<div class="phx-topic abstract-wrapper">Transportation Secretary Sean Duffy gave California, New Mexico and Washington 30 days to adopt and enforce ELP regulations or lose access to federal safety funding. </div>

Transportation Secretary Sean Duffy gave California, New Mexico and Washington 30 days to adopt and enforce ELP regulations or lose access to federal safety funding.

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<div class="phx-topic">California, New Mexico and Washington will lose access to federal motor carrier safety funding unless those states adopt and enforce a federal <a href="https://www.joc.com/article/us-dot-initiates-crackdown-on-non-english-speaking-truckers-6009357">English language proficiency</a> (ELP) requirement for truck drivers, US Transportation Secretary Sean Duffy said Tuesday. “States don’t get to pick and choose which federal safety rules to follow,” Duffy said at a press conference in Washington, D.C. Duffy gave the states 30 days to adopt and enforce ELP regulations or lose access to Motor Carrier Safety Assistance Program (MCSAP) funds. The Department of Transportation (DOT) sent notices to California, New Mexico and Washington opening a process that would freeze millions of dollars in funds distributed annually through the MCSAP program, which helps fund law enforcement. California received approximately $30.7 million in MCSAP funding in fiscal 2024, while Washington received $9.8 million and New Mexico about $6.7 million, according to the US Federal Motor Carrier Safety Administration (FMCSA), which administers MCSAP. “It’s my hope these states will understand the commonsense nature of what we’re doing and become good partners,” Duffy said. “This is about keeping individuals and families safe as we use our roadways.” The states have not responded to DOT’s announcement. The DOT’s action follows an investigation into an Aug. 12 accident in Florida that claimed three lives when a truck driver, Harjinder Singh, made an illegal U-turn. Singh, who federal officials claim entered the US illegally and obtained commercial driver’s licenses from Washington and California, failed a post-accident English language test. Following the accident, US Secretary of State Marco Rubio <a href="https://x.com/secrubio/status/1958644528253948015?s=46&amp;t=yxYBta0zhKqvzUP8zCYxjw">last Thursday announced</a> a freeze on certain worker visas for non-US commercial truck drivers. The State Department later clarified the targeted credentials were H-2B, E-2 and EB-3 work visas. H-2B visas are capped at 66,000 a year, and truck drivers represent a small portion of those. The other visas are aimed at investors and skilled workers. Singh has not been reported to have a work visa of any type. The company he worked for, White Hawk Carriers of Ceres, Calif., no longer has <a href="https://ai.fmcsa.dot.gov/SMS/Carrier/2866642/Overview.aspx?FirstView=True">for-hire operating authority</a>. Neither greater ELP enforcement nor a related freeze on new work visas are expected to have <a href="https://apnews.com/article/foreign-truckers-visas-rubio-trump-florida-crash-beee82cfa284a174d7a74c42199bbd45">a major impact</a> on US truck capacity or pricing. <h3>ELP enforcement </h3>The DOT action highlights uneven state enforcement of the ELP requirement. Since June 25, the FMCSA has considered failure to pass an ELP test as an out-of-service violation for truck drivers. New Mexico and Washington have adopted the ELP guidance issued by the DOT but are not enforcing it, the DOT said in a statement, adding that California has yet to adopt and enforce compatible ELP laws and regulations. New Mexico allegedly did not administer an ELP test when state police conducted a roadside inspection of Singh and his truck in July. Singh was given a speeding ticket. States receiving MCSAP funds are required to adopt FMCSA regulations <a href="https://www.joc.com/article/congress-states-join-dot-targeting-non-english-speaking-truckers-6014680">in their own laws</a>, but how that is done, and how quickly, can vary from state to state. Out of 6,067 ELP violations issued during roadside inspections so far in calendar year 2025, 1,201 have resulted in out-of-service orders, according to FMCSA data. That compares with 5,863 violations and five out-of-service orders in calendar year 2024. An analysis by <a href="https://www.overdriveonline.com/regulations/article/15751741/california-highway-patrol-not-enforcing-trumps-elp-mandate-for-truck-drivers">trucker magazine Overdrive</a> found Texas, Arizona and California were the top three states for ELP violations from June 25 to July 20, with 2,089 violations. Those violations only resulted in 50 out-of-service orders, however. That’s because most of those violations occurred in counties on the US-Mexico border, where inspectors are allowed to issue violations but not place drivers out of service. Non-border states mostly have placed drivers with ELP violations out of service since June 25, Overdrive found. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a></div>

California, New Mexico and Washington will lose access to federal motor carrier safety funding unless those states adopt and enforce a federal English language proficiency (ELP) requirement for truck drivers, US Transportation Secretary Sean Duffy said Tuesday. “States don’t get to pick and choose which federal safety rules to follow,” Duffy said at a press conference in Washington, D.C. Duffy gave the states 30 days to adopt and enforce ELP regulations or lose access to Motor Carrier Safety Assistance Program (MCSAP) funds. The Department of Transportation (DOT) sent notices to California, New Mexico and Washington opening a process that would freeze millions of dollars in funds distributed annually through the MCSAP program, which helps fund law enforcement. California received approximately $30.7 million in MCSAP funding in fiscal 2024, while Washington received $9.8 million and New Mexico about $6.7 million, according to the US Federal Motor Carrier Safety Administration (FMCSA), which administers MCSAP. “It’s my hope these states will understand the commonsense nature of what we’re doing and become good partners,” Duffy said. “This is about keeping individuals and families safe as we use our roadways.” The states have not responded to DOT’s announcement. The DOT’s action follows an investigation into an Aug. 12 accident in Florida that claimed three lives when a truck driver, Harjinder Singh, made an illegal U-turn. Singh, who federal officials claim entered the US illegally and obtained commercial driver’s licenses from Washington and California, failed a post-accident English language test. Following the accident, US Secretary of State Marco Rubio last Thursday announced a freeze on certain worker visas for non-US commercial truck drivers. The State Department later clarified the targeted credentials were H-2B, E-2 and EB-3 work visas. H-2B visas are capped at 66,000 a year, and truck drivers represent a small portion of those. The other visas are aimed at investors and skilled workers. Singh has not been reported to have a work visa of any type. The company he worked for, White Hawk Carriers of Ceres, Calif., no longer has for-hire operating authority . Neither greater ELP enforcement nor a related freeze on new work visas are expected to have a major impact on US truck capacity or pricing. ELP enforcement The DOT action highlights uneven state enforcement of the ELP requirement. Since June 25, the FMCSA has considered failure to pass an ELP test as an out-of-service violation for truck drivers. New Mexico and Washington have adopted the ELP guidance issued by the DOT but are not enforcing it, the DOT said in a statement, adding that California has yet to adopt and enforce compatible ELP laws and regulations. New Mexico allegedly did not administer an ELP test when state police conducted a roadside inspection of Singh and his truck in July. Singh was given a speeding ticket. States receiving MCSAP funds are required to adopt FMCSA regulations in their own laws , but how that is done, and how quickly, can vary from state to state. Out of 6,067 ELP violations issued during roadside inspections so far in calendar year 2025, 1,201 have resulted in out-of-service orders, according to FMCSA data. That compares with 5,863 violations and five out-of-service orders in calendar year 2024. An analysis by trucker magazine Overdrive found Texas, Arizona and California were the top three states for ELP violations from June 25 to July 20, with 2,089 violations. Those violations only resulted in 50 out-of-service orders, however. That’s because most of those violations occurred in counties on the US-Mexico border, where inspectors are allowed to issue violations but not place drivers out of service. Non-border states mostly have placed drivers with ELP violations out of service since June 25, Overdrive found. Contact William B. Cassidy at bill.cassidy@spglobal.com

Trucking News

Truckload

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Trucking labor

Surface

US DOT presses states to enforce English-language trucking rules

<div class="phx-topic abstract-wrapper">The Israeli carrier said it’s taking steps to comply with a purported ban on its ships at Turkish ports as relations between the two countries sour over the war in Gaza.</div>

The Israeli carrier said it’s taking steps to comply with a purported ban on its ships at Turkish ports as relations between the two countries sour over the war in Gaza.

<div class="phx-topic">Zim Integrated Shipping Services may revamp its Mediterranean long-distance and feeder networks due to Turkey’s purported ban on arrivals of Israeli-linked ships at its ports. Haifa-based Zim said Monday in a customer advisory that it plans on updating its vessel schedules due to the “latest decisions made by the authorities in Turkey regarding Israeli-linked vessels.” The company said it will service “Turkish customers while complying with the new guidelines.” The carrier did not provide any detail about those guidelines, but <a href="https://www.reuters.com/world/middle-east/turkish-ports-raise-new-barriers-israel-linked-ships-sources-say-2025-08-21/">Reuters reported last week</a> that Turkey’s port authorities are requesting local ship agents to declare that ships arriving at the country’s ports are not linked to Israel nor are carrying military or related cargoes destined for Israel. Some local ship agents are reportedly being told that the ban extends to any ships going to or from Israeli ports. Turkey’s move comes 15 months after the country suspended all trade with Israel in May 2024 due to the war in Gaza, with Turkey’s President Recep Erdogan ramping up his criticism after Israel signaled its intent to occupy more of Gaza. Following the ban, an unidentified Zim vessel was <a href="https://en.globes.co.il/en/article-turkey-prevents-zim-ship-from-docking-at-istanbul-port-1001519821">reportedly refused entry to Istanbul</a> last week, forcing the ship to dock in the Greek port of Piraeus instead. Zim did not return a request for comment about the ban. <h3>Long distance, feeder services affected </h3>Turkey’s ban has the potential to change the rotation on several long-distance Zim services. The carrier lists two Mediterranean-US East Coast services that call Turkey, along with one Asia-Europe service and one Mediterranean-Northwest Europe service. The other impact would be on its intra-Mediterranean feeder services, five of which call Turkish ports. While the extent of the ban is not clear, Zim also has two services that also cross Turkey’s Bosphorus Straits to serve Black Sea ports. Zim’s vessels made 88 port calls to Turkey during the second quarter, according to AIS data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

Zim Integrated Shipping Services may revamp its Mediterranean long-distance and feeder networks due to Turkey’s purported ban on arrivals of Israeli-linked ships at its ports. Haifa-based Zim said Monday in a customer advisory that it plans on updating its vessel schedules due to the “latest decisions made by the authorities in Turkey regarding Israeli-linked vessels.” The company said it will service “Turkish customers while complying with the new guidelines.” The carrier did not provide any detail about those guidelines, but Reuters reported last week that Turkey’s port authorities are requesting local ship agents to declare that ships arriving at the country’s ports are not linked to Israel nor are carrying military or related cargoes destined for Israel. Some local ship agents are reportedly being told that the ban extends to any ships going to or from Israeli ports. Turkey’s move comes 15 months after the country suspended all trade with Israel in May 2024 due to the war in Gaza, with Turkey’s President Recep Erdogan ramping up his criticism after Israel signaled its intent to occupy more of Gaza. Following the ban, an unidentified Zim vessel was reportedly refused entry to Istanbul last week, forcing the ship to dock in the Greek port of Piraeus instead. Zim did not return a request for comment about the ban. Long distance, feeder services affected Turkey’s ban has the potential to change the rotation on several long-distance Zim services. The carrier lists two Mediterranean-US East Coast services that call Turkey, along with one Asia-Europe service and one Mediterranean-Northwest Europe service. The other impact would be on its intra-Mediterranean feeder services, five of which call Turkish ports. While the extent of the ban is not clear, Zim also has two services that also cross Turkey’s Bosphorus Straits to serve Black Sea ports. Zim’s vessels made 88 port calls to Turkey during the second quarter, according to AIS data from Sea-web, a sister company of the Journal of Commerce within S&P Global. Contact Michael Angell at michael.angell@spglobal.com

International ports

Container lines

Zim signals changes to Med network amid apparent Turkish port ban

<div class="phx-topic abstract-wrapper">CPKC’s opposition comes just two years after its acquisition of Kansas City Southern Railway was approved by US regulators.</div>

CPKC’s opposition comes just two years after its acquisition of Kansas City Southern Railway was approved by US regulators.

<div class="phx-topic">Canadian Pacific Kansas City (CPKC) on Tuesday urged federal regulators to reject Union Pacific Railroad’s proposed acquisition of Norfolk Southern Railway, arguing the deal would create the US’ first coast-to-coast railroad would not serve the public interest and that shippers can achieve similar benefits through stronger rail partnerships. The opposition comes two years after US regulators approved Canadian Pacific’s takeover of Kansas City Southern, the last major rail merger that created CPKC. "We believe that a transcontinental merger would trigger permanent restructuring of the industry and result in a disproportionately large railway whose size and scope would require others to take action," Keith Creel, CPKC’s president and CEO, said in a statement. "This will likely result in an unnecessary wave of railway mergers that today is not the best way to support American businesses nor the public interest, and has the potential to create more issues than it solves." Union Pacific and Norfolk Southern expect to file their application with the US Surface Transportation Board by mid-January. A final decision on the proposed deal is unlikely until at least the spring of 2027 at the earliest The two railroads argue the combination would create the nation’s first true <a href="https://www.joc.com/article/up-looks-to-create-first-coast-to-coast-railroad-with-85-billion-ns-deal-6052288">transcontinental US carrier</a>, but CPKC believes further rail consolidation is unnecessary. “The existing six major railways in the United States are capable of offering their customers high-quality and near-seamless transportation services across the continent,” CPKC said. “As evidenced by previous rail network alliances by CPKC and CSX in the Southeast US, as well as the recent alliance announced by BNSF and CSX, there remain opportunities for further cooperation between ‘willing’ railways to improve service while preserving optionality for shippers.” Warren Buffett, chairman of Berkshire Hathaway, which owns BNSF Railway, echoed that view in a <a href="https://www.cnbc.com/2025/08/25/warren-buffett-is-not-in-market-to-buy-another-railroad-but-he-met-with-csx-ceo-about-greater-cooperation.html">CNBC interview</a> Monday. He said he was not interested in acquiring another railroad and told CSX CEO Joe Hinrichs in an Aug. 3 meeting that partnerships can deliver the same benefits. BNSF and CSX last week <a href="https://www.joc.com/article/bnsf-csx-unveil-new-joint-intermodal-lanes-in-aftermath-of-up-ns-merger-6067789">announced</a> a joint service linking Southern California with Charlotte and Jacksonville and Phoenix with Atlanta. The trains will operate in a nearly single-line fashion via BNSF to Atlanta, where the railroads co-manage a terminal in Fairburn, Ga., before CSX moves loads onward to Charlotte and Jacksonville. Neither BNSF nor CSX has taken a public position on the UP–NS transaction. Canadian National Railway has also remained silent, a stance that may reflect its close partnerships with Union Pacific and Norfolk Southern. CN and UP are the two railroads involved in the Falcon Premium service, an intermodal offering connecting Canada and Mexico. CN also runs dozens of cross-border US lanes with UP and NS using a shared pool of rail-owned containers, known as “EMP” boxes, many of which interchange with NS in the eastern US. <h3>Others support UP-NS deal </h3>Other companies, however, have endorsed the proposed deal. C.R. England, a leading temperature-controlled carrier and UP partner, and Mode Global, a non-asset-based intermodal marketing company, said the UP-NS merger would improve service and lower costs for shippers. C.R. England, well-known as a refrigerated truckload carrier, partners with UP on more than 95% of its temperature-controlled intermodal business in the western US. Mode is among the largest users of the rail-owned container pool. “The improved transit times and single-carrier service will mean faster, more reliable deliveries for our customers and lower shipping costs for beneficial cargo owners,” MODE CEO Lance Malesh said in a statement. “Ultimately, those savings will benefit the entire American economy – when shippers save, consumers do too.” C.R. England said the deal is something it has “dreamed about for years.” “It means faster transit, greater capacity, and lower costs,” Zach England, chief operating officer of C.R. England, said in a statement. “For our customers, that translates to improved supply chain efficiency and savings we can pass on to consumers.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

Canadian Pacific Kansas City (CPKC) on Tuesday urged federal regulators to reject Union Pacific Railroad’s proposed acquisition of Norfolk Southern Railway, arguing the deal would create the US’ first coast-to-coast railroad would not serve the public interest and that shippers can achieve similar benefits through stronger rail partnerships. The opposition comes two years after US regulators approved Canadian Pacific’s takeover of Kansas City Southern, the last major rail merger that created CPKC. "We believe that a transcontinental merger would trigger permanent restructuring of the industry and result in a disproportionately large railway whose size and scope would require others to take action," Keith Creel, CPKC’s president and CEO, said in a statement. "This will likely result in an unnecessary wave of railway mergers that today is not the best way to support American businesses nor the public interest, and has the potential to create more issues than it solves." Union Pacific and Norfolk Southern expect to file their application with the US Surface Transportation Board by mid-January. A final decision on the proposed deal is unlikely until at least the spring of 2027 at the earliest The two railroads argue the combination would create the nation’s first true transcontinental US carrier , but CPKC believes further rail consolidation is unnecessary. “The existing six major railways in the United States are capable of offering their customers high-quality and near-seamless transportation services across the continent,” CPKC said. “As evidenced by previous rail network alliances by CPKC and CSX in the Southeast US, as well as the recent alliance announced by BNSF and CSX, there remain opportunities for further cooperation between ‘willing’ railways to improve service while preserving optionality for shippers.” Warren Buffett, chairman of Berkshire Hathaway, which owns BNSF Railway, echoed that view in a CNBC interview Monday. He said he was not interested in acquiring another railroad and told CSX CEO Joe Hinrichs in an Aug. 3 meeting that partnerships can deliver the same benefits. BNSF and CSX last week announced a joint service linking Southern California with Charlotte and Jacksonville and Phoenix with Atlanta. The trains will operate in a nearly single-line fashion via BNSF to Atlanta, where the railroads co-manage a terminal in Fairburn, Ga., before CSX moves loads onward to Charlotte and Jacksonville. Neither BNSF nor CSX has taken a public position on the UP–NS transaction. Canadian National Railway has also remained silent, a stance that may reflect its close partnerships with Union Pacific and Norfolk Southern. CN and UP are the two railroads involved in the Falcon Premium service, an intermodal offering connecting Canada and Mexico. CN also runs dozens of cross-border US lanes with UP and NS using a shared pool of rail-owned containers, known as “EMP” boxes, many of which interchange with NS in the eastern US. Others support UP-NS deal Other companies, however, have endorsed the proposed deal. C.R. England, a leading temperature-controlled carrier and UP partner, and Mode Global, a non-asset-based intermodal marketing company, said the UP-NS merger would improve service and lower costs for shippers. C.R. England, well-known as a refrigerated truckload carrier, partners with UP on more than 95% of its temperature-controlled intermodal business in the western US. Mode is among the largest users of the rail-owned container pool. “The improved transit times and single-carrier service will mean faster, more reliable deliveries for our customers and lower shipping costs for beneficial cargo owners,” MODE CEO Lance Malesh said in a statement. “Ultimately, those savings will benefit the entire American economy – when shippers save, consumers do too.” C.R. England said the deal is something it has “dreamed about for years.” “It means faster transit, greater capacity, and lower costs,” Zach England, chief operating officer of C.R. England, said in a statement. “For our customers, that translates to improved supply chain efficiency and savings we can pass on to consumers.” Contact Ari Ashe at ari.ashe@spglobal.com

North-American rail

Rail News

UP-NS deal would trigger ‘unnecessary wave’ of rail mergers: CPKC

<div class="phx-topic abstract-wrapper">The scale and scope of the number of products now subject to US steel and aluminum tariffs is likely to affect providers across multiple modes, writes Jason Miller.</div>

The scale and scope of the number of products now subject to US steel and aluminum tariffs is likely to affect providers across multiple modes, writes Jason Miller.

<div class="phx-topic">The White House on Aug. 15 announced a substantial increase in the number of products subject to the <a href="https://public-inspection.federalregister.gov/2025-15819.pdf">steel and aluminum tariffs</a> that went into effect on Aug. 18. The scope of this expansion was massive, covering 407 new HTS (harmonized tariff schedule) codes that swept up over $160 billion in additional goods in the steel and aluminum tariff net; previously, these tariffs captured roughly $190 billion in goods. While the steel and aluminum tariffs apply only to the steel or aluminum content for the <a href="https://www.flexport.com/blog/what-president-trumps-2024-u-s-election-win-means-for-global-trade-and/">derivative product</a>s, the scale and scope of these tariffs is likely to affect transportation providers across multiple modes. <h3>More pressure on container volumes </h3><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6069773_0.1.jpg"></img></div>The derivative expansion swept up a wide range of furniture products in addition to the ones already covered. Combined with higher country-specific IEEPA rates (International Emergency Economic Powers Act) coming into effect, this is expected to place further pressure on furniture import volumes, which declined 16% in the second quarter of 2025 from the first quarter of 2025 based on seasonally adjusted imports from the Bureau of Economic Analysis’ (BEA) associated end-use category once adjusted for inflation. Compounding matters, continued sluggishness in the housing market and pressures many consumers are experiencing in paying <a href="https://www.stlouisfed.org/on-the-economy/2025/may/broad-continuing-rise-delinquent-us-credit-card-debt-revisited">credit card debt</a> are likely to further pressure import volumes of goods such as furniture. <h3>Roll-on/roll-off effects for construction, ag equipment </h3>One of the most profound changes with the steel and aluminum tariffs is the last expansion captured many finished capital goods such as bulldozers, backhoes, agricultural tractors and similar associated goods. To understand what this means, consider agricultural equipment imported from Germany. Previously, such goods would be charged a 15% tariff based on the most recent “agreement” between the US and European Union. Now, the steel and aluminum content of agricultural equipment will be charged a 50% tariff, and the remaining value will be charged the 15% tariff. As such, if one-third of the value of a piece of construction equipment is in steel, the effective tariff rate will now be 26.55%. Tariff rates at such levels are likely to place further headwinds on construction and agricultural equipment import demand, which had steadily been falling prior to these tariffs. <h3>Trucking companies and railroads </h3>The steel and aluminum derivative tariffs captured various HTS codes associated with capital goods for railroads and motor carriers. For example, Flexport’s <a href="https://tariffs.flexport.com/?entryDate=2025-08-20&amp;country=CN&amp;value=10000&amp;advanced=true&amp;code=8607191200+Railway+Wheels%2C+Whether+Or+Not+Fitted+With+Axles+%28kg%29&amp;FIELD_CHOSEN_SPIS=%7B%7D&amp;FIELD_CHOSEN_HTS_CODES=%7B%2299030121%22%3Afalse%2C%2299030130%22%3Afalse%7D&amp;FIELD_STEEL_PERCENTAGE=80&amp;FIELD_STEEL_COUNTRY_OF_POUR=%22CN%22&amp;FIELD_EXISTING_HTS_CODES=%5B%5D">Tariff Simulator</a> estimates that HTS 8607.19.1200 (Railway Wheels, Whether Or Not Fitted With Axles) imported from China (the second-largest source from 2024) with 80% steel content poured in China will see an increase in the tariff rate to 87% from 55%. Perhaps more significantly is the impact on imports from Canada (the largest source from 2024 for this HTS). Data for June indicated the ratio of dutiable value over customs import value for consumption was just 2.4%, with an effective tariff rate at just 0.6%. This will change dramatically with this HTS falling under the steel and aluminum tariffs, where we would now expect effective tariff rates of 20% or more, assuming the steel was poured in Canada. For trucking companies, the most significant shock from the newest derivative products comes in the form of tariffs on truck trailers, with HTS 8716.39.0040 (dry van trailers) and HTS 8716.39.0090 (other trailers for transporting goods) being the two categories to watch for. For example, other trailers for transporting goods, imports from the two top sources (Canada and Mexico) had a ratio of dutiable value of customs import value of &lt; 0.1% in June 2025 due to compliance with the US-Mexico-Canada Agreement. Similar figures applied for dry van trailers. These figures will increase substantially given the high value of steel and aluminum content in these products. <h3>Headwinds and rising costs </h3>The massive expansion of steel and aluminum products subject to tariffs is unwelcome news for transportation providers. These tariffs will create further headwinds for ocean volumes while raising the cost of capital goods for railroads and trucking companies. Given the trucking sector is entering the third year of a prolonged market downturn, higher prices for equipment is unwelcome news. Jason Miller is an associate professor of logistics at Michigan State University. Contact him at <a href="mailto:mill2831@broad.msu.edu">mill2831@broad.msu.edu.</a></div>

The White House on Aug. 15 announced a substantial increase in the number of products subject to the steel and aluminum tariffs that went into effect on Aug. 18. The scope of this expansion was massive, covering 407 new HTS (harmonized tariff schedule) codes that swept up over $160 billion in additional goods in the steel and aluminum tariff net; previously, these tariffs captured roughly $190 billion in goods. While the steel and aluminum tariffs apply only to the steel or aluminum content for the derivative product s, the scale and scope of these tariffs is likely to affect transportation providers across multiple modes. More pressure on container volumes The derivative expansion swept up a wide range of furniture products in addition to the ones already covered. Combined with higher country-specific IEEPA rates (International Emergency Economic Powers Act) coming into effect, this is expected to place further pressure on furniture import volumes, which declined 16% in the second quarter of 2025 from the first quarter of 2025 based on seasonally adjusted imports from the Bureau of Economic Analysis’ (BEA) associated end-use category once adjusted for inflation. Compounding matters, continued sluggishness in the housing market and pressures many consumers are experiencing in paying credit card debt are likely to further pressure import volumes of goods such as furniture. Roll-on/roll-off effects for construction, ag equipment One of the most profound changes with the steel and aluminum tariffs is the last expansion captured many finished capital goods such as bulldozers, backhoes, agricultural tractors and similar associated goods. To understand what this means, consider agricultural equipment imported from Germany. Previously, such goods would be charged a 15% tariff based on the most recent “agreement” between the US and European Union. Now, the steel and aluminum content of agricultural equipment will be charged a 50% tariff, and the remaining value will be charged the 15% tariff. As such, if one-third of the value of a piece of construction equipment is in steel, the effective tariff rate will now be 26.55%. Tariff rates at such levels are likely to place further headwinds on construction and agricultural equipment import demand, which had steadily been falling prior to these tariffs. Trucking companies and railroads The steel and aluminum derivative tariffs captured various HTS codes associated with capital goods for railroads and motor carriers. For example, Flexport’s Tariff Simulator estimates that HTS 8607.19.1200 (Railway Wheels, Whether Or Not Fitted With Axles) imported from China (the second-largest source from 2024) with 80% steel content poured in China will see an increase in the tariff rate to 87% from 55%. Perhaps more significantly is the impact on imports from Canada (the largest source from 2024 for this HTS). Data for June indicated the ratio of dutiable value over customs import value for consumption was just 2.4%, with an effective tariff rate at just 0.6%. This will change dramatically with this HTS falling under the steel and aluminum tariffs, where we would now expect effective tariff rates of 20% or more, assuming the steel was poured in Canada. For trucking companies, the most significant shock from the newest derivative products comes in the form of tariffs on truck trailers, with HTS 8716.39.0040 (dry van trailers) and HTS 8716.39.0090 (other trailers for transporting goods) being the two categories to watch for. For example, other trailers for transporting goods, imports from the two top sources (Canada and Mexico) had a ratio of dutiable value of customs import value of < 0.1% in June 2025 due to compliance with the US-Mexico-Canada Agreement. Similar figures applied for dry van trailers. These figures will increase substantially given the high value of steel and aluminum content in these products. Headwinds and rising costs The massive expansion of steel and aluminum products subject to tariffs is unwelcome news for transportation providers. These tariffs will create further headwinds for ocean volumes while raising the cost of capital goods for railroads and trucking companies. Given the trucking sector is entering the third year of a prolonged market downturn, higher prices for equipment is unwelcome news. Jason Miller is an associate professor of logistics at Michigan State University. Contact him at mill2831@broad.msu.edu.

Supply chain

Steel, aluminum tariff expansion ‘unwelcome news’ for transport providers

<div class="phx-topic abstract-wrapper">The unit cost of moving a container has been pushed higher compared with the prevailing pre-pandemic price structure, according to carrier executives, prompting cost-control measures.</div>

The unit cost of moving a container has been pushed higher compared with the prevailing pre-pandemic price structure, according to carrier executives, prompting cost-control measures.

<div class="phx-topic">Container lines, facing rate pressure on all major trades, are doubling down on cutting costs that have materially increased above pre-pandemic levels. Executives from Hapag-Lloyd, Maersk and Zim Integrated Shipping Services told investors during second-quarter earnings calls that they are facing higher prices from shipbuilding to port labor. And that has prompted cost-cutting measures ranging from improving fuel efficiency through better scheduling, cutting port time, returning chartered ships at the end of contracts and slow steaming. “Pre-COVID we were bunkering the ships on HFO [heavy fuel oil], and since then we have transitioned to VLSFO [very low-sulfur fuel oil]. This is a cost increase,” Zim CFO Xavier Destriau told analysts. “If we look at the newbuilding price, that went up. The chartering rate went up. So the cost of securing tonnage has also gone up compared to the prior period.” Destriau also pointed to increases in cargo handling charges, higher wages for dockworkers that are passed on to carriers, and a lack of terminal investment that has made port congestion an ongoing challenge requiring more ships per string. “To give you an example, our main Asia to the US East Coast service used to operate on a weekly basis with 10 ships pre-COVID, but now we need 12 in order to maintain the weekly schedule,” he said. “All these elements of additional cost have found their way into our cost structure, and that contributes to increasing the overall cost that we carry,” Destriau added. While carriers believe higher rates at the end of the second quarter and strong bookings through July will ensure third-quarter earnings are close to those recorded in the second quarter, the shipping companies are expecting a fourth-quarter decline and thus are intensifying cost-reduction efforts across their networks to mitigate any supply-demand shortfall. <h3>Steady rise in capacity </h3>Global demand has been resilient year to date, but J.P. Morgan in a market update Tuesday pointed to softening trends in the second half. The bank highlighted overall first-half ocean volume growth of 4.5% year over year, while real global GDP grew 3% in the same period. “We expect market growth to slow in the second half and forecast 1.8% in Q3 and flat in Q4 [-0.3%],” the bank noted. “For 2026 onwards, we estimate volume growth of 2% per annum, broadly in line with J.P. Morgan economists’ real GDP growth forecasts, as we expect the trade multiplier to hold at 1x.” J.P. Morgan is expecting the rate erosion to accelerate over the next two years as demand slows and capacity grows, pushing the industry into deep losses. “We expect a widening demand-supply imbalance into H2 25, driven by slower demand growth into the end of the year and estimated effective supply growth of 6.5% year over year,” the bank noted. A return of sailings to the Red Sea in 2026 will drive supply growth up 9%, but even if the route remains closed, effective supply will still grow 3% to 5%, the market update predicted. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e9676ea4-c6b9-4589-9a4b-822a9c82e2f8"></dynamic-object></div>Spot rates are certainly feeling the effects of weakening demand and excess capacity. Asia-US West Coast spot rates at $1,640 per FEU are one-third of the price at the beginning of January, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. On Asia-North Europe routes, rates are half of what they were on Jan. 1, while on the trans-Atlantic westbound trade, spot prices <a href="https://www.joc.com/article/trans-atlantic-carriers-limit-capacity-cuts-despite-ongoing-rate-weakness-6066878">have been at loss-making levels for weeks</a>. At the same time, capacity is steadily increasing. The global order book is now 9.3 million TEUs, or 29% of the in-service fleet, according to Alphaliner. About 1.8 million TEUs of capacity are set to be delivered this year, with another 1.6 million TEUs coming online in 2026, according to Drewry. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="77c97ac7-f6be-4816-9394-8c10326f863f"></dynamic-object></div>Still, Hapag-Lloyd CEO Rolf Habben Jansen told analysts on the carrier’s recent second-quarter earnings call that while rates were falling on the major trade lanes, he could not imagine any scenario where they would remain 10% to 20% below unit cost levels for a sustained period due to underlying supportive fundamentals. “Anyone who believes that freight rates would go back to that level, it’s just not going to happen because we see EU ETS [Emissions Trading System], we see low-sulfur fuel, we see the prices of shipyards having gone up significantly on investments that need to be done for newer ships,” he said, adding that port congestion means boxes and ships take longer to turn. In an aggressive move to bring down expenses in a rapidly eroding rate environment, Hapag-Lloyd recently launched a comprehensive cost-cutting program that targets more than $1 billion in savings by the end of 2026, with the program extending across the carrier’s network and including synergies and efficiency gains from its Gemini Corporation alliance with Maersk. “We set ourselves a target to bring unit costs down in a double-digit percentage versus what we saw in 2022 ... I think that is achievable,” Habben Jansen said. “I also believe the $1 billion plus [cost-cutting target] is realistic to get that out until the end of next year.” <h3>No return to 2019 rate levels </h3>Habben Jansen said even with the extensive cuts in expenses, it would not bring the carrier costs back to 2019 levels “for the very simple reason that some of our factor costs are very different.” “We did not have the EU ETS before COVID, and we did not have low-sulfur fuel. Those alone will drive up costs quite significantly,” he said. “Then there has been inflation that impacts our cost as well, and you certainly cannot negotiate that away.” Unit costs at Hapag-Lloyd rose 4% in the first half year over year to $1,320 per TEU, up more than $300 per TEU compared with pre-pandemic times. However, a significant portion of the increased expenses were generated by the startup investments required in the transition of Hapag-Lloyd’s services to the new Gemini Cooperation network. While Gemini’s startup expenses were adding to the costs of its members, Maersk CEO Vincent Clerc outlined the cost savings that will be generated by the new network with “two principal buckets” set to drive down unit costs. “One is the reliability of schedules that means lower fuel consumption,” Clerc said during the carrier’s recent second-quarter earnings call with analysts. “The second one is less sail distances also means higher asset intensity where we can basically move more cargo on the same amount of tonnage, which lowers the unit cost as well.” Clerc said cost increases in the charter markets and at marine terminals battling congestion were being exacerbated by ongoing diversions around southern Africa to avoid attacks on commercial shipping in the Red Sea. “We saw further inflation in the cost base because of the longer sailing distances that we have, which means that our breakeven point is higher now than it was in 2019,” he said, although he did not disclose Maersk’s rate breakeven point. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Container lines, facing rate pressure on all major trades, are doubling down on cutting costs that have materially increased above pre-pandemic levels. Executives from Hapag-Lloyd, Maersk and Zim Integrated Shipping Services told investors during second-quarter earnings calls that they are facing higher prices from shipbuilding to port labor. And that has prompted cost-cutting measures ranging from improving fuel efficiency through better scheduling, cutting port time, returning chartered ships at the end of contracts and slow steaming. “Pre-COVID we were bunkering the ships on HFO [heavy fuel oil], and since then we have transitioned to VLSFO [very low-sulfur fuel oil]. This is a cost increase,” Zim CFO Xavier Destriau told analysts. “If we look at the newbuilding price, that went up. The chartering rate went up. So the cost of securing tonnage has also gone up compared to the prior period.” Destriau also pointed to increases in cargo handling charges, higher wages for dockworkers that are passed on to carriers, and a lack of terminal investment that has made port congestion an ongoing challenge requiring more ships per string. “To give you an example, our main Asia to the US East Coast service used to operate on a weekly basis with 10 ships pre-COVID, but now we need 12 in order to maintain the weekly schedule,” he said. “All these elements of additional cost have found their way into our cost structure, and that contributes to increasing the overall cost that we carry,” Destriau added. While carriers believe higher rates at the end of the second quarter and strong bookings through July will ensure third-quarter earnings are close to those recorded in the second quarter, the shipping companies are expecting a fourth-quarter decline and thus are intensifying cost-reduction efforts across their networks to mitigate any supply-demand shortfall. Steady rise in capacity Global demand has been resilient year to date, but J.P. Morgan in a market update Tuesday pointed to softening trends in the second half. The bank highlighted overall first-half ocean volume growth of 4.5% year over year, while real global GDP grew 3% in the same period. “We expect market growth to slow in the second half and forecast 1.8% in Q3 and flat in Q4 [-0.3%],” the bank noted. “For 2026 onwards, we estimate volume growth of 2% per annum, broadly in line with J.P. Morgan economists’ real GDP growth forecasts, as we expect the trade multiplier to hold at 1x.” J.P. Morgan is expecting the rate erosion to accelerate over the next two years as demand slows and capacity grows, pushing the industry into deep losses. “We expect a widening demand-supply imbalance into H2 25, driven by slower demand growth into the end of the year and estimated effective supply growth of 6.5% year over year,” the bank noted. A return of sailings to the Red Sea in 2026 will drive supply growth up 9%, but even if the route remains closed, effective supply will still grow 3% to 5%, the market update predicted. Spot rates are certainly feeling the effects of weakening demand and excess capacity. Asia-US West Coast spot rates at $1,640 per FEU are one-third of the price at the beginning of January, according to Platts, a sister company of the Journal of Commerce within S&P Global. On Asia-North Europe routes, rates are half of what they were on Jan. 1, while on the trans-Atlantic westbound trade, spot prices have been at loss-making levels for weeks . At the same time, capacity is steadily increasing. The global order book is now 9.3 million TEUs, or 29% of the in-service fleet, according to Alphaliner. About 1.8 million TEUs of capacity are set to be delivered this year, with another 1.6 million TEUs coming online in 2026, according to Drewry. Still, Hapag-Lloyd CEO Rolf Habben Jansen told analysts on the carrier’s recent second-quarter earnings call that while rates were falling on the major trade lanes, he could not imagine any scenario where they would remain 10% to 20% below unit cost levels for a sustained period due to underlying supportive fundamentals. “Anyone who believes that freight rates would go back to that level, it’s just not going to happen because we see EU ETS [Emissions Trading System], we see low-sulfur fuel, we see the prices of shipyards having gone up significantly on investments that need to be done for newer ships,” he said, adding that port congestion means boxes and ships take longer to turn. In an aggressive move to bring down expenses in a rapidly eroding rate environment, Hapag-Lloyd recently launched a comprehensive cost-cutting program that targets more than $1 billion in savings by the end of 2026, with the program extending across the carrier’s network and including synergies and efficiency gains from its Gemini Corporation alliance with Maersk. “We set ourselves a target to bring unit costs down in a double-digit percentage versus what we saw in 2022 ... I think that is achievable,” Habben Jansen said. “I also believe the $1 billion plus [cost-cutting target] is realistic to get that out until the end of next year.” No return to 2019 rate levels Habben Jansen said even with the extensive cuts in expenses, it would not bring the carrier costs back to 2019 levels “for the very simple reason that some of our factor costs are very different.” “We did not have the EU ETS before COVID, and we did not have low-sulfur fuel. Those alone will drive up costs quite significantly,” he said. “Then there has been inflation that impacts our cost as well, and you certainly cannot negotiate that away.” Unit costs at Hapag-Lloyd rose 4% in the first half year over year to $1,320 per TEU, up more than $300 per TEU compared with pre-pandemic times. However, a significant portion of the increased expenses were generated by the startup investments required in the transition of Hapag-Lloyd’s services to the new Gemini Cooperation network. While Gemini’s startup expenses were adding to the costs of its members, Maersk CEO Vincent Clerc outlined the cost savings that will be generated by the new network with “two principal buckets” set to drive down unit costs. “One is the reliability of schedules that means lower fuel consumption,” Clerc said during the carrier’s recent second-quarter earnings call with analysts. “The second one is less sail distances also means higher asset intensity where we can basically move more cargo on the same amount of tonnage, which lowers the unit cost as well.” Clerc said cost increases in the charter markets and at marine terminals battling congestion were being exacerbated by ongoing diversions around southern Africa to avoid attacks on commercial shipping in the Red Sea. “We saw further inflation in the cost base because of the longer sailing distances that we have, which means that our breakeven point is higher now than it was in 2019,” he said, although he did not disclose Maersk’s rate breakeven point. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Trans-Atlantic

Asia-Europe

Trans-Pacific

Maritime

Ocean carriers intensify cost-cutting efforts as rates slide on major trades

<div class="phx-topic abstract-wrapper">Drayage operators say they want EV trucks because they’re cheaper to operate than conventional trucks but driving ranges limit usage. </div>

Drayage operators say they want EV trucks because they’re cheaper to operate than conventional trucks but driving ranges limit usage.

<div class="phx-topic">Advances in electric truck technology are making zero-emission vehicles more viable for container drayage, but operators say demand in the sector will only take off if the driving range of electric vehicle (EV) trucks is extended beyond the current limit of about 200 miles. The 200-mile mark is significant because most drayage operators need to run trucks at least 500 miles per day to make sufficient turns to cover their operating costs. While EVs are cheaper to operate than conventional diesel-burning trucks, they cost nearly twice as much to purchase at approximately $300,000 per rig. “At the end of the day, that’s what’s going to drive EV truck sales. Diesel fuel is not getting any cheaper,” said Matt Schrap, the newly appointed chief commercial officer at Forum Mobility, which builds electric charging infrastructure, and former CEO of the Harbor Trucking Association (HTA), which represents drayage carriers on the US West Coast. Many drayage operators who shuttle containers back and forth between ports and distribution warehouses cannot achieve the two turns they need per day before recharging, current HTA CEO Robert Loya told the Journal of Commerce. He added, however, that Tesla is developing an electric heavy-duty truck with a range of up to 500 miles, which would make the vehicle commercially viable for most drayage operators. “We as an industry support the move towards EVs,” Loya said. “But the 150- to 200-mile range; is that realistic?” Other improvements are also needed, such as the ability to handle larger, heavier payloads such as agricultural products and to climb up steep grades like the six-mile incline on the Grapevine highway north of Los Angeles, Loya said. <h3>Capital costs and range challenges </h3>Ken Kellaway, CEO of RoadOne IntermodaLogistics, which has drayage operations across the country, noted that the price of a new electric truck can be more than twice that of a diesel-powered vehicle. “Most owner-operators, which make up 80-plus percent of the drayage market, depend on buying used [diesel] trucks to get into business,” he added. Drayage operators in California have been whipsawed by regulations requiring them to purchase zero-emission trucks. <a href="https://www.joc.com/article/california-regulator-gives-temporary-reprieve-on-zero-emission-drayage-enforcement-5215238">California’s Advanced Clean Fleets (ACF) rule</a>, enacted in 2023, required fleets to transition to EVs over time and would have prohibited the sale of new diesel trucks starting in 2036. However, state regulators in late 2023 agreed to suspend the rule, and the state of California in January stopped seeking exemptions for the rule from the US Environmental Protection Agency. In the meantime, drayage operators in Southern California still have access to state and port subsidies to help narrow the pricing gap between diesel and electric trucks. The ports of Los Angeles and Long Beach since 2022 have <a href="https://www.joc.com/article/second-california-drayage-operator-shuts-business-cites-electric-truck-costs-6056822">collected about $250 million</a> in revenue from the joint Clean Truck Fund (CTF) Rate. Those funds are used to help drayage operators purchase new EV trucks and also to assist in the development of charging stations and infrastructure. Many drayage operators in other port regions don’t have access to large subsidies to help them purchase electric trucks, but they also don’t have to comply with state regulations that mandate the purchase of zero-emission vehicles. Still, Kellaway said they would be motivated to invest in EV trucks that can operate about 500 miles before needing to be recharged. “Range has been a challenge, but things will get better with time when it comes to technology,” he said. He also noted that charging stations for electric trucks are being developed on the East Coast, especially near the Port Authority of New York and New Jersey. Drayage operators need convenient access to charging stations in heavy-traffic corridors to invest in electric trucks, Kellaway said. Contact Bill Mongelluzzo at <a href="bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Advances in electric truck technology are making zero-emission vehicles more viable for container drayage, but operators say demand in the sector will only take off if the driving range of electric vehicle (EV) trucks is extended beyond the current limit of about 200 miles. The 200-mile mark is significant because most drayage operators need to run trucks at least 500 miles per day to make sufficient turns to cover their operating costs. While EVs are cheaper to operate than conventional diesel-burning trucks, they cost nearly twice as much to purchase at approximately $300,000 per rig. “At the end of the day, that’s what’s going to drive EV truck sales. Diesel fuel is not getting any cheaper,” said Matt Schrap, the newly appointed chief commercial officer at Forum Mobility, which builds electric charging infrastructure, and former CEO of the Harbor Trucking Association (HTA), which represents drayage carriers on the US West Coast. Many drayage operators who shuttle containers back and forth between ports and distribution warehouses cannot achieve the two turns they need per day before recharging, current HTA CEO Robert Loya told the Journal of Commerce. He added, however, that Tesla is developing an electric heavy-duty truck with a range of up to 500 miles, which would make the vehicle commercially viable for most drayage operators. “We as an industry support the move towards EVs,” Loya said. “But the 150- to 200-mile range; is that realistic?” Other improvements are also needed, such as the ability to handle larger, heavier payloads such as agricultural products and to climb up steep grades like the six-mile incline on the Grapevine highway north of Los Angeles, Loya said. Capital costs and range challenges Ken Kellaway, CEO of RoadOne IntermodaLogistics, which has drayage operations across the country, noted that the price of a new electric truck can be more than twice that of a diesel-powered vehicle. “Most owner-operators, which make up 80-plus percent of the drayage market, depend on buying used [diesel] trucks to get into business,” he added. Drayage operators in California have been whipsawed by regulations requiring them to purchase zero-emission trucks. California’s Advanced Clean Fleets (ACF) rule , enacted in 2023, required fleets to transition to EVs over time and would have prohibited the sale of new diesel trucks starting in 2036. However, state regulators in late 2023 agreed to suspend the rule, and the state of California in January stopped seeking exemptions for the rule from the US Environmental Protection Agency. In the meantime, drayage operators in Southern California still have access to state and port subsidies to help narrow the pricing gap between diesel and electric trucks. The ports of Los Angeles and Long Beach since 2022 have collected about $250 million in revenue from the joint Clean Truck Fund (CTF) Rate. Those funds are used to help drayage operators purchase new EV trucks and also to assist in the development of charging stations and infrastructure. Many drayage operators in other port regions don’t have access to large subsidies to help them purchase electric trucks, but they also don’t have to comply with state regulations that mandate the purchase of zero-emission vehicles. Still, Kellaway said they would be motivated to invest in EV trucks that can operate about 500 miles before needing to be recharged. “Range has been a challenge, but things will get better with time when it comes to technology,” he said. He also noted that charging stations for electric trucks are being developed on the East Coast, especially near the Port Authority of New York and New Jersey. Drayage operators need convenient access to charging stations in heavy-traffic corridors to invest in electric trucks, Kellaway said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port News

Drayage

Limited mileage range of EVs slowing US drayage adoption

<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 .

Marine terminals

Ro/ro cargo

North American ports

Port infrastructure

Michigan inland port offers new option for Great Lakes containerized freight

Total In service

Total On-order

% of fleet on order

The Sea-web ocean vessel order book database aggregates data for fully cellular container ships on order, including order date, registered owner, operator, TEU capacity and current ship status, on a weekly basis. [Sea-web](https://maritime.ihs.com/EntitlementPortal/Home/Information/Seaweb_Ships)

Global container ship capacity in service and on order (Sea-web)

Global container ship fleet ( Sea-web) Gateway

<div class="phx-topic abstract-wrapper">Just over 7,000 TEUs of capacity is scheduled to be withdrawn through blank sailings in September even as carriers increase their deployed capacity by 2%.</div>

Just over 7,000 TEUs of capacity is scheduled to be withdrawn through blank sailings in September even as carriers increase their deployed capacity by 2%.

<div class="phx-topic">Rates on the trans-Atlantic westbound ocean trade — a route dominated by Gemini Cooperation and Mediterranean Shipping Co. — have been stuck at loss-making levels for weeks, yet carriers are showing little appetite for blank sailings to raise prices. Spot rates assessed by Platts, a sister company of the Journal of Commerce, are at $1,600 per FEU this week, far below the breakeven level ocean carriers say is near $2,100/FEU. Rates have lost only $100 since mid-May. While carriers on the North Europe-US East Coast route are scheduled to increase deployed capacity to 376,132 TEUs in September, up 2% compared with August, just 7,349 TEUs in capacity will be withdrawn via blank sailings, according to data from rate benchmarking platform Xeneta. However, Destine Ozuygur, product marketing manager for Xeneta, cautioned about reading too much into the low blank sailings levels. “Blanks used to be a standard measure against persistent demand deficit, but it’s also become a widely used tool for ad-hoc reliability management,” Ozuygur said. “Carriers are far more comfortable admitting them into schedules in the short term, and repealing them, than they used to be. “Regardless of the tariff or rate environment, we would naturally expect at least a few more blanks to trickle in over the coming weeks,” she added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="004f46ea-f9b5-4bd8-96be-a0146f19f1f0"></dynamic-object></div>The restructured ocean alliances have adjusted market share on the trans-Atlantic, leaving the trade lane dominated by MSC and Gemini partners Maersk and Hapag-Lloyd. Data from Alphaliner shows that after splitting from its 2M partner Maersk, MSC increased its Atlantic market share from 41.1% to 41.8% over the 12 months from July 2024 to July 2025. MSC now deploys a fleet of more than 500,000 TEUs between Europe and North America. Hapag-Lloyd remains the second-largest carrier in the trade, but its market share of 14.9% is significantly lower than the 19.6% share it held in July 2024. Hapag-Lloyd’s Gemini-partner Maersk increased its market share from 8.9% in July last year to 14.4% this year. “With the absence of both Ocean Alliance and Premier Alliance on this trade, reliability is largely left to Gemini, MSC and the non-alliances services,” said Ozuygur. Despite a lack of wider carrier representation, the present incumbents are not exactly setting reliability records. North Europe to US East Coast schedule reliability in July was 38%, a dismal level by any measure, although still a significant improvement on January’s 24%, Xeneta data showed. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="face521b-d4c4-40cd-b809-f10a6707a371"></dynamic-object></div>Some of the blame can be attributed to ongoing European port congestion that slows vessel turnarounds, which, on the relatively short transits across the Atlantic, “adds another layer of constraint and reduces effective service frequency,” C.H. Robinson noted in a recent market update. <h3>Addressing a new tariff landscape </h3>The schedule reliability and capacity deployed through the rest of the year will likely depend on how demand shapes up in the new trans-Atlantic tariff landscape. In a July 27 deal, a 15% tariff was applied to most EU goods exported to the US instead of the 30% tariff President Donald Trump had previously threatened, <a href="https://www.joc.com/article/trans-atlantic-trade-dispute-averted-as-us-eu-reach-weekend-deal-6051144">averting a destructive trade war</a>. The deal included provisions for zero tariffs on certain US exports to the EU and left the door open for negotiations on further market access. Frontloading in June as US-EU trade tensions escalated saw North Europe to US East Coast volume grow 14.2% year over year to almost 200,000 TEUs, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. It was short-lived, however, with July volume sliding to 198,750 TEUs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="808b5499-12f0-4682-8df3-9427d1d05738"></dynamic-object></div>Most observers believe the 15% tariff, while significantly higher than the pre-deal tariffs of about 4.8%, is not high enough to create a material change in shipper behavior on the trans-Atlantic. But Emily Stausbøll, senior analyst at Xeneta, said while 15% was more manageable than the threatened 30%, it was expected to keep demand muted considering frontloading in the second quarter has left fewer goods needing to be moved over the rest of the year. “We are still in a waiting period before we see the real effects of tariffs on prices and US consumer demand, with frontloading and retailers absorbing some of these extra costs,” Stausbøll told the Journal of Commerce. “But at some point, this will be passed on and should lower demand on this trade over the longer term.” The “wait-and-see” approach was also highlighted by an executive from one of the ocean carriers on the trans-Atlantic who said the market did not seem to have been heavily affected by the tariffs. “There have been clients taking a wait-and-see approach and others adding some shipments, but that is not having a major impact on the trade route, partly due to tariffs not being high enough to affect trade flows,” the carrier executive said, adding that the trade lane was expected to “settle without much change.” Xeneta’s Ozuygur agreed that shippers were taking a wait-and-see approach, noting that after the trade agreement, the trans-Atlantic was on a more stable and positive footing than during the volatile buildup to the deal. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Rates on the trans-Atlantic westbound ocean trade — a route dominated by Gemini Cooperation and Mediterranean Shipping Co. — have been stuck at loss-making levels for weeks, yet carriers are showing little appetite for blank sailings to raise prices. Spot rates assessed by Platts, a sister company of the Journal of Commerce, are at $1,600 per FEU this week, far below the breakeven level ocean carriers say is near $2,100/FEU. Rates have lost only $100 since mid-May. While carriers on the North Europe-US East Coast route are scheduled to increase deployed capacity to 376,132 TEUs in September, up 2% compared with August, just 7,349 TEUs in capacity will be withdrawn via blank sailings, according to data from rate benchmarking platform Xeneta. However, Destine Ozuygur, product marketing manager for Xeneta, cautioned about reading too much into the low blank sailings levels. “Blanks used to be a standard measure against persistent demand deficit, but it’s also become a widely used tool for ad-hoc reliability management,” Ozuygur said. “Carriers are far more comfortable admitting them into schedules in the short term, and repealing them, than they used to be. “Regardless of the tariff or rate environment, we would naturally expect at least a few more blanks to trickle in over the coming weeks,” she added. The restructured ocean alliances have adjusted market share on the trans-Atlantic, leaving the trade lane dominated by MSC and Gemini partners Maersk and Hapag-Lloyd. Data from Alphaliner shows that after splitting from its 2M partner Maersk, MSC increased its Atlantic market share from 41.1% to 41.8% over the 12 months from July 2024 to July 2025. MSC now deploys a fleet of more than 500,000 TEUs between Europe and North America. Hapag-Lloyd remains the second-largest carrier in the trade, but its market share of 14.9% is significantly lower than the 19.6% share it held in July 2024. Hapag-Lloyd’s Gemini-partner Maersk increased its market share from 8.9% in July last year to 14.4% this year. “With the absence of both Ocean Alliance and Premier Alliance on this trade, reliability is largely left to Gemini, MSC and the non-alliances services,” said Ozuygur. Despite a lack of wider carrier representation, the present incumbents are not exactly setting reliability records. North Europe to US East Coast schedule reliability in July was 38%, a dismal level by any measure, although still a significant improvement on January’s 24%, Xeneta data showed. Some of the blame can be attributed to ongoing European port congestion that slows vessel turnarounds, which, on the relatively short transits across the Atlantic, “adds another layer of constraint and reduces effective service frequency,” C.H. Robinson noted in a recent market update. Addressing a new tariff landscape The schedule reliability and capacity deployed through the rest of the year will likely depend on how demand shapes up in the new trans-Atlantic tariff landscape. In a July 27 deal, a 15% tariff was applied to most EU goods exported to the US instead of the 30% tariff President Donald Trump had previously threatened, averting a destructive trade war . The deal included provisions for zero tariffs on certain US exports to the EU and left the door open for negotiations on further market access. Frontloading in June as US-EU trade tensions escalated saw North Europe to US East Coast volume grow 14.2% year over year to almost 200,000 TEUs, according to PIERS, a sister product of the Journal of Commerce within S&P Global. It was short-lived, however, with July volume sliding to 198,750 TEUs. Most observers believe the 15% tariff, while significantly higher than the pre-deal tariffs of about 4.8%, is not high enough to create a material change in shipper behavior on the trans-Atlantic. But Emily Stausbøll, senior analyst at Xeneta, said while 15% was more manageable than the threatened 30%, it was expected to keep demand muted considering frontloading in the second quarter has left fewer goods needing to be moved over the rest of the year. “We are still in a waiting period before we see the real effects of tariffs on prices and US consumer demand, with frontloading and retailers absorbing some of these extra costs,” Stausbøll told the Journal of Commerce. “But at some point, this will be passed on and should lower demand on this trade over the longer term.” The “wait-and-see” approach was also highlighted by an executive from one of the ocean carriers on the trans-Atlantic who said the market did not seem to have been heavily affected by the tariffs. “There have been clients taking a wait-and-see approach and others adding some shipments, but that is not having a major impact on the trade route, partly due to tariffs not being high enough to affect trade flows,” the carrier executive said, adding that the trade lane was expected to “settle without much change.” Xeneta’s Ozuygur agreed that shippers were taking a wait-and-see approach, noting that after the trade agreement, the trans-Atlantic was on a more stable and positive footing than during the volatile buildup to the deal. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic carriers limit capacity cuts despite ongoing rate weakness

<div class="phx-topic abstract-wrapper">The announcement of Leatherman’s expansion comes as MSC looks to bring in more trans-Atlantic services to call the terminal.</div>

The announcement of Leatherman’s expansion comes as MSC looks to bring in more trans-Atlantic services to call the terminal.

<div class="phx-topic">The Port of Charleston plans to add a second big ship berth to its Hugh K. Leatherman marine terminal, with the terminal’s main customer, Mediterranean Shipping Co., readying to bring new trans-Atlantic capacity to the port. The South Carolina State Ports Authority (SC Ports) said in a statement this week it began installing the test piles to ensure the integrity of a new 1,600-foot berth at Leatherman. The second berth, outfitted with five cranes, will allow the terminal to handle two super-post-Panamax vessels at once. SC Ports said it expects to complete the second berth by late 2026, bringing Leatherman’s capacity to about 1.6 million TEUs per year. The port’s board of directors approved an $88.5 million contract with Orion Marine Group for the preliminary work. Plans for a third berth at Leatherman, which would bring it to full capacity of 2.4 million TEUs, have yet to go forward. SC Ports said the cost of both the second and third berths could reach a total of $1.5 billion. In addition to the second berth, Leatherman will also be able to offer near-dock rail service with the opening of the Navy Base Intermodal Facility. SC Ports said it is in the process of commissioning six rail-mounted gantry cranes for that facility, which is expected to open by early 2026. <h3>MSC adds services </h3>Leatherman’s sole berth has seen usage rise quickly a little over a year after SC Ports and the International Longshoremen’s Association (ILA) settled <a href="https://www.joc.com/article/sc-ports-strikes-deal-with-ila-to-fully-open-leatherman-marine-terminal-5192280">a legal dispute that kept ocean carriers away from the terminal</a>. Leatherman handled 45 vessels in the second quarter, according to data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. The second-quarter vessel count was up from 33 ships in the first quarter and 23 in the fourth quarter of 2024. Zim Shipping became <a href="https://www.joc.com/article/zim-becomes-first-carrier-to-commit-to-reopened-leatherman-terminal-5735909">the first carrier to provide weekly service into Leatherman</a> following its reopening, but it has since moved the service to Charleston’s other marine terminal. Now, Leatherman primarily handles MSC services from the Indian subcontinent and the Mediterranean. SC Ports said MSC will bring two additional trans-Atlantic services to Leatherman starting in September. Those include the “Albatros” service from Baltic ports and London’s Felixstowe, and the “Dragon” service between the Mediterranean and the US East Coast. Thanks to the presence of automakers and other high-value manufacturing in South Carolina, Charleston sees relatively steady freight volumes coming from Europe. Since the start of 2024, containerized imports from Europe into Charleston have averaged 89,125 TEUs per quarter, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Hapag-Lloyd carries the majority of the trans-Atlantic freight into Charleston, with its average quarterly volume near 29,590 TEUs, PIERS data shows. MSC is second with a quarterly average of 21,939 TEUs. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Port of Charleston plans to add a second big ship berth to its Hugh K. Leatherman marine terminal, with the terminal’s main customer, Mediterranean Shipping Co., readying to bring new trans-Atlantic capacity to the port. The South Carolina State Ports Authority (SC Ports) said in a statement this week it began installing the test piles to ensure the integrity of a new 1,600-foot berth at Leatherman. The second berth, outfitted with five cranes, will allow the terminal to handle two super-post-Panamax vessels at once. SC Ports said it expects to complete the second berth by late 2026, bringing Leatherman’s capacity to about 1.6 million TEUs per year. The port’s board of directors approved an $88.5 million contract with Orion Marine Group for the preliminary work. Plans for a third berth at Leatherman, which would bring it to full capacity of 2.4 million TEUs, have yet to go forward. SC Ports said the cost of both the second and third berths could reach a total of $1.5 billion. In addition to the second berth, Leatherman will also be able to offer near-dock rail service with the opening of the Navy Base Intermodal Facility. SC Ports said it is in the process of commissioning six rail-mounted gantry cranes for that facility, which is expected to open by early 2026. MSC adds services Leatherman’s sole berth has seen usage rise quickly a little over a year after SC Ports and the International Longshoremen’s Association (ILA) settled a legal dispute that kept ocean carriers away from the terminal . Leatherman handled 45 vessels in the second quarter, according to data from Sea-web, a sister company of the Journal of Commerce within S&P Global. The second-quarter vessel count was up from 33 ships in the first quarter and 23 in the fourth quarter of 2024. Zim Shipping became the first carrier to provide weekly service into Leatherman following its reopening, but it has since moved the service to Charleston’s other marine terminal. Now, Leatherman primarily handles MSC services from the Indian subcontinent and the Mediterranean. SC Ports said MSC will bring two additional trans-Atlantic services to Leatherman starting in September. Those include the “Albatros” service from Baltic ports and London’s Felixstowe, and the “Dragon” service between the Mediterranean and the US East Coast. Thanks to the presence of automakers and other high-value manufacturing in South Carolina, Charleston sees relatively steady freight volumes coming from Europe. Since the start of 2024, containerized imports from Europe into Charleston have averaged 89,125 TEUs per quarter, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Hapag-Lloyd carries the majority of the trans-Atlantic freight into Charleston, with its average quarterly volume near 29,590 TEUs, PIERS data shows. MSC is second with a quarterly average of 21,939 TEUs. Contact Michael Angell at michael.angell@spglobal.com .

Charleston’s Leatherman terminal eyes second berth by late 2026

<div class="phx-topic abstract-wrapper">The difficulties have led to transshipment delays and rolled cargo, which have caused increased yard density at some ports that has exacerbated delays, shipping sources say. </div>

The difficulties have led to transshipment delays and rolled cargo, which have caused increased yard density at some ports that has exacerbated delays, shipping sources say.

<div class="phx-topic">Tight feeder capacity between secondary ports in Asia and the region’s main transshipment hubs are hitting both exports from Asia and imports to the region from the US and Europe, forwarders and carriers say. Shippers are having to wait up to a month to secure space on some carriers serving Thailand and Indonesia, according to forwarders who spoke with the Journal of Commerce. The difficulties have led to transshipment delays and rolled cargo, which have caused increased yard density at some ports that has exacerbated delays, shipping sources say. The problems have been compounded by bad weather, including typhoons in China, carriers said. “For Thailand, cargo bookings must be made at least three to four weeks ahead,” a spokesperson for FIBS Logistics in Singapore said. “Most bookings for Indonesian cargo are only being accepted with a minimum lead time of two to three weeks.” The spokesperson said FIBS Logistics has been impacted by the delays on its own customer shipments, with even short-haul services affected. “We need to book two to three weeks in advance for cargo from Batam, Indonesia, for connections to the mother vessel in Singapore,” the source said. "These delays are largely due to feeder capacity shortages, which are impacting both exports and imports across Asia and resulting in cargo rolling.” Forwarder Rhenus Logistics said the feeder capacity shortages began in June and have been the result of a tariff-related cargo surge from Southeast Asia. “We have been experiencing some challenges with feeder capacity out of Southeast Asia over the past three months,” Scott Dudley, Rhenus’ head of ocean freight for North America, told the Journal of Commerce. “These challenges are mainly tied to carriers and alliances operating transshipment services out of Southeast Asia cargo origins.” <h3>Carriers being particular on US export choices </h3>The disruption at transshipment hubs, including those in Asia, has led carriers to pick and choose which export cargo from the US to accept. “If it’s a direct lane, they have a very high appetite,” said M. Can Fidan, executive vice president of business development at New York-based forwarder MTS Logistics. “If it’s a transshipment or if it is off their hub-and-spoke lanes, then they are not. “So, it’s a very interesting environment where carriers are actually looking for cargo on the export, but only looking for cargo that fits their shipping model, rather than a general area,” he added. A Hong Kong-based freight forwarder said it is fortunate the disruption largely comes after the cargo rush caused by shippers consigning shipments early to beat the Trump administration’s mid-August tariff deadline. “Transshipping cargo to and from second-tier markets like Thailand, the Philippines and Vietnam is a mess right now, with cargo rolling and delays at the key hub ports,” the source said. “But it would be significantly worse if these countries hadn’t cut tariff deals with the US at the end of July.” <h3>Multiple-day delays </h3>Highlighting congestion and cargo delays at key Asian gateways, CMA CGM, Hapag-Lloyd and Kuehne + Nagel all reported disrupted operations at Singapore, Shanghai, Ningbo, Qingdao and Malaysia’s Port Klang in recent customer advisories. CMA CGM said it had up to 60,000 TEUs of transshipment cargo waiting at Singapore last week. “Overall yard density [in Singapore] is high — around 85% to 90% that is impacting overall operations productivity,” the carrier said in a trans-Pacific weekly update. CMA CGM said Singapore terminal operator PSA is rejecting port-in/port-out (PIPO) boxes and vessels that are discharging more containers than loading containers until yard density drops back to a normal level. Heavy berth congestion meant there was at least a two-day delay at all of PSA’s Singapore terminals, both CMA CGM and Kuehne + Nagel said. Shanghai is also heavily congested with a two- to three-day delay at the city center Waigaiqiao terminals and up to a four-day wait at the deepwater Yangshan terminals due to continuing disruption caused by the port’s closure during Typhoon Co-May at the end of July, carriers said. The typhoon was one of three tropical storms to disrupt port operations in eastern and southern China since mid-July. Hapag-Lloyd said vessels are having to wait up to three days to berth at Ningbo due to the bunching of vessels and up to two days at Qingdao. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Tight feeder capacity between secondary ports in Asia and the region’s main transshipment hubs are hitting both exports from Asia and imports to the region from the US and Europe, forwarders and carriers say. Shippers are having to wait up to a month to secure space on some carriers serving Thailand and Indonesia, according to forwarders who spoke with the Journal of Commerce. The difficulties have led to transshipment delays and rolled cargo, which have caused increased yard density at some ports that has exacerbated delays, shipping sources say. The problems have been compounded by bad weather, including typhoons in China, carriers said. “For Thailand, cargo bookings must be made at least three to four weeks ahead,” a spokesperson for FIBS Logistics in Singapore said. “Most bookings for Indonesian cargo are only being accepted with a minimum lead time of two to three weeks.” The spokesperson said FIBS Logistics has been impacted by the delays on its own customer shipments, with even short-haul services affected. “We need to book two to three weeks in advance for cargo from Batam, Indonesia, for connections to the mother vessel in Singapore,” the source said. "These delays are largely due to feeder capacity shortages, which are impacting both exports and imports across Asia and resulting in cargo rolling.” Forwarder Rhenus Logistics said the feeder capacity shortages began in June and have been the result of a tariff-related cargo surge from Southeast Asia. “We have been experiencing some challenges with feeder capacity out of Southeast Asia over the past three months,” Scott Dudley, Rhenus’ head of ocean freight for North America, told the Journal of Commerce. “These challenges are mainly tied to carriers and alliances operating transshipment services out of Southeast Asia cargo origins.” Carriers being particular on US export choices The disruption at transshipment hubs, including those in Asia, has led carriers to pick and choose which export cargo from the US to accept. “If it’s a direct lane, they have a very high appetite,” said M. Can Fidan, executive vice president of business development at New York-based forwarder MTS Logistics. “If it’s a transshipment or if it is off their hub-and-spoke lanes, then they are not. “So, it’s a very interesting environment where carriers are actually looking for cargo on the export, but only looking for cargo that fits their shipping model, rather than a general area,” he added. A Hong Kong-based freight forwarder said it is fortunate the disruption largely comes after the cargo rush caused by shippers consigning shipments early to beat the Trump administration’s mid-August tariff deadline. “Transshipping cargo to and from second-tier markets like Thailand, the Philippines and Vietnam is a mess right now, with cargo rolling and delays at the key hub ports,” the source said. “But it would be significantly worse if these countries hadn’t cut tariff deals with the US at the end of July.” Multiple-day delays Highlighting congestion and cargo delays at key Asian gateways, CMA CGM, Hapag-Lloyd and Kuehne + Nagel all reported disrupted operations at Singapore, Shanghai, Ningbo, Qingdao and Malaysia’s Port Klang in recent customer advisories. CMA CGM said it had up to 60,000 TEUs of transshipment cargo waiting at Singapore last week. “Overall yard density [in Singapore] is high — around 85% to 90% that is impacting overall operations productivity,” the carrier said in a trans-Pacific weekly update. CMA CGM said Singapore terminal operator PSA is rejecting port-in/port-out (PIPO) boxes and vessels that are discharging more containers than loading containers until yard density drops back to a normal level. Heavy berth congestion meant there was at least a two-day delay at all of PSA’s Singapore terminals, both CMA CGM and Kuehne + Nagel said. Shanghai is also heavily congested with a two- to three-day delay at the city center Waigaiqiao terminals and up to a four-day wait at the deepwater Yangshan terminals due to continuing disruption caused by the port’s closure during Typhoon Co-May at the end of July, carriers said. The typhoon was one of three tropical storms to disrupt port operations in eastern and southern China since mid-July. Hapag-Lloyd said vessels are having to wait up to three days to berth at Ningbo due to the bunching of vessels and up to two days at Qingdao. Contact Keith Wallis at keithwallis@hotmail.com .

Tight Asia feeder capacity causing disruption for export, import shippers

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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: https://www.ssamarine.mx/

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Quarterly Intelligence

<div class="phx-topic abstract-wrapper">The Premier Alliance is revamping a trans-Pacific service that would otherwise incur hundreds of millions of dollars in US port fees on Chinese-built vessels.</div>

The Premier Alliance is revamping a trans-Pacific service that would otherwise incur hundreds of millions of dollars in US port fees on Chinese-built vessels.

<div class="phx-topic">Container lines are taking preemptive steps to reduce their exposure to hefty tariffs on Chinese-built and -operated vessels calling US ports that take effect in mid-October. The Premier Alliance of Ocean Network Express (ONE), HMM and Yang Ming Marine Transport is revamping a trans-Pacific service to avoid the <a href="https://www.joc.com/article/revised-china-tonnage-tax-less-disruptive-still-costly-6005402">US Trade Representative’s fees</a>, and other major carriers are expected to follow suit. Carriers say the deployment of non-China-built ships won’t be the most efficient for their networks but balk at fees that will initially equate to $1 million per voyage. The savings that come from removing China-built vessels from US services could increase to ultimately more than $500 million per year by April 2028, as the severity of the tariffs ratchets up over the next three years. Ocean Network Express and HMM have confirmed that the Asia-Mediterranean segment of the current Mediterranean Pacific South 2 (MS2) service will operate as a standalone service, renamed Mediterranean 2 (MD2), starting early next month. The trans-Pacific leg of the MS2 will be incorporated into the alliance’s existing Asia Gulf Express 2 service, which will be rebranded as the Gulf Pacific South 2 (GS2) as of next week, limiting the deployment of 10 Chinese-built ONE container ships currently operating the MS2 service to the shortened MD2 route. According to ONE service schedules, these vessels include seven 15,300-TEU ships built by Yangzijiang Shipbuilding Group, China’s largest privately owned shipyard, and three built by state-controlled China State Shipbuilding Corp. Yang Ming Marine Transport has yet to announce the changes, which stand to save ONE an estimated $185 million in tariffs in the first year after the levy is implemented on Oct. 14. Under the USTR fee proposal, ships operated by China-based carriers or built by Chinese shipyards will be subject to fees of $50 per net ton of capacity per voyage calling at US ports in the first year of enforcement, rising to $140 per net ton in April 2028. The fees will be capped at five voyages, and <a href="https://www.joc.com/article/cosco-slams-us-port-fees-as-other-carriers-reckon-with-potential-costs-5989606">China-based carriers, the USTR’s primary target</a>, will face higher levies. With each of the MS2 deployed vessels assessed at about 74,000 net tons, ONE would face a bill of $3.7 million per ship per voyage, maxing out at $18.5 million for each of the 10 ships — a total of $185 million — after five voyages. In announcing the MS2 service adjustment, ONE and HMM said the changes would improve connectivity and transit times to certain markets. HMM said the new Mediterranean Service 2 (MD2) would provide an express service from western Mediterranean to Busan and central China. Similarly, GS2 — which HMM calls the Korea Middle East–Pacific South (KMP) loop — will provide direct services from Dubai to the US West Coast and the US West Coast to Dalian and Xingang, HMM said. Contact Keith Wallis at <a href="keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Container lines are taking preemptive steps to reduce their exposure to hefty tariffs on Chinese-built and -operated vessels calling US ports that take effect in mid-October. The Premier Alliance of Ocean Network Express (ONE), HMM and Yang Ming Marine Transport is revamping a trans-Pacific service to avoid the US Trade Representative’s fees , and other major carriers are expected to follow suit. Carriers say the deployment of non-China-built ships won’t be the most efficient for their networks but balk at fees that will initially equate to $1 million per voyage. The savings that come from removing China-built vessels from US services could increase to ultimately more than $500 million per year by April 2028, as the severity of the tariffs ratchets up over the next three years. Ocean Network Express and HMM have confirmed that the Asia-Mediterranean segment of the current Mediterranean Pacific South 2 (MS2) service will operate as a standalone service, renamed Mediterranean 2 (MD2), starting early next month. The trans-Pacific leg of the MS2 will be incorporated into the alliance’s existing Asia Gulf Express 2 service, which will be rebranded as the Gulf Pacific South 2 (GS2) as of next week, limiting the deployment of 10 Chinese-built ONE container ships currently operating the MS2 service to the shortened MD2 route. According to ONE service schedules, these vessels include seven 15,300-TEU ships built by Yangzijiang Shipbuilding Group, China’s largest privately owned shipyard, and three built by state-controlled China State Shipbuilding Corp. Yang Ming Marine Transport has yet to announce the changes, which stand to save ONE an estimated $185 million in tariffs in the first year after the levy is implemented on Oct. 14. Under the USTR fee proposal, ships operated by China-based carriers or built by Chinese shipyards will be subject to fees of $50 per net ton of capacity per voyage calling at US ports in the first year of enforcement, rising to $140 per net ton in April 2028. The fees will be capped at five voyages, and China-based carriers, the USTR’s primary target , will face higher levies. With each of the MS2 deployed vessels assessed at about 74,000 net tons, ONE would face a bill of $3.7 million per ship per voyage, maxing out at $18.5 million for each of the 10 ships — a total of $185 million — after five voyages. In announcing the MS2 service adjustment, ONE and HMM said the changes would improve connectivity and transit times to certain markets. HMM said the new Mediterranean Service 2 (MD2) would provide an express service from western Mediterranean to Busan and central China. Similarly, GS2 — which HMM calls the Korea Middle East–Pacific South (KMP) loop — will provide direct services from Dubai to the US West Coast and the US West Coast to Dalian and Xingang, HMM said. Contact Keith Wallis at keithwallis@hotmail.com .

Transport, Trade and Regulation News

Container lines begin shifting China-built ships out of US loops

<div class="phx-topic abstract-wrapper">A sense of uncertainty — if not alarm — about future demand and tariff levels on China has slowed, and even paralyzed, some orders from small and medium-sized importers, four veteran forwarders told the Journal of Commerce.</div>

A sense of uncertainty — if not alarm — about future demand and tariff levels on China has slowed, and even paralyzed, some orders from small and medium-sized importers, four veteran forwarders told the Journal of Commerce.

<div class="phx-topic">The true toll of US tariffs on China is just beginning to be felt on the trans-Pacific. Months of frontloading that drove an earlier peak season have come to an end, and US retailers are pulling back on ordering for the rest of the year in the face of a slowing US economy and higher tariff costs. Shippers and consignees are also racking up stiffer demurrage and storage bills because demand uncertainty is slowing their pickup of containers from marine terminals. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6065756_0.1.jpg"></img></div>A sense of uncertainty — if not alarm — about future demand and tariff levels on China has slowed, and even paralyzed, some orders from small and medium-sized importers, four veteran forwarders told the Journal of Commerce. While China bookings haven’t cratered as they did in April when the Trump administration temporarily raised the US tariff level to 145%, forwarders warn of a renewed weakness in the market caused by more than just the end of peak season. Laden volumes from Asia to the US in July surged to a six-month high as shippers moved product ahead of August tariff deadlines. And while US imports are forecast to be up 5.8% year over year in August, <a href="https://www.joc.com/article/us-retailers-project-big-year-over-year-import-declines-to-close-out-2025-6060323">according to the latest Global Port Tracker (GPT)</a>, the rest of the year looks dismal. Volumes from September through December are expected to be down at least 20% year over year each month. Granted, volumes were elevated last year due to the threat of a labor strike on the East and Gulf coasts, but the current malaise is more than just tough 2024 comparisons. Small importers in particular are finding it harder to eat higher tariff costs, hampering orders as they try to push price increases onto consumers or back onto suppliers. <h3>Importers passing prices to consumers </h3>An index measuring the likelihood of US small business owners to increase prices hit its highest level in July since March 2024, according to the National Federation of Independent Businesses. A US Census Bureau survey of all US businesses, excluding farms, came to a similar conclusion, with 34% of respondents in late July saying they would increase prices over the next six months. Two weeks earlier, that figure was 29%. Even Home Depot, the second-largest US importer as measured by volume in 2024, is having to increase prices modestly. The company told investors Tuesday that while it had pledged in May not to increase prices due to tariffs, the tariff levels have since increased. August tends to be a strong year for inbound volumes, but not this year, said one executive for a forwarder that serves big box importers and a top online retailer. Because of tariff uncertainty, the seasonality of the inbound trade “is out the window,” the source said. “We’re feeling the pinch,” he said. “I think we’ve got a couple rough months ahead.” <h3>Demurrage levels on the rise </h3>Customers importing lower-value goods have even begun abandoning containers as the cost of the tariffs outweighs what the items can be sold for. Even those who tapped bonded warehouse space face the prospect of no more reprieves in tariffs — and a hefty storage bill, the forwarder source said. Other customers are shifting toward origin-controlled cargo, in which the seller bears all shipping and customs costs until it delivers the goods to the buyer, he said. Rising demurrage levels at major US ports also speak to increased deterioration in the trans-Pacific market. Demurrage levels have been rising all year but spiked in July to an average of 8.1 days, up from 3.8 days in January, according to data from transportation management visibility software vendor GoComet. While shipper customers of GoComet say erratic vessel reliability is playing a role in higher demurrage bills, tariff uncertainty is the main driver. Beneficial cargo owners (BCOs) “are either rushing orders to get ahead of tariffs or, more critically, canceling orders while cargo is already on the water,” said Chitransh Sahai, CEO of GoComet. “This leaves them with containers at the destination that have to be held or rerouted, which directly results in demurrage.” Part of that uncertainty is that some importers aren’t confident that the 55% tariff rate agreed upon between the US and China in an initial framework of a trade deal won’t be adjusted again when the since-extended tariff truce expires Nov. 10, said another forwarder source, who predominantly serves Chinese exporters. That has led to dribs and drabs of replenishment. “Customers are doing crazy types of operations to sustain their businesses,” he said. “Some customers have [even] stopped ocean shipping and have gone to small parcel.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>.</div>

The true toll of US tariffs on China is just beginning to be felt on the trans-Pacific. Months of frontloading that drove an earlier peak season have come to an end, and US retailers are pulling back on ordering for the rest of the year in the face of a slowing US economy and higher tariff costs. Shippers and consignees are also racking up stiffer demurrage and storage bills because demand uncertainty is slowing their pickup of containers from marine terminals. A sense of uncertainty — if not alarm — about future demand and tariff levels on China has slowed, and even paralyzed, some orders from small and medium-sized importers, four veteran forwarders told the Journal of Commerce. While China bookings haven’t cratered as they did in April when the Trump administration temporarily raised the US tariff level to 145%, forwarders warn of a renewed weakness in the market caused by more than just the end of peak season. Laden volumes from Asia to the US in July surged to a six-month high as shippers moved product ahead of August tariff deadlines. And while US imports are forecast to be up 5.8% year over year in August, according to the latest Global Port Tracker (GPT) , the rest of the year looks dismal. Volumes from September through December are expected to be down at least 20% year over year each month. Granted, volumes were elevated last year due to the threat of a labor strike on the East and Gulf coasts, but the current malaise is more than just tough 2024 comparisons. Small importers in particular are finding it harder to eat higher tariff costs, hampering orders as they try to push price increases onto consumers or back onto suppliers. Importers passing prices to consumers An index measuring the likelihood of US small business owners to increase prices hit its highest level in July since March 2024, according to the National Federation of Independent Businesses. A US Census Bureau survey of all US businesses, excluding farms, came to a similar conclusion, with 34% of respondents in late July saying they would increase prices over the next six months. Two weeks earlier, that figure was 29%. Even Home Depot, the second-largest US importer as measured by volume in 2024, is having to increase prices modestly. The company told investors Tuesday that while it had pledged in May not to increase prices due to tariffs, the tariff levels have since increased. August tends to be a strong year for inbound volumes, but not this year, said one executive for a forwarder that serves big box importers and a top online retailer. Because of tariff uncertainty, the seasonality of the inbound trade “is out the window,” the source said. “We’re feeling the pinch,” he said. “I think we’ve got a couple rough months ahead.” Demurrage levels on the rise Customers importing lower-value goods have even begun abandoning containers as the cost of the tariffs outweighs what the items can be sold for. Even those who tapped bonded warehouse space face the prospect of no more reprieves in tariffs — and a hefty storage bill, the forwarder source said. Other customers are shifting toward origin-controlled cargo, in which the seller bears all shipping and customs costs until it delivers the goods to the buyer, he said. Rising demurrage levels at major US ports also speak to increased deterioration in the trans-Pacific market. Demurrage levels have been rising all year but spiked in July to an average of 8.1 days, up from 3.8 days in January, according to data from transportation management visibility software vendor GoComet. While shipper customers of GoComet say erratic vessel reliability is playing a role in higher demurrage bills, tariff uncertainty is the main driver. Beneficial cargo owners (BCOs) “are either rushing orders to get ahead of tariffs or, more critically, canceling orders while cargo is already on the water,” said Chitransh Sahai, CEO of GoComet. “This leaves them with containers at the destination that have to be held or rerouted, which directly results in demurrage.” Part of that uncertainty is that some importers aren’t confident that the 55% tariff rate agreed upon between the US and China in an initial framework of a trade deal won’t be adjusted again when the since-extended tariff truce expires Nov. 10, said another forwarder source, who predominantly serves Chinese exporters. That has led to dribs and drabs of replenishment. “Customers are doing crazy types of operations to sustain their businesses,” he said. “Some customers have [even] stopped ocean shipping and have gone to small parcel.” Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Toll of US tariffs begins to emerge on unsettled trans-Pacific

<div class="phx-topic abstract-wrapper">US agriculture exporters say the ongoing trade standoff between Washington and Beijing has effectively shut them out of the key Chinese market, causing them to fear for their long-term survival.</div>

US agriculture exporters say the ongoing trade standoff between Washington and Beijing has effectively shut them out of the key Chinese market, causing them to fear for their long-term survival.

<div class="phx-topic">US exporters of soybeans and meat say they are losing key Chinese buyers due to high tariffs and are turning to President Donald Trump for relief. The 34% tariff China imposed in April is suppressing US containerized exports, Caleb Ragland, president of the American Soybean Association (ASA), said in a letter this week urging Trump to remove reciprocal duties on China, which also imposed a 32% tariff on US beef and a 57% levy on pork amid the trade standoff between Washington and Beijing. “US soybean farmers cannot survive a prolonged trade dispute with our largest customer,” Ragland said. Approximately 112,000 TEUs of US soybeans and meat were exported to China last year, down about 6% from 2023, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. According to Mike Steenhoek, executive director of the Soy Transportation Coalition, the 34.07% duty rate for cargo into China is pushing American soybean exporters out of the global market. Between July 2024 and June 2025, the most recent data available, PIERS shows a total of 356,830 TEUs of soybeans exported from the US, up 7% compared with the previous 12-month period. Total US meat exports declined 3.5% to 402,610 TEUs during that time. The China tariffs on the US are a boon for Brazilian exporters of soybeans and meat who compete with the US for Chinese buyers. Most US soybean exports are shipped via bulk; the commodity is transported in containers when smaller volumes are ordered. Meat exports move exclusively through refrigerated containers. Since China’s implementation of tariffs on US exports, South American soybeans cost about 20% less than their US competition, according to the ASA. <h3>Export window closing </h3>Meanwhile, the window for US exporters to regain the Chinese market this year is closing. US soybeans are harvested from September to March. After March, China sources soybeans from Brazil until its season ends in September, when US exporters typically resume supply. “The window for US soybean exporters to sell and ship this fall’s harvest to China is rapidly closing,” Steenhoek told the Journal of Commerce. “If an agreement is not reached during the latest US-China three-month [tariff] pause, it will probably be too late for this fall’s harvest.” US meat exporters are facing similar challenges. Last year, China consumed 15% of US pork exports and 14% of US beef exports, said Joe Schuele, spokesperson for the US Meat Export Federation. In 2024, the US exported about 424,000 TEUs of meat, about 56,380 TEUs of which were destined for China. Also creating a problem is the fact that China failed to reauthorize exports from individual US beef plants in February and March when the five-year authorizations expired, further hindering US beef exporters. “We are all but shut out of the China market until those authorizations [for the individual beef plants] are renewed,” Schuele said. Thomas Eskesen, founder of reefer market consultant Eskesen Advisory, said given the ongoing tariff complications, US shippers need to look at new markets to sell their products. “[But] for this year, it’s almost too late to sort of just kind of plan like that,” Eskesen said Wednesday during a Journal of Commerce webcast. 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>. </div>

US exporters of soybeans and meat say they are losing key Chinese buyers due to high tariffs and are turning to President Donald Trump for relief. The 34% tariff China imposed in April is suppressing US containerized exports, Caleb Ragland, president of the American Soybean Association (ASA), said in a letter this week urging Trump to remove reciprocal duties on China, which also imposed a 32% tariff on US beef and a 57% levy on pork amid the trade standoff between Washington and Beijing. “US soybean farmers cannot survive a prolonged trade dispute with our largest customer,” Ragland said. Approximately 112,000 TEUs of US soybeans and meat were exported to China last year, down about 6% from 2023, according to PIERS, a sister company of the Journal of Commerce within S&P Global. According to Mike Steenhoek, executive director of the Soy Transportation Coalition, the 34.07% duty rate for cargo into China is pushing American soybean exporters out of the global market. Between July 2024 and June 2025, the most recent data available, PIERS shows a total of 356,830 TEUs of soybeans exported from the US, up 7% compared with the previous 12-month period. Total US meat exports declined 3.5% to 402,610 TEUs during that time. The China tariffs on the US are a boon for Brazilian exporters of soybeans and meat who compete with the US for Chinese buyers. Most US soybean exports are shipped via bulk; the commodity is transported in containers when smaller volumes are ordered. Meat exports move exclusively through refrigerated containers. Since China’s implementation of tariffs on US exports, South American soybeans cost about 20% less than their US competition, according to the ASA. Export window closing Meanwhile, the window for US exporters to regain the Chinese market this year is closing. US soybeans are harvested from September to March. After March, China sources soybeans from Brazil until its season ends in September, when US exporters typically resume supply. “The window for US soybean exporters to sell and ship this fall’s harvest to China is rapidly closing,” Steenhoek told the Journal of Commerce. “If an agreement is not reached during the latest US-China three-month [tariff] pause, it will probably be too late for this fall’s harvest.” US meat exporters are facing similar challenges. Last year, China consumed 15% of US pork exports and 14% of US beef exports, said Joe Schuele, spokesperson for the US Meat Export Federation. In 2024, the US exported about 424,000 TEUs of meat, about 56,380 TEUs of which were destined for China. Also creating a problem is the fact that China failed to reauthorize exports from individual US beef plants in February and March when the five-year authorizations expired, further hindering US beef exporters. “We are all but shut out of the China market until those authorizations [for the individual beef plants] are renewed,” Schuele said. Thomas Eskesen, founder of reefer market consultant Eskesen Advisory, said given the ongoing tariff complications, US shippers need to look at new markets to sell their products. “[But] for this year, it’s almost too late to sort of just kind of plan like that,” Eskesen said Wednesday during a Journal of Commerce webcast. Contact Laura Robb at laura.robb@spglobal.com .  Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Breakbulk News

Tariff battle suppressing Chinese market for US soybean, meat exports

<div class="phx-topic abstract-wrapper">Domestic intermodal volumes have been stagnant on partner BNSF Railway out of Los Angeles, likely dulling the justification for the original $1,500 fee.</div>

Domestic intermodal volumes have been stagnant on partner BNSF Railway out of Los Angeles, likely dulling the justification for the original $1,500 fee.

<div class="phx-topic">More than a month after imposing a $1,500 peak season surcharge that frustrated some targeted shippers moving goods out of Southern California, J.B. Hunt Transport Services has cut the fee by nearly half, several customers told the Journal of Commerce. The surcharge is primarily directed at retailers moving holiday merchandise in the third quarter. In recent weeks, J.B. Hunt has lowered the fee to approximately $800 per container, according to several shippers who did not want to be identified. J.B. Hunt did not respond to a request for comment. “J.B. Hunt told us that they re-evaluated and were able to work with BNSF to more efficiently reposition capacity to Los Angeles for any surge,” one J.B. Hunt customer said. J.B. Hunt’s decision to lower its surcharge might be related to the volume of the domestic intermodal shipments it handles. BNSF Railway, its exclusive West Coast partner, has seen stronger gains in international intermodal shipments than in domestic shipments during a recent uptick in port volumes in Los Angeles and Long Beach. International shipments rose more than 20% last week in Southern California compared with two months ago, according to data provider RailState. But BNSF’s domestic intermodal has been largely flat since January. J.B. Hunt reported that transcontinental intermodal freight — i.e. anything originating or terminating on the West Coast — declined 1% year over year in the second quarter. Because J.B. Hunt is BNSF’s largest domestic intermodal customer, the data suggests much of the same for J.B. Hunt in the third quarter. <h3>UP implemented its own surcharge </h3>After J.B. Hunt’s <a href="https://www.joc.com/article/jb-hunt-hits-some-shippers-with-big-surcharges-in-southern-california-6043454">initial announcement</a>, competitors introduced their own surcharges ranging from $300 to $900 per container, including one by Union Pacific Railroad (UP) for shippers using non-asset brokers. <a href="https://www.joc.com/article/up-seeks-surcharges-amid-intermodal-volumes-surge-6062080">UP is charging</a> $300 per container on high-volume shippers and $500 per box on low-volume shippers on excess freight in Southern California. Union Pacific has posted stronger results, with domestic intermodal in Southern California up nearly 20% last week compared with two months ago, according to RailState. UP partners Hub Group and Schneider National described July demand in Southern California as robust during recent quarterly earnings calls. Even with the increase in volume, intermodal service out of Southern California has remained stable. Both BNSF and UP have reported faster train speeds, fewer trains being held and a decline in idle railcars compared with their weekly averages since 2017, according to the US Surface Transportation Board. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

More than a month after imposing a $1,500 peak season surcharge that frustrated some targeted shippers moving goods out of Southern California, J.B. Hunt Transport Services has cut the fee by nearly half, several customers told the Journal of Commerce. The surcharge is primarily directed at retailers moving holiday merchandise in the third quarter. In recent weeks, J.B. Hunt has lowered the fee to approximately $800 per container, according to several shippers who did not want to be identified. J.B. Hunt did not respond to a request for comment. “J.B. Hunt told us that they re-evaluated and were able to work with BNSF to more efficiently reposition capacity to Los Angeles for any surge,” one J.B. Hunt customer said. J.B. Hunt’s decision to lower its surcharge might be related to the volume of the domestic intermodal shipments it handles. BNSF Railway, its exclusive West Coast partner, has seen stronger gains in international intermodal shipments than in domestic shipments during a recent uptick in port volumes in Los Angeles and Long Beach. International shipments rose more than 20% last week in Southern California compared with two months ago, according to data provider RailState. But BNSF’s domestic intermodal has been largely flat since January. J.B. Hunt reported that transcontinental intermodal freight — i.e. anything originating or terminating on the West Coast — declined 1% year over year in the second quarter. Because J.B. Hunt is BNSF’s largest domestic intermodal customer, the data suggests much of the same for J.B. Hunt in the third quarter. UP implemented its own surcharge After J.B. Hunt’s initial announcement , competitors introduced their own surcharges ranging from $300 to $900 per container, including one by Union Pacific Railroad (UP) for shippers using non-asset brokers. UP is charging $300 per container on high-volume shippers and $500 per box on low-volume shippers on excess freight in Southern California. Union Pacific has posted stronger results, with domestic intermodal in Southern California up nearly 20% last week compared with two months ago, according to RailState. UP partners Hub Group and Schneider National described July demand in Southern California as robust during recent quarterly earnings calls. Even with the increase in volume, intermodal service out of Southern California has remained stable. Both BNSF and UP have reported faster train speeds, fewer trains being held and a decline in idle railcars compared with their weekly averages since 2017, according to the US Surface Transportation Board. Contact Ari Ashe at ari.ashe@spglobal.com .

Intermodal providers

J.B. Hunt reduces peak season surcharge on Southern California moves

<div class="phx-topic abstract-wrapper">The joint BNSF/CSX services come as rivals Union Pacific and Norfolk Southern have agreed to an $85 billion deal that would create the first transcontinental railroad, if approved by federal regulators.</div>

The joint BNSF/CSX services come as rivals Union Pacific and Norfolk Southern have agreed to an $85 billion deal that would create the first transcontinental railroad, if approved by federal regulators.

<div class="phx-topic">BNSF Railway and CSX Transportation are adding new joint intermodal routes linking the US West Coast to the Southeast, a competitive counterpunch to Union Pacific and Norfolk Southern (NS) as they seek federal approval for their <a href="https://www.joc.com/article/up-looks-to-create-first-coast-to-coast-railroad-with-85-billion-ns-deal-6052288">proposed merger</a>. BNSF and CSX said Friday they will launch bi-directional trains from Southern California to Charlotte, North Carolina, and to Jacksonville, Florida, supplementing their existing joint service to Atlanta. They also announced a new service that will connect Phoenix and Atlanta, opening an intermodal option in a lane long dominated by truckload carriers. The three new trains will travel via BNSF to the jointly-operated BNSF/CSX Fairburn terminal in Georgia, where CSX will take over and haul the cargo to Charlotte and Jacksonville. “This collaboration between BNSF and CSX demonstrates the power of partnership, delivering greater flexibility, efficiency and value for our customers,” Jon Gabriel, BNSF’s group vice president of consumer products, which includes intermodal, said in a statement. In addition, the two railroads announced new international intermodal trains connecting Kansas City with the Port of New York and New Jersey and the Port of Virginia. That comes after Virginia recently saw <a href="https://www.joc.com/article/norfolk-southern-to-drop-international-intermodal-service-on-many-usec-lanes-5993642">NS pulling out</a> of rail service to Memphis. Ocean containers will be routed on CSX to Chicago, then onto Kansas City via BNSF. The joint BNSF/CSX services come as their rivals, UP and NS, have agreed to a deal that would create the first transcontinental railroad, if approved by federal regulators. UP and NS are expected to file their formal application in early 2026; a decision by regulators could come in mid-2027. The proposed UP-NS coupling has drawn notice in the investor community, with activist investor Ancora Holdings writing a scathing letter to CSX on Aug. 6 urging it to pursue its own merger or face a proxy battle. Ancora, which has mounted unsuccessful battles against C.H. Robinson Worldwide and Norfolk Southern, attacked CSX CEO Joe Hinrichs and his management team, calling them “junior varsity executives.” “The [CSX] board needs to announce in the near term that it is working with identified third-party advisors to explore a range of merger options,” Ancora wrote in the letter, shared with the media this week. “Shareholders cannot afford more missteps as CSX plays catch-up in the rail consolidation race.” <h3>Single-line services </h3>BNSF and CSX have operated a direct intermodal service between Southern California and CSX’s Fairburn terminal for nearly two decades, bypassing busy interchanges in Chicago, Memphis and New Orleans, which often add a day or more to transit times. The service functions more like a single-line railroad, with only crew changes along the way. Replicating that model to Charlotte and Jacksonville with a switchover in Atlanta may serve as an important lever to show that an official BNSF-CSX merger is unnecessary. There are significant growth opportunities on the Charlotte and Jacksonville lanes. A total of more than 150,000 domestic intermodal containers move bi-directionally each year between Southern California and Atlanta, according to a Journal of Commerce analysis of data from the US Surface Transportation Board. About 80,000 containers move each year between Southern California and Charlotte, and approximately 55,000 between Southern California and Jacksonville. Those volumes highlight the growth potential in the new lanes, although Union Pacific and Norfolk Southern hold a transit time advantage from Southern California to Atlanta and Jacksonville using the Meridian Speedway through Mississippi, which runs faster than the BNSF-CSX service. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

BNSF Railway and CSX Transportation are adding new joint intermodal routes linking the US West Coast to the Southeast, a competitive counterpunch to Union Pacific and Norfolk Southern (NS) as they seek federal approval for their proposed merger . BNSF and CSX said Friday they will launch bi-directional trains from Southern California to Charlotte, North Carolina, and to Jacksonville, Florida, supplementing their existing joint service to Atlanta. They also announced a new service that will connect Phoenix and Atlanta, opening an intermodal option in a lane long dominated by truckload carriers. The three new trains will travel via BNSF to the jointly-operated BNSF/CSX Fairburn terminal in Georgia, where CSX will take over and haul the cargo to Charlotte and Jacksonville. “This collaboration between BNSF and CSX demonstrates the power of partnership, delivering greater flexibility, efficiency and value for our customers,” Jon Gabriel, BNSF’s group vice president of consumer products, which includes intermodal, said in a statement. In addition, the two railroads announced new international intermodal trains connecting Kansas City with the Port of New York and New Jersey and the Port of Virginia. That comes after Virginia recently saw NS pulling out of rail service to Memphis. Ocean containers will be routed on CSX to Chicago, then onto Kansas City via BNSF. The joint BNSF/CSX services come as their rivals, UP and NS, have agreed to a deal that would create the first transcontinental railroad, if approved by federal regulators. UP and NS are expected to file their formal application in early 2026; a decision by regulators could come in mid-2027. The proposed UP-NS coupling has drawn notice in the investor community, with activist investor Ancora Holdings writing a scathing letter to CSX on Aug. 6 urging it to pursue its own merger or face a proxy battle. Ancora, which has mounted unsuccessful battles against C.H. Robinson Worldwide and Norfolk Southern, attacked CSX CEO Joe Hinrichs and his management team, calling them “junior varsity executives.” “The [CSX] board needs to announce in the near term that it is working with identified third-party advisors to explore a range of merger options,” Ancora wrote in the letter, shared with the media this week. “Shareholders cannot afford more missteps as CSX plays catch-up in the rail consolidation race.” Single-line services BNSF and CSX have operated a direct intermodal service between Southern California and CSX’s Fairburn terminal for nearly two decades, bypassing busy interchanges in Chicago, Memphis and New Orleans, which often add a day or more to transit times. The service functions more like a single-line railroad, with only crew changes along the way. Replicating that model to Charlotte and Jacksonville with a switchover in Atlanta may serve as an important lever to show that an official BNSF-CSX merger is unnecessary. There are significant growth opportunities on the Charlotte and Jacksonville lanes. A total of more than 150,000 domestic intermodal containers move bi-directionally each year between Southern California and Atlanta, according to a Journal of Commerce analysis of data from the US Surface Transportation Board. About 80,000 containers move each year between Southern California and Charlotte, and approximately 55,000 between Southern California and Jacksonville. Those volumes highlight the growth potential in the new lanes, although Union Pacific and Norfolk Southern hold a transit time advantage from Southern California to Atlanta and Jacksonville using the Meridian Speedway through Mississippi, which runs faster than the BNSF-CSX service. Contact Ari Ashe at ari.ashe@spglobal.com .

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