rates, and some forwarder quotes for US West Coast routings have been as low as $1,300-$1,400 per FEU. Container lines thus far have been modest in blanking capacity despite falling rates and weak forecasts for year-end volumes . But analysts and forwarders warn that a sharp increase in blanks is nearly inevitable. Carriers’ averseness to losing import volumes already weakened by US tariff frontloading , the potential for a late-year surge, and niche carriers sticking to the trade have kept blanking levels consistent with past years. More capacity coming in October Container lines plan to inject more capacity in October, nonetheless, adding nearly 100,000 TEUs more than what’s deployed in September, according to maritime intelligence provider eeSea. The share of tonnage deployed on Asia to the US West Coast that is made unusable through blank sailings hovered near 8.4% in August, and carriers so far plan to blank a similar proportion of tonnage in September and October, although that can rise as weeks progress. If carriers can’t adjust demand to supply, they face the risk of more shippers turning to the spot market rather than fulfilling contracted cargo allocations. Spot rates, as measured by various indexes, are at levels that many small and medium-sized shippers signed contracts at in the spring. Short-term ocean rates, as measured by benchmarking provider Xeneta, began falling in early August below contract rates covering 88 days or more. The short-term cost to ship an FEU from Asia to the US West Coast was $1,319 for the week ending Aug. 28, compared with $1,597 for the long-term rate in the same period. “We've got customers who are eager to save $100 anywhere, and they want a piece of that,” said a forwarder who did not want to be identified. “We are not trying to sell it, but when they ask us, ‘What are your FAK rates?’ We can’t tell them, ‘No, we’re not going to offer you our FAK rates,’ especially if it means we’re going to get some incremental business out of it.” Small and medium-sized importers signed service contract rates at a larger-than-usual premium than the largest retailers in mid-April just as the market was showing strength, said another forwarder. The largest big-box retailers signed contracts that generally began May 1 in the range of $1,600 to $1,800 per FEU, while midsize and smaller importers secured contract rates in the range of $2,000 to $2,200 per FEU. The danger importers face chasing cheaper spot rates when the rates are falling is that carriers will be loath to help out cargo owners when the market inevitably tightens — even if it’s short-lived. Container lines are more agile in moving vessels to and from ocean trades by omitting calls to ports or voiding sailings, according to an Aug. 28 notice sent by forwarder American Shipping Co. to its customers that was seen by the Journal of Commerce. While such tools to manage capacity haven’t had much impact in recent months, “if timed right, it can have a direct impact on the freight rates,” the notice read. Most shippers are not concerned about carriers charging them for dead freight if they do not fill the minimum quantity commitments (MQCs) in their contracts because, historically, carriers have never done that. Carriers normally roll over the unused MQCs into the next year’s contracts. So far, the shift from contracted cargo to spot cargo has been minimal, according to forwarders and carriers who spoke with the Journal of Commerce. But the inflection point is getting closer. “It could happen” that more BCOs turn to the spot market if rates reverse course in the coming weeks and begin dropping again toward $1,600 to the West Coast and $2,600 to the East Coast, said Benton Kauffman, head of trans-Pacific air and sea logistics at forwarder DSV Global Logistics. “If the West Coast spot rate sinks to $1,400, some BCOs will seek to reopen their contracts, or they could book more under spot,” Kauffman said. Contact Mark Szakonyi at mark.szakonyi@spglobal.com . Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report.

Ocean market in trans-Pacific arrives at spot pricing tipping point

<div class="phx-topic abstract-wrapper">The Montreal Port Authority (MPA) is expected later this fall to announce the winning bid to run the Contrecoeur terminal. </div>

The Montreal Port Authority (MPA) is expected later this fall to announce the winning bid to run the Contrecoeur terminal.

<div class="phx-topic">DP World is seeking to operate a long-planned, nearly C$1.6 billion container terminal in Montreal that the new Canadian government is backing amid its shift away from US trade dependence.The Montreal Port Authority (MPA) is expected later this fall to announce the winning bid to run the Contrecoeur terminal, which, with an annual capacity of 1.15 million TEUs, would increase Canada’s second-largest container port by capacity 150%. DP World, which operates at Vancouver and Prince Rupert the first- and third-largest ports in Canada, respectively, <a href="https://www.bloomberg.com/news/articles/2025-08-29/dp-world-vies-for-deal-to-run-montreal-port-championed-by-carney">confirmed to Bloomberg</a> that it was involved in project negotiations. DP said in a statement it was always exploring ways to expand its network in Canada and increase investment in the country. “While we see strong potential for developing logistics infrastructure in Montreal that drives economic growth and long-term value, we have no announcements to share at this time,” said a DP World spokesperson. Since the port failed to attract a bidder in 2021, the <a href="https://www.joc.com/article/quebec-provides-new-funding-for-proposed-montreal-terminal-citing-us-trade-tensions-5947783">Contrecoeur project has received</a> C$130 million from the Quebec provincial government and C$130 million from Canada’s infrastructure bank for construction. Prime Minister Mark Carney last week said that he was seeking to fast-track the Contrecoeur project and highlighted <a href="https://www.joc.com/article/carney-has-fresh-opportunity-to-galvanize-canadian-shipping-industry-6047928">newly passed legislation streamlining regulatory</a> approval for major infrastructure projects. The C$1.57 billion project, which is located 43 miles downriver from legacy Montreal terminals along the St. Lawrence River, requires extensive dredging and shoring up portions of the waterway. MPA seeks to begin construction as early as October and open the facility in 2029. The authority in 2022 <a href="https://www.joc.com/article/montreal-relaunches-search-process-for-contrecoeur-terminal-operator-5204826">sent bid invitations</a> to Axium Infrastructure Canada and Pomerleau Capital, Ports America Holdings, and Terminal Investment Limited, in which Mediterranean Shipping Co. owns a majority stake. The port originally planned to have the first phase of the project finished by 2024 and had identified three finalist but scrapped plans. DP World operates the Centerm facility in Vancouver and solely operates at Prince Rupert and Port Saint John. Montreal’s four existing container terminals are operated by two companies, Montreal Gateway Terminals Partnership and Termont Montreal.Container volumes through Montreal last year slipped 1%, to approximately 750,500 TEUs compared with 2023, according to MPA. Sporadic labor issues and the Port of New York and New Jersey’s ability to attract more exports from the Midwest have contributed to volume declines in recent years, with traffic down 8.9% in 2024 compared with 2020. Container volume, however, is up nearly 6.5% in the first seven months of this year on a year-over-year basis. While the port began the project in the late 1980s, work has gathered speed in the last decade, Julie Gascon, CEO and president of MPA, said on a Journal of Commerce webinar on May 22. The need to diversify away from US trade due to high tariffs has only added more momentum to the project. “If there is a 6% shift of Canadian exports from us to other international markets, Montreal would get at capacity very, very quickly, so it’s not just a project for the future, it’s a project that is urgent,” Gascon said. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

DP World is seeking to operate a long-planned, nearly C$1.6 billion container terminal in Montreal that the new Canadian government is backing amid its shift away from US trade dependence. The Montreal Port Authority (MPA) is expected later this fall to announce the winning bid to run the Contrecoeur terminal, which, with an annual capacity of 1.15 million TEUs, would increase Canada’s second-largest container port by capacity 150%. DP World, which operates at Vancouver and Prince Rupert the first- and third-largest ports in Canada, respectively, confirmed to Bloomberg that it was involved in project negotiations. DP said in a statement it was always exploring ways to expand its network in Canada and increase investment in the country. “While we see strong potential for developing logistics infrastructure in Montreal that drives economic growth and long-term value, we have no announcements to share at this time,” said a DP World spokesperson. Since the port failed to attract a bidder in 2021, the Contrecoeur project has received C$130 million from the Quebec provincial government and C$130 million from Canada’s infrastructure bank for construction. Prime Minister Mark Carney last week said that he was seeking to fast-track the Contrecoeur project and highlighted newly passed legislation streamlining regulatory approval for major infrastructure projects. The C$1.57 billion project, which is located 43 miles downriver from legacy Montreal terminals along the St. Lawrence River, requires extensive dredging and shoring up portions of the waterway. MPA seeks to begin construction as early as October and open the facility in 2029. The authority in 2022 sent bid invitations to Axium Infrastructure Canada and Pomerleau Capital, Ports America Holdings, and Terminal Investment Limited, in which Mediterranean Shipping Co. owns a majority stake. The port originally planned to have the first phase of the project finished by 2024 and had identified three finalist but scrapped plans. DP World operates the Centerm facility in Vancouver and solely operates at Prince Rupert and Port Saint John. Montreal’s four existing container terminals are operated by two companies, Montreal Gateway Terminals Partnership and Termont Montreal. Container volumes through Montreal last year slipped 1%, to approximately 750,500 TEUs compared with 2023, according to MPA. Sporadic labor issues and the Port of New York and New Jersey’s ability to attract more exports from the Midwest have contributed to volume declines in recent years, with traffic down 8.9% in 2024 compared with 2020. Container volume, however, is up nearly 6.5% in the first seven months of this year on a year-over-year basis. While the port began the project in the late 1980s, work has gathered speed in the last decade, Julie Gascon, CEO and president of MPA, said on a Journal of Commerce webinar on May 22. The need to diversify away from US trade due to high tariffs has only added more momentum to the project. “If there is a 6% shift of Canadian exports from us to other international markets, Montreal would get at capacity very, very quickly, so it’s not just a project for the future, it’s a project that is urgent,” Gascon said. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Port News

DP World aims to run Carney-backed Montreal terminal

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In today’s competitive logistical landscape, efficiency is an absolute necessity for smooth operations. Yet, in the barge sector, many operators still rely on fragmented systems, delayed updates, and manual tracking methods that slow decision-making and increase operational risk. OpenTug’s new eBook, How Enhanced Visibility Transforms Barge Operations, reveals how unified, real-time data can become your competitive advantage leading to improved voyage management and more actionable insights. Drawing on industry best practices and real-world examples, it explores how operational transparency empowers teams to: ●	Reduce delays with accurate ETAs and proactive scheduling decisions ●	Improve asset utilization by identifying underused equipment and optimizing cargos ●	Strengthen safety and compliance through consistent, accessible documentation and reporting ●	Boost customer satisfaction with transparent status updates and faster response time You’ll learn how visibility can connect every part of your operation into a single, actionable view. The ability to see and act on real-time information transforms the way you plan, execute, and deliver. From managing a small regional fleet to running a large, national operation, this eBook will help you understand the measurable benefits of enhanced visibility and how technology like BargeOS is transforming the way barge logistics is managed. Get your copy today and see how clear insights lead to stronger performance, smarter decisions, and more profitable operations. <a href="https://9315820.fs1.hubspotusercontent-na1.net/hubfs/9315820/eBook/Nav-theFuture-AJW-08.19.25.pdf" rel="noreferrer" class="joc_admin__link">Click here</a><span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-16_9 joc_admin__inline-image-position-left joc_admin__inline-image-size-small" data-figure-size="small" data-figure-position="left" data-figure-aspect-ratio="16:9"><img src="/content-assets/1756152344211_Opentug%20logo.png" alt="" class="joc_admin__inline-image-inherit">

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Transform Barge Operations with Total Visibility

At SSA Marine Mexico, we firmly believe that business development must go hand in hand with social and environmental well-being. Our vision is not solely focused on operating efficiently, but also on creating a meaningful and positive impact in the communities where we are present. Since 1995, we have reaffirmed this commitment through tangible actions that reflect our core values of responsibility, solidarity, and sustainability. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584535914_Photo%201.jpg" alt="" class="joc_admin__inline-image-inherit"> A Year of Major Achievements Over the past year, we allocated more than $107,000 USD to the implementation of 60 social and environmental projects, positively impacting over 7,800 people across various regions of Mexico. Each initiative was designed with a holistic approach, addressing key areas that contribute to long-term community development. Education: Laying the Foundation for the Future Education is one of the most powerful tools to promote social mobility and equitable development. At SSA Marine Mexico, we support academic initiatives that inspire and empower the next generation of leaders. One of our most impactful partnerships was with the University of Colima, where we sponsored the “Reto Camp” program. This initiative encourages university students to develop innovative solutions in the fields of sustainability, logistics, and port operations, offering them mentorship, tools, and real-world challenges to solve. In addition, we donated microscopes, school supplies, and educational materials to institutions in underserved communities, helping to improve the learning environment and provide students with the resources they need to succeed. Health and Sports: Promoting Wellness We believe that healthy communities are strong communities. We have supported several local sporting events and provided direct assistance to talented athletes, enabling them to pursue their passions and represent their regions with pride. Beyond sports, we also strengthened our collaboration with critical emergency response organizations such as the Mexican Red Cross and Civil Protection. Our contributions helped enhance their readiness and capabilities in times of crisis, ensuring better outcomes for those affected by emergencies. Supporting Vulnerable Groups: Reaching Those Who Need It Most A core part of our social responsibility efforts is directed toward supporting vulnerable populations. We have contributed to a range of initiatives focused on children, migrants, and at-risk families. These efforts included donations to orphanages and shelters, as well as support for the National Institute of Migration and grassroots organizations dedicated to protecting and empowering people facing adversity. By standing with those in need, we reinforce our commitment to inclusion and social justice, values that are central to our identity as a responsible company. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584944645_Photo%202.png" alt="" class="joc_admin__inline-image-inherit">Culture: Strengthening Community Identity Cultural identity is a key element in building resilient and united communities. At SSA Marine Mexico, we actively participate in the organization and sponsorship of cultural events that celebrate local traditions and foster civic pride. Working alongside port authorities and municipal governments, we helped bring music, art, and heritage to the forefront, creating spaces for community engagement and intercultural dialogue. Environment: Investing in the Planet Our commitment to sustainability goes beyond operations—it’s a philosophy that drives every decision we make. We have partnered with environmental institutions to carry out reforestation campaigns, beach cleanups, and conservation efforts. In collaboration with the Institute for the Environment, we supported initiatives aimed at decarbonization, biodiversity protection, and environmental education. By involving our employees and local volunteers in these actions, we also foster a culture of environmental stewardship throughout our organization and our surrounding communities. Innovation for a Sustainable Future Sustainability is not just about doing good—it’s also about doing things better. In 2024, we invested $22 million USD in the acquisition of 11 state-of-the-art E-RTG cranes. These electric rubber-tired gantry cranes represent a significant technological advancement in port equipment. Seven of them are already operating on clean electric energy, resulting in a reduction of nearly 4,000 tons of CO₂ emissions and improving operational efficiency by 7%. The remaining four cranes are fully compatible with future electrification, underscoring our long-term strategy to modernize our operations in an environmentally responsible way. This investment is part of a broader innovation roadmap that includes digitalization, automation, and cleaner energy sources—all designed to ensure that our ports continue to grow without compromising the health of our planet. Building a Better Tomorrow, Together At SSA Marine Mexico, we understand that sustainability is a shared and ongoing responsibility. True impact requires collaboration across sectors, long-term vision, and unwavering commitment. That is why we continue to work hand-in-hand with local authorities, non-profit organizations, universities, and our own employees to create solutions that are both scalable and sustainable. Our journey is far from over. In the years ahead, we will continue to deepen our community engagement, explore cleaner technologies, and strengthen the social fabric of the regions where we operate. Each initiative, no matter the size, is a step toward building a future where business success goes hand-in-hand with human and environmental prosperity. We are proud of what we have achieved in 2024, but we are even more excited about what lies ahead. SSA Marine Mexico — Moving the World, Caring for People and Planet. LINK: <a href="https://www.ssamarine.mx/" rel="noreferrer" class="joc_admin__link">https://www.ssamarine.mx/</a>

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SSA Marine Mexico: True Commitment to Sustainability

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">Container lines offering regular calls at India’s busiest port have told customers the landside logjam is causing considerable supply chain risks for the trade as train turnarounds remain increasingly chaotic.</div>

Container lines offering regular calls at India’s busiest port have told customers the landside logjam is causing considerable supply chain risks for the trade as train turnarounds remain increasingly chaotic.

<div class="phx-topic">Mundra Port — India’s busiest container handler — is grappling with major harbor congestion that has severely disrupted the flow of cargo to and from northern hinterlands by rail. Rail freight accounts for a significant portion of box volumes handled by Mundra, with northern inland container depots contributing the most. Container lines offering regular calls at Mundra have told customers the landside logjam is causing considerable supply chain risks for the trade as train turnarounds remain increasingly chaotic. “Due to congestion, train movement towards Mundra Port is currently disrupted,” Maersk said in a customer advisory. “This is affecting the timely placement of export trains at the port and, consequently, causing delays in the evacuation of import containers.” The import backlogs have choked rail yards, complicating the typically followed first-in, first-out model of train operations, sources said. Concerns among local supply chain stakeholders are growing, with freight depot service leader Gateway Distriparks (GDL) sending out a trade advisory to customers. “Train movement towards the port [Mundra] is currently sluggish,” GDL noted. “We are in regular touch with Indian Railways to expedite train movement.” Officials at India’s Association of Container Train Operators (ACTO) who spoke with the Journal of Commerce have attributed the rail slowdowns to chronic capacity pressure at Mundra stemming from landside infrastructure gaps amid steady trade growth. “There is a critical need for port rail capacity to increase with more handling lines and evacuation capacity in order to deal with the growing volumes,” said ACTO President Manish Puri. “This is the only long-term solution, otherwise congestion will keep occurring whenever there is even a minor volume peak or other operational hiccup due to external factors.” <h3>Terminals, train operators at odds </h3>As shippers face additional cost implications, a blame game over the cargo buildups appears to be at play between port terminals and container train operators (CTOs), including state-owned giant Container Corporation of India. “We are not denying the increased pressure from import surges, but CTOs stick to their normal business approach on the export leg — wait until trains are completely full to dispatch,” said a port executive who didn’t want to be identified. Sunil Vaswani, executive director of the Container Shipping Lines’ Association (India), said the issue needs fixing between terminals and CTOs, adding that a shortage of truck drivers linked to the festive season and lingering vessel bunching cases have exacerbated the problem. Mundra is equipped to handle up to 30 trains a day, generally railing out between 5,000 TEUs to 6,000 TEUs daily. But the normal inventory of import containers landing into its yards is in the range of 15,000 TEUs, which sources said has peaked at 20,000 TEUs in recent days. Mundra — Adani Ports’ flagship port entity — features five box terminals, which have had 90%-plus utilization of existing capacity levels for some time because of strong cargo growth. But the pace of volumes passing through rival Nhava Sheva Port has ticked noticeably higher over the past few months following the recent launch of Phase II operations by concessionaire PSA International, pushing overall port capacity to about 10 million TEUs. The latest port data reflects that altering regional trend. April–August volumes at Nhava Sheva were up 13% year over year to 3.3 million TEUs, while Mundra remained relatively flat at 3.5 million TEUs. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Mundra Port — India’s busiest container handler — is grappling with major harbor congestion that has severely disrupted the flow of cargo to and from northern hinterlands by rail. Rail freight accounts for a significant portion of box volumes handled by Mundra, with northern inland container depots contributing the most. Container lines offering regular calls at Mundra have told customers the landside logjam is causing considerable supply chain risks for the trade as train turnarounds remain increasingly chaotic. “Due to congestion, train movement towards Mundra Port is currently disrupted,” Maersk said in a customer advisory. “This is affecting the timely placement of export trains at the port and, consequently, causing delays in the evacuation of import containers.” The import backlogs have choked rail yards, complicating the typically followed first-in, first-out model of train operations, sources said. Concerns among local supply chain stakeholders are growing, with freight depot service leader Gateway Distriparks (GDL) sending out a trade advisory to customers. “Train movement towards the port [Mundra] is currently sluggish,” GDL noted. “We are in regular touch with Indian Railways to expedite train movement.” Officials at India’s Association of Container Train Operators (ACTO) who spoke with the Journal of Commerce have attributed the rail slowdowns to chronic capacity pressure at Mundra stemming from landside infrastructure gaps amid steady trade growth. “There is a critical need for port rail capacity to increase with more handling lines and evacuation capacity in order to deal with the growing volumes,” said ACTO President Manish Puri. “This is the only long-term solution, otherwise congestion will keep occurring whenever there is even a minor volume peak or other operational hiccup due to external factors.” Terminals, train operators at odds As shippers face additional cost implications, a blame game over the cargo buildups appears to be at play between port terminals and container train operators (CTOs), including state-owned giant Container Corporation of India. “We are not denying the increased pressure from import surges, but CTOs stick to their normal business approach on the export leg — wait until trains are completely full to dispatch,” said a port executive who didn’t want to be identified. Sunil Vaswani, executive director of the Container Shipping Lines’ Association (India), said the issue needs fixing between terminals and CTOs, adding that a shortage of truck drivers linked to the festive season and lingering vessel bunching cases have exacerbated the problem. Mundra is equipped to handle up to 30 trains a day, generally railing out between 5,000 TEUs to 6,000 TEUs daily. But the normal inventory of import containers landing into its yards is in the range of 15,000 TEUs, which sources said has peaked at 20,000 TEUs in recent days. Mundra — Adani Ports’ flagship port entity — features five box terminals, which have had 90%-plus utilization of existing capacity levels for some time because of strong cargo growth. But the pace of volumes passing through rival Nhava Sheva Port has ticked noticeably higher over the past few months following the recent launch of Phase II operations by concessionaire PSA International, pushing overall port capacity to about 10 million TEUs. The latest port data reflects that altering regional trend. April–August volumes at Nhava Sheva were up 13% year over year to 3.3 million TEUs, while Mundra remained relatively flat at 3.5 million TEUs. Contact Bency Mathew at bencyvmathew@gmail.com .

International ports

Congestion choking Mundra Port threatens North India cargo flow

<div class="phx-topic abstract-wrapper">The carriers, because they offer services tailored to their customers’ needs, say they are “sheltered” somewhat from declining spot rates given they are able to charge a premium for those services.</div>

The carriers, because they offer services tailored to their customers’ needs, say they are “sheltered” somewhat from declining spot rates given they are able to charge a premium for those services.

<div class="phx-topic">Several niche carriers that added tonnage to the trans-Pacific trade over the past year say they aren’t going anywhere despite retreating spot rates and the downward pressure tariffs are exerting on US imports from Asia. Those carriers, offering services tailored to their customers’ needs, say they are sheltered somewhat from declining spot rates because they charge a premium for their services that provide expedited ocean transport from Asia and Southeast Asia and, oftentimes, next-day container availability for landside pickup. “We’re fairly sheltered from the spot rates because 80% of our cargo is BCO [beneficial cargo owner] contracted cargo,” said Duncan Wright, president of third-party logistics provider UWL, which offers <a href="https://www.joc.com/article/uwl-locks-in-new-vessel-partner-for-trans-pacific-vietnam-service-6032327">the bi-weekly Sun Chief Express service</a> from Vietnam to Seattle. The ocean transit is 19 days from the last port call at Ho Chi Minh City to the Seattle gateway, while most other lines are 20-plus days, Wright told the Journal of Commerce Friday. China-based Hede Shipping in July launched its <a href="https://www.joc.com/article/hede-shipping-to-launch-third-expedited-service-from-china-to-los-angeles-6034891">third expedited service from China to Los Angeles</a>, zeroing in on the e-commerce sector with its expedited transit times and quick delivery of containers upon discharge from vessels. A Hede representative confirmed that newest service is in operation. Premium niche services offered by UWL, Hede and Matson appeal to BCOs with specific requirements based upon their customers’ needs. For example, customers of UWL’s Sun Chief service focus on footwear importers who are based in Southeast Asia and ship through Seattle, which offers direct inland point intermodal (IPI) rail service to markets such as Minneapolis and Chicago, Wright said. <h3>Huge spot rate swings this year </h3>The niche carriers, which also include SeaLead and CU Lines, entered the trans-Pacific trades in 2024 when spot and freight-all-kinds (FAK) rates surged as high as $7,800 per FEU to the US West Coast and $10,000 per FEU to the East Coast, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. Niche carriers account for about 4.5% of total capacity on the trans-Pacific trade to the West Coast, about the same percentage in the post-COVID-19 import surge in 2021–22, Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter this week. While that market share is not enough to prevent a further slide in spot rates, the continued presence of the niche lines in the trans-Pacific indicates they are not just “opportunistic” carriers that came into the trade when spot rates were high and plan to leave if rates drop too low, he said. “These carriers are seemingly staying on the trade lane ... and it seems as if they are continuing to introduce capacity on the trade lane,” Murphy said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e9676ea4-c6b9-4589-9a4b-822a9c82e2f8"></dynamic-object></div>Given the volatile nature of the trans-Pacific market so far this year, with major rate spikes in January and June followed by plunging prices in subsequent months, the niche lines apparently have ample cash on hand to weather the current downturn. Spot rates from Asia to the West Coast as of Thursday were $1,500 per FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global; Drewry pegged the market at $2,332 per FEU. “Pulling the plug is a tough decision because the money, when available, was so lucrative there’s the hope such margins will return,” said Stephen Nothdurft, vice president of sales at the forwarder MOL Consolidation Service. “It seems the current operators are taking a hard look at their commitments and calculating a longer-term strategy,” he said. “Maybe the new normal is continued chaos, so the smaller players are staying in place, building a viable clientele, [and] preparing to pounce when another catastrophe hits the liner market,” Nothdurft said. <h3>Premium rates can only do so much </h3>Still, if spot/FAK rates continue to drift below $1,500 to the West Coast, and possibly lower, some niche lines will find it difficult to sustain the losses for very long, an executive at an alliance carrier told the Journal of Commerce. “Even with an upcharge of $500-$600 [per FEU], it’s not going to be enough,” said the executive, who did not want to be identified. “The niche carriers, like all lines, have fixed costs such as bunker fuel, port fees and crew costs.” The source said $2,000 per FEU is the breakeven spot for most carriers’ West Coast business, adding their presence on the eastbound trans-Pacific “can’t last forever.” The challenge these carriers face is that rates are also depressed in the intra-Asia trade, and the small vessels they deploy in the range of 3,000-TEU capacity are not suited for the long-distance Asia-Europe trades, he said. Contact Bill Mongelluzzo at <a href="https://www.joc.com/article/bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Several niche carriers that added tonnage to the trans-Pacific trade over the past year say they aren’t going anywhere despite retreating spot rates and the downward pressure tariffs are exerting on US imports from Asia. Those carriers, offering services tailored to their customers’ needs, say they are sheltered somewhat from declining spot rates because they charge a premium for their services that provide expedited ocean transport from Asia and Southeast Asia and, oftentimes, next-day container availability for landside pickup. “We’re fairly sheltered from the spot rates because 80% of our cargo is BCO [beneficial cargo owner] contracted cargo,” said Duncan Wright, president of third-party logistics provider UWL, which offers the bi-weekly Sun Chief Express service from Vietnam to Seattle. The ocean transit is 19 days from the last port call at Ho Chi Minh City to the Seattle gateway, while most other lines are 20-plus days, Wright told the Journal of Commerce Friday. China-based Hede Shipping in July launched its third expedited service from China to Los Angeles , zeroing in on the e-commerce sector with its expedited transit times and quick delivery of containers upon discharge from vessels. A Hede representative confirmed that newest service is in operation. Premium niche services offered by UWL, Hede and Matson appeal to BCOs with specific requirements based upon their customers’ needs. For example, customers of UWL’s Sun Chief service focus on footwear importers who are based in Southeast Asia and ship through Seattle, which offers direct inland point intermodal (IPI) rail service to markets such as Minneapolis and Chicago, Wright said. Huge spot rate swings this year The niche carriers, which also include SeaLead and CU Lines, entered the trans-Pacific trades in 2024 when spot and freight-all-kinds (FAK) rates surged as high as $7,800 per FEU to the US West Coast and $10,000 per FEU to the East Coast, according to PIERS, a Journal of Commerce sister product within S&P Global. Niche carriers account for about 4.5% of total capacity on the trans-Pacific trade to the West Coast, about the same percentage in the post-COVID-19 import surge in 2021–22, Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter this week. While that market share is not enough to prevent a further slide in spot rates, the continued presence of the niche lines in the trans-Pacific indicates they are not just “opportunistic” carriers that came into the trade when spot rates were high and plan to leave if rates drop too low, he said. “These carriers are seemingly staying on the trade lane ... and it seems as if they are continuing to introduce capacity on the trade lane,” Murphy said. Given the volatile nature of the trans-Pacific market so far this year, with major rate spikes in January and June followed by plunging prices in subsequent months, the niche lines apparently have ample cash on hand to weather the current downturn. Spot rates from Asia to the West Coast as of Thursday were $1,500 per FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global; Drewry pegged the market at $2,332 per FEU. “Pulling the plug is a tough decision because the money, when available, was so lucrative there’s the hope such margins will return,” said Stephen Nothdurft, vice president of sales at the forwarder MOL Consolidation Service. “It seems the current operators are taking a hard look at their commitments and calculating a longer-term strategy,” he said. “Maybe the new normal is continued chaos, so the smaller players are staying in place, building a viable clientele, [and] preparing to pounce when another catastrophe hits the liner market,” Nothdurft said. Premium rates can only do so much Still, if spot/FAK rates continue to drift below $1,500 to the West Coast, and possibly lower, some niche lines will find it difficult to sustain the losses for very long, an executive at an alliance carrier told the Journal of Commerce. “Even with an upcharge of $500-$600 [per FEU], it’s not going to be enough,” said the executive, who did not want to be identified. “The niche carriers, like all lines, have fixed costs such as bunker fuel, port fees and crew costs.” The source said $2,000 per FEU is the breakeven spot for most carriers’ West Coast business, adding their presence on the eastbound trans-Pacific “can’t last forever.” The challenge these carriers face is that rates are also depressed in the intra-Asia trade, and the small vessels they deploy in the range of 3,000-TEU capacity are not suited for the long-distance Asia-Europe trades, he said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

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